Marel hf. - Financial Statement Release

Marel Q2 2010 results

Strong order intake and good operating results

- Revenues for Q2 2010 totalled 136.1 mln, an increase of 26.9% compared to
revenues from core business in the same period the year before [Q2 2009: 107.2
mln]. The increase is 3.1% compared to the consolidated figures [Q2 2009: 132.0
mln]. 
- Normalized EBITDA was 21.1 mln, or 15.5% of sales [Q2 2009: 12.1 mln from
core business]. Consolidated EBITDA was 13.6 mln, or 10% of sales [Q2 2009:
28.0 mln]. 
- Normalized operating profit (EBIT) was 15.1 mln, or 11.1% of sales [Q2 2009:
6.5 mln from core business]. Consolidated EBIT was 7.6 mln, or 5.6% of sales
[Q2 2009: 21.6 mln]. 
- One-off costs associated with a recovery plan for the Stork Pension Fund,
amounting to 7.6 mln, are included in the consolidated income statement for Q2
2010. 
- Consolidated net result was 0.1 mln for Q2 2010 [Q2 2009: 17.3 mln]. 
- Operational cash flow remains strong and net interest bearing debt is 284.1
mln at the end of Q2 2010 [Q2 2009: 349.4 mln]. 
- The order book continues to grow as a result of improved market conditions
and was 125.3 mln at the end of the quarter [Q2 2009: 76.1 mln]. 

It was another good quarter for Marel. Revenues from core business totalled
136.1 mln, an increase of 5.6% compared to the previous quarter and 26.9%
compared to Q2 2009. For the second quarter in a row, the company delivered on
its long-term target of a 10-12% return on revenues. It is expected that the Q3
results will be marked by the summer holiday period, when business activity is
traditionally at a lower level. However, Marel fully expects to reach its
target of 10-12% return on revenues for the year as a whole. 

Highlights for the first six months of 2010
- Revenues from core business totalled 264.9 mln for the first half of the year
[1H 2009: 210.4 mln]. Consolidated revenues totalled 283.2 mln [1H 2009: 262.3
mln]. 
- Operating profit (EBIT) from core business totalled 30.3 mln for the first
half of the year [1H 2009: 4.8 mln]. Consolidated EBIT was 23.5 mln [1H 2009:
15.8 mln]. 
- Consolidated net result was 5.7 mln for the first half of the year [1H 2009:
10.4 mln]. 

Theo Hoen, CEO:
“We are very pleased to have achieved our long-term Return on Sales (ROS)
target of 10-12% for the second quarter in a row, thanks to our strict focus on
cost control and our strong position in a recovering and growing market. We
believe that this level of performance is sustainable and can serve as the
baseline for further growth moving forward. Our challenge now is to reinforce
the company's position as market leader and, at the same time, to increase
profitability. The underlying demand in the food industry is rising and
automation is increasing at a robust rate in developing countries such as
China. What's more, we are benefitting from our strategy of having sustained
our level of investment in innovation throughout the crisis. 

Our product development pipeline shows a healthy number of new projects in
progress and I am proud of the success we have had with our latest innovations,
including the StreamLine, RevoPortioner and the SensorX. The performance of the
SensorX team especially, is an excellent example of the teamwork we have in our
product centers. Furthermore, new integrated solutions that combine the
technologies of the different business units in our group are clearly creating
more value for our customers and contributing nicely to our Q2 results. I feel
that we are well on our way to creating a healthy and sustainable company that
will play a major role in the protein industry for many years to come.” 

Order book at a good level
Market activity continues to increase across the board, with the poultry
segment leading the way. Accordingly, the order book has continued to grow and
is at a good level. The number of larger orders continues to gradually
increase. Orders received, including service revenues, amounted to 149.4 mln in
Q2 2010, compared  to 126.8 mln for the same period the year before. This was
the sixth quarter in a row that orders received exceeded orders booked off,
leading to a continuing increase in the equipment order book, which stood at
125.3 mln at the end of Q2 2010, compared to 76.1 mln at the same time the year
before. 

Healthy cash flow and reduced debt
Operating cash flow remains healthy at 19.0 mln before interest and tax. The
balance sheet is strong and net debts amount to 284.1 mln compared with 349.4
mln a year ago. The net debt was slightly reduced in the quarter despite
unfavourable currency effects, payment of a recovery premium for the Stork
Pension Fund and the fact that the business is growing. 

Outlook
Market conditions continue to gradually improve. We expect that Marel will
claim its fair share of growth in the market, resulting in an increase in
revenues. Nevertheless, results may vary from quarter to quarter due to
fluctuations in orders received and deliveries for larger systems. 

NOTE: For the full press release please open the attached Press Release
document. 


Presentation of results, 29 July 2010

Marel will present its results at a meeting on Thursday, 29 July, at 8:30 a.m.,
at the company‘s headquarters at Austurhraun 9, Gardabaer, Iceland. 
The meeting will also be webcast: www.marel.com/webcast

Publication days of the Consolidated Financial Statements in 2010 and the
Annual General Meeting 2011 

Publication dates of the Financial Statements for 2010:
- 3rd quarter 2010					27 October 2010
- 4th quarter 2010					2 February 2011

Annual General Meeting of Marel hf.			2 March 2011

For further information, contact: 
Erik Kaman, CFO Tel: (+354) 563-8072 
Sigsteinn Grétarsson, Managing Director of Marel ehf. Tel: (+354) 563-8072 


About Marel 
Marel is the leading global provider of advanced equipment, systems and
services to the fish, meat and poultry industries. With offices and
subsidiaries in over 30 countries and a global network of more than 100 agents
and distributors, we work side-by-side with our customers to extend the
boundaries of food processing performance. Advance with Marel for all your
processing needs.

Attachments:

financial statements q2 2010.pdf

press release-q2 2010.pdf