Matthews International Corporation · NASDAQ:MATW
Matthews International — Q3 2020 Earnings Presentation
33 slides from Matthews International's earnings presentation, Aug 20, 2020
Slide 1: Investor Presentation Third Quarter Fiscal Year 2020
INVESTOR PRESENTATION THIRD QUARTER FISCAL YEAR 2020
Slide 2: Disclaimer
DISCLAIMER Any forward-looking statements contained in this presentation are included pursuant to the “safe harbor” provisions of the Private The Company believes that adjusted EBITDA provides relevant and useful information, which is used by the Company’s Securities Litigation Reform Act of 1995. S
Slide 3: Matthews International Overview
Matthews Etaiss INTERNATIONAL’ OVERVIEW
Slide 4: Rooted in Identification Products
ROOTED IN IDENTIFICATION PRODUCTS FOUNDED in 1850 TODAY • Marking Products • SGK Brand Solutions • Printing Plates • Memorialization • Bronze Plaques • Industrial Technologies © 2020 Matthews International Corporation. All Rights Reserved. 4
Slide 5: Fiscal 2019 Segment Sales
Fiscal 2019 SEGMENT SALES (% of Total ) Memorialization 42% SGK Brand Solutions 48% Industrial Technologies 10% © 2020 Matthews International Corporation. All Rights Reserved. 5
Slide 6: COVID-19 Impacts
COVID-19 IMPACTS CRITICAL SUPPLIER IN MOST OF OUR BUSINESSES • Continuing operations as an essential supplier • Safeguarding our employees is top priority • Meeting demand with virtual information technology enabled environment - globally COMMERCIAL IMPACTS VARY • Memorialization – Recent higher cas
Slide 7: Global Products and Services Sales Across Diverse Businesses
GLOBAL PRODUCTS AND SERVICES SALES ACROSS DIVERSE BUSINESSES (FY19) ASIA- AMERICAS EUROPE PACIFIC / OTHER 68% 28% 4% ~11,000 EMPLOYEES | 6 CONTINENTS | OVER 25 COUNTRIES NASDAQ LISTED – 31.3M Shares outstanding as of June 30, 2020 © 2020 Matthews International Corporation. All Rights Reserved. 7
Slide 8: © 2020 Matthews International Corporation. All Rights Reserved.
© 2020 Matthews International Corporation. All Rights Reserved.
Slide 9: Packaging Production: Our Core Business
PACKAGING PRODUCTION: OUR CORE BUSINESS From Logo To Shelf BRAND BRAND ASSETS, PACKAGING LAYOUT, COLOR CONTROL PRINTED PACKAGING CREATIVE CLIENT & LEGAL PRODUCTION ART & & PRINT TOOLING SKU’s & DESIGN INPUTS COLOR SEPARATION © 2020 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 non- woven materials with new opportunities in energy storage. © 2020 Matthews International Corporation. All
Slide 11: SGK Brand Solutions Servicing Global and Regional Clients
SGK BRAND SOLUTIONS SERVICING GLOBAL AND REGIONAL CLIENTS FOOD/BEVERAGE GLOBAL PHARMA / GLOBAL OTHER • Longstanding relationships with a CLIENTS HEALTHCARE RETAILER LEADING large, blue chip customer base CLIENTS CLIENTS BRANDS consisting of many Fortune 100 and Fortune 500 companies • "Strategic" re
Slide 12: © 2020 Matthews International Corporation. All Rights Reserved.
© 2020 Matthews International Corporation. All Rights Reserved.
Slide 13: Memorialization Products
PRODUCTS Cremation and Incineration Cemetery Products Funeral Home Products 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 © 2020 Matthews International Corporat
Slide 14: Our Market
OUR MARKET Product Markets* Casketed Deaths vs. Total Deaths* * * Full-service provider – leading position across key Relatively stable demand driven by predictable trends: product markets increased deaths and rising cremation rates Customer base consolidating but still fragmented *Company estimates
Slide 15: © 2020 Matthews International Corporation. All Rights Reserved.
© 2020 Matthews International Corporation. All Rights Reserved.
Slide 16: Product Identification
PRODUCT IDENTIFICATION Matthews A Market Leader New Market Opportunity Drop on Demand 28% Continuous Inkjet 46% New Technology Print & Apply 11% Laser 15% Limited Offering Improved Reliability + 75% lower cost of Source: Technavio Report (May 2017) ownership + Reduced downtime © 2020 Matthews Intern
Slide 17: Warehouse Automation and Applied Technologies
WAREHOUSE AUTOMATION AND APPLIED TECHNOLOGIES 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
Slide 18: © 2020 Matthews International Corporation. All Rights Reserved.
© 2020 Matthews International Corporation. All Rights Reserved.
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, Year to Date June 30, except per share data) 2017 2018 2019 2019 2020 (unaudited) (unaudited) Consolidated Sales $ 1,515,608 $ 1,602,580 $ 1,537,276 $ 1,144,871 $ 1,099,166 Net Income Attributable to Matthews $ 74,368 $ 107,
Slide 21: Segment Operating Results
SEGMENT OPERATING RESULTS Fiscal Year Ended September 30, Year to Date June 30, (Dollars in thousands) 2017 2018 2019 2019 2020 Sales: (unaudited) (unaudited) SGK Brand Solutions $ 770,181 $ 805,274 $ 743,869 $ 557,881 $ 513,515 Memorialization 615,882 631,392 636,892 474,279 478,342 Industrial Tech
Slide 22: Free Cash Flow Yield
FREE CASH FLOW YIELD Fiscal Year Ended September 30, (Dollars in thousands) 2017 2018 2019 Cash Provided from Operating Activities $ 149,299 $ 147,574 $ 131,083 Less: Capital Expenditures (44,935) (43,200) (37,688) Free Cash Flow $ 104,364 $ 104,374 $ 93,395 Market Capitalization 2,001,249 1,608,551
Slide 23: Earnings Per Share (EPS)
EARNINGS PER SHARE (EPS) Diluted EPS Non-GAAP Adjusted EPS(1) $3.96 $4.00 $4.00 $3.37 $3.60 $3.50 $3.38 $3.31 $3.00 $3.03 $2.28 $3.00 $1.91 $2.03 $2.00 $2.50 $1.00 $2.00 $1.50 $0.00 $1.00 $-1.00 $0.50 $-1.21 $-2.00 $0.00 2015 2016 2017 2018 2019 2015 2016 2017 2018 2019 Note: See Disclaimer (Page 2)
Slide 24: Sales and Total Adjusted EBITDA
SALES AND TOTAL ADJUSTED EBITDA (Dollars in millions) (1) Consolidated Sales Total Adjusted EBITDA $1,800.0 $300.0 $1,602.6 $1,600.0 $1,515.6 $1,537.3 $255.1 $1,480.5 $1,426.1 $250.0 $239.6 $238.7 $1,400.0 $216.0 $220.9 $1,200.0 $200.0 $1,000.0 $150.0 $800.0 $600.0 $100.0 $400.0 $50.0 $200.0 $0.0 $0
Slide 25: Common Stock Price
COMMON STOCK PRICE $70.00 $62.25 $60.76 $60.00 $50.15 $50.00 $48.97 $43.89 $40.00 $38.08 $35.18 $35.36 $35.39 $30.73 $29.82 $30.00 $20.00 $10.00 $0.00 9/30/2009 9/30/2010 9/30/2011 9/30/2012 9/30/2013 9/30/2014 9/30/2015 9/30/2016 9/30/2017 9/30/2018 9/30/2019 Note: Stock price obtained from NASDAQ
Slide 26: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Debt Reduction • Significant Q3 reduction in debt of $104.9M • Near-term focus of cash flow on debt reduction Total Debt and Net Debt* Cash Dividend (in millions) • $0.80 per share for FY2019 • $0.21 per share for Q3 FY2020 $960.6 $919.0 $940.7 $905.4 $860.9 Invest in G
Slide 27: Institutional Shareholders
INSTITUTIONAL SHAREHOLDERS Shares June 30, 2020 BlackRock, Inc. 4,634,523 The Vanguard Group, Inc. 3,282,744 Franklin Resources, Inc. 2,276,340 Dimensional Fund Advisors, L.P. 1,850,072 Aristotle Capital Boston, LLC 1,132,609 State Street Corporation 1,032,686 Gamco Investors, Inc. et al 720,557 Ame
Slide 28: Appendices
APPENDICES
Slide 29: Total Adjusted EBITDA Non-GAAP Reconciliation
TOTAL ADJUSTED EBITDA NON-GAAP RECONCILIATION (Unaudited) APPENDIX A (In thousands, except per share data) Year to Date Fiscal Year Ended September 30, June 30, 2017 2018 2019 2019 2020 Net income (loss) $ 73,933 $ 107,111 $ (38,889) $ 32,602 $ (95,052) Income tax provision (benefit) 22,354 (9,118)
Slide 30: Adjusted Net Income and Earnings Per Share Non-GAAP Reconciliation
ADJUSTED NET INCOME AND EARNINGS PER SHARE NON-GAAP RECONCILIATION (Unaudited) APPENDIX B (In thousands, except per share data) Year to Date Fiscal Year Ended September 30, June 30, 2017 2018 2019 2019 2020 per share per share per share per share Net income (loss) attributable to Matthews $ 74,368 $
Slide 31: Additional Segment Information: Supplemental Asset Data
ADDITIONAL SEGMENT INFORMATION SUPPLEMENTAL ASSET DATA APPENDIX C (Dollars in thousands) (unaudited) Industrial Corporate and SGK Brand Solutions Memorialization Technologies Non-Operating Total Fiscal 2019 Operating assets (1) $ 397,544 $ 263,685 $ 53,133 $ 22,110 $ 736,472 Intangible assets, net 6
Slide 32: Net Debt Non-GAAP Reconciliation
NET DEBT NON-GAAP RECONCILIATION (Unaudited) APPENDIX D (Dollars in thousands) Fiscal Year Ended September 30, June 30, (unaudited) 2017 2018 2019 2020 Long-term debt, current maturities $ 29,528 $ 31,260 $ 42,503 $ 23,114 Long-term debt 881,602 929,342 898,194 837,770 Total debt 911,130 960,602 940
Slide 33: Proprietary and . oration. All rights reserved. No part of this document may be
Proprietary and confidential. © 2020 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
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