Marel: 2018 Results - 15% Revenue Growth and a Solid 14.6% EBIT Margin in 2018
Marel's 2018 revenues for the full year 2018 were up 15%.
Q4 2018 – Record revenues of EUR 331m
Orders received were EUR 296.0m (4Q17: 281.5m).
Revenues were EUR 330.8m (4Q18: 294.8m).
EBIT was EUR 48.2m (4Q17: 46.2m), translating to an EBIT margin of 14.6% (4Q17: 15.7%).
Net result was EUR 38.0m (4Q17: 33.8m).
Basic earnings per share (EPS) were EUR 5.61 cents (4Q17: 4.81 cents).Cash flow from operating activities before interest and tax in the quarter was EUR 62.2m (4Q17: 65.2m).
Full year 2018 – Strong organic growth and solid operational performance
Orders received were EUR 1,184.1m (FY17: 1,143.7m).
Revenues were EUR 1,197.9m (FY17: 1,038.2m).
EBIT was EUR 175.2m (FY17: 157.4m), translating to an EBIT margin of 14.6% (FY17: 15.2%).
Net result was EUR 122.5m (FY17: 96.9m).
Basic earnings per share (EPS) were EUR 17.95 cents (FY17: 13.70 cents).
Cash flow from operating activities before interest and tax was EUR 205.8m (FY17: 236.2m).
Net debt/EBITDA was x2.0 at year-end (3Q18: x2.1). Targeted capital structure is x2-3 net debt/EBITDA.
The order book was EUR 476.0m (YE17: 472.1m).
Árni Oddur Thórdarson, Marel´s CEO, said: “We are delighted to report record revenues of 331 million in the final quarter of 2018, up 12% compared to the strong fourth quarter in 2017. Revenues for the full year 2018 were up 15%, of which 12.5% was organic growth. With one of the largest installed base worldwide and our proactive service mindset, 35% of our total revenues are recurring maintenance revenues. EBIT was solid at 14.6% in Q4 2018 and for the full year.
Orders received in Q4 were 296 million, up by 5% when compared to Q4 2017 and a 10% rise from Q3 2018. The orders received for the full year 2018 were solid at 1,184 million, and rose marginally when compared with the robust growth in 2017. Trade constraints and geopolitical issues make timing of orders harder to predict. In such circumstances however, Marel as a product pioneer with extensive global reach, is well positioned to capitalize on the markets’ requirement to match the supply and demand of food. We still expect the underlying annual growth of the total market to be 4-6% on average and our aim is to continue to grow faster.
Marel Fish is focused on becoming a full-line provider for wild whitefish, farmed salmon and farmed whitefish.
Our cash flow generation continues to be best in class and we continuously reinvest in innovation, global reach and infrastructure. We also complement our product portfolio and global reach with acquisitions to accelerate our journey to transform the way food is processed. Last year we acquired MAJA for the enterprise value of 35 million, acquired treasury shares and paid out dividends for close to a 100 million. Our strong operational cash flow and improvements in operating performance lead us to x2 net debt/EBITDA, which is at a similar level to last year despite these high investments.
The dual listing of Marel shares on an international stock exchange in addition to its listing in Iceland is proceeding well and the primary focus is now on Nasdaq Copenhagen and Euronext Amsterdam. It is important for a global leader to have a global stage to support its ambitious growth plan, and drive fair day-to-day trading and continued shareholder returns.”
Higher investments in innovation to close application gaps, and greater emphasis on standardization of the business have delivered good orders received and improved margins.
Marel Fish -Delivered 13% of total revenues and 7.9% EBIT in 2018
The order book for Marel Fish has slowed down after a good first half of the year in 2018. There was good geographical and product diversity in orders received in 2018, including greenfield projects and salmon sector orders in Chile, France and Norway. Projects over the year include a whitefish projects in Namibia, a refit of a salmon factory in Chile, while the first Flexicut for cod was sold in South Europe and the first Flexicut installed in Russia.
Árni Oddur Thórdarson.
Marel Fish is focused on becoming a full-line provider for wild whitefish, farmed salmon and farmed whitefish. Higher investments in innovation to close application gaps, and greater emphasis on standardization of the business have delivered good orders received and improved margins.
Although the full year of 2018 delivered strong revenues for Marel Fish, up 20.3% to EUR 159.1m, revenues in 4Q18 were down 9.1% YoY or EUR 37.8m (4Q17: 41.6m). EBIT for the full year was EUR 12.6m (FY17: 5.6m) and the EBIT margin was 7.9% (FY17: 4.2%). Marel has shown operational improvements in the past few quarters but EBIT in 4Q18 was affected by lower order book and lack of large orders, resulting in EBIT of EUR 1.1.m (4Q17: 2.1m) and EBIT margin of 2.9%. As previously stated, the short-term operational margin for Marel Fish was likely to adjust downwards, however management is targeting medium and long-term EBIT margin expansion for the industry segment.
Marel is the leading global provider of advanced equipment, systems and services to the fish, meat and poultry industries. The company's brands – Marel, Stork Poultry Processing and Townsend Further Processing – are among the most respected in the industry and together, they offer the convenience of a single source to meet its customers’ every need.
Marel is a multinational company, with over 4,000 employees worldwide. Marel has offices and subsidiaries in over 30 countries on six continents, a global network of over 100 agents and distributors, and manufacturing facilities in 16 locations worldwide, working side-by-side with its customers to extend the boundaries of food processing performance.
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