H. B. Fuller Company · NYSE:FUL
H. B. Fuller — Q2 2018 Earnings Presentation
19 slides from H. B. Fuller's earnings presentation, Jun 28, 2018
Slide 1: Second Quarter 2018 Conference Call
Second Quarter 2018 Conference Call Investor Presentation St. Paul, MN June 28, 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 Q2 Highlights • Very strong quarter and another milestone towards 2020 • Both legacy H.B. Fuller and Royal businesses performing well and synergy delivery creating improved results • Revenue growth of 8% vs proforma 2017 • Adjusted gross margin improved 30bps YOY • Adjusted EBITDA
Slide 4: 2018 Focus Areas
4 2018 Focus Areas Annual Imperatives Q2 Achievements • Realize $50 million in pricing, • Met goal by realized solid as communicated, to offset pricing during quarter, in-line raw material inflation with annual target • Continue Royal integration • Achieved $4 million of and deliver $15 million in s
Slide 5: Q2 2018 Segment Summary
5 Q2Better 2018 Segment Summary accountability Stronger teamwork Global vision EIMEA • Organic growth +4% YOY • Adjusted EBITDA margin up 160 bps to 13% Americas Adhesives Asia Pacific • Revenue growth +1% YOY • Net Revenue Growth +15% YOY • Adjusted EBITDA margin up • Adjusted EBITDA margin down si
Slide 6: Royal Integration
6 Royal Integration • Ted Clark, Royal CEO, continues to lead the integration Framework • Leveraging our synergy tracking tools; well managed governance process • Realized $4 million in savings in the second quarter; $6 million to date Procurement • On track to achieve $15 million in synergies this
Slide 7: Q2 2018 Financial Results Summary
7 Q2 2018 Financial Results Summary • 8% revenue growth vs proforma 2017, including +4% from currency, with price a significant contributor at more than 3% • Adjusted gross margin improved 30bps YOY and 190bps sequentially, a solid result given timing of last year’s inflation • Adjusted SG&A up 6% v
Slide 8: Fiscal Year 2018 Guidance
8 Fiscal Year 2018 Guidance • 5-6% revenue growth for the remainder of year, proforma for Royal − Good growth across all segments driven by pricing to offset raw material inflation in 2017 − Currency neutral in second half • Adjusted EBITDA of ~$470 million,13% growth on proforma basis, expect ~$125
Slide 9: Wrap-Up
9 Wrap-Up • Great Q2, 2018 is progressing well • We are well on our way to successfully integrating the Royal business • Secured a significant percentage of raw material synergy • Created plan for manufacturing synergies • Received first orders related to revenue synergies • Solid organic growth in
Slide 10: We look forward to seeing you at our Investor Day
We look forward to seeing you at our Investor Day
Slide 11: Regulation G – EPS & EBITDA Reconciliation
Regulation G – EPS & EBITDA Reconciliation Three Months Ended Six Months Ended June 2, 2018 June 3, 2017 June 2, 2018 June 3, 2017 Net income attributable to H.B. Fuller $ 44,451 $ 25,867 $ 92,133 $ 40,662 Acquisition project costs 297 855 672 1,499 Tonsan call option agreement (2,294) (3,569) (2,17
Slide 12: Regulation G – Q2 Segment Information
12 Regulation G – Q2 Segment Information Three Months Three Months Ended Ended June 2, 2018 June 3, 2017 Net Revenue: Americas Adhesives $ 277,992 $ 229,622 EIMEA 193,427 135,226 Asia Pacific 74,326 64,466 Construction Adhesives 121,795 63,754 Engineering Adhesives 121,847 68,583 Total H.B. Fuller $
Slide 13: Regulation G – YTD Q2 Segment Information
13 Regulation G – YTD Q2 Segment Information Six Months Six Months Ended Ended June 2, 2018 June 3, 2017 Net Revenue: Americas Adhesives $ 539,323 $ 422,784 EIMEA 372,010 259,265 Asia Pacific 141,000 127,112 Construction Products 219,039 120,800 Engineering Adhesives 231,094 135,013 Total H.B. Fulle
Slide 14: Regulation G – Adjusted Gross Margin and SG&A
Regulation G – Adjusted Gross Margin and SG&A Three Months Ended Six Months Ended June 2, 2018 June 3, 2017 June 2, 2018 June 3, 2017 Net revenue 789,387 561,651 1,502,466 1,064,974 Gross profit $ 222,385 $ 146,038 $ 410,090 $ 285,034 Gross profit margin 28.2% 26.0% 27.3% 26.8% Adjustments: Acquisit
Slide 15: Regulation G – Q2 18 Segment EBITDA Recon
15 Regulation G – Q2 18 Segment EBITDA Recon Americas Asia Construction Engineering Corporate H.B. Fuller Adhesives EIMEA Pacific Adhesives Adhesives Total Unallocated Consolidated Three Months Ended June 2, 2018 $ 32,607 $ 14,040 $ 5,040 $ 11,673 $ 13,826 $ 77,186 $ (32,735) $ 44,451 Net income att
Slide 16: Regulation G – YTD Q2 18 Segment EBITDA Recon
16 Regulation G – YTD Q2 18 Segment EBITDA Recon Americas Asia Construction Engineering Corporate H.B. Fuller Adhesives EIMEA Pacific Adhesives Adhesives Total Unallocated Consolidated Six Months Ended June 2, 2018 $ 50,118 $ 21,878 $ 7,362 $ 12,938 $ 21,575 $ 113,871 $ (21,738) $ 92,133 Net income
Slide 17: Regulation G – Q2 17 Segment EBITDA Recon
17 Regulation G – Q2 17 Segment EBITDA Recon Americas Asia Construction Engineering H.B. Fuller Adhesives EIMEA Pacific Adhesives Adhesives Total Unallocated Consolidated Three Months Ended June 3, 2017 $ 26,456 $ 8,083 $ 4,751 $ (1,853) $ 5,832 $ 43,268 $ (17,401) $ 25,867 Net income attributable t
Slide 18: Regulation G – YTD Q2 17 Segment EBITDA Recon
18 Regulation G – YTD Q2 17 Segment EBITDA Recon Americas Asia Construction Engineering H.B. Fuller Adhesives EIMEA Pacific Adhesives Adhesives Total Unallocated Consolidated Six Months Ended June 3, 2017 $ 47,488 $ 9,880 $ 6,630 $ (2,536) $ 7,887 $ 69,349 $ (28,687) $ 40,662 Net income attributable
Slide 19: Revenue Growth Components
19 Revenue Growth Components Three Months Ended June 2, 2018 Americas Construction Engineering Adhesives EIMEA Asia Pacific Products Adhesives Total HBF Price 3.1% 4.8% 0.6% (0.6%) 6.8% 3.2% Volume (5.2%) (1.5%) 7.4% (0.2%) 9.3% (0.5%) Mix 1.2% 0.5% (0.7%) 0.5% 1.2% 0.7% Acquisition 23.1% 29.9% 1.4%