Matthews International Corporation · NASDAQ:MATW
Matthews International — Q3 2019 Earnings Presentation
32 slides from Matthews International's earnings presentation, Sep 6, 2019
Slide 1: Investor Presentation Third Quarter Fiscal Year 2019
INVESTOR PRESENTATION THIRD 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 • Industrial Technologies • Printing Plates • SGK Brand Solutions • Bronze Plaques • Memorialization © 2019 Matthews International Corporation. All Rights Reserved. 4
Slide 5: Fiscal 2018 Segment Sales
FISCAL 2018 SEGMENT SALES (% of Total ) Memorialization SGK Brand 40% Solutions 50% 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 (FY18) AMERICAS EUROPE ASIA-PACIFIC / OTHER 67% 28% 5% ~11,000 EMPLOYEES | 6 CONTINENTS | OVER 25 COUNTRIES NASDAQ LISTED – 31.5M Shares outstanding as of June 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: Broad Capabilities on a Global Scale
BROAD CAPABILITIES ON A GLOBAL SCALE Creative Design Artwork Production Tooling © 2019 Matthews International Corporation. All Rights Reserved. 8
Slide 9: 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. 9
Slide 10: 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. 10
Slide 11: 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 12: © 2019 Matthews International Corporation. All Rights Reserved.
© 2019 Matthews International Corporation. All Rights Reserved.
Slide 13: 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 14: 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 15: © 2019 Matthews International Corporation. All Rights Reserved.
© 2019 Matthews International Corporation. All Rights Reserved.
Slide 16: 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 17: Warehouse Automation and Applied Technology
WAREHOUSE AUTOMATION AND APPLIED TECHNOLOGY 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 fu
Slide 18: Overview
Matthews Bien INTERNATIONAL’ OVERVIEW
Slide 19: 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 20: Consolidated Results
CONSOLIDATED RESULTS (Dollars in thousands, Fiscal Year Ended September 30, YTD June 30, except per share data) 2016 2017 2018 2018 2019 (unaudited) (unaudited) Consolidated Sales $ 1,480,464 $ 1,515,608 $ 1,602,580 $ 1,195,136 $ 1,144,871 Net Income Attributable to Matthews $ 66,749 $ 74,368 $ 107,
Slide 21: Segment Operating Results
SEGMENT OPERATING RESULTS (Dollars in thousands) Fiscal Year Ended September 30, YTD June 30, 2016 2017 2018 2018 2019 Sales: (unaudited) (unaudited) SGK Brand Solutions $ 755,975 $ 770,181 $ 805,274 $ 601,794 $ 557,881 Memorialization 610,142 615,882 631,392 475,557 474,279 Industrial Technologies
Slide 22: 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
Slide 23: 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 $2.28 $2.50 $2.03 $2.50 $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
Slide 24: Sales and Total Adjusted EBITDA
SALES AND 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 $239.6 $238.7 $1,400.0 $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 2
Slide 25: Common Stock Price
COMMON STOCK PRICE $70.00 $62.25 $60.76 $60.00 $50.74 $48.97 $50.15 $50.00 $43.89 $38.08 $40.00 $35.18 $35.36 $30.73 $29.82 $30.00 $20.00 $10.00 $0.00 09/30/2008 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 Note: Stock price obtained f
Slide 26: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Debt Reduction • Target less than 3x Adjusted EBITDA(1) Capitalization (in millions) Annualized Cash Dividend (Current) $1,829.3 $1,828.0 • $0.80 per share for FY2019 Invest in Growth $868.7 $848.4 • Three-year average capex ~2.8% of revenue Acquisitions • Extend capabi
Slide 27: Institutional Shareholders
INSTITUTIONAL SHAREHOLDERS Shares June 30, 2019 BlackRock, Inc. 4,655,999 The Vanguard Group, Inc. 3,441,174 Franklin Resources, Inc. 2,953,421 Dimensional Fund Advisors, L.P. 1,868,479 Clarkston Capital Partners, LLC 1,459,961 Wellington Management Group, LLP 1,230,547 State Street Corporation 925,
Slide 28: Appendices
Matthews INTERNATIONAL® APPENDICES
Slide 29: Total Adjusted EBITDA (Non-GAAP Reconciliation) Appendix A
TOTAL ADJUSTED EBITDA (NON-GAAP RECONCILIATION) APPENDIX A (Dollars in thousands) Fiscal Year Ended September 30, YTD June 30, (unaudited) 2016 2017 2018 2018 2019 Net income $ 66,161 $ 73,933 $ 107,111 $ 77,575 $ 32,602 Income tax provision (benefit) 29,073 22,354 (9,118) (18,703) 4,429 Income befo
Slide 30: Adjusted Net Income & EPS (Non-GAAP Reconciliation) Appendix B
ADJUSTED NET INCOME & EPS (NON-GAAP RECONCILIATION) APPENDIX B (Dollars in thousands, Fiscal Year Ended September 30, YTD June 30, 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 $ 74,36
Slide 31: Additional Segment Information Supplemental Asset Data Appendix C
ADDITIONAL SEGMENT INFORMATION SUPPLEMENTAL ASSET DATA APPENDIX C (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
Slide 32: Proprietary and Confidential Notice
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 — Q3 2019 Earnings Presentation on 6ix