Earnings call transcript Q2 2023

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

Operator

Greetings, welcome to the Hillenbrand's Second Quarter Fiscal Year 2023 Earnings Call. At this time, all participants are in listen-only mode. [Operator Instructions] Please note, this conference is being recorded.

At this time, I'll turn the conference over to Sam Mynsberge, Vice President, Investor Relations. Sam, you may now begin.

Sam Mynsberge

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

performance segment reminder, And be will our Batesville as of continuing operations is the operations. our a As divested for discontinued commentary based classified the all presented. on periods

may the for laws. our operating contain of a on subject the of X, to to of for discussion impact non-GAAP we are actual acquisitions, which comments differ Also, results. be our divestitures that Harbor that factors and you a Turning statements results certain not and forward-looking the that actual reminder measures, our presentation are call, materially. certain will discussing our information, appendix during well risk segments, to provisions Slide performance Slide the statements comparisons organic of impact foreign encourage These could guarantees be and Safe review including course the the performance this non-GAAP could the future securities statements deeper found exchange. which of can our as our I exclude website currency forward-looking and XX-Q, X as of

Kim. Kim? now to With over I'll call that, the turn

Kim Ryan

good And Sam. morning, everyone. today. Thank you, joining Thank for you us

are highly divestiture mission-critical underpinned that completion growth Batesville to significantly of in announced into focused our With our solutions secular long-term end industrial be engineered, we previously delivering trends. February, organization the by transformed processing on markets have

to is products markets these our on focus that quantity increased plastics, strengths is you At and common the processing allow are of durable and As of where produced on our both and of material sustainable can markets foundation demand for increased global the us and that recycling focus the core requirements middle our driving on across the an quality equipment. leverage food. primary end of a enterprise, factors solutions expanding class be know, key

acquisitions. acquired good year, existing we've the making our past solutions. Coperion end-to-end on We're to leverage and enhanced value by unique integrating the breadth long-term combining Over our leading provide deep identify with these continue and progress we complementary customers superior capabilities. shareholders. of And technologies, to additional expertise technologies, our for our opportunities applications them we've our brands, benefits to And for

update performance of the Now I'll an overall and a provide summary on our environment. demand

high-end what for our and as shape they the as I'm per employees we pleased over share world earnings quarter execute a our way growth hard that very revenue to delivered I'm of exceeded guidance. with performance I'm have our strong tomorrow. work associates this environment. our proud dynamic for the the to of the strategy truly around macro continued navigate X,XXX grateful of matters our

the for organic contributions revenue driven quarter recent in grew growth by Consolidated our segment. XX% and robust from our APS acquisitions our primarily

by orders including strong sequential total of and we another quarter order aftermarket parts And see continue We encouraged performance within to service. to APS were record order leading improvement MTS, within backlog. for record

I'll across seeing we're markets. detail providing now moment end on spend a our more what

signs the quarter. cautious approach pipeline And timing a some MTS, experience across extended we the demand throughout with we That as remained seeing healthy the decisions Overall, of remains said to investment APS. are improvement. continue by of customers,

runner executing from anticipated, level segment, But, products backlog. for MTS the of and in equipment. with revenue the particularly the a segment. job with our a record in product from remained revenue sequential margin higher a margin begin our line, as Let's great soft molding teams as injection hot the saw the orders quarter improvement did We orders, of across

Along end markets of as key back the for We more and delays continued move more we runners decision half as demand do Order a that, also to product through and year. to pipelines to next a normal the are pickup we fiscal margins environment return favorable improving geographies. across the expect over in hot the see we mix, two improves see with demand expect quarters. due to to customer

Now on to APS.

Let's where recent we've start our most made investments.

food. First, the level demand particularly for North for areas with and pipeline and food. of Europe, outlook equipment at The baked is in new America record order a strong goods with pet

we did opportunities that we and development. extended in product on quarter, business continue to remains pipeline capabilities the the to portfolio. and on leverage see focus While Gabler delays the customers we LINXIS, identify with integration Peerless to decision some solutions of continue The track, customer of sell our

recycling. to Turning

continues of our Coperion, pipeline rapidly. provide of Herbold and to combination in systems, and the can regarding orders solutions. With we a grinding shredding, to provide our value receptivity customers the material The expectations, and and exceptional washing handling acquired position recently recycling complete we has outpace extrusion equipment, are the grown from plastics unique

We we to East America, scale and expect are and the over quarters the see customer and see investments but also in North particularly demand of strong starting also Europe Middle these to years the India ahead. increase, in

to integration continues Our planned. as progress

segment. finally, And within and of growth durable APS core our platform plastics our

global high Middle visibility projects. for system. We're in strong to of and increase continue the and these provider strengths as also As And backlog projects record fiscal large aftermarket by equipment throughout and to plays the China APS, will discuss heading service, in our parts investments. Bob particularly continue on a further maximize half continues more demand in extrusion critical the engineering of their and we in stable our we we've look confidence customers call. growth, India remains key of the into handling a our good as output, to past material North end efficiency strong customers our demand scale for well for need outlook to continues attractive of to this which systems. plastics. seeing and over the America, polyolefin The us communicated as bolstered Demand to cycle leading remains the Overall, to see which markets their and investment across life of region for detail East later the as gives see the and an support polyolefin second and few we're for quarters, particularly indicate year,

over acquisitions, productivity teams creation. on growth shareholder Moving discretionary model built the near-term. drive deploying laser and forward, our also managing are and to remain integrate we've our focused confident the aggressively our while long-term Hillenbrand in costs operations We profitable operating value foundation the in drive to recent

overview provide outlook for and the remainder financial detailed a now performance call of I'll of turn our Bob over to year. the the to more

Bob VanHimbergen

Thanks, Kim, before I everyone. morning, good and Two reminders brief begin.

second, And will be comparisons be the results I'll discussing organic impacts basis, currency acquisitions, divestitures, of making our First, that a which excludes continuing exclude operations exchange. and on I Batesville. foreign

an performance delivered On compared $XXX primarily revenue to and X% higher service aftermarket revenue of acquisitions million, on increase turning XX% the Slide consolidated our to by an year-over-year year, organic parts segment. basis, revenue. within our prior growth APS of increased X. We Now XX% due to and organic led

primarily unfavorable X% margin and the basis to partially pricing offset Adjusted million $XXX Adjusted EBITDA and of X% cost EBITDA of or product points, productivity by dilutive acquisitions. inflation. mix the due were organically favorable decreased effect improvements as XX.X% increased XXX of

acquisitions lower relative the discussed, previously margins. operate we with currently recent As

over next and margins in years, drive we operating through these bring line productivity the with model. to APS of expect historical do few we the the as However, deployment margins Hillenbrand synergies

$X.XX at The effective and $X.XX, We Adjusted was inflation, to tax per XX.X%. full year, higher higher rate geographic previously shares $X.XX reported pricing interest provided range, exchange EPS increased earnings to per anticipate high-end our of primarily share the from continuing and to be share. improvements, or $XX of productivity expense. year outstanding. approximately operations of unfavorable net to volume, tax mix. compared partially prior due of impact adjusted acquisitions, We GAAP is quarter in offset income the currency which the due by XX%, million or rate XX% fewer unfavorable our This and foreign the primarily is

Capital in up were quarter, we the dividend. shareholders $XX our million quarter, We million quarterly generated from primarily million approximately of capital. returned from $XX in due favorable the to operations prior the and working through expenditures cash $XX flow approximately year, of to timing $XX million

supply to in the continue of improvements the through to and receivables our inventory chain lower through environment large expect normalizes, reduction related we particularly working As capital unbilled profile, projects.

XXX%. cash first XXXX, expectation while of half. target for our remains that flow will half to We the an also anticipate increase second stronger year, the higher half will to leading at longer generate in in term our order in that conversion maintain the full compared approximately in fiscal volume cash of advances XX% customer range the We year XX% to a be back

increase and lower investments. to Now the delays impacting pricing, increased Adjusted higher and EBITDA with anticipated, productivity primarily improvements effect service negatively due driven to acquisitions compared Organic X. in of were XX% favorable than were moving growth increased XXX the of for decreased $XXX a year-over-year. XX% revenue of revenue of by to dilutive revenue and an segment due pricing. performance, on parts the prior organically and as offset the Slide bit primarily APS investments. basis EBITDA partially cost acquisitions, or acquisitions, the favorable million XX% inflation to quarter year-over-year increased margin by starting million volume and year, X% in APS growth Margins points, customer $XX Adjusted higher aftermarket XX% volume.

historical we As years. these the to next I towards mentioned segment improve expect margins few over still earlier, levels

primarily increased and orders parts year for $X.XX to of compared or billion, the aftermarket Backlog increased and basis, plastics by an prior for driven XX% record on orders large organic XX% service. systems

recycling we we of robust second translate and the of into which our growth in the are pleased the durable year. plastics, in key higher growth As Kim pipelines platforms half to food, with expect mentioned,

quarter. and equipment, molding coming relative due decreased hot adjusted Turning favorable $XX X% $XXX X. to increased in an molding higher a and by which, to the X% when parts MTS in of which equipment, million, anticipated elevated margin offset Adjusted we've points, lower pricing partially discussed, year-over-year X% organically, hot we compared EBITDA margin XX.X%, of basis or of injection X% primarily Slide as XXX relative and the into million, increase a of runners. decreased injection comes organically Revenue volume EBITDA service at as to was runner decrease aftermarket equipment, on or

mentioned, overall Kim this of in segment. improvement we for which the will margins As the result half in year, the to mix second expect normalize in

pipelines compared to in to $XXX product XX% molding from our of seeing the lower is throughout injection for of line applications molding softness existing are line order was injection with which The testament improve on execution. revenue equipment. and expectations, and most saw year, orders quarter, focus decreased team's across in record we primarily relentless due geographies. We Backlog delivered quarter a the and the million prior our to execution the backlog the the we

the as We see to pick second through fiscal expect the to of up we orders the half of remainder year. continue work

is this Batesville as Turning adjusted cash credit to on second range approximately pro our that in million. we ratio end to to to of end under leverage be sheet net and hand Slide the within had the Net X.Xx. net remainder $X X.Xx $X.X tax to which balance approximately available we Including revolving end, $XXX the our the billion, debt X.Xx. payment, facility. ratio of of X. I'd X.Xx of expect payment our approximately debt under of quarter billion, quarter, and At the sale just to of our highlight was like targeted at including make quarter on $XXX June, will back the related the in a forma was tax liquidity EBITDA million

XX. Slide to Turning

a that on record focused the you expect value track deleveraging have deployment As profitable and know, strategy this capital strong as record following we forward, and continue disciplined while shareholder growth many of track creation. acquisitions, move we we of to maintaining is

appropriate our leverage returning profitable As opportunistic priorities: around policy, of and leverage to X.Xx. we've capital attractive to deployment with repurchases, through growth and inorganic based net a investment attractive key our target X.Xx profile communicated, shareholders four maintaining cash and opportunities, dividend share through framework consistently is an driving organic

progress the our strategic acquisitions, that acquisitions recent term. strengthen make to shareholders we and markets, growth provide evaluate As accelerate integrating we strategy continue strong those return our our over capabilities that to in long profitable potential end a will key

Now moving Slide to XX.

as well fiscal As updating guidance the performance we the the and see based operating our we we half of in environment. are half what second current demand on enter first year, as in

billion. Our slightly $X.XX the approximately guidance now $X.XX expected $X.XX of assumes to $X.XX increased billion revenue year, to billion billion previously for

to slightly the range while adjusted maintaining of are midpoint $X.XX EPS to to per $X.XX range from narrowing $X.XX $X.XX share share. previous We a our per of

Now the segments. to turning

billion, our billion expected billion are to we range billion. $X.X to to be $X.XX APS, $X.XX $X.XX annual revenue refining For previously

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

EBITDA mix guidance and XX of lowering basis to price of XX%, We in reflects margin than range XX more previously XX.X% has due primarily are our expectations to unfavorable for underlying product XX% expansion be XX%, adjusted of the This that to cost points margin to anticipated. to effect remained dilutive points. organic the basis elevated

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

expected of our We the in for the on guidance maintaining previous the to based mix range second margin year. are XX% XX% half the EBITDA of product in

$X.XX, adjusted EPS, continuing year-over-year to which both improvements we the basis operations segments. macro With XX% are strong on a to to uncertainty, XX% sequential $X.XX a of and in providing reflects for we range growth be which expect guidance ongoing QX

Please I'll assumptions. review guidance Kim. With the call over additional turn XX Slide for to that, back

Kim Ryan

Thanks, Bob.

a Before and excited global this nearly our organization presentation ago, Hillenbrand significantly XX end the I'll few opportunities months energized became into ahead. industrial transformed pure-play we've that taking I and about morning leader remarks. questions, final remains CEO Since entire lie our a with

growth large value sustained enhancing we in positions First, growing our As communicated profitable long-term growth drive and shareholders create key December, dividends synergies; leveraging finally, our capabilities focus to cash strategic our brands competitive through Second, our leveraging deploying large with through markets; expansion to shareholder at opportunistic by drive capital leading And strong Investor our repurchase. high-return in improvements, tenets: operating and Day and and share end our four by the opportunities utilizing is drive expanding base installed Hillenbrand Third, to M&A; profitable operational aftermarket productivity model through and towards to returning and by

you. highlight fourth to that report progress we our sustainability pleased month, this annual our sharing and continued publish look I'm with to Finally, we will later forward

we'll Now open for the questions. line

Operator

our And of the Instructions] Securities. from CJS first line question Moore is [Operator with Daniel

Daniel Moore

maybe out at lower? "the But APS, with thing a of should strong, particularly start polyolefins, cycle." would this a in I'll point fact, be pharma, to et in are we which pickup expect food, nice cetera. seen in bit this as start when remarkably backlog a point? tick remains good times And Obviously, terms at you've in that, stretched to lead

Kim Ryan

I see see investments over strong some Yes. I a would say the we last as trends around that continue you to macro of years. to just And we've pipeline those continue there. think China the seen several in

in but investments that address the transfer Now manufacturing of seeing you're those moved own needs, regions. they as try into domestic their of has some and India also

end variety take in in of continue move to natural just markets. You to demands see able typically be investing. for These regional -- Middle regions for these to East of in the see address regions those the and and we that product swaps, each a in market advantage demand resources of the

is that these To big. continued that the all Lead point, this key the think Dan, lot products. certainly around of touches the it the very ever demand a backlog are growing times I backlog and we've had. the extra And driver do manage extended, in global to world middle takes for are largest your we class

responding the efficient more So But to to backlog. not of see customer the well depend sales building but are that grateful over part on in for level did all to now, also has have down been quarter terms to many that like their also right the which a move and touches on that customers a jobs have optimal more helping around allows backlog. the of time, them to and us we so in us would very demands of just service, we're on world

Bob VanHimbergen

operations. Yes, Dan, would what is the and I as right, may add, be Kim mentioned,

to continue reductions and successful model Hillenbrand the application is to the We on proven lead focus be of operating APS. within time

we off continue and more pipeline demand, see the strong push door. And still so obviously but we to

Daniel Moore

lineate of between more it demand, turn injection runners, past, which Perfect. have times turns of hot to you it quickly. -- quick lead I'll generally hot a it gears. longer in the and when turns has usually as business Maybe but runner versus when switch kind molding, turns,

order the sequential sustainability in of get half that the QX of the about sequential we your activity far talk confidence the back improvement as So thus in on particularly side? and into runner year, hot

Bob VanHimbergen

Yes.

So we making tell with far the closing still what it's there's remarks right had a we've and but timing still quarter in to I'd fluid improvement and you really in decisions Dan, versus books. pipeline, orders associated and month. in a fluid. strong month in about early strong say so have our still in that been now. QX the versus those But sequential But I again, see QX surprises we April, so continue in in would decisions pipelines, we're as orders are And X% seen We is QX. customer the did saw no improvement prepared customer just the

So I we of the say encouraged just decisions in being should about we're feel our fluidity -- customer the ultimate recognizing I but activity, guidance. guess

Daniel Moore

pick is see pipeline there? maybe give term growth guideposts the And that we is fiscal but about pick one like over up injection up current I'll Maybe to as longer 'XX? to it half back the of more, about the we on orders orders discussions for you generate back mid-single-digit longer-term do in sounds confidence And and jump have, expectation talk -- your follow-up to that with think the a when customers you it's just molding the need kind Overall, of year. you the and the will there. in side signposts some MTS expectation that of just that the back, if

Kim Ryan

Yes.

times -- are The the business molding XX to from in need size depending side injection the the on when project. anywhere do of it XX six we to see the So can be lead months, to that? of

Some that seeing of fluidity, we months. is kind think so of the I some of projects, midterm are projects nine to that those XX

certainly start so, quarter or those or two. in here breaking is quarter so next are next will And projects expecting we're loose that the in we anticipating what the

business. of watching much are mentioned, of side the injection signs a is runner And molding those time. we're hot you that watch side lead the as on the the shorter business, the So in

activity customers, a of of again, But with normal months. what a is folks collaboratively really discussions cycle projects until in to have we're starting of sales lot -- that around certain able a What are up. in not lot is seeing work relative these to last geographies been few the particularly just kind

some processes Those And so those lines seeing do are bit of starting little are India. sometimes -- time We're a that jobs. the seeing up. we're is a those to specifically preparations which design certain starting new and in what for types those lines, we're of as longer and degree, work in the we lead new

is, -- cycle And six is typically so sales business a months, it, typically a as on the a that a much project, the Maybe larger, typically, but for us. quarter. as much quarter maybe on -- multiline call those much shorter-term

we'll And turned in that revenues those financials. to quickly so in get seeing if in start timing. Then we'll the We'll decision the start pickup get around. that we experience

Daniel Moore

some recycling will and got questions cover. queue I around any I'll food, but jump back helpful. in if Really

Operator

of is Summerville next Davidson. D.A. Matt from the line Our with question

Matt Summerville

questions. of couple A

a acquisition forma the you side business? prepared highlighted, pro the a what your on particularly might be You in growth put can remarks be some look the may around that basis, the volumes a delays what contributions mentioned the organic food versus And of point of you did like expectations. the for driving in in less that acquisitions finer quarter? On bit

Kim Ryan

bit what performance we lines the time get handing the the acquired little handy look it's to businesses. LINXIS that demand, through see certainly and closing delayed projects. for not they you are or I'll in businesses we driving got decisions have we've that in elongated some topic, that let were can market, on -- a of were held. that of decision They we've any kind really, specifically forma. way in of sure saw and but we are businesses for what that same saw They pro can just frankly, publicly Bob quarterly that. smaller with these smaller on not reference we just businesses. a I'm not in Relative that slowdown anything to customer we were Remember on specifically quarters because back

clear is on so we're their timing with what processes on exactly closes. really really And how -- to them on working be of going the being

probably every but we're quickly close would And some our our how optimism around in the of on have part businesses. better I continuing exactly our so estimates on that some we work, in of timing I or get terms there think new was how think to these the controls kind and would these orders of processes month

discussions a I terms portfolio these important Are We the with of seeing we different on most continue we pipeline? seeing robust that to -- the thing traction of is having being parts lines. do think good the able see into Are customers we're interest? we in good add

of and those of all and And in value pieces really, of are parts just work businesses of to offer really signs portfolio really the equipment. the all all individual of as pieces positive the collaboratively opposed are now full And those to positive. terms and together signs

systems And good businesses. all improving We're that making are close, fifth bringing estimates as early And and in we're of on that progress things of so the these into the the the again, businesses they're owning businesses. approach making really really of still the timing month those quarterly we're the of -- of accuracy days.

make to date, the in So exactly but that have it's does pleased to that like to some time some it take main base we'll going we'll runs sure business. everything just -- we're us have

Bob VanHimbergen

again, million of on the that in timing customer I quarter decisions. then about underperformed in the in think the say Matt, total acquisitions, based would it, probably $X I $X And to call acquisitions really, Yes. way top revenue, line, just just just million the probably,

way But pipelines see I'd we so piece. forward. still moving about the the And think that's M&A strong

Matt Summerville

to a want And then I it. just Got price. minute about talk

X%, had the right, being XX% I think of APS I up by volume? numbers that price driven was growth MTS up is much organic, if versus how

Bob VanHimbergen

me with quarter, about on the probably It's X% Bear here. in Matt. price

Matt Summerville

of MTS, little hot you what of about to about Got With talking kind respect runner it. business hand do the doesn't dictate a talking questions. you're in sound kind starting to bit though better, you And necessarily the cadence. round that during it then have like last were to even orders to of

curious to improving, So what driving hot runners about macro I guess be I'm as geographies gives the guys? might you the might informs what you confidence and that that environment, you markets be that how for

Kim Ryan

expecting markets travel affected for the -- pickup of by a we a very that will over not and the sorry. China, activities myself, us been -- quarters we in see has a see will our So hot just possible the markets that know, runner some for see very has as normal which wasn't been, business, the like as really you one number where -- in pickup quarters. expecting I'm of that We're some has last we'll where been we'll that's and we was market Rob prevalent that sorry, several it are

-- we really those last really restarting And as we were quarter's so just in mentioned we're restarting call, conversations.

lot interest India of continued projects and From move would India getting I we as across in that seeing about pipeline in a market. really those the standpoint, a are it line. decision into China is say also finish suppliers So that

next right indicate improvement. now And process these a different decision-making while to all heat the the map in XX of are they of do we pipeline -- the packaging, remember, today I are give kind resources a next us really our still indications we months, was play and over in of expect XX that the of expectations would months ground slow automotive, kind quoting would confidence our on on medical, end see they lot electronics. versus over markets goods, if And markets, of see to we consumer where the their that that

And a so attention of to lot be helps to opportunistic in little markets. bit places will there of that paying chasing that are to a Matt. us clarify Hopefully, to trends for be those that, be

Operator

from question the Company. & Sidoti [Operator The of next is line Instructions] Franzreb John with

John Franzreb

the everyone's quarter, it. expect about myself, It it But you opportunity but seems macroeconomic into you like surprised to duration light and current given at right strong I'm of not on the you pipeline been maybe I, suggest in holding elevated that long that. possibly When focused opportunity it's the rightfully what has do beyond of how the think now? how pipeline, you're sustainability see this only level, conditions.

Kim Ryan

the -- side of or -- terms are more speaking on on you of APS In the side or MTS kind broadly?

John Franzreb

Broadly.

Kim Ryan

Okay. All right.

So maybe about. me couple and kind of of address a a things to couple let of chunks think

as investments stay continue continue. have it that and high relative about in stable geographies, for we to let's where to see instance, talk China several was a various years in our we So plastics business We've to, there. both very we've investments been lot of There those continued base have the -- we've APS mentioned, MTS segments. continued see see to And but ago.

for, a we're frankly, those doing up. start couple able to longtime these types just and still have in flight work in get to working projects to of now, fruition to years at and We that of service start been commissioning are and sites on and things projects and do bring

revenues as our the high. seen activity But to terms of to expect we We've that by, Much to growth specifically Asia investing see we'll incremental projects. remains there with we India areas, also lot that in are continue conversations those demand wanting so in complete continue And of of another people have not a in is driven customers is China. make that India. in who they frankly, footprint sure that

opportunities those investments by then of are also in an Middle up so seeing lines. We're and in in And And the but all initial be in will that investment followed India. capital, those maintaining investments there coming East. investment service have again are the those in

when So they will build during parts those XX as are a a result XX once commission then they to these duration. are service that you've come and be -- so I online, start, I of investments. do and got the then process. those to projects expect come months longer And mean, that

of on long be just markets pretty recycling, to se from about demand producing elongating the other products, capable facilities just world are of type major that's their more those for that these cycle own right whether hyper and different or is That's I recycled think a own their think end or going in in like post that have it's that realize capabilities So we're of vertical of becoming a this of seeing required absolutely something recycling, I in and When people those don't to is some reach of we that industrial duration. all per now. what's biopolymers, to manufacturers by types integration around the investment types going and who just increase. many things. some them use expect

So that is cycle. going a hyper-investment just to be

we're that, time the it the have North plastic to primarily, East as to seeing be America will a with expect continue continue Middle we also to Europe that and have people over able and them. deal in Asia but and absolutely right reuse Now now, need investments to way in increased materials

capacity address food That I we global area, is the to happening. don't global investments growing foreseeable are this growing class. expansion are And class, recycling of cycle be just that the think for as to on this seeing again, middle future. going So key then that's that a side, is middle

take markets these shareholders we advantageous long-term believe markets, had just could and for term advantage very long themselves capabilities into had these us, but markets capabilities why that these the were of to investment the address key our our not were attractive over markets. I secular mean important growing them so and we be extended growth for that to because and trends were these be to because will

John Franzreb

I maybe bit granular a service addressing at function And that know, channels business about of guess going of Perfect. a the aftermarket? something talk The what's new I just little Can mix. in or bit customer more relatively just Was the little that was a a don't on low inventories good. question. levels, you're aftermarket you the on

Kim Ryan

at it of level. kind -- Bob of let I'll will Yes. some high I hit just address

think all been margins. we've up margins the say differential -- there's of been that is I the has our APS I done, of has I service pent-up a say bit increment some service wouldn't that because affected certainly between which seen demand, and and there will parts in a increase being decent pent demand that not actually that

that So we comes sell. than, of was a instance, did see to margin teams, great of and lot proprietary parts some of be of volume that service a but addressing that and for needed lot work of that at our some we utilization some done lower the service

that we've large business, years. over last cycle capital a So the investment aftermarket had several

investments they we've and those increase to capital because original investments quarters be been needs, to of world. or global -- an just all maintenance from needs all that It's we of our and around modernization, has got as the ongoing one calling So as -- the to in standard that aftermarket -- from with of things capital those those was relationship job see does a of business which we where time that team a where our just periods relationship part being of service and for expected spectacular hit for of that a there to time or customers those we've a customers number -- types some of address addressing of a customers. result debottlenecking parts do

Bob VanHimbergen

thing add, the And John, Yes. would is book-to-bill both saw only a businesses over X. I

as the mentioned, And to Kim aftermarket us in it's And and been entire grow and for focus so there's right, strategic business. in some that a there we're seeing the it well. today across pricing portfolio, as past,

results seeing the we're so in it And quarter. the in

John Franzreb

Well, one question. I last guess

be much in what that aftermarket? three how mix lower important in other the is it about ago? in profile versus, for is we factor the APS, And margins Regarding the of reduction say, EBITDA should thinking now margin APS the months in

Bob VanHimbergen

Yes, of relates reduction mix. there's probably to that X/X

the that it made on The the quarter a rounding QX that's in still And XXX% some pricing investments John. just for the but we for in we costs side. bit really incremental other just piece the price food little were had year, battery then out drop the pressure and pressure margins, more the putting there's be in on and is we above would saw that

Operator

to for I'll turn floor At now you. the this management remarks. Thank back further time,

Kim Ryan

forward We our August transformation. again call today. Have your to a and quarter talking look report will to third appreciate Thanks Thank Great. interest We on joining the Hillenbrand us and you. for your again, when everyone, in results. you ownership our we in fiscal great day.

Operator

will today's conclude This conference.

You participation. may disconnect for your lines at this your time. Thank you

Hillenbrand (HI) 9 May 232023 Q2 Earnings call transcript