Slide 1: Second Quarter 2023 Earnings
Second Quarter 2023 Earnings (Unaudited Results) July 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: Q2 2023 Chairman and CEO Perspective
Q2 2023 Chairman and CEO Perspective Financial results in-line with company expectations Sales trends improved significantly from Q1 but were down vs. the prior year due to the continued impact of retailers managing inventory levels and industry softness Net Sales declined 12% as reported, or 13% in
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 Barbie movie range of toys and products launched with releases to date sold out across major distribution channels; expanding range in 2H Franchise brands expanded with the launch of new innovative products, inc
Slide 7: Mattel's Strategy – Expand Entertainment Offering
Mattel’s Strategy – Expand Entertainment Offering The Barbie movie is a milestone moment for Mattel Largest opening weekend at the box office of 2023, with a comprehensive marketing campaign and positive film reviews Extensive product tie-ins, cross-platform amplification from Warner Bros Discovery
Slide 8: Mattel's Strategy – Expand Entertainment Offering
Mattel’s Strategy – Expand Entertainment Offering Recent announcements outside the toy aisle The Barbie movie music album released in partnership with Warner Brothers and Warner Music Group, produced by Mark Ronson, and featuring a stellar lineup including Dua Lipa, Nicki Minaj & Ice Spice, Billie E
Slide 9: Financial Review
Q2 2023 Earnings Financial Review ©2023 Mattel, Inc. All Rights Reserved. 9
Slide 10: Q2 2023 P&L Highlights
Q2 2023 P&L Highlights Results impacted by retailers managing inventory levels and industry softness YOY (in millions, Q2 2023 except EPS and percentages) Change Net Sales $1,087 -12% Constant Currency1 -13% Adjusted Gross Margin1 44.9% - Adjusted Operating Income1 $75 -$47 Adjusted EPS1 $0.10 -$0.0
Slide 11: Q2 2023 Gross Billings by Category
Q2 2023 Gross Billings by Category 1 Sequential quarterly improvement in Gross Billings YOY Growth Rate (%) Worldwide Gross Billings As Constant (as reported; $ in millions) Reported Currency1 Dolls 441 10% 9% Vehicles 364 11% 10% Infant, Toddler, and Preschool 197 -28% -29% Action Figures, Building
Slide 12: Q2 2023 Gross Billings by Region
Q2 2023 Gross Billings by Region 1 Results impacted by retailers managing inventory levels and industry softness YOY Growth Rate (%) Gross Billings As Constant (as reported; $ in millions) Reported Currency1 North America2 637 -18% -18% EMEA 304 -7% -8% Latin America 161 11% 3% Asia Pacific 97 2% 7%
Slide 13: Q2 2023 Adjusted Gross Margin Comparison
Q2 2023 Adjusted Gross Margin1 Comparison Pricing, cost savings, and favorable foreign exchange offset margin headwinds flat 0.9% 1.5% 1.7% 1.4% 44.9% 1.0% 44.9% 0.9% 0.8% Gross Margin improvement expected in 2H (1) Amounts may not foot due to rounding. Please see Appendix – Reconciliation of Non-GA
Slide 14: Q2 2023 Advertising and Adjusted SG&A
Q2 2023 Advertising and Adjusted SG&A 1 Advertising flat, Adjusted SG&A benefited from cost savings Advertising Adj. SG&A (in millions) (in millions) -$19 Flat $343 $324 $90 $90 n/m n/m Q2'22 Q2'23 Q2'22 Q2'23 Effectively managing cost structure (1) Please see Appendix – Reconciliation of Non-GAAP F
Slide 15: Q2 2023 Adjusted Operating Income and Adjusted EBITDA
Q2 2023 Adjusted Operating Income and Adjusted EBITDA 1 1 Decline primarily due to lower sales, partly offset by lower Adjusted SG&A1 Adj. Operating Income Adj. EBITDA (in millions) (in millions) $185 -$37 $148 $121 -$47 $75 Q2'22 Q2'23 Q2'22 Q2'23 Expect to achieve full year Adjusted EBITDA guidanc
Slide 16: YTD 2023 Cash Flow
YTD 2023 Cash Flow Cash Flow improvement primarily driven by working capital performance, partly offset by lower Net Income (in millions)1 Q2 2023 Q2 2022 Net Income (Loss) ($79) $88 Depreciation & Amortization $87 $91 Share-Based Compensation $37 $38 Other Non-Cash Charges $20 $27 Changes in Workin
Slide 17: Q2 2023 Balance Sheet Highlights
Q2 2023 Balance Sheet Highlights Meaningful reduction in owned inventory (in millions) Q2 2023 Q2 2022 Cash $300 $275 Debt $2,328 $2,576 Accounts Receivable $891 $989 Inventory $972 $1,178 Leverage Ratio (Total Debt / Adj. EBITDA)1 3.1x 2.3x Increase in Leverage Ratio primarily due to the timing of
Slide 18: Optimizing For Growth
Optimizing For Growth Q2 2023 savings of $24 million Cumulative Savings $300 $300 A&P 2023 ~10% $106 Program to date savings of $257 million SG&A ~30% 2022 Total estimated cash expenditures now $97 $155 - $185 million COGS 2021 ~60% Savings 2021 2022 2023 Allocation in millions On track to achieve $
Slide 19: 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 20: Q2 2023 Closing
Q2 2023 Closing “Mattel’s second quarter financial results were in-line with our expectations. We significantly increased free cash flow and continued to gain market share. Importantly, this moment will be remembered as a key milestone in our company’s history with the release of the Barbie movie, o
Slide 21: One of the strongest catalogs of children's and family entertainment franchises in the world
Q2 2023 Earnings Call One of the strongest catalogs of children’s and family entertainment franchises in the world ©2023 Mattel, Inc. All Rights Reserved. 21
Slide 22: Appendix
Appendix 22
Slide 23: Consolidated Statements of Operations
Consolidated Statements of Operations ©2023 Mattel, Inc. All Rights Reserved. 23
Slide 24: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets ©2023 Mattel, Inc. All Rights Reserved. 24
Slide 25: Supplemental Balance Sheet and Cash Flow Data
Supplemental Balance Sheet and Cash Flow Data ©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: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures ©2023 Mattel, Inc. All Rights Reserved. 31
Slide 32: Worldwide Net Sales and Gross Billings
Worldwide Net Sales and Gross Billings ©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: Net Sales and Gross Billings by Segment
Net Sales and Gross Billings by Segment ©2023 Mattel, Inc. All Rights Reserved. 35
Slide 36: 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 37: 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