JBT Marel Corporation Price & Performance (JBTM)

Thanks, Marley, and good morning.

We are excited to be hosting our first earnings call since Uniting, JBT, and Merrell. The combination, which we completed on January 2, represents the culmination of more than a year of work bringing together two leaders in the food technology industry. We are now seven weeks into integration and are in increasingly confident in our ability to generate long term value for our customers shareholders and other stakeholders. [indiscernible] Given our focus on realizing the benefits of this combination, I will begin today's call providing an update on our progress. Then Arne will provide color on the integration process and talk about ORL's 2024 performance. Lastly, Matt will provide an overview of JBT's 2024 performance followed by guidance for the combined company In uniting JBT and Merau, JBT we have the ability to be an even more valuable partner to our global customers by providing holistic equipment solutions with enhanced application knowledge, service capabilities and innovative technology. In terms of integration, our efforts are focused on best serving our customers' constantly evolving needs. That starts with a purpose built company leveraging talent from both organizations. We have already made significant progress establishing the JBT Morel organizational design, and expect to be materially complete by the March.

We are also focusing on a customer centric go to market commercial strategy that adopts an end market focus This will allow us to cross sell the breadth of our solutions. We believe this customer driven approach versus one organized by technology will streamline our commercial presence and enhance our value proposition to In fact, our diverse technology solutions were on full display at the recent IPPE trade show otherwise known as a poultry show, [indiscernible] Combination of JBT and Merrell's JBT portfolio of innovative technology and service capabilities allows us to integrate primary, secondary, further and end of line process under one brand. This matters for our customers. As it reduces the complex engineering required to integrate and commission full line solutions. It also leads to improved operational efficiency, machine uptime and traceability in high volume operations. Additionally, our software and digital solutions are a differentiator as customers increasingly adopt digital technologies to optimize processing efficiency and improve profitability. Overall, our many productive conversations at IPPE along with the recently reported financial results of our customers, confirm the strong fundamentals of the poultry industry. We believe we will see incremental investment in 2025 as customers look to take advantage of our technology to support automation, and efficient operations by investing in existing facilities as well as consider greenfield opportunities in a more meaningful way than we have seen in some time.

I am pleased that we are already seeing the commercial strategy We secured a few significant orders at IPPE that included equipment we booked on the strength of each other's existing relationships. Speaking of orders, as you saw in our earnings release, JBT reported record orders of $523,000,000 in the fourth quarter. Merrell also reported record orders of €474,000,000 Together, orders totaled more than $1,000,000,000 for the period benefiting from broad based strength. Geographically, we enjoyed a pickup globally with the sole exception of Asia Pacific. From an end market perspective, as already mentioned, the poultry industry remains strong in the fourth quarter and is expected to improve further in 2025. Other proteins, we enjoyed a very solid quarter for both meat and fish. While the fundamentals of these markets remain uncertain, we are starting to see increased pipeline activity for pork, and remain confident in the long term fundamentals for fish. We also enjoyed strong order demand in fruit and vegetable and pharmaceutical markets, which have continued into the first quarter of twenty twenty five. While the beverage end market was weaker through most of 2024 due to challenging fundamentals we saw some pickup exiting the year. Lastly, both Pet Food and Ready Meals performed well in the quarter, while AGV our Automated Material Handling business experienced another solid quarter of demand.

Our positive view on the key end market must be balanced against macro concerns. Including U. S. And potential utility tariffs, and the prospect of higher inflation. However, we believe that end market dynamics are generally favored for favorable for investment while our recurring revenue franchise for parts and service is expected to provide resilience growth and close to half of our total revenue. [indiscernible] Most importantly, we are increasingly confident in the value created by this combination as it relates to serving our customers. Now let me turn the call over to Ernie. Thanks, Brian. When JBT and Marl began exploring the potential to combine the two businesses It quickly became clear that we share a common purpose. Which is to transform the future of food. We achieved that purpose by helping our customers improve their operations solutions uptime and sustainable processes. I'm very pleased to see and experience the momentum generated in just the first few weeks as JBT modest. Right after finalizing the transaction, we launched our new JBT model brand.

We also introduced our new purpose, vision and values. Which resonated well with our teams as it builds on the two company cultures while we transition to a new and exciting future, We also went on the roads hosting welcome days at key locations around the world introducing the leadership team and the strategic pillars of JBT Moda. It was a great success and I'm excited about the future. We also recognize the respective strengths that each company brings to the table that makes this combination so exciting. For example, I'm very proud of the reputation that model has for its industry leading technology and ongoing investment in innovation. And JBT JBT its technology brings a highly disciplined and efficient operational culture focused on continuous improvement. We realized that a combination of this scale requires rigorous execution and oversight an experienced team of operators across the organization. The integration teams are co led by top talent from our respective legacy organizations and report directly to Brian and Meet. [indiscernible] Throughout this integration, our highest priority is to ensure business continuity and a seamless experience for our customers. Moreover, we are focused on cultural integration as our talented teams across the world represents our greatest asset, Since the close of the transaction, have been able to have full transparency with one another allowing us to do a deeper analysis into the benefits of the combination.

Based on this extensive work, we have raised our expectations for cost synergies to an annual run rate savings of $150,000,000 and that's by the end of year three. That compares with our prior guidance of greater than 125,000,000 Most of that increase is the result of supply chain savings as we leverage our purchasing power and optimize our combined footprint. Looking at Motto's performance in 2024, I'm happy to report that we had a strong fourth quarter to close the year. On an IFRS basis, record orders of €474,000,000 increased 18% sequentially and reflect the improvement we have been expecting. We saw sequential growth in orders for meat, fish and pet food, while poultry had another healthy quarter. The strong book to bill of 1.11 increased the order book 8% sequentially to €600,000,000 MAMADEL's full year revenue of €1,640,000,000 declined 4.6%. Compared to the prior year due to lower project revenues. At the same time, there were continued gains in recurring revenue with a record fourth quarter. For the full year, recurring revenues €821,000,000 and grew 5%. Full year adjusted EBITDA of €200,000,000 included a net year end adjustment of €17,000,000 resulting from initial efforts to align policies related to balance sheet reserves as a part of our combination with JBT.

We Underlying performance improved year over year as a result of cost discipline and efficiency improvements. Excluding the balance sheet adjustments, models adjusted EBITDA margin for twenty twenty four was in line with our most recent guidance of 13% to 14%. I want to take this opportunity to commend the dedication and valuable contribution of our teams across the world. We are excited JBT legacy model momentum entering 2025 underpinned by order growth and strengthening order book and our ability as JBT model to do even greater things for our customers. With the combined and highly complementary product portfolios. With that, let me turn the call over to Matt. Thanks Arne and good morning. Let me begin with a quick recap of JBT's performance in 2024. We ended the year with extremely strong orders in the fourth quarter, up 25% year over year and 19% sequentially. For the full year, orders increased 7%. JBT's full year revenue increased 3% or about 3.5% organically. Excluding the impact of foreign exchange. Adjusted EBITDA of $295,000,000 increased 8%. The adjusted EBITDA margin of 17.2% for the year was an improvement of 80 basis points. Driven by supply chain savings and continuous improvement initiatives.

Specific to the fourth quarter, our results came in at the lower end of our guidance.

Due to a mix of lower than expected volume on quick turn book and ship revenue and some delayed equipment shipments. On the expense side, we had higher than expected employee healthcare costs. That said, adjusted EBITDA margins for the quarter were 19.7%, represented 150 basis point improvement over the prior year. Beginning in 2025, we are revising our adjusted EPS calculation to exclude acquisition related items such as intangible amortization expense. We believe this change will be will better reflect our core operating earnings and improved comparability versus peers. When further adjusted for this change, JBT twenty twenty four's have been $6.15 compares to the reported figure of $5.1 Finally, for 2024, we delivered strong cash flow performance. Driven by more efficient management inventory and higher deposits from the strong order growth. For the year, we generated free cash flow of $199,000,000 an increase of 20% from the prior year period. Now let's move to the results and expectations for the combined JBT Marl business.

On a combined basis, which reflects adjustments to align Morrell's IFRS results, with U. S. GAAP 2024 results were as follows: orders of $3,600,000,000 revenue of $3,500,000,000 and adjusted EBITDA of $479,000,000 representing an adjusted EBITDA margin of 13.7%. [indiscernible] In 2025, we are forecasting full year revenue growth on a constant currency basis of 4.50.5%, which excludes the projected negative foreign exchange impact dollars or 2% due to the recent strength in the U. S. Dollar. We are guiding to adjusted EBITDA margin 15.75% to sixteen point five percent twenty twenty five, which represents more than 200 basis points of improvement. We expect to realize cost synergies of $35,000,000 to $40,000,000 in 2025 and exiting the year estimate achieving run rate synergies of $80,000,000 to $90,000,000 For the full year, we are projecting adjusted EPS of $5.5 to $6.1 includes certain one time items and acquisition related costs which were outlined in yesterday's press release and investor presentation.

For the first quarter of twenty twenty five, we expect revenues to be in the range of $820,000,000 to $850,000,000 inclusive of an estimated negative $2,023,000,000 dollars of year over year FX translation impact. First quarter is historically JBT seasonally lightest For morale, pickup in orders occurred in late twenty twenty four. And given the large project nature of its business, the conversion time from order to revenue is longer. We are forecasting adjusted EBITDA margins of 12% to 13% and adjusted EPS in the range of $0.7 to $0.9 On the balance sheet, we expect CapEx of $90,000,000 to $100,000,000 for the year. Starting leverage post merger was just under four times. Which excludes the benefit of any projected synergies. We continue to expect to delever to below three times by year end 2025 due to higher adjusted EBITDA, which includes realized cost synergies and strong cash flow generation.

Let me turn the call back to Brian for some concluding remarks. Thanks, Matt.

There's been a tremendous amount of hard work getting to this point where we can leverage our combined expertise and achieve more for our employees customers and communities at JBT JBT.

Together, we've established an unmatched position across the value chain as the premier global food and beverage solutions provider. Thank you to everyone across the organization for all you've done. We look forward to the exciting things to come as we transform the future of food. Now let's open the call to questions. Operator?

Your first question comes from Saree Boroditsky with Jefferies. Please go ahead. So I wanted to touch on the synergies. So you are now kind of two months into owning Merrell and you are able to increase the cost synergy guidance on kind of supply chain synergies. So can you talk more about what gave you confidence to raise the guidance, like a little bit more color on the supply synergies And was there a lot of like low hanging fruits that you were able to identify after owning them?

Yes, good question. So we've been working together two companies for the last year or so But there has been certain limitations on vendor names, that until we combined we weren't able to have access to. So after getting access to that, we were really able to determine our strategy as it relates to supply chain savings. And including some of the early hits, we do feel that that that $38,000,000 to $40,000,000 first year savings will include some early hits on the supply chain side. As well as some of the organizational design things that we're doing. So it really the confidence really became came along from access to information that we otherwise didn't have in the past.

Got it. Great. Thanks for the color. And I guess kind of staying on the synergy, more on the revenue side, I think you noticed some benefit [indiscernible] solutions and opportunities to kind of cross sell. So can you provide more color on kind of revenue synergy opportunities?

Yes. We're really excited about this. So as I mentioned in the prepared remarks, we had a really excellent IPPE show, the poultry show.

And the conversations were great. And frankly, the thing that was most exciting about it was the way our commercial teams interacted with one another They really fell right into understanding each other's product lines, We obviously have experts across the industry So it was fairly natural for them to be able to engage in conversations with customers on a combined basis. And as part of that, what we also found was each company legacy company has some particularly strong relationships with certain customers and that really facilitated conversations about providing either JBT or morale solution some of the projects that they were considering that perhaps they had not considered one or the other in the past. So that was that really developed nicely. And then I would say, we announced earlier $75,000,000 of revenue synergies by year three. We haven't updated but we are taking a close look at it Again, now that we have access to customer data and conversations on a more combined basis, we are taking a review of that and we'll follow-up in the next quarter or two what that means.

And just briefly to add on that, I think what was exciting around kind of what we heard and saw an experience at IPPE was a lot of conversation in the prepared foods area where our portfolio is quite complementary and we've talked in the past for example a chicken nugget line when you just see kind of the different technologies across that same line. So that's where we saw some interesting opportunities with which was really kind of confirming what we believe, but it was just nice to see that really happen.

Your next question comes from Mig Dobre with Beren.

Please go ahead.

Thank you. Good morning, everyone, and I apologize in advance actually have a bunch of questions. So hopefully, you hear me here.

I guess maybe we can start with a clarification. Maybe I missed this in the guidance slides, but free cash flow for $25,000,000 how should we think about [indiscernible] Yes, let's start with that. Let's start with free cash flow.

Yes, Mig. I think from a free cash flow perspective, it's it's still a little early for us to provide sort of specific numbers around that, I'd say. As we try to get a better feel for how the cadence and cash flows will will go through the year. But I think the fundamentals of the business both businesses together still remain strong with relatively low CapEx high recurring revenue and deposits from customers. And so when we account for some of the one time items on the P and L side, our expectation is that we should be able to achieve 100% free cash flow for the year.

And adjusted net income, right?

Right. So yes, so we'll provide more guidance But if you think about the general profile this business make, it's still quite attractive when you think about the the math just between the CapEx spend versus the depreciation and kind of how that [indiscernible] We will have a lot of onetime costs in 2025 as as mentioned in the the press release. But if you kind of look away from that, it certainly a profile of more than 100% of adjusted net income.

That's helpful. One of the things that also stood out to me was the order intake, right, for I think [indiscernible] had a bit of a tough comp and yes, they were able to grow off of that. You had quite a bit of growth in legacy JBT Maybe talk a little bit about what's going on here. We heard from you that poultry markets are getting better, but I guess it's more than just poultry. And the question here is on sustainability into 2025. Has this quarter simply been a bit unusual? Was there like a CapEx flush or something like that to help you out?

Or are these trends kind of sustaining into Q1? I mean, we're almost through February. What have you seen in Q1 thus far?

Sure. I'll provide some comments on legacy JBT and Arne can provide a little bit on legacy morale and kind of how thinking about this going forward. So on the JBT side, what we normally see is I'm talking from an end market perspective. There's always pluses and minuses Bruden Juice is up, maybe beverages down, and that's since I've been here, that's always been the case because these are lumpy projects. Often. So you see a lot of variability and almost magically kind of evens out by the end of [indiscernible] However, in the fourth quarter, there was really no weak markets, which is quite unusual. So everything kind of hit, we mentioned ready meals, pet food, our AGV business, fruit and juice, even beverage improved in the quarter. Poultry remained strong. So it really kind of just flow through it in a nice way. I can't say this was a CapEx dump, but here is the way I think of it generally. Is $900,000,000 is kind of the baseline for us right? And that $1,000,000,000 in the month extraordinarily strong. So I still think we're going to coalesce around that number plus or minus and there'll still be variability given the lumpy nature of our business.

So I do think there'll be some general reversion But overall, the markets are strong right now. And I put the caveat about regarding tariffs and whatnot. But aside from that, conditions do seem strong.

Yes. And on the model side, obviously, very pleased with the orders in the quarter and poultry the poultry market continues to be quite attractive and we see that ultra GPS if you look at at the results of some of our customers, I mean, they are they're showing very robust numbers on the poultry side. So that continued to be healthy in the fourth quarter for us. But then if we look at it sequentially, then we saw improvement in in the other segments as well on the model side. And what I would say is on the pork side, kind of the market sentiment is improving, but from a very low level, there is kind of with the low investment that has been there for kind of throughout the cycle, there there needs to be at some point catch up on and kind of renewing the install base and more automation. And we kind of consolidation in Europe is in the final steps. We saw improved pipeline in the fourth quarter on the park side. So that was kind of encouraging. I mean, FIS also improved sequentially. But I think I'm not as [indiscernible] we really believe in the fundamentals of that market.

And Mig, just to clarify that $900,000,000 baseline, that's the combined company quarterly kind of I'll say baseline, if you will, for orders.

You for the clarification there. And I want to move on to your outlook, your guidance Apologize for the numbers and the math here, but I'm trying to understand the moving piece dollars dollars On a combined basis, the company has done pro form a $479,000,000 So we're looking at $103,000,000 of EBITDA growth dollars 37,000,000 of that is synergies.

So the rest of it, dollars 66,000,000 would be the lift from the two businesses.

We look at this 66, how much of it comes from legacy JBT, versus lift in Morel's business?

Relative to the prior year?

Yes. I think the starting point on the four seventy nine for 2024 MIG is you have to adjust for the year end piece at Morrell was about $20,000,000 or so, dollars 17,000,000 of sort of year end adjustments. You kind add that back as a starting point. So you're kind of starting closer to $500,000,000 for the combined company. And then you add in the synergies So now you're at $5.38. So now you're kind of doing the math off of that number. And so flow through from the combined business is closer to like 35% to 40% And it's a little higher than we would typically expect for flow through on the combined business. But there is a benefit from Morrell on some of the restructuring activities that they took in 2024 that's also coming through. And we estimate that sort of around $8,000,000 to $10,000,000 benefit in 2025.

Right. So you've got the benefit of the synergies, the volume as well as some of the, I'll say, rollover of some of the actions that Merrell took in last year So overall, MIG I'd say more of the improvement is coming from the morale side, giving some given some of the they have a little bit higher growth rate in their forecasted revenues versus JBT because of the recovery continued recovery of the poultry market. As well as some of the restructuring actions that they took last year, which will flow into this year.

To be honest with you, based on what you've just told me, to me it seems like it's the opposite where you end up with ex synergies, you end up with maybe like less than $50,000,000 of EBITDA lift but a good chunk of that would probably come just from JBT and the growth that you have on your business assuming normal incremental margins on that organic revenue growth.

Which I mean, I'm missing something where you're just being conservative, which is perfectly fine. Just looking to make sure that we understand the moving pieces.

Yes. So I think we've given revenue guidance for the two businesses individually. And if you look at that, and apply generally you apply 30% -ish flow through on that incremental volume.

And then from there, You add on the benefit of the synergies and whatnot. So take a look. We're happy to walk through in more detail as we go from here. But our math shows a little bit more contribution from the morale side than the JBT side, at least from an EBITDA perspective. Perfect. Then my final question, is on Morrell specifically.

As we're trying to look through what the fourth quarter looked like, at least on our math, the fourth quarter looked to be a sequential step down in margin. Maybe even tougher than some of the prior quarters in 2024. You can give us some context or Arne can give us some context as to what's been going on with margins in the fourth quarter. [indiscernible] big picture, sort of how you think about progression here through 2025? And maybe you can comment on fish and meat specifically, because it's pretty clear poultry is doing all right, the other two segments that have struggled. Thank you.

Yes. So what I would say, it could have we saw healthy kind of absent the balance sheet adjustment that we talked through, we saw a good margin in Q4, both improving sequentially and year over year So I think kind of that is moving in the right direction. We also saw that kind of moving in the right direction for for fish and meat. But there's still a lot of work to be done on that front. So So we are kind of just [indiscernible] so that's kind of on the margin side where we kind of are on the right track and kind of exiting the year at a healthy level or more healthy level kind of improving over the year and we can expect to be able to kind of do more as we enter 2025. And I mean, some of the initiatives that we have been going through, we will continue with such as going to have standardizing the portfolio more rigorous kind of project control and selecting the projects. And then we're also kind of this signed the combined organization in a way where we believe both businesses will benefit more with greater scale in emerging markets, embedding the service capabilities and some of the other designs that we've taken.

And to add onto that, Mig, as we look to bring some of the continuous improvement capabilities, we've already started that on both meat and fish and we obviously have a large tool chest. One of the things we're actually looking at right now is applying some of the eightytwenty approach to to the business and looking at the segmentation of of the larger customers, larger projects and product lines and how that profitability is segmented and making sure that we've got the right resources in the right places to to attack that. So as well as some of the general continuous improvement things that we're looking at. So we are laser focused on the overall improvement and the synergy perspective, but in particular, meat and fish are getting good attention all the way up to to the top.

Yes. And just Mig just to clarify again on the Q4 margins, again, I want to make sure we kind of look at it with and without the year end adjustments that were booked at Morrill in December. Those were really some sort of alignment on accounting policies and procedures between Marl and JBT. And so they're a little bit I think, kind of one time in nature and related to some older inventory and some older AR valuation reserves. And if you look at the underlying business, I think what Arne had said that they are seeing some improvements in the margins. That's what we would expect to see heading into 2025.

I'm sorry, just to clarify, the $20,000,000 that was a €20,000,000 add back So in the fourth quarter with IFRS margin at Morrill JBT somewhere close to 15%? Yes, I think it's in I think it's in the 13% to 14% range. It's $20,000,000 about €17,000,000 Okay.

We're not adding that back from an adjusted perspective. It's just It's just a different, I think, again, a different kind of accounting approach. So I don't want to I don't want to blur the underlying performance of the operations with those adjustments.

Understood. Understood. Thank you. JBT you're correct, Mig.

You're correct, Mig.

If you look at the reported results, IFRS €200,000,000 that is burdened by about $17,000,000 $18,000,000 of one time items.

And if you would absent of that, you would have kind of EBITDA margin for the full year kind of a little bit north of 13%.

And so fourth quarter was more healthy.

Got it. Thank you.

Next question comes from Ross Baut with William Blair.

Please go ahead.

Hey, good morning, guys.

Matt, you touched on this in your opening remarks, but you maybe just remind us of the timing for backlog conversion for JBT in MREL?

Kind of what that mix looks like on a pro form a NRE going forward?

Yes.

I mean, for the most part, we look at about for JBT, it's in the 50% or so of our equipment revenue is in backlog that we'd expect So the backlog for equipment is sort of in the $450,000,000 range for JBT historically or legacy JBT. And only a small portion of that sort of bleeds into next year We did take some bigger pharma projects and fruit and veg projects. So those will bleed into 2026 for Marl, they do have some larger greenfield type projects that do have longer lead times. I don't have the exact sort of timing of that, but I would expect their revenue cadence to look very similar in terms of the backlog for equipment. So I'd expect probably 80% to 85% of their backlog on equipment would result in revenue in 2025.

And I'd say as a whole, when you consider the stability of the recurring revenue business, when you kind of add that into kind of the visibility as we start the year on the equipment side, we have somewhere ballpark 70% visibility for the full year revenue.

Okay. So with that expectation then recurring revenue is probably being implied over 50% kind of your 2025 guidance?

It's actually a little bit less because your equipment we were about combined right about 15% last year. However, we do expect equipment growth to outpace aftermarket growth in 2025. So the mix will actually will grow both, but the mix will change a little bit just because of the outside growth on the equipment side.

Okay. That's helpful. And then just going back to a prior question on kind of the morale margin lift. For next year. The filings called out I believe, 11,700 employees, which does imply some material attrition over the past year. So I was trying to get a sense of timing there around reductions and maybe how we should think about sizing that benefit in the context of the 8% to 10 prior restructuring actions that are going to step up next year.

Yes, I think there's two things to kind of mention there, Ross. I think there is as we're going through this integration process, some definitional difference [indiscernible] we reported as at 11,700. So that's a little bit of the difference. But I do think that morale has taken some significant actions in 2024 to reduce their FTEs. That's sort of already built into our guidance and part of the additional self help that we were talking about in terms of the margin uplift for Merrell. And that is before we actually think about this. The benefit from synergies.

Okay. And is there any definitional changes between the recurring revenue from MREL and JBT?

Kind of look like there might have been Slightly.

There's a the big question is open question is refurbishments and how late we both treat those.

Otherwise, we haven't married those up quite yet. So we will do that as we report out First quarter, but not materially.

Okay.

Thank you, guys.

Your next question comes from Walt Liptak with Seaport Research Partners. Please go ahead.

Thanks. Good morning and congratulations on the deal. Good morning.

Thank you. Wondering about the year one [indiscernible] I wonder if you could just help bucket it for us in terms of procurement versus people cost versus plant consolidation And then on that procurement side, how are you thinking about pricing and tariffs this year? And if there are inflationary pressures, how do you expect to deal with those? Yes, I'll take the first part Walt. So in terms of bucketing, I would say approximately of the $30,000,000 $35,000,000 to $40,000,000 45% to 50% of that is related to procurement and cost of goods sold. And the remainder of the synergies is going to be related to either redundant contract logistics and other SG and A related sort of redundancies that we may have And then as it relates to tariffs, still a little bit early to tell. We still don't know all the specifics of the tariff policies and any potential retaliation. So we haven't factored in tremendous amount into the numbers right now. Mainly because as it fits today with what has been announced, We can largely manage through that in terms of our supply chain. So over the last few years coming out of COVID, and this is applies to both legacy Morrill and JBT, We've enhanced our supply chain in terms of more options I'll say more diversification of our supply chain JBT because of some of the challenges we saw a few years ago.

So think we're both well positioned. And we're particularly well positioned relative to our competition given our our global scale, our strength of our procurement organization, as well as our diversified manufacturing footprint. So So we do need to see how this plays out. But I think in the short term, in terms of at least what we know today, don't see a material impact in 2025.

Okay.

Okay, great. Thanks for that. And then I wanted to ask a follow on you commented about doing some segmentation and some eightytwenty work. And that's very interesting to me. Wonder if you could talk a little bit more about that. Is this like a homegrown thing or are you bringing in experts? Like is it how robust of eightytwenty program are you thinking about?

Yes. Well, we are the experts on continuous improvement in eightytwenty. So we have more than enough resources within the company So what we're going to do is just to get a little bit more specific, what you do is look at the revenue streams and and you segment that and look at the underlying I'll say, concentration and then what are the costs associated with those buckets, if you will. And then you make sure that you're serving your best customers and your best product lines, in a way that allows you to grow them and then taking a close look at your projects otherwise and I'll say the discipline around pricing, the discipline around costing those projects before you give those quotes, and then, strongly and execution on those projects as you go through So there's a lot of different tools that we'll have. It's not just eightytwenty. But as continuous improvement experts, we are focused on this. Okay, great. Thanks. And then with regard to the change in focus, to end markets, Is that has that happened already or what's the timing on that taking place?

It's happening as we speak. It started organizational design started in the fourth quarter. And continues through the end of the first quarter here. So organizationally wise, we should be done by the end of the first quarter.

Think there'll be some transition over the next few months, but I would say we would be done with that transition by the middle of the year completely.

Okay, great. Thank you.

Thank you. Your next question comes from Justin Ages with CJS Securities.

Please go ahead.

Hi. How's everyone doing? Great.

Thanks.

During the prepared remarks, there was a comment about some greenfield opportunities, but just hoping to get a little more color on either end markets or where that is Yes.

So, I mean, I would say first and foremost, that is in the poultry segment. I mean, that is an area where kind of the fundamentals have been [indiscernible] We've seen some of those opportunities kind of in the past. I mean, I think Maral spoke [indiscernible] kind of one big one in the fourth quarter of twenty twenty three, which kind of for Q4 twenty twenty four. And then we've seen kind of just improvement in the market in the second half of of twenty twenty four. Also what is very interesting with I've spoken about in Madoff's results is some of the solutions and technologies that we've been introducing in The U. S. Market. [indiscernible] a line split solution that allows our customers to increase the line speeds And we model has kind of very good technologies to be able to advance the industry and help our customers in particular in The U. S. Market, to invest. So there's a lot of there's a few very interesting opportunities that we see there. It's still early, but we're optimistic.

And just to follow-up on that. So on the poultry side, Morales took is best in class without question. And some of these techniques of line split allows, I'll say, the unleashing of the speed and that technology that is currently I'll say, under some restrictions under USDA policy, but this line split solution effectively allows us to again leverage this technology while still remaining compliant with USDA. So that's exciting for our customers. In [indiscernible] what we do here is if you can unleash this technology in these line speeds, It allows customers to take current, I'll say inefficient operations maybe you can close two facilities and open one new Greenfield facility that you could take on that capacity with one operation. So are the type of conversations that are happening on the poultry side. And then on the non poultry side, what we are what we have been seeing is particularly in The Middle East, a lot of Greenfield opportunities on fruit and juice. And then we are also seeing greenfield opportunities on the pharma side. So those are the areas where we are seeing some good activity.

That's helpful. Thanks. And then just one more on AGV, and I know it's a smaller portion of the combined entity now. But hoping to get a little more color. I know you said demand in fourth quarter was was good. But looking ahead, what is What are expectations for that segment or end market, how do you want to define it?

Yes. AGV is a great business. It was probably it was definitely our most improved business in 2024, we talked quite a bit about that. I won't go into all those details, but very good business. So and in terms of go forward expectations, continued double digit revenue growth, and they are in that 20% EBITDA range, so accretive on the growth and accretive on the margins.

I appreciate that. Thank you. Thank you. There are no more questions. I will now turn the conference back over to Mr. Brian Dech, for closing remarks.

Thank you all for joining us this morning. As always, our Investor Relations team will be available if you have any additional questions.

Ladies and gentlemen, that concludes today's call.