Matthews International Corporation · NASDAQ:MATW

Matthews International — Q4 2018 Earnings Presentation

24 slides from Matthews International's earnings presentation, Nov 16, 2018

  1. Slide 1: Fourth Quarter Fiscal 2018 Earnings Teleconference

    Fourth Quarter Fiscal 2018 Earnings Teleconference November 16, 2018 Joseph C. Bartolacci President and Chief Executive Officer Steven F. Nicola Chief Financial Officer ©2018 Matthews International Corporation. All Rights Reserved.

  2. Slide 2: Disclaimer

    Disclaimer ➢ Any forward-looking statements with respect to Matthews International Corporation (the “Company”) in connection with this presentation are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve k

  3. Slide 3: Financial Overview

    Financial Overview ©2018 Matthews International Corporation. All Rights Reserved. 3

  4. Slide 4: Q4 FY2018 Highlights

    Q4 FY2018 Highlights ➢ Drivers of Q4 FY2018 GAAP EPS growth EPS - Diluted Improvements $0.93 ▪ Higher sales $0.60 ▪ Acquisitions & synergies ▪ Cost reduction initiatives; lower SG&A Partial offsets ▪ Higher commodity costs Q4 FY17 Q4 FY18 ▪ Higher intangible amortization expense ▪ Higher interest ex

  5. Slide 5: Full Year Highlights

    Full Year Highlights ➢ Drivers of FY2018 GAAP EPS growth EPS - Diluted Improvements ▪ $3.37 Higher sales ▪ Acquisitions & synergies $2.28 ▪ Cost reduction initiatives; lower SG&A ▪ Tax regulation implementation Partial offsets ▪ FY 2017 FY 2018 Higher commodity costs ▪ Higher intangible amortization

  6. Slide 6: Q4 FY2018 Consolidated Results

    Q4 FY2018 Consolidated Results ($ in millions) Sales GAAP Operating Profit and Margin $396.1 $407.4 $47.2 $29.9 7.6% 11.6% Q4 FY2017 Q4 FY2018 Q4 FY2017 Q4 FY2018 GAAP Gross Profit Adjusted EBITDA* and Margin and Margin $153.6 $148.8 $77.0 $64.1 38.8 % 36.5% 16.2% 18.9% Q4 FY2017 Q4 FY2018 Q4 FY2017

  7. Slide 7: Full Year Consolidated Results

    Full Year Consolidated Results ($ in millions) Sales GAAP Operating Profit and Margin $1,515.6 $1,602.6 $132.8 $112.6 7.4% 8.3% FY2017 FY2018 FY2017 FY2018 GAAP Gross Profit Adjusted EBITDA* and Margin and Margin $238.7 $255.1 $563.4 $581.4 37.2% 36.3% 15.7% 15.9% FY2017 FY2018 FY2017 FY2018 * See s

  8. Slide 8: Q4 FY18 SGK Brand Solutions Results

    Q4 FY18 SGK Brand Solutions Results ($ in millions) Sales GAAP Operating Profit and Margin $203.7 $203.5 $18.9 $5.0 2.5% 9.3% Q4 FY2017 Q4 FY2018 Q4 FY2017 Q4 FY2018 ➢ Higher sales in Europe (surfaces & engineering), UK, Adjusted EBITDA* Asia, acquisitions; Fx was $2.6 million unfavorable and Margin

  9. Slide 9: Full Year SGK Brand Solutions Results

    Full Year SGK Brand Solutions Results ($ in millions) Sales GAAP Operating Profit and Margin $770.2 $805.3 $35.4 $24.9 3.2% 4.4% FY2017 FY2018 FY2017 FY2018 ➢ Higher sales in Europe (surfaces & engineering), UK, Adjusted EBITDA* Asia, acquisitions; Fx was $22.8 million favorable; LY and Margin inclu

  10. Slide 10: Q4 FY18 Memorialization Results

    Q4 FY18 Memorialization Results ($ in millions) Sales GAAP Operating Profit and Margin $23.1 $152.3 $155.8 $19.9 13.1% 14.8% Q4 FY2017 Q4 FY2018 Q4 FY2017 Q4 FY2018 Adjusted EBITDA* ➢ Higher sales from acquisitions and bronze market share and Margin gains partially offset by lower casket sales, memo

  11. Slide 11: Full Year Memorialization Results

    Full Year Memorialization Results ($ in millions) Sales GAAP Operating Profit* and Margin $615.9 $631.4 $80.7 $86.4 13.1% 13.7% FY2017 FY2018 FY2017 FY2018 Adjusted EBITDA* ➢ Higher sales from cremation equipment, acquisitions and Margin and bronze market share gains partially offset by lower $118.9

  12. Slide 12: Q4 FY18 Industrial Technologies Results

    Q4 FY18 Industrial Technologies Results ($ in millions) Sales GAAP Operating Profit and Margin $48.1 6 $5.1 $5.3 $40.1 5 4 3 2 1 12.7% 11.0% 0 Q4 FY2017 Q4 FY2018 Q4 FY2017 Q4 FY2018 Adjusted EBITDA* ➢ Higher sales from fulfillment systems, marking products, and Margin OEM solutions, Compass Enginee

  13. Slide 13: Full Year Industrial Technologies Results

    Full Year Industrial Technologies Results ($ in millions) Sales GAAP Operating Profit and Margin $165.9 $11.0 $129.5 $7.0 5.4% 6.6% FY2017 FY2018 FY2017 FY2018 ➢ Adjusted EBITDA* Higher sales from fulfillment systems, marking products, OEM solutions, acquisitions; Fx was $1.2 million and Margin favo

  14. Slide 14: Capitalization and Cash Flows

    Capitalization and Cash Flows ($ in millions) Debt Operating Cash Flow $149.3 $147.6 $911.1 $960.6 9/30/2017 9/30/2018 FY2017 FY2018 ➢ Debt reduction of $65.8 million during Q4 FY2018, Cash significantly reducing leverage ratio ➢ $57.5 Generated strong operating cash flow; record level in FY2017 inc

  15. Slide 15: Business Overview

    Business Overview ©2018 Matthews International Corporation. All Rights Reserved. 15

  16. Slide 16: Business Highlights & Market Climate

    Business Highlights & Market Climate ➢ Equator showing signs of recent ➢ Several global clients pressuring wins; private label and retail focused segment performance SGK Brand ➢ ➢ Solutions Europe seeing positive momentum Currency climate ➢ Several new account wins; but ➢ Realizing benefits from cos

  17. Slide 17: Acquisitions Integration Update

    Acquisitions Integration Update SGK Brand Solutions ➢ Frost Converting Systems (November 2018) ➢ Equator (March 2017) ➢ Ungricht (January 2017) ➢ VCG (January 2017) Memorialization ➢ Star Granite & Bronze (February 2018) ➢ Aurora (August 2015) Industrial Technologies ➢ Compass Engineering (November

  18. Slide 18: Outlook for Fiscal 2019

    Outlook for Fiscal 2019* Observations ➢ Order rates for fulfillment systems (Industrial Technologies) and engineered solutions (SGK Brand Solutions) remain solid ➢ Recent new brand account wins and Frost acquisition will contribute favorably ➢ Commodity cost increases (primarily steel) present ongoi

  19. Slide 19: Supplemental Information

    Supplemental Information ©2018 Matthews International Corporation. All Rights Reserved. 19

  20. Slide 20: Reconciliations of Non-GAAP Financial Measures

    Reconciliations of Non-GAAP Financial Measures The Company uses non-GAAP financial measures to assist in comparing its performance on a consistent basis for purposes of business decision making by removing the impact of certain items that management believes do not directly reflect the Company’s cor

  21. Slide 21: Adjusted Earnings Per Share Non-GAAP Reconciliation

    Adjusted Earnings Per Share Non-GAAP Reconciliation Three Months Ended Fiscal Year Ended September 30, September 30, ($ in thousands, except per share data) 2018 2017 2018 2017 Net income attributable to Matthews $ 29,595 $ 19,641 $ 107,371 $ 74,368 Acquisition-related items (1) 3,104 4,925 16,168 2

  22. Slide 22: EBITDA and Adjusted EBITDA Non-GAAP Reconciliation

    EBITDA and Adjusted EBITDA Non-GAAP Reconciliation Three Months Ended Fiscal Year Ended September 30, September 30, ($ in thousands, except percentage amounts) 2018 2017 2018 2017 Net income attributable to Matthews $ 29,595 $ 19,641 $ 107,371 $ 74,368 Interest expense 10,645 6,621 37,427 26,371 Inc

  23. Slide 23: Adjusted EBITDA by Segment Non-GAAP Reconciliation

    Adjusted EBITDA by Segment Non-GAAP Reconciliation Three Months Ended Year Ended ($ in thousands) September 30, September 30, 2018 2017 2018 2017 SGK Brand Solutions Operating profit $ 18,893 $ 4,978 $ 35,443 $ 24,919 Depreciation and amortization (1) 12,484 11,513 48,970 43,508 Other (2) 1,209 637

  24. Slide 24: Fourth Quarter Fiscal 2018 Earnings Teleconference

    Fourth Quarter Fiscal 2018 Earnings Teleconference November 16, 2018 ©2018 Matthews International Corporation. All Rights Reserved.

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