Marel hf. - Financial Statement Release

Marel Q3 2012 results

Slower growth with improving profit margins

(All amounts in EUR)

  -- R
evenues for Q3 2012 totalled 164.3 million, a decrease of 2.8% 
compared to the third quarter of 2011 [169.1 million]. 
R
evenues YTD are up by 10.6% compared with 9 months 2011.
  -- EBITDA was 20.5 million or 12.5% of revenues [Q3 2011: 25.8 million].
  -- Operating profit (EBIT) was 14.1 million or 8.6% 
of revenues in Q3 2012 [Q3 2011: 19.5 million].
  -- Net result for Q3 2012 was 8.4 million [Q3 2011: 10.5 million]. Basic
     earnings per share in Q3 were 1.15 euro cents [Q3 2011: 1.42 euro cents].
  -- Cash flow from operating activities was 13.7 million and net
     interest-bearing debt was 261.1 million at the end of the quarter.
  -- The order book amounted to 151 million at the end of the quarter compared
     to 196.8[1] million at the end of Q3 2011.

Revenues for the first nine months of 2012 show growth of 10.6% compared to
same period last year. The operating profit (EBIT) YTD is 8.9% which is below
the Company's target (10-12%) for the full year. 

Marel expects the revenues growth for the year 2012 to be around 5-6% with
revised EBIT margin of around 9%. 



Theo Hoen, CEO:

“The market in 2012 has been challenging with results in last two quarters
below our target. Despite this I feel we are doing well. We have achieved
strong growth this year with operating profits close to 9% and expect to meet
our EBIT target of 10-12% soon again. We believe that demand is building up and
we have many promising projects underway which we expect will turn into orders
in the near future. 

With our strong global sales and service network we are uniquely positioned to
deliver our innovative products. The efforts of our people to create a market
driven organisation are showing results. Our fish segment is doing very well
and the outlook for our meat segment is improving. All in all, we are well on
track realising our growth agenda and I´m optimistic for the coming years.” 



Revenues are expected to reach 700 million in 2012

Revenues totalled 535.6 million for the 9-month period ending 30 September
which is an increase of 10.6% compared to the previous year. Marel has grown
rapidly in the last few years. The third quarter reflects a slower pace in the
world's economy resulting in uncertainty which has caused delays in investment. 

Marel has emphasised fluctuations between quarters. For the moment the
uncertain market conditions are reflected in the Company's operations. However,
the revenue split in the third quarter is geographically well balanced with
large projects coming in from Canada, Saudi Arabia and Russia. As discussed
further below under “Markets”, the near- and long-term outlook remains good
with steady growth projected in the protein industry. Therefore, Marel
maintains its goal for EUR 1 billion turnover in 2015. 



Expected EBIT margin of around 9% for the full year 2012

  -- Operating profit (EBIT) was 47.4 million for the first nine months of the
     year, or 8.9% of revenues, compared to 51.5 million normalised
[2]
 for the same period of last year.
  -- The EBIT margin is expected to be around 9% for the full year.

Operating profit has improved since last quarter and is up to 8.6% from 6.5% in
Q2 while falling below the Company's target. The main reasons are similar to
last quarter; there were some extra costs of realising projects and the product
mix was rather unfavourable due to market conditions. There was less demand for
standalone equipment whereas larger projects have lower margins. However,
larger projects create future demand for standard products and services. 



Order book at acceptable level

Orders received during the third quarter are at the lower end of what Marel has
seen in the recent past, amounting to 133 million. The timing of large orders
received always impacts the level of the order book which now amounts to 151.4
million. Marel's customers are faced with difficult economic conditions coupled
with higher feed prices, which has caused delays in investment decisions both
in larger projects and standalone equipment as well as in spare parts and
services. The manufacturing load is at acceptable level. The company's position
in the market is strong and the near to long-term outlook for orders received
is positive as the protein industry is expected to grow steadily in the coming
year 



Presentation of results, 25 October 2012

Marel will present its results at an investor meeting on Thursday, 25 October,
at 8:30 am (GMT), at the Company's headquarters at Austurhraun 9, Gardabaer.
The meeting will also be webcast at www.marel.com/webcast. 



See complete announcement in enclosed pdf file.



[1]This is a restated figure for Q3 2011 of EUR (7.3) million, in accordance
with the Q2 presentation which disclosed that the order book was restated
following the new set-up of the organisation. 

[2]Taking into account the one-off cost related to pension funding amounting to
11.1 million.

Attachments:

Announcement_Q3_2012 results.pdf

Marel hf - Financial Statements Q3 2012.pdf