Matthews International Corporation · NASDAQ:MATW
Matthews International — Q4 2019 Earnings Presentation
31 slides from Matthews International's earnings presentation, Dec 3, 2019
Slide 1: Investor Presentation Fourth Quarter Fiscal Year 2019
INVESTOR PRESENTATION FOURTH QUARTER FISCAL YEAR 2019 www.matw.com | Nasdaq: MATW
Slide 2: Disclaimer
DISCLAIMER Any forward-looking statements contained in this presentation are included pursuant to the “safe harbor” provisions of earnings before the impact of investing and financing charges and income taxes, and the effects of certain acquisition the Private Securities Litigation Reform Act of 199
Slide 3: Overview
Matthews [Elsixess INTERNATIONAL® OVERVIEW
Slide 4: Rooted in Identification Products
ROOTED IN IDENTIFICATION PRODUCTS FOUNDED in 1850 TODAY • Marking Products • SGK Brand Solutions • Printing Plates • Memorialization • Bronze Plaques • Industrial Technologies © 2019 Matthews International Corporation. All Rights Reserved. 4
Slide 5: Fiscal 2019 Segment Sales
FISCAL 2019 SEGMENT SALES (% of Total ) SGK Brand Memorialization Solutions 42% 48% Industrial Technologies 10% © 2019 Matthews International Corporation. All Rights Reserved. 5
Slide 6: Global Products and Services Sales Across Diverse Businesses
GLOBAL PRODUCTS AND SERVICES SALES ACROSS DIVERSE BUSINESSES (FY19) AMERICAS EUROPE ASIA-PACIFIC / OTHER 68% 28% 4% ~11,000 EMPLOYEES | 6 CONTINENTS | OVER 25 COUNTRIES NASDAQ LISTED – 31.3M Shares outstanding as of September 30, 2019 © 2019 Matthews International Corporation. All Rights Reserved. 6
Slide 7: Brand Solutions
BRAND SOLUTIONS © 2019 Matthews International Corporation. All Rights Reserved.
Slide 8: Packaging Production: Our Core Business
PACKAGING PRODUCTION: OUR CORE BUSINESS From Logo To Shelf BRAND BRAND ASSETS, PACKAGING LAYOUT, COLOR CONTROL PRINTED CREATIVE CLIENT & LEGAL PRODUCTION ART & & PRINT TOOLING PACKAGING SKU’s & DESIGN INPUTS COLOR SEPARATION start © 2019 Matthews International Corporation. All Rights Reserved. 8
Slide 9: Tooling Expertise
TOOLING EXPERTISE Taking Ideas To Finished Products. We are a leading global designer and supplier of rotary tools and services for printing, texturing and converting of packaging and other woven materials. © 2019 Matthews International Corporation. All Rights Reserved. 9
Slide 10: SGK Brand Solutions Servicing Global and Regional Clients
SGK BRAND SOLUTIONS SERVICING GLOBAL AND REGIONAL CLIENTS FOOD/ GLOBAL GLOBAL OTHER • Longstanding relationships with BEVERAGE PHARMACEUTICAL RETAILER LEADING a large, blue chip customer base CLIENTS CLIENTS CLIENTS BRANDS consisting of many Fortune 100 and Fortune 50 companies • “Strategic” relatio
Slide 11: © 2019 Matthews International Corporation. All Rights Reserved.
© 2019 Matthews International Corporation. All Rights Reserved.
Slide 12: Products
PRODUCTS Cemetery Products Funeral Home Products Cremation Equipment Market Position (U.S.) Bronze Memorials - #1 Caskets - #2 Cremation Equipment - #1 Granite Memorials - #1 Core Geographies North America, Italy, Australia United States Global © 2019 Matthews International Corporation. All Rights R
Slide 13: Our Markets
OUR MARKETS Product Markets* Casketed Deaths vs. Total Deaths* Cremation Equipment / * * Services Cremation Products / Other Caskets Granite Memorials Bronze Memorials Full-service provider – leading position across key Relatively stable demand driven by predictable trends: product markets increased
Slide 14: © 2019 Matthews International Corporation. All Rights Reserved.
© 2019 Matthews International Corporation. All Rights Reserved.
Slide 15: Product Identification
PRODUCT IDENTIFICATION Matthews A Market Leader New Market Drop on Opportunity Demand 28% Non-contact ink-jet printing units Continuous apply print on products. Printing Inkjet 46% Technologies New Technology Print & Apply 11% Jetting Assembly Laser Limited 15% Offering Sleeve Improved Reliability +
Slide 16: Warehouse Automation and Applied Technologies
WAREHOUSE AUTOMATION AND APPLIED TECHNOLOGIES Autonomous Vehicle Navigation Industrial’s Pyramid unit introduced Industrial’s Pick-to-Light Systems Multiple integrated distribution and The market looks to Matthews as a trail a new warehouse execution solution, utilizing light indicators for sorting
Slide 17: Overview
Matthews Bien INTERNATIONAL’ OVERVIEW
Slide 18: Value Creation
VALUE CREATION ORGANIC • Expanding market penetration with existing products • Synergies and manufacturing / cost structure improvements • New product introductions ACQUISITIONS • Support segment business plans; fill product / geographic gaps • Leverage existing operating infrastructure • Achieve lo
Slide 19: Consolidated Results
CONSOLIDATED RESULTS (Dollars in thousands, except per share data) Fiscal Year Ended September 30, 2017 2018 2019 Consolidated sales $ 1,515,608 $ 1,602,580 $ 1,537,276 Net income (loss) attributable to Matthews $ 74,368 $ 107,371 $ (37,988) Total adjusted EBITDA(1) $ 238,683 $ 255,114 $ 220,872 Dil
Slide 20: Segment Operating Results
SEGMENT OPERATING RESULTS (Dollars in thousands) Fiscal Year Ended September 30, 2017 2018 2019 Sales: SGK Brand Solutions $ 770,181 $ 805,274 $ 743,869 Memorialization 615,882 631,392 636,892 Industrial Technologies 129,545 165,914 156,515 Consolidated Sales $ 1,515,608 $ 1,602,580 $ 1,537,276 Adju
Slide 21: Free Cash Flow Yield
FREE CASH FLOW YIELD (Dollars in thousands) Fiscal Year Ended September 30, 2017 2018 2019 Cash provided from operating activities $ 149,299 $ 147,574 $ 131,083 Less: Capital expenditures (44,935) (43,200) (37,688) Free cash flow $ 104,364 $ 104,374 $ 93,395 Market capitalization 2,001,249 1,608,551
Slide 22: Earnings Per Share (EPS)
EARNINGS PER SHARE (EPS) Diluted EPS Non-GAAP Adjusted EPS(1) $3.96 $4.00 $3.37 $4.00 $3.60 $3.38 $3.31 $2.28 $3.50 $3.00 $2.03 $3.03 $1.91 $3.00 $2.00 $2.50 $1.00 $2.00 $1.50 $0.00 $1.00 -$1.00 -$1.21 $0.50 -$2.00 $0.00 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Note: See Disclaimer (Page 2)
Slide 23: Sales and Total Adjusted EBITDA
SALES AND TOTAL ADJUSTED EBITDA (Dollars in millions) Consolidated Sales Total Adjusted EBITDA (1) $1,602.6 $1,537.3 $1,480.5 $1,515.6 $300.0 $1,600.0 $1,426.1 $255.1 $1,400.0 $239.6 $238.7 $250.0 $216.0 $220.9 $1,200.0 $200.0 $1,000.0 $800.0 $150.0 $600.0 $100.0 $400.0 $50.0 $200.0 $0.0 $0.0 2015 2
Slide 24: Common Stock Price
COMMON STOCK PRICE $70.00 $62.25 $60.76 $60.00 $48.97 $50.15 $50.00 $43.89 $38.08 $40.00 $35.18 $35.36 $35.39 $30.73 $29.82 $30.00 $20.00 $10.00 $0.00 09/30/2009 09/30/2010 09/30/2011 09/30/2012 09/30/2013 09/30/2014 09/30/2015 09/30/2016 09/30/2017 09/30/2018 09/30/2019 Note: Stock price obtained f
Slide 25: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Debt Reduction • Target less than 3x Adjusted EBITDA(1) Capitalization (in millions) Cash Dividend $1,829.3 • $0.80 per share for FY2019 $1,659.9 • $0.21 per share for Q1 FY2020 $868.7 Invest in Growth $719.2 • Three-year average capex ~3% of revenue Acquisitions • Exte
Slide 26: Institutional Shareholders
INSTITUTIONAL SHAREHOLDERS Shares September 30, 2019 BlackRock, Inc. 4,717,879 The Vanguard Group, Inc. 3,417,468 Franklin Resources, Inc. 2,945,322 Dimensional Fund Advisors, L.P. 1,896,880 Clarkston Capital Partners, LLC 1,566,502 Wellington Management Group, LLP 1,104,788 Aristotle Capital Boston
Slide 27: Appendices
Matthews INTERNATIONAL® APPENDICES
Slide 28: Total Adjusted EBITDA (Non-GAAP Reconciliation)
TOTAL ADJUSTED EBITDA (NON-GAAP RECONCILIATION) Fiscal Year Ended September 30, (Dollars in thousands) APPENDIX A 2017 2018 2019 Net income (loss) $ 73,933 $ 107,111 $ (38,889) Income tax provision (benefit) 22,354 (9,118) 806 Income (loss) before income taxes 96,287 97,993 (38,083) Net loss attribu
Slide 29: Adjusted Net Income & EPS (Non-GAAP Reconciliation)
ADJUSTED NET INCOME & EPS (NON-GAAP RECONCILIATION) APPENDIX B (Dollars in thousands, except per share data) Fiscal Year Ended September 30, (unaudited) 2017 2018 2019 per share per share per share Net income (loss) attributable to Matthews $ 74,368 $ 2.28 $ 107,371 $ 3.37 $ (37,988) $ (1.21) Acquis
Slide 30: Additional Segment Information: Supplemental Asset Data
ADDITIONAL SEGMENT INFORMATION SUPPLEMENTAL ASSET DATA APPENDIX C (Dollars in thousands) SGK Brand Industrial Corporate and (unaudited) Solutions Memorialization Technologies Non-Operating Total Fiscal 2019 Operating assets (1) $ 397,544 $ 263,685 $ 53,133 $ 22,110 $ 736,472 Intangible assets, net 6
Slide 31: Proprietary and . oration. All rights reserved. No part of this document may be
Proprietary and confidential. © 2019 Matthews International Corporation. All rights reserved. No part of this document may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage or retrieval systems, without p
Matthews International — Q4 2019 Earnings Presentation on 6ix