FUL - Earnings call transcript Q1 2019

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Operator

Good morning and welcome to the H.B. Fuller’s First Quarter 2019 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. After today’s presentation, there will be an opportunity to ask questions. Instructions]. [Operator event this being is note, recorded. Please now Barbara Doyle, would like Relations. to to over conference the Vice turn I President Investor of Please go ahead, ma’am.

Barbara Doyle

quarter welcome fiscal and H.B. earnings first morning, call. Good to XXXX Fuller’s

to Jim Owens, John items let After me questions. and Vice Jim. our Our speakers remarks, Executive call I today H.B. President turn will Executive Corkrean, Financial and Chief and few Please we cover before Fuller the President prepared a Officer; Chief Officer. over your are take

any are in made during risks to filed available these and undertake this our and subject are Exchange forward-looking We statements results that of that to assumptions reminder will earnings references update results call on a discussion forms today First, of investors.hbfuller.com. risk release, our Commission earnings performance any statement. results. measures be that included we our include Form factors These measures this duty conference comparability with to of factors believe making our our of measures the expectations not non-GAAP in our to in Also do and current based uncertainties. of discussed operating comments These XX-Q measures. GAAP to are in and because is our We differ and call. materially forward-looking XX-K release in non-GAAP on the expectations these could useful the measure Reconciliation and Actual will the from our comments the investors financial and and in during to XX-K. addition Securities GAAP nearest website to release. is earnings understanding statements assist at

This certain restated a March financial changes These year sheet, reflects impacts on to the fiscal accounting were accounting on have a implemented filed segments. operating an standard reported. XXXX. retrospective flows that or XXXX. the as The implemented changes between balance XXXX for XXXX of cash company's update income, unaudited statements in the changes X, of if X, consolidated related no ended and an the we changes XX, March consolidated plans year that realignment pension fiscal at beginning basis XXXX quarter the previously Lastly, net filing ended include consolidated historical on December information X-K provided customer

to X-K. Our this remarks include XXXX today in will restated information comparisons financial provided the

turn the investor please deck I X Now, to over Owens. Slide in the turn will Jim and to call

Jim Owens

you, Barbara, to everyone. Thank and welcome

business imperatives. of provide call I then comments I'll call, your we financials up summary discuss segment. then and today's finally to I'll some with turn over review business it And will first performance During questions. and our our the take then will quarter wrap against our John by XXXX a closing performance to

for are solid to XXXX. We a start off

our in were despite growth results EPS and organic expectations our EBITDA quarter and our below revenue First guidance with line expectation.

planned generally the Our resilience and controls, few a results a in December, and first H.B. of positioning dollar, Strong China. growth on the deliver be lower in was expecting Construction XX% by basis; was the quarter which our companies; the reasons: QX performance. slow forma to strengthening QX in of solid first and pricing segments. from unusually repositioning impacted synergies The of our business year’s QX; Last entered Adhesive pro model all organic Fuller for effective our portfolio in year-over-year results to year demonstrated a market the strategic cost helped and growth expense month carryover slowdown We key reported XXXX, of QX clear was high, many as revenue the

with US due of increased our housing for rain because durable in lower forecasted snow. colder market assembly impacts, primarily expected the roofing business these than solutions winter to addition was In and the revenue and softness in to our a

improved However, Royal performance. markets overcame at key shortfalls our the from customers year And and wins actions pricing our and these in targeted overall profit benefit revenue improving. our is of synergies, last organic

XXXX. as not This year. is QX operational upon year us in the to identified be Margin three the of and a growth beginning XXXX in will continues impacting be will in Going line we levels forward look EBITDA we improvement the key deliver the higher rest of to QX achieved factor build elements of areas: at the we all First, many with imperatives the of the in we EBITDA. an for XXXX as in focus

in of basis You points our currency objective EBITDA segment. met million quarter will and increased versus EBITDA QX XXXX. repeat basis on We this this increased XX XX% adjusted adjusted first constant the margin each $XX of of hear by as of across theme a

We to expect with increase during course year the total EBITDA the for to of continue in improvement solid XXXX. trends

million remain progress we and to Our total in planned to of with an $XX of XXXX. second captured quarter We acquisition. continue on cost to imperative deliver million $X this of as is the incremental integration synergies in additional Royal track synergies the

repayment is our commitments. imperative debt third deliver Our to

in Our QX was debt million than $XX QX greater paydown of year. of last

two put since $XXX XXXX our our in will operations of and the business. the in million from cash us XXXX paid our our of rate for debt repayment year throughout plan XXXX Thus have on seasonal far beginning accelerate our debt the down repayment like and Just plan debt of profile year based original ahead reduction. the in we will flow $XXX million of

first of new and sales. on some from cover mid-single-digit insulating soft assembly demand efficient, pricing Americas, were performance in areas slowdown in glass in offset strong RVs I'll and durable pricing Slide first improved and a The market growth Adjusted and volumes currency and doors modestly Europe core emerging gains driven the about generation, markets. in and from segment as impacted energy contribution negatively XX% were in US. underlying in pound constant pricing sales Now, durable reported some X. solution windows In by a revenues sales combined EBITDA The overall margin up quarter in improvement. demand general the lira currencies quarter such margin with These EBITDA gains offset assembly offset EIMEA year-over-year weaker slowdown flattish constant in and dollar-based impacted also packaging on the for substantially weaker the XXXX primarily expense. with Turkish basis with compared Europe SG&A British costs XX Positive points and lower X% increased operating currency as by Currency revenue. the core XXXX our strong and euro, of packaging. positive

QX for and EBITDA for reflecting quarter in and from woodworking are in including hygiene decline. in significant, severe last some roofing weather growth January Pacific in Low remainder a stabilization export of EBITDA our a was historical lagged in the related impacted result. strong pretty a also Asia up anticipated, portfolio to The margin market. EBITDA. flat, and margins, to assembly Asia, accounted performance was XX% in was by we Asia and still sales The Southeast and basis with sales customers adhesives and sales We in half roofing than more point China lower Pacific increase this QX This slower driven impact in middle offset XXXX, a as of Construction durable year, softer in versus year-over-year sales little for increase XXX products XX% decline we profit reported very the late textiles, products a in in this order more demand we although than organic quarter, growth repositioning impacting underperforming and continuous planned segment sales performance, volume strong away maximize packaging positive as and in moving particular. other were especially in February. revenue EBITDA portfolio the were levels. forecasted of saw focus. dollars organic with geographies pricing Adhesives by

rubber For drives shipments we context, that source, Weather institutes first what of of to membrane a down the quarter course, every roofing manage February are fiscal compared XXXX. in single-ply significant XX% EPDM February data year. independent and of roofing was reported seasonality impacts part our temporal an the of

Adhesives includes quarter New and H.B. and into Chinese QX. Christmas, and in sales weather-related going Construction Year, Both begun improve For slowdowns fiscal February. contribution have margin December, in our Fuller January, first to

EBITDA was revenues increased EBITDA points Lastly, the XX% was strong performance driven in single-digits business. growth strong. by XX% mid Engineering up Organic basis to in X% margin XXX a dollars our by impact. and up by were of higher Adhesives excluding parts margin currency

new even slower QX with as quarter our for results weather-related higher with with was continue along growth and customers bottom-line organic impacts our to line automotive. applications QX, and low absorb across our Engineering performance We continued We expectations in including growth offset construction. in In guidance, strong in in large aerospace win growth double-digit year some in second to organic strong full new forecast end the EBITDA electronics, unplanned Overall, we strong Adhesives, in performance. markets. energy and performance many

We improved half in are strong continue the and the results second the we second to of quarter in results forecast seeing year.

our me guidance let in Now, and to discuss the financials John to detail. over turn our more call

John Corkrean

and products gross months in last a carryover the offsetting expense with reflecting share about Slide last same over carryover, the year. customers pricing Construction year, that, volume $X.XX manufacturing year as lower impact and turn the currency, quarter for net driven Jim. offset was by adjusted X.X% markets year. expenses. reduction same control guidance by Year-on-year taken revenue actions improved period X%. down me construction actions significantly versus expense expectations pricing margin Adhesives let discretionary related first $XX for fiscal and acquisition currency EBITDA Thanks, on efficiency organic and general earnings our EBITDA of negatively With headwinds reflecting margins, X pricing from versus was as Adjusted selling, some to strong the underperforming for period X.X% down the XX now markets. additional away per by gains. of margin administrative I’ll same was weaker synergies our of impacted gains softness related offset in was foreign and dollar expense basis points line period to improved profit revenues efficiency debt versus down thoughtful $X.XX and on XXXX were and details XXXX associated interest the compared and Adjusted quarter. reflecting solid year, construction our X% nearly last last business in the begin Adjusted for in expense revenue good in financial increased increased versus stronger which with Adjusting control the manufacturing segment. last Net basis guidance. points winter was significant repositioning XX year, strong control the with currency mix, million exchange

the versus X% EBITDA expect approximately between of adjusted based continue the full year and $XXX XXXX will over This and three of EBITDA exchange seasonality improving the the million adjusted to volumes at for adjusted EBITDA we $XXX foreign remaining improve quarters million an continue represents $XXX to in on impacts million second expect EBITDA We the our million and of moderating midpoint. $XXX XXXX. increase quarter. to currency business, of

expect also closing range. represents With This now EPS full comments. I that, of year will We the for XXXX $X.XX the of midpoint versus fiscal continue to year growth back $X.XX. Owens some turn the between at to range Jim the XX% call and adjusted of

Jim Owens

Thank you, John.

acquisition trends the soaked to XXXX, Our with improve wins segments line in key several strong to synergies and quarter executed growth throughout other show and customer stronger the quarter were the pricing, second in in In our to synergies we results costs, guidance. we delivered business markets, that EBITDA leveraged along Adhesives effective debt applications positive momentum. and improvement raw strategic and with engineered the expect QX year. actions Based and through material pricing Engineering we continue highly earning win and and improving continued in the in plan on well all paydown throughout organic related in in continued quarter, we margins

for track XXXX. to We paydown EBITDA EPS, ranges guidance our are fiscal deliver within on and debt

adhesives. in in our as business as on results disposition resiliency our build first strategic a the global Our we quarter leader model show

We in that external factors our the markets. control customer and gaining share macro We can't business targeted are winning our global growth to occur business.

toughest and we That margin share today. can are prepared our business we However, customers’ through gaining and problems. solving comments of our concludes adhesion model for

let's some operator, for up the So call questions. open

Operator

today Ghansham ahead. And our comes Panjabi Baird. first question Please with from [Operator go Instructions]

Ghansham Panjabi

can in do off, first a I for guess I the well. given you was segment, us past by breakdown same you've as quarter hoping volume the the first

could? flow if trying reconcile you X% the and Just how that And kind mix price segment? then to decline same that with through of also by

Jim Owens

little a quarter-by-quarter been mix volume about Investor hasn't comment so We add. is bit a something can by The Yes, segment maybe I'll on especially basis that and Day. a talked this John really the during that the our customer that of packaging, Ghansham providing information. well reason that we change any amount uses. can for the product, the meaningful we And is enough for because as customer adhesives the that have, as price, breakdown

organic specifically in trucks. integrated at of our business, gotten important adhesives we tank look as XX as revenue even big So to up the this more sell Royal. We CCs we've has driver

metrics these I So were quarter-by-quarter But basis overall reported weren't well. business stopped lot still quarter. segment on volume of a we think really a the as why doing driving. that by creating a that's basis it And noise on we've for

John, add So you to want to that? something

John Corkrean

markets, a similar saw the construction to And QX as it, to tried to QX. very right. we adhesives say is to a Yes, case the I regional similar little impact in in give we reemphasize and too maybe a attrition what I net really pricing with Engineering the volume in volume, mean, that's driving it's there in volume color Adhesives with really script story picture just but well. driven, let’s is little think been

So color. hopefully that gives some you

Ghansham Panjabi

first obviously, I initially just run And from meaningfully when guess quarterly probably the thought down a did the volumes constructed than high previous what lower I helpful. you level step you during mean ‘XX. or from versus much. guidance basis, rate, the That's commercialization, the et are for confidence cost, that in then on offsets give synergy something standpoint What lower confidence you you seeing raw you're it that guidance, reiterated so in are the offsets a a your the cetera? material that that Thanks guidance? give is is quarter

Jim Owens

of and even Royal of the QXare weaker I P&L. are kind more standpoint. flowing in had an we organic Yes, the revenue benefits right, through environment of thanks, that some the Ghansham. that in things benefits Yes, think away happened QX, of so But materials, as going out, our we organic pointed revenues, in from where importantly, raw synergies

So here I a quarter, we people, see December for into if trend, to at and was that improve it continued problem think it to improving continuing the the March. combination as an of improve look you for us other and was

lot quarter why So the business, most raw sizeable roofing of away. top-line is we have The performance has on. the materials, synergies definitely and what's taking we improved underlying optimism margin were impacts, go the But to as our because for importantly, went business, stronger which think our effect I a due as of forward. in go

Operator

question ‎Dmitry Research. ahead next Silversteyn our question. your comes go from Buckingham with Please And with

Dmitry Silversteyn

that of the guys that to couple A undergoing. are things of kind wanted you I construction products transformation dig into

CapEx for transformation, in caused as are of is, will, capacity as I So also, and kind if and business how other little I'm of issues volume higher or slower any understand running or smaller it some long or going your this to you And executing into is you're as the the you products growth you assuming higher talked behavior by margin you're half batches in last where part businesses you however trying making equipment work on this resulting being side? transformation, division is type you the I'm and there of overwhelmed, your to they or plant pruning and a over far your a there as is overall? what overwhelming decline your be or it. the being processes, of to transformation done aligned from needs term away of bit that with that setup equipment are guess about want walking to

Jim Owens

think I a but of quarter, we in lower had QX a in thanks up terms kind seen improvement in And it's you’d roofing revenue, actually look we a time for little EBITDA. this in of see happened effect, had an decline And think effect same I do so good that thing our results, would have on our question, is if a good spend Yes, at to what you explaining. hadn't one for to EBITDA Dmitry, us revenue. this that

defining profit this took negative volume ultimately business, that it business high the our was of we growth about was once pieces were really very some so of those away supplying business, costs. that And we was

line. I’ll capital, business capital into types think dramatic it's of pulling commoditized sand volumes or area. the product new mortars, have product cement those the both businesses a question of inefficiently we add things, have lines capacity terms the drives shifting growth the profit lines this or that completely more in like that we're a where like don't both our country. areas of and we call we of shift that well efficient better around had more those in I supply manage there's on we technologies, are it's on our But value down those, -- and in that need. chain, in the thing better those it's have So this, are and things part about a product to a because whole fact, -- has have lower a And products We the things focus bag them your not on but moving performance, we rest

So process part the was products of around this an relatively move margin country. low to efficient

you that So the need does you Dmitry? background give

Dmitry Silversteyn

than for And time of how about announcement follow-up time? was that Japanese think markets explaining you decision you Can getting you do make us to into that's venture spend does, this H.B. into we that I you quick, did going Jim, at there. the have the It business made get work for if a Japan as recent why to directly going little to a forward? and how And already a really Fuller could rather joint Thank that.

Jim Owens

think a technical that's I Yes, Dmitry. issue

line, joint of our businesses. it's locally. reported such as that driver gets There's that's great had the certain is our primary have It the a technicalities with joint contract through that Fuller, venture some Sekisui employed P&L below in the in venture. and business to said people we a Our

not change all We venture and in our a strategy. technicality, So at it's it's a the joint and very successful. love

Dmitry Silversteyn

Okay, that so this business competing is you …? not a

Jim Owens

in couple strategy. we through just at us but not all. our of Engineering not do growth accelerate Engineering directly it things It a at able joint the us venture, specifically do all, Adhesives some that allows No, to weren't to helps areas, in Adhesives

Operator

Next question go Securities. Please comes Mike Seaport with Global from Harrison ahead.

Mike Harrison

seems bit. Engineering it which the holding like of surprising. that specifically It us specific was I bit if maybe return a little which and sense markets which not decelerated we're about going you talk Maybe year? about you to gives little growth can those of regions it sounded maybe rates or a a in wondering deteriorated? was to talk But better that about business, volume growth Adhesives sales auto, -- up confidence like the rest is the of give were what

Jim Owens

Yes.

in So technologies a growth North general we're of We couple in off aerospace, we're Royal from comments there, good as leverage growth first the from America. seeing some particularly is and electronics, Tonsan in the US, Mike. really in our industries, opportunities, where into we -- seeing

right, in particularly and China December. and weaker, in particularly You're was auto the business

we specifically the on keep that do rolling we forward. see not auto lot but in, in So winds electronics. of optimistic not a as is what overly bad business, going We're the see

and take our is assembly business the some electronics solar micro to expand efforts now a winning the solar. now of to Some starting We're of in really Korea around business, that's hold. which installations We're helping some accessories business able of our solar business. that are some to

that a rolling of So, through good wins are lot those still business.

problems so fact that be year this going confident for last of continues everybody churn our leverage was down of despite and that wins. probably of the that will our you back the flat would point is to that that very business, last year soon very at there piece business that model I headwind technology either than fact else. single-digits, strong to be was in out, we year. went strong As QX that to to And really business, know, also auto QX double-digits to out faster the the the is solve model very we're up

Mike Harrison

of by in expect little then Got also bit math If were in was it. sales. or that terms when Wondering growth absolute efforts dollars, the costs right, a talk some that of like better of And to surprised it but do of SG&A Royal that, you we does guess investments. we're an up SG&A little hoping a given on the absolute down about might I number. we SG&A I leverage? inflation just terms looks reflect could basis the synergies, see normal percent around some some but your

Jim Owens

on in SG&A that And in by some costs. that then lot I'd weren’t the in SG&A savings synergies there's Yes, our so they're amount raw is of side, of there's me sales. and as a indirect the operations the a -- thing so start one mostly material let in saying costs say of fair other percentage and cost lumpiness a any Royal quarter

look quarter. -- be year rather the color me each happened more I percentage maybe think over at to a precise more I'd So the be John it that. maybe what of as in sales this than to of about turn on But we the quarter, course let

John Corkrean

points, dollars, our Yes. right. if relative all that the think other have thing structure we you are I Jim, structure, our add revenue more constant I would cost is at to only the look Those right

a sales. believe bit but a based has we headquarters getting we're looking the at little that impact the as a a percentage of out So it SG&A we larger an of impact. of US currency do synergies terms leverage have have we and in of planned We as

Mike Harrison

understood. Alright, Thanks much. very

Jim Owens

was -- the last Mike euro as it color is than today. weaker happened year ago a euro XX% year, Just today on the but it a there currency, the

So a it's number. big

Operator

with your ahead question next Please Deutsche from Begleiter question. our David with Bank. And comes go

David Huang

here March? to would volumes. if be is if I would cold impact some wondering in those can what your quantify by again shifted and weather given comment lingering wet percentage guess, on was David. QX construction I Dave and in this first, roughly be offset Hi, from for Huang QX you impacting QX,

Jim Owens

have do up weather for to of you really in roofing. my a I kind tell see to climbing pulled on can heart going our some warmed not lot March we're in that of up our to into us I on is tell QX that it roofers QX know you were strong I come tough be is up effects but something able it's and when predict you, positive. to much parking to today these business how here it roof so very Yes, can but repairs there. the should that's bunch versus

David Huang

Okay. mid guidance And secondly, need cost achieve actions the high your for to to additional take say do you year? to end EBITDA at your

Jim Owens

Yes, the of revenue I them to organic we would right. say to that's that end, of if a you think benefits then -- raw the high mid materials, the look to I revenue expect and combination stabilizing where

benefits Currently, the So raws in worse year. QX. of out we're or we'll our see raw little second benefits modest way, a projecting flatten the maybe in material through P&L get a flow more for the only to in half

we plan, to So expect to raw bit our and of the little a through. material the see organic upside for come hit us I probably certainly benefits think growth

So the a top upside that the we're there, that's that's end. plan. the And at way I we of the as what went still year into with drives expectation, the we and think look

Operator

Eric next question ahead. Citi, go with our Petrie from And comes please

Eric Petrie

trade signs that sustainable, the think and positive you out in the playing growth year? how region, no see notXr do there's you You China into stabilization the rest or that's of do of resolution, in

Jim Owens

but in our grew China it business that of is prognosticator the would the China. say regional be in to hate I I fact Well, we Yes.

good that thought a was sign. So I

definitely think said on: I in as quarter, destocking. China and was I a two things slowdown last going there

stopped I because think the has things stopped. destocking

I I think it'll today negative a to but lot. help I I’d So business a QX. low in if as certainly that would great not expect a we're the that deal, going plans lot our China and we at on. there's If and is -- downturn war say, really saw is building grand trade And where QX think not, and our growth help we're what slow and what and

add to you want John, that? to So anything

John Corkrean

exactly that's right. think I No,

impacted a sort saw business we consumer-led maybe in improvement little parts are think that the to by of I more as of exports. more those opposed the

Jim Owens

Yes. a great That's point.

did things So the packaging of than some and hygiene exports. like better

Eric Petrie

to color And you. organic Thank a than growth doing is better little give Helpful. as why then in you Americas? EIMEA could

Jim Owens

Yes, then give let a maybe can. me high level John and but

EIMEA outside our think of higher of business I core Europe. a has percentage business

So Africa drivers Middle East, business, our Europe. not for fundamental growth India, core it's are the

to add? want you do John, So

John Corkrean

to emerging think higher point said growth X, kind that always on was in sort I growth going Americas growth that based EIMEA we've was versus at at and that make, in higher looked of we've think roughly we've I I the EIMEA X% as looked market. of target always the in

Operator

our Rosemarie G And from next question comes go ahead. Morbelli with Research. Please

Rosemarie Morbelli

Jim, you showing are areas signs that which are mentioned certain there pickup. of

you wondering that have fundamentally mentioned weather was forward? related So what see and you I could some speaking, is and roofing that if going you talk about of areas those

Jim Owens

saw great out sure that signs Yes. of not there. we growth I I'm said

growth stability seen out in well has really Asia Asia, as job a we've China. as Southeast really solid our I in seen think team is I think doing We’ve strong Southeast benefited there.

were then homes. and Africa, we businesses things the other East picking then we places a we positive. growth, of consumer up mentioned as and India, things negative vehicles In materials construction used positive be recreational where that that -- in John As John in so… see a mentioned, little, see But have the was North saw some that production America, there would were the just Middle related China been

Rosemarie Morbelli

particular in India? Middle -- picking East Africa, up in Any the areas those

Jim Owens

think a growth a We’ve of picking engine on last shock India so We year, got years of us for a pretty as say couple India investment made that slowed put Africa, that's that then there a solid see been Last we're the we little would teams year has some I the doing our I business, well ground Yes. ago. in for currency And Africa. us. middle bit up. the in stabilizing. down. devalued India good

those be particular the two would So ones.

Rosemarie Morbelli

and be So a another $XXX a so be case $X.X what you you reduction, forward? billion in which in debt going that then that comfortable I particular, to anticipating maybe a doing planning then, recession debt million will this high you about leverage down pay this you mean is of net for order looking at at year, level type net net level. your X.X and leverage, million do in can seems a if offset of what would recession, And that coming? about are you in are what target a $XXX year, talk

Jim Owens

Yes, maybe John I you high level to give the depth. more and some want so, give can then you

million deal. we the year, $XXX original So, our some to or pay and do this year better, next do $XX was to was $XXX million well issues million, issues, and we’re Last exceeded plan commitment million. after growth over our first that number year year then Royal down committed to this $XXX -- the -- by organic despite three years

think are I X.X a to the three have on that do look management, year plan as number we a to it's And can want respect further? with a we down brought a as a ratios to low comment this would So quickly on to priority debt our clear leverage pay very to make we that you levers with strategic pull there goal possibly can. that get we of recession for capital, us working certain pull there John to we that. capital were that but if down,

John Corkrean

I think hit key all the you points.

in the long-term and to be working in model we'd recession be short-term below are capital materials think there's neutral do what We getting comfortable. down the if coming where positive raw That's goal. try would X typically of if and release. they're a to I actually implications kind is our

of this So we're stay regardless we're going comfortable, repayment plan sort the environment. debt to on external of

Jim Owens

were a kind models we’ve release pointed put place, if helpful plans to capital is have as the environment. -- take place have in we really in and we done working and this action John out, recession So that of that

Operator

And comes go with next our Curt question Siegmeyer from KeyBanc. Please ahead.

Curt Siegmeyer

expected. I you expecting ask outlook, for obviously XQ could is year If clarification the into than on you growth coming just lower X% little your X%, a a to organic are

EPS and you what to or your internally, maintain So down is tune be are -- are that that if offsets X% guidance? thinking you little that a maybe bit allowing still would the EBITDA to positive X% you've

Jim Owens

expected lower today, be think would you our that maybe looked at let I I'll the at improvements then to you’d I’ll margin but reasons be and if comment, that raw talked synergy all where we going current see Yes, models be delivery. guidance more about, internal than of positive year more materials specific, due yes, John the the I with end the are into we’d

to lower if So, center what did those think X% and about would the expect offset seeing that's be to closer where get end the you range, probably of of we I range. the two of you forward. things -- rest what X% going that something But year, that's the we're to the for wouldn't would the

John Corkrean

Yes, that's right.

we're think a I recover and sort with but significantly to an QX bit would of kind be declining we precipitously bit China a of China not pretty in current continue of easier -- our we a have probably if little comparison positive on little we're trend projecting of comparison. that

Curt Siegmeyer

it, that’s Got helpful.

Jim Owens

the is EPS on mid-range very but EBITDA in and X% the to confident answer. X% the

Curt Siegmeyer

XX of your Okay, great. color adjustment? million to guidance Can more Royal which to just includes some range. give why little as million now you And follow up the XX million think up, I expenses, just integration then us is XX a pre-tax to there

Jim Owens

timing more I operational of to think anything related projects kind some with particularly of the of projects. than it's

bit of project. probably restructuring. we're change the incurring our So think in expectation full for will don't sort a little I more it

Operator

question Paretosh And Misra our from with Berenberg. next Please ahead. go comes

Paretosh Misra

in costs? FX have So, just of you in terms and terms assumed what QX material your of guidance, raw

Jim Owens

specifics some you give maybe John let will I there.

John Corkrean

in We believe very I Raw year if this you some material materials, costs, similar than Paretosh in QX. last up that improvement was hung raw versus currencies as in FX lot still we of year of terms think I is probably that in So to account of view instead through them the QX, better saw QX QX. will in for year-on-year a QX QX. and moderately inventory come

raw So in material modest improvement costs QX. in

Paretosh Misra

seen earlier sounds going Thank any because consumer end your half? late and supported maybe of Have last you seems in some improve of back second expecting this the the something you. And that slightly export better of then China, to Or announced than that growth to impact it year are like policies government has the year? there markets. you is doing

Jim Owens

is that One strong. there's areas initiatives. only that an think would done where of And would one we've electric a I that impacting I those say and vehicles, two solar supporting, on market very government were some the continues area drive with Yes. electric is, that that the be output well to helps we're buses. in be very especially

that business. both our those helpful the for of positive, Engineering us some initiatives Adhesives been of impacting being have see So and there are those we

Paretosh Misra

Got the non-US is on from it. then one construction based how you me business, remind much US the last based? me, can your And versus

Jim Owens

about think based. US I XX% it's to today XX% Yes,

Jim Owens

we're particularly today's Well, great. thank results Okay, quarter. for performance about the time given of and going your everyone, on forward, of H.B. Fuller really our the first support We this optimistic very appreciate you, overall call.

So your support. for thanks again,

Operator

And for this concludes conference. attending you today's Thank today's presentation.

website check for may the the replay You company's options.

your disconnect this now time. may You at line

H.B. Fuller (FUL) 28 Mar 192019 Q1 Earnings call transcript