H.B. Fuller announces integration related restructuring charges
H.B. Fuller Company has announced that it has approved a detailed plan associated with the integration of the Royal and H.B. Fuller businesses that is expected to result in the delivery of EUR 28 million in annual cost synergies by fiscal 2020.
In addition to procurement savings, this plan includes savings resulting from the closure of two small production facilities, the consolidation of up to six other locations into three locations, and the reduction of certain positions to support manufacturing and SG&A cost savings. These actions are in line with the previously announced Royal integration and synergy plan, and are in addition to planned revenue synergies. “We are passionate about being the best adhesives provider in the world, and our customers are benefiting from the broader portfolio and expanded development and production capabilities obtained in the Royal acquisition,” said Jim Owens, H.B. Fuller president and chief executive officer. “The integration of our two businesses continues to progress very well, and every day we gain more confidence in our ability to deliver the synergies that we committed. The actions we are announcing will further enhance our efficiency and enable us to deliver the 2020 target of EUR 483 million in EBITDA and corresponding debt paydown.”
These actions will result in pre-tax charges of EUR 35 million to EUR 40 million with after-tax cash costs of between EUR 16 million to EUR 19 million over the next three years. In 2018, H.B. Fuller expects to incur charges of approximately EUR 12 million to EUR 16 million (EUR 8 million to EUR 11 million in after-tax costs) related to these actions. These charges will be excluded from the company’s adjusted earnings per share.
Three-year project
“The Royal integration is a three-year project that will be completed in the best interest of customers and employees with a clear focus on creating value for our customers,” continued Owens. “Our goal for the integration of our two great companies are prioritized to protect and grow our business, retain our best employees, deliver our committed synergies and build a unified culture. We are off to a great start, and the actions that we are undertaking will make H.B Fuller a better and stronger company.”
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