JBT Marel Q2 Earnings Call Highlights

Key Points

• JBT Marel’s orders remained strong, rising 10% year over year and exceeding $1 billion for the third consecutive quarter. Second-quarter revenue increased 5% to $981 million, while the company maintained its full-year 2026 guidance.
• Protein Solutions delivered 11% revenue growth, led by poultry, but Prepared Food and Beverage revenue was flat due to logistics delays and manufacturing inefficiencies. Management expects the approximately $20 million revenue shortfall to shift into the second half of the year.
• Integration and restructuring initiatives are progressing, with facility consolidations expected to generate $25 million to $30 million in annual savings by 2028. The company also reported $179 million in year-to-date free cash flow and ended the quarter with net leverage just below 2.5 times.

JBT Marel NYSE: JBTM reported continued order strength in the second quarter of 2026, with orders rising 10% year over year and exceeding $1 billion for the third consecutive quarter. Management said the results reflected solid poultry-industry investment, growth in prepared foods demand and cross-selling opportunities created by the combination of JBT and Marel.

Second-quarter revenue rose 5% from a year earlier to $981 million, including 3% organic growth and a 2% favorable foreign-exchange impact. Adjusted EBITDA was $168 million. The company maintained its full-year 2026 revenue and adjusted EBITDA guidance, though it expects a steeper improvement in fourth-quarter results than in the third quarter.

Protein Growth Offsets Prepared Food Execution Issues

Protein Solutions revenue increased 11% year over year to $467 million, including 8% organic growth. Chief Executive Officer Brian Deck said poultry remains the company’s largest and strongest protein category, while pork and fish markets showed modest strength. Beef was the weakest category because limited cattle inventories have constrained processor investment, though Deck said beef represents less than 5% of the Protein Solutions portfolio.

Prepared Food and Beverage Solutions revenue was flat from the prior-year quarter, despite an approximately 2% foreign-exchange benefit. Chief Financial Officer Matt Meister said equipment revenue in the segment fell short of expectations because of logistics constraints and production inefficiencies tied to manufacturing-footprint optimization efforts.

Deck said the company was about $20 million below its expected second-quarter revenue level, excluding foreign exchange, entirely within the Prepared Food and Beverage segment. About half of that amount was associated with delayed shipments caused by logistics availability, while the other half stemmed from production inefficiencies related to facility moves. The company expects to redistribute that revenue across the second half of the year.

Management said the shortfall also weighed on segment profitability. Deck estimated that the deferred revenue reduced quarterly EBITDA by roughly $5 million to $6 million, based on expected margin flow-through. Meister said Prepared Food and Beverage margins are expected to improve by approximately 25 to 50 basis points year over year in the third quarter, followed by about another 100 basis points of improvement in the fourth quarter.

Tariffs, Inflation and Warehouse Automation Restructuring

Second-quarter adjusted EBITDA included $17 million in refunds related to IEEPA tariffs. That benefit was partially offset by $4 million in higher-than-expected tariff expense associated with prior years and $5 million in accelerated long-term incentive compensation expense.

Meister said higher logistics, metals and other input costs continued to pressure margins. The company has implemented pricing actions, but Deck said inbound and intercompany logistics costs are more difficult to pass through to customers. JBT Marel spends more than $100 million annually on logistics, with roughly 60% to 65% tied to inbound and intercompany activity, according to Deck.

Protein Solutions adjusted EBITDA margins improved from a year earlier, helped by poultry volume leverage, synergies and continuous-improvement efforts. However, Deck said the segment’s approximately 24% second-quarter margin included about 200 basis points of benefit from tariff refunds. He expects margins in the low-to-mid-20% range during the second half, with a higher equipment mix partially offsetting aftermarket profitability.

The company also restructured its warehouse automation business, citing product standardization progress that will allow it to deploy engineering resources more efficiently and consolidate two facilities into one. Meister said the actions are expected to generate about $9 million in annual savings, including approximately $3 million during the second half of 2026.

JBT Marel recorded a non-cash impairment charge during the quarter to write off intangibles related to its 2021 acquisition of Provenio. Meister said the charge reflected a shift in poultry customers’ demand away from Provenio’s value-added antimicrobial offering toward a more commodity-based approach.

Integration Savings and Footprint Changes

President Arni Sigurdsson said cross-selling initiatives generated $45 million in synergy orders during the first six months of 2026 and $75 million over the past 18 months. He cited a multi-line poultry order that combined forming, coating, frying and heating technologies for fully cooked retail chicken products.

The company has announced facility consolidations totaling approximately 1.3 million square feet, including 1.1 million square feet of manufacturing and distribution capacity and 200,000 square feet of office space. The reductions represent about 15% of JBT Marel’s global footprint, with nearly 80% of the manufacturing-space reductions affecting the Prepared Food and Beverage segment.

Sigurdsson said the initiatives are expected to produce $25 million to $30 million in annualized savings by 2028, above the company’s original estimate of $10 million to $15 million. About $4 million to $5 million of savings is included in the 2026 forecast. The company also expects a cash benefit from real-estate asset sales in 2027 or 2028.

Management said facility moves will be phased through the end of 2027. Deck said two larger consolidations are planned for 2027, one to be completed by midyear and another by year-end. Meister said the 2027 transitions should be smoother because production is generally being consolidated into facilities that already manufacture the relevant products.

Outlook Maintained

For the third quarter, JBT Marel forecast organic revenue growth of 2% to 4%, partially offset by a 1% foreign-exchange headwind, and adjusted EBITDA margins of 17% to 17.5%. Management said its record backlog provides visibility into more than 90% of second-half equipment revenue.

At the midpoint of full-year guidance, the company expects consolidated revenue growth of 6% and adjusted EBITDA margin expansion of 145 basis points. It also refined adjusted earnings-per-share guidance to reflect updated depreciation, amortization and tax-rate assumptions, without providing figures on the call.

JBT Marel generated $179 million in year-to-date free cash flow, equivalent to 58% conversion of adjusted EBITDA. Net leverage ended the quarter just below 2.5 times, within the company’s target range of 2 times to 2.5 times. Management said it would remain focused on integration while evaluating debt reduction and opportunistic share repurchases under its previously announced $200 million buyback authorization.

Deck said the company continues to target a 20% adjusted EBITDA margin in 2028, supported by integration, supply-chain optimization, pricing and lower-cost manufacturing initiatives.

About JBT Marel (NYSE:JBTM)

JBT Marel Corporation provides technology solutions to food and beverage industry in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. It offers value-added processing that includes chilling, mixing/grinding, injecting, blending, marinating, tumbling, flattening, forming, portioning, coating, cooking, frying, freezing, extracting, pasteurizing, sterilizing, concentrating, high pressure processing, weighing, inspecting, filling, closing, sealing, end of line material handling, and packaging solutions to the food, beverage, and health market.

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