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    Rosemarie Morbelli • Gabelli Funds

    Rosemarie Morbelli's questions to H.B. Fuller Company (FUL) leadership

    Rosemarie Morbelli's questions to H.B. Fuller Company (FUL) leadership • Q2 2025

    Question

    Rosemarie Morbelli asked for an assessment of the potential direct and indirect impacts from tariffs, assuming currently announced levels remain. She also inquired about the size and growth prospects of H.B. Fuller's business in the defense sector, noting its increasing global importance.

    Answer

    President & CEO Celeste Mastin explained that the company's 'make where we sell' strategy, combined with active sourcing and pricing actions, minimizes direct tariff impacts. The primary uncertainty remains the indirect effect on global volumes, which the company is preparing for via cost reduction efforts. Regarding defense, she described it as a differentiated, high-margin, and fast-growing area within their portfolio, but noted it is still on a small base and is not expected to have an outsized material impact in the near term.

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    Rosemarie Morbelli's questions to H.B. Fuller Company (FUL) leadership • Q1 2025

    Question

    Rosemarie Morbelli asked about the potential indirect impact of tariffs on H.B. Fuller through its customers and whether a percentage of affected revenue could be estimated. She also inquired about the company's position on PFAS-free alternatives for sealants and adhesives and the potential market size for such products.

    Answer

    President and CEO Celeste Mastin stated it was difficult to quantify the indirect tariff impact but emphasized that H.B. Fuller performs well in low-volume environments, citing the ability to drive down raw material costs and grow EBITDA as they did in 2023. Regarding PFAS, she described it as an exciting opportunity, confirming that the company has already introduced PFAS-free alternatives, particularly in the electronics market, and is actively working with customers on migrating to these newer technologies.

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    Rosemarie Morbelli's questions to H.B. Fuller Company (FUL) leadership • Q4 2024

    Question

    Rosemarie Morbelli asked when management became aware of the Q4 shortfall and what actions are being taken to improve forecasting. She also questioned if further divestitures from the HHC portfolio are being considered to help achieve the company's long-term 20% EBITDA margin target.

    Answer

    CFO John Corkrean stated the weakness became apparent late in the quarter, specifically in late October and November, driven by an unexpected slowdown in packaging. CEO Celeste Mastin outlined immediate actions, including enhanced pricing initiatives and cost controls. She explained that divestitures from HHC are unlikely due to integrated operations, and the strategy is instead focused on growing high-margin areas like flexible packaging and medical adhesives.

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