Slide 1: Investor Presentation August 2011
Investor Presentation August 2011 Materion Corporation Exhibit 99.1
Slide 2: Forward-Looking Statements
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 ca
Slide 3: Materion Today: New Name, Same Impressive Performance
M A T E R I O N T O D A Y : New Name, Same Impressive Performance Sales growth (2005 – 2010) Operating profit growth (2005 – 2010) Repositioning of company 19% CAGR 30% CAGR Successful
Slide 4: Thesis: Positioned to Deliver Long-Term, Sustainable Growth
T H E S I S Positioned to Deliver Long-Term, Sustainable Growth A company with a strong platform…
Slide 5: The Repositioning of Materion
The Repositioning of Materion Prior to 2002 2002 – 2011 + Metals and mining focus Repositioning Sustained growth
Slide 6: Successful Repositioning – Snapshot 2002 2010
Successful Repositioning – Snapshot 2002 2010 Revenues $373M $1.3B Revenue % in Advanced Materials 47% 75% Sales per employee (thousands) $200 $524 Debt-to-Debt-Plus-Equity 43% 18% Working capital % of sales 41% 25% Cyclicality High Low
Slide 7: Operating Businesses are Well-Positioned and Growing
Operating Businesses are Well-Positioned and Growing Business End Markets (Examples) Products (Examples) Sales Growth (2002-2010) Advanced Materials • Wireless • LED • Optical • Medical • Alternative energy • PVD targets • Optical / medical coatings • Electronic packaging • Inorganic powders 453% 75
Slide 8: Positioned in Diverse Set of High-Growth Markets
Positioned in Diverse Set of High-Growth Markets Growth 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 Entered multiple leading-edge growth m
Slide 9: High Operating Margins
High Operating Margins Operating Profit % Operating Profit % of Value-Added (1) Integrated Metals 11 – 13% 14 – 16% Advanced Materials 5 – 7% 22 – 24% Company 5 – 7% 13 – 15% Removing High Value Metals Clarifies True Margins Note (1): Excludes high value metals from sales
Slide 10: A Global Platform
A Global Platform 28% Operations in US and 11 Countries Significant and Expanding International Sales “Direct” International Sales Customers in >50 countries Expect “direct” international sales to be 40 - 50% in 3-5 years
Slide 11: Thesis: Leveraging a High Value-Added Business Model
T H E S I S Positioned to Deliver Long-Term, Sustainable Growth A company with a strong platform… … Leveraging a high value-added business model… … Executing a focused growth plan
Slide 12: High Value-Added Business Model
High Value-Added Business Model 1. Target high growth markets 2. Own fast growing niches 3. Expand with innovative products 4. Add synergistic acquisitions 5. Ensure financial discipline
Slide 13: 1. Target High Growth, Leading-Edge Markets
1. Target High Growth, Leading-Edge Markets Market Q2 2011 % of Value- Added Sales 2011 Trends Key Drivers Consumer Electronics 23% • Smartphone growth • Tablet computers & LEDs • Miniaturization Industrial Components & Commercial Aerospace 16% • New airplane builds & retrofits • Increasing air trav
Slide 14: 1. Target High Growth, Leading-Edge Markets: Segments
1. Target High Growth, Leading-Edge Markets ADVANCED MATERIAL TECHNOLOGIES PERFORMANCE ALLOYS BERYLLIUM & COMPOSITES TECHNICAL MATERIALS Key Markets Precious, Non-precious, Specialty Metal and Inorganic Materials; Electronic Packages and Components Bulk and Strip Form Products and Beryllium Hydroxid
Slide 15: 2. Own The Niche – Examples
2. Own The Niche – Examples • Only fully integrated producer of beryllium – one-of-a-kind business Leading position in niche • Unique copper-nickel material ToughMet – multiple advanced applications growing at over 30% annually • Optical coatings – highly sophisticated uses for defense and medical a
Slide 16: 3. Continually Develop Innovative Products
3. Continually Develop Innovative Products • Customer-centric product development • Active research programs • New product areas include – LEDs – Medical – Commercial Optics – Disk drive arms – Solar – Batteries – Science – Commercial Aerospace
Slide 17: 4. Synergistic Acquisitions – Strong Record
4. Synergistic Acquisitions – Strong Record Add complementary products / technology Expand market position Accretive in year 1 By 2010, added over $300M to sales and approximately 25% of company profit Acquisitions 2005-2010 – Impact OMC – shield kit cleaning TFT – thin film coatings CERAC – inorgan
Slide 18: 4. Synergistic Acquisitions: Growing a Niche Business
4. Synergistic Acquisitions Barr (2009) Techni- Met (2008) Case Study of Growing a Niche Business – Optical Filters and Medical Coatings (Revenues) • Revenues of $91M • 78% CAGR • Positioned in $1.2B+ market growing at 11% annually $9M $82M Barr (2009) Techni- Met (2008)
Slide 19: 5. Ensure Financial Discipline
5. Ensure Financial Discipline Maintain strong balance sheet Debt-to-Debt-Plus-Equity 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 acquisitions of $50M to $1
Slide 20: Thesis: Executing a Focused Growth Plan
T H E S I S Positioned to Deliver Long-Term, Sustainable Growth A company with a strong platform… … Leveraging a high value-added business model… … Executing a focused growth plan
Slide 21: Financial Goals Next 3-5 Years
Financial Goals Next 3-5 Years 2010 Next 3-5 years Revenue growth – organic 35% >10% Acquisitions $21M $50 - $100M per year Margins (OP % VA) 14% 14% - 18% Working capital % sales 25% <20% Debt to Debt-Plus-Equity 18% <30% ROIC (pre-tax) 17% >20%
Slide 22: Continuing to Execute Three Point Strategy
Continuing to Execute Three Point Strategy Grow and diversify revenue base Expand margins Improve fixed and working capital utilization Increasing Shareholder Value
Slide 23: Strategy 1: Growth – Expand and Diversify Revenue Base
S T R A T E G Y # 1 : G R O W T H Expand and Diversify Revenue Base • Targeting expansion in 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 – Te
Slide 24: Strategy in Action: Outgrowing Growth Markets
S T R A T E G Y # 1 : G R O W T H Strategy in Action: Outgrowing Growth Markets Growth of Materion Oil and Gas Sales vs. Market Growth of Materion Aerospace Sales vs Market
Slide 25: Strategy 2: Margins – Expand Margins Key Drivers
S T R A T E G Y # 2 : M A R G I N S Expand Margins – Key Drivers 1 2 3 Lean Sigma operating efficiency Higher value added products Cost reductions Margin Today 12 - 14% Target Margin 14 - 18% (OP % VA)
Slide 26: Improve Fixed and Working Capital Efficiency
Improve Fixed and Working Capital Efficiency Based on 2011 projected sales, each 5% of working capital efficiency = $43M of cash S T R A T E G Y # 3 : C A P I T A L E F F I C I E N C Y Lean Sigma • Cycle time reduction • Yield improvement • On-time shipments Improve Working Capital Efficiency Workin
Slide 27: 2011 Outlook and Guidance
2011 Outlook and Guidance Revenues ($B) EPS ($) $2.25 2011(F) $1.3B 2011(F) $1.55B $2.35 - $2.60
Slide 28: In Summary: Why Invest in Materion Corporation
I N S U M M A R Y Why Invest in Materion Corporation Positioning Performance Growth Niche leader in high-growth markets Strong performance record Executing three point strategy • Global player, strong secular market drivers • Sustainable long-term growth • Proven business model • Target, expand, the
Slide 29: Appendix
Appendix
Slide 30: Applications: Smart Phones
Applications: Smart Phones 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 Solution
Slide 31: Applications: Aerospace
Applications: Aerospace 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 J
Slide 32: Applications: Defense
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 Coa
Slide 33: Applications: Automotive Electronics
Applications: Automotive Electronics 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 Hybri
Slide 34: Applications: Oil & Gas
Applications: Oil & Gas 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 prev
Slide 35: Applications: Solar Energy
Applications: Solar Energy 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 sol
Slide 36: Applications: Telecommunications Infrastructure
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-7
Slide 37: Applications: Medical
Applications: Medical 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) Externa
Slide 38: Value-Added Sales: Advanced Material Technologies
Value-Added Sales: Advanced Material Technologies A-9
Slide 39: Value-Added Sales: Performance Alloys
Value-Added Sales: Performance Alloys A-10 Q2 2011
Slide 40: Value-Added Sales: Beryllium and Composites
Value-Added Sales: Beryllium and Composites A-11
Slide 41: Value-Added Sales: Technical Materials
Value-Added Sales: Technical Materials A-12
Slide 42: New Product and Technology Development
New Product and Technology Development Advanced Material Technologies – Optics Coating Materials and Large Format Components – Precision Optical Thin Film Coatings (specialty filters) – Thin Film Electrodes (medical diagnostics) – Optical package for New Photonics applications – RF packages for the
Slide 43: New Product and Technology Development
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 diaphra
Slide 44: Materion Corporation
Investor Presentation August 2011 Materion Corporation