Materion Corporation · NYSE:MTRN
Materion — Q2 2024 Earnings Presentation
27 slides from Materion's earnings presentation, Aug 6, 2024
Slide 1: Materion Corporation 2Q 2024 Earnings Presentation
Materion Corporation 2Q 2024 Earnings Presentation August 5, 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: Q2 2024 Highlights
Q2 2024 Highlights Record Second Quarter VA Sales and Adjusted EPS Record Quarterly Adjusted EBITDA Value-added (VA) sales of $279.8 million, up 4% YoY ▪ Driven by strength in aerospace & defense, semiconductor and precision clad strip ▪ Partially offset by weakness in industrial, automotive and ene
Slide 6: End Market Performance
End Market Performance Q2 2024 Market VA Sales vs. Q2 2023 Q2 Comments ▪ Strength in advanced logic and memory devices, aligned with increasing AI applications Semiconductor $65.9 6% ▪ Strongest quarter since Q1 ’23 Consumer ▪ Incorporating precision clad strip project into Consumer Electronics $67.
Slide 7: New Business Awards and Customer Partnerships
New Business Awards and Customer Partnerships Precision Clad Aerospace & Defense Semiconductor Strip Awarded a new Leading A&D customer Announcing Precision Clad Received an Strip application is for Philip $150M Secured to invest “Overall Excellent Morris International’s multiyear contract to ~$60M
Slide 8: Key Takeaways
Key Takeaways Delivered record quarterly earnings ▪ Record 2nd quarter VA Sales and adjusted EPS ▪ Record quarterly adjusted EBITDA ▪ Outperformed mid-term adjusted EBITDA margin target of 20% Delivering on key strategic growth initiatives ▪ Announced significant new business awards and customer par
Slide 9: Financial Review
Financial Review Shelly Chadwick Vice President and Chief Financial Officer © 2024 Materion Corporation 9
Slide 10: Q2 2024 Operating Performance
Q2 2024 Operating Performance Value-added Sales ($M) Adj. EBITDA ($M) Adj. EPS $268.3 +4% $279.8 +4% +3% $1.42 $57.8 $1.38 $55.5 20.7% 20.7% Q2 2023 Q2 2024 Q2 2023 Q2 2024 Q2 2023 Q2 2024 Value-added sales were $279.8 million, up 4% Record adjusted EBITDA at $57.8 million, Adjusted EPS of $1.42, up
Slide 11: Q2 2024 Financial Comparison
Q2 2024 Financial Comparison Record adjusted EBITDA of $57.8 million, or 20.7% of VA Sales ▪ Outperformed the mid-term adjusted EBITDA margin target of 20% ▪ Record adjusted EBITDA for any quarter ▪ Increase driven by higher volume, improving operational performance and 20.7% targeted cost improveme
Slide 12: Performance Materials Segment
Performance Materials Segment Value-added Sales ($M) Adj. EBITDA ($M) Value-added sales of $173.1 million $173.1 ▪ Increase due to strength in the aerospace and defense $165.6 +4% -6% market and consumer electronics (precision clad strip) $45.9 $43.1 ▪ Partially offset by weakness in industrial, aut
Slide 13: Electronic Materials Segment
Electronic Materials Segment Value-added Sales ($M) Adj. EBITDA ($M) Value-added sales of $81.1 million $81.1 ▪ Driven by semiconductor market improvement $77.6 +5% +17% $17.1 ▪ Energy and industrial markets remain challenged $14.6 Adjusted EBITDA of $17.1 million ▪ Increase driven by higher volume
Slide 14: Precision Optics Segment
Precision Optics Segment Value-added Sales ($M) Adj. EBITDA ($M) Value-added sales of $25.6 million ▪ Driven by strength in aerospace, life sciences and $25.1 +2% $25.6 $2.6 -19% consumer electronics $2.1 ▪ Slightly offset by defense order timing Adjusted EBITDA of $2.1 million 10.2% 8.2% ▪ Operatio
Slide 15: Cash, Debt and Liquidity
Cash, Debt and Liquidity ($M) Q2 2023 Q2 2024 Leverage at midpoint of target range of 1.5x – 3x Short-term Debt $27.5 $38.8 Approximately $106 million available on existing credit facility Long-term Debt $412.7 $446.0 ▪ Adequate liquidity remains to support growth Total Debt $440.2 $484.8 initiative
Slide 16: Full Year 2024 Guidance
Full Year 2024 Guidance Adj. EPS Guidance 2024 Guidance ~2% $5.60 - $5.90 ▪ Updating full year adjusted EPS to $5.60-$5.90, an increase of 2% from 2023 at the midpoint $5.64 ▪ Guidance revision lowers top end of the range to reflect softer end market conditions 2023 2024E 2024 Modeling Assumptions C
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), additional start up resources and scrap, and merger, acquisition and divestiture related co
Slide 21: 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), additional start up resources and scrap, and merger, acquisition and divestiture re
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), additional start up resources and scrap, and merger, acquisition and divestiture re
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), additional start up resources and scrap, and merger, acquisition and divestiture re
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), additional start up resources and scrap, and merger, acquisition and divestiture re
Slide 25: Reconciliation for Non-GAAP Measures (Cont.)
Reconciliation for Non-GAAP Measures (Cont.) ($ in millions) Q2 2024 Q2 2023 Q2 2024 TTM Q2 2023 TTM GAAP as Reported Net income $ 19.0 $ 24.1 $ 78.5 $ 98.4 Income tax expense (benefit) 4.9 4.3 9.3 17.9 Interest expense 8.8 7.7 33.3 28.6 Depreciation, depletion, and amortization 16.5 16.3 62.8 58.8
Slide 26: Reconciliation for Non-GAAP Measures (Cont.)
Reconciliation for Non-GAAP Measures (Cont.) Certain prior year amounts have been reclassified to conform with the current year presentation. These reclassifications had no effect on the reported results of operations, © 2024 Materion Corporation 26 cash flows or financial position. Specifically, bo
Slide 27: 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