Matthews International Corporation · NASDAQ:MATW

Matthews International — Q1 2018 Earnings Presentation

34 slides from Matthews International's earnings presentation, Feb 23, 2018

  1. Slide 1: Investor Presentation 1st Quarter Fiscal 2018

    ©2016 Matthews International Corporation. All Rights Reserved. INVESTOR PRESENTATION 1st QUARTER FISCAL 2018

  2. Slide 2: Business Overview

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

  3. Slide 3: Disclaimer

    ©2016 Matthews International Corporation. All Rights Reserved. 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

  4. Slide 4: Matthews

    ©2016 Matthews International Corporation. All Rights Reserved. Matthews  Founded in 1850 – headquartered in Pittsburgh, PA  Three business segments:  SGK Brand Solutions  Memorialization  Industrial Technologies  Approximately 11,000 employees  Over 25 countries  NASDAQ – 32.3 million shares

  5. Slide 5: Fiscal 2017 Sales by Segment

    ©2016 Matthews International Corporation. All Rights Reserved. 51% 8% 41% Memorialization SGK Brand Solutions Industrial Technologies 5 Fiscal 2017 Sales

  6. Slide 6: SGK Brand Solutions

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

  7. Slide 7: SGK Brand Solutions

    ©2016 Matthews International Corporation. All Rights Reserved. SGK Brand Solutions 7 Monoprix, a major city center retailer in France, teamed up with Brandimage to launch its new Food To Go line. Anthem developed a three-year ―Live Your Break‖ connected platform for Nestlé KitKat. The activity combi

  8. Slide 8: SGK Brand Solutions

    ©2016 Matthews International Corporation. All Rights Reserved. SGK Brand Solutions 8 Premedia / Tooling / Merchandising = + Marketing / Packaging Execution Marketing / Packaging Execution SGK Brand Solutions Creative / Adaptive

  9. Slide 9: SGK Brand Solutions

    ©2016 Matthews International Corporation. All Rights Reserved. SGK Brand Solutions • SGK Brand Solutions has longstanding relationships with a large, blue chip customer base consisting of many of the Fortune 100 and Fortune 50 companies • Through brand development, SGK Brand Solutions has developed

  10. Slide 10: Memorialization

    ©2016 Matthews International Corporation. All Rights Reserved. MEMORIALIZATION 10

  11. Slide 11: Matthews Architectural Products and Memorialization

    ©2016 Matthews International Corporation. All Rights Reserved. 11 Matthews Architectural Products - Building signs are an example of the segment’s architectural product offerings. Memorialization Bronze Memorials Forest Park West Cemetery Cremation Garden

  12. Slide 12: Memorialization

    ©2016 Matthews International Corporation. All Rights Reserved. 12 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

  13. Slide 13: Memorialization: Casketed Deaths vs. Total Deaths

    ©2016 Matthews International Corporation. All Rights Reserved. - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Total US Deaths Casketed Deaths 13 Memoria

  14. Slide 14: Industrial Technologies

    ©2016 Matthews International Corporation. All Rights Reserved. INDUSTRIAL TECHNOLOGIES 14

  15. Slide 15: Industrial Technologies

    ©2016 Matthews International Corporation. All Rights Reserved. 15 Industrial Technologies Non-contact ink-jet printing units apply print on products. Multiple integrated distribution and fulfillment systems (including laser-based identification and dimensioning technologies) communicate in a warehou

  16. Slide 16: Financial Overview

    ©2016 Matthews International Corporation. All Rights Reserved. Financial Overview 16

  17. Slide 17: Key Elements of Long-Term EPS Growth

    ©2016 Matthews International Corporation. All Rights Reserved. Key Elements of Long-Term EPS Growth  Internal Growth  Expand market presence of existing products  Manufacturing/cost structure improvements  New product development  Acquisitions  Primary objective to support strategic business p

  18. Slide 18: Consolidated Results

    ©2016 Matthews International Corporation. All Rights Reserved. Consolidated Results 18 2015 2016 2017 2016 (a) 2017 (unaudited) (unaudited) Sales 1,426,068$ 1,480,464$ 1,515,608$ 348,998$ 369,454$ Operating Profit 105,023$ 118,815$ 112,603$ 19,063$ 17,924$ Adj. Operating Profit (b) 141,906$ 154,872$

  19. Slide 19: Segment Operating Results (as reported)

    ©2016 Matthews International Corporation. All Rights Reserved. Segment Operating Results (as reported) 19 (Dollars in thousands) 2015 2016 2017 2016 2017 Sales: (unaudited) (unaudited) SGK Brand Solutions 798,339$ 755,975$ 770,181$ 175,801$ 191,766$ Memorialization 508,058 610,142 615,882 145,622 14

  20. Slide 20: Segment Results – Sales & Adjusted EBITDA

    ©2016 Matthews International Corporation. All Rights Reserved. 20 (Dollars in thousands) 2015 2016 2017 2016 2017 Sales: (unaudited) (unaudited) SGK Brand Solutions 798,339$ 755,975$ 770,181$ 175,801$ 191,766$ Memorialization 508,058 610,142 615,882 145,622 144,889 Industrial Technologies 119,671 11

  21. Slide 21: Free Cash Flow

    ©2016 Matthews International Corporation. All Rights Reserved. Free Cash Flow 21 (Dollars in thousands) 2015 2016 2017 Net Income 63,449$ 66,749$ 74,368$ Depreciation and Amortization 62,620 65,480 67,981 Stock-Based Compensation 9,097 10,612 14,562 Pension Cost (non-service portion) 5,677 8,413 8,7

  22. Slide 22: Free Cash Flow Yield

    ©2016 Matthews International Corporation. All Rights Reserved. Free Cash Flow Yield 22 2015 2016 2017 Free Cash Flow (1) 92,592$ 109,572$ 120,749$ Market Capitalization 1,609,892$ 1,952,929$ 2,001,249$ Free Cash Flow Yield (1) 5.75% 5.61% 6.03% Free Cash Flow Yield (based on 12/31/2017 Market Capita

  23. Slide 23: Earnings Per Share

    ©2016 Matthews International Corporation. All Rights Reserved. Earnings Per Share 23 Note: Adjusted earnings per share reflects certain adjustments to facilitate comparability and other adjustments. See reconciliation at Appendix C. Earnings Per Share Adjusted Earnings Per Share $0.00 $0.50 $1.00 $1

  24. Slide 24: EBITDA

    ©2016 Matthews International Corporation. All Rights Reserved. EBITDA (Dollars in millions) 24 Note: EBITDA represents earnings before interest expense, income taxes, depreciation and amortization. See reconciliation at Appendix B. Adjusted EBITDA represents EBITDA plus certain expenses, and also re

  25. Slide 25: Common Stock Price

    ©2016 Matthews International Corporation. All Rights Reserved. Common Stock Price 25 Note: Stock price obtained from NASDAQ for each respective month-end period. $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $50.74 $35.18 $35.36 $30.73 $29.82 $38.08 $43.89 $48.97 $60.76 $62.25 $52.80

  26. Slide 26: Recent Highlights

    ©2016 Matthews International Corporation. All Rights Reserved. Recent Highlights  Company raised fiscal 2018 non-GAAP earnings per share expectations to be better than 10% over fiscal 2017  Reported record sales of $1.52 billion in fiscal 2017  Increased quarterly dividend 11.8% to 19.0 cents (No

  27. Slide 27: Institutional Shareholders

    ©2016 Matthews International Corporation. All Rights Reserved. Institutional Shareholders 27 Shares 12/31/2017 BlackRock Institutional Trust Company, N.A. 4,166,858 The Vanguard Group, Inc. 3,217,078 Franklin Advisory Services, LLC 2,955,118 Wellington Management Company, LLP 1,465,646 Dimensional F

  28. Slide 28: Appendices

    ©2016 Matthews International Corporation. All Rights Reserved. Appendices 28

  29. Slide 29: Adjusted Operating Profit Non-GAAP Reconciliation

    ©2016 Matthews International Corporation. All Rights Reserved. Adjusted Operating Profit Non-GAAP Reconciliation 29 Appendix A (Dollars in thousands) 2015 2016 2017 2016 2017 SGK Brand Solutions Operating Profit 21,864$ 42,909$ 24,919$ 4,190$ 3,152$ Acquisition-related items (1) 33,605 24,872 21,103

  30. Slide 30: EBITDA and Adjusted EBITDA Non-GAAP Reconciliation

    ©2016 Matthews International Corporation. All Rights Reserved. EBITDA and Adjusted EBITDA Non-GAAP Reconciliation 30 Appendix B (Dollars in thousands) 2015 2016 2017 2016 (1) 2017 Net Income 63,449$ 66,749$ 74,368$ 10,322$ 35,180$ Interest expense 20,610 24,344 26,371 6,148 7,801 Income tax provisio

  31. Slide 31: Adjusted Earnings Per Share Non-GAAP Reconciliation

    ©2016 Matthews International Corporation. All Rights Reserved. Adjusted Earnings Per Share Non-GAAP Reconciliation 31 Appendix C 2015 2016 2017 2016 (1) 2017 EPS - GAAP 1.91$ 2.03$ 2.28$ 0.32$ 1.10$ Acquisition-related items 0.79 0.74 0.65 0.19 0.09 Intangible asset w rite-offs 0.10 - - - - Litigati

  32. Slide 32: Adjusted Net Income Non-GAAP Reconciliation

    ©2016 Matthews International Corporation. All Rights Reserved. Adjusted Net Income Non-GAAP Reconciliation 32 Appendix D (Dollars in thousands) Pretax After Tax Pretax After Tax Pretax After Tax Net Income 89,652$ 63,449$ 95,234$ 66,749$ 96,287$ 74,368$ Acquisition-related items 38,865 26,428 34,674

  33. Slide 33: Adjusted EBITDA by Segment Non-GAAP Reconciliation

    ©2016 Matthews International Corporation. All Rights Reserved. Adjusted EBITDA by Segment Non-GAAP Reconciliation 33 Appendix E (Dollars in t housands) 2015 2016 2017 2016 (1) 2017 S GK Br a nd S ol ut i ons Operat ing Prof it 21,864$ 42,909$ 24,919$ 4,190$ 3,152$ Depreciat ion and amort izat ion (2

  34. Slide 34: Operating Assets and Total Assets by Segment

    ©2016 Matthews International Corporation. All Rights Reserved. 34 (a) Operating assets include accounts receivable, net, inventories and property, plant and equipment, net. (Dollars in thousands) (unaudited) SGK Brand Solutions Memorialization Industrial Technologies Corporate Total Operating assets

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