Slide 1: Materion Corporation 3Q 2024 Earnings Presentation
Materion Corporation 3Q 2024 Earnings Presentation October 30, 2024 © 2024 Materion Corporation
Slide 2: Agenda
Agenda Introduction Kyle Kelleher – Director, Investor Relations and Corporate FP&A Opening Remarks & Jugal Vijayvargiya – President and Chief Executive Officer Business Update Financial Shelly Chadwick – Vice President and Chief Financial Officer Review Q&A Question and Answer Session © 2024 Materi
Slide 3: Forward-looking Statements and Non-GAAP Financial Information
Forward-looking Statements and Non-GAAP Financial Information These slides contain (and the accompanying oral discussion will contain, where applicable) “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown
Slide 4: Opening Remarks & Business Update
Opening Remarks & Business Update Jugal Vijayvargiya President and Chief Executive Officer © 2024 Materion Corporation 4
Slide 5: Q3 2024 Highlights
Q3 2024 Highlights Delivered Record Adjusted EBITDA Margin Despite Soft Macro Value-added (VA) sales of $263.8 million, down 2% YoY ▪ Decrease due to general market softness combined with lower precision clad strip sales ▪ Partially offset by strength in space and defense, improvement in semiconduct
Slide 6: End Market Performance
End Market Performance Q3 2024 Market VA Sales vs. Q3 2023 Q3 Comments Semiconductor $65.7 10% ▪ Improving demand across advanced logic and memory applications Consumer ▪ Decrease due to lower precision clad strip sales $52.0 -16% Electronics ▪ Soft market demand across household appliance and other
Slide 7: Focused Actions Position Company for Stronger Performance
Focused Actions Position Company for Stronger Performance ▪ Selected as technology partner for major global semi equipment supplier in development of their new New deposition technology Business ▪ SupremEX material selected for use on prototype for U.S. army’s future long-range tiltrotor aircraft Wi
Slide 8: Key Takeaways
Key Takeaways Record Quarterly Adjusted EBITDA Margin ▪ Outperformed mid-term adjusted EBITDA margin target of 20% ▪ Electronic Materials YTD margins expand 360 bps with business improvement actions contributing Taking Strategic Actions to Reduce Costs and Deliver Strong Results ▪ Portfolio actions
Slide 9: Financial Review
Financial Review Shelly Chadwick Vice President and Chief Financial Officer © 2024 Materion Corporation 9
Slide 10: Q3 2024 Operating Performance
Q3 2024 Operating Performance Value-added Sales ($M) Adj. EBITDA ($M) Adj. EPS $1.51 $270.5 -2% $55.4 +2% $56.7 -7% $1.41 $263.8 21.5% 20.5% Q3 2023 Q3 2024 Q3 2023 Q3 2024 Q3 2023 Q3 2024 Value-added sales were $263.8 million Adjusted EBITDA at $56.7 million, margin of 21.5%, Adjusted EPS of $1.41
Slide 11: Q3 2024 Financial Comparison
Q3 2024 Financial Comparison Adjusted EBITDA of $56.7 million, or 21.5% of VA Sales, up 100 bps YoY ▪ Outperformed the midterm adjusted EBITDA margin target of 20% ▪ Record adjusted EBITDA margin for any quarter ▪ Increase driven by continued cost management and operational performance offsetting lo
Slide 12: Performance Materials Segment
Performance Materials Segment Value-added Sales ($M) Adj. EBITDA ($M) Value-added sales of $163.6 million $168.9 ▪ Decrease due to general market softness combined with -3% $163.6 0% lower precision clad strip and hydroxide sales $46.5 $46.5 ▪ Partially offset by strength in space and defense Adjust
Slide 13: Electronic Materials Segment
Electronic Materials Segment Value-added Sales ($M) Adj. EBITDA ($M) Value-added sales of $77.8 million, up 3% YoY ▪ Increase driven by semiconductor demand +3% +20% $75.5 $77.8 $15.6 ▪ Partially offset by industrial and energy market weakness $13.0 Adjusted EBITDA of $15.6 million, up 20% YoY ▪ Inc
Slide 14: Precision Optics Segment
Precision Optics Segment Value-added Sales ($M) Adj. EBITDA ($M) Value-added sales of $22.4 million ▪ Decrease due to defense order timing and market $26.1 -14% $3.4 weakness across automotive and industrial -85% $22.4 Adjusted EBITDA of $0.5 million ▪ Lower volume and unfavorable price/mix driving
Slide 15: Cash, Debt and Liquidity
Cash, Debt and Liquidity ($M) Q3 2023 Q3 2024 Leverage at midpoint of target range of 1.5x – 3x Short-term Debt $38.6 $37.5 Approximately $127 million available on existing revolving credit facility Long-term Debt $422.4 $457.8 ▪ Adequate liquidity remains to support growth Total Debt $461.0 $495.3
Slide 16: Full Year 2024 Guidance
Full Year 2024 Guidance Adj. EPS Guidance $5.64 2024 Guidance $5.20 - $5.40 ▪ Full year adjusted EPS of $5.20 - $5.40 ▪ Significant market weakness offset by continued cost, portfolio and footprint actions 2023 2024E 2024 Modeling Assumptions Capital Expenditures $75M Interest Expense $34M Precision
Slide 17: Invest in Materion as We Advance Our Strategy
Invest in Materion as We Advance Our Strategy Becoming a global leader in high-performing advanced materials serving diverse and attractive markets well aligned with megatrends Building robust pipeline with investments in R&D as we focus on developing innovative solutions for our customers Leveragin
Slide 18: Appendix
Appendix © 2024 Materion Corporation 18
Slide 19: Reconciliation for Value-added Sales
Reconciliation for Value-added Sales The cost of gold, silver, platinum, palladium, copper, ruthenium, iridium, rhodium, rhenium, and osmium is passed through to customers and, therefore, the trends and comparisons of net sales are affected by movements in the market price of these metals. The use o
Slide 20: Reconciliation for Non-GAAP Measures
Reconciliation for Non-GAAP Measures We have adjusted the results for certain special items such as restructuring and cost reduction initiatives (including costs associated with temporarily idled facilities), Electronic Materials inventory adjustment, business transformation costs, additional start
Slide 21: Reconciliation for Non-GAAP Measures
Reconciliation for Non-GAAP Measures We have adjusted the results for certain special items such as restructuring and cost reduction initiatives (including costs associated with temporarily idled facilities), Electronic Materials inventory adjustment, business transformation costs, additional start
Slide 22: Reconciliation for Non-GAAP Measures (Cont.)
Reconciliation for Non-GAAP Measures (Cont.) We have adjusted the results for certain special items such as restructuring and cost reduction initiatives (including costs associated with temporarily idled facilities), Electronic Materials inventory adjustment, business transformation costs, additiona
Slide 23: Reconciliation for Non-GAAP Measures (Cont.)
Reconciliation for Non-GAAP Measures (Cont.) We have adjusted the results for certain special items such as restructuring and cost reduction initiatives (including costs associated with temporarily idled facilities), Electronic Materials inventory adjustment, business transformation costs, additiona
Slide 24: Reconciliation for Non-GAAP Measures (Cont.)
Reconciliation for Non-GAAP Measures (Cont.) We have adjusted the results for certain special items such as restructuring and cost reduction initiatives (including costs associated with temporarily idled facilities), Electronic Materials inventory adjustment, business transformation costs, additiona
Slide 25: Reconciliation for Non-GAAP Measures (Cont.)
Reconciliation for Non-GAAP Measures (Cont.) ($ in millions) Q3 2024 Q3 2023 Q3 2024 TTM Q3 2023 TTM GAAP as Reported Net income $ 22.3 $ 26.6 $ 74.2 $ 105.0 Income tax expense (benefit) 0.8 3.0 7.1 16.5 Interest expense 8.8 7.6 34.4 30.4 Depreciation, depletion, and amortization 18.6 15.1 66.4 60.7
Slide 26: Materion enables what's next
Materion enables what’s next Materion Corporation +1 216.486.4200 http://www.materion.com Connect With Us © 2024 Materion Corporation