Fuller(US:FUL)2025-09-25 15:30Financial Data and Key Metrics Changes - Organic sales decreased by 0.9%, with positive pricing of 1% offset by a volume decline of 1.9% [4] - Adjusted EBITDA for the quarter was $171 million, up 3% year-on-year, with an EBITDA margin of 19.1%, an increase of 110 basis points year-on-year [4][11] - Adjusted earnings per share (EPS) was $1.26, reflecting a 12% increase compared to the third quarter of 2024 [11] - Revenue was down 2.8% year-on-year, with currency having a positive impact of 1% [10] Business Line Data and Key Metrics Changes - HHC (Health and Hygiene) organic revenue decreased by 3.1%, with EBITDA up 2% year-on-year and EBITDA margin increasing to 16.9% [5] - Engineering Adhesives (EA) organic revenue increased by 2.2%, with EBITDA up 14% and EBITDA margin expanding to 23.3% [6][7] - Building Adhesive Solutions (BAS) organic sales decreased by 1%, with EBITDA increasing by 3% to $41 million and EBITDA margin expanding to 17.7% [7] Market Data and Key Metrics Changes - In the Americas, organic revenue was up 1% year-on-year, driven by EA's high single-digit growth [8] - EIMEA (Europe, India, Middle East, and Africa) organic revenue declined by 2% year-on-year, with EA flat and HHC and BAS down modestly [8] - Asia-Pacific organic revenue decreased by 4% year-on-year, primarily due to significant volume decline in solar [8] Company Strategy and Development Direction - The company is focused on enhancing its portfolio, driving efficiencies, and repositioning for growth and margin expansion [3][16] - Management remains cautious due to a globally subdued economic backdrop and expects volume growth to remain elusive [3][9] - The company is actively managing pricing and raw material costs while emphasizing operational efficiency [15][16] Management's Comments on Operating Environment and Future Outlook - Management noted a widespread slowing economic environment, with customer demand appearing uneven and less predictable [9] - The company anticipates a slow growth environment with continued economic volatility and high interest rates [9] - Management expressed confidence in achieving long-term EBITDA margin and growth targets despite current challenges [16] Other Important Information - The company updated its financial guidance for fiscal 2025, expecting net revenue to be down 2 to 3% year-on-year and adjusted EBITDA to be in the range of $615 to $625 million [12][14] - Full-year adjusted diluted EPS is expected to be between $4.10 and $4.25, reflecting year-on-year growth of 7% to 11% [14] Q&A Session Summary Question: Could you provide more detail behind the reduction in cash flow guidance? - Management explained that the increase in working capital, specifically inventory, is driving the decrease in cash flow expectations due to preparations for footprint consolidation [19] Question: What helped EA volumes and margins in the quarter? - Management noted a return to double-digit organic growth in electronics and strong performance in the U.S. EA business, driven by new customer wins and strong execution [24] Question: How would you explain the HHC decline in volumes versus EA? - Management indicated that EA is performing stronger than the market, while HHC volumes reflect a decline in consumer demand across major regions [27] Question: What are the pricing trends for your segments in the fourth quarter? - Management highlighted a supportive pricing environment across all three GBUs, with many companies raising prices in response to inflation and tariffs [49]