Slide 1: Third-Quarter 2024 Investor Call
Third-Quarter 2024 Investor Call Corning Reports Third-Quarter Financial Results October 29, 2024 1
Slide 2: Forward-Looking and Cautionary Statements
Forward-Looking and Cautionary Statements The statements contained in this presentation and related comments by management that are not historical facts or information and contain words such as “will,” “believe,” “anticipate,” “expect,” “intend,” “plan,” “seek,” “see,” “would,” “target,” “estimate,”
Slide 3: Q3 GAAP Earnings: FX Hedge Accounting and Other Charges
Q3 GAAP EARNINGS FX Hedge Accounting and Other Charges • Recorded realized gains and unrealized, non-cash mark-to-market losses on currency-hedging contracts for a net after-tax loss of $121M – Translation hedges reduce our economic exposure to currency fluctuations, providing higher certainty for o
Slide 4: Third-Quarter 2024 Core Performance
CEO PERSPECTIVE Third-Quarter 2024 Core Performance “We delivered another strong quarter of year-over-year growth. Third-quarter core sales grew 8% to $3.73 billion, and core EPS grew 20% – more than double the rate of sales – to $0.54, with core operating margin expanding 160 basis points to 18.3%.
Slide 5: Springboard Sales Opportunity
“Springboard” Sales Opportunity – Not Risk Adjusted $9 Incremental Annualized Sales Run-Rate vs. Q4’23 $8 Incremental Annualized Sales vs. Q4’23 ($B) First, we focused on a three-year $7 time period $6 $5B $5 $4 $3 $2 $1 $0 Q4'23 Q4'24 Q4'25 Q4'26 Q4'27 Q4'28 © 2024 Corning Incorporated 9 “Springboa
Slide 6: Important Observations; Display Technologies
CEO PERSPECTIVE Important Observations Significantly improving our return profile • Sales grew 8% YoY • EPS grew more than 2x the rate of sales • Operating margin expanded 160 bps YoY to 18.3% • Gross margin expanded 220 bps YoY to 39.2% • Generated strong adjusted free cash flow of $553M Reaching k
Slide 7: Optical Communications
CEO PERSPECTIVE Optical Communications GENERATIVE AI City A • Expect Enterprise business to grow at a 25% CAGR over the next four years • Enterprise Network sales grew 55% YoY in Q3, continuing outperformance • Agreement with Lumen Technologies reserves 10% of global fiber capacity for each of next
Slide 8: Springboard Progress Recap and CEO Summary
CEO PERSPECTIVE “Springboard” Progress Recap • Making significant progress on “Springboard” plan • Q3 results demonstrate sales growth and powerful incremental profit and cash flow we expect to deliver • Expect to improve return profile and achieve 20% operating margin target by end of 2026 • Markin
Slide 9: Third-Quarter 2024 Results and Outlook
CFO PERSPECTIVE Third-Quarter 2024 Results “We had an outstanding third quarter. Our outperformance was led by Optical Communications, with 36% year-over-year sales growth – and 55% growth in the Enterprise portion of the segment, driven by continued strong adoption of our new optical connectivity p
Slide 10: Springboard Plan; Optical Communications Segment Recap
CFO PERSPECTIVE “Springboard Plan” Capacity and technical capabilities in place to add more than $3B in annualized sales by the end of 2026 with minimal cash investment Expect to grow profit significantly faster than sales © 2024 Corning Incorporated 19 SEGMENT RECAP Optical Communications Q3 Result
Slide 11: Display Technologies Segment Recap
SEGMENT RECAP Display Technologies Q3 Results • Q3 Sales of $1.0B, up 4% YoY and consistent QoQ $1.0B • Q3 Net income of $285M, up 18% YoY and up 10% QoQ Q3 Net Sales Up 4% YoY Observations • Panel makers lowered utilization rates in Q3; Display glass volume down sequentially • Expect lower panel ma
Slide 12: Specialty Materials and Environmental Technologies
SEGMENT RECAP Specialty Materials Q3 Results • Q3 Sales of $548M, down 3% YoY • Q3 Net income of $72M, flat YoY $548M Q3 Net Sales Down 3% YoY Observations • Q3 sequential sales increase of 9% driven by premium glass for mobile devices • Q3 sequential net income increase of 14% reflected higher volu
Slide 13: Life Sciences; Hemlock and Emerging Growth Businesses
SEGMENT RECAP Life Sciences Q3 Results • Q3 Sales of $244M, up 6% YoY $244M • Q3 Net income of $15M, up 15% YoY Q3 Net Sales Up 6% YoY $15M Q3 Net Income Up 15% YoY © 2024 Corning Incorporated 25 SEGMENT RECAP Hemlock and Emerging Growth Businesses Q3 Results • Q3 Sales of $298M, down 9% YoY $298M •
Slide 14: Operating Expenses; Sales Run-Rate Against Springboard
CFO PERSPECTIVE Operating Expenses • Variable compensation tied to financial performance • Increased compensation accruals accordingly as our performance has accelerated in 2024 • Higher accruals lead to temporarily higher operating expenses in the back half of 2024 © 2024 Corning Incorporated 27 Sa
Slide 15: Q4 Guidance Increases Sales Run-Rate; Operating Margin Target
Q4 Guidance Increases Sales Run-Rate $9 Incremental Annualized Sales Run-Rate vs. Q4’23 $8 Incremental Annualized Sales vs. Q4’23 ($B) $3.75B Q4’24F Sales $7 - $3.27B Q4’23 Sales $6 $0.48B Incremental x 4 Annualized $5B Not Risk Adjusted $5 $1.9B Q4’24F Run-Rate $4 $3B High-Confidence Plan $3 Q3 Q4F
Slide 16: Capital Allocation and CFO Summary
CFO PERSPECTIVE Capital Allocation • Reduced 2024 capital expenses to ~$1.1B • Prioritize investing for organic growth opportunities • Seek to maintain strong and efficient balance sheet – One of the longest debt tenors in the S&P 500 – current average debt maturity is ~23 years – Only ~$1B in debt
Slide 17: Q&A Session
Q&A Session Corning’s Q4 Investor Outreach Plans • December 3 – UBS Global Technology Conference • Management visits to investor offices in select cities © 2024 Corning Incorporated 34 17
Slide 18: Appendix: 2024 Corporate Metrics
Appendix 2024 Corporate Metrics (as of October 29, 2024)(1)(2) Q4 2024 • Core Sales: ~$3.75B • Core EPS: $0.53 - $0.57 • Hemlock and Emerging Growth Businesses sales: ~$400M • SG&A and RD&E: ~$750M • Other income/expense: ($75M - $80M) • Gross equity earnings: ~$5M • Non-controlling interest: (~$30M
Slide 19: Q3 2024 Core Performance and Operating Performance by Segment
Q3 2024 Core Performance Core performance measures are non-GAAP measures. Definitions and reconciliations are provided on our website. © 2024 Corning Incorporated 37 Q3 2024 Operating Performance by Segment Optical Communications - Prior results have been recast to conform to the current period pres
Slide 20: Year-to-Date Core Performance
Year-to-Date Core Performance Core performance measures are non-GAAP measures. Definitions and reconciliations are provided on our website. © 2024 Corning Incorporated 39 Year-to-Date Operating Performance by Segment Optical Communications - Prior results have been recast to conform to the current p
Slide 21: Adjusted Free Cash Flow Reconciliation
Adjusted Free Cash Flow Reconciliation Core performance measures are non-GAAP measures. Definitions and reconciliations are provided on our website. © 2024 Corning Incorporated 41 Reconciliation of Non-GAAP to GAAP Financial Measures Core performance measures are non-GAAP measures. Definitions and r
Slide 22: Corning
CORNING 22