Mativ(US:MATV)2025-02-20 16:51Financial Data and Key Metrics Changes - Consolidated net sales from continuing operations for Q4 2024 were $459 million, up 4.3% year-over-year on an organic basis and 1.4% as reported [24] - Adjusted EBITDA from continuing operations was $44.8 million, down 10% from $50 million in the prior year, impacted by higher input and manufacturing costs [25][30] - Adjusted EBITDA margin increased slightly year-over-year in the SAS segment, while FAM's adjusted EBITDA was down more than $10 million year-over-year [26][27] Business Line Data and Key Metrics Changes - SAS segment net sales were $291 million, up almost 13% on an organic basis, driven by higher volumes across all end markets [25] - FAM segment net sales were $168 million, down more than 7% year-over-year, with stable performance in filtration but lower volumes in advanced films [27] - SAS generated strong adjusted EBITDA performance of $36 million, up almost 8% year-over-year, while FAM's adjusted EBITDA was $26 million [25][27] Market Data and Key Metrics Changes - The overall market demand remains challenged, impacting Q1 results, with expectations of higher inventory costs and input costs [32] - The company anticipates a $10 million to $15 million headwind on input costs mainly driven by increases in the price of pulp, papers, resins, and polymers [33] Company Strategy and Development Direction - The company is focused on profit growth, cash flow generation, and reducing debt and leverage, with plans to reduce overall capital spending while still investing for growth [21][22] - A clear portfolio strategy has been established with identified growth platforms and investments aligned with the strongest markets and customers [21] - The company has restructured its organization, reducing non-operating costs by over $20 million in 2024, with plans for an additional $20 million reduction by the end of 2026 [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a prolonged low industrial demand environment and is optimistic about leveraging commercial excellence best practices across the company [22][23] - The company is executing initiatives to deliver a more agile operating model and grow share in current markets while expanding addressable markets [35] - Management expressed confidence in the turnaround efforts in the FAM segment, particularly in advanced films, and expects improvements in the second half of the year [58] Other Important Information - The company has reduced its debt by over 35% and streamlined its plant footprint by over 25% [19] - A new leadership structure has been implemented to drive improvements across the business, with Ryan Elwart promoted to lead commercial activities [20] Q&A Session Summary Question: Impact of higher inventory and input costs on Q1 - Management confirmed that Q1 will be impacted by higher inventory and input costs, with plans in place to cover these through pricing actions over the year [38][39] Question: Strategy regarding potential tariffs in Canada and Mexico - Management indicated that there has been minimal impact from implemented tariffs and has plans to mitigate potential future tariffs through supply chain adjustments [41][42] Question: Leveraging SAS successes in FAM - Management outlined four key areas for leveraging SAS successes in FAM, including demand generation, strategic customer management, cross-selling opportunities, and leveraging talent across segments [49][50] Question: Sustainability of healthcare turnaround - Management expressed confidence in the sustainability of the healthcare turnaround, highlighting strong growth and margin improvements [54][56] Question: Progress on previous investments in new lines - Management provided updates on various investments, noting that while some are still in early stages, they are confident in the growth potential despite reducing CapEx spending [60][61]