Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Marel hf (OISE:MAREL, Financial) saw a strong pickup in orders received in the poultry segment, driving total orders to 403 million with a book-to-bill ratio of 1.04.
- Profitability improved with EBITDA at 13.8% and EBIT at 9.4%, despite a decline in revenues.
- The company maintained cost discipline, evidenced by a 2.5% reduction in the workforce and a decrease in operating expenses.
- The order book increased to 554 million, indicating a positive trend in future revenue generation.
- The potential merger with JBT is progressing well, with shareholder support and regulatory processes advancing, targeting a close by January 3, 2025.
Negative Points
- Revenues declined by 6.8% compared to the previous quarter and 4.1% year-on-year, due to low project revenues and a soft order book.
- The meat and fish segments experienced softness, with delays in project orders and continued market challenges.
- The time to secure down payments and provide financial security for orders is taking longer, impacting cash flow.
- The order book remains soft, representing only 33.3% of trailing 12-month revenues, which could affect future revenue forecasts.
- The company faces continued short-term uncertainty due to geopolitical tensions, inflation, and high interest rates.
Q & A Highlights
Q: Can you provide more details on the cost actions and their impact on OpEx for the next year?
A: Sebastiaan Boelen, CFO, explained that they are targeting improvements and restructuring, especially in divisions struggling with performance. The potential combination with JBT will allow for a reset of the OpEx base. Arni Sigurdsson, CEO, added that actions taken in Q3 could result in an $8 million run rate improvement, with further actions depending on market developments.
Q: Was the strong order intake in poultry a result of pent-up demand, and should we expect a slowdown in Q4?
A: Arni Sigurdsson, CEO, noted that poultry orders were strong across Europe and North America. While there might be some fluctuation, the overall order intake is expected to trend upwards, with other segments potentially compensating for any slowdown in poultry.
Q: There was a build-up in receivables; is this a timing issue, and what are the expectations for cash collection in Q4?
A: Sebastiaan Boelen, CFO, stated that the control efforts will continue, and they expect to maintain receivables at current levels. Inventory is expected to decrease, aiding the working capital picture, with the main driver being the order intake in the next quarter.
Q: Can you comment on the order intake for PPF, particularly in the pet food segment, and why the environment has been challenging?
A: Arni Sigurdsson, CEO, explained that the soft orders in PPF were mainly due to timing. The pet food segment has shown good demand, and October has already seen strong orders. The outlook remains positive, with a healthy pipeline.
Q: What is the status of the new distribution center in Eindhoven, and are there benefits in terms of customer satisfaction and financials?
A: Arni Sigurdsson, CEO, mentioned that the distribution center is still in the startup phase, with some teething problems being addressed. They expect improvements by Q4. Sebastiaan Boelen, CFO, added that operational improvements are visible, and financial benefits will follow as more warehousing is integrated.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
