H. B. Fuller Company · NYSE:FUL
H. B. Fuller — Q2 2020 Earnings Presentation
23 slides from H. B. Fuller's earnings presentation, Jun 25, 2020
Slide 1: Second Quarter 2020 Conference Call
Second Quarter 2020 Conference Call Investor Presentation St. Paul, MN June 25, 2020
Slide 2: COVID-19
2 COVID-19 • Rapidly implemented health & safety protocols, business continuity plans globally • Factories safely remained open and operational as provider for essential goods • Strong demand in hygiene, health and consumables helped mitigate impacts in transportation, new energy and construction-re
Slide 3: Q2'20 Quarterly Results Summary
3 Q2’20 Quarterly Results Summary • Strong Q2’20 with Adjusted EBITDA of $101M above guidance • Sales trends in line with expectations ▪ +7% HHC Adhesives organic growth YoY ▪ Greater China organic revenues up ~1% YoY as COVID-19 recovery continues • Continue to drive restructuring savings with $7M
Slide 4: Q2 2020 Global Segment Summary
4 Q2Better 2020 Global Segment accountability Summary Global vision Stronger teamwork Hygiene, Health and Consumables Adhesives (HHC) • Double-digit growth in Hygiene, Paper products, Tape and Label and Health & Beauty markets • EBITDA margin up 70 basis points on volume growth, lower raw material c
Slide 5: Q2 2020 Key Financial Results Summary
5 Q2 2020 Key Financial Results Summary • Adjusted EBITDA of $101M exceeded guidance range • Organic revenue -7%, in line with expected sales trends • Adjusted EPS of $0.68 down YoY due to COVID-19 impacts on global demand • Q2 YTD Cash Flow from Operations of $108M up 40% YoY; improved working capi
Slide 6: 2020 Current Planning Assumptions
6 2020 Current Planning Assumptions • Q3’20 revenue estimated to be down between 5% and 10% year-over-year • Q3’20 adjusted EBITDA estimated in the range of $95M to $105M • Planning for recessionary forces to impact global demand and revenues in 2H20 • Planning for decreased raw material costs prima
Slide 7: 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 agility is competitive advantage • Cash generative business with ample liquidity and room under deb
Slide 8: H.B. Fuller
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Slide 9: Appendix
APPENDIX Q2 2020 Investor Presentation
Slide 10: 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 11: Regulation G – EPS & EBITDA Reconciliation
11 Regulation G – EPS & EBITDA Reconciliation Three Months Ended Six Months Ended May 30, 2020 June 1, 2019 May 30, 2020 June 1, 2019 Net income attributable to H.B. Fuller $ 31,613 $ 36,641 $ 41,508 $ 48,885 Adjustments: Acquisition project costs (1,266) 539 (998) 623 Organizational realignment 1,5
Slide 12: Regulation G – Q2 Segment Information
12 Regulation G – Q2 Segment Information Three Months Ended Three Months Ended May 30, 2020 June 1, 2019 Net Revenue: Hygiene, Health and Consumable Adhesives $ 344,673 $ 337,892 Engineering Adhesives 236,063 303,922 Construction Adhesives 93,866 111,791 Corporate Unallocated - 5,978 Total H.B. Full
Slide 13: Regulation G – FY2020 Segment Information
13 Regulation G – FY2020 Segment Information Six Months Ended Six Months Ended May 30, 2020 June 1, 2019 Net Revenue: Hygiene, Health and Consumable Adhesives $ 657,185 $ 657,746 Engineering Adhesives 484,958 568,294 Construction Adhesives 179,023 194,581 Corporate Unallocated - 11,897 Total H.B. Fu
Slide 14: Regulation G – Adjusted Income Reconciliation
14 Regulation G – Adjusted Income Reconciliation Three Months Ended Six Months Ended May 30, 2020 June 1, 2019 May 30, 2020 June 1, 2019 Income before income taxes and income from equity method investments $ 41,206 $ 51,449 $ 55,089 $ 65,272 Adjustments: Acquisition project costs (1,725) 655 (1,512)
Slide 15: Regulation G – Adjusted Income Tax Reconciliation
15 Regulation G – Adjusted Income Tax Reconciliation Three Months Ended Six Months Ended May 30, 2020 June 1, 2019 May 30, 2020 June 1, 2019 Income taxes $ (11,471) $ (16,441) $ (17,082) $ (19,581) Adjustments: Acquisition project costs 459 (116) 514 (146) Organizational realignment (562) (311) 177
Slide 16: Regulation G – Adjusted Gross Margin Reconciliation
16 Regulation G – Adjusted Gross Margin Reconciliation Three Months Ended Six Months Ended May 30, 2020 June 1, 2019 May 30, 2020 June 1, 2019 Net revenue 674,602 759,583 1,321,166 1,432,518 Gross profit $ 184,901 $ 218,459 $ 355,163 $ 398,384 Gross profit margin 27.4% 28.8% 26.9% 27.8% Adjustments:
Slide 17: Regulation G – Adjusted SG&A Reconciliation
17 Regulation G – Adjusted SG&A Reconciliation Three Months Ended Six Months Ended May 30, 2020 June 1, 2019 May 30, 2020 June 1, 2019 Selling, general and administrative expenses $ (127,998) $ (146,079) $ (269,507) $ (291,792) Adjustments: Acquisition project costs (1,725) 655 (1,512) 769 Organizat
Slide 18: Regulation G – Q2'20 Segment EBITDA Reconciliation
18 Regulation G – Q2’20 Segment EBITDA Reconciliation Hygiene, Health and Consumable Engineering Construction Corporate H.B. Fuller Adhesives Adhesives Adhesives Total Unallocated Consolidated Three Months Ended May 30, 2020 Net income attributable to H.B. Fuller $ 36,804 $ 21,598 $ 7,708 $ 66,110 $
Slide 19: 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 Six Months Ended May 30, 2020 Net income attributable to H.B. Fuller $ 61,291 $ 38,433 $ 7,518 $ 107,242
Slide 20: Regulation G – Q2'19 Segment EBITDA Reconciliation
20 Regulation G – Q2’19 Segment EBITDA Reconciliation Hygiene, Health and Consumable Engineering Construction Corporate H.B. Fuller Adhesives Adhesives Adhesives Total Unallocated Consolidated Three Months Ended June 1, 2019 Net income attributable to H.B. Fuller $ 33,397 $ 40,397 $ 9,236 $ 83,030 $
Slide 21: 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 Six Months Ended June 1, 2019 Net income attributable to H.B. Fuller $ 55,633 $ 63,462 $ 8,567 $ 127,662
Slide 22: Revenue Performance Components
22 Revenue Performance Components Three Months Six Months Ended Ended May 30, 2020 May 30, 2020 Total Total Price (0.5%) (0.8%) Volume (6.8%) (3.7%) Organic Growth (Decline) (7.3%) (4.5%) M&A (0.8%) (0.8%) F/X (3.1%) (2.5%) Total H.B. Fuller net revenue decline (11.2%) (7.8%) Three Months Ended Six
Slide 23: Investor contact
23 Investor contact: Vice President, Investor Relations H.B. Fuller Barbara Doyle (651) 236-5023 Q2 2020 Investor Presentation