Mativ Holdings, Inc. (MATV)

Item 2.   Management's Discussion and Analysis of Financial Condition and Results of Operations

The following is a discussion of our financial condition and results of operations. This discussion should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this report and the audited consolidated financial statements and related notes and the selected financial data included in our Annual Report on Form 10-K for the year ended December 31, 2025. The discussion of our financial condition and results of operations includes various forward-looking statements about our markets, the demand for our products and our future prospects. These statements are based on certain assumptions we consider reasonable. For information about risks and exposures relating to us and our business, you should read the section entitled "Risk Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, the section entitled "Forward-Looking Statements" at the end of this Item 2 and the section entitled “Risk Factors” at Part II, Item 1A hereof. Unless the context indicates otherwise, references to "Mativ," "we," "us," "our," the "Company" or similar terms include Mativ Holdings, Inc. and our consolidated subsidiaries.

This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is designed to provide a reader of our financial statements with an understanding of our recent performance, our financial condition and our prospects. This MD&A discusses the financial condition and results of operations of the Company as of and for the three and six months ended June 30, 2026.

Recent Developments

Throughout 2025, the U.S. government proposed the implementation of, or did implement, a number of tariffs on imports to the United States from a large number of countries. On February 20, 2026, the U.S. Supreme Court issued a ruling invalidating tariffs imposed under the International Emergency Economic Powers Act ("IEEPA"), and on April 20, 2026, the U.S. Customs and Border Protection ("U.S. CBP") launched a refund platform. The net impact of IEEPA tariff refund claims submitted and accepted by U.S. CBP as of June 30, 2026 was not significant. The Company continues to monitor developments with respect to tariffs and trade policy, including refund initiatives and other opportunities to mitigate the related impacts, costs and other effects of tariffs.

SUMMARY

25

RESULTS OF OPERATIONS

Comparison of the Three Months Ended June 30, 2026 and 2025

Net Sales and Gross Profit

The following table presents net sales by segment for the three months ended June 30, 2026 and 2025 (in millions):

The following table presents components of change in net sales by segment for the three months ended June 30, 2026 compared to 2025 (as a percentage of net sales):

FAM segment net sales decreased primarily due to lower volume/mix driven by filtration & netting and the impact from an exited facility. This loss was partially offset by higher selling prices and favorable currency translation.

SAS segment net sales increased, reflecting higher selling prices and favorable currency translation, partially offset by lower volume/mix as strong growth in tapes, labels & liners was offset by lower volume/mix across other categories.

FAM gross profit decreased, reflecting lower volume/mix while higher proactive pricing actions offset increases in manufacturing and distribution costs.

SAS gross profit increased, reflecting favorable price vs. cost performance as proactive pricing actions offset general cost increases including higher manufacturing and distribution costs.

26

Nonmanufacturing Expenses

The following table presents nonmanufacturing expenses for the three months ended June 30, 2026 and 2025 (in millions):

Nonmanufacturing expenses decreased primarily due to lower research and development ("R&D") expense, as a result of actions taken under our organizational realignment initiative (the "Plan") that were focused on R&D project prioritization and resource optimization.

Restructuring and Other Impairment Expense

The following table presents restructuring and other impairment expense for the three months ended June 30, 2026 and 2025 (in millions):

Restructuring and other impairment expenses decreased primarily due to severance charges incurred in the prior period.

Interest Expense

Interest expense of $19.3 million during the three months ended June 30, 2026 increased $0.7 million, or 3.8%, compared to the prior year period driven by higher weighted average interest rates.

Other Income (Expense), Net

Other expense was $0.5 million during the three months ended June 30, 2026, compared to the prior year period income of $1.5 million. The decrease was attributed to gains on asset disposals in the prior period.

Income Taxes

A $3.2 million income tax expense in the three months ended June 30, 2026 resulted in an effective tax rate of 47.1% compared with 416.7% in the prior year period. The Company's effective tax rate for the quarter was impacted by mix of earnings and certain jurisdictions with a full valuation allowance. In the prior period, a valuation allowance expense of $8.5 million was recorded against certain deferred tax assets.

Net Income (Loss) and Net Income (Loss) per Share

Net income during the three months ended June 30, 2026 was $3.6 million, or $0.06 per diluted share, compared with net loss of $9.5 million, or $0.18 per diluted share, during the prior-year quarter.

27

RESULTS OF OPERATIONS

Comparison of the Six Months Ended June 30, 2026 and 2025

Net Sales and Gross Profit

The following table presents Net sales, Cost of products sold, and Gross profit by segment (in millions):

The following table presents components of change in net sales by segment for the six months ended June 30, 2026 compared to 2025 (as a percentage of net sales):

FAM segment net sales decreased primarily due to lower volume/mix, including the impact from an exited facility, partially offset by favorable currency translation and higher selling prices.

SAS segment

[Excerpt truncated for page length; source filing is linked above.]

Item 7.   Management's Discussion and Analysis of Financial Condition and Results of Operations

The following is a discussion of our financial condition and results of operations. This discussion should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The discussion of our financial condition and results of operations includes various forward-looking statements about our markets, the demand for our products and our future prospects. These statements are based on certain assumptions that we consider reasonable. For information about risks and exposures relating to us and our business, you should read the sections entitled "Factors That May Affect Future Results," in Part I, Item 1A of this Annual Report on Form 10-K and "Forward Looking Statements" at the end of this Item 7. Unless the context indicates otherwise, references to "Mativ," the "Company," "we," "us," "our," or similar terms include Mativ Holdings, Inc. and our consolidated subsidiaries.

This Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") is designed to provide a reader of our financial statements with an understanding of our recent performance, our financial condition and our prospects.

As discussed in Note 8. Discontinued Operations of the Notes to Consolidated Financial Statements, the results from continuing operations exclude the results of our EP Business for all periods presented. All information presented within this MD&A is on a continuing operations basis.

Recent Developments

Throughout 2025, the U.S. government proposed the implementation of, or did implement, a number of tariffs on imports to the United States from a large number of countries, including baseline tariffs and additional individualized reciprocal tariff on certain countries with whom the United States has the largest trade deficits. Increased tariffs by the United States has led and may continue to lead to the imposition of retaliatory tariffs by foreign governments. Additionally, throughout 2025, the U.S. government announced and rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of the tariffs on economic conditions. Uncertainties about tariffs and their effects on trading relationships, including as a result of future developments, may impact the macroeconomic conditions in the markets in which we operate, and may do so with little to no advanced notice. Although we are continuing to monitor the impact of such announcements, as well as opportunities to mitigate their related impacts, costs and other effects associated with the tariffs remain uncertain.

36

CRITICAL ACCOUNTING ESTIMATES

We disclose those accounting estimates that we consider to be significant in determining the amounts to be utilized for communicating our consolidated financial position, results of operations and cash flows in the first note to our consolidated financial statements included elsewhere herein. Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements. Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the U.S., which require management to make estimates that affect the amounts of revenues, expenses, assets and liabilities reported and disclosure of contingencies. Changes in these estimates could have a material impact on our financial position, results of operations, and cash flows. We discussed with the Audit Committee of the Board of Directors the estimates and judgments made for each of the following items and our accounting for and presentation of these items in the accompanying consolidated financial statements:

Income Taxes

Our income tax expense (benefit), deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect management’s best estimate of current and future taxes to be paid. We are subject to income taxes in the U.S. and numerous foreign jurisdictions.

Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. In evaluating our ability to recover our deferred tax assets in the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. In projecting future taxable income, we begin with historical results adjusted for the results of discontinued operations and incorporate assumptions about the amount of future state, federal, and foreign pretax operating income adjusted for items that do not have tax consequences. The assumptions about future taxable income require the use of significant judgment and are consistent with the plans and estimates we are using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, we consider three years of cumulative operating income (loss).

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our global operations. Accounting Standards Codification Topic No. 740, Income Taxes ("ASC 740"), states that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. We record unrecognized tax benefits as liabilities in accordance with ASC 740 and adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available.

Contingencies

We accrue an estimated loss by taking a charge to income when the likelihood that a future event, such as a legal proceeding, will result in a loss or the occurrence of a liability is probable, and the amount of loss can be reasonably estimated. We disclose material contingencies if there is at least a reasonable possibility that a loss has been incurred. In determining whether a loss should be accrued, we evaluate, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. Changes in these factors could materially impact our financial condition, results of operations, and our cash flows.

For further information, refer to "Litigation" in Part I, Item 3, "Legal Proceedings" and Note 18. Commitments and Contingencies of the Notes to Consolidated Financial Statements.

37

Property, Plant and Equipment Valuation

Certain of our manufacturing processes are capital intensive; as a result, we make substantial investments in property, plant and equipment which are recorded at cost. Net property, plant and equipment comprised 30% of our total assets as of December 31, 2025. Property, plant and equipment is depreciated on the straight-line method over the estimated useful lives of the assets. Production machines and related equipment are not subject to substantial technological changes rendering them obsolete and are generally depreciated over estimated useful lives of 5 to 20 years. When indications of impairment exist, we assess the likelihood of recovering the cost of long-lived assets based on our expectation of future profitability and undiscounted cash flow of the related asset group. These factors, along with management's plans with respect to the operations, are considered in assessing the recoverability of property, plant and equipment. Changes in management's estimates and plans could significantly impact our financial condition, results of operations and cash flows.

Goodwill

Goodwill is not subject to amortization and is tested for impairment at the reporting unit level annually, during the fourth quarter, specifically October 1, or more frequently if events or changes in circumstances indicate impairment may exist. The Company determines the fair value of its reporting units using the income approach based upon estimated future cash flows discounted at a rate commensurate with the risk involved or market-based comparables. The determination of the fair value using the income approach requires management to make significant estimates and assumptions related to forecasts of future cash flows and discount rates. Changes to the forecasted revenue growth, earnings before income taxes, depreciation and amortization (“EBITDA”) and discount rate assumptions may result in a significantly different estimate of the fair value of the reporting units, which could result in a different assessment of the recoverability of goodwill or measurement of an impairment charge. During the years ended December 31, 2025 and 2023, we performed interim quantitative goodwill impairment tests, which resulted in non-cash impairment charges of $411.9 million and $401.0 million, respectively. Refer to Note 9. Goodwill, of the Notes to Consolidated Financial Statements for additional information. The annual impairment tests performed on October 1, 2025, 2024 and 2023 resulted in no impairment charges. We continue to monitor the impact of the sustained impact of macro-economic conditions, an increasingly global competitive environment, along with continued volatility particularly in the construction and automotive sectors. Future deterioration in these conditions may require us to perform an interim quantitative impairment test in 2026.

The fair value estimates used in the assessment of impairment for goodwill consider historical trends in addition to significant assumptions including projections of future performance. Changes in these assumptions can have a significant impact on the assessment of fair value.

RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

For a discussion regarding recently adopted accounting pronouncements, refer to Recently adopted Accounting Pronouncements included in Note 2. Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements.

38

SUMMARY

In 2025, we reported a net loss of $337.4 million on total net sales of $1,987.0 million. Compared to the prior year, net sales increased $5.9 million, or 0.3%. Sales reflected higher volume/mix, favorable currency translation, and higher selling prices, partially offset by sales associated with exited facilities. FAM segment net sales increased $1.0 million, or 0.1%, compared to prior year primarily driven by favorable currency translation, partially offset by lower selling prices. SAS segment net sales increased $4.9 million, or 0.4%, compared to prior year primarily driven by higher volume/mix, higher selling prices, and favorable currency translation, partially offset by sales associated with exited facilities.

The increase in net loss in 2025 compared to 2024 was primarily due to the $411.9 million goodwill impairment expense. For more information on the goodwill impairment, refer to Note 9. Goodwill of the Notes to Consolidated Financial Statements. The Company incurred restructuring and other impairment charges of $19.9 million and $38.1 million, in 2025 and 2024, respectively, primarily related to exiting certain product categories and site closures.

RESULTS OF OPERATIONS

[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]