H.B. Fuller Off to Solid Start in Q1 2025 Despite Challenging Market Conditions
H.B. Fuller Company kicked off its fiscal year with a solid first quarter performance in 2025, demonstrating resilience amidst weak overall market conditions. According to the company's recent earnings conference call, H.B. Fuller's organic revenue increased by 1.9% year-on-year, driven primarily by positive volume trends and consolidated pricing.
The company's President and Chief Executive Officer, Celeste Mastin, highlighted the importance of maintaining pricing discipline, driving market share gains, and effectively managing cost structures during a challenging period. Despite weak overall market demand and unpredictable geopolitical conditions, H.B. Fuller remains confident in its ability to adapt and execute in this dynamic environment.
In its Hygiene and Health Care (HHC) segment, organic revenue grew 4% year-on-year on the back of solid volume growth and positive pricing. Volume was up low single digits, driven by strength in hygiene and flexible packaging markets, while delayed price increases from the fourth quarter began to be realized. However, H.B. Fuller anticipates market dynamics in HHC will remain challenging for the remainder of 2025 due to weak consumer demand.
The EBITDA margin in HHC declined versus last year, as expected, but H.B. Fuller expects the price-versus-raw-material dynamic to continue improving throughout the year. In contrast, Engineering Adhesives (EA) saw a decline of 2% in organic revenue due to ongoing challenges in solar markets. However, excluding solar, organic growth was positive in EA. EBITDA increased by 16%, driven by favorable net pricing and raw material cost actions, restructuring benefits, and the ND Industries acquisition.
The Building Adhesive Solutions (BAS) segment reported a 2% increase in organic sales year-on-year, driven by continued strength in roofing markets and improving trends in infrastructure and mechanical market segments. Overall, H.B. Fuller remains confident that it can deliver growth in organic sales and EBITDA for the year while expanding EBITDA margins towards its greater than 20% target.
H.B. Fuller's President and Chief Executive Officer, Celeste Mastin, concluded by stating that 'we are off to a solid start to the year' despite caution due to weak overall market demand and unpredictable geopolitical conditions. The company remains optimistic about its ability to navigate these challenges and deliver strong performance in the quarters ahead.
