JBT - Earnings call transcript Q3 2024 | John Bean Technologies Corporation

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Operator

Good morning, and welcome to JBT Corporation's Third Quarter 2024 Earnings Conference Call. My name is Prilla, 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 Director of Investor Relations, Marlee Spangler to begin today's conference.

Marlee Spangler

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

Now over I'll to call turn Brian. the

Brian Deck

Thanks, third Marlee, pleased the quarter. very were everyone. and good We for with JBT's results morning,

Automated at financing midpoint Then will EBITDA Moreover, the third we also growth benefit and XX% turns, geographic our Overall, to orders and our posted and recovery quarter. the end global performance speak strong with the some end revenue ongoing in on continue will expected, combination the XXXX quarter to X% walk and revenue commitments of the the As we expansion. an double-digit Marel generate from demand merger. year-over-year progress Vehicle adjusted X% and in market. provide poultry of full of of third He will reinforces our on margin discuss from in our of year market the expectations in growth and securing you the Guided captured growth confidence exceptional Marel meaningful through for guidance. Matt analysis about our I discuss updates business. Matt? highlights

Matthew Meister

morning. good Thank you, and

margin XXXX. quarter million of Brian increased XX.X% mentioned, Revenue and improvement the in third we of As strong achieved $XXX year-over-year. growth

as as $XX revenue driven increased year-over-year to margin increased our flow-through initiatives. Adjusted revenue XX% $X.XX restructuring third program and and million strong well benefited our chain of EBITDA $XX higher $X.XX cash Adjusted converted cost versus the performance savings shortfall XX% generated XXX in year. of EBITDA our strong supply interest we by the This the EPS in operational of improvement was basis million. we anticipated, flow the was net from positive and EPS year-over-year adjusted second prior As our from income. quarter. from Year-to-date, both volume free quarter recover and backlog points. primarily

a free For $XXX cash achieved basis, million. reference, September we on trailing of flow XX, of XX-month as

working achieve flow Our strong the performance quarter remain capital XXX%. And conversion higher cash is in the year, confident for a in result improved free income rate excess to the ability our third of we of full and management. in

Given JBT's strong year-to-date we performance adjusted EBITDA and EPS. are year reiterating full revenue, for adjusted and backlog, our guidance

combination reflect updating a however, pension are, settlements fourth of outstanding plan continuing lump from income receive plan to through plan. an lump quarter, and to to GAAP sum all EPS, our voluntary in purchase from the the expect We the operations of participants of sum JBT's eligible elect settlements a contract. And portion and guidance for obligations which settle of we annuity

the during incur to $X.XX result, EPS million continuing year for from in GAAP our estimate expect million, $X.XX. million approximately $XXX $XXX income a to charges to pretax This quarter. As $XX to to we brings and noncash full operations

the charges of the we pretax remaining of $XXX in to plan noncash approximately further XXXX, expect and Additionally, quarter settle of first anticipate obligations the million.

immaterial funded will cash have we an on status, these fully impact Given anticipate flow. the plans actions

will Once in and balance with portion sheet, the on used of transaction, debt executed, Marel's this on financing the merger we capital from along our transaction-related October, cash press new revolving outlined issue credit with Marel. refinance cash completion million contingent the we expenses. to the our outstanding as Term facility Loan to Lastly, existing $XXX and $X.X a be of in billion. will B Funds the secured structure, pay pay expand release, commitments

the pleased we first-time very were As upsize and Term and we achieve able pricing. overall to market, With that oversubscribed, in issuer favorable B are Loan the a pricing demand more Xx offering structure. was with than an

that step to to willingness add management's Additionally, business. we a lenders' down believe confidence indicates pricing leverage-based the delever in ability

have call to we stated, As turn year-end than Brian. committed I'll JBT's we leverage less that, are to reducing to by XXXX. With the Xx back

Brian Deck

Thanks, Matt.

we feel quarter, order with order means what the in start for XX% us plan totaled demand well year markets current the market, end me end also vegetable as XXXX. Driving in period. it second demand orders, Let business in gains quarter. overall which healthy the recovery in poultry globally. Pet showed AGV and of state from increased the improvement food, million strength positions Orders, pharma we for We experienced $XXX good prior from and which the our enjoyed continued at normalized and trends. Orders record quarter. the about the from the fruits

including CPG function beverages, like our and a certain overall JBT's portfolio weakness, is strength While customer broad market end and of there of areas were exposure. pockets

beverage nice food have activity changing said, in we customers serve pickup portfolio diversified the As consumer order we good experienced order momentum. in and North Asia preferences. Geographically, also in of and good regardless we to quarter America a have our Europe. experienced a

shortages mentioned Secular record remains which and our we orders. for labor posting sales costs, critical last automation, demand to addressing is and AGV high robust. quarter, As facility is business

product, automation the customers' of with warehouse and factory quality results the market, integrate of AGV decades the ability [ our technology experience, boasts operations. ] Within the of to and a differentiated

few invested heavily past we have the years, R&D its adjusted AGV's in and model. Over business

value scalable service with to bespoke larger as customers paying opposed element intelligence, on our the projects is projects. have This strategy off. proposition we Specifically, on of our and focused focusing while safety

X customers or X seek expanded enterprise. AGV they their warehouses We at establish are across who to as solution seeing automation returned us installed an to

with This value and on safety and motion the the for introduction have proprietary which based the with allows contract. our software highest we systems to high-touch with continue efficiency as recent operating to installed revenue time, upgrades. subscription life performance moved we service cybersecurity model, the changes premium constant quarter, manufacturing multiyear throughout meaningfully expect cost. last we we Additionally, software requires the most along the delivering system, to standardization recurring a the product of of our access improved have a build features a process base. At internal out grow same contract our parts as With to model, and and and discussed proposition this

ongoing ability we AGV a enhanced lead our and systems deliver As result, address demand. to times have reduce robust to

to with on the even on developments Moving Marel. bigger merger

the planning customer go-to-market to our planning, businesses our aligns structure to continue with of create integration of and We their day organizational on we lens structure. that the preparedness, a future In viewing an our through evaluation focus including one needs. are

and also Marel's portfolios, to -- operational the sought have enabling of while strengths sought We synergies respective to providing the optimize customers. most on complementary capital the comprehensive to capitalize us solutions JBT

approvals. are the the front, of required the On stages we final nearing completing regulatory

have receiving business We be engaged XX-day a in formal days. which file and to the our prenotification received notification to dialogue after formally Once Commission filing, in period been that EC European process approval. we the an this with anticipate will submit the review have able we begins, merger in-depth feedback and we coming

and shareholders Marel confident offer. Based the will remain to of of Marel extension close on with the extension, JBT or to about JBT our related In Marel the developments, that terms determine conversations the takeover are of will their most press and merger. appropriate itself, time which adequate in Iceland remains to and for end tender And shares. the provide voluntary we based following shareholders, issue regulatory these to with will Marel of supportive line recent releases FSA the outreach time on the work on the XXXX. approvals extensive they

members. operational our and to want people our customers commitment be I possible passionate Lastly, around JBT's thank wouldn't JBT to the without world. the excellence growth, team

let's up Now Operator? call. open the

Operator

RW the your [Operator Instructions] Baird. from comes Mig first And of line with question Dobre

Mircea Dobre

Is talking Brian, at business below be much? it's it especially, portfolio of Or average maybe point, growing AGV, and is than look to curious of a so portion this a bit mix? it product? that great since I'm you your get a you a for in how from business more spent of It is normal well. quite this is terms would a size time this of like doing been the bit margin? this sounds maybe reminder the margins like little for this And positive about

Brian Deck

Right.

question. for thanks -- the So

look from of are XX% they terms terms if is With striving for they So north perspective, for bit we're will year -- -- there. of above in the growth, impressive north in a north that of you plus at little JBT's range year. said, a be this this And revenue, year. They're $XXX XX% -- this XX.X%, year. you to million margin XX% growth like of guidance

Mircea Dobre

And would X able potential, their its and within you business this curious some there as is some about think to X, with sort Yes, doing, on comments you is be well. either out? as customers? that think cross-pollinate how as AGV the would And of Interesting. business or what that Marel I'm cross-sell of love anything to years

Brian Deck

Sure.

beverage pet operations, think where probably applicable. you customers, few these automation if yes, cross-sell customers, the using these their that anywhere -- it's of you have just be say will, are area, this, you CPG if have, business. with So portfolio to would vehicles. the on about warehouse would I AGV our Certainly, they a easiest quite food

you go potential. couple of are into type has downstream There markets warehouse I clear some items, other of years that Wenger stage as the CPG end traditional more pet So a a with once say, But type from certainly, they food that's would opportunities opportunity. the ago. the and that potentially acquisition they get have the a

Mircea Dobre

core maybe this more frankly, it. sustainable to from better. little what better? How there? sounds are as is getting Got things customers into mean, you love hearing I I'd you're poultry Then business, XXXX? do why think a insight a on

Brian Deck

Right.

So They good it's continue good money. make news. to

conversations good them. have with to continue We

refurbishment would of aware but are on, they say, perspective, or from, are a We also either lines. working a brownfield of I that from individual several replacement projects

as over generally feel we it. or some -- obviously, years, the had good pent-up about So they investment deferred do they've

at a go, think would kind consistent So it of, do the I it want to month-over-month, you we snaps have quarter-over-quarter. but say, never back pace improvement really

good. We orders what is quarter -- was side. was on primary some in to saw the the pipeline some nice Our really third see

that, that's a not other side. in what's is We where particularly Marel do nice strong. But the about JBT So and chillers some is player systems. primary huge

So we're XXXX of and hoping to that precursor hopefully into to that the we is would strength see hope thereafter. -- some a

could probably in We've XX if visibility, of we overall, they that But a prices. levels the are fundamentals there seen hanging our poultry some seasonal for both quite remain in are customers from input sure, profitable. but declines say at in a think I to XX terms as Obviously, we good the change the I visibility would here. sit have change, fundamentals months perspective. where

that. slow So about you generally, but kind march of expect recovery. depends And will or to steady think kind -- or of to get or we either feel we're of good perhaps as full 'XX this those we And if But on talking secondary recoveries. when it primary I to full to would recovery. get end XXXX line back

Mircea Dobre

and sort, first maybe with that at election whole and this Meaning a made ICE to some could efficient year that had to Mr. coming during guess their don't deportations I going disruption certainly is that they if actually line? was force. In have I the whole impacted the -- the or need down of be need this you more headlines. that administration, we've the And answer tackle Trump know around discussion there will up risk additional processors or Trump manage do the their from immigration automation have raids, looking sort of to end? I something potential order inherent sort this question, we're in remember some force my days. that final that their poultry to things in on equipment are an idea as topic, And to discussions labor few of have but develop this your want that customers, addressed got labor

Brian Deck

yield, what during -- very Yes. has will interesting last efforts bit cetera, of Trump been administration replacement. we that the labor and over I And It's labor et a on pure over little applicable question. available. have is more what improving say, last heard would our we say the years few on I a and the have less saw efficiency, more been

I takes have knives you where you immigration, and for I but generally we'll Obviously, cut-up the more see JBT that expect on circumstance well tighter a Trump companies folks long like shoulder how administration. for solutions. would play to opportunities with And to under controls That thesis and that would automated would lines, going So Marel. under standing generally from, and whatnot. frankly have more manual whatnot, a have bode to say, on shoulder be would where it to out

Operator

Blair. comes line question from Sparenblek of Ross next the Your with William

Ross Sparenblek

Can into the XXXX? the about as orders to your cadence the you year? a maybe us year then potential exiting size to think of contribution also in the seasonality get next versus poultry for we sense expectations your quarter? Just for help And acceleration orders trying

Brian Deck

Yes.

of incremental in versus in second $XX $XX the orders So the something range million quarter, more, to of terms million ballpark. the

as decent us, So I -- the mentioned say need to I the as full in that of, -- does bring I the to kind side. with would would be on where specifically, -- where kind Mig back of get we recovery. say, quarter, we primary But I and still fully to improvements not we're on yet otherwise mentioned,

Ross Sparenblek

it. Got

Okay.

to I million So $XX poultry in million mean... more $XX quarter-over-quarter.

Brian Deck

specifically. America, North In

Ross Sparenblek

In North America.

Brian Deck

Yes.

interesting, is so of North America outside specifically was We -- that saw was actually some Ross what as Now Asia. improvements well, North America.

was see in to that as we to know, So investments Asia are some actually because in is quarter a tend lines, poultry nice business and kind for They [indiscernible] Europe a had starting us. of be but Asia to lumpy you see well. decent as

Ross Sparenblek

Now that's segue. a perfect

as in I'm greenfield, So in seeing why more between far? of third understand, kind Marel kind it haven't downstream, it in mean, more the quarter upstream, obviously seen angle is of I acceleration We brownfield, of the noted, business the strength a you to an you're your of Or versus your is with orders results. poultry thus quarter? geographic trying

Brian Deck

have line further I more full just lines. They of which primary/secondary so equipment, kind are X system. to cycles type full which JBT's line, tend been. second are in X full they're and solutions. kind Marel in play along I further assumption. it's won't the upfront versus generally line down -- specifically But the times talk be of -- generally, to or where They they've JBT of your a sales will or and lead say, processing shorter pieces not as X shorter does

place little lines. a just bit the we in where So different play

Ross Sparenblek

EU timeline XX-day notice. Okay. the And about thinking Marel then here,

remedy, as I be filings? other which think positive. of that kind mitigates relates of us outside we to can should from watching a any out what Europe is remind just countries concerns for it you But of

Brian Deck

Yes.

collaborative That's are forth. where been So them, long process, we we've multiple we're back really pleased with process with a with had very the very a EU. and

to So to get this milestone. stage, that's a major

-- EC you for the that those are the As with process. EU, filing familiar

light So the waiting them ahead go XX-day is kick period off to very and us this filing positive. giving green to the very, formal

basically That crossing then other period frame, the I but play -- by then one Ts. and probably feel within as will with same approvals offer, say of that confident finalizing. Australia, expectation that. time to we're that's the extend end that takeover will the few weeks a brings would have in that dates some regulatory here the itself couple -- it which we we there, full We VTO, precisely again after choose, characterize I the out Is of and jurisdiction doting working out order. that does We're we of to is announce -- would voluntary short would Marel us a November. that and And we

Ross Sparenblek

one get in. more could just right. All If I Perfect. maybe

the It we read Now you expect look the give business closed? synergy you've had early hood. to more really out regards just looks cost and maybe margins once a there? maybe accretion more be they to required Or acquisition time consensus, us can that goals? be to maybe your to targets into need targets hit to bit there's with the the revision aren't forma pro Marel an little will is Should and upward in based all like where

Brian Deck

done Well, I over quite would X the have we months. work bit a of last say

on of synergies. will, know We if have million certainly you a pipeline, to all-in $XXX savings all-in a to bit. have gotten them deliver and -- quite funnel We the

the But let just certainly actually So we'll until that. in say we we're only we businesses. we do much do know. -- more, you combine you you if think I so can would point get can We'll there's confident really, where to

In terms of visibility, perfect visibility.

with appropriate stick to it's $XXX just million think I said as here. the So I

Matthew Meister

Yes.

margin I is from, improvement expecting in also in to that poultry recovery again, we're the the markets that come volume. and think benefits Marel going higher further how the

only side. in is margins not at also So which synergies, there's there improved Marel recovery but will help just drive the the volumes,

Brian Deck

mean opportunity. I they're also are their would of, kind doing synergy say, also own certainly, regardless -- And improvement they I efforts of

Operator

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

Walter Liptak

ask a about the we're nice and poultry market. to order recovery the on quarter. in that the seeing Wanted Congratulations strength

days coming So is you it it Asia geographically, Maybe as doing recovery it Europe still see you from? early doing is not seems the well. most the do where at it but Is it's of quite... sounds well. where do -- like we U.S. expect is look strength -- like

Brian Deck

say our probably Yes, remains biggest pace the America I improvement, opportunity. of North would

who those always us For North following, so. years for hasn't been or the America years have it been just market over the for always last -- strongest and was X

of consistency. in that's our go-to typically, and So terms strength

And consistency be we're getting think is why to. looking level so That terms forward strength do and what of back to I in just of the that's that primary. would

Walter Liptak

plus that the that tell then you Okay. do All maybe of talked how revenue us aftermarket? about this negatives positive And any some sales, you about growth? call, but much too -- to keep or growth right. X% on initiatives and about we you've had aftermarket growing Great. And can feel haven't the that the the around

Brian Deck

growth. X% the we're Yes. very with Sure. No, happy

equipment know, a than more side. the that's you As business stable

the the of recoveries reflective strength that talking had been have think and years. backlog equipment about and quarter, whatnot past plus of XX% in the that's a ] few and the [ the obviously we growth over in I we some

kind can a So and times it does bad, deliver really that's continue if to good in we mid-single-digit have aftermarket growth profile. better good Obviously, margin considering a consistent of answer.

of it we of on a couple on we about things, is terms focus there's parts. that doing, are important to the on-time delivery is to the really In that -- have continue providing things most but things

some that. helps making right in on with our digital engaged those focusing with terms -- got places, sure that to on we've doing responsiveness. right sure offering the we're service the the So parts additional places our really relationships and continue the us in Certainly, OmniBlu penetrate and our right -- people the making we network again, then of work lastly, customers model. And more having right in

it's kind with ability really had. that's those metrics, looking things the one and of So just side inventory And adds whatnot, like that's the turnover combination like and customer meaningfully, they've again, think the right well-developed that of -- Marel flipping that they metrics, of parts aftermarket about the from focus that are the to business centers. the some a got metrics you distribution feel the through we've not perspective, having eyes and important our on about really

optimize working their in usage pretty So that, of service with that, the coverage. how their we're and people to network but impressive also of terms a

like well. quite to and So and customers constraints one products of that's serve valuable, know in terms are the -- the the quite usually effectively, of and being biggest and customers able business they service the techs our

really come opportunity together. as a we that's So wonderful

Operator

to Deck for this are at no Mr. closing questions turn it Brian there And remarks. Instructions] [Operator to would I back time. further like

Brian Deck

you for all this joining Thank morning. us

if any day. Marlee always, a Have have you. will As you be questions. great follow-up Thank available

Operator

you for Thank conference this you. all today's Thank participating. call. concludes And

You disconnect. may now

John Bean Technologies (JBT) 23 Oct 242024 Q3 Earnings call transcript