Matthews International Corporation · NASDAQ:MATW

Matthews International — Q3 2018 Earnings Presentation

24 slides from Matthews International's earnings presentation, Jul 27, 2018

  1. Slide 1: Third Quarter Fiscal 2018 Earnings Teleconference

    Third Quarter Fiscal 2018 Earnings Teleconference July 27, 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: Q3 FY2018 Highlights

    Q3 FY2018 Highlights EPS - Diluted  Factors impacting Q3 GAAP EPS $0.91 . $0.77 Higher intangible amortization . Prior year included loss recoveries  Drivers of Q3 Adjusted EPS growth Q3 FY17 Q3 FY18 Improvements . Higher sales – all segments Adjusted EPS* . Acquisitions and acquisition synergies

  5. Slide 5: Q3 FY18 Consolidated Results

    Q3 FY18 Consolidated Results ($ in millions) Sales GAAP Operating Profit and Margin $37.9 $389.6 $411.6 $36.8 9.4% 9.2% Q3 FY2017 Q3 FY2018 Q3 FY2017 Q3 FY2018 GAAP Gross Profit Adjusted EBITDA* and Margin and Margin $65.6 $69.2 $144.1 $151.9 37.0 % 36.9% 16.8% 16.8% Q3 FY2017 Q3 FY2018 Q3 FY2017 Q3

  6. Slide 6: YTD FY18 Consolidated Results

    YTD FY18 Consolidated Results ($ in millions) Sales GAAP Operating Profit and Margin $1,195.1 $1,119.5 $82.7 $85.6 7.4% 7.2% YTD FY2017 YTDFY2018 YTD FY2017 YTD FY2018 GAAP Gross Profit Adjusted EBITDA* and Margin and Margin $178.2 $409.8 $432.6 $174.6 36.6% 36.2% 15.6% 14.9% YTD FY2017 YTD FY2018 Y

  7. Slide 7: Q3 FY18 SGK Brand Solutions Results

    Q3 FY18 SGK Brand Solutions Results ($ in millions) Sales GAAP Operating Profit and Margin $200.6 $203.0 $11.4 $8.3 5.7% 4.1% Q3 FY2017 Q3 FY2018 Q3 FY2017 Q3 FY2018  Higher European sales (brand / surfaces & Adjusted EBITDA* engineering), acquisitions and currency; PY and Margin included significa

  8. Slide 8: YTD FY18 SGK Brand Solutions Results

    YTD FY18 SGK Brand Solutions Results ($ in millions) Sales GAAP Operating Profit and Margin $601.8 $566.5 $19.9 $16.6 3.5% 2.8% YTD FY2017 YTD FY2018 YTD FY2017 YTD FY2018  Sales growth driven by Europe, UK & Asia Adjusted EBITDA* Pacific, acquisitions, and favorable currency and Margin  Operating

  9. Slide 9: Q3 FY18 Memorialization Results

    Q3 FY18 Memorialization Results ($ in millions) Sales GAAP Operating Profit and Margin $155.8 $162.0 $23.5 $24.9 15.1% 15.4% Q3 FY2017 Q3 FY2018 Q3 FY2017 Q3 FY2018  Sales growth driven by cremation equipment Adjusted EBITDA* and Star acquisition; partially offset by lower and Margin memorial and c

  10. Slide 10: YTD FY18 Memorialization Results

    YTD FY18 Memorialization Results ($ in millions) Sales GAAP Operating Profit* and Margin $463.6 $475.6 $60.8 $63.3 13.1% 13.3% YTD FY2017 YTD FY2018 YTD FY2017 YTD FY2018  Sales growth driven by cremation equipment, Adjusted EBITDA* and acquisition; partially offset by lower and Margin memorial and

  11. Slide 11: Q3 FY18 Industrial Technologies Results

    Q3 FY18 Industrial Technologies Results ($ in millions) Sales GAAP Operating Profit $46.7 and Margin $4.7 $33.2 $1.9 5.9% 10.0% Q3 FY2017 Q3 FY2018 Q3 FY2017 Q3 FY2018  Sales growth reflected increases in marking Adjusted EBITDA* products, fulfillment systems and OEM and Margin solutions; and recen

  12. Slide 12: YTD FY18 Industrial Technologies Results

    YTD FY18 Industrial Technologies Results ($ in millions) Sales GAAP Operating Profit and Margin $117.8 $89.5 $5.8 $2.0 2.2% 4.9% YTD FY2017 YTD FY2018 YTD FY2017 YTD FY2018  Sales benefited from higher organic revenues Adjusted EBITDA* and acquisitions and Margin  Operating profit includes $0.9 mi

  13. Slide 13: Capitalization and Cash Flows

    Capitalization and Cash Flows ($ in millions) Debt Operating Cash Flow $1,026.4 $95.8 $911.1 $82.8 9/30/2017 6/30/2018 YTD FY2017 YTD FY2018  Debt reduction of $19.9 million during Q3 Cash FY2018 $57.5  $53.7 YTD operating cash flow impacted by CY pension contribution; PY included benefit of loss

  14. Slide 14: Business Overview

    Business Overview ©2018 Matthews International Corporation. All Rights Reserved. 14

  15. Slide 15: Business Highlights & Market Climate

    Business Highlights & Market Climate  Strong backlog, particularly in engineering; Equator, US, UK, new wins ramping up; EMEA tobacco slowed but expected to SGK Brand rebound; Q3 difficult comp due to large project PY Q3 Solutions  Benefiting from cost initiatives  Sales growth driving adjusted E

  16. Slide 16: Acquisitions Integration

    Acquisitions Integration SGK Brand Solutions  Equator (March 2017)  Ungricht (January 2017)  VCG (January 2017) Memorialization  Star Granite & Bronze (February 2018)  Aurora (August 2015) Industrial Technologies  Compass Engineering (November 2017)  RAF Technology (February 2017) ©2018 Matth

  17. Slide 17: Outlook for Fiscal 2018

    Outlook for Fiscal 2018* Growth in non-GAAP EPS by at least 10% over FY 2017 Operating cash flow currently expected to exceed FY2017 record level * As of July 26, 2018 ©2018 Matthews International Corporation. All Rights Reserved. 17

  18. Slide 18: Supplemental Information

    Supplemental Information ©2018 Matthews International Corporation. All Rights Reserved. 18

  19. Slide 19: 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

  20. Slide 20: Adjusted Earnings Per Share Non-GAAP Reconciliation

    Adjusted Earnings Per Share Non-GAAP Reconciliation ($ in thousands, except per share data) Three Months Ended June 30, Nine Months Ended June 30, 2018 2017 2018 2017 (1) Net income attributable to Matthews $ 24,414 $ 29,485 $ 77,776 $ 54,727 Acquisition-related items 4,609 5,127 13,064 17,972 Pensi

  21. Slide 21: EBITDA and Adjusted EBITDA Non-GAAP Reconciliation

    EBITDA and Adjusted EBITDA Non-GAAP Reconciliation ($ in thousands, except percentage amounts) Three Months Ended June 30, Nine Months Ended June 30, 2018 2017 2018 2017 (1) Net income attributable to Matthews $ 24,414 $ 29,485 $ 77,776 $ 54,727 Interest expense 9,719 6,988 26,782 19,750 Income taxe

  22. Slide 22: Adjusted Operating Profit by Segment Non-GAAP Reconciliation

    Adjusted Operating Profit by Segment Non-GAAP Reconciliation ($ in thousands) Three Months Ended Nine Months Ended June 30, June 30, 2018 2017 2018 2017 SGK Brand Solutions Operating profit $ 8,308 $ 11,390 $ 16,550 $ 19,941 Acquisition-related items (1) 5,162 4,785 14,808 17,895 Strategic initiativ

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

    Adjusted EBITDA by Segment Non-GAAP Reconciliation Three Months Ended Nine Months Ended ($ in thousands) June 30, June 30, 2018 2017 2018 2017 (1) SGK Brand Solutions Operating profit $ 8,308 $ 11,390 $ 16,550 $ 19,941 Depreciation and amortization (2) 12,468 12,097 36,486 31,995 Other (3) 256 3,972

  24. Slide 24: Third Quarter Fiscal 2018 Earnings Teleconference

    Third Quarter Fiscal 2018 Earnings Teleconference July 27, 2018 ©2018 Matthews International Corporation. All Rights Reserved.

Matthews International — Q3 2018 Earnings Presentation on 6ix