Mativ Holdings, Inc. Q2 FY2025 earnings call

• Sequentially, Q2 sales were more than $40 million higher (up over 8%) and adjusted EBITDA increased $30 million (up more than 80) vs Q1. Year-over-year, adjusted EBITDA and free cash flow were favorable. - SAS sales up 5% organic (fifth consecutive quarter of Y/Y sales improvement), with tapes/labels, liners, healthcare, commercial print leading. FAM had growth in HVAC, air pollution control filtration, optical films. - Delayered organization, promoted talent, optimized resource allocation. - Target $35M-$40M in cost reductions by end 2026 ($15M-$20M in 2025). - Strategic portfolio review underway; supply chain, operational, and distribution cost improvements in progress.

Sustainable & Adhesive Solutions (SAS) segment: Net sales were $321 million, up more than $15 million or 5% on an organic basis. Adjusted EBITDA was $45 million, decreasing by just under 2% year-over-year. Filtration & Advanced Materials (FAM) segment: Net sales were $204 million, down 1% versus Q2 of 2024. FAM adjusted EBITDA was $40 million, decreasing by just under $2 million year-over-year.

• Expect Q3 adjusted EBITDA to increase 5%-10% vs prior year, Q4 also favorably. - Full year 2025 free cash flow expected to be twice that of 2024. - Target leverage 2.5-3.5x; working to reduce year-end 2025 inventory by $20M-$30M.

• Tariffs and trade policies with less than 7% of annual sales subject to tariffs, indirect impacts on demand patterns. - Uncertain macroeconomic environment affecting sales and operating leverage.

Q: Provide update on paint protection film and optical films, and cash flow.

A: Paint protection film is seeing positive momentum with mid-tier strategy in Asia and premium segment gain in North America; optical films are growing well. Cash flow on track to $80M for 2025.

Q: Talk about second quarter outperformance, self-help, and strategic review.

A: Disciplined approach, solid pipeline, share gains; cost reduction initiatives driving EBITDA growth; strategic review in progress with no specific assets committed yet.