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May 30, 2020
H.B. Fuller Q2 2020 Earnings Report
H.B. Fuller reported strong operational performance driven by solid organic sales results, benefits from restructuring efficiencies, and lower raw material costs.
Key Takeaways
H.B. Fuller reported net income of $32 million, or $0.61 per diluted share, and adjusted EBITDA of $101 million, exceeding the company's guidance. Organic revenues declined by 7% compared with last year, while Hygiene, Health and Consumable Adhesives (HHC) revenues grew by 7%. The company remains on track to achieve its $200 million debt repayment target for 2020.
Strong operational performance with net income of $32 million and adjusted EBITDA of $101 million, which exceeded the company’s guidance, driven by solid organic sales results, benefits from restructuring efficiencies, and lower raw material costs.
Total organic revenues declined by 7% compared with last year, reflecting the company’s broadly diversified customer base and end markets.
7% organic growth in Hygiene, Health and Consumable Adhesives (HHC) revenues, driven by double-digit growth in adhesives for essential goods and packaging.
Debt paydown of $45 million in the quarter exceeded the amount repaid in the second quarter of last year.
Forward Guidance
Estimated revenue in the third quarter anticipated to be down 5% to 10% year over year, and adjusted EBITDA anticipated to be approximately $95 million to $105 million.
Positive Outlook
- Continued elevated demand for HHC goods, such as food and e-Commerce packaging, paper products, medical and personal protective equipment through the second half of the year, although at a slower rate than experienced in the second quarter as restocking of these products returns to more typical levels.
- Lower year-over-year demand for durable products and building materials in industries such as new energy, transportation and construction.
- The company currently anticipates year-over-year comparisons for Engineering Adhesives and Construction Adhesives in the second half of the year will improve compared with second quarter results as industrial production and building construction starts to ramp up around the world.
- Continued moderate declines in raw material costs in the second half of the year, driven by supply-demand dynamics for specialty chemicals and petrochemical feedstock costs.
- Continued benefits from restructuring actions taken at the end of 2019.
Historical Earnings Impact
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