Mativ (MATV) Q4 2023 earnings summary

Executive summary

• FY 2023, the first full year after the merger, faced prolonged customer destocking, inflation and weaker volumes; synergies were achieved ahead of plan.

• Engineered Papers was sold on November 30, 2023; continuing-operations results exclude the business in all periods.

Financial highlights

• Q4 continuing-operations sales were $452.3M, down 13.7% YoY; adjusted EBITDA was $50.0M, down 20%.

• Q4 GAAP net loss was $13.6M, diluted EPS $(0.25), and operating loss $2.2M; adjusted income was $13.2M and adjusted EPS $0.23.

• FY continuing-operations sales were $2,026.0M, up 24% including the merger benefit but down 9% on a comparable basis; adjusted EBITDA was $213.4M, down 17% comparable.

• FY GAAP net loss was $507.7M versus $68.9M in 2022; adjusted income was $47.3M versus $65.9M.

• FY adjusted diluted EPS was $0.80 versus $1.54; Q4 adjusted diluted EPS was $0.23 versus $0.49.

Outlook and guidance

• 2024 goals include sales and EBITDA growth, strong free cash flow generation, and further debt and leverage reduction; a material sales step-up was anticipated in H1.

• Forecast an additional $25M in synergies in 2024; January restructuring is expected to reduce costs by $40M over three years.

• From Q1 2024, Filtration & Advanced Materials is positioned at 40% of annual revenue, with GDP+ growth and mid-to-high-teens adjusted EBITDA margin; Sustainable & Adhesive Solutions at 60%, with GDP growth and low-to-mid-teens margin.