Adjusted EBITDA in the second quarter of fiscal 2023 was $143 million, at the mid-point of company guidance and up 3% year-on-year. Adjusted EBITDA margin increased 190 basis points year-on-year to 15.9%, driven by the combined impact of pricing and raw material cost actions versus the prior year’s second quarter, as well as restructuring savings, partially offset by the impacts of lower volume and wage and other inflation.

“Pricing discipline and focused efforts to reduce costs drove margin expansion and overcame a challenging volume environment, delivering second-quarter profit performance in line with our expectations,” said Celeste Mastin, president and CEO, H.B. Fuller. “Our ability to successfully manage changing price and raw material dynamics, and scale production costs with volume, is delivering EBITDA growth and significant margin improvement. We remain on track to deliver strong growth in adjusted EBITDA and outstanding cash flow in fiscal 2023.

“Global industrial activity has slowed, but underlying demand across the portfolio remains much stronger than our second quarter volume performance implies, due to the effect of customer destocking, which is significant, but not unique to us, or our industry. This destocking is now tapering over a large portion of our portfolio, and we believe our year-on-year volume comparisons will be stronger in the second half of the year.”

Looking forward, H.B. Fuller expects adjusted EBITDA for fiscal 2023 to be in the range of $580 million to $610 million, equating to growth of approximately 9% to 15% versus fiscal year 2022. Both net revenue and organic revenue for fiscal 2023 are now expected to be down 3% to 5% versus fiscal 2022, reflecting continued customer destocking actions and slower industrial production.

To learn more, visit www.hbfuller.com.