Annual report 2017
The largest company on NASDAQ Iceland, Marel had a market capitalization of ISK 237.6 billion at year-end 2017, or EUR 1.9 billion.
Since its original listing in 1992, Marel has created excellent value for its close to 2,200 shareholders. As the only large cap listed in Iceland, the company’s investor base is dominated by Icelandic investors. Although capital restrictions were fully lifted in Iceland in 2017, the NASDAQ Iceland exchange maintains some specific market limitations. In particular, the denomination of shares in Icelandic krónur (ISK) and the limited overall size of the domestic securities market.
Marel is the largest company listed on NASDAQ Iceland by market capitalization. The market value of the company at year-end 2017 was ISK 237.6 billion (EUR 1.9 billion) compared to ISK 178.7 billion (EUR 1.5 billion) at year-end 2016, an increase of ISK 58.9 billion (EUR 0.4 billion).
|
2017
|
Unit
|
|
|---|---|---|
|
Market capitalization
|
237,588
|
ISKm
|
|
Share price at year-end
|
323.00
|
ISK
|
|
High / Low price per share
|
374.50 / 250.50
|
ISK
|
|
Dividend per share
|
2.14
|
EUR cents
|
|
Earnings per share
|
13.70
|
EUR cents
|
|
P/E ratio
|
18.85
|
-
|
|
P/B ratio
|
3.31
|
-
|
|
Issued shares
|
735.57
|
Million
|
The share price rose 33% over the year, in striking comparison to the modest 4.4% drop in the OMXI8 index for the top listed companies in Iceland. At year-end 2017 Marel’s share price stood at ISK 323.00, compared to ISK 243.00 at the end of 2016 (equivalent to EUR 2.58 per share at year-end 2017, compared to EUR 2.04 at the end of 2016). Marel’s average end-of-day spread was 0.97%. Since the company’s shares are traded in ISK, fluctuations of the Icelandic krona during 2017 affected the market value when converted into euros.
Indeed, Marel shares were the most actively traded on NASDAQ Iceland in 2017, 18.2% of all trading in listed equities. Shares in Marel were traded 3,197 times in 2017 (2016: 2,654 times) for a total market value of ISK 114.5 billion (2016: ISK 70.3 billion), which corresponds to a turnover rate of 47%. However, the daily turnover of the Icelandic exchange (all-share index) is limited compared to the turnover on leading European indices.
Marel has agreements with Landsbankinn hf. and Kvika banki hf. for market making in its shares. The purpose of these agreements is to improve liquidity and to enhance transparent price formation of 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 2,206 shareholders at year-end 2017, compared to 1,907 at year-end 2016. As of December 31, 2017, Marel held 41,747,226 treasury shares.
Eyrir Invest hf. is Marel’s largest shareholder, with 25.88% of issued shares, followed by the Pension Fund of Commerce (LIVE) (9.4%), and the Pension Fund for State Employees (LSR) and Pension Fund for Nurses (LH) (6.4%).
The ten largest shareholders held 64.6% of the total issued shares. In total, Icelandic pension funds held 38.2% of Marel’s issued share capital. International shareholders owned 5.2% at year-end 2017. The free float of Marel shares was 74% and free float adjusted market value of the company was EUR 1.4 billion.
| Year-end 2017 | Year-end 2016 | |||||
|---|---|---|---|---|---|---|
|
Shareholder
|
Type
|
Million of shares
|
%
|
Million of shares
|
%
|
|
| 1 |
Eyrir Invest
|
Investment company
|
190.4
|
25.9
|
215.4
|
29.3
|
| 2 |
The Pension Fund of Commerce
|
Pension fund
|
69.4
|
9.4
|
67.0
|
9.1
|
| 3 |
LSR A, B & S divisions and Nurses
|
Pension fund
|
47.4
|
6.4
|
48.0
|
6.5
|
| 4 |
Gildi
|
Pension fund
|
47.0
|
6.4
|
51.3
|
7.0
|
| 5 |
Birta
|
Pension fund
|
30.3
|
4.1
|
31.9
|
4.3
|
| 6 |
MSD Partners Luxembourg
|
Investment company
|
24.6
|
3.3
|
0.0
|
0.0
|
| 7 |
Stefnir - IS 15
|
Asset management
|
23.4
|
3.2
|
32.1
|
4.4
|
| 8 |
Stefnir - IS 5
|
Asset management
|
15.2
|
2.1
|
20.1
|
2.7
|
| 9 |
Stapi
|
Pension fund
|
14.5
|
2.0
|
17.3
|
2.4
|
| 10 |
Landsbankinn
|
Bank
|
13.2
|
1.8
|
13.7
|
1.9
|
|
Top 10 total
|
475.4
|
64.6
|
496.7
|
67.5
|
||
|
Others
|
218.5
|
29.7
|
217.4
|
29.5
|
||
|
Marel hf.
|
Treasury shares
|
41.7
|
5.7
|
21.5
|
2.9
|
|
|
Total issued shares
|
735.6
|
100.0
|
735.6
|
100.0
|
||
At year-end 2017, there were 735.6 million Marel shares issued, all in one class. Of the total share capital base, Marel holds 5.68% or 41.7 million treasury shares.
During the year, Marel purchased 22.2 million treasury shares for a total amount of EUR 63.5 million to be used as a payment for potential future acquisitions. Marel sold 0.9 million treasury shares for EUR 2.5 million to the management of Sulmaq as part of Marel‘s acquisition of Sulmaq. The sold shares are subject to a lock-in period of 18 months from the date of closing which was August 31, 2017. Marel also sold 1.1 million treasury shares for a total amount of EUR 1.2 million to fulfill employees’ stock option schedules.
Stock options are granted to management and selected key employees. At the end of 2017 granted and unexercised stock options totaled 9.9 million shares, of which 1.7 million were exercisable at the end of 2017. The remainder will become vested in the years 2018 to 2021.
At the company’s 2014 Annual General Meeting, 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 2017 under this resolution.
|
Number of shares
|
Shareholders
|
%
|
Shares
|
%
|
|---|---|---|---|---|
|
1 - 9,999
|
1,432
|
64.91
|
4,789,114
|
0.69
|
|
10,000 - 99,999
|
586
|
26.56
|
17,080,691
|
2.46
|
|
100,000 - 9,999,999
|
174
|
7.89
|
164,737,564
|
23.74
|
|
10,000,000 - 99,999,999
|
13
|
0.59
|
316,847,564
|
45.67
|
|
100,000,000 and more
|
1
|
0.05
|
190,366,838
|
27.44
|
|
Total without treasury shares
|
2,206
|
100.00
|
693,821,771
|
100.00
|
Earnings per share (EPS), measuring the amount of net income earned per share of stock outstanding, was 13.7 euro cents in 2017, increasing by 29% over the previous year. Earnings per share are expected to grow faster than revenues.
The Board of Directors has proposed that a dividend of 4.19 euro cents per share be paid for the operational year 2017, 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 results and a targeted capital structure of x2-3 net debt/EBITDA.
|
Year of payment (for previous year of operations)
|
2017
|
2016
|
2015
|
2014
|
2013
|
|---|---|---|---|---|---|
|
Dividend per share EUR cents
|
2.14
|
1.58
|
0.48
|
0.00
|
0.97
|
|
Dividend yield, %*
|
1.0%
|
0.9%
|
0.5%
|
-
|
1.2%
|
|
Payout ratio, %**
|
20.2%
|
19.9%
|
29.7%
|
-
|
20.0%
|
|
Ex. Dividend date
|
Mar 3
|
Mar 3
|
Mar 5
|
-
|
Mar 7
|
|
Record date
|
Mar 6
|
Mar 4
|
Mar 6
|
-
|
Mar 11
|
|
Payment date
|
Mar 23
|
Mar 23
|
Mar 27
|
-
|
Apr 5
|
*Dividend yield, %: Dividend per share / Price per share at previous year-end
**Payout Ratio: Total dividend paid / Net income of previous year