Advanced Energy Industries, Inc. · NASDAQ:AEIS
Advanced Energy Industries — Investor Presentation (September 2022)
25 slides from Advanced Energy Industries's investor presentation, September 2022
Slide 1: A Best-in-Class Industrial Growth Enterprise
A Best-in-Class Industrial Growth Enterprise September 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
At a Glance ADVANCED ENERGY AT A GLANCE #1 or #2 in All Four Markets INDUSTRIAL & SEMICONDUCTOR MEDICAL EQUIPMENT Headquartered in Denver Colorado, Advanced Energy (NASDAQ: AEIS) is a global $10.5B leader in design and manufacture of highly Combined SAM engineered precision power conversion, 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: A History of Innovation and Technology Leadership
Technology Leadership A HISTORY OF INNOVATION AND Transforms how power TECHNOLOGY LEADERSHIP is delivered Direct Control of Ion Energy with eVoSTM AE leads with generations of power delivery innovations Copyright © 2022 Advanced Energy 7
Slide 8: 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 $1.6B Techn
Slide 9: Semiconductor: Extending Our Leadership
Semiconductor SEMICONDUCTOR: EXTENDING OUR LEADERSHIP MARKET LEADER WITH PROVEN TRACK RECORD MAXStreamTM Market share every year for No.1 over 10 years in Process Power and RF Power(1) 16% 10-year Semi Product Revenue CAGR (2) eVoSTM TARGET TO CONTINUE TO OUTGROW OUR MARKET AE targeted Semi revenue
Slide 10: Industrial & Medical: Expanding Our Portfolio of Proprietary Solutions
Industrial & Medical INDUSTRIAL & MEDICAL: EXPANDING OUR PORTFOLIO OF PROPRIETARY SOLUTIONS LEVERAGE BROAD PORTFOLIO LARGE MARKET WITH WIDE ACCELERATING INVESTMENTS OF STANDARD PRODUCTS TO RANGE OF NICHE OPPORTUNITES TO DRIVE GROWTH DELIVER CUSTOM SOLUTIONS Large SAM of $4.3B Engineering AC-DC RF Ge
Slide 11: Data Center Computing: From Fast Follower to Technology Leader
Data Center Computing DATA CENTER COMPUTING: FROM FAST FOLLOWER TO TECHNOLOGY LEADER GROWING INVESTMENTS MORE HIGH VALUE CONTENT AE TECHOLOGY LEADERSHIP ($ in billions) Hyperscale CAPEX(1) 98% Industry-Leading $140 96% Best Power Conversion 94% Efficiency $120 Good $100 Mainstream $80 2X Power Conte
Slide 12: Telecom & Networking: Targeting 5G Infrastructure
Telecom & Networking TELECOM & NETWORKING: TARGETING 5G INFRASTRUCTURE 5G INFRASTRUCTURE MARKET GROWTH Powering many of the largest wireless networks across the world GROWTH TREND STRATEGY Wireless infrastructure Spend (1) • Win proprietary designs in 5G radio High reliability ruggedized power ($ in
Slide 13: 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 Earnings Accretive Thyro Acquired Power Contro
Slide 14: Q2 2022 Results Surpassed High End of Guidance
Recent Results Q2 2022 RESULTS SURPASSED HIGH END OF GUIDANCE RECORD REVENUE NON-GAAP GROSS MARGIN(1) NON-GAAP EPS(1) $441 million 37.1% $1.44 Up 11% Q/Q Up 50 bps Q/Q Up 16% Q/Q BACKLOG NON-GAAP OP MARGIN(1) CASH & INVESTMENTS(2) $1.17 billion 15.8% $375 million Up 15% Q/Q Up 130 bps Q/Q Net Debt o
Slide 15: Strong Demand and Record Backlog
Strong Demand STRONG DEMAND AND RECORD BACKLOG STRONG DEMAND HIGHLIGHTED BY RECORD BACKLOG STRENGTH OF THE BACKLOG • Proprietary products represent approximately 80% of the backlog Revenue vs. Backlog ($ in millions) • ~2/3 of the backlog has customer request date in the next two $1,200 quarters Bac
Slide 16: Reaccelerating Earnings Growth on Supply Improvement
Earnings Growth REACCELERATING EARNINGS GROWTH ON SUPPLY IMPROVEMENT EARNINGS AND MARGINS TO ACCELERATE AS SUPPLY IMPROVES COST & SUPPLY MITIGATION ACTIONS ($ per share) Non-GAAP EPS vs. Gross Margins • Recover a portion of high material premiums from $2.00 44% customers, which temporary impacts mar
Slide 17: Pre-Supply Constraint Original Financial Framework
Financial Framework PRE-SUPPLY CONSTRAINT ORIGINAL FINANCIAL FRAMEWORK 3-YEAR LONG-TERM INORGANIC LONG-TERM ASPIRATIONAL ORGANIC FINANCIAL GROWTH VISION GOALS FRAMEWORK ASSUMPTIONS (6-8 YEARS) Revenue ($M) $1,650 5-6% Net CAGR Add ~$500M $2,500 Non-GAAP OPEX at ½ rev. CAGR >10% acquired 21% 21% Oper
Slide 18: Capital Allocation Plan
Capital Allocation CAPITAL ALLOCATION PLAN Allocation of Free Cash Flow GROWTH: ~75% • M&A Engine with a disciplined process Capital Allocation Track Record • Building a solid funnel • Maintain gross debt leverage at 1.0-1.5x, and 2014 to 1H’22 Total comfortable raising to 2.5X • Ample liquidity wit
Slide 19: 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 20: Thank You
THANK YOU Copyright © 2022 Advanced Energy 20
Slide 21: Guidance
GUIDANCE Q3 2022 Guidance Revenue $435M +/- $25M GAAP EPS from continuing operations $0.92 +/- $0.30 Non-GAAP EPS(1) $1.30 +/- $0.30 (1) 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 Advan
Slide 22: Quarterly Non-GAAP Financials
QUARTERLY NON-GAAP FINANCIALS(1) Quarterly Trend All figures from Continuing Operations (figures in $ millions, except percentage and EPS) 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Backlog 300.1 280.1 281.5 290.7 405.7 534.7 771.4 927.8 1,012.4 1,166.5 Revenue 3
Slide 23: 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 24: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION (figures in $ thousands, except percentage and EPS) Reconciliation of Non-GAAP measure - Reconciliation of Non-GAAP measure - operating expenses and operating income excluding certain items Three Months Ended Six Months Ended income, excluding certain items Three Months Ended
Slide 25: Reconciliation of GAAP to Non-GAAP Guidance
RECONCILIATION OF GAAP TO NON-GAAP GUIDANCE Reconciliation of Q3 2022 Guidance Low End High End Revenue $410 million $460 million Reconciliation of non-GAAP earnings per share GAAP earnings per share $ 0.62 $ 1.22 Stock-based compensation 0.15 0.15 Amortization of intangible assets 0.19 0.19 Restruc
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