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John Bean Technologies(JBT) - 2024 Q3 - Earnings Call Transcript
JBTJohn Bean Technologies(JBT)2024-10-23 18:48
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Financial Data and Key Metrics - Revenue for Q3 2024 was 454million,a12.4454 million, a 12.4% year-over-year increase [3] - Adjusted EBITDA for Q3 2024 was 82 million, a 23% year-over-year increase, with an adjusted EBITDA margin of 18%, up 160 basis points [4] - Adjusted EPS for Q3 2024 was 1.50,comparedto1.50, compared to 1.11 in the prior year [4] - Free cash flow for the trailing 12 months as of September 30th was 184million[4]−Full−yearguidanceforrevenuegrowthremainsat3184 million [4] - Full-year guidance for revenue growth remains at 3% to 5%, with adjusted EBITDA growth of 10% at the midpoint [3] Business Line Performance - Orders totaled 440 million in Q3 2024, a 10% increase year-over-year, driven by recovery in the poultry end market and healthy demand in pet food, food, vegetable, and pharma markets [8] - The Automated Guided Vehicle (AGV) business posted record sales and orders, with revenue expected to exceed 150millionfortheyear,growingover30150 million for the year, growing over 30% [15] - AGV margins are above the company's guidance range of 17% to 17.5%, targeting 20%+ for the year [15] Market Performance - Geographically, order activity improved in Asia and Europe, with North America also showing good momentum [9] - The poultry market showed recovery globally, with North America seeing an incremental 10 million to 15millioninorderscomparedtoQ22024[23][25]−AsiaandEuropealsosawimprovementsinpoultryorders,withAsiashowinginvestmentsinfull−linesolutions[25]StrategicDirectionandIndustryCompetition−ThecompanyisfocusingonintegratingwithMarel,withregulatoryapprovalsnearingcompletion,includinga25−dayreviewperiodbytheEuropeanCommission[12][27]−ThemergerwithMarelisexpectedtoclosebytheendof2024,withfinancingsecuredthrougha15 million in orders compared to Q2 2024 [23][25] - Asia and Europe also saw improvements in poultry orders, with Asia showing investments in full-line solutions [25] Strategic Direction and Industry Competition - The company is focusing on integrating with Marel, with regulatory approvals nearing completion, including a 25-day review period by the European Commission [12][27] - The merger with Marel is expected to close by the end of 2024, with financing secured through a 900 million Term Loan B and an expanded revolving credit facility to 1.8billion[6][7]−TheAGVbusinessistransitioningtoasubscriptionmodel,whichisexpectedtodriverecurringrevenuegrowth[11]ManagementCommentaryonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinthefull−yearguidance,citingstrongbacklogandoperationalperformance[3][4]−Thepoultrymarketrecoveryisexpectedtocontinue,withvisibilityintoprojectsforthenext18to24months[19][20]−Laboravailabilityhasimproved,butautomationremainsakeyfocus,especiallyinthecontextofpotentialimmigrationpolicychanges[22]OtherImportantInformation−Thecompanyplanstosettlealloutstandingobligationsofitspensionplan,incurring1.8 billion [6][7] - The AGV business is transitioning to a subscription model, which is expected to drive recurring revenue growth [11] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the full-year guidance, citing strong backlog and operational performance [3][4] - The poultry market recovery is expected to continue, with visibility into projects for the next 18 to 24 months [19][20] - Labor availability has improved, but automation remains a key focus, especially in the context of potential immigration policy changes [22] Other Important Information - The company plans to settle all outstanding obligations of its pension plan, incurring 30 million in non-cash pretax charges in Q4 2024 and an additional 145 million in Q1 2025 [5] - The AGV business is benefiting from investments in R&D, product standardization, and a shift to larger, scalable projects [10][11] Q&A Session Summary Question: AGV Business Size and Margins - The AGV business is expected to exceed 150 million in revenue for the year, with margins above the company's guidance range, targeting 20%+ [15] Question: Poultry Market Recovery - The poultry market is recovering, with North America seeing incremental orders of 10millionto10 million to 15 million compared to Q2 2024, and Asia and Europe also showing improvements [23][25] Question: Impact of Immigration Policies on Automation - Management noted that tighter immigration controls could drive demand for automation solutions, particularly in manual processes like cut-up lines [22] Question: Synergy Targets with Marel - The company remains confident in achieving $125 million in synergies from the Marel merger, with potential for further margin improvements from volume recovery [29][30] Question: Aftermarket Sales Growth - Aftermarket sales grew 5% in the quarter, with initiatives focused on on-time delivery, digital offerings, and optimizing the service network [34][36]