Marel Meat A/S

Ledelsesberetning

Financial highlights(DKK'000) 2023 2022 2021 2020 2019Income statement:Gross profit48.01243.54079.21954.05568.986Ordinary operating profit 26.313 16.695 33.529 5.386 20.791Financial income and expenses, net 4.912 1.557 61 -786 2.133Profit for the year24.39313.53626.4783.72917.859Balance sheet:Total assets 199.081 202.856 221.263 203.928 160.857Equity147.893123.500109.96483.48679.757Gross investments in property, plant andequipment 747 1.134 3.260 43.060 207Financial ratios %:Return on investment 13,1 7,9 15,8 3,0 25,9Return on equity 18.0 11,6 27,4 4,6 25,2Solvency ratio74,360,949,740,949,6The financial ratios are defined as follows:Return on invest-Ordinary operating profit/lossmentAverage number of operating assetsReturn on equityProfit after tax x 100Average equitySolvency ratio Equity at year end x 100Total equity and liabilities at 31 DecemberDevelopment in activities and financial positionProfit for the year after tax totalled DKK 24.4 million, which is an increase of DKK 10.9 million(+80.2%) compared to 2022.Equity totalled DKK 147.9 million at the end of the year, corresponding to a solvency ratio of74.3%.Overall, the financial statements are in line with our expectations disclosed in the latest publishedannual report.Events after the balance sheet dateNo events materially affecting the Company’s financial position have occurred subsequent to thefinancial year end.Particular risksOur management has identified certain key risks to our business that demand attention. Of these,seven key risks are discussed below, together with an overview of corresponding mitigative ac-tions.Profit and earnings volatility risk:Our operational results are subject to volatility. Factors like increase in competition, geopoliticalconflicts, trade restrictions, and natural disasters might influence our ability to predict revenues,costs, and expenses affecting our growth objectives. Our business model with revenue streamsgenerated by different industries, geographical areas, and product mix allows us toachieve and maintain strong profitability throughout economic cycles.Innovation risk:Changes in technology, failure to understand customer needs, inability to enforce intellectual prop-erty rights, etc. can affect our expansion objectives. Our success depends on our ability to developand successfully introduce new products in addition to ensuring the competitiveness of existingones, including solutions and software.The company will continue to lead the innovation game in the food processing industry by com-mitting significant resources to support its ambitious innovation objectives.People management risk:A high turnover rate, disengaged employees, gaps in workforce skills or misalignment of thoseskills with the company’s needs, an inadequate succession plan, etc. can harm our business. Work-place instability, absenteeism, and additional stress caused by the global pandemic, coupled withchanging global workforce preferences, further increase the risk of effective talent management.The Company remains a desirable place to work that attracts and retains talented employees.Throughout the pandemic, we have implemented initiatives to maintain motivation and engagewith our workforce in a personal manner. Marel is proactive in adapting its policies to align withcurrent global trends.Particular risksSupply chain disruption risk:The Company makes use of its global footprint to mitigate supply chain risks, while continuing toadopt new supply chain technologies. Deliberate mitigations include the increasing of inventorylevels, as well as identifying substitute suppliers. The company remains agile and proactive whenprioritising its manufacturing needs.Reputation and compliance risk:The Company operates worldwide and needs to comply with numerous and changing laws andregulations. Failure to comply can lead to penalties and adverse publicity. The evolution of socialmedia further increases the risk of reputational damage.The Company strives to preserve and enhance its brand value, build resilience, and create emo-tionally connected customers, employees, and stakeholders, while complying with all industry,regulatory, and other general standards of significance.Information security risk:Failure to secure our information systems and data could result in operational disruptions, financiallosses, reputational damage with existing and new customers, etc.The Company continues to invest in new facilities and infrastructure and in upgrading existingones to ensure their integrity and availability in case of adverse events.Foreign exchange risk:As an international company, the Company is exposed to foreign exchange risk arising from vari-ous currency movements, primarily with respect to the EUR/USD exchange rate for revenues andEUR/ISK rate on the cost side.The Company takes advantage of natural currency hedges by matching revenues and operationalcosts as economically as possible. The company’s funding is denominated in its main operationalcurrencies to create natural hedging in the balance sheet. Where necessary, financial exposure ishedged in accordance with the Company’s policy on permitted instruments and exposure limits.Intellectual capitalThe primary business foundation is to provide competitive products, solutions and technology forthe food industry improving its competitiveness. Accordingly, the Company must be able to de-velop and retain intellectual capital and know-how on products and business processes. The Com-pany therefore regularly develops policies and procedures for recruiting, training and retainingemployees and for developing and documenting products and business processes.Research and development activitiesThe Company's research and development activities comprise regular development of new andexisting products and processes for the food industry. The Company is committed to developingindustry-leading technology in partnership with our customers.In 2023 we have invested DKK 16,3 million in research and development activities This is essen-tial to the creation of transformative solutions for the food processing industry and securing ourcompetitive advantage, which in turn deliver organic growth to the company.OutlookThe continued geopolitical tensions, especially in Europe is still causing uncertainty. Marel has abalanced exposure to global economies and local markets through its global reach, innovativeproduct portfolio and diversified business mix. Indeed, our business model has proved to be resil-ient during times of turbulence. Our global reach and years of investment in innovation and digitalsolutions have proved to be key differentiating factors for Marel. These will enable us to pushforward and help us navigate geopolitical tensions in the long run. That path is of course one ofdiscovery to some extent, with inherent challenges and learnings, but one that team Marel willmanage with its characteristic determination.The expectation for 2024 is an unchanged activity level and net results in line with current year.These expectations are subjected to uncertainties due the increased geopolitical tensions men-tioned above.

Beskrivelse af virksomhedens væsentligste aktiviteter

Principal activitiesMarel is a leading global provider of advanced processing equipment, systems, software and ser-vices to the poultry, meat and fish industries. Marel has a global reach with local presence inover 30 countries, with sales and service engineers servicing customers in over 140 countries.The company’s business model is based on providing full-line solutions and services to the foodprocessing industry, one of the most important value chains in the world. With an emphasis oninnovation, close partnership with customers, and global and local reach, this model supports ourvision of a world where quality food is produced sustainably and affordably.Our revenue streams consist of sales of standard equipment, major projects, and recurring salesof parts, services, and software licenses. We have a global customer base diversified across dif-ferent industries, product mixes, and geographical areas, allowing us to achieve and maintainstrong profitability throughout economic cycles.