FULLER H B Q2 FY26 earnings call FUL

H.B. Fuller delivered organic revenue up 2.6% with pricing of 3% partly offset by slightly lower volume, and EBITDA above the midpoint of guidance. Swift April price increases (announced late March, effective early April) are ramping, run-rating ~6% in the quarter and ~6% in May. Management credits industry-leading global sourcing for maintaining supply continuity while some competitors struggle with availability, echoing the differentiation seen in 2021-2022. They do not expect a rapid recovery of global supply chains or a full retrace of raw material costs even after the Middle East conflict resolves — the cost structure of the industry has reset.

The announced all-cash offer for Advanced Medical Solutions (GBP2.85/share, ~GBP715M EV) establishes a scaled global medical platform. AMS employs 1,800+ people across 16 sites, sells into 100+ countries, and generated FY25 revenue of ~$302M and adjusted EBITDA of ~$54M (after IFRS-to-GAAP adjustment). Its portfolio spans surgical adhesives, tapes and dressings, mechanical closures and formulated biosurgicals. Combined with H.B. Fuller's cyanoacrylate medical platform, it expands medical adhesives revenue more than 4x from $68M to ~$370M pro forma and lifts the combined addressable market to $95 billion. AMS grew organic revenue ~8% from 2023-2025.

Management frames medical as one of the most attractive spaces in the industry: durable structural tailwinds from an aging population, rising chronic conditions and a shift to minimally invasive techniques; demand largely nondiscretionary and uncorrelated with economic cycles. The market is fragmented and highly specialized with meaningful entry barriers — regulatory approvals, clinical validation and rigorous customer qualification. H.B. Fuller currently serves a $6 billion addressable market growing ~8% per year across topical/internal adhesives, device assembly, medical tapes and wearables, and surgical drapes and gowns.

Identified run-rate synergies total ~$55M — ~$20M commercial and ~$35M cost — from back-office rationalization, vertical integration of adhesives, indirect sourcing leverage, public-company cost elimination and wage arbitrage. About $14M relates to the in-flight Peters Surgical integration (consolidating 5 suture plants to 1 and 2 collagen plants to 1). Synergies at ~11-12% of acquired revenue exceed prior deals (Royal was ~7-8%). Management stresses AMS integration and Project Quantum Leap are fully independent workstreams with dedicated teams. Since 2023, across 11 acquisitions, acquired-business EBITDA has grown ~55% and margins expanded 1,000+ bps.

HHC organic +3% with EBITDA margin up 230bps to 17.9% on strong pricing execution and lower-cost inventory; strength in medical, tape/label and end-of-line packaging offset flexible-packaging weakness. EA organic +5% ex-solar (-1% including solar) with aerospace up >30%, electronics and general industries up double digits, but automotive down mid-single-digit across all three regions. BAS organic +6% with EBITDA +10%, led by glass and infrastructure/mechanical, plus data centers and Foster's LNG product. Geographically, EIMEA +8% and Asia Pacific +10% (ex-solar) benefited from supply dislocation and sourcing strength; Americas +1%.

H.B. Fuller identified AMS as a target as far back as 2023 and had no active plans given AMS's public-company status. A leaked TA Associates offer surfacing April 18 set H.B. Fuller in motion; it submitted an LOI April 30 (accepted weeks later) and kicked off diligence May 26, including a dozen expert sessions. The company filed its Rule 2.7 binding offer the morning of the call. Under UK Takeover Code there is no breakup fee; remaining steps are AMS shareholder approval and regulatory clearance, driving an expected end-of-CY2026 close.