Mativ (NYSE:MATV) executives highlighted improving profitability, record free cash flow, and continued cost and portfolio actions during the company’s fourth-quarter and full-year 2025 earnings call, while noting that demand in several end markets remains soft heading into early 2026.
Management cites a “transformational” 2025
Chief Executive Officer Shruti Singhal said 2025 was a “transformational journey” marked by external headwinds, including “anemic demand in certain industrial sectors” and a dynamic trade and macroeconomic environment. Despite those pressures, Singhal said the company delivered year-over-year improvements in sales, adjusted EBITDA, and adjusted EBITDA margin, while generating record free cash flow.
- Driving enhanced commercial excellence
- Strengthening the balance sheet
- Optimizing the portfolio
She pointed to a cultural reset emphasizing speed, accountability, and closer alignment with customers. Singhal said the company shifted from a “defensive posture” to an “offensive one,” focusing on share gains and value maximization rather than relying solely on market growth.
Fourth-quarter performance and full-year financial results
Chief Financial Officer Scott Minder, who joined Mativ in January, said full-year 2025 net sales were “just under $2 billion,” up 2.5% organically versus the prior year. Adjusted EBITDA for 2025 was $225 million, up 3% year-over-year, and adjusted EPS was $0.70 compared with $0.62 in the prior year.
For the fourth quarter, Mativ reported net sales of $463 million, up nearly 2% organically and 1% as reported versus the prior year period. Adjusted EBITDA in Q4 increased 19% to $53.5 million. Management attributed the year-over-year earnings improvement to a favorable price-to-input cost relationship and lower manufacturing and SG&A expenses, partially offset by unfavorable volume mix and higher distribution costs.
Singhal also emphasized free cash flow as a key indicator of operating discipline. The company generated record free cash flow of $94 million in 2025, up nearly 140% year-over-year, which she said reflected inventory management, lower capital spending, and expense controls.
Segment trends: Filtration strength offsets softness in SAS
In Filtration and Advanced Materials (FAM), Q4 net sales were $177 million, up more than 5% year-over-year, driven by favorable volume mix and currency translation, partially offset by slightly lower selling prices, according to Minder. FAM adjusted EBITDA rose 26% to $33 million, and segment margin expanded 300 basis points to 18.7%. Singhal said the segment posted its second consecutive quarter of sales and adjusted EBITDA growth since the merger, citing double-digit growth in transportation and industrial filtration, paint protection films, and erosion control netting.
In Sustainable & Adhesive Solutions (SAS), Q4 net sales were $285 million and were largely flat year-over-year on an organic basis, while down about $5 million on a reported basis. Minder said favorable currency and selling prices were more than offset by lower organic volume mix. SAS adjusted EBITDA increased more than 8% to nearly $39 million, with margin up 130 basis points to 13.6%, driven by lower manufacturing costs and a favorable price-to-input cost ratio, partially offset by lower volume mix and higher distribution expenses.
During the Q&A, Singhal provided more detail on SAS softness, citing weakness in automotive tapes and industrial labels, and “particularly in release liners in Europe.” She said the company is focusing on share gain opportunities in Europe and North America, and she expressed optimism for release liners “especially in the second half of 2026.”
On FAM sustainability, Singhal said investments and leadership changes are showing results, with growth in transportation and industrial filtration and continued progress in films. She added that the company is benefiting from tariffs that were implemented, and said she expects favorable FAM trends to continue into the first quarter.
Cost savings, portfolio actions, and balance sheet progress
Management said cost reduction and working capital discipline were central to 2025 results. Singhal said cost-cutting efforts produced nearly $20 million in savings across the business in 2025, and Minder said those realized benefits were part of a two-year initiative. For 2026, the company expects “Wave Two” cost actions to generate an additional $15 million to $20 million of P&L benefits over the year.
On portfolio optimization, Singhal said Mativ completed a comprehensive review over the past three quarters. Actions taken in 2025 included closing an underperforming facility in Wilson, North Carolina, optimizing supply chain support infrastructure, streamlining SKUs, and prioritizing R&D resources. She said portfolio optimization will remain a top priority in 2026, with efforts to harmonize go-to-market strategies and align resources to higher-growth areas.
Minder said Mativ ended 2025 with net debt of $934 million, down $61 million year-over-year, and liquidity of $515 million. Net leverage, as defined in the credit agreement, was 4.2x. Minder said the company’s cash flow priority remains debt reduction, and management expects progress toward its leverage goal of 2.5x to 3.5x in 2026. In response to an analyst question, Minder said he expects leverage to end 2026 in the “mid to high threes,” based on current expectations.
Early 2026 outlook: soft demand, margin actions, and input cost pressure
Minder said Mativ is entering 2026 with soft demand signals, impacted by tariffs and macroeconomic policies, and expects that to weigh on volume growth and operating efficiencies in the first quarter. Still, the company expects Q1 2026 adjusted EBITDA to increase 15% to 20% versus the prior year period, driven by slightly favorable price-to-input cost performance, operational improvements, and SG&A savings.
While the company did not provide formal full-year guidance, Minder outlined key assumptions and drivers for 2026, including:
- $45 million in capital expenditures, roughly split between growth projects and efficiency/safety projects
- One-time cash costs of $5 million to $10 million to fund savings initiatives
- A $10 million investment in net working capital to support volume growth
- Combined depreciation, amortization, and stock-based compensation of $90 million
- Interest expense of roughly $74 million (based on current market conditions)
- $8 million in annual fees related to the accounts receivable securitization facility
On input costs, Minder said the company expects a $20 million to $25 million headwind in 2026, driven mainly by projected market price increases for resins, polymers, pulp, and paper, weighted toward the second half of the year. He said the company expects to use pricing actions to offset those increases, similar to 2025.
Separately, Singhal said Mativ plans to leverage AI as an enterprise capability, citing potential use cases including sales lead generation, production scheduling, predictive maintenance, data analysis, and contract management.
In response to a question on new projects, Singhal said Mativ expects some sales tied to its collaboration with Miru “towards the end of 2026,” with a larger contribution “flowing into 2027,” depending on market conditions.
About Mativ (NYSE:MATV)
Mativ is a global supplier of specialty fiber-based materials and engineered solutions, established in April 2021 through the spin-off of Ahlstrom-Munksjö’s global filtration and engineered materials business. Trading on the New York Stock Exchange under the ticker MATV, the company focuses on designing and manufacturing high-performance products for a broad range of end markets, including life sciences, energy storage, industrial filtration, and consumer products.
Through its Advanced Solutions segment, Mativ produces innovative materials such as lithium-ion battery separators, specialty release liners, and pressure-sensitive adhesive tapes.
