The Coperion compounding extruder business is performing strongly in large polyolefin production lines, "some of largest, most challenging projects in the world," Joe Raver, CEO of Coperion parent Hillenbrand Inc., said in a fourth-quarter conference call Nov. 14.
Hillenbrand bought Coperion in 2012, adding it to its stable of auxiliary equipment, including K-Tron feeders blenders and conveyors and Rotex screening and material separation equipment. Those businesses, along with industrial pumps, valves and heavy-duty crushing equipment, make up the Process Equipment Group.
Raver signaled during the call that Batesville, Ind.-based Hillenbrand is looking to make acquisitions.
Process Equipment Group sales increased 19 percent, to $1.2 billion, for the fiscal year 2018, which ended Sept. 30. Raver said Hillenbrand has invested in new products, and also continued its strong performance in parts and service. More than 70 percent of the segment's sales come from outside of North America, he said in the conference call with financial analysts.
Hillenbrand is traded on the New York Stock Exchange.
Companywide, 2018 sales of $1.77 billion increased 11 percent over 2017. The strong Process Equipment Group growth was partially offset by a 2 percent sales decline at Hillenbrand's Batesville casket business. Raver said Batesville buys U.S. steel, but is paying more as American steel makers raised prices to take advantage of the steel tariffs. Some items for burial caskets come from tariff-impacted China, including fabric and hand-painted hardware, he said.
The competitive casket business is resistant to price increases. But Kristina Cerniglia, Hillenbrand's chief financial officer, said the company is taking steps to offset higher material costs for the Process Equipment Group through higher pricing and more-efficient operations.
Raver said the big polyolefin lines that include Coperion equipment tend to come with a lower profit margin than some other Process Equipment Group projects. But, he said: "We believe the growing installed base of these systems presents a great opportunity to provide maintenance and spare parts business going forward." Parts and service also is growing in Coperion extrusion lines for engineered plastics, Raver said.
Coperion, which Raver said is a small part of large multibillion dollar resin projects around the world, has a large backlog.
"This reflects confidence that I think the overall need for plastics and activity will continue to increase over the next several years," he told analysts.
Raver said the Hillenbrand will continue to look for strategic acquisitions to strengthen its plastics-related equipment and the food and pharmaceutical markets, as a way to transform Hillenbrand into a "world-class industrial company."
Raver said Hillenbrand has beefed up its staff for mergers and acquisitions and has a strong balance sheet. "We're in a better position as an organization to execute a deal than we have in a long time," he said.