Marel‘s preliminary and unaudited financial results for 2019 show revenue growth of around 7% to EUR 1,284m (FY18: 1,198m), of which EUR 320m was generated in Q4 2019 (4Q18: 331m). The EBIT margin is approximately 13.5% for the full year of 2019 (FY18: 14.6%), due to a low EBIT margin of around 10% in Q4 2019 (4Q18: 14.6%). This temporary drop in operational performance is due to an unfavorable industry and product mix as well as increased costs incurred to address shifts in geographical demand.
Preliminary orders received were EUR 303m in 4Q19 (4Q18: 296m). Preliminary free cash flow in 4Q19 was robust at EUR 53m (4Q18: 41m), and down payments on orders received in the back-end of the quarter reflect the improved market conditions and rising investment appetite of Marel’s customers.
Marel remains committed to its long-term strategy and target of 12% average annual revenue growth in 2017-2026.
Árni Oddur Thórdarson, Chief Executive Officer:
“We are publishing this pre-announcement of our headline results due to the fact that operational results were around 10% EBIT margin in the fourth quarter which is below expectations. This means that we close the year at around 13.5% EBIT, while reporting 14-15% EBIT in recent years. At the same time, we achieved revenue growth of 7% in 2019 and the absolute EBIT was at similar levels as the previous year.
In partnership with our customers, we have navigated through a challenging period where the market environment was affected by geopolitical tensions and trade constraints. It seems like the tide is turning and we notice much more optimism and investment appetite in the market. We have a strong pipeline, which together with actions being initiated to streamline the operations, give us confidence that revenues and profitability will gradually increase through the course of the year 2020. With our pioneering product portfolio, global reach and strong financial position, we remain committed to our long-term strategy and target of 12% average annual revenue growth in 2017-2026 with an EBIT margin expansion.”
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The preliminary results are unaudited and subject to change. Marel will release its audited Q4 2019 and annual consolidated financial statements after market closing of both NASDAQ Iceland and Euronext Amsterdam as scheduled on 5 February 2020.
On 6 February 2020, at 8:30 am GMT (9:30 am CET), Marel will host an investor meeting where CEO Árni Oddur Thórdarson and CFO Linda Jónsdóttir will give an overview of the financial results and operational highlights in the fourth quarter.
The investor presentation is broadcast live on www.marel.com/webcast and recordings will be available after the meeting on marel.com/IR. Members of the investment community can also join the investor meeting through conference call. Details for the webcast and conference call will be published the week prior to the investor meeting.
Investor relations
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 poultry, meat and fish industries. Our united team of more than 6,000 employees in over 30 countries delivered EUR 1.2 billion in revenues in 2018. Annually, Marel invests around 6% of revenues in innovation which translated to EUR 74 million in 2018. By continuously advancing food processing, we enable our customers to increase yield and throughput, ensure food safety and traceability, and improve sustainability in food production. Marel has been listed on NASDAQ Iceland since 1992. Marel had a public offering on Euronext Amsterdam in June 2019.
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.
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.