Hillenbrand's Q1 2025 Earnings Call: Contradictions in Order Trends, Aftermarket Performance, and Customer Insights

These are the key contradictions discussed in Hillenbrand's latest 2025Q1 earnings call, specifically including: Order Trends and Market Recovery, Aftermarket Performance and Revenue Expectations, Customer Decision Making, and Backlog Trends:



Revenue and Earnings Trends:
- Hillenbrand reported consolidated revenue of $707 million in Q1, down 9% year-over-year, with adjusted earnings per share of $0.56, down 19%.
- The decline was primarily due to lower capital equipment demand and a lower starting backlog, despite strong order performance in Food, Health, and Nutrition segments.

Segment Performance and Order Trends:
- Polymers and Performance Materials and APS segments saw a 10% decline in revenue to $511 million, while MTS segment revenue was $196 million, down 5%.
- Lower volumes and delayed order decisions, influenced by macroeconomic uncertainties like inflation, interest rates, and government policies, were the key factors affecting orders.

Transaction and Financial Impact:
- Hillenbrand announced the sale of approximately 51% of its Milacron injection molding and extrusion business for $287 million, with an expected transaction close in Q2 or early Q3.
- The sale will contribute to debt reduction, with net proceeds of $250 million. The impact on 2025 guidance includes adjustments for $300 million in revenue and $41 million in adjusted EBITDA.

Cost Actions and Outlook:
- The company implemented cost actions, including facility consolidations, to mitigate near-term market uncertainties and improve long-term efficiency.
- For Q2, Hillenbrand expects revenue of $685 million to $705 million, with adjusted earnings per share in the range of $0.53 to $0.58, reflecting modestly improved operational performance offset by unfavorable FX.