Q3 2024 Mativ Holdings Inc Earnings Call Transcript
Key Points
- Mativ Holdings Inc (MATV) reported a 10% increase in adjusted EBITDA from continuing operations, reaching USD 60.8 million compared to the prior year.
- The company has successfully implemented a turnaround effort in its healthcare segment, achieving above-market organic sales growth of over 5% and improved profitability.
- Investments in growth areas such as filtration, specialty tapes, and release liners are expected to provide incremental revenue of over $115 million in the next 3 to 4 years.
- Mativ Holdings Inc (MATV) has streamlined its operations by reducing its footprint from 48 sites to 35, which is expected to improve margins and reduce costs.
- The company has secured new customer agreements and commitments, including a long-term commitment for release liners with a major consumer goods company in North America.
- Net sales in the filtration and advanced materials segment were down 3% compared to Q3 2023, primarily due to lower volumes in the advanced films category.
- The advanced films category is facing challenges due to weak markets in automotive and construction, increased competition from Asia, and poor operational performance in a major North American plant.
- Interest expense increased by 9% from the prior year, driven by higher interest rates on floating rate debt and a higher revolver balance.
- The company expects Q4 adjusted EBITDA to be down in low double digits versus last year due to timing of incentives, product mix, and extended downtime over the holiday season.
- Demand recovery remains sluggish, with no significant indicators of improvement in the near term, impacting overall sales growth.
Largest film site focused on driving sustainable improved productivity quality and operational performance.
The advanced film turn around effort is similar to the approach we took over the course of 2023 to improve performance in health care.
The year-to-date results of this effort in health care are above market organic sales growth of more than 5% versus prior year and significantly improved profitability that has exceeded our expectations. Based on this similar effort and the outcome, I'm confident we will successfully improve results in advanced film over the course of the next 12 months, I'll now turn to some of our high growth categories where we are investing for additional capacity. We've previously talked about the investments we are making in filtration, specialty tapes and release liners and I just touched on the new investment in the UK to expand our medical film capacity. We also recently improved an investment in specialty tapes to support our polyplex and athletic tape category with a new line in our
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