Matthews International Corporation · NASDAQ:MATW

Matthews International — Q2 2019 Earnings Presentation

31 slides from Matthews International's earnings presentation, Jul 5, 2019

  1. Slide 1: Investor Presentation Second Quarter Fiscal Year 2019

    INVESTOR PRESENTATION SECOND QUARTER FISCAL YEAR 2019 ©2019 Matthews International Corporation. All Rights Reserved.

  2. Slide 2: Business Overview

    Business Overview ©2019 Matthews International Corporation. All Rights Reserved. 2

  3. Slide 3: Disclaimer

    Disclaimer Any forward-looking statements contained in this presentation are included pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks and uncertainties that may cause the Company’s actua

  4. Slide 4: Matthews

    Matthews ➢ Founded in 1850 – headquartered in Pittsburgh, PA ➢ Three business segments: ▪ SGK Brand Solutions ▪ Memorialization ▪ Industrial Technologies ➢ Approximately 11,000 employees ➢ Over 25 countries ➢ NASDAQ – 31.7 million shares outstanding, as of March 31, 2019 ©2019 Matthews International

  5. Slide 5: Fiscal 2018 Sales (Percentage of Total Sales)

    Fiscal 2018 Sales (Percentage of Total Sales) Memorialization 40% SGK Brand Solutions 50% 10% Industrial Technologies ©2019 Matthews International Corporation. All Rights Reserved. 5

  6. Slide 6: SGK Brand Solutions

    SGK BRAND SOLUTIONS ©2019 Matthews International Corporation. All Rights Reserved. 6

  7. Slide 7: SGK Brand Solutions

    SGK Brand Solutions Monoprix, a major city center retailer in France, teamed up with Brandimage to Anthem developed a three-year “Live Your Break” connected platform for launch its new Food To Go line. Nestlé KitKat. The activity combines connected packaging via a mobile digital hub of user generate

  8. Slide 8: SGK Brand Solutions

    SGK Brand Solutions Marketing / Packaging Execution Marketing / Packaging Creative / Adaptive SGK Brand Solutions Execution + = Premedia / Tooling / Merchandising ©2019 Matthews International Corporation. All Rights Reserved. 8

  9. Slide 9: SGK Brand Solutions

    SGK Brand Solutions • SGK Brand Solutions has longstanding relationships with a large, blue chip customer base consisting of many of the Fortune 100 and Fortune 50 companies • Through brand development, SGK Brand Solutions has developed “strategic” relationships rather than “vendor” relationships wh

  10. Slide 10: Memorialization

    MEMORIALIZATION ©2019 Matthews International Corporation. All Rights Reserved. 10

  11. Slide 11: Memorialization

    Memorialization Matthews Architectural Products - Building signs are an example of the segment’s architectural product offerings. Bronze Memorials Forest Park West Cemetery Cremation Garden ©2019 Matthews International Corporation. All Rights Reserved. 11

  12. Slide 12: Memorialization

    Memorialization The Company is a leading manufacturer and distributor of caskets (wood, metal and cremation) in North America. The Super Power Pak III Plus cremation unit has some of the most advanced features in combustion technology as well as industry leading performance, reliability and support.

  13. Slide 13: Memorialization: Casketed Deaths vs. Total Deaths

    Memorialization ❖ Casketed Deaths vs. Total Deaths Company estimates as of December 31, 2018. Data compiled from CDC, US Census Bureau, Industry reports and internal projections. ©2019 Matthews International Corporation. All Rights Reserved. 13

  14. Slide 14: Industrial Technologies

    INDUSTRIAL TECHNOLOGIES ©2019 Matthews International Corporation. All Rights Reserved. 14

  15. Slide 15: Industrial Technologies

    Industrial Technologies Multiple integrated distribution and fulfillment systems (including laser-based identification and dimensioning technologies) communicate in a warehouse to identify and route items and parcels through the facility and out to a customer. Pyramid introduced a new warehouse exec

  16. Slide 16: Financial Overview

    Financial Overview ©2019 Matthews International Corporation. All Rights Reserved. 16

  17. Slide 17: Driving Growth Amidst Change

    Driving Growth Amidst Change EPS Growth Strategy Organic ▪ New product introductions ▪ Synergies and manufacturing/cost structure improvements ▪ Expanding market penetration with existing products Acquisitions ▪ Support segment business plans ▪ Leverage existing operating infrastructure ▪ Achieve lo

  18. Slide 18: Consolidated Results

    Consolidated Results (Dollars in thousands, Fiscal Year Ended September 30, YTD March 31, except per share data) 2016 2017 2018 2018 2019 (unaudited) (unaudited) Consolidated Sales $ 1,480,464 $ 1,515,608 $ 1,602,580 $ 783,515 $ 765,577 Net Income Attributable to Matthews $ 66,749 $ 74,368 $ 107,371

  19. Slide 19: Segment Operating Results

    Segment Operating Results (Dollars in thousands) Fiscal Year Ended September 30, YTD March 31, 2016 2017 2018 2018 2019 Sales: (unaudited) (unaudited) SGK Brand Solutions $ 755,975 $ 770,181 $ 805,274 $ 398,818 $ 375,951 Memorialization 610,142 615,882 631,392 313,578 316,062 Industrial Technologies

  20. Slide 20: Free Cash Flow Yield

    Free Cash Flow Yield (Dollars in thousands) Fiscal Year Ended September 30, 2016 2017 2018 Cash Provided from Operating Activities $ 140,274 $ 149,299 $ 147,574 Less: Capital Expenditures (41,682) (44,935) (43,200) Free Cash Flow $ 98,592 $ 104,364 $ 104,374 Market Capitalization 1,952,929 2,001,249

  21. Slide 21: Earnings Per Share (EPS)

    Earnings Per Share (EPS) Diluted EPS Non-GAAP Adjusted EPS(1) $3.96 $4.00 $4.00 $3.60 $3.37 $3.38 $3.50 $3.50 $3.03 $3.00 $3.00 $2.74 $2.50 $2.28 $2.50 $2.03 $1.91 $2.00 $2.00 $1.49 $1.50 $1.50 $1.00 $1.00 $0.50 $0.50 $0.00 $0.00 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Note: See Disclaimer

  22. Slide 22: Sales & Total Adjusted EBITDA

    Sales & Total Adjusted EBITDA (Dollars in millions) Consolidated Sales Total Adjusted EBITDA(1) $1,602.6 $1,515.6 $1,600.0 $1,480.5 $300.0 $1,426.1 $255.1 $1,400.0 $239.6 $238.7 $250.0 $216.0 $1,200.0 $1,106.6 $200.0 $172.1 $1,000.0 $800.0 $150.0 $600.0 $100.0 $400.0 $50.0 $200.0 $0.0 $0.0 2014 2015

  23. Slide 23: Common Stock Price

    Common Stock Price $70.00 $60.76 $62.25 $60.00 $50.74 $50.15 $48.97 $50.00 $43.89 $38.08 $40.00 $35.18 $35.36 $30.73 $29.82 $30.00 $20.00 $10.00 $0.00 9/30/2008 9/30/2009 9/30/2010 9/30/2011 9/30/2012 9/30/2013 9/30/2014 9/30/2015 9/30/2016 9/30/2017 9/30/2018 Note: Stock price obtained from Nasdaq

  24. Slide 24: Capital Allocation Priorities

    Capital Allocation Priorities ➢ Invest in organic growth Capitalization ▪ Three-year average capex ~2.8% of revenue (in millions) Total: $1,829.3 Total: $1,823.2 ➢ Debt reduction $960.6 $975.7 $868.7 $847.5 ▪ $7.3 million reduction in Q2 FY2019 ▪ 3.8x Net debt : adjusted EBITDA based on Axis Title A

  25. Slide 25: Recent Developments

    Recent Developments ➢ FY2019 Updated Targets(1) • Total Adjusted EBITDA(2) targeted in the range of $240 million to $250 million • Non-GAAP Adjusted EPS(2) targeted in the range of $3.60 to $3.75 • Debt reduction remains a priority ➢ FY2018 results • Record sales of $1.6 billion • Record adjusted EB

  26. Slide 26: Institutional Shareholders

    Institutional Shareholders ©2019 Matthews International Corporation. All Rights Reserved. 26

  27. Slide 27: Appendices

    Appendices ©2019 Matthews International Corporation. All Rights Reserved. 27

  28. Slide 28: Appendix A Total Adjusted EBITDA Non-GAAP Reconciliation

    Appendix A Total Adjusted EBITDA Non-GAAP Reconciliation (Dollars in thousands) Fiscal Year Ended September 30, YTD March 31, (unaudited) 2016 2017 2018 2018 2019 Net income $ 66,161 $ 73,933 $ 107,111 $ 53,230 $ 18,178 Income tax provision (benefit) 29,073 22,354 (9,118) (23,015) 440 Income before

  29. Slide 29: Appendix B Adjusted Net Income and EPS Non-GAAP Reconciliation

    Appendix B Adjusted Net Income and EPS Non-GAAP Reconciliation (Dollars in thousands, Fiscal Year Ended September 30, YTD March 31, except per share data) 2016 2017 2018 2018 2019 (unaudited) per share per share per share per share per share Net income attributable to Matthews $ 66,749 $ 2.03 $ 74,3

  30. Slide 30: Appendix C Additional Segment Information

    Appendix C Additional Segment Information Supplemental Asset Data (Dollars in thousands) SGK Brand Industrial Corporate and (unaudited) Solutions Memorialization Technologies Non-Operating Total Fiscal 2018 Operating assets (1) $ 408,167 $ 265,352 $ 64,655 $ 26,515 $ 764,689 Intangible assets, net 7

  31. Slide 31: Appendix D Net Debt Ratio Non-GAAP Reconciliation

    Appendix D Net Debt Ratio Non-GAAP Reconciliation (Dollars in thousands) Fiscal Year Ended September 30, (unaudited) 2016 2017 2018 Balance Sheet Information: Long-term debt, current maturities $ 27,747 $ 29,528 $ 31,260 Long-term debt 844,807 881,602 929,342 Total debt 872,554 911,130 960,602 Less:

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