Mativ Holdings, Inc. · NYSE:MATV
Mativ — Schweitzer Mauduit International — Investor Presentation (February 2017)
36 slides from Mativ's investor presentation, Feb 17, 2017
Slide 1: Investor Presentation February 2017
Investor Presentation NYSE: SWM February 2017
Slide 2: Safe Harbor Statement
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Safe Harbor Statement This presentation may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws that are subject to the safe harbor created
Slide 3: Agenda
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Agenda Introduction Engineered Papers Segment Advanced Materials & Structures Segment 3 Growth Opportunities Financials Annual Review / Outlook
Slide 4: Introduction: Corporate Overview
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Introduction: Corporate Overview Global supplier of highly engineered products to a diverse customer base Customized Solutions + Operational Excellence + Technology & Innovation GROWING ADVANCED MATERIALS & STRUCTURES SEGMENT (AMS) M
Slide 5: Introduction: Strategy & Transformation
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Introduction: Strategy & Transformation 5 Acquisitions in Advanced Materials & Structures’ growth-oriented business supported by mature Engineered Papers cash flow engine AMS Segment: Long-term GDP-plus organic sales growth, synergie
Slide 6: Introduction: Historical Cash Flow
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. 6 Introduction: Historical Cash Flow NOTE: All financial measures in this presentation relate to continuing operations unless stated otherwise. Strong cash flow has enabled a 5x increase in dividends per share since 2011; recent annu
Slide 7: Introduction: Segment Overviews
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Introduction: Segment Overviews 7 Engineered Papers (EP) • Fiber-based rolled goods in high value applications primarily for tobacco end-market • A key profit driver is Low-Ignition Propensity paper (LIP), a fire safety product manda
Slide 8: Agenda
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Agenda Introduction Engineered Papers Segment Advanced Materials & Structures Segment 8 Growth Opportunities Financials Annual Review / Outlook
Slide 9: Structures: Overview
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. AMS is a portfolio of complementary businesses which SWM is integrating into a unified segment to maximize synergies and growth opportunities Advanced Materials & Structures: Overview How we define AMS: Advanced materials and structu
Slide 10: Structures: End-Markets (Water Filtration)
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Advanced Materials & Structures: End-Markets 10 Demand for reverse osmosis (RO) water filtration expected to generate long-term annual growth ≈ 10% SWM has a strong foothold in several key products used in the water filtration indust
Slide 11: Structures: End-Markets (Air and Liquid Filtration)
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. • Demand for improved residential and commercial air quality • High margin electrostatic media technology was key strategic rationale for Pronamic bolt-on acquisition • Cabin air, face mask, HVAC and vacuum filtration • OEM demand, a
Slide 12: Structures: End-Markets (Infrastructure and Construction)
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Advanced Materials & Structures: End-Markets 12 Leading positions in erosion/ sediment control applications used in highway development and oil & gas industry • Erosion/sediment control blankets used in highway development and other
Slide 13: Structures: End-Markets (Transportation)
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. $0 $25 $50 $75 $100 $125 $150 2015E 2018E Projected Total Auto Paint Protection TPU Film Sales ($MM)1 1 Source: Management estimates Advanced Materials & Structures: End-Markets SWM’s high value TPU films are used in surface protecti
Slide 14: Structures: End-Markets (Industrial and Medical)
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Advanced Materials & Structures: End-Markets 14 SWM produces a variety of materials for specialty industrial and medical applications SWM has presences in finger bandages and other woundcare applications; generally GDP- type growth e
Slide 15: Structures: Products/Technologies
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Advanced Materials & Structures: Products/Technologies 15 Precision engineered components to meet customer needs; key attributes, such as thickness, clarity, durability, UV resistance, waterproof, puncture proof, heat tolerance, and
Slide 16: Agenda
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Agenda Introduction Engineered Papers Segment Advanced Materials & Structures Segment 16 Growth Opportunities Financials Annual Review / Outlook
Slide 17: Engineered Papers: Cigarette Paper Products
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Engineered Papers: Cigarette Paper Products SWM is a global leader in cigarette papers through focus on solving customer issues, industry-leading R&D, strategic relationships, and global capabilities 17 LIP is a key profit driver; SW
Slide 18: Engineered Papers: Reconstituted Tobacco Products
© 2017 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 – Attractive vs. high grade tobacco leaf - Oversupply of high-quality virgin lea
Slide 19: Engineered Papers: Non-Tobacco Paper Products
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Continued strategic focus on developing more value-add products; balance between supporting new products and serving as “filler” volumes 19 SWM is capitalizing on existing process technologies and paper manufacturing assets to increa
Slide 20: Engineered Papers: Tobacco End-Market
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Engineered Papers: Tobacco End-Market 20 Global Cigarette Consumption 2016: 5.5 trillion sticks, down 3% Am & Oceania 2016: -3% ~6% of global Latin America 2016: -6% ~4% of global Europe 2016: -2% ~9% of global China 2016:-5% ~44% of
Slide 21: Engineered Papers: Tobacco End-Market Trends
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Engineered Papers: Tobacco End-Market 21 Marketplace Trends / Developments Comments / Impacts Global oversupply of high-quality virgin tobacco leaf - RTL volumes were down 10+% in 2016 at French mill, 10+% declines expected to contin
Slide 22: Engineered Papers: Customers/Partners
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Relationships averaging more than 50 years among leading customers • Top SWM customers include Altria, Philip Morris International, British American Tobacco, Japan Tobacco, Reynolds, and Imperial Brands… • …Together these 6 customers
Slide 23: Agenda
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Agenda Introduction Engineered Papers Segment Advanced Materials & Structures Segment 23 Growth Opportunities Financials Annual Review / Outlook
Slide 24: Growth Opportunities
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. 24 Growth Opportunities AMS expected to benefit from high growth in several specialty applications and optimized manufacturing and sales operations AMS Sales Growth GDP-plus long-term growth trends in several AMS applications/end-mar
Slide 25: Agenda
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Agenda Introduction Engineered Papers Segment Advanced Materials & Structures Segment 25 Growth Opportunities Financials Annual Review / Outlook
Slide 26: Financials: Annual Results Overview
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Financials: Annual Results Overview NOTE: Throughout this presentation, the term GAAP EPS is used to represent GAAP Diluted EPS, and Adjusted EPS is used to represent Adjusted Diluted EPS. Adjusted EPS and Adjusted Operating Profit a
Slide 27: Financials: Segment Results
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Financials: Segment Results NOTE: Adjusted Operating Profit and Adjusted Unallocated Corporate Expenses are non-GAAP financial measures. See non-GAAP reconciliations and supplemental data in appendix. All financial measures presented
Slide 28: Financials: Capital Structure, Liquidity, and Cash Flow
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. 2016 Operating Cash Flow: $130 million Cash Uses: • Capital Spending/Software: $31 million • Dividends: $49 million • Acquisitions (Conwed): $295 million Transaction announced 4Q:16, closed 1Q:16 2017 Expected Cash Uses: • Capital Sp
Slide 29: Financials: Capital Allocation Strategy
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. 29 Financials: Capital Allocation Strategy AMS End-markets / Technologies Filtration Infrastructure & Construction Transportation Industrial Medical Nets Films Non-Wovens Tubes Return of Capital Target > 1/3 o
Slide 30: Agenda
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. Agenda Introduction Engineered Papers Segment Advanced Materials & Structures Segment 30 Growth Opportunities Financials Annual Review / Outlook
Slide 31: 2016 Review & 2017 Outlook
© 2017 Schweitzer-Mauduit International, Inc. All Rights Reserved. 31 2016 Review & 2017 Outlook 2016 Review 2017 Outlook (as issued in February 2017) • Adjusted EPS guidance of $3.15 - GAAP equivalent to be determined upon completion of purchase accounting for Conwed acquisition • Potential upside
Slide 32: Appendix - Non-GAAP Reconciliations & Supplemental Data
Appendix - Non-GAAP Reconciliations & Supplemental Data - Historical Segment Financials 32
Slide 33: Non-GAAP Reconciliations & Supplemental Data
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Non-GAAP Reconciliations & Supplemental Data 33 Certain financial measures and comments contained in this presentation are “non-GAAP” financial measures, specifically measures which exclude one or more of the following: currency impa
Slide 34: Non-GAAP Reconciliations & Supplemental Data, Cont.
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Non-GAAP Reconciliations & Supplemental Data, Cont. 34 Certain financial measures and comments contained in this presentation are “non-GAAP” financial measures, specifically measures which exclude one or more of the following: curren
Slide 35: Segment Financials – Historical
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Segment Financials – Historical 35 In October 2015, SWM consolidated its former Paper and Reconstituted Tobacco segments into one reportable segment, Engineered Papers, conforming to the current organizational structure and strategic
Slide 36: Segment Financials – Historical, Cont.
© 2016 Schweitzer-Mauduit International, Inc. All Rights Reserved. Segment Financials – Historical, Cont. 36 Net Sales FY 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015 Engineered Papers 666.9$ 147.5$ 141.3$ 142.4$ 152.7$ 583.9$ -14.7% -17.6% -16.7% 0.9% -12.4%
Schweitzer Mauduit International — Investor Presentation (February 2017) on 6ix