A press release out of Batesville, Indiana, caught a lot of the death care profession off guard on Wednesday. That press release, which you can read here, was from Hillenbrand Industries and announced that the company would “explore strategic alternatives for its Batesville business”.
Here’s what parent company Hillenbrand Industries President and CEO Kim Ryan said in the release, “Today’s announcement is a defining moment for Hillenbrand, building on the exceptional work our teams have done to position our businesses for success. Batesville has been a recognized leader in the death care industry for more than 115 years because of its exceptional quality, innovation, and customer service. Through this process, we are focused on determining the best path to benefit Batesville, its stakeholders, and Hillenbrand.”
The press release also mentioned that “Hillenbrand has retained Evercore as the financial advisor for its evaluation of strategic alternatives for Batesville. There can be no assurance that the process will result in any transaction for Batesville or that any transaction, if pursued, will be consummated.”
Funeral Director Daily take: While it’s true that Hillenbrand Industries traces its start back to 1906 when John A. Hillenbrand purchased the Batesville Casket Company, if you’ve followed the company over the years an eventual sale or spin-off of the Batesville branch is not completely surprising.
Since about 2008 when the company branched into two companies — one, the current Hillenbrand Industries, with Batesville Casket as its cornerstone – and two, the Hil-Rom Company, with Hil-Rom medical as the cornerstone, there has been a lot of change to the make-up of Hillenbrand Industries.
In 2010 Hillenbrand started acquiring operating companies to its portfolio and has been strategically acquiring and divesting in its quest for owning and operating the high quality companies it believes in going forward. In 2021 alone, the company divested of previously acquired companies Red Valve, ABEL, and TerraSource Global.
As for Batesville, in Fiscal Year 2021 it contributed $623 million in revenue to the Hillenbrand Industries total of $2.9 billion. . .that’s about a 21.4% figure. In the latest quarter on public record, 2Q 2022 (January thru March in Hillenbrand’s fiscal year) Batesville showed a 6% Year over Year revenue increase to $176 million for the quarter in comparison to Hillenbrand Industries total revenue of $742 million — that’s a 23.7% figure of total company revenues.
However, it was disclosed that Batesville EBITDA, even on that higher revenue number, decreased 17% with management stating it was because of lower volume and inflation. As you can see from this graphic, taken from Hillenbrand Industries’ press release on Fiscal 2021 Year Results, on a forward looking basis, Batesville revenue was expected to decline as other segments of the company are expected to grow.
|Revenue Outlook||FY 22 Range (M$)||Year over Year %|
|Advanced Process||$1,275 – $1,315||8-12%|
|Molding Technology||$1,015 – $1,045||2-5%|
|Batesville||$540 – $555||(-11) to (-13)%|
|Hillenbrand Total||$2,830 – $2,915||1-4%|
Anecdotally, it also easy to see in the death care business that any increase in casket sales volumes will be driven by an increase in the number of deaths, certainly not by consumer choice as the groundswell of cremation choice keeps growing. Increased profit in the casket business will more than likely come to companies that can take market share from other existing companies as volume growth will be anything but a certainty. And, it is estimated that Batesville is the market leader with 47% of the market share according to this 2019 graphic from IbisWorld.
Here is the Hillenbrand Press Release on FY 2021 Results
Here is a history of Hillenbrand Industries from the company website.
- Related Article: OZY: Why the coffin industry is dying for disruption. 2019 article. Open Markets.
- Related Article: Can the American casket monopoly be disrupted. 2019 article. TheHustle
More news from the world of Death Care:
- Local teacher makes a unique career change. Video story and print article. Bristol Herald-Courier (VA)
- A Phoenix mortuary where you can get your loved ones turned into rocks. Phoenix New Times (AZ)
- Changing attitudes to funerals: Cremations, natural burials on the rise in Canberra. ABC News – Australia
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