H.B. Fuller Co. recently reported financial results for its second quarter ended May 29, 2021. According to the company, strong operational execution, benefits from restructuring efficiencies, and improved global industrial demand drove significant revenue and earnings growth vs. the second quarter of fiscal 2020. Revenue was up 22.7% compared to the second quarter of last year, while organic revenue increased 18.8%. Organic revenue increased by 9.5% when compared with the non-COVID-impacted second quarter of 2019.
Net revenue of $828 million increased 22.7% compared with the second quarter of 2020. Foreign currency exchange rates favorably impacted revenue by 3.9%. Organic revenue, which excludes impacts from foreign currency translation, increased 18.8% compared to last year, with organic growth in all three global business units (GBUs), including strong, double-digit growth in Engineering Adhesives and Construction Adhesives.
“H.B. Fuller did an outstanding job supporting customers during the quarter, and we delivered another quarter of strong sales and earnings growth,” said Jim Owens, H.B. Fuller president and CEO. “Despite considerable raw material and packaging shortages, H.B. Fuller was able to meet a sizeable increase in demand by leveraging our extensive global network and partnering with customers and suppliers.
“Raw material costs increased substantially in the second quarter, exacerbated by shortages and impacts from Storm Uri earlier this year. We have implemented significant price adjustments and delivered efficiencies through our streamlined global business unit structure and operational excellence programs. These actions are enabling us to seamlessly serve our customers, achieve our profit targets, and increase our debt paydown over last year’s level, in line with our target for $200 million of debt reduction in 2021. Our effective sourcing strategies, market-driven innovation and operational agility are supporting H.B. Fuller’s profitable business growth in the current supply-constrained environment. We continue to demonstrate the resiliency of our business, and our ability to grow, gain share and deliver value for shareholders.”
Based on current assumptions, revenue growth for 2021 is anticipated to be in the low double digits compared to 2020. H.B. Fuller expects raw material cost increases to exceed 10% on a full-year basis vs. 2020, with the most significant margin headwinds expected in the third quarter. The company has implemented annualized price adjustments of $150 million effective March 1 through July 15 and is planning additional increases of $75 million in August and September to offset higher raw material costs. The company is prepared to implement further increases as necessary.
Learn more about H.B. Fuller at www.hbfuller.com.