Letter to Shareholders

Dear Shareholder,

Preparations have been underway in recent months for the listing of Marel's shares on the Euronext Exchange in Amsterdam, which will be in addition to the current listing in Iceland. Trading and settlement of transactions in Marel's shares will therefore soon take place on two exchanges, in ISK on Nasdaq Iceland and in EUR on Euronext in Amsterdam. In selecting a stock exchange, major emphasis was placed on safeguarding the interests of current and future shareholders and ensuring that the trading and settlement process between the two markets would be smooth and problem-free.

This is an important milestone in the history of Marel, a company originating in a project at the University of Iceland 40 years ago. Over the years Marel has grown and is now a global leader in the development and manufacture of equipment, software and services for poultry, meat and fish processing. We operate in highly attractive end-markets, where secular growth trends such as population growth, the rising middle class, and urbanisation continue to drive demand for quality food that is produced sustainably and affordably. Marel is at the centerpoint of these prevailing trends. Powered by innovation and in close partnership with our customers, we steadily seek new ways to boost performance and yield and reduce waste.

A natural next step for Marel

The listing of Marel's shares on the Icelandic stock exchange in 1992 provided strong impetus for the further development and growth of the company. Since that time, total revenues have grown by an average of 22% per year, with organic and acquired growth. Marel is currently by far the largest company on Nasdaq Iceland, with a market cap equivalent to about 36% of the total market value of all companies listed on Nasdaq Iceland. Dual listing of the company's shares is therefore a natural next step in the company's strategy for further development and growth.

Listing on Euronext in Amsterdam will provide access to a broader international investor base. Furthermore, the offering will strengthen the company's capital structure and provide our experienced management team a solid foundation and global currency to put our ambitious growth strategy into practice. The company has set a target of 12% annual average revenue growth during the period 2017-2026, based on robust marketing penetration and innovation, complemented by acquisitions.

Proposed offering of up to 100 million new shares

The offering in anticipation of Marel's listing on Euronext in Amsterdam will be in two parts: on the one hand, a public offering in Iceland and the Netherlands and, on the other, a closed offering for international institutional investors. Those Marel shares which will be on offer will be issued in euros and listed on Euronext Amsterdam. Marel has published a prospectus for the offering which shareholders can access on the company's website, www.marel.com/listing.

Marel's shares are expected to be admitted to trading on Euronext Amsterdam on 7 June 2019, provided that the legal requirements are met and market circumstances permit. Shareholders are advised that from that date forth they will be able to transfer their shares between the two exchanges if they choose.

Answers to frequently asked questions and further information on the transfer of shares is also available on the offering pages of Marel’s website: www.marel.com/listing.

Preparation for the company's dual listing

As announced at the AGM in March 2018, Marel engaged independent international consultant STJ Advisors to evaluate potential listing alternatives to further advance the Company’s global vision and provide continued strong shareholder returns. After thorough analysis of the alternative listing options available to Marel, the AGM on 6 March authorised the Board of Directors to increase the company’s share capital by up to ISK 100,000,000 nominal value by issuing new shares. At this same meeting, shareholders agreed to waive their pre-emptive rights to subscribe to the new shares offered for sale in connection with the company's listing on Euronext in Amsterdam.

Marel's share capital is currently ISK 671,007,916 nominal value, after twice being decreased as part of preparation for the company's dual listing. Based on the decision of a shareholders' meeting held on 22 November 2018, share capital was reduced by ISK 52,983,076 nominal value and then by ISK 11,578,005 nominal value following the Annual General Meeting (AGM) on 6 March 2019.

Preparation for the company's dual listing

As announced at the AGM in March 2018, Marel engaged independent international consultant STJ Advisors to evaluate potential listing alternatives to further advance the Company’s global vision and provide continued strong shareholder returns. After thorough analysis of the alternative listing options available to Marel, the AGM on 6 March authorised the Board of Directors to increase the company’s share capital by up to ISK 100,000,000 nominal value by issuing new shares. At this same meeting, shareholders agreed to waive their pre-emptive rights to subscribe to the new shares offered for sale in connection with the company's listing on Euronext in Amsterdam.

Marel's share capital is currently ISK 671,007,916 nominal value, after twice being decreased as part of preparation for the company's dual listing. Based on the decision of a shareholders' meeting held on 22 November 2018, share capital was reduced by ISK 52,983,076 nominal value and then by ISK 11,578,005 nominal value following the Annual General Meeting (AGM) on 6 March 2019.

Responsible growth and value creation

These actions are in line with Marel’s emphasis on responsible growth and long-term value creation, for the benefit of the company and its shareholders. Marel's dividend policy provides for remuneration to shareholders, in the form of dividends or share buybacks, equivalent to 20-40% of profit. Marel paid dividends to shareholders amounting to 30% of its 2018 profit, with the dividend per share increasing by 33% YoY. For the past five years, the company's pay-out ratio has been in the range of 20-30%, with the remaining capital used to increase the company's growth and value creation. Shareholders have earned a good return on their investment, as the annual average real return on Marel's shares has been around 20% per year since its listing in 1992.

Our future vision is clear: 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.

On behalf of the Board of Directors of Marel

Ásthildur Otharsdóttir, Chairman of the Board of Marel