Matthews International Corporation · NASDAQ:MATW
Matthews International — Q4 2020 Earnings Presentation
33 slides from Matthews International's earnings presentation, Nov 23, 2020
Slide 1: Investor Presentation Fourth Quarter Fiscal Year 2020
INVESTOR PRESENTATION FOURTH QUARTER FISCAL YEAR 2020 © 2020 Matthews International Corporation. All Rights Reserved.
Slide 2: Disclaimer
DISCLAIMER Any forward-looking statements contained in this presentation are included pursuant to the “safe harbor” provisions of the The Company believes that adjusted EBITDA provides relevant and useful information, which is used by the Company’s Private Securities Litigation Reform Act of 1995. S
Slide 3: Matthews International Overview
Matthews fE@siiss INTERNATIONAL? OVERVIEW
Slide 4: Rooted in Identification Products
ROOTED IN IDENTIFICATION PRODUCTS FOUNDED in 1850 TODAY • Marking Products • Industrial Technologies • Printing Plates • SGK Brand Solutions • Bronze Plaques • Memorialization © 2020 Matthews International Corporation. All Rights Reserved. 4
Slide 5: Fiscal 2020 Segment Sales
Fiscal 2020 SEGMENT SALES (% of Total ) Memorialization SGK Brand Solutions 44% 46% 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 • Safeguarding our employees is top priority • Continuing operations as an essential supplier • Meeting demand with virtual information technology enabled environment - globally COMMERCIAL IMPACTS VARY • Memorialization: Higher casket volu
Slide 7: Global Products and Services Sales Across Diverse Businesses
GLOBAL PRODUCTS AND SERVICES SALES ACROSS DIVERSE BUSINESSES (FY2020) ASIA- AMERICAS EUROPE PACIFIC / OTHER 70% 26% 4% ~11,000 EMPLOYEES | 6 CONTINENTS | OVER 25 COUNTRIES NASDAQ LISTED – 31.8M Shares outstanding as of September 30, 2020 © 2020 Matthews International Corporation. All Rights Reserved
Slide 8: © 2020 Matthews International Corporation. All Rights Reserved.
© 2020 Matthews International Corporation. All Rights Reserved.
Slide 9: Core Packaging to Brand Experience
CORE PACKAGING TO BRAND EXPERIENCE 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 Taking Ideas to Finished Products
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 R
Slide 11: SGK Brand Solutions Servicing Global and Regional Clients
SGK BRAND SOLUTIONS SERVICING GLOBAL AND REGIONAL CLIENTS FOOD/BEVERAGE GLOBAL PHARMA / GLOBAL OTHER CLIENTS HEALTHCARE RETAILER LEADING • Longstanding relationships with a CLIENTS CLIENTS BRANDS large, blue chip customer base 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.
© 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 2018 esti
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 • Leverage existing capability in new markets • Cost structure improvements • Expand geographic reach ACQUISITIONS • Support segment business plans; fill product / geographic gaps • Leverage existing operating infrastructure • Achieve long-term annual return (EBITDA) on invest
Slide 20: Consolidated Results
CONSOLIDATED RESULTS (Dollars in thousands, Fiscal Year Ended September 30, except per share data) 2018 2019 2020 Consolidated Sales $ 1,602,580 $ 1,537,276 $ 1,498,306 Net Income (Loss) Attributable to Matthews $ 107,371 $ (37,988) $ (87,155) Total Adjusted EBITDA(1) $ 255,114 $ 220,872 $ 203,080 D
Slide 21: Segment Operating Results
SEGMENT OPERATING RESULTS Fiscal Year Ended September 30, (Dollars in thousands) 2018 2019 2020 Sales: SGK Brand Solutions $ 805,274 $ 743,869 $ 693,093 Memorialization 631,392 636,892 656,035 Industrial Technologies 165,914 156,515 149,178 Consolidated Sales $ 1,602,580 $ 1,537,276 $ 1,498,306 Adju
Slide 22: Free Cash Flow Yield
FREE CASH FLOW YIELD Fiscal Year Ended September 30, (Dollars in thousands) 2018 2019 2020 Cash Provided from Operating Activities $ 147,574 $ 131,083 $ 180,447 Less: Capital Expenditures (43,200) (37,688) (34,849) Free Cash Flow $ 104,374 $ 93,395 $ 145,598 Market Capitalization 1,608,551 1,109,112
Slide 23: Earnings Per Share (EPS)
EARNINGS PER SHARE (EPS) Diluted E(L)PS Non-GAAP Adjusted EPS(1) $3.96 $4.00 $4.00 $3.37 $3.60 $3.50 $3.38 $3.31 $2.28 $2.03 $3.01 $2.00 $3.00 $2.50 $0.00 $2.00 $1.50 $-1.21 $-2.00 $1.00 $-2.79 $0.50 $-4.00 $0.00 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Note: See Disclaimer (Page 2) for Man
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 $255.1 $1,600.0 $1,515.6 $1,537.3 $1,498.3 $1,480.5 $250.0 $239.6 $238.7 $1,400.0 $220.9 $203.1 $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 $35.36 $35.39 $30.73 $29.82 $30.00 $22.36 $20.00 $10.00 $0.00 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 9/30/2020 Note: Stock price obtained from NASDAQ
Slide 26: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Debt Reduction • Significant reduction in debt of $106M in FY 2020 • Continued near-term focus of cash flow on debt reduction Total Debt and Net Debt* (in millions) Cash Dividend • $0.21 per share for FY2020 $960.6 $919.0 $940.7 $905.4 • $0.215 per share for FY2021 $834
Slide 27: Institutional Shareholders
INSTITUTIONAL SHAREHOLDERS Shares September 30, 2020 BlackRock, Inc. 4,983,330 The Vanguard Group, Inc. 2,984,276 Dimensional Fund Advisors, L.P. 1,693,085 Aristotle Capital Boston, LLC 1,179,688 Russell Investments Group, Ltd. 1,144,777 State Street Corporation 999,329 Gamco Investors, Inc. et al 8
Slide 28: Appendices
Matthews APPENDICES INTERNATIONAL
Slide 29: Total Adjusted EBITDA Non-GAAP Reconciliation
TOTAL ADJUSTED EBITDA NON-GAAP RECONCILIATION (Unaudited) APPENDIX A (In thousands, except per share data) Fiscal Year Ended September 30, 2018 2019 2020 Net income (loss) $ 107,111 $ (38,889) $ (87,652) Income tax (benefit) provision (9,118) 806 (18,685) Income (loss) before income taxes 97,993 (38
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) Fiscal Year Ended September 30, 2018 2019 2020 per share per share Net income (loss) attributable to Matthews $ 107,371 $ 3.37 $ (37,988) $ (1.21) $ (87,155) $ (2.79) Acqui
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 2020 Operating assets (1) $ 372,804 $ 256,946 $ 50,486 $ 26,838 $ 707,074 Intangible assets, net 5
Slide 32: Net Debt Non-GAAP Reconciliation
NET DEBT NON-GAAP RECONCILIATION (Unaudited) APPENDIX D (Dollars in thousands) Fiscal Year Ended September 30, (unaudited) 2018 2019 2020 Long-term debt, current maturities $ 31,260 $ 42,503 $ 26,824 Long-term debt 929,342 898,194 807,710 Total debt 960,602 940,697 834,534 Less: Cash and cash equiva
Slide 33: Matthews Memorialization Proprietary Notice
Matthews MEMORIALIZATION Matthews \_ INTERNATIONAL [d¢] Matthews Proprietary and confidential. © 2020 Matthews International Corporation! All rights reserved. No part ofthis document may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recordin
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