H.B. Fuller lowers sales projections for 2024 full year, Q4

ST. PAUL, Minn.—Delayed orders and lower volumes have caused H.B. Fuller Co., a global chemical and pureplay adhesives distributor, to lower its projected sales estimates for the fourth quarter and full-year 2024.

The company will release its official financial results for the two fiscal periods after the market closes Jan. 15, with an investor call to follow Jan. 16 at 10:30 a.m. EST.

"Late in the fourth quarter there was a negative inflection point on volume whereby a number of market segments exhibited topline deceleration versus the previous quarter, and this adversely impacted our operating results and led to a disappointing shortfall relative to our expectations," said Celeste Mastin, president and CEO at H.B. Fuller. "In response to this weaker market environment, we are focusing on the controllable variables and putting in place new pricing actions and cost controls.

"This is in addition to our ongoing restructuring initiatives to streamline our manufacturing footprint and overall SG&A profile."

The company said Jan. 2 that it expects 2024 net revenue to be approximately $3.57 billion, adjusted diluted earnings per share to be approximately $3.84 and adjusted EBITDA to be approximately $594 million, compared to previous guidance of adjusted EBITDA between $610 million and $620 million announced Sept. 25, 2024.

H.B. Fuller said cash flow from operations for 2024 will be approximately $300 million.

"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," H.B. Fuller 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."

A telephone replay of the upcoming conference call will be available from Jan. 16 to Jan. 23.

To access the telephone replay dial 800-770-2030 (toll free) or 609-800-9909 and enter the conference identification code 6370505.

H.B. Fuller on Dec. 2 divested its flooring business and is acquiring two medical adhesive firms, as the company realigns its building and construction market segments into a larger global business unit.

The company sold its flooring business for $80 million Dec. 2 to Los Angeles-based Pacific Capital Partners, a private equity company.

The sale is expected to result in the loss of about $160 million in annual revenue and adjusted EBITDA of approximately $15 million going forward, according to H.B. Fuller.

The same day, H.B. Fuller announced the planned acquisition of Italy-based GEM S.r.L.—set to close in February—and Medifill Ltd. of Dublin, Ireland, a sale that closed Dec. 2, 2024.

Combined, the two medical adhesive technology companies will be purchased by H.B. Fuller for $189 million.

The medical adhesive companies offer a greater European foothold for H.B. Fuller and are expected to generate combined annual revenue of $24.2 million, with an adjusted annual EBITDA of $12.1 million.

The planned purchase of GEM, a provider of medical adhesives and devices approved for more than 80 internal applications, establishes a European headquarters for H.B. Fuller's Medical Adhesive Technologies business and expands the company's medical adhesive offerings.

Medifill Ltd. formulates and produces medical-grade cyanoacrylate adhesives, and boasts a clean room and manufacturing capabilities.

Medifill's technologies are tailored for the wound closure market, "enabling fast, safe and effective wound closure," H.B. Fuller said in a Dec. 2 release on the acquisition.

In addition to the M&A movement on Dec. 2, H.B. Fuller also launched its new Building Adhesives Solutions global business unit (without flooring), a combination of the company's insulated glass, woodworking and composite segments (which had been part of Engineering Adhesives); and its roofing and building envelope and infrastructure (BE&I) segments.

Moving forward, the three official GBUs for H.B. Fuller will be the BAS GBU, which replaces the Construction Adhesives GBU; Engineering Adhesives GBU; and Hygiene, Health and Consumable Adhesives (HHC) GBU.