Matthews International Corporation · NASDAQ:MATW

Matthews International — Q4 2017 Earnings Presentation

33 slides from Matthews International's earnings presentation, Nov 21, 2017

  1. Slide 1: Investor Presentation 4th Quarter Fiscal 2017

    ©2016 Matthews International Corporation. All Rights Reserved. INVESTOR PRESENTATION 4th QUARTER FISCAL 2017 Exhibit 99.1

  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 – 32.1 million shares

  5. Slide 5: Fiscal 2017 Sales

    ©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 Brand Development Brand Deployment Create Brand Performance Improved top- line growth Activate Improved bottom-line performance = + Premedia Tooling Merchandising Delivering Brand Performance

  8. Slide 8: SGK Brand Solutions

    ©2016 Matthews International Corporation. All Rights Reserved. SGK Brand Solutions 8 The full U.K. packaging portfolio for Kit Kat was redesigned by Anthem, a global creative agency that is part of the brand development business of the SGK Brand Solutions segment. The SGK Brand Solutions segment pro

  9. Slide 9: Memorialization

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

  10. Slide 10: Memorialization

    ©2016 Matthews International Corporation. All Rights Reserved. 10 Building signs are an example of the segment’s architectural product offerings. Memorialization Matthews is well known for its heritage of creating beautiful, time-tested bronze memorials. The segment designs unique glass-front niches

  11. Slide 11: Memorialization

    ©2016 Matthews International Corporation. All Rights Reserved. 11 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

  12. Slide 12: 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 12 Memoria

  13. Slide 13: Industrial Technologies

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

  14. Slide 14: Industrial Technologies

    ©2016 Matthews International Corporation. All Rights Reserved. 14 Industrial Technologies Non-contact ink-jet printing units apply print on products. Driven by sophisticated automation software and controls, multiple integrated distribution and fulfillment systems (including laser-based identificati

  15. Slide 15: Financial Overview

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

  16. Slide 16: 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

  17. Slide 17: Consolidated Results

    ©2016 Matthews International Corporation. All Rights Reserved. Consolidated Results 17 2015 2016 2017 Sales 1,426,068$ 1,480,464$ 1,515,608$ Operating Profit 105,023$ 118,815$ 112,603$ Adj. Operating Profit (a) 141,906$ 154,872$ 151,062$ EBITDA (b) 173,043$ 185,646$ 191,074$ Adj. EBITDA (c) 215,974$

  18. Slide 18: Segment Operating Results (as reported)

    ©2016 Matthews International Corporation. All Rights Reserved. Segment Operating Results (as reported) 18 (Dollars in thousands) 2015 2016 2017 Sales: SGK Brand Solutions 798,339$ 755,975$ 770,181$ Memorialization 508,058 610,142 615,882 Industrial Technologies 119,671 114,347 129,545 Consolidated 1

  19. Slide 19: Segment Results - Adjusted Operating Profit

    ©2016 Matthews International Corporation. All Rights Reserved. Segment Results - Adjusted Operating Profit 19 (Dollars in thousands) 2015 2016 2017 Sales: SGK Brand Solutions 798,339$ 755,975$ 770,181$ Memorialization 508,058 610,142 615,882 Industrial Technologies 119,671 114,347 129,545 Consolidat

  20. Slide 20: Segment Results - Adjusted EBITDA

    ©2016 Matthews International Corporation. All Rights Reserved. 20 (Dollars in thousands) 2015 2016 2017 Sales: SGK Brand Solutions 798,339$ 755,975$ 770,181$ Memorialization 508,058 610,142 615,882 Industrial Technologies 119,671 114,347 129,545 Consolidated 1,426,068$ 1,480,464$ 1,515,608$ Adjusted

  21. Slide 21: Adjusted Free Cash Flow

    ©2016 Matthews International Corporation. All Rights Reserved. Adjusted 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

  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$ Adjusted Free Cash Flow (1) 113,073 133,314 141,093 Market Capitalization 1,609,892$ 1,952,929$ 2,001,249$ Free Cash Flow Yield (1) 5.75% 5.61% 6.03% Adj

  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 9/30/2008 9/30/2009 9/30/2010 9/30/2011 9/30/2012 9/30/2013 9/30/2014 9/30/2015 9/3

  26. Slide 26: Recent Highlights

    ©2016 Matthews International Corporation. All Rights Reserved. Recent Highlights  Reported record sales of $1.52 billion in fiscal 2017  2017 GAAP EPS of $2.28; Adjusted EPS of $3.60  Increased quarterly dividend 11.8% to 19.0 cents (November 2017)  23rd consecutive annual dividend increase sinc

  27. Slide 27: Institutional Shareholders

    ©2016 Matthews International Corporation. All Rights Reserved. Institutional Shareholders 27 Shares 9/30/2017 BlackRock Institutional Trust Company, N.A. 3,864,137 The Vanguard Group, Inc. 3,162,328 Franklin Advisory Services, LLC 2,955,117 Wellington Management Company, LLP 1,425,550 Dimensional Fu

  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 SGK Brand Solutions Operating Profit 21,864$ 42,909$ 24,919$ Acquisition-related items 33,605 24,872 21,103 Intangible asset w rite-off

  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 Net Income 63,449$ 66,749$ 74,368$ Interest expense 20,610 24,344 26,371 Income taxes 26,364 29,073 22,354 Depreciation and Amortizati

  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 EPS - GAAP 1.91$ 2.03$ 2.28$ Acquisition-related items 0.79 0.74 0.65 Intangible asset w rite-offs 0.10 - - Litigation matter (0.18) - - Strategic initiativ

  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 S GK Br a nd S ol ut i ons Operat ing Prof it 21,864$ 42,909$ 24,919$ Depreciat ion and Amort izat ion 47,215 42,471 43,508 Ot her (1

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