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Nov 30, 2019
H.B. Fuller Q4 2019 Earnings Report
H.B. Fuller reported Q4 2019 results with adjusted EPS decreasing slightly due to currency and divestiture impacts, while strategic businesses gained share.
Key Takeaways
H.B. Fuller's Q4 2019 net revenue was $739 million, a decrease of 3.8% compared to Q4 2018. Net income was $32 million, or $0.61 per diluted share. Adjusted net income was $46 million, or $0.88 adjusted EPS. The company completed its business realignment to three global segments.
Debt pay down of $268 million in 2019 exceeded $200 million target.
Integration of Royal Adhesives on target with $15 million of incremental cost synergies realized in fiscal 2019.
Organic revenue was down 0.9% versus the fourth quarter of 2018, with improved volume trends sequentially versus the third quarter of 2019.
Adjusted EPS decreased 2% versus the same period last year, and would have increased approximately 4% excluding unfavorable impacts from foreign currency exchange and the divestiture of the surfactants, thickeners and dispersants business.
Forward Guidance
For fiscal year 2020, the company anticipates adjusted EPS of $3.15 to $3.35 and adjusted EBITDA of $440 to $460 million. Full year organic revenue growth is expected to be 1 to 2% compared with 2019.
Positive Outlook
- Adjusted diluted EPS of $3.15 to $3.35; up approximately 10% at the midpoint.
- Adjusted EBITDA of $440 to $460 million; up approximately 4% at the midpoint.
- Organic revenue growth of 1 to 2% from new business wins and share gains, even as challenging global macroeconomic conditions are assumed to continue in manufacturing sectors in 2020.
- Approximately $20 million of cost savings resulting from the company’s business realignment drives additional earnings growth.
- Debt repayment of approximately $200 million, on-track to accelerate the company’s 2020 deleveraging and exceed the three-year target by more than 10%.
Challenges Ahead
- Net revenue growth impacted by an estimated unfavorable impact from foreign currency exchange rates of 0.5%.
- Net revenue growth impacted by an unfavorable 0.5% impact from the divestiture of the surfactants business.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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