Outlook

Marel is targeting 12% average annual revenue growth from 2017-2026 through market penetration and innovation, complemented by strategic partnerships and acquisitions.

Marel enjoys a balanced exposure to global economies and local markets through its global reach, innovative product portfolio and diversified business mix.

Labor scarcity, inflation and rising input costs, coupled with favorable secular trends, focused on automation, robotics technology and digital solutions that support sustainable food processing, will continue to support organic growth outlook in the long term.

Marel is committed to its financial targets

Growth is not expected to be linear but based on opportunities and economic fluctuations. Operational results may vary from quarter to quarter due to general economic developments, fluctuations in orders received and timing of deliveries of larger systems.

Marel targets a run-rate of 14-16% EBIT, allowing for 2% contingency buffer due to volatility in market conditions. Other 2023 financial targets are gross profit of ~38-40%, SG&A of ~18% and innovation at the 6% strategic level.

Market conditions remain challenging resulting in elevated uncertainty. Headwinds expected to moderate in coming quarters, supported by optimization actions and general easing in supply chain and logistics, resulting in a stronger second half of the year towards the YE23 financial targets. Labor scarcity, inflation and rising input costs, coupled with favorable secular trends, focused on automation, robotics technology and digital solutions that support sustainable food processing, will continue to support organic growth outlook in the long term.

In the period 2017-2026, Marel is targeting 12% average annual revenue growth through market penetration and innovation, complemented by strategic partnerships and acquisitions.

Maintaining solid operational performance and strong cash flow is expected to support 5-7% revenue growth on average by acquisition.
Marel’s management expects average annual market growth of 4-6% in the long term. Marel aims to grow organically faster than the market, driven by innovation and growing market penetration.
Management believes that market growth will be at a level of 6-8% 2021-2026, due to catch up effect and a tailwind in the market.
Recurring aftermarket revenues to reach 50% of total revenues by YE26, including software and services.

Marel’s management expects basic EPS to grow faster than revenues.

Cash capital expenditures excluding R&D investments are expected to increase to an average of 4-5% of revenues in 2021-2026, thereafter, returning to more normalized levels.

We are committed to our year-end 2023 financial targets and 2026 growth strategy, and will continue investments in digital solutions and infrastructure initiatives that support our target to reach 50% of recurring revenues from service and software by year-end 2026.

Financial targets

Marel is targeting 12% average annual revenue growth from 2017-2026 through market penetration and innovation, complemented by strategic partnerships and acquisitions.

Revenue growth
Innovation investment
Earnings per share
Leverage
Dividend policy

Target	Description	FY22	FY21	FY20	FY19	FY18	FY17
12% average annual revenue growth in 2017- 2026¹	Maintaining solid operational performance and strong cash flow is expected to support 5-7% revenue growth on average by acquisition. Marel’s management expects average annual market growth of 4-6% in the long term. Marel aims to grow organically faster than the market, driven by innovation and growing market penetration. Management believes that market growth will be at a level of 6-8% in the medium term (2021-2026), due to catch up effect from the past five years and a tailwind in the market. Recurring revenues to reach 50% of total revenues by YE26, including software, services and spares.	25.6%	9.9%	-3.6%	7.2%	15.4%	7.1%

Target

Description

FY22

FY21

FY20

FY19

FY18

FY17

12% average
annual revenue
growth in 2017-
2026¹

Maintaining solid operational performance and strong cash flow is expected to support 5-7% revenue growth on average by acquisition.

Marel’s management expects average annual market growth of 4-6% in the long term. Marel aims to grow organically faster than the market, driven by innovation and growing market penetration.

Management believes that market growth will be at a level of 6-8% in the medium term (2021-2026), due to catch up effect from the past five years and a tailwind in the market.

Recurring revenues to reach 50% of total revenues by YE26, including software, services and spares.

25.6%

9.9%

-3.6%

7.2%

15.4%

7.1%

¹Growth is not expected to be linear but based on opportunities and economic fluctuations. Operational results may vary from quarter to quarter due to general economic developments, fluctuations in orders received and timing of deliveries of larger systems.

Target	Description	FY22	FY21	FY20	FY19	FY18	FY17
~6% of revenues	To support new product development and ensure continued competitiveness of existing product offering.	5.7%	5.9%	5.6%	6.4%	6.2%	5.6%

Target	Description	FY22	FY21	FY20	FY19	FY18	FY17
EPS to grow faster than revenues	Marel’s management expects Earnings per share to grow faster than revenues	7.78 eurocents	12.9 eurocents	13.6 eurocents	15.3 eurocents	17.95 eurocents	13.70 eurocents

Target	Description	FY22	FY21	FY20	FY19	FY18	FY17
Net debt/ EBITDA x2-3	The leverage ratio is estimated to be in line with the targeted capital structure of the company.	x3.6	x1.0	x1.0	x0.4	x2.0	x1.9

Target	Description	FY22	FY21	FY20	FY19	FY18	FY17
20-40% of net profit	Dividend or share buyback targeted at 20-40% of net profits. Excess capital used to stimulate growth and value creation, as well as payment of dividends / funding share buybacks.	20%*	40%	40%	40%	30%	30%

* In line with Marel’s dividend policy of 20-40% payout ratio, the Board of Directors will propose a 20% payout ratio at the 2023 Annual General Meeting, to be held on 22 March 2023.

Outlook

Marel is committed to its financial targets

Financial targets

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