H. B. Fuller Company · NYSE:FUL
H. B. Fuller — Q3 2020 Earnings Presentation
22 slides from H. B. Fuller's earnings presentation, Sep 24, 2020
Slide 1: Third Quarter 2020 Conference Call
Third Quarter 2020 Conference Call Investor Presentation St. Paul, MN September 24, 2020
Slide 2: Q3 2020 Quarterly Results Highlights
2 Q3 2020 Quarterly Results Highlights • Built on share gains, new business wins and continued cost efficiencies and delivered performance ahead of our expectations • Solid sequential improvement in sales, EPS and EBITDA vs. strong Q2’20 • Adjusted EBITDA of $106M, exceeded expectations • Sales perf
Slide 3: Q3 2020 Global Segment Summary
3 Q3Better 2020 Global Segment accountability Summary Global vision Stronger teamwork Hygiene, Health and Consumables Adhesives (HHC) • Continued growth especially in Packaging, Tissue & Towel, Health & Beauty • EBITDA margin remained strong at 13.6% with lower raw material costs, restructuring savi
Slide 4: Q3 2020 Key Financial Results Summary
4 Q3 2020 Key Financial Results Summary • Adjusted EBITDA of $106M and organic revenue down 2.5% exceeded expectations • Adjusted EPS of $0.76 down YoY due to COVID-19 impacts on global demand • YTD Cash Flow from Operations of $193M up 20% YoY • Paid down $59M of debt, ahead of our $40 - $50M Q3 ta
Slide 5: Q4 2020 Guidance
5 Q4 2020 Guidance • Forecasting sequential improvement from Q3’20 • Revenues expected to increase by 4% to 7% sequentially vs. Q3’20 ‒ Flat to down 3% year-over-year • Adjusted EBITDA range of $110M to $115M ‒ In-line with Q4’19 performance • Raw material costs beginning to flatten: Q4 costs expect
Slide 6: Wrap-Up
7 Wrap-Up • World’s largest dedicated manufacturer of adhesives critical for health, hygiene, packaging and consumer goods and digital connectivity • FUL’s global supply chain, global coordination and speed is competitive advantage • Cash generative business with ample liquidity and room under debt
Slide 7: H.B. Fuller
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Slide 8: Appendix
APPENDIX Q3 2020 Investor Presentation
Slide 9: Anticipated Near-Term End Market Impacts
10 Anticipated Near-Term End Market Impacts 2020 Planning Assumptions Favorably Impacted - Hygiene - Rolled paper & tips - Health & Beauty - Tissue & towel - Packaging - Tapes ~45% Down Moderately - Construction - Insulating Glass - Filters - Electronics ~20% - Durable Consumer Goods ~35% Down Signi
Slide 10: Regulation G – EPS & EBITDA Reconciliation
11 Regulation G – EPS & EBITDA Reconciliation Three Months Ended Nine Months Ended August 29, 2020 August 31, 2019 August 29, 2020 August 31, 2019 Net income attributable to H.B. Fuller $ 41,607 $ 49,718 $ 83,115 $ 98,603 Adjustments: Acquisition project costs (55) 1,535 (1,162) 2,158 Organizational
Slide 11: Regulation G – Q3 Segment Information
12 Regulation G – Q3 Segment Information Three Months Ended August 29, 2020 August 31, 2019 Net Revenue: Hygiene, Health and Consumable Adhesives $ 320,187 $ 328,420 Engineering Adhesives 276,083 286,716 Construction Adhesives 95,193 108,406 Corporate Unallocated - 1,834 Total H.B. Fuller $ 691,463
Slide 12: Regulation G – FY2020 Segment Information
13 Regulation G – FY2020 Segment Information Nine Months Ended August 29, 2020 August 31, 2019 Net Revenue: Hygiene, Health and Consumable Adhesives $ 977,373 $ 986,166 Engineering Adhesives 761,040 855,010 Construction Adhesives 274,216 302,987 Corporate Unallocated - 13,731 Total H.B. Fuller $ 2,0
Slide 13: Regulation G – Adjusted Income Reconciliation
14 Regulation G – Adjusted Income Reconciliation Three Months Ended Nine Months Ended August 29, 2020 August 31, 2019 August 29, 2020 August 31, 2019 Income before income taxes and income from equity method investments $ 45,202 $ 66,976 $ 100,291 $ 132,248 Adjustments: Acquisition project costs (73)
Slide 14: Regulation G – Adjusted Income Tax Reconciliation
15 Regulation G – Adjusted Income Tax Reconciliation Three Months Ended Nine Months Ended August 29, 2020 August 31, 2019 August 29, 2020 August 31, 2019 Income taxes $ (5,112) $ (19,321) $ (22,194) $ (38,902) Adjustments: Acquisition project costs 18 (336) 423 (482) Organizational realignment (797)
Slide 15: Regulation G – Adjusted Gross Margin Reconciliation
16 Regulation G – Adjusted Gross Margin Reconciliation Three Months Ended Nine Months Ended August 29, 2020 August 31, 2019 August 29, 2020 August 31, 2019 Net revenue 691,463 725,376 2,012,629 2,157,894 Gross profit $ 187,844 $ 207,321 $ 543,007 $ 605,705 Gross profit margin 27.2% 28.6% 27.0% 28.1%
Slide 16: Regulation G – Adjusted SG&A Reconciliation
17 Regulation G – Adjusted SG&A Reconciliation Three Months Ended Nine Months Ended August 29, 2020 August 31, 2019 August 29, 2020 August 31, 2019 Selling, general and administrative expenses $ (129,113) $ (140,615) $ (398,620) $ (432,407) Adjustments: Acquisition project costs (73) 1,871 (1,584) 2
Slide 17: Regulation G – Q3'20 Segment EBITDA Reconciliation
18 Regulation G – Q3’20 Segment EBITDA Reconciliation Hygiene, Health and Consumable Engineering Construction Corporate H.B. Fuller Adhesives Adhesives Adhesives Total Unallocated Consolidated Three Months Ended August 29, 2020 Net income attributable to H.B. Fuller $ 33,688 $ 31,334 $ 5,468 $ 70,49
Slide 18: Regulation G – FY 2020 Segment EBITDA Reconciliation
19 Regulation G – FY 2020 Segment EBITDA Reconciliation Hygiene, Health and Consumable Engineering Construction Corporate H.B. Fuller Adhesives Adhesives Adhesives Total Unallocated Consolidated Nine Months Ended August 29, 2020 Net income attributable to H.B. Fuller $ 94,979 $ 69,767 $ 12,987 $ 177
Slide 19: Regulation G – Q3'19 Segment EBITDA Reconciliation
20 Regulation G – Q3’19 Segment EBITDA Reconciliation Hygiene, Health and Consumable Engineering Construction Corporate H.B. Fuller Adhesives Adhesives Adhesives Total Unallocated Consolidated Three Months Ended August 31, 2019 Net income attributable to H.B. Fuller $ 33,934 $ 38,014 $ 8,662 $ 80,61
Slide 20: Regulation G – FY 2019 Segment EBITDA Reconciliation
21 Regulation G – FY 2019 Segment EBITDA Reconciliation Hygiene, Health and Consumable Engineering Construction Corporate H.B. Fuller Adhesives Adhesives Adhesives Total Unallocated Consolidated Nine Months Ended August 31, 2019 Net income attributable to H.B. Fuller $ 89,567 $ 101,476 $ 17,228 $ 20
Slide 21: Revenue Performance Components
22 Revenue Performance Components Three Months Nine Months Ended Ended August 29, 2020 Price (0.4%) (0.7%) Volume (2.1%) (3.1%) Organic Growth (Decline) (2.5%) (3.8%) M&A (0.2%) (0.6%) F/X (2.0%) (2.3%) Total H.B. Fuller net revenue decline (4.7%) (6.7%) Three Months Ended Nine Months Ended August 2
Slide 22: Investor contact
23 Investor contact: Vice President, Investor Relations H.B. Fuller Barbara Doyle (651) 236-5023 Q3 2020 Investor Presentation