Q2 2026 Mativ Holdings Inc Earnings Call Transcript
Key Points
- Record Q2 2026 performance with adjusted EBITDA of $75 million, up 12% year-over-year, and adjusted EBITDA margin of 14.1%, a 130 basis point improvement.
- Strong free cash flow of $60 million in Q2, the best second-quarter performance, driven by lower restructuring expenses and capital expenditure timing.
- Significant debt reduction with net leverage improving to 3.8x, down 300 basis points sequentially and 700 basis points year-over-year, ahead of expectations.
- SAS segment achieved record adjusted EBITDA and margins, with Tapes and Labels growing nearly 10% and commercial print outperforming market declines.
- New aerospace and defense win with a global space exploration leader, ramping up as planned and expected to drive growth into 2027 and beyond.
- Proactive pricing actions and cost-out initiatives are on track, with $15-20 million in cost savings expected for 2026, supporting margin expansion.
- Q3 2026 sales expected to be negatively impacted by $20-25 million due to tornado damage at a third-party distribution center in Wisconsin.
- Price-to-cost ratio expected to be less favorable in Q3 due to timing of price increases and higher raw material costs, partially offsetting Q2 gains.
- Healthcare category remains a minor headwind in the second half of 2026 due to ongoing customer destocking.
- Elevated commodity costs from the Middle East conflict are expected to persist, with full-year inflation impact of $40-50 million.
- Q2 tax rate was high at 47% due to geographical earnings mix and valuation allowances in certain jurisdictions.
- FAM segment volumes declined due to lower Filtration volumes and the exit of the Wilson, North Carolina facility, partially offset by pricing and currency.
Welcome to Mativ's second-quarter 2026 earnings conference call. On the call today from Mativ are Shruti Singhal, President and Chief Executive Officer; Scott Minder, Chief Financial Officer; and Chris Cooper, 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 Cooper. Sir, you may begin.
Good morning, everyone, and thank you for joining us for Mativ's second-quarter 2026 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 SEC filings, including our annual report on Form 10-K and our quarterly reports on Form 10-Q.
Some financial metrics discussed during this call are non-GAAP financial metrics. Reconciliations of these metrics to the closest GAAP metrics
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