Earnings call transcript Q1 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello and welcome to the Hillenbrand Q1 2023 Earnings Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It’s now my pleasure to turn the call over to Sam Mynsberge, Vice President, Investor Relations. Please go ahead.

Sam Mynsberge

Thank you, operator and good morning everyone. call first earnings of Hillenbrand’s to for quarter the XXXX. Welcome and joined and Ryan by am CEO, CFO, our VanHimbergen. President I Vice President Kim Senior and Bob our posted your referenced be today’s call. the to that on attention like IR website direct supplemental I’d slides on our will to

As the has Batesville been operations as discontinued a all periods reminder, for presented. segment classified

Our noted. otherwise continuing operations commentary will unless be based on the performance of our

the Safe are performance Harbor guarantees comments Slide of may results be that from contain foreign and subject the exchange. discussing X, could course acquisitions, including to statements forward-looking during operating currency of will actual to laws. non-GAAP the Turning securities our exclude we measures, that provisions performance not call, our the impact differ These certain and for Also, a certain are organic divestitures of reminder materially. comparisons this statements our which future segments,

appendix as on XX-Q, X to forward-looking you Slide our of risk in statements encourage for and website, our can presentation the of which could deeper the a review non-GAAP I actual impact that discussion information, our as be the factors well results. found

turn I to over With will the Kim. that, now call

Kim Ryan

milestone good pure-play we industrial Sam week, company. This first a morning Hillenbrand’s for you, represents today the Thanks in sale significant as journey. closed we and Thank of fiscal us our completing review into transformation joining our from Last results everyone. quarter XXXX. of a Batesville, transaction

finally, positions end profitable for our long-term brands growth our to on trends. by last expertise months we in equipment It customers. attractive made it our processing developing highly also recycling. Hillenbrand builds industrial momentum engineered, and acquisitions fully supported growth strategic our and First, it leading with secular food through the over And markets focus the created solutions portfolio XX mission-critical for upon in we and the simplifies

in in place my thank I that this I organization we Batesville career the towards opportunities as value. years and to companies strength spent pursue to successful with have am forward who a our are transaction. own of want completion our of XX create the I associates unique move to confident worked tirelessly both

to have at customer the their and We legacy. instilled thank operations, contributions. through of large for lean service, responsible part foundation strong I development tenets want talent corporate Hillenbrand, team the in entire built citizenship a Batesville’s Batesville to

Now quarter first a I performance. delivered continued to broader will our the year. impacting to global economy, start uncertainty Despite the fiscal we turn solid

year, acquisitions we operations quarter, Our business. first newly from and our prior by our compared our segment. and saw recycling for Advanced for growth In continued businesses the our and revenue quarter healthy recent demand saw continuing good in organic to driven food Solutions we aftermarket growth the grew acquired XX% Process

end Peerless, nearly the record our LINXIS and now quarter which backlog, billion at at Our near APS organic and includes of levels. the $X backlog remained

project pipeline remains solutions highly across key engineered APS food. platforms equipment Our growth durable and our of our plastics, recycling robust for and

and strong engineered a This to providing core high-output, the to systems customers quoting trend for with leader output capabilities. a requirements and demand East, polyolefin as plastics in Asia is Middle business, positive we us our with plastics. Starting the durable complete increasing continue high-quality in see global are as at for plastics are projects we growing demand meet global

planned, for we year discussed, with our Turning demand believe of area Herbold will North orders have Since be pipeline better recycling the America, than a us. high-growth been India we and to Middle growing even acquisition recycling, as the we in have East. last of

center with of in aim in will we this our innovation excited this We in momentum to April recycling year. be the are bolster about which which Germany, area, further completed

America North the recognize the food, quarter, orders Coperion customers increased demand better-than-planned and Europe. as of and opportunities solutions now had LINXIS value combination we in comprehensive seeing we revenue and technologies, quote by the are to Through of Now across which driven provide. our can solid we

been were wallet of with plastics approach with months increase applications used within our that feeding historically We customers success have to have help to technologies for certain the ownership. this first existing able and seen adapt share LINXIS of already few

our acquisitions. Finally, from and in creation integration remain to we proceeding Peerless value expect achieve well program Gabler LINXIS, is confident and the the we

the to are which tends challenges we in consumer. segment, pose the our our macroeconomic applications be seeing While that of continued for are to quicker APS MTS the solid to segment, closer and serves momentum uncertainty environment turn

experienced resulted beginning we’re we as while to optimistically the As quarter’s of inside drive to as just reopening we call, discussed we’ve during the travel delays that these representatives again softness are This project the the through pipeline quarter. trend and monitoring quarter, entered China, now customer decision seen order not yet sales convert last in decisions. order China continued

inflationary deploying experience chain critical Hillenbrand in extended supply to will to address Bob the our other and he and remain ease, impacts on manage the for and our softness. results and further the heavily continue covers this prioritize costs we year outlook. to to investments, shortages more discretionary response chips model components, operating segment. We which full focused electronic when efficiencies drive operational have begun while pressures MTS Additionally,

ATS segment. dynamic segment, continue through see managing strong to focused impacting environment while and for macro on our remaining we our Overall, outlook performance MTS

communicated strategy our next As and journey enhance our renewed at grow, Day for chapter December, we in optimize. of Investor the to is our

excited the will a high-return value industrial creation opportunities leader. of shareholder as Hillenbrand momentum position We deployment continue long-term higher for disciplined pure-play that growth, to are towards further about through our the investments capital

quickly to on the turning before update I’d call provide like an Lastly, sustainability. Bob, to over

our in also our ensure stakeholders year. and of results we our for We advance portfolio, accounting revisited in to publish divestiture. the our With with sustainability the changes later our acquisitions survey our to mind, assessment our upcoming recent we materiality annual this sustainability new report while incorporating plan in the Batesville strategy have that

turn more over to outlook. provide call will and Bob to that, on now the With financial our details performance I

Bob VanHimbergen

Thanks, Kim, and everyone. good morning,

section. to Turning a throughout Slide note to X, few my items

discontinued Batesville’s are results operations all reported as presented. financial mentioned, periods Sam As for

For earnings and be operations providing exclude on discussion going only, otherwise impacts basis continuing acquisitions as in basis you’ll well Results results clear and our our these our deck. as GAAP appendix and today’s a an I’ll foreign unless organic of reconciliations reviewing guidance exchange. and of We compared the comparisons performance believe performance a on noted. of provide currency and assessment divestitures non-GAAP of forward, the slide the find

prior compared from organic an adjusted increased basis, as EBITDA and million, and higher and from $XXX strategic year-over-year. quarter, Adjusted primarily X% productivity million cost were first revenue operations partially an improvements to of to acquisitions, revenue increased EBITDA year, X% pricing. favorable due On revenue investments. operations increased we the XX%. continuing an our of delivered favorable pricing $XXX aftermarket inflation In of increase XX% offset continuing basis, On organic by

favorable our rate was prior of interest and and anticipate Batesville, Adjusted for currency compared discrete above EBITDA rate was full per margin due or ahead the partially $XX net year, per adjusted quarter rate. Adjusted XX% of effect unfavorable high-technology the fewer to outstanding basis We acquisitions, a total XX% a or companies. performance We by increased reported exchange was income onetime $X.XX of year, of foreign compared $X.XX and $X.XX. quarter, cost. the year. included to of an our year $X was shares primarily share continuing into the higher XXX or the $X.XX from offset expense. tax in million incentive the in from price XX.X% the tax XX inflation, impact improvements, a GAAP expectations basis operations coming $X.XX points remain This to the XX%. tax increase to productivity pricing of to This continuing XX% primarily of to The of earnings prior original effective share, prior primarily to decreased and points lower dilutive to EPS, from our of due due in operations our China adjusted to XX% range impact tax as guidance of

down unfavorable resulting primarily Cash prior more was flow of a we operations the $X advances cash within than the represented from $XX order which softness to from year, significant million quarter approximately in expected. MTS, from due customer use of million

causing we Kim mentioned, pockets to delays causing continue remain quarter, As also optimal higher-than-planned while to resulted milestones, inventories AR. above experience levels certain the which unbilled challenges project chain of in achieving in supply in

across to We stronger strong as capital the business, ability to working supply that cash through cautiously fundamentals qualify and XX%. million the to we discontinued improve year. reporting. cash chain highlight will With we’re to of and the cash quarters in of remaining the the balance flow to that, continue includes conversion be we XX% broader related optimistic year for approximately remain work our of in confident full the anticipate that approximately flow our drive Batesville this expect onetime do not charges divestiture operations $XX I

expenditures Excluding these in the XX% expectations. conversion $XX with would Capital line our were in items, be which XX%. full to million roughly quarter, year was

cost Now on acquisitions, the driven XX% of compared increased pricing. Organic $XXX productivity investments. of year, increased year-over-year. inflation basis, on prior pricing starting increased offset moving an increased partially X% organic to in EBITDA million as strategic X. APS to improvements higher XX% revenue revenue Adjusted adjusted by EBITDA segment and year-over-year. On an $XX aftermarket by performance, increase X% favorable Slide favorable and and million revenue APS were

EBITDA XX.X% of points. while improved basis XX increased adjusted margin margin points, XX organic basis XX.X% EBITDA Adjusted of

fully these next operational margins deployment below Operating and through reminder, margins a have our the that the As recent of we over synergies. to bringing performance, on achieve are Hillenbrand Model execute in anticipate legacy few segment years line improvements but acquisitions the the

parts to $X.XX strong of or an volume basis, on Backlog by large order XX% plastic increased projects service. billion and prior and XX% driven aftermarket compared organic year for the

are key see we recycling pipeline offerings these of mentioned, growth plastics, excited in Kim are quoting enhanced platforms As our and demand markets. we continue and of across the our end customer through a food, opportunities to about solid

increased higher reduced basis X% points XX% of were organically. an parts more aftermarket of operating Turning lower X, and offset XX% and a partially pricing of prior EBITDA $XX organic MTS on X% XX.X% inflation, than the Slide EBITDA to year leverage unfavorable service to volume by or runner favorable revenue pricing. year-over-year, decreased compared and as offset Adjusted on in basis million sales. million Adjusted mix on revenue hot decreased $XXX XXX as decreased favorable margin decrease but

this million $XXX customer enter XX% delays the year We a to in cost quarter, a longer and our these molding and to of injection discuss updated greater and persisted now product the backlog to in is persist equipment. later We in Backlog expected, anticipated extrusion expect for decrease injection decreased due existing softness which initially primarily within anticipated, though the for reflected particularly we will of prior extent now as in initially presentation. sequentially, orders the execution molding to I MTS line. than the guidance compared than X%

are current demand As investments we discretionary Kim spend and softness. taking to to the mentioned, curtail prioritize mitigate measures help our

the remainder was in X.X. we At balance hand available at Turning net cash was to debt to our approximately the Slide $XXX first X. of adjusted of credit debt the revolving quarter end billion, end, and including million liquidity sheet ratio pro quarter forma million, had the on and $XXX under $X.X on Net facility. EBITDA

in existing of debt. $XXX X.Xx of December million, the we plan we expect after-tax forma net end which proceeds of With reduce of result use approximately Batesville to which the net XX. leverage will approximately at completed, to pro sale

Slide to XX. Turning

forward. As this we continue to record deleveraging a and have as track we strong acquisitions, of record many you of move expect know, we track

Slide capital on moving deployment XX. to Now priorities

opportunistic and pure-play and returning a company, target to capital shareholders to attractive dividends. within continuing through shareholder to inorganic industrial maximize growth repurchases as of to through well cash to while X.X will As organic net we leverage opportunities, deploy look X.X. value as range the share

me let conclude updated outlook. remarks my Now prepared with our

per sale. share the equated from expense $X.X previous earnings to guidance divestiture contribution and we million $XXX interest well $X previously of from moving annual model, to as of to Batesville, were XX, financial Turning annual $XXX reduced expected with Slide revenue share of million Batesville’s to our $X.XX to which of the reflects $X.X proceeds expected as $X.XX adjusted a that, would and a guidance paydown have planned operations billion of per annual with our earnings $X.XX basis. adjusted approximately revenue billion, from the debt continuing of on the net to total With the

Slide Now moving to XX.

operations a our including more full continuing and of MTS developments, recent impact, guidance the foreign the updating are expected favorable Given performance softer-than-expected segment, we in the Peerless currency year. for our addition

increased reflecting slightly share for XX% earnings growth assumes basis. in operations now per with from guidance to $X.XX, to revenue our year, operations of continuing expected of billion $X.XX billion continuing result, on XX% of $X.X a As to the range approximately adjusted $X.X a year-over-year the

to Now turning the segments.

our more contribution impact, favorable For billion primarily billion $X.XX APS, from revenue well we the reflects euro, a the to are $X.XX billion, range expected previously to $X.XX beginning Peerless, change closed increasing from billion. at expected the to $X.XX due of annual we as December. foreign stronger currency which This as

underlying organic for at to assumption Our remains approximately XX%. growth strong XX%

are range which margin points. to reflects our of be for of expectations underlying to We maintaining expansion EBITDA the margin organic XX% XX%, adjusted XXX to XX in basis

our previously range are $X.XX to $X.XX MTS, For $X.XX expected be revenue billion, reducing billion billion. annual we to to million $XXX

our the adjusted to XX% from reducing are in As the guide a of range EBITDA to result margin of of we expectations XX%, volume, be previous to XX% XX%. anticipated lower our

and Please be to foreign per portfolio uncertainty, currency are acquisitions, which to ahead XX a EPS rate. is the by continuing changes expected to and a within the slightly Slide essentially range which expect unfavorable growth, is to prior from earnings With additional the guidance continued mostly assumptions. we be we exchange year, QX ongoing flat $X.XX softness higher for $X.XX, of macroeconomic adjusted operations, for MTS, offset as recent guidance including share our providing tax review to

we which within look our forward to helping the momentum see mitigate segment. year, see balance As in APS our we order to softness the segment. we MTS continue strong the of to is

Our to solid expectations. start of recent ahead our are acquisitions a performing off and

growth teams remained ability a creation I’m our shareholder uncertainty, and macroeconomic have and despite company. as continue to Our nimble further value industrial ongoing pure-play Hillenbrand the confident in to for position

With that, over I’ll to Kim. turn the call back

Kim Ryan

Bob. Thanks,

final I’ll Before remarks. few this taking end with presentation our a questions, morning

which Hillenbrand environment. I Operating we to instilled excellence our our discipline confident by macro through Our remain track the navigate And strong provides associates stability backlog continue our in organization, as the proven operational and enabled record the of dedication driving Model. this challenging of by is

our important Additionally, our completion marks a we to recent global XX over start, for these been the as returns acquisitions divestiture growth renewed driving great my to leader. Hillenbrand, an off new Batesville of investments. a at excited In I’ve journey. transformation years focus remain and strong chapter our on our are to The future the pure-play never with more committed in industrial and strategy propel

Day, that through As serving to well focus and we’re discussed our Investor utilizing our capital to by improvements, to positioned and our growth value believe aftermarket shareholder expand create capabilities value. productivity through high-return M&A., operational our highly at leading large brands, opportunities growing through Model strategic continuing drive sustained Operating markets profitable maximize end synergies deploying and by on we towards will and the Hillenbrand

impact communities our for We value customers, our opportunities our to to solutions shareholders. to for matters excellent remain world-class a our committed and shape we our to purpose positive service and product for what tomorrow compelling provide associates, as

your open will line questions. for We now the

Operator

is question Moore coming first Securities. today from CJS Daniel Our from Instructions] [Operator

Your is live. line now

Daniel Moore

Kim. you. morning, Good Good Bob. Thank morning,

Kim Ryan

Good morning.

Daniel Moore

my the detail, bridging the questions, to taking formas, gap helpful. pro between it as for and the Thanks particularly all very relates

start So APS. maybe with

mentioned some You strong, plastics regions, the remained food, obviously, of recycling.

about for strength talk you’re maybe region just both and Just end where market. outlook margins. incremental the by And seeing

as you little do into helpful. up you see over is kind and percentage know about but those the And and that those mouthful, as X businesses the it’s synergies? parts as I a layer acquired in really to trend of margins Beyond Thanks. X out well. deeper years, digging aftermarket how guide, looking talk next current a coming a generate

Kim Ryan

Okay. Alright.

I’ll market on base, comment how and – kind of Bob let in. those the take I’ll layering we’re the demand margins and So

So overall from standpoint, to we a demand see continue stability.

be Year, momentum to So reopening we’ve those are Year, of that, projects now to again let’s are able get think, Lunar kind and in are through we they a as look working New been geographically. that I allowed China will, Chinese positive New China us travel and the on. that for resources the

to to service but be and more over we’ve project has service packages to around Our commission new that implement of limiting challenges will to decisions on earlier. country drive travel also that the that the able that has move representatives of sales freely on of we’ve created in been plants because last been to continue and capital, allowed working be had rising on the AR years in country, couple the commented some the – our we

commented, and demand beginning those market. we’ve Middle the are are India, us. under India to commission be move the regions. And in kind are discussion move as resources new China, of East, been that but able those for – forward we plants, APS as those time have for a ahead and go as expect those that that, positive have projects So some been of in two areas geographically for to will

over of in footprint last business, very we’ve to and there. is good where equation to of and we been needs able markets service in. few capital and parts service the to the the are The we’ve from months. we’ve and side respond looking positioned each had begin years, stable. implementations perspective that that be U.S. kick also we’re customer all a have to we’re regions, growth of beginning We in And the service sales really well in over seen those both these And next something as our commented, has see forward XX to to

the So normal demand for that’s see side the on on we APS what plastics business.

as with to and market, continue. part operating they the and the equation today in acquisition both is and is be be U.S. long LINXIS both those to continue variety the The into year our the them, encouraged continued in of of we markets able global players take that we’ve the with side, the And will we’ve tenure there. and really responsive and result the of seen be in to on can to that this value that a our in seeing in demand that and Show able quality demand recycling cross-sell we’re commented, more relationships we benefit more And that good quoting a with local in – end we offer, those of brands we’ve continue well. as markets. solutions with now that as side, that be seeing volume showcasing some of primarily we of the and food multinational about we’re Europe, a broader good seen portfolio continue and that and K a players the as On presentations that can of to and have, they we areas, October at that of and business we demand in be have some expect that work to the we business

Now Bob let hit I’ll margins.

Bob VanHimbergen

about by as margins so of And margins things. we a couple couple just the driven over years, think longer of continue we improve, next term, to really EPS see do

of profiles margins operating turning thing our First the about several of we’ve level margin into basis productivity annual the other highlight, with the XXX were improvement application below acquisitions in one model, what those be would and segment are. certainly points the months, made continued I’d to last the year-over-year. say

I synergies, revenue and us, And we the to aftermarket XXs in XX%. And not more think stated, those some for like is continue level in the drive the which, know, do accreting only as operating but also the you our model it’s we through so mix, the segment profile. see of low up to margins,

continue to will our time. I over move to of those margins up continue strategy those guess aftermarket the see to application that So we

Daniel Moore

or not gears any lifting the recently, I’m Very you’re activity revenue, to wondering too of but passing COVID in a in inquiries more helpful. maybe to if seeing Thank early if then switching little you. It like yet, is just pickup, it in sounds MTS. Lunar still the not restrictions or quite Maybe New of China Year and, tell? the following

Kim Ryan

there the into there, getting New just mid-December, number of that for the when a preparations doing back up followed Lunar kind are that. by market, consider but opened cases the very were really significant of was then Year in in the obviously COVID increase market and you that We many

more back getting the are we to broad-based travel. So,

been with reenergized standpoint. out with the are have We decision from sales and projects on force a somewhat customers working delayed that

we activity So, a seeing are lot of yet. there

into especially to we orders convert And those are yet. that just – anticipated which year. to expect we And anticipating markets one will business, that, remainder would expect to that over begin initially pick seen but haven’t improve – our of the products we first molding year. that, the We is half that up. softness the We the market, of in of last larger had that our

second year, in expect our half may into that’s the last that and We of the guide. reflected

we just see continued perhaps But position as to improvement little footprint on had a anticipated. back half of there we think America pick the one India see primary the and strong On side. the us market more serve leading stable. up of year, on our our well India will delay again, North has in to injection a over side, been markets But the we to the slowness MTS and making timeframe begins original some in remember some that that a bit But molding not India, in the market. that in is decision of market we that expect there

Daniel Moore

me, It adjusted Great. in terms cash back jump about basis, conversion. and And updated in just will on appreciate be the – an it free XX%s jump sounds flow, out. from range like last I talk guide. up would But I of the

You to expect low-Xs, and over towards in closer to ‘XX back still fiscal you M&A. exit to with leverage excluding net still the kind XXX% additional trend of expect time,

Bob VanHimbergen

Yes.

Dan. those, of both to yes is answer simple So,

inventory the flow and But coming QX a on MTS continuing not picking pay-down our did back time, supply continue conversion, improve. that come we mentioned in will only to And continues see orders free over flow range free low-Xs XXX% we the that past just chain still over Investor be as obviously, be into turned anticipate XXX% the to that quarter, see, obviously, as pressure at cash question, cash debt. levels maybe from we here, advances. continued the bit, but leverage order trend, to yes, flow cash being over I In a cash through. we we do your certainly reduced starting lower at also Day, in time As up And conversion. some

And transaction, some year. so qualify impact certainly as XX% impact our advances, associated also will XX%, that of cash that reflects it Batesville the in – from a the some are the of won’t the with somewhat cash reflects of you the reflects see but costs discontinued operations. Those one-time

Daniel Moore

you Very color. the good. Thank again for

Kim Ryan

Dan. Thanks

Operator

Thank you.

question Your D.A. Matt next is Summerville coming from from Davidson.

Your line live. now is

Kim Ryan

morning Good Matt.

Will Jellison

Good Matt morning. on Will Summerville this Jellison is morning. for This

Kim Ryan

Good morning.

Bob VanHimbergen

Good morning.

Will Jellison

asking start respect trended price wanted you and quarter respect with quarter I to how spread? price-cost by throughout to progress you the where that about the both realization with businesses, were in to

Bob VanHimbergen

Yes.

continued So, quarter. fiscal through management continued price-cost through and the to ‘XX, processes we throughout global improve that supply team, chain around our our pricing and

in saw have our execute, I in the continue quarter. think And the price-cost to backlog we covered past, we protected. mentioned that as I was be

about We are still slightly XX our of margins basis price-cost. EBITDA but on in because of favorable points dilutive dollars,

would of the trend year. continue so I rest the And to throughout that expect

dollars, obviously dilutive margin We on but will be a percentage. in favorable

Will Jellison

Understood.

both about well Okay. ability your that and little the would learn as on a to impact sales flow and as And respect progressed follow-up, to chain as cash also more how Thank as impact bit to and you then we for free generate stand today, ship supply a that. there. outlook your like with the I

Bob VanHimbergen

say execute will cash just would – couple on flow, of mean our comments. I some provide orders. Yes. a free impacted it the ability I certainly to I

our so say supply outlook. chain mean we billing are I I supply improving But able those would say is constrained, do see on that that’s as we on side. reflected – the happens into and APS flow would not in are chain so hit saw the what certain supply And that is I primarily certain we chain to part, a year, But coming areas. in milestones free cash challenges and

to there I lead would And and However, some still have are gearboxes two motors, say are engineered products. things up would the lead XX-week longest certain time. those and the that times of be a

over have that. to been orders those building And so of inventory ahead a and get year we on last the placing probably

Kim Ryan

say. chips, And I would

couple So, and where those improvement a delays yet. of seen are areas haven’t we have some we really the seen

I that parts. There are these very components that think important some them. to highly meet systems on side engineered are APS the have the required in few that can a it’s in those the only for note specifically engineered world of specifications suppliers

And the supply base supply longer as you chain limited a so items working the very things – on take on are through when such can those.

Will Jellison

I you appreciate taking our question.

Kim Ryan

Great. you. Thank

Operator

[Operator from Sidoti next John question & Instructions] Franzreb from is Our coming Company.

live. Your line is now

John Franzreb

morning Thanks for Good question. taking Kim Bob. and the

Kim Ryan

morning. Good

John Franzreb

a that more function little that is or highlighted, customer kind of? the geographic level we there puts bit the of anticipated. going color that a little a of on intake cognizant was wider else on, you Just than you and seems of technology should molding really on Is side takes the business. It like the something the be order

Kim Ryan

No.

of – of investing through and see we slowdown, lose. projects – large-scale in started can short there delayed some mid-term I mid-term economy. think – typically, cycle. typically are be concerns don’t you when On the short-term projects, that peaks have can see stopped But around to what significant have the kind waiting be when see very you valleys, invest. or they are everyone very X-year to continuously projects X-year the happens working around or to project, Because just and and a people or you X-year have can the delayed you hit you try can’t projects, you or preservation when time typically because decisions when concerns amounts on that we cash and you in of be

I the than thing, seen But anticipated, that and good. be So, little geographic continue are we to wouldn’t would that say last have a a we that. inquiries have China. we responding it’s longer to save

just for that which in the think large things policy absolutely start I wanting the say, costs. I MTS not up us making the going and to China general in conservatism the think slowness business zero saw is around which some But decisions was in segment. is drive China, this COVID on and there isolated we around overall, stop projects, of to a would I a can obviously

So, down rather to event something decision need start cash. that preserve delay the the and stop in people slow and than

John Franzreb

business it a And gradual turn around that it turns quickly, does or recovery? around, when is

Kim Ryan

all And cycle first longer short-cycle out. these businesses, the generally, and you are go businesses later. later in duration, first characterize And would Yes. they as and businesses. Short-cycle out industrial enter I out the come the

John Franzreb

synergies, do talk the highlighted on as those? reasonable your sales and far a benefit opportunity bringing is bit you think in just And about Could LINXIS. synergies? little businesses sales Peerless with the a as you from what And it. Got profile you

Kim Ryan

that can our that And things or engineered this something particularly market that facing broader a that buying have two. penetrating is the And So, able take because the side, was one yes, looking the be previously market really the augment is really the one is we what help knowledge plus think we kind our to of was modified delivered. built systems, remember, things to subsystems, think highly great was But a they place sell LINXIS, those what we three a I the great that – where extremely going was the for cross-sell – that that to were periods are phenomenal long type to as equipment service they in bought that’s expertise for companies to equals of equation. that our effectively, market one process Periodically, systems expertise, and the by food bringing and of customer relationships reengineered portfolio together. Coperion been less market products, attractive systems and or brought to an with have attractive kind were that strong and is over absolutely can recycling been would particularly to add of and secret ability the on which Herbold their side providers. work capability be reason a And an when and among on sauce be ability we Gabler opportunity from very things of have brands, to out. out what LINXIS we have time

global aftermarket. as our and ability think group more model also we procurements well help create the also as efficient around that profiles for our influence margin back processes that can support to help are to synergies office operating looking We chain supply and that

John Franzreb

And from Perfect. aftermarket margin are bringing the to need reasonable timeline the about drivers, steps do of you to to Could that is you there? those a profile it sales, and talk increase get the what get XX% the threshold to to low-XXs the XXs.

Kim Ryan

Yes.

truly and specific sight it’s – the know really as opportunities simple. have that when has key the mixing a that it’s in of installed of if execution that the business. to We in to opportunities been operating taken on by specific clear We vision it. of many around information, we analyzing rather So, it’s go that’s than kind pull effective the dedicated playbook after it’s around trying we go back isolate that – some I the of understand very turn really after has out we go resources done business, around business. once. steps. steps going easy actually are we to this process on of and to And And aftermarket it kind you on you career, we our to just really been at we seeing and an We I proactive around were are really model. in businesses have wallet. we stepping with my disciplines that everything into can in couple deploying how that, I profitability those a share the that a of just be improve a into to the And and successful a playbook our determined in each It’s sometimes then of pricing, sounds and focused sure very where of where reality. understand base them our isolate have named winning it times of have a businesses, instead playbook making opportunities capital other – we mean business, selling, be that identifying brought leader put lose aftermarket. running very as of that

John Franzreb

Appreciate get queue. will the all color. into the back for Thanks it. I Great.

Kim Ryan

Thank you.

Operator

the to turn reached back floor We end like session. closing you. comments. Thank any for our of would I the over question-and-answer or further

Kim Ryan

the appreciate for you. May look wish today. and you forward call great We in We report we ownership talking of everyone us Hillenbrand, again interest you on to joining our a you your day. results. thank your and Well, in will Thank all Alright. we to when second fiscal quarter

Operator

conclude webcast. today’s does and That teleconference you. Thank

time thank today. and your your for disconnect at line a day. this participation have We may you wonderful You

Hillenbrand (HI) 9 Feb 232023 Q1 Earnings call transcript