Attached files
| file | filename |
|---|---|
| 8-K - 8-K - MATERION Corp | d359509d8k.htm |
 Investor Presentation
May 2012
Materion Corporation
Exhibit 99.1 |
 Forward-Looking Statements
These slides contain (and the accompanying oral discussion will contain)
“forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements involve known and unknown risks, uncertainties and other factors
that could cause the actual results of the Company to differ materially from
the results expressed or implied by these statements, including health
issues, litigation and regulation relating to our business, our ability to
achieve and/or maintain profitability, significant cyclical fluctuations in
our customers’ businesses, competitive substitutes for
our products, risks associated with our international operations, including foreign
currency rate fluctuations, energy costs and the availability and prices of
raw materials, the timing and ability to achieve further efficiencies and
synergies resulting from our name change and product line alignment under
the Materion name and brand, and other factors disclosed in periodic reports
filed with the Securities and Exchange Commission. Consequently these
forward-looking statements should be regarded as the Company’s
current plans, estimates and beliefs.
The Company does not undertake and specifically declines any obligation to publicly
release the results of any revisions to these forward-looking statements
that may be made to reflect any future events or circumstances after the
date of such statements or to reflect the occurrence of anticipated or
unanticipated events. 2 |
 Unique
Global
Positions
–
Advanced
Materials
•
Only Fully Integrated Producer of Beryllium and
Beryllium Alloys in the World
–
Over 75 years of reserves at Utah
Leading Global
Position
•
Unique Copper-Nickel-Tin Material ToughMet®
–
Multiple advanced applications growing at over 30%
annually
•
Precision Optical Coatings –
Visible to Infrared
Bandwidth
–
“Go To”
Supplier for defense, thermal imaging, space
and medical applications
•
High Purity Gold Products for Semiconductor
Fabrication (Wireless & LED)
–
Offering
“full
metal
management”
capabilities
•
Blood Analysis Test Coatings for Medical Diagnosis
3 |
 New
Name, Same Impressive Performance 4
12%*
CAGR
Sales
growth
(2005 –
2011)
19%
CAGR
Operating profit
growth
(2005 –
2011)
Successful
Repositioning
of company
*Excluding pass-through metal
M A T E R I O N T O D A Y :
|
 Positioned to Deliver Long-Term, Sustainable Growth
5
A company
with a strong
platform…
…
Leveraging a
high value-added
business
model…
…
Executing
a focused
growth plan
T
H
E
S
I
S |
 The
Repositioning of Materion Prior to 2002
2002 –
2010
2011 +
Metals and
mining focus
Repositioning
Advanced
Materials
6 |
 Successful
Repositioning
–
Snapshot
7
2002
2011
Revenue
$373M
$1.5B
Revenue % in
Advanced Materials
47%
76%
Debt-to-Debt-Plus-Equity
43%
17%
Working capital *
% of sales
41%
23%
Cyclicality
High
Lower
Growth
Low
Higher
* A/R, Inventory & A/P |
 Operating Businesses are Well-Positioned and Growing
8
Business
End Markets
(Examples)
Products
(Examples)
Advanced Materials
•
Wireless
•
LED
•
Optical Coatings
•
Medical
•
Alternative Energy
•
Defense & Science
•
PVD Targets
•
Optical / Medical Coatings
•
Electronic Packaging
•
Inorganic Powders
76% of revenues
Integrated Metals
•
Wireless
•
Oil & Gas
•
Aerospace
•
Heavy Equipment
•
Defense & Science
•
Electronic Connectors
•
Directional Drilling Components
•
Optical Structures
•
Bushings and Bearings
24% of revenues |
 Positioned to Deliver Long-Term, Sustainable Growth
9
T
H
E
S
I
S |
 High Value-Added Business Model
10
1.
Identify high growth
secular markets
2.
Target the fastest growing
niches of those markets
3.
Expand with
innovative
products
4.
Add synergistic
acquisitions
5.
Ensure
financial
discipline |
 1.
Identify High Growth Secular Markets 11
Market
Q1 2012
% of Value-
added Sales
2012
Trends
Key Drivers
Consumer Electronics
21%
•
Smartphone growth
•
Tablet computers & LEDs
•
Miniaturization
Industrial Components &
Commercial Aerospace
20%
•
New airplane builds & retrofits
•
Increasing air travel
•
Heavy equipment builds
Defense & Science
14%
•
DoD & foreign military budgets
•
Demand for communications satellites
•
High performance optical devices
Automotive Electronics
9%
•
Increasing global car production
•
HEV/EV lithium ion battery components
•
Engine control & electronic systems
Energy
8%
•
Directional drilling
•
Rig counts
•
Solar, batteries & smart grid devices
Medical
7%
•
Glucose testing
•
Blood analysis test coating for medical diagnosis
•
Diagnostics equipment
Telecommunications
Infrastructure
6%
•
Global 3G/4G builds
•
Base stations
•
Undersea fiber
-optics expansion |
 Positioned in Diverse Set of High-Growth Markets
12
Growth
Entered multiple leading-edge growth markets since 2002
Defense
Commercial Aerospace
Medical
Devices
Disk Drives
Optics
Telecom
Infrastructure
LED’s
Alternative
Energy
LCD
Space /
Science
Notebooks
Cellular phones
(smartphones),
Tablet computers
Heavy
Equipment
12 |
 High Operating Margins
Operating
Profit %
Operating Profit % of
Value-Added
(1)
Advanced Materials
3% -
5%
16% –
18%
Integrated Metals
6% -
8%
8% –
10%
Company
3% –
5%
10% –
12%
13
Removing High Value Metals Clarifies Margins
2011
(1) Value added sales excludes metal pass-through
|
 A
Global Platform Operations in US
and 11 Countries
Significant International Sales*
Q1 2012
38%
14
•
Customers in >50 countries
•
Expanded presence in Asia
*Percentage of value added sales |
 2.
Target High Growth, Leading-Edge Markets 15
Reportable Segments
CONSUMER
ELECTRONICS
DEFENSE & SCIENCE
INDUSTRIAL
COMPONENTS &
COMM. AEROSPACE
TELECOM
INFRASTRUCTURE
AUTOMOTIVE
ELECTRONICS
ENERGY
MEDICAL
Key Markets
ADVANCED MATERIAL
TECHNOLOGIES
PERFORMANCE
ALLOYS
BERYLLIUM &
COMPOSITES
TECHNICAL
MATERIALS
Precious, Non-precious,
Specialty Metal and Inorganic
Materials, Electronic Packages
and Components
Bulk and Strip Form Products
and Beryllium Hydroxide
Beryllium and Beryllia Ceramic
Products
Specialty Strip Metal
Products |
 Value Added Sales: Materion
Q1 2012
16
Consumer Electronics
21%
Industrial
Components &
Commercial
Aerospace
20%
Defense & Science
14%
Automotive
Electronics
9%
Energy
8%
Medical
7%
Telecom
Infrastructure
6%
Services
4%
Appliance
3%
Other
8% |
 Strategy in Action: Outgrowing Growth Markets
Growth of Materion
Oil and Gas Sales vs. Market
Growth of Materion
Aerospace Sales vs. Market
17
0
100
200
300
400
500
600
700
0
100
200
300
400
500
Materion Sales
Materion Sales
Global Rig Count
Aircraft Delivered
+512%
+85%
+349%
+80% |
 3.
Continually Develop Innovative Products •
Leveraging customer-centric product development
•
Active research programs to take advantage of
secular trends
•
Key product areas include
–
LEDs
–
Medical
–
Commercial Optics
–
Computer Hard Drives
–
Alternative Energy
–
Science
–
Commercial Aerospace
–
Hybrid & Electric Vehicles
–
Wireless
18 |
 New
Product and Technology Development Advanced Material Technologies
Materials
–
Optics Coating Materials and Large Format Components
–
Thin Film Electrodes (medical diagnostics)
–
Expanded
refining/chamber
services
–
Complement
to
Thin
Film
Materials &
Coating businesses
–
Nanotechnology Materials
–
Materials for High Brightness LEDs
–
Specialty Inorganic Compounds (Solar, Security)
–
Precious
Metal
Materials
–
rod,
bar,
sheet,
slugs,
etc.
–
Global Refining and Metal Recovery and Management Services
–
Ultra high purity Precious Metals for medical and semiconductor applications
–
Next generation magnetic data storage thin film head materials
19 |
 New
Product and Technology Development Coatings
Packaging
20
Advanced Material Technologies
–
Precision Optical Thin Film Coatings (specialty filters) –
Large format Thin Film Materials for large area coatings (Energy, Solar) –
Solar Panel Thin Film, Concentrator Materials and Barrier Film Coatings –
Optical package for New Photonics applications –
RF packages for the latest transistor technology (3G and 4G infrastructure) –
MEMS and Photovoltaic Packaging
Materials |
 New
Product and Technology Development Performance Alloys
–
ToughMet®
Alloy for High Volume Bearing Applications
–
BrushForm 158 for Voice Coil Motor (VCM) applications
–
Materion R270 Strip
Beryllium and Composites
–
Nearer net shape fabrication (hot isostatic pressing)
–
Truextent™
speaker diaphragms
–
Investment Casting
–
Amorphous Metals
–
SupremEX™
Aluminum Metal Matrix Composites
Technical Materials
–
Hybrid & Electric Vehicle Battery Components
–
Power Electronics
–
Smart Grid Meters
–
Computer Hard Drives (Dual Stage Activation)
–
Medical Applications
21 |
 Impact
Add complementary
products / technology
Expand market
position
Accretive in
year 1
Acquisitions
2005
-
2012
OMC
–
shield
kit
cleaning
–
2005
TFT
–
thin
film
coatings
–
2005
CERAC
–
inorganic
chemicals
–
2006
Techni-Met
–
thin
film
coatings
–
2008
Barr
–
thin
film
coatings
–
2009
Academy
–
precious
metals
–
2010
EIS
Optics
–
thin
film
coatings
–
2011
TBD
AMC
–
metal
matrix
composites
–
2012
TBD
Added
over
$440M
to
sales
and
approximately
30%
of
company
profit
in
2011
22
4. A Strong Record of Synergistic Acquisitions |
 Synergistic Acquisitions
Case Study of Growing a Niche Business
–
Optical Filters and Medical Coatings
(Pro-Forma Revenues)
•
Positioned in $1.2B+ market growing
at 11% annually
•
Markets served include: defense,
aerospace, medical, energy,
semiconductor, telecommunications,
lighting and astronomy
•
The recent acquisition of EIS Optics
continues to expand our global
footprint in Asia
$9M
$165M
Barr
(2009)
Barr
(2009)
Techni-
Met
(2008)
Techni-
Met
(2008)
TFT
TFT
EIS Optics
(2011)
EIS Optics
(2011)
2006
2012 (F)
23 |
 5.
Ensure Financial Discipline 24
Maintain strong
balance sheet
Debt-to-Debt-Plus-Equity
Maximum 30%
Strong
cash flow
•
Cash flow from operations
$30M -
$75M annually for
the past five years
•
Capex below depreciation
•
Reduction in working
capital goal to <20% sales
Resources to
finance organic
growth and
acquisitions
while returning
cash to
shareholders
After $228M in acquisitions
21%
17%
12%
0%
10%
20%
30%
2005
2011
2012(F) |
 THESIS
Positioned to Deliver Long-Term, Sustainable Growth
25
A company
with a strong
platform…
…
Leveraging a
high value-added
business
model…
…
Executing
a focused
growth plan
1
2
3 |
 Continuing to Execute Three Point Strategy
26
1
Grow and diversify revenue base
2
Expand margins
3
Improve fixed and
working capital utilization
Increasing Shareholder Value |
 Financial Goals Next 3-5 Years
Past 3-5 Years
Next 3-5 years
Revenue growth –
organic
12%
>10%
Acquisitions
$35M -
$40M
Per year
$50 -
$100M
Per Year
Margins (OP % VA)
10% -
14%
14% -
18%
Working capital % sales
23% -
25%
<20%
Debt-to-Debt-Plus-Equity
16% -
18%
<30%
ROIC (pre-tax)
9% -
12%
>20%
27
27 |
 Expand and Diversify Revenue Base
•
Targeting expansion in secular growth markets including:
–
smart mobile devices, 3G / 4G, commercial aerospace, oil & gas,
alternative energy, optics, LED / LCD
•
Ongoing global expansion
–
Asia
•
Strategic acquisition
fast accretion
–
Technology breadth
–
Global reach
–
Product diversification
28
S T R A T E G Y # 1 : G R O W T H
|
 Expand Margins –
Key Drivers
29
1
Lean Sigma
operating
efficiency
2
Higher value
added products
3
Cost
reductions
Margin
Today
10 -
12%
Target
Margin
14 -
18%
(OP % VA)
S
T
R
A
T
E
G
Y
# 2 : M A R G I N S
|
 Improve Fixed and Working Capital Efficiency
30
Lean Sigma
•
Cycle time reduction
•
Yield improvement
•
On-time shipments
Based on 2012 projected sales, each 5% of working capital efficiency = $50M of
cash Improve Working Capital
Efficiency
Working capital % of sales
41%
23%
<20%
2002
2011
Target
S T R A T E G Y # 3 : C A P I T A L E F F I C I E N C Y
|
 2012 Outlook and Guidance
Revenues
(Billions)
EPS
31
$1.5-$1.6
$1.5
2011
2012 (F)
$1.95-$2.10
$1.93
2011
2012 (F) |
 Why
Invest in Materion Corporation Positioning
A leader in high-growth markets
Performance
Strong performance record
Growth
Executing three point strategy
•
Global player, strong secular market drivers
•
Sustainable long-term growth
•
Proven business model
•
Target, capture niche, then expand
•
Clear financial goals, performance
continuing to improve
I N S U M M A R Y
32 |
    Appendix |
 Value Added Sales: By Segment
A-1
Q1 2012 |
 Value-Added Sales: Advanced Material Technologies
A-2 |
 Value-Added Sales: Performance Alloys
A-3
Q1 2012 |
 Value-Added Sales: Beryllium and Composites
A-4 |
 Value-Added Sales: Technical Materials
A-5 |
 I/O
Connector Contacts
Battery Contacts
Internal Antenna Contacts
Grounding Clips
and Audio Jacks
Micro Mezzanine
Connectors for
LCD Screen
Internal Electronics and LED
•
Thin
Film
Materials
–
Power
amplifiers, LED, SAW and
BAW devices, filters, and ICs
•
Hermetic Solutions for SAW
•
Refining / Recycling
•
Precision Parts Cleaning
Other Smart Phone Applications:
•
Circuit Board and IC Inspection
•
RoHS Compliance Assurance
•
Cellular Infrastructure with High Power
RF Packaging
Internal Electronics
•
Precursor materials for GaAs
wafer production
Applications: Smart Phones
A-6 |
 Avionics/Electrical
Systems
Airframe Structure
Landing Gear
Attachments
Engine and Pylon
Attachments
Flight Control
Mechanisms
Horizontal Stabilizer &
Rudder Attachments
Hydraulic Systems
Fuel Systems
Wing Attachments
Doors & Hatches
Landing Gear
Components
Flight Attendant
Jumpseat Spring
Safety Slide
Mechanism
Other Aerospace Applications:
•
Baggage Inspection
•
Nondestructive Evaluation (Cracked
Component Detection)
A-7
Applications: Aerospace |
 Under Water Wellhead Equipment
Directional Drilling
Equipment
MWD, LWD, MPT Systems
Drill Bits
Structural Rig
Components
Wellhead Control Equipment
Other Oil & Gas Applications:
•
Artificial Lift Equipment
•
Elemental Analysis
•
Down Hole X-Ray Inspection
ROV’s, blow out preventers,
hydraulic actuators, control fluid couplings
Applications: Oil & Gas
A-8 |
 Technology: Amorphous Silicon
(a-Si, tandem and multi-junction)
Thin Film (PVD) Materials
Silicon based photovoltaic cells
Front and back contact layers
TCO Transparent Conductive Oxide layers
Technology: Cadmium Telluride
(CdTe)
Thin Film (PVD) Materials
Cadmium based solar cell architecture. N and
P type Cadmium Semiconductor materials
TCO Transparent Conductive Oxide layers
Front and Back-contact layers
Technology: Copper
Indium Gallium Selenide
(CIGS)
Thin Film (PVD) Materials
as well as Powders for
Printing CIGS applications
Copper Indium Gallium
Selenide thin film and screen
printing applications for flexible
and rigid solar cells.
Technology: Concentrator Photovoltaic
(CPV)
Thin Film (PVD) Materials
Solar technology based on concentrating Solar
rays into a semiconductor device via large lens.
Anti-Reflection Coating Materials
Precious metal contact materials
Micro Electronic Packaging Products:
Bonding Ribbon -
Au & Ag
Lead-free Solders
Metalized Ceramic Substrates
Technology:
Flexible
Solar
Cells
/
Building Integrated Photovoltaic:
Thin Film Services:
Solar cells built in flexible substrates to
accommodate applications such as roofing tiles
or defense.
Technology: Crystalline
Silicon (Si)
Interconnect Materials
Front and backplane systems for
high efficiency designs.
Applications: Solar Energy
A-9 |
 Cardiac Rhythm Management
•
Electronic Interconnects/Components
•
Niobium/Titanium Electron Beam Weld
Insulin Pump
•
EMI Shielding and Grounding
•
Electrical Terminals in Connectors
Seizure Control
•
Thin Film Deposition Implantable
Electrode –
Parkinson's disease
(R&D)
External Glucose Analysis
•
Subcutaneous sensors for glucose measurement
Subcutaneous Glucose Analysis
•
Thin Film Coatings –
Electrode Monitoring device
Radiation Therapy –
Neutron Reflectors
X-Ray Mammography
Other Medical Applications:
•
DNA Sequencing Optics
•
CT Scan
•
Diagnostic X-Rays
•
Advanced Drug Delivery Components
•
Diagnostic Electronic Components
•
Anesthesia Monitoring Components
•
Operating Instruments
Applications: Medical
A-10 |
 Applications: Telecommunications Infrastructure
Base Stations
•
Coaxial Connectors
•
High Power Amplifiers
Local Area Networks
•
Shielding
•
Modular Jacks
•
PCB Sockets
•
Processor Sockets
Other Telecommunications Infrastructure
Applications
•
Undersea Repeater Housings
A-11 |
 Lithium Ion Battery
Interconnects
Battery Management
Resistors
Electronic Power
Steering Modules
ABS Leadframes
Engine Efficiency Oxygen
Sensors
Mirror & Windshield Electronic
Connections
Air Bag Sensors
Lamp Socket Connectors
Auto Dimming Mirror
Connectors
Hybrid Vehicle Motor &
Module Connectors
Window and Door
Switches
Fuel Pump and Fuel
Level Sensors
Battery
Terminals
Engine Ignition and
Control Modules
Battery & Relay Control
Modules
Turn Signal and Emergency
Flasher Relays
On Board
Telematics
Applications: Automotive Electronics
A-12
Night Vision Optics
Speed Control Optics
Camera Optics |
 Applications: Defense
•
Infrared Sensors for Fighter
Jet and UAV Optical
Targeting
•
Electronic Packaging for
Defense Avionics, Radar
and Electronic
Countermeasure Systems
•
Structural and Electronic
Components for Satellites
•
X-ray Windows in Security
Imaging Systems
•
Laser Protection Optical
Coatings
•
Night Vision System Optics
A-13 |