H. B. Fuller Company · NYSE:FUL
H. B. Fuller — Q1 2018 Earnings Presentation
15 slides from H. B. Fuller's earnings presentation, Mar 29, 2018
Slide 1: First Quarter 2018 Conference Call
First Quarter 2018 Conference Call Investor Presentation St. Paul, MN March 29, 2018
Slide 2: Safe Harbor & Regulation G
2 Safe Harbor & Regulation G Safe Harbor Statement Certain matters discussed today may include 'forward looking statements' as that term is defined under the Private Securities Litigation Reform Act of 1995. Since such statements reflect our current expectations, actual results may differ as they ar
Slide 3: Business Summary
3 Business Summary Q1 Items of Note 2018 Focus Areas • Royal integration underway • Realize $50 million in pricing, and delivering results as communicated, to offset • Revenue growth of 42%; up raw material inflation 11% vs proforma 2017, led • Continue Royal integration by Engineering Adhesives and
Slide 4: Q1 2018 Segment Summary
4 Q1Better 2018 Segment Summary accountability Stronger teamwork Global vision EIMEA • Organic Growth +4% YOY • Adjusted EBITDA up over 10% Americas Adhesives Asia Pacific • Organic growth +4% YOY • Net Revenue Growth +6% YOY • Adjusted EBITDA margin down • Adjusted EBITDA margin down YOY due to RM
Slide 5: Royal Integration
5 Royal Integration • Ted Clark, Royal CEO, will remain to run the integration Management • Five primary commercial leaders will remain in key commercial roles Continuity • We began to see benefits in January • Realized $2 million in savings in the first quarter Procurement Synergies • On track to a
Slide 6: Q1 2018 Financial Results Summary
6 Q1 2018 Financial Results Summary • Net revenue grew 40% vs Q1 2017, driven by inclusion of Royal • 11% revenue growth vs proforma 2017, including +4% from currency, with price a more positive contributor • Adjusted gross margin declined versus prior year driven by increased raw material costs dur
Slide 7: Fiscal Year 2018 Guidance
7 Fiscal Year 2018 Guidance • Net revenue growth of ~35% − 6-7% growth on a proforma 2017 basis, for the remainder of the year − Good growth across all segments plus incremental pricing to offset raw material inflation in 2017 − Currency contributes 2% at current rates • Adjusted EBITDA of ~$465 mil
Slide 8: Wrap-Up
11 Wrap-Up • 2018 is off to a great start • Key priority is successful integration of Royal business • Secured a significant percentage of raw material synergy • Announced action plan for manufacturing synergies • Received first orders related to revenue synergies • Positive volume growth in both le
Slide 9: a =H.B. Fuller
a =H.B. Fuller
Slide 10: Regulation G – Q1 2018 Proforma P&L
Regulation G – Q1 2018 Proforma P&L Adjusted Three Months Three Months Ended % of Net Ended % of Net March 3, 2018 Revenue Adjustments March 3, 2018 Revenue Net revenue $ 713,079 100.0% $ $ 713,079 100.0% Cost of sales (525,374) (73.7%) (559) (524,815) (73.6%) Gross profit 187,705 26.3% (559) 188,26
Slide 11: Regulation G – Q1 2017 Proforma P&L
Regulation G – Q1 2017 Proforma P&L Adjusted Three Months Three Months Ended % of Net Ended % of Net March 4, 2017 Revenue Adjustments March 4, 2017 Revenue Net revenue $ 503,323 100.0% $ - $ 503,323 100.0% Cost of sales (364,327) (72.4%) (5,156) (359,171) (71.4%) Gross profit 138,996 27.6% (5,156)
Slide 12: Regulation G – EPS Adjustments
12 Regulation G –EPS Adjustments Three Months ended March 3, 2018 Three Months ended March 4, 2017 Income Income before Income Diluted before Income Diluted Income Tax Taxes EPS Income Tax Taxes EPS GAAP Earnings $ 15,050 $ (32,632) $ 0.92 $ 20,560 $ 5,765 $ 0.29 Acquisition project costsb 559 184 0
Slide 13: Regulation G – Q1 Segment Information
13 Regulation G – Q1 Segment Information Three Months Ended Three Months Ended March 3, 2018 March 4, 2017 Net Revenue: Americas Adhesives $ 261,331 $ 193,162 EIMEA 178,583 124,039 Asia Pacific 66,674 62,645 Construction Adhesives 97,245 57,046 Engineering Adhesives 109,246 66,431 Total H.B. Fuller
Slide 14: Revenue Growth Components
14 Revenue Growth Components Three Months Ended March 3, 2018 Americas Asia Construction Engineering Adhesives EIMEA Pacific Adhesives Adhesives Total HBF Price 1.0% 3.2% 0.8% (0.3%) 4.5% 1.8% Volume 1.8% 0.5% (1.5%) (4.0%) 5.8% 0.9% Mix 0.5% 0.1% 0.0% (0.7%) 2.2% 0.4% Acquisition 31.7% 29.4% 1.9% 7
Slide 15: Regulation G – Q1 EBITDA Reconciliation
15 Regulation G – Q1 EBITDA Reconciliation Three Months Ended Three Months Ended March 3, 2018 March 4, 2017 Net income including non-controlling interests $ 47,667 $ 14,831 Income from equity method investments (1,821) (2,274) Income taxes (32,632) 5,765 Interest expense 27,545 8,380 Other income (