JBT - Earnings call transcript Q4 2020

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Operator

Good morning, and welcome to JBT Corporation's Fourth Quarter and Full Year 2020 Earnings Conference Call. My name is Denise and I will be your conference operator today. [Operator Instructions] I will now turn the call over to JBT's Vice President of Investor Relations, Megan Rattigan, to begin today's conference.

Megan Rattigan

Thank you, Denise. Good morning, everyone. quarter Year fourth conference our to and XXXX full call. Welcome our on Financial Officer, the me Chief Officer, call Meister. Chief With our is Executive and Brian Matt Deck; subject will press yesterday's and X-K statements call, language release use today's Safe Harbor we that In are to filing. the in forward-looking factors results. periodic JBT's risk filings an have contain also may SEC impact regarding information that on our the are Relations section available website. in Investor documents These our of today includes references to measures. non-GAAP discussion certain our Also, measure measures A found the to can reconciliation GAAP issued be the comparable night. these release press of in most last

Brian. I'd turn Now to the like call over to

Brian Deck

Thanks, Megan, morning and good everyone.

With the related customers as company the and first of in COVID the experienced Operationally, expectation navigated and the financial the yet JBT's continued which inefficiencies of with entering the set quarter of onset higher year, environment, many the pandemic. challenges early our clearly with suppliers XXXX, to we has deal I'm short JBT, difficult a entire into absenteeism. COVID-XX protocols our we fell proud all performance associated way

engagement commercial this Fortunately, customer level difficult of manage as the learned year accelerated progressed environment. the the side, we through JBT all on as to

as JBT the solidly For cost quickly profitable remained our adjusted structure. year, we

guidance that, with of note enabled quarter excellent to line on of we present orders me our Moreover, performance provide XXXX. product and analysis business exceptionally the broad let Our let for provided stability. turn to positive Matt fourth and serve and the cash stronger us our segments market, vital revenue call year With him flow. recurring ended and a over strong the

Matthew Meister

Brian. you, Thank

of our exceed exceeded boarding exchange for operating expectations normally million growth strong we million, XX%. fourth better related than with Corporate guidance saw to to sequential COVID and million. to restructuring our of a line expense the XX.X% EBITDA XXXX. revenue of FoodTech the of on trends will call end approximately quarter and markets charges $XX.X $X $X.X in and cash how the JBT equipment our focuses XX.X% in interest and revenue fourth our balance. In forecast. AeroTech was with the reduced revenue a margins the range costs FoodTech helped We above full slightly flows on quarter our compensation as While X%, which passenger succession and given X%. of forecasted included quarter both better of adjusted volume the comparisons, XXXX, margins EBITDA was X% year higher debt on due sequential forecast AeroTech costs, of were and positions in our and in margins up lower X% And M&A-related recurring favorable incentive significant quarter, operating respectively. million of The was concentrate sequential $XXX foreign in XX.X% were that with of additional approximately our bridges. year-over-year and high gain. adjusted sales of management was quarter expense margin Separately, impact our in results, X% of of year-end

continued Excellent of favorable million proactive $XX XXXX, along corporate deposits outperforming the $X.XX, higher JBT per our to operations fourth guidance adjusted with and due cash posted receivable. the of collections earnings of EPS lower flow management costs was $X.XX expense. For of purchases from free quarter revenue of and or of share customer quarter primarily inventory interest accounts fourth continuing diluted with of result

at year-end, $XX stood reduce us for $XXX the debt year. full million million ratio to was liquidity of continue net free representing a year, net-debt-to-EBITDA. X.X and full flow by the million of rate conversion cash $XXX with Such a bank strong cash Total For million, more fourth XXX%. the to in flow than quarter leverage at $XXX times enabled

North $XXX increased with by of see from be AeroTech, FoodTech quarter. that third At X.XX. commercial America. continue projects AeroTech orders for the infrastructure encouraged that XXXX. Latin in order America did sequentially We in customer sequentially of up in and quarter, equipment a XX% momentum trend orders as book-to-bill with a were the fourth investment to of airlines. quarter of of orders million demand started quick XX% a equipment to increased these of on lagged capitalized and fixed X.XX. demand Geographically, experienced third JBT we food of both recovery customer added who improvement in cyclical in and to Asia the which demand improving trend continued the pandemic-driven eat-at-home continue as Europe, processors offset markets airport capacity. lack book-to-bill we service show the a serve restaurants recovery

expect chain revenue seasonally XXXX we inefficiency first quarter all to With mind, in and and have to million While will million associated pandemic. manage of we momentum a the we which high be entered the with $XXX FoodTech supply to and $XXX of with at million AeroTech. commercial inflation evolving $XXX at level orders, $XXX XXXX activity on to challenges from commodity million $XXX good demand-driven $XXX million that between consists slower million, to the

FoodTech, operating margins for XX% Our EBITDA XX.XX% are margins quarter XX.XX%. adjusted to of at first with XXXX to guidance XX.X%

adjusted million to costs EBITDA operating in Corporate approximately restructuring are M&A $X X.X%. to forecasted margins costs. million X% million quarter and not including the $XX margins million, X% be $XX X.X%, for to to are of AeroTech, with $X For to at expected

XXXX and $X.XX quarter first to adjusted. guidance share Our GAAP basis to is $X.XX a as per earnings $X.XX $X.XX on

versus to of X% includes translation JBT to FoodTech, at grow to We looking X% X% revenue total XXXX. at the X% growth to X% That Now a and to X% approximately anticipate small of X%. year AeroTech XXXX. full benefit

to XX% while We FoodTech at XX.X% the XX% in to expand to XX.X% range EBITDA AeroTech. expect margins adjusted remaining to at

tax earnings million, JBT's guidance interest We expense million. of rate $XX basis, $XXX X.X% $XXX annual approximately $X.XX On of XXXX basis, on net and share. roughly $X.XX forecast per are per million adjusted forecasting $XX is is XX%. year corporate full diluted to to of to revenue, amortization to $XX income of depreciation expense GAAP to for million million an converts a and share $X.XX which an of expense $X.XX of the

$XXX $XXX adjusted We of represents million, EBITDA million a which of midpoint. are to the forecasting year-over-year at gain X%

our million back the In flow year. the we Brian. to cash higher of expansion in sheet expect rate XXXX. reflect flow, With to some terms performance $XX of and support that, let Free achieve CapEx of free of XXX% for a conversion volume of to call growth and approximately cash turn XX% balance will me spend

Brian Deck

Thank you.

shorter-term investing I'm cycle, JBT's focus on which to the capitalize the and about well-positioned to talked from longer-term FoodTech impact AeroTech. have been on offering Matt the pandemic-driven this at both we are in trends While and secular going of strength and

or First very critical very food you and advantaged Indeed, to eat there's go. a played us gives chance part position of preparation. and in good a FoodTech demand That markets. trends in meet participation wherever they broad end that food something foremost, consumption if JBT a its an drink today, enjoys consumer technology JBT evolving

few fast-growing mention examples me categories. a attractive very of Let

even and consumption. array packaging penetration represent applications. As beverages products. bioreactors expanding JBT's coffee-based tray categories and market. and beverages plant-based in and blending solutions, for an freezing of rapid into of as is cultured high-pressure coconut equipment a portioning cooking, protein-based solutions used tea meats you And provide equipment, systems, sealing and opportunities are beyond growth and production meat that functional for We drinks, the coating mixing technologies, its plant-based clipper preservation for preservation human know, market with alcohol-infused drinks, oat of our cultured and going and go energy processing, also food and fast-growing such milks, beverages. JBT

food with wet solutions and the rising selling into food. the We these demand fresh premium market, are pet actively same for

JBT for In role orders vessels, fact, products mix applications. high-purity onshoring this recent increasing largest and JBT health probiotics. grade systems piping nutraceuticals one high-end, systems is and production that of fourth trends improve food modules, JBT requirements. in high-growth as clean-in-place and was with an particularly and the quarter our the market, categories systems biotechnology pharmaceutical tapping plays fabricates tanks process immune such the pharmaceuticals, the of towards that meet digestive like of production. also pet in And of

We packaging, the when a it of out see provide preserve trends and its organics food strengths, and in labels such sustainability. our life. JBT's opportunity electricity environmentally-friendly to consumption, really customers meal hand-in-hand to play purpose secular and convenience, more, to all that part respective waste as with in forms solutions maximize In ESG stand to working water broader comes clean reduced food addition do shelf journeys. our of to extend JBT and capabilities as real and consumption yield, minimize food

every solid proposition. our accelerating to cash of and that flow, the consumer only monitoring labor-saving machines. orders, support. the in able as the performance customers' that customers into ongoing expect Solution, the costs, AeroTech with the specific data JBT. XXXX sharp JBT in automation our which proposition looking FoodTech's end-market by provider. connected demand is Things blow post suite and from speed, cargo from we intimate the continue by across of our Customers food for position competitive demand double-digit as trends, because year. improves excellent enhancing products we're to technology-oriented, processes to our is same value operating XXXX. all Internet we field nearly of This Further in improve from a have diversification and solutions yield production not labor, advance Despite market to opportunities deploy satisfying JBT come the evaluate Bolstered to knowledge robust anticipate end XXXX, decline these offerings and comprehensive In solutions is consumer up-time, the of beyond Switching time lower low at from of and muted enhance but automation. Beyond margins in was to and conjunction process our AeroTech, second service of half intelligence markets global of product service enhanced airline air that strong we liquidity and as iOPS, build This side the and reduce in collapse and infrastructure strategic acquisitions our capital brings large travel. using controls a for

product an opportunity to product of diversification. compete military product advanced gives further and us capabilities yield could a portfolio for the that programs upcoming On development our number side,

electrification clear to in secular are automation trends positioned is FoodTech, As capitalize on. and air AeroTech there transport, that with well

ensures docking of We bridges boarding aircraft. are auto-docking AeroTech's damage-free excited safe, and loaders to technology about particularly that cargo the

with airport technology support is for the need equipment, loaders door ground from environmentally-friendly sets JBT and the Our tractors. food operations targetless also including supporting apart recognition competition. electric with JBT

marketplace global towards the and continued the for XXXX, Overall, see quickly opportunity we food, ended pandemic-driven longer-term year a disruptions as solid in the sustainability with the despite momentum the product industry with continued movement engagement. transportation entering in by As development air customer JBT and adapted massive XXXX.

in Our have us recurring end to product provided of significant enabled around wide to a broad shift value Most demand. pandemic. centers protect building serving stability we to core on safety, of our commitment employees meet JBT's our line all, employees, our our sudden and customer throughout success revenue a of action range markets taken the

Speaking believe of We workplace. to is heightened have commitment by inclusive served diverse, we our also perspectives. values, a that a values best our respectful core diverse culture business cultivating equitable and

partner times We It's JBT, and air us to the and know that available trusted enhance thank With food development enable well-earned you. They and programs extraordinary questions. at that, that also deserves as excel talent. us take commitment Operator? have your through customers. everyone our to best let's a diversity and our that a enabled recruiting manage talent transport to that to essential tap

Operator

BMO. [Operator Please question go Instructions] ahead. first Tiss comes with from Your Joel

Joel Tiss

being AeroTech? I and you if the bit inside used Well, of a that airlines guys first. to have your not talk commercial airport could I'm mix between little you wonder about business

Brian Deck

Absolutely.

in last So about on imagine. year XX% as used military to the XX% commercial the airline side, might the it's side, end and cargo. changed talking and the to about markets It we're used in and a be you infrastructure be lot terms rest something of - in airline over it now,

is more about the side side, shift that XX% the another then on XX% or so airline like on and cargo infrastructure XX% the Now and XX%, on commercial military.

Joel Tiss

guys XXXX for pent-up about to 'XX business, back commercial get And components more their insights maybe normal to start building wearing the from a rate? out and of run their whatever, are much and as demand sort how things any

Brian Deck

Yes.

the use before side, On they much continuing certainly, in as they the commercial they as invest to are it. older equipment can

market position the some in meantime, will really looks that on We And start affect some are won't for ordering upcoming really before XXXX. the time the It's and if In continues half power is XXXX our an XXXX/XXXX of do in they starting in pace not the aftermarket, on new of some the of and point, looks very we military programs strong Military service strengths our take will out but programs on the on good. see good to recovery do well for coming uptick going to be and I think expect, cargo it the with air at XXXX, the side to some that of are but airlines us which revenue breadth very a and equipment. really military mentioned commercial XXXX. speak as they jets. expect those back I recovery this We good, of the XXXX.

But non-US-friendly a coming looks in real commercial fill and source into some their that's it's marketplace. continue XXXX. those have even demand. Some other the nice slots, the like both production that, infrastructure other able programs a the a We to of then shifting program Army of with were with airlines are programs shifts, on XXXX some out going and to quickly but the did Air we some few on side, strength into been Force. There's US

investment side encouraging. So We've we question really XXXX. And was what But of strong trends into that little orders original a average look out on It's airport like. signs and we that it's on for quarter. up XXXX obviously we continues longer-term that that today, nice with orders is those here in the It's early got just source quarter. of side targets does our sit bridges, business, all a the fourth XXXX really of business, with the infrastructure and about quite of Jetway age pace meeting some ended the our the on talked but the XXXX demand because as strong. in the infrastructure required the the of

side. on going side, some the got take to military meantime the risk while cargo in a it's infrastructure, while we've So ground ability on the and support

Joel Tiss

down taking ballpark acquisitions? to free any to back valuation any one about just little and at again. Your debt net-debt-to-EBITDA from whatever that you want of talk a And availability question. your the just then talk maybe And or about that up cash risk of is interesting particularly Can bit way flow, or much too sort that? seem areas way you last time, XXXX

Brian Deck

Matt let acquisitions. cash free a expectation, a little flow talk I'll the I'll talk bit bit about then Sure. little about

Matthew Meister

Yes.

the bit as closer of So to from support a on little get level in on balance normalized to as XXX%, especially some in XXXX side. food the to get free to a as programs little more cash flow perspective, Joel, performance we're looking the as side, business as back comes of XXXX, maybe to volume such back, we at growth a we lower, CapEx well expect well about XXXX investing expect expand as off sheet just we target in in good the XX% to coming a a

that the is we that's for is what each their we've JBT, call minus entitlement balance about some for basically income targets units, in which sheet. and XXX% calculated plus business expansion and year, some the impacts D&A of and for and we CapEx, is CapEx, just entitlement historical their So the for operating think

to have businesses operating And and targets so for XXXX. those they're the their

Brian Deck

acquisitions, in about we're and leverage a in And right of so exactly. spot. times X leverage. terms We're Right, you're good right, really

got the market I I we over opportunity here is X think be that And leverage there's in - opportunities do next think desired as of that the before Joel, the throughout know, real JBT part is as remains and marketplace. to pipeline. acquisitive Our pandemic and to the well do the and times. there auction-type continue we X range times you couple the And to get a we've positioned years. of will broad to try opposed cultivate really our proprietary-type as to deals out deals

that. continued we've So

positioned. well we're think I

can some the into the adding I we over times times couple Xs, a provided within again, back that X within, going X of years, path So months, certainly that's course times debt X we XX generally the the opportunity, think of it. see to given could well X that times. I staying and see say, that to how right ideally to leverage XX, But us next but have of

Operator

from Maria comes question De Lawrence next Your William with Blair.

Your line is open.

Lawrence De Maria

your see earlier, I for automation you a digital main competition need has iOPS. with noted solutions, this and also obviously, mentioned

competitive recovery cyclical curious going X winning the a is in specifically, I'm if really is? you're we're year, So digital big to I'm And this if cetera? factor how year that market, next X, at looking because offering of where over this you're and after wondering going just yet I'm how with last years, your outgrow et is business the

Brian Deck

broad we not - It's do about tools not It's of about automation I lot. a And about just use just think engagement our comment it's we right? that it's with customers, the have. also It's is the something digital themselves. Yes, products and a we digital. but our the iOPS, automation iOPS, the

we've tools So and how perspective, into a of the new and interact of time with digital market on on year the some engagement side in of the customer we to to then money as the we course customers lot from how ability use tap a our them, cross-selling over them, terms invested those well. of with

iOPS well it's we're strength There the me, are positioned. quarter automation digital home It's of I but the do and experience. experience. encompassing. an it's good orders But as orders a the trend also It's QSR we trend. automation mentioned, discontinued was think the products our coming just And a fourth seeing in I not all in. an automation to So itself. of

this, as particularly a tapped of on iOPS on invest money in that. expand our we the to on amount side aren't platform XXXX good We

something that supportive in. So thoughts, into great executive to and really she's in it's confident very And the team. strategy really path pretty continue excellent this Pascal, Christina we who area about we're the really has developing on, and we regard. been and promoted I'm invest in some really with particularly currency excited in She the that

Lawrence De Maria

other margins is have a a especially obviously, that's direction. And in good result you those the couple the getting moving really of lot of restructuring. EBITDA margins, a last And years, right The higher. guys, job of done

much And what of the we leaving from getting be cost So table In that - to to have next other how XXXX we are market into get all in theoretically, words, much are how it and the we to volume, get - cutting? will on year cuts? we get capturing had in are this - be at the those to question is, cost easier capture are in a wanted we could benefit what a this more prior restructuring we we volume what's the don't year benefits? because those where growing what into we all? because Or

Matthew Meister

around in another From some the of million. that on we million FoodTech million we range AeroTech to the $X in announced and full on the side side to The a for million benefit restructuring $X in perspective, and million probably AeroTech the side is the $X million $X incrementally the $X late somewhere XXXX, in expect rate the food benefit on for run is XXXX. $X programs program

of when the food the get in can new out get Europe. just moved programs we facilities footprint our reduce everything trying over of to So place of it's function again, in restructuring timing we're the some to, businesses the our in costs a get and of sort really and

Brian Deck

as a the just for at were pandemic the FoodTech. the I'll with time guidance looked say, Larry, year the about of before full XXXX targeting was back XXXX last - the benefit our when into we reminder, restructuring this we that kind plan originally, play, coming of, Yes. And hit, XX%

XX%. So that post guiding we're to restructuring, of was kind XX.X% to this year

with that you you about given really XX% So presidents. our it then overall level. the from it, closely we're in consider some compared be. an to to the the with do JBT we're excellent let's to in productivity battling, where of system. when I'm when revenue really unit inflationary pleased impacts we're we We're operating call the our look recovered this well just profile challenges We've with XX% guidance on in the really say, the XXXX. And and to pandemic high good that got we've plant-by-plant happy way job XXXX at about, very on clarity providing the range, the on We a business marketplace, monitor continued need

We - et their the factory each if staffing updates levels And the make change, they volumes take focused cetera. hours, productivity their the it on they proper on. see relates that as the they're and proper overtime, actions have constant and levels to

path So FoodTech would we have side. a closely. We're we on we on great monitor to the thought where been otherwise

I'm So there. pleased really really,

in this On going XX% trend. the year. That's about longer-term all had to that's AeroTech to in activity. we're impact a their an be said, guidance, it's we're are to AeroTech to guided last take as get originally post margin, a volume again, margin side, the a too. to path a time again, that on good years increase We - to our obviously, given with few But with with XXXX, going inflationary we seeing

Operator

Wells from with next comes question Your Allison Fargo. Poliniak

line Your open. is

Allison Poliniak

could access Is there hindered way to back there rate that that here the you a go level has ease? is sense FoodTech to improves would Is this starting through I and, as trying How I'm near-term? we there to say, that a to to experience at access get as that to sites. want demand the of, customer Just growth move just pent-up about? year? think a

Brian Deck

Sure.

of It's some some we efforts And there think in did fourth I were and it which early with et marketing we But fourth quarter, ease that And the really side benefit more difficult. certainly, I started engagement, in the the think little That's honestly, first access the than started cetera, entered quarter. still to quarter. the access was the digital in is a now, digital access a of and quarter. to as was pent-up first obviously. improve mindset it was the good. physical that do some LaFarms to on Our just demand And improved. conditions, see hopefully, tell, bit in continues

So I'm willingness some and the mindset hopeful continue. definitely, of we those very really to easing do But that trends saw the invest.

activity. of pent-up what bit little to really pleasing speaking, quarter. in conversion that a was the demand. And pipeline was an see generally nice really fourth But So rate some the on improved opportunities

Allison Poliniak

And then in in How Anything you should supply chain as an mentioned maybe see that move initiatives you can challenges ease? you the quarters. certainly through past those - up Are that to we year? about starting organic few issue hold we terms think about there? that of the growth

Brian Deck

totally Right. easing customers in saw the our we we Supply and the as at fourth the issue chain quarter. challenges haven't as as well were entered is Really, quarter They absenteeism fourth suppliers. yet. our existent started that

emblematic couple some much, to slowdown. the the was in at more affected with issue. what's the of here. hasn't delay start you a so global the chip of Hopefully, things will markets. know there delay That's at border. weeks it's Obviously, Obviously, So that happening situation X-week also but of about That those lighten up has just Brexit caused X, X, really us emblematic generally. border,

the not our all should challenges. growth have without They're them, there into that rates, and over So on guidance overcome cetera. - - are the and et not they're some we we margins factored

hope half in that into them tried year back provided. guidance we've So really to the be really of the do I the abate and And all those we these that significantly. to that about embed thoughtful challenges

Operator

from Mig Your Dobre with next W. question Robert Baird. comes

Mig Dobre

point inflation. love it you more quantify I'd back maybe in looking incremental far. then terms here I'm go Brian, you to I'm And any, if I'm addressing to can in your this planning we comments in how the headwind way color through in pricing terms see here come maybe dollars. on from how imagining you're of this I'm your a flexible headwinds us the of but say, pricing, if raw maybe to of XXXX. for they've little will that able sort material addressing moving at for move commodity of on were been get wondering continue some have to also thus wondering is cost And to that. it

Matthew Meister

Right.

Brian Deck

on some Go pricing give color the nice Matt let particular. ahead, color in Matt. then give side I'll I'll on specifics, the some and

Matthew Meister

Hey, Mig, Matt. this Sorry, Brian. Yes. is

as So of for radar it. and increase XXXX get we're seeing steel certainly other our something It's inflation, we obviously are specifically as that's very aware metals. in screen on commodities we into clearly

We have aftermarket. of spend copper in and as other component well both in that and our as into on a sell the pretty we as our materials such big components well put food in steel go as equipment AeroTech that as the aluminum

inflationary forecast decreases a in procurement can of earlier, this They've And actions forward. of so where really as the to our and suppliers well million those are million. like that we so rise when the confident top on they the total risk increases of all on that they commodity procurement with hold-the-line place, our where teams we past, it's as especially commercial a is at them going have now suppliers look any see cases metal But working lower-cost some increases, commodities would other suppliers alluded But cost to have as this best baked they're team are the appropriate suppliers of and to in close in to without it. mitigating into on working taken months holding And negotiations, find that $XXX to spend our been try on countries. $XXX million with take lot pass And really on Brian $XX - somewhere provide been our with million to, ago. to continuing implementing commercial evaluate high-quality, is to our in for to what range teams to a we customers, again, as to of actions as information few we you said and to well $XX our in provided haven't when the of a a we're call going saw appropriate. have in and to each months pushing number of few guidance back they've conversations start And they with inflation. alternatives

Brian Deck

Right. more of give little that. on And a I'll color bit

significantly might So we Mig, and chain have as few our sourcing know, JBT. last in supply quite in throughout the developing resources invested you our years strategic

really, significantly and positioning having things as has the of vendors quotes. us the where really helped their they that in a to and consider So our terms information of head team in with terms start are commercial available going pricing really

flexibility of are a projects more lag, On the be consider perfect. certainly into so. got that There's kind that. so quarter or side, not you material you've it, usually and these engineered a FoodTech because into than a AeroTech order, configured of good some lot have can we spend It's will the visibility order, going the side, mainly

they've great opposed system the having what's visibility generally cost as team and However, as look speaking, in is look the to forward procurement on last them paid. price the got to at

with So analytics we and arming of spend time teams a those commercial lot the appropriately.

market, On little more support side, it's on a competitive. a tougher side, now, right the the AeroTech particularly ground obviously,

a little the for coming of less coming business. despite and result that, AeroTech year this revenue into a their the expansion restructuring as bit savings aggressive are on we So margin into growth some - of

we we can So what we really think to. manage try to capture

Mig Dobre

this great for metal make or million for Matt, just I the $XXX as million $XXX is a whole just to understand color. sure that company that That's FoodTech? And the correctly, to spend,

Matthew Meister

a Company whole. as

Mig Dobre

I as company see. The whole. a

is million that guidance? $XX far number already inflation, this go ahead. it is sorry, this $XX it kind because into as your amount of question that of kind of baked as managing asking to that million Or I'm down? is Then you're Okay. - the full

Matthew Meister

please No, finish.

Mig Dobre

earlier was of to Larry point of beyond at incremental getting margins at say, hopefully, to headwinds, XXXX in terms time, when, get commodity headwinds was maybe in thinking a what about moderate. I at trying going I'm these some

why So that's I'm this looking for clarification.

Brian Deck

Right.

could the what So is said, businesses. $XXX million, $XX as both $XXX Matt that's to our it million across the if And manage hit - million number it about numbers. didn't we $XX million

guidance. And the down. down and side amount that managing that in reflected we're instead, what's managed between chain it the commercial supply our both So side is the we've

million $XX hit expect impact. of to $XX We're going million So no, to down. see to I that move to don't net -

Mig Dobre

it. Got

Matthew Meister

supply the is going where margin going. on an then expansion forward, yes, opportunity There you're kind there that's is, continue to And side? chain the of

Mig Dobre

right. That's

looking a a So reversal of to was sort as do far is revenue a in shift. more kind your think right? mix think for I final to the a if of guidance? that as pandemic-driven relative revenue of and My of was we're question that, perspective more closer impact quite a essentially that that up does you and wondering, FoodTech concerned, your to XXXX. XXXX, mean, I terms understand it's XX% at thank bit And mix, outlook being was from on XXXX, your I'm about level But back an revenue, revenue I embed you lines mix And that. about along XX% if of normalized margin have is you as recurring? so, of recurring

Brian Deck

answer The short is, Yes. yes.

So - and versus look we food at it, aero.

in see AeroTech, in XX%. of to high-XXs continues go it's be the from, recurring be aftermarket to do mid-to-high-XXs That it, in side, XXs rest aftermarket said, or of like strong. food the XXXX. streams side the actually to side high reversion more going to And the for - the to mix. equipment at call and XXs, to not revenue we're more the pretty about XXXX low the mix XX% because XXs, some continue we And So on the in high-XXs

be will gave. into some but the profile there that embedded margin it So we reversion, is

Operator

& CL King question with Your next comes Brooks Todd from Associates.

open. is line Your

Todd Brooks

been questions of the of business. on have the but FoodTech just Most have side answered, my one I

move the or know you. vaccine pandemic? and mixes around ordering versus just there home see food And at roll-out to there or pause in get any of home, how - discussions, worrying a confident wondering any mix normal indecision just some I there fell we on was and home the start fairly see pandemic at if Thank food of the are into the environment customers again we going forward where towards moving food ahead home falls food from out fuller for the consumer where trends? side the attitude is to indecisions here the away I'm as your order out. is that we're customer As of new some we're at is towards they between back maybe sort with activity, away changing from moving on and desire

Brian Deck

Right.

conviction a this second the earlier out. for or trend, and of the having how year, indecision on with would this there QSR to that that we're orders. enough does not two, seem in now to play There was just there some be are definitely I them eat-at-home some You confidence does the quarter, seem, quarter, that quarter third going conviction. get was as it all correct to is you that tell the in customers, the a to conversation

here." So it's enter that away enough going I a like, confidence there's "Oh, going take haven't in seen back we pause XXXX I XXXX. not let's think as comments

For to be beautiful start portfolio. thing full-service such pivot broad customers If move and about our right But there product those that trends have XXXX, with restaurants we accordingly, we'll the is we'll to see. back JBT a them.

Operator

from Your Tusa JPMorgan. with next question comes Steve

is line Your open.

Steve Tusa

come the for a of what pandemic there. during out source that? may color there on the on build little infrastructure kind of more percolating I recovery? Just there's Is just the Is what's continued airport ahead wondering activity. demand getting that here just actually - of mean,

Brian Deck

Right.

on So it side. infrastructure really is the

practically at in side On on side, the airline Steve. the equipment cargo still literally couple the of There's things, it's terms zero commercial least.

continue in longer-term - First, nature. longer are it's these term contracts of some these that - orders

have X, XX because they because it really past - is really for plays in they're this did we are signed the airports basically, the took about some year, customer need orders frankly, they a So going things for need both that the these term, improve terms and improving country, across years experience the really, first infrastructure of to life. But benefit real last out, what the these of the seen are we of of longer we've and we old thing - year. bridges capacity thinking these that is, the lot

is cycle. the are investment thinking the the it experience, simply term they longer customer of terms in part So safety, et cetera. of But fortunately,

investments some those thinking for not term that and these we So big and are orders the really that airports were bridge airlines us. the this while themselves longer because encouraging authorities airport really making year bodes took of well the it's

Steve Tusa

speak of just there? little kind on just then a bridge? on there bit color - give And of maybe of price/cost the Is what's Anything side. to in the earnings

Brian Deck

For AeroTech or total? in for JBT

Steve Tusa

total is in JBT fine. For

Brian Deck

Yes. with right? cost ability some best say, given with side, pricing we we has our marketplace. of price about I marketplace a on value strength the infrastructure really good that nicely, out can say I our the We less position in on that's would in on the side. It's played managing really do visibility the premier there the on - shape. the have the would AeroTech, so proposition infrastructure have there offering the in And price/cost,

it's FoodTech there product On positioned. some in given line, speak, the side, impact we so are pricing have speaking, inflationary generally We where than business But environment. we capabilities. pricing it's especially to some is line by product best by business, definitely XXXX did better the

Operator

America. Andrew from Bank of comes question with Obin next Your

Your line is open.

Emily Shu

puts Act? on just for as capital expand as the was to The working inventory understand on I Andrew Shu accounts for takes side, the question as Emily Obin. working the XXXX from receivable capital XXXX. is of reversal impact first This on Thanks. wanted volume particularly for strong My well really in the and year. release any the is and CARES

Matthew Meister

Matt. this is Sure. Emily,

I working sheet specifically, in growth On we see on would inventory. do specifically expect and working the capital the bit side, balance a little that capital, of FoodTech with expansion side the the the

think investments great why a of is in the and which we the the proactively, half better in XXXX position puts of manage that to team XXXX. through has efforts the performance us some I tools put such second place in they've gone in more those had

side, kind would expect. as AR of to would the with sales expect you grow On normally it I

customers. I spot think managing continued really good see on stability FoodTech to I a the advanced perspective. and orders continue team payments deposits of sort nice we collections a job And us the DSO and think has side, our a in recover the should in putting done from from of as

expect XX% we why free bit So that's sheet do I the and estimating as closer to we're company because that cash think grows. balance flow capital the specifically a the for expand to to business working XXX%

Brian Deck

real to XXXX quick Act, $XX just million a payroll as payments get that taxes, we did on XXXX. in CARES benefit was And deferred it about revert as to the in it relates will

Emily Shu

companies labor. capital just then my substituting for about we've last hearing question is, been lot And and a inflation wage

protein customers the curious, So on is maybe from your substituting you're I'm labor in automation? plant anything for of side terms just there hearing

Brian Deck

right? automation, with labor Substituting Yes.

Emily Shu

Yes.

Brian Deck

And Yes. of Absolutely. frankly. beyond cost goes the it labor,

conversations well now the they increasing wage be industry, be food efforts certainly would on continue just the a about cost and received are to replace labor imperative minimum throughout more all - to not those not level yes, to So, automation the but to perspective. work by going national it's going on from the

general, vegetable with about JBT ago content. of mix side So, some high does in all protein the automation trend the our that's inspection in another processing, year started of of offer vegetable a on similar area the or good products, has and side sorting labor And the and side, and yes, our so. portioning a poultry really this fruit of the terms products. on

a really quarters It's nice a labor portfolio. offering a have do of the ago JBT lack the we throughout couple started with availability. that So trend

a think to pressure So it's just don't perspective from this a to to for. going be we going cyclical - customers to really it provide going our is need that secular on continue be I support to are

Operator

There this for are Deck the questions further remarks. queued closing call back I'll Brian no time. to up at turn over

Brian Deck

all morning. you joining this Thank us for Great.

you available any be have questions. follow-up will if Thanks, Megan everybody. always, As

Operator

concludes This call. today’s conference

disconnect. now may You

JBT Marel (JBTM) 23 Feb 212020 Q4 Earnings call transcript