JBT Marel (JBTM) Q4 2023 earnings summary

Executive summary

• Record FY adjusted EBITDA, adjusted EBITDA margin and adjusted EPS; Q4 and FY adjusted EBITDA and adjusted EPS exceeded prior guidance.

• Price-cost improvement, supply-chain execution, manufacturing efficiencies, recurring revenue growth and restructuring savings supported margin expansion.

• Elevate 2.0 progress included a move to a pure-play food and beverage business, digital adoption and recurring revenue growth.

Financial highlights

• Q4 revenue was $444.6M, up 1% YoY; FY revenue was $1,664.4M, up 5%, primarily from acquisitions.

• Q4 adjusted EBITDA was $81.0M, up 18%, with an 18.2% margin, up 260 bps; FY adjusted EBITDA was $273.1M, up 20%, with a 16.4% margin, up 210 bps.

• Q4 income from continuing operations was $52.7M and diluted EPS was $1.64; FY income was $129.3M and diluted EPS was $4.02.

• Adjusted EPS was $1.40 in Q4, up 24%, and $4.10 for FY, up 12%; GAAP EPS included an $11M discrete tax benefit from a subsidiary sale, excluded from adjusted EPS.

• FY operating income was $164.7M, versus $132.6M in 2022; operating margin was 9.9%, versus 8.3%.

Outlook and guidance

• FY 2024 guidance: revenue $1.750B–$1.780B; income from continuing operations $150M–$162M; adjusted EBITDA $295M–$310M; adjusted EBITDA margin 17.0%–17.5%.

• FY 2024 GAAP EPS guidance is $4.65–$5.05; adjusted EPS is $5.05–$5.45; free cash flow conversion target is >100%.

• Organic revenue growth is expected in the mid-single digits; revenue mix is forecast at 47% in H1 and 53% in H2, with sequential margin improvement through the year.

• North American poultry recovery is expected in H2; guidance assumes price-cost neutrality, while aftermarket growth is supported by uptime investment and OmniBlu adoption, and AGV growth by backlog.

• FY 2024 guidance includes ~$1M restructuring costs and $15M M&A costs in H1; GAAP guidance also reflects anticipated M&A costs.