John Bean Technologies(US:JBT)2024-02-21 17:20Financial Data and Key Metrics Changes - Adjusted EBITDA grew 20% year-over-year to $273 million, with an adjusted EBITDA margin increase of 210 basis points to 16.4% [15] - Diluted earnings per share from continuing operations increased to $4.02 from $3.23 in 2022, while adjusted EPS rose to $4.10 from $3.67 [15] - Full year revenue increased by 5%, with gross margins improving by 190 basis points year-over-year [39] Business Line Data and Key Metrics Changes - The poultry segment was the largest contributor to revenue, although equipment orders faced pressure, resulting in a decline of over 20% compared to a normal mid-cycle year [67][86] - Recurring revenue grew significantly, with a notable contribution from the acquisition of Bevcorp, which has over 60% recurring revenue [65][83] - The AGV business is expected to see growth due to strong backlog from warehouse automation demand [41] Market Data and Key Metrics Changes - Fourth quarter orders reached $418 million, with full year orders increasing by 5% year-over-year, particularly strong in Europe and Asia [46] - North American poultry demand is anticipated to recover in the back half of 2024, contributing to overall market improvement [19][41] Company Strategy and Development Direction - The company announced its intention to merge with Marel, which is expected to create significant value through synergies and expanded market reach [13][25] - Ongoing supply chain initiatives aim to improve cost efficiency and inventory management, with expectations of margin expansion in 2024 [24][47] - The merger is projected to capture over $125 million in cost synergies within three years post-transaction [50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering a recovery phase in equipment demand, particularly in the poultry market [22] - The company expects solid top-line growth of 5% to 7% for 2024, with adjusted EBITDA forecasted to be between $295 million and $310 million [16][17] - The anticipated recovery in North American poultry markets is expected to influence revenue positively in the latter half of 2024 [19][41] Other Important Information - The company plans to incur approximately $15 million in M&A costs related to the merger with Marel in the first half of 2024 [43] - Free cash flow conversion is expected to exceed 100%, with capital expenditures projected between $50 million and $60 million [18] Q&A Session Summary Question: What is the status of the merger with Marel? - The tender offer for Marel is expected to launch in the second quarter, with regulatory approval processes ongoing [72][73] Question: How does the company view the overlap between JBT and Marel? - The portfolio is primarily complementary, with no significant antitrust issues anticipated [73] Question: What are the expectations for revenue and margin in Q1? - Revenue is expected to show year-over-year improvements, with margins anticipated to improve by 75 to 100 basis points [62][76] Question: What is driving the growth in recurring revenue? - Growth in recurring revenue is attributed to price increases and the full-year impact of the Bevcorp acquisition [65][83]