Mativ (MATV) Q4 2025 Earnings Call Transcript

Date

Thursday, Feb. 19, 2026 at 8:30 a.m. ET

Call participants

• Chief Executive Officer — Shruti Singhal
• Chief Financial Officer — Scott Mender

Takeaways

• Net Sales -- $463 million for the quarter, representing 1% reported and 1.9% organic growth year over year.
• Adjusted EBITDA -- $53.5 million in Q4, up 19% versus prior year, with margins rising by 180 basis points.
• Full-Year Organic Sales Growth -- 2.5%, with total reported net sales just under $2 billion.
• Free Cash Flow -- $94 million for 2025, more than doubling the prior year, setting a new record post-merger.
• Inventory Reduction -- Lowered by $26 million for the year, supporting sales growth without impacting customer service.
• Net Debt -- $934 million at year end, down by $61 million, equating to a reduction of more than 6%.
• Net Leverage Ratio -- Closed the year at 4.2x; management reiterated a target range of 2.5-3.5x and expects continued progress in 2026.
• Cost Savings -- $20 million in cost reductions realized in 2025; an additional $15 million-$20 million targeted for 2026.
• Capital Expenditures -- $40 million in 2025; planned increase to $45 million for 2026, split evenly between growth and efficiency/safety projects.
• Liquidity -- $515 million in available liquidity at year end.
• FAM Segment Sales -- $177 million for the quarter, up over 5% with adjusted EBITDA up 26% to $33 million and margins expanding by 300 basis points to 18.7%.
• SAS Segment Sales -- $285 million for the quarter, flat organically and down $5 million as reported, with adjusted EBITDA rising over 8% to nearly $39 million and margins up 130 basis points to 13.6%.
• Interest Expense -- $17 million for the quarter, declining by 14% year over year, attributed to lower debt balances.
• Q1 2026 Adjusted EBITDA Outlook -- Expected 15%-20% year-over-year increase, based on management’s operational and SG&A improvement initiatives.
• Raw Material Cost Headwind -- Forecasted $20 million-$25 million increase in 2026, with most pressure in the second half of the year.
• Free Cash Flow Cadence -- Management expects typical seasonality: outflow in Q1 to rebuild inventory, strong middle-year generation, and a positive finish.
• Portfolio Optimization -- Closure of underperforming Wilson, NC facility, SKU streamlining, supply chain and R&D resource optimization announced as part of multi-year review.
• AI Initiatives -- Dual strategy to deploy AI for sales lead generation, advanced production scheduling, predictive maintenance, and productivity enhancements throughout the organization.

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Risks

• Management cited "an anemic end-market demand environment" projected for Q1 2026, with anticipated negative impact on volume growth and operating efficiencies.
• Raw material costs in 2026 are forecast to present a headwind of $20 million-$25 million, mostly in the second half, requiring ongoing pricing actions to offset.
• SAS segment continues to experience weakness in specific categories including automotive tapes, industrial labels, and release liners, especially in Europe.
• Management noted, "we anticipate a small decline from 2025 record levels, but that is primarily to fund growth."

Summary

Mativ Holdings (NYSE:MATV) reported year-over-year growth in sales, adjusted EBITDA, and margins for both the quarter and full year, with free cash flow more than doubling to a post-merger record and net debt reduced by over 6%. Management stated its operational transformation has yielded tangible results, with disciplined capital deployment and cost savings initiatives supporting significant leverage reduction and providing the flexibility for targeted investments in 2026. The company’s two main segments showed contrasting dynamics: FAM delivered sequential sales and margin increases, while SAS volumes remained pressured by persistent weakness in select end markets, particularly Europe. The ongoing portfolio optimization, targeted cost savings, and planned AI adoption were explicitly cited as central to further margin gains and operational agility in the coming year.

• Management named a $10 million working capital investment and $5 million increment in capital expenditures, both directed toward supporting growth initiatives in 2026.
• Interest expense is projected at roughly $74 million for the next year, with $8 million in annual accounts receivable securitization fees.
• Additional one-time costs of $5 million-$10 million will be incurred in 2026 to fund further savings initiatives.
• Full realization of the Miru partnership contribution is expected mainly in 2027, with some revenue possible in 2026 "depending on market."
• The company expects to have $5 million to $7 million of annualized cost savings as a run-rate in 2026, not all realized in Q1, with the balance of expected annual savings weighted to the middle to latter part of the year.

Industry glossary

• FAM (Filtration and Advanced Materials): Segment specializing in resin-based products such as filtration media, films, and netting for industrial, transportation, and environmental applications.
• SAS (Sustainable and Adhesive Solutions): Segment focused on adhesive/coated specialty products and papers serving healthcare, cable, commercial print, and related markets.
• Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, excluding certain nonrecurring charges, providing a normalized view of operating performance.
• Net Leverage Ratio: Measure of net debt over adjusted EBITDA, reflecting financial leverage as defined in the company’s credit agreement.
• SKUs: Stock Keeping Units; unique product identifiers used for inventory and sales tracking and subject to streamlining in portfolio optimization.

Full Conference Call Transcript

Shruti Singhal: Thanks, Chris. Good morning, everyone, and thank you for joining our call. We appreciate your continued interest in Mativ Holdings, Inc. and are pleased to have this opportunity to share our outstanding results for the fourth quarter and full year of 2025, marking a period of remarkable success and progress. As I reflect on the past twelve months, I am incredibly proud and inspired by the unwavering commitment, agility, and perseverance the Mativ Holdings, Inc. team has demonstrated. 2025 was not just another year. It was a transformational journey for our company. We faced a convergence of external headwinds, from anemic demand in certain industrial sectors to a dynamic and often unpredictable macroeconomic environment.

Yet it was also the year we proved that Mativ Holdings, Inc. is built to navigate these challenges and emerge even stronger. We not only overcame these obstacles, but also showcased Mativ Holdings, Inc.'s strength and determination to thrive and grow. Our fourth quarter results are a powerful culmination to this exceptional year. We delivered year-over-year improvements in sales, adjusted EBITDA, and adjusted EBITDA margin. The metric that best showcases our operational discipline was free cash flow. We generated record free cash flow for the full year, more than double compared to the prior year. This is the direct result of an enterprise-wide focus on disciplined execution, prudent inventory management, and aggressive expense control.

Shruti Singhal: Early in 2025, our mandate became clear: improve the company's performance and build a foundation for sustainable, profitable growth. I can confidently say today that we have made significant progress towards that goal. Over the past year, our cultural transformation has been underway at Mativ Holdings, Inc. that fundamentally reset our trajectory. It fosters agility, speed, and accountability. By streamlining decision-making and bringing our teams closer to the customer, we have shifted from a reactive stance to a productive, growth-driven approach, confidently shaping our future. We also moved from a defensive posture reacting to market volatility to an offensive one, where we drive our own destiny through focused execution.

Shruti Singhal: We established a strong foundation built on three strategic pillars: driving enhanced commercial excellence, strengthening our balance sheet, and optimizing our portfolio. Let us start with the first pillar, commercial excellence. In a global environment characterized by weakened market demand, driving top-line growth requires more than just serving the current market. It requires share growth and value maximization. Capping off this year, Q4 net sales grew to $463 million, with organic sales up 1.9% compared to prior year. These results validate how our unified sales force is collaborating across segments, leveraging the full Mativ Holdings, Inc. portfolio to expand our growth pipeline and deliver innovative solutions to both existing and new customers.

The resilience of our results also underlines how our portfolio of highly engineered technical materials is instrumental to our customers’ success. We are partnering with customers to solve their most complex challenges, supporting their global operations with a reliable and localized supply chain and cutting-edge products.

Shruti Singhal: In the second pillar, strengthening our balance sheet, operational and working capital efficiencies were central to achieving this objective. Recognizing early in 2025 that volume leverage would be a challenge during the year, we focused on what was within our control: our pricing, our cost structure, our capital investments, and our inventory levels. We successfully drove pricing execution with precision to carefully manage our price versus input cost performance, ensuring coverage of our raw material inflation, while we captured additional value through innovation and supply chain excellence. In 2025, our cost-cutting efforts yielded savings across the business of nearly $20 million.

The results were evident throughout 2025, culminating with Q4’s adjusted EBITDA growing 19% to $53.5 million and margins increasing by 180 basis points compared to prior year. This margin expansion is clear evidence that our determined initiatives are taking hold and driving value.

Shruti Singhal: Another principle of this pillar is cash flow. I am pleased to report that we generated record free cash flow of $94 million in 2025, increasing nearly 140% year over year. In 2025, with a focus on inventory efficiency, we intentionally lowered our inventory levels by $26 million versus 2024 while supporting full-year organic sales growth of 2.5% and not compromising customer service levels. We also lowered our annual capital expenditures by $15 million while prioritizing safety and growth projects. The additional free cash flow allowed us to reduce our net debt by over $60 million and advance toward our target leverage range.

This continued focus on cash flow generation provides us with liquidity and flexibility to navigate future uncertainties while continuing to invest in our highest-return opportunities.

Shruti Singhal: Finally, our third pillar centers around optimizing our portfolio. Over the past three quarters, we have performed a comprehensive portfolio review, including assets, product categories, facilities, and support functions. In 2025, we took decisive steps in closing an underperforming facility in Wilson, North Carolina, and we further optimized our supply chain support infrastructure. We streamlined SKUs and optimized R&D resources by prioritizing efforts and expenditures to better leverage resources while minimizing impact to our commercial pipeline. Portfolio optimization remains a top priority for 2026. We are harmonizing our go-to-market strategies to match customer needs and demand trends, aligning a broad portfolio with areas of strongest growth.

This approach will guide innovation, manufacturing, supply chain, and sales resources, ensuring capital is deployed where it can deliver the greatest impact.

Shruti Singhal: With that, let us turn to our segment results for the quarter. Our Filtration and Advanced Materials segment, or FAM, had an outstanding quarter and built on its momentum from last quarter. This marks the second quarter of sales and adjusted EBITDA growth since the merger. Net sales were up more than 5% versus prior year with notable growth in all categories, led by double-digit growth in transportation and industrial filtration, paint protection films, and erosion control netting. In our Sustainable and Adhesive Solutions segment, or SAS, sales were down slightly on an organic basis, driven by lower-than-expected volumes.

SAS growth in key categories was led by healthcare, cable tapes, as well as commercial print, more than offset by headwinds in labels, automotive tapes, and release liners, partly in Europe. We remain optimistic about overcoming these pockets of softness and are confident in our ability to adapt effectively as market conditions evolve throughout 2026.

Shruti Singhal: Before I turn to our outlook, I will provide a few thoughts on the macro environment, how it affects Mativ Holdings, Inc., and how we drive value. We are operating in a world of heightened complexity with dynamic trade movements and pockets of significant geopolitical instability. These realities require us to remain agile and adapt our business. Mativ Holdings, Inc. is uniquely positioned to navigate this constantly evolving environment. Our global footprint allows us to be close to our customers in over 100 countries, mitigating single-region risks. A diverse supply chain and procurement strategies have proven resilience, ensuring that we can deliver for our customers on time without interruption and at a fair price.

To demonstrate our strategy and full range of capabilities, and how they drive value, I will share a brief overview of our value proposition. We engineer surfaces and substrates through coating, saturation, extrusion, and adhesive technologies to unlock material performance in some of the most demanding customer applications. Our harmonized global network consistently delivers continuous, tight-tolerance, highly complex profiles, from development through high-volume production. Our global supply chain scale delivered through localized assets and service capabilities guarantees efficient execution and dependable fulfillment. These capabilities are at the core of our customer relationships. Mativ Holdings, Inc. wins when our customers win in their markets. This builds long-lasting relationships on a foundation of trust that drives sustained demand and value creation.

We are committed to growing these strategic imperatives in the years ahead.

Shruti Singhal: Looking ahead, I am encouraged by the opportunity to build on the foundation we established in 2025. Scott will walk you through our underlying assumptions for 2026, but I want to leave you with a key takeaway. As we continue to strengthen our performance, I want to emphasize our unwavering focus on profitable growth and confident execution. The improvements we made in 2025, strengthening our balance sheet, right-sizing our inventory, and optimizing our cost structure, provide the foundation for future growth and resilience against uncertainty. We have and will continue to transform Mativ Holdings, Inc. into an agile, more capable entity, one that can better navigate dynamic environments to achieve profitable growth and increased cash flow generation.

In 2026, our cost-saving efforts will remain a focus, with wave two expected to deliver an additional $15 million to $20 million of realized savings throughout 2026. Another important priority in 2026 will be leveraging AI as a foundational enterprise capability. We are strategically pursuing a dual approach to AI, balancing return-on-investment use cases like sales lead generation, advanced production scheduling, and predictive maintenance with return-on-employee initiatives that boost productivity, such as AI-powered data analysis and contract management. These applications will be embedded across commercial, operational, and supply chain functions. In the 2025 demand environment in both segments, we focused on factors within our control and drove tangible results.

As a result, our consolidated adjusted EBITDA margins improved by 180 basis points versus prior year. This strong performance is a testament to the dedication and expertise of the entire Mativ Holdings, Inc. team, who also improved our company-wide safety metrics by almost 10%. I extend my deepest gratitude for their outstanding contribution and effort. I will now turn the call over to our new CFO, Scott Mender, to provide a more detailed overview of our financial performance. Welcome to the team, Scott.

Scott Mender: Thanks, Shruti, and good morning. Let me start by saying that I am excited to be part of Mativ Holdings, Inc.'s dynamic team. The company strengthened its foundation in 2025, and in 2026 we are accelerating progress toward our strategic objectives. Turning to our financials, 2025's results were solid, and we ended the year with a strong quarter. Mativ Holdings, Inc.'s full-year 2025 net sales were just under $2 billion, up 2.5% organically and up modestly on a reported basis, both compared to prior year. On the positive side, volume/mix increases in both segments, favorable selling prices in our SAS segment, and favorable currency helped to drive this growth.

These benefits were partially offset by sales from closed or divested plants and unfavorable selling prices in our FAM segment.

Scott Mender: 2025 adjusted EBITDA was $225 million, up 3% versus prior year. A favorable price-to-input-cost ratio and lower SG&A expenses provided an $18 million benefit. Increased distribution cost due to cross-sourcing of certain products that would have been subject to tariffs, higher manufacturing costs, and unfavorable volume/mix provided partial offsets. Adjusted EPS were $0.70 versus $0.62 in the prior year.

Scott Mender: Turning to Q4, Mativ Holdings, Inc.'s net sales were $463 million, increasing year over year by nearly 2% organically and 1% as reported. Favorable currency and selling prices were partially offset by lower volume/mix. Adjusted Q4 EBITDA was $53.5 million, increasing 19% versus prior year. A favorable price-to-input-cost ratio, along with lower manufacturing and SG&A expenses, were partially offset by unfavorable volume/mix and higher distribution costs.

Scott Mender: Looking at our segments, FAM net sales of $177 million were up over 5% versus Q4 2024. This growth was driven by favorable volume/mix and currency translation. These benefits were partially offset by slightly lower selling prices. FAM's adjusted EBITDA of $33 million increased by 26% year over year, while margins of 18.7% improved by 300 basis points over the same period. These gains were led by favorable prices net of input costs, improved volume/mix, and lower SG&A expenses. Increased manufacturing costs partially offset these gains.

Scott Mender: In our SAS segment, net sales of $285 million were largely flat year over year on an organic basis and were down roughly $5 million on a reported basis. Favorable currency and selling prices were more than offset by lower organic volume/mix. As Shruti mentioned, this was driven mainly by lower-than-expected volumes in labels, automotive tapes, and release liners, in part due to European markets. SAS's adjusted EBITDA of nearly $39 million increased by more than 8% year over year, with margins of 13.6% improving by 130 basis points. Earnings benefited from lower manufacturing costs and a favorable price-to-input-cost ratio. This was partially offset by lower volume/mix and higher distribution expenses.

Scott Mender: Looking at corporate items, unallocated expense of roughly $19 million increased by $1 million versus prior year due to the timing of employee-related transition costs. Other expenses of roughly $3 million compared to other income of approximately $9 million in 2024. This change was driven by asset sale gains and favorable foreign currency movements in the prior year. Our Q4 2025 tax rate was a benefit driven largely by the impact from reductions in our valuation allowance. Interest expense of $17 million decreased by 14% versus prior year, primarily due to lower debt balances.

Scott Mender: Throughout 2025, we updated you on strategic initiatives to improve our structures and generate increased cash flow. As Shruti highlighted, in year one of our two-year cost savings focus, we generated nearly $20 million of realized benefits in 2025 P&L. In wave two, we expect to continue this progress, executing on multiple cost savings initiatives to yield an additional $15 million to $20 million of P&L benefits in 2026. We will keep you updated as we make progress throughout the year.

Scott Mender: 2025's free cash flow of $94 million was the highest since the merger in mid-2022 and more than doubled 2024's result. It was driven by operating cash flow of nearly $134 million, which increased by more than 40% compared to prior year. Disciplined capital expenditures of $40 million, as we previously guided, also supported this strong result. At the end of 2025, net debt was $934 million, reducing by $61 million, or by more than 6% year over year. We closed the year with ample available liquidity of $515 million. Our net leverage ratio, as defined in our credit agreement, was 4.2 times.

While we made progress deleveraging in 2025, our cash flow utilization priority continues to be on debt reduction. In 2026, we expect to make progress toward our leverage goal of 2.5 to 3.5 times. Since arriving in January, I have worked with the team to understand our capital structure and develop a plan that thoughtfully addresses our debt maturities on a timely basis while maximizing flexibility and cost efficiency. More to come on this topic as we progress throughout the year.

Scott Mender: Now I will share our Q1 and full-year 2026 outlook. Similar to 2025, we are navigating an anemic end-market demand environment in the first quarter, one that is impacted by tariffs and macroeconomic policies. As a result, demand signals into our business remain soft. We anticipate this to negatively impact our volume growth and operating efficiencies in the quarter. We are working diligently to offset these manufacturing impacts in the near term by streamlining workflows, debottlenecking processes, and eliminating waste. As a result of these efforts to offset the impacts from soft demand, we expect Q1 adjusted EBITDA to increase by 15% to 20% versus prior year, driven by a slightly favorable price-to-input-cost ratio, operational improvements, and SG&A savings.

Both of our business segments proved resilient while navigating a similar environment in 2025, and we are confident in our ability to manage through this landscape in early 2026.

Scott Mender: While we do not provide formal full-year guidance, I will give you some drivers for cash flow and expense. In 2026, we expect to invest $45 million in capital expenditures, increasing from 2025's restrained level. These investments are split roughly 50% on growth projects and 50% on efficiency and safety projects. Additional 2026 drivers include one-time cash costs between $5 million and $10 million to fund savings initiatives; a $10 million investment in net working capital to support volume growth; depreciation, amortization, and stock-based compensation of $90 million combined; interest expense of roughly $74 million, based on current market conditions; and finally, $8 million in annual fees for our accounts receivable securitization facility.

Scott Mender: Looking at our raw material costs, we expect a $20 million to $25 million headwind, mainly driven by forecasted market price increases for resins, polymers, pulp, and paper. These increases are weighted towards the second half of the year. As you saw in 2025, our commercial teams successfully implemented pricing to offset the impact from rising input costs. We expect to leverage this capability in 2026, maintaining a healthy balance between the timing and magnitude of pricing to offset the expected input cost increases.

Scott Mender: I will conclude by highlighting our key financial imperatives for 2026. Cash flow generation and disciplined deployment remain key focus areas. We expect to make progress toward our target leverage range of 2.5 to 3.5 times. Rigorous cost discipline remains a focus, with an additional $15 million to $20 million in cost savings expected within the year. These efforts, combined with several working capital efficiency projects, are expected to drive meaningful free cash flow generation again in 2026. The team made great progress in 2025, and we intend to build on that in 2026. With that, I will hand the call back to Shruti for closing remarks.

Shruti Singhal: Thank you, Scott.

Shruti Singhal: What you should take away from today's call is that Mativ Holdings, Inc. has effectively ignited a comprehensive transformation. 2025 marked the pivotal juncture where we demonstrated the capacity to deliver robust financial results despite a complex macroeconomic landscape. Our performance, characterized by year-over-year improvements in sales, adjusted EBITDA, and margins, serves as a clear validation of our operational strategy and business resilience. Our progress is underpinned by a disciplined adherence to our three core pillars: enhanced commercial excellence, balance sheet strengthening, and portfolio optimization. By rigorously managing factors within our control, we generated record free cash flow, more than doubling prior year's levels.

This fiscal discipline has enabled us to materially reduce net debt and realign our leverage profile, thereby securing the operational flexibility required for future value creation. Looking towards 2026, Mativ Holdings, Inc. is now structurally positioned for sustainable, profitable growth. We have the requisite leadership, strategy, and capital discipline to deliver long-term shareholder value. We remain fully committed to delivering for our customers, improving our leverage and balance sheet by generating significant cash flow, and capturing volume and share gains that validate our go-to-market strategy. I am excited for the path ahead as we continue our increased pace of execution to drive value for Mativ Holdings, Inc., our customers, and our shareholders. Thank you for joining us this morning.

We will now open for questions.

Operator: Thank you, Shruti. To ask a question, please press star followed by one on your touch-tone phone. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure your device is unmuted locally. Please kindly limit yourself to one question and one follow-up. If you have any further questions, please rejoin the queue. Our first question is from Daniel Scott Harriman from Sidoti. Your line is now open. Please go ahead.

Daniel Scott Harriman: Guys, good morning. Thank you so much for taking my questions. I have got a couple for Shruti and then one for Scott today. Shruti, you talked about the headwinds within SAS. I was hoping you could provide a little bit more detail on the specific businesses that are being pressured there, then whether you see any potential catalysts that could support improvement as we move through 2026. We have been really impressed with the progress within FAM, and I am curious if you could talk to how sustainable you think that momentum is given the current demand backdrop. And then, Scott, we look forward to working with you. Welcome to the team.

I am curious if you could talk about the cadence of free cash flow in 2026, and if we should expect that to mirror the quarterly cadence from 2025.

Shruti Singhal: I will start. Thanks, Dan, for that question. Appreciate it, and your kind words. Regarding SAS, the good thing about our portfolio is its ability to offset demand that is weak in some markets with growth in others. Specifically, we saw some weakness in automotive tapes and industrial labels, and particularly in release liners in Europe. What we are doing is focusing on share-gain opportunities in Europe, and in North America and beyond Europe we are looking at our overall release liner portfolio and capitalizing on the better free trade agreements to be competitive in the market in North America and also enabling share growth. I am very optimistic on release liners going forward, especially in 2026.

Regarding your question on FAM, it was a really outstanding quarter. As we have mentioned in the past, this is an area we focused our investments and our resources, changing leadership, and we are seeing the results of that. We are seeing growth despite the markets: growth in transportation and industrial filtration. We are seeing growth in our netting, which is the erosion control market that we mentioned before. We are benefiting from the tariffs that were implemented. In the films business, where we made significant investment, both capital as well as resources, we are seeing an improvement year on year and closing that gap.

Overall impact is very favorable for FAM, and I expect that trend to continue in Q4 and in Q1. Scott, over to you.

Scott Mender: Thanks, Dan. Appreciate the comments, and looking forward to working with you as well. I will split your question into two parts and start with free cash flow and how that dovetails into leverage. The team did a really good job in 2025. We generated record free cash flow of $94 million. That more than doubled our 2024 result. Efforts were broad-based across the board: improved profitability by reducing costs, increased margins, reduced inventory, and showed CapEx discipline. We will continue to push in these areas in 2026, and we expect meaningful results.

We talked about additional cost savings of $15 million to $20 million, ongoing CapEx discipline with some additional focus on growth investments, and we will continue the working capital focus. We will need to fund some growth as we talked about. If you put all that together for the full year, we anticipate a small decline from 2025 record levels, but that is primarily to fund growth. We talked about $10 million in working capital and an additional $5 million in CapEx. We also have opportunities to build on our working capital efficiency and continue to improve our profitability. You asked about cadence.

From a cadence point of view, we will follow our normal seasonal pattern, hopefully improving on prior year. Generally, we will have some outflow in Q1 to rebuild inventory. We expect strong generation in the middle part of the year and a positive finish to the year. Bottom line, as I have come in and talked to folks, we have really evolved the culture at Mativ Holdings, Inc. to be more cash-flow centric. We expect this to produce good results in 2026 and great results over the long term. That is free cash flow, and it dovetails into leverage. Again, the team did a great job in 2025.

From peak to where we ended the year, we reduced leverage by half a turn, ending the year at 4.2, which was the low point for the year. It was enabled by improvements across the financial statements. We increased profitability, improved working capital, stayed disciplined on our capital spending, and focused that benefit on leverage reduction. We reduced debt by $61 million. That discipline is really built into the business. Our primary focus remains on leverage reduction in 2026. We expect to continue to make progress toward the goal we have given you of 2.5 to 3.5 times, and we should end the year in 2026, as we see now, in the mid to high threes.

We will keep you posted as the year progresses.

Daniel Scott Harriman: Really appreciate it, guys, and it is great to see all the progress here. Best of luck in the coming quarter.

Shruti Singhal: Thank you, Dan.

Operator: Thank you, Daniel. Our next question is from Lars F. Kjellberg from Stifel. Your line is now open. Please go ahead.

Lars F. Kjellberg: Thank you for taking my question. I am thinking about your guidance for Q1. Of course, you are looking up against a very easy comp from 2024 last year and talking about up 15% to 20%. It seems to be slowing progress on an underlying basis a bit. Can you talk to us about what you are seeing in the market, and if the seasonally weak quarter is, from an underlying perspective, a low point and how you build through the balance of the year? If you look at the EBITDA, essentially, you are ending up below where you were in 2024. I appreciate there have been some corporate changes, but the progress seems to be slowing a bit.

If you could provide any color on that, it would be of interest.

Shruti Singhal: I will start with that, and Scott, please feel free to comment. Lars, thanks for that question. For Q1, as Scott mentioned, the guidance is 15% to 20%. We see some weakness in demand on the top line, especially in the categories I mentioned in our SAS segment. Even in SAS, we are seeing other categories performing well, and I expect them to continue to perform well beyond Q1 and into the remainder of the year. In our FAM segment, remember that due to our presence in filtration and also in Europe, in automotive, demand is weak there, especially in Q1.

But the actions that we have taken, and as that pipeline continues to flow, I expect the FAM segment to perform well in Q1 and as we go into the remainder of the year. We are starting off on a positive note in Q1 while navigating through the weak demand. As we build our pipeline and commercialize those opportunities for the remainder of the year, both in SAS and FAM, I am optimistic on our performance. Scott, feel free to add anything else.

Scott Mender: Hi, Lars. Good to meet you. I think Shruti said most of it there. On the top line, we expect very low single-digit volume growth, reflecting that soft demand environment. We are going to continue working on our pricing initiatives to help offset those input costs. Where we see the leverage coming through is really on EBITDA. While top line is muted, we expect EBITDA growth of 15% to 20%, offsetting that demand weakness and the manufacturing inefficiencies that come along with it, with the efforts we worked on last year around operational costs and SG&A costs. We have a program this year to take out another $15 million to $20 million that started on January 1.

We are doing a lot to continue to improve the earnings power of the business even despite a top line that is relatively soft.

Lars F. Kjellberg: Just a quick follow-up on the commercial pipeline, Shruti. You have made a tremendous change to the commercial approach and expect to win in the market. Can you share how you view that commercial pipeline and how you expect to perform relative to the underlying market in the key segments you are pursuing?

Shruti Singhal: It is a very focused approach on the commercial pipeline. The rigor and cadence by our commercial leadership is very different in terms of realistic opportunities, and we are controlling what we can control. There are different categories in the market which are weak. For example, in our films business, we made the investments in resources and capital. We have made good progress in lead time reductions and quality improvements, and we are winning the customer confidence and trust back. As a result, that business is one example of how our commercial pipeline and operations are working. A similar approach is in filtration. We have seen good progress, and we know the automotive market, especially in Europe, is anemic.

But we have seen good progress in HVAC, air pollution control, and water filtration. We built a good pipeline there with customers, and we are winning in those. To sum it up, both in SAS and FAM segments, we are very surgical on our commercial pipeline. We are pursuing the opportunities with great precision, and our customer collaboration and intimacy is better than I have ever seen before, and even customers have alluded to that. That is why we are optimistic for Q1 and especially beyond in 2026.

Lars F. Kjellberg: Thank you. Very clear. I will hand it over.

Operator: Thank you, Lars.

Operator: Our next question is from Massimiliano Pilato from Stifel. Your line is now open. Please go ahead.

Massimiliano Pilato: Good morning, and thanks for taking my questions. I have a couple. On the comment on capturing volumes and share gains, you mentioned you had some headwinds in SAS, and you also mentioned higher input costs through 2026 to be offset by price increases. How do you plan to capture volumes if the demand environment is still very muted and the ability to flex on prices is a little bit limited through 2026? That is the first one, and I will ask the second one after that.

Shruti Singhal: Thanks, Masi, for your question. Regarding share gain and pricing, this is a collaborative effort, and, as I mentioned in my comments as well, it is very precise. We are working very closely with our procurement, supply chain, and operations teams to balance our costs with the commercial team going in for pricing or share gain. It is a very precise and very surgical process depending on the category. That is the approach we have taken. It is a proven play. We have shown that in our FAM business. As I mentioned, there have been two consecutive quarters of growth, and that approach is also being applied to SAS.

Because it is a proven approach for us, we are winning in the market segments, and we will continue to do that in Q1 and beyond.

Scott Mender: If I could add one thing, Shruti. Massimiliano, our pricing is, one, to recover input cost increases, but there is also a connection to value, and our products bring a lot of value to our customers. Think of a protective film. It is protecting a valuable asset. We bring value-add solutions to our customers, so we can get pricing in some areas because of the benefit it brings to customers. One, it is to recover input costs, and we are committed to that, but it is also to capture the value we are bringing to the customer.

Massimiliano Pilato: Thank you. Then the second question relates to the rollouts of new projects. You announced the partnership with Miru. How should we be thinking of the contribution of those new projects to flow through the P&L? Is it something that we can see in 2026, or is it more of a 2027 contribution?

Shruti Singhal: Thanks, Masi. We are very excited about our partnership and collaboration with Miru. As they announced, we made investments, and the technology, in terms of improving the energy efficiency in automobiles and buildings, is very exciting for Mativ Holdings, Inc. We continue to work with Miru on a very close basis. We can expect to see some sales depending on market towards 2026, but more flowing into 2027.

Massimiliano Pilato: Gotcha. Then the last one on the outlook for Q1 2026: how much of the $15 million to $20 million of savings through 2026 are already baked into Q1?

Scott Mender: On a run-rate basis, we think we have $5 million to $7 million that we are going to lap in 2026, not all in Q1. The rest of the savings will be new initiatives that we come up with from now until the end of the year, so they will be a little bit more weighted to the middle to latter part of the year.

Massimiliano Pilato: Very good. Thank you, and good luck next quarter.

Shruti Singhal: Thank you. Appreciate it.

Operator: Thank you, Massimiliano. As a final reminder, to ask a question, please press star followed by one on your telephone keypad. We currently have no further questions, so I will hand back to Shruti for closing remarks. Thank you.

Shruti Singhal: First, I want to express my sincere gratitude to all Mativ Holdings, Inc. employees for their dedication and hard work over the past twelve months, embracing change and delivering our Q4 and full-year results. Finally, thanks to all of you for joining us this morning for our earnings call. We look forward to staying connected in the coming months and to welcoming you to our next earnings call in May. Have a wonderful day ahead. Thank you for your time.

Operator: This concludes today's Mativ Holdings, Inc. fourth quarter and full year 2025 earnings call. Thank you for joining. You may now disconnect your lines.

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