JBT Marel (JBTM) Q4 FY25 earnings call: guidance and Q&A

What end markets drove Q4 order performance, especially given AGV being flat and fruit & vegetable being down?

Poultry remained the strongest category, followed by beverages. Meat and fish were supportive, and pet food showed momentum. AGV is expected to recover in 2026. Poultry orders split 75% to Protein Solutions and 25% to Prepared Food & Beverage Solutions.

“I would say, generally speaking, poultry remains the leader across all of our categories. and I would say, followed by beverages in 2020 -- as we ended the year 2025. Meat remains supportive as does fish. And we're starting to see some real momentum on the pet food side as well. And as you suggested, we do expect a nice recovery in AGV as we go into next year.”

asked by Ross Sparenblek · answered by Brian Deck

Were synergies called out for R&D and SG&A in Q4, and what are the expectations for R&D and SG&A in 2026?

Synergies in 2025 were predominantly in SG&A, not R&D. The company is harmonizing R&D accounting treatment, moving legacy JBT's R&D from COGS to a single R&D line, starting in Q4 2025 for apples-to-apples comparison.

“We did not call out the synergies specifically to either R&D and SG&A. I mean -- but in general, the synergy savings that we saw in 2025 was predominantly in the SG&A part of OpEx, not in R&D. Going forward, our -- we split out SG&A and R&D in our segment disclosures. So you'll see that in the K going forward, but we aren't providing that guidance as a percent for 2026.”

asked by Ross Sparenblek · answered by Matthew Meister

Can you differentiate 2026 top-line growth between Protein Solutions and Prepared Food & Beverage, and comment on margin expansion for both segments?

Protein Solutions is expected to grow at the higher end of the 5-7% overall range, while Prepared Food & Beverage will be at the lower end. Both segments anticipate margin improvement, with Prepared Food & Beverage seeing slightly higher improvement due to correcting Q4 2025 issues.

“on revenue for 2026, again, we're guiding to a 5% to 7% range overall. And for Protein Solutions, it's probably at the higher end of that range and for Prepared Food & Beverage, probably at the lower end of that range, which kind of gets you to that midpoint that we have in our forecast. And then from a margin perspective, we're expecting to see margin improvement in both segments, obviously, from the benefit of the higher volume as well as from the continued benefits from the synergy actions that we are taking.”

asked by Mircea Dobre · answered by Matthew Meister

Can you elaborate on the inefficiencies in the Prepared Food & Beverage segment, specifically what caused them and the line of sight for improvement?

Challenges primarily on the AGV side, impacted by higher tariffs and a broader end-market focus. These issues impacted Q4 2025 and are expected to be contained within Q1 and early Q2 2026.

“Yes. As we somewhat forecasted in the last call that we had after Q3, we did have some challenges primarily on the AGV side. And we did see that impact us in Q4 as we predicted. And A lot of that is driven by some of their impacts from the end market from the higher tariffs, and that's impacting them more significantly just because they have a little bit of a more broader end market focus than the rest of the business. But we expect to see our ability through that -- those issues through Q1 and early Q2. So it should be relatively contained the first quarter, maybe a little bit bleed into the early part of the second quarter.”

asked by Mircea Dobre · answered by Matthew Meister

How much of the $45 million tariff drag for 2026 can be mitigated through pricing actions?

The forecast includes some pricing mitigation, but a net negative benefit of 25-50 basis points on EBITDA margins is still expected for the full year. Management will be intentional with selective price increases where market conditions support it.

“Yes, Mig, it's Brian. So we have included in our forecast some mitigation on the pricing side. We do think that there will be still some net negative benefit perhaps in the 25 basis points range for the full year, maybe somewhere between 25 and 50 basis points. It really kind of depends on the status of the markets, right? We don't feel it's 100% on the customers' backs to take on these cost increases. So we're doing everything that we can on the cost side to mitigate that. But we are intentional -- we'll be intentional on select price increases where we think it's supportive from the market perspective.”

asked by Mircea Dobre · answered by Brian Deck

How is the company thinking about capital allocation given the leverage ratio is below target, especially with the convertible notes coming up in May?

The company is focused on integration and aims for a 2x to 2.5x leverage range by the end of 2026 before seriously considering M&A. The convertible notes are pre-funded, and liquidity from the revolving credit facility and cash flow will be used to retire them.

“Justin, just to touch on 2026 specifically, we did the convertible in September of 2025 to prefund the financing to retire the notes in May. So we're in a really good position here. We expect to be able to leverage the liquidity that we have on our revolving credit facility to be able to take out the convert that plus the cash flow that we will generate this year, we do expect all things sort of staying the way they are, that we'll be in the range of 2 to 2.5x leverage by the end of 2026.”

asked by Justin Ages · answered by Matthew Meister

Can you provide more detail on supply chain regionalization efforts and the impact of tariffs on customer orders?

Supply chain regionalization is in early stages, with parts suppliers already moving from Europe to the U.S. Manufacturing regionalization will be a continuum through 2026, likely completing in 2027. The company has U.S. plants mirroring European ones, allowing faster movement for some products like poultry equipment.

“So from a supply chain perspective, it's still relatively early days. We have already started moving parts suppliers. to -- from Europe to the U.S. where it's feasible. That takes a little bit of time just with product testing and first articles, et cetera. So that's further along, if you will. From a manufacturing side, we certainly are very busy filling our backlog. So we are starting that process as well. So that will be a continuum during the course of 2026. But I don't think we will be complete with that until more likely the 2027 time frame.”

asked by Justin Ages · answered by Brian Deck

Was the $30 million in sales synergies for 2025 in line with expectations, and what are the expectations for 2026?

The $30 million in sales synergies for 2025, with half in Q4, means the company is ahead of pace on its original $75 million cumulative revenue synergies target by 2027. A new, updated number will be provided at the Investor Day in March.

“As we mentioned on the prepared remarks, it did -- the benefits on the synergies revenue side did accelerate through the year. And it's essentially as you might think, right? You get the organizational structure in place first, then you start training, get marketing, and it really did pick up through the course of the year. So again, $30 million with approximately half in the fourth quarter alone. So I would -- and that will convert to revenue in 2026. So I would say we are ahead of pace on our original $75 million cumulative revenue synergies by 2027.”

asked by Walter Liptak · answered by Brian Deck