ST. PAUL, Minn.—H.B. Fuller Co. saw increased EBITDA margins on slightly higher year-on-year net sales of $3.57 billion in 2024, the company said in a Jan. 16 investor call.
However, delayed orders and lower volumes across a majority of end markets in the fourth quarter of last year led the global chemical and pureplay adhesives distributor to a flat finish.
"Overall, I am proud of the progress we made in fiscal year 2024," said Celeste Mastin, president and CEO of H.B. Fuller. "We continued to expand adjusted EBITDA margin and enhanced the profile of our portfolio through several strategic acquisitions and the divestiture of our flooring business."
"At the same time, I am disappointed that we were unable to finish the year as strong as we had expected. In the fourth quarter, we encountered an unexpected deceleration in volume across the majority of our end markets."
In addition, Mastin told media and investors Jan. 16 that delays in customer order patterns, particularly in consumer products market segments, "shifted price increase realization into fiscal 2025, delaying the offset of higher raw material costs and resulting in margin deterioration."
"We are intensely focused on what we can control and have already begun executing additional pricing actions and cost controls to prudently prepare for a challenging volume growth environment in 2025," she said. "Our strategic plan to continue to evolve H.B Fuller into a higher growth, higher margin company remains on track on the timeline we originally communicated."
The $3.57 billion in net revenue for the full year was 1.6 percent higher than net revenue in 2023, with an adjusted diluted earnings per share of $3.84 and adjusted EBITDA of approximately $594 million—up 2.2 percent year-on-year to 16.6 percent.
The increase in gross margin was a function of pricing and raw material cost actions, higher year-on-year volume and restructuring benefits.
Cash flow from operations for 2024 was approximately $301 million.
For the fourth quarter of 2024, net revenue was $923 million, up 2.3 percent year-on-year. This was offset by organic sales, which were down slightly against the fourth quarter of 2023.
Net income showed a $7 million loss, including an unfavorable $38 million impact related to the flooring divestiture. Adjusted EBITDA was $148 million, down 14 percent year-on-year, and adjusted EBITDA margin was 16.1 percent.
"Fourth quarter net revenue and earnings were adversely impacted by weaker than expected conditions and delayed orders, particularly in consumer product goods and packaging related end markets as well as durable goods distribution," Mastin said. "In addition, delayed customer order patterns shifted price increase realization into fiscal 2025 while higher raw material costs, primarily in hygiene, health and consumable adhesives, negatively impacted adjusted EBITDA."