Marel (MAREL) Q2 2024 earnings summary

Executive summary

• Q2 2024 EBIT margin reached 9.1%, improving both sequentially and year-over-year, driven by cost discipline and operational efficiency.

• Revenue for Q2 2024 was EUR 415m, down 1.7% YoY; H1 2024 revenue was EUR 827.8m, down from EUR 869.8m YoY.

• Order intake was soft at EUR 393m, with a book-to-bill ratio of 0.95 and order book at EUR 538.5m (32% of TTM revenue).

• The environment remains challenging due to geopolitical tensions, inflation, and high interest rates, but customer sentiment and market fundamentals are improving.

• Board recommends acceptance of JBT's voluntary takeover offer, with transaction expected to close by year-end 2024, pending regulatory and shareholder approvals.

Financial highlights

• Adjusted EBIT was EUR 38m (9.1% margin) in Q2; H1 adjusted EBIT was EUR 70.5m (8.5% margin).

• Gross profit margin improved to 36.9% (EUR 153m) in Q2; H1 gross profit was EUR 301.1m.

• Free cash flow was negative EUR 22.0m in Q2; net cash from operating activities was negative EUR 19.8m in H1.

• CapEx was EUR 5.6m (1.3% of revenue) in Q2; H1 CapEx was EUR 29.1m, down from EUR 60.5m YoY.

• Leverage increased to 3.9x, with net interest-bearing debt at EUR 854.1m at June 2024.

Outlook and guidance

• Orders are expected to pick up in H2, especially in poultry, with book-to-bill anticipated above 1.

• Full-year 2024 guidance: low single-digit revenue decline, EBIT margin of 9–10%, and EBITDA margin of 13–14%.

• Q3 expected to be weaker for poultry, with recovery in Q4 and into 2025.

• Mid-term targets: above-market revenue growth, EBIT margin 14%+, EBITDA margin 18%+.

• Long-term market growth expected at 4–6% annually.