Matthews International Corporation · NASDAQ:MATW
Matthews International — FY2021 Earnings Presentation
35 slides from Matthews International's earnings presentation, Dec 1, 2021
Slide 1: December 2021 Investor Presentation: Fiscal Year 2021 Highlights
DECEMBER 2021 INVESTOR PRESENTATON FISCAL YEAR 2021 BUSINESS AND FINANCIAL HIGHLIGHTS; CHANGES TO REPORTING SEGMENTS www.matw.com | Nasdaq: MATW Exhibit 99.1
Slide 2: 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
Slide 3: Business Overview
Matthews INTERNATIONAL BUSINESS OVERVIEW Matthews
Slide 4: Matthews at a Glance
Note: All figures reflect fiscal years ended September 30th. 1 Effective in the first quarter of fiscal 2022, the Company transferred its surfaces and engineered products businesses from the SGK Brand Solutions segment to the Industrial Technologies segment. The above chart sets forth sales and adju
Slide 5: Segment Overview
($mm) Overview A leading supplier to the U.S. funeral industry, including provision of memorials, cremation equipment and caskets Leading provider of brand solutions to many of the world’s strongest brands and only provider with a network of global operations and services in the brand and graphics s
Slide 6: Future of Industrial Technologies: Energy Storage Solutions Opportunity
Stringent rules and regulations on emissions Growing demand for fuel efficient and low emission vehicles Increasing government support FUTURE OF INDUSTRIAL TECHNOLOGIES SEGMENT ENERGY STORAGE SOLUTIONS OPPORTUNITY Effective in the first quarter of fiscal 2022, Matthews transferred its energy storage
Slide 7: Future of Industrial Technologies: Warehouse Automation
FUTURE OF INDUSTRIAL TECHNOLOGIES SEGMENT WAREHOUSE AUTOMATION Systems communicate in a warehouse to identify and route items and parcels through the facility and out to a customer DISTRIBUTION AND FULFILLMENT SYSTEMS PYRAMID PICK-TO-LIGHT SYSTEMS AUTONOMOUS VEHICLE NAVIGATION Proven platform integr
Slide 8: Future of Industrial Technologies: Inkjet Organic Growth Opportunity
FUTURE OF INDUSTRIAL TECHNOLOGIES SEGMENT INKJET ORGANIC GROWTH OPPORTUNITY Product identification dates back to Matthews’ original branding irons and hand stamps from the 1850s Matthews identified a significant market opportunity to displace incumbent continuous inkjet (CIJ) technology, which is co
Slide 9: Business Update and Opportunities
BUSINESS UPDATE AND OPPORTUNITIES BUSINESS UPDATE GROWTH OPPORTUNITIES Strong results in FY2021 including positive growth in consolidated sales and adjusted EBITDA despite challenging operating environment Consolidated sales and adjusted EBITDA of $1.7bn and $228mm1 (13.6% margin2), respectively Con
Slide 10: Key Credit Highlights
Matthews INTERNATIONAL KEY CREDIT HIGHLIGHTS ry — Matthews ce Matthows international Corporation. All Rights Reserved |
Slide 11: Key Credit Highlights
KEY CREDIT HIGHLIGHTS FAVORABLE COMPETITIVE POSITIONS IN ATTRACTIVE ADDRESSABLE MARKETS DISCIPLINED TRACK RECORD OF ACQUISITIONS AND INTEGRATION ROBUST CASH FLOW AND LOW LEVERAGE SUPPORTING CONSERVATIVE FINANCIAL POLICY Well diversified cash flows with attractive margin and Free Cash Flow profile ST
Slide 12: Favorable Competitive Positioning of Each Segment
Each of MATW’s business segments enjoys favorable competitive positioning… A B C Strong operating platforms and leading market positions STRONG HISTORY OF 170+ YEARS ROOTED IN IDENTIFICATION PRODUCTS #1 / #2 market positions Distribution footprint allows for efficient delivery and a wide-spread cust
Slide 13: Attractive Markets and Growth Opportunities
A B C Attractive markets and growth opportunities Stable casket demand driven by increased deaths as a result of population growth Strong presence and growing revenue in cremation supported by long-term cultural shift away from casketed deaths Investment in innovations to drive profitability Expandi
Slide 14: Memorialization Market Position and Competitive Advantages
1 MEMORIALIZATION MARKET POSITION COMPETITIVE ADVANTAGES LEADING MARKET POSITION STRONG BRAND AND REPUTATION Respected and growing market leader within the death care services industry ü DEEP CUSTOMER RELATIONSHIPS Provides innovative, value-added services to help clients grow their businesses BREAD
Slide 15: Stability in Memorialization with Growth Potential
1 STABILITY IN MEMORIALIZATION WITH GROWTH POTENTIAL Relatively stable demand driven by predictable trends: increased deaths and rising cremation rates CASKETED VS. NON-CASKETED DEATHS1 SALES OF CREMATION PRODUCTS2 ($mm) A ADDITIONAL GROWTH OPPORTUNITIES New 3D printing technology presents opportuni
Slide 16: SGK Market Position and Strategic Initiatives
1 SGK MARKET POSITION & STRATEGIC INITIATIVES B Extend revenue opportunity within the core pack business Improving focus and messaging in the marketplace Redesigning, rebranding and bundling products and services Continued focus on ESG through sustainability and D&I initiatives Continue to evolve th
Slide 17: Industrial Technologies Market Position
1 INDUSTRIAL TECHNOLOGIES MARKET POSITION SUB-SEGMENTS COMPETITIVE ADVANTAGES Energy Storage Solutions Design and build advanced purpose built equipment including tooling that supports lithium-ion battery production Leader in the renewable energy market with advanced manufacturing solutions for lith
Slide 18: Well Diversified Cash Flows with Attractive Margin and FCF Profile
WELL DIVERSIFIED CASH FLOWS WITH ATTRACTIVE MARGIN AND Free Cash Flow PROFILE 2 SALES BY SEGMENT ADJ. EBITDA ($mm)1 FREE CASH FLOW4 ($mm) ADJ. EBITDA BY SEGMENT % Adjusted EBITDA margin3 14.4% 13.6% 13.6% x% % Free Cash Flow conversion5 42.2% 71.7% 54.0% x% Note: All figures reflect fiscal years end
Slide 19: Disciplined Track Record of Acquisitions and Integration
DISCIPLINED TRACK RECORD OF ACQUISITIONS AND INTEGRATION 3 Principal objective Identify and integrate complementary businesses with an insistence on prudent capital deployment Focus on complementary geographies with minimal customer overlap Financial criteria Immediately accretive to earnings per sh
Slide 20: Robust Cash Flow and Low Leverage
ROBUST CASH FLOW AND LOW LEVERAGE SUPPORTING CONSERVATIVE FINANCIAL POLICY 4 CASH FLOW SUMMARY FINANCIAL LEVERAGE2 FREE CASH FLOW ($mm)1 CAPITAL EXPENDITURES ($mm) Note: All figures reflect fiscal years ended September 30th; Historical FY2017 – FY2018 reflects public filing figures. 1 Defined as cas
Slide 21: Strong and Experienced Management Team
STRONG AND EXPERIENCED MANAGEMENT TEAM Joseph Bartolacci Chief Executive Officer and President Chief Executive Officer and President since 2006 and previously served as Chief Operating Officer from 2005-2006 President of York Casket division and EVP of Matthews from 2004-2005 Joined Matthews in 1997
Slide 22: Financial Overview
FINANCIAL OVERVIEW TBU – new image
Slide 23: COVID-19 Impacts
COVID-19IMPACTS MATTHEWS REMAINED A CRITICAL SUPPLIER Operated as an essential supplier through the pandemic Effectively met global demand with virtual information technology enabled environment and flexible workforce PRUDENT MANANGEMENT THROUGH PANDEMIC Strategic initiatives to reduce costs, manage
Slide 24: Segment Highlights and Outlook
Record quarterly sales with higher sales across all segments Realized savings from cost-reduction program Higher expected direct material costs as well as higher labor and freight costs in FY2022 Improved price realization, with higher sales of cemetery memorial products and cremation equipment Risi
Slide 25: Financial Policy and Capital Allocation Strategy
FINANCIAL POLICY AND CAPITAL ALLOCATION STRATEGY DEBT REDUCTION Historically maintained a modest leverage profile Publicly stated leverage target of 3.0x or less Near-term focus on cash flow and continued debt reduction Approximately $200mm of debt repayment since the beginning of the pandemic Settl
Slide 26: Financial Summary
FINANCIAL SUMMARY SALES BY SEGMENT ($mm) ADJ. EBITDA1 BY SEGMENT ($mm) Y-o-Y Growth (%) 0.9% 2.5% 0.9% 3.0% 17.2% 1.9% 4.6% (7.6)% nm 0.6% 13.3% 28.1% (5.7)% nm 24.5% Note: All figures reflect fiscal years ended September 30th; Historical FY2017 – FY2018 reflects public filing figures. 1 Total adjus
Slide 27: ESG Overview
ESG OVERVIEW
Slide 28: Commitment to Sustainability
COMMITMENT TO SUSTAINABILITY ESG IS AT THE CORE OF OPERATIONS MATTHEWS IS COMMITTED TO BUILDING A BETTER WORLD Bringing environmentally responsible solutions to market Sustainability improvement projects Socially responsible employment environment KEY AREAS OF ENVIRONMENTAL METRICS FOCUS IDENTIFIED
Slide 29: Appendix
APPENDIX hy -_— 7anark Matthews
Slide 30: Total Adjusted EBITDA Reconciliation
TOTAL ADJUSTED EBITDA RECONCILIATION FYE September 30, $mm 2017A 2018A 2019A 2020A 2021A Net income (loss) $73.9 $107.1 ($38.9) ($87.7) $2.9 Income tax provision (benefit) $22.4 ($9.1) $0.8 ($18.7) $6.4 Income (loss) before income taxes $96.3 $98.0 ($38.1) ($106.3) $9.2 Net loss attributable to nonc
Slide 31: Segment Reclassification Reconciliation
Revenue FYE September 30, 2020A 2021A $mm SGK Industrial Technologies SGK Industrial Technologies Total Historical $693.1 $149.2 $726.9 $175.1 Surfaces & Engineered Products ($79.3) $79.3 ($109.4) $109.4 Total Reclassified $613.8 $228.5 $617.5 $284.5 Adjusted EBITDA FYE September 30, 2020A 2021A $mm
Slide 32: Free Cash Flow Reconciliation
FREE CASH FLOW RECONCILIATION FYE September 30, $mm 2017A 2018A 2019A 2020A 2021A Cash Flow from Operating Activities $149.3 $147.6 $131.1 $180.4 $162.8 Less: Capital Expenditures ($44.9) ($43.2) ($37.7) ($34.8) ($34.3) Free Cash Flow $104.4 $104.4 $93.4 $145.6 $128.5
Slide 33: Total and Net Leverage Reconciliation
TOTAL AND NET LEVERAGE RECONCILIATION FYE September 30, $mm 2017A 2018A 2019A 2020A 2021A Total Debt $911.1 $960.6 $940.7 $834.5 $763.7 Less: Cash ($57.5) ($41.6) ($35.3) ($41.3) ($49.2) Net Debt $853.6 $919.0 $905.4 $793.2 $714.5 Adj. EBITDA $238.7 $255.1 $220.9 $203.1 $227.9 Debt / Adj. EBITDA 3.8
Slide 34: Global Corporate Structure
GLOBAL CORPORATE STRUCTURE ¹ Defined as subsidiary with a) individual total assets of > $50.0mm (excluding intercompany advances) or (b) aggregate total assets (with other non-loan party subsidiaries) of > $200mm (excluding intercompany advances); 100.0% of stock pledged ² Same materiality as above;
Slide 35: Matthews
Matthews INTERNATIONAL® &- Daaie Mainew [x] Matthews -* 7, A NZ Do, 4 Shy 4
Matthews International — FY2021 Earnings Presentation on 6ix