H.B. Fuller Company Acquisition of Royal Adhesives accelerates strategy and creates shareholder value
2
H.B. Fuller to Acquire Royal Adhesives & Sealants
Combined company will
have improved growth, margin
and free cash flow profile
Fits with H.B. Fuller’s 2020 strategic plan
Creates significant and
immediate shareholder
value
H.B. Fuller Company
Leading global provider of specialty adhesives
• Consumable annuity business
• Highly valuable / small % of customer spend
Long history of winning with customers to create specified solutions in highly diverse markets
Application science, problem solving & world class innovation create superior customer solutions
• We help customers create new products
• We enable new manufacturing processes and higher efficiency
Global presence – more than half of $2.85 billion pro-forma revenue outside of the U.S.
2
4
Strong Foundation / Portfolio Shift
2010($1.3 billion)
2016($2.1 billion)
Engineering, Durable
Assembly & Construction
AdhesivesHygiene & Packaging
Non-Strategic
Durable Assembly & Construction
Adhesives
Hygiene & Packaging
Non-Strategic
Revenue
EBITDA
$148,127
13.4%
10.7%
10.0%
10.5%
11.0%
11.5%
12.0%
12.5%
13.0%
13.5%
14.0%
$-
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
2010 2011 2012 2013 2014 2015 2016
44%32%
Adhesives: Our Strategic Market Space
5
Over time, expand the number of key target markets by expanding core competencies
Adhesives are an attractive market space:
High value-added product enables:
• New product development
• Improved manufacturing efficiency
• Reduced cost of customer substrates
Small % of customer spend
Consumable with limited cyclicality
Highly diverse market segments
Low customer/supplier concentration
Concentrate resources where:
End markets are growing
Adhesives create high value
We have competitive advantage
Global Adhesives Opportunity $40-50b
Engineering / Electronics
Durable Assembly
Hygiene
End of Line
LabelingFlooring
General Construction
Sealants
6
Gain market share through application expertise and strong customer relationships
Increase global growth with greater share in emerging markets and engineering adhesives
Innovate to address existing market opportunities and capitalize on emerging trends
Build best-in-class supply chain capabilities - excellence in cost, quality and service
Leverage supplier relationships to drive cost and innovation differentiation
Build a winning, global team
How We
Win
By 2020: 3-5% organic CAGR plus ~$500M inorganic
17% EBITDA margin
15% ROIC
EPS CAGR > 15%
Financial
Targets
Manage and grow the core while enhancing our portfolio through aggressive growth in
selected high value segments Create teams of experts that understand our customers’ adhesive applications to help them win
Develop differentiated applications to solve problems and create opportunities for our customers
Leverage our human capital with efficient processes, capable tools and a winning culture
Make informed and critical decisions on where and how to allocate our resources
Key
Success
Levers
H.B. Fuller will be the best
adhesive company in the world as
defined by customer satisfaction,
employee engagement, and
shareholder returns.
Vision:
2020 Strategic Plan
Operating
Principles
Winning the right way: High ethical standards
Safe working environment
Commitment to sustainability and community involvement
Collaboration across geographic and business line boundaries
Our
Competitive
Advantage
We strive to be the best globally connected team of adhesive experts,
enabling us to share ideas, make decisions, execute plans and solve customer problems
better and faster than anyone in the industry
The 2020 Financial Plan as Communicated in February of 2016
Elements of 2020 plan• Modest organic growth expectations
• Targeted margin improvement initiatives
• Cash flow generation increased
• Commitment to smart acquisition as part of base plan
• Balanced deployment of available cash flow
Organic revenue growth 3% - 5%
2020 EBITDA % 17%
EPS growth 15% per annum
ROIC 15%
7
7
8
H.B. Fuller to Acquire Royal Adhesives & Sealants
Combined company will
have improved growth, margin
and free cash flow profile
Fits with H.B. Fuller’s 2020 strategic plan
Creates significant and
immediate shareholder
value
Huge Value Creation Opportunity for Shareholders
9
Significantly shifts portfolio toward high value, specified adhesive
applications in Engineering, Construction and Durable Assembly.
Immediate improvement in EBITDA margin,
cash flow, and revenue. EPS accretive in 2018.
Delivers cost synergies of $35 million and revenue synergies
of $15 million in EBITDA by 2020.
Provides significant short- and long-term value for
customers, employees and shareholders.
Complementary acquisition of pure play adhesive manufacturer.
10
Royal Adhesives Overview
11
16
1821 21
2017 Financial Forecast*
• $650M Revenue
• $138M Adjusted EBITDA
• $120M Free Cash Flow**
Pro Forma Net Sales
Company Overview
• Pure play adhesives and sealants company
ranked in the top 10
• Headquartered in South Bend, IN
• 19 manufacturing facilities across 5 countries
on 3 continents
• ~1,500 employees
70%
North America,
68%
Europe & ROW, 32%
Engineering Adhesives,
20%
Durable Assembly,
34%
Construction Products,
33%
Packaging, 2% Other,
11%
Geography
End-Market
** Defined as adjusted EBITDA minus capital expenditures. Adjusted EBITDA and
Free Cash Flow are Non-GAAP financial measures. A reconciliation is provided in the appendix.
* Based on H.B. Fuller fiscal calendar
12
Opera
ting S
egm
ents
Geogra
phie
s
FY 2017
Forecasted
Results*
Sales: $650 million
Adjusted EBITDA: $138 million
Margin: 21.2%
Product
LineApplications
Engineering
20%
Construction
Adhesives
33%
Durable
Assembly
34%
Packaging,
Paper,
Polymer
13%
• Rubber to metal bonding adhesives
• Aerospace sealants
• Auto adhesives and sealants
• MMA and CA adhesives
• Solar attachment adhesives
• Insulating glass adhesives, spacer
systems and glazing
• Repair tapes and caulks
• Recreational and marine Vehicle
adhesive and sealants
• Low slope roofing systems
• Tapes for edge and seam bonding
• Insulation attachment
• Flooring adhesives
• Below grade waterproof bonding
• Food packaging adhesives
• Paper / labels
• Textile coatings
• Graphic arts polymers
Geography Specialized Capabilities
Asia
3%
• Precision small pack competence
• Leader in commercial roofing
• Partnerships with leading flooring
materials, roofing materials and, retail
product producers
• Advanced laboratories and testing skill
• Growing position with leading
aerospace manufacturers
• Strong Kömmerling brand and
technology
• Leading position in insulating glass
market
• Complementary position with German
auto manufacturers
• Modern facility in Nanjing, China
• Growing position in insulating glass
• Strong partners in Korea and Japan
US &
Canada
68%
Europe
29%
* Based on H.B. Fuller fiscal calendar. ** Adjusted EBITDA is a Non-GAAP financial measures. A reconciliation is provided in the appendix.
Strong Historical Growth(Royal financial performance 2014-2017, USD M)
Stable organic growth and solid EBITDA growth over the past number of years
13
*Pro forma for acquisitions and constant currency.
Pro Forma Adjusted EBITDA
110124
137 138
2016
+9% CAGR
2017 TTM May
2014 2015
Pro Forma Net Sales*
604 630 643 653
2014
~4%CAGRvol.
2017 TTMMay
2015
+3% CAGR
2016
EBITDA Margin
*Pro forma for acquisitions and constant currency.
**Adjusted EBITDA is a Non-GAAP financial measures. A reconciliation is provided in the appendix.
20
18
21 21
14
Global Business Footprint
R&D and Manufacturing Facility
Manufacturing Facility
Michigan Center, MI
Butyl, PIB, Hot Melt,
Solvent-Based, Water-
Based, Acrylic
South Bend, IN
Solvent-Based, Low
Volatile Organic
Compounds,
Reactive, Water-Based
Chagrin Falls, OH
Polyurethane, MicroSealant
Tapes
Wilmington, CA
Aerospace Polysulfide,
Specialty Packaging
Simpsonville, SC
Polymers, Flooring Adhesives,
UV/EB, Water-Based
Mansfield, TX
Flooring Adhesives
Dalton, GA
Surfactants, Thickeners Raymond, NH
Specialty Packaging, Reactive
Methyl Methacrylate AdhesivesPeabody, MA
Specialty Packaging
Wayne, NJ
Solvent-Based
Pirmasens, Germany
Polyurethane, Polysulfide,
Reactive Butyl TPS, MS
Polymer,
Solvent-Based, Water-Based
Langelsheim,
Germany
Polysulfide, PIB
Nanjing, China
Polysulfide, PIB,
Silicone,
Polyurethane
Rexdale, ON
Polyurethane, Epoxy, Silicone
and Hybrid Resin SystemsSyracuse, NY
Paper, Packaging,
Coating
Preston, UK
Solvent-Based,
Water-Based
Ball Ground, GA
Specialty Packaging
Irvine, CA
Epoxy, Urethane
Frankfort, IL
MMA, CA
15
Highly experienced management team with strong track record of results
Management team has an average of 25+ years of relevant experience
VP Operations, EH&S
33 years in industry
33 years at Royal
VP Supply Chain 22 years in industry
6 years at Royal
VP Technology 31 years in industry
5 years at Royal
EVP & CFO
28 years in industry 2 years at Royal
VP Human Resources 23 years in industry
6 years at Royal
President, Transportation, Assembly & Construction Managing Director, Europe, All Segments35 years in industry 34 years in industry20 years at Royal 34 years at Royal
President, Commercial Roofing25 years in industry12 years at Royal
President, T,P,P & P
42 years in industry9 years at Royal
Ted Clark
CEO, Director
42 years in industry
14 years at Royal
Functional leaders Business leaders
VP Business Development & President RAS Canada 35 years in industry30 years at Royal
16
Impact on H.B. Fuller and Transaction Overview
17
The combined company has improved growth, margin and free cash flow profile
Pro-Forma Combined Financials – H.B. Fuller and Royal – $M
$350
$500
$0
$200
$400
$600
FY17PF FY18PF FY19PF FY20PF
Strong projected revenue and EBITDA growth of 4% and 12%,
respectively, across business segments enabled by top
positons in multiple end-markets
Achieves EBITDA margin goals ahead of H.B. Fuller 2020 Plan
and enables organic upside
Includes growth synergies from globalization of the Windsor
product suite, leveraging established H.B. Fuller channels
Attractive Free Cash Flow conversion fueling aggressive debt
pay-down forecast
$430
$600
$0
$200
$400
$600
$800
FY17PF FY18PF FY19PF FY20PF
Adjusted EBITDA* Growth and Margin Profile
Key Growth Drivers
Net Sales Growth
Free Cash Flow Growth*
$2,850
$3,200
$2,500
$2,800
$3,100
$3,400
FY17PF FY18PF FY19PF FY20PF
* Defined as adjusted EBITDA minus capital expenditures. Adjusted EBITDA and Free Cash Flow are Non-GAAP financial measures. A reconciliation is
provided in the appendix
18
Compelling Overlap and Portfolio Complement for Significant Value Creation
Improves and broadens portfolio mix
Expands technology portfolio capabilities
Expands global footprint
Significant synergy opportunities
Enhances growth and margin profile
1
2
3
4
5
Immediately meets 2020 plan goals by accelerating current strategy
Expands Engineering Adhesives presence into Aerospace and other high value segments.
Increases geographic presence in Engineering Adhesives in the Americas and Europe.
Provides small pack capabilities for reactive systems in the US.
Provides a stronger position in Durable Assembly in the Americas and Europe.
Creates the #1 global Insulating Glass supplier, complementing our profitable business in N. America.
Introduces a second, sizable construction segment -#1 player in commercial roofing space.
Strengthens business in overlapping segments of Flooring and Flexible Packaging.
19
Improves and Broadens Portfolio Mix1
Engineering13%
Durable Assembly
20%
Construction Adhesives
11%
Hygiene20%
Packaging19%
Other17%
CURRENT H.B. FULLER
$2,200 M
Portfolio Shift to Highly Specified Adhesive Applications (Engineering, Durable Assembly and Construction Adhesives and Sealants)
Engineering20%
Durable Assembly
34%
Construction Adhesives
33%
Packaging2%
Other11%
ROYAL$650 M
20
Engineering14%
Durable Assembly
23%
Construction Adhesives
16%
Hygiene16%
Packaging15%
Other16%
NEW H.B. FULLER$2,850 M+ =
The addition of Royal increases highly specified business from 44% of a
$2.2 billion portfolio to 53% of a $2.85 billion portfolio
21
Expands Technology Portfolio Capabilities2
Extending our application capabilities in new or adjacent applications
Advanced Aerospace Sealants
Perform well under demanding industry requirements
33% quicker curing time than previous solutions
Resistance to aviation fuel and other chemical and petroleum products
22
Expands Technology Portfolio Capabilities2
Extending our application capabilities in new or adjacent applications
Energy Efficient
Insulating Glass
Drive toward energy efficiency has led to increased performance demands
Triple pane glass is a growing trend in Germany and around the world
Spacer technology changing which requires highly specified adhesives
23
Expands Technology Portfolio Capabilities2
Extending our application capabilities in new or adjacent applications
Satellite Dish
Installation
Royal developed a small package 2 part patent pending system
Replaces three 50lb bags of concrete
Reduces installation time by hours
24
Expands Technology Portfolio Capabilities2
Extending our application capabilities in new or adjacent applications
VOC-free Commercial
Roofing
Royal developed new products and application expertise to eliminate VOCs in Asphaltic roofing systems
Partnerships developed with equipment suppliers to address a market opportunity
Also significantly reduces labor costs and is compatible with application equipment
25
Royal
H.B. Fuller
Expanded Global Footprint3
EUROPE:
Efficient, versatile
German site and
specialty UK site add
new competencies
and capabilities
NORTH AMERICA:
Unique production and
packaging capability
will accelerate growth
in engineering
adhesivesASIA and
EMERGING
MARKETS:
Opportunity to
leverage H.B. Fuller’s
global network to
penetrate new
geographies
26
$35M
Procurement Manufacturing SG&A RevenueSynergies
SynergyOpportunity
Cost Reduction Revenue Synergies
Estimated EBITDA Synergies by Source $M
Significant Synergy Opportunities
Expect cost synergies alone of $35M+
• Quick win price harmonization and strategic
sourcing of raw materials
• Manufacturing synergies achieved through
creation of technology driven centers of excellence
• SG&A synergies reflect reduction of Corporate
overhead and duplicate third party costs
Significant additional opportunity to grow
engineering adhesives and globalize Royal
business segments that are regional today.
• Cross-selling Royal technology to Engineering
Adhesives customers
• Leveraging Royal technology into new
geographies, including emerging markets
Planned actions
• Workstreams engaged to scope out and execute
3-year synergy plan
4
$35M
Procurement: Most of $20M+ synergies identified across raw
material, packaging & indirect can be captured early
27
Estimated Procurement Savings
Procurement Levers
Quick win price harmonization
For overlapping categories, reduce spend through alignment of best pricing
Indirect consolidation and sourcing
Procurement organization consolidation
Consolidate all procurement activity into a single, centralized team
Raw material strategic sourcing
Conduct strategic sourcing in waves on total raw material spend
Packaging Strategic Sourcing
Saving opportunities through external benchmarking and consolidation
1a
3
4
1b
2
Strategic sourcing in waves on total combined spend
Growth Synergy Overview
• Cross-selling of Royal engineering adhesives through H.B. Fuller channels in China, India and Emerging Markets
• Cross-selling of Royal and TONSAN small-pack technologies to Electronics, Auto, Assembly, and Aerospace customers
• Cross-selling of H.B. Fuller technology to Royal flooring & carpet OEMs and wood flooring manufacturers
• Cross-selling of Royal high performance tapes for consumer electronics, and metal to metal bonding
• Cross-selling of sealants and reactive adhesives in the RV, Bus Truck & Rail markets; leveraging Royal relationships in North America and H.B. Fuller relationships in China and other countries
• Cross-selling of primary and secondary sealants to insulated glass manufacturers in North America and Asia
• Increased capacity and cross-selling from shifting hotmelt moisture cure manufacturing from H.B. Fuller to Royal plant
Total Synergies Identified of ~$50M in Revenue and ~$15M in EBITDA by 2020
Growth: Synergies are centered in H.B. Fuller’s Engineering Adhesives and Durable Assembly business units
28
Guiding principles defined to eliminate execution risk
Integration Principles
29
Five Integration
Projects
Independence
Talent
Retention
3-Year
Plan
Protecting & growing the base business is more important than headcount synergies
Align Integration Projects with existing HB Fuller segment structure in order to align accountability, project plans and resources.
Balance Integration with independent operation of existing businesses in order to leverage Royal effectively
Use a staggered integration approach and create a three year planning horizon to deliver synergies.
Retain talent and build a unified culture to bring our best thinking together in robust plans
Create a cash driven mentality in order to optimize balance sheet, maximize returns and drive efficiency
Integration Plan Summary
Royal business would be aligned with current H.B. Fuller structure and strategy• Engineering Adhesives and Construction Products run globally
• Other businesses will be run geographically
Combined businesses have a more balanced and diversified revenue base and opportunities for growth
$35M of cost synergies in addition to revenue synergies will create sustainable value
Confidence level in achieving successful integration and synergy plan is very high• We are leveraging our learning from multiple large and small scale acquisitions
• Historical success leveraging raw material synergies in acquisitions
• Majority of project is within the United States where integrations can occur relatively quickly and cost-effectively
• Leverage corporate cost structure
30
31
$2,200
$650 $2,850
$290 - $300
$138
$428 - $438
Pro Forma Pro Forma
Pro Forma Revenue – FY 2017 $M
Pro Forma Adjusted EBITDA – FY 2017$M
Margin
Transaction expected to be accretive to earnings in 2018
Enhanced Growth and Margin Profile5
$35
Synergies
• Definitive agreement signed, limited closing contingencies
• Fully underwritten interim financing in place
• Expect to close after customary conditions and receipt of
regulatory approvals
Transaction Structure
32
Financial valuation
Financing
Closing conditions
and timing
• $1.575 billion on a cash free/debt free basis
• Represents 11.4x multiple of 2017 adjusted EBITDA
• 9.1x after cost synergy estimates
• Permanent financing expected to be primarily through pre-
payable term loan
• Allows maximum flexibility to de-leverage
Capital Structure
All-cash, debt-funded consideration to the seller
Expect closing leverage of 5.3x 2017 pro forma adjusted EBITDA*
reducing to less than 3.0x by 2020
Expected post closing debt structure:
• $1,275 million + transaction costs and potential refinancing drawn under new
covenant-lite term loan
• New issuance of $300 million senior unsecured notes
• Existing $300 million of notes due 2027 remain in place
$400 million revolving facility largely undrawn
Over the first three years, H.B. Fuller pro forma expected to generate:
• Operating cash flow of approximately $1 billion
• Over $600 million of cash flow available to pay down debt
33
* Includes $35M of expected run rate synergies. Adjusted EBITDA and leverage are Non-GAAP financial measures. A reconciliation is provided in
the appendix
1.5X
1.7X
1.9X
2.1X
2.3X
2.5X
2.7X
2.9X
3.1X
3.3X
3.5X
Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16
Gross Debt - EBITDA
34
Historical Leverage - Bank Covenant Definition
Forbo
TONSAN
35
Strong Foundation. Portfolio Shift.
ADJUSTED EBITDA
REVENUE
44%
38%
18%
57%31%
12%
2010($1.3 billion)
2016($2.1 billion)
2020($3.2 billion)
32%
43%
25%
Non-StrategicEngineering, Durable, Construction Hygiene & Packaging
$148
$281
> $600
$-
$100
$200
$300
$400
$500
$600
$700
2010 2016 2020 PFE
MIL
ION
S
• Complementary higher value, higher margin segments
• Expands technology platform
• Significant cost and offensive synergy opportunities
• Higher EBITDA + asset-light businesses = strong cash flow
• Significantly accretive to EBITDA margin and EPS
• Exceptional cash flow generation
Creating shareholder value and accelerating delivery of H.B. Fuller’s strategic plan
36
Together, H.B. Fuller and Royal will deliver significant shareholder value.
Portfolio Shift
Leverageable Synergies
Value Creation
Appendix
37
38
Engineering Adhesives Business Overview
• $12 + billion market
• Growing at high single digits
• High profitability driven by
demanding specifications
• Innovative reputation
• Diverse technology solutions and
expertise
• Global execution capability
• Credible alternative to incumbent
ATTRACTIVE MARKET FINANCIAL PERFORMANCE
COMPETITIVE ADVANTAGE WINNING WITH CUSTOMERS
$0
$200
$400
$600
2010 2015 2020E
22% CAGR
39
Durable Assembly Business Overview
• High profitability driven by
demanding customer specifications
• Macro trends create opportunities
• Light weighting
• Composite materials
• Miniaturization
• Drive for process improvement
• Leverages H.B. Fuller’s reactive hot
melt technology
• Global execution capability
• Application expertise through
dedicated market experts
ATTRACTIVE MARKET FINANCIAL PERFORMANCE
COMPETITIVE ADVANTAGE WINNING WITH CUSTOMERS
$0
$200
$400
$600
$800
2010 2015 2020E
11% CAGR
40
Hygiene Business Overview
• Increasing utilization of disposable
diapers globally
• Market driven by a handful of
global Multinational customers
• Opportunity to use innovation to
meet customer requirements for
improved functionality
• Proven innovation leadership
• Global execution capability --
strong global R&D centers
supported by local industry experts
& manufacturing presence
ATTRACTIVE MARKET FINANCIAL PERFORMANCE
COMPETITIVE ADVANTAGE WINNING WITH CUSTOMERS
$0
$200
$400
$600
2010 2015 2020E
6% CAGR
41
Packaging Business Overview
• Stable, diverse consumer
disposable end-market applications
• Changes in packaging formats
creates new adhesive opportunities
• Higher growth rates in emerging
markets
• Proven innovation leadership
• Ability to serve global & multi-
regional customers with consistent
execution
• Deep experience and application
knowledge across multiple
industries
ATTRACTIVE MARKET FINANCIAL PERFORMANCE
COMPETITIVE ADVANTAGE WINNING WITH CUSTOMERS
$0
$100
$200
$300
$400
$500
2010 2015 2020E
3% CAGR
42
Construction Products Business Overview
• Steady growth in end-markets
• Consumer preferences shifting
toward hard surfaces such as tile
and wood
• Evolution of the retail channels
• Recognized innovation leader
• Focus on understanding end-user
customer preferences
• Products available through multiple
channels
ATTRACTIVE MARKET FINANCIAL PERFORMANCE
COMPETITIVE ADVANTAGE WINNING WITH CUSTOMERS
$0
$200
$400
$600
$800
2010 2015 2020E
16% CAGR
43
Non-GAAP reconciliationAdjusted EBITDA
*Figures in Thousands FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016
Net income including non-controlling interests 70,419 89,047 125,855 97,186 50,151 87,097 124,382
Income from discontinued operations - (8,832) (57,568) (1,211) - 1,300 -
Income from equity method investments (8,008) (9,006) (9,218) (8,380) (5,187) (5,907) (7,393)
Income taxes 25,307 31,211 30,479 39,949 34,348 55,855 50,436
Interest expense 10,414 10,811 19,793 19,120 19,744 25,021 27,359
Other income (expense), net (2,572) (4,101) (784) 3,751 (716) 2,465 7,549
Asset impairment charges 8,785 332 1,517 - - - -
Special charges - 7,499 52,467 45,087 51,501 4,654 (168)
Segment Operating Income 104,345 116,961 162,541 195,502 149,841 170,485 202,165
Depreciation expense 30,361 28,888 35,787 36,287 42,455 47,906 49,189
Amortization expense 10,839 10,162 18,703 22,508 23,069 26,984 28,495
EBITDA 145,545 156,011 217,031 254,297 215,365 245,375 279,849
41,200 39,050 54,490 58,795 65,524 74,890 77,684
EBITDA margin 10.7% 10.8% 11.5% 12.4% 10.2% 11.8% 13.4%
Non-recurring costs 2,583 - 3,314 1,098 33,000 22,452 1,093
Adjusted EBITDA 148,128 156,011 220,345 255,395 248,365 267,827 280,942
Adjusted EBITDA margin 10.9% 10.8% 11.7% 12.5% 11.8% 12.8% 13.4%
44
Non-GAAP reconciliationDebt-to-EBITDA
*Figures in Thousands FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016
Consolidated Net Income 70,877 89,105 68,054 95,550 49,773 87,980 124,128
Interest Expense 10,414 10,811 19,793 19,120 19,744 25,021 27,359
Total Income Taxes 25,307 34,951 30,479 39,949 34,348 55,855 50,436
Total Depreciation & Amortization 41,200 41,216 57,416 61,657 70,494 75,289 77,684
Goodwill & Other Impairment Charges 8,785 332 1,517 3,792 2,020 1,474 2,452
Extraordinary Non-Cash Losses - - - - - 3,226 (6,032)
Non-Recurring Extraordinary Restructuring Charges - - - - - - -
Cash Expenses for Forbo Acquisition - 3,089 11,684 - - - -
Cash Expenses during FY 2011 to FY 2014 - 4,410 49,481 38,454 42,102 - -
Cash Expenses to complete Tonsan - - - - 1,491 1,715 310
Pro Forma Tonsan EBITDA - - - - - 2,662 -
Pro Forma Cyberbond EBITDA - - - - - - 1,678
Pro Forma Advanced Adhesives EBITDA - - - - - - 626
Extraordinary Non-Cash Gains - - - - - - -
Consolidated EBITDA 156,583 183,914 238,424 258,522 219,972 253,222 278,641
Total Indebtedness for Borrowed Money 246,618 225,185 511,363 486,839 570,149 719,507 704,051
Maximum Letters of Credit Drawing Amount 2,361 1,695 1,618 7,615 1,494 1,520 1,489
Total Consolidated Indebtedness 248,979 226,880 512,981 494,454 571,643 721,027 705,540
Consolidated Indebtedness to Consolidated EBITDA 1.6x 1.2x 2.2x 1.9x 2.6x 2.8x 2.5x
45
Non-GAAP reconciliation - Segment EBITDA
$'s in Thousands FY 2016 FY 2015 FY 2010
Net Revenue
Americas Adhesives 806,062 830,808 674,348
EIMEA 545,135 549,569 404,750
Asia Pacific 241,827 230,671 154,868
Construction Products 256,346 272,693 122,194
Engineering Adhesives 245,235 199,919 -
Total H.B. Fuller 2,094,605 2,083,660 1,356,160
Segment Operating Income
Americas Adhesives 125,979 127,778 81,730
EIMEA 40,121 15,117 13,961
Asia Pacific 15,410 12,953 5,996
Construction Products 3,265 13,766 2,659
Engineering Adhesives 17,390 871 -
Total H.B. Fuller 202,165 170,485 104,346
Depreciation & Amortization
Americas Adhesives 18,979 19,890 15,314
EIMEA 21,441 19,965 11,125
Asia Pacific 7,484 6,930 3,453
Construction Products 14,977 15,321 11,309
Engineering Adhesives 14,804 12,783 -
Total H.B. Fuller 77,685 74,889 41,201
EBITDA
Americas Adhesives 144,958 147,668 97,044
EIMEA 61,562 35,082 25,086
Asia Pacific 22,894 19,883 9,449
Construction Products 18,242 29,087 13,968
Engineering Adhesives 32,194 13,654 -
Total H.B. Fuller 279,850 245,374 145,547
Adjusted EBITDA
Americas Adhesives 145,890 149,285 97,044
EIMEA 63,912 41,940 27,669
Asia Pacific 24,061 20,514 9,449
Construction Products 19,473 34,393 13,968
Engineering Adhesives 27,607 21,695 -
Total H.B. Fuller 280,943 267,827 148,130
Adjusted EBITDA Margin
Americas Adhesives 18.1% 18.0% 14.4%
EIMEA 11.7% 7.6% 6.8%
Asia Pacific 9.9% 8.9% 6.1%
Construction Products 7.6% 12.6% 11.4%
Engineering Adhesives 11.3% 10.9% 0.0%
Total H.B. Fuller 13.4% 12.8% 10.9%
46
*The H.B. Fuller forecasted 2017 EBITDA range excludes between $30 and $35 million, pre-tax, of previously announced restructuring charges, as well as
acquisition related costs and Project ONE development costs, as well as any costs related to this transaction, which cannot be estimated at this time.
Pro-Forma Sales
Royal
2017 Forecasted Sales 650
Pro-Forma Adjusted EBITDA Low High
Royal
2017 Forecasted Adjusted EBITDA 138 290 * 300 * 428 438
Forecasted 2017 Capital Expenditures (20) (60) (60) (80) (80)
Forecasted 2017 Free Cash Flow(1) 118 230 240 348 358
2017 Forecasted Adjusted EBITDA 138 290 300 428 438
Forecasted Run Rate Cost Synergies 35 35
Forecasted 2017 Adjusted EBITDA including run rate synergies 463 473
Debt Profile
New Debt Including Refinancing of Private Placements and Term Loans 2,115
Estimated Year End Exstiing Debt 330
Total Debt 2,445
Low High
Total Debt / PF Adjusted EBITDA 5.3x 5.2x
(1) Defined as adjusted EBITDA minus capital expenditures
H.B. Fuller Combined
Pro-Forma
CombinedH.B. Fuller
Pro-Forma
2,200 2,850
47
Focus Markets
Hygiene
Construction Adhesives
Engineering Adhesives
Durable Assembly
Packaging
Engineering Adhesives
17%
Durable Assembly
22%
Construction Adhesives
18%
Hygiene17%
Packaging14%
Non-Strategic
12%
2016($2.1 billion)
2020 w/Royal($3.2 billion)
Engineering Adhesives
10%
Durable Assembly
20%
Construction Adhesives
13%
Hygiene20%
Packaging19%
Non-Strategic
18%