H.B. Fuller (FUL) 26 Sep 242024 Q3 Earnings call transcript

Thank you for standing by, and welcome to the H.B. Fuller Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the call over to Steven Brazones, Vice President of Investor Relations. Please go ahead.

operator. you, Thank H.B. Welcome to Quarter XXXX Third Conference Investor Fuller's Call. and today President and Officer; Celeste and President are Mastin, Chief John Financial Executive Officer. Presenting Chief Corkrean, Executive Vice have After question-and-answer we prepared will our session. remarks, a

include to with and to GAAP useful non-GAAP are about let believe release. measures. me performance and organic performance that compare to included GAAP. our measures measures. that margins EBITDA noted, EPS, today to non-GAAP otherwise Before profit we earnings non-GAAP to determined understanding of references are in our revenue refer operating remind Reconciliations certain companies. supplemental begin, other to measures about We adjusted and are investors results our the comments measure our nearest refer Unless in comments these everyone comments revenue in to measures will the These with financial accordance

subject on Actual these this are factors to We and assumptions will during release, website These call. all the expectations also statements are risks be this which and making Commission, our and current materially the from expectations in during earnings could differ filings comments Securities statements Exchange to made factors and at based due forward-looking that results with on available investors.hbfuller.com. covered our are of our risk in detailed call uncertainties.

I will now turn Celeste? to Celeste the call over Mastin.

everyone. and welcome, Thank you, Steven,

the continued expected from Several margin EBITDA we the incrementally EBITDA and range within acquisitions, expand quarter, EBITDA improvement third to volume actions quarter. the for in in including and factors, growth. the leverage, we an third and positive drove In organic performance margin year-on-year resulted restructuring realized benefits

market low goods came our growth volume demand Slowing in volume quarter. constrained of our end consolidated related EA and the expectations. certain during said, in at market that the durable segments With

relatively stable anticipating the throughout year. was incremental While were we strengthening sequentially, growth volume

and the strong rising the third interest HHC years began exhibited even rate EA, during segments most market had volume slowing past across offset of continued growth volume was relatively market by Several over Construction trends environment in the strong demand improving Adhesives quarter. which This during the portfolio. in

these We to While our reverse decline. line EA EA volume dynamics fully volume we rates over below expectations to and and expect with as time be interest more as growth volume expectations, conditions moderate long-term accelerate our macro in normalize. was expect

we invest in higher-margin of businesses Additionally, in strategy margin efficiency disproportionately improving EBITDA cost result XX%. EBITDA and our while strong our that remain confident will structure an to long-term and drive operating growth than greater higher-growth,

the economic adjustments trend in our the against in Volume continued we a year-on-year, of sales X.X%. moderated X.X%, expected, declined moderation X% we organic as achieved sequentially index-based anticipate improve pricing sales results further consolidated and quarter, third our quarter. growth organic increased at pricing to weak Looking fourth backdrop, and and positive

to the executed perspective, principally XX%. year-on-year acquisitions benefits $XXX profitability delivered margin margin and and expanded prior to results. leverage, million and adjusted year-on-year increase well by a relative We to in from EBITDA the basis From points strong grew XX savings drove recent we EBITDA restructuring Volume year. X% adjusted

the portfolio Now to improving significantly, the market sales packaging to our continue performance labeling, in segment the would performance HHC me quarter. to most let third and this organic trend drove positive evidenced by We volume the improve that led of organic performance medical across to volume nearly improvement performance. in the HHC, growth improved every during for continued quarter. in improve sales fact expect HHC. Strength the in achieved bottle revenue move pricing review of each on to development as moderating organic segments In the index-based adjustments in and

restructuring savings to X% down year-on-year year-on-year of XX.X%. decreased quarter, by leverage XX adjustments. carryover offset and third the adjusted was EBITDA were basis margin and unfavorable points pricing for EBITDA Adjusted XXXX in Positive impact HHC index-based volume

pricing revenue quarter, by while driven sales organic China in Adhesives, to and in lower electronics clean both slightly quarter. lower result positive as significantly as third decreased organic but Engineering the we've portfolio. the market of during energy mentioned dynamics, most segments the the a in volumes had generated reposition earlier. and market growth, organic slower growth In solid particularly X% taken volume Automotive EA Overall, saw of actions third and

XX.X%. drove EA raw benefits, offset increased the cost and and management expanded material X% year-on-year. and by points EBITDA basis adjusted adjusted in to in partially increase the of EBITDA margin lower EBITDA Adjusted margin volume, Net XX year-on-year acquisition price impact

which sales a continued strong, expect declining moving year-on-year organic Adhesives, Demand interest CA year-on-year. XX% Construction benefit increased grew on in XX% will environment and rate we roofing, In nearly remains strength in forward. construction

leverage in CA improvement basis of and cost Adjusted EBITDA to margin versus year-on-year. the increased million EBITDA third expanded XXX points year last and for drove savings Net margin restructuring adjusted volume $XX XX% quarter the adjusted price and material to management, EBITDA raw XX.X%.

Americas a in the region, organic declined quarter. modestly. region was increase revenue Geographically, for flat for Americas down prior representing from year, organic revenue a EA X% the year-on-year sales organic in XX% the achieving double-digit the the was HHC when in sales. organic third increase destocking. nearly versus during was HHC first drove quarter the significant up revenue improvement CA organic

declined the continuing X the all in performance revenue was and down revenue improvement improved GBUs CA market organic EA while were X% flat development its The organic organic year. EIMEA, for region. HHC in beginning sequentially In both the sales year-on-year, since year-on-year, modestly. of

decline by the X% decreased In in Pacific, Asia revenue significant volume driven organic energy. clean year-on-year,

double-digit for revenue in the due to a approximately energy, X% region achieved increased Asia sales growth strong clean organic Pacific increase end HHC packaging-related organic in markets. sales year-on-year. organic in Excluding

revenue. mid-single-digit a experienced EA decline in organic

region insulated clean relatively by in electronics. automotive revenue was Excluding results EA the up and year-on-year organic X.X% in energy strong for glass, driven

servicing is and construction the quarter. United the the Butyl of tapes On Kingdom's front, HS in the of distributor M&A infrastructure acquisition and we Limited the largest building Butyl manufacturer markets. completed high-quality butyl HS third

that is strengthens of States. acquisition This will Adhesives Sealants. as twice represents strategic product Europe HS business important Construction The efforts our portfolio be highly tape addition the and butyl acquisition American-based large an tape complements establishes the GSSI further initially United acquisition Adhesives. XXXX to of market waterproofing beachhead as The in where our and greatly of continuation globalize included a North Butyl of Construction our our in

HS into million. are However, in opportunities approximately annualized we automotive extend such markets sales Adhesives expect to transportation. expected XXXX other to and $XX growth be as Butyl's Engineering

let review for and quarter more detail results me call third in to to Corkrean John Now updated our outlook turn the XXXX. over our

I'll additional financial the on with some details third quarter. Celeste. Thank begin you,

X%. quarter, X.X% the had was for organic period a For revenue impact last year-on-year and increased up the X.X% of the same was revenue versus revenue X.X% items, pricing up volume by in year. acquisitions negative with down quarter. up and those Adjusting Currency X% X.X%

was XX.X%, driven XX the Adjusted profit. versus last margin benefit and year. savings profit Adjusted acquisitions restructuring by adjusted gross selling, primarily up up increase points general gross drove Volume acquisitions. leverage, the in administrative basis year-on-year, X% was from and expense

XXXX, offset restructuring X% earnings versus growth. the pricing contribution was $XXX of quarter reflecting acquisitions, driven more higher and share Adjusted of Adjusted of by than income third up of wage leverage, in quarter impact volume EBITDA year-on-year, for net operating and favorable inflation the savings was raws. X% up per million the of which the $X.XX

year-on-year was flow higher as growth cash working volume. of trailing flat operating resulted profitability to third at was a investments Year-to-date, of The debt capital year-on-year improved the quarter, end XX-month related end on by X.Xx EBITDA EBITDA last from net flat offset XX% the to in versus basis of the of adjusted year. third down the quarter QX, and X.Xx at sequential in

and XXX,XXX repurchased we share so to shares, bringing repurchase made on this XXX,XXX. program During third far acquired shares the progress the quarter, year our continued total

let With that, turn XXXX now the fiscal for our guidance to me year.

our $XXX Adjusted to of guidance equating in X% of year-on-year. now our and to are to expected XXXX This $XXX million year-to-date EBITDA now between expected be year-on-year. up million and performance growth guidance of to organic X% to be approximately million, as revenue communicated year compares As with full original our Net of $XXX we the X% revenue range range previously to million. a growth is updating $XXX current is fiscal conditions, macroeconomic for financial follows: flat result

X% Combined, flow to Net to to interest still of range the $XXX to and million, adjusted to $XXX growth be between is be shares. expected $XXX Full in is adjusted to million, expected diluted $X.XX, still be to year-on-year be Operating diluted count is expected approximately is million. expected EPS depreciation still approximately share to XX.X% year rate expense and between be equating full XX.X and $XXX our million and X%. these year assumptions is million expected in effective fully XX.X%. $X.XX cash now of result still tax our approximately expense amortization

Celeste. Now let me turn the call over to back

Thank you, John.

are ourselves and companies We positions job effectiveness our strategic important and spirit be most of H.B. our monitoring fostering promotion entrepreneurial to our working and high internal regularly apply leveraging rich of frequent employer through which priorities this track and upon by applicants history, magnet engagement the for our through do industry. when choice at winning internal set adhesives expectations for One building We our Fuller. culture. and in the rates progress for they a is our talent surveys,

Newsweek of I recently America's am as by admired very proud to were announce most workplaces. that we recognized one

employees U.S. and collected X.X reviews. million XXX,XXX than over more surveyed Newsweek company

questions well One for measures but our key external very was independently assessment. from yet this would all doing receive to internal respondents corroborate powerful to own work? We on tracking also recognition simple love key asked wonderful know question, our which the we strategic is employer are internal priority of they that it to survey a you

who for professional be amongst honored the an and admired it and work the set are what XXX companies employer. We balance be innovation standard life top to growth, means champion foster to

team culture it. fantastic you great and a our members. have a of team Congratulations to thank We and all embodies that

continue we expansion. To make streamlining wrap we our to margin improving pleased EBITDA driving are portfolio, and the our in progress operations up, with

strategy the expectations, engaged to growth targets. is track and remain well and team While end on low deliver equipped this growth have that quarter's a of our success. and EBITDA highly margin was We we clear drive execute a our volume at business long-term focused upon and to

for prepared remarks open Operator, for the our today. please questions. line concludes That

from [Operator Instructions] Citi. Cunningham will question come Our first from Patrick

couple of a EA questions. just the volume decline, On

what rate? frame you was deceleration And the expect electronics sales growth maybe further do expectations quarters several and the energy for and the clean lower in next autos any significantly there? you Can driving

Yes.

be to industry. So particularly us, a as as of in that's industry saw with it's And it that's for solar it function business really little to regions. it just our is technology plaguing still that relates the all HJT, new the but solar relates panels a bumpy. going global solar, But volumes of exciting overcapacity an down to

with expanding into exciting. which expanding We're regions. new new We're customers, is

We product, PVS us that really which is panels. very of an unique sensitivity that XXX HJT, the moisture technology in which have helps of reduce a leading allows to our succeed offset

so given week space grow a as but environment transform And really an solar. that we opportunity an to a it in industry it. and definitely to is for see today just macro

As at other of the it XX positive to actually EA business, in markets, market growth look some the you if goods volume our relates durable segments of QX. showed XX

growth, that So We electronics. quarters. double-digit previous growth good see solid. growth and the in single-digit It it in did solar wasn't seen but It clearly positive not. autos did was we've was

I starting to markets. in in So continue the multiple rates We've of to I goods to those there. around this think that front hold catch that is just steady share up of what's a happening that. is durable anticipate starting fatigue we're years to And taken see now interest with of and higher going end And just lot market. we're

helpful. EA, it. Got reposition the follow-up very portfolio. comments some That's prepared And on actions the you mentioned similar then to for

any away Just walking Is helpful. would be color there additional some you're that there business from there?

great that Yes. for look technology as we had solar play. where at industry we've that the Clearly, experiencing. that are new clearly it We're we And that as picking there's of I no industry, is definitely it. that derive place got process technology. solution new to we do are of parts wins of short-term probably can we we and we We've where best mentioned, And overcapacity value geographies. there at determining, in the in say, where we lot it a look

we're to there back, we real are where going some where places generate retrench, So can't value. walk

the to on we're that parts going Meanwhile, we're bringing value down to double are industry really believe the the the new that bringing great of market. in technology

efficiency Anhui of You might helping our increased that. recognized have awards of part customers have of them innovation the was really we with that panels. achieve solar noticed Huasun. we're customer one They the And

that. customers So we like have

matter going us, taking that's the customers a market. be old IRA customer from technology We where India of there. some rebalancing really to the a playing leading America But [ is our expanding, we're beneficial to position in away North moving and the it of have in past new we're is ] day efforts base in

Our next from question Partners. McCarthy Vertical from comes Kevin Research

trends Can be talk saw about versus in And to think of you volume chunk you a a a Celeste, regions? assume what about regional your in weakness, I solar China. that may that little the bit other mentioned you basis. on China large

any to about Can It's China? stimulus reinvigorate would recent talk the on how see few but you only China's in and you you days, out? a that efforts welcome efforts been playing comments have

Yes.

the But you market, single was up actually low down of was extract were it they quarter digits. -- actually this impact business China high solar our digits. the So if single

really So performance good automotive in strong growth in in we really China, HHC. showed

HHC are fact, focusing in on a our in and beverage more there our XX diapers, actually volume and portfolio revising we And that's really, market of Asia, markets XX strategy the care, Asia. labeling, In adult like incontinence. really team because market interestingly, like we We participate fem where baby in we're markets done packaging, from segments grew the away in has job. remarkable adjusting higher-value

to were And in -- that high in is high where QX. it When QX. double-digit at I was now in growth digits. organic were single the organic look single-digit Asia, we growth growth first in quarter They business down shifted we organic down up

a the done So really job we've in remarkable Asia job in EA, a tremendous in HHC repositioning. automotive. in has team And done

Chinese to Chinese transform we with sustainability. and together In intelligence, tier comfort that EV fact, success we just supplier in signed X a continue trim to ways increase environmental a exterior strategic with and alliance have vehicle producers. And

the there. right in spaces we're So

mid-single performance solar to really we're if digits, overshoot for Solar the high in not the China, the seeing good growth, again, business.

stimulus, Now going I'm about the you optimistic. asked that? with happen to what's very

think we'll impact. some see I

in it in not more in construction are should China, environment. We but the economic robust a space housing build for still,

And you margins. I That's to about ask very wanted then helpful.

notwithstanding a north little top at on Your line of was still quarter the XX% adjusted gross XX.X%. margin, pressure maybe the in

able XX% grow ahead, level that might you sustain look adjusted you and be that you'll confidence north it? able As what's your to of margin be of gross to

Yes.

continue XXs. XX% big margin part So a EBITDA our those grow of gross achieving mid margins to target into is to

enhanced XX that's a continue company. be so as which the things and faster-growing major programs We've margin, and selectively and the about successful our reduce emphasis help we We're doing our how acquiring, And top restructuring there. thinking focused And business conversion for to you process pricing like really footprint on growing optimization at we're to our opportunities, higher spaces. targeting have are costs. look

around continue those. is own So help but expand cost self-help part the our and to mix shift us products conversion will optimization higher-margin of to also restructuring this,

from Mike from comes Harrison question Seaport next Our Research Partners.

dig of a repeat? you're pent-up growth the right some now restocking the little bit could unusual other maybe we or that hoping or related might that construction some business. was on Is demand to I seeing factors not in

Just trying sustain are to on maybe going a the next how or sense can get level not the you on growth that confident into activity of rate, or revenue you but year? of level maybe the build kind --

is a business a of Adhesives Construction number things. the in performance our -- The Yes. culmination of

after this going really cost of lower recognizing breakeven it and restructure that to change the point all, in profile, cyclical of business, last be got market. quarter is First to the started always team end year, that a their fourth their

continued space, segments. right share. in to in take We're particular, In the we've the roofing

centers data projects. chip on buildings few we're benefiting from manufacturing participating institutional and as a well as in So growth

again, again, So we're that's taking innovation. exciting. Then share also, with

it just product fluorinated its We propellant. two introduced, a use Mike, a EF canisterized a called and foam, ECO PG-X adhesive, hydrocarbon a spray as doesn't

labor really contractors more well, other it's actually it's which environmentally as been easier And successful. much like. So It's than It's dispense friendly to products. saving.

of share business. drive to reduction our It's and our solid So you to with driving combination when there. you're it's customers I innovation, solutions and as it's our look at self-help around that working well things own a construction cost bring starting think closely good, see

see about whether like the things got volume how flowing We way we've don't don't really think to. time, through restocking. to on a lead we're responding flow volume restocking. seeing I order supplying like asked few seeing assess restocking. market we're You monitor like to I size, are things the the the distributors through we're and things all

fourth think the market that demand, seeing is and I this into we're just quarter. carry good

it it's into helpful. demand seems the know are like All uncertainties still macro of and a I and around right. next That's going early very then And environment there lot year.

attention of we're investors turn acquisitions, restructuring, But control, about synergies? are you your are 'XX, to within starting as some thinking like fiscal talk things that can from the and our about things contribution

growth? How starting mind to year-on-year much about to any takes want keep maybe think might next should puts other we we're for those to year? that models and our as contribute in And EBITDA

Yes.

Let bit going you the I'm turn little of use it over then some me to to John little just talk could more to model bit about it. a macro, things about the talk to a

our when quarter. -- to for PX, perspective and what a think we're next continuation into of PX from planning I seeing what on year, and we're a the relates about volume sort The of fourth

subdued to us of program. demand, restructuring market continue finish sort for good our opportunities to So

of million As benefits the million you'll program next restructuring last happening a recall, year. $XX that with $XX was

and growth less a year. than XXXX And balance are that it be great compounding in this coming we've course, material companies more synergies normalized. off raw now is to year. next going the in starting price think XXXX we was be that to and really I of going acquired be to It's lumpy going got lot then

provide to some things. little want detail more a might you of on John, these

Sure.

you market Mike, self-help that about things maybe the more are asked a some So bit other of or dependent. little

our $XX of end to delivering a $XX the of XXXX. million run rate program by talked by million million we about of to So this restructuring the $XX million $XX end We'll be of savings at year.

that carry we synergies $XX well the the EBITDA We'll So the then increase. ones another closed annualize of additional last wage based merit year. we those this on have year. million the up over to deals deliver inflation, XXXX. Acquisitions million as show deals in and $XX those amount closed two up on will as probably Always

ball $XX million year, $XX it I that anticipated but range the I range. the be rebuild. million parked year. there still coming $XX this will it probably same. And into million then last to be variable in will million be to think than comp It expect that we be less to we in some will $XX

a So as grow expect but in neutral. that helps We're to ought little in with volume, be of we to days we're about and thinking I our bit pricing how raws some said, drivers. of the the budgeting, operating of still the relatively early terms of insight hopefully, environment

comes from from Bank. Begleiter David Our Deutsche next question

the were on what in is How this down volumes the China? solar guys? And is much How quarter business back business. of big for in China business? Celeste, in the you

for about much you in when solar? how about China, Down just down are were asking you asking ask clarity, about -- total? you in volumes the Are

Just solar.

Yes. Just solar.

Okay.

that's market than at if diverse. business no revenue. of segment you single no it's business X% there's that very our look greater combo region, is no So region And portfolio,

was from what interesting business the that on global level. impact solar we weak a was saw Now in that was how

our total, So end bottom our business such on of guidance. say the pushed solar of slowdowns EBITDA us the some impact that overall, we definitely I'd to experienced range the

in in mean, it down almost significantly was reduction, China? was China, double-digit much I How down solar half.

range. X%, X% And right, than that of between -- XX% in and is X% yes, China. Celeste right. outside business X% XX% probably it's -- and less is That's about so the About Yes. of in China,

So you. helps bit hopefully, that for dimensionalize a it little

in do continue? there competitive If expect on how that? No, very Are share further by this you to Any that destocking panel helpful. color ] [ impacting threats And is this that's long your region? manufacturers? so,

in of experienced that's since speak So sealants the construction market some we things see slowed just redeployed overcapacity. we've silicon have was China where down that solar particular, been heavy market the industry Chinese from that industry. this And the one in particular of the in into to about the construction

compounded. particularly into was the market, more So got a which alternate a in in material We've you is got whammy got and It end in bringing overcapacity market. suppliers double the raw situation China. China, we've

Our next question from JPMorgan. Zekauskas comes Jeff from

$XXX guide and million for the midpoint Your now at $XXX it's EBITDA in year to be the million. used

So there's that's returns? lower the from? decrease $XX causing pricing explain Is experience, you'll in what lower that you mostly a quarter. Can guess, fourth it million What's or the volumes? lower I of

turn Yes, I'll start, I'll it over then John. to and

second XXXX, And case. volume originally, we in planned for the we when was PX, definitely until So mid-single-digit see half. we would that anticipated up solid the growth

the In updated PX. we And of half, pronounced volume reset be thought really would took we profile fact second very a for indicative growth guidance lower. we What Still as PX the into would a we positive account. PX half. second in volume slowdown the that in our see experienced we and was but

add a Jeff. color, just little I'll

So year, midpoint QX, relates by as We midpoint to working. guidance guidance lowered and our were $XX you we million. just how as then million pacing the full said, and versus is below $X that in current about previous it

out. QX And more looked the is we look of -- like weakness. the half markets the It did saw for in that QX at half kind it the will the of the but And weaken thought quarter. second really of way those projected played second we about way we've QX then that

of bottom revenue guidance. And really through and so partial to versus that it in by lowered quarter. But million of roughly kind a guidance That and all We XX%. it the roughly the revenue to X%. volume. for full all can at alluded quarter of at equate is Celeste it's volume, midpoint as That's flows that see about you our $XX kind to, the line equivalent would a

our current guidance. you how to guidance So bridge our previous that's of kind would

Okay. Great.

from X to X your is sales of first think for benefit the the your adjusted your first operating quarters I And EBITDA about the quarters, grown it and Or at the X% is it adjusted is X%. Or acquisitions? X%. Is acquisition income EBITDA operating income Secondly, the of year, you've for is the comes lower? That of about fair it growth growth higher? to or that say growth?

I'd probably -- range. it's the in say So that Jeff, yes,

think indicated we will of in that ND year higher the from into million That a acquisitions coming the bit $XX $XX with would that I thought we Butyl. see a acquisition we to little be now million the contribution range. Industries and HS

we So probably million $X as similar, $X this in about an will of from example, quarter, a And in contribution acquisitions. million that probably maybe than it be QX. saw more

Okay. flat basis an in essentially the adjusted then quarter up $X the but quarter, of your And sold was the third your on gross cost margin, second were maybe Great. goods sales with million. on

as raw a we sequential are that flatten now to materials rise Should beginning or read little bit out?

to this the to And that? quarter. third What's -- gross reason expect margin your happen that will relative would often quarter, for fourth And year? that jumps in your your you

Yes.

-- think you're what really what a really any saw. materials, flip that negative that QX, $XX and in we mentioned gross on for million it in last a year-on-year, half and in the pricing be did. is pricing, year. what to first been raw year, is is half million we And about drove said in it. from sequential and the dynamic QX we and probably move in the of It's had us this that's the the a would we I tailwind it -- effect. sequential said, QX, the profit QX raw of tailwind change margin we sequential year-on-year call. seeing as in would The $XX on the There wasn't really second it And

into than look million about by the more bit expect to slightly expect you higher to difference But a really we -- be little driven up raw profit material maybe headwind. pronounced, would $XX margin maybe QX, tick volume. a little gross that higher If we'd pricing bit same,

we the are That's of that. quarter thing highest more is So thing. projecting and of seasonality really QX market-driven volume than our a a year,

what lastly, were in first Okay. And then recall comparisons don't year-over-year. I quarters solar X the your

rough the you what solar And the to compares first in X just idea us the could So third quarters? were of give like a how comparisons quarter? that

Yes.

So more quarter. volume relatively quarters we than were first -- quarter, And -- XX% in in more second the in quarter. first than X third we mid-teens saw down down the organic flat, the kind the of XX% then

picked it So up steam. really

be market, soft We but we expected saw not this the to in third this as quarter. a soft as of the development

Instructions] comes from Ghansham next Our [Operator Baird. from question Panjabi

sitting This in Ghansham. is Matt Krueger for

that given generated that for in margins as would for expected? profitability in were HHC third call or volumes impactful would anything the business quarter, level if in So segment there you the of unique was the have quarter out from that And segment not, you a the perspective?

margins You know, in quarter. the were as expected the for HHC

going bucket was in flip we John material and impact had just as quarter, tailwinds the QX, impact to said, price see in saw in about We last a remember midyear. that are been mentioned we that million of might you think that, I HHC. $XX raw

-- -- now P&L. that's that's seen So through we've worked through the worked the

probably next see HHC is there question, to your improvement. If which pricing is forward, continued going what you're you at look going

so. these or So every really price resetting -- price indexes quarter are

market And HHC you'll volume start price positive so segment. next see in HHC less and forward. Meanwhile, to had XX or what moving in growth we've in negative the XX flattening quarter out

solid improve. good, we're quarter growth where is squeeze. This the in and volume, So you the saw seeing pricing

formulaic Got the business. it. then in largely rollover across the understanding been that And has pricing Understood.

the there. comments XXXX? volumes seeing relates it and landscape you a first about competitive that across talk to the markets on already certain from just the you've end then appreciate as are fluctuating here. expecting What as I Can perspective from raw a fourth you're given what quarter price you oscillating? And are follow-on materials half cost of are

Yes.

X that's And lumpy XXXX, happens what really material this had strong prices. raw a I we've decrease after the or next. from think year raw was quarter the bucket in to overall price in increase

balanced X,XXX that's look materials If those classes material monitor lot. X,XXX we the into monitor, raw out evenly move -- markets. at to them as going staying some really that of a them As already of an X/X pretty actions increasing, taking I are of relates X/X to we X/X And it those and flat. decreasing of level in XXXX, that we QX we're the from pricing

as have changed go, X have -- sophisticated, will general, we that market the or far across large large, X over seeing responsibly. sophisticated, large they hasn't in They X responsible very acumen pricing time. and I'm As good really price competitors very competitors. the that and very

color little seen a forward add what on in question we've expect to going just Matt, And pricing your versus to raws. what about

coming a you're price aware into to -- captured year, knew capture bit lot And -- this we this impact. price of of to pricing there's on generator raw big into coming also and contracts. material that a we a raws been year, has of ability there's manage also But a value. So catch-up the our little last our related year, adjustments although savings we index-based lag

to it pretty other. expected but had be neutral, numbers we big So pretty offsetting each

over, on know impacts As carry we year, this pretty are both that much offsetting what would each we again, today, relatively small exit based other.

yes. year big of less -- next be like neutral lumpy volatility we So relatively less the to expect but this year,

quarter-to-quarter a Yes. From basis. Yes.

turn queue. We Celeste would have I questions remarks. any Mastin to over to back no further like for closing the in call

and quarter. Thanks, we else, morning, day. having to a this us for next back forward everyone joining look great you Have

conference This you Thank today's for your concludes call. participation.

disconnect. now may You