Matthews International : Quarterly Presentation Q4 23

INVESTOR PRESENTATION -

QUARTERLY UPDATE

Fiscal Fourth Quarter 2023

www.matw.com | Nasdaq: MATW

© 2023 Matthews International Corporation. All Rights Reserved.

DISCLAIMER

Any forward-looking statements contained in this presentation are included pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding the expectations, hopes, beliefs, intentions or strategies of the Company regarding the future, and may be identified by the use of words such as "expects," "believes," "intends," "projects," "anticipates," estimates," "plans," "seeks," "forecasts," "predicts," "objective," "potential," "outlook," "may," "will," "could" or the negative of these terms, other comparable terminology and variations thereof. Such forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results in future periods to be materially different from management's expectations. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove correct. Factors that could cause the Company's results to differ materially from the results discussed in such forward-looking statements principally include changes in domestic or international economic conditions, changes in foreign currency exchange rates, changes in interest rates, changes in the cost of materials used in the manufacture of the Company's products, any impairment of goodwill or intangible assets, environmental liability and limitations on the Company's operations due to environmental laws and regulations, disruptions to certain services, such as telecommunications, network server maintenance, cloud computing or transaction processing services, provided to the Company by third-parties, changes in mortality and cremation rates, changes in product demand or pricing as a result of consolidation in the industries in which the Company operates, or other factors such as supply chain disruptions, labor shortages or labor cost increases, changes in product demand or pricing as a result of domestic or international competitive pressures, ability to achieve cost-reduction objectives, unknown risks in connection with the Company's acquisitions and divestitures, cybersecurity concerns and costs arising with management of cybersecurity threats, effectiveness of the Company's internal controls, compliance with domestic and foreign laws and regulations, technological factors beyond the Company's control, impact of pandemics or similar outbreaks, or other disruptions to our industries, customers, or supply chains, the impact of global conflicts, such as the current war between Russia and Ukraine, and other factors described in the Company's Annual Report on Form 10-K and other periodic filings with the U.S. Securities and Exchange Commission.

The information contained in this presentation, including any financial data, is made as of September 30, 2023 unless otherwise noted. The Company does not, and is not obligated to, update this information after the date of such information. Included in this report are measures of financial performance that are not defined by generally accepted accounting principles in the United States ("GAAP"). The Company uses non-GAAP financial measures to assist in comparing its performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect the Company's core operations including acquisition and divestiture costs, ERP integration costs, strategic initiative and other charges (which includes non-recurring charges related to operational initiatives and exit activities), stock-based compensation and the non-service portion of pension and postretirement expense. Management believes that presenting non-GAAP financial measures is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items that management believes do not directly reflect the Company's core operations, (ii) permits investors to view performance using the same tools that management uses to budget, forecast, make operating and strategic decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating the Company's results. The Company believes that the presentation of these non-GAAP financial measures, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures, provided herein, provides investors with an additional understanding of the factors and trends affecting the Company's business that could not be obtained absent these disclosures.

The Company believes that adjusted EBITDA provides relevant and useful information, which is used by the Company's management in assessing the performance of its business. Adjusted EBITDA is defined by the Company as earnings before interest, income taxes, depreciation, amortization and certain non-cash and/or non-recurring items that do not contribute directly to management's evaluation of its operating results. These items include stock-based compensation, the non-service portion of pension and postretirement expense, acquisition and divestiture costs, ERP integration costs, and strategic initiatives and other charges. Adjusted EBITDA provides the Company with an understanding of earnings before the impact of investing and financing charges and income taxes, and the effects of certain acquisition, divestiture and ERP integration costs, and items that do not reflect the ordinary earnings of the Company's operations. This measure may be useful to an investor in evaluating operating performance. It is also useful as a financial measure for lenders and is used by the Company's management to measure business performance. Adjusted EBITDA is not a measure of the Company's financial performance under GAAP and should not be considered as an alternative to net income or other performance measures derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of the Company's liquidity. The Company's definition of adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

The Company has presented constant currency sales and constant currency adjusted EBITDA and believes these measures provide relevant and useful information, which is used by the Company's management in assessing the performance of its business on a consistent basis by removing the impact of changes due to foreign exchange translation rates. These measures allow management, as well as investors, to assess the Company's sales and adjusted EBITDA on a constant currency basis.

The Company has also presented adjusted net income and adjusted earnings per share and believes each measure provides relevant and useful information, which is widely used by analysts and investors, as well as by the Company's management in assessing the performance of its business. Adjusted net income and adjusted earnings per share provides the Company with an understanding of the results from the primary operations of our business by excluding the effects of certain acquisition, divestiture and system-integration costs, and items that do not reflect the ordinary earnings of our operations. These measures provide management with insight into the earning value for shareholders excluding certain costs, not related to the Company's primary operations. Likewise, these measures may be useful to an investor in evaluating the underlying operating performance of the Company's business overall, as well as performance trends, on a consistent basis.

The Company has also presented net debt and a net debt leverage ratio and believes each measure provides relevant and useful information, which is widely used by analysts and investors as well as by our management. These measures provide management with insight on the indebtedness of the Company, net of cash and cash equivalents and relative to adjusted EBITDA. These measures allow management, as well as analysts and investors, to assess the Company's leverage.

© 2023 Matthews International Corporation. All Rights Reserved.

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OUR BUSINESS SEGMENTS

Matthews today builds on its legacy with development of new technologies

that provide a platform for continued evolution and growth.

	The Memorialization segment is a leading
The Industrial Technologies segment	provider of memorialization products,	The SGK Brand Solutions segment is a
including memorials, caskets, cremation-
designs, manufactures, services and
related products, and cremation and	leading provider of packaging solutions and
distributes high-tech custom energy storage
incineration equipment, primarily to cemetery	brand experiences, helping companies
solutions, product identification, and
and funeral home customers that help	simplify their marketing, amplify their brands
warehouse automation technologies and
families move from grief to remembrance.	and provide value.
solutions.

© 2023 Matthews International Corporation. All Rights Reserved.

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Q4 & YTD FY2023 SUMMARY

($ in millions except per-share amounts)
Q4
		Q4 2022		Q4 2023
	Sales	$	457.1	$	480.2
	Gross Margin		31.8 %		31.4 %
	Diluted (Loss) Earnings Per Share	$	(2.63)	$	0.56
	Non-GAAP Adjusted EPS*	$	0.82	$	0.96
	Net (Loss) Income Attributable to Matthews	$	(81.0)	$	17.7
	Adjusted EBITDA*	$	55.9	$	61.9

YTD
		YTD 2022		YTD 2023
	Sales	$	1,762.4	$	1,880.9
	Gross Margin		29.6 %		30.7 %
	Diluted (Loss) Earnings Per Share	$	(3.18)	$	1.26
	Non-GAAP Adjusted EPS*	$	2.88	$	2.88
	Net (Loss) Income Attributable to Matthews	$	(99.8)	$	39.3
	Adjusted EBITDA*	$	210.4	$	225.8

4th Quarter ("Q4") Highlights Sales

• Consolidated sales up $23.1 million
• Industrial Technologies sales 34% higher

GAAP EPS

• Prior year fourth quarter reflects goodwill write-down and charges in connection with cost reduction initiatives in the SGK Brand Solutions segment

Adjusted EBITDA

• All three business segments reported higher adjusted EBITDA Adjusted EPS
• Higher adjusted EBITDA, partially offset by higher interest expense

Year-to-Date ("YTD") Highlights

• Consolidated sales 6.7% higher than last year
• On a constant currency basis, consolidated sales increased 8% and adjusted EBITDA increased 9%
• Higher adjusted EBITDA reflects strong Q4 performance
• FY 2023 Industrial Technologies sales grew to over $500 million

* See supplemental slides for Adjusted EPS and Adjusted EBITDA reconciliations, and other important disclaimers regarding Matthews' use of Non-GAAP measures

© 2023 Matthews International Corporation. All Rights Reserved.

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FINANCIAL SUMMARY

(Unaudited)

	(Dollars in thousands)		Fiscal Year Ended September 30,
Sales:		2021			2022			2023
Memorialization	$	769,016	$	840,124	$	842,997
Industrial Technologies			284,495			335,523			505,751
SGK Brand Solutions			617,519			586,756			532,148
Consolidated Sales
	$	1,671,030		$	1,762,403		$	1,880,896
Adjusted EBITDA:
Memorialization	$	165,653	$	151,849	$	163,986
Industrial Technologies			34,889			56,762			66,278
SGK Brand Solutions			91,435			60,120			57,128
Corporate and Non-Operating			(64,227)			(58,323)			(61,583)
Total Adjusted EBITDA(1)	$	227,750	$	210,408	$	225,809

See Disclaimer (Page 2) for Management's assessment of supplemental information related to total adjusted EBITDA.

1. Total adjusted EBITDA is defined by the Company as earnings before interest, income taxes, depreciation, amortization and certain non-cash and/or non-recurring items that do not contribute directly to management's evaluation of its operating results. See reconciliation at Appendix A.

© 2023 Matthews International Corporation. All Rights Reserved.

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INDUSTRIAL TECHNOLOGIES

($ in millions)	Q4 Sales	$140.6
$104.6
Q4 FY2022		Q4 FY2023
Q4 Adjusted EBITDA & Margin*

$23.4	$23.5
22.4%	16.7%
Q4 FY2022	15.5%
Q4 FY2023

YTD Sales

	$505.8
$335.5
FY2022	FY2023

YTD Adjusted EBITDA & Margin*

		$66.3
	$56.8
	16.9%	13.1%
12.4%	15.6%
10.3%	FY2023
	FY2022

Sales

• Q4 increased 34%; YTD increased over 50%
• Olbrich GmbH and R+S Automotive GmbH acquisitions were a significant contributor
• Ongoing interest in and discussions on our energy storage solutions business

Adjusted EBITDA

• Q4 growth impacted favorably by higher sales and improved margins within the automation business, offset partially by the Olbrich GmbH and R+S Automotive GmbH acquisitions

* See supplemental slide for Adjusted EBITDA reconciliation and other important disclaimers regarding Matthews' use of Non-GAAP measures

© 2023 Matthews International Corporation. All Rights Reserved.

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MEMORIALIZATION

($ in millions)	Q4 Sales

$206.3	$204.9
Q4 FY2022	Q4 FY2023
Q4 Adjusted EBITDA & Margin*

$33.4	$36.9
16.2%	18.0%
Q4 FY2022	Q4 FY2023

YTD Sales

$840.1	$843.0
FY2022	FY2023

YTD Adjusted EBITDA & Margin*

$151.8	$164.0
23.0%	21.1%
18.1%	19.5%
FY2022	FY2023

Sales

• Improved price realization
• U.S. death rates have normalized from higher pandemic levels, impacting unit volumes for caskets and memorials

Adjusted EBITDA

• Improved pricing and benefits from operational cost savings initiatives
• Lower casket and memorial sales volumes

* See supplemental slide for Adjusted EBITDA reconciliation and other important disclaimers regarding Matthews' use of Non-GAAP measures

© 2023 Matthews International Corporation. All Rights Reserved.

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SGK BRAND SOLUTIONS

($ in millions)	Q4 Sales	YTD Sales

Sales

$146.3	$134.7
Q4 FY2022	Q4 FY2023
Q4 Adjusted EBITDA & Margin*

$16.7	$17.5
15.4%	12.9%
11.4%	13.0%
Q4 FY2022	Q4 FY2023

$586.8	$532.1
FY2022	FY2023

YTD Adjusted EBITDA & Margin*

$60.1	$57.1
10.2%	10.7%
FY2022	FY2023

• Unfavorable currency impacts of $16.1 million YTD
• European businesses continued to be challenged by market conditions

Adjusted EBITDA

• Favorable impacts of cost reduction initiatives and price realization
• Partially offset by impact of lower sales

* See supplemental slide for Adjusted EBITDA reconciliation and other important disclaimers regarding Matthews' use of Non-GAAP measures

© 2023 Matthews International Corporation. All Rights Reserved.

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APPENDIX

© 2023 Matthews International Corporation. All Rights Reserved.

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APPENDIX A

	NON-GAAP RECONCILIATION (Unaudited)
TOTAL ADJUSTED EBITDA
	NON-GAAP RECONCILIATION (Unaudited)
	(In thousands, except per share data)			Fiscal Year Ended September 30,
			2021				2022			2023
Net income (loss)	$	2,858	$	(99,828)		$	39,136
	Income tax provision (benefit)		6,375			(4,391)			1,774
income (loss) before income taxes		9,233			(104,219)			40,910
	Net loss attributable to noncontrolling interests		52			54			155
	Interest expense, including Receivables Purchase Agreement ("RPA") and factoring financing fees (1)		28,684			28,771			48,690
	Depreciation and amortization		133,512			104,056			96,530
	Acquisition and divestiture related items (2)		541			7,898			5,293
	Strategic initiatives and other charges (3)		34,310			31,045			13,923
	Highly inflationary accounting losses (primarily non-cash)(4)		-			1,473			1,360
	Defined benefit plan termination related items (5)		-			(429)			-
	Asset write-downs, net (6)		-			10,050			-
	Goodwill write-downs(7)		-			82,454			-
	Stock-based compensation		15,581			17,432			17,308
	Non-service pension and postretirement expense (8)		5,837			31,823			1,640
Total Adjusted EBITDA	$	227,750	$	210,408		$	225,809

1. Includes fees for receivables sold under the RPA and factoring arrangements totaling $4.0 million and $1.0 million for the fiscal years ended September 30, 2023 and 2022, respectively.
2. Includes certain non-recurring costs associated with recent acquisition and divestiture activities, and also includes a gain of $1.8 million in fiscal year 2023 related to the divestiture of a business in the Industrial Technologies segment.
3. Includes certain non-recurring costs associated with productivity and cost-reduction initiatives intended to result in improved operating performance, profitability and working capital levels and costs associated with global ERP system integration efforts totaling $12.4 million, $28.1 million, and $29.5 million for the fiscal years ended September 30, 2023, 2022, and 2021, respectively, net of loss recoveries of $2.2 million for the fiscal year ended September 30, 2023 related to a previously disclosed theft of funds by a former employee initially identified in fiscal 2015. Also includes certain non-recurring direct incremental costs (such as costs for purchases of computer peripherals and devices to facilitate working-from-home, additional personal protective equipment and cleaning supplies and services, etc.) incurred in response to COVID-19 totaling $3.0 million and $5.3 million for the fiscal years ended September 30, 2022 and 2021, respectively. This amount does not include the impact of any lost sales or underutilization due to COVID-19.
4. Represents exchange losses associated with highly inflationary accounting related to the Company's Turkish subsidiaries.
5. Represents items associated with the termination of the Company's DB Plan, supplemental retirement plan and the defined benefit portion of the officers retirement restoration plan.
6. Represents asset write-downs, net of recoveries within the SGK Brand Solutions segment.
7. Represents goodwill write-downs within the SGK Brand Solutions segment.
8. Non-servicepension and postretirement expense includes interest cost, expected return on plan assets, amortization of actuarial gains and losses, curtailment gains and losses, and settlement gains and losses. These benefit cost components are excluded from adjusted EBITDA since they are primarily influenced by external market conditions that impact investment returns and interest (discount) rates. Curtailment gains and losses and settlement gains and losses are excluded from adjusted EBITDA since they generally result from certain non-recurring events, such as plan amendments to modify future benefits or settlements of plan obligations. The service cost and prior service cost components of pension and postretirement expense are included in the calculation of adjusted EBITDA, since they are considered to be a better reflection of the ongoing service-related costs of providing these benefits. Please note that GAAP pension and postretirement expense or the adjustment above are not necessarily indicative of the current or future cash flow requirements related to these employee benefit plans.

* See Disclaimer (page 2) for Management's assessment of supplemental information related to adjusted EBITDA.

© 2023 Matthews International Corporation. All Rights Reserved.

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