JBT Marel (JBTM) Q2 2024 earnings summary

Executive summary

• Q2 2024 orders reached $437 million, just below the all-time record, with strong demand in North American poultry, AGV, and warehouse automation, and sequential improvement in orders.

• Q2 2024 revenue was $402.3 million, down 6% year-over-year, impacted by book-and-ship timing, system upgrade delays, and FX, but up 3% sequentially.

• Adjusted EBITDA for Q2 was $63.7 million, down 11% year-over-year, but up 11% sequentially, with margin at 15.8% and margin expansion from restructuring and supply chain savings.

• Adjusted EPS for Q2 was $1.05, up from $0.97 in the prior year, aided by a $9 million net interest expense improvement and non-recurring tax benefits.

• The company is advancing the Marel acquisition, with a voluntary takeover offer issued, integration planning underway, and transaction close targeted by year-end 2024.

Financial highlights

• Q2 2024 revenue: $402.3 million (down 6% year-over-year), with a $4 million negative FX impact and $15 million revenue shifted to Q3 due to timing and system issues.

• Gross profit margin improved 120 basis points year-over-year to 35.6%.

• Adjusted EBITDA: $63.7 million (down 11% year-over-year, up 11% sequentially); adjusted EBITDA margin: 15.8%.

• Adjusted EPS: $1.05 (up from $0.97 year-over-year); GAAP EPS: $0.95.

• Free cash flow for the first half of 2024 was $13.5 million, lower than prior year due to higher working capital and inventory increases.

Outlook and guidance

• Full-year 2024 organic revenue growth guidance updated to 3%–5%, with double-digit year-over-year growth expected in Q3 and Q4.

• Adjusted EBITDA guidance narrowed to $295–$305 million (margin 17.0%–17.5%); adjusted EPS: $5.05–$5.35.

• About $40 million in pre-closing M&A costs for the Marel combination included in full-year GAAP guidance.

• Free cash flow conversion expected to exceed 100% for the full year.

• Capital expenditures for 2024 anticipated at $40–$50 million.