John Bean Technologies CORP (JBT)·Q2 2024 Earnings Summary

Executive Summary

• Orders near-record at $437M and backlog ~$697M, but revenue declined 6% YoY to $402.3M as book-and-ship timing, customer delivery schedules, and a system upgrade delayed ~$15M of revenue into Q3; adjusted EPS rose 8% to $1.05 and gross margin improved 120 bps to 35.6% .
• FY24 guidance narrowed: revenue growth trimmed to 3–5% (from 4–6% prior), adjusted EBITDA kept at $295–$305M with 17–17.5% margins, adjusted EPS to $5.05–$5.35, GAAP EPS to $4.25–$4.55; pre-closing M&A costs now ~ $40M .
• Management expects a back-half ramp: double-digit YoY revenue growth in both Q3 and Q4 and sequential margin improvement, underpinned by ~$90M higher scheduled backlog conversion in H2 vs last year and an AGV contribution now expected to add ~2% to 2024 revenue growth (up from ~1% prior) .
• Strategic catalysts: initial recovery in North American poultry; AGV (warehouse automation) recovery; Marel combination progressing (offer launched; UK not considering formal antitrust investigation), with targeted >$125M cost and >$75M revenue synergies by year 3 post-close .

What Went Well and What Went Wrong

• What Went Well

  • Orders were the Food Technology business’ second-best quarter ever ($437M), driven by an initial recovery in North American poultry and robust AGV demand; Europe stable and Middle East strong; fruit & veg solid .
  • Gross margin expanded 120 bps YoY to 35.6% on restructuring and supply chain savings; adjusted EPS up 8% YoY to $1.05 despite lower volume, and adjusted EBITDA improved sequentially by 11% .
  • “We expect double-digit year-over-year revenue growth in each [H2] quarter and margins to improve sequentially,” underscored by ~$90M higher scheduled backlog conversion and AGV process improvements lifting capacity .

• What Went Wrong

  • Revenue fell short as book-and-ship performance, customer scheduling, and a system upgrade delayed recognition; management estimates ~$15M shifted from Q2 to Q3 .
  • Adjusted EBITDA down 11% YoY (to $63.7M) and adjusted EBITDA margin down 90 bps to 15.8% due to volume deleverage; beverage end-market underperformed .
  • Asia-Pacific order conversion cycles elongated; high cost of capital remained a headwind, particularly for smaller customers; North American poultry is still ~15–20% below normalized levels .

Financial Results

KPIs (Q2 2024):

• Orders: $437.1M; Backlog: $697.2M .
• YTD Operating Cash Flow: $32.0M; YTD Free Cash Flow: $13.5M .
• Net leverage: 0.6x net debt/TTM adjusted EBITDA; Bank total net leverage 0.7x .
• Cumulative annual run-rate restructuring savings exiting Q2: ~$17M .

Note: GAAP Diluted EPS from continuing operations in Q2 2024 was $0.95 (vs $0.89 in Q2 2023) .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Second quarter orders of $437 million represented our Food Technology's second best quarterly performance ever... [including] initial recovery in equipment demand from North American poultry producers.” — Brian Deck .
• “Revenue... fell short of our expectations... We believe approximately $15 million of revenue shifted from the second quarter to the third quarter.” — Matt Meister .
• “We expect double-digit year-over-year revenue growth in each [H2] quarter and margins to improve sequentially.” — Matt Meister .
• “AGV will now contribute 2% to JBT's total revenue growth for 2024, an incremental 1% from our previous guidance.” — Matt Meister .
• “Within North America specifically, we're still off 15%–20% versus... normalized levels [in poultry].” — Brian Deck .
• “By the end of the third year post-close, we believe we can capture revenue synergies of more than $75 million and cost synergies of more than $125 million.” — Brian Deck .
• “We have received an indication... that the U.K. is not considering a formal antitrust investigation.” — Brian Deck .

Q&A Highlights

• Revenue shortfall and recovery cadence: ~$15M shifted from Q2 to Q3 from system upgrade and customer/order timing; management expects most to be recovered in Q3; H2 ramp supported by ~$90M higher scheduled backlog conversion vs LY and comparable book-and-ship volumes .
• Backlog and 2025 setup: Backlog will deplete somewhat with higher H2 revenue, but order momentum (poultry recovery, pharma, food & beverage) and pipeline at a >1-year high support 2025 outlook .
• Poultry normalization: North America still 15–20% below normalized; orders progressed through Q2 and expected to build through Q3 as customers’ price/cost remain favorable and quotes extend upstream .
• Margin trajectory: Expect YoY margin improvement in both Q3 and Q4, driven by volume flow-through (high-20s/low-30s incremental margins), favorable mix (poultry, AGV), aftermarket project improvement, and ongoing supply chain cost reductions .
• Marel process: Filings submitted across jurisdictions; process varies by region; active outreach to Marel shareholders (incl. retail) with strong engagement .

Estimates Context

• S&P Global consensus retrieval was unavailable for this ticker in our system at this time (CIQ mapping error), so we cannot provide a definitive beat/miss versus Wall Street estimates for Q2 2024. We will update when S&P Global data becomes available.
• Company provided non-GAAP results for comparison (Adjusted EPS $1.05, Adjusted EBITDA $63.7M) and YoY changes; however, estimate comparisons are not presented due to the data limitation .

Key Takeaways for Investors

• H2 execution is pivotal: hitting double-digit YoY revenue growth in Q3/Q4 and sequential margin expansion depends on timely backlog conversion (~$90M higher H2 schedule vs LY) and maintaining book-and-ship volumes; monitor Q3 print closely .
• Poultry recovery is material to mix and margins; management cites continued improvement into Q3 but still below normal—evidence of sustained order conversion will be a key stock driver .
• AGV momentum and manufacturing efficiency raise confidence; guidance now embeds ~2% FY revenue contribution from AGV (raised from ~1%), helping offset beverage weakness .
• Margin levers remain intact (supply chain, restructuring, mix); gross margin expanded 120 bps YoY despite lower volume—supportive for 17–17.5% adjusted EBITDA margins in FY24 if volume materializes .
• Guidance narrowed, not overhauled: revenue growth trimmed to 3–5% and adjusted EPS band tightened; execution risk elevated but targets remain achievable with backlog and AGV support .
• Marel combination is progressing (offer launched; UK not considering formal antitrust probe); synergy targets (> $125M cost, > $75M revenue by year 3) offer medium-term upside, but integration/regulatory timing remains a watch item .
• Liquidity and leverage are conservative ahead of the deal (0.6x net leverage); YTD FCF is modest ($13.5M) given working capital for the H2 ramp—expect higher conversion as backlog ships .

Additional note: Aside from the earnings press release furnished in the 8-K, no other separate Q2 2024 press releases were identified in our search window .

Citations: All figures and quotes derived from company filings and transcripts: Q2 2024 earnings press release and 8-K , Q2 2024 earnings call transcript , Q1 2024 call , Q4 2023 call , and related 8-Ks regarding transaction process .