The following is a summary of the H.B. Fuller Company (FUL) Q1 2024 Earnings Call Transcript:

Financial Performance:

• H.B. Fuller reported a 4% year-on-year decline in Q1 organic revenue, attributed to expected pricing adjustments and a slight decrease in volume.

• Adjusted EBITDA grew by 12% year-over-year to $123 million, expanding the EBITDA margin by 160 basis points year-on-year to 15.2%.

• Despite declining organic revenue, the company's operating cash flow improved significantly from the previous year due to higher margins and reduced working capital requirements.

• Adjusted EPS increased by 22% year-on-year.

Business Progress:

• Organic revenue grew by 10% year-on-year in the construction adhesives segment, which benefited from a lack of customer's destocking.

• The company anticipates future growth due to planned pricing adjustments and restructuring savings.

• The company experienced volume declines in the hygiene market and exited some business due to price competition in Asia, but expects this market to correct in future quarters.

• The company's 2023 vintage acquisitions have outperformed, doubling the deal model performance.

• The company anticipates strong profit growth, continued margin expansion, and improved volume trends in 2024, with volume expected to improve sequentially in Q2.

• H.B. Fuller is looking ahead to favorable trends such as stable index prices, an increase in the construction season, continued growth in China, completion of destocking across all GBUs, and increasing synergies and restructuring.

• The company reported significant growth in the electronics business and aerospace adhesives, with 30% of the new volume in electronics coming from new models.

• Despite the hygiene business becoming smaller due to a selective focus, it continues to drive productivity and improve EBITDA margins.

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