Annual report 2018
The largest company on NASDAQ Iceland, Marel had a market capitalization of ISK 252.6 billion (EUR 1.9 billion) at year-end 2018. Its share price rose by 15% and Marel shares were the most actively traded on NASDAQ Iceland in 2018 with a turnover rate of 36%.
Since its original listing in 1992, Marel has created excellent value for its almost 2,500 shareholders. As the only large cap listed company in Iceland, Marel’s investor base consists predominately of Icelandic investors.
Marel is the largest company listed on NASDAQ Iceland by market capitalization. The market value of the company at year-end 2018 was ISK 252.6 billion (EUR 1.9 billion) compared to ISK 237.6 billion (EUR 1.9 billion) at year-end 2017, an increase of ISK 15.0 billion (decrease in EUR of 4.3 million due to exchange rate movements).
|
2018
|
2017
|
Unit
|
|
|---|---|---|---|
|
Market capitalization
|
252,557
|
237,588
|
ISKm
|
|
Share price at year end
|
370.00
|
323.00
|
ISK
|
|
High / Low price per share
|
402.00 / 320.00
|
374.50 / 250.50
|
ISK
|
|
Dividend per share
|
4.19
|
2.14
|
EUR cents
|
|
Earnings per share
|
17.95
|
13.70
|
EUR cents
|
|
P/E ratio
|
15.47
|
18.85
|
-
|
|
Issued shares
|
682.59
|
735.59
|
Million
|
|
Outstanding shares*
|
671.82
|
693.84
|
Million
|
* Issued shares multipled by share price at last trading day of 2018
Marel’s share price rose 14.6% over the year, in striking comparison to the modest 1.3% drop in the OMXI8 index for the top-listed companies in Iceland. At year-end 2018 Marel’s share price was ISK 370.00, compared to ISK 323.00 at the end of 2017 (equivalent to EUR 2.78 per share at year-end 2018, compared to EUR 2.58 at the end of 2017). Marel’s average end-of-day spread was 0.88%. Since the company’s shares are traded in ISK, fluctuations of the Icelandic krona during 2018 affect its market value expressed in euros.
Indeed, Marel’s shares were the most actively traded on NASDAQ Iceland in 2018, comprising 19% of all trading in listed equities. Shares in Marel were traded 3,680 times in 2018 (2017: 3,197 times) for a total market value of ISK 96.8 billion (2017: ISK 114.5 billion), which corresponds to a turnover rate of 36%. However, it should be borne in mind that the daily turnover of the Icelandic exchange (all-share index) is limited compared to turnover on leading European indices.
Marel has agreements with Landsbankinn hf., Kvika banki hf. and Íslandsbanki hf. for market making in its shares. The purpose of these agreements is to improve liquidity and to enhance transparent price formation in the company’s shares on NASDAQ Iceland. The agreements have an unspecified duration but can be terminated with one month’s notice.
According to its shareholders’ register, Marel had 2,491 shareholders at year-end 2018, compared to 2,206 at year-end 2017. As of 31 December 2018, Marel held 10,762,406 (1.6%) treasury shares.
Eyrir Invest hf. is Marel’s largest shareholder, with 27.9% of issued shares, followed by the Pension Fund of Commerce (LIVE) (10.0%) and the pension fund Gildi (6.8%).
The ten largest shareholders held 67.2% of Marel’s issued shares, with Icelandic pension funds holding a total of 41.4%. International shareholders owned 6.7% at year-end 2018. The free float of Marel shares was 72% and free-float adjusted market value of the company was EUR 1.4 billion.
| Year-end 2018 | Year-end 2017 | |||||
|---|---|---|---|---|---|---|
|
Shareholder
|
Type
|
Million of shares
|
%
|
Million of shares
|
%
|
|
| 1 |
Eyrir Invest hf.
|
Investment company
|
190.4
|
27.9
|
190.4
|
25.9
|
| 2 |
The Pension Fund of Commerce
|
Pension fund
|
68.0
|
10.0
|
69.4
|
9.4
|
| 3 |
Gildi
|
Pension fund
|
46.2
|
6.8
|
47.0
|
6.4
|
| 4 |
LSR A, B & S divisions and Nurses
|
Pension fund
|
46.0
|
6.7
|
47.4
|
6.4
|
| 5 |
Birta
|
Pension fund
|
27.6
|
4.0
|
30.3
|
4.1
|
| 6 |
MSD Partners Luxembourg
|
Investment company
|
24.6
|
3.6
|
24.6
|
3.3
|
| 7 |
Stapi
|
Pension fund
|
15.0
|
2.2
|
14.5
|
2.0
|
| 8 |
Stefnir - IS 15
|
Asset management
|
14.4
|
2.1
|
23.4
|
3.2
|
| 9 |
Festa
|
Pension fund
|
13.4
|
2.0
|
13.0
|
1.8
|
| 10 |
Frjálsi
|
Pension fund
|
13.1
|
1.9
|
10.4
|
1.4
|
|
Top 10 total
|
458.7
|
67.2
|
470.4
|
63.9
|
||
|
Others
|
213.1
|
31.2
|
223.5
|
30.4
|
||
|
Marel hf.
|
Treasury shares
|
10.8
|
1.6
|
41.7
|
5.7
|
|
|
Total issued shares
|
682.6
|
100.0
|
735.6
|
100.0
|
||
At year-end 2018, there were 682.6 million Marel shares issued, all in one class. Of the total share capital base, Marel holds 1.6% or 10.8 million shares (2017: 41.7 million treasury shares).
Marel‘s Extraordinary General Meeting (EGM), held on 22 November 2018, approved the two proposals that were on the agenda. Firstly, to reduce the company‘s share capital by ISK 53.0 million nominal value, by cancelling 53.0 million of the company‘s own shares. The company‘s share capital was thus reduced from ISK 735.6 million to ISK 682.6 million nominal value.
Secondly, to initiate a formal share buyback program, under which the company may purchase up to 34,129,296 shares in total, corresponding to 5% of share capital. The main purpose of the program is to reduce the company‘s share capital and to meet its obligations under share incentive programs with employees.
At year-end 2018, Marel hf. had purchased a total of 4.1 million shares under the buyback program, which corresponds to 0.6% of issued shares in the company, for a total purchase price of EUR 11.3 million.
During the year, Marel purchased 24.1 million shares for a total amount of EUR 71.7 million, thereof 4.1 million shares for EUR 11.3 million according to the buyback program. Marel sold 2.1 million treasury shares for EUR 2.2 million to fulfill employees’ stock option schedules and subsequently cancelled 53.0 million own shares.
Stock options are granted to management and selected key employees. Granted and unexercised stock options totaled 11.9 million shares, of which 1.7 million were exercisable at the end of 2018. The remainder will become vested in the years 2019 to 2021.
At the company’s 2014 Annual General Meeting (AGM), shareholders authorized the Board of Directors to increase the company’s share capital by 35 million shares to fulfill stock option agreements. This authorization is valid for five years following its adoption. No new shares were issued in 2018 under this resolution.
|
Number of shares
|
Shareholders
|
%
|
Shares
|
%
|
|---|---|---|---|---|
|
1 - 9,999
|
1,607
|
64.51
|
5,360,170
|
0.79
|
|
10,000 - 99,999
|
714
|
28.67
|
21,134,295
|
3.10
|
|
100,000 - 9,999,999
|
155
|
6.22
|
139,559,123
|
20.45
|
|
10,000,000 - 99,999,999
|
14
|
0.56
|
315,403,089
|
46.21
|
|
100,000,000 and more
|
1
|
0.04
|
190,366,838
|
27.89
|
|
Total without treasury shares
|
2,491
|
100.00
|
671,823,515
|
98.42
|
|
Treasury shares
|
10,762,406
|
1.58
|
||
|
Total with treasury shares
|
682,585,921
|
100.00
|
Earnings per share (EPS), measuring the amount of net income earned per share of stock outstanding, was 17.95 euro cents in 2018, increasing by 31% over the previous year. Earnings per share are expected to grow faster than revenues.
The Board of Directors has proposed that a dividend of 5.57 euro cents per share be paid for the operational year 2018, corresponding to approximately 30% of profits for the year.
The proposed dividend is in line with Marel’s targeted capital allocation and dividend policy, i.e. a dividend policy of 20-40% of net earnings and a targeted leverage ratio of 2-3x net debt/EBITDA.
|
Year of payment (for previous year of operations)
|
2018
|
2017
|
2016
|
2015
|
2014*
|
|---|---|---|---|---|---|
|
Dividend per share EUR cents
|
4.19
|
2.14
|
1.58
|
0.48
|
0.00
|
|
Dividend yield, %**
|
1.6%
|
1.0%
|
0.9%
|
0.5%
|
-
|
|
Payout ratio, %***
|
30.0%
|
20.0%
|
20.0%
|
30.0%
|
-
|
|
Ex. Dividend date
|
Mar 7
|
Mar 3
|
Mar 3
|
Mar 5
|
-
|
|
Record date
|
Mar 8
|
Mar 6
|
Mar 4
|
Mar 6
|
-
|
|
Payment date
|
Mar 27
|
Mar 23
|
Mar 23
|
Mar 27
|
-
|
*No dividend was paid in 2014 for the operational year 2013.
**Dividend yield, %: Dividend per share / Price per share at previous year-end
***Payout Ratio: Total dividend paid / Net income of previous year