Coherent Corp. · NYSE:COHR
Coherent — II-VI — Investor Presentation (September 2021)
36 slides from Coherent's investor presentation, Sep 9, 2021
Slide 1: September 2021 Investor Presentation
September 2021 Investor Presentation Exhibit 99.1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements relating to future events and expectations that are based on certain assumptions and contingencies. The forward-looking statements are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigatio
Slide 3: II-VI at a Glance
II-VI at a Glance as of June 30, 2021 FY21 Revenue $3.1B Cash & Equivalents $1.6B FY21 Free Cash Flow (1) $428M Vertically Integrated Model 18 Countries 73 Locations 3,800+ Employees Core Competency Engineered Materials 1971 Year Founded 22,000+ Employees 2,200+ Patents Engineering & Technology (1)
Slide 4: Q4 FY21 Financial Highlights
Communications Industrial Q4 FY21 Financial Highlights Results fueled by execution of a growth strategy, a market super-cycle, and focused execution Semiconductor Capital Equipment Life Sciences Consumer Electronics Aerospace & Defense Japan Other North America Automotive & Other Revenue by Region R
Slide 5: FY21 Revenue Distribution
FY21 Revenue Distribution Europe North America China Photonic Solutions Compound Semiconductors Communications Industrial Semiconductor Capital Equipment Life Sciences Automotive & other Aerospace & Defense By Region By Segment By End Market Consumer Electronics Japan FY21 Revenue $3.1B
Slide 6: History of Insightful Targeting and Successful Integration of Strategic Acquisitions
History of Insightful Targeting and Successful Integration of Strategic Acquisitions 10 Years of Continuous Revenue Growth CAGR 20% 2010 - Optical networks & China market 2013 - Gallium arsenide technology platform 2016 - Epitaxial wafer and SiC electronic devices 2019 - Indium phosphide technology
Slide 7: Attractive and Increasing Gross and Operating Margins
Attractive and Increasing Gross and Operating Margins All non-GAAP amounts exclude certain adjustments for share-based compensation, acquired intangible amortization expense, certain one-time transaction expenses, debt extinguishment expense, fair value measurement period adjustments and restructuri
Slide 8: Building Momentum for Years
Building Momentum for 50 Years One of the largest photonics and compound semiconductor companies Materials expertise drives differentiation in multiple growing markets Vertically integrated, diverse global manufacturing footprint History of insightful targeting and successful integration of strategi
Slide 9: A Leader in Engineered Materials
A Leader in Engineered Materials Aerospace & Defense Semiconductor Equipment Life Sciences Automotive Datacom, Telecom & Wireless Communications 3D Sensing/Consumer Industrial Leveraging a broad range of differentiated materials and devices across 7 strategic markets: II-VI engineered materials are
Slide 10: Addressing Multiple and Strong Growing End-Markets
Addressing Multiple and Strong Growing End-Markets Optical Communications Sources: Omdia, LightCounting, Cignal AI, 650 Group, Yole, Internal Estimates CY26 Market CY21-26 CAGR 10.5 % $26.9 B Datacenter and telecom networks Wireless Sources: Yole, Internal estimates 37 % $8.5 B 4G/5G RF base station
Slide 11: Two Decades of SiC Materials Innovation
Demonstrated Demonstrated Manufacturing 100 mm Wafer 150 mm Wafer World’s First 200 mm Wafer Two Decades of SiC Materials Innovation 200 mm Wafer Manufacturing 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 24 Years High-Quality Wafer Demonstrated Manufacturing 3’’ Wafer Back-end Processing i
Slide 12: GE Technology II-VI and Wide-Bandgap Electronics
GE Technology II-VI (3DSiC®) II-VI and GE Technology II-VI and GE Technology II-VI Vertical Integration New Ventures & Wide-Bandgap Electronics Technology Significant SiC Market Opportunity(1) ($bn) 50%+ CAGR (1) Internal company estimates. Includes module and device TAM. $0.5 $30+ 2020 2030 A verti
Slide 13: II-VI to Acquire Coherent
II-VI to Acquire Coherent
Slide 14: Coherent Transaction Overview
Coherent Transaction Overview Transaction Details Coherent stockholders to receive $220.00 per share in cash and 0.91 of a II-VI common share for each Coherent share At closing, Coherent stockholders to own approximately 15% of the common shares of combined company Projected Synergies & Financial Im
Slide 15: Significant Value Creation Potential from Coherent Synergies
Significant Value Creation Potential from Coherent Synergies Expected Synergies within 3 years Cost of Goods Sold Supply chain management – procurement Infeed – Internal supply of enabling materials and components Global supply chain function savings $150M Operating Expenses More efficient R&D with
Slide 16: Well Capitalized for Future Growth
Well Capitalized for Future Growth Rapid deleveraging post-closing from strong EBITDA and cash flow generation External Financing Sources Debt $5.125B total commitment, including unfunded $350M revolving credit facility Convertible Preferred Equity $2.15 billion commitment from Bain Capital, $750 mi
Slide 17: Key Transaction Details
$4.1B Communications Semi. Cap. Equip. Materials Proc. Life Sci. Aero Cons. 48% 16% 6% 9% 15% 6% Key Transaction Details Fully-Diluted Shares II-VI basic shares 105.8M Stock comp shares 5.8M Series A preferred debt 8.9M Convertible debt 7.3M Shares issued to Coherent 22.3M Series B preferred 25.7M P
Slide 18: Summary of Strategic Rationale
Summary of Strategic Rationale Greater exposure to megatrends from larger operational scale Sustained growth from increased diversification Higher growth and margins through complementary technology platforms Improved competitiveness from greater scale across the value chain Sales synergies by utili
Slide 19: End Market Appendix
End Market Appendix
Slide 20: Datacom
Datacom #1 provider of datacom solutions Materials I Components I Transceiver modules The most innovative leader in datacom transceivers Co-packaged Transceiver Pluggable Board-Mount ROSA IC (TIA, LD, CDR) Polarization Beam Splitter Laser PIC DSP Garnet Lenses Isolators Mux/DeMux TOSA High Speed Det
Slide 21: Telecom: Well poised for disaggregation
Well poised for disaggregation Telecom Optical Monitoring System (OMS) Pluggable Optical Line System (POLS) A market mover in ROADM technology and coherent transmission Growing share in coherent optics 400G IC-TROSA 400G QSFP-DD
Slide 22: Industrial – Materials Processing
Industrial – Materials Processing Laser processing in electric vehicles Automation: Remote laser welding heads assisted by machine vision software Electric vehicle battery manufacturing: Laser processes adapted to most joining tasks on the cell, module, pack, and frame levels Welding battery cells,
Slide 23: 3D Sensing & LiDAR
3D Sensing & LiDAR Face biometrics, auto-focus, augmented reality, automotive in-cabin & LiDAR, machine vision Roadmap to integrating functionality in modules leveraging broad portfolio of lasers, detectors, optics, and integrated circuits
Slide 24: Ceramics and Composites for Wafer Fab Equipment
Ceramics and Composites for Wafer Fab Equipment Aluminum-Reinforced SiC Metal Matrix Composites Reaction Bonded SiC Diamond Ceramics Silicon Carbide Particles Aluminum Diamond Particles Silicon Carbide Silicon Metals Ceramics and metal matrix composites for front end of line (FEOL) to back end of li
Slide 25: Life Sciences
Life Sciences II-VI plays an important role in the medical diagnostics markets that have a vital role in PCR, sequencing and diagnostic platforms, which are critical for disease testing and research, and lead to new medicines Thermoelectrics Vertically integrated subassemblies & systems Biotechnolog
Slide 26: Automotive
Automotive Key Trends Green Optics & optoelectronics Connectivity & Entertainment Safety Capabilities & Expertise HEV/EV Telematics, information & comfort LiDAR/OMS/DMS SiC substrates & devices Li/S batteries MMC Broad and deep portfolio in optics & optoelectronics (VCSELS, Edge Emitting Lasers, Mir
Slide 27: Financial Appendix
Financial Appendix
Slide 28: End Market Distribution of Q4FY21 QTD Revenue
End Market Distribution of Q4FY21 QTD Revenue Reported Segments Q4FY20 Revenue Q4FY21 Revenue Q4FY21 Op Margin – GAAP / Non-GAAP Q4FY21/ Q4FY20 Revenue Growth Industrial (Automotive) Communica-tions Aerospace & Defense Semi Cap Life Science, Consumer, Other Photonic Solutions $517M $550M 11% / 16% 6
Slide 29: End Market Distribution of Full Year FY21 Revenue
End Market Distribution of Full Year FY21 Revenue Reported Segments FY21 Revenue FY21 Op Margin – GAAP / Non-GAAP FY21/FY20 Revenue Growth Proforma(1) FY21/FY20 Revenue Growth Industrial (Automotive) Fiber Optic & Wireless Comm. Aerospace & Defense Semi Cap Life Science, Consumer, Other Photonic Sol
Slide 30: Hypothetical Illustration of EPS Calculation
Summary: Hypothetical Illustration of EPS Calculation The following calculations are based on hypothetical amounts of GAAP net income and should not be construed as an estimate or expectation of the Company’s actual financial results for any period indicated Refer to the following slide for sample c
Slide 31: Reconciliation of GAAP Measures to Non-GAAP Measures
Note: Dollars in millions. Q1 FY20 represents quarter ending October July 28, 2019. Reconciliation of GAAP Measures to Non-GAAP Measures Three Months Ended 7/28/19 (Last Finisar Stand Alone Report)
Slide 32: Reconciliation of GAAP Measures to Non-GAAP Measures
Reconciliation of GAAP Measures to Non-GAAP Measures
Slide 33: Reconciliation of GAAP Measures to Non-GAAP Measures
Reconciliation of GAAP Measures to Non-GAAP Measures
Slide 34: Reconciliation of GAAP Measures to Non-GAAP Measures
Reconciliation of GAAP Measures to Non-GAAP Measures
Slide 35: Reconciliation of GAAP Measures to Non-GAAP Measures
Reconciliation of GAAP Measures to Non-GAAP Measures
Slide 36: Materials That Matter
IVI MATERIALS THAT MATTER