H. B. Fuller Company · NYSE:FUL
H. B. Fuller — Q3 2019 Earnings Presentation
23 slides from H. B. Fuller's earnings presentation, Sep 26, 2019
Slide 1: Third Quarter 2019 Conference Call
Third Quarter 2019 Conference Call Investor Presentation St. Paul, MN September 26, 2019
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: Q3'19 Business Summary
3 Q3’19 Business Summary Q3’19 Highlights 2019 Imperatives EBITDA • Share gains and margin expansion in a • Margins up in challenging environment weak industrial production environment • Adj EPS & EBITDA up YoY, excluding FX and impact from divestiture • Strong cash flow conversion and • $4M Royal
Slide 4: Q3 2019 Segment Summary
4 Q3Better 2019 Segment Summary accountability Stronger teamwork Global vision Americas Adhesives • Organic sales growth ~flat year-over-year • Improving volume trends; now annualized against 2018 pricing actions • Adjusted EBITDA margin of 16% up sequentially from Q2 EIMEA Asia Pacific • PMI slowdo
Slide 5: Realigning in 2020 to Three Global Business Units
5 Realigning in 2020 to Three Global Business Units • Enhances strategic alignment of business strategies • Accelerates global coordination across regions and end markets • Simplifies business and reduces costs 2020 + Engineering Hygiene, Health & Construction Adhesives Consumable Adhesives Adhesive
Slide 6: Q3 2019 Key Financial Results Summary
6 Q3 2019 Key Financial Results Summary • Net Revenue down 5.8% year-over-year; organic sales down 3.3% • Adjusted gross margin of 28.8% increased 40 bps YOY • Adjusted SG&A declined by 5.6% YoY • Adjusted EPS of $0.86, flat YoY; up excluding FX and divestiture • Adjusted EBITDA of $116M vs. $120M i
Slide 7: FY 2019 Guidance Update
7 FY 2019 Guidance Update Revised Prior Reported Revenue Approx -5% YoY Approx -3% YoY Organic Growth Approx -1% 1% to 2% FX impact -3% to -4% -3% to -4% Divestiture -0.5% -0.5% Adjusted EPS $2.95 to $3.05 $3.10 to $3.30 Adjusted EBITDA $440M to $445M $455M to $465M Debt paydown $260M $250M Assumes:
Slide 8: Wrap-Up
6 Wrap-Up • Strong margin and cash flow resilience to dynamic external conditions • Winning new customer business in highly engineered applications • Continued focus on organic revenue growth and margin improvement • Accelerating debt deleverage commitments • 2020 Business realignment to drive cost
Slide 9: H.B. Fuller
a =H.B. Fuller
Slide 10: Appendix
APPENDIX Q3 2019 Investor Presentation
Slide 11: Regulation G – EPS & EBITDA Reconciliation
9 Regulation G – EPS & EBITDA Reconciliation Three Months Ended Nine Months Ended August 31, 2019 September 1, 2018 August 31, 2019 September 1, 2018 Net income attributable to H.B. Fuller $ 49,718 $ 37,730 $ 98,603 $ 129,863 Adjustments: Acquisition project costs 1,535 1,545 2,158 2,216 Tonsan call
Slide 12: Regulation G – Q3 Segment Information
10 Regulation G – Q3 Segment Information Three Months Ended Three Months Ended August 31, 2019 September 1, 2018 Net Revenue: Americas Adhesives $ 259,758 $ 268,736 EIMEA 154,278 171,505 Asia Pacific 65,624 65,960 Construction Adhesives 107,920 123,977 Engineering Adhesives 137,796 139,929 Total H.B
Slide 13: Regulation G – YTD Segment Information
11 Regulation G – YTD Segment Information Nine Months Ended Nine Months Ended August 31, 2019 September 1, 2018 Net Revenue: Americas Adhesives $ 761,408 $ 785,931 EIMEA 476,244 522,658 Asia Pacific 200,109 206,990 Construction Adhesives 301,619 345,125 Engineering Adhesives 418,514 411,869 Total H.
Slide 14: Regulation G – Adjusted Income Reconciliation
12 Regulation G – Adjusted Income Reconciliation Three Months Ended Nine Months Ended August 31, 2019 September 1, 2018 August 31, 2019 September 1, 2018 Income before income taxes and income from equity method investments $ 66,976 $ 44,836 $ 132,248 $ 113,863 Adjustments: Acquisition project costs
Slide 15: Regulation G – Adjusted Income Tax Reconciliation
13 Regulation G – Adjusted Income Tax Reconciliation Three Months Ended Nine Months Ended August 31, 2019 September 1, 2018 August 31, 2019 September 1, 2018 Income Taxes $ (19,321) $ (9,300) $ (38,902) $ 9,844 Adjustments: Acquisition project costs (336) (556) (482) (892) Tonsan call option agreeme
Slide 16: Regulation G – Adjusted Gross Margin Reconciliation
14 Regulation G – Adjusted Gross Margin Reconciliation Three Months Ended Nine Months Ended August 31, 2019 September 1, 2018 August 31, 2019 September 1, 2018 Net revenue 725,376 770,107 2,157,894 2,272,573 Gross profit $ 207,321 $ 215,030 $ 605,705 $ 620,729 Gross profit margin 28.6% 27.9% 28.1% 2
Slide 17: Regulation G – Adjusted SG&A Reconciliation
15 Regulation G – Adjusted SG&A Reconciliation Three Months Ended Nine Months Ended August 31, 2019 September 1, 2018 August 31, 2019 September 1, 2018 Selling, general and administrative expenses $ (140,615) $ (147,739) $ (432,407) $ (447,335) Adjustments: Acquisition project costs 1,871 279 2,641
Slide 18: Regulation G – Q3'19 Segment EBITDA Reconciliation
16 Regulation G – Q3’19 Segment EBITDA Reconciliation Americas Asia Construction Engineering Corporate H.B. Fuller Adhesives EIMEA Pacific Adhesives Adhesives Total Unallocated Consolidated Three Months Ended August 31, 2019 $ 30,239 $ 7,086 $ 6,155 $ 8,065 $ 18,573 $ 70,118 $ (20,400) $ 49,718 Net
Slide 19: Regulation G – YTD 2019 Segment EBITDA Reconciliation
17 Regulation G – YTD 2019 Segment EBITDA Reconciliation Americas Asia Construction Engineering Corporate H.B. Fuller Adhesives EIMEA Pacific Adhesives Adhesives Total Unallocated Consolidated Nine Months Ended August 31, 2019 $ 76,398 $ 20,400 $ 15,773 $ 13,205 $ 57,826 $ 183,602 $ (84,999) $ 98,60
Slide 20: Regulation G – Q3'18 Segment EBITDA Reconciliation
18 Regulation G – Q3’18 Segment EBITDA Reconciliation Americas Asia Construction Engineering Corporate H.B. Fuller Adhesives EIMEA Pacific Adhesives Adhesives Total Unallocated Consolidated Three Months Ended September 1, 2018 $ 33,335 $ 7,132 $ 3,714 $ 12,735 $ 14,219 $ 71,135 $ (33,405) $ 37,730 N
Slide 21: Regulation G – YTD 2018 Segment EBITDA Reconciliation
19 Regulation G – YTD 2018 Segment EBITDA Reconciliation Americas Asia Construction Engineering Corporate H.B. Fuller Adhesives EIMEA Pacific Adhesives Adhesives Total Unallocated Consolidated Nine Months Ended September 1, 2018 $ 78,378 $ 25,589 $ 11,117 $ 26,893 $ 43,029 $ 185,006 $ (55,143) $ 129
Slide 22: Revenue Growth Components
20 Revenue Growth Components Three Months Ended Nine Months Ended August 31, 2019 August 31, 2019 Total Total Price (0.6%) 1.5% Volume (2.7%) (2.7%) Organic Growth (Decline) (3.3%) (1.2%) M&A (0.6%) (0.2%) F/X (1.9%) (3.7%) Total H.B. Fuller net revenue (5.8%) (5.1%) Three Months Ended Nine Months E
Slide 23: Investor contact
21 Investor contact: Vice President, Investor Relations H.B. Fuller Barbara Doyle (651) 236-5023 Q3 2019 Investor Presentation