Mativ Holdings, Inc. Q1 FY2026 earnings call

Last year, strategic portfolio review led to actions like closing underperforming plant, streamlining SKUs, optimizing R&D. Q1 2026 was solid with profit margin expansion and cash flow improvement. Segments had adjusted EBITDA and margin increases. Faced volume weakness in healthcare, supply chain issues, but FAM's European filtration and SAS's finished tapes had growth. Earned new commitment for specialty films from aerospace customer. Focus on extending commercial pipeline via cross-sell and leveraging product portfolio. Allocated corporate expenses to segments, published restated quarterly figures.

FAM segment: Net sales $188 million, up >2% organic, reported up modestly; adjusted EBITDA $27 million, up 41%, margin 14.6% (+430bps). SAS segment: Net sales $291 million, down 2%; adjusted EBITDA ~$31 million, up ~16%, margin 10.5% (+160bps). Consolidated net sales $480 million, nearly flat organic, down ~1% reported; adjusted EBITDA $47.5 million, up 28%, margin 9.9% (+220bps).

Q2 adjusted EBITDA expected to be mid single digit percentage down vs strong prior year due to lower healthcare volumes. But FAMS films/filtration growth, favorable price-cost ratio, SG&A savings to offset partially. Expect to manage input cost volatility and demand uncertainty with new strategic growth blueprint, focusing on high growth opportunities.

Volatile macro environment with mixed demand. Q1 volume weakness in healthcare, supply chain inefficiencies at Knoxville facility, soft demand in release liner and labels. Middle East crisis impact on input costs, with oil price rise leading to higher input costs for resins, polymers, chemicals. Uncertainty in broader market demand impact.

Q: Details on healthcare vertical customer destocking and supply chain issue, and normalization; A: Customer destocking and Knoxville plant outage, near-term issue with improvement expected in back half, offset by other portfolio strengths.

Q: Pricing continuation with input costs; A: Middle East conflict causing sticky input cost inflation, will take further pricing actions if needed, pricing critical for margin management.

Q: Revenue impact of aerospace films commitment; A: Commence in Q2, ramp up slowly with shipments in second quarter, confidential on financial terms.

Q: Cash flow for balance of 2026; A: Seasonal working capital build, expect strongest cash in Q2/Q3, plan to invest $10M working capital and $5M capex in 2026.

Q: Divestitures of non-core assets; A: Continue evaluating businesses for asset optimization, but current portfolio well-positioned for long-term growth.