H.B. Fuller Company Q2 FY2025 earnings call

• Innovation: Highlighted winners of the second annual H.B. Fuller Customer Innovation Awards, including CMC Packaging Automation, Chengdu Xinyu, MITRE Brands, and Georgia Pacific.
• Sustainability: Mentioned the newly released sustainability report and being named one of the world's greenest companies in 2025.
• Retirement: Steven Brazones, Vice President of Investor Relations, announced his intention to retire this summer.

In HHC, organic revenue increased 1.8% year on year, driven by positive volume and price. EBITDA margin was 15.6% but down year on year due to higher raw material costs. In Engineering Adhesives, revenue decreased 0.4% y/y, but EBITDA increased 24% and margin rose 310 basis points to 22.9% due to favorable net pricing, raw material actions, cost savings, and acquisitions. Building Adhesive Solutions sales decreased 0.9% y/y, but EBITDA increased 5% and margin expanded 60 basis points to 16.7% from favorable net pricing, raw material actions, and cost savings. Geographically, Americas organic revenue was up 2% y/y, EIMEA was down 2% y/y, and Asia Pacific was slightly up y/y.

• Net revenue expected to be down 2% to 3% year on year.
• Organic revenue expected to be flat to up 2% year on year.
• Foreign exchange expected to adversely impact revenue by between 1-1.5% year on year.
• Adjusted EBITDA expected in the range of $615 million to $630 million, equating to growth of 4% to 6% year on year.
• Fully diluted shares outstanding expected in the range of 55 million to 56 million shares.
• Full-year adjusted EPS expected in the range of $4.10 to $4.30, equating to year-on-year growth of between 7-12%.
• Full-year operating cash flow expected to be between $300 million and $325 million.
• Third-quarter EBITDA expected in the range of $165 million to $175 million.

• Geopolitical and market uncertainties.
• Currency unpredictability.
• Potential volume constraints due to tariffs and global economic uncertainties.

Q: Ghansham Panjabi asks about EA margin performance and solar timeline.

A: Celeste Mastin responds about EA margin being boosted by ND Industries acquisition outperformance and cost control, and solar impact expected to lessen later in the year.

Q: Patrick Cunningham asks about electronics weakness and HHC margin progression.

A: Celeste Mastin talks about electronics business strength in certain areas and HHC margin expansion due to raw material cost reductions and pricing benefits.

Q: Kevin W. McCarthy asks about EPS cadence and capital expenditure trajectory.

A: John Corkrean discusses EPS cadence resembling normal year and capital expenditure expectations for the back half and beyond.

Q: Jeff Zekauskas asks about acquisition project costs, pension income, raw materials, and demand.

A: John Corkrean addresses acquisition costs related to flooring divestiture, pension income, raw materials declining sequentially, and demand steady outside of domestic home construction slowdown.

Q: Mike Harrison asks about volume trends in China and FlexPack packaging.

A: Celeste Mastin talks about temporary electronics volume pause in China and FlexPack growth due to share gains and solution provision.

Q: Rosemarie Morbelli asks about tariff impact and defense business.

A: Celeste Mastin discusses limited direct tariff impact due to sourcing and pricing actions, and defense business being a small but growing part of the diversified portfolio