Mattel, Inc. · NASDAQ:MAT

Mattel — Q1 2022 Earnings Presentation

39 slides from Mattel's earnings presentation, Apr 27, 2022

  1. Slide 1: First Quarter 2022 Earnings

    First Quarter 2022 Earnings (Unaudited Results) April 27, 2022

  2. Slide 2: Forward-Looking Statements / Presentation Information

    Forward-Looking Statements / Presentation Information This presentation contains a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical

  3. 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

  4. Slide 4: Q1 2022 CEO Perspective

    Q1 2022 CEO Perspective Highest first quarter results we have on record Net Sales up 19% and exceeded $1 billion, on top of a 47% increase last year Adjusted Operating Income1 nearly tripled Adjusted EPS1 improved from negative $0.10 to positive $0.08 Adjusted EBITDA1 increased by 65% Gross Billings

  5. Slide 5: Q1 2022 Gross Billings by Categories

    1 Q1 2022 Gross Billings by Categories Up 23% vs. prior year Well positioned with owned and retail inventories to meet consumer demand for our product (1) Amounts may not foot due to rounding. Gross Billings. In constant currency, unless otherwise stated. Please see Appendix – Reconciliation of Non-

  6. Slide 6: Q1 2022 Category Highlights

    1 Q1 2022 Category Highlights Gross Billings growth across all four categories Category Gross Billings Up 8%, led by Barbie and Polly Pocket Dolls Barbie +12% Up 36%, with growth across all product lines Vehicles Hot Wheels +36% Infant, Toddler, and Up 15%, driven primarily by FP Core Preschool Fish

  7. Slide 7: 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

  8. Slide 8: Toy Business

    Toy Business Accelerate topline and increase profitability Expanded to 494,000 brick and mortar stores1 where our product is sold Strengthened position as a partner of choice with multi-year global licensing agreement with Universal for DreamWorks Animation’s Trolls Extended DTC offerings to custome

  9. Slide 9: Entertainment Offering

    Entertainment Offering Capture the full value of our IP JJ Abrams’ Bad Robot will produce the Hot Wheels movie, in development with Warner Brothers Barbie movie in principal photography; worldwide launch on July 21st, 2023 Growing portfolio of Mattel163 games; launched He- Man and the Masters of the

  10. Slide 10: Corporate Citizenship

    Corporate Citizenship Contributing to a more diverse, equitable, inclusive, and sustainable future Publishing Mattel’s 2021 Citizenship Report, which provides a progress update on Environmental, Social, and Governance strategy and goals New goal to reduce plastic packaging by 25% per product by 2030

  11. Slide 11: Financial Review

    Q1 2022 Earnings Financial Review ©2022 Mattel, Inc. All Rights Reserved. 11

  12. Slide 12: Q1 2022 P&L Highlights

    Q1 2022 P&L Highlights Very strong first quarter YOY (in millions, Q1 2022 except EPS, percentages and bps)1 Change Net Sales $1,041 19% Constant Currency1 22% Adjusted Gross Margin1 46.6% -70 bps Adjusted Operating Income1 $90 +$59 Adjusted EPS1 $0.08 +$0.18 Adjusted EBITDA1 $152 +$60 Strategy to a

  13. Slide 13: Q1 2022 Gross Billings by Region

    1 Q1 2022 Gross Billings by Region Growth across all regions Continuing Momentum (1) Gross Billings. In constant currency, unless otherwise stated. Please see Appendix – Reconciliation of Non-GAAP Financial Measures and Glossary of Non-GAAP Financial Measures & Key Performance Indicator (2) Excludes

  14. Slide 14: Q1 2022 Adjusted Gross Margin Comparison

    Q1 2022 Adjusted Gross Margin1 Comparison Raw materials and ocean freight drove significant input cost inflation FX, pricing, scale, and cost savings mostly offset the impact of inflation (1) Amounts may not foot due to rounding. Please see Appendix – Reconciliation of Non-GAAP Financial Measures an

  15. Slide 15: Q1 2022 Advertising and Adjusted SG&A

    1 Q1 2022 Advertising and Adjusted SG&A Advertising flat; SG&A increase due to employee-related expenses +4% -% Effectively managing cost structure while benefiting from topline growth (1) Amounts may not foot due to rounding. Please see Appendix – Reconciliation of Non-GAAP Financial Measures and G

  16. Slide 16: Q1 2022 Adjusted Operating Income and Adjusted EBITDA

    1 1 Q1 2022 Adjusted Operating Income and Adjusted EBITDA Flow-through benefit of topline growth, FX, pricing, and cost savings +$60 +$59 Another quarter of strong bottom-line results (1) Amounts may not foot due to rounding. Please see Appendix – Reconciliation of Non-GAAP Financial Measures and Gl

  17. Slide 17: Q1 2022 Cash Flow Results

    Q1 2022 Cash Flow Results Use of cash reflecting business seasonality (in millions)1 Q1 2022 Q1 2021 Net (Loss) Income $21 ($112) Depreciation & Amortization $45 $46 Share-Based Compensation $19 $15 Other Non-Cash Charges $19 $73 Changes in Working Capital & Other ($249) ($57) Cash from Operations (

  18. Slide 18: TTM Free Cash Flow Conversion

    TTM Free Cash Flow Conversion1, 2 Free Cash Flow1 impacted by pre-build of inventory to support growth (in millions, TTM 2022 TTM 2021 YOY Change except percentages and pts) Adjusted EBITDA1 $1,067 $859 +24% Free Cash Flow $226 $305 -26% Free Cash Flow Conversion1 21% 36% -15 pts For the full year,

  19. Slide 19: Q1 2022 Balance Sheet Highlights

    Q1 2022 Balance Sheet Highlights Leverage ratio1 continued to improve (in millions) Q1 2022 Q1 2021 Cash $537 $615 Total Long-Term Debt $2,572 $2,838 Accounts Receivable $862 $681 Inventory $969 $626 Leverage Ratio (Debt / Adj. EBITDA1) 2.4 3.3 Goal to achieve investment grade rating (1) Includes Sh

  20. Slide 20: Optimizing For Growth Program Update

    Optimizing For Growth Program Update Q1 2022 savings of $17 million Cumulative Savings $250 $250 A&P Program to date savings of $114 million 2023 ~10% $80 - $90 2022 expected savings of $80 - $90 million SG&A 2022 ~35% Total estimated cash expenditures of $97 $100 - $125 million by 2023 COGS 2021 ~5

  21. Slide 21: 2022 Guidance

    2022 Guidance Reiterating full year guidance and providing Adjusted Tax Rate1 forecast (in millions, except EPS and percentages) FY2022 Expected FY2021 Net Sales +8 - 10% $5,458 (Constant Currency) Adjusted Gross Margin1 ~ 47% 48.2% Adjusted EBITDA1 $1,100 - $1,125 $1,007 Adjusted EPS1 $1.42 - $1.48

  22. Slide 22: 2023 Goals

    2023 Goals Reiterating 2023 goals FY2023 Net Sales + High-Single Digit % (Constant Currency) Adjusted Operating Income Margin1 ~ 16 - 17% of Net Sales Adjusted EPS1 > $1.90 Goals driven by expected topline growth, margin expansion, and benefit of free cash flow (1) Please see Appendix – Reconciliati

  23. Slide 23: Q1 2022 Closing

    Q1 2022 Closing “Mattel achieved its highest first quarter results we have on record for net sales, operating income, and EBITDA. Our strong performance continued, with growth across regions, categories, and our three power brands. These results are in line with our strategy to grow Mattel’s IP-driv

  24. Slide 24: Q1 2022 Earnings Call

    Q1 2022 Earnings Call ©2022 Mattel, Inc. All Rights Reserved. 24

  25. Slide 25: Appendix

    Appendix 25

  26. Slide 26: Consolidated Statements of Operations

    Consolidated Statements of Operations MATTEL, INC. AND SUBSIDIARIES EXHIBIT I CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) 1 For the Three Months Ended March 31, 2022 20212 % Change as % Change (In millions, except per share and percentage information) $ Amt % Net Sales $ Amt % Net Sales Report

  27. Slide 27: Condensed Consolidated Balance Sheets

    Condensed Consolidated Balance Sheets MATTEL, INC. AND SUBSIDIARIES EXHIBIT II CONDENSED CONSOLIDATED BALANCE SHEETS 1 March 31, December 31, 2 2022 2021 2021 (In millions) (Unaudited) Assets Cash and Equivalents $ 536.6 $ 615.2 $ 731.4 Accounts Receivable, Net 862.2 680.6 1,072.7 Inventories 969.2

  28. Slide 28: Supplemental Balance Sheet and Cash Flow Data

    Supplemental Balance Sheet and Cash Flow Data MATTEL, INC. AND SUBSIDIARIES SUPPLEMENTAL BALANCE SHEET AND CASH FLOW DATA (Unaudited) 1 March 31, 2022 2021 Key Balance Sheet Data: Accounts Receivable, Net Days of Sales Outstanding (DSO) 75 70 For the Three Months Ended March 31, (In millions) 2022 2

  29. Slide 29: Reconciliation of Non-GAAP Financial Measures

    Reconciliation of Non-GAAP Financial Measures MATTEL, INC. AND SUBSIDIARIES EXHIBIT III SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited) 1 RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES For the Three Months Ended March 31, (In millions, except percentage information) 2022 20212 Change Gross Pr

  30. Slide 30: Reconciliation of Non-GAAP Financial Measures

    Reconciliation of Non-GAAP Financial Measures MATTEL, INC. AND SUBSIDIARIES SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited) 1 RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES For the Three Months Ended March 31, (In millions, except per share and percentage information) 2022 20212 Change Earnin

  31. Slide 31: Reconciliation of Non-GAAP Financial Measures

    Reconciliation of Non-GAAP Financial Measures MATTEL, INC. AND SUBSIDIARIES SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited) 1 RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES For the Trailing Twelve Months Ended March 31, (In millions, except percentage and pts information) 2022 20212 Change Le

  32. Slide 32: Reconciliation of Non-GAAP Financial Measures

    Reconciliation of Non-GAAP Financial Measures MATTEL, INC. AND SUBSIDIARIES SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited) 1 RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES For the Year Ended December 31, (In millions, except percentage and per share information) 2021 Gross Profit Gross Profi

  33. Slide 33: Reconciliation of Non-GAAP Financial Measures

    Reconciliation of Non-GAAP Financial Measures MATTEL, INC. AND SUBSIDIARIES SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited) 1 RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES For the Year Ended December 31, (In millions, except percentage information) 2021 Tax Rate Income before Income Taxes, A

  34. Slide 34: Supplemental Key Performance Indicator

    Supplemental Key Performance Indicator MATTEL, INC. AND SUBSIDIARIES EXHIBIT IV WORLDWIDE GROSS BILLINGS1 (Unaudited)3 SUPPLEMENTAL KEY PERFORMANCE INDICATOR For the Three Months Ended March 31, % Change in % Change Constant (In millions, except percentage information) 2022 2021 as Reported Currency

  35. Slide 35: Supplemental Key Performance Indicator

    Supplemental Key Performance Indicator MATTEL, INC. AND SUBSIDIARIES EXHIBIT V GROSS BILLINGS1 BY SEGMENT (Unaudited)3 SUPPLEMENTAL KEY PERFORMANCE INDICATOR For the Three Months Ended March 31, % Change in % Change Constant (In millions, except percentage information) 2022 2021 as Reported Currency

  36. Slide 36: Supplemental Key Performance Indicator

    Supplemental Key Performance Indicator MATTEL, INC. AND SUBSIDIARIES EXHIBIT VI GROSS BILLINGS1 BY SEGMENT (Unaudited)3 SUPPLEMENTAL KEY PERFORMANCE INDICATOR For the Three Months Ended March 31, % Change % Change as in (In millions, except percentage information) 2022 2021 Reported Constant Interna

  37. Slide 37: Supplemental Key Performance Indicator

    Supplemental Key Performance Indicator MATTEL, INC. AND SUBSIDIARIES EXHIBIT VII GROSS BILLINGS1 BY SEGMENT (Unaudited)3 SUPPLEMENTAL KEY PERFORMANCE INDICATOR For the Three Months Ended March 31, % Change % Change in as Constant (In millions, except percentage information) 2022 2021 Reported Curren

  38. Slide 38: 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

  39. Slide 39: 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

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