Mattel, Inc. · NASDAQ:MAT
Mattel — Q3 2024 Earnings Presentation
35 slides from Mattel's earnings presentation, Oct 23, 2024
Slide 1: Third Quarter 2024 Earnings
Third Quarter 2024 Earnings (Unaudited Results) October 23, 2024
Slide 2: Cautionary Note Regarding Forward-Looking Statements / Presentation Information
Cautionary Note Regarding Forward-Looking Statements / Presentation Information Mattel cautions the viewer that this presentation contains a number of forward-looking statements, which are statements that relate to the future and are, by their nature, uncertain. Forward-looking statements can be ide
Slide 3: Mattel, Inc. Who We Are
Mattel, Inc. Who We Are Mattel is a leading global toy and family entertainment company and owner of one of the most iconic brand portfolios in the world. We engage consumers and fans through our franchise brands, including Barbie, Hot Wheels, Fisher-Price, American Girl, Thomas & Friends, UNO, Mast
Slide 4: Mattel's Strategy
Mattel’s Strategy Grow IP-Driven Toy Business and Expand Entertainment Offering Our mission is to create innovative products and experiences that inspire fans, entertain audiences, and develop children through play ©2024 Mattel, Inc. All Rights Reserved. 4
Slide 5: Chairman and CEO Perspective
Chairman and CEO Perspective Meaningful expansion in Gross Margin fully offset the Barbie movie comparison in our bottom line relative to the prior year Net Sales declined 4% as reported, and 3% in constant currency1 Adjusted Gross Margin1 increased 210 basis points to 53.1% Adjusted EBITDA1 improve
Slide 6: Category Performance
Category Performance Gross Billings1 comparison impacted by the success of the Barbie movie Dolls down as expected, with comparisons impacted by Barbie movie in year-ago quarter - Monster High continued to grow as we expand this key franchise Vehicles performance was very strong, led by Hot Wheels -
Slide 7: Expand Entertainment Offering
Expand Entertainment Offering Recent entertainment highlights include: Film - Masters of the Universe with Amazon MGM in pre-production; worldwide theatrical release June 5, 2026 - Matchbox with Skydance and Apple greenlit and will star John Cena - View-Master to be co-developed with Sony Pictures E
Slide 8: Industry Performance and Expectations
Industry Performance and Expectations Toy industry continued to perform better than first anticipated heading into 2024; expect a good holiday season for Mattel Expectation for toy industry to decline modestly in 2024 is unchanged Fundamentals are strong, toys are an important part of consumers’ liv
Slide 9: Q3 2024 P&L Highlights
Q3 2024 P&L Highlights Another strong quarter of profitability YOY (in millions, Q3 2024 except EPS, percentages, and bps) Change Net Sales $1,844 -4% Constant Currency1 -3% Adjusted Gross Margin1 53.1% +210 bps Adjusted Operating Income1 $504 -$2 Adjusted EPS1 $1.14 +$0.06 Adjusted EBITDA1 $584 +$5
Slide 10: Q3 2024 Gross Billings by Category
Q3 2024 Gross Billings by Category 1 Gross Billings declined 3% YOY Growth Rate (%) Worldwide Gross Billings (as reported; $ in millions) As Constant Reported Currency1 Dolls $757 -14% -14% Vehicles 12% 13% $580 Infant, Toddler, and Preschool $350 -3% -2% Action Figures, Building Sets, $364 2% 3% Ga
Slide 11: Q3 2024 Gross Billings by Region
Q3 2024 Gross Billings by Region 1 Growth in Asia Pacific and Latin America YOY Growth Rate (%) Gross Billings As Constant (as reported; $ in millions) Reported Currency1 North America $1,184 -3% -3% EMEA $479 -4% -6% Latin America $282 -7% 2% Asia Pacific $106 9% 8% Well-positioned for a good holid
Slide 12: Q3 2024 Adjusted Gross Margin Comparison
Q3 2024 Adjusted Gross Margin Comparison 1 Another quarter of significant year-over-year Gross Margin gains +210bps 0.5% 0.7% 0.8% 1.9% 53.1% 1.8% 51.0% Benefiting from supply chain efficiencies and cost savings (1) Amounts may not sum due to rounding. Please see Appendix – Reconciliation of Non-GAA
Slide 13: Q3 2024 Advertising and Adjusted SG&A
Q3 2024 Advertising and Adjusted SG&A 1 Advertising timing benefit; Adjusted SG&A impacted by several factors Advertising Adj. SG&A (in millions) (in millions) +$23 $370 $124 -$19 $347 $105 n/m n/m Q3'23 Q3'24 Q3'23 Q3'24 Lower advertising in Q3 reflects our strategy to shift spend to later in the y
Slide 14: Q3 2024 Adjusted Profit Metrics
Q3 2024 Adjusted Profit Metrics Benefiting from continued strong Gross Margin Adj. Operating Income1 Adj. EBITDA1 Adj. EPS1 (in millions) (in millions) n/m n/m n/m +$5 +$0.06 -$2 $580 $584 $1.14 $506 $504 $1.08 Q3'23 Q3'24 Q3'23 Q3'24 Q3'23 Q3'24 Adjusted EPS1 benefiting from lower share count, refl
Slide 15: YTD 2024 and TTM Cash Flow
YTD 2024 and TTM Cash Flow Significant improvement in TTM Free Cash Flow1 (in millions)1 YTD 2024 YTD 2023 Net Income $401 $67 Depreciation & Amortization $125 $133 Share-Based Compensation $57 $52 Other Non-Cash Charges $100 $301 Changes in Working Capital & Other ($745) ($632) Cash (used for) Oper
Slide 16: Q3 2024 Balance Sheet Highlights
Q3 2024 Balance Sheet Highlights Leverage Ratio1 continued to improve compared to the prior year (in millions) Q3 2024 Q3 2023 Cash $724 $456 Accounts Receivable $1,477 $1,571 Inventory $737 $791 Debt $2,333 $2,329 Leverage Ratio (Total Debt / Adj. EBITDA)1 2.3x 2.7x Strong balance sheet with signif
Slide 17: 2024-2026 Optimizing for Profitable Growth (OPG)
2024-2026 Optimizing for Profitable Growth (OPG) Achieving significant cost savings Target Cumulative Target Savings1 Allocation1 $200 $200 $23 million of savings achieved in Q3 S&A ~30% $60 million of savings achieved YTD 2025-26 Target program savings of $200 million ~$75 COGS Expected cash expend
Slide 18: 2024 Guidance
2024 Guidance Updating guidance Updated FY2024 Prior FY2024 FY2023 (in millions, except EPS and percentages) Guidance Guidance Actual Comparable to Net Sales Comparable $5,441 Slightly Down (Constant Currency1) (Constant Currency1) Adjusted Gross Margin1 ~50% 48.5% - 49% 47.5% Adjusted EPS1 $1.35 -
Slide 19: Closing
Closing “We continue to execute on our multi-year strategy to grow our IP-driven toy business and expand our entertainment offering. In line with our priorities this year, we continue to improve profitability, expand Gross Margin, and generate significant cash flow. We expect topline growth in the f
Slide 20: Q3 2024 Earnings Call
Q3 2024 Earnings Call One of the most iconic brand portfolios in the world ©2024 Mattel, Inc. All Rights Reserved. 20
Slide 21: Appendix
Appendix 21
Slide 22: Consolidated Statements of Operations
Consolidated Statements of Operations MATTEL, INC. AND SUBSIDIARIES EXHIBIT I 1 CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2024 2023 2024 2023 % Change % Change % Change in % Change in (In millions, except per sh
Slide 23: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets MATTEL, INC. AND SUBSIDIARIES EXHIBIT II CONDENSED CONSOLIDATED BALANCE SHEETS1 September 30, December 31, 2024 2023 2023 (In millions) (Unaudited) Assets Cash and Equivalents $ 723.5 $ 455.7 $ 1,261.4 Accounts Receivable, Net 1,477.4 1,571.0 1,081.8 Inventories
Slide 24: Supplemental Balance Sheet and Cash Flow Data
Supplemental Balance Sheet and Cash Flow Data MATTEL, INC. AND SUBSIDIARIES EXHIBIT II 1 SUPPLEMENTAL BALANCE SHEET AND CASH FLOW DATA (Unaudited) September 30, 2024 2023 Key Balance Sheet Data: Accounts Receivable, Net Days of Sales Outstanding (DSO) 72 74 For the Nine Months Ended September 30, (I
Slide 25: 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 September 30, For the Nine Months Ended September 30, (In millions, except percen
Slide 26: 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 September 30, For the Nine Months Ended September 30, (In millions, except per sh
Slide 27: 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 September 30, (In millions, except percentage and pts information) 2024 2023 Chan
Slide 28: 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 Trailing Twelve Months Ended September 30, (In millions, except percentage and pts information) 2024
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 Year Ended December 31, (In millions, except percentage and per share information) 2023 Gross Profit
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 For the Year Ended December 31, (In millions, except percentage information) 2023 Tax Rate Income Before Inco
Slide 31: Worldwide Net Sales and Gross Billings
Worldwide Net Sales and Gross Billings MATTEL, INC. AND SUBSIDIARIES EXHIBIT IV WORLDWIDE NET SALES AND GROSS BILLINGS1 (Unaudited) 2 For the Three Months Ended September 30, For the Nine Months Ended September 30, % Change % Change % Change in % Change in as Constant as Constant 2024 2023 Reported
Slide 32: Net Sales and Gross Billings by Segment
Net Sales and Gross Billings by Segment MATTEL, INC. AND SUBSIDIARIES EXHIBIT V 1 2,3 NET SALES AND GROSS BILLINGS BY SEGMENT (Unaudited) For the Three Months Ended September 30, For the Nine Months Ended September 30, % Change % Change % Change in % Change in as Constant as Constant 2024 2023 Repor
Slide 33: Net Sales and Gross Billings by Segment
Net Sales and Gross Billings by Segment MATTEL, INC. AND SUBSIDIARIES EXHIBIT VI 1 2 NET SALES AND GROSS BILLINGS BY SEGMENT (Unaudited) For the Three Months Ended September 30, For the Nine Months Ended September 30, % Change % Change % Change in % Change in as Constant as Constant 2024 2023 Report
Slide 34: Glossary of Non-GAAP Financial Measures & Key Performance Indicators
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 35: Glossary of Non-GAAP Financial Measures & Key Performance Indicators
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/used for operating activities less capital expenditures. Free Cash Flow Conversion represents Mattel’s f