Mativ Holdings, Inc. · NYSE:MATV
Mativ — Schweitzer Mauduit International — Investor Presentation (February 2016)
41 slides from Mativ's investor presentation, Feb 18, 2016
Slide 1: Investor Presentation
Investor Presentation NYSE: SWM February 2016
Slide 2: Safe Harbor Statement
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Safe Harbor Statement This presentation may contain ―forward-looking statements.‖ All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward- looking st
Slide 3: Agenda
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Agenda Overview Engineered Papers Segment Advanced Materials & Structures Segment 3 Growth Opportunities Financials Annual Review / Outlook
Slide 4: Overview – Highlights
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Overview – Highlights Global supplier of highly engineered products to a diverse customer base Customer Intimacy + Operational Excellence + Technology/Innovation MATURE HIGH-MARGIN ENGINEERED PAPERS SEGMENT (EP) Concentration in toba
Slide 5: Overview – Historical Cash Flow, Dividends, & Buybacks
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. 5 Overview – Historical Cash Flow, Dividends, & Buybacks (1) Free Cash Flow from Continuing Operations is a non-GAAP financial measure. See appendix for Non-GAAP reconciliations. For 2011 and 2012 (not shown in appendix), Free Cash F
Slide 6: Overview – Segments
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Overview – Segments 6 Engineered Papers (EP) • Fiber-based rolled goods in innovative, high-value applications primarily for tobacco industry • 34% SWM share in the global cigarette paper industry (excluding China) • A key profit dri
Slide 7: Overview – Infrastructure
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Overview – Infrastructure 7 SWM has a global manufacturing infrastructure; U.S.-centric AMS segment becoming more international with access to global footprint and acquisitions China 9% EP EP EP EP AMS AMS Operational Excellence, roo
Slide 8: Overview – Strategic Transformation
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Overview – Strategic Transformation 8 Mature Engineered Papers is cash flow engine, supporting investments in Advanced Materials & Structures’ growth-oriented end-segments • EP Segment: Maintain leadership in tobacco papers, maximize
Slide 9: Agenda
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Agenda Overview Engineered Papers Segment Advanced Materials & Structures Segment 9 Growth Opportunities Financials Annual Review / Outlook
Slide 10: Engineered Papers – Tobacco Paper Products
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Engineered Papers – Tobacco Paper Products SWM is a global leader in cigarette papers through focus on solving customer issues, collaborative relationships, and global capabilities 10 LIP is a key profit driver; SWM has 40%+ direct s
Slide 11: Engineered Papers – Reconstituted Tobacco Products
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Engineered Papers – Reconstituted Tobacco Products RTL offers 3 key benefits: 1) Harmful Constituents Reduction – lower tar and nicotine delivery 2) Cost – Historically attractive vs. high-grade tobacco leaf, however current leaf ove
Slide 12: Organic diversification toward value-add non-tobacco products
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. SWM is looking more strategically at organic diversification with a drive toward developing more value-add products versus historical focus on “filler” volumes 12 SWM is capitalizing on existing process technologies and paper manufac
Slide 13: Engineered Papers – Customers
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Engineered Papers – Customers 13 SWM’s extensive expertise in the engineering and production of specialty lightweight papers has been leveraged primarily in the tobacco industry • Relationships averaging more than 50 years among five
Slide 14: Engineered Papers – China Joint Ventures
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Engineered Papers – China Joint Ventures • SWM ownership: 50% (signed in 2011) • Start-up: 2014 • SWM equity contribution: ≈ $35 million • Potential Annual Net Income (SWM share): $8 - $10 million • Ramp to full capacity expected ove
Slide 15: Engineered Papers – Tobacco Industry
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Engineered Papers – Tobacco Industry 15 Global Cigarette Consumption 2014: 5.7 trillion sticks, -0.5% (-2.4% excluding China) Preliminary indications show China flattening and U.S. and EU shrinking less in 2015 Am & Oceania 2014: -4%
Slide 16: Engineered Papers – Tobacco Industry
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. SWM, 34% Delfort; 25% Glatz; 13% MyC, 8% BMJ; 10% Other; 10% Engineered Papers – Tobacco Industry 1 Share by volume for 2014, excluding China Source: Company filings, SWM management 16 Product SWM Delfort Glatz Miquel y Costa BMJ RTL
Slide 17: Engineered Papers – Tobacco Industry Marketplace Trends
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Engineered Papers – Tobacco Industry 17 Marketplace Trends / Developments Comments / Impacts LIP mandated in North America and Western Europe 2009 - 2011, potential further international adoptions - SWM’s technology preferred choice
Slide 18: Agenda
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Agenda Overview Engineered Papers Segment Advanced Materials & Structures Segment 18 Growth Opportunities Financials Annual Review / Outlook
Slide 19: Structures – Overview
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. AMS consists of 4 complementary acquired businesses to be run as one integrated segment maximizing growth opportunities, synergies, operational best practices, R&D Advanced Materials & Structures – Overview How we define AMS: advance
Slide 20: Structures – Industries (Water Filtration)
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Advanced Materials & Structures – Industries 20 Global demand for reverse osmosis (RO) water filtration is growing ≈ 10% per year, and SWM is well-positioned to capitalize on this growth SWM has a strong foothold in several key produ
Slide 21: Structures – Industries (Air and Other Filtration)
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. • Demand for improved residential and commercial air quality • Cabin air, face mask, HVAC and vacuum filtration • OEM demand, auto/aerospace • High-value, high-growth electrostatic media technology was key strategic rationale for Pro
Slide 22: Structures – Industries (Surface Protection)
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. $0 $25 $50 $75 $100 $125 $150 2015E 2018E Projected Automotive Paint Protection End-Segment ($MM)1 1 Source: Management estimates 22 Advanced Materials & Structures – Industries The late 2015 acquisition of Argotec added high-value f
Slide 23: Structures – Industries (Medical and Other)
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Advanced Materials & Structures – Industries 23 SWM has presences in finger bandage, wound dressings and surgical mask products, acquisitions have augmented existing DelStar’s technologies and product breadth; generally GDP-type grow
Slide 24: Structures – Customers
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Advanced Materials & Structures – Customers 24 A culture of customer intimacy and innovation results in collaborative product development and often times unique long-term value-based relationships Filtration ≈ 1/3 of Segment Net Sale
Slide 25: Structures – Products
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Advanced Materials & Structures – Products 25 Products are highly engineered to meet customer needs; key attributes such as, thickness, clarity, UV resistant, waterproof, puncture proof, heat tolerance, flow- through, are critical to
Slide 26: Agenda
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Agenda Overview Engineered Papers Segment Advanced Materials & Structures Segment 26 Growth Opportunities Financials Annual Review / Outlook
Slide 27: Growth Opportunities – AMS & Paper Diversification
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. 27 Growth Opportunities – AMS & Paper Diversification The Advanced Materials & Structures growth platform has opportunities to benefit from high-growth end-segments and an optimized platform across the acquired companies • Organic Gr
Slide 28: Growth Opportunities – Tobacco
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Growth Opportunities – Tobacco Source: SWM management, National Bureau of Statistics of China, Philip Morris International 28 SWM has several profitable long-term growth opportunities, including global LIP adoptions, reduced harm pro
Slide 29: Agenda
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Agenda Overview Engineered Papers Segment Advanced Materials & Structures Segment 29 Growth Opportunities Financials Annual Review / Outlook
Slide 30: Financials – Annual Results Overview
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. 30 Financials – Annual Results Overview (1) Adjusted EBITDA from Continuing Operations, Adjusted Operating Profit from Continuing Operations, Adjusted Income from Continuing Operations, Adjusted Diluted EPS from Continuing Operations
Slide 31: Financials – Segment Results
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. 31 Financials – Segment Results (1) Adjusted Operating Profit from Continuing Operations is a non-GAAP financial measure. See appendix for Non-GAAP reconciliations. ($ in millions, except per share amounts) 2013 2014 Change 2015 * Ch
Slide 32: Financials – Capital Structure, Liquidity, and Cash Flow
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. 2015 Operating Cash Flow: $145 million Cash Uses: • Capital Spending/Software: $25 million • Dividends: $47 million • Acquisitions (Argotec): $280 million 2016 Expected Cash Uses: • Capital Spending/Software: $30 million • Dividends:
Slide 33: Financials – Capital Allocation Strategy
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. 33 Financials – Capital Allocation Strategy AMS Existing End-segments / Technologies Filtration Surface Protection Medical Industrial Nets Films Non-Wovens Tubes Return of Capital Target > 1/3 of FCF, dividends Or
Slide 34: Agenda
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Agenda Overview Engineered Papers Segment Advanced Materials & Structures Segment 34 Growth Opportunities Financials Annual Review / Outlook
Slide 35: Financials – 2015 Review & 2016 Outlook
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. 35 Financials – 2015 Review & 2016 Outlook 2015 Review 2016 Outlook Internal growth and Argotec offset challenge in RTL and tax rate increase; 2015 LIP inventory build reversal (timing), and currency impacts drive projected EPS decli
Slide 36: Financials – 2016 Guidance Bridge
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. 36 Financials – 2016 Guidance Bridge (as communicated in February 2016) (1) Adjusted Diluted EPS from Continuing Operations is a non-GAAP financial measure. See appendix for Non-GAAP reconciliations. • 2016 Adjusted Diluted EPS (1) g
Slide 37: Appendix - Non-GAAP Reconciliations - Historical Segment Financials
Appendix - Non-GAAP Reconciliations - Historical Segment Financials 37
Slide 38: Non-GAAP Reconciliations
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Non-GAAP Reconciliations Note: Non-GAAP info spreadsheet saved in applicable SEC filing folder. Copy, paste as enhanced metafile with white fill to eliminate grid lines Certain financial measures and comments contained in this presen
Slide 39: Non-GAAP Reconciliations, Cont.
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Non-GAAP Reconciliations, Cont. Note: Non-GAAP info spreadsheet saved in applicable SEC filing folder. Copy, paste as enhanced metafile with white fill to eliminate grid lines Certain financial measures and comments contained in this
Slide 40: Segment Financials – Historical
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Segment Financials – Historical Note: Non-GAAP info spreadsheet saved in applicable SEC filing folder. Copy, paste as enhanced metafile with white fill to eliminate grid lines In October 2015, SWM consolidated its former Paper and Re
Slide 41: Segment Financials – Historical, Cont.
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Segment Financials – Historical, Cont. Note: Non-GAAP info spreadsheet saved in applicable SEC filing folder. Copy, paste as enhanced metafile with white fill to eliminate grid lines In October 2015, SWM consolidated its former Paper
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