JBT MAREL Corp Q4 FY2024 earnings call

• Integration progress: Focused on organizational design, expected to be materially complete by end of March. Customer-centric go-to-market strategy adopted, leveraging complementary portfolios of JBT and Marel for holistic equipment solutions.
• IPPE trade show: Displayed diverse technology solutions, highlighting ability to integrate primary, secondary, further, and end-of-line processing under one brand, enhancing operational efficiency and traceability.
• Marel's 2024 performance: Strong Q4 orders (€474 million, up 18% sequentially), strong book-to-bill of 1.11, full year revenue €1.64 billion (down 4.6% due to lower project revenues), recurring revenues €821 million (up 5%), full year adjusted EBITDA €200 million (including net year-end adjustment of €17 million).
• JBT's 2024 performance: Strong orders (4th quarter up 25% YOY, full year up 7%), revenue up 3% organically, adjusted EBITDA $295 million (up 8%), free cash flow $199 million (up 20% from prior year).

JBT reported record orders of $523 million in the fourth quarter. Marel reported record orders of €474 million. Combined orders totaled more than $1 billion for the period. Geographically, there was global pickup except Asia-Pacific. From an end market perspective, the poultry industry was strong in Q4 2024 and expected to improve in 2025. Other proteins (meat and fish) had solid quarters, with increased pipeline activity for pork and confidence in fish fundamentals. Fruit/vegetable and pharmaceutical markets had strong order demand, while beverage end market was weaker in most of 2024 but picked up at year-end. Pet food and ready meals performed well, and AGV business had solid demand. Marel's 2024 full year revenue was €1.64 billion (down 4.6% due to lower project revenues), with recurring revenues of €821 million (up 5%). JBT's 2024 full year revenue increased 3% organically. Combined 2024 results: orders of $3.6 billion, revenue of $3.5 billion, and adjusted EBITDA of $479 million, with an adjusted EBITDA margin of 13.7%.

• 2025 full year revenue growth on constant currency basis forecasted at 4.5% to 6.5%, excluding negative foreign exchange impact of ~$75 million (2%).
• Adjusted EBITDA margin guided at 15.75% to 16.5% in 2025.
• Expect to realize cost synergies of $35 million to $40 million in 2025 and exit the year with run rate synergies of $80 million to $90 million.
• Projected adjusted EPS for 2025 is $5.50 to $6.10, including certain one-time items and acquisition-related costs.
• Q1 2025 revenue expected in the range of $820 million to $850 million, inclusive of an estimated negative $23 million FX translation impact.

• Macro concerns including U.S. and potential retaliatory tariffs, and the prospect of higher inflation.

Q: Touch on the synergies, specifically supply chain synergies.

A: Brian states that access to information previously unavailable allowed determination of supply chain savings strategy, with early hits expected in the $35 million to $40 million first year savings.

Q: Clarification on free cash flow 2025.

A: Matt mentions it's still early to provide specific numbers, but fundamentals of the business are strong with low CapEx, high recurring revenue, and deposits, expecting more than 100% free cash flow relative to adjusted net income.

Q: Order intake and sustainability into 2025.

A: Brian notes JBT had no weak markets in Q4 2024, with strong performance across various end markets, and Árni mentions Marel's poultry market remained attractive, with improvement in other segments like pork and fish having improved sequentially but still work needed.

Q: Year one synergy savings bucketed.

A: Matt says approximately 45%-50% of $35 million to $40 million synergy savings are related to procurement and cost of goods sold, remainder related to SG&A redundancies.

Q: Greenfield opportunities.

A: Árni and Brian discuss Greenfield opportunities in poultry (e.g., line split solutions) and non-poultry (e.g., Middle East farmer side) markets.