Mativ Holdings Inc (MATV) 2023 Q3 法說會逐字稿

Welcome to Mativ's Third Quarter 2023 Earnings Conference Call. On the call today from Mativ is Julie Schertell, Chief Executive Officer; Greg Weitzel, Chief Financial Officer; and Chris Kuepper, Director of Investor Relations. Today's call is being recorded and will be available for replay later this afternoon. (Operator Instructions) It is now my pleasure to turn the call over to Mr. Chris Kuepper. Please go ahead.

歡迎參加 Mativ 2023 年第三季財報電話會議。今天，執行長 Julie Schertell 接聽了 Mativ 的電話；格雷格‧韋策爾，財務長；和投資者關係總監 Chris Kuepper。今天的通話正在錄音中，將於今天下午晚些時候重播。 （接線生指示）現在我很高興將電話轉給 Chris Kuepper 先生。請繼續。

Good morning, everyone, and thank you for joining us on Mativ's Third Quarter 2023 Earnings Call. Before we begin, I'd like to remind you that comments included in today's conference call include forward-looking statements. Actual results may differ materially from these comments for reasons shown in detail in our Securities and Exchange Commission filings, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. Some financial measures discussed during this call are non-GAAP financial measures. Reconciliations of these measures to the closest GAAP measures are included in the appendix of the earnings release and accompanying presentation slides.

大家早安，感謝您參加 Mativ 的 2023 年第三季財報電話會議。在開始之前，我想提醒您，今天電話會議中的評論包含前瞻性陳述。實際結果可能與這些評論有重大差異，具體原因請參閱我們向美國證券交易委員會提交的文件，包括我們的 10-K 表年度報告和 10-Q 表季度報告。本次電話會議中討論的一些財務指標屬於非公認會計準則財務指標。這些指標與最接近的 GAAP 指標的對帳包含在收益發布的附錄和隨附的簡報幻燈片中。

Unless stated otherwise, financial and operational metric comparisons are to the prior year period and relate to continuing operations. The earnings release issued yesterday afternoon is available on our website at ir.mativ.com as are the slides for today's presentation. You can download the slides and or click through the slides at your own pace during the call using the webcast interface. Since the SWM and Neenah merger closed on July 6, 2022, the third quarter of 2023 is the first reporting period since the merger that is truly comparable. However, year-to-date GAAP results for the first half of 2022 will still include legacy SWM since this was prior to the merger.

除非另有說明，財務和營運指標與去年同期進行比較，並與持續營運相關。昨天下午發布的收益報告以及今天演示的幻燈片均可在我們的網站 ir.mativ.com 上取得。您可以在通話期間使用網路廣播介面下載投影片並/或按自己的步調點擊投影片。自 SWM 和 Neenah 合併於 2022 年 7 月 6 日結束以來，2023 年第三季是合併以來第一個真正具有可比性的報告期。然而，2022 年上半年迄今的 GAAP 業績仍將包括傳統 SWM，因為這是在合併之前。

Comparable performance for year-to-date figures to illustrate how our results compare on a like-for-like basis are shown in tables in our earnings release and the appendix of our presentation slides. Finally, with the August announcement about the sale of the Engineered Papers. Results for this business are now being summarized separately as discontinued operations. With all remaining businesses, being reported as continuing operations. With that, I'll turn the call over to Julie.

我們的收益報告和簡報幻燈片附錄中的表格顯示了年初至今數據的可比較業績，以說明我們的業績如何在同類基礎上進行比較。最後，八月發布了有關出售工程論文的公告。該業務的業績現單獨匯總為已終止業務。所有剩餘業務均以持續經營業務報告。這樣，我就把電話轉給茱莉。

Thanks, Chris. And good morning, everyone. The third quarter marked the start of our second year as Mativ. Our teams have accomplished a lot over the past year, bringing 2 companies together and establishing one new can-do culture quickly identifying and realizing synergies that are tracking ahead of our $65 million target and completing a detailed strategic assessment of our business portfolio. As we assess our businesses, we analyzed market dynamics, coupled with our right to win, looking for the ability to grow and deliver attractive margins and returns on capital.

謝謝，克里斯。大家早安。第三季標誌著我們作為 Mativ 第二年的開始。我們的團隊在過去一年中取得了許多成就，將兩家公司合併在一起，建立了一種新的進取文化，快速識別和實現協同效應，從而實現我們6500 萬美元的目標，並完成對我們業務組合的詳細策略評估。在評估我們的業務時，我們分析了市場動態以及我們的獲勝權利，尋找成長和提供有吸引力的利潤和資本回報的能力。

We plan to invest most strongly behind our fastest-growing and most profitable categories like filtration and release liner. And drive operational efficiencies and margin improvement across all categories. Following this review, we made the decision to divest our tabacular-related Engineered Papers business and found a strategic buyer who was able to move quickly with an attractive offer. The transaction is moving forward as planned and on track to close in the fourth quarter.

我們計劃大力投資成長最快、利潤最高的類別，例如過濾和防黏膜。並推動所有類別的營運效率和利潤率提高。經過這次審查，我們決定剝離與 tabacular 相關的工程紙業務，並找到了一位能夠快速採取有吸引力的報價的戰略買家。該交易正在按計劃進行，預計將在第四季度完成。

Net proceeds from the sale are expected to be over $575 million and will be used to reduce debt. Now in our second year, we are focused on further augmenting cash flows through both operating savings and capital efficiencies and have a number of activities underway. Our supply chain efforts have been impressive. We've rightsized crew schedules and asset plan to reflect the current demand environment and reduced costs and have taken out over $50 million of inventory since the first quarter.

此次出售的淨收益預計將超過 5.75 億美元，並將用於減少債務。現在是第二年，我們致力於透過營運節約和資本效率進一步增加現金流，並正在進行多項活動。我們的供應鏈努力令人印象深刻。我們調整了船員班次和資產計劃，以反映當前的需求環境並降低成本，並且自第一季以來已清理了超過 5000 萬美元的庫存。

We have plans to further improve inventory efficiencies measured as a percent of sales, targeting at least another 100 basis points. I mentioned in the past that we would be working on footprint optimization as part of the merger. We've recently announced manufacturing footprint consolidation at 3 of our smaller and less profitable facilities and are in the process of consolidating warehouse and distribution operations as well. These changes will begin in early 2024. And while they have minor upfront costs, they will deliver meaningful ongoing savings. We have aggressive and specific cost reduction programs for manufacturing and SG&A.

我們計劃進一步提高庫存效率（以銷售額的百分比衡量），目標是再提高至少 100 個基點。我過去提到過，作為合併的一部分，我們將致力於足跡優化。我們最近宣布對 3 個規模較小且利潤較低的工廠進行製造足跡整合，並且正在整合倉庫和分銷業務。這些變化將於 2024 年初開始。雖然前期成本很小，但將帶來有意義的持續節省。我們針對製造和 SG&A 制定了積極而具體的成本削減計劃。

Some of these began delivering value earlier this year, and some will begin in early 2024. We are carefully managing capital spending with 2024 spending expected to be below $70 million, down from the past 2 years. While tightening our belts, we will continue to invest in projects necessary to safely operate and maintain our equipment as well as those delivering compelling financial returns. Lastly, synergy realization remains a priority and is ahead of plan, with over $25 million of value being delivered in 2023 and another $25 million identified for 2024. These efforts are especially appropriate in today's uncertain economic and geopolitical environment. As a manufacturing company, many of our markets are economically sensitive.

其中一些在今年稍早開始創造價值，有些將在 2024 年初開始。我們正在謹慎管理資本支出，預計 2024 年支出將低於 7,000 萬美元，低於過去兩年。在勒緊褲腰帶的同時，我們將繼續投資於安全操作和維護我們的設備所需的項目以及那些能夠帶來令人信服的財務回報的項目。最後，實現協同效應仍然是優先事項，並且提前於計劃，2023 年將交付超過2500 萬美元的價值，並在2024 年確定另外2500 萬美元的價值。這些努力在當今不確定的經濟和地緣政治環境中尤其合適。作為一家製造公司，我們的許多市場都對經濟敏感。

The U.S. manufacturing sector as measured by the manufacturing PMI contracted in the third quarter as order softness continues, and this was confirmed by volume declines reported by our customers.

由於訂單持續疲軟，以製造業 PMI 衡量的美國製造業在第三季出現收縮，我們的客戶報告的銷售下降也證實了這一點。

Turning to third quarter results. Sales from continuing operations were about $0.5 billion and reflected lower customer demand due to economic conditions, continued destocking of inventory as well as seasonal slowdowns in some of our European businesses. Sales were down 5% from Q2 and 10% below prior year. comparisons versus prior year were impacted more significantly in specialty paper and packaging where industry-wide customer destocking continued this year. and compared to a very strong prior year period.

轉向第三季業績。持續經營業務的銷售額約為 5 億美元，反映出由於經濟狀況、持續去庫存以及我們一些歐洲業務的季節性放緩而導致的客戶需求下降。銷售額比第二季下降 5%，比去年同期下降 10%。與去年相比，特種紙和包裝受到的影響更大，今年全行業客戶繼續去庫存。與去年同期相比非常強勁。

Adjusted EBITDA was $55 million for the quarter, similar to Q2 but below prior year levels. Volume continues to be the biggest driver, including impact of fixed cost absorption at manufacturing sites. And this offset continued benefit from synergy realization and positive price input cost management. I noted many of the activities we have underway to reduce costs. Demand generation is also extremely important in this environment, and we are working closely with customers to grow share and explore new opportunities.

本季調整後 EBITDA 為 5,500 萬美元，與第二季類似，但低於去年同期水準。銷售量仍是最大的驅動因素，包括製造工廠固定成本吸收的影響。這種抵銷持續受益於綜效的實現和積極的價格投入成本管理。我注意到我們為降低成本而進行的許多活動。在這種環境下，需求的產生也極為重要，我們正在與客戶密切合作，以擴大份額並探索新的機會。

Some of these efforts include the launch of new pearlized high-quality packaging paper, where we are the only North American producer capable of making this a faster dissolving label that improves efficiency for customers, a new mid-tier paint protection film to meet growing market adoption rate and advancements in optical films, such as those used in ballistic resistant materials. In total, we expect these initiatives can add over $10 million in new revenue over the next 12 months.

其中一些努力包括推出新型珠光高品質包裝紙（我們是唯一一家能夠將其打造成溶解速度更快的標籤以提高客戶效率的北美生產商）、推出新型中層油漆保護膜以滿足不斷增長的市場需求光學薄膜（例如防彈材料中使用的薄膜）的採用率和進步。總的來說，我們預計這些措施可以在未來 12 個月內增加超過 1,000 萬美元的新收入。

In addition, we are on track with larger projects to enable ad growth in key markets. Release Liners has a strong record of profitable growth. Our new capacity in Mexico recently came online and allows us to continue this growth as we expand our position in North and South America. Air, Industrial and Life Science filtration are large, fast-growing markets. Our investment in a new melt-blown signed fiber asset to support these markets is on track to come online early in Q2 of next year.

此外，我們正在實施更大的項目，以促進主要市場的廣告成長。離型紙具有良好的獲利成長記錄。我們在墨西哥的新產能最近上線，使我們能夠在擴大我們在北美和南美的地位的同時繼續保持這種增長。空氣、工業和生命科學過濾是龐大且快速成長的市場。我們為支持這些市場而對新的熔噴簽約纖維資產進行的投資預計將在明年第二季初投入使用。

As noted in our last call, these 2 capacity additions represent over $50 million of added revenue. So let me sum up with a few comments.

正如我們在上次電話會議中所指出的，這 2 個產能的增加意味著超過 5,000 萬美元的新增收入。因此，讓我總結一些評論。

Over the course of the past year, our goal has been and continues to be to reposition Mativ strategically and financially for a strong future. While the short-term environment is challenging, we know what we need to do, and our teams are focused in executing well. We are addressing the fundamentals by providing customers with innovative new products that meet their needs, managing operations to deliver high-quality products in a safe manner and driving continuous improvement in productivity and efficiencies in all areas. We are continuing to deliver benefits by managing selling prices to cover input cost inflation and realized merger synergies.

在過去的一年裡，我們的目標一直是並將繼續是在策略和財務上重新定位 Mativ，以實現美好的未來。雖然短期環境充滿挑戰，但我們知道我們需要做什麼，而且我們的團隊專注於良好執行。我們透過為客戶提供滿足其需求的創新新產品、管理營運以安全地提供高品質產品以及推動各領域生產力和效率的持續提高來解決根本問題。我們將繼續透過管理銷售價格來彌補投入成本通膨並實現合併綜效，從而創造效益。

We are taking additional actions to reduce costs and increase cash flow, including footprint optimization spending controls and working capital and capital spending initiatives.

我們正在採取其他行動來降低成本和增加現金流，包括足跡優化支出控制以及營運資本和資本支出計劃。

And importantly, we continue to execute against our long-term strategy. Investing in attractive markets like filtration and release liners that will accelerate our growth rate and expand our margins. I'm confident our actions will make Mativ stronger in the long run, and I'm excited about our future. I'll talk more about our outlook later in the call.

重要的是，我們繼續執行我們的長期策略。投資於過濾和防黏襯墊等有吸引力的市場，這將加快我們的成長率並擴大我們的利潤。我相信從長遠來看，我們的行動將使 Mativ 變得更加強大，我對我們的未來感到興奮。我將在稍後的電話會議中詳細討論我們的前景。

But for now, I'll turn it over to Greg to review the third quarter financials.

但現在，我將把它交給格雷格來審查第三季的財務狀況。

Thanks, Julie, and good morning, everyone. Consolidated net sales for the quarter were $498 million compared to $551 million in the prior year. Selling price and currency were up about 3%, but were more than offset by a 12% volume base decline. Healthcare was our best-performing category in the quarter with sales up 12%. While packaging and specialty papers felt the most pressure for the reasons Julie noted.

謝謝朱莉，大家早安。該季度的綜合淨銷售額為 4.98 億美元，去年同期為 5.51 億美元。售價和貨幣上漲約 3%，但被銷量基數下降 12% 所抵銷。醫療保健是我們本季表現最好的類別，銷售額成長了 12%。由於朱莉指出的原因，包裝紙和特種紙承受的壓力最大。

Adjusted EBITDA from continuing operations was over $55 million, in line with Q2 but down from $70 million in the prior year.

持續經營業務調整後的 EBITDA 超過 5,500 萬美元，與第二季持平，但低於前一年的 7,000 萬美元。

Volume and manufacturing costs represented a combined $40 million impact, which was only partially offset by $23 million of combined net selling price input cost benefits and favorable impacts from lower SG&A, realized synergies and currency.

產量和製造成本合計產生了 4000 萬美元的影響，但僅被 2300 萬美元的合計淨售價投入成本效益以及較低的 SG&A、實現的協同效應和貨幣帶來的有利影響所部分抵消。

Turning to each of our segments. Net sales in Advanced Technical Materials of $394 million were down 8% year-over-year and 6% versus Q2. This reflected lower volumes due to increased customer caution and the uncertain macroeconomic environment as well as seasonal flowing, particularly in Europe.

轉向我們的每個細分市場。先進技術材料的淨銷售額為 3.94 億美元，年減 8%，與第二季相比下降 6%。這反映出由於客戶更加謹慎、宏觀經濟環境不確定以及季節性流動（特別是在歐洲）導致銷量下降。

The lower volumes were partially offset by higher selling prices and currency translation. ATM adjusted EBITDA of $59 million was down 6% year-over-year, reflecting the effects of lower volumes that were partially offset by positive net selling price input costs, distribution efficiencies in currency translation. Despite weak demand, we improved adjusted EBITDA margin by 30 basis points to 15%, mainly due to realized synergies and favorable product mix. In our fiber-based solutions for FBS segment, which now is comprised solely of packaging and specialty papers, net sales of $104 million were down 2% from last quarter and 17% from last year.

銷量下降被較高的銷售價格和貨幣換算部分抵銷。 ATM 調整後 EBITDA 為 5,900 萬美元，年減 6%，反映出銷售量下降的影響，但銷售量下降的影響被正淨售價投入成本和貨幣換算的分銷效率部分抵銷。儘管需求疲軟，我們仍將調整後 EBITDA 利潤率提高了 30 個基點，達到 15%，這主要是由於實現了協同效應和有利的產品組合。在我們針對 FBS 領域的基於纖維的解決方案（目前僅由包裝紙和特種紙組成）中，淨銷售額為 1.04 億美元，比上季度下降 2%，比去年下降 17%。

Year-on-year results reflected customer destocking, along with lower demand for premium paper and packaging in the current quarter. Industry data for uncoated freesheet papers indicated demand was down around 25% during the quarter. Results compared to a very strong prior year when there was significant industry-wide customer inventory build, partly offsetting impacts of lower volumes were increased sales of consumer papers and higher selling prices. FBS adjusted EBITDA of $15 million was down slightly versus the prior quarter but down significantly year-over-year.

年比結果反映出客戶庫存減少，以及本季對優質紙張和包裝的需求下降。無塗層免費單頁紙的行業數據表明，本季需求下降了約 25%。與去年非常強勁的結果相比，當時全行業客戶庫存增加，部分抵消了銷售下降的影響，但消費紙銷售增加和售價上漲。 FBS 調整後 EBITDA 為 1,500 萬美元，較上一季略有下降，但較去年同期大幅下降。

The comparison to prior year was negatively impacted by a onetime benefit in 2022 of almost $7 million as we harmonized inventory costing systems between Neenah and SWM following the merger. Lower volume and associated manufacturing cost impact in the current quarter were partly offset by favorable net selling price input costs. Turning to a few of the corporate items. Unallocated corporate adjusted EBITDA expense of around $18 million was flat year-on-year. Interest expense of $17 million was up $2 million from the prior year period, due to higher interest rates on our variable debt in 2023.

與前一年相比，由於我們在合併後協調了 Neenah 和 SWM 之間的庫存成本核算系統，因此 2022 年一次性收益近 700 萬美元，對這一收益產生了負面影響。本季銷售下降和相關製造成本的影響被有利的淨售價投入成本所部分抵銷。轉向一些公司專案。未分配的企業調整後 EBITDA 費用約為 1800 萬美元，與去年同期持平。由於 2023 年我們的可變債務利率上升，利息支出為 1,700 萬美元，比去年同期增加了 200 萬美元。

We will be paying off this higher cost debt with proceeds from the EP sales. Other income was around 0 in 2023, down $2 million from 2022 when we recorded gains on certain foreign currency contracts. Our tax rate was negative in the quarter. This rate was driven by the goodwill impairment that was not deductible for tax purposes and a change in the valuation allowance against one of our tax assets. As you saw on our GAAP results, during the third quarter, we performed a goodwill impairment analysis and recorded a pretax noncash charge of $401 million.

我們將用 EP 銷售收益來償還這筆成本較高的債務。 2023 年其他收入約為 0，比 2022 年我們在某些​​外幣合約上錄得收益時減少了 200 萬美元。本季我們的稅率為負。這一比率是由不可扣除稅收目的的商譽減損以及我們的一項稅收資產的估價準備金的變化所驅動的。正如您在我們的 GAAP 業績中看到的那樣，在第三季度，我們進行了商譽減損分析，並記錄了 4.01 億美元的稅前非現金費用。

The write-off included goodwill created at the time of the merger when our company market valuation was higher and reflected today's weaker economic conditions and associated impact on the valuation of certain acquisitions.

沖銷包括合併時產生的商譽，當時我們公司的市場估值較高，反映了當今較弱的經濟狀況以及對某些收購估值的相關影響。

I'd note that while current valuations for some acquisitions are lower than when they were acquired a few years ago, when conditions were more robust and interest and discount rates were lower, these acquisitions are still attractive and gaining momentum.

我要指出的是，雖然目前某些收購的估值低於幾年前收購時的估值，但當時的情況更加強勁，利率和貼現率較低，但這些收購仍然具有吸引力，並且勢頭強勁。

During the quarter, we also recorded $19 million of noncash costs to write down assets, including sites impacted by rationalizing our manufacturing footprint and just over $5 million of cash costs related to the pending sale of Engineered Papers.

在本季度，我們還記錄了1,900 萬美元的非現金成本來減記資產，包括因合理化我們的製造足跡而受到影響的工廠，以及與待售工程紙相關的略高於500 萬美元的現金成本。

At the end of the quarter, net debt was a little over $1.6 billion and available liquidity was $414 million. Our debt matures on a staggered basis between 2026 and 2028. As announced in August, with our revised capital allocation priorities, we resized our quarterly dividend to $0.10 a share.

截至本季末，淨負債略高於 16 億美元，可用流動資金為 4.14 億美元。我們的債務在 2026 年至 2028 年之間分期到期。正如 8 月所宣布的那樣，根據我們修訂的資本配置優先順序，我們將季度股息調整為每股 0.10 美元。

We made our first dividend payout of $5.5 million in September at this new rate. This revised payout frees up cash while still providing an attractive yield. We also repurchased over $4 million of shares in the quarter. Our intent is to opportunistically repurchase shares to offset dilution from stock compensation. We expect repurchases in the fourth quarter to be at or below this amount. The priorities of cash flow, however, remains paying down debt. The sale of our Engineered Papers business, which is on track to close this year, will enable us to pay off more than 1/3 of our outstanding net debt.

9 月份，我們以新的利率派發了首次股息 550 萬美元。此次調整後的支出釋放了現金，同時仍提供了有吸引力的收益率。本季我們也回購了超過 400 萬美元的股票。我們的目的是趁機回購股票，以抵銷股票薪資的稀釋。我們預計第四季的回購額將等於或低於這筆金額。然而，現金流的首要任務仍然是償還債務。工程紙業務的出售預計將於今年完成，這將使我們能夠償還超過 1/3 的未償淨債務。

We expect a reduction of over $575 million will decrease annual interest expense by more than $40 million. For modeling purposes, following the sale of Engineered Papers, depreciation and amortization expense should decline by around $20 million annually, and we expect a normalized tax rate of about 24%. With that, I will turn the call back to Julie for her closing remarks.

我們預計減少超過 5.75 億美元將使年度利息支出減少超過 4,000 萬美元。出於建模目的，在出售工程紙後，折舊和攤提費用每年應下降約 2,000 萬美元，我們預計標準化稅率約為 24%。接下來，我將把電話轉回給朱莉，讓她發表結束語。

Thanks, Greg. I'll start with a few near-term outlook comments before getting into 2024. Discussions with customers, vendors and others indicate near-term demand will remain subdued given the still uncertain environment. While indications are that destocking is largely over, customers typically manage inventories down at year-end. So there may be a small sequential impact on our sales in the fourth quarter. We also take maintenance and holiday downs across our facilities which may add $2 million to $3 million of incremental cost to the bottom line, in addition to impacts from lower quarterly sales.

謝謝，格雷格。在進入 2024 年之前，我將首先發表一些近期前景評論。與客戶、供應商和其他人的討論表明，鑑於環境仍然不確定，近期需求將保持低迷。儘管有跡象表明去庫存已基本結束，但客戶通常會在年底減少庫存。因此，我們第四季的銷售可能會受到輕微的連續影響。我們還對我們的設施進行維護和假期停機，除了季度銷售額下降的影響外，這可能會增加 200 萬至 300 萬美元的增量成本。

Looking ahead to 2024, expectations are for demand to stabilize and then begin to pick up modestly later in the first half with recovery accelerating in the second half of the year. Input costs generally appear to have reached their low point and are projected to modestly increase. We will continue to implement our disciplined pricing practices that overcome input cost pressures. Overall, we expect growing sales and profits in 2024. Improvement should accelerate in the back half of the year as volumes recover allowing us to reach quarterly EBITDA of $70 million as we exit the year and grow from there.

展望2024年，預計需求將穩定，然後在上半年稍後開始小幅回升，下半年將加速復甦。投入成本似乎已達到最低點，預計將小幅增加。我們將繼續實施嚴格的定價實踐，以克服投入成本壓力。總體而言，我們預計2024 年的銷售額和利潤將會成長。隨著銷售量的恢復，今年下半年的改善應該會加速，使我們能夠在今年結束並在此基礎上實現成長時達到7000 萬美元的季度EBITDA。

To bridge this number, a 5% increase in annual sales add $35 million annually of profit contribution, and we expect to deliver an additional $25 million in synergies as procurement contracts go into access and footprint efforts are executed. Combined, this represents an incremental $15 million of quarterly EBITDA and excludes any upside from additional cost-saving initiatives underway.

為了彌補這一數字，年銷售額成長 5% 每年將增加 3,500 萬美元的利潤貢獻，隨著採購合約進入進入和足跡工作的執行，我們預計將帶來額外 2,500 萬美元的協同效應。總而言之，這意味著季度 EBITDA 增加了 1500 萬美元，並且不包括正在進行的其他成本節約舉措帶來的任何好處。

However, the key to this starts with demand recovery. As market dynamics stabilize and recover, Mativ is well positioned for long-term growth. Following the sale of engineered paper, about 80% of our revenues will come from ATM, which has stable mid-teen EBITDA margin.

然而，這一切的關鍵始於需求復甦。隨著市場動態穩定和復甦，Mativ 已做好長期成長的準備。在出售工程紙後，我們約 80% 的收入將來自 ATM，其 EBITDA 利潤率穩定在 15 左右。

This business is global, serving both industrial and consumer markets with attractive growth drivers, such as clean air and water and infrastructure investments. Our technical capabilities are broad, and we have a long-standing relationships with leading customers with specified products that can uniquely meet their needs.

該業務是全球性的，為工業和消費市場提供有吸引力的成長動力，例如清潔空氣和水以及基礎設施投資。我們擁有廣泛的技術能力，並與領先客戶建立了長期合作關係，提供能夠獨特地滿足他們需求的特定產品。

You've heard this morning that our teams are aggressively executing plans to reduce costs, drive operating and capital efficiencies and working closely with customers to generate demand.

今天早上您聽說我們的團隊正在積極執行降低成本、提高營運和資本效率並與客戶密切合作以產生需​​求的計劃。

Our business and capital allocation strategies are clear and designed to accelerate profitable growth, strengthen our financial position and deliver value to our stakeholders. I remain confident in our success in the years ahead and look forward to sharing our progress with you. That concludes our prepared remarks. Thank you for joining us, and please open the line for questions.

我們的業務和資本配置策略清晰，旨在加速獲利成長、增強我們的財務狀況並為利害關係人創造價值。我對我們未來幾年的成功仍然充滿信心，並期待與您分享我們的進步。我們準備好的演講到此結束。感謝您加入我們，請撥打電話提問。

(Operator Instructions) First question comes from John Tanwanteng from CJS Securities.

（操作員說明） 第一個問題來自希捷證券的約翰譚萬騰。

This is Justin on for John. I know you just mentioned about the quarterly EBITDA run rate of $70 million. I was just hoping to get a little more color on when you expect to hit that? And what kind of volume or macro improvement do you need to see to get there?

這是賈斯汀替約翰代言。我知道您剛剛提到了 7000 萬美元的季度 EBITDA 運行率。我只是希望在你期望達到這個目標時能得到更多的色彩？您需要看到什麼樣的數量或宏觀改進才能實現這一目標？

Sure. I would say, as we think about 2024, we believe the first quarter will be similar to our current pace. And over the course of the year, we'll continue to make progress toward an exit rate of $70 million in EBITDA so in Q1, we expect demand to remain fairly subdued with a modest pickup in Q2 and then continued recovery in the back half of the year. And then as I mentioned, we are expecting in total stronger top line and bottom line in '24 and it doesn't take much to get there to the $70 million.

當然。我想說的是，當我們考慮 2024 年時，我們相信第一季將與我們目前的步伐相似。在這一年中，我們將繼續朝著EBITDA 退出率達到7000 萬美元的方向取得進展，因此在第一季度，我們預計需求將保持相當低迷，第二季度將略有回升，然後在下半年繼續復甦。那一年。正如我所提到的，我們預計 24 年的總收入和利潤將更加強勁，並且不需要太多就能達到 7,000 萬美元。

We were at $70 million last Q3 with a stronger macro environment a 5% increase in top line, coupled with our synergies, adds $15 million to our current pace. So I'm really bullish about it. We just need a little bit of modest market recovery to get there.

上個第三季度，我們的營收為 7,000 萬美元，宏觀環境更加強勁，營收成長了 5%，再加上我們的協同效應，我們目前的成長速度增加了 1,500 萬美元。所以我真的很看好它。我們只需要市場稍微復甦即可實現這一目標。

Okay. That's helpful. And then can you give some more detail on which end markets do you see remaining weak or strengthening heading into Q4 and then 2024?

好的。這很有幫助。然後您能否提供更多詳細信息，說明您認為哪些終端市場在進入第四季度和 2024 年時會保持疲軟或走強？

Yes. From an end market standpoint, I'd say we've seen the most strength in healthcare in where we compete in healthcare, weakness primarily in construction, and that's new construction, rebuilds, commercial and residential. And that impacts us from an industrial standpoint or release liner standpoint in our adhesives and films and protective solutions.

是的。從終端市場的角度來看，我想說，我們在醫療保健領域的競爭中看到了醫療保健領域的最大優勢，而弱點主要集中在建築領域，即新建、重建、商業和住宅領域。從工業角度或離型膜角度來看，這對我們的黏合劑、薄膜和保護解決方案產生了影響。

And then a little bit of weakness in transportation as well. The strongest in health hygiene, I'd say moderate weakest in construction and transportation. And then our paper business, we have good visibility to our customers' inventories in paper, and we can see there is continued destocking in that business, inventory they're still remaining a little bit elevated.

然後交通方面也有點疲軟。健康衛生方面最強，建築和交通方面最弱。然後是我們的紙張業務，我們對客戶的紙張庫存有很好的了解，我們可以看到該業務正在持續去庫存，庫存仍然保持在一點點高位。

That's great. And then just one more, if I could squeeze it in. Can you give a little more detail on the valuation allowance you had in the quarter? Where is that coming from?

那太棒了。如果我可以的話，還有一個。您能否提供有關本季度估值津貼的更多詳細資訊？那是從哪裡來的？

Sure, Justin, this is Greg. That was related to a tax asset that we had associated in Luxembourg associated with the EP business. that we are now releasing don't -- with the sale of EP, don't see the ability to fully utilize that asset.

當然，賈斯汀，這是格雷格。這與我們在盧森堡與 EP 業務相關的一項稅務資產有關。我們現在發布的--隨著 EP 的出售，我們看不到充分利用該資產的能力。

Our next question is from Daniel Harriman from Sidoti.

我們的下一個問題來自 Sidoti 的 Daniel Harriman。

Please don't worry, I'm not going to ask a question about destocking. I promised you last time. But it seems like margins in both segments held up fairly well for the quarter despite the negative impact of volumes. So could you maybe just provide a little bit more color about the ongoing cost reduction efforts and what you're planning to do as we enter 2024? And then Julie, you mentioned footprint optimization. And I was just hoping to get a little bit more color on that as well.

請放心，我不會問有關去庫存的問題。我上次就答應過你了。但儘管銷量產生了負面影響，但本季這兩個領域的利潤率似乎都保持得相當不錯。那麼，您能否提供更多有關正在進行的成本削減工作以及進入 2024 年時您計劃做什麼的資訊？然後朱莉，你提到了足跡優化。我只是希望能在這方面得到更多的色彩。

Sure. Yes, I'm really bullish on our margins and how well the team has managed them in this environment with ATM margins at 15% and up versus prior year. It gives me a lot of confidence that as we realize some volume recovery, our margins will continue to show really nice expansion. From a cost reduction standpoint, we talked earlier this year about a $10 million target versus Q1 in manufacturing costs. We achieved that in Q2, and then that continues to pull through in Q3 and Q4. That's mainly driven by staffing changes, asset schedule changes, maintenance and purchase service reductions. Then there's an additional $5 million in cost improvement that will come as we consolidate some of these smaller assets that I mentioned. So we've announced the consolidation at 3 small sites that will migrate mostly to different sites that we have. Some of the business won't, but the majority of it will. There's some upfront costs, it's fairly minimal, and then it adds about $5 million going forward. And that really starts I'd say, mid to late Q1 of 2024.

當然。是的，我真的很看好我們的利潤率，以及我們團隊在這種環境下管理利潤的表現，ATM 利潤率比去年提高了 15% 甚至更高。這給了我很大的信心，當我們意識到銷量有所回升時，我們的利潤率將繼續表現出非常好的成長。從降低成本的角度來看，我們今年稍早討論了與第一季相比製造成本達到 1,000 萬美元的目標。我們在第二季度實現了這一目標，然後在第三季和第四季繼續實現這一目標。這主要是由於人員變動、資產計劃變更、維護和採購服務減少所致。然後，當我們整合我提到的一些較小資產時，將額外節省 500 萬美元的成本。因此，我們宣布了 3 個小型站點的整合，這些站點將主要遷移到我們擁有的不同站點。有些企業不會，但大多數會。有一些前期成本，相當小，然後會增加大約 500 萬美元。我想說，這真正開始是在 2024 年第一季中後期。

And then the last thing I would mention is as we divest EP, it's a great time for us to launch an SG&A effort to ensure that we're rightsizing our internal infrastructure to mirror what we have from a remaining business standpoint. So we have launched that we're using an outside resource because I think it's important to somebody to help us kind of look really strongly in the mirror what we need to reduce so that we don't end up with stranded costs. So those are the really the 3 big buckets I would think about from a cost standpoint, manufacturing costs, asset consolidation and then SG&A efforts.

我要提到的最後一件事是，當我們剝離EP 時，現在是我們啟動SG&A 工作的好時機，以確保我們正在調整我們的內部基礎設施規模，以反映我們從剩餘業務角度所擁有的東西。因此，我們開始使用外部資源，因為我認為有人幫助我們認真審視我們需要減少的內容，這樣我們就不會陷入擱淺成本，這對我們來說很重要。因此，從成本的角度來看，這些確實是我要考慮的三大領域：製造成本、資產整合以及銷售、管理和行政費用 (SG&A) 工作。

Okay. Great. That's really helpful. And then last 1 for me is just how should we think about the company's leverage target? Obviously, as you build up through 2024 and you see that $70 million in EBITDA run rate in the fourth quarter. Is there a particular target that the company is looking to achieve by year-end 2024.

好的。偉大的。這真的很有幫助。最後一個對我來說就是我們該如何考慮公司的槓桿目標？顯然，隨著 2024 年的進展，您會看到第四季度的 EBITDA 運行率為 7000 萬美元。公司是否希望在 2024 年底前實現特定目標？

Yes, Daniel. The target still remains the same of 2.5 to 3.5x. The journey there is a little more prolonged based on kind of the market dynamics that we just talked about. As we recover and work our way to that $70 million a quarter. That's what gets us there. The fact that, that metric is based on a trailing 12 months, and we're not going to come out of the gate, not expecting to come out of the gates in Q1 at $70 million. It will prolong that a little bit, but the target remains the same, and our plan to get there remains the same.

是的，丹尼爾。目標仍然是 2.5 至 3.5 倍。根據我們剛才談到的市場動態，這個過程會更長一些。當我們恢復並努力實現每季 7000 萬美元的目標時。這就是我們到達那裡的原因。事實上，該指標是基於過去 12 個月的數據，我們不會一開始就實現這一目標，也不會期望在第一季實現 7,000 萬美元的收入。這會稍微延長一點，但目標保持不變，我們實現目標的計劃保持不變。

So we have no further questions on the call at this time. So I'll hand the call back to the team.

因此，我們目前在電話會議上沒有其他問題。所以我會將電話轉回給團隊。

Yes. Thank you for joining us this morning and your interest in Mativ, and we look forward to talking to you at our next quarterly call.

是的。感謝您今天早上加入我們以及您對 Mativ 的興趣，我們期待在下一次季度電話會議上與您交談。

This concludes today's conference. Thank you all very much for joining. You may now disconnect your lines.

今天的會議到此結束。非常感謝大家的加入。現在您可以斷開線路。