Hillenbrand reports fiscal Q1 2025 earnings, updates outlook following Milacron stake sale

Hillenbrand, Inc. (NYSE: HI) has released its fiscal first-quarter 2025 earnings report, revealing a 9% decline in revenue while executing a strategic transformation of its business portfolio. The company has entered into an agreement to sell a majority stake in its Milacron injection molding and extrusion business to an affiliate of Bain Capital for $287 million. The transaction aligns with Hillenbrand’s long-term goal of focusing on higher-margin, less cyclical industries, particularly within the food, health, and nutrition markets, which now contribute nearly 30% of total revenue.

The Milacron business sale is expected to generate approximately $250 million in net proceeds after taxes, which Hillenbrand plans to allocate primarily toward debt reduction. Under the terms of the agreement, the company will retain a 49% stake in Milacron, with its earnings reported as equity income rather than consolidated revenue. This shift in reporting will result in lower reported revenue going forward but is expected to enhance overall profitability and capital efficiency.

How Did Hillenbrand Perform in Q1 2025?

Hillenbrand reported total revenue of $707 million for the quarter ending December 31, 2024, reflecting a 9% year-over-year decline. The decrease was primarily driven by lower sales volume across its business segments, though pricing adjustments provided some offset. The company’s GAAP earnings per share (EPS) dropped to $0.09, down from $0.24 in the previous year, representing a 63% decline. Adjusted EPS came in at $0.56, marking a 19% decrease, while adjusted EBITDA fell 15% to $97.1 million.

CEO Kim Ryan highlighted that despite macroeconomic pressures, Hillenbrand remains focused on capturing cross-selling opportunities, optimizing cost synergies, and driving operational efficiencies. She noted that the company’s customer quote pipeline remains strong, reinforcing confidence in its long-term strategy.

Why Did Hillenbrand Sell a Majority Stake in Milacron?

The decision to divest the Milacron injection molding and extrusion business reflects Hillenbrand’s continued effort to reshape its portfolio, prioritizing higher-growth and less cyclical markets. The company has made a series of strategic moves in recent years, including the sale of its death care segment and multiple acquisitions aimed at expanding its presence in food processing, healthcare, and industrial solutions.

Milacron generated $526 million in revenue and $64 million in adjusted EBITDA in fiscal 2024. Hillenbrand believes that partnering with Bain Capital will enable Milacron to accelerate its next phase of growth while allowing the parent company to enhance its overall margin profile. Following the sale, Milacron’s financial results will no longer be consolidated in Hillenbrand’s revenue but will instead be reported as equity income. This restructuring is expected to improve the company’s financial stability and operational focus.

How Did Hillenbrand’s Business Segments Perform?

Hillenbrand’s largest segment, Advanced Process Solutions (APS), recorded $511 million in revenue for the quarter, a 10% decline compared to the previous year. The decrease was largely attributed to lower order intake, though the company noted that pricing remained favorable. APS adjusted EBITDA dropped by 14% to $82.8 million, as cost inflation and weaker demand offset productivity gains. The segment’s backlog declined by 17% to $1.58 billion, reflecting softer near-term demand. Despite these challenges, Hillenbrand remains confident in APS’s long-term growth potential, particularly in the food, health, and industrial processing markets.

The Molding Technology Solutions (MTS) segment, which includes Milacron, reported a 5% revenue decline, reaching $196 million. The downturn was primarily driven by lower sales volume, while adjusted EBITDA fell by 15% to $27.4 million, impacted by cost inflation and price competition. However, MTS backlog increased by 1% to $233 million, indicating stable demand within the plastics and manufacturing sectors. Once the Milacron sale is finalized, Hillenbrand’s MTS segment will become significantly smaller, further emphasizing its strategic pivot toward industrial processing solutions.

What Is Hillenbrand’s Financial Position?

Hillenbrand closed the quarter with $1.7 billion in net debt, maintaining a net debt-to-adjusted EBITDA ratio of 3.4x. The company reported total liquidity of $632 million, including $208 million in cash and the remainder available under its revolving credit facility. The sale of Milacron is expected to generate $250 million in net proceeds, which will be directed toward debt repayment, further strengthening the company’s balance sheet.

What Is Hillenbrand’s Fiscal 2025 Outlook?

Following the Milacron transaction, Hillenbrand has updated its fiscal 2025 guidance. The company now projects total revenue between $2.63 billion and $2.79 billion, revised downward from the prior estimate of $2.93 billion to $3.09 billion. Adjusted EPS is expected to range between $2.45 and $2.80, compared to the earlier projection of $2.80 to $3.15. Free cash flow is now forecast at approximately $105 million, reflecting changes in business composition.

For the second quarter of fiscal 2025, Hillenbrand anticipates revenue between $685 million and $705 million, with adjusted EPS ranging from $0.53 to $0.58. The company stated that its revised outlook does not assume a broad-based recession but remains subject to risks related to tariffs, foreign currency fluctuations, and overall macroeconomic uncertainty.

How Did Hillenbrand’s Stock React?

Hillenbrand’s stock performance remained under pressure following the earnings announcement, reflecting investor concerns over revenue declines and weaker EPS figures. However, analysts believe that the company’s long-term shift toward food processing, healthcare, and industrial equipment markets could improve profitability and operational efficiency.

With the Milacron sale nearing completion, Hillenbrand is expected to continue streamlining its operations and reinforcing its presence in stable, high-margin industries. The company’s ability to navigate ongoing market headwinds while executing its portfolio transformation will be key to its future performance.

Hillenbrand’s first-quarter results highlight both challenges and strategic progress. While revenue declines persist, the company remains committed to optimizing its business model and driving long-term profitability. The sale of a majority stake in Milacron marks a significant milestone in Hillenbrand’s transition away from cyclical industries and toward more resilient, higher-growth markets.

As the company moves forward, its emphasis on cost management, debt reduction, and strategic investments in food, health, and industrial processing sectors will be critical in shaping its financial future. Despite near-term pressures, Hillenbrand’s leadership remains confident that its transformation strategy will enhance shareholder value and position the company for sustainable growth.