ST. PAUL, MN — H.B. Fuller Company has announced an initiative to accelerate its growth by restructuring various parts of its business to more closely align with the company’s 2020 strategic vision.
“Our results over the past five years demonstrate the strength of our long-term growth strategy and the commitment of our employees to the company’s success,” said Jim Owens, president and CEO, H.B. Fuller. “Over the past five years, we have transformed our market focus, innovation portfolio and manufacturing capabilities to deliver value for customers, shareholders and employees. As we continue to shift our product portfolio to a richer mix of higher growth, higher profitability adhesive market segments, we need to ensure our resources align with our vision. The proactive changes we are announcing will allow us to invest in the highest opportunity areas within our portfolio and become more agile as we support our customers’ success and deliver our 2020 plan.”
The restructuring initiative will include the elimination or relocation of approximately 220 positions globally by early 2017 across various businesses and functions at the company, along with other product line and operations enhancements and efficiencies. The changes the Company is making will allow H.B. Fuller to operate more effectively and efficiently, while proactively responding to end-market and global industry dynamics, such as global prices for petrochemicals and a significantly stronger U.S. dollar.
“These changes support our plan to deliver 10 percent adjusted EPS growth in 2017 versus 2016 on a comparable 52 week basis,” said Owens. “Our fourth quarter numbers are not yet finalized, but we expect results in line with previous guidance.”
These actions, in addition to other initiatives the Company will be undertaking to optimize its operations, product lines and business portfolios, will result in restructuring charges of $17 million to $20 million ($13 million to $16 million after-tax) during the 2017 fiscal year. These charges will be excluded from the Company’s adjusted earnings per share. The Company expects the program to deliver approximately $18 million in annual savings, a portion of which will be realized in 2017. The Company plans to provide further financial details concerning the 2016 fiscal year and 2017 guidance during its regularly scheduled conference call in mid-January.
Owens added, “The changes we are announcing will be difficult for those affected, and we will treat each person with the respect they deserve and will help them move forward. Our values and commitment to ‘winning the right way’ will guide our actions.” The new organizational structure is based on a thorough analysis of the company’s operations and 2020 strategic vision, and is subject to Works Council and/or Trade Union consultations and other legal requirements.