Mattel, Inc. · NASDAQ:MAT
Mattel — Q2 2022 Earnings Presentation
38 slides from Mattel's earnings presentation, Jul 21, 2022
Slide 1: Second Quarter 2022 Earnings
Second Quarter 2022 Earnings (Unaudited Results) July 21, 2022
Slide 2: Forward-Looking Statements / Presentation Information
Forward-Looking Statements / Presentation Information This presentation contains a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical
Slide 3: Mattel, Inc. Who We Are
Mattel, Inc. Who We Are Mattel is a leading global toy company and owner of one of the strongest catalogs of children’s and family entertainment franchises in the world. We engage consumers through our portfolio of iconic brands, as well as other popular intellectual properties that we own or licens
Slide 4: Q2 2022 Chairman and CEO Perspective
Q2 2022 Chairman and CEO Perspective Another quarter of exceptional results; significant top and bottom-line growth Net Sales up 20%; 8th consecutive quarter of year-over-year growth Adjusted Operating Income1 up 82% Adjusted EPS1 improved from $0.03 to $0.18 Adjusted EBITDA1 increased by 42% Mattel
Slide 5: Q2 2022 Chairman and CEO Perspective (continued)
Q2 2022 Chairman and CEO Perspective (continued) Another quarter of exceptional results; significant top and bottom-line growth Total company POS1 up low double digits in the second quarter and up low single digits in the first half of the year, with an improving trend post-Easter Adjusted EBITDA in
Slide 6: Q2 2022 Gross Billings by Categories
1 Q2 2022 Gross Billings by Categories Up 20% as reported, up 24% in constant currency Strong growth in all leader categories, as well as Challenger categories (1) Amounts may not foot due to rounding. Gross Billings. In constant currency, unless otherwise stated. Please see Appendix – Reconciliatio
Slide 7: Mattel's Strategy
Mattel’s Strategy Grow IP-Driven Toy Business and Expand Entertainment Offering TOYS ENTERTAINMENT ACCELERATE INCREASE CAPTURE TOPLINE PROFITABILITY FULL VALUE OF IP EXPAND SCALE GROW ADVANCE OPTIMIZE CONTENT, CONSUMER PORTFOLIO FRANCHISE E-COMMERCE OPERATIONS PRODUCTS AND DIGITAL BRANDS AND DTC EXP
Slide 8: Entertainment Offering
Entertainment Offering Capture the full value of our IP Barbie movie completed principal photography Matchbox motion picture in development with Skydance Media Monster High live-action television musical launching October on Nickelodeon and Paramount+ He-Man and the Masters of the Universe season 3
Slide 9: Financial Review
Q2 2022 Earnings Financial Review ©2022 Mattel, Inc. All Rights Reserved. 9
Slide 10: Q2 2022 P&L Highlights
Q2 2022 P&L Highlights Another quarter of strong results YOY (in millions, Q2 2022 except EPS, percentages and bps)1 Change Net Sales $1,236 20% Constant Currency1 24% Adjusted Gross Margin1 44.9% -260 bps Adjusted Operating Income1 $121 +$55 Adjusted EPS1 $0.18 +$0.15 Adjusted EBITDA1 $185 +$55 Ach
Slide 11: Q2 2022 Gross Billings by Region
Q2 2022 Gross Billings by Region Gross Billings1 increased 24%, with double-digit growth in three of four regions POS up in all four regions (1) In constant currency, unless otherwise stated. Please see Appendix – Reconciliation of Non-GAAP Financial Measures and Glossary of Non-GAAP Financial Measu
Slide 12: Q2 2022 Adjusted Gross Margin Comparison
Q2 2022 Adjusted Gross Margin1 Comparison Cost inflation, principally materials and ocean freight, had a significant impact on Gross Margin Pricing, strong topline growth, and cost savings, partially offset significant inflation (1) Amounts may not foot due to rounding. Please see Appendix – Reconci
Slide 13: Q2 2022 Advertising and Adjusted SG&A
1 Q2 2022 Advertising and Adjusted SG&A Advertising and Adjusted SG&A up modestly +3% +2% Effectively managing cost structure (1) Please see Appendix – Reconciliation of Non-GAAP Financial Measures and Glossary of Non-GAAP Financial Measures & Key Performance Indicator ©2022 Mattel, Inc. All Rights
Slide 14: Q2 2022 Adjusted Operating Income and Adjusted EBITDA
1 1 Q2 2022 Adjusted Operating Income and Adjusted EBITDA Strong double-digit bottom-line growth +$55 +$55 Benefiting from the flow-through of topline growth (1) Amounts may not foot due to rounding. Please see Appendix – Reconciliation of Non-GAAP Financial Measures and Glossary of Non-GAAP Financi
Slide 15: YTD 2022 Cash Flow Results
YTD 2022 Cash Flow Results Increased use of cash due to higher working capital requirements, partly offset by higher net income (in millions)1 YTD 2022 YTD 2021 Net Income (Loss) $88 ($118) Depreciation & Amortization $91 $92 Share-Based Compensation $38 $30 Other Non-Cash Charges $27 $84 Changes in
Slide 16: TTM Free Cash Flow Conversion
TTM Free Cash Flow Conversion1, 2 Free Cash Flow impacted by an increase in working capital (in millions, TTM 2022 TTM 2021 YOY Change except percentages and pts) Adjusted EBITDA1 $1,121 $961 +17% Free Cash Flow $147 $374 -61% Free Cash Flow Conversion1 13% 39% -26 pts Expect to improve Free Cash Fl
Slide 17: Q2 2022 Balance Sheet Highlights
Q2 2022 Balance Sheet Highlights Leverage ratio1 continued to improve (in millions) Q2 2022 Q2 2021 Cash $275 $385 Total Debt1 $2,576 $2,839 Accounts Receivable $989 $784 Inventory $1,178 $818 Leverage Ratio (Debt / Adj. EBITDA1) 2.3 3.0 Goal to achieve investment grade rating (1) Includes Short-Ter
Slide 18: Optimizing For Growth
Optimizing For Growth Q2 2022 savings of $22 million Cumulative Savings $250 $250 A&P 2023 Program to date savings of $136 million $80 - $90 ~10% SG&A 2022 expected savings of $80 - $90 million 2022 ~35% $97 Total estimated cash expenditures of $125 - $150 million by 2023 COGS 2021 ~55% Savings 2021
Slide 19: 2022 Guidance
2022 Guidance Reiterating full year guidance for Net Sales, Adjusted EPS, and Adjusted EBITDA (in millions, except EPS and percentages) FY2022 Expected FY2021 Net Sales +8 - 10% $5,458 (Constant Currency) Net Sales Currency Translation1 (2 - 3%) Adjusted Gross Margin1, 2 47 - 48% 48.2% Adjusted EBIT
Slide 20: 2023 Goals
2023 Goals Reiterating 2023 goals FY2023 Net Sales + High-Single Digit % (Constant Currency) Adjusted Operating Income Margin1 ~ 16 - 17% of Net Sales Adjusted EPS1 > $1.90 Goals driven by expected topline growth, margin expansion, and utilization of improved Free Cash Flow (1) Please see Appendix –
Slide 21: Q2 2022 Closing
Q2 2022 Closing “Mattel achieved another quarter of exceptional results, with double-digit growth in revenue and Adjusted EBITDA despite significant inflation. This was the eighth consecutive quarter of increased topline performance, reflecting the strength and breadth of our portfolio, and the succ
Slide 22: Brands that Resonate
Q2 2022 Earnings Call Brands that Resonate ©2022 Mattel, Inc. All Rights Reserved. 22
Slide 23: Appendix
Appendix 23
Slide 24: Consolidated Statements of Operations
Consolidated Statements of Operations MATTEL, INC. AND SUBSIDIARIES EXHIBIT I CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)1 For the Three Months Ended June 30, For the Six Months Ended June 30, % Change % Change 2022 2021 % Change in Constant 2022 2021 % Change in Constant (In millions, except
Slide 25: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets MATTEL, INC. AND SUBSIDIARIES EXHIBIT II 1 CONDENSED CONSOLIDATED BALANCE SHEETS June 30, December 31, 2022 2021 2021 (In millions) (Unaudited) Assets Cash and equivalents $ 274.5 $ 384.7 $ 731.4 Accounts receivable, net 989.2 784.1 1,072.7 Inventories 1,177.6 8
Slide 26: Supplemental Balance Sheet and Cash Flow Data
Supplemental Balance Sheet and Cash Flow Data MATTEL, INC. AND SUBSIDIARIES SUPPLEMENTAL BALANCE SHEET AND CASH FLOW DATA (Unaudited)1 June 30, 2022 2021 Key Balance Sheet Data: Accounts receivable, net days of sales outstanding (DSO) 72 69 For the Six Months Ended June 30, (In millions) 2022 2021 C
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures MATTEL, INC. AND SUBSIDIARIES EXHIBIT III SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)1 RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES For the Three Months Ended June 30, For the Six Months Ended June 30, (In millions, except percentage informa
Slide 28: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures MATTEL, INC. AND SUBSIDIARIES EXHIBIT III SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)1 RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES For the Three Months Ended June 30, For the Six Months Ended June 30, (In millions, except per share and perc
Slide 29: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures MATTEL, INC. AND SUBSIDIARIES EXHIBIT III 1 SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited) RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES For the Three Months Ended June 30, (in millions, except percentage information) 2022 2021 Tax Rate Income B
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures MATTEL, INC. AND SUBSIDIARIES EXHIBIT III SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)1 RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES (In millions, except percentage and pts information) For the Trailing Twelve Months Ended June 30, Leverage R
Slide 31: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures MATTEL, INC. AND SUBSIDIARIES EXHIBIT III SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited)1 RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES For the Year Ended (In millions, except percentage and per share information) December 31, Gross Profit 2021
Slide 32: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures MATTEL, INC. AND SUBSIDIARIES EXHIBIT III 1 SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited) RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES For the Year Ended (In millions, except percentage information) December 31, Tax Rate 2021 Income before Inc
Slide 33: Supplemental Key Performance Indicator
Supplemental Key Performance Indicator MATTEL, INC. AND SUBSIDIARIES EXHIBIT IV 1 3 WORLDWIDE GROSS BILLINGS (Unaudited) SUPPLEMENTAL KEY PERFORMANCE INDICATOR For the Three Months Ended June 30, For the Six Months Ended June 30, % Change in % Change in % Change Constant % Change Constant (In millio
Slide 34: Supplemental Key Performance Indicator
Supplemental Key Performance Indicator MATTEL, INC. AND SUBSIDIARIES EXHIBIT V GROSS BILLINGS1 BY SEGMENT (Unaudited)3 SUPPLEMENTAL KEY PERFORMANCE INDICATOR For the Three Months Ended June 30, For the Six Months Ended June 30, % Change in % Change in % Change Constant % Change Constant (In millions
Slide 35: Supplemental Key Performance Indicator
Supplemental Key Performance Indicator MATTEL, INC. AND SUBSIDIARIES EXHIBIT VI 1 3 GROSS BILLINGS BY SEGMENT (Unaudited) SUPPLEMENTAL KEY PERFORMANCE INDICATOR For the Three Months Ended June 30, For the Six Months Ended June 30, % Change in % Change in % Change Constant % Change Constant (In milli
Slide 36: Supplemental Key Performance Indicator
Supplemental Key Performance Indicator MATTEL, INC. AND SUBSIDIARIES EXHIBIT VII GROSS BILLINGS1 BY SEGMENT (Unaudited) 3 SUPPLEMENTAL KEY PERFORMANCE INDICATOR For the Three Months Ended June 30, For the Six Months Ended June 30, % Change in % Change in % Change Constant % Change Constant (In milli
Slide 37: Glossary of Non-GAAP Financial Measures & Key Performance Indicator
Glossary of Non-GAAP Financial Measures & Key Performance Indicator NON-GAAP FINANCIAL MEASURES To supplement our financial results presented in accordance with generally accepted accounting principles in the United States (“GAAP”), Mattel presents certain non-GAAP financial measures within the mean
Slide 38: Glossary of Non-GAAP Financial Measures & Key Performance Indicator
Glossary of Non-GAAP Financial Measures & Key Performance Indicator NON-GAAP FINANCIAL MEASURES Free Cash Flow and Free Cash Flow Conversion Free Cash Flow represents Mattel’s net cash flows from operating activities less capital expenditures. Free Cash Flow Conversion represents Mattel’s free cash