The global population already exceeds seven billion people and is expected to exceed nine billion by 2050. In addition to more mouths to feed, increased economic development allows people to consume more, leading to an expected increase in food demand of well over 50% by mid-century.
At the same time, it is estimated that each year, more than one third of all the food the world produces is lost or wasted. Not only does this mean an economic loss, it means that all of the natural resources used for growing, processing, packaging, transporting, and marketing that same food were also wasted.
In a world with more people to feed and less natural resources, we cannot afford this.
These trends and challenges are powerful growth drivers for Marel's industry. The opportunities are abundant. With our innovative products and global presence, we are in a great position to participate in solving one of the world's greatest problems: how to feed the growing population.
Marel is committed to the continuous advancement of how food is processed – doing more with less:
Marel's operating results for 2013 did not reflect potential. We need to improve our earnings to enable us to better serve our customers and provide satisfactory returns to shareholders. Economic uncertainty has delayed investments in food processing equipment and the turnaround has been slower than we expected. This has affected our revenues. There is now a clear need for expansion and modernization in our industry - external signs are pointing in the right direction.
We can increase the efficiency of our internal operations. In the last few years, we have taken crucial steps towards becoming a market-driven organization and standardizing our products. Our newly launched Simpler – Smarter – Faster program marks the beginning of a new phase with a focus on simplifying our structure and driving down fixed costs, while improving service and customer value. Our cash-flow has remained strong and our balance sheet is healthy. We have a solid foundation for future growth and increasing profitability.
In 2011, the Board introduced a targeted capital structure for Marel of net debt in the range of 2-3 times earnings before interest, tax, depreciation, and amortization, where excess capital is used to stimulate growth and pay dividends to shareholders targeted at 20-40% of net profits.
In 2012 and 2013, dividends of €6.9 and €7.1 million, respectively, were paid to shareholders. In light of the current capital structure and upcoming refocusing program, the Board has proposed that no dividends will be paid for 2013.
Structural changes were made at Marel in 2013, including at the level of senior management. The Board of Directors would like to thank Theo Hoen, who has been an integral part of the Marel and Stork Food Systems story for 28 years, for his dedication and contribution to the growth and success of Marel.
At the same time, we welcome Arni Oddur Thordarson as new CEO. Arni has been instrumental in shaping Marel's strategy during his eight year tenure as Chairman of the Board of Directors. We would also like to thank Theo Bruinsma, who has left the Board of Directors, for his valuable contribution.
We look to the future with optimism. With our innovative products and global presence in a market with powerful growth drivers, we are in a unique position to secure healthy growth, improved profitability, and increased shareholder value.
The Board would like to thank the entire Marel team for their dedication in 2013.
Our highly skilled and motivated people are the assurance that we will continue to create value in 2014 and beyond. We are also grateful to our customers who buy and use our products, as well as help drive our innovations, and to our investors for their continued support.