Matthews International Corporation · NASDAQ:MATW

Matthews International — Q2 2018 Earnings Presentation

23 slides from Matthews International's earnings presentation, Apr 27, 2018

  1. Slide 1: Second Quarter Fiscal 2018 Earnings Teleconference

    Second Quarter Fiscal 2018 Earnings Teleconference April 27, 2018 Joseph C. Bartolacci President and Chief Executive Officer Steven F. Nicola Chief Financial Officer ©2018 Matthews International Corporation. All Rights Reserved.

  2. Slide 2: Disclaimer

    Disclaimer  Any forward-looking statements with respect to Matthews International Corporation (the “Company”) in connection with this presentation are being made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve k

  3. Slide 3: Financial Overview

    Financial Overview ©2018 Matthews International Corporation. All Rights Reserved. 3

  4. Slide 4: Q2 FY2018 Highlights

    Q2 FY2018 Highlights EPS - Diluted $0.57 $0.46  Drivers of Q2 EPS growth  Higher sales – all segments  Acquisitions and acquisition Q2 FY2017 Q2 FY2018 synergies  Lower acquisition Adjusted EPS* integration costs $0.93  Lower US tax rates $0.84  Favorable foreign currency Q2 FY17 Q2 FY18 * See

  5. Slide 5: Q2 FY2018 Consolidated Results

    Q2 FY2018 Consolidated Results ($ in millions) Sales GAAP Operating Profit and Margin $414.1 $380.9 $29.8 $26.8 7.0% 7.2% Q2 FY2017 Q2 FY2018 Q2 FY2017 Q2 FY2018 GAAP Gross Profit Adjusted EBITDA* and Margin and Margin $150.0 $62.5 $58.3 $138.4 36.3% 36.2% 15.3% 15.1% Q2 FY2017 Q2 FY2018 Q2 FY2017 Q

  6. Slide 6: 1H FY2018 Consolidated Results

    1H FY2018 Consolidated Results ($ in millions) Sales GAAP Operating Profit $783.5 and Margin $729.9 $47.7 $45.9 6.3% 6.1% 1H FY2017 1H FY2018 1H FY2017 1H FY2018 GAAP Gross Profit Adjusted EBITDA* and Margin and Margin $109.0 $109.0 $280.7 $265.7 36.4% 35.8% 14.9% 13.9% 1H FY2017 1H FY2018 1H FY2017

  7. Slide 7: Q2 FY2018 SGK Brand Solutions Results

    Q2 FY2018 SGK Brand Solutions Results ($ in millions) Sales GAAP Operating Profit and Margin $207.1 $190.1 $5.1 $4.4 2.3% 2.5% Q2 FY2017 Q2 FY2018 Q2 FY2017 Q2 FY2018  Sales growth driven by EMEA, Adjusted EBITDA* acquisitions, favorable currency and Margin  Operating profit includes $4.3 million

  8. Slide 8: 1H FY2018 SGK Brand Solutions Results

    1H FY2018 SGK Brand Solutions Results ($ in millions) Sales GAAP Operating Profit and Margin $398.8 $8.6 $8.2 $365.9 2.3% 2.1% 1H FY2017 1H FY2018 1H FY2017 1H FY2018  Sales growth driven by acquisitions, Adjusted EBITDA* EMEA, APAC, favorable currency; and Margin $47.8 $47.4 partially offset by Am

  9. Slide 9: Q2 FY2018 Memorialization Results

    Q2 FY2018 Memorialization Results ($ in millions) Sales GAAP Operating Profit and Margin $168.7 $23.9 $162.1 $22.9 14.1% 14.2% Q2 FY2017 Q2 FY2018 Q2 FY2017 Q2 FY2018  Sales benefited from Star Granite & Adjusted EBITDA* Bronze acquisition, favorable currency; and Margin $33.2 $33.3 partially offse

  10. Slide 10: 1H FY2018 Memorialization Results

    1H FY2018 Memorialization Results ($ in millions) Sales GAAP Operating Profit* and Margin $307.7 $313.6 $37.3 $38.4 12.1% 12.2% 1H FY2017 1H FY2018 1H FY2017 1H FY2018  Sales benefited from cremation Adjusted EBITDA* equipment, Star Granite & Bronze and Margin acquisition, favorable currency; parti

  11. Slide 11: Q2 FY2018 Industrial Technologies Results

    Q2 FY2018 Industrial Technologies Results ($ in millions) Sales GAAP Operating Profit and Margin $38.3 2 1.5 $28.7 $0.8 1 0.5 2.1% 0 -0.5 -1 ($0.5) Q2 FY2017 Q2 FY2018 Q2 FY2017 Q2 FY2018  Sales benefited from higher organic Adjusted EBITDA* revenue, acquisitions, favorable currency and Margin  Op

  12. Slide 12: 1H FY2018 Industrial Technologies Results

    1H FY2018 Industrial Technologies Results ($ in millions) Sales GAAP Operating Profit and Margin $71.1 $1.1 $56.3 $0.04 1.6% 1H FY2017 1H FY2018 1H FY2017 1H FY2018  Sales benefited from higher organic Adjusted EBITDA* revenue, acquisitions, favorable currency and Margin  Operating profit includes

  13. Slide 13: Capitalization and Cash Flows

    Capitalization and Cash Flows ($ in millions) Debt Operating Cash Flow $56.3 $1,046.3 $911.1 $44.3 9/30/2017 3/31/2018 1H FY2017 1H FY2018  Q2 FY2018 debt increased $20.1 million Cash from Q1 FY2018; financed Star Granite & $64.8 Bronze acquisition $57.5  Strong operating cash flow driven by profi

  14. Slide 14: Business Overview

    Business Overview ©2018 Matthews International Corporation. All Rights Reserved. 14

  15. Slide 15: Business Highlights & Market Climate

    Business Highlights & Market Climate  Robust pipeline driven by solid sales discipline – EMEA tobacco SGK Brand orders, Equator, APAC and Americas new wins ramping up, Ungricht and VCG progressing well Solutions  Minor UK divestiture  Gaining market share – environmental solutions, pet cremation,

  16. Slide 16: Acquisitions Integration

    Acquisitions Integration SGK Brand Solutions  Equator (March 2017)  Ungricht (January 2017)  VCG (January 2017) Memorialization  Star Granite & Bronze (February 2018)  Aurora (August 2015) Industrial Technologies  Compass Engineering (November 2017)  RAF Technology (February 2017) ©2018 Matth

  17. Slide 17: Outlook for Fiscal 2018

    Outlook for Fiscal 2018*  Growth in non-GAAP EPS by at least 10% over FY 2017  Operating cash flow currently expected to exceed FY2017 record level * As of April 26, 2018 ©2018 Matthews International Corporation. All Rights Reserved. 17

  18. Slide 18: Supplemental Information

    Supplemental Information ©2018 Matthews International Corporation. All Rights Reserved. 18

  19. Slide 19: Reconciliations of Non-GAAP Financial Measures

    Reconciliations of Non-GAAP Financial Measures The Company uses non-GAAP financial measures to assist in comparing its performance on a consistent basis for purposes of business decision making by removing the impact of certain items that management believes do not directly reflect the Company’s cor

  20. Slide 20: Adjusted Earnings Per Share

    Adjusted Earnings Per Share Non-GAAP Reconciliation Three Months Ended Six Months Ended March 31, March 31, 2018 2017 2018 2017 (1) Net income attributable to Matthews $ 18,182 $ 14,920 $ 53,362 $ 25,242 Acquisition-related items 5,476 6,738 8,455 12,845 (2) Pension and postretirement expense 1,055

  21. Slide 21: EBITDA and Adjusted EBITDA

    EBITDA and Adjusted EBITDA Non-GAAP Reconciliation Three Months Ended Six Months Ended March 31, March 31, 2018 2017 2018 2017 (1) Net income attributable to Matthews $ 18,182 $ 14,920 $ 53,362 $ 25,242 Interest expense 9,262 6,614 17,063 12,762 (2) Income taxes 2,212 5,973 (23,015) 8,462 Depreciati

  22. Slide 22: Adjusted EBITDA by Segment

    Adjusted EBITDA by Segment Non-GAAP Reconciliation March 31, March 31, 2018 2017 2018 2017 (1) SGK Brand Solutions Operating profit $ 5,090 $ 4,361 $ 8,242 $ 8,551 Depreciation and amortization (2) 12,565 10,926 24,018 19,898 Other (3) (63) 316 (142) 267 EBITDA 17,592 15,602 32,118 28,717 Acquisitio

  23. Slide 23: Second Quarter Fiscal 2018 Earnings Teleconference

    Second Quarter Fiscal 2018 Earnings Teleconference April 27, 2018 ©2018 Matthews International Corporation. All Rights Reserved.

Matthews International — Q2 2018 Earnings Presentation on 6ix