H.B Fuller Full-Year Report 2023

Highlights

• 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;
• Gross margin was 30.3%; adjusted gross margin of 31.3% increased 510 basis points year-on-year, driven by pricing and raw material cost actions and restructuring benefits;
• Net income was $45 million; adjusted EBITDA was $173 million, up 22% year-on-year, and adjusted EBITDA margin expanded 440 basis points year-on-year to 19.1%;
• Reported EPS (diluted) was $0.80; adjusted EPS (diluted) was $1.32, up 27% versus the prior year, driven by strong operating income growth;
• Net working capital, as a percentage of annualized net revenue, decreased 200 basis points sequentially from 18.1% in the third quarter to 16.1% in the fourth quarter;
• Net debt-to-adjusted EBITDA ratio declined sequentially from 3.3X to 2.9X driven both by lower net debt and growth in adjusted EBITDA.