John Bean Technologies (JBT) 31 Jul 242024 Q2 Earnings call transcript

Good morning, and welcome to JBT Corporation Second Quarter 2024 Earnings Conference Call. My name is Krista, and I will be your conference operator today.

As a reminder, today's call is being recorded. [Operator Instructions] Thank you.

I will now turn the call over to JBT's Vice President of Corporate Development and Investor Relations, Kedric Meredith, to begin today's conference.

Krista. 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 Relations results. in yesterday's an that Investor release we in forward-looking of will filings In periodic filing. may These impact press website. available the regarding also the today's language statements have contain and call, information that documents our harbor are safe subject section JBT's use our SEC X-K on to factors risk

our today A website. can Relations to comparable Also, discussion certain Investor includes non-GAAP our measure reconciliation the references measures. GAAP be to the of measures found in of these section most

over Brian. the turn call I'll Now to

Thanks, Kedric, and morning, good everyone.

Let start me with the news. good

last poultry equipment recovery call, that as second activity producers. quarter's optimistic JBT's orders. to quote strong the orders on industry initial North and begin played included were improving in to will translate quarter, demand poultry strong This from higher we we American As in economics out said an

-- history our handling sequential of as the our business, quarter in second translated the this food Overall, technology XX% expected. best material AGV, our technology for quarter food in second automated orders and rebounded terms a nicely Additionally, in improvement. to

said, line have year, essentially to growth X% to that be the in guidance short due second recovered top With of fell JBT's of our full expectations, With we expected that for quarter back to year. to our X% shortfall. of performance financial much a revenue refined the the reflect half

Marel. year. I'll and latest trends, our second geographic and will who to speak with for on about the Matt? the provide our quarter the detail turn market expectations me Let over on combination report more Matt, call performance updates ESG Then and full order provide

good and Brian, morning. Thanks,

primarily delayed negative from second from short delivery $X declined million the ship of impacted revenue expectations, We quarter recognized orders, third site. million, quarter book of and system and customer of the resolved a shifted That X% $XX the year-over-year. the to fell second now temporarily foreign that quarter. from million approximately which included XXXX, that scheduling translation, of revenue of issue from upgrade our impact $XXX For a revenue performance exchange believe

On to the margin side, delivered the we chain and from from restructuring cost actions our realize benefits savings continue initiatives. our better-than-expected supply

XX% quarter our our adjusted improved a As points. and from gross EBITDA XXX we margin the restructuring benefits increased by offset expanded were Adjusted second improvement, impact than chain year-over-year. volume. XX.X% supply adjusted declined of result, sequential That lower basis XX% more year-over-year, XXX of profit of margin the $XX EBITDA said, and points as million initiatives as basis EBITDA realized

quarter result capital. benefited the of was $XX EPS $X due interest year in adjusted year the working $X.XX improvement. net expense prior was in million a current as million Second lower in to year the $X.XX free prior versus higher Year-to-date from cash flow than

higher inventory AGV's with and associated Our partially timing. work our overall in profile due increased, growth to backlog progress

a free achieve flow excess convert full we XXX%, continues confident cash of order to to and backlog as in to year, strong our rate remain For conversion the improve. revenue ability demand we in our

back additional to our to updated year-to-date guidance contributions X% full by partially organic reflect revenue is to year offset AGV half. we which from earlier, mentioned growth X% performance, the Brian our in

in than steeper back the updated before. half suggests guidance quarterly progression Our a

shipping is million in is higher. backlog is year, This approximately conversion consistent that million the back $XX $XXX several XXXX. the revenue our year's While long-term projects scheduled backlog of in result the in included prior to last half with is

revenue, discussed given the warehouse constrained which, is for strong backlog forecasted previously, has the higher in demand capacity conversion AGV been automation. we've as Included

and lead efficiency process manufacturing our improved and standardization times. However, to changes product our have

As expect an is previous X% incremental will AGV from X% contribute a JBT's our we revenue guidance. for total result, which XXXX, to now growth

in an the year, with half together million XXXX at ship of this book in would of volume confidence All approximately midpoint our comparable our last provides back back forecast and put of guidance. revenue, half to $XX of year-over-year us the which, along increase

adjusted our updated has revenue to narrowed updates $X.XX at expectations $XXX to adjusted to to to on XX.X%. have We $X.XX. full growth, year now million for and maintains EPS. which margin adjusted million, Adjusted $XXX also EPS Based been we guidance our EBITDA of XX% expect EBITDA

half we to in in margins each of terms through cadence, growth sequentially double-digit revenue remainder back the XXXX, year. the of the For as move improve year-over-year and quarter quarterly we of expect

Lastly, pre-closing M&A our of in with GAAP combination year million guidance full we reflect costs expectation to $XX current updated the Marel. for our

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

Thanks, Matt.

Let order trends. me start with

As orders Technology's the Food best our $XXX I said of top at second call, second performance the represented quarter million ever. of quarterly

producers poultry Moreover, We to demand and not were the materialize. back recovery pleased early, orders still is has from yet to in baseline that it levels. North we're started American anticipated

we As in improve to such, expect orders American industry further QX. poultry North

areas we to also was and enjoy demand continue robust other demand at of quite in strong for vegetable As fruit the quarter. strength, AGV, while

On particularly the buying expectations, industry remains smaller in capital the among of And did headwind, high our other a customers. meet hand, as consumer adjust not patterns. manufacturers to cost beverage the our general, current

Asia and continued South pipeline while demand strong strong. remained promising region has America stable elongated foreseeable future. Pacific for conversion in as experience the to was The cycles, appears that Middle a disappointing East was order the Europe we Geographically,

all exposure demand. as it quarter in poultry significant recovery diversified the Putting American North strength market well in second the initial together, reflected JBT's as end

in of third anticipate inbound the quarter rates we strong another order quarter. total such, As

gears. Switching

resilient, report, supply published fourth focused Social future As annual JBT's we have more on and you enable a food sustainable Environmental, equitable may Governance the & seen, we food how chain. fortifying are to recently of

operational larger performance. portfolio and an footprint decisions, purchasing of customers' Sustainability solutions JBT's customers' our factor is our improve becoming in environmental and can ever innovative

energy waste with yield reduce packaging and for precious make processes food helping better safety. improved use and as products to while and Our resources, food such also of water,

JBT's creates we their as -- sustainability a innovation objectives. such, As competitive help innovative meet advantage customers

JBT's to environmental the internal action of performance improve taking also We're operations.

are calculating according carbon improving emissions and protocol greenhouse supply identify to our sustainability. gas opportunities our our footprint X We to for chain Scope reducing the

Finally, held for London let JBT XX, and with Marel. launched On held the Marel. on August merger to delivered proposed Since updates vote be to shareholder the voluntary June provide me on in outstanding proxy have offer shareholders JBT of shares all Marel then, materials acquire a we Iceland meetings and with takeover X.

the $XX value customers, creation industrial on JBT end we the of other enhance shareholders more As stakeholders. proposition on of opportunities than and call investor June customers post By we can confident third and logic close, services our are we combination of combined and $XXX we in the with for of discussed special benefit increasingly we leverage as and the scale. XX, more in million revenue synergies cost capture from value products and detail our the year, the believe to our million, synergies than complementary

with the jurisdictions, investor and that the have engaged an indication our investigation, remaining the we a Since actively we're not call, received EU. U.K. considering from June antitrust is the formal including regulatory counsel

closing. And imminently. year-end listing on to Icelandic XXXX exchange, continue file the secondary the plan to we expect we Regarding for

to transaction execution. Moving

from and integration. focus now to on has for a activity pivoted matters legal regulatory Our planning operational

and companies named and members readiness underway. This finance, and integration planning selection overall IT, few a guide importantly, for both org work to talent support cultural name with and an operations, integration streams already to to team to planning teams procurement X design digital our connectivity, our ensure advisers and We are and support Marel includes and communications. a an with purpose team from with overarching team have an to process, working day

stronger world, at to around core Marel collaboration our the your Before JBT and let and are success. the take beverage appreciation comprehensive questions, to for global thank who extend resources team, we as for we combined entity our customers. my And greater an solutions me envision with food you of your teams even the

Now open the call. let's up Operator?

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

you still where comment a had was initially is the your you the a of being If event? question the in QX get issues about terms correctly, to And is first base That doesn't these recovered of does revenue million it you exactly as this into you mentioned $XX revenues to surrounding impact. guided delta Or My relative that what QX. I of on in you really stretch in us expectations? that the heard bit Can QX. QX the all back little system half? Is well?

Sure.

down that going from would represent, at guidance, really, overall to about X% say, seeing. specific X% there's markets the X% million end reduction at a to look I in that does $XX we're And the X%, to midpoint. weakness you some if So

in suggest, a bit to you minute. we $XX not missed quarter quarter the about and if we're about of have for a all of I'll little that the as most, $XX cadence third while talk Matt million, by that, the in the quarter, the rest and regain And million, of going

it seeing other we is seeing of seeing weakness, that, impacts to strength increased strong, as bev. that say, nice partially some and relates But very actually generally. food which select -- some mentioned are actually are well. end and the despite we pockets guidance market as some, our of I we're offset we AGV

from on in the here. Matt we're the the and kind confident terms let then of address of that I'll of cadence, But why cadence strength

Yes. Thanks, Brian.

$XX and the was That that's issue expect was is delays as some into that QX. things. I from half systems million you that other shift book half QX, and that up what of shorter-cycle QX mentioned customer-related specific orders. prepared About the shifting referenced, a remarks, Mig, ship made the we is and we of to to of couple timing of think in the upgrade

we than backlog about more bottoms-up of provided revenue looked really should backlog that we what we what of at deliver based a $XX at this detail. -- in as talked timing and the year off in -- is $XX business-unit-by-business-unit had million prepared lot timing, again, time. than expect about, that, forecast last million we Beyond a the this and is And remarks, information we

it us last half that demand. numbers ship and high Again, necessarily back in order book that demand ship the the half, saw the overly to similar book for of we back wasn't a and hit But assumes at for year.

we've seen that confident North that, with continue, the in in the other strength and pretty can that especially markets the poultry markets. in recovery America we're So

analysis big the but is certainly, backlog and best and of slam no additional to business information and dunk, means, assumptions based the ship and provided it's units. us on by on So the book forecast we the have a did it the we a ramp

Okay.

more investors that mentioned color more to little -- if You or progression down? about pretty expected that think there quarter million you're QX market did how there headwind look, last in to bringing a in it backlog that issue? fair So that through should is you burn you backlog than regard. differently, your around us backlog to strong an context Can well year? for a build And year, that Is a put backlog to you become more through think can momentum XXXX? that give does progressing be do convert and orders Or are the not going enough you $XX to this? we're say the

very that's question, good quite at a and this we've a looked Yes, bit.

some to I'll given when we the backlog, at XXXX -- depletion revenue. into thinking to your more orders just least, certainly, expect see, compared bit said, year about of the a That half. going start little back still say, high you're here XXXX, outside in we So of going good well, last

how we'll So that out. turns see

more think a when about couple what's things. XXXX and you happening, think I importantly, But of

levels. are recovery do the early we're at we obviously, the So poultry very they just to end market. particular in nowhere some in we going -- post-COVID XXXX near or believe pre-COVID even the where were American back North in levels markets, looking of We're

to So room run there's still quite a there. bit of

goes some looks also looking signs markets strong. in Food like back of are are of that. half couple a into and good still looks end of CPG, areas other and There of -- very of kind showing bev the Pharma beverage weakness, pretty year. strength. We're the

I converting been at at we and which over likelihood That look look of But of -- it's will, of warm like we year. kind X measure, it's if like you the view overall, is have highest kind orders, our orders. in to if we actually pipeline, best more

we feel as actually kind ourselves where kind take good XXXX. we So prepare or for sit of about orders we of

industry? where or a of define put I Can follow currently the you as for that can point market a So up would comment finer is? on normalized level pre-COVID on dollar-wise you to levels the where are poultry relative whatever or you volume-wise

within And -- market one otherwise is our you certainly North know, XX%, that We're versus as of our largest XX% of kind America as specifically, be. Yes. whole. we -- that's we're off still would a where end

we saw bit go. of but a again, good now progression, So quite -- to decent , ways

Got is it. And my question margin. on final

improvement year-over-year And as it I'll about all fair makes us well at improve margins sense. talked for to that both to You sequentially, it quarters? leave Is expect that. in

a higher volume. typically sort on Mig, what and think absolutely estimate of increase, in I by is expect. that flow-through driven range. certainly It And XX%. big of lot volume we We XXs, of the should Yes, range margins, end of in that think a high the with we is the that should low the be on I increase, the incremental is high

products to perspective higher AGV. They've margins. of nice profitable recovery job tends be with addressing really their in done And well and some their a as in poultry then That beyond that, some mix from a more markets. the efficiency as our the manufacturing volume in there's benefits

along those in expecting mix together, improvements gives that nice that perspective. So aftermarket, with from on a we're tailwind us a especially projects,

we've of from lot team a success especially then honestly -- costs they've input and and materials. had on costs, very chain effects supply the around seen And happy been the

expect half the we continue So -- back year. that in to the back of

expecting improved that the rates sequentially. that in margin All we're would will back of higher of half year. the support the And

be So better QX better, than QX then will QX. be will and

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

Ross. for on Karlov Sam is This

submitted you've related Marel filings to you So press relevant I release, that In the noted within all regulatory guess jurisdictions. guys I'll start.

be to just formal clear, Just still or informal? are submissions these

depends on because processes different different It in are jurisdiction the there jurisdictions.

For of, before EU there's and a I'll and you formally forth submit. example, is the lot say, advocacy actually back

opposite. So where little you is comes U.S., the versus this bit then it, of afterwards, submit Q&A a the just and the

jurisdictions, are that's So formal. most other in underway. those But

retail you Got give update that it. an related can investor your us investor outreach specifically That's to helpful. with XX% investors, And efforts then on Marel base?

good question. No, Yes.

and a had June, call, webcast guess, in, we in we late and towards a was, back which been really London. part, it broadcast strongly I And retail in great geared Iceland would in week So have -- investors. this had had both

-- within was that So well and viewed very that market. was and that received

So really that helped.

process. There's Iceland say, a of print campaign also well that specific, in part very happens that as I'll as

like So it et newspaper ads, cetera. goes

broadcast, underneath. aside as major live process from the strong with of the again, that we all conference Iceland. attended one-on-ones London had very across a Marel, shareholders of there's So Separately, was and well as both

investors so. And I or think the we hit something week like, I a course think, over XX of

to the So here, really appreciate and the opportunity and great industrial a deep penetration really logic. support. as understand certainly the They, see group,

so in regard. so So, good far, that

of that second kind you gives through us you're then July? half? visibility give Got and customers very what That's of poultry into last Can then of And that the quarter a level one helpful. of hearing on sense kind you kind just it. orders progressed one. you of from how can into And comment the

Right.

a did third And bit momentum So It but slow, just say quarter. the would in our progressed. But any quarter. that's seen progress the expect numbers throughout expectation the the actually -- say, quarter orders see for case. frankly, July then generally do second generally little throughout would we some quarter. I speaking, the started I general haven't I

what it's you we're In our hearing from might terms generally what customers, of of more kind expect.

the prices as all, fundamentals are whole. kind prices, The remaining this last held. good. They haven't wholesale a -- versus remain time increased poultry of They've First they've solid. further of the quarter

remained also However, input costs have stable.

price/cost the held. dynamics our customers say, general, for So I'll have

of some later the are of the next operationally. well they're out coming as of big doing But this it, I some understand we think on or seen results haven't week guys. the week some -- We

more, we on -- further So more -- the activities further -- was second I the of quarter, down type quoting are we're like end-of-line line. would for the third say, processing things for kind are it

some of quotes some activity and upfront to starting stuff. see are on We the

bodes into -- good well. which into to It's further deeper to the lines, is So starting get that see. just

and told conversation. us that continue releases overall, So seeing CapEx to of about, more good They're they've we just We're investing. quote.

turn And over Instructions] I conference conclude closing session our remarks. that Brian question-and-answer Mr. [Operator for the now to for will today. Deck does

all morning. for us Thank joining you this

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

may conference participation, you This you disconnect. call. concludes today's Thank and now your for