On this page of StockholderLetter.com we present the latest annual shareholder letter from FULLER H B CO — ticker symbol FUL. Reading current and past FUL letters to shareholders can bring important insights into the investment thesis.
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3/4/2025 Letter Continued (Full PDF)
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2/22/2023 FUL Stockholder Letter
• 2/28/2024 FUL Stockholder Letter
• More "Specialty Chemicals" Category Stockholder Letters
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FUL Benford's Law Stock Score = 88
3/4/2025 Letter Continued (Full PDF)
•
2/22/2023 FUL Stockholder Letter•
2/28/2024 FUL Stockholder Letter•
More "Specialty Chemicals" Category Stockholder Letters•
FUL Benford's Law Stock Score = 88FUL Shareholder/Stockholder Letter Transcript:
ANNUAL Connecting What Matters H.B. Fuller Dear Shareholders, In fiscal 2024, H.B. Fuller made meaningful progress toward our long-term strategic goals - remaining focused on Connecting What Matters while setting the stage for future growth. Amid challenging market conditions, we took deliberate and decisive actions throughout the year to streamline our operations and cost structure as we proactively managed raw material and pricing dynamics amid lower-than-expected volumes. Consistent with our commitment to drive our portfolio and capital allocation to the highest margin, fastest growing market segments of the $80 billion global adhesives industry, we announced several margin accretive portfolio actions with the divestiture of our Flooring business, and the addition of two new strategic acquisitions: NO Industries Inc. and H.S. Butyl Ltd. (see page 4). These highly complementary acquisitions are a natural fit with H.B. Fuller's existing portfolio, expanding our technology platform, and enhancing our position in key growth markets. As a result of these and other actions, we expanded our adjusted EBITDA margin to a record 16.6% for fiscal 2024, and we remain on track to achieve our goal of becoming a 20%+ EBITDA margin business within the next two to four years. Recognizing Customer Innovation At H.B. Fuller, we are driven to support our customers' innovation goals. This means closely collaborating with them to test new ideas and develop highly tailored, advanced adhesive solutions - so that they can deliver products that meet the evolving demands and trends in the market. In April, we launched our inaugural Customer Innovation Awards, which honored three visionary companies for world-changing innovations using adhesive technologies. The 2024 winners included Anhui Huasun Energy Co. Ltd., GAF Inc., and Niine Pvt. Ltd. Building an Award-Winning Culture One of our most important strategic priorities is to be a Talent Magnet and the employer of choice in the adhesives industry. We achieve this by building upon our rich history, leveraging our winning spirit, and fostering our entrepreneurial culture. Once employees join our winning team, we commit to supporting and empowering them through meaningful career development programs and training. Our global mentorship program, for example, has resulted in more than 400 pairings across our global team since its inception in 2023. I am constantly energized by the passion and dedication of our global workforce. Our strong company culture is on display during Global CEO Huddles, where we go to H.B. Fuller locations around the world to analyze future growth opportunities, reinforce our goals and values, and celebrate the outstanding accomplishments of our global team. These events - along with our new Employee Voice survey strategy and employee Collaboration Weeks - are just a few of the ways we continue to build our entrepreneurial and collaborative culture. Looking Ahead As we look ahead to 2025, we are confident in our ability to permanently transform H.B. Fuller into a sustainably faster-growing, higher-margin business, and we remain committed to the portfolio improvement actions and long-term strategic plan we have outlined. We continue to selectively consider acquisitions that build on our strategic priorities and support our continued track record of success. Our 2023 collection of acquisitions performed extremely well in 2024, closing the year at an EBITDA run rate well above our collective business case. By successfully executing on our synergy plan, we reduced the post-synergy multiple to less than 6X and continue to make solid progress toward our three-year target of 4X. Given our proven ability to develop innovations that solve our customers' biggest problems, we continue to support the optimization of our Engineering Adhesives (EA) and Hygiene, Health and Consumable Adhesives (HHC) Global Business Units (GBUs). To solidify our position in construction-related market segments, we recently formed a new Building Adhesive Solutions (BAS) GBU, creating a faster-growing solutions business with a complementary customer base across the architectural and infrastructure markets. In early 2025, we also announced that we are finalizing plans to further optimize our manufacturing footprint and North America logistics and delivery operations. As the largest pureplay adhesives company in world, we remain deeply committed to delivering exceptional results for our shareholders, a best-in-class culture for our team, and industry-leading innovation for everyone who relies on H.B. Fuller's adhesive, sealant, and coating solutions. As we enter 2025, we do so in a position of strength, fueled by our relentless desire to better serve our customers, team, partners, and you. Thank you, as always, for your continued trust and partnership. c,t I Celeste Mastin President and CEO, H.B. Fuller Company t Adjusted EBITDA Margin 16.6% Expanded adjusted EBITDA margins year-on-year to a new fiscal year record high of 16.6% t Adjusted EBITDA $594M Achieved record adjusted EBITDA of $594 million , up 2.2% year -on-year .J Net Working Capital 14.5% Down 160 basis points year-on-year Net Debt Leverage 3.1x Workplace Awards Named to Newsweek's "America's Most Admired Companies" list Named to Time's "World's Best Companies" 2024 list Recognized on Time's inaugural list of America's Best Mid-Size Companies 2024 Recognized with a 2024 ASC Innovation Award for our TPx Platform Received Knowde's 2024 "Digital Innovation Award" Named to the "Best Companies to Work For" list by Exame Portugal and ManpowerGroup Portugal Global Business Unit Results- Fiscal 2024 Adjusted EBITDA Revenue 46% Engineering Adhesives 41% Engineering Adhesives 13% Construction Adhesives 16% Construction Adhesives 42% Hygiene, Health and Consumable Adhesives 43% Hygiene, Health and Consumable Adhesives 29% Europe, India, Middle East, and Africa 18% Asia Pacific 53% Americas Regional Results - Fiscal 2024 Revenue Maximizing our Portfolio Acquisition Spotlights At H.B. Fuller, portfolio management and capital allocation are focused on the highest margin, fastest growing market segments of the global adhesives industry. Strategically acquiring companies focused on these segments complements our strong pipeline of innovation and enables us to enter new, highly profitable markets. In 2024, we welcomed two new acquisitions to the H.B. Fuller family. HS Butyl Ltd. HS Butyl is the UK's largest manufacturer and distributor of high-quality butyl tapes, which provide strong, permanent, watertight seals for a wide variety of applications within the construction, infrastructure, automotive, and renewable energy industries. The acquisition uniquely positions H.B. Fuller to accelerate our expansion into the $15 billion global waterproofing tape market. NO Industries Inc. NO Industries is a leading provider of specialty adhesives and fastener locking and sealing systems. Their products are a natural fit with H.B. Fuller's existing market segments and bring new technology to our portfolio- combining the benefits of an adhesive and a mechanical fastener within extremely demanding applications.