Marel Q3 2016 Results
(All amounts in EUR)
Solid performance with 14.2% EBIT
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Revenue for Q3 2016 totaled 234.8m [Q3 2015: 189.1m]. On a pro forma basis, revenue in Q3 2015 was 229.7m.
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EBITDA for Q3 2016 was 41.5m or 17.7% of revenue [Q3 2015: Adj. EBITDA** 31.6m or 16.7% of reve-nue]. Pro forma adj. EBITDA** Q3 2015 was 41.5m or 18.0% of revenue.
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EBIT* for Q3 2016 was 33.4m or 14.2% of revenue [Q3 2015: Adj. EBIT** 24.2m or 12.8% of revenue]. Pro forma adj. EBIT** in Q3 2015 was 31.6m or 13.8% of revenue.
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Net result for Q3 2016 was 17.3m [Q3 2015: 14.7m]. Basic earnings per share were 2.42 euro cents in Q3 2016 [Q3 2015: 2.07 euro cents].
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Cash flow from operating activities before interest and tax in Q3 2016 was 33.2m [Q3 2015: 29.7m]. Net debt/EBITDA is 2.6x at the end of Q3 2016.
- The order book was at 305.1m at the end of Q3 2016 compared with 306.5m at the end of Q2 2016 [Q3 2015: 187.7m]. On a pro forma basis the order book at end of Q3 2015 was 303.6m.
Marel continues on a good track and reports solid performance in Q3 2016. Revenue for Q3 2016 is 235 mil-lion with 14.2% EBIT*. Cash flow remains strong resulting in a net debt/EBITDA of 2.6x.
Order intake in Q3 2016 was 233 million and year to date 718 million on a pro forma basis. Order intake of standard equipment and spare parts was strong across all industries. Greenfields and large projects were strong in poultry in the first 9 months while volume of larger projects was soft in meat and fish. Meat began to pick up in Q3 with a unified sales team securing full line projects in Europe and China. In the beginning of Q4, fish secured a landmark greenfield project in Norway.
Pro forma revenue for the first 9 months of 2016 was 733 million and EBIT* was 108.4 million or 14.8%. Marel expects modest organic revenue growth and increase in EBIT* between years.
Arni Oddur Thordarson, CEO:
“We are pleased with our Q3 2016 results. The team is focused and committed and is delivering robust opera-tional results with close to 15% EBIT* year to date. We continue to introduce steady stream of innovative cus-tomer solutions and to invest in the business to support future profitable growth.
In general the demand for larger projects is promising while timing of closure of such transactions is hard to predict due to general economic circumstances.
Integration with MPS is on track. We have unified and cross-trained our sales team in meat. This great team has now secured full line projects in various geographical areas. It is clear that we are stronger together in serving our customers’ needs”.
Markets
Marel is the leading global provider of advanced processing systems and services to the poultry, meat and fish industries. Marel has a commercially strong product portfolio stemming from its continuous focus on innovation and strategic acquisitions.
Revenue year to date on a pro forma basis was 733 million. Order intake in Q3 2016 was 233 million and year to date on a pro forma basis 718 million. Order intake of standard equipment and spare parts was strong across all industries. Greenfields and large projects were strong in poultry in the first nine months while volume of larger projects was soft in meat and fish. Meat began to pick up in Q3 with a unified sales team securing full line projects in Europe and China. In the beginning of Q4, fish secured a landmark greenfield project in Norway.
Revenue and order intake from discontinued operations are close to 20 million lower in 2016 than in 2015.
Marel Poultry
Year to date order intake, revenue and profitability is strong in poultry. Compared with the strong beginning of the year and exceptionally strong Q3 2015 order intake was slightly lower in Q3 2016. Key projects were secured in North-America and Europe during Q3.
During the first 9 months of 2016 Marel Poultry generated 393 million in revenue and EBIT of 68.1 million (17.3% of revenue). Marel Poultry accounted for 54% of Marel’s pro forma revenue in the first 9 months of 2016.
Marel Fish
Marel Fish generated 91 million in revenue and EBIT of 3.3 million (3.6% of revenue) in the first 9 months of 2016. Marel Fish accounted for 12% of Marel’s pro forma revenue in the first 9 months of 2016. Market condi-tions in the fish industry have been soft throughout the year. In October, Marel Fish secured a large greenfield project in the salmon industry in Norway.
Marel has been focusing its business and product portfolio shifting the focus from low-end customized solu-tions to high tech innovative salmon solutions and white fish solutions for both onshore and onboard.
Marel Meat
Marel Meat generated 243 million on a pro forma basis in revenue and EBIT* of 35.0 million (14.4% of reve-nue) in the first 9 months of 2016. Marel Meat accounted for 33% of Marel’s pro forma revenue in the first 9 months of 2016. Order intake and volume is at a good level. Q3 was a good quarter for Marel Meat especially in primary processing which saw good order intake and volume.
Integration of Marel and MPS is on track and going well. During Q3, a unified sales team secured full line pro-jects in both China and Europe. As well in Q3, joined teams participated together at exhibitions in Brazil, China and Russia with good results.
Financial items
Cash flow and investments
Marel returned a strong cash flow from operations with operational cash flow before interest and tax being 33.2 million for Q3 2016 compared with 29.7 million in Q3 2015.
Marel continues to invest in the business to prepare for future growth and full potential in line with previous communication. Investment activities are expected to be on average above depreciation level for the coming quarters. Net debt/EBITDA is 2.6x which is within the range of the targeted capital structure.
In Q3 2016, there were no transactions with Marel’s treasury shares. Marel now holds 18.1 million treasury shares.
Acquisition related items
Purchase price allocation in relation to the acquisition of MPS is recorded as provisional; the period during which adjustments are permitted is limited to 12 months from the date of acquisition. No material changes are foreseen from previous publication.
Outlook
Marel expects modest organic revenue growth and increase in EBIT* between years.
The industry that Marel operates in has a history of 4-6% annual growth and it is expected that average annual growth will remain at that level in the long term. Marel’s aim is to continue to grow faster than the market by leveraging its market presence and with continuous investments in innovation.
Long term growth prospects for Marel are promising. Results may vary from quarter to quarter due to general economic developments, fluctuations in orders received and deliveries of larger systems.
Presentation of results, October 27, 2016
Marel will present its results at an investor meeting on Thursday, October 27, at 8:30 am (GMT), at the Com-pany’s headquarters at Austurhraun 9, Gardabaer. The meeting will also be webcasted at marel.com/webcast.
Publication days of Consolidated Financial Statements in 2017 and 2018
4th quarter 2016 February 8, 2017
1st quarter 2017 May 3, 2017
2nd quarter 2017 July 26,2017
3rd quarter 2017 October 25, 2017
4th quarter 2017 January 31,2018
Release of financial statements will take place after market closing on the aforementioned dates.
For further information, contact:
Audbjorg Olafsdottir, Corporate Director of Investor Relations and Communications, tel: (+354) 563 8626 / mobile: (+354) 853 8626.
