Matthews International Corporation · NASDAQ:MATW
Matthews International — Q2 2020 Earnings Presentation
33 slides from Matthews International's earnings presentation, May 26, 2020
Slide 1: Investor Presentation Second Quarter Fiscal Year 2020
INVESTOR PRESENTATION SECOND QUARTER FISCAL YEAR 2020 www.matw.com | Nasdaq: MATW
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: Overview
Matthews [Elsixess 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 ) SGK Brand Memorialization Solutions 42% 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) AMERICAS EUROPE ASIA-PACIFIC / OTHER 68% 28% 4% ~11,000 EMPLOYEES | 6 CONTINENTS | OVER 25 COUNTRIES NASDAQ LISTED – 31.3M Shares outstanding as of March 31, 2020 © 2020 Matthews International Corporation. All Rights Reserved. 7
Slide 8: Brand Solutions
BRAND SOLUTIONS © 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 CREATIVE CLIENT & LEGAL PRODUCTION ART & & PRINT TOOLING PACKAGING SKU’s & DESIGN INPUTS COLOR SEPARATION start © 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 / GLOBAL PHARMA / GLOBAL OTHER • Longstanding relationships with BEVERAGE CLIENTS HEALTHCARE RETAILER LEADING a large, blue chip customer base CLIENTS CLIENTS BRANDS consisting of many Fortune 100 and Fortune 50 companies • “Strategic” r
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 Markets
OUR MARKETS Product Markets* Casketed Deaths vs. Total Deaths* Cremation Equipment / * * Services Cremation Products / Other Caskets Granite Memorials Bronze Memorials Full-service provider – leading position across key Relatively stable demand driven by predictable trends: product markets increased
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 Drop on Opportunity Demand 28% Non-contact ink-jet printing units Continuous apply print on products. Printing Inkjet 46% Technologies New Technology Print & Apply 11% Jetting Assembly Laser Limited 15% Offering Sleeve Improved Reliability +
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: Financial Overview
Matthews Bien INTERNATIONAL’ OVERVIEW
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, YTD March 31, except per share data) 2017 2018 2019 2019 2020 (unaudited) (unaudited) Consolidated Sales $ 1,515,608 $ 1,602,580 $ 1,537,276 $ 765,577 $ 739,744 Net Income Attributable to Matthews $ 74,368 $ 107,371 $ (37,98
Slide 21: Segment Operating Results
SEGMENT OPERATING RESULTS (Dollars in thousands) Fiscal Year Ended September 30, YTD March 31, 2017 2018 2019 2019 2020 Sales: (unaudited) (unaudited) SGK Brand Solutions $ 770,181 $ 805,274 $ 743,869 $ 375,951 $ 347,735 Memorialization 615,882 631,392 636,892 316,062 316,224 Industrial Technologies
Slide 22: Free Cash Flow Yield
FREE CASH FLOW YIELD (Dollars in thousands) Fiscal Year Ended September 30, 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 $3.37 $4.00 $3.60 $3.38 $3.31 $2.28 $3.50 $3.00 $2.03 $3.03 $1.91 $3.00 $2.00 $2.50 $1.00 $2.00 $1.50 $0.00 $1.00 -$1.00 -$1.21 $0.50 -$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) Consolidated Sales Total Adjusted EBITDA (1) $1,602.6 $1,537.3 $1,480.5 $1,515.6 $300.0 $1,600.0 $1,426.1 $255.1 $1,400.0 $239.6 $238.7 $250.0 $216.0 $220.9 $1,200.0 $200.0 $1,000.0 $800.0 $150.0 $600.0 $100.0 $400.0 $50.0 $200.0 $0.0 $0.0 2015 2
Slide 25: Common Stock Price
COMMON STOCK PRICE $70.00 $62.25 $60.76 $60.00 $48.97 $50.15 $50.00 $43.89 $38.08 $40.00 $35.18 $35.36 $35.39 $30.73 $29.82 $30.00 $20.00 $10.00 $0.00 09/30/2009 09/30/2010 09/30/2011 09/30/2012 09/30/2013 09/30/2014 09/30/2015 09/30/2016 09/30/2017 09/30/2018 09/30/2019 Note: Stock price obtained f
Slide 26: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Net Debt (1) Reduction • $34 million reduction in Q2 FY2020 • Near-term focus of cash flow on debt reduction Capitalization (in millions) Cash Dividend $1,659.9 • $0.80 per share for FY2019 $1,557.0 • $0.21 per share for Q2 FY2020 $719.2 Invest in Growth $591.2 • Capita
Slide 27: Institutional Shareholders
INSTITUTIONAL SHAREHOLDERS Shares March 31, 2020 BlackRock, Inc. 4,674,552 The Vanguard Group, Inc. 3,515,772 Franklin Resources, Inc. 2,854,757 Dimensional Fund Advisors, L.P. 1,919,463 Clarkston Capital Partners, LLC 1,537,853 Wellington Management Group, LLP 1,057,332 State Street Corporation 1,0
Slide 28: Appendices
Matthews INTERNATIONAL® APPENDICES
Slide 29: Total Adjusted EBITDA (Non-GAAP Reconciliation) Appendix A
TOTAL ADJUSTED EBITDA (NON-GAAP RECONCILIATION) APPENDIX A (Dollars in thousands) Fiscal Year Ended September 30, YTD March 31, (unaudited) 2017 2018 2019 2019 2020 Net income (loss) $ 73,933 $ 107,111 $ (38,889) $ 18,178 $ (96,901) Income tax provision (benefit) 22,354 (9,118) 806 440 (16,463) Inco
Slide 30: Adjusted Net Income & EPS (Non-GAAP Reconciliation) Appendix B
ADJUSTED NET INCOME & EPS (NON-GAAP RECONCILIATION) APPENDIX B (Dollars in thousands, Fiscal Year Ended September 30, YTD March 31, except per share data) 2017 2018 2019 2019 2020 (unaudited) per share per share per share per share per share Net income (loss) attributable to Matthews $ 74,368 $ 2.28
Slide 31: Additional Segment Information Supplemental Asset Data Appendix C
ADDITIONAL SEGMENT INFORMATION SUPPLEMENTAL ASSET DATA APPENDIX C (Dollars in thousands) SGK Brand Industrial Corporate and (unaudited) 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) Appendix D
NET DEBT (NON-GAAP RECONCILIATION) APPENDIX D (Dollars in thousands) Fiscal Year Ended September 30, March 31, (unaudited) 2017 2018 2019 2020 Balance Sheet Information: Long-term debt, current maturities $ 29,528 $ 31,260 $ 42,503 $ 26,077 Long-term debt 881,602 929,342 898,194 939,753 Total debt 9
Slide 33: Proprietary notice
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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