Advanced Energy Industries, Inc. · NASDAQ:AEIS
Advanced Energy Industries — Baird Technology & Service Conference June 2022
20 slides from Advanced Energy Industries's conference presentation, June 2022
Slide 1: A Best-in-Class Industrial Growth Enterprise
A Best-in-Class Industrial Growth Enterprise Baird Technology & Service Conference / June 2022 1
Slide 2: Safe Harbor
SAFE HARBOR The company’s guidance with respect to anticipated financial results, potential future growth and profitability, guidance on possible future results, future business mix, expectations regarding future market trends, future performance within specific markets and other statements herein o
Slide 3: Advanced Energy at a Glance
Introduction ADVANCED ENERGY AT A GLANCE #1 or #2 in All Four Markets SEMICONDUCTOR INDUSTRIAL & EQUIPMENT MEDICAL Headquartered in Denver Colorado, Advanced Energy (NASDAQ: AEIS) is a global $9.4B leader in design and manufacture of highly Combined engineered precision power conversion, SAM measure
Slide 4: Precision Power Leader for the Digital Economy
Key Messages PRECISION POWER LEADER FOR THE DIGITAL ECONOMY PURE PLAY POWER LEADER OUTPERFORMING MARKETS Strategic focus on precision power ensures Track record of broadening market reach, sustainable advantage and scale growing share and adding content PROPRIETARY SOLUTIONS ACCELERATING EARNINGS Le
Slide 5: We Are the Pure Play Power Leader
Introduction WE ARE THE PURE PLAY POWER LEADER AE provides precision power conversion and control solutions for a wide range of high value and long life-cycle SEMICONDUCTOR INDUSTRIAL & DATA CENTER TELECOM & applications EQUIPMENT MEDICAL COMPUTING NETWORKING Grid Power Process Custom Server Radio P
Slide 6: Digital Economy Drives Growth Across Our Verticals
Secular Drivers DIGITAL ECONOMY DRIVES GROWTH ACROSS OUR 4 VERTICALS • Leading-edge capacity for AI • Accelerating adoption of & 5G processors process automation • Digital Transformation and IoT • Smart manufacturing drives demand in trailing-edge • Telemedicine, remote • Move to regional supply cha
Slide 7: Focus on Proprietary Designs to Accelerate Growth
Growth Strategies FOCUS ON PROPRIETARY DESIGNS TO ACCELERATE GROWTH AE TARGETED GROWTH STRATEGIES Semiconductor: Industrial & Medical: Extend Our Leadership Expand Our Portfolio of GROW SHARE Proprietary Solutions Across Mission-Critical Precision Power Verticals Invest in INNOVATION and $1.50B Tech
Slide 8: Inorganic Growth: Growing Scope and Leveraging Scale
Inorganic Growth INORGANIC GROWTH: GROWING SCOPE AND LEVERAGING SCALE Acquired Electrostatic Acquired Embedded Business Power Business Track Record 2014 2014 2018 2018 2020 2022 Deployed >$700M Across 11 Acquisitions Core AE 2014 2017 2018 2019 2021 All Accretive Thyro Acquired Power Control Module
Slide 9: SL Power Acquisition Brings Many Strategic Benefits
Inorganic Growth SL POWER ACQUISTION BRINGS MANY STRATEGIC BENEFITS FOCUSED ON MEDICAL STRATEGIC BENEFITS Revenue Mix by Market(1) • Expands AE’s addressable market in industrial and medical by > $400 million Semi • Complements AE’s medical portfolio with low operating power, low emission (EMI/EMC),
Slide 10: Q1 2022 Results Surpassed High End of Guidance
Recent Results Q1 2022 RESULTS SURPASSED HIGH END OF GUIDANCE REVENUE NON-GAAP GROSS MARGIN* NON-GAAP EPS* $397 million 36.6% $1.24 Up 0.1% Q/Q Up 110 bps Q/Q Down 9% Q/Q on tax BACKLOG NON-GAAP OP MARGIN* CASH & INVESTMENTS $1.0 billion 14.5% $524 million Up 9% Q/Q Up 70 bps Q/Q Net Cash of $136 mi
Slide 11: Strong Demand and Record Backlog
Strong Demand STRONG DEMAND AND RECORD BACKLOG STRONG DEMAND HIGHLIGHTED BY RECORD BACKLOG STRENGTH OF THE BACKLOG • Vast majority of the backlog consists of proprietary designs Ending Backlog and Backlog as % of Revenue ($ in millions) • ~ 60% is immediately shippable as soon as we can build $1,200
Slide 12: Reaccelerating Earnings Growth on Supply Improvement
Earnings Growth REACCELERATING EARNINGS GROWTH ON SUPPLY IMPROVEMENT EARNINGS AND MARGINS TO ACCELERATE AS SUPPLY IMPROVES COST & SUPPLY MITIGATION ACTIONS ($ per share) Non-GAAP EPS vs. Gross Margins • Recover a portion of high material premiums from $2.00 44% customers, which temporary impacts mar
Slide 13: Capital Allocation Plan
Capital Allocation CAPITAL ALLOCATION PLAN Allocation of Free Cash Flow GROWTH: ~75% Capital Allocation Track Record • M&A Engine with a disciplined process • Building a solid funnel 2014 to 2021 Total • Maintain gross debt leverage at 1.0-1.5x, and comfortable raising to 2.5X • Ample liquidity with
Slide 14: Precision Power Leader for the Digital Economy
Key Messages PRECISION POWER LEADER FOR THE DIGITAL ECONOMY PURE PLAY POWER LEADER OUTPERFORMING MARKETS Strategic focus on precision power ensures Track record of broadening market reach, sustainable advantage and scale growing share and adding content PROPRIETARY SOLUTIONS ACCELERATING EARNINGS Le
Slide 15: Thank You
THANK YOU Copyright © 2022 Advanced Energy 15
Slide 16: Guidance
GUIDANCE Q2 2022 Guidance Revenue $395M +/- $25M GAAP EPS from continuing operations $0.65 +/- $0.30 Non-GAAP EPS* $1.05 +/- $0.30 * Detailed explanations of non-GAAP financials and reconciliations of GAAP to non-GAAP financials can be found at the end of this presentation Copyright © 2022 Advanced
Slide 17: Quarterly Non-GAAP Financials
QUARTERLY NON-GAAP FINANCIALS* Quarterly Trend All figures from Continuing Operations (figures in $ millions, except percentage and EPS) 2020 2020 2020 2020 2021 2021 2021 2021 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Backlog 300.1 280.1 281.5 290.7 405.7 534.7 771.4 927.8 1,012.4 Revenue 315.5 339.9 389.5 3
Slide 18: Non-GAAP Measures
NON-GAAP MEASURES Advanced Energy’s non-GAAP measures exclude the impact of non-cash related charges such as stock-based compensation and amortization of intangible assets, as well as discontinued operations, and non-recurring items such as acquisition-related costs and restructuring expenses. The n
Slide 19: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Reconciliation of Non-GAAP measure - operating Reconciliation of Non-GAAP measure - income expenses and operating income, excluding certain items Three Months Ended excluding certain items Three Months Ended (in thousands) (in thousands) March 31, December 31, March 31, Decem
Slide 20: Reconciliation of GAAP to Non-GAAP Guidance
RECONCILIATION OF GAAP TO NON-GAAP GUIDANCE Reconciliation of Q2 2022 Guidance Low End High End Revenue $370 million $420 million Reconciliation of non-GAAP earnings per share GAAP earnings per share $ 0.35 $ 0.95 Stock-based compensation 0.15 0.15 Amortization of intangible assets 0.14 0.14 Restruc
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