Marel Q4 and annual 2012 results

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Marel 2012 results – healthy growth in a challenging market


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Marel 2012 results – healthy growth in a challenging market

All amounts in EUR:

  • Revenues for 2012 totaled 714.0 million (m), an increase of 6.8% compared to the year before [2011: 668.4m].
  • EBITDA was 86.0m or 12.0% of revenues compared with 87.0m in 2011 [2011: 98.0m normalized].1
  • Operating profit was 61.1m or 8.6% of revenues compared with 62.2m in 2011 [2011: 73.2m normalized].1
  • Net result for 2012 was 35.6m compared to 34.5m in 2011. Earnings per share were 4.88 euro cents [2011: 4.70 euro cents].
  • Cash flow remains healthy and net interest bearing debt is 243.2m at the end of 2012 [2011: 250.5m].
  • The order book was at 125.4m at the end of the year [2011: 188.9m].

Playing on its strengths by reaping the benefits of integration and a global network of sales and service, Marel showed solid revenue growth of 6.8%. Marel’s core business has grown organically by 29% in the last four years, a period which has been economically challenging.

Revenues for the year are in line with the Company’s expectations with EBIT margin of 8.6%, below the long-term target of 10-12%. Last year was challenging in Europe and USA with delays in high margin standard equipment whereas sales of large projects in new markets continued to grow. Large greenfield projects are expected to generate future revenues in the form of standard equipment and service related revenues.

Theo Hoen, CEO:

“A healthy 6.8% growth in a challenging market is an achievement. In the last four years we have grown immensely. We have introduced a steady pipeline of new products, strengthened our sales and service network, and at the same time we have merged several companies into one.

Last year we saw strong growth in our fish segment and in fourth quarter we saw signs of a turn-around in the meat industry. We maintained our position as market leader in further processing, and the poultry segment remained the backbone of our revenue base with returns above target.

We expect moderate growth in 2013, assuming recovery in our established markets in the second half of the year, in particular in USA which has been in downturn for over two years. Looking further into the future, we believe that our innovative products and standardization of solutions and service in all our industries will secure strong organic growth. With increased sales of standard solutions and focus on operational excellence we expect to be back on track with 10-12% EBIT in the second half of 2013.”

The Company’s revenue base remains strong and can generally be divided into three approximately equal components: 1) the sale of large systems, often for greenfield projects, 2) the sale of stand-alone equipment and smaller standardized systems, and 3) service and spare parts. However, last year large projects generated around 40% of revenues, whereas standard solutions accounted for less than 25%, lagging behind the previous two years, resulting in lower gross profit in 2012. Marel’s poultry industry sector still accounts for over 50% of the Company’s revenues; however, there are signs that other segments may grow faster in the coming years.

The Board of Directors will propose to the Annual General Meeting (AGM) on 6 March 2013 that a dividend of 0.97 euro cents per share be paid for the operational year 2012 [2011: 0.95 euro cents per share]. Based on the current number of outstanding shares, the estimated total dividend payment will be approximately EUR 7.1m, corresponding to about 20% of profits for the year. The proposed dividend is in line with Marel’s targeted capital allocation and dividend policy introduced at the 2011 AGM.

If approved by Marel’s shareholders, the Company’s shares traded on and after 7 March 2013 (Ex-Date) will be ex-dividend and the right to a dividend will be constricted to shareholders identified in the Company’s Shareholders’ Registry at the end of 11 March 2013, which is the proposed record date. The Board will propose that payment date of the dividend is 5 April 2013.

1) Taking into account the one-off cost related to pension funding amounting to 11m.

Q4 2012 results – solid revenues with lower profit margin

  • Revenues for Q4 2012 totaled 178.4m, a decrease of 3% compared to revenues for the same period the year before [Q4 2011: 183.9m].
  • EBITDA was 19.5m, or 10.9% of revenues [Q4 2011: 27.9m].
  • Operating profit (EBIT) was 13.6m, or 7.6% of revenues [Q4 2011: 21.6m].
  • Net result was 7.1m for Q4 2012 [Q4 2011: 15.0m].
  • Operating cash flow before interest and tax remains healthy at 28.6m for Q4 compared to 19.9m in Q4 2011.

In the face of challenging economic conditions throughout 2012, Marel generated healthy revenue stream based on its strong market position and product pipeline. Orders received during Q4 2012 amounted to 152.3m [Q4 2011: 176.0m] which is an increase from previous quarter. At the end of 2012, the order book amounted to 125.4m as opposed to 188.9m at the end of the previous year.

In December 2012, Marel signed an agreement with its lenders to amend and extend the term of present loan facilities from November 2010 by one year, or to the end of 2016. This important achievement in global, turbulent financial markets will lead to more efficient financing and lower financing cost.

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Forward-looking statements

Statements in this press release that are not based on historical facts are forward-looking statements. Although such statements are based on management’s current estimates and expectations, forward-looking statements are inherently uncertain.

We, therefore, caution the reader that there are a variety of factors that could cause business conditions and results to differ materially from what is contained in our forward-looking statements, and that we do not undertake to update any forward-looking statements. All forward-looking statements are qualified in their entirety by this cautionary statement.

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