In partnership with our customers, we are transforming the way food is processed.
Our vision is of a world where food is produced sustainably and affordably.
Marel is the leading global provider of advanced equipment, systems and services to the poultry, fish, meat, and further processing industries.
Marel operates in a dynamic growth market that is driven by a steady increase in the number of active consumers worldwide, urbanization and a change in dietary habits. Poultry, meat and fish consumption has been increasing by 2-3% annually for the past two decades and is expected to continue at a similar pace for the next 20 years.
Food processors worldwide are asking for increased yield and more valuable products while consumers demand safe and affordable food. This results in more focus on efficiency by using less water, energy and other resources. Processors are constantly automating and advancing their operations, leading to 4-6% annual growth in the market in which Marel is the leader — providing advanced equipment and innovative solutions for the animal protein processing industries. Marel’s aim is to continue to grow faster than the market by leveraging its market presence and with continuous investments in innovation
The two-year Simpler, Smarter, Faster refocusing program was successfully completed in 2015, and has resulted in increased sales and net profits, improved operational efficiency, and strong cash flow. The focus will now shift towards a full potential program with the aim of achieving further operational improvements, continuous innovation and focused investments to improve the business and support future growth and value creation.
During the two-year refocusing program Marel streamlined the general business, refocused its product portfolio, optimized its manufacturing footprint and invested in further growth through innovation and advanced business tools. During the program, Marel’s manufacturing footprint was reduced from 19 to 9 locations and employees were reduced by 200, while at the same time revenue increased.
Taking into account the proceeds from sales of operations, the total cash-out cost of the refocusing program from start to finish is estimated at €16 million, with €35 million P/L effect for the same period. Further streamlining of operations will take place in 2016, such as the streamlining of the operations in Seattle, U.S. along with Marel’s further processing activities, where the focus is on supporting poultry, meat and fish customers in further value creation.
Marel announced the closing of its acquisition of MPS meat processing systems on January 29, 2016. The purchase price is approximately €382 million on a debt and cash-free basis. Agreement of the acquisition was announced on November 21, 2015 and the closing was subject to anti-trust approvals that were obtained without reservation in January 2016.
United, the two companies will be at the forefront in developing full-line solutions and equipment for the meat processing industry. They have a good strategic and cultural fit with a highly complementary product portfolio and geographic presence, creating a strong platform to enhance further growth.
MPS is a leader in primary processing solutions for the pork and beef industry, as well as in innovative solutions in water treatment and food logistics. They have shown solid growth and profitability in recent periods as well as having one of the largest installed bases in the industry, along with a large global base of customers.
The MPS acquisition enhances Marel’s position as a leading global provider of advanced systems and solutions to the poultry, meat and fish industries and is fully in line with the company’s previously announced growth strategy. This step will contribute to a more balanced revenue split between industry segments and geographies. On a pro-forma basis, Marel Meat will now contribute close to 30% of Marel’s revenue and EBITDA.
Preliminary MPS results for 2015 show revenue of €158 million and EBITDA of €41 million. MPS accounts are based on Dutch GAAP and will be transferred to IFRS in 2016. The results of 2016 will be affected by purchase price allocation, which involves allocating the purchase price to various balance sheet items, including intangible assets. Orders received at MPS were strong and amounted to €190 million, resulting in an order book of close to €140 million at the end of the year.
Pro forma revenue in 2015 for the combined Marel and MPS is €977 million with estimated adjusted EBIT of €133 million. The combined order book is estimated about €320 million at the beginning of 2016, compared with around €280 million at the beginning of 2015.
* Based on audited Marel numbers and preliminary unaudited MPS numbers (based on Dutch GAAP)