Matthews International Corporation · NASDAQ:MATW
Matthews International — Q3 2022 Earnings Presentation
42 slides from Matthews International's earnings presentation, Nov 3, 2022
Slide 1: Investor Presentation Third Quarter Fiscal Year 2022
INVESTOR PRESENTATION THIRD QUARTER FISCAL YEAR 2022 www.matw.com | Nasdaq: MATW
Slide 2: Disclaimer
© 2022 Matthews International Corporation. All Rights Reserved. 2 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
Slide 3: Business Overview
© 2022 Matthews International Corporation. All Rights Reserved. 3 BUSINESS OVERVIEW
Slide 4: Matthews at a Glance – $1.7B FY2021 Revenue
© 2022 Matthews International Corporation. All Rights Reserved. 4 MATTHEWS AT A GLANCE – $1.7B FY2021 REVENUE Note: 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 Technologi
Slide 5: Engineered Solutions, Product Identification, Warehouse Automation
© 2022 Matthews International Corporation. All Rights Reserved.© 2022 Matthews International Corporation. All Rights Reserved. ENGINEERED SOLUTIONS PRODUCT IDENTIFICATION WAREHOUSE AUTOMATION
Slide 6: Industrial Technologies Products and Markets
© 2022 Matthews International Corporation. All Rights Reserved. 6 INDUSTRIAL TECHNOLOGIES PRODUCTS AND MARKETS COMPETITIVE ADVANTAGEPRINCIPLE PRODUCT LINES • Warehouse Automation systems provides software, hardware and control solutions that allow the tracking and distribution of products with autom
Slide 7: Energy Storage Solutions
© 2022 Matthews International Corporation. All Rights Reserved. 7 ENERGY STORAGE SOLUTIONS • In the first quarter of fiscal 2022, Matthews began reporting its energy storage solutions-related business in the Industrial Technologies segment (previously SGK) • Matthews’ exposure to electric vehicles c
Slide 8: Position Strengthened with Inflation Reduction Act
© 2022 Matthews International Corporation. All Rights Reserved. 8 POSITION STRENGTHENED WITH INFLATION REDUCTION ACT • Projections on incremental GWh installed for US by 2030 was over 600 GWh prior to the IRA • Expect this number to be significantly higher based on the tax credits and incentives ava
Slide 9: Energy Opportunities Reach Beyond EV
© 2022 Matthews International Corporation. All Rights Reserved. 9 ENERGY OPPORTUNITIES REACH BEYOND EV Battery Converting Hydrogen Fuel Cells Rollers & After Sales Service 2022 2027 Converting Hydrogen Fuel Cell Battery Rollers & After Sales Service 5 YEAR POTENTIAL REVENUE DESCRIPTION OF PRODUCTS /
Slide 10: Warehouse Automation
© 2022 Matthews International Corporation. All Rights Reserved. 10 WAREHOUSE AUTOMATION • Warehouse Automation systems provides software, hardware and control solutions that allow the tracking and distribution of products with automated order fulfillment for material handling systems • Material hand
Slide 11: Warehouse Automation Expansion Potential
© 2022 Matthews International Corporation. All Rights Reserved. 11 WAREHOUSE AUTOMATION EXPANSION POTENTIAL • Expand configurability and web interface for information everywhere • Continued growth in e-commerce solutions • Warehouse automation market continues to grow in demand from both greenfield
Slide 12: Product Identification
© 2022 Matthews International Corporation. All Rights Reserved. 12 PRODUCT IDENTIFICATION • 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) techn
Slide 13: New Printhead Technology Drives Additional Demand
© 2022 Matthews International Corporation. All Rights Reserved. 13 NEW PRINTHEAD TECHNOLOGY DRIVES ADDITIONAL DEMAND GLOBAL EXPANSION • Technology miniaturizes valves the same way a transistor miniaturized switches • Business development evaluating additional opportunities in adjacent markets PATENT
Slide 14: Cemetery, Funeral Home, Cremation Products and Equipment
© 2022 Matthews International Corporation. All Rights Reserved.© 2022 Matthews International Corporation. All Rights Reserved. CEMETERY PRODUCTS FUNERAL HOME PRODUCTS CREMATION PRODUCTS AND EQUIPMENT tt s I t r ti l r r ti . ll i ts s rv .
Slide 15: Market Leadership
© 2022 Matthews International Corporation. All Rights Reserved. Cemetery Products Bronze Memorials - #1 Granite Memorials - #1 North America, Italy, Australia 15 Funeral Home Products Caskets - #2 United States Cremation and Incineration Equipment Cremation Equipment - #1 Global Market Position (U.S
Slide 16: Memorialization Market Position
© 2022 Matthews International Corporation. All Rights Reserved. MEMORIALIZATION MARKET POSITION *Company estimates based on industry reports for fiscal year 2022 MARKET POSITIONS (U.S.) Bronze Memorials Granite Memorials Caskets Cremation Equipment COMPETITIVE ADVANTAGE Cremation Equipment / Service
Slide 17: Stability in Memorialization with Growth Potential
© 2022 Matthews International Corporation. All Rights Reserved. * * Note: All financial figures reflect fiscal years ended September 30th. 1 Internal estimates based upon data compiled from CDC, US Census Bureau and Industry reports; 2 Includes incineration products CASKETED VS. NON-CASKETED DEATHS
Slide 18: Strategic Growth Opportunities
© 2022 Matthews International Corporation. All Rights Reserved. STABILITY IN MEMORIALIZATION WITH GROWTH POTENTIAL • Cremation products • Online solutions • Technology services – software as a service • Complimentary new products to funeral homes / cemeteries • 3D printing proprietary capabilities t
Slide 19: SGK Brand Solutions
© 2022 Matthews International Corporation. All Rights Reserved.© 2022 Matthews International Corporation. All Rights Reserved.
Slide 20: Core Packaging Services
© 2022 Matthews International Corporation. All Rights Reserved. 20 PRINTED PACKAGING SKU’s BRAND CREATIVE & DESIGN BRAND ASSETS, CLIENT & LEGAL INPUTS PACKAGING LAYOUT, PRODUCTION ART & COLOR SEPARATION COLOR CONTROL & PRINT TOOLING CORE PACKAGING SERVICES CORE PACKAGING SERVICES
Slide 21: SGK Brand Solutions
© 2022 Matthews International Corporation. All Rights Reserved. SGK BRAND SOLUTIONS FOOD/BEVERAGE CLIENTS GLOBAL PHARMA / HEALTHCARE CLIENTS GLOBAL RETAILER CLIENTS OTHER LEADING BRANDS 21 • Longstanding relationships with a large, blue chip customer base consisting of many Fortune 100 and Fortune 5
Slide 22: SGK's Strategic Initiatives Extend Revenue Opportunity
© 2022 Matthews International Corporation. All Rights Reserved. SGK's STRATEGIC INITIATIVES 22 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 sus
Slide 23: SGK Technology Continues to Drive Growth
© 2022 Matthews International Corporation. All Rights Reserved. 23 CORE PACKAGING SERVICES SGK TECHNOLOGY CONTINUES TO DRIVE GROWTH TODAY Services related to packaging and brand experience Tech stack primarily serves internal users (HubX, Automation Suite,) NEAR-TERM Service expansion into digital T
Slide 24: Investment Thesis
© 2022 Matthews International Corporation. All Rights Reserved. 24 INVESTMENT THESIS
Slide 25: Key Highlights
© 2022 Matthews International Corporation. All Rights Reserved. 25 FAVORABLE COMPETITIVE POSITIONS IN ATTRACTIVE ADDRESSABLE MARKETS DISCIPLINED TRACK RECORD OF ACQUISITIONS AND INTEGRATION ROBUST CASH FLOW AND LOW LEVERAGE SUPPORTING DISCIPLINED FINANCIAL POLICY STABLE CORE BUSINESSES SUPPORT GROWT
Slide 26: Attractive Markets and Growth Opportunities
© 2022 Matthews International Corporation. All Rights Reserved. A B C Attractive markets and growth opportunities • Stable demand driven by increased deaths as a result of population growth • Strong presence and growing revenue in cremation products and equipment • Investment in innovations to drive
Slide 27: Stable Core Businesses Support Growth Opportunities
© 2022 Matthews International Corporation. All Rights Reserved. 27 STABLE CORE BUSINESSES SUPPORT GROWTH OPPORTUNITIES STABLE CORE BUSINESSES GROWTH OPPORTUNITIES • Memorialization – Demographic (death rate) trends support long-term stable demand for core product lines – Strong market positions/cust
Slide 28: Disciplined Track Record of Acquisitions and Integration
© 2022 Matthews International Corporation. All Rights Reserved. 28 3 DISCIPLINED TRACK RECORD OF ACQUISITIONS AND INTEGRATION • Identify and integrate complementary businesses with an insistence on prudent capital deployment • Focus on complementary geographies with minimal customer overlap • Immedi
Slide 29: Robust Cash Flow and Low Leverage
© 2022 Matthews International Corporation. All Rights Reserved. 29 Note: All figures reflect fiscal years ended September 30th; Historical FY1994 – FY2018 reflect amounts as reported in the Company's 10-K filings for those fiscal years. See Disclaimer (Page 2) for Management’s assessment of suppleme
Slide 30: Strong and Experienced Management Team
© 2022 Matthews International Corporation. All Rights Reserved. 30 5 STRONG AND EXPERIENCED MANAGEMENT TEAM Joseph Bartolacci Chief Executive Officer and President Greg Babe Chief Technology Officer Lee Lane Group President of Industrial Automation and Environmental Solutions Steven Gackenbach Group
Slide 31: Financial Overview
© 2022 Matthews International Corporation. All Rights Reserved. 31 FINANCIAL OVERVIEW
Slide 32: Debt Reduction and Growth
© 2022 Matthews International Corporation. All Rights Reserved. 32 DEBT REDUCTION • Historically maintained a modest leverage profile • Publicly stated Net Debt Leverage Ratio (1) target of 3.0x or less • Continued debt reduction, balanced growth and share repurchase • Approximately $190mm of debt r
Slide 33: Sales and Adjusted EBITDA by Segment
© 2022 Matthews International Corporation. All Rights Reserved. 33 (Dollars in thousands) Fiscal Year Ended September 30, Year to Date June 30, 2019 2020 2021 2021 2022 Sales: Memorialization $ 636,892 $ 656,035 $ 769,016 $ 573,068 $ 633,868 Industrial Technologies 239,238 228,453 284,495 200,538 23
Slide 34: ESG Overview
© 2022 Matthews International Corporation. All Rights Reserved. 34 ESG OVERVIEW
Slide 35: Bringing Environmentally Responsible Solutions to the Marketplace
© 2022 Matthews International Corporation. All Rights Reserved. 35 BRINGING ENVIRONMENTALLY RESPONSIBLE SOLUTIONS TO THE MARKETPLACE • Provider of Energy storage solutions including battery production technology for electric vehicles • Waste-to-Energy solutions with projects in UK and Europe SOCIALL
Slide 36: Appendix
© 2022 Matthews International Corporation. All Rights Reserved. 36 APPENDIX
Slide 37: Total Adjusted EBITDA Non-GAAP Reconciliation
© 2022 Matthews International Corporation. All Rights Reserved. TOTAL ADJUSTED EBITDA NON-GAAP RECONCILIATION (Unaudited) * See Disclaimer (page 2) for Management’s assessment of supplemental information related to adjusted EBITDA. 37 (In thousands, except per share data) Fiscal Year Ended September
Slide 38: Adjusted Net Income and EPS Non-GAAP Reconciliation
© 2022 Matthews International Corporation. All Rights Reserved. ADJUSTED NET INCOME AND EARNINGS PER SHARE NON-GAAP RECONCILIATION (Unaudited) * See Disclaimer (page 2) for Management’s assessment of supplemental information related to adjusted net income and adjusted EPS. 38 (In thousands, except p
Slide 39: Net Debt and Net Debt Leverage Ratio
© 2022 Matthews International Corporation. All Rights Reserved. 39 (Dollars in thousands) Fiscal Year Ended September 30, June 30, (unaudited) 2019 2020 2021 2022 Long-term debt, current maturities $ 42,503 $ 26,824 $ 4,624 $ 3,364 Long-term debt 898,194 807,710 759,086 772,673 Total debt 940,697 83
Slide 40: Free Cash Flow
© 2022 Matthews International Corporation. All Rights Reserved. 40 (Dollars in thousands) Fiscal Year Ended September 30, Nine Months Ended June 30, 20222019 2020 2021 Cash Provided from Operating Activities $ 131,083 $ 180,447 $ 162,811 $ 84,367 Less: Capital Expenditures (37,688) (34,849) (34,313)
Slide 41: Institutional Shareholders
© 2022 Matthews International Corporation. All Rights Reserved. 41 Shares June 30, 2022 BlackRock, Inc. 5,399,897 The Vanguard Group, Inc. 3,512,363 Phoenix Holdings Ltd. 1,814,248 Dimensional Fund Advisors, L.P. 1,482,001 Gamco Investors, Inc. et al 1,137,850 State Street Corporation 1,133,475 Amer
Slide 42: © 2022 Matthews International Corporation. All Rights Reserved.
© 2022 Matthews International Corporation. All Rights Reserved.
Matthews International — Q3 2022 Earnings Presentation on 6ix