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Published: 2024-05-07 18:00:00 CEST
Marel hf.
Interim report (Q1 and Q3)

Marel: Q1 2024 Results

Revenues of EUR 413m and 7.9% EBIT, further build up of order book needed to improve operational performance

Executive summary

  • Soft performance in 1Q24 in line with communication at year-end, pick up expected in 2H24.
  • Soft order book at 33% trailing twelve months revenues. To deliver revenue growth and improved operational performance, the order book needs to build up.
  • Continued good momentum in aftermarket revenues at EUR 205.7m in the quarter and above 800m in trailing twelve months.
  • EBIT margin of 7.9% in 1Q24, with continued weakness in margins for Meat and Fish, lower volume for Plant, Pet and Feed, while continued delivery from Poultry.
  • Ongoing actions to lower cost base, including 9% reduction in FTEs YoY (2% QoQ).
  • Leverage increased to 3.75x on the back of lower orders received and EBITDA, however good covenant headroom and liquidity.

Financial highlights Q1 2024

  • Orders received: EUR 392.8m (4Q23: 466.4m, 1Q23: 362.6m).
  • Revenues: EUR 412.6m (4Q23: 448.0m, 1Q23: 447.4m).
  • EBITDA[1] margin: 11.7% (4Q23: 13.1%, 1Q23: 12.6%).
  • EBIT1 margin: 7.9% (4Q23: 9.6%, 1Q23: 9.0%).
  • Net result: EUR -3.2m (4Q23: 8.7m, 1Q23: 9.1m).
  • Cash flow from operating activities before interest and tax: EUR 26.2m (4Q23: 102.0m, 1Q23: 34.3m).
  • Free cash flow: EUR 11.2m (4Q23: 83.4m, 1Q23: -0.3m).
  • Leverage[2]: 3.75x (4Q23: 3.45x, 1Q23: 3.34x).

Arni Sigurdsson, CEO:
„The first quarter results were soft, as indicated in the Q4 2023 results, with EUR 413 million in revenues and an 7.9% EBIT margin. We continue to perform well in the aftermarket reaching EUR 800 million in trailing twelve months revenues, while project revenues have declined materially in line with the soft project orders received and weaker order book.

We have been taking decisive cost actions with increased cost discipline to manage through the cycle and improving working capital management. It is, however, clear that further build up of the order book is needed to improve operational performance.

There is continued short-term uncertainty evidenced by the lower-than-expected projects orders received in the quarter. However, we do see signs of improving market fundamentals and customers’ sentiment with lower feed prices, better pricing and positive tone from our customers at key trade shows over the quarter providing us with an optimistic view on the market in the second half this year.

A significant milestone was reached in April when we signed a transaction agreement with JBT. Looking ahead to the potential combination, there are exciting opportunities to accelerate progress on our strategic journey and have a meaningful impact on our industry towards more sustainable food systems. We continue to work closely with JBT ahead of the targeted offer launch later this month.

I want to thank the dedicated and talented global team at Marel navigating this changing landscape, and together we are fully committed to our vision to transform food processing and deliver on our potential.“

FY24 and mid-term outlook
Market conditions remain challenging resulting in elevated uncertainty. Headwinds expected to moderate in coming quarters, supported by positive signs in the market.

Labor scarcity and continued wage inflation, coupled with favorable secular trends, focused on automation, robotics technology and digital solutions that support sustainable food processing, will continue to support Marel’s organic growth outlook.

The challenging market conditions have resulted in a decline of the order book in 2023 and 1Q24, orders received and revenues expected to build up in 2H24.

To deliver revenue growth and improved operational performance in the future, build up of the order book is needed.

Financial calendar
Marel will publish its financial results according to the below financial calendar:

  • Q2 2024 – 24 July 2024
  • Q3 2024 – 30 October 2024
  • Q4 2024 – 12 February 2025
  • AGM – 26 March 2025

Financial results will be disclosed and published after market closing of both Nasdaq Iceland and Euronext Amsterdam.

Upcoming trade shows and events
Marel regularly participates in exhibitions around the world where it showcases the company’s innovative solutions. In addition, Marel hosts its own trade shows and KnowHows in the company’s demonstration facilities. Here are some of Marel’s upcoming events in 2024:

  • Interzoo in Nürnberg, Germany, 7-10 May
  • Marel’s Pork ShowHow in Copenhagen, Denmark, 29 May
  • Propak Asia in Bangkok, Thailand, 12-15 June
  • Tecnocarne in Sao Paulo, Brazil, 18-21 June
  • Marel’s Software KnowHow in Copenhagen, Denmark, 19 June

Virtual investor meeting
On Wednesday 8 May 2024, at 10:30 am CET (8:30 am GMT), Marel will host a virtual investor meeting where CEO Arni Sigurdsson and CFO Sebastiaan Boelen will give an overview of the financial results and operational highlights in the first quarter 2024.

Please note that the investor meeting is virtual only.

The investor meeting will be streamed live via Zoom and a recording will be made available after the meeting on marel.com/ir.

Registration is available here.

[1] Result from operations and EBITDA adjusted for PPA related costs, including depreciation and amortization, acquisition related expenses and restructuring costs. In Q4 2023 and Q1 2024, result from operations is also adjusted for one-off write-offs related to product portfolio rationalization.
[2] Net debt (excluding lease liabilities) / Pro forma LTM adjusted EBITDA (including recent acquisitions) excluding non-cash and one-off costs per Marel's credit agreement.

Market share data
Statements regarding market share, including those regarding Marel’s competitive position, are based on outside sources such as research institutes, industry and dealer panels in combination with management estimates. Where information is not yet available to Marel, those statements may also be based on estimates and projections prepared by outside sources or management. Rankings are based on sales unless otherwise stated.

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.

Investor Relations
For further information, please contact Marel Investor Relations via email ir@marel.com or tel. +354 563 8001.

About Marel
Marel (NASDAQ: MAREL, AEX: MAREL) is a leading global provider of advanced food processing equipment, systems, software and services to the food processing industry. Established in 1983, we have around 7,500 employees and a presence in more than 30 countries, servicing customer accounts in over 140 countries. We are listed on Nasdaq Iceland and Euronext Amsterdam, and in 2023 we delivered EUR 1.7 billion in revenues, with 46% coming from recurring aftermarket services and software. We invest 5-6% of revenues in innovation every year, setting new benchmarks in processing poultry, meat, fish as well as pet food, aqua feed and plant protein. Utilizing cutting edge technologies such as robotics, data-driven solutions, automation and software, we empower our customers to increase yield, ensure food safety, improve sustainability and ultimately create value for their businesses. For further information, please visit marel.com/ir.


Marel Q1 2024 Condensed Consolidated Interim Financial Statements.pdf
Marel Q1 2024 Condensed Consolidated Interim Financial Statements Excel.xlsx
Marel Q1 2024 Press Release.pdf
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