JBT - Earnings call 2 2023 | JBT Marel Corporation

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Operator

Good morning, and welcome to JBT Corporation's Second Quarter 2023 Earnings Conference Call. My name is Boe and I will be your conference operator today.

As a reminder, today's call is being recorded. [Operator Instructions] I will now turn the call over to JBT's Vice President of Corporate Development and Investor Relations, Kedric Meredith. Please go ahead, sir.

Kedric Meredith

Boe. you, Thank and call. everyone, our quarter second Good welcome conference XXXX morning, to With Chief is Deck; call me the on our Financial Matt and Officer, Executive Meister. Chief Brian Officer,

are our section results. these in Relations are includes yesterday's an be discussion that release we forward-looking most will available filings In periodic Also, Investor filing. may These impact press the regarding also our today's measures. language statements today of the Relations section to reconciliation have of comparable contain and website. in measures call, information non-GAAP that certain Investor can documents harbor our found safe in references website. subject JBT's the of the use our GAAP SEC X-K A measure to on to factors risk

I'll over the Brian. call turn Now to

Brian Deck

and Thanks, everyone. morning, Kedric, good

We AeroTech, which With we beverage commitment become the will to a which pure-play food on M&A strong valuable support for balance with our announced make sheet a customers. believe yesterday, business. an and sale of partner and its the even has delivered AeroTech, more positioning an to achieved to strategic closing beverage food JBT JBT we attractive valuation of JBT technology

a business second beverage JBT's demonstrated operations with our the the product again, pleased value-added exceeding of end are diverse We acquisitions. our Once and and and our margins, performance benefit quarter resilient in continuing earnings the with expectations. orders market of model, business and solid food mix JBT's performance

revised full through over With that, and second who our turn quarter to will Matt, guidance. performance you call the I'll year walk

Matthew Meister

Brian. Thanks,

in the recast revenue second guidance operation of AeroTech quarter previous the period results our earnings end the operations year-over-year in second high at the JBT's we release, you business. classified discontinued and our have as continuing X.X% accordingly. the as of prior for financial increased quarter FoodTech from a As now saw

the leverage, of operations from operations Included price/cost $XX initial points million continuing approximately XXX program. corporate-related continued savings on grew and the costs. restructuring $XX Adjusted continuing from EBITDA volume of basis to increased XX.X% adjusted margins from the was million. improvement EBITDA XX% EBITDA benefit in that, of adjusted in With

operations margins costs, guidance to those adjusted our EBITDA exceeds FoodTech previous from XX.X%, XX.XX%. of our which was XX% Excluding

effective earnings from Adjusted compared -- was in exceeded EPS from implied XX% share and provided operations Diluted per prior $X.XX as the expense second to $X.XX guidance improved versus performance continuing higher year. to was interest operations the previously continuing of a the tax the $X.XX operations higher of $X.XX from in the quarter in with XXXX rate $X.XX increased the offset by $X.XX quarter quarter. partially current and

and million, second conversion actions In progress quarter, a continuing positive operations free from representing we the flow on XXX%. cash of delivered made $XX of rate inventory our

flow free continuing expect to for above cash the We be year. operations slightly full conversion XXX% for

rate debt. variable pay remaining short-term proceeds AeroTech be in significant and $XXX The impact will balance of $XXX cost, to M&A. held estimated approximately redeployed The will million have net until transaction. proceeds that after of transaction million of will be we sheet of to used have Sale the portion now taxes closed approximately costs cash on strategic higher down JBT's the securities

continuing considered Xx of debt to we pro a end from below EBITDA as been would net On the adjusted impact XX. basis, considers operations AeroTech our of forma the June from sale, -- which have the ratio

charges million million those million year pure-play $X beverage are to and of approximately $XX restructuring actions, streamline food anticipate the XXXX Regarding of our costs to now to compared cost our program. rate $XX We million to of $XX scope we a With company, to transition including $XX expense million. increasing our run mid-XXXX. brings approximately generate the expect annualized to $XX program technology savings continue restructuring $XX and to of total we full of the as restructuring by we structure million that, XXXX with million. That guidance incurred previous our in

full holding our growth operations to performance, essentially implied XXXX revenue we at guidance Looking are continuing year X%. X% for at

we to guidance profitability, our adjusted forecasting of XX.XX% EBITDA XX.X%. operations EBITDA to of XX.X% Additionally, XX.XX% margins with FoodTech are That margins improved adjusted previous to includes XX.XX% of XX.XX%. from compared

we an continuing lower earnings per share improved increase for our interest XXXX. $X.XX the guidance margins for Adjusted now the implied of expense previously our business, and is of over forecasted $X.XX resulting operations guidance to their Considering from $X.XX. $X.XX, are sale AeroTech earnings raising at to

quarter, third EBITDA impact decline a the poultry in sequential seasonal recurring due we to revenue the of decline in meat adjusted and a softer slight a in backlog markets. the expect revenue For and and

With $X.XX the to the $X.XX benefit expense, are adjusted we in of quarter. lower projecting of EPS interest third

With back that, the let me turn to call Brian.

Brian Deck

highlights mix. poultry price product benefit market our similar the end order pressure, diversified quarter for weak first markets Matt. under the in quarter second and given in demand meat environment Demand Thanks, of space. and remains strength to JBT's cost and end the that

pharmaceutical However, industry automated and the orders vehicle guided significant and we for nutraceutical business. booked from

higher line to stable of cost time and capital appetite pipeline of impact remains invest. availability of Our to continuing the we is and but our do strength -- the note the tighter diversification, cost on that higher

compelling opportunities JBT's even customers. forward, capital of and and deploying existing solutions managing that part businesses is our will operations that critical smooth portfolio complement to food transition pure-play optimizing our priority company. markets of build acquire end to technology be and expand our Looking A for an a beverage more a to

process maintain firm always fit financial highly with rates. for will strategic and M&A said, hurdle we disciplined a criteria we've As

And focus other on the to of customers' potential solutions with presence end We our on opportunities and an as our to to presence. sustainable food efficiency. market alternatives where secondary acquisition and further and complementary automation, customer expand for to we technologies our bolt-on our line there in existing continue also value is or would that will such for and bakery, strength candidates, JBT's are There confectionery As snack we sustainability grow in processing. primary beverage could needs offering packaging expand build plan processing end foods, including and proposition. on our end

of bring and terms transactions will we synergistic and as enhance our medium scale could consider that highly revenue larger as bolt-ons size, well In recurring base.

As service always, by and look from leveraging value any deep operational sourcing, create strategic global acquisition we a to customer and excellence, sales relationships network. JBT's

to for capital environment, alignment starting come the with the realities valuations the markets. As into of M&A are

proprietary its course, maintained Of active corporate JBT posture, has and relationships cultivating opportunities. long-term development

solution, we traction digital gain our customer and to OmniBlu, continue Regarding contracts. sign additional

as that uptime and while all service, easier parts frictionless one system partner optimizes OmniBlu see customers which service, improves and differentiated yield with profitability providing Our it a JBT. to makes and their

soliciting in process ongoing process case of providers. monitoring quality the customer developed a feedback, sanitation we our third-party produced study of As meaningful have freezer daily and installation. large efficiency has a OmniBlu part of and case, gains support In of compliance this of improve oversight

and OmniBlu annual to result asset of while downtime through avoidance including prescriptive incremental operating the conditions, been X% gain, operating case hours representing maintenance has enhanced suboptimal all of efficiently. identification also XXX has uptime, The in an life of XX% this more events.

best of to my provides and on we extending And by of me means vehicles everyone confident our the to globe. at leadership that AeroTech's across Let purpose-built leading are thanks part and sincere Oshkosh, market employees AeroTech, demand equipment strong the capitalize innovator conclude being to a environment.

take let's Operator? your that, questions. With

Operator

this you, Thank [Operator Deck. Mig question R. we'll W. And our take Dobre Mr. Instructions] first morning at from Baird.

Mircea Dobre

is And in question your given and orders. really frankly, that on growth going backlog, nice orders around we protein. My a know little bit that in from is surprised me first everything

are you're that I market think I pointing days know if bottom. be that I'm poultry even is of at some aware to if you to maybe provided better or here see So ahead to to on what play forward? that's your going to the commentary curious we But one other has as progressing peers of? guess need some actually know elements starting how side about or as seeing don't there demand I again,

Brian Deck

was from improvement starting terms some Sure. Mig, the in prices I demand to it as coming down, terms the -- probably supports prices say of which wholesale see it's well in their with of microeconomics are in as environment. Brian. bottom the the in retail particular, their would the associated side, to QX poultry we Yes, customers

that said, second So didn't it the result in quarter. increased orders any in

improved we're from be as still them the that slightly the it incremental hopeful frankly, orders will take quarter, perspective time where to the a likely for economics lead to in make some third third we're money. real quarter fourth back more So because it will not to needs and fourth poultry than quarter,

invest they're a concerned cognizant -- of we they going certainly, money. our make not of ton to And do money, until

it third more going call light one-off are is that, to So signs than the similar supporting to likely and our hopefully we're quarter of the more be we're monitoring see some more growth. quarter. we to obviously, again, some projects close than, staying in supportive second fourth But that I'll on see starting quarter. to the But them to do But their performance. customers, fundamental and meantime,

Mircea Dobre

bit? your on you backlog big poultry Does being you on provided how have side? have revenue implications about the mix not recognized? that the that maybe talk So of mix with comment in obviously orders that's of Can margin implications for a that part. as and a the in terms this is that Does based gets different the

Brian Deck

obviously, in ramp-up growth I fairly the mean, the forth backlog that and model the the our is fourth of particular. in Sure. put supportive and diverse with we quarter,

seasonal reflective weakness poultry in slightly way, By prepared general from As decline in Matt some the -- as the the in said aftermarket. some the to and pork book the is of poultry the of a then situation similar sequential QX and from pork. order QX is comments, impact for

that's sequential So in guidance. aftermarket expect some and business, decline our do reflected all the in QX we

we pharma our you that's that inclusive our some in on of supportive quarter as if nutraceutical of fourth quite the the of at mentioned the and backlog, and we broader go But into guidance. reflected us side, look things

markets, of of got and margins we're we're that the cost diverse paying off. their out as mentioned, availability certain some markets order lower will But end and and some is say working there these a that's that good because have of time is longer making some higher in There's generally where on fairly the less especially tepid product of I that strength concern, bit the they've we've a orders durable mixed, those seeing been capital. the the the I for demand, of on environment on generally pleased we're right? are frame, and So of side. little where industries, efforts

Mircea Dobre

good. QX want margin incremental I a was quite in The question. to Okay. margin ask

as here love idiosyncratic have reporting incremental cost term price this EBITDA played thinking to maybe so more we you've normalized that -- how And margins? structure the any about should I'd drove sort changed quarter or on, -- of and specifically hear maybe So be out. about what elements longer increment

Matthew Meister

question. results of mix for to continue pleased back the some and we quarter. sure, benefit the favorable then recurring -- flowing Yes, to that has Certainly, side continue I'll second in operations in a definitely definitely that point benefit. the take of strong performance benefit the be the business, we go margin of on our of the food that can from impact margins. the the pricing the margins in this part, business year definitely implemented to continues half The year we the a the and were actions quarter first were during And Mig, from with on to last a the that was higher through revenue, into

and I'd of things very sort of improvement been proactive margin drive two in they've where discretionary businesses the quarter, in say helped very are the costs. market really the are, that conditions conscious other managing the

that. started great we to activity at think did starting being job to actions of restructuring the they doing some taken we're of of from and are the I on take benefits that XXXX. see And the quarter end the in obviously, a currently in year last that here

XX% high range. past, margins, really as the for to food low talked in that I think we've In terms operations, in ongoing of we to be the expect XX% the incremental

going there -- from level corporate are consolidated I XXs But the be total So -- would for operations. mid-XXs drag and costs to going the high little revenue. of at margins will maybe consolidated a be still a say continuing forward bit probably the to the lower incremental

Mircea Dobre

I'm sorry.

corporate mid- unallocated the to costs. consolidated, XXs So including high

Matthew Meister

That's right.

Operator

go Liptak at We Research. Seaport Walter now to next

Walter Liptak

try that to is wanted AGV on divestiture pharma on like follow-on AeroTech just don't work orders. I and Congratulations looking think the as in a the and product I sale. orders more the the said, kind funnel pivot you find and category? you but ask of and what

Brian Deck

this the are Yes. the It about a a for Generally warehouse quite making is trend. sure And quite needs AGV. meet speaking and -- backlog to in marketplace. I'll adequate the robust. longer lead They're need frankly, obviously and cycle start really the a or automation. enjoying the with really it's at surge and managing have resurgence point times order And capacity we of pipeline

we positioned the So from on not could be side AGV better here.

really those -- timely, There on cost quite side still And vehicles about product good little on good sure some in so basis. otherwise, we're the things bit the that it's are the on supply from chain looking electronics there. are making making line. But challenges a

the in to common really On have formula year those investments side what they starting industry need pharmaceutical news, and speak flow. for you're seen reading And challenges of X the about see and it the the are or characteristics, that now we've ago. some some production, you're recently just right, quickly a nutraceutical nutraceutical given the side, faced which probably to is baby

well -- may powder lot been we've with preservation in filling but investments got those are going all we've on also as a as formula baby and and filling as the aseptic of where you know, side, side. and nicely crossed the in on And -- nutraceutical dairy skills experience

So going feel a generally do trend. good to we be that's

a Now whole, in those that at capacity be nature, as to looks comes good. in once. bit large projects general quite tend But a of

you -- the process think our then technology, media onshoring on resources. investing lines pharma of and on engineering pharma. been focused when going, on product we side, are resources the side the we've And our And on that's a about quite bit our similarly, where of of flow liquids

we as again, quarter, side, the But do speaking, bioresins nutraceutical So success. it's the took generally be we're similarly chunkier in supportive. particular, to things the are like in -- pharma plasmas second where seeing we that and for orders But the going pretty some to see orders.

environment chunky be that But a to seeing an frequently. So that of there little more come I could markets those be less whole, nice a think you're a type part orders as now. right are

Walter Liptak

I sounds in could -- wonder and great. you heard that and and I going it is the maybe wonder, feedback that freezer new feeling the that And two, about comments even customer? like if talk or I uptake to how of Great. Okay. of just well, can qualify quickly can and product? But contracts this what your that's terms you the your about about for ROI, one, acceptance how customer had OmniBlu install. on you're of project quantify OmniBlu freezer if you payback you an you equates something like the your

Brian Deck

Sure.

so invested terms about digital being exciting support we our customer to that acceptance relationships feel in when durable them deep investments that to more with support closer sense time where specifically, to profitability. So digital can the as a them, the we're and engagement develop what seen in pretty we're and it of we've see think customer, will is that broadly the as advantage And truly making visibility speaking, you we get and feedback we they going. profitable. kind It's our what over in our really with have continue that for More from relates of customers. those providing accomplish trying competitive to be more offering, their

it, the ROI, value the software, to of the relative this we of -- and add. was to translate case capacity product incremental XX% saw particular is a a on the one it's As year I'll in immediately does mentioned, cost because to early quite certainly -- less nice very increase installations the opportunity it's that I a attractive study, X% to which an flow call them than

parts really e-commerce And then portal. those importantly, think frictionless about very on as of aftermarket us when and getting I'll tools add getting the service to start supportive service of you they and it's, again, use our uplift what digital tools parts in, that

customer that more the there. OmniBlu get they used that's tool, to see So uplift. And be to a see think over from quite we'll on as going value the time, I stickiness continued aside confident, we'll driver using more

Walter Liptak

Okay. when we what the it timing yet? see of Great. starting come think Are is... that aftermarket to do and you Or some through is

Brian Deck

to to a see starting it. and it It's to starting relative to it. a tricky bit are see We are I'll on measure little bit we basis. little -- and baseline it, It's hard call the a line will

working little So that starting right to -- analytics -- scientist bit team of but a would or it. we the for now. data are terms Is data our It's analyst starting have with not this are a in tricky part installations otherwise we're so the just have occurred, that they on not precise. we bought -- the see

Operator

[Operator to De Blair. now next Instructions] Maria And at we'll Lawrence go William

Lawrence De Maria

but into Congrats about on kind closure. everything you talk sales of primary did the curious line. have much, and I don't and more just moving end

what's just necessary more of curious and mean, takes have over is sort TAM? more you as Just digital it solutions as opening want as board. the is that? up Or simple behind the it I across to

of kind like perhaps of and -- more consolidation? further in the opening the imperative is is market and or pipeline for strategically is mature terms just changing maybe more and up just curious processing So secondary this more even TAM if because simply

Brian Deck

solutions the Sure. primary order customers. say reason in I entire our aligned would across lines to for is those provide an full

that So and the you because of help often primary end they're And our can because the we're on the front on, positioned processing type later headaches processing again, plant, on the decisions first the food better that then secondary and make their would and customers activities. some decisions the JBT the us. from on making away further further ready play being the on they a and for when in investments think about our more typically, taking role at secondary --

now, likely levers is So imperative. space an be it We primary do that consolidated than actually the will a pull market. multiple more secondary the That is the in of acquisitions said, which wouldn't larger not we mean further, frankly, M&A have it's more that side because within bit some that more and consolidated. little could the

further I an of Bevcorp largely Proseal We've the And as line is speaking, the that's made investments to mentioned, processing and over there unconsolidated space. flow attractive still Again, generally nicely with and with some our end side. attractive us. years, would and

levers that there's multiple got have mentioned we've the we participation. of as then some So bakery can terms I markets today, in that don't end huge levers snacks obviously, in others And other we confectionery, pull. prepared And another and that lever. is remarks, again,

valuation think go the good positioned as is with forward capital looking And the kind we I be the well the they've the impacts are absorbed is The with of externally supportive thing and -- sheet. that of constructive. the balance as market closing. to be our conversations markets gaps realities are is JBT So seem to that associated and here

JBT we decisively when pulling yet and capable So capital the tricky in the actively pull the -- of do good news but quickly is without market. a in are opportunities trigger trigger, and when raising terms worry has debt having to discipline of the about very arise

Lawrence De Maria

$XX and apologize next about is change does mentioned just if divestiture? and breakeven OmniBlu quickly, headwind this already, that a with Brian, but Or I you year? million AeroTech the profit still

Brian Deck

Yes.

year. a $XX drag this into corporate embedded It business embedded terms and is a into still expenses, half about million of half the it's about the year, In units.

would profitability over sometime we during Our into would be kind the we course expand that. of intent of as XXXX, cross

Operator

Deck, to this have it further any appears turn back like comments. And for we Mr. things you. questions Thank you I'd morning, to no closing

Brian Deck

joining us for all this you morning. Thank

have As any available questions. Marlee follow-up be will you always, if

Operator

JBT We'd all a all Second and Thank you, joining conclude so day. will that Call. you wish Earnings thank Deck. Corporation's Ladies like and Quarter to much for us Mr. Goodbye. XXXX gentlemen, great you

JBT Marel (JBTM) 2 Aug 232023 Q2 Earnings call transcript