H.B. Fuller Company (FUL) Q3 2024 earnings summary

Executive summary

• Adjusted EBITDA grew 6% year-over-year to $165 million, with margin expanding to 18% and net revenue up 1.9%, driven by acquisitions and higher sales volume despite lower pricing and currency headwinds.

• Organic sales increased 0.4% year-over-year, with volume up 3% and pricing down 2.6%.

• Adjusted EPS rose 7% year-over-year to $1.13; net income attributable to shareholders was $55.4 million.

• Construction Adhesives and most HHC segments showed strong volume growth, offsetting weakness in Engineering Adhesives due to slowing durable goods and clean energy demand.

• Acquired HS Butyl Limited, expanding the European construction adhesives and global waterproofing tape portfolio.

Financial highlights

• Q3 2024 net revenue was $917.9 million, up 1.9% year-over-year; adjusted gross profit margin improved 40 bps to 30.4%.

• Net income attributable to shareholders rose to $55.4 million; adjusted EBITDA margin was 18%.

• Net working capital as a percentage of annualized revenue improved to 16.1% from 18.1% a year ago.

• Net debt-to-adjusted EBITDA ratio improved to 3.1x from 3.3x a year ago.

• Year-to-date operating cash flow was flat, as higher profitability was offset by working capital investments.

Outlook and guidance

• Fiscal 2024 net revenue growth expected at ~2%, with organic revenue flat year-over-year.

• Adjusted EBITDA guidance narrowed to $610–$620 million (5–7% growth).

• Full-year adjusted diluted EPS expected at $4.10–$4.20, up 6–9% year-over-year.

• Operating cash flow projected at $325–$350 million.

• Management expects restructuring costs to be largely recognized by end of 2024, with plans completing in 2026.