The year 2018 was yet another excellent one for Marel. We are delighted to report record revenues of EUR 1,200 million representing a 15% year-on-year revenue growth, of which 12.5% was organic. Operational performance was solid with 14.6% EBIT. We have been operating at close to 15% EBIT in the past three years with robust cash flow.
The strong cash flow enables us to invest in talent, innovation, infrastructure and global market presence. Operational cash flow was EUR 206 million in 2018, and free cash flow after our extensive investments and payments of taxes and interests amounted to EUR 121 million or over 10% of revenues.
We are a global leader in providing advanced solutions and services to poultry, meat and fish processors. Our customer base ranges from small family-owned companies to the largest players in the food industry. Our long lasting customer relationships are due to our strong partnerships in transforming the way poultry, meat and fish are processed. Attracting new customers and retaining existing ones is driven by our constant commitment to service and innovation and being at the customer -for the customer out in the field. Today, we have more than 6,000 dedicated team members operating in over 30 countries serving our customers across 180 countries.
We have a healthy mix of revenues deriving from greenfield projects, modernization and maintenance of our existing customers’ installed base worldwide. Maintenance is transitioning from reactive services to more preventative maintenance that include long-term service level agreements, spare parts packages and remote monitoring. Taking a proactive approach with our customers prevents unexpected downtime at their production facilities and ensures consistent peak productivity. 35% of total revenues derives from recurring service and spares business, underpinning our high quality of earnings. Our customer base is diverse with the single largest customer in any calendar year accounting for less than 5% of total revenues.
Population growth, urbanization and technological disruption are significant trends shaping the world today. We are witnessing the most rapid urbanization and growth of the middle class in history or at around 3-4% annually. These active consumers are seeking and consuming a balanced diet that is rich in vegetables, fruits and proteins. The need for increased automation, improved productivity and more innovative solutions to process quality food safely and sustainably, is clearer than ever. We must find ways to do more with less. The only reliable solution is for food processors to step up investments and vertically integrate the supply chain.
The annual retail value of poultry, meat and fish products is estimated to be EUR1,200 billion. With current urbanization rates, there is a rapid transition from small back-yard grown farming into a fully commercialized approach. Consequently, the underlying demand for new greenfield processing plants is high, especially in poultry, pork and fish processing deriving from aquaculture. However, the current annual value of solutions and services to serve the needs within our playing field is estimated to be only EUR 12 billion, of which Marel revenues are EUR 1.2 billion.
The task in the meat segment is to standardize and modularize the offering in primary processing and further drive our customer value creation by vertically integrating the value chain from primary to secondary and further processing. In the fish segment, we have successfully managed to improve standardization across our product line and we are already starting to reap the benefits mirrored in higher service and spare revenues and gradually improving operational margin. Within the fish segment, we are focusing on closing application gaps in primary processing and further automating all processes in line with what we already accomplished in the poultry segment. This is the journey ahead of us.
We have had great support from the Icelandic stock exchange and our shareholders since listing in 1992. The dual listing of Marel shares on an international stock exchange in addition to its listing in Iceland is on track. It is important for a global leader to have a global stage to support its ambitious growth plan. An international listing and access to a broader investor base is expected to drive fair day-to-day trading and continued shareholder returns.
Our team is dedicated and passionate. We are guided every single day by our shared vision and we share the values of Innovation, Unity and Excellence. We put great emphasis on being a dynamic workplace with diverse and well-educated team members.
For several years, we have run an internal Marel leadership program, where we select talent from across the company worldwide for a general management training in cooperation with universities and consultancies. Many of our senior managers come from the ranks of this leadership program, including two members of the executive team. Since mid-2017, we have also trained more than 500 employees to apply what they learned in “The 7 Habits” to their professional and personal lives.
This well-known leadership framework highlights important paradigms to become more effective through proactive behavior, prioritization, time management, empathic listening, and synergistic thinking.
I would like to sincerely thank our shareholders, customers, partners, and employees for their continued trust and support. We are all in this together! Together, we are transforming the way food is processed.
Árni Oddur Thórdarson,
Chief Executive Officer