Marel (MAREL) Q3 2024 earnings summary

Executive summary

• Orders received rose to EUR 403 million, up 2.3% sequentially and 3% year-over-year, driven by strong poultry project demand, especially in Europe.

• Revenues declined to EUR 387 million in Q3, down 6.8% from Q2 and 4.1% year-over-year, with nine-month revenues at EUR 1,214.7 million, down from EUR 1,273.4 million year-over-year.

• Profitability improved with EBITDA margin at 13.8% and EBIT margin at 9.4% in Q3, supported by cost discipline and workforce reduction.

• Operating cash flow turned positive at EUR 57 million for Q3, with year-to-date operating cash flow at EUR 79 million and free cash flow at EUR 41.4 million.

• JBT's takeover offer is progressing, with over 99% shareholder approval, regulatory reviews underway, and transaction closing targeted by January 3, 2025.

Financial highlights

• Gross profit margin reached 36.6% in Q3, aided by a higher aftermarket mix and efficiency gains; nine-month gross profit was EUR 441.3 million.

• OPEX was EUR 106 million in Q3, lower than Q2, with OPEX as a percentage of revenues at 27.3%.

• Order book increased to EUR 554 million, representing 33.3% of trailing 12-month revenues.

• CapEx (excluding R&D) was EUR 5 million in Q3, or 1.2% of revenues, below normalized levels; nine-month CapEx was EUR 47.5 million.

• Leverage covenant improved to 3.75, with ample liquidity and headroom; net interest-bearing debt at EUR 819.2 million.

Outlook and guidance

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

• Expectation to finish at the low end of guidance range due to ongoing market challenges.

• Midterm outlook remains positive, with long-term growth prospects driven by protein consumption, automation, and digital solutions; long-term market growth assumed at 4-6% annually.

• Orders received expected to trend upwards, with poultry remaining strong and other segments showing signs of improvement.