Strategy

The market for food processing solutions, software and services for Marel’s key markets is expected to grow by 4-6% in the long term. We believe the market growth will be at a level of 6-8% in the medium term, or 2021-2026, due to the catch-up effect from the past years and a tailwind in the market.

Population growth, urbanization and the growing income of the middle class are important global macro trends that continue to increase demand for more protein-rich products. Marel’s portfolio of solutions and services is uniquely positioned to address these worldwide trends that influence our customers—and their customers. The addressable market for Marel continues to grow, driven by several factors including: a continued focus on automation to tackle labor shortages and rising costs, the need for flexibility to adapt to changing consumer preferences with different products, and greater emphasis on sustainability where food safety, traceability and efficient resource utilization are top priorities.

Three key strategic pillars to drive growth

Marel has three strategic growth pillars: customer focus, best-in-class products and technology, and people and culture.

Through strategic partnerships, we are able to close application gaps in the value chain by combining forces with leaders in various fields. Successful strategic partnerships increase our competitive advantage, accelerate new developments and speed to market.

One example of a strategic partnership is our collaboration with TOMRA, a true technical leader in vision and grading technology. For the past two years, we have been working in partnership developing the Marel Spectra, a revolutionary solution that will enable our customers to deliver the highest-quality products free from foreign contaminants such as plastic and wood. Marel Spectra is a true game-changer in foreign material detection, giving processors ease of mind in their challenge of delivering contamination-free, safe and sustainable food. We are already testing the technology with selected customers and getting feedback on working optimization of the solution.

Another great example is our partnership with Virtual Arts, a best-in-class virtual and immersive technologies company headquartered in the UK. Together, we are revolutionizing the Marel extended reality offering and building a product library, enabling fully simulated solutions and animations of our products and line concepts.

We are committed to achieving our targeted average annual revenue growth of 5-7% through acquisitions in the period 2017-2026. Acquisitions support our strategic pillars and drive organic growth, enabling us to achieve better market reach and customer engagement and thus improve customer focus. As we strengthen our line offering and high-quality products, we are able to transfer the technology and expertise from one market segment to another.

Moreover, with a shared vision and strategy, we enrich our people and culture.

We do not anticipate that acquired growth will be linear, but rather based on opportunities and economic fluctuations. To capture the full value of acquired companies, we have continued to professionalize our integration capabilities to tap into the strength of the combined organizations. This also helps us capture both untapped aftermarket potential as well as any crossselling and upselling opportunities from the combined entity.

More than EUR 1.2 billion deployed in external growth

Marel has deployed more than EUR 1.2 billion in high-quality acquisitions since 2016 to supplement our full-line offering in the poultry, meat and fish industries.

We also recently acquired Wenger as a platform for the attractive and high-growth markets of pet food, plant-based proteins and aqua feed. Marel’s considerable investments in global reach and digital solutions, complemented by a proven track record in acquisitions and integration, strengthen our position as an appealing partner in the ongoing consolidation wave within our industry.

With a supportive banking group and access to capital markets through our dual listing in Iceland and the Netherlands, Marel has the financial capacity to continue to support strategic actions in the consolidation wave, in line with our company’s growth strategy. In addition, our listing of shares in EUR on Euronext Amsterdam provides the platform and acquisition currency to pursue our 2026 growth ambitions. This makes Marel’s shares an attractive currency in merger and acquisition (M&A) projects and enables sellers to take part in Marel’s future growth journey as shareholders.

Acquisition target profile

When partnering with companies through acquisitions, our aim is to enhance value by broadening and strengthening our line offerings and improving our portfolio of high-quality products, expanding our market reach and achieving better customer engagement, while also aligning our vision and values.

The companies we acquire are often second- or third-generation family-owned niche companies, with revenues of EUR 30-200 million and around 100-800 employees, or companies where the founder is exiting. These companies are looking to future-proof their business or prepare for succession planning to ensure the best home for their legacy.

Wenger: A platform investment in a new industry segment

The acquisition of Wenger in 2022 is an entry point for Marel into important market segments in pet food, plant-based proteins and aqua feed. Marel has sold some solutions to this segment in the past, and now we intend to further penetrate these markets.

When entering new market segments, acquisitions can be the principal enabler for success. For example, Wenger is a true leader in its field of providing solutions and services to the pet food and aqua feed industries. In recent years, the company has also made its mark on the fast-growing plant-based protein consumer market with advanced solutions positioned right in the center of the value chain. Wenger enjoys a diversified and loyal customer base ranging from blue-chip pet food processors to startup companies in plant-based proteins.

With Wenger’s extrusion technology as an anchor point, Marel can further build on its success and create value for customers with more extensive offerings, digital capabilities and a larger network for sales and service. With headquarters in Sabetha, Kansas, US, Wenger has around EUR 180 million in annual revenues and 500 full-time equivalents.

Sleegers: A leader in interleaving and loading complements line offering

In April 2022, Marel acquired Sleegers Technique, a Dutch provider of interleaving, underleaving and loading solutions founded in 1993. These solutions for hamburger, bacon and cheese processing are well-known in the foodservice industry and retail markets. Sleegers’ founder has stayed on board to assist in the successful handover of the business and currently acts as an advisor to the company with a focus on innovation.

With Sleegers, Marel can now offer more complete line solutions for processing prepared foods. We secured the first orders that included both Sleegers and Marel solutions shortly after the acquisition was completed. Sleegers has around EUR 5 million in annual revenues and 27 full-time equivalents, with headquarters in Nieuwkuijk, the Netherlands.

Marel and Tyson join forces to lead a Soft Robotics investment round

In November 2022, Marel and Tyson Ventures joined hands in a Series C investment round in Soft Robotics by investing USD 3 million in the company. Soft Robotics is a US-based company focused on automated robotic picking solutions in food processing.

Soft Robotics has developed a soft gripper for a variety of hard-to-grasp and delicate end-products, as well as imaging and artificial intelligence (AI) technology for optimized gripping and path planning.

The company has good technology to automate bin picking, i.e., picking products such as chicken drumsticks or wings from a pile and singulating them on a conveyor belt. Furthermore, Marel and Soft Robotics will enter a strategic partnership that will initially focus on product styling—properly placing the product in trays—and automated infeed for portion cutting.

Headquartered in South Easton, Massachusetts, US, Soft Robotics has around USD 5 million in annual revenues and around 50 fulltime equivalents.

Integration to enable continued growth

Previous integrations have shown that the companies Marel acquires are able to continue their growth journey because of their integration with Marel. Leveraging our worldwide sales and service network, digital capabilities and worldwide infrastructure creates more opportunities to achieve higher-margin revenues.

New acquisitions enable Marel to rethink the organization and optimize our operating model due to changes in scale and new or strengthened capabilities from the acquired company. Each acquisition process includes an integration strategy, often created before final offers are placed and refined after the acquisition is closed. In addition, we focus on enabling systems, which helps strengthen and align customer facing processes and collaboration, while allowing the acquired organization to scale more effectively.

Integrations of Wenger and Sleegers progressing as planned
Since closing the Wenger acquisition in June 2022, we have focused on setting strategic direction and strengthening the Wenger organization to drive further growth. We actively pursue cross-selling opportunities by creating integrated line solutions with Marel’s equipment downstream in the value chain. Wenger will be run on a standalone basis for around 2 years, however, integration activities for compliance with regulations for listed companies, such as financial reporting and legal compliance, have all been initiated and are well underway.

Marel also acquired Sleegers Technique as a bolt-on in 2022, with an emphasis on making them an integral part of our organization. Following the planning phase, the combined integration teams have been working on integrating various aspects of the organization to create a seamless and integrated experience for our customers. The integration is progressing well and is expected to transfer to business-as-usual by mid-2023.