USA – H.B. Fuller, an adhesives manufacturing company, has reported a net income attributable to the company of US$37.62 million for the third quarter (Q3) of 2023, down by 19% from US$46.49 million in Q3 2022.
For this quarter, which ended on 2 September 2023, basic and diluted earnings per common share attributable to Fuller were US$0.69 and US$0.67, respectively.
The company’s net revenue for the reported quarter was US$900.63 million, representing a 4.3% year-on-year (YoY) decline from US$941.23 million in Q3 last year.
Celeste Mastin, president and CEO of H.B. Fuller (FUL), in a statement, said, “In the third quarter we successfully drove a double-digit increase in adjusted EBITDA year-on-year and increased adjusted EBITDA margin meaningfully, demonstrating the strength of our business model and ability to increase profitability regardless of market conditions.
“We achieved profit growth despite weaker than expected volumes, driven by a more adverse customer destocking impact in Hygiene, Health, and Consumable Adhesives and lower market demand in construction-related markets.”
Organic revenue for the quarter was down by 7.4% on a YoY basis due to lower volumes, partly offset by favorable pricing.
Volume declined 8.0%, driven by customer destocking actions, principally in Hygiene, Health, and Consumable Adhesives, and generally slower industrial demand across all three global business units.
Volume development in the third quarter improved significantly versus the second quarter, when volume declined 14.2% year-on-year.
Gross profit for Q3 2023 totaled US$263.47 million while the same was US$249.16 million in the previous year’s Q3.
Adjusted gross profit for the reported period was US$270.26 million against US$249.81 million in the same period of 2022 while adjusted gross profit margin was 30%, which increased 350 basis points YoY from 26.5%.
The company noted that the net debt at the end of the third quarter of fiscal 2023 was US$1.79 billion, up US$11 million sequentially versus the second quarter and down US$67 million year-on-year.
The sequential increase in net debt was driven by acquisition activity during the third quarter, offset by improved cash flow from operations.
Cash flow from operations in the third quarter was US$108 million, up US$50 million year-on-year, reflecting improving margins and lower net working capital requirements.
H.B. Fuller Acquires business of Sanglier Limited in the UK
Meanwhile, the adhesive manufacturer has announced the acquisition of business of UK-based Sanglier Limited, one of Europe’s largest independently owned manufacturers and fillers of sprayable (aerosol and canister) industrial adhesives.
The acquisition expands H.B. Fuller’s innovation capabilities and product portfolio across the UK and Europe, particularly in the Construction Adhesives and Engineering Adhesives businesses, complementing technologies obtained through the acquisitions of Apollo and Fourny and spray capabilities acquired and developed in the United States.
“Transforming adhesive applications to enable sprayable delivery provides end users with an opportunity to greatly improve labor efficiency,” says Boz Malik, senior vice president, H.B. Fuller Construction Adhesives.
“This is particularly valuable in today’s tight labor market and is a key megatrend that H.B. Fuller is applying its unique innovation capabilities toward to enable our customers’ success.
“This acquisition will strengthen the integration of our adhesive manufacturing and packaging capabilities, which we will leverage to generate a strong market advantage in terms of operations, innovation, and service.”
The team of nearly 60 employees will operate within H.B. Fuller’s existing Construction Adhesives global business unit.
