In an effort to address prevalent supply chain uncertainties and to maintain the commercial viability of its Graphic Paper business, Sappi Europe will keep prices for its Woodfree Coated Paper grades stable at today’s level for the remainder of 2023. This commitment facilitates customers' ability to commit to business in advance of the traditionally busier fourth quarter for the printing industry. Market conditions are similar across the region, but obviously diverge between countries and segments and as such Sappi Europe’s sales personnel is always available for these individual customer specifics. Sappi Europe remains fully committed to serving the printing business and will work closely with our customers to ensure the best possible outcome throughout the print media value chain.
Mativ Holdings, Inc. (“Mativ” or the “Company”) (NYSE: MATV) reported earnings results for the three month and nine month periods ending September 30, 2022. On July 6, 2022, Schweitzer Mauduit International, Inc. (“SWM”) and Neenah, Inc. (“Neenah”) completed a merger of equals (“the merger”); Financial statements for periods prior to the merger reflect only the legacy SWM results.
Mativ Third Quarter 2022 Highlights:
*Sales increased 76% to $674.1 million with 12% constant currency organic sales growth, or 7% organic growth including negative currency impacts; strong sales growth in release liners, protective solutions, filtration, and paper and specialty packaging led the portfolio
*GAAP EPS was $(0.43), and included significant expenses related to the Neenah merger closing and integration; Adjusted EPS was $0.74
*GAAP Operating Loss was $13.9 million; Adjusted Operating Profit was $65.5 million, up 24% on a comparable basis (see non-GAAP reconciliation)
*Pricing actions across the Company driving top-line gains and offsetting raw material cost increases, with margin expansion across most categories
*Macro trends such as negative currency changes, increasing global economic uncertainty, and European energy inflation impacted results, as did a cybersecurity incident (unrelated to the integration of the Neenah merger) during the quarter
*The Company now expects 4Q:22 Adjusted EBITDA to be consistent with 3Q:22 Adjusted EBITDA of $93.0 million and continued year-over-year Adjusted EBITDA growth into 2023
*The Company still expects net leverage to be at 3.75x or below by year-end with the benefit of enhanced working capital programs, and to be within the 2.5x to 3.5x target range during 2023
Julie Schertell, Chief Executive Officer, commented, “Mativ delivered organic constant currency sales growth of 12% in the quarter, with most business areas delivering increased price, revenue, and margin. On a comparable basis, adjusted operating profits were up nearly 25%. Our merger integration is progressing well and we are executing on our $65 million cost synergy plan. Based on current performance, we now expect to exceed our previously communicated $20 million synergy run-rate exiting 2022.”
“Despite these positive performance trends, several factors are converging since mid-year to push second half 2022 EBITDA below our original expectations of $210 million to $230 million. Unfavorable currency trends have accelerated and there has been an increase in volatility in the macro backdrop, including global demand uncertainty and inflationary pressures led by the rapid escalation in energy costs, particularly in Europe. Our latest round of pricing actions primarily go into effect late this year and early 2023 and will lag recovery of this rapid increase in energy in the short-term. Additionally, we were also impacted by a cybersecurity incident during the third quarter which temporarily disrupted our operations and reduced sales.”
Ms. Schertell concluded, “Mativ’s fundamental outlook remains positive despite the current turbulence facing global manufacturers. Looking forward, we expect consistent sequential EBITDA in the fourth quarter, which would represent another period of strong comparable year-over-year growth, and to continue these profit growth trends into 2023 as we trend toward $100 million EBITDA quarters. Our conviction in this outlook is a function of recovering from the cybersecurity incident’s impact on our operating performance, accelerated synergy realization, and additional pricing actions. Furthermore, our synergies provide a valuable offset if macro trends move more unfavorably or recessionary conditions emerge. Our global teams are executing on these near-term cost synergies, as well as laying the foundation for accelerated long-term growth by leveraging the manufacturing technologies, customer relationships, and geographic footprint of our newly merged enterprise.”
details at: https://ir.mativ.com/investors/news/news-details/2022/Mativ-Announces-Third-Quarter-2022-Results/default.aspx