H.B. Fuller reports first quarter 2025

St. Paul, MN – H.B Fuller reported that net revenue for the first quarter of fiscal 2025 was $789 million, down 2.7% versus the first quarter of fiscal 2024. Organic revenue increased 1.9% year-on-year, with pricing increasing 0.2% and volume increasing 1.7%. Foreign currency translation decreased net revenue by 3.4% and acquisitions/divestitures decreased net revenue by 1.2%.

Gross profit in the first quarter of fiscal 2025 was $227 million. Adjusted gross profit was $233 million. Adjusted gross profit margin of 29.6% decreased 50 basis points year-on-year. While raw material cost inflation has started to moderate, it was still up year-on-year in the first quarter, resulting in the decline in adjusted gross margin.

Selling, general and administrative (SG&A) expense was $181 million in the first quarter of fiscal 2025 and adjusted SG&A was $169 million, up 2 percent year-on-year. The impact of acquisitions and higher variable compensation drove most of the year-on-year increase in adjusted SG&A.
Net income attributable to H.B. Fuller for the first quarter of fiscal 2025 was $13 million. Adjusted net income attributable to H.B. Fuller for the first quarter of fiscal 2025 was $30 million. Reported EPS (diluted) was $0.24 and Adjusted EPS (diluted) was $0.54.

Adjusted EBITDA in the first quarter of fiscal 2025 was $114 million, down 7% year-on-year, as expected, driven by the impact of higher raw material costs and higher variable compensation.
“I am encouraged by our first quarter financial performance and positive organic sales growth,” said Celeste Mastin, president and chief executive officer. “Despite weak overall market demand conditions, we remain focused on pricing discipline, market share gains, and effectively managing our cost structure. Simultaneously, we continue to execute our long-term strategic plan to optimize our portfolio mix and streamline our manufacturing cost structure to drive our business toward our greater than 20% EBITDA margin target.
“As we look ahead, we remain cautious given weak overall market demand and unpredictable geopolitical conditions around the globe. Nevertheless, we are off to a solid start to the year and remain confident we can successfully adapt and execute in this dynamic environment to deliver growth in both organic sales and EBITDA for the year, while expanding EBITDA margin.”

Balance Sheet and Working Capital:
Net debt at the end of the first quarter of fiscal 2025 was $2,074 million, up $233 million sequentially versus the fourth quarter and up $409 million year-on-year. Acquisitions principally drove the increase in net debt, both year-on-year and sequentially. Net debt-to-adjusted EBITDA increased to 3.5X at the end of the first quarter of fiscal 2025.

Net working capital in the first quarter of fiscal 2025 increased $9 million sequentially versus the fourth quarter and declined $12 million year-on-year. As a percentage of annualized net revenue, net working capital was essentially flat year-on-year. Cash flow from operations was down versus last year, as expected, driven by higher working capital needs associated with revenue growth. As previously communicated, cash flow delivery for 2025 is expected to be weighted to the second half of the year.