Marel: 2020 a year of unity, resilient operations and strategic
2020: Resilient profitability and
- Orders received were EUR 1,234.1m (2019: 1,222.1m).
- The order book was EUR 415.7m (3Q20: 434.3m, 4Q19:
- Revenues were EUR 1,237.8m (2019: 1,283.7m).
- EBIT* was EUR 166.8m (2019: 173.4m), translating to an EBIT*
margin of 13.5% (2019: 13.5%).
- Net result was EUR 102.6m (2019: 110.1m).
- Basic earnings per share (EPS) were EUR 13.62 cents (2019:
- Marel took actions earlier in the year that will deliver EUR 8m
in annualized savings with around EUR 4m in non-recurring cost.
Additionally, the pandemic has accelerated new ways of working and
use of digital solutions that provide opportunities for further
- Cash flow from operating activities before interest and tax was
EUR 217.6m (2019: 189.8m).
- Net debt/EBITDA was 1.0x at year-end (3Q20: 0.5x, 4Q19: 0.4x).
Targeted capital structure is 2-3x net debt/EBITDA.
Q4 2020: A strong close to 2020
- Orders received were EUR 319.7m (4Q19: 302.6m).
- Revenues were EUR 343.3m (4Q19: 320.1m).
- EBIT* was EUR 52.3m (4Q19: 32.0m), translating to an EBIT*
margin of 15.2% (4Q19: 10.0%).
- Net result was EUR 29.1m (4Q19: 10.2m).
- Basic earnings per share (EPS) were EUR 3.87 cents (4Q19:
- Cash flow from operating activities before interest and tax in
the quarter was EUR 38.9m (4Q19: 60.2m).
- Free cash flow at EUR 17.7m (4Q19: 44.0m).
income adjusted for purchase price allocation (PPA) costs related
to acquisitions and beginning in 2020, adjusted for acquisition
TREIF acquisition completed 8 Oct 2020
- TREIF is included in the consolidated financial statements in
4Q20. Annual revenues prior to acquisition were about EUR 80m, with
EUR 13m EBITDA.
- In 4Q20, TREIF delivered seasonally strong revenues and
Arni Oddur Thordarson, CEO
“I would like to take this opportunity and thank
team Marel, our customers, suppliers and partners, for all their
commitment and dedication to ensure that one of the most important
value chains in the world remains operational. While ensuring the
safety and well-being of our employees and our customers, we have
met every obstacle with optimism to secure daily access for
consumers around the world to quality food that is safe, affordable
and produced in a sustainable way.
Marel’s digital platform and global reach with a
local presence, with sales and service engineers servicing
customers in over 140 countries, have proven to be key
differentiating factors in supporting our customers. Team Marel
took transformative decisions in early 2020 to ensure continued
innovation and operational resilience in a highly volatile and
challenging environment. We secured long-term sustainability-linked
financing, solidified our supplier partnerships and ramped up
inventories, and canceled all traditional tradeshow activity to
focus solely on virtual events.
As a result, we close the fourth quarter on
strong note, with revenues of EUR 343 million and EBIT in excess of
15%. We should note that TREIF’s complementary cutting technology
solutions and services are included in 4Q20, positively
contributing to revenues and margins. We close the year with a
healthy order book and strong financials with net debt at one times
Overall, we are satisfied with the full-year
performance, orders were on par with the previous year, although
revenues and EBIT were down by 4%. Cash flow remained strong,
enabling us to continue to invest in infrastructure and take on
acquisitions in line with strategy. Quality of earnings remained
good with recurring revenues from aftermarket at the 40% level in
Automation and digital solutions in the food
value chain are a driving force to further transform the industry,
with COVID-19 further accelerating the strong underlying secular
trends. We embed sustainability in everything we do and we are
pioneers in our industry to commit to SDG goals, including
committing to the Science Based Targets initiatives to meet the
goals of the Paris Agreement. In addition we add financial
disclosure requirements on climate risk, that is based on the Task
force recommendation (TCFD climate risk reporting).
While we are mindful of the fact that in times
of such transformation on top of economic uncertainties, there can
be fluctuations quarter-by-quarter, Marel is fully committed to its
mid-term and long-term targets of continued growth and value
2020 in review
Marel remains committed to its mid- and
Management is committed to its mid-term targets
to achieve gross profit of 40%, SG&A of 18% and maintain the
innovation investment at the 6% strategic level by year-end
For the period 2017-2026 Marel has set a target
of 12% average annual increase in revenues, through both organic
growth and acquisitions. Compound annual growth rate (CAGR)
2017-2020 was 6.3%. Marel’s growth plan involves capitalizing on
strong innovation investment and global reach to drive expansion
and market penetration. The focus is on strategic partnerships and
acquisitions to fill gaps in the value chain, and to augment our
full-line product offering.
Acquisitions and strategic partnerships
With the acquisition of German food cutting
technology provider TREIF in Oct 2020, Marel has strengthen the
full-line product offering, increased standard equipment sales and
will leverage its global sales and service network to synergize
aftermarket potential. With around 500 employees and EUR 80m in
revenues, TREIF’s product portfolio in cutting, portioning, dicing
and slicing is highly complementary with Marel’s product portfolio.
The purchase price on a cash and debt free basis was paid with EUR
128m in cash and 2.9 million Marel shares.
As of 4 Jan 2021, ownership of stake in
Icelandic fish processing equipment provider Curio increased from
39.3% to 50% with an option to acquire the remaining 50% in three
years. With the acquisition, Marel has a full-line offering of
solutions for wild whitefish industry. Curio will be consolidated
into Marel’s financial results in 2021.
Marel made a follow-on investment in Canadian
software company Worximity, which was part of the original
agreement in 2019, increasing the ownership from 14.3 to 25.0%.
Strategic partnership with Tomra on vision based
technology is proceeding well. Over the year, the two companies
have joined forces on different projects building on advanced
sensor based grading, sorting, peeling and analytics equipment for
the food industry.
Subsequent events in beginning of 2021
The acquisition of Dutch duck processing
solutions provider Poultry Machinery Joosten (PMJ) announced on 21
Jan 2021, will enable Marel to strengthen the position in the
duck market as a third pillar within poultry processing
alongside broilers and turkey, and leverage its
global sales and service network and expand into new markets. PMJ
has 40 employees and annual revenues of around EUR
5 million and their complementary product
portfolio of primary processing, including waxing and
automated evisceration, will make Marel the industry’s
only full-line provider of duck processing solutions in this
growing 4.5m tons market (estimated to be ~EUR 6bn).
The acquisition of a 40% stake in Stranda
Prolog, a Norwegian provider of salmon processing solutions, and
the launch of a strategic partnership between the two companies was
announced on 29 Jan 2021. With 100 employees and EUR 25m in annual
revenues, Stranda Prolog’s complementary product portfolio for
primary salmon processing and aquaculture solutions will bring
Marel closer to becoming a full-line provider to the global 2.5m
tons salmon industry.
Investment in innovation to maintain
Marel R&D amounted to EUR 69.1m in 2020,
equal to 5.6% of revenues. This is in line with the company’s
innovation promise of ~6% on a continuous basis to drive further
Through strong cooperation between centrally
located innovation teams, local teams in close proximity to
customers and our innovation partners, 2020 proved to be an
impressive year for innovation despite the inherent challenges due
to the pandemic. Innovation in recent years has focused on digital
and full-line offering to improve automation, yield and efficiency
as well as enabling processors to meet consumer demand for a
balanced diet, traceability and food safety. In total, more than 30
new highly innovative products were introduced to the market in
Investments to support organic and
To best serve customer needs, Marel is focusing
on increasing digitalization and agility, leading to an increased
level of investments in the coming years. More specifically, Marel
has identified opportunities to automate and digitize its
manufacturing platform and aftermarket services, to best support
our customers as they adapt to changing market conditions, as well
as shifts in demand by channel and geographies.
Continued focus on streamlining the
back-end while investing in front-end sales and service
platform. In 2021, Marel will be opening sales and service
offices, as well as demo centers in both Shanghai, China and
Campinas, Brazil, expanding the company’s ability to support
the region’s protein processing industries with advanced
automated systems and solutions.
Transforming food processing,
Marel has formally committed to the Science
Based Targets initiative (SBTi) to meet the goals of the Paris
Agreement, and set a defined path to achieve carbon neutrality well
ahead of 2050. This marks an important next step in Marel’s
sustainability journey, where innovation and high-tech solutions
can optimize the production process and reduce food waste.
To improve the disclosure of climate-related
risks and opportunities, Marel has also committed to integrating
the recommendations of the Task Force on Climate-Related Financial
Disclosure (TCFD) into its 2021 climate-risk reporting.
New ways of working have had a positive impact
on Marel's CO2 footprint, with sales and marketing, installations,
aftermarket services, and customer training moving online and
significantly reducing fly-in fly-out. Focus on maintaining
benefits from new ways of working since the pandemic.
Marel is committed to increase diversity and
inclusion within its organization, whereby the improved gender
balance in the Executive Team and Board of Directors is a recent
In 2020, Marel donated EUR 1.0 million to the
Red Cross which will use the funds to improve the food security of
the most vulnerable communities in South Sudan.
Solid level of orders received in the
quarter and for the full year
Orders received in the quarter were EUR 319.7m,
up 13.2% QoQ and 5.7% YoY. Orders received in fourth quarter
include TREIF. Orders received in FY20 were EUR
1.234.1m, on par with last year.
Orders received continue to be well balanced
between large projects, standard equipment and maintenance
The need for automation and digital solutions in
the food value chain is driven by secular trends like population
growth and urbanization. COVID-19 has been an accelerator for these
trends, placing more focus on minimizing human intervention as a
means to improve hygiene and disease, as well as traceability and
trust in the food value chain. Marel is uniquely positioned to
support the food industry with the use of robotics, increased
tracking & tracing and process control.
Marel’s competitive position remains strong with
the pipeline trending upwards, particularly in automated solutions.
Timing of conversion of pipeline to committed orders remains
Strong revenues in 4Q20 with solid
recurring aftermarket revenues
Revenues totaled EUR 343.3m in 4Q20, up by 19.5%
QoQ and 7.2% YoY, with TREIF included in 4Q20, positively
contributing to revenues and margins. Full year revenues were
1,237.8, down 3.6% YoY. Organic revenue growth -5.4% and acquired
growth +1.8% in 2020.
Full-year aftermarket revenues were 40%,
compared to 37% in 2019. Aftermarket in the quarter was
38% of total revenues (3Q20: 41%, 4Q19: 40%) due to higher
proportion of project revenues in 4Q20 than in prior quarters.
Good delivery performance during the pandemic
and growth in aftermarket revenues over the year, especially in
spare parts, compensated for lower revenues from projects in
1-3Q20. Although service was impacted by the limitation of field
service engineers to be on customers sites due to travel
restrictions, the ability to offer remote support was paramount
during this period.
The local teams with virtual and remote global
support from industry experts, have shown great solution-driven
leadership in installation and aftermarket services, reducing the
carbon footprint of fly-in fly-out.
Marel’s global reach with a local presence, with
sales and service engineers servicing customers in over 140
countries, has proven to be a key differentiating factor in
Resilient profitability in 2020
supported by lower OPEX
Gross profit margin 37.4% in the quarter (3Q20:
39.2%, 4Q19: 36.2%) and gross profit was EUR 128.5m (3Q20: 112.5m,
4Q19: 116.0m), impacted by revenue mix, lower margin on projects
due to higher cost and more complex execution associated with the
pandemic. For the full year, gross profit margin was 37.4% (FY19:
38.3%) and gross profit EUR 462.5m (FY19: 491.1m).
Operating expenses at similar levels as last two
quarters, lower costs due to travel restrictions, reduced physical
trade show activity and more focus on online solutions and
EBIT* margin was strong in fourth quarter at
15.2% (3Q20: 15.4%, 4Q19: 10.0%) and 13.5% for the full year (FY19:
To increase transparency of one-off costs
related to acquisitions and better reflect underlying business
performance, Marel has changed its adjustments of EBIT. Previously,
Marel adjusted result from operations to exclude the impact of PPA
related costs, and beginning in 2020, will exclude the impact of
PPA related costs and acquisition related expenses.
Net result was EUR 29.1m in the quarter, down
1.0% QoQ and up 185.3% YoY. For the full year, net result was EUR
102.6 (FY19: 110.1m)
Basic EPS was EUR 3.87 cents (3Q20: 3.93 cents,
4Q19: 1.34 cents), and EUR 13.62 cents for the full year (FY19:
Order book on par with last
The order book at year-end was EUR 415.7m (3Q20:
434.3m, 4Q19: 414.4m). This equals 34% of 12-month trailing
revenues and includes EUR 5.0m acquired order book from
The book-to-bill ratio in the quarter was 0.93
(3Q20: 0.98, 4Q19: 0.95), while at 1.00 for the full year (FY19:
Greenfields, such as large equipment orders, and
large projects with longer lead times constitute the vast majority
of the order book while services, spares and standard equipment
have shorter lead times and run faster through the
With its strong product portfolio of solutions,
software and services, Marel is well positioned to lead the
transformation of the food processing industry and support food
processors channel flexibility to chase consumer-ready
Strong cash flow generation in
Operational cash flow in the quarter was EUR
38.9m (4Q19: 60.2m) and EUR 217.6m (FY19: 189.8m) for the full
Free cash flow in 4Q20 was EUR 17.7m (4Q19: 44.0m)
and EUR 140.5m (FY19: 115.3m) for the full year.
Strong cash flow generation FY20 and
positive working capital development, despite strategic buildup on
Cash flow in the fourth quarter was impacted by
payment of pension liabilities, elevated investment levels,
and timing of invoicing. Partly offset by improved net contract
Marel paid EUR 107.0m for the acquisition of
TREIF, which contributed positively to operational cash flow in
Marel continues to invest in its infrastructure
and platform. Net cash used in investing activities, excluding
business combinations and investments/loans in associates, was EUR
18.4m in the quarter (4Q19: 11.5m), or EUR 51.7m (FY19: 37.5m) for
the full year equivalent.
Strong financial position with leverage
ratio below 1.0x
Marel has committed liquidity of
EUR 646.4m at year-end 2020 and fully committed funding
in place until 2025.
Leverage was 1.0x at the end of 4Q20 following
the TREIF acquisition closing in October 2020, compared to 0.5x at
end of 3Q20.
Over the year, a total of around EUR 100m in
dividends payout and share buybacks. In addition, Marel acquired
TREIF for EUR 128m and 2.9m shares in Marel (net working capital
settlement to be finalized in 1H21, purchase price allocation in
progress and provisional).
Leverage is well below the targeted capital
structure (2-3x) and coupled with Marel's strong financial
position, will support continued investment and facilitate future
strategic moves in the ongoing industry consolidation wave, in line
with the company's 2017-2026 growth strategy.
In Dec 2020, a new corporate tax law
was enacted in the Netherlands. Consequently, the reduction in
corporate tax rate from 25.0% to 21.7% as approved by Dutch
Government in 2019 will be reversed and the Dutch corporate
income tax rate will remain at 25.0%, resulting in a negative
impact of EUR 5.7m on the 4Q20 tax expense.
Resilient business model in challenging
times and a united team
Significant investments in recent years in
Marel’s global reach, digital platform and infrastructure, have
been instrumental in positioning the company to successfully
navigate a business environment colored by the pandemic,
geopolitical uncertainty, trade constraints and change in consumer
behavior already accelerated by the ongoing changes.
The pandemic continues to accelerate Marel’s
approach in providing virtual and remote support to engage and
connect with our customers.
Marel is a critical infrastructure company in
the food industry. Earlier in the year, Marel’s manufacturing sites
in close cooperation with our suppliers, diligently organized
themselves to ensure business continuity and safety for both
employees and customers.
All manufacturing sites have remained open
throughout the pandemic, although we did see increased
inefficiencies (e.g. absenteeism and logistics costs). Uncertainty
still remains for 2021 as to the impact of COVID-19 and the severe
lockdowns on efficiency of operations.
Marel’s effort in recent years, to shorten
production lead times and co-locate production, created more
resilience in the supply chain. This together with the strategic
inventory build-up allows us to be more agile, serve customers’
needs and ultimately keep the food value chain running.
Marel implemented a Global Pay Policy during
COVID-19 in April 2020, to secure minimum pay for a defined period
of time if employees could not, for one reason or the other,
conduct their work due to COVID-19.
Marel did not make use of government support or
rent discounts related to COVID-19 in 2020. If government support
was provided due to local laws, an equivalent or greater amount was
donated to charity by Marel.
Dividend proposal of 40% payout
ratio for upcoming 2021 AGM
In line with Marel’s targeted capital
allocation and dividend policy of 20-40% payout ratio,
the Board of Directors will propose a 40% payout ratio at
the 2021 Annual General Meeting, to be held on 17 March 2021
(2020: 40%, 2019: 30%).
Based on a EUR 5.45 cents dividend per
outstanding share paid for the operational year 2020, or
6% lower per share than in 2020, the estimated total dividend
payment will be around EUR 41.0m.
4Q20: 48% of total revenues with 19.7% EBIT margin FY20:
51% of total revenues with 18.3% EBIT margin
Full-line offering with one of the largest installed bases
worldwide, focusing on roll-out of innovative products and market
penetration through cross-selling of secondary and further
M&A: Following the acquisition of PMJ, Marel will expand its
third pillar within poultry processing alongside broilers and
turkey and become the industry’s only full-line provider of duck
processing solutions for this large and growing market.
Orders received for Marel Poultry were at a good level in 4Q20
and the full year. Pipeline is strong, as the need to automate
processing with track and trace capabilities is rising, although
timing of converting pipeline into orders is uncertain.
Profitability in poultry has proven the most resilient during the
pandemic due to its convenience, affordability and ability to adapt
to supply relatively quickly.
Revenues in 4Q20 for Marel Poultry were EUR 165.1m, down 1.2%
YoY. Revenues in 2020 were 635m, down 8% YoY due to drop in project
revenues while compensated somewhat by higher aftermarket
EBIT in 4Q20 was EUR 32.5m (4Q19: 23.4m) and the EBIT margin was
19.7% (4Q19: 14.0%). EBIT margin for FY20 was 18.3% (FY19:
4Q20: 37% of total revenues with 12.1% EBIT* margin
FY20: 34% of total revenues with 8.7% EBIT* margin
Full-line offering with focus on strong product development,
increased standardization, modularization and market penetration
and further cross- and upselling.
M&A: The TREIF acquisition will double standard equipment
sales for Marel Meat and enhance the full-line offering from
post-farm to dispatch of consumer-ready products.
Orders received for Marel Meat were at a good level in 4Q20.
Pipeline is building up with interesting opportunities in Europe,
Latin America and China, as customers pursue greater automation and
channel flexibility, although timing of orders remains
Revenues in 4Q20 for Marel Meat were EUR 128.0m, up by 12.1% YoY
(4Q19: 114.2m). Revenues in 2020 were down 1% due to lower project
revenues, compensated by aftermarket revenues and the TREIF
EBIT* in 4Q20 was EUR 15.5m (4Q19: 9.2m) and the EBIT* margin
was 12.1% (4Q19: 8.1%). EBIT margin for FY20 was 8.7% (FY19:
10.5%). In 4Q20, TREIF positively contributed to margins.
Management continues to target medium and long-term EBIT* margin
expansion for Marel Meat.
4Q20: 11% of total revenues with 0.0% EBIT margin FY20:
12% of total revenues with 5.4% EBIT margin
Objective to reach full-line offering across
farmed and wild whitefish and salmon through continued focus on
innovation and M&A.
M&A: Curio will be consolidated into Marel’s
financial results in 2021 and expected to positively contribute to
margins (ownership increased to 50% with option to acquire the
remaining 50% in three years). Salmon primary processing offering
solidified through the 40% acquisition of Stranda Prolog and
Orders received in 2020 were soft, as the fish
industry has experienced the biggest impact from the shift in
consumer behavior from foodservice to retail.
Together with its innovation partners like Brim
in Iceland, Marel has installed reference plants showcasing
transformative solutions that improve agility and channel
flexibility to cater to different consumer channels for bone-free,
ready-to-cook products and for restaurants.
Revenues for Marel Fish in 4Q20 were EUR 37.3m,
3.3% up YoY (4Q19: 36.1m). Revenues in 2020 were up 1.5%,
however still below the volume needed to deliver sufficient margin
EBIT in 2020 was EUR 8.1m (FY19: 6.4m) and the
EBIT margin was 5.4% (FY19: 4.3%). EBIT in the quarter was EUR 0.0m
(4Q19: -0.3m) and the EBIT margin was 0.0% (4Q19: -0.8%).
Management continues to target medium and
long-term EBIT margin expansion for Marel Fish.
Market conditions have been challenging due to
geopolitical uncertainty and the ongoing COVID-19 pandemic. Marel
enjoys a balanced exposure to global economies and local markets
through its global reach, innovative product portfolio and
diversified business mix. At the moment it is not known what the
full economic impact of COVID-19 will be on Marel.
Marel is committed to achieve its mid- and
long-term growth targets. Our strategic mid-term targets are to
achieve gross profit around 40%, SG&A of around 18% and
Innovation at the 6% strategic level by year-end
In the period 2017-2026, Marel is targeting 12%
average annual revenue growth through market penetration and
innovation, complemented by strategic partnerships and
Marel’s management expects 4-6% average annual market growth in the
long term. Marel aims to grow organically faster than the market,
driven by innovation and growing market
Maintaining solid operational performance and strong cash flow is
expected to support 5-7% revenues growth on average by
Marel’s management expects basic EPS to grow faster than
Growth is not expected to be linear but based on
opportunities and economic fluctuations. Operational results may
vary from quarter to quarter due to general economic developments,
fluctuations in orders received and timing of deliveries of larger
Virtual investor meeting and live
webcast/conference call 4 February 2021
On Thursday 4 February 2021, at 8:30 am GMT
(9:30 am CET), Marel will host a virtual investor meeting where CEO
Arni Oddur Thordarson and CFO Linda Jonsdottir will give an
overview of the financial results and operational highlights in the
fourth quarter and for the full year.
The virtual meeting will be webcast live on
www.marel.com/webcast and a recording will be available after the
meeting on marel.com/ir.
Members of the investment community can join the
conference call at:
IS: +354 800
NL: +31 10 712
UK: +44 33 3300
US: +1 833 526 8384
Upcoming virtual investor
Citi‘s 2021 Global Industrials Virtual Conference, 18 February
For the latest roadshow calendar please visit
Upcoming Marel Live virtual
Salmon ShowHow (series of events and VIP sessions) - 1 to
Prepared Foods, Low-pressure forming technology – 17
Meat, Count on us (series of events) - 9 to 26
Software KnowHow (series of events) - 20 to 22
Prepared Foods, Plant-based protein - 28 April
For the latest schedule please visit
Marel will publish its financial results according
to the below financial calendar:
- AGM – 17 March 2021
- Q1 – 28 April 2021
- Q2 – 21 July 2021
- Q3 – 20 October 2021
- Q4 – 2 February 2022
Financial results will be disclosed and published
after market closing of both Nasdaq Iceland and Euronext
For further information, please contact Marel
Investor Relations via email IR@marel.com or tel. (+354) 563
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.
Marel has around 6,800 employees in over 30 countries. In 2020,
Marel delivered EUR 1,238 million in revenues, and invests around
6% of revenues in innovation annually. By continuously transforming
food processing, Marel enables its customers to increase yield and
throughput, ensure food safety and improve sustainability in food
production. Marel was listed on Nasdaq Iceland in 1992 and
dual-listed on Euronext Amsterdam in June 2019.
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.
- Marel Q4 2020 Press Release
- Marel Consolidated Financial Statements 2020
- Marel Consolidated Financial Statements 2020 (Excel)
- Marel 2020 ESG Report
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