Matthews International Corporation · NASDAQ:MATW

Matthews International — Q3 2016 Earnings Presentation

31 slides from Matthews International's earnings presentation, August 2016

  1. Slide 1: Investor Presentation 3rd Quarter Fiscal 2016

    INVESTOR PRESENTATION 3RD QUARTER FISCAL 2016 ©2016 Matthews International Corporation. All Rights Reserved.

  2. Slide 2: Business Overview

    Business Overview ©2016 Matthews International Corporation. All Rights Reserved. 2

  3. Slide 3: Disclaimer

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

  4. Slide 4: Matthews

    Matthews  Founded in 1850 – headquartered in Pittsburgh, PA  Three business segments:  SGK Brand Solutions  Memorialization  Industrial Technologies  Over 10,000 employees  Over 25 countries  NASDAQ – 32.1 million shares outstanding, as of June 30, 2016 ©2016 Matthews International Corporati

  5. Slide 5: Sales

    Sales FISCAL 2015 SGK Brand Solutions Memorialization Industrial SGK Brand Solutions 56% Technologies Memorialization 36% Industrial Technologies 8% 100% ©2016 Matthews International Corporation. All Rights Reserved. 5

  6. Slide 6: SGK Brand Solutions

    SGK BRAND SOLUTIONS ©2016 Matthews International Corporation. All Rights Reserved. 6

  7. Slide 7: SGK Brand Solutions

    SGK Brand Solutions Delivering Brand Performance Brand Brand Brand Development Deployment Performance Create + Premedia Tooling = Improved top- line growth Activate Improved Merchandising bottom-line performance ©2016 Matthews International Corporation. All Rights Reserved. 7

  8. Slide 8: SGK Brand Solutions

    SGK Brand Solutions iDL Worldwide, a brand services firm within the SGK Brand Solutions segment, brought Sunglass Hut’s “Punk- The full U.K. packaging portfolio for Kit Kat was redesigned by It-Up!” campaign to life with this pop-up experience in Anthem, a global creative agency that is part of the

  9. Slide 9: Memorialization

    MEMORIALIZATION ©2016 Matthews International Corporation. All Rights Reserved. 9

  10. Slide 10: Memorialization

    Memorialization Building signs are an example of the segment’s architectural product offerings. Matthews is well known for its heritage of creating beautiful, time-tested bronze memorials. The segment designs unique glass-front niches to meet the growing demand for cremation memorialization. ©2016 M

  11. Slide 11: Memorialization

    Memorialization The Company is a leading manufacturer and distributor of caskets (wood, metal and cremation) in North America. The Super Power Pak III Plus cremation unit has some of the most advanced features in combustion technology as well as industry leading performance, reliability and support.

  12. Slide 12: Memorialization: Casketed Deaths vs. Total Deaths

    Memorialization  Casketed Deaths vs. Total Deaths Non-Cremation *Total anticipated deaths per US Census Bureau 2009 projections Data compiled from CDC, US Census Bureau, Industry reports and internal projections. ©2016 Matthews International Corporation. All Rights Reserved. 12

  13. Slide 13: Industrial Technologies

    INDUSTRIAL TECHNOLOGIES ©2016 Matthews International Corporation. All Rights Reserved. 13

  14. Slide 14: Industrial Technologies

    Industrial Technologies Driven by sophisticated automation software and controls, multiple integrated distribution and fulfillment systems (including laser-based identification and dimensioning technologies) communicate in a warehouse to identify and route items and parcels through the facility and

  15. Slide 15: Financial Overview

    Financial Overview ©2016 Matthews International Corporation. All Rights Reserved. 15

  16. Slide 16: Key Elements of Long-Term EPS Growth

    Key Elements of Long-Term EPS Growth  Internal Growth  Expand market presence of existing products  New product development  Manufacturing/cost structure improvements  Acquisitions  Share Repurchases ©2016 Matthews International Corporation. All Rights Reserved. 16

  17. Slide 17: Acquisition Program

    Acquisition Program Principal objective: Support existing business plans of each operating segment and long-term growth objectives of the Company. Financial criteria: Immediately accretive to EPS. Achieve long-term target of an annual return (EBITDA) on invested capital of 15%. ©2016 Matthews Intern

  18. Slide 18: Consolidated Results

    Consolidated Results (Dollars in thousands, Fiscal year ended September 30, YTD June 30, except per share data) 2013 2014 2015 2015 2016 (unaudited) (unaudited) Sales $ 985,357 $1,106,597 $1,426,068 $1,057,730 $1,103,469 Operating Profit $ 94,615 $ 81,522 $ 105,023 $ 72,265 $ 79,143 Adj. Operating P

  19. Slide 19: Segment Results – Sales

    Segment Results – Sales (Dollars in thousands) Fiscal year ended September 30, YTD June 30, 2013 2014 2015 2015 2016 Sales: (unaudited) (unaudited) SGK Brand Solutions $ 373,941 $ 497,328 $ 798,339 $ 597,638 $ 562,308 Memorialization 517,911 508,420 508,058 372,076 457,802 Industrial Technologies 93

  20. Slide 20: Segment Results – Operating Profit

    Segment Results – Operating Profit (Dollars in thousands) Fiscal year ended September 30, YTD June 30, 2013 2014 2015 2015 2016 Operating Profit: (unaudited) (unaudited) SGK Brand Solutions $ 13,999 $ 2,536 $ 21,864 $ 5,536 $ 26,108 Memorialization 71,754 67,937 70,064 57,374 48,059 Industrial Techn

  21. Slide 21: Adjusted Free Cash Flow

    Adjusted Free Cash Flow (Dollars in thousands) Fiscal year ended September 30, 2013 2014 2015 Net Income $ 54,121 $ 42,625 $ 63,449 Adjustments to Net Income (1) 10,533 27,416 20,481 Adjusted Net Income 64,654 70,041 83,930 Depreciation and Amortization 37,865 42,864 62,620 Stock-Based Compensation

  22. Slide 22: Earnings Per Share

    Earnings Per Share Earnings Per Share Adjusted Earnings Per Share $3.50 $3.50 $3.03 $3.00 $3.00 $2.69 $2.74 $2.45 $2.53 $2.59 $2.43 $2.50 $2.31 $2.50 $1.95 $1.91 $1.95 $2.00 $2.00 $1.49 $1.50 $1.50 $1.00 $1.00 $0.50 $0.50 $0.00 $0.00 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 Note:

  23. Slide 23: EBITDA

    EBITDA (Dollars in millions) EBITDA Adjusted EBITDA $250.0 $250.0 $216.0 $200.0 $200.0 $173.0 $172.1 $160.9 $160.6 $156.8 $141.4 $146.8 $143.4 $150.0 $131.1 $150.0 $123.9 $120.9 $100.0 $100.0 $50.0 $50.0 $0.0 $0.0 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 Note: EBITDA represents ea

  24. Slide 24: Common Stock Price

    Common Stock Price Note: Stock price obtained from daily adjusted close price for each respective month-end period. ©2016 Matthews International Corporation. All Rights Reserved. 24

  25. Slide 25: Recent Highlights

    Recent Highlights  Acquisition integrations remain on track  Increased quarterly dividend 15.4% to 15.0 cents (November 2015)  21st consecutive annual dividend increase since the Company’s IPO  Reported record sales of $1.4 billion in fiscal 2015  Reported record operating cash flow of $141.1 m

  26. Slide 26: Institutional Shareholders

    Institutional Shareholders Shares 6/30/2016 Franklin Advisory Services, LLC 3,076,200 BlackRock Institutional Trust Company, N.A. 2,827,107 The Vanguard Group, Inc. 2,742,543 T. Rowe Price Associates, Inc. 1,479,692 Wellington Management Company, LLP 1,408,897 Dimensional Fund Advisors, L.P. 1,363,0

  27. Slide 27: Appendices

    Appendices ©2016 Matthews International Corporation. All Rights Reserved. 27

  28. Slide 28: Adjusted Operating Profit

    Appendix A Adjusted Operating Profit Non-GAAP Reconciliation (Dollars in thousands) Fiscal year ended September 30, YTD June 30, 2013 2014 2015 2015 2016 SGK Brand Solutions Operating Profit $ 13,999 $ 2,536 $ 21,864 $ 5,536 $ 26,108 Acquisition-related items 9,408 28,214 33,605 26,455 18,680 Intang

  29. Slide 29: EBITDA and Adjusted EBITDA

    Appendix B EBITDA and Adjusted EBITDA Non-GAAP Reconciliation (Dollars in thousands) Fiscal year ended September 30, YTD June 30, 2013 2014 2015 2015 2016 Net Income $ 54,121 $ 42,625 $ 63,449 $ 46,475 $ 42,886 Interest expense 12,925 12,628 20,610 15,116 18,146 Income taxes 26,174 22,805 26,364 18,

  30. Slide 30: Adjusted Earnings Per Share

    Appendix C Adjusted Earnings Per Share Non-GAAP Reconciliation Fiscal year ended September 30, YTD June 30, 2013 2014 2015 2015 2016 EPS - GAAP $ 1.95 $ 1.49 $ 1.91 $ 1.40 $ 1.30 Acquisition-related items (0.14) 0.71 0.79 0.57 0.57 Intangible asset w rite-offs 0.04 0.10 0.10 Litigation matter 0.07 (

  31. Slide 31: Adjusted Net Income

    Appendix D Adjusted Net Income Non-GAAP Reconciliation (Dollars in thousands) Fiscal year ended September 30, 2013 2014 2015 Pretax After Tax Pretax After Tax Pretax After Tax Net Income $ 80,179 $ 54,121 $ 66,076 $ 42,625 $ 89,652 $ 63,449 Acquisition-related items 3,369 2,291 28,662 19,490 38,865

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