JBT Marel Corporation (NYSE: JBTM)
**Q3 2025 Earnings Call Transcript**
November 4, 2025

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**Operator:**
Good day, everyone, and welcome to JBT Marel’s Earnings Conference Call for the Third Quarter of 2025. My name is Jim, and I will be your conference operator today. As a reminder, today’s call is being recorded.

[Operator Instructions]

It is now my pleasure to turn the call over to JBT Marel’s Senior Director of Investor Relations, Marlee Spangler, to begin today’s conference.

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**Marlee Spangler:**
Thank you, Jim. Good morning, everyone, and thank you for joining our third quarter conference call. With me on the call are our Chief Executive Officer, Brian Deck; President, Arni Sigurdsson; and Chief Financial Officer, Matt Meister.

In today’s call, we will use forward-looking statements that are subject to the safe harbor language detailed in yesterday’s press release and 8-K filing. JBT Marel’s periodic SEC filings also contain information regarding risk factors that may impact our results. These documents are available in the Investor Relations (IR) section of our website.

Additionally, our discussion includes references to certain non-GAAP measures. A reconciliation of these measures to the most comparable GAAP figures can also be found in the IR section of our website.

With that, I’ll turn the call over to Brian.

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**Brian Deck:**
Thanks, Marlee, and good morning.

As you saw in our earnings release, we significantly exceeded our expectations for revenue and earnings in the third quarter of 2025.

The primary drivers of our outperformance were excellent manufacturing and supply chain productivity, which enabled higher backlog-to-revenue conversion, a favorable equipment mix, and an acceleration of synergy savings.

In light of our strong Q3 performance, we have raised our guidance for the full year 2025. Demand remained healthy, with combined JBT Marel orders totaling $946 million — an increase of 7% from the prior year period.

In particular, we experienced continued equipment investment from the poultry industry, our largest end market. Our pipeline for poultry-related projects is expected to provide support well into next year. Beyond poultry, orders from pet food and pharma sectors were robust this quarter.

Demonstrating the benefits of diversification, we secured two large orders supporting a major pharmaceutical firm’s investments in GLP-1 production capacity.

Geographically, demand was strong in North America. While Europe and Asia softened sequentially, we had a solid quarter in Latin America, driven by large orders in pet food, poultry, and juice sectors.

We ended the quarter with a backlog of $1.3 billion. That, coupled with resilient recurring revenue, provides strong visibility for the remainder of the year and solid support as we enter 2026.

As Matt will discuss, we made further progress on deleveraging our balance sheet. And as Arni will highlight, the integration of JBT and Marel remains on track as we continue to capture synergy savings and enhance our customer value proposition.

I will return at the end to talk about several ongoing initiatives that will make JBT Marel an even stronger partner over the long term.

Let me now turn the call over to Matt to review our third quarter performance and revised outlook.

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**Matthew Meister:**
Thanks, Brian.

For Q3 2025, total revenue was approximately $1 billion, a 7% sequential increase. We exceeded revenue expectations by about $65 million, benefiting from excellent manufacturing and supply chain productivity. This allowed us to convert approximately $45 million more backlog to revenue than originally expected, along with $20 million higher book and ship revenue compared to forecasts.

Revenue included roughly $26 million in favorable year-over-year foreign exchange translation impact, aligned with our expectations.

Our third quarter adjusted EBITDA margin was 17.1%, exceeding forecasts by approximately 140 basis points. Beyond volume flow-through, margins were stronger due to a favorable mix of poultry equipment and shorter-cycle products, coupled with better-than-expected synergy savings.

We realized year-over-year synergy savings of $14 million in the quarter.

Third quarter GAAP EPS was $1.28, while adjusted EPS was $1.94. Adjusted EPS excludes certain one-time and acquisition-related costs detailed in yesterday’s press release and investor presentation.

Regarding tariffs, we believe the quarterly impact on JBT Marel’s material costs remains in the range of $22 million to $25 million before mitigation efforts. Due to cost mitigation, the net tariff impact before pricing was approximately $15 million in Q3, slightly less than anticipated.

We expect net cost impact to increase to about $20 million in Q4, primarily due to recently enacted additions to Section 232 tariffs.

In the immediate to intermediate term, we will increase utilization of domestic facilities for production and assembly and further localize our supply chain.

Regarding proposed additional Section 232 tariffs on robotics and industrial equipment, we understand that food production equipment is not included. Therefore, while modest component cost increases are possible, we do not expect material impact on JBT Marel.

As the JBT and Marel integration progresses, the revenue and expense allocation between legacy companies is becoming less meaningful.

Accordingly, in Q4 2025, we plan to introduce new segment reporting reflecting how we operate the business:

– **Protein Solutions** will include businesses focused on early stages of processing and harvesting animal proteins.

– **Prepared Food and Beverage Solutions** will focus on downstream value-added preparation, preservation, and packaging of foods and drinks into ready-to-eat or drink products.

To provide comparability, we will recast historical annual results for 2023 and 2024, and quarterly results for 2025, with those financials available before our Q4 earnings release.

For Q3 segment results:

– **JBT segment:** Revenue of $465 million, up approximately 2% year-over-year and sequentially. Adjusted EBITDA was $71 million, down 13% year-over-year and sequentially, with a margin of 15.3%. Margin decline reflected unfavorable equipment mix, one-off project variances, and a higher share of corporate-related costs.

– **Marel segment:** Revenue of $537 million, up 12% sequentially. Adjusted EBITDA was $100 million, with a margin of 18.6%. Marel’s strong profitability stemmed from favorable mix of higher-margin poultry equipment, integration synergies, volume leverage, and continued improvement in fish and meat businesses.

Through the first nine months of 2025, we generated $224 million in operating cash flow and $163 million in free cash flow.

Q3 operating cash flow was a record $88 million.

We have made significant progress in reducing leverage — from an initial 4x at close of combination to 3.1x at Q3-end — and expect to be below 3x by year-end.

This quarter, we completed issuance of $575 million senior convertible notes due 2030 with a coupon of 37.5 basis points. These prefund the May 2026 convertible notes maturity at a lower interest expense and, with the call spread, effectively mitigate shareholder dilution until the share price reaches approximately $283.

Reflecting Q3 strength, we raised full-year 2025 guidance:

– Revenue: $3.76 billion to $3.79 billion (including $70 million to $85 million favorable FX impact)

– Adjusted EBITDA margin: 15.75% to 16%

– Adjusted EPS: $6.10 to $6.40

We now expect in-year synergy savings of $40 million to $45 million, slightly above prior targets, and run rate savings of $80 million to $90 million exiting 2025.

We remain on track to achieve $150 million annual run-rate savings within three years of combination.

Now, I’ll turn the call over to Arni to discuss integration progress and benefits realized.

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**Arni Sigurdsson:**
Thanks, Matt.

Our results clearly demonstrate the benefits of JBT and Marel’s complementary solutions, diverse end-market participation, increased scale, and continuous improvement efforts.

As Matt highlighted, we increased our estimates for in-year realized synergy savings, reflecting disciplined execution of our integration plan and team dedication.

**Supply Chain:**
We are actively realizing synergies by rightsizing our supplier base and optimizing procurement strategies, aiming to improve terms, quality, delivery, and pricing.

Recently, we renegotiated air and ocean freight contracts, reducing suppliers from over 150 to just 5. This is expected to generate more than $5 million in annualized cost savings — a meaningful figure.

**Operating Expenses:**
Following our new organization implemented in Q2, we continue to capture operating expense savings through contract consolidation, streamlining sales and service office footprints, and reducing third-party spend across finance, legal, and IT.

**Global Footprint:**
This quarter, we inaugurated a new global production center in Pune, India, fully rebranded under JBT Marel. India now serves as a key expert hub, enhancing application expertise across Asia Pacific.

Our global scale enables production flexibility where customers are located, adding optionality amid evolving tariffs. We maintain dedicated low-cost manufacturing platforms in Asia, Latin America, and Eastern Europe supporting profitable in-region growth.

**Customer Value Proposition:**
As shared previously, JBT and Marel together are an even more valuable partner. Our customer-centric approach features:

– Account managers representing the full portfolio

– An expanded service network

– Full-line solutions and process know-how across the value chain

We simplify buying, installation, and service, providing customers with one accountable vendor.

Customer feedback at trade shows and project discussions confirms they recognize our expanded capabilities.

For example, we secured a recent hamburger line order including meat preparation, forming, weighing, lean measurement, freezing, and software from both portfolios.

**Sustainability:**
Sustainability remains top of mind for the food and beverage industry and is embedded in who we are.

This quarter, we published JBT Marel’s first joint sustainability report, highlighting how we deliver sustainable and efficient outcomes via application expertise and leading technology.

We focus on minimizing food and packaging waste, lowering energy and water usage, and improving food traceability and safety.

We are proud to play a role in advancing sustainability as we transform the future of food.

With that, I’ll turn the call back to Brian.

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**Brian Deck:**
Thank you, Arni.

We are making excellent integration progress and delivering quantifiable benefits through supply chain and operating expense savings. More benefits lie ahead as we enhance holistic solutions with an emphasis on service and digital capabilities.

Our software and digital platforms further strengthen JBT Marel’s value proposition by providing control and connectivity that improve system performance and optimize machine yield, throughput, and uptime.

Our digital ecosystems are complementary. We have combined our digital teams and aligned technology infrastructure platforms.

We continue integrating customer software interfaces, feature content, and developing an intermediate-term technology roadmap.

Our goal is to provide food and beverage industry-specific best-in-class technology without customer disruption.

We are also integrating service resources and capabilities, expanding our reach, and instituting a rigorous customer-facing performance measurement system.

Reliability, responsiveness, and quality of service and parts are essential to our value proposition. We strive to deliver best-in-class performance.

Our software solutions and service franchise development go hand-in-hand as we enhance our integrated customer value.

As we approach our first full year as JBT Marel, our commercial success and financial results reinforce our conviction that we are better together.

Our complementary portfolio, enhanced service capabilities, and global footprint make us an even more valuable partner.

We continue optimizing operational efficiency and productivity internally.

Strong cash flow has enabled us to quickly deleverage our balance sheet and provides liquidity to support growth strategy.

My heartfelt thanks to our teams worldwide for enabling JBT Marel to bring greater value as we transform the future of food.

Now, let’s open for questions.

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### Q&A Session

**Operator:**
[Operator Instructions]

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**Question 1: Joseph Grabowski, Baird**
*Joe Grabowski on for Mig this morning.*

**Q:** The Marel EBITDA margin in Q3 was impressive — 330 basis points higher than core JBT. Even excluding $14 million in synergy savings, Marel’s margin remains above JBT’s. You mentioned favorable mix and improvements in meat and fish. Could you drill down further on drivers behind Marel’s higher margins compared to pre-acquisition?

**Brian Deck:**
Certainly. We’re very proud of Marel’s Q3 performance. The key driver was volume throughput—higher volumes delivered significant operating leverage.

Additionally, the synergies, particularly corporate overhead reductions, benefited the Marel segment more. Meat and fish businesses also continued steady improvement.

We’ve long recognized the strength of Marel’s technology. As volume increased and market conditions improved, that strength is now really apparent.

Overall, solid commercial execution and factory efficiency drove these great results.

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**Q:** Great, thanks. Regarding the raised full-year EBITDA guidance midpoint — you raised it by about $20 million, comparable to Q3’s outperformance. Could you discuss Q4 moving pieces including revenue backlog impacts, tariffs, and synergies compared to prior expectations?

**Brian Deck:**
We expect Q4 revenue to be lower than Q3. Some of the Q3 upside stemmed from backlog clearing and supply chain improvements, including resolving port delays related to tariffs.

Hence, some revenue pulled into Q3 will not recur in Q4, impacting operating leverage.

**Matt Meister:**
On the cost side, tariff expenses will increase in Q4 due to additional Section 232 tariffs, potentially compressing margins sequentially.

Supply chain benefits from Q3 are one-time and won’t continue, so margins may be slightly unfavorable in Q4 compared to Q3.

**Brian Deck:**
Looking to 2026, we plan measured investments aligned with anticipated growth.

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**Q:** One last question — how is automation trending through the business as we progress through the year?

**Brian Deck:**
Automation remains a key theme, especially in proteins, given labor challenges in food factories.

The biggest automation opportunity is the secondary side—the slicing, dicing, and meat-from-bone processes. We saw strong orders in Q3 and expect this to continue.

Similar labor issues exist in cutting fruits and vegetables.

Our combined portfolios offer robust solutions in the secondary market for automation, and these trends continue as expected.

—

**Operator:**
Next question from Ross Sparenblek, William Blair.

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**Q:** Can you share examples or size of cross-selling orders and update us on revenue synergy capture?

**Arni Sigurdsson:**
We’re seeing encouraging improvements in cross-selling opportunities.

For example, a recent hamburger line order combined meat preparation, forming, weighing, and freezing from both portfolios.

Our pipeline shows increasing opportunities from both sides — JBT selling to former Marel customers and vice versa.

Bundled products like freezers combined with convenience food lines and fryers with ovens illustrate this synergy.

Overall, progress aligns well with our expectations.

**Ross Sparenblek:**
Is the cross-selling expansion broader than poultry-related?

**Arni Sigurdsson:**
Yes. While poultry remains a focal point due to market strength and our position, we also see broader opportunities.

Unexpected wins include FTNON equipment sales into the fish industry, for example.

We maintain a strong, broadly diversified pipeline.

**Brian Deck:**
To add, our account management model speeds cross-selling discovery as sales teams explore complementary portfolio opportunities.

This has led to unanticipated applications and growing synergistic sales heading into 2026.

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**Q:** Last one from me — you previously mentioned 12 months of poultry market visibility last quarter. How is visibility today? What are customer outlooks for pork, fish, and other proteins?

**Brian Deck:**
Poultry demand remains strong and visible well into 2026, though exact duration is hard to predict.

Pork and fish markets also show signs of improvement.

Many customers hold longer-term plans for greenfield projects and line expansions due to several years of deferred investment.

We’re already quoting into 2027, reflecting confidence in sustained demand.

—

**Operator:**
Next question from Saree Boroditsky, Jefferies.

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**Q:** You noted improvements in meat and fish, which had lower margins at acquisition. Could you detail margin improvement actions?

**Arni Sigurdsson:**
We employ 80/20 analysis to focus on top products generating 80% of volume across geographies and customers.

This helps us allocate resources effectively and address profitability gaps.

We examine project variances and take corrective actions where expected margins aren’t met.

Our emphasis is on strengthening profitability first before aggressive top-line growth.

We are confident we are laying strong foundations, especially with markets stabilizing and gradually improving.

We saw margin improvements in Q3 and aim for mid-teens margins by 2027 in these businesses.

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**Q:** You mentioned investments ahead of growth; can you comment on early 2026 growth outlook and visibility?

**Brian Deck:**
It’s early for detailed forecasts.

However, strong backlog and pipelines coupled with market health give us confidence that 2026 will be a growth year.

**Matt Meister:**
We have over 70% visibility into 2026 revenue based on backlog and order pipeline.

Recurring revenue also remains resilient.

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**Q:** With two new segments announced, how will they differ in growth, margins, or go-to-market approach?

**Brian Deck:**
Both segments will be similar in size and margin profile.

Protein Solutions will be more Marel-weighted; Prepared Food and Beverage Solutions more legacy JBT-weighted.

We will provide detailed historical recast and future outlook with Q4 earnings for better transparency.

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**Operator:**
Next question from Walter Liptak, Seaport Research.

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**Q:** Can you discuss selling price dynamics in Q3 — volume versus price impact — and approach to tariffs in Q4? Are tariff-related costs absorbed or passed through as surcharges?

**Brian Deck:**
Q3 revenue growth was mainly volume-driven, with some pricing benefits from price increases enacted in Q2 to anticipate tariff impacts.

FX also contributed positively year-over-year.

For Q4, with added Section 232 tariffs, costs will increase by roughly $5 million, impacting margins.

We continue to embed tariff costs in project pricing.

Parts pricing is monitored, and if costs increase materially, we consider pricing adjustments.

Our guidance includes these tariff considerations.

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**Q:** You mentioned shifting manufacturing footprint to mitigate tariffs. What progress has been made, and when will benefits materialize?

**Brian Deck:**
We’ve initiated shifts. Where ‘sister’ plants exist—such as between Boxmeer, Netherlands, and Gainesville, Georgia—we are moving more production domestically.

Such transitions are quicker and already underway.

Broader supply chain localization will take several quarters (2 to 4) to implement.

It’s a mix of short-term and longer-term actions.

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**Operator:**
Next question from Justin Ages, CJS Securities.

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**Q:** Any update on the Automated Guided Vehicle (AGV) business?

**Brian Deck:**
AGV markets like factory and warehouse automation have strong long-term drivers.

Q3 was challenging for the AGV segment, impacted by tariffs and delayed orders.

We anticipate a stronger Q4 and growth into 2026.

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**Q:** Regarding tariff mitigation pricing — any pushback from customers, order cancellations, or delays?

**Brian Deck:**
We adopt a balanced approach considering customer perspectives.

We absorb some tariff impacts and share pain fairly.

Orders remain robust, indicating positive customer acceptance.

We feel confident about our positioning heading into 2026.

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**Operator:**
That concludes our questions.

Mr. Deck, any closing remarks?

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**Brian Deck:**
Thank you, everyone, for joining us today.

For further questions, please contact Marlee Spangler.

Have a great day.

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*End of Transcript*
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