Financial Performance - Adjusted EBITDA and Adjusted EPS increased by 5% year-over-year[6] - Adjusted gross margin increased by 110 bps to 32.2% due to cost savings, acquisitions/divestitures, and pricing actions[6] - Adjusted EBITDA margin increased by 130 bps year-over-year to 18.4%[6] - Q2 2025 adjusted EBITDA increased 5% year-over-year to $166 million[16] - Q2 2025 adjusted EPS increased 5% year-over-year to $1.18, driven by higher adjusted net income and lower shares outstanding[16] Revenue and Organic Growth - Organic revenue increased by 0.4% year-over-year[16] - Expect fiscal year 2025 net revenue to be down 2% to 3%[18] - Expect fiscal year 2025 organic revenue to be flat to up 2% year-over-year[18] Segment Performance - Hygiene, Health, and Consumable Adhesives organic revenue increased 1.7% year-over-year, with an adjusted EBITDA margin of 15.6%[9] - Engineering Adhesives organic revenue declined 0.4% year-over-year, but adjusted EBITDA margin increased 310 bps year-over-year to 22.9%[9] - Building Adhesive Solutions organic sales decreased 0.9% year-over-year, but adjusted EBITDA margin expanded 60 bps year-over-year to 16.7%[9] Financial Guidance - Expect fiscal year 2025 adjusted EBITDA to be in the range of $615 million to $630 million, representing a 4% to 6% increase year-over-year[18] - Expect fiscal year 2025 adjusted EPS to be in the range of $4.10 to $4.30, representing growth of 7% to 12% year-over-year[18]

Financial Data and Key Metrics Changes - The company reported a 2.1% decrease in revenue year on year, but net revenue adjusted for the flooring divestiture increased by 2.8% [14] - Organic revenue was up 0.4%, with pricing growth of 0.7% and a volume decline of 0.3% year on year [15] - Adjusted EBITDA for the quarter was $166 million, reflecting a 5% year on year increase, driven by targeted pricing actions and cost savings [16] - Adjusted earnings per share (EPS) increased by 5% to $1.18 due to higher net income and lower shares outstanding [17] - Operating cash flow increased by 36% year on year to $111 million, reflecting improved net income and working capital [17] - Net debt to adjusted EBITDA decreased from 3.5 times to 3.4 times, indicating improved cash flow and lower debt balances [17] Business Line Data and Key Metrics Changes - In the HHC segment, organic revenue increased by 1.8% year on year, driven by positive volume and pricing, although EBITDA margin was down year on year due to higher raw material costs [8] - Engineering Adhesives saw a 0.4% decrease in organic revenue, with strong performance in transportation markets offset by weakness in solar [9] - Building Adhesive Solutions experienced a 0.9% decrease in organic sales year on year, but EBITDA increased by 5% with a margin expansion of 60 basis points [10] Market Data and Key Metrics Changes - In the Americas, organic revenue was up 2% year on year, driven by strength in roofing and flexible packaging [10] - EIMEA region saw a 2% decline in year-over-year organic revenue, with strong performance in hygiene offset by weak demand in construction-related markets [11] - Asia Pacific experienced slight organic revenue growth year on year, with strong performance in transportation markets but slower results in solar and electronics [11] Company Strategy and Development Direction - The company is focused on delivering positive organic revenue growth while managing costs and leveraging global sourcing to respond to market uncertainties [6] - A strategic shift towards higher growth and higher margin markets is underway, including the divestiture of lower margin businesses [6] - The company aims to achieve a greater than 20% EBITDA margin target and is optimistic about margin expansion in 2025 [26] Management's Comments on Operating Environment and Future Outlook - Management expects a challenging operating environment with high uncertainty and constrained demand, particularly in the second half of the year [12] - Despite economic uncertainties, the company is optimistic about its strong execution and expects profit growth to accelerate in the second half [12] - The company anticipates slightly weaker volume in the latter half of the year but expects continued margin expansion due to pricing actions and raw material purchasing leverage [12] Other Important Information - The company was recognized as one of the world's greenest companies in 2025 by Newsweek, highlighting its commitment to sustainability [23] - The Vice President of Investor Relations announced his retirement, with plans for a smooth transition [24][25] Q&A Session Summary Question: Can you provide more context on the strong margin performance in Engineering Adhesives? - Management noted that the acquisition of ND Industries performed better than expected and strong cost control contributed to margin expansion [32][33] Question: How did volume velocity across business units compare in fiscal Q2? - Overall volume trends were flat in Q2, with some positive momentum in automotive and flexible packaging, while residential construction markets showed softness [38][39] Question: What is the expected impact of tariffs on the business? - The company has limited direct tariff impact due to local sourcing but is prepared for potential lower volumes and is actively managing costs to mitigate impacts [86][89] Question: Can you elaborate on the capital expenditure trajectory? - The company expects to close the gap in capital spending in the second half of the year, with a full-year guidance of $150 million [61][62] Question: What was the pension income for the quarter? - Pension income for the quarter was approximately $5.7 million, up from $4 million in the previous year [67]

Financial Data and Key Metrics Changes - The company reported a 2.1% decrease in revenue year on year, but net revenue adjusted for the flooring divestiture increased by 2.8% [15] - Organic revenue was up 0.4%, with pricing up 0.7% and volume down 0.3% year on year [16] - Adjusted EBITDA for the quarter was $166 million, reflecting a 5% year on year increase [17] - Adjusted earnings per share (EPS) was $1.18, up 5% compared to the second quarter of 2024 [17] - Operating cash flow increased by 36% year on year to $111 million [17] - Net debt to adjusted EBITDA decreased from 3.5 times to 3.4 times [17] Business Line Data and Key Metrics Changes - In HHC, organic revenue increased by 1.8% year on year, driven by positive volume and pricing, although EBITDA margin was down year on year due to higher raw material costs [8] - Engineering Adhesives saw a 0.4% decrease in organic revenue, but EBITDA increased by 24% with EBITDA margin rising to 22.9% [10] - Building Adhesive Solutions experienced a 0.9% decrease in organic sales, while EBITDA increased by 5% and EBITDA margin expanded to 16.7% [11] Market Data and Key Metrics Changes - In the Americas, organic revenue was up 2% year on year, driven by strength in roofing and flexible packaging [11] - EIMEA region saw a 2% decline in year-over-year organic revenue, with strong performance in hygiene offset by weak demand in construction-related markets [12] - Asia Pacific organic revenue was slightly up year on year, with strong performance in transportation-related markets but slower results in solar and electronics [12] Company Strategy and Development Direction - The company is focused on delivering positive organic revenue growth while managing costs and leveraging global sourcing to respond to market uncertainties [6] - A strategic shift towards higher growth, higher margin markets is underway, including the divestiture of lower margin businesses [6] - The company aims to achieve a greater than 20% EBITDA margin target and is optimistic about margin expansion in 2025 [26] Management's Comments on Operating Environment and Future Outlook - Management expects a challenging operating environment with constrained demand and high uncertainty, particularly in the second half of the year [12] - Despite economic uncertainties, the company is optimistic about its strong execution and expects profit growth to accelerate in the second half [13] - The company is prepared for potential lower volumes due to tariffs and is actively managing costs to mitigate impacts [89] Other Important Information - The company was recognized as one of the world's greenest companies in 2025 by Newsweek, highlighting its commitment to sustainability [23] - The Vice President of Investor Relations announced retirement, with a transition plan in place [24] Q&A Session Summary Question: Can you provide more context on the strong margin performance in Engineering Adhesives? - The strong margin performance was attributed to better-than-expected performance from the ND Industries acquisition and strong cost control measures [34] Question: How did volume velocity compare across business units in fiscal Q2? - Overall volume trends were flat in Q2, with some positive momentum in automotive and flexible packaging, while residential construction showed softness [39] Question: What is the outlook for the electronics market, particularly in China? - There was a temporary pause in electronics exports from China, but the company expects recovery in the second half due to new business opportunities [48] Question: How should we think about the progression of price cost and margin profile in HHC? - The company anticipates significant margin expansion in HHC due to raw material cost reductions and strong pricing actions [50] Question: What is the expected capital expenditure trajectory for the remainder of the year? - The company expects to close the gap in capital spending in the second half of the year, with a total guidance of $150 million for the full year [61] Question: What is the impact of tariffs on the company's operations? - The direct impact of tariffs is limited due to local sourcing, but the company is prepared for potential volume impacts and is actively managing costs [89]

Core Insights - Analysts project H. B. Fuller (FUL) will report quarterly earnings of $1.10 per share, reflecting a year-over-year decline of 1.8% [1] - Revenue is expected to reach $898.25 million, down 2.1% from the same quarter last year [1] - The consensus EPS estimate has remained unchanged over the past 30 days, indicating a reassessment by covering analysts [1] Revenue Projections - 'Net Revenue- Hygiene, Health and Consumable Adhesives' is forecasted to be $394.59 million, showing a change of +0.4% from the prior-year quarter [4] - 'Net Revenue- Construction Adhesives' is expected to reach $232.15 million, indicating a significant increase of +54.3% from the prior-year quarter [4] - 'Net Revenue- Engineering Adhesives' is estimated at $272.46 million, reflecting a decline of -27.1% from the year-ago quarter [5] EBITDA Estimates - 'Adjusted EBITDA- Engineering Adhesives' is projected to be $56.36 million, down from $68.82 million reported in the same quarter last year [5] - 'Adjusted EBITDA- Construction Adhesives' is expected to reach $37.82 million, compared to $22.63 million in the previous year [6] - 'Adjusted EBITDA- Hygiene, Health and Consumable Adhesives' is forecasted at $60.93 million, down from $65.22 million reported in the same quarter last year [6] Stock Performance - H. B. Fuller shares have experienced a -1% change in the past month, contrasting with a +0.6% move of the Zacks S&P 500 composite [6] - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to mirror overall market performance in the near future [6]

Financial Performance - Adjusted EPS was $0.54[6], down compared to Q1 2024 due to lower operating income[14] - Adjusted EBITDA reached $114 million[6], but was negatively impacted by foreign exchange by approximately $5 million year-over-year[14] - Adjusted EBITDA margin was 14.5%[6], compared to 15.2% in the prior year[24] - Organic revenue increased by 1.9% year-over-year, driven by positive volume and pricing performance[6] - Net revenue decreased by 2.7% year-over-year[36], from $810.419 million to $788.663 million[22] Segment Performance - Hygiene, Health, and Consumable Adhesives saw organic revenue increase by 4% year-over-year[8] - Engineering Adhesives organic revenue declined by 2%[8], but adjusted EBITDA margin increased by 180 basis points year-over-year to 18.7%[8] - Building Adhesive Solutions organic sales increased by 2% year-over-year[8] Regional Performance - Americas organic revenue decreased by 1% year-over-year[12] - EIMEA (Europe, India, Middle East, and Africa) organic revenue increased by 4% year-over-year[12] - Asia-Pacific organic revenue increased by 7% year-over-year[12] 2025 Financial Guidance - The company expects net revenue to be down 2% to 4% year-over-year[16]; excluding the impact of Flooring, net revenue is expected to be up 1% to 2% year-over-year[16] - Adjusted EBITDA is expected to be in the range of $600 million to $625 million[16], representing a 1% to 5% increase year-over-year[16] - Adjusted EPS is expected to be in the range of $3.90 to $4.20[16], representing year-over-year growth of 2% to 9%[16]

Market Overview - The China automotive adhesives market is projected to grow from USD 574.03 million in 2024 to USD 737.4 million by 2030, at a CAGR of 4.2% [1][3][14] - The market plays a significant role in the broader adhesives market in China, with a notable contribution to overall growth [3] Key Market Drivers - Increasing vehicle production and the adoption of lightweight materials are primary drivers of market growth, as automakers seek to improve fuel efficiency and reduce emissions [4][7] - Government initiatives promoting domestic production and technological innovation are enhancing the competitiveness of Chinese automakers [5][6] Market Trends - There is a growing emphasis on lightweighting in the automotive industry, leading to increased demand for high-performance adhesives that can bond lightweight materials [11][12] - The shift towards lightweight vehicles is driven by sustainability goals and the need for reduced carbon emissions [11][12] Key Market Players - Major players in the market include Henkel, H.B. Fuller, 3M China, and Sika China, among others [1][16] Market Challenges - The complexities associated with high performance and durability requirements for automotive adhesives present challenges, as they must withstand harsh operating conditions [10]