avatar Marel Poultry B.V. Manufacturing
  • Location: NOORD-BRABANT 
  • Founded: 1948-07-27
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    Marel – Annual Report 2018 ANNUAL REPORT 2018 TO OUR STAKEHOLDERS 1

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    Marel – Annual Report 2018 CONTENT TO OUR STAKEHOLDERS 3 Chairman’s statement 4 CEO´s review 7 MAREL IN BRIEF 10 Who we are 11 Vision and values 12 Business model 13 Strategy 18 DELIVERING GROWTH 21 Poultry 22 Meat 28 Fish 34 Innova 44 Innovation 45 Global markets and service 49 Global supply chain 54 INVESTORS 57 Shares 58 Financials 64 Investor relations 71 RESPONSIBLE GROWTH 73 Corporate responsibility 74 Social 78 Environmental 83 Economic 87 Corporate governance 90 Board of directors 94 Executive team 95 Organizational chart 101 Risk management 102 2017 CONSOLIDATED FINANCIAL STATEMENTS 106

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    Marel – Annual Report 2018 TO OUR STAKEHOLDERS Weighing in rough seas? Challenge accepted. When we brought accurate data collection to the fishing grounds with the first motion-compensating marine scales forty years ago, we tipped the scales towards increased efficiency throughout the value-chain. TO OUR STAKEHOLDERS 3

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    Marel – Annual Report 2018 CHAIRMAN’S STATEMENT Business as a force for good Global challenges ranging from climate, water and food crises, to poverty, conflict and inequality are in need of solutions that require the combined efforts of the public, private and civil sectors. We are inspired by the UN Sustainable Development Goals and Global Compact’s call to the corporate sector for responsible business operations. Our response is to apply our culture of innovation and collaboration to address some of the societal challenges ahead. Marel’s vision is founded on the strong belief that we can create economic value and have a positive social impact at the same time: In partnership with our customers, we are transforming the way food is processed. Our vision is of a world where quality food is produced sustainably and affordably. in more than 30 countries, and total revenues of EUR 1.2 We are proud of our achievements in 2018. Excellence in oper- billion. Quite a contrast to the company’s 45 employees and ations and disciplined capital allocation are the foundation for revenues of EUR 6 million at the time of listing. us to effectively serve our customers and other stakeholders, as well as provide a healthy return to our shareholders. Returning value to shareholders Marel’s remarkable average revenue growth of over 20% per Data-driven from day one year since its listing in 1992 has been fueled by innovation When we brought accurate data collection to the fishing and several strategic acquisitions, made possible by strong grounds with the first motion-compensating marine scales shareholder support. The acquisitions of Scanvægt in 2006 forty years ago, we tipped the scales towards increased and Stork in 2008 were funded with an equity contribution of efficiency throughout the value chain. Marel’s marine scales, EUR 268 million, while the more recent acquisitions of MPS, developed by passionate entrepreneurs at the University of Sulmaq and MAJA in 2016-2018 were financed with support Iceland, introduced data collection to the Icelandic fishing from banking partners, operational results and cash flow. grounds. Using decades of precise data, we’ve continuously developed solutions that ensure quality food at the lowest A review of financial developments over the last 5 years shows cost – to businesses and to the environment. This is a great just how great the company’s progress has been. Revenues example of both the power of numbers, and how our increased by an average of 13% in the past five years and extraordinary and talented team here at Marel use their power earnings per share rose 43% on average yearly. During that in numbers. same period, Marel’s share price also climbed by an average of 27% per year in EUR terms. In 2018, we celebrate the 35th anniversary of the founding of Marel. The listing of Marel’s shares on Nasdaq Iceland in In 2018, revenues increased by over 15% and earnings 1992 was an important milestone in Marel’s progress from a per share by 31%. Operational performance has improved start-up to a leading global provider of advanced processing significantly, with EBIT averaging around 15% for the past systems and services to the poultry, meat and fish industries. three years. The share price rose 15% in 2018 and the number At the end of 2018, Marel had over 6,000 employees, working of shareholders grew from 2,206 to 2,491. TO OUR STAKEHOLDERS 4

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    Marel – Annual Report 2018 In 2018, EUR 28.9 million were paid in dividends to shareholders to purchase of up to 34 million shares, corresponding to 5% for the operational year 2017. In line with our capital allocation of issued share capital. The plan is to announce the final dual and dividend policy, the Board of Directors will propose to listing location at the 2019 Annual General Meeting, following the 2019 Annual General Meeting (AGM) that shareholders which the execution phase is expected to take up to nine be paid a dividend of around EUR 5.57cents per share, which months. The precise timing will depend on both developments corresponds to approximately 30% of profits for 2018. in Marel’s business and general financial market conditions. A global stage for an international Unique position for sustainable value company creation Although listing on Nasdaq Iceland has served Marel well, Our growth targets are ambitious. We aim to increase reve- there have been clear indications for some time now that we nues on average by 12% per year in 2017-2026, capitalizing on are outgrowing the small Icelandic stock market. We are a strong innovation and market reach, complemented by strate- global company with ambitious growth plans. Furthermore, gic acquisitions and partnerships. even though capital controls in Iceland have been lifted, hav- ing Marel’s shares listed in Icelandic krona has proven to be an Marel has both the premises and prerequisites for such obstacle for potential international strategic investors. growth. Our industry is experiencing robust global growth driven by population growth and changing consumer behav- ior, coupled with secular demands for traceability, food safety, nutrition and sustainability. The value of the consumer market for animal protein is estimated at EUR 1,200 billion annually. Marel, the global leader in food processing solutions, software and services for the poultry, meat and fish industries, had rev- enues of around EUR 1.2 billion in 2018. In spite of our leading As announced at the AGM in March 2018, Marel engaged inde- position, therefore, our market is still fragmented and there is pendent international advisors to evaluate potential listing al- significant room for growth and consolidation. ternatives to further advance the company’s global vision and provide continued strong shareholder returns. The objective is Innovation is at the core of our strategy – and in our DNA. A to facilitate trade and ensure fair pricing of Marel shares for the key competitive strength is our long-standing commitment benefit of all shareholders. to research and development, where we invest around 6% of revenues annually, well above the industry standard. Our Primary focus now on Euronext Amsterdam and ongoing investment and strategic focus on exploiting oppor- Nasdaq Copenhagen tunities offered by digitalization and automation have great After thorough analysis of the three options considered, i.e. to potential. Not only are we improving yield and throughput in remain listed on Nasdaq Iceland only, to list both in Iceland the food processing industry, resulting in higher quality prod- and on an international exchange, and to delist from Iceland ucts at better value, but also reducing waste and providing full and relist on an international exchange, the conclusion was traceability throughout the value chain. to aim for dual listing of Marel shares in 2019. The optimal listing venue has yet to be decided, but the primary focus is currently on Euronext Amsterdam and Nasdaq Copenhagen. € A total of five exchanges were reviewed with an eye to various aspects such as market depth and sector awareness, access to international investors, analyst coverage, index inclusion, valuation and peer group positioning. Several Marel-specific considerations were also taken into account, such as our The world’s population is expected to rise from today’s 7.6 bil- operational presence in these countries, reporting currency, lion to 10 billion by 2050 – an increase of almost one-third. and technicalities such as clearing and settlement mechanics. Active consumers at the same time are expected to rise by 60 We are focused on ensuring a smooth journey for our current million a year, the equivalent of the UK population, as levels of and future shareholders. well-being and purchasing power rise. Together with urban- ization and changes in consumer behavior, this is expected Share capital decrease and formal share buyback to increase demand for food by 70% by 2050, a figure which program initiated is practically incomprehensible in view of the planet’s limited To better align the interests of current and future shareholders land, water and other resources. in connection with the dual listing, the Board of Directors convened an Extraordinary General Meeting on 22 November Waste in the food value chain is estimated at around 33%, 2018. There it was proposed to reduce share capital by 53 equivalent to 1.3 billion tons of food lost. This needs to change. million shares and initiate a formal share buyback program Innovation and optimization of food production, together TO OUR STAKEHOLDERS 5

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    Marel – Annual Report 2018 with changes in consumer behavior, are the only solution to Marel’s success is the result of efforts by a united and diverse the enormous challenge of feeding the planet. Marel is at the team of more than 6,000 people around the world, with a forefront in adapting to prevailing trends and needs. In part- wealth of process know-how and industry experience. The nership with our customers, we have a unique opportunity to company’s senior management team has a clear vision and create economic and social value at the same time. an excellent execution track record. Earlier this year, the Board of Directors had the privilege of visiting our expanding oper- Our role in feeding the future ations in Brazil – both our dedicated team in Piricicaba and our We view the future in a positive light. Despite a number of fac- new team members from Sulmaq in Guapore – as well as our tors of uncertainty on the horizon, such as geopolitical con- operations in Kansas, USA. It is truly spectacular to experience cerns, trade constraints and Brexit, we are convinced that our at first hand the relentless passion and dedication of our team around the world. On behalf of the Board of Directors, I congratulate the Marel team on the impressive results and achievements of 2018, achieved not least thanks to their dedication and hard work. May I also express our appreciation of the continuing commit- determined advance in transforming how food is processed ment and support of our shareholders. will continue to provide a strong foundation for long-term sustainable value creation - for all Marel’s stakeholders. Ásthildur Otharsdóttir, Chairman of Marel’s Board WHEN WE BROUGHT ACCURATE DATA COLLECTION TO THE FISHING GROUNDS WITH THE FIRST MARINE SCALES FORTY YEARS AGO, WE TIPPED THE SCALES TOWARDS INCREASED EFFICIENCY THROUGHOUT THE VALUE CHAIN. TO OUR STAKEHOLDERS 6

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    Marel – Annual Report 2018 CEO’S REVIEW 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. Global market leader with blue-chip customer base worldwide 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 earnings. Our customer base is diverse with the single largest to the largest players in the food industry. Our long lasting customer in any calendar year accounting for less than 5% of customer relationships are due to our strong partnerships in total revenues. transforming the way poultry, meat and fish are processed. Attracting new customers and retaining existing ones is Growth driven by secular trends driven by our constant commitment to service and innovation Population growth, urbanization and technological disruption and being at the customer -for the customer out in the field. are significant trends shaping the world today. We are Today, we have more than 6,000 dedicated team members witnessing the most rapid urbanization and growth of the operating in over 30 countries serving our customers across middle class in history or at around 3-4% annually. These active 180 countries. consumers are seeking and consuming a balanced diet that is rich in vegetables, fruits and proteins. The need for increased We have a healthy mix of revenues deriving from greenfield automation, improved productivity and more innovative projects, modernization and maintenance of our existing solutions to process quality food safely and sustainably, is customers’ installed base worldwide. Maintenance is clearer than ever. We must find ways to do more with less. transitioning from reactive services to more preventative The only reliable solution is for food processors to step up maintenance that include long-term service level agreements, investments and vertically integrate the supply chain. spare parts packages and remote monitoring. Taking a proactive approach with our customers prevents unexpected Marel is at the center point of prevailing trends. With downtime at their production facilities and ensures consistent continuous innovation and complementary acquisitions, we peak productivity. 35% of total revenues derives from recurring have managed to extend our playing field gradually. service and spares business, underpinning our high quality of TO OUR STAKEHOLDERS 7

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    Marel – Annual Report 2018 Last year we successfully launched the ATLAS system, our live Innovation drives transformation bird handling system that achieves new animal wellbeing In 2018, we increased investments in innovation to a level standards while simultaneously increasing the quality of the of 6.2% of revenues compared with 5.6% of revenues for inputs to the factory. Thereby moving our operating window the previous year. The step up was mainly in investments in from serving only the factory level to serving processors all the the overarching Innova software platform that collects and way from post-farm gate to dispatch of the final products. distributes data that improves operational efficiency and ensures full traceability of products throughout the value A sizeable market serving the basic needs chain. The annual retail value of poultry, meat and fish products is estimated to be EUR1,200 billion. With current urbanization We are continuously becoming better and better in utilizing rates, there is a rapid transition from small back-yard grown technologies and realizing synergies across the three industries farming into a fully commercialized approach. Consequently, we operate in. The best example of this is the SensorX, an the underlying demand for new greenfield processing plants X-ray detection system that was initially developed for the fish is high, especially in poultry, pork and fish processing deriving industry and has now become a huge success in the poultry from aquaculture. However, the current annual value of industry by providing bone and contamination free meat for solutions and services to serve the needs within our playing products like chicken nuggets. We are now further mirroring field is estimated to be only EUR 12 billion, of which Marel the SensorX technology into the red meat industry. revenues are EUR 1.2 billion. In addition to detecting bones and other contaminants, the Based on our position as a product pioneer with an extensive SensorX-system is capable of monitoring and blending fat sales and service network around the globe, our target is to and lean muscles with high accuracy and speed to meet continue to grow organically above the market rate. Moreover, the growing demands for “home-style” premium burgers at Marel is at the forefront of consolidating the fragmented affordable prices. market of equipment and solution providers. We have a solid track record in M&A where our primary focus is on closing application gaps to compliment innovation and accelerate the process of becoming a full-line provider to our customers. TO OUR STAKEHOLDERS 8

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    Marel – Annual Report 2018 Are there any structural differences A global scene for a global leader between the three industries? We have had great support from the Icelandic stock exchange Our poultry segment accounts for 53% of total revenues and and our shareholders since listing in 1992. The dual listing of delivered around 18% EBIT in 2018. At the same time the meat Marel shares on an international stock exchange in addition segment accounted for 32% of total revenues with 11% EBIT to its listing in Iceland is on track. It is important for a global followed by Fish with 13% of revenues with around 8% EBIT. leader to have a global stage to support its ambitious growth plan. An international listing and access to a broader investor We frequently get questions from our current and potential base is expected to drive fair day-to-day trading and continued shareholders whether there are any structural differences shareholder returns. between the poultry, meat and fish segments that explain the difference in margins. Management’s view is that there is no Liquid and tradable shares are an important acquisition fundamental difference across the three industries and the currency, as many of our potential acquisition targets are well- growth and value drivers are similar. It is all about comparative run family-owned companies. In many cases, the owners of business advantages within the segments. these companies want to stay in this attractive industry and join forces with Marel, a product pioneer with a global sales In poultry, we have been very successful in closing application and service network and strong digital platform. By offering gaps and providing full lines with the speed of 15,000 them Marel shares that are listed on an international stock chickens per hour in a highly automated process. We interlink exchange they can become a part of the Marel growth story the processing steps seamlessly from primary processing to going forward. secondary and further processing to enable our customers to meet various consumer demands. With improved We are in a partnership standardization and modularization, we lower the execution Our team is dedicated and passionate. We are guided every risk in large projects and simplify the modernization and single day by our shared vision and we share the values of maintenance business. This takes focus and time to build up Innovation, Unity and Excellence. We put great emphasis on and is difficult to replicate. 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 The task in the meat segment is to standardize and modularize managers come from the ranks of this leadership program, the offering in primary processing and further drive our including two members of the executive team. Since mid- customer value creation by vertically integrating the value 2017, we have also trained more than 500 employees to apply chain from primary to secondary and further processing. In what they learned in “The 7 Habits” to their professional and the fish segment, we have successfully managed to improve personal lives. standardization across our product line and we are already starting to reap the benefits mirrored in higher service and This well-known leadership framework highlights important spare revenues and gradually improving operational margin. paradigms to become more effective through proactive Within the fish segment, we are focusing on closing application behavior, prioritization, time management, empathic listening, gaps in primary processing and further automating all and synergistic thinking. processes in line with what we already accomplished in the poultry segment. This is the journey ahead of us. 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 TO OUR STAKEHOLDERS 9

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    Marel – Annual Report 2018 WHO WE ARE MAREL IN BRIEF 11

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    Marel – Annual Report 2018 VISION AND VALUES UNITED UNDER ONE VISION AND ONE SET OF VALUES In partnership with our customers we are transforming the way food is processed. Our vision is of a world where quality food is produced sustainably and affordably.

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    Marel – Annual Report 2018 BUSINESS MODEL Taking an innovative, high-tech approach has placed Marel in the forefront of the food processing equipment industry. As a leader in the field, we provide advanced equipment and systems for the fish, meat and poultry industries around the world. Our business model is based on maintaining a good balance between our industry segments, business mix and geographical operations. Leading pure-play supplier Clear and focused growth strategy We sell advanced and high-end equipment, solutions and Marel’s playing field is gradually expanding to cover the software to the poultry, meat and fish industries. We serve entire production process from farm to fork and from catch to producers looking to increase the automation of their consumer. This entails a full-line offering of integrated systems, production processes. solutions and software for every step of the production process, available in all relevant geographical areas of our Technology leader industries. We invest around 6% of revenues in innovation support of our strong focus on process and product innovation. Ensuring a Strong culture of innovation seamless operating flow and integrating different applications We are a company defined by our dedication to innovation, boosts overall efficiency and production capacity. as reflected in our extensive investment in research and development. Marel began as an idea at the University of Global reach Iceland in 1977 and innovation is and has always been at We have a dedicated team of about 6,000 employees in over 30 its heart. We invest around 6% of revenues in research and countries around the world. Through the years, we have built development annually, which translated into EUR 74 million a unique sales and service network of over 500 employees in in 2018. global sales and more than 1,000 in global services supporting clients around the world. We also complement our local From the start, Marel has bundled software and equipment presence with a network of over 100 agents and distributors. together. Our approach to innovation is not limited to mechanical engineering to optimize the performance of each Blue-chip customer base worldwide application, but also encompasses integrated technologies Our customer base includes most of the world’s blue-chip and connectivity. Data analytics and software control are food processors in the poultry, meat and fish industries. Our becoming increasingly important. Today, Marel is the focal long-standing partnerships are strong, built on co-operation point of information gathering for global food processing, one and teamwork across industries and geographies. of the most significant value chains in the world. Innova software platform Marel is also known for applying its technology across different We give our customers full control over their production with industries. In 2018, we continued to leverage our strong Innova, our advanced, overarching food production software. innovation investments in one field to successfully develop Designed to optimize production using our high-tech solutions for other protein product groups, across processes equipment lines, Innova software can integrate and increase and geographies. the efficiency of third-party equipment as well. MAREL IN BRIEF 13

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    Marel – Annual Report 2018 € 1 1250 1000 10% 1000 800 8% EUR million 750 600 6% 500 400 4% 250 200 2% 0 0% 2016 2017 2018 Revenues R&D expenses as % of revenue Three key industry segments Marel Poultry At Marel we focus our efforts on three main production Marel Poultry offers the most complete product range in the industries: poultry, meat and fish. Our teams analyze trends industry and has the largest installed base worldwide. We and anticipate processing challenges, enabling us to stay on provide in-line poultry processing solutions for all process top of market developments and changes in the industries we steps and all processing capacities for broilers, turkeys and serve. ducks. Marel Poultry, Marel Meat and Marel Fish are constantly Marel Meat working on new ways to improve existing processes, increase Marel Meat supplies advanced equipment and systems to the automation and streamline product processing. red meat industry. We focus on slaughtering, deboning and trimming, case-ready and food-service solutions. Following acquisitions of MPS, Sulmaq and MAJA, we are now a full-line supplier from farm gate to finished pack. Marel Fish Marel Fish is the leading global supplier of advanced stand- alone equipment and integrated systems to the fish industry. We provide innovative equipment, systems and software for processing whitefish and salmon, both farmed and wild, onboard and ashore. MAREL IN BRIEF 14

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    Marel – Annual Report 2018 Customer focus Our strong and long-standing relationships with our We expect automation in food processing to increase steadily, customers form the bedrock of our business model. We’re especially in emerging markets. This means higher growth here to partner with our customers. Together we innovate and in advanced and high-end segments of the food processing create products that set new benchmarks in the industry and equipment industry. Our expertise in this segment focuses on achieve continuous improvements in line with our customers’ helping customers become more efficient, more sustainable needs. and more profitable. This shared success creates higher margins and better value, both for our customers and for Marel. VERY HIGH-END EQUIPMENT FAST LINE SPEED FAST ADVANCED EQUIPMENT MEDIUM SLOW LOW-END EQUIPMENT NON-AUTOMATED SEMI-AUTOMATED FULLY-AUTOMATED DEGREE OF AUTOMATION Sales and service network Marel’s extensive sales and service network, spread over more We serve a diverse customer base around the world. Our than 30 countries on all continents, is a key competitive edge. professional team of field service engineers ensures the This network is the first line of contact for customers at local uptime and reliability of our large installed base. Service level level. It means first-rate service, consistency and continuity in agreements, a dedicated service commitment and our track our partnership with our clients. We are currently reinforcing record have earned us strong customer loyalty and repeat this network on a regional level to strengthen our connection business. with customers. • Sales and service in over 30 countries • Global sales organization of over 500 employees • Global service organization of over 1,000 employees MAREL IN BRIEF 15

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    Marel – Annual Report 2018 Customer collaboration As a high-tech provider at the forefront of the industry, we have This example of a ten-year relationship with a customer in the built strong customer relationships based on collaboration and meat industry is a prime example of how we do business. It partnership. Our cooperation with customers in innovation, is also a good reflection of our revenue mix, where greenfield new projects and process improvements further supports our projects, modernization and standard equipment, and service ability to transform the industry and increase customer value and spare parts account for around a third each. in the advanced and high-end segments. • Customer begins operation in primary processing and then expands into secondary processing. • After-sales revenue from spare parts and service starts around year three. MAREL IN BRIEF 16

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    Marel – Annual Report 2018 Balanced revenue stream across business Our main revenue stream drivers are turnkey projects, mix and geographies encompassing brownfields, greenfields, modernization Marel’s presence across geographies and multiple protein and maintenance as well as the production of modular, segments serves as a countercyclical buffer. It gives us flexibility standardized equipment and processing lines. The stand- and the opportunity to transfer technical know-how, solutions alone, modular portfolio is the building block for larger and expertise across borders, both industrial and geographical. projects and the entry point for new customers. Our installed We strive to capitalize on the technological advances made in base is also large and growing, effectively driving our resilient one sector by implementing them in another. service and parts revenues. MAREL IN BRIEF 17

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    Marel – Annual Report 2018 STRATEGY For the period 2017-2026 Marel has set a target of 12% average annual increase in revenue, through both organic growth and acquisitions. Our growth plan involves capitalizing on strong innovation investment to drive expansion and market penetration. We will also focus on strategic partnerships and acquisitions to fill gaps in the value chain, and to augment our full-line product offering. Leading global provider of systems and services Marel’s strategic objective is to be a full-line provider to the This offers our customers process control, real-time traceability poultry, meat and fish industries. Our focus is to put our and monitoring of throughput and yield that is hard to advanced, automated systems and solutions to work at every replicate. Seamless flow and integration between different step of the production process and to cover the relevant applications result in higher overall efficiency and improved geographical areas in our industries. Strong organic growth yield. Marel has thus become a one-stop shop for customers’ and strategic acquisitions have helped make Marel a leader in needs for equipment, software and service. its field. In line with our strategy, we have actively reinforced our value Our product line includes standalone equipment, individual chain in recent years. Strong cash flow has made it possible systems and full production lines, all controlled and integrated to support organic growth actively through innovation, with Innova, our overarching software solution. advancing our manufacturing facilities and updating our IT platform across geographies. It has also allowed Marel to MAREL IN BRIEF 18

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    Marel – Annual Report 2018 undertake strategic acquisitions, such as Sulmaq in 2017 and outperforming that of the market. Ongoing and continued MAJA in 2018, without issuing new shares or taking out new investment in the future scalability of our platform, IT loans for that purpose. We will continue to fill the remaining infrastructure and global reach supports organic growth application gaps in our value chain through innovation, going forward. organic growth, strategic partnerships and acquisitions. Acquired growth Investing in growth We will also supplement our full-line offering and accelerate Marel aims to achieve on average 12% annual revenue growth market penetration through acquisitions. We believe our in the period 2017-2026. The growth is expected to be a solid operational performance and strong cash flow can balanced mix of organic and acquired growth. support 5-7% revenue growth on average annually through acquisitions. This growth is not expected to be linear but Organic growth reflect opportunities which become available and economic The market for food processing equipment is expected to fluctuations. To capture the full value of acquired companies, grow 4-6% annually on average in the long term. Driven by we are further professionalizing our integration capabilities our significant innovation investment, market penetration and expertise to become a solid integration partner. and extensive product portfolio, we aim at organic growth MERGERS AND ACQUISITIONS Acquisition of German food processing equipment manufacturer MAJA Marel was pleased to welcome MAJA, a German food processing equipment manufacturer, and its team of 200 employees to the group in 2018. Since its founding in 1955, MAJA has been a highly innovative manufacturer of food processing machinery, specializ- ing in skinning and portioning with its main focus on the meat mar- ket. It also produces ice machines for the preservation of fresh food. MAJA has an excellent manufacturing site in Kehl-Goldscheuer and had annual revenues of roughly EUR 30 million in 2017. The MAJA acquisition strengthens Marel’s global market presence and is in line with the company’s strategic objective to be a full-line supplier of advanced processing equipment and solutions to the food processing industry. MAREL IN BRIEF 19

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    Marel – Annual Report 2018 A prime example: how Marel fills value gaps Acquisition of MPS paved the way for entry into primary meat processing • Marel became a full-line provider to the meat industry • Complementary geographical presence and product portfolio • Integration is proceeding well with all meat solutions united under the Marel Meat brand Another prime example: how Marel • Improved foothold in the rapidly growing meat market expands its geographical presence in South and Central America • Strong customer relationships enable further sales of The acquisition of Sulmaq strengthens Marel’s market complementary equipment presence in Latin America. • Solid workforce with strong engineering know-how • Future manufacturing hub that can be scaled to support the region MAREL IN BRIEF 20

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    Marel – Annual Report 2018 DELIVERING GROWTH Celebrate less waste Yield from poultry production increased from 60% to 75% in recent decades. Our use of real-time data to monitor yield has been key in improving the production process. That’s the power in numbers. DELIVERING GROWTH 21

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    Marel – Annual Report 2018 POULTRY Poultry is one of Marel’s three key protein industries. With the most complete product range in the industry and the largest installed base worldwide, Marel Poultry is a leading global provider of advanced food processing systems and services for broilers, turkeys and ducks. Marel Poultry contributed EUR 638 million in revenue in 2018, or 53% of total revenues, translating to an EBIT of 18.4%. The consumer value of the global poultry, meat and fish of food processing equipment for poultry, meat and fish market is currently estimated to be around EUR 1,200 billion, is estimated to be around EUR 10 billion. Of this, poultry with the poultry market accounting for EUR 400 billion. More processing equipment sales are estimated at around EUR 3 specifically for Marel, the market for sale and maintenance billion, a figure which is expected to grow annually by 4-6%. DELIVERING GROWTH 22

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    Marel – Annual Report 2018 Overview Poultry processors embrace Innova Marel Poultry continued to increase its strong world-wide In 2018, Innova Food Processing Software became more presence in 2018. Despite challenging market conditions in integrated with Marel Poultry’s products. In today’s processing various parts of the world, we completed a large number of plants, sophisticated software is indispensable. Intelligent significant projects around the globe during the year. software is not only helpful in high-tech plants that process 15,000 birds per hour (bph), it can benefit any processing Our high-tech systems and services time and time again facility. Data-driven processors are able to reach higher proved to be the preferred choice for customers dealing with performance levels and add value, resulting in less production local market requirements. For example, our ATLAS live-bird loss and lower cost per product. Accurate data also facilitates handling system has been a great success, with the solution quicker and more accurate decision-making. currently operating in countries including Germany, the UK, France, Portugal, Spain, Australia, Canada and the USA. By gathering data, Innova plays a major role in automation across all stages of the process. It enables processors to use this Scarcity of human labor was a prominent trend across many data to find the most efficient functioning of their machinery, markets in 2018. Poultry processors across nearly all regions, allowing them to adapt to changing circumstances remotely from China to South America, Europe to the US, are struggling and maintain a consistent product quality. With Innova, Marel to find skilled workers, particularly in countries where workers is helping poultry processors around the globe to maintain a have access to multiple job opportunities in a variety of competitive edge in a challenging industry. industries. Further processing solutions for a wide variety of This limited access to skilled employees has been a key convenience foods reason why poultry processors are investing in greater levels In 2018, Marel Poultry successfully added several further of automation. Marel Poultry offers innovative solutions that processing solutions to its range of primary and secondary can automate and streamline processes throughout the poultry processing systems. We can now enable our customers plant, reducing reliance on human labor, while increasing to produce a wide variety of convenience foods rapidly and throughput and yield. with high precision. Products The highly automated further processing systems and In 2018, we worked in partnership with our customers to solutions that we offer for poultry processors can be used design fit-for-purpose solutions, ranging from modest plants for preparation, portioning and forming, coating, frying and to complete greenfield facilities. In response to processors’ cooking, but also for linking and peeling sausages and co- demands, we optimized both efficiency and product quality extrusion. Marel Poultry understands how processors think in by bringing automation to higher levels. this important part of the industry. DELIVERING GROWTH 23

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    Marel – Annual Report 2018 The 700mm wide Convenience Line for further processed In 2018, Marel Poultry invested in the Dutch FlexCRAFT products underwent a transformation in 2018. research program, co-operating with Wageningen University & Research (WUR), Technical University Eindhoven, Technical The new, patented Helix Drum for the RevoPortioner was one University Delft, University of Twente, and University of important innovation in that line. In the Helix Drum, products Amsterdam. are positioned along a helix shaped line, leading to continuous filling. The low-pressure method replaces the previous start- The objective of the FlexCRAFT research program is to develop stop method and ensures an optimal and more consistent end robots that can deal with a large variety of agri-food products. product. The parties involved are aware that intelligent robots will play a significant role in the food industry in the near future, The combination of Helix Drum Technology with the new making it essential that we devise ways to utilize such robots Active Batter Applicator, as well as the new RevoCrumb, for optimal efficacy. unlocks opportunities for poultry processors. The crumb management of RevoCrumb guarantees perfect coverage of Marel’s RoboBatcher marks a milestone in food processing the product, keeping even the most vulnerable crumbs such automation. Similar robotic technology could be used to as coarse panko and cornflakes, intact during processing. improve other processes in the poultry value chain, particularly for tasks such as planning, control, gripping, and manipulation. Innovation In 2018, we introduced several new, innovative solutions We are committed to making our contribution to developing that have helped advance the poultry production process. In this technology. Through our participation in FlexCRAFT, partnership with our customers, our innovative developments we can support this development, particularly as one of the resulted in numerous successful implementations of new program’s three cognitive robot projects focused primarily on concepts for the industry. poultry processing. 15,000 BPH processing Tray styling with 3D-printed components In 2018, Marel Poultry rolled out 15,000 birds per hour (bph) As part of the continuous development of the RoboBatcher, processing, an increase from the previous maximum speed this year we launched an improved version featuring refined of 13,500 bph. Given that the global population is growing and specialized grippers for fillets, drumsticks, and whole legs. steadily, and each year more people move from rural to urban areas, the demand for poultry is expected to increase The new gripper design can place products into trays according considerably. To keep up with consumer demand, processing to patterns chosen by the user and with minimal giveaway. plants need to intensify their operations and improve both With supermarkets insisting on attractive presentations, tray efficiency and speed. styling is a hot topic among our customers. Improvements in styling performance minimize the need for restyling after the At the same time, strong market pressure to lower production product has been placed in the tray, which helps processors costs per bird without compromising quality requires increased save on labor. levels of effectiveness, which is a significant challenge. Another important achievement in our tray styling innovation Marel Poultry is the world’s first supplier of integrated 15,000 is the ability to print lightweight 3D plastic components for bph lines. Reliability is paramount when dealing with such our equipment. As the design of the jaws in the RoboBatcher high speeds. The first plants to operate at 15,000 bph are required advanced engineering, we utilized 3D printing, giving located in Germany, with plants in the UK and elsewhere our engineers design flexibility and allowing them to keep the around the world soon to install the solution. weight of the equipment as low as possible. Robotic research with leading universities As the RoboBatcher needs to move quickly with powerful Marel invests around 6% of its revenues annually in research acceleration forces, a heavy gripper could potentially slow and development. As a leading innovator in the industry, we down performance and risk damage. Our new grippers feature are committed to collaborating with companies and other many 3D-printed, lightweight plastic parts with fewer bolted stakeholders, which includes working closely with leading joints needed, making them also easier to clean. universities. DELIVERING GROWTH 24

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    Marel – Annual Report 2018 Marel hf. – Annual Report 2017 Projects Mergers and acquisitions are frequent in the food processing For its Milford, Delaware, facility US poultry processor Perdue industry, and something we follow closely. Farms invested in a higher-wellbeing CAS system, as well as a live bird handling process that will be the first of its kind in The takeover of Crown Chicken by Cranswick in the UK, the US. formerly a pork-only processor and a long-term customer of Marel Meat, resulted in an expanded and closer partnership Perdue has officially committed itself to converting all its plants between Cranswick and Marel. Now that the firm has entered to CAS instead of electrical stunning. While both electric and the poultry business, it has chosen Marel Poultry as the primary CAS stunning systems are approved, proven, and accepted supplier for its new facility. for bringing the highest levels of animal wellbeing to poultry processing in the US, a growing number of customers show A trend in the US interest in integrating CAS systems at poultry facilities. The year 2018 saw the breakthrough of modern live-bird supply and anesthetization in North America, with several We expect orders from poultry processors, including large conglomerates switching to the ATLAS system and CAS conglomerates, for CAS stunning systems to grow following SmoothFlow for stunning. positive results from pilot projects. CUSTOMER STORY Cranswick aims to be best-in-class In 2018, Cranswick PLC planned to build a £54 million chicken processing facility in Eye, Suffolk. Cranswick and Marel Poultry joined forces to realize this hypermodern greenfield project, by implementing Marel’s latest innovations and state-of-the- art solutions, including our 15,000 bph integrated line system. “We want to have the best chicken factory with the highest processing speed, to become the premium poultry processor in Britain,” says Adam Couch, Chief Executive. Throughout the plant, Marel Poultry’s innovative solutions will support Cranswick’s high-tech, high-value processing. As part of the project, we will install our ATLAS technology and CAS SmoothFlow stunning application, the AeroScalder, a com- plete evisceration department, a shock/maturation air-chill- ing tunnel, LineLink transfer units, two distribution lines with SmartWeigher and IRIS, breast deboning with AMF-i, thigh deboning with two Thigh Fillet Systems, and SensorX inspec- tion technology. The integrated Innova software solution allows plant manage- ment to control, monitor and report on the real-time status of production and yield. DELIVERING GROWTH 25

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    Marel – Annual Report 2018 Sustainability Less waste with optimal carcass balancing Sustainability concerns, such as limiting the carbon footprint Maximum carcass balancing was an important trend in 2018. and reducing food waste, as well as animal wellbeing and food Perfect carcass balancing means being able to sell all parts of safety, are driving demands for new automated technologies in a chicken at the best possible price. Marel Poultry introduced the poultry industry. With this in mind, Marel Poultry continues two new products to optimize carcass balancing: total leg to focus on developing sustainable processing solutions. deboning and Q-Wing. Food safety Total leg deboning Any degree of bacterial contamination in the food chain can Deboning both thighs and drumsticks with the Thigh Fillet have significant consequences, making hygiene of paramount System and the Drumstick Deboning System adds value for importance in the food processing industry. Marel Poultry processors by harvesting more boneless leg meat at a higher offers solutions that help processors produce safe, high-quality quality. Total leg deboning allows processors to upgrade food, with automation playing a key role by reducing the lower value products to high-quality products in demand by number of steps at which workers manually handle products. consumers. Our maturation chilling system is an excellent example of such The fully inline, high capacity, total leg deboning solution from a solution, as it virtually eliminates the risk of product cross- Marel Poultry helps poultry processors achieve optimal carcass contamination. The result is higher quality products with a balance. In adding more value to chicken legs, they are making longer shelf life. optimal use of every part of the broiler. These solution show how sustainability and profitability can go hand-in-hand. Carbon footprint Reducing the company’s carbon footprint has become one of Higher quality and yield with Q-Wing the key goals of Marel Poultry’s innovation team. This objective With previous methods, only a very labor-intensive process is in line with Marel’s commitment to the UN Sustainable could detect a broken whole wing. As a result, processors Development Goals, including the goal of ensuring sustainable would downgrade both broken and unbroken whole wings, consumption and production patterns. To reduce our carbon even if some were high-grade pieces of meat. Wing products footprint, we take water and energy use into account when are becoming more popular and consumers demand designing all of our new technologies. consistent high quality wings. This provides incentive for poultry processors to invest in automated, accurate wing One example of carbon footprint reduction is ATLAS’ processing. SmartStack transport module. Its construction features a bottom tray, which doubles as a pallet. The dual function To address this challenge, Marel Poultry introduced Q-Wing, design enables transportation of more birds per module, and an automated quality assessment and distribution solution gives them the most headroom in the industry. The design for wing parts. The system helps secure consistent quality and also reduces truck movements from farm to processing plant, increase wing yields. Q-Wing makes it possible to harvest the thereby lowering the carbon footprint in transportation of the highest value and yield from each part of the wing, thereby birds. contributing to a better carcass balance. DELIVERING GROWTH 26

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    Marel – Annual Report 2018 Growth drivers Animal wellbeing Automation and smarter processing are important growth Increased attention to animal wellbeing is both a challenge drivers in the poultry industry, but there are various other and an opportunity for growth in the poultry industry. secular trends that come to play. Animal wellbeing in poultry processing is particularly From manual labor to automation important during live-bird handling and anesthetization, two As the industry’s focus on automation increases, poultry steps which are currently under close scrutiny. To address processors are assessing, and subsequently investing in, more this, we developed the ATLAS and CAS SmoothFlow systems, advanced systems. Marel Poultry works in partnership with both of which have set new standards as the industry’s most processors to help them introduce automated and robotized humane systems. systems into their facilities without requiring a complete plant redesign. Global production and trade trends In 2019, global production of chicken meat is forecast to rise Our solutions are designed to meet and exceed the yield and by 2.3% and reach 97.8 million tons. Global trade in chicken effectiveness of manual work, with a high return on investment, meat is expected to grow by 4.2% to 11.6 million tons. and the lowest possible impact on daily operation. We ensure processors can continue to deliver end products of consistent The US is expected to continue to be the leading producer quality as they modernize their plants. in 2019, accounting for 20% of total production, followed by Brazil with 14%. Traceability In the poultry market, traceability is not just a buzzword. In 2017, the European Union overtook China to become Food companies around the world are trying to minimize the third-largest producer of chicken meat in the world. It is any loss of business and damage to their brand due to costly expected to hold that position in 2019. product recalls. Without an effective traceability system, food processors can be shut out of lucrative new markets, or Brazil continues to be the world’s leading exporter of chicken could end up losing business to companies that demonstrate meat, although the figures are lower than forecasts. reliable traceability to ensure food safety. Marel Poultry offers processors solutions that allow them to gather data and achieve end-to-end traceability. Sensors at crucial positions throughout the plant can deliver information to the control room, where Innova software can then identify and trace backwards every product in the plant. Source: USDA Foreign Agricultural Service (2018, October 11). Chicken Meat Production and Trade. Retrieved from: https://apps.fas.usda.gov/ DELIVERING GROWTH 27

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    Marel – Annual Report 2018 MEAT Meat industry is one of Marel’s three key protein industries. Marel Meat is a leading global supplier of integrated systems and advanced stand-alone processing equipment to the red meat industry. Our equipment handles all stages – from live animal receipt, to finished consumer packs – fresh, chilled, cooked or frozen. Marel Meat contributed EUR 387 million in revenues in 2018, or 33% of the total, translating to an EBIT of 11.3% (operating income adjusted for PPA related costs, including depreciation and amortization). The consumer value of the global poultry, meat and fish of food processing equipment for poultry, meat and fish is market is estimated to be around EUR 1,200 billion. Meat is estimated to be around EUR 10 billion. Of this, meat processing the largest market segment, with an estimated value of EUR equipment is estimated to be around EUR 5.5 billion, a figure 600 billion, followed by poultry and fish respectively. More which is expected to grow annually by 4-6%. specifically for Marel, the market for sale and maintenance This steak has a story and we want to tell it With data collection, we provide full traceability throughout the production process. That’s the power in numbers. DELIVERING GROWTH 28

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    Marel – Annual Report 2018 Overview Products Integration continued to be the key theme for Marel Meat Our red meat product offerings link up to cover the entire value in 2018. Over the course of the year, we worked diligently chain. Our position as a full-line supplier was reinforced in 2018, on the integration of new team members into the front-line with both the launch of new products and improvements to sales team, following the MPS (Meat Processing Systems) existing solutions. acquisition that made us a full-line supplier to the meat processing industry. During 2018, Marel Meat added the Robot Bung Remover (MBR) to the M-Line robot series, which is already well established in We unified our product offering and the team providing it, pig slaughter plants. We also continued the development of following an approach as simple as it was effective. Our whole the DeboFlex leg system and the trim handling systems, while team is trained to be able to represent the full product line, at the same time introducing the portion cutters V-Cut 160 and from farm gate to final pack. Intralogistics and wastewater V-Cut 200, which set new standards in volumetric portioning. treatment were also areas of focus, with successful projects undertaken in both fields. Intelligent processing Our highly effective Innova software is a key element of our Market penetration through acquisitions full-line processing equipment. This software is at the heart of In 2016, we became a full-line supplier of primary, secondary many of our cutting and deboning solutions where product and further processing solutions for meat with the acquisition traceability is essential. It enables customers to mitigate of MPS (Meat Processing Systems). Another major milestone operational risk, providing full traceability from farm to fork. towards closing the remaining gaps in our product offering and geographical reach was the acquisition of Brazilian meat Food logistics processing equipment manufacturer Sulmaq in 2017. In 2018, Sales of food logistics systems were particularly good in we further reinforced our full-line approach by acquiring the 2018. We offer intralogistics solutions that range from small German firm MAJA. MAJA’s product line and complementary conveying systems to large integrated turnkey projects. All geographical reach have strengthened our position in the our systems are modular, making them easy to fit into existing meat industry globally and expanded market penetration. plants. Another key feature is seamless integration between the intralogistics systems and our Innova Food Processing Collaboration for improved customer experience Software. Coupled together, they can ensure full control of the We continued our efforts on unifying our teams throughout products through processing, storage, and distribution. 2018. A new structure for Marel Meat was introduced, with new management leading sales, service, innovation and Automation in hog slaughtering engineering functions. Through training and leadership, our Our automatic, robotic slaughter solutions (M-Lines) were management is ensuring effective collaboration between installed at many customers across the globe in 2018. The sales and service to serve our customers better and deliver M-line generation of hog floor slaughtering uses articulating solutions that help them improve their processing operations arm robots and the latest techniques in 3D scanning to from post-farm gate to consumer-ready packs. ensure high cutting accuracy. Automation reduces the need for manual labor in the slaughtering process and, with less manual handling needed, the risk of contamination is lower and hygiene is improved. This can extend the shelf-life of fresh pork products, adding value for both food processors as well as end consumers. DELIVERING GROWTH 29

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    Marel – Annual Report 2018 Innovation Deboning made easier with Deboflex In 2018, Marel Meat continued to work on innovative We continued improving and adding to our groundbreaking equipment and software solutions for the industry. As a solution for pork deboning, DeboFlex, in 2018. Three new company thriving on innovation and the development of modules: shoulder blade pulling, shank pre-cutting and high-tech applications, Marel sees opportunities where others shank-sawing, make deboning and cutting easier and more see challenges. Our teams at Marel Meat are adept at turning efficient. The shackle-based logistical solution takes care of ideas into reality, and challenges into solutions. Intelligent transporting fore-ends and legs through overhead conveyers software applications have become a key facet of the meat and in a controlled flow past work stations. The solution production solutions we offer our clients. creates a safer and more ergonomical working environment for operators who can focus fully on the task at hand. Improving margins and safety with SensorX Electus The SensorX Electus is a part of our trim handling system and is Projects based on X-ray technology. It measures the precise lean-to-fat Thanks to strategic acquisitions and organic growth, Marel ratio (CL ratio) as well as detecting bones and contaminants. Meat now covers the entire value chain from live animal intake Since it became available as a standard solution in 2018, the to finished consumer product. Our projects in 2018 reflect this system has been installed at many customer sites. SensorX scope, as larger installations and greenfield projects became Electus provides accurate information for informed decision more prominent. Some of our largest greenfield projects took making that can help further processors and grinding facilities us to China, Japan, South Korea, Russia, Spain, and North processing meat trim produce products that meet their America. specifications. They improve their margins while increasing the safety of their products. In China, we completed a greenfield project for the beef processor Zhejiang Aozhou Cattle Industry. The new plant is Precise thickness or weight every time with I-Saw equipped with a slaughtering system, a StreamLine system Since the I-Saw was released for sale in 2018, several processors for deboning and trimming, logistics and water treatment, have added this portioning solution to their operations. Using all connected with overarching Innova Food Processing camera-vision scanning technology, the I-Saw cuts boneless Software. Another customer, Pronaca upgraded their existing as well as bone-in frozen meat products into portions of pork processing plant in Ecuador with a new slaughtering, consistent thickness or weight. This portion cutter is designed cutting, deboning and logistics solutions from Marel Meat. with ultra-high-speed bandsaw blades that produce a clean- In Vietnam, Masan Group Corporation inaugurated its new cut product with minimal smear or bone chips. greenfield pork processing complex, fully supplied with Marel equipment and software for slaughtering, cutting, deboning and logistics. We also developed a complete greenfield plant for pig slaughtering for Litera Meat in Spain. DELIVERING GROWTH 30

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    Marel – Annual Report 2018 CUSTOMER STORY Making the most of Argentinian beef La Anónima is the fourth largest supermarket chain in Argen- tina, and operates 161 stores throughout the country. Each store has its own dedicated butcher, and the company is re- nowned for its quality beef cuts. La Anónima is working toward a more centralized meat pro- duction and cutting operation to optimize their processing. “Our two meat processing plants supply various cuts of beef and primals to the supermarkets, where they are further cut and pro- cessed. We want to make that process more efficient, which is why we also bought the StreamLine deboning and trimming system,” says Nicolas Braun, CEO of La Anónima and the great-grand- son of the company’s founder. With the StreamLine solution, La Anónima also added a sys- tem for traceability using barcodes that allow the firm to trace cuts and primals back to the carcasses. Higher throughput and yield, in addition to better insights on traceability and food safety, are vital for La Anónima’s objec- tive of expanding into foreign markets once Argentina opens fully for beef exports. “Implementing new technology demands a lot of commitment, but we felt that with Marel we had found a good long-term part- ner who would help us move forward. In fact, the co-operation with Marel – both here and in Iceland – is excellent,” said Nicolas Braun, CEO of La Anónima. DELIVERING GROWTH 31

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    Marel – Annual Report 2018 Sustainability Growth drivers Animal wellbeing is, and will always be, an issue of utmost Given the various trends governing our sector, Marel Meat importance in the protein sector. Increasingly conscious sees opportunities for expansion in both traditional growth consumers want products that are produced sustainably and markets, as well as what some would call saturated markets. As ethically. Marel Meat worked closely with customers in 2018 on a well-established provider with a full-line offering for primary, these issues, delivering systems and equipment that improve secondary and further processing, we see our basic growth production sustainability, both in terms of raw material being driven by traditional demands such as improvements in utilization, as well as energy and water consumption. We yield, quality and throughput. emphasize helping processors to be flexible in their product offerings, while simultaneously adhering to animal wellbeing In the more advanced sectors of the market, where automation standards in the primary part of their processing and ensuring and production optimization have already occurred, sustainability throughout the value chain. This applies to their customers will need to continue their investments in order processing facilities and their equipment set-up. to sustain their margins. Our approach is to introduce new technologies to increase automation still further and boost Marel Water Treatment yield. We have witnessed a clear trend in recent years towards Wastewater treatment is an area where Marel Meat directly greater requirements for automated systems and processing contributes to clients’ sustainability efforts. The Marel water procedures. As processors face tougher competition, they treatment division is part of Marel Meat. The systems are realize that they need to implement new technologies to stay designed to ensure the most efficient use of water and include at the forefront and meet fluctuations in consumer demand. units that treat wastewater so that it can be re-used in food processing operations. This long-standing, internationally recognized division was integrated in 2017 and offers primary, secondary, and tertiary treatments for all types of food processing wastewater. Marel water treatment systems are efficient, easy to use, and characterized by low maintenance. DELIVERING GROWTH 32

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    Marel – Annual Report 2018 Global production and trade trends The US is expected to continue as the leading producer in Beef and veal 2019, accounting for 20% of total production, followed by In 2019, the global production of beef and veal is forecast to Brazil with 16%. reach 63.6 million tons, an increase of 1.2% from previous year. Global trade in beef and veal is expected to grow by 0.2% and On the import side, China (including Hong Kong) has been the reach 10.6 million tons. world’s largest importer since 2017 and is expected to remain the leader in 2019. Brazil has replaced India as the world’s largest exporter of beef and veal and is expected to remain the top exporter in 2019. Brazil’s exports are expected to rise by 4.8% to reach 2.2 million tons in 2019. Pork In 2019, global production of pork is forecast to rise by 1.4% to The EU is the world’s largest exporter of pork. Its exports are 114.6 million tons. Global trade in pork is expected to grow by expected to grow by 3.3% and reach 3.2 million tons in 2019. 3.0% and reach 8.8 million tons. China continues to be the largest importer followed by Japan, China continues to dominate the pork market, accounting for which it overtook in 2016. an estimated 48% of world production in 2019, followed by the EU with 21%. DELIVERING GROWTH 33

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    Marel – Annual Report 2018 FISH Fish is one of Marel’s three key protein industries. Marel is a leading global supplier in the sector, providing both advanced standalone equipment and integrated systems for all stages of the fish processing value chain. Our systems range from single scales to integrated production lines and turnkey systems, both onboard and ashore. Marel Fish contributed EUR 159 million in revenues in 2018, or 13% of total revenues, translating to an EBIT of 7.9%. The business has been transformed in recent years, as investments in innovation and enhanced levels of standardization have increased orders and improved margins. The consumer value of the global poultry, meat and fish of food processing equipment for poultry, meat and fish is market is estimated to be around EUR 1,200 billion, with the estimated to be around EUR 10 billion. Of this, fish processing fish market accounting for an estimated 200 billion. More equipment sales are estimated at around EUR 1.5 billion, a specifically for Marel, the market for sale and maintenance figure which is expected to grow annually by 4-6%. With precision comes perfection A cut that’s 0.5% more accurate saves hundreds of tons of salmon, bringing us one slice closer to a world where quality food is produced sustainably and affordably. That’s the power in numbers. DELIVERING GROWTH 34

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    Marel – Annual Report 2018 Overview Products In 2018, Marel Fish continued to enable fish processors to At Marel, we recognize the potential for significant generate higher value through better utilization of raw improvement in yield, quality and safety by improving material, maximization of throughput, and better quality and processing at every step in the plant. In 2018, we introduced process control. a range of new solutions for fish processing, beginning the moment catch is hauled onboard and continuing to the In the past year, we have focused on helping processors finished consumer packs. achieve gains by making the most of digital technology. With the latest technological advances increasingly influencing the High-precision cutting with the new salmon deheader way Marel serves and supports the fish processing industry, Marel’s new automatic MS2720 Deheading Machine for salmon digital is only going to become more vital in the future. was released for sale in January 2018. The new machine offers some of the highest levels of throughput, yield and quality The wild whitefish segment continues to occupy an important ever achieved for this process. It allows salmon processors to place in the Marel Fish portfolio due to its long-standing achieve optimum yield from every fish, as well as enabling use of technology, as well as modern fishing and processing a better flow by performing high-precision cutting and methods. Wild fish is a relatively fixed resource with limited allowing for the automatic transfer of deheaded fish into our potential for growth in terms of volume, largely due to the MS2730 Filleting Machine. Besides boosting productivity, the state of fish stocks and quota limitations. However, thanks to deheader is easy to operate, with all settings and operations their investment in high-tech onboard solutions, whitefish made on a touchscreen panel next to the operator platform at processors can now meet the rising demand for wild fish the machine’s infeed. products by improving the utilization and value of their catch. Automated whitefish processing, both onboard and ashore Growth opportunities in the farmed fish sector Marel has sold more than 35 FleXicut machines since the Aquaculture has been the fastest growing food production revolutionary pinboner and portioner was introduced in segment in the last decade, and Marel Fish has a strong 2014, including several FleXicut Marine machines for onboard foothold in the sector, especially in the salmon industry. We processing of boneless fillets. The automation of bone removal have also worked for many of the world’s largest processors and portioning with FleXicut enables processors to raise of tilapia, sea bream, and sea bass. Our efforts to extend productivity while greatly improving product handling and our market penetration in this sector has strengthened our yield. position as a leading provider of processing solutions for the farmed fish sector. As the second generation of FleXicut emerges, greater levels of interconnectivity and new features are improving processing Leadership expertise results further, while the reliability of existing systems is Marel was an active participant at global seafood conferences fueling the growing interest in FleXicut across the industry. throughout 2018 in order to share its expertise in processing advances, as well as to nurture its close partnership with The pinboning and portioning system now also offers companies throughout the seafood industry. an integrated pre-trim solution and advanced product distribution system that automate this process even further. Marel participated in the North Atlantic Seafood Forum in Norway, the Global Fishery Forum and Seafood Expo in Russia, and the China Salmon Summit, to name just a few. Gatherings such as these offer the chance to share processing knowledge and expertise with researchers, academics, investors, and influential organizations, both national and international. DELIVERING GROWTH 35

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    Marel – Annual Report 2018 Innovation The global seafood value chain is facing unprecedented Better food safety with automated data collection consumer demand, creating a fundamental need for The fish industry as a whole is increasingly recognizing that processors to scale up their productivity. At the same time traceability is essential to ensuring food safety. The ability to as fish processors face challenges to increase throughput demonstrate reliable data collection and a valid traceability and obtain better yields, they also need to respond to tighter system from source to shelf is essential to gaining and quality and safety requirements. maintaining a competitive edge, as well as accessing new markets. Through continuous innovation and the incorporation of robotics, analytics software, and other Industry 4.0 As the leading provider of automated data collection solutions technologies, we provide the fish processing sector with a to the food processing industry, Marel continues to take a very viable means of raising its game and meeting current and active role in realizing the vision of data-driven food safety future requirements. in the fish industry. Our Innova Food Processing Software can provide relevant data to both sides of the supply chain, Transferring technology between industries and guarantee that products meet the highest food safety The FleXicut pinboning and portioning system is a perfect standards. example of how Marel transfers technology between processes and industries. Its technology is the result of innovation New automated quality control and development of X-ray technology that started with the In 2018, we demonstrated the QC scanner (not yet released SensorX in 2004 – a machine that is now the quality assurance for sale) for the first time, a solution to automate the quality standard in the poultry industry – and image processing and control process. The scanner color grades fillets, and computer applications that Marel started using in its intelligent automatically detects surface defects such as pearl stripes and portioning machines in the 1990s. melanin or blood spots after filleting and skinning. With this information, the scanner can determine if fillets need further This technological transfer continued with FleXicut in 2017. manual trimming or can skip that step. With automated quality Initially developed for whitefish, the equipment underwent control, processors can both speed up production and raise extensive testing in 2017 for salmon applications, and the value and quality. successful results were demonstrated at the 2018 Salmon ShowHow in February. DELIVERING GROWTH 36

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    Marel – Annual Report 2018 Projects For Marel Fish, 2018 was a productive year with both The plant produces up to 30 metric tons of salmon products greenfield projects as well as standard equipment and every day, and the Marel installation is vital to ensuring system installations. The whitefish segment had steady sales filleting, trimming, pinbone removal, skinning, portioning and of standard systems to current and new customers in all slicing is carried out effectively and in a timely manner. our regions and the farmed fish team participated in large greenfield projects in Scandinavia. The following examples Leroy greenfield plant illustrate the variety of those projects we undertook in 2018. Leroy Seafood Group’s new plant in Norway became one of the most advanced salmon processing plants in the world when it Primex greenfield plant began operating in 2018. The facility is equipped with high- Primex’s ultramodern whitefish plant at Myre, in northern tech salmon processing systems from Marel that are setting Norway, became operational in 2018. The latest technology new industry benchmarks. from Marel helps the company ensure high volume and economical processing with the best possible yield, quality, Marel supplied solutions for pre-rigor filleting lines, including and productivity. new deheading machines that transfer fish to five parallel filleting lines, as well as whole fresh salmon packing and The new factory produces vacuum-packed cod loins and logistics solution for the plant. portions, as well as a variety of other products. The Marel equipment extends along the processing chain to include The salmon is brought directly into the factory early each raw material grading, pre-trimming, automatic pinboning morning, and leaves the factory packed as fillets or whole fish and portioning, all of which is followed by quality control and later the same day. By filleting so close to source, Leroy saves packing. FleXicut is a vital part of the Primex factory concept, on freight costs, raises the quality of the end product, and and new robot technology from Marel is helping to increase reduces the carbon footprint of the salmon that ends up on the efficiency of product distribution and handling at the our plates. facility. FleXicut systems at G.Run As well as achieving a very high level of automation, Primex In 2018, Icelandic fish processor G.Run installed two FleXicut also uses Innova Food Processing Software to manage pinboning and portioning machines, a FleXitrim flowline and optimize the whole production process, controlling and two packing lines. The installation was part of a major the distribution of raw material coming in and controlling expansion of the company’s facilities in Grundarfjordur, production based on product orders. Iceland, which includes a new 2000m2 building. Hi-Chain automation, China’s first fully-automatic salmon The FleXicut systems enable G.Run to increase the primary processing line product ration, which is extremely valuable to them. The Shanghai Hi-Chain Foods’ salmon processing facility upgrade also helps the processor meet its goals of significantly completed its first full year of operation in 2018, utilizing a new raising throughput without adding more staff. The project Marel processing line that was installed in 2017 - China’s first marks the first time the FleXicut has been used for processing automatic processing line for salmon. redfish. With two FleXicut lines running, one can be used for redfish and the other for cod and similar species. In recent years, Chinese salmon processors have increasingly looked to technologically advanced processing equipment to Marel’s Innova Food Processing Software is a vital element improve performance and food safety, raise yields, and reduce of the installation. The software supports the complete costs. The installation marked a shift in the nature of many of integrated system and compliance with quality standards and the jobs at the factory, and Marel’s service engineer were in food safety regulations, as well as improving utilization of the close contact with Hi-Chain from the start to ensure successful raw material. installation of the plant. DELIVERING GROWTH 37

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    Marel – Annual Report 2018 CUSTOMER STORY Filleting solutions for the future Salmones Camanchaca is a salmon producer based in the Bío Bío region of Los Lagos Aysén, Chile. In 2018, the company installed a second Marel filleting line, two years after it installed its first Marel salmon filleting machine (MS2730), which achieved excellent results. As Jorge Fernández, CEO at Camanchaca, explains: “We invested in a Marel filleting line to improve our processing results. We have experienced an improvement of around 30% in productivity since the installation, with at least a 1% gain in yield.” Fernández says that the company recognizes the value of investing in a complete filleting line, rather than buying individual standalone units. “In this way, we keep waste to a minimum and we gain the most in yield. We like it so much that our idea now is to equip two more of our plants with Marel equipment.” Camanchaca now uses Marel equipment for all its processes, from deheading to fillet distribution, and enjoys greater efficiency and easy cleaning in addition to better performance control. Sustainability Marel Fish contributes both directly and indirectly to increased Reduction of manpower is also a key emphasis, with compa- sustainability in the world of food processing. Improved raw nies increasingly prepared to invest in technology to reduce material utilization preserves resources, both natural and eco- costs and/or compensate for a diminishing supply of labor. nomic. Our equipment is designed for optimal energy and wa- ter usage, as well as to facilitate cleaning, all of which is geared Changes in dietary habits have brought a continuous rise towards using resources more efficiently. in the demand not only for seafood in general, but also for differentiated and value-added seafood products. This will Growth drivers continue to be a major growth driver for the industry. Innova- For Marel, the key factors for future market growth include the tive solutions in both salmon and whitefish will set new indus- expansion of the farmed whitefish segment, and the overall try standards in the coming years, with major Norwegian and rise in automation in fish processing around the world. Auto- Icelandic processors leading the way. Watershed installations mated factories are expected to aim at increasing their level are already underway, and will likely set the tone for others to of automation, while highly automated players will be eyeing follow. robotics and hands-free processing. An increase in entry-level automation is also anticipated. DELIVERING GROWTH 38

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    Marel – Annual Report 2018 Global production and trade trends Salmon In 2019, global salmon production is forecast to rise by 3.6% to 2.7 million tons. Atlantic salmon will account for an estimated 93% of the production. Norway continues to dominate production with around 49% of the forecast production in 2019, followed by Chile with 31%. After an impressive 18% increase in 2018, salmon production in Chile is forecast to increase further by 2% in 2019, compared to an expected 4% increase in Norway. The two countries continue to dominate the market. Tilapia and catfish The global production of tilapia is now shown alongside pangasius, instead of catfish as last year. In 2019, global production of tilapia and pangasius is expected to rise by 3.2% to surpass 7.0 million tons, of which pangasius accounts for 1.3 million tons. China continues to lead the tilapia market with a 32% share, followed by Egypt with 17%. DELIVERING GROWTH 39

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    Marel – Annual Report 2018 Cod According to forecasts, global production of cod will continue to shrink, and amount to 1.5 million tons in 2019, a decrease of 5.6%. Atlantic cod is expected to account for 76% of production. Russia continues to lead with a 28% share of the market, followed by Norway with 22%. In 2019, the cod catch is expected to decrease in all leading countries except Iceland. Icelandic production has increased gradually from 2014. Iceland overtook the US and Canada in 2018 as the third-largest supplier of cod and is expected to remain in this position in 2019. DELIVERING GROWTH 40

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    Marel – Annual Report 2018 INNOVA FOOD PROCESSING SOFTWARE Innova is our revolutionary food processing software that provides full production control and traceability, giving a complete overview of a product’s journey through processing, from reception to dispatch. To date, we have more than 2,000 Innova installations worldwide, meaning that many of the largest food processing companies in the world already use this cutting-edge software. Innova can be implemented as an all-inclusive production system, adapted for specific production units, and can even be connected to third party equipment. Processing with an eye for detail Our goal is to make the most of the valuable resources that run through our systems. Using real-time data, our Innova Food Processing Software helps our clients get the job done. That’s the power in numbers. DELIVERING GROWTH 41

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    Marel – Annual Report 2018 gather huge amounts of data on these key performance The future of intelligent production indicators, but the challenge lies in understanding what control particular data can help optimize performance and putting Utilizing the latest technology and cloud analytics, Innova this to use. has established itself as the future of intelligent production control. It enables plants to control, monitor and improve their entire production process, allowing producers to spot THERE ARE MANY WAYS TO COLLECT DATA, BUT IF inefficiencies on the factory floor by highlighting the specific YOU DON’T PRESENT IT TO THE END USER IN THE data needed to maximize throughput, quality and yield. RIGHT WAY, THEN IT’S NOT GOING TO HELP IM- Food producers need to be able to keep pace with ever- PROVE YOUR BUSINESS. increasing industry and regulatory demands for animal wellbeing, traceability and quality. Innova provides efficient, Jarred brand, director of manufacturing, engineering and technology, trident seafoods high-performing software solutions that enable them to do just that. Innova’s comprehensive, real-time reporting presents data Meaningful insights through data by using dashboards, giving clear visual interpretation of the visualization relevant information. Smarter decisions can be made in real Innova provides processors with user-friendly tools to turn time to optimize production results, tailor processes to achieve data into meaningful insights through visualization. In the day- specific goals, and respond immediately to any deviations. to-day operations of a plant, key performance indicators such as yield, throughput, quality, capacity and labor efficiency are Such insights enable processors to identify opportunities for vital to processors. Most organizations across the food industry improvement, while ensuring that production conforms to DELIVERING GROWTH 42

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    Marel – Annual Report 2018 Marel hf. – Annual Report 2017 quality and food safety standards. Direct traceability Innova connects to third-party equipment Innova controls and monitors animal reception and The software is set up to work with the third-party equipment, registration, the production flow, as well as the deboning, systems and solutions that are independent of Marel packing and dispatching processes. Having Innova manage equipment. This means our customers can install a single the entire operation creates a direct traceability line between software system to oversee production and integrate with the slaughtered animal and the end customer. their existing equipment. The highest quality using the highest tech Innova Food Processing Software has helped US-based Kuna FoodService achieve full traceability in its production, from INNOVA ALLOWS US TO KEEP RECORDS start to finish. The ease of use, real-time data and reporting THROUGHOUT EACH DAY AND TRACEABILITY functionalities with built-in traceability allow the company to FOR USDA REQUIREMENTS, NOT ONLY FROM monitor individual suppliers and ensure high-quality products. THE START, BUT ALSO NOW RIGHT THROUGH By paying attention to the details at every stage of production, TO THE FINISH. overall performance is optimized. Dan Fernandez Streamlined order management and inventory control Meat Unit Production Manager, Kuna FoodService Innova not only provides full production control and traceability, but also helps improve how the company fills its orders, making this more streamlined, and easier to manage. It’s all in the label Innova can optimize workflows, enable cost-effective inventory The Innova label designer is a very powerful tool, as it ensures control, and ensure efficient order management. The system all traceability information on the product is collected includes purchase orders, production orders, inventory orders accurately and incorporated in the final product label. The and sales orders. flexible labeling design system means processors can easily create their own designs and edit the content on the label to contain all relevant and necessary information for the final product package. DELIVERING GROWTH 43

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    Marel – Annual Report 2018 CUSTOMER STORY Full production control at trident seafoods Marel and Trident Seafoods have been working together to develop a software solution for the fish industry that solves key challenges concerning traceability, packaging, order control and inventory management. Trident Seafoods currently operates close to 30 processing facilities around the world, 20 of which run Innova Food Processing Software. By implementing Innova across several of its plants, Trident Seafoods has been able to standardize its operations and scale its primary processing operations. A key benefit of Innova for Trident has been the increased food safety resulting from standardized product labelling and palletizing. “From a food safety standpoint, being able to do individual box identifiers – which are linked to a pallet, which is linked to a shipment – and being able to trace the raw material to the finished product and then to the container and the customer, is extremely important,” says Jarred Brand, Director of Manufacturing, Engineering and Technology at Trident Seafoods. DELIVERING GROWTH 44

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    Marel – Annual Report 2018 INNOVATION Innovation is, and has always been, at the very heart of Marel. We invest around 6% of our revenues in research and development annually, which translated into EUR 74 million in 2018. With over 15 new solutions brought to market in 2018, it is safe to say that innovation is in the DNA of our people. Our experts are relentless in their efforts to meet the next farm to fork, Marel is in a unique position to gather informa- challenge with an effective solution. We have over 850 dedi- tion in the global food processing industry, one of the most cated technology professionals located in nine countries, all of important value chains in the world. Our approach to innova- whom work in partnership with our key customers to improve tion is not limited to mechanical engineering, but also encom- the way food is processed. Our people, who are creative, pas- passes integrated technologies and connectivity. sionate and brave, are our greatest asset in driving innovation. Quite simply, we are focused on continually delivering solu- With each passing year, data analytics and software control tions that add value for our customers, and also for our com- become increasingly important. With its full-line offering from munity, our environment and not least our shareholders. Seeing the future is our business We envision a world where quality food is produced sustainably and affordably. By using virtual reality to simulate food production, we speed up development and minimize waste. That’s the power in numbers. DELIVERING GROWTH 45

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    Marel – Annual Report 2018 GIVEN MAREL’S HISTORY OF COMBINING SOFTWARE AND MECHANICS TO TACKLE FOOD PROCESSING CHALLENGES, WE ARE READY TO EMBRACE DIGITAL-AGE TECHNOLOGIES. Global trends demand innovation in food Product launches 2018 processing In 2018, we introduced over 15 new, innovative products to At Marel, we conceive and deliver solutions that cater to a the market. Our significant investment in innovation of EUR 74 growing world population demanding high-quality food, million, more than any of our competitors, demonstrates our produced sustainably and at affordable prices. On the commitment to transforming the way meat, poultry and fish market side, we see mega trends calling for industry-wide is processed. transformation in food processing. With automation as the driving force, we see changing dynamics emerging in the • Animal wellbeing, traceability, sustainability, efficiency, and value chain, together with the need for increased flexibility product quality all came together following the launch of and diversity in terms of end products. our innovative and highly integrated solutions enabling the processing of 15,000 birds per hour. Innova software runs in There are number of enablers contributing to the the background to monitor all processes plant-wide and transformation in food processing, including new scalable nsures full traceability. technologies and production channels, such as the Internet of Things (IoT), cloud services, advanced robotics and 3D • Salmon processors are constantly looking for ways to printing, for example. improve yield and attain a better flow. The new Salmon Deheader helps achieve this by performing high-precision We work each day on new solutions by applying and cutting for optimum yield on every fish, and automatically expanding our broad-based industry know-how. We are transferring deheaded fish into our Filleting Machine. In dedicated to delivering unique products and services that addition, the QC Scanner enables better sorting of fillets will shape our customers’ future business landscape. At the downstream based on the quality of the raw material. same time we help them create scaleable infrastructure that supports their growth and Marel’s simultaneously. To that end, • In the meat industry, secondary processing was boosted by we are committed to collaborative innovation with customers a number of innovations that increased automation and and partners that both speeds up the innovation process improved food safety and traceability. One of the break while ensuring our products add value in a way that suits their through 2017 innovations, the DeboFlex automatic specific needs. deboning system, has been an incredible success, and new modules were added to the system in 2018. • Twenty years ago, the Marel RevoPortioner - which reduced raw material waste to almost 0% - was revolutionary. Now, the Helix Drum Technology transforms rotational forming into continuous filling, further enhancing the Revo- Portioner’s capabilities and reputation. DELIVERING GROWTH 46

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    Marel – Annual Report 2018 DELIVERING GROWTH 47

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    Marel – Annual Report 2018 Smarter processing to make quality food equipment, process knowledge, service and data analytics will available to everyone result in smarter processing and proactive service, meaning The growing world population, fast-changing consumer fewer disturbances in the customer’s production process, and behaviour, and a rising focus on sustainability and legislative better support for the technicians on the factory floor. compliance, means demands on our industry are constantly evolving. Our challenge is to make even better use of the raw Speeding up innovation with virtual material coming into the plant and ensure that the entire reality Marel team is focused on creating cutting-edge solutions that At Marel, innovation teams now use virtual reality to design allow processors to deliver high-quality food at affordable and test new solutions, which increases the speed of prices. Insights from the digital revolution are opening up innovation considerably. Rapid prototyping can be achieved great opportunities for progress in this direction which Marel by running a new idea in a simulated and virtual world to get is ready to make the most of. immediate feedback. Given Marel’s long history of combining software and Virtual reality makes simulations more valuable, giving mechanics to create innovative solutions to tackle food product developers life-like input and enabling realistic processing challenges, we are well equipped to fully embrace interaction without having to wait weeks or months to try a digital-age technologies. We want to ensure customers new concept. Saving on time and materials by using virtual understand how to use data to support their processes and reality in innovation allows our teams to make greater strides keep production at optimal levels for improved profitability. towards novel solutions to food processing challenges. In 2018, we worked on enablers for a successful, connected From one industry to another business. Central to this is our established standardized Marel is known for applying its technology across industries. control platform, Marel Core. Once implemented, Marel Core In 2018, we continued to leverage our strong innovation offers simple solutions and improved service. It facilitates investments across numerous product groups, processes quick fault-finding and less need for spare parts, a higher and geographies. A recent example of this is the DeboFlex level of flexibility for extensions and upgrades, and seamless solution, where technology for overhead transportation and integration of equipment and software. In this way, Marel Core positioning of raw materials originally developed for poultry enables us to implement leading industry 4.0 standards across processing is now applied in meat processing. the company. In addition, our Innova division has been scaled up to fully capitalize on the benefits of digital technology for We will continue to exploit the synergies available to a smarter processing. company of our scale, scope and ambition, delivering innovative products for our customers, and creating additional In the coming years, in collaboration with our customers, we growth opportunities. In particular, major opportunities lie in will follow the course laid out in our digitalization roadmap, the secondary and further processing parts of the value chain, moving from pilot schemes to proven solutions. Combining e.g. portioning, batching, weighing and marinating, where the processing steps are becoming more similar across industries. DELIVERING GROWTH 48

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    Marel – Annual Report 2018 GLOBAL MARKETS AND SERVICE Marel is constantly looking for ways to strengthen its partnerships with customers around the world. Our vision of a world where food is produced sustainably and affordably can only be realized through close collaboration with customers. Through our extensive global network, which stretches over 30 countries and all continents, our sales and service specialists are in close contact with our customers every single day. To further strengthen its local reach and come closer to new Ulrika Lindberg has over 20 years of experience in global ser- and existing customers Marel has embarked on a journey vices, having held senior positions at large international orga- aimed at reinforcing its local sales teams and strengthening its nizations such as Alfa Laval and Tetra Pak. links as a service and maintenance partner to customers. Einar Einarsson has over 15 years of experience in managing The first steps were taken in 2018. In June, Marel announced Marel’s sales and service operations in North America. Einar an organizational change, splitting the former Commercial became President of Marel US in 2003 and prior to that held function into two sections: Global Markets and Service. The several positions within Marel as a Sales Engineer, Area Sales move added two new Vice-Presidents to Marel’s Executive Manager and Product Manager. Team. Ulrika Lindberg joined Marel and became Executive Vice-President of Service, while Einar Einarsson moved to the position of Executive Vice-President of Global Markets. THINK GLOBAL, ACT LOCAL. DELIVERING GROWTH 49

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    Marel – Annual Report 2018 GLOBAL MARKETS Marel’s global network of dedicated sales representatives is In addition, Marel also hosts its own trade shows in Progress one of the company’s strongest and most visible assets. Our Point in Copenhagen, holding ShowHows annually for the sales operation consists of local representatives in over 30 meat and fish industries and biannually for the poultry countries, plus a global network of more than 100 agents and industry. distributors. With such a large global presence, Marel can serve large and small food processors and food retailers on location, wherever 42 EXHIBITIONS they are. Each of our industry-specific segments – fish, meat HELD IN 30 COUNTRIES and poultry – has specialized sales people, working in part- nership with customers around the world. We are dedicated to bringing top-of-the-line services, consistency and excellence In addition to Progress Point, Marel operates three to each project we undertake and to providing our customers demonstration facilities: one in Boxmeer, the Netherlands, and around the world with local proximity and intimacy, yet with two in the USA, in Lenexa, Kansas, and Des Moines, Iowa. The the support and knowledge of a global leader. Our committed facilities offer a hands-on environment where customers can sales force has been and will always be the cornerstone of our see how Marel innovations can improve their food production, operations around the globe. develop employee expertise and bring positive operational outcomes. Exhibitions around the world Each year Marel participates in some 45 trade exhibitions Enhanced online support around the globe where the latest innovative systems and All of Marel’s equipment is on display at Marel.com. Customers technologies for the fish, meat, poultry and further processing can browse through online product catalogues, watch videos industries are presented. Trade exhibitions are an excellent and read customer testimonies. Our dedicated staff is available venue for customers to get to know at first hand Marel’s for live chat on request to answer questions and enquiries. state-of-the-art food processing systems and solutions. Marel Marel is constantly improving the online customer experience exploits these opportunities to premier its latest technology, and in January 2019 a new website was launched with many strengthen relationships with existing customers, and create new features to better serve our customers online. The new new ventures with new customers. Marel.com improves the online user experience, benefits existing and potential customers, as well as future employees and other stakeholders. GLOBAL MARKETS AND SERVICE Marel opens in Namibia In July 2018 Marel opened a new office in Namibia as part of our long-term strategy to step closer to our customers and to further strengthen customer support in southern Africa. There are multiple benefits to having a local office in the region, including more direct contact with customers, better customer service and an improved position to respond quickly to local market needs and changes. The new office in Walvis Bay, Namibia, is part of the journey that includes the reorganization of Marel’s sales and service structure. It is driven by our aim to continue growing and further enhance our customers’ experience with strategic services and maintenance near at hand. Namibia is the largest hake producer in the world. Having a local office deepens our relationship with the Namibian fish processing industry and opens the door to meat and poultry processors in the region. DELIVERING GROWTH 50

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