H. B. Fuller Company · NYSE:FUL
H. B. Fuller — Q4 2018 Earnings Presentation
23 slides from H. B. Fuller's earnings presentation, Jan 17, 2019
Slide 1: Fourth Quarter 2018 Conference Call
Fourth Quarter 2018 Conference Call Investor Presentation St. Paul, MN Jan. 17, 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: Business Summary
3 Business Summary Q4 Highlights • Good business performance in challenging macro-economic conditions • Adjusted EBITDA margins increased vs. Q4’17 in every segment • Strong legacy FUL and Royal performance and Royal synergy capture • Exceeded debt pay down target for 2018 • 2019 guidance w/growth o
Slide 4: Imperatives for Continued Improvements in 2019
4 Imperatives for Continued Improvements in 2019 2018 2018 Imperatives Results 2019 Imperatives • Realize annualized • Strategically manage pricing to offset raw product lines & pricing material inflation to maximize EBITDA • Continue Royal • Deliver additional $15 integration and deliver million in
Slide 5: Q4 2018 Segment Summary
5 Q4Better 2018 Segment Summary accountability Stronger teamwork Global vision EIMEA • Organic revenue growth 3% YOY • Adjusted EBITDA margin 11% • Anticipate some core Europe slowdown Americas Adhesives Asia Pacific • Organic revenue growth 3% YOY • Organic revenue -2% YOY • Adjusted EBITDA margin
Slide 6: Q4 2018 Key Financial Results Summary
6 Q4 2018 Key Financial Results Summary • Net Revenue up 13%, with ~4% organic revenue growth vs. Q4’17 • Adjusted gross margin of 28%, up 150bps YOY, proforma for Royal • Adjusted SG&A lower by 2% YoY, proforma for Royal • Adjusted EPS of $0.90, up 27% YOY • Strong Cash Flow from Operations of $146
Slide 7: Fiscal Year 2019 Guidance Summary
7 Fiscal Year 2019 Guidance Summary • Adjusted FY’19 EPS of $3.15 - $3.45; ~10% growth at mid-point • Organic Revenue growth of 3 - 5% vs. 2018 – Anticipate negative F/X impact of 2 – 3% – Approx. 1 - 2% net revenue growth, including FX impacts – Good pricing vs. raws pricing carryover and low-singl
Slide 8: Wrap-Up
10 Wrap-Up • Good business execution on our key imperatives • Higher margins and organic growth in legacy and Royal businesses • Pricing actions delivered results in 2018 and position us well in 2019 • Successful Royal integration driving shareholder value – Sourcing cost synergy capture on target –
Slide 9: a =H.B. Fuller
a =H.B. Fuller
Slide 10: Appendix
APPENDIX Q4 2018 Investor Presentation
Slide 11: Regulation G – EPS & EBITDA Reconciliation
12 Regulation G – EPS & EBITDA Reconciliation 13 Weeks Ended 52 Weeks Ended December 1, 2018 December 2, 2017 December 1, 2018 December 2, 2017 Net income attributable to H.B. Fuller $ 41,345 $ (6,907) $ 171,208 $ 59,418 Acquisition project costs 616 1,894 2,833 5,258 Tonsan call option agreement 3,
Slide 12: Regulation G – Q4 2018 Segment Information
12 Regulation G – Q4 2018 Segment Information 13 Weeks Ended 13 Weeks Ended December 1, 2018 December 2, 2017 Net Revenue: Americas Adhesives $ 278,105 $ 254,100 EIMEA 184,522 171,984 Asia Pacific 71,135 74,609 Construction Adhesives 105,922 80,450 Engineering Adhesives 128,745 97,057 Total H.B. Ful
Slide 13: Regulation G – FY 2018 Segment Information
13 Regulation G – FY 2018 Segment Information 52 Weeks Ended 52 Weeks Ended December 1, 2018 December 2, 2017 Net Revenue: Americas Adhesives $ 1,099,918 $ 907,765 EIMEA 738,553 568,658 Asia Pacific 278,079 264,692 Construction Adhesives 446,101 260,330 Engineering Adhesives 478,351 304,598 Total H.
Slide 14: Regulation G – Adjusted Income Reconciliation
12 Regulation G – Adjusted Income Reconciliation 13 Weeks Ended 52 Weeks Ended December 1, December 2, December 1, December 2, 2018 2017 2018 2017 Income before income taxes and income from equity method investments $ 42,863 $ (25,812) $ 156,726 $ 60,599 Adjustments: Acquisition project costs 848 2,
Slide 15: Regulation G – Adjusted Income Tax Reconciliation
12 Regulation G – Adjusted Income Tax Reconciliation 13 Weeks Ended 52 Weeks Ended December 1, December 2, December 1, December 2, 2018 2017 2018 2017 Income Taxes $ (3,488) $ 16,691 $ 6,356 $ (9,810) Adjustments: Acquisition project costs (232) (952) (1,124) (2,732) Organizational realignment (75)
Slide 16: Regulation G – Adjusted Gross Margin Reconciliation
16 Regulation G – Adjusted Gross Margin Reconciliation 13 Weeks Ended 52 Weeks Ended December 1, December 2, December 1, December 2, 2018 2017 2018 2017 Net revenue 768,429 678,200 3,041,002 2,306,043 Gross profit $ 209,600 $ 168,788 $ 836,894 $ 605,070 Gross profit margin 27.3% 24.9% 27.5% 26.2% Ad
Slide 17: Regulation G – Adjusted SG&A Reconciliation
16 Regulation G – Adjusted SG&A Reconciliation 13 Weeks Ended 52 Weeks Ended December 1, December 2, December 1, December 2, 2018 2017 2018 2017 Selling, general and administrative expenses $ (139,844) $ (151,126) $ (582,132) $ (477,030) Adjustments: Acquisition project costs 323 1,359 1,436 3,561 T
Slide 18: Regulation G – Q4 18 Segment EBITDA Reconciliation
18 Regulation G – Q4 18 Segment EBITDA Recon. Americas Asia Construction Engineering Corporate H.B. Fuller Adhesives EIMEA Pacific Adhesives Adhesives Total Unallocated Consolidated 13 Weeks Ended December 1, 2018 $ 30,430 $ 9,424 $ 6,939 $ 7,212 $ 15,751 $ 69,756 $ (28,411) $ 41,345 Net income attr
Slide 19: Regulation G – FY 2018 Segment EBITDA Reconciliation
19 Regulation G – FY 2018 Segment EBITDA Recon. Americas Asia Construction Engineering Corporate H.B. Fuller Adhesives EIMEA Pacific Adhesives Adhesives Total Unallocated Consolidated 52 Weeks Ended December 1, 2018 $ 115,363 $ 40,060 $ 17,995 $ 32,917 $ 48,427 $ 254,762 $ (83,554) $ 171,208 Net inc
Slide 20: Regulation G – Q4 17 Segment EBITDA Reconciliation
20 Regulation G – Q4 17 Segment EBITDA Recon. Americas Asia Construction Engineering H.B. Fuller Adhesives EIMEA Pacific Adhesives Adhesives Total Unallocated Consolidated 13 Weeks Ended December 2, 2017 $ 17,579 $ 68 $ 5,402 $ (9,891) $ 4,504 $ 17,662 $ (24,569) $ (6,907) Net income attributable to
Slide 21: Regulation G – FY 2017 Segment EBITDA Reconciliation
21 Regulation G – FY 2017 Segment EBITDA Recon. Americas Asia Construction Engineering H.B. Fuller Adhesives EIMEA Pacific Adhesives Adhesives Total Unallocated Consolidated 52 Weeks Ended December 2, 2017 $ 91,198 $ 18,821 $ 14,826 $ (12,975) $ 16,170 $ 128,040 $ (68,622) $ 59,418 Net income attrib
Slide 22: Revenue Growth Components
22 Revenue Growth Components 13 Weeks Ended December 1, 2018 Americas Constructio Engineering Adhesives EIMEA Asia Pacific n Adhesives Adhesives Total HBF Price 5.0% 4.3% 2.4% 0.2% 2.1% 3.5% Volume (4.0%) (1.5%) (3.1%) (1.0%) 15.8% (0.1%) Mix 2.4% 0.3% (1.1%) (2.5%) (1.1%) 0.4% Acquisition 11.8% 12.
Slide 23: Investor contact
23 Investor contact: Vice President, Investor Relations H.B. Fuller Barbara Doyle (651) 236-5023 Q4 2018 Investor Presentation