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Dec 02, 2023
H.B. Fuller Q4 2023 Earnings Report
Reported strong profit growth and record fourth quarter adjusted EBITDA margin on exceptional execution and proactive response to significant customer destocking activity throughout the year.
Key Takeaways
H.B. Fuller reported Q4 2023 results with net revenue of $903 million, a decrease of 5.8% year-on-year. Adjusted EPS was $1.32, up 27% year-on-year. The company achieved a record fourth quarter adjusted EBITDA margin, driven by pricing and raw material cost actions, restructuring benefits and general cost reductions.
Achieved strong profit growth and record fourth quarter adjusted EBITDA margin on exceptional execution and proactive response to significant customer destocking activity throughout the year.
Net revenue was $903 million, down 5.8% year-on-year; net revenue was up 1.2% year-on-year on a 13-week comparable basis; organic revenue decreased 3.5% year-on-year, driven by slightly lower pricing and volume.
Adjusted EBITDA was $173 million, up 22% year-on-year, and adjusted EBITDA margin expanded 440 basis points year-on-year to 19.1%.
Adjusted EPS (diluted) was $1.32, up 27% versus the prior year, driven by strong operating income growth.
H.B. Fuller
H.B. Fuller
Forward Guidance
Net revenue growth for fiscal 2024 is expected to be in the range of up 2% to 6% with organic revenue flat to up 3% versus fiscal 2023, reflecting a rebound in demand following the unprecedented customer destocking activity in fiscal 2023, offset by slightly lower pricing as customers qualify lower price formulations and index-based pricing has a greater effect.
Positive Outlook
- Net revenue growth for fiscal 2024 is expected to be in the range of up 2% to 6% with organic revenue flat to up 3% versus fiscal 2023, reflecting a rebound in demand following the unprecedented customer destocking activity in fiscal 2023, offset by slightly lower pricing as customers qualify lower price formulations and index-based pricing has a greater effect.
- Adjusted EBITDA for fiscal 2024 is expected to be in the range of $610 million to $640 million, equating to growth of approximately 5% to 10% year-on-year.
- Adjusted EPS (diluted) is expected to be in the range of $4.15 to $4.45, equating to a range of up 7% to 15% year-on-year.
- Operating cash flow in fiscal year 2024 is expected to be between $300 million and $350 million
- Capital expenditures are expected to be approximately $140 million.
Challenges Ahead
- Slightly lower pricing as customers qualify lower price formulations and index-based pricing has a greater effect
- The core tax rate, excluding the impact of discrete items, is anticipated to be between 27% and 28% in fiscal year 2024.
- Net interest expense for fiscal 2024 is expected to be between $115 million and $125 million.
- Operating cash flow in fiscal year 2024 is expected to be between $300 million and $350 million
- Capital expenditures are expected to be approximately $140 million.