Slide 1: Earnings Call Presentation Second Quarter 2023
Earnings Call Presentation Second Quarter 2023 August 1, 2023 10:00 am ET • By phone: 877-407-6184 in the US or 201-389-0877 internationally • A live webcast of the call will be available and archived on the investor relations section of the Company's website at investor.ipgphotonics.com © 2023 IPG
Slide 2: Safe Harbor Statement
Safe Harbor Statement Information and statements provided by IPG and its employees, including statements in this presentation, that relate to future plans, events or performance are forward-looking statements. These statements involve risks and uncertainties. Any statements in this presentation that
Slide 3: Q2 '23 Highlights
Q2 '23 Highlights • Total revenue decreased 10% YoY as growth in welding, cleaning and other THE WORLD applications was offset by continued softness in cutting and marking applications LEADER IN FIBER LASERS ◦ Revenue benefited from strong sales in welding, driven by e-mobility applications and high
Slide 4: Financial Review
Financial Review • Gross margin decreased due to In millions except per share Q2 '23 Q2 '22 Y/Y Q1 '23 Q/Q higher cost of product sold and charges for scrap, partially offset by Revenue $340.0 $377.0 (10)% $347.2 (2)% lower inventory reserves and shipping costs as well as an improvement in absorptio
Slide 5: Revenue by Power
Revenue by Power • High power (more than 1kW) sales declined YoY due to softer 180 demand in flat sheet metal cutting applications; sales of ultra- high power lasers (more than 6kW) represented 50% of high 160 power lasers 140 • Pulsed lasers sales declined as growth in cleaning and solar cell manuf
Slide 6: Revenue by Geography
Revenue by Geography 160 300 140 250 120 200 In millions In millions 100 80 150 60 100 40 50 20 0 0 North America Europe China Other Asia China RoW Q2 '22 Q1 '23 Q2 '23 Q2 '22 Q2 '23 • Sales declined in North America with strong growth in welding and cleaning applications offset by lower revenue in
Slide 7: Balance Sheet and Cash Flow Summary
Balance Sheet and Cash Flow Summary In millions Q2 '23 • Maintaining a strong balance sheet Cash and Short-term Investments $1,096 • Repaid $16M of debt Inventories $491 • Continue to focus on inventory control and reducing the value of inventory on hand Total Debt $— • Capital Allocation Net Income
Slide 8: Balance Sheet and Cash Flow Generation
Balance Sheet and Cash Flow Generation Operating Cash Flow and Capital Allocated Exceptional Balance Sheet 200 1,500 100 1,000 0 In millions In millions -100 500 -200 0 -300 -400 -500 YTD 2022 YTD 2023 Dec 2022 Jun 2023 Cash from operations Cash and cash equivalents CapEx Short-term investments Buyb
Slide 9: Financial Guidance
Financial Guidance Q3 '23 Outlook • Q2 book-to-bill was below 1 Revenue $300M - $330M Gross Margin 40% - 42% Operating Expenses $74M - $76M EPS $0.85 - $1.15 Tax Rate ~25% Diluted common shares ~47.5M VERTICAL INTEGRATION PROVIDES COMPETITIVE EDGE © 2023 IPG Photonics 9
Slide 10: Vertical Integration Provides Competitive Edge
VERTICAL THE WORLD INTEGRATION LEADER IN PROVIDES FIBER LASERS COMPETITIVE EDGE CREATING NEW LASER ENABLING APPLICATIONS GREATER & DISPLACING AUTOMATION NON-LASER PROCESSES STRONG HIGH ELECTRICAL MARGINS, EFFICIENCY ENABLES BALANCE SHEET LOWER CUSTOMER & CASH FLOW ENERGY USE © 2023 IPG Photonics 10
Slide 11: Thank you
Thank you © 2021 IPG Photonics