Slide 1: Fourth Quarter 2023 Earnings
Fourth Quarter 2023 Earnings (Unaudited Results) February 7, 2024
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: Q4 and FY 2023 Chairman and CEO Perspective
Q4 and FY 2023 Chairman and CEO Perspective 2023 was a milestone year for Mattel Q4 results saw meaningful sales growth and margin expansion Consumer demand for our product increased and we continued to outpace the industry1 Full year sales comparable to prior year with Gross Margin expansion and si
Slide 5: Q4 and FY 2023 Chairman and CEO Perspective (continued)
Q4 and FY 2023 Chairman and CEO Perspective (continued) Mattel outpaced the industry in Q4 and full year1 Fourth quarter: - Net Sales increased 16%, or 14% in constant currency2 - Adjusted Gross Margin2 improved 570 bps to 48.8% - Adjusted EBITDA2 increased 48% to $234 million - POS3 up low-single d
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: Mattel's Strategy – Grow IP-driven Toy Business
Mattel’s Strategy – Grow IP-driven Toy Business Scaling portfolio, growing franchise brands, and advancing e-commerce and DTC Barbie was the #1 Doll property globally and #2 toy property overall1 Hot Wheels achieved its 6th consecutive record year Monster High relaunched globally, and was the fastes
Slide 8: Mattel's Strategy – Expand Entertainment Offering
Mattel’s Strategy – Expand Entertainment Offering Break-out year for Mattel’s entertainment business Barbie movie was a cultural phenomenon, achieving largest global box- office of 2023 and the 14th largest box-office of all time1 Recently announced first animated movie, Bob the Builder, and partner
Slide 9: Operations and Capital Deployment
Operations and Capital Deployment Executing business strategy and advancing capital deployment priorities Successfully concluded Optimizing for Growth Program; Achieved $343 million of annualized savings, well beyond initial target of $250 million and revised target of $300 million Optimizing for Pr
Slide 10: 2024 Guidance
2024 Guidance Emphasizing profitability, gross margin expansion, and strong cash flow Expect Net Sales in constant currency1 to be comparable to prior year, Adjusted EPS1 to be $1.35-$1.45, and Free Cash Flow1 of approx. $500 million In line with capital deployment priorities, intend to explore M&A
Slide 11: Financial Review
Q4 and FY 2023 Earnings Financial Review ©2024 Mattel, Inc. All Rights Reserved. 11
Slide 12: Q4 and FY 2023 P&L Highlights
Q4 and FY 2023 P&L Highlights Strong Q4 with double-digit top and bottom-line growth YOY YOY (in millions, Q4 2023 FY 2023 except EPS, percentages and bps) Change Change Net Sales $1,621 +16% $5,441 - Constant Currency +14% -1% Adjusted Gross Margin1 48.8% +570 bps 47.5% +160 bps Adjusted Operating
Slide 13: Q4 and FY 2023 Gross Billings by Category
Q4 and FY 2023 Gross Billings by Category 1 Strong growth in Q4; Dolls and Vehicles grew double digits in the full year Q4 YOY Growth (%) FY YOY Growth (%) As Constant 1 As Constant Reported Currency Reported Currency 29% 27% 15% 13% 18% 15% 13% 11% 9% 7% -10% -12% 3% 1% -24% -25% 18% 16% 1% -1% Mat
Slide 14: Q4 and FY 2023 Gross Billings by Region
Q4 and FY 2023 Gross Billings by Region 1 Growth in Q4 primarily driven by North America 1 Shipping patterns returned to historical trends, favorably impacting fourth quarter performance in comparison to the prior year (1) In constant currency, unless otherwise stated. Please see Appendix – Reconcil
Slide 15: Q4 2023 Adjusted Gross Margin Comparison
Q4 2023 Adjusted Gross Margin1 Comparison Significant increase in Adjusted Gross Margin, up 570 bps +570bps 0.7% 0.2% 1.3% 48.8% 1.5% 1.4% 3.4% 43.1% Benefited from cost deflation, lower inventory management costs, cost savings, and pricing (1) Amounts may not add due to rounding. Please see Appendi
Slide 16: Q4 2023 Advertising and Adjusted SG&A
Q4 2023 Advertising and Adjusted SG&A 1 Advertising reflects shift of spend, Adjusted SG&A up due to incentive comp. +$127 -$8 Expect 2024 Advertising and SG&A to remain relatively stable as a percent of net sales (1) Please see Appendix – Reconciliation of Non-GAAP Financial Measures and Glossary o
Slide 17: Q4 2023 Adjusted Profit Metrics
Q4 2023 Adjusted Profit Metrics Profit increase driven primarily by Net Sales growth and margin expansion +$76 +48% +$0.11 +$68 +61% +86% Adjusted EPS increased by 61% and benefited from share repurchase activity (1) Amounts may not add due to rounding. Please see Appendix – Reconciliation of Non-GA
Slide 18: 2023 Cash Flow
2023 Cash Flow Significant cash flow; benefited from improved working capital performance (in millions)1,2 FY 2023 FY 2022 Net Income $214 $394 Depreciation & Amortization $177 $182 Share-Based Compensation $83 $69 Other Non-Cash Charges $273 $202 Changes in Working Capital & Other $122 ($404) Cash
Slide 19: 2023 Balance Sheet Highlights
2023 Balance Sheet Highlights Significant progress reducing owned inventory (in millions) Q4 2023 Q4 2022 Cash $1,261 $761 Debt $2,330 $2,326 Accounts Receivable $1,082 $860 Inventory $572 $894 Leverage Ratio (Total Debt / Adj. EBITDA)1 2.5x 2.4x Meaningfully improved financial position; Cash balanc
Slide 20: 2021-2023 Optimizing For Growth (OFG)
2021-2023 Optimizing For Growth (OFG) Concluded program with Q4 2023 savings of $46 million Cumulative Savings1 $132 $343 A&P 11% $300+ A&P 2023 savings of $132 million $114 SG&A ~10% Total program savings of $343 million 29% SG&A ~30% Total cash expenditures of $170 million $97 COGS 61% COGS ~60% 2
Slide 21: 2024-2026 Optimizing for Profitable Growth (OPG)
2024-2026 Optimizing for Profitable Growth (OPG) New, three-year efficiency and cost savings program Cumulative Savings1 $200 $200 S&A ~30% Target program savings of $200 million 2025-26 Total expected cash expenditures of $130-$170 million ~$60 COGS ~70% 2024 Target 2024 2026 Allocation Aim to furt
Slide 22: 2024 Guidance
2024 Guidance Expect to outpace the industry and continue to gain global market share FY2024 FY2023 (in millions, Guidance Actual except EPS and percentages) Net Sales Comparable $5,441 (Constant Currency1) Adjusted Gross Margin1 48.5% - 49% 47.5% Adjusted EPS1 $1.35 - $1.45 $1.23 Adjusted EBITDA1 $
Slide 23: 2023 Closing
2023 Closing “2023 was a milestone year for Mattel. We extended our leadership in our key toy categories and gained significant share overall, achieved extraordinary success with the Barbie movie, and further strengthened our financial position. Execution on our toy strategy was strong and we made m
Slide 24: One of the strongest catalogs of children's and family entertainment franchises
Q4 2023 Earnings Call One of the strongest catalogs of children’s and family entertainment franchises in the world ©2024 Mattel, Inc. All Rights Reserved. 24
Slide 25: Appendix
Appendix 25
Slide 26: Consolidated Statements of Operations
Consolidated Statements of Operations ©2024 Mattel, Inc. All Rights Reserved. 26
Slide 27: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets ©2024 Mattel, Inc. All Rights Reserved. 27
Slide 28: Supplemental Balance Sheet and Cash Flow Data
Supplemental Balance Sheet and Cash Flow Data ©2024 Mattel, Inc. All Rights Reserved. 28
Slide 29: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ©2024 Mattel, Inc. All Rights Reserved. 29
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ©2024 Mattel, Inc. All Rights Reserved. 30
Slide 31: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ©2024 Mattel, Inc. All Rights Reserved. 31
Slide 32: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ©2024 Mattel, Inc. All Rights Reserved. 32
Slide 33: Worldwide Net Sales and Gross Billings
Worldwide Net Sales and Gross Billings ©2024 Mattel, Inc. All Rights Reserved. 33
Slide 34: Net Sales and Gross Billings by Segment
Net Sales and Gross Billings by Segment ©2024 Mattel, Inc. All Rights Reserved. 34
Slide 35: Net Sales and Gross Billings by Segment
Net Sales and Gross Billings by Segment ©2024 Mattel, Inc. All Rights Reserved. 35
Slide 36: Net Sales and Gross Billings by Segment
Net Sales and Gross Billings by Segment ©2024 Mattel, Inc. All Rights Reserved. 36
Slide 37: 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 38: 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