Marel — Earnings Release 2016

Oct 26, 2016

Marel Q3 2016-Solid performance with 14.2% EBIT

Marel Q3 2016-Solid performance with 14.2% EBIT

Marel Q3 2016 Results
(All amounts in EUR)

Solid performance with 14.2% EBIT

--  Revenue for Q3 2016 totaled 234.8m [Q3 2015: 189.1m]. On a pro forma
basis, revenue in Q3 2015 was 229.7m.
--  EBITDA for Q3 2016 was 41.5m or 17.7% of revenue [Q3 2015: Adj. EBITDA**
31.6m or 16.7% of reve-nue]. Pro forma adj. EBITDA** Q3 2015 was 41.5m or
18.0% of revenue.
--  EBIT* for Q3 2016 was 33.4m or 14.2% of revenue [Q3 2015: Adj. EBIT**
24.2m or 12.8% of revenue]. Pro forma adj. EBIT** in Q3 2015 was 31.6m
or 13.8% of revenue.
--  Net result for Q3 2016 was 17.3m [Q3 2015: 14.7m]. Basic earnings per
share were 2.42 euro cents in Q3 2016 [Q3 2015: 2.07 euro cents].
--  Cash flow from operating activities before interest and tax in Q3 2016
was 33.2m [Q3 2015: 29.7m]. Net debt/EBITDA is 2.6x at the end of Q3 2016.
--  The order book was at 305.1m at the end of Q3 2016 compared with 306.5m
at the end of Q2 2016 [Q3 2015: 187.7m]. On a pro forma basis the order
book at end of Q3 2015 was 303.6m.

Marel continues on a good track and reports solid performance in Q3 2016.
Revenue for Q3 2016 is 235 mil-lion with 14.2% EBIT*. Cash flow remains strong
resulting in a net debt/EBITDA of 2.6x.

Order intake in Q3 2016 was 233 million and year to date 718 million on a pro
forma basis. Order intake of standard equipment and spare parts was strong
across all industries. Greenfields and large projects were strong in poultry in
the first 9 months while volume of larger projects was soft in meat and fish.
Meat began to pick up in Q3 with a unified sales team securing full line
projects in Europe and China. In the beginning of Q4, fish secured a landmark
greenfield project in Norway.

Pro forma revenue for the first 9 months of 2016 was 733 million and EBIT* was
108.4 million or 14.8%. Marel expects modest organic revenue growth and
increase in EBIT* between years.

Arni Oddur Thordarson, CEO:
“We are pleased with our Q3 2016 results. The team is focused and committed and
is delivering robust opera-tional results with close to 15% EBIT* year to date.
We continue to introduce steady stream of innovative cus-tomer solutions and to
invest in the business to support future profitable growth.

In general the demand for larger projects is promising while timing of closure
of such transactions is hard to predict due to general economic circumstances.

Integration with MPS is on track. We have unified and cross-trained our sales
team in meat. This great team has now secured full line projects in various
geographical areas. It is clear that we are stronger together in serving our
customers’ needs”.

Markets
Marel is the leading global provider of advanced processing systems and
services to the poultry, meat and fish industries. Marel has a commercially
strong product portfolio stemming from its continuous focus on innovation and
strategic acquisitions.

Revenue year to date on a pro forma basis was 733 million. Order intake in Q3
2016 was 233 million and year to date on a pro forma basis 718 million. Order
intake of standard equipment and spare parts was strong across all industries.
Greenfields and large projects were strong in poultry in the first nine months
while volume of larger projects was soft in meat and fish. Meat began to pick
up in Q3 with a unified sales team securing full line projects in Europe and
China. In the beginning of Q4, fish secured a landmark greenfield project in
Norway.

Revenue and order intake from discontinued operations are close to 20 million
lower in 2016 than in 2015.

Marel Poultry
Year to date order intake, revenue and profitability is strong in poultry.
Compared with the strong beginning of the year and exceptionally strong Q3 2015
order intake was slightly lower in Q3 2016. Key projects were secured in
North-America and Europe during Q3.

During the first 9 months of 2016 Marel Poultry generated 393 million in
revenue and EBIT of 68.1 million (17.3% of revenue). Marel Poultry accounted
for 54% of Marel’s pro forma revenue in the first 9 months of 2016.

Marel Fish
Marel Fish generated 91 million in revenue and EBIT of 3.3 million (3.6% of
revenue) in the first 9 months of 2016. Marel Fish accounted for 12% of Marel’s
pro forma revenue in the first 9 months of 2016. Market condi-tions in the fish
industry have been soft throughout the year. In October, Marel Fish secured a
large greenfield project in the salmon industry in Norway.

Marel has been focusing its business and product portfolio shifting the focus
from low-end customized solu-tions to high tech innovative salmon solutions and
white fish solutions for both onshore and onboard.

Marel Meat
Marel Meat generated 243 million on a pro forma basis in revenue and EBIT* of
35.0 million (14.4% of reve-nue) in the first 9 months of 2016. Marel Meat
accounted for 33% of Marel’s pro forma revenue in the first 9 months of 2016.
Order intake and volume is at a good level. Q3 was a good quarter for Marel
Meat especially in primary processing which saw good order intake and volume.

Integration of Marel and MPS is on track and going well. During Q3, a unified
sales team secured full line pro-jects in both China and Europe. As well in Q3,
joined teams participated together at exhibitions in Brazil, China and Russia
with good results.

Financial items

Cash flow and investments
Marel returned a strong cash flow from operations with operational cash flow
before interest and tax being 33.2 million for Q3 2016 compared with 29.7
million in Q3 2015.

Marel continues to invest in the business to prepare for future growth and full
potential in line with previous communication. Investment activities are
expected to be on average above depreciation level for the coming quarters. Net
debt/EBITDA is 2.6x which is within the range of the targeted capital
structure.

In Q3 2016, there were no transactions with Marel’s treasury shares. Marel now
holds 18.1 million treasury shares.
Acquisition related items

Purchase price allocation in relation to the acquisition of MPS is recorded as
provisional; the period during which adjustments are permitted is limited to 12
months from the date of acquisition. No material changes are foreseen from
previous publication.

Outlook
Marel expects modest organic revenue growth and increase in EBIT* between years.

The industry that Marel operates in has a history of 4-6% annual growth and it
is expected that average annual growth will remain at that level in the long
term. Marel’s aim is to continue to grow faster than the market by leveraging
its market presence and with continuous investments in innovation.

Long term growth prospects for Marel are promising. Results may vary from
quarter to quarter due to general economic developments, fluctuations in orders
received and deliveries of larger systems.

Presentation of results, October 27, 2016

Marel will present its results at an investor meeting on Thursday, October 27,
at 8:30 am (GMT), at the Com-pany’s headquarters at Austurhraun 9, Gardabaer.
The meeting will also be webcasted at marel.com/webcast.

Publication days of Consolidated Financial Statements in 2017 and 2018
 4th quarter 2016 February 8, 2017
 1st quarter 2017 May 3, 2017
 2nd quarter 2017 July 26,2017
 3rd quarter 2017 October 25, 2017
 4th quarter 2017 January 31,2018

Release of financial statements will take place after market closing on the
aforementioned dates.

For further information, contact:
Audbjorg Olafsdottir, Corporate Director of Investor Relations and
Communications, tel: (+354) 563 8626 / mobile: (+354) 853 8626.

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