HB Fuller records net revenue of US$3.75B in FY22, up by 14%

US – American adhesives manufacturing company, HB Fuller has recorded net revenue of US$3.75 billion, up 14% versus fiscal year 2021

For the year ended 3 December, the company’s organic revenue increased by 17% year-on-year (YoY), driven by ‘responsibly strong’ pricing execution.

HB Fuller recorded a net income of US$180 million and earnings per diluted share (EPS) of US$3.26 for the year, while its adjusted EPS rose by 15% YoY to US$4.00.

In the fourth quarter (Q4) of FY22, the company’s net revenue grew by 7% YoY to US$958 million and its organic revenue increased by 6% from a year earlier.

Its net income during the quarter was US$48 million, while its EPS was US$0.87 on a reported basis.

In addition, HB Fuller recorded a gross profit of US$248 million and an adjusted gross profit of US$251 million in Q4 2022.

Celeste Mastin, HB Fuller president and CEO said: “We delivered double-digit growth in organic revenue, adjusted EBITDA and adjusted EPS in FY22, driven by market share gains, appropriately strong pricing actions, and improved execution.

“At the same time, we recognize that we did not finish the year as strong as we had expected. During the fourth quarter, we experienced a more pronounced and accelerated slowdown in demand for Construction Adhesives than we anticipated, which was driven by customer inventory de-stocking actions prior to the end of the calendar year.

“Additionally, we experienced unexpected softness in China due to more dramatic Covid-related lockdowns and on a global basis, greater than expected headwinds from foreign currency translation.”

Celeste added: “As we look to the year ahead, we expect global economic conditions to remain slow and we are prepared to control expenses, expand margins by continuing to innovate for our customers and benefitting from scale with our suppliers, and grow cash flow in such an environment.”

2023 outlook

The company expects its adjusted EBITDA for fiscal 2023 to be in the range of US$580 million to US$610 million, equating to growth of approximately 9% to 15% versus fiscal year 2022.

Revenue for 2023 is expected to be flat to down 3% versus 2022; organic revenue growth for fiscal year 2023 is expected to be in the range of 2% to 4%, adjusting for the impact of the extra week in fiscal year 2022.

The fiscal year 2023 will be a 52-week year compared to a 53-week year in fiscal year 2022, which will unfavorably impact year-on-year net revenue and adjusted EBITDA growth by approximately 2% in fiscal year 2023, notes the company.

Adjusted EPS in fiscal year 2023 is expected to be in the range of US$4.15 to US$4.55, equating to growth of between 4% to 14% year-on-year, despite the significantly stronger U.S. dollar, higher borrowing costs, weakening global economic demand conditions, and one less week in fiscal 2023.

Operating cash flow in fiscal year 2023 is expected to be between US$300 million and US$350 million, being more weighted to the second half of the year, and capital expenditures are expected to be US$120 million.

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