Hillenbrand, Inc. (NYSE:HI) Q4 2022 Earnings Call Transcript

And so we’ve leveraged and started leveraging some of our best practices to improve their entitlement on aftermarket. Then the last thing I would say is, right, I mean, we’ve got key account relationships and we didn’t have a lot of customer overlap between both companies. But I can tell you in the first 30 days, we’ve identified several multimillion dollar opportunities that we’re going to go quote that we wouldn’t have had we been separate companies. And so I think our teams have done a fantastic job already really getting to work, and so we feel good about where things are going.

Kim Ryan: And I would just add that as with any of these acquisitions, we evaluate as we determine whether or not we can make appropriate returns on these acquisitions. We evaluate that in our various disciplined M&A process that we conduct with our Board of Directors. We base that primarily on cost. And then as we get into the integration planning and we are really able to test some of the theories that we have around other opportunities, that we will continue to update those synergies as we move along through the integration. As we have demonstrated with the Milacron integration, if it becomes appropriate to do so, we’ll update on what types of opportunities we see there.

Matt Summerville: Understood. And then two follow-ups. First, can you maybe provide a little bit more of a high-level comment, Kim, on the Batesville process? You’re roughly four months into this. Are you happy with the interest levels you’re seeing and maybe how the current market environment may be influencing the process?

Kim Ryan: I would €“ I would say that we are €“ we continue to work this process. We are confident that we will arrive at a final outcome that will be the best result for associates, customers, shareholders. I would say, even though there is a challenging market in front of us, I think we’ve had a great partner involved in this and we’ve been able to really be €“ had a very fulsome look at the opportunities out in the marketplace and be able to make sure that all interested parties have an opportunity to evaluate this great asset that we are exploring the strategic alternatives for. And we’ll continue to provide updates as those become available.

Matt Summerville: Appreciate that. And then just finally, just one more for me. If you look at Slide 14 and the organic guidance you provided by segment, I appreciate you providing that. Can you maybe comment by segment how much of the organic is split between volume and price? Thank you.

Bob VanHimbergen: For the acquisitions? Yes, I can here, Matt. So if you think about €“ I guess, maybe let’s take APS, obviously, overall, where the acquisitions are. So the volume is going to be the biggest driver in that segment. That’s going to be about, call it, mid-single digits. The acquisitions is going to be closer to the higher 20s, and that’s primarily volume. There’s not too much price. There’s going to be some price opportunity we have as part of our synergies, Matt, but I would consider most of that to be volume right now. But then obviously, total price is going to be kind of mid-single digits of an impact, and then we’ve got the foreign exchange really offsetting that. But as far as the acquisitions alone, consider that mostly volume and then we’ll work through our processes of integration and applying the HOM to get pricing and aftermarket mix.

Matt Summerville: And then the other two segments, same thing, volume versus price, please?

Bob VanHimbergen: Yes, I’d say on MTS, we’re primarily €“ it’s primarily price, offset with some slight volume headwinds and then foreign exchange. And then Batesville, as you can imagine, with the Omicron virus we had last year and we don’t have this year, we’re going to lose volume of about kind of high single digits, but that will be offset by price. And so that’s how you get to that kind of 2% to 4% decline.