Annual report 2018
Taking an innovative, high-tech approach has placed Marel in the forefront of the food processing equipment industry. As a leader in the field, we provide advanced equipment and systems for the fish, meat and poultry industries around the world. Our business model is based on maintaining a good balance between our industry segments, business mix and geographical operations.
We sell advanced and high-end equipment, solutions and software to the poultry, meat and fish industries. We serve producers looking to increase the automation of their production processes.
We give our customers full control over their production with Innova, our advanced, overarching food production software. Designed to optimize production using our high-tech equipment lines, Innova software can integrate and increase the efficiency of third-party equipment as well.
We invest around 6% of revenues in innovation support of our strong focus on process and product innovation. Ensuring a seamless operating flow and integrating different applications boosts overall efficiency and production capacity.
We have a dedicated team of about 6,000 employees in over 30 countries around the world. Through the years, we have built a unique sales and service network of over 500 employees in global sales and more than 1,000 in global services supporting clients around the world. We also complement our local presence with a network of over 100 agents and distributors.
Our customer base includes most of the world’s blue-chip food processors in the poultry, meat and fish industries. Our long-standing partnerships are strong, built on co-operation and teamwork across industries and geographies.
Marel’s playing field is gradually expanding to cover the entire production process from farm to fork and from catch to consumer. This entails a full-line offering of integrated systems, solutions and software for every step of the production process, available in all relevant geographical areas of our industries.
We are a company defined by our dedication to innovation, as reflected in our extensive investment in research and development. Marel began as an idea at the University of Iceland in 1977 and innovation is and has always been at its heart. We invest around 6% of revenues in research and development annually, which translated into EUR 74 million in 2018.
From the start, Marel has bundled software and equipment together. Our approach to innovation is not limited to mechanical engineering to optimize the performance of each application, but also encompasses integrated technologies and connectivity. Data analytics and software control are becoming increasingly important. Today, Marel is the focal point of information gathering for global food processing, one of the most significant value chains in the world.
Marel is also known for applying its technology across different industries. In 2018, we continued to leverage our strong innovation investments in one field to successfully develop solutions for other protein product groups, across processes and geographies.
At Marel we focus our efforts on three main production industries: poultry, meat and fish. Our teams analyze trends and anticipate processing challenges, enabling us to stay on top of market developments and changes in the industries we serve.
Marel Poultry, Marel Meat and Marel Fish are constantly working on new ways to improve existing processes, increase automation and streamline product processing.
Marel Poultry offers the most complete product range in the industry and has the largest installed base worldwide. We provide in-line poultry processing solutions for all process steps and all processing capacities for broilers, turkeys and ducks.
Marel Meat supplies advanced equipment and systems to the red meat industry. We focus on slaughtering, deboning and trimming, case-ready and food-service solutions. Following acquisitions of MPS, Sulmaq and MAJA, we are now a full-line supplier from farm gate to finished pack.
Marel Fish is the leading global supplier of advanced stand-alone equipment and integrated systems to the fish industry. We provide innovative equipment, systems and software for processing whitefish and salmon, both farmed and wild, onboard and ashore.
Our strong and long-standing relationships with our customers form the bedrock of our business model. We’re here to partner with our customers. Together we innovate and create products that set new benchmarks in the industry and achieve continuous improvements in line with our customers’ needs.
We expect automation in food processing to increase steadily, especially in emerging markets. This means higher growth in advanced and high-end segments of the food processing equipment industry. Our expertise in this segment focuses on helping customers become more efficient, more sustainable and more profitable. This shared success creates higher margins and better value, both for our customers and for Marel.
Marel’s extensive sales and service network, spread over more than 30 countries on all continents, is a key competitive edge. This network is the first line of contact for customers at local level. It means first-rate service, consistency and continuity in our partnership with our clients. We are currently reinforcing this network on a regional level to strengthen our connection with customers.
We serve a diverse customer base around the world. Our professional team of field service engineers ensures the uptime and reliability of our large installed base. Service level agreements, a dedicated service commitment and our track record have earned us strong customer loyalty and repeat business.
As a high-tech provider at the forefront of the industry, we have built strong customer relationships based on collaboration and partnership. Our cooperation with customers in innovation, new projects and process improvements further supports our ability to transform the industry and increase customer value in the advanced and high-end segments.
This example of a ten-year relationship with a customer in the meat industry is a prime example of how we do business. It is also a good reflection of our revenue mix, where greenfield projects, modernization and standard equipment, and service and spare parts account for around a third each.
Marel’s presence across geographies and multiple protein segments serves as a countercyclical buffer. It gives us flexibility and the opportunity to transfer technical know-how, solutions and expertise across borders, both industrial and geographical. We strive to capitalize on the technological advances made in one sector by implementing them in another.
Our main revenue stream drivers are turnkey projects, encompassing brownfields, greenfields, modernization and maintenance as well as the production of modular, standardized equipment and processing lines. The stand-alone, modular portfolio is the building block for larger projects and the entry point for new customers. Our installed base is also large and growing, effectively driving our resilient service and parts revenues.