Mattel, Inc. · NASDAQ:MAT
Mattel — Q3 2022 Earnings Presentation
40 slides from Mattel's earnings presentation, Oct 25, 2022
Slide 1: Third Quarter 2022 Earnings
Third Quarter 2022 Earnings (Unaudited Results) October 25, 2022
Slide 2: Cautionary Note Regarding Forward-Looking Statements / Presentation Information
Cautionary Note Regarding Forward-Looking Statements / Presentation Information Mattel cautions the viewer that this presentation contains a number of forward-looking statements, which are statements that relate to the future and are, by their nature, uncertain. Forward-looking statements can be ide
Slide 3: Mattel, Inc. Who We Are
Mattel, Inc. Who We Are Mattel is a leading global toy company and owner of one of the strongest catalogs of children’s and family entertainment franchises in the world. We engage consumers through our portfolio of iconic brands, as well as other popular intellectual properties that we own or licens
Slide 4: Q3 2022 Chairman and CEO Perspective
Q3 2022 Chairman and CEO Perspective Growth in Net Sales in constant currency1 and Adjusted EBITDA1 Net Sales flat, up 3% in constant currency; YTD up 10%, up 13% in constant currency Adjusted Operating Income1 down 1%; YTD up 22% Adjusted EPS1 down $0.02; YTD up $0.30 or 38% Adjusted EBITDA increas
Slide 5: Q3 2022 Chairman and CEO Perspective (continued)
Q3 2022 Chairman and CEO Perspective (continued) Growth in Net Sales in constant currency1 and Adjusted EBITDA1 2022 price increases successfully implemented; while still early, have not seen a meaningful impact on consumer demand Adjusted EBITDA benefited from pricing actions and cost savings, offs
Slide 6: Mattel's Strategy
Mattel’s Strategy Grow IP-Driven Toy Business and Expand Entertainment Offering TOYS ENTERTAINMENT ACCELERATE INCREASE CAPTURE TOPLINE PROFITABILITY FULL VALUE OF IP EXPAND SCALE GROW ADVANCE OPTIMIZE CONTENT, CONSUMER PORTFOLIO FRANCHISE E-COMMERCE OPERATIONS PRODUCTS AND DIGITAL BRANDS AND DTC EXP
Slide 7: Entertainment
Entertainment Capture the full value of our IP Monster High live-action television musical was #1 Kids and Family movie on Paramount+; 26-episode animated series before Halloween Pictionary premiered on Fox and CBS affiliates in September Deepa & Anoop second season to premiere in November; Thomas &
Slide 8: Workplace Culture and Employee Well-being
Workplace Culture and Employee Well-being Recognized for achievements World’s Best Employers by Forbes Best Workplaces for Innovators by Fast Company 100 Best Companies by Seramount Healthiest 100 Workplaces in America by Healthiest Employers Aim to contribute to a more diverse, equitable, inclusive
Slide 9: Q3 2022 Chairman and CEO Summary
Q3 2022 Chairman and CEO Summary Strong fundamentals Portfolio is resilient and well-balanced, with thriving brands that drive cultural relevance New product innovation and white space opportunities Growing major entertainment partnerships and winning new key licenses Making progress on capturing th
Slide 10: Financial Review
Q3 2022 Earnings Financial Review ©2022 Mattel, Inc. All Rights Reserved. 10
Slide 11: Q3 and YTD 2022 P&L Highlights
Q3 and YTD 2022 P&L Highlights Year-to-date performance has been very strong Q3 YOY YTD YOY (in millions, Q3 2022 YTD 2022 except EPS, percentages and bps)1 Change Change Net Sales $1,756 flat $4,033 +10% Constant Currency1 +3% +13% Adjusted Gross Margin1 48.3% +50 bps 46.8% -80 bps Adjusted Operati
Slide 12: Q3 and YTD 2022 Gross Billings by Category
Q3 and YTD 2022 Gross Billings by Category 1 Q3 Gross Billings1 up 3%; YTD Gross Billings up 13% Growth driven by Vehicles and Challenger categories in aggregate (1) Amounts may not foot due to rounding. In constant currency, unless otherwise stated. Please see Appendix – Reconciliation of Non-GAAP
Slide 13: Q3 and YTD 2022 Gross Billings by Region
Q3 and YTD 2022 Gross Billings by Region 1 Q3 growth in three of four regions; YTD growth in all four regions1 Working closely with partners to meet the anticipated acceleration in POS (1) In constant currency, unless otherwise stated. Please see Appendix – Reconciliation of Non-GAAP Financial Measu
Slide 14: Q3 2022 Adjusted Gross Margin Comparison
Q3 2022 Adjusted Gross Margin1 Comparison Gross Margin improvement vs. prior year period Pricing and cost savings exceeded significant cost inflation (1) Amounts may not foot due to rounding. Please see Appendix – Reconciliation of Non-GAAP Financial Measures and Glossary of Non-GAAP Financial Measu
Slide 15: Q3 2022 Advertising and Adjusted SG&A
Q3 2022 Advertising and Adjusted SG&A 1 Advertising increased to drive demand; Adjusted SG&A comparable -% +8% Effectively managing cost structure (1) Please see Appendix – Reconciliation of Non-GAAP Financial Measures and Glossary of Non-GAAP Financial Measures & Key Performance Indicator ©2022 Mat
Slide 16: Q3 2022 Adjusted Operating Income and Adjusted EBITDA
Q3 2022 Adjusted Operating Income and Adjusted EBITDA 1 1 Higher Advertising mostly offset an increase in Adjusted Gross Margin +$10 -$3 Another quarter of Adjusted EBITDA growth; Year-to-date up 18% (1) Amounts may not foot due to rounding. Please see Appendix – Reconciliation of Non-GAAP Financial
Slide 17: YTD 2022 Cash Flow Results
YTD 2022 Cash Flow Results Increased use of cash primarily due to higher working capital usage (in millions)1 YTD 2022 YTD 2021 Net Income $378 $677 Valuation Allowances - ($492) Depreciation & Amortization $137 $137 Share-Based Compensation $56 $46 Other Non-Cash Charges $91 $57 Changes in Working
Slide 18: TTM Free Cash Flow Conversion
TTM Free Cash Flow Conversion1, 2 Free Cash Flow decline due to increased working capital usage and higher capital expenditures, mostly offset by higher cash earnings (in millions, TTM 2022 TTM 2021 YOY Change except percentages and pts) Adjusted EBITDA1 $1,131 $959 +18% Free Cash Flow $303 $320 -5%
Slide 19: Q3 2022 Balance Sheet Highlights
Q3 2022 Balance Sheet Highlights Decline in Net Debt1 reflects free cash flow generation over the last 12 months (in millions) Q3 2022 Q3 2021 Cash $349 $149 Total Debt $2,574 $2,698 Net Debt $2,225 $2,549 Accounts Receivable $1,382 $1,438 Inventory $1,084 $854 Leverage Ratio (Total Debt / Adj. EBIT
Slide 20: Optimizing For Growth
Optimizing For Growth Q3 savings of $29 million Cumulative Savings $250 $250 A&P 2023 Program to date savings of $165 million $80 - $90 ~10% SG&A 2022 expected savings of $80 - $90 million 2022 ~35% $97 Total estimated cash expenditures of $125 - $150 million by 2023 COGS 2021 ~55% Savings 2021 2022
Slide 21: 2022 Guidance
2022 Guidance Updated 2022 Guidance Current FY2022 Prior FY2022 (in millions, FY2021 except EPS and percentages) Guidance Guidance Net Sales + 8 - 10% + 8 - 10% $5,458 (Constant Currency) (Constant Currency) Net Sales Currency Translation1 (3 - 4%) (2 - 3%) Adjusted Gross Margin1, 2 ~ 47% 47 - 48% 4
Slide 22: Q3 2022 Earnings
Q3 2022 Earnings ©2022 Mattel, Inc. All Rights Reserved. 22
Slide 23: Q3 2022 Closing
Q3 2022 Closing “This was a good quarter for Mattel, with the 9th consecutive quarter of Net Sales growth in constant currency. We believe our fundamentals are strong and our world-class leadership team and global organization are executing with excellence. Our results reflect the resilience of our
Slide 24: One of the strongest catalogs of children's and family entertainment franchises
Q3 2022 Earnings Call One of the strongest catalogs of children’s and family entertainment franchises in the world ©2022 Mattel, Inc. All Rights Reserved. 24
Slide 25: Appendix
Appendix 25
Slide 26: Consolidated Statements of Operations
Consolidated Statements of Operations ©2022 Mattel, Inc. All Rights Reserved. 26
Slide 27: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets ©2022 Mattel, Inc. All Rights Reserved. 27
Slide 28: Supplemental Balance Sheet and Cash Flow Data
Supplemental Balance Sheet and Cash Flow Data ©2022 Mattel, Inc. All Rights Reserved. 28
Slide 29: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ©2022 Mattel, Inc. All Rights Reserved. 29
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ©2022 Mattel, Inc. All Rights Reserved. 30
Slide 31: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ©2022 Mattel, Inc. All Rights Reserved. 31
Slide 32: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ©2022 Mattel, Inc. All Rights Reserved. 32
Slide 33: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ©2022 Mattel, Inc. All Rights Reserved. 33
Slide 34: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ©2022 Mattel, Inc. All Rights Reserved. 34
Slide 35: Supplemental Key Performance Indicator
Supplemental Key Performance Indicator ©2022 Mattel, Inc. All Rights Reserved. 35
Slide 36: Supplemental Key Performance Indicator
Supplemental Key Performance Indicator ©2022 Mattel, Inc. All Rights Reserved. 36
Slide 37: Supplemental Key Performance Indicator
Supplemental Key Performance Indicator ©2022 Mattel, Inc. All Rights Reserved. 37
Slide 38: Supplemental Key Performance Indicator
Supplemental Key Performance Indicator ©2022 Mattel, Inc. All Rights Reserved. 38
Slide 39: Glossary of Non-GAAP Financial Measures & Key Performance Indicator
Glossary of Non-GAAP Financial Measures & Key Performance Indicator NON-GAAP FINANCIAL MEASURES To supplement our financial results presented in accordance with generally accepted accounting principles in the United States (“GAAP”), Mattel presents certain non-GAAP financial measures within the mean
Slide 40: Glossary of Non-GAAP Financial Measures & Key Performance Indicator
Glossary of Non-GAAP Financial Measures & Key Performance Indicator NON-GAAP FINANCIAL MEASURES Free Cash Flow and Free Cash Flow Conversion Free Cash Flow represents Mattel’s net cash flows from operating activities less capital expenditures. Free Cash Flow Conversion represents Mattel’s free cash