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2009-08-06 18:19:50 CEST 2009-08-06 18:20:51 CEST REGULATED INFORMATION Marel Food Systems hf. - Financial Statement ReleaseMarel Food Systems hf. Q2 2009 Financial resultsStrong cash flow; reduced costs contribute to improved results - Consolidated revenues for Q2 2009 amounted to EUR 132.0 mln (Q2 2008: EUR 145.0 mln). - Revenues from core business for Q2 2009 totalled EUR 107.2 mln compared to EUR 103.2 mln in Q1 2009 (Q2 2008 pro forma: EUR 143.2 mln). - Consolidated EBITDA was EUR 28.0 million in Q2 2009 (Q2 2008: 16.4 mln). EBITDA from core businesses excluding one off items was EUR 12.2 mln (Q2 2008: EUR 19.9 mln). - Consolidated operating profit (EBIT) was EUR 21.6 mln in Q2 2009 (Q2 2008: EUR 11.1 mln). EBIT from core business excluding one off items was EUR 6.5 mln (Q2 2008: EUR 15.1 mln). - Profit after tax was EUR 17.3 mln for Q2 2009 (Q2 2008: EUR 10.1 mln). - Net interest bearing debt was reduced to EUR 349.4 mln due to strong operational cash flow, limited capital expenditure, sale of non-core assets and an equity increase. The average maturity of debt is four years. Highlights of the first six months of 2009 - Consolidated revenues for the first six months of the year totalled EUR 262.3 mln (1H 2008: EUR 219.0 mln). - Revenues from core business for the first six months of the year totalled EUR 210.4 mln (1H 2008: EUR 283.7 mln). Consolidated EBITDA for the period was EUR 28.8 million (1H 2008: EUR 21.4 mln). EBITDA from core businesses excluding one off items was EUR 14.6 mln EUR (1H 2008: EUR 38.3 mln). - Consolidated operating profit (EBIT) was EUR 15.8 mln for the first half of the year (1H 2008: EUR 13.3 mln). EBIT from core business excluding one off items was EUR 3.3 mln (1H 2008: EUR 28.5 mln EUR). Theo Hoen, CEO: “We are pleased with our improved operating results for the quarter. We have increased our cash flow, improved our financing structure and closed several large orders with our customers. The orders received from our core business increased for the second quarter in a row and we expect them to continue to grow, though figures may vary from quarter to quarter due to the influence of large projects. At the operational level, we are now profitable and operating in a more stable financial environment after a successful refinancing of short term debts. We will continue to focus on reducing costs to support our operating results. Our view of the long-term prospects of the market and the strong underlying growth in the industry remains unchanged. We are aiming for a growth rate of at least two percent above the prevailing market rate. We are confident that we will emerge from the crisis stronger than before after having sharpened the strategic focus of the company and implemented a series of rationalisation measures that have driven our cost base down to sustainable lower levels. Protein consumption continues to grow and our customers are profitable. They rely on us to develop the equipment and systems that enable them to capture the growth in the most profitable way possible.” Prospects Marel's key markets are gradually improving. • Order intake has increased by 17% between quarters and several large orders have been closed. However, the volume of activity is not yet back at 2008 level. Order intake leads to revenues in 2-6 months. • The increase reflects Marel's strong position as market leader and favourable prevailing consumer trends. Increased activity in all industry segments. • The fish industry is picking up with processors looking to invest in new plants and new technologies. • The poultry industry shows the strongest signs of recovery and order intake is expected to increase. • In fresh meat, the first signs of improvement are emerging in many markets with interest in advanced meat processing systems growing. • Added value processors have benefitted the most from changes in consumer behaviour. Markets There are indications of slow but gradual improvements in Marel's key markets. The order intake from Marel's core business continues to improve, with a 17% increase between quarters. In general terms, the markets in Europe and North America appear to be improving although the speed of recovery varies from country to country. Still, global financial and market conditions continue to take their toll on the company's operations, especially the sale of larger systems and installations, which under normal circumstances account for approximately one-third of the company's revenues. On the positive side, most of Marel's customers are profitable and doing well. We are confident that an accumulated need for investment will have built up once market conditions improve further. The improvement in Marel's order intake between quarters reflects Marel's strong position as an industry leader, as well as the favourable prevailing trends in consumer behaviour. Consumers are eating out less at mid- and high-priced restaurants and choosing instead to go to fast food outlets or purchase low-cost ready-made meals at discount supermarkets. Food service companies and retailers active in these segments are profiting and so are our customers, the food processors who supply these outlets with products. They are continuing to operate their processing lines at normal levels. For Marel, the result has been that the economic slowdown has had no impact on the sale of spare parts and services, which normally accounts for roughly one-third of revenues. Moreover, the impact on the sale of smaller systems and standard equipment, which normally accounts for another third of revenues, has been limited. The food industry Developments in the first half of the year show that the downturn of the global economy and the resulting changes in consumer eating habits have created opportunities for the food processing industry. With its strong integrated brands and comprehensive range of innovative products and solutions, Marel is ideally positioned to exploit these opportunities and to meet its customers' needs. The company's focus on innovation remains unchanged, with 5-6% of revenues invested in new product development, the highest ratio in the industry. - Fish: In Q2, the markets began picking up again after a slow start in Q1. Customers in both the salmon and whitefish industries are investing in new plants, as well as new technologies to improve the productivity of existing plants. Salmon processors, for example, are increasingly drawn to complex robotic systems, such as intelligent trimming of salmon fillets. While the Chilean salmon market is down, other key markets like Norway and the United States are doing well and salmon prices are high. In Norway, there has been an increase in investment in the fish industry over the past 12 months, with major contracts having been concluded in Q2 in both the salmon and whitefish industries. - Poultry: The poultry industry shows the strongest signs of recovery of all the protein segments of the food processing industry. Processors are profiting from the fact that the financial crisis has caused the consumption of the less expensive proteins like poultry to increase. As a result, Marel has seen an increase in turnover from poultry processing equipment and systems, with several large-scale projects having been concluded in Q2 with processors in Europe and South America. Activity is also picking up in the Eastern hemisphere, with notable successes recently in China. - Meat: Overall, the global fresh meat market is still not performing as well as other industry segments. Although corn and oil prices have dropped considerably after having reached record highs in the summer of 2008, they are still high for meat producers - particularly since beef and pork have muchhigher feed conversion ratios than poultry and fish. Nevertheless, the first signs of improvement are emerging in many markets, including Europe, the U.S. and Australia. Attitudes are beginning to change as a result of the concerted marketing efforts undertaken in recent months and years, and interest in advanced meat processing systems is growing in all sub-segments of the industry, i.e. beef, pork and lamb. Sales are expected to continue to increase with growing customer awareness of the benefits of the latest processing systems in the form of increased yield, productivity and traceability. - Further processing: Added value processors have benefitted most from the rise in popularity of fast food and the current ‘eat at home' trend and processors have continued to invest in Marel's RevoPortioners, bacon slicers and QX system. A significant percentage of bacon is sold to the food service industry pre-cooked, with companies such as McDonald's and Burger King being major users. Marel's newly developed pre-cook bacon slicer has already found eager customers and this sector of the market is expected to make a significant contribution to our slicer business. - Customer focus - Salm Partners, LLC: Marel's commitment to pushing the envelope in the development of new technologies continues to help food processors of all sizes, in all markets, to operate at peak productivity and to enhance the overall quality and value of their products. U.S.-based company Salm Partners, which operates in the further processing segment of the market, is one such company. The company recently invested in their third QX Coextrusion System from Townsend for their Denmark, Wisconsin, business. The system will be installed in early 2010. With QX, a unique technology for making sausages, reducing the cost price of the sausage by at least 10%. Following the acquisition of their first two lines, Salm Partners became a major producer of “cooked in package” sausages in the U.S., with distributions in all markets across the country. “Our company is based upon working with our business partners to bring new technologies into the market,” says Chris Salm. “Because we have a strong belief in the consumer benefits of the QX technology, we have built our business on it.” Outlook Despite the effects of the challenging market conditions on the sale of our larger systems in particular, we expect to be able to maintain strong cash flow throughout the year. Sales are expected to increase slightly in the second half of the year as market conditions continue to improve. As a result, operating results are also expected to improve. Marel Food Systems will continue to support this trend with an unrelenting focus on cost control, which has had a significant effect on the operating results in Q2. Presentation of results, 7 August 2009 Marel Food Systems will present its results at a meeting on Friday, 7 August 2009, at 8:30 a.m., at the company‘s headquarters at Austurhraun 9, Gardabaer. Publication days of the Consolidated Financial Statements in 2009 and the Annual General Meeting 2010 3rd quarter - 3 November 2009 4th quarter - 4 February 2010 Annual General Meeting of Marel Food Systems hf - 3 March 2010 For further information, contact: Erik Kaman, CFO Tel: (+354) 563-8072 Sigsteinn Grétarsson, Managing Director of Marel ehf. Tel: (+354) 563-8072 |
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