Slide 1: First Quarter 2023 Earnings
First Quarter 2023 Earnings (Unaudited Results) April 26, 2023
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: Q1 2023 Chairman and CEO Perspective
Q1 2023 Chairman and CEO Perspective Results negatively impacted by elevated retail inventory Underlying business performed well with overall growth in consumer demand1 and market share gains Net Sales declined 22% as reported, or 21% in constant currency2 Adjusted EBITDA2 declined $166 million to a
Slide 5: 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 6: Mattel's Strategy – Grow IP-driven Toy Business
Mattel’s Strategy – Grow IP-driven Toy Business Recent announcements in the toy business New and separate licensing agreement for Disney’s Wish Relaunch of Barney Licensing agreement with Hasbro to create co-branded toys and games Disney The Little Mermaid new line of dolls Successfully executing ou
Slide 7: Mattel's Strategy – Expand Entertainment Offering
Mattel’s Strategy – Expand Entertainment Offering Recent announcements outside the toy aisle Hot Wheels: Ultimate Challenge Primetime show Barbie Dreamhouse Challenge home makeover competition series Hot Wheels: Rift Rally mixed reality racing game New Monster High live tour Launch of our own publis
Slide 8: Financial Review
Q1 2023 Earnings Financial Review ©2023 Mattel, Inc. All Rights Reserved. 8
Slide 9: Q1 2023 P&L Highlights
Q1 2023 P&L Highlights Results negatively impacted by movements in retail inventory levels Q1 YOY (in millions, Q1 2023 except EPS, percentages and bps)1 Change Net Sales $815 -22% Constant Currency1 -21% Adjusted Gross Margin1 40.0% -660 bps Adjusted Operating Income (Loss)1 ($87) -$177 Adjusted EP
Slide 10: Q1 2023 Gross Billings by Category
Q1 2023 Gross Billings by Category 1 POS2 significantly outpaced Gross Billings in all categories YOY Growth Rate (%) Worldwide Gross Billings As Constant (as reported; $ in millions) Reported Currency Dolls 306 -23% -22% Vehicles 284 1% 1% Infant, Toddler, and Preschool 150 -27% -26% Action Figures
Slide 11: Q1 2023 Gross Billings by Region
Q1 2023 Gross Billings by Region 1 Inventory-driven decline partly offset by growth in Latin America and Asia Pacific YOY Growth Rate (%) Gross Billings As Constant (as reported; $ in millions) Reported Currency North America2 469 -27% -27% EMEA 252 -26% -24% Latin America 88 5% 1% Asia Pacific 69 1
Slide 12: Q1 2023 Adjusted Gross Margin Comparison
Q1 2023 Adjusted Gross Margin1 Comparison Margin significantly impacted by inventory management, cost inflation, fixed cost absorption, and mix and other factors -660bps 46.6% 4.2% 1.2% 40.0% 2.1% 1.2% 1.4% 1.4% Carry-over benefit of 2022 pricing actions and cost savings mitigated margin pressures (
Slide 13: Q1 2023 Advertising and Adjusted SG&A
Q1 2023 Advertising and Adjusted SG&A 1 Advertising increased to support POS2 growth Advertising Adj. SG&A (in millions) (in millions) +$15 $322 $336 +$2 $74 $76 n/m n/m Q1'22 Q1'23 Q1'22 Q1'23 Adjusted SG&A increase primarily due to market-related pay increases, partly offset by savings from the Op
Slide 14: Q1 2023 Adjusted Operating Income (Loss) and Adjusted EBITDA
1 1 Q1 2023 Adjusted Operating Income (Loss) and Adjusted EBITDA Decline primarily due to lower sales and lower margins Adj. Operating Income (Loss) Adj. EBITDA (in millions) (in millions) n/m n/m n/m $152 $90 -$177 -$166 ($14) ($87) Q1'22 Q1'23 Q1'22 Q1'23 Believe we are on track to achieve full ye
Slide 15: Q1 2023 Cash Flow
Q1 2023 Cash Flow Increased use of cash due to lower net earnings, partly offset by reduced working capital requirements (in millions)1 Q1 2023 Q1 2022 Net Income (Loss) ($106) $21 Depreciation & Amortization $43 $45 Share-Based Compensation $17 $19 Other Non-Cash Charges $10 $19 Changes in Working
Slide 16: Q1 2023 Balance Sheet Highlights
Q1 2023 Balance Sheet Highlights Cash used to reduce debt and repurchase shares (in millions) Q1 2023 Q1 2022 Cash $462 $537 Total Debt $2,327 $2,572 Accounts Receivable $674 $862 Inventory $961 $969 Leverage Ratio (Total Debt / Adj. EBITDA)1 2.9x 2.4x Increase in Leverage Ratio1 primarily due to th
Slide 17: Optimizing For Growth
Optimizing For Growth Q1 2023 savings of $21 million Cumulative Savings $300 $300 A&P 2023 ~10% Program to date savings of $225 million $106 SG&A 2023 expected savings of $96 million ~30% 2022 $97 Total estimated cash expenditures now COGS $155 - $185 million 2021 ~60% Savings 2021 2022 2023 Allocat
Slide 18: 2023 Guidance
2023 Guidance Reiterating full year guidance (in millions, FY2023 FY2022 except EPS and percentages) Guidance Actual Net Sales Comparable $5,435 (Constant Currency1) Adjusted Gross Margin1 ~ 47% 45.9% Adjusted EPS1 $1.10 - $1.20 $1.25 Adjusted EBITDA1 $900 - $950 $968 Adjusted Tax Rate1 25% - 26% 24
Slide 19: Q1 2023 Closing
Q1 2023 Closing “While retail inventory management impacted the first quarter’s results, the underlying business performed well. Mattel achieved growth and gained market share, per Circana. The fundamentals of our business are strong. We expect to outpace the industry, gain market share, and achieve
Slide 20: One of the strongest catalogs of children's and family entertainment franchises
Q1 2023 Earnings Call One of the strongest catalogs of children’s and family entertainment franchises in the world ©2023 Mattel, Inc. All Rights Reserved. 20
Slide 21: Appendix
Appendix 21
Slide 22: Consolidated Statements of Operations
Consolidated Statements of Operations ©2023 Mattel, Inc. All Rights Reserved. 22
Slide 23: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets ©2023 Mattel, Inc. All Rights Reserved. 23
Slide 24: Supplemental Balance Sheet and Cash Flow Data
Supplemental Balance Sheet and Cash Flow Data ©2023 Mattel, Inc. All Rights Reserved. 24
Slide 25: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ©2023 Mattel, Inc. All Rights Reserved. 25
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ©2023 Mattel, Inc. All Rights Reserved. 26
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ©2023 Mattel, Inc. All Rights Reserved. 27
Slide 28: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ©2023 Mattel, Inc. All Rights Reserved. 28
Slide 29: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ©2023 Mattel, Inc. All Rights Reserved. 29
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ©2023 Mattel, Inc. All Rights Reserved. 30
Slide 31: Worldwide Net Sales and Gross Billings
Worldwide Net Sales and Gross Billings ©2023 Mattel, Inc. All Rights Reserved. 31
Slide 32: Net Sales and Gross Billings by Segment
Net Sales and Gross Billings by Segment ©2023 Mattel, Inc. All Rights Reserved. 32
Slide 33: Net Sales and Gross Billings by Segment
Net Sales and Gross Billings by Segment ©2023 Mattel, Inc. All Rights Reserved. 33
Slide 34: Net Sales and Gross Billings by Segment
Net Sales and Gross Billings by Segment ©2023 Mattel, Inc. All Rights Reserved. 34
Slide 35: 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 36: 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