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Feb 26, 2022
H.B. Fuller Q1 2022 Earnings Report
Reported strong first quarter fiscal 2022 results driven by operational execution, volume growth, and pricing gains.
Key Takeaways
H.B. Fuller reported a strong start to fiscal 2022, with a 21% increase in organic revenues and adjusted EPS. The company delivered adjusted EBITDA growth of 12%, exceeding guidance for the quarter, driven by volume growth and pricing performance in all three global business units.
Significant revenue and earnings growth versus the first quarter of fiscal 2021 was driven by outstanding operational execution, strong volume growth and pricing gains.
Net revenue increased 18% versus last year. Organic revenue increased 21%, with strong double-digit organic revenue growth in all three Global Business Units (GBUs).
Strong volume growth, pricing gains and cost efficiencies resulted in net income of $38 million; adjusted EBITDA of $113 million increased 12% year over year.
Earnings per diluted share (EPS) were $0.69; adjusted EPS of $0.80 increased 21% versus the prior year quarter.
H.B. Fuller
H.B. Fuller
H.B. Fuller Revenue by Segment
Revenue by Segment
Engineering Adhesives Revenue
CapyFin.com Forward Guidance
H.B. Fuller has updated its outlook for fiscal year 2022 based on current market conditions and to include the impact from the Apollo and Fourny acquisitions which were completed in January 2022.
Positive Outlook
- Year-on-year organic revenue growth of 15% to 20%.
- Apollo and Fourny acquisitions are expected to contribute approximately $60 million of revenue in 2022.
- Full year adjusted EBITDA in the range of $530 to $550 million.
- Adjusted EPS of $4.10 to $4.35.
- Working capital as a percentage of revenue is expected to decline to below 16% by fiscal 2022 year-end resulting in more normalized levels of cash flow generation for the remainder of the year.
Challenges Ahead
- Raw material and delivery costs are expected to continue to rise as the year progresses primarily driven by increasing industrial demand and supply constraints of U.S. petrochemicals.
- Anticipating an increase of approximately 12% to 15% in the cost of raw materials in the first half of 2022 versus the fourth quarter 2021 exit rate.
- Foreign currency exchange rates are anticipated to have an unfavorable impact of 3% to 4% on full year net revenue growth versus fiscal 2021.
- Full year net interest expense of $75 to $80 million.
- Total capital investments for the year are expected to increase to a range of $105 to $115 million.