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

Executive summary

• Adjusted EBITDA increased 6% year-over-year to $165 million, with margin expansion to 18% and net income rising to $55.4 million.

• Organic sales grew 0.4% year-over-year, with volume up 3% and pricing down 2.6%; net revenue rose 1.9% to $918 million, impacted by currency headwinds.

• Adjusted EPS was $1.13, up 7% year-over-year.

• Construction Adhesives and most of the HHC portfolio showed strong volume growth, offsetting weakness in Engineering Adhesives due to slowing durable goods and solar demand.

• Acquired HS Butyl Limited, expanding presence in the waterproofing tape market.

Financial highlights

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

• Net income attributable to shareholders was $55.4 million, up from $37.6 million a year ago.

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

• Net debt-to-adjusted EBITDA was 3.1x, flat sequentially and down from 3.3x a year ago.

• Operating cash flow year-to-date was flat, as profitability gains were 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.

• Price/raw material dynamics expected to be more neutral and less volatile in 2025.