H B Fuller : Q1 2024 H.B. Fuller Company Earnings Call Presentation

Title Slide

First Quarter 2024

Conference Call

March 28, 2024

Disclosure

Safe Harbor Statement

Certain matters discussed today may be considered forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements reflect our current expectations, and actual results may differ as they are subject to the kinds of risks that are enumerated in the Company's Securities and Exchange Commission (SEC) filings. The Company disclaims any obligation to subsequently revise any forward-looking statements to reflect actual events or circumstances after the date of such statements.

Regulation G

The information presented in this presentation regarding consolidated and segment organic revenue growth, operating income, adjusted gross profit, adjusted gross profit margin, adjusted selling, general and administrative expense, adjusted income before income taxes and income from equity investments, adjusted income taxes, adjusted effective tax rate, adjusted net income, adjusted diluted earnings per share, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), adjusted EBITDA margin, net debt, net debt-to-adjusted EBITDA, trailing twelve months adjusted EBITDA, net working capital, annualized net revenue and net working capital as a percentage of annualized net revenue does not conform to U.S. generally accepted accounting principles (U.S. GAAP) and should not be construed as an alternative to the reported results determined in accordance with U.S. GAAP. Management has included this non-GAAP information to assist in understanding the operating performance of the company and its operating segments as well as the comparability of results to the results of other companies. The non-GAAP information provided may not be consistent with the methodologies used by other companies. All non-GAAP information is reconciled with reported U.S. GAAP results in the "Regulation G Reconciliation" tables except for our forward-looking non-U.S. GAAP measures contained in our financial guidance, which the company cannot reconcile to forward-looking U.S. GAAP results without unreasonable effort.

Additional Information

Please refer to our annual report on Form 10-K, filed with the SEC, and available on our website atwww.investors.hbfuller.com.

First Quarter Highlights

Continue to proactively respond to changing business dynamics to drive strong adjusted EBITDA growth, margin expansion, and robust cash flow

Global Business Unit Update

• • Organic revenue down 2% YOY

• • Diversification of portfolio resulted in consistent volume despite challenging global environment

• • Adjusted EBITDA margin increased 90 basis points YOY to 15.9%

• • Favorable net pricing and raw material cost actions and restructuring drove adjusted EBITDA margin increase

• • Organic revenue up 10% YOY

• • Absence of customer destocking and expectation of return to normal construction season in North America benefitted CA

• • Adjusted EBITDA margin

  increased 530 basis points

  YOY to 8.4%

• • Net price and raw material cost management, improved volumes, and restructuring savings drove improvement in EBITDA margin

Regional Perspective

AMERICAS

• • Organic revenue declined 2% YOY

• • Driven by lower HHC organic revenue and adversely impacted by a spillover of 2023 destocking activity

• • EA and CA combined achieved organic revenue growth of more than 4 percent YOY in the Americas region

EIMEA

• • Organic revenue declined 13% YOY

• • Economic conditions deteriorated in Europe and negatively impacted each GBU

• • EIMEA volume adversely impacted by currency restrictions and political uncertainties in Egypt and broader Middle East

ASIA PACIFIC

• • Organic revenue increased 2% YOY

• • China achieved a mid-single-digit increase in organic revenue, and more than offset weaker demand in rest of the region

• • Continue to be optimistic about our business in China

Q1 Financial Summary

Continued Margin Expansion and Adjusted EBITDA Growth

• • Net revenue was up 0.2% YOY

• • Organic revenue was down 4.2% YOY, primarily due to pricing

• • Adjusted gross profit margin was 30.1%, up 320 basis points YOY, reflecting net price and raw material cost actions and restructuring

• • Adjusted SG&A up YOY, as expected, due to acquisitions, wage inflation, and variable compensation rebuild

• • Adjusted EBITDA was up 12% YOY to $123 Million

• • Adjusted EPS of $0.67 was up 22% driven by strong operating income growth

• • Operating cash flow in the quarter improved $42 million YOY

• • Reduced net debt-to-Adjusted EBITDA ratio from 2.9x in Q4 to 2.8x

FY 2024 Financial Guidance Update

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"As the market leader in innovation, we have the privilege of collaborating with some of the most exciting and forward- thinking companies in the marketplace"

- Celeste Mastin, President and CEO

Summary

Confident in our ability to achieve long-term growth and profitability goals

• • Off to a good start to the year

• • Team is executing well in challenging environment, demonstrating discipline and drive

• • On track for another year of strong profit growth, continued margin expansion, and improved volume trends in fiscal 2024

• • Continue to strengthen the portfolio through targeted organic investments and new highly synergistic strategic acquisitions

Q&A Session