Has JBT Marel's ability to internally pass through its own inflationary costs changed meaningfully since 2022 following the Marel acquisition?

Management believes the company is generally more competitive due to continuous improvement efforts and strong market positions, allowing for a good ability to pass costs along while remaining conscious of competitive pricing. The Marel business faced a 'perfect storm' of headwinds in 2022 that are not present today. “I would say, generally, we're more competitive than we've ever been by virtue of just our continuous improvement efforts, and we have strong market positions. So yes, I think we do have a good ability to pass things along.”

What are the persistent causes of headwinds in the warehouse automation business within the Prepared Food & Beverage segment?

The warehouse automation business was significantly impacted by tariff changes affecting its customers, leading to reduced demand. It also worked through a few discrete projects in the last two quarters. Management believes these issues are largely behind them and expects actions to address lower volume and improve margins to start impacting late Q2 and continue into Q3 and Q4. “that business had a bigger impact from the tariff changes on its customers than the rest of our business did. So they've been really impacted by demand because of the impacts on its market. And they've also had a few discrete projects that they've been working through over the last 2 quarters.”

Can you provide more color on the geographic distribution of strong poultry demand?

Poultry demand is fairly broad-based. Europe is strong, North America is considered earlier in its cycle with continued demand expected, and South America is very strong, potentially having a record year. Asia is not as strong but has good opportunities, particularly in Australia and New Zealand. “So the demand is fairly broad-based. The -- Europe is strong. North America is, I would say, even a little earlier in the cycle than the European cycle. And we expect continued demand there, especially with some of the opportunities with [indiscernible] speeds and whatnot.”

JBTM

JBT Marel (JBTM) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Industrials· May 5, 2026

Source: earnings call transcript

Executive summary

JBT Marel Corporation Q1 FY26 — Strong Orders and Margin Expansion

JBT Marel reported a solid start to FY26, driven by robust order intake, particularly in poultry, and significant margin expansion from synergy realization and operational execution. The company made substantial progress on deleveraging and reaffirmed its full-year guidance, confident in its Next-Gen strategy to deliver profitable growth and value creation despite specific segment challenges and a dynamic macro environment.

Highlights

Orders exceeded $1 billion for the second consecutive quarter, representing a 17% year-over-year increase.
Consolidated adjusted EBITDA grew 27% year-over-year to $142 million.
Consolidated adjusted EBITDA margin expanded by 210 basis points to 15.2%.
Protein Solutions segment revenue grew 22% year-over-year to $460 million, with adjusted EBITDA margin improving by over 500 basis points to 21.7%.
Free cash flow was $100 million, resulting in a 70% conversion to adjusted EBITDA, and financial leverage reduced to 2.6x.

Concerns

Prepared Food & Beverage Solutions segment revenue was flat year-over-year at $476 million.
Prepared Food & Beverage Solutions adjusted EBITDA margin declined 170 basis points year-over-year to 14.7%, impacted by higher tariff costs, volume decline, and underperformance in warehouse automation.
Full-year guidance continues to reflect a 25 to 50 basis point headwind from tariffs after mitigation actions.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 Revenue Growth	6% high materiality	FY26	High
Full-year 2026 Adjusted EBITDA Margin Expansion	145 basis points high materiality	FY26	High
Full-year 2026 Adjusted EPS Improvement	29% high materiality	FY26	High
Full-year 2026 Leverage Ratio	approximately 2x high materiality	FY26	High
Q2 2026 Revenue	$975 million to $1 billion medium materiality	Q2 · FY26	High
Q2 2026 Adjusted EBITDA Margin	17% to 17.5% medium materiality	Q2 · FY26	High
Full-year 2026 Tariff Impact	25 to 50 basis point headwind medium materiality	FY26	High
2028 Organic Revenue CAGR	5% to 7% high materiality	FY26-FY28	High
2028 Adjusted EBITDA Margin	20% high materiality	FY28	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Protein Solutions Revenue growth included an approximately 8% benefit from foreign exchange. Organic growth was primarily due to higher poultry volume as the company executed on strong backlog built in 2025. Adjusted EBITDA margin improved by more than 500 basis points year-over-year, driven by volume leverage in poultry and synergy/continuous improvement initiatives in meat and fish businesses. Foreign exchange benefit: approximately 8%Organic growth driver: higher poultry volume	$460 million	22%	—	21.7%
Prepared Food & Beverage Solutions Revenue was flat year-over-year, including an approximate 4% benefit from foreign exchange. The segment experienced softness in the CPG end market during 2025, contributing to lower volume. Adjusted EBITDA margin declined 170 basis points year-over-year due to the expected impact of higher tariff costs, volume decline, and underperformance in the warehouse automation business. Foreign exchange benefit: approximately 4%Margin decline driver: higher tariff costs, volume decline, warehouse automation underperformance	$476 million	flat	—	14.7%

Orderbook & backlog

Total Orders exceeded $1 billion Q1 FY26

17% year-over-year increase

Second consecutive quarter of orders exceeding $1 billion, reflecting continued robust demand from poultry customers globally and broad-based strength across segments.

Risks & headwinds

Higher Tariff Costs Q1 FY26 and full-year FY26

170 basis point margin decline for Prepared Food & Beverage Solutions in Q1 FY26; 25-50 basis point full-year headwind for FY26.

Mitigation:Management is taking mitigation actions, but the full-year guidance still reflects a net headwind. Benefit from elimination of some tariffs is offset by incremental Sections 122 and 232 increases.

Softness in CPG End Market Q1 FY26 (carryover from 2025)

Contributed to lower volume and flat revenue for Prepared Food & Beverage Solutions in Q1 FY26.

Mitigation:Management is seeing some recovery and improved pipeline in these end markets, which manifested in strong Q1 orders for the segment.

Underperformance in Warehouse Automation Business Q1 FY26

Contributed to 170 basis point margin decline for Prepared Food & Beverage Solutions in Q1 FY26.

Mitigation:The business had a bigger impact from tariff changes on its customers and worked through discrete projects. Management believes this is largely behind them and is taking actions to address lower volume and improve margins, expected to impact late Q2 and beyond.

Middle East Conflict and Inflationary Environment Ongoing

Resulting in a more challenging logistics, fertilizer, and energy inflationary environment.

Mitigation:The Middle East region historically accounts for less than 5% of total revenue. Management observes that customers remain confident in their ability to pass these costs along or manage through them. JBT Marel is also more diversified and competitive to pass costs along.

Sustainability of Poultry Investment Cycle Beyond current period

Analyst concern regarding the duration of the strong poultry cycle.

Mitigation:Management highlights secular tailwinds, fixed supply-demand balance, and new investment opportunities in further processing and North American line speed changes, suggesting a longer cyclical tailwind.

What to watch in Q2 FY26

Warehouse Automation Business Improvement

late Q2 FY26, Q3 FY26, Q4 FY26

Current Underperforming, contributing to PFB margin decline in Q1 FY26

Target Actions to start impacting late Q2, leading to improved margins

Why it matters

Improvement in this business is crucial for the recovery of the Prepared Food & Beverage segment's profitability.

We think that's largely behind us now. And the business is taking some actions to try to address the lower volume and improve margins going forward. And we should expect those actions to start to impact late here in Q2, and then going on to Q3 and Q4.

Find out whether JBTM delivers this. Inve re-checks your case every morning.

Q&A highlights

How does the current inflationary trend compare to 2022, and how is it impacting customer willingness to order, given concerns about input costs?

Management stated that poultry customers are in a much stronger position than in 2022, with excellent demand, good price-cost spreads, and strong balance sheets. Corn and soybean prices are low, unlike 2022. The combined JBT Marel is more diversified across products, end markets, and geographies, making it less susceptible to cyclical forces than in the past.

“Really, what I'm saying is the combined benefits of the scale and diversification of both the product and the market side. We've severely derisked the company compared to where we were in the past.”

asked by Robert Samuel Karlov · answered by Brian Deck

2 min read 5 chapters

Detailed narrative

Next-Gen Strategy and 2028 Targets

JBT Marel unveiled its Next-Gen strategy at its Investor Day in March, outlining plans for profitable growth and margin expansion through 2028. Key pillars include advancing a customer-centric service model, enhancing product offerings with full-line solutions and digital capabilities, capturing cross-selling opportunities in emerging markets, and pursuing strategic M&A.

The strategy targets a 3-year organic revenue CAGR of 5% to 7% and an adjusted EBITDA margin of 20% by 2028.

Strong Order Intake and Commercial Momentum

The company achieved its second consecutive quarter of orders exceeding $1 billion, marking a 17% year-over-year increase. This strength was broad-based, with double-digit year-over-year growth in both Protein Solutions and Prepared Food and Beverage segments. Robust demand from poultry customers globally, coupled with a pickup in investment in Prepared Foods, meat, and food & vegetable end markets, drove this momentum.

Geographically, Europe, North America, and Latin America showed sequential increases in demand.

Poultry Market Dynamics and Line Speed Opportunity

Poultry demand remains strong and broad-based across Europe, North America, and South America, driven by secular tailwinds and improved supply-demand balance. North America is considered earlier in its investment cycle, with significant potential from USDA decisions on line speeds. An increase from 140 to 175 birds per minute would necessitate substantial investment across the entire processing system, representing a multi-year opportunity.

Even without waivers, line splits are enabling increased speeds under current rules, with one deployment in Q1.

Prepared Food & Beverage Segment Challenges and Outlook

The Prepared Food & Beverage Solutions segment faced headwinds, with flat revenue and a 170 basis point margin decline year-over-year. This was attributed to softness in the CPG end market, higher tariff costs, volume decline, and underperformance in the warehouse automation business.

Management expects these issues to largely be behind them, with actions in warehouse automation starting to impact late Q2 and sequential margin improvement anticipated through the year, leading to year-over-year margin growth for the segment in FY26.

De-risked Business Model and Inflationary Environment

Management emphasized that the combined JBT Marel entity is significantly de-risked compared to 2022, benefiting from a more diversified product portfolio (including primary, secondary, and further processing in poultry), broader end-market exposure, and a better mix of recurring revenue. While acknowledging inflationary pressures from the Middle East conflict, customers are perceived to be in a stronger position to manage or pass on costs, and the company's competitive position allows for effective cost pass-through.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.