Annual report 2014
Population growth — combined with urbanization and rising incomes — is expected to result in a more than 50% increase in food demand by 2030. The challenge of fulfilling rising consumption demands in an environmentally, economically and socially sustainable way – providing safe and healthy food for all – is what drives us at Marel to constantly seek new ways of doing more with less.
Innovation is the cornerstone of our strategy. It is in our DNA; it is our heartbeat. We partner with our customers to continuously create new methods for improving yields and minimizing waste in food production, reducing the use of scarce resources such as energy and water and improving the handling of raw materials.
Together, we contribute to making quality food more affordable and safe while protecting the environment.
Further modernization of food production is essential to enable feeding a global population of 9 billion people by 2050. This creates a wealth of opportunities for both Marel and our customers.
During the past year, I had the privilege of meeting many of our employees and customers.
It has been extremely rewarding to experience first hand the real meaning of innovation through partnership. I have seen our employees’ relentless dedication to creating value for our customers. And I have witnessed our customers’ trust and commitment to Marel.
Joining forces is a necessary route to success in today’s interconnected world. This also applies to our own organization.
We have opportunities to create value by further fostering partnership within our own ranks. Increased collaboration, transferring technologies across segments, breaking barriers and sharing best practices will enrich our culture and strengthen our competitive position. The broadening of Marel’s executive management team at the end of 2013 was an important step in this direction.
At the beginning of 2014, we launched the Simpler, Smarter, Faster refocusing program with the aim of building a stronger Marel. We are now halfway through the program and have taken important steps in simplifying our structure and driving down fixed costs while at the same time improving service and customer value. We had to make some tough decisions involving our employees when combining units and addressing underperforming businesses, but these were necessary in order to create a stronger foundation for sustainable growth.
We gained momentum throughout the year and ended by delivering two consecutive quarters with record revenues and orders received, while also investing and building for long-term success and value creation. Our net results for 2014 are colored by significant investments in refocusing actions but our cash flow remained strong and the balance sheet healthy. At the end of the year, we increased and extended the maturity of our loan facilities to support both operational and strategic flexibility, enabling eventual bolt-on acquisitions to close strategic gaps.
The Board of Directors has proposed to the Annual General Meeting that a dividend payment of €3.5 million, corresponding to 30% of net profits, is paid to shareholders. This is in line with Marel’s targeted capital allocation and dividend policy.
We are fully committed to improving our earnings. Solid economic performance creates value for all our stakeholders. It allows us to serve our customers better, provide employment opportunities, provide satisfactory returns to our shareholders and pursue an active role in our communities. As we enter the second year of the Simpler, Smarter, Faster program we will continue streamlining our operations, while focusing on innovation and investing in our business for the future. We expect organic revenue growth in 2015, with a solid increase in both operational and net profit. Our aim continues to be achieving profit from operations of over €100 million in 2017.
The Board of Directors of Marel is committed to good corporate governance and ethical business practices, which promote the long-term interest of shareholders and helps build trust in the company. Our code of conduct puts integrity and values at the core of all our activities and decisions.
We emphasize communication of honest, consistent and transparent information to our shareholders, financial partners and other stakeholders with the aim of establishing trust and understanding.
On behalf of the Board of Directors of Marel, I would like to give my sincere thanks to our employees for their commitment, dedication and hard work and to our shareholders for their trust and continuing support. We are also grateful to our customers, who buy and use our solutions as well as help drive our innovation.
We are optimistic for the future. With our strong team, innovative products and global presence we are in a great position to secure future growth and value creation.