Slide 1: Materion Corporation Investor Presentation November 2011
Exhibit 99.1 Materion Corporation Investor Presentation November 2011
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
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 Operating profit Repositioning growth growth of company (2005 – 2010) (2005 – 2010) 19% 30% Successful CAGR CAGR
Slide 4: Positioned to Deliver Long-Term, Sustainable Growth
T H E S I S Positioned to Deliver Long -Term, Sustainable Growth … Leveraging a A company … Executing high value-added with a strong a focused business platform … growth plan model… 2 3
Slide 5: The Repositioning of Materion
The Repositioning of Materion Prior to 2002 2002 – 2010 2011 + Metals and Repositioning Sustained mining focus growth
Slide 6: Successful Repositioning – Snapshot
Successful Repositioning – Snapshot 2002 2010 Revenues $373M A $1.3B Revenue % in 47% A 75% Advanced Materials Sales per employee $200 A $524 (thousands) Debt-to-Debt-Plus-Equity 43% A 18% Working capital 41% A 25% % of sales Cyclicality High A Low
Slide 7: Businesses are Well-Positioned and Growing
Operating Businesses are Well -Positioned and Growing Business End Markets Products Sales Growth (Examples) (Examples) (2002-2010) Advanced Materials • Wireless • PVD targets • LED • Optical / medical • Optical coatings 453% • Medical • Electronic packaging 75% of revenues • Alternative • Inorganic
Slide 8: Positioned in Diverse Set of High-Growth Markets
Positioned in Diverse Set of High -Growth Markets Growth Cellular phones (smartphones), LED’s Tablet computers Defense Notebooks Optics LCD Commercial Aerospace Telecom Infrastructure Alternative Energy Space / Science Medical Devices Disk Heavy Drives Equipment Entered multiple leading -edge growth
Slide 9: High Operating Margins
High Operating Margins Removing High Value Metals Clarifies True Margins Operating Operating Profit % of Profit % Value-Added (1) Integrated Metals 11 – 13% 14 – 16% Advanced Materials 5 – 7% 22 – 24% Company 5 – 7% 13 – 15% 9 Note (1): Excludes high value metals from sales
Slide 10: A Global Platform
A Global Platform Operations in US Significant and Expanding and 11 Countries International Sales 2010 28% “Direct” International Sales Expect “direct” international sales Customers in >50 countries to be 40—50% in 3-5 years
Slide 11: Positioned to Deliver Long-Term, Sustainable Growth
T H E S I S Positioned to Deliver Long -Term, Sustainable Growth … Leveraging a A company … Executing high value-added with a strong a focused business platform … growth plan model… 2 3
Slide 12: High Value-Added Business Model
High Value -Added Business Model 1. Target high growth 2. Own fast growing markets niches 5. Ensure 3. Expand with financial innovative discipline products 4. Add synergistic acquisitions
Slide 13: 1. Target High Growth, Leading-Edge Markets
1. Target High Growth, Leading -Edge Markets Q3 2011 Current Market % of Value—2011 Key Drivers Added Sales Trends • Smartphone growth Consumer Electronics 22% • Tablet computers & LEDs • Miniaturization • DoD & foreign military budgets Defense & Science 15% • Demand for communications satellites •
Slide 14: 1. Target High Growth, Leading-Edge Markets – Reportable Segments
1. Target High Growth, Leading -Edge Markets Reportable Segments ADVANCED MATERIAL PERFORMANCE BERYLLIUM & TECHNICAL TECHNOLOGIES ALLOYS COMPOSITES MATERIALS Precious, Non-precious, Specialty Metal and Inorganic Bulk and Strip Form Products Beryllium and Beryllia Ceramic Specialty Strip Metal Materi
Slide 15: 2. Own The Niche – Examples
2. Own The Niche – Examples Leading position • Smartphone applications in niche – currently in 90% of all smartphones, with 9 expected device penetration of 50% in 2011 • Optical coatings – highly sophisticated uses for defense, thermal 9 imaging, space and medical applications • Only fully integrat
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 Acquisitions 2005-2011 – Impact Add complementary Expand market Accretive in products / technolo gy position year 1 OMC – shield kit cleaning 9 9 9 TFT – thin film coatings 9 9 9 CERAC – inorganic chemicals 9 9 9 Techni-Met – thin film coatings 9 9 9 Barr
Slide 18: 4. Synergistic Acquisitions – Case Study of Growing a Niche Business
4. Synergistic Acquisitions Case Study of Growing a Niche Business – Optical Filters and Medical Coatings (Pro-Forma Revenues) $140M EIS Optics • Positioned in $1.2B+ market growing (2011) at 11% annually • Markets served include: defense, Barr (2009) medical , , ace aerosp energy, semiconductor, te
Slide 19: 5. Ensure Financial Discipline
5. Ensure Financial Discipline Maintain strong Strong balance sheet cash flow Debt-to-Debt-Plus-Equity 30% Maximum 30% • Cash flow from operations Resources to $30M—$75M annually for finance 21% 18% the past five years acquisitions of 20% $50M to $100M • Capex below depreciation annually 10% • Reduc
Slide 20: Positioned to Deliver Long-Term, Sustainable Growth
T H E S I S Positioned to Deliver Long -Term, Sustainable Growth … Leveraging a A company … Executing high value-added with a strong a focused business platform … growth plan model… 2 3
Slide 21: Financial Goals Next 3-5 Years
Financial Goals Next 3-5 Years 2010 Next 3-5 years Revenue growth – organic 35% >10% $50—$100M Acquisitions $21M 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 Increasing Shareholder Value Grow and diversify revenue base Expand margins Improve fixed and working capital utilization
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 A fast accretion –
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 Growth of Materion Oil and Gas Sales vs. Market Aerospace Sales vs Market 5.00 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00
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 (OP % VA) 14—18% 3 12—14% 2 Higher value Cost Lean Sigma added products reductions operating efficiency Margin Target Today Margin
Slide 26: Strategy #3: Improve Fixed and Working Capital Efficiency
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 Improve Fixed and Working Capital Efficiency Improve Workin g Capital Lean Sigma Efficiency Working capital % of sales 41% • Cycle time reduction • Yield improvement 25% • On-time shipments <20% 2002 2010 Target Based on 2011 projected sales, e
Slide 27: Outlook and Guidance
Outlook and Guidance Revenues EPS (Billions) $1.56 -$1.58 $2.10 -$2.20 $2.25 $1.3 2010 2011(F) 2010 2011(F)
Slide 28: Why Invest in Materion Corporation
I N S U M M A R Y Why Invest in Materion Corporation Niche leader in high-growth markets Positioning • Global player, strong secular market drivers • Sustainable long-term growth Strong performance record Performance • Proven business model • Target, expand, then own niche Executing three point stra
Slide 29: Appendix
Appendix
Slide 30: Applications: Smart Phones
Applications: Smart Phones Internal Antenna Contacts Internal Electronics • Precursor materials for GaAs wafer production Grounding Clips Internal Electronics and LED and Audio Jacks • Thin Film Materials – Power amplifiers, LED, SAW and BAW devices, filters, and ICs Micro Mezzanine • Hermetic Solut
Slide 31: Applications: Aerospace
Applications: Aerospace Flight Attendant Jumpseat Spring Avionics/Electrical Flight Control Systems Airframe Structure Mechanisms Horizontal Stabilizer & Rudder Attachments Wing Attachments Landing Gear Attachments Hydraulic Systems Engine and Pylon Attachments Doors & Hatches Landing Gear Component
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 Auto Dimming Mirror Mirror & Windshield Electronic Connectors Air Bag Sensors Connections Window and Door Turn Signal and Emergency Switches Telematics On Board Flasher Relays Lithium Interconnects Ion Battery Sensors Engine Efficiency Oxygen LevelFuel Pump and F
Slide 34: Applications: Oil & Gas
Applications: Oil & Gas Wellhead Control Equipment Under Water Wellhead Equipment Structural Rig ROV’ s, blow out preventers, hydraulic Components actuators, control fluid couplings Directional Drilling Other Oil & Gas Applications: Equipment • Artificial Lift Equipment Drill Bits MWD, LWD, MPT Syst
Slide 35: Applications: Solar Energy
Applications: Solar Energy Technology: Crystalline Technology: Flexible Solar Cells / Building Silicon (Si) Integrated Photovoltaic: Technology: Cadmium Telluride (CdTe) Interconnect Materials Thin Film Services: Thin Film (PVD) Materials Front and backplane systems for Solar cells built in flexible
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 Seizure Control • Thin Film Deposition Implantable Radiation Therapy –Electrode – Parkinson’s disease Neutron Reflectors (R&D) X-Ray Mammography Cardiac Rhythm Management Subcutaneous Glucose Analysis • Electronic Interconnects/Com ponents • Thin Film Coatings – Electrode Monit
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 Q3 2011 A-10
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 – Advanced Material Technologies
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 – Performance Alloys and Others
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