JBT Marel Corporation Q2 FY2025 earnings call

• Financial Performance: JBT posted a strong second quarter with adjusted EBITDA margins and adjusted EPS exceeding expectations, excellent cash flow, and significant balance sheet deleveraging. Combined orders totaled $938 million, including $22 million favorable foreign exchange.
• Demand Environment: Healthy orders despite dynamic economic backdrop. Poultry industry showed continued equipment investment with pipeline support into next year. Other end markets like meat, beverages, etc., had good quarterly demand; pharma and pet food softer, seafood and material handling neutral. Geographically, EMEA strongest, North America relatively soft, Latin America strong, Asia Pacific choppy. Backlog at $1.4 billion.
• Integration Progress: Integrated process on track, capitalizing on expanded portfolio for cross-selling. Global service network realigned for better responsiveness. Continuous improvement initiatives in meat and fish businesses to optimize performance.

For the second quarter, JBT segment revenue increased 13% year-over-year (approximately 11% on constant currency basis). JBT segment adjusted EBITDA was $82 million, up 28%, with the adjusted EBITDA margin improving 220 basis points to 18% due to favorable recurring revenue mix and higher volume. Marel segment revenue in the second quarter was $480 million. Marel segment adjusted EBITDA was $75 million, representing a margin of 15.5%. Marel's strong profitability was due to savings from integration synergies, restructuring actions, favorable revenue mix, and better margins in the meat and fish businesses.

• Full year 2025 revenue expected at midpoint of $3.7 billion, including ~$70-$85 million favorable foreign exchange translation. Adjusted EBITDA margin forecast 15.25%-16%, adjusted EPS $5.45-$6.15.
• Third quarter revenue expected flat sequentially with slightly favorable FX, sequential margins to decline ~100 basis points due to increased net tariff costs and less favorable mix, partially offset by synergy savings.
• Full year 2025 guidance reestablished with greater clarity on tariff environment (including 15% rate on Europe) and strength of backlog.

• Tariffs impacting direct material costs, with ongoing efforts to mitigate through supplier negotiations, repositioning sourcing, and pricing actions. Episodic customer order delays due to tariffs, particularly in specific projects.

Q: Ross Sparenblek on poultry visibility and line speed regulations A: Brian Deck and Arni Sigurdsson discuss poultry industry investments, visibility into front half of 2026, and USDF approval of higher line speeds with workarounds for inspection Q: Mircea Dobre on Marel margin performance and 2027 targets A: Matthew J. Meister and Brian Deck discuss Marel's margin improvement, ~400 basis points year-over-year, and mid-teens margins target for meat and fish by 2027 Q: Saree Boroditsky on Q3-Q4 guidance and tariffs A: Matthew J. Meister and Brian Deck discuss Q3-Q4 margin expectations, tariff impacts, and plans to offset tariff costs Q: Justin Ages on customer order delays due to tariffs A: Brian Deck mentions episodic customer order delays, particularly in specific projects, but minimal impact on protein business Q: Walter Liptak on meat orders and pricing A: Brian Deck discusses improvement in pork orders, automation opportunities, and pricing actions taken to offset tariff impacts Q: Ross Sparenblek on parts seasonality and R&D definition A: Brian Deck and Matthew J. Meister discuss parts seasonality, particularly in Europe, and ongoing R&D definition alignment Q: Mircea Dobre on FX impact and pipeline growth A: Matthew J. Meister and Brian Deck discuss FX impact on full year guidance and 15% increase in North America poultry pipeline due to integration