Annual report 2017
Marel has set a target of 12% average annual revenue growth for 2017-2026, both organic and through acquisitions. Our growth plan involves capitalizing on our strong R&D investment to drive growth and market penetration. We will also focus on strategic partnerships and acquisitions to fill gaps in the value chain, and to accelerate our full-line product offering and market penetration.
Marel's strategic objective is to be a full-line provider to the poultry, meat and fish industries. Our focus is to bring our advanced, automated systems and solutions to every step of the production process and cover the relevant geographical areas in our industries. Strong organic growth and strategic acquisitions have helped make Marel a leader in its field.
Our full-line approach includes standalone equipment, individual systems and full production lines all controlled and integrated with Innova, our overarching software solution.
This offers our customers process control, real-time traceability and monitoring of throughput and yield that is hard to replicate. Seamless flow and integration between different applications result in higher overall efficiency and improved yield. Marel has thus become a one-stop shop for the customer from an equipment, software and service standpoint.
In line with our growth strategy, we have actively reinforced our value chain in recent years. We will continue to fill the remaining application gaps in our value chain through innovation, organic growth, strategic partnerships and acquired growth.
Marel aims to achieve an average of 12% annual revenue growth in the next decade. Around a third of this will be organic growth and two-thirds will be acquired growth.
The market for food processing equipment is expected to grow 4-6% annually on average in the long term. Driven by our extensive innovation investment and market penetration, we aim to grow organically faster than the market.
We will also supplement our full-line offering and accelerate market penetration through acquisitions. We believe our solid operational performance and strong cash flow can support 5-7% revenue growth on average through acquisitions. Growth will not be linear but reflect opportunities and economic fluctuations.
Acquisition of MPS paved the way for entry into primary meat processing
The acquisition of Sulmaq strengthens Marel’s market presence in Latin America.
Our solid revenue growth and strong cash flow have made it possible to make a significant investment to support organic growth by innovation, advancing our manufacturing facilities and updating our IT platform across geographies. It has also allowed Marel to undertake strategic acquisitions that have closed application gaps in our value chain or complimented existing product portfolio.
The recent acquisitions of MPS and Sulmaq in 2016-2017 were financed with support from our banking partners, our strong operational results and cash flow without issuing new shares. It is also worth noting that Marel undertook no new loans to finance the the acquisitions of Sulmaq.
The Scanvaegt and Stork Food Systems acquisitions in 2006-2008 were financed with an equity contribution of EUR 268 million.