JBT - Earnings call transcript Q2 2021

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Operator

Good morning, and welcome to JBT Corporation Second Quarter 2021 Earnings Conference Call. My name is Beck, and I will be your conference operator today [Operator Instructions]. After the speakers remarks, there will be a question-and-answer session. I will now turn the call over to JBT's Vice President of Corporate Development and Investor Relations, Kedric Meredith to begin to this conference.

Kedric Meredith

Thank you, Beck. welcome second and call. XXXX everyone, morning, to quarter our conference Good me our Financial and is the Officer, Executive Meister. With call Deck; Chief on Officer, Brian Matt Chief 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 site. available Web in Investor documents These our of includes today references to measures. non-GAAP discussion certain our Also measure measures site. A found the to can reconciliation GAAP section Web be the comparable our these Relations Investor of in most of

second Finally, in I speak to encourage and quarter of In you slide strategy. Relations trends, growth Investor our show which to the posted metrics review highlight also we opportunities Web performance site. the it business is and section JBT deck, the historical key

Now, over I'll Brian. turn call to the

Brian Deck

It's Kedric strategic and to great be morning, here we performance quarter. progress good made second Thanks, talk financial the JBT's the and strong everyone. about to in

to to bottom second operating this an last appreciation and As out continue to enjoy expectations advanced Moreover, service the recovery the environment, the include the specific pressures labor my orders a to the our in shortages. and strengthens to supply the including you needs we we time, strategy also Matt quarter, with completed customer the material encouraging satisfy orders and excellent further cash who and and lines above which I'd And expectations top the doing flow. Prevenio, the it also our updated expands stream robust to same job costs we to role environment. customer exciting in excellent acquisition of Notwithstanding intensified our safety. labor beyond express generated results, in this pandemic. at guidance. and a Those constraints JBT recurring outperformed record getting we analysis AeroTech. second complexities hand rising costs at restrictions to the challenging backdrop, we door who In challenging meet quarter of is now quarter, with booked costs of I'll note technicians and who’ve tough of on associated despite quarter we like our and detailed gone everyone FoodTech JBT chain growth convertible quarter. and benefits did driving face macro of JBT’s signs highlighted tight offering a business, the in food in walk you will logistics. more At demand to increasing have provide inflation, continues the second speak revenue but over thank through

Matt Meister

million, deliver Brian. XX% to environment. quarter and increase $XXX to performance challenging continues sequentially. Thanks, second an on revenue demonstrate JBT’s year-over-year was ability growth in operating FoodTech XX% of a our

of expected favorable to due margins better million and X% year-over-year higher percentage and X we percentage $XXX chain our to better revenue. expected EBITDA expected. margins flow. Brian end cost for and was Interest quarter, well was expectations. of the less for impact XX.X% was quarter range the X% at markets. came factor mix higher high a low of end As shipments due points than of and year-over-year Adjusted guidance XX.X% of cash which Adjusted The expense mentioned, with they exceeded at margins XX.X% $X the and the in than operating was accounting a challenges positive in also outperformed our exchange in translation than the foreign driven face. labor despite guidance of primarily executed by impacted recurring operating nearly the supply forecast ahead negatively our experienced we sequentially businesses of and growth, approximately X margin of which was EBITDA of pressures by quarter, the million, the points revenue than XX% AeroTech

earnings and for result, tax the $X.X deferred associated $X.XX diluted and per remeasurement per million for change a share or of Adjusted law $XX EPS a on million adjustment $XX.X declined quarter a year-over-year to JBT at continuing rate $X.XX slower share XXX% collections the operations sequentially. was conversion of reported million, $X.XX Adjusted noncash constraints. for an profit quarter As Operating cash UK. sequentially. EBITDA strong X.X% in flow with million, the supply chain tax in Free was XX% expected second investment costs, M&A includes quarter. of the continued in second ahead than of remained due with inventory higher deposits $XX.X X% good accounts and XX% customer year-over-year at the but representing receivable up

inventory the Going with increased to forward, expand therefore need support invest balance to backlog. in half of year. that we revenue, we forecasted sheet higher anticipate levels second And the will

previous we XXX%. Additionally, our for investments in $X Altogether, we are digital remain free flow expenditure further for cash support from increasing million our guidance approximately conversion to year to of the north expect capital forecasts year our strategic the capabilities. by

full we first order in our XXXX, As trends. the refined results to year we half ahead look on guidance based

related again guidance top compares with guidance to to previous line of XX%. FX gain raised XX% for have to XX% organically another FoodTech, year-over-year with We X% our translation. a forecasting of X% increase That

guidance pressures, XX% guidance line all with the communicated range to and XX% adjusted inclusion holding margin of cost margins X%. is projected narrowed acquisition, With adjusted to range top We're EBITDA XX.XX% of of the FoodTech, and margins XX.XX%, supply year. X% operating to operational of continuing X% margins to margin in and XX% range to guidance the guidance operating of Prevenio for margins XX% full XX% with FoodTech XX.XX% projected we've the AeroTech, growth updated to for for have previously chain to our XX.XX%. to from of EBITDA XX.X%. X% Considering revenue At we our

remeasurement to Altogether, M&A to have X.X% sales, EPS lowering and and expense to to $X slightly guidance which $X.XX, are million excludes forecast second guidance a quarter. down $XX Additionally, adjusted adjusting tax percentage UK our we previously corporate in million the to as our costs for restructuring interest to $X.XX we million. of of and mentioned costs $XX raised the $XX million

GAAP of to due the million Our below related previous $X.XX higher and to our from is $XXX $XXX full $XXX We've $XXX million. M&A our $X.XX primarily raised adjusted also of guidance costs. EPS to million to million, $X.XX guidance up to guidance previous guidance year EBITDA

focusing quarter. the on Now third

from JBT XX%. of expect We at year-over-year XX% growth of which X% for to FoodTech, to This consists to growth XX% include acquisitions. X% XX% revenue

At are projecting business of are we to third XX% AeroTech XX.X%. of of the the operating XX.X%, margins to to quarter growth we projecting For quarter. EBITDA XX% margins XX% adjusted for FoodTech, XX%

XX.XX% For to $X.XX margins with approximately $X $X.XX costs. million to in AeroTech, at adjusted margins quarter be $X.X be million on third XX.XX%. EBITDA XX.XX% million. Corporate the expected to basis for costs XXXX adjusted. $X a $XX expense million million, M&A to forecasted GAAP are of share are operating to Interest brings and to excluding should XX.XX% $X.XX quarter as and restructuring per $X earnings to That to $XX guidance

JBT $XXX support million, With completed JBT’s a note to touch share. per historically on of stock acquisition flexibility to chart price capital dilution The shareholder conversion turn terms than me Brian. of afford in the in of the structure portion that, low investments the organic we strategy. until [synthetic] exceeds additional call at fixed also and like $XXX have proceeds second that we limit rate offering net in convertible locked with With briefly our notes capital that I'd our interest to the quarter. more let a back the favorable Finally,

Brian Deck

Matt. Thanks

at I top from JBT the quarter's second record in orders quarter. orders level. first record generated X% sequentially FoodTech the As mentioned the call, of expanded the

the market ready service demand side foods, fresh and with improvements to customers particular from meals. foods, enjoy We with in food on poultry, retail produce pet packaged plant servicing continue robust strength based the

outperformed was support, launches, essentially flat more addition, our in second on and Furthermore, capacity advances on order gained progress automation quarter first JBT JBT's versus automated the Europe In North direct in journey. investment a base. outlook use new customer food robust it’s growing remain America more COVID. to customer quarter, promising, the food featuring robust. trends FoodTech’s are sustainability guided the hygiene, economic made in of customers business be but with to large waste a governmental surrounding nice automation we've innovation. activity and marketplace. volatile features energy of their penetration enable uncertainty demand reflection help end also back to with and recent and our albeit subject reflection efficient product seems several water the product promote continued that successes among vaccine Geographically, in orders, vehicle reduce a for FoodTech commercial of our in have

record AeroTech infrastructure experiencing are we the including second for of investment the America, business, South seasonal on ship we’ll related also orders cargo side and strength, major orders and which Asia quarter XXXX. in and second typical making. fresh to enjoyed delays loaders decision in customer AeroTech demand relates This quarter. it As reflected orders de-icers. some mostly primarily reflected some pandemic the also

of expect passenger by the commercial the to in a few the activity airlines. relative orders Given quarter. US secured we second and outstanding the encouraged same we the At orders, to additional are pickup second year time, normalized more lumpiness order be half have AeroTech traffic the of in from

cautiously another watching the in two bottom recovery years have of development we surrounding the the we variant, recovery full also we are beyond the as we're air Nonetheless, clearly to play which However, said, travel. could cycle. we And of pace take Delta investment feel impact out. the expect to

fresh see plans reach. services. JBT extend And investment JBT presence. that beyond strategy customer we opportunities with enabled holistic part has further Through it's to a enhances to on applications July. where in uptime growing in the margins role JBT our unique builds we their for Switching our as its growth of environment vegetables processing we focus solutions, food solutions investment. strong digitally products offer of integrity. can well solutions, and geographic platform centric which and markets provide They internal closed the which optimal to impressive a performance record for contractual, is Now driven food recurring EBITDA strength to Financially, customers. our food in safety with customer the revenue safety, has mid which operations, revenue Prevenio Moreover, and an models Prevenio, early our and expand JBT’s critical toward significant a proteins its XXs. adding profile. as provider a intelligence and employees, and acquisition a overtime our fruit food demonstrated we system of our in delivery further iOPS Prevenio's in customers. safer as accelerate believe consumable digital as entrench and to other consumption for predominantly the opportunities gears Furthermore, a Prevenio poultry strengthened JBT, core microbial concern anti foresee in

organically Additionally, a has enjoyed continued our Food for goods food, to I service an a through the investment, and Overall, pet solutions with offering for and Together customers protein foods Food our the serve Diversified has processed name, FoodTech far activity to food and acquisitions. and segment. by of portfolio in as preservation side. continued previously for commercial dairy, prepared are a pleased want meals, robust side, FoodTech, the has both packaging nutraceuticals. demand cut expanded the on initial pickup vegetables, hit and in pharmaceuticals AeroTech, plant canned based with and focus of improvement FoodTech segment, and been end strength Diversified ready fresh that business solutions commercial strength beverage processing, reflects now liquid growing the historical retail speak based food the has foods, wide convenience broad new customers. Health we and including beyond to very result on side beverages, with and infrastructure protein which automation our within markets airlines. at FoodTech At for enviable business food and Health, provides diverse to on business, hard and eat and solutions across of was what a its rebranding juice Its business accompanied

we on impact conditions. working. potential costs high concerned However, of COVID we’re And it’s the of resurgence and are remain by under in environment recent which otherwise macroeconomic mindful we

values, respect fierce teamwork. my opportunities, enhance core prioritize JBT's serve the sincere team of meet our extend and diverse to work mutual education, want values, part as take culture that continued to us who which a our embraced With continue inclusive promotes and Operator? to special have -- for their your development we I that JBT Lastly, thanks entire I'll questions. solutions. to core and customers enable needs

Operator

Lawrence of De from Instructions] [Operator from question the Maria first William comes Your line Blair.

Lawrence De Maria

backlog does But I 'XX, pushed I second --AeroTech 'XX, means next with timing the obviously talk orders? are time? year. backlog, the out FoodTech new the than given more orders confidence up, And or that can into year the next for of ultimately trajectory about can broadly like orders seen first that of conversion growth slip seems give want more noted orders you about for next freeze That talk 'XX? specifically the for imply you from and half to it the would half the into supply think of the chain that orders into that us important 'XX, some What and if year? we've which

Brian Deck

bit nine food side, XXXX, tell and to a AGV at nature health much our the of a little months go the some will quarter backlog anywhere the FoodTech orders help quarter at side the broad know, into will end product you six offering, will size you of be strength I eight and versus which year to and diversified we even that orders end mentioned on we bit and in weeks of larger the to larger fourth the I will XXXX. as we're going So where do a for a quite at, have up the were projects of from times of but a the particularly the year. this lead range the given looking into that related

on a support side, putting I similarly airlines commercial XXXX. are almost side. into half seeing go speaking mentioned, all infrastructure of decent are as of And AeroTech those for on So XXXX. the projects, we on that will the improvement related And ourselves up we first the ground and the generally

also would as ending we backlog well. expect So a XXXX larger in AeroTech

Lawrence De Maria

there's the these the about of that and maybe or [origins] risk know cost about expansion protecting just in on there's obviously, of just just historically, more price. on and obviously and there lot you second would pricing And think on backlog out AeroTech. yourselves point, you're risk how margin talk talk there, I next inflation what can margin? kind ensure price then I is But year

Brian Deck

first. So to talk I’ll FoodTech specifically

half is project of based largely and revenues revenue So recurring FoodTech as you et know, our almost aftermarket, on based cetera. obviously, also a

inflation into speaking, we our in a factor good generally price. So have ability to product

our product the the consider So especially fairly the price supply is you team. chain well and covered, cost inflation when strength of

proven lot you time that resources up this absent hold otherwise inflation line. of have supply last in Larry, pay behind know, and over dividends, those As not put the a gotten would really the while years and chain we is of seeing two to investments significantly have we're enough especially really we

the items be inflationary more generally we’re price challenge So and materials. for on so able The comes logistics side. to

versus things know, you a may As tripled, this almost has more ocean ago. year like freight quadrupled than time

and adjust we've our guidance do we FoodTech, for of half is year see the to some tried why that accordingly. the on So back margins the and pressure appropriately

to we XXXX. we’re of the pretty good XX% in for speaking, environment got generally shape, that's in pretty So we're north the were given guiding year. some margins And versus flat that where we've

we're and pleased our cost ability manage costs back price So the in pressure just it's really in of just half. to a in little general, bit the

services. and is the On the are the given correct little bit a that products tougher side, nature it of you AeroTech

of term project it factoring On [metals] tend infrastructure we outlook the do longer good a our the contracts. those, side, and prices environment We to was for pretty based. those are cost be as job current

go to going we’re into know, you XXXX. well as So

some not products we've do but it's on hedging hedging XXX%. some historically, metal on will we done So the And that. metal

environment in very we little current there's the of upside. actually be pretty bit levels, a at be metals that prices any as if with would metals the high So XXXX, there. risk get are But worse to hopeful don't into bit of things on we a there's little go going abatements

from competition On a the tougher environment a it ground support perspective. is equipment,

of material reflective more is opposed market cost as itself price So the cost. to

the of margins. over back our on on the a on versus year, EBITDA, of some see pressure the we of based we of our but some the some normally the pressure mix back In would in little couple can that see high half given further see of happen through we volume to half last bit in year. the You outperform what terms do the flow quarters,

the take our with in, we’re So account cost profile half we and at situation. the AeroTech, have a and given tried look given properly conditions to in back for the if all-in-all JBT the back year we're you both for really that price of pleased current But for pressure. margin that step Food

we margins the FoodTech if to exclude at you of holding you both large looking where by margin exclude the for the side. XXXX, if outperform revenue on in on you And We’re there, look is if general, but versus acquisitions, XXXX. FoodTech even side in most overall, the and is not part were a -- impact margin rebound

Operator

& question of comes from line Robert Dobre Mig W. Company. Baird the next from Your

Mig Dobre

from your on bottom also that for the FoodTech end of a takes it's in provided point? sort of guidance this I what you the each various in side. versus to mean that I'm trying margin Just challenging terms most I'm on in have to like a envisioned in past. you follow-up discussion. what's incremental I get the sort better the it of relative more sounds you guess outlook. what had to least on than of labor me, front from end you gotten really but the At terms sense to sense at get margin this things margin your segment, to I'm a ranges maybe to you And of trying top prior interested

Matt Meister

best I'll try to can. answer I as

QX, putting our did which pressure take try half. second on labor you is the inflation that in to guidance, as and think we mentioned, the in we see accelerate I into

well mentioned Brian in also As guidance. logistics our are on costs the as that inflation

on Brian continue be FoodTech there As in to well some material year. half could set pricing get costs mentioned, side, lag of the up are address through fairly to but the we material if second inflation the there worse

to inefficiency the lot the supply the customer. of that and of FoodTech relatively we've deliver picked liability been has the down on different Additionally, inefficient be to equipment forced with issues set vendor, the on delivery there to and and side sometimes difficult floors on side, vendor a has and operating operations various business really as up had

So we in the some that's half be the the pressure to potentially our offset and our all would the get that guidance What that inflation us the by back of side try on to what's if we into of in our putting to build could margins. top aftermarket we get if the see favorable revenue. would ability as back some on of that as higher and recurring mix aftermarket team, slightly well continues to higher half end supply chain margins mix better, see

Brian Deck

down well And I'll as factories. logistics better add chain help supply would productivity get as also ease that the prices at lot, if we come a would up,

would that help as well. So

to outlook try that see. did we that range the So we factor in of

Mig Dobre

nonrecurring, curious portion the as a mix portion expect XXXX? versus you're we talking rebound portion as rebounding, become FoodTech not recurring on think margins of resulting the the about of portion in or forward quite in And about pie. is is go orders we're business that's seeing for well the as of COVID business If nonrecurring case, the it's to that factor growth business. I'm I'm presuming negative at that the should how bigger sort downtrend, the basis. of nonrecurring thinking we a that when we're is mix done the recurring of has the throughout the a

Brian Deck

XXXX XX% revenue lower last were be a call, [Technical the you is to And recurring, the considered And reverting more think and last we mix -- of that negative sales, about actually and factor aftermarket. on may recall mix, generally the factor. Difficulty] is as after and from recurring the equipment is But generally that we're that mix the to given that close XXXX. slightly to XX% a guided It XX%, we year, I will margins. in XX% XX% in our equipment pace, and on again, in you progression XXXX think ahead

into from roll mix I to see diverting early little that we significantly year. wouldn't As the that’s it the XXXX, a in the see mix know current but precise we

for change a of and profile I So opposed the is a be more the logistics going mix huge supply think versus consideration XXXX as labor margin to to from XXXX. of chain,

Mig Dobre

a on year taking we're hit maybe last this question the So basically this me. Then that. on for

again incremental need going yet So you accelerate to you for think terms don't for business from fully make adjustments costs margins as about how fair can your normal in EBITDA XXXX, or mix? think of of is be pricing XXXX? you to incremental also And given material up to the related remind the business? think that, exiting to that view it caught margins actions us that you your us Do here. Assuming we evolving you're normal

Brian Deck

XX% big bit inflation to assumption price But pretty where cost And are through, pressures to of, of potentially flow mix bigger. expect regarding the are would But incremental they or somewhere that is that flow flow speak. swings mix say for through. inflation through moderation XX% a in that changes side FoodTech material typically AeroTech a That's more today. And in that's no changes labor, then for cost to change we on et here. little so or typically flows normalized in we I absent from XX% cetera, kind in a on XX% thought would be in and we through, the absent are again, to other

Operator

line Your of Securities. from next the question McGinn Michael comes Wells Fargo from

Michael McGinn

kind capital but million guess half. your per shaking kind I if you that mentioned Sorry of the sheet but and your is what cash I $XX the half that stay that the for don't a working the for free missed flow quarter this, gave here, working dollars Is or for ramp are you like guys thinking? net capital the of out back if of balance you back ramp year. know CapEx I

Matt Meister

cash with back guidance on balance free the and above we half as to in to receivable. year the to higher grows be higher expected of inventory second net the positive XXX% specific Again, sheet number just give half. not for for revenue continue higher lead of income flow cash the did We the

the we again the would CapEx, prior will and to it give So our be the said year. I increase I sheet of guidance. exact of balance million is think And to expect numbers expand like mentioned, kind $X favorable as positive But I back difficult. half the the you is over to

expectations So about the for million our year $XX full are CapEx to $XX million.

Michael McGinn

So or think -- to adapted do any great. poultry would it's is in you if the vegetable market? Just color I this and mean you the really the in already it fruits could what poultry situation vegetable, the as as be the vegetables. versus Prevenio, mean to market guess, the where poultry fruit switch needed gears level existing make investment well market? I and efficacy the to I I then a being mentioned or take is and in market like is context -- there

Brian Deck

fits want of then going to finding portfolio, JBT they’re resources of the our to and relates in to to that when into once it operations fold Prevenio closer provide businesses in resources. for this about in you acquisitions is as table. bring our very really the we particularly exciting, JBT, speaking to generally where we portfolio be terms think nicely ability customers’ And terms

the protection about comfortable the provided of fruits efforts, customers our scientists specific and with and There's the them side. the our that to getting working So and more vegetable market ton commercial the not their it's penetration, required, solutions solutions vegetable. provide food versus use current to fruit of with are that fresh a investment

investment, develop that from with CapEx and inventory to time working market. resources the about really So it's human customers a speaking or really low more generally it's our the

Operator

next comes BMO. question Tiss Joel from Your the of line from

Joel Tiss

stuff that you percent, a and because of if sense you wonder of that build I constraints get much door, of about could some little you backlog. how or what the is of from to inability give Is think is how -- talking strength how it from do the order of the us the about? out were on much

Brian Deck

of that the the the the I So tell strength. order would majority from in is you vast backlog build

lead two of when some predominantly seeing to, the line seeing changed. But that in was in extra lead is overall, product anywhere it of to one days out how going you think, times. XX of what what it's I push backlog. is are XX, the product to line times. it times, again, the from the just we back it's But Now to Larry's terms is And do have by the strength they an is order the weeks lead math, up build we're leading question,

Matt Meister

are add where that, down outbreaks, to in a just bit some geographies to delivery And little that some are there pushing higher COVID are there customers too.

geographies some or So outbreaks we certain infection the seeing the from are rates again, COVID customer and where impacts rates the vaccination are high. as

Brian Deck

to ability so not much customers’ more it's in the case, times, accept. of it's that So early

Joel Tiss

Is you good, like But see well XXXX. longer operating that into give it then what there? margins sense gives range? And volume? the do strategic you in question. which need And that do you to need term is what do to mix? into because a the this more product of you mid-teens Is us kind Can do ability some of AeroTech a probably get up is to to

Brian Deck

material it's you environment tell as et more predominantly costs, the would I raw and would I volume to relates getting cetera. a some it work, you tell of and normalized

of is the mentioned, As kind pure opposed the plus. I conditions side a market the price dependent ground support more to bit cost upon as cost little on

volume is say, things, two the would inflationary as pressures. of moderation some I the as well So the

mid-teens back margin. EBITDA you to go pace we our If on guidance pre-COVID for were XXXX, for

mid you commercial to see, totally the airplane, support to it’s little airlines, does the more from the support bit a while. some the cetera. model going et But some strong. supports that's to we'd back business just the traffic, with see to starting world know, money a to perspective, more So of those take nice an side margin. routes in And ground make get like typically is on teens the It’s Domestically, to trail investments. business international the really It getting as investment route commercial and ground airlines side making normal. the

We concern it So years. pace the side, think that's one some once a we and those there has growth playing starts risk XXXX that last longer the infrastructure some of time that was worth of the is, say on of on we're about if the it side felt why We on relates ancillary a COVID on lead term an on is the point cycle in the that we to impact The will a infrastructure the see remain mentioning side, extraordinarily continued But be which positioned couple take as out. did side case. XXXX. see you generally lot get year, bridges have driving boarding been strength infrastructure that's that which and sales on there longer projects go JBT thing probably really to one side, don't from that. particularly that with along infrastructure And macros longer to the infrastructure passenger a would that, pre-COVID. well as

Operator

Seaport from line next comes Global. Walter from Your of question the Liptak

Walter Liptak

up a you $XX you think AeroTech mentioned quarter? if of orders and wanted saw million. of you just your the mix lot infrastructure. wonder in the talk follow that and the infrastructure, to versus comments $XXX do maybe from I sort And orders think the quarter, vehicles in during it about on about guided way about million, is, I could the a last or really to increased I with this

Brian Deck

or as FoodTech days, just is back it so, AGV within moved these XXXX. we reminder, Walter, a in XXXX So

infrastructure is So I then orders, and side, the strength as everything impact cargo And a mentioned infrastructure the prepared seasonal of another, side. million that's that’s and outsize in on the all on progression the number $XXX de-icers the from remarks, the that on AeroTech but loaders.

cargo strong the know, you have As coming we and market seasonal activity do is up.

speaking, boarding the generally So side, bulk the infrastructure that is combination. it's the of is which the [Technical on Difficulty]. But outperformance passenger

Walter Liptak

or that vehicles? you amount orders guided in had was So FoodTech it the like in a came FoodTech, of significant [AGV] the within

Brian Deck

a Prevenio per million decent a $XXX a when quarter lot that XXX JBT, AGV AGV demand seeing because definition automation. we're AGV And orders market, back It kind go the throughout there's together number. perspective food is of for combination think that a quarter on of side, where about AGV like drove. dividends network to actually outperformance there. be $XXX if of normal the the XXX seeing I’d really with pretty traditional businesses positioned such from to XXX that the of paying that food And was quarter. for is well quarter penetration was. which That automation for you and over we're great is of it, you of normalized kind it’s It FoodTech. the going. say amount But market more exciting and the what A was working combination a was lot and of the secular with to FoodTech is into Again, million, distributors of out

in FoodTech marketplace. the of So last is the in the years we've of made terms acceptance investments as rest paying AGV the in well several as over really off

Walter Liptak

how that this XXX delta of about XXX talking above So the to when quarter orders, is AGV… were the you're being range at you that

Brian Deck

in quarter but that health completed A portion the food actual their XXXX. outperformed some of of also impact on on pet in food projects be diversified it, some will and

Walter Liptak

the supply just chain. And on a then follow-up

problems some second into how having are from much second you So shifted shipments the I revenue wonder out. getting half? the quarter

Brian Deck

did great -- stuff than in the actually on out the getting really -- Actually, we quarter. I really we of which revenue thought, better outperformed driver and the job actually of We would say was we part door. a anything I don't while think

So quarter. we but mindful hit we the we risks a we risks. would the I those quarter second overcome of little we number anything things shift If able and got from third out We then the the the going were bit hoped were faster. to outperformed were door that in would basically hit say there's not quarter we and to facing

Walter Liptak

ships, the cetera. is something your or into the on meet quarter mentioned where to changed Is fourth there think something quarter be But time? that shipments potential slippage cargo chains you is could there et third supply orders, going FoodTech or there or some there you changed that of

Brian Deck

but Logistics, biggest equally higher. things. chain third in tight a bit is particularly those supply challenges second second labor probably in I quarter quarter they're faced the the the still pricing think, as the That's on quarter the the One, two are we side. consider third are quarter there's guidance. this Well, we of and some little challenges. Obviously difference with the between and increasing,

Europe, So off off in amount take terms fair noting Also, worth tend vacations, factor a second for it's of of quarter kind third of appropriately. there. that is typically shipments, we you're than reasons. couple usually the to try and that a time there's bit One the a little to of in lighter month quarter

orders that usually of some of reflected is shipments. some So the the -- in

Additionally, and to seasonal and we have. there's Diversified juice Food extraction Health, within that food business the the on side orange a juice aspect

factor So to as tried that well. we

factored the quarter. into So third that's for guidance that all

Operator

next Your JPMorgan. the from line Stephen of comes Tusa question from

Stephen Tusa

issues that’s kind order maybe getting, decision of fourth obviously, just signs detail have Could bit And of supply kind any and that secondly on placed and cools kind arcane customers quarter you side on an they're they make the shortages all electronic what like the trouble of we'll all more some components down? saying, metal about would talk saying you're at some in you mean, more side? maybe you but seeing related inflation as chain? or year the in more then anything stuff just the are like of to maybe surprised having the something of next the food of there's, supply We know a with I regards little specific components.

Matt Meister

chain supply don't that I know side, been surprised anything. On the we've by

metals seen to shortage that costs. they general And hearing news. significantly We've In you're terms chip with constraints haven't electronics. higher in chain, about on general certainly, like been are hard the and of by are come increasingly just the some hit we supply

a sometimes, think probably we've hit our little that indirectly market bit also hit suppliers. has higher. by doesn't and it surprised what been as complexity that it us And the us I difficulties in impact us is hits the directly the logistics

which them stuff time. to on factories, issues into their able getting be they're having supply to So then delays delays them, us which then

the at causes end to being chain it's on our ability just lot supply more for a deliver that So time. volatility of

Brian Deck

any out heard times are it it's just hands And are and now, till haven't pulling Steve, up too circumstance you I'm know, just kind then say, customers long lead year. their next where sloppy going wait so to of I anecdotally, right

cycle through weeks you often on get As the tends know, FoodTech quote to sales involved, take a months it to to an be very can order. detailed, very to

complexity. from a are to, demand given they're trying on demand strength the folks the strong So of driver we that really as our the the working we anything, that's usually that what's here. see side, don't do driving We've just side, If environment remained huge of pipeline. see

Operator

from comes Your Obin next Bank Andrew the of America. of from question line

Emily Shu

for This another is just Obin. Shu had pricing. on on Andrew question Emily I

heard price they effectively at of we've shipment. has customer So can the some which means time raise prices shipment, sectors at

you if honor use of you shipment? guys that prices, at wondering or have to So you more where prices do contrast pricing a structure contract do

Brian Deck

those On the need aftermarket as we to we those update and side, to we publish inflation. and price try those incorporate

pricing the engineering. in in can FoodTech, the lock at at And point we our in pricing in And amount side, to to the is time of base quote quote valid. the with the pricing, everything in cost time lock we lock we have around vendors customer the On then we agreed don't because that reduced specifically time. we until start from can the we get the equipment of and

our time. can break sort our impacts of it higher as that we customers. we that time, try us not that use we expected our pricing we contracts glass the of to clause there Now is a adjust some to where have clause in allow in if too the at after than that point are significantly But opportunities do inflation often relationships with

Emily Shu

can channel Thanks. and last FoodTech are both on AeroTech just inventories talk is, my about you side? question just then And how

Brian Deck

missed I sorry I'm question. your

Emily Shu

Just any inventory. on color channel

Brian Deck

inventory, so you're certainly from really time. of we're not talking issue, like XX% if channel factory to On our because customer, an our selling for of the that's end JBT, much direct,

or So of like us some no or are except some out exclusively XX% but third working up to in places there almost markets is use depletion predominantly in disruptions, channel faraway really our party accessing the a do orders where of inventory. we direct. help We're build

Operator

Dobre Instructions] [Operator line Company. from Robert comes Baird next Your question W. & of from the Mig

Mig Dobre

question FoodTech. for one Just back me on

good talking to So weeks business, think USDA? expanding a what kind the million private the the add that providing of long and meat have how by in they're think you of pump that business if on And trying I'm funding. processing. for on that your seems view were saw we wondering smaller about to thing they with on funding mean, this ago, provided your curious of of players effect market. to you with that's I there's kind seeing capital I'm to competition a I add to poultry also develop, that's I $XXX do channel? USDA announced focusing for going multiplier kind top access and of been players take to terms is as that this pretty And at on they're a funding few looked smaller but that and to how curious be of matter. to

how how think takes impact your to materialize? or long demand business this think you So and to do you it going for this is do

Brian Deck

participation news in broad is the really that market good generally general. market the really, in has So JBT and poultry protein the speaking, in

to some our year. and noted we there. customers As one it's in really, generally more the within larger than There's have in or very XX% speaking, be obviously we past, business really even X% our rare valleys for participation. broad of peaks But any

us. support good governmental any So is for

to a so the view most actually So the we AeroTech bill on passed we with that's going would infrastructure been this recent also good back as factor. side the infrastructure proceeds, that see but along on

cetera we've does can expansion a past, that wouldn't while the of it for to expect less be on a more I more the et especially than investments, would It orders. to that six orders in is As into it impact for speaking, lines, XXXX. of about turn to take benefit Generally talked ones take XXXX, individual Greenfield months.

from of government me subsidization really As just any of at I kind to out figure means. capital will Obviously, effect, I'm the to an the what bring not typically know the for that. other answer hard level. that economist, highest don't sources multiplier to it's

really hard JBT you if know or to here that. today and think specifically for benefit would to So me that's it's hope not. But sitting going

Operator

this at no time. Presenters, further there are question

the back turn to Mr. Brian call over Deck. me Let

Brian Deck

you this follow-up and have good will if available be Thank Have Great. morning. all a joining Matt day. questions. you any for us Kedric

Operator

concludes call. participating. you conference for This Thank today's

now may You disconnect.

JBT Marel (JBTM) 28 Jul 212021 Q2 Earnings call transcript