Morgan Advanced Materials Plc · LSE:MGAM

Morgan Advanced Materials — Investor Day (December 2022)

61 slides from Morgan Advanced Materials's investor day presentation, Dec 6, 2022

1. Slide 1: Resilient, Scalable Growth

   Resilient, Scalable Growth Morgan Advanced Materials Capital Markets Event 6 December 2022

2. Slide 2: Agenda

   © Morgan Advanced Materials 6 December 2022 2 Agenda Part 1 – Introduction Part 2 – Business drivers WELCOME FASTER GROWTH DEEP-DIVES Douglas Caster, Non-Executive Chairman 14:00 1. Semiconductors 15:30 2. Healthcare INTRODUCTION, STRATEGY & GROWTH 3. Clean energy and transportation Pete Raby, CEO W

3. Slide 3: Our Company

   © Morgan Advanced Materials 6 December 2022 3 Our Company Our purpose is to use advanced materials to make the world more sustainable, and to improve the quality of life. We are the global manufacturer of advanced carbon and ceramic materials for complex and technologically demanding applications. W

4. Slide 4: Leading global manufacturer of carbon and ceramic advanced materials

   © Morgan Advanced Materials 6 December 2022 4 Leading global manufacturer of carbon and ceramic advanced materials​ FY2021 1H2022 Balanced diversified approach Industrial to end markets Revenue Revenue Transportation £950.5m £530.2m 6% 8% Chemicals and Adjusted operating profit Adjusted operating pr

5. Slide 5: Our business transformation

   © Morgan Advanced Materials 6 December 2022 5 Our business transformation 2016 – 2020 2020 – 2022 2022+ Simplify, strengthen and accelerate Resilience through the Accelerated organic and acquisitive growth pandemic growth Simplified through five Group restructuring and efficiency Organic investment

6. Slide 6: Why Morgan?

   © Morgan Advanced Materials 6 December 2022 6 Why Morgan? 1 2 3 4 Well positioned Leading, differentiated Sustainable solutions Resilient Group in attractive, high- market positions to support the energy delivering attractive growth markets transition through cycle returns Capital Markets Event 2022

7. Slide 7: Well positioned in attractive, high-growth markets

   © Morgan Advanced Materials 6 December 2022 7 1. Semiconductors CAGR Healthcare CAGR Well positioned in attractive, TAM TAM high-growth markets £3.1bn 11.1% £618m 6.4% 3.10 618 2.80 581 2.50 547 2.30 514 Supportive and powerful Mega-trends 2022 2023 2024 2025 2022 2023 2024 2025 1. Climate Change Re

8. Slide 8: Well positioned in attractive, high-growth markets: revenue

   © Morgan Advanced Materials 6 December 2022 8 1. Well positioned in attractive, high-growth markets Revenue from faster growing markets Revenue from core markets (£m) CAGR (£m) 11.8% 219 874 183 845 156 153 767 746 2019 2020 2021 2022E 2019 2020 2021 2022E Capital Markets Event 2022

9. Slide 9: Well positioned in attractive high-growth markets: growth rates

   © Morgan Advanced Materials 6 December 2022 9 1. Well positioned in attractive 5-year indicative revenue growth rates (%) high-growth markets 14 • Revenue growth aligned to 12 fast growing end markets for next five years​ 10 • Core critical to Morgan; providing strong base with a diversified and dif

10. Slide 10: Leading, differentiated market positions: Reliable Problem Solving

    © Morgan Advanced Materials 6 December 2022 10 2. Leading, differentiated market positions • Four Centres of Excellence driving innovation, margin expansion and growth​ - £28.5m R&D spend in 2021 - 460 engineers and scientists Reliable Problem • Deep application engineering expertise Solving turns o

11. Slide 11: Leading, differentiated market positions

    © Morgan Advanced Materials 6 December 2022 11 2. Leading, differentiated market positions Share of revenue (%) Market (H1 2022) Market Position Differentiation Faster growing L H Semiconductors 8% Emerging Healthcare 7% Leader Clean energy + clean transportation 5% Emerging 20% Core L H Industrial

12. Slide 12: Sustainable solutions to support the energy transition

    © Morgan Advanced Materials 6 December 2022 12 3. Sustainable solutions to support the energy transition Our approach to sustainability Diversified portfolio of sustainable solutions Aerospace: Leading materials for high efficiency engines Clean energy: Increasing lifetime and performance of solar,

13. Slide 13: Sustainable solutions case studies

    © Morgan Advanced Materials 6 December 2022 13 3. 1 Aircraft 2 Wind Turbines Sustainable solutions to support the energy We make main shaft seals, Leading brush grades for ceramic cores and wind turbines offering transition accessory components, longer lifetimes, and lower enabling the latest throug

14. Slide 14: Sustainable solutions: carbon reduction targets

    © Morgan Advanced Materials 6 December 2022 14 3. Sustainable solutions to support the energy transition 2022 2023 2025 2030 2035 2050 50% Reduction Net zero Switch standard grid electricity • We continue to make good progress to carbon free against our 2030 carbon reduction target First phase switc

15. Slide 15: Resilient Group delivering attractive through cycle returns

    © Morgan Advanced Materials 6 December 2022 15 4. Resilient Group delivering attractive through cycle returns Diverse end markets with early/late/ Adjusted Operating Profit (£m) ROIC (%) counter cyclical characteristics provide market resilience BPS Diverse customer base CAGR +550 No single customer

16. Slide 16: Why Morgan?

    © Morgan Advanced Materials 6 December 2022 16 Why Morgan? 1 2 3 4 Well positioned Leading, differentiated Sustainable solutions Resilient Group in attractive, high- market positions to support the energy delivering attractive growth markets transition through cycle returns Capital Markets Event 202

17. Slide 17: Finance Framework and Priorities for Capital

    © Morgan Advanced Materials 6 December 2022 17 Finance Framework and Priorities for Capital Richard Armitage, Chief Financial Officer Capital Markets Event 2022

18. Slide 18: Resilient financial performance

    © Morgan Advanced Materials 6 December 2022 18 Resilient Revenue (ongoing £m) Adjusted Operating Profit (ongoing £m) financial CAGR CAGR 1,031 +3% 1,064 +5% 143 1,013 963 125 performance 950 123 129 115 893 899 104 88 • A stronger more dynamic business • Delivering growth in underlying 2016 2017 201

19. Slide 19: Significant improvement in balance sheet & ROIC

    © Morgan Advanced Materials 6 December 2022 19 Significant 300 Net Debt (£m) & Net Debt/EBITDA (X) Pension Deficit (£m) improvement 1.6 250 271 242 Net debt 1.2 1.2 218 in balance 200 Net debt / EBITDA 1.0 190 181 180 176 150 157 0.8 157 128 sheet & ROIC 100 0.5 101 0.3 76 74 50 47 0 2016 2017 2018

20. Slide 20: Removing the pensions burden

    © Morgan Advanced Materials 6 December 2022 20 Removing the pensions burden Deficits 2019 - 2022 (£m) Contributions to UK schemes (£m) • Accelerated contribution of £67m agreed with trustee Gross debt/ Gross debt/ • FCF improvement of 240 EBITDA EBITDA 2019: 2022: £17m per annum 17.3 • Inflation & i

21. Slide 21: Capital allocation prioritises growth and returns

    © Morgan Advanced Materials 6 December 2022 21 Capital allocation prioritises growth and returns 1. Strong balance sheet Removal of pension burden creates flexibility Investment focused on growth & efficiency improvement 2. Organic investment Capex averaging c.7-8% of revenue in medium term 3. Regul

22. Slide 22: M&A Business Review

    © Morgan Advanced Materials 6 December 2022 22 M&A Strategic alignment thorough a disciplined approach to accelerate growth Business Review Sectors Americas Europe Asia Internal External Semiconductors Identify Strengths Identify where we and Gaps want to play Healthcare Clean Energy Strong strategi

23. Slide 23: A disciplined approach to delivering improving growth & returns

    © Morgan Advanced Materials 6 December 2022 23 A disciplined approach to delivering improving growth & returns Delivering enhanced EPS growth Clear through cycle financial framework Organic revenue growth 3-6% organic revenue growth + Continuing profit growth 12.5% to 15% adjusted operating profit m

24. Slide 24: Q&A

    © Morgan Advanced Materials 6 December 2022 24 Q&A Capital Markets Event 2022

25. Slide 25: Business drivers

    © Morgan Advanced Materials 6 December 2022 25 Business drivers Capital Markets Event 2022

26. Slide 26: Semiconductors: Enabling a Rapidly Changing World

    © Morgan Advanced Materials 6 December 2022 26 Faster Growing Deep-Dives Semiconductors: Enabling a Rapidly Changing World​ Wendy Pryce Lewis, President Electrical Carbon John Righini, President Technical Ceramics Capital Markets Event 2022

27. Slide 27: Semiconductors

    © Morgan Advanced Materials 6 December 2022 27 Semiconductors We are outperforming the market in two attractive sub segments​ 1.Consumables for Silicon 2.Consumables for Silicon Carbide Semiconductor Fabrication Semiconductor Fabrication 8% Digitisation, connectivity and artificial intelligence macr

28. Slide 28: Front-end processes experiencing transformational growth

    © Morgan Advanced Materials 6 December 2022 28 Front-end processes experiencing transformational growth Crystal Growth & Wafer Integrated Device Wafer Preparation Processing Circuit Our participation aligns Four Growth Drivers Capital Equipment Consumables with the industry’s front-end transformatio

29. Slide 29: Morgan's diverse technologies advance fabrication

    © Morgan Advanced Materials 6 December 2022 29 Morgan's diverse technologies advance fabrication Crystal growth & Lithography Etch Ion Deposition Rapid Thermal Wafer preparation Implant Processing Crystal Growth & Wafer Fab Equipment • 3000C Furnace insulation • UV waveguides • Focus rings and • Bea

30. Slide 30: Morgan's diverse technologies advance fabrication

    © Morgan Advanced Materials 6 December 2022 30 Morgan's diverse technologies advance fabrication ​ Advanced silicon and compound semiconductors Crystal growth & Lithography Etch Ion Deposition Rapid thermal Wafer preparation implant processing High-precision & resilient light source Pulse power modu

31. Slide 31: Morgan's diverse technologies advance fabrication

    © Morgan Advanced Materials 6 December 2022 31 Morgan's diverse technologies advance fabrication Advanced silicon and compound semiconductors Crystal growth & Lithography Etch Ion Deposition Rapid thermal Wafer preparation implant processing Leading, engineered, ultra-pure, durable ion implant tool

32. Slide 32: Morgan's diverse technologies advance fabrication

    © Morgan Advanced Materials 6 December 2022 32 Morgan's diverse technologies advance fabrication Advanced silicon carbide semiconductors Crystal growth & Lithography Etch Ion Deposition Rapid thermal Wafer preparation implant processing Leading graphite products that improve crystal quality and yiel

33. Slide 33: Morgan's diverse technologies advance fabrication

    © Morgan Advanced Materials 6 December 2022 33 Morgan's diverse technologies advance fabrication Advanced silicon carbide semiconductors Crystal growth & Lithography Etch Ion Deposition Rapid thermal Wafer preparation implant processing Thermally and chemically stable products to withstand harsh con

34. Slide 34: Customers trust Morgan to meet their growth needs in SiC semiconductors

    © Morgan Advanced Materials 6 December 2022 34 Customers trust Morgan to meet their growth needs in SiC semiconductors Material Science CEO of Major SiC Wafer Supplier: - Material customisation: purity & performance “During this time of tremendous growth in the silicon - Consistent and repeatable pr

35. Slide 35: Semiconductor strategy to continue delivering above market growth

    © Morgan Advanced Materials 6 December 2022 35 Through execution of our semiconductor strategy, we expect to continue delivering above market growth • Morgan is well positioned with leading • Morgan is actively supporting the fast growth products in fast growing spaces across in this space: front-en

36. Slide 36: Healthcare: Improving Quality of Life

    © Morgan Advanced Materials 6 December 2022 36 Faster Growing Deep-Dives ​Healthcare: Improving Quality of Life ​ John Righini, President Technical Ceramic Capital Markets Event 2022

37. Slide 37: Passion for Healthcare

    © Morgan Advanced Materials 6 December 2022 37 Passion for Healthcare Ageing Growing Innovative Greater Population Middle Class New Therapies Access to Care Capital Markets Event 2022

38. Slide 38: Healthcare

    © Morgan Advanced Materials 6 December 2022 38 Healthcare A resilient and attractive segment where we expect to deliver above market growth 6.4% Medical devices include a diverse set of technologies that support delivery of therapies Competitors CAGR 21-25 Improve treatment outcomes Reduce the cost

39. Slide 39: We are a trusted partner

    © Morgan Advanced Materials 6 December 2022 39 We are a trusted partner To our broad customer base Active Medical Implants Medical Imaging Diagnostic & Analytical Surgical Equipment & Oncology Equipment Capital Markets Event 2022

40. Slide 40: Implantable feedthroughs technology

    © Morgan Advanced Materials 6 December 2022 40 Implantable feedthroughs technology Support new & innovative treatments Brain Interface • Brain-machine interface (BMI) • Drug resistant depression 1. Customised solutions for new therapies • Cancer treatment 2. Enabling safe and hermetic technology min

41. Slide 41: Our imaging solutions

    © Morgan Advanced Materials 6 December 2022 41 Our imaging solutions Play a key role in ensuring diagnostic and treatment delivery Bare ceramics and metalised components 1. Greater power density for better diagnosis and treatment 2. Increased production yields 3. Better equipment up-time improving p

42. Slide 42: Critical components

    © Morgan Advanced Materials 6 December 2022 42 Critical components In analysis and dispensing of body fluid for diagnosis and treatment Ceramic Metalized Orifice Assembly Ceramic Quadrapole Spacers 1. Robust ceramic materials for longer-life solutions 2. Custom engineered material solutions for impr

43. Slide 43: Analytical and Diagnostic Equipment: Haematology

    © Morgan Advanced Materials 6 December 2022 43 Analytical and Diagnostic Equipment: Haematology 1. Improved ceramic wear characteristics for safer seals 2. High quality material surface finish for low-friction operation 3. Volume manufacturing to support one-time use Haematology Ceramic Seals Capita

44. Slide 44: Healthcare strategy to continue delivering above market growth

    © Morgan Advanced Materials 6 December 2022 44 Through our healthcare strategy, we expect to continue delivering above market growth • In a demanding healthcare solutions market, • Continue to partner with customers and Morgan’s portfolio of biocompatible materials, search for new growth opportuniti

45. Slide 45: Clean Energy and Clean Transportation: Driving the Clean Energy Transition

    © Morgan Advanced Materials 6 December 2022 45 Faster Growing Deep-Dives Clean Energy and Clean Transportation: Driving the Clean Energy Transition Damien Caby, President Thermal Ceramics​ Capital Markets Event 2022

46. Slide 46: Clean Energy and Transportation

    © Morgan Advanced Materials 6 December 2022 46 Clean Energy and Transportation An exciting growth sector where we expect to deliver above market growth​ Clean Totals Clean Energy Clean Transportation 9% Decade of rapid renewables growth, led by solar (19% CAGR) and wind Massive rail electrification

47. Slide 47: Morgan in clean energy, energy storage and clean transportation

    © Morgan Advanced Materials 6 December 2022 47 Morgan in clean energy, energy storage and clean transportation PV Solar Electric Rail Wind EV Energy Storage Capital Markets Event 2022

48. Slide 48: Wind turbines

    © Morgan Advanced Materials 6 December 2022 48 Wind turbines Differentiated products increase reliability and minimise maintenance frequency and cost Shaft Grounding Lightning Protection Generator Slip Ring & Brush Gear Yaw Grounding Capital Markets Event 2022

49. Slide 49: Rail

    © Morgan Advanced Materials 6 December 2022 49 Rail Highest performing products lower operational costs, reduce Carbon Pantograph destructive current upsets Strip and minimise ongoing maintenance costs Coupler Contact Third-rail Collector Shoes Wheel Flange Grounding Lubrication Device Capital Marke

50. Slide 50: Automotive

    © Morgan Advanced Materials 6 December 2022 50 Automotive Well established component supply is expanded to address the new and specific needs of Electric Vehicles Passive Fire Protection for Batteries Carbon Carbon Brushes for Rotors, Electric Bearings A/C Motor & and Vanes Cooling Pumps for Electri

51. Slide 51: Clean energy and transport strategies for above market growth

    © Morgan Advanced Materials 6 December 2022 51 Through our clean energy and transport strategies, we expect to continue delivering above market growth • We are design partners for our customers • We keep in close contact with the markets • We invest in end applications testing developing innovative

52. Slide 52: Core: Improving the Sustainability of Global Industry

    © Morgan Advanced Materials 6 December 2022 52 Core: Improving the Sustainability of Global Industry Damien Caby, President Thermal Ceramics​ Capital Markets Event 2022

53. Slide 53: Our core portfolio

    © Morgan Advanced Materials 6 December 2022 53 Our core portfolio Competitors Core portfolio is diversified and differentiated with all markets forecast positive growth outlook Thermal Other (including Rail) Petrochemicals Security and defence Carbon 2-4% Automotive (IC) CAGR 21-25 Share of Revenue

54. Slide 54: Thermal Management Solutions for the Petrochemical Industry

    © Morgan Advanced Materials 6 December 2022 54 Thermal Management Solutions for the Petrochemical Industry We engineer high temperature insulation solutions from a wide range of materials to maximise throughput efficiency and minimize carbon footprint Insulating Fire Mortars and Pyro-Bloc™ Folded an

55. Slide 55: Fire Protection for Life and Assets

    © Morgan Advanced Materials 6 December 2022 55 Fire Protection for Life and Assets We combine industry-leading refractory insulation materials and thermal design expertise into fire protection products that provide evacuation time and asset protection against catastrophic structural failure Thermal

56. Slide 56: Load Bearing Systems for Pumps

    © Morgan Advanced Materials 6 December 2022 56 Load Bearing Systems for Pumps We design from long lasting material combinations and manufacture to tight tolerances full load bearing systems to increase reliability and reduce energy consumption Ceramic Shaft and Bearings Capital Markets Event 2022

57. Slide 57: Our core business will remain strong and outgrow its underlying markets

    © Morgan Advanced Materials 6 December 2022 57 Our core business will remain strong and outgrow its underlying markets • Our core markets are growing, • We continuously develop new solutions in diverse and resilient collaboration with our customers by • We hold leading market positions with combinat

58. Slide 58: Key Takeaways

    © Morgan Advanced Materials 6 December 2022 58 Key Takeaways Pete Raby, CEO Capital Markets Event 2022

59. Slide 59: Summary

    © Morgan Advanced Materials 6 December 2022 59 Summary We have transformed the business over We have a clear capital allocation framework to the last 7 years. The business is better prioritise growth and returns and a clear medium term performing and more resilient. financial framework for our perfo

60. Slide 60: Q&A

    © Morgan Advanced Materials 6 December 2022 60 Q&A Capital Markets Event 2022

61. Slide 61: Contact

    © Morgan Advanced Materials 6 December 2022 61 Contact investorrelations@morganplc.com +44 (0)1753 837 000 morganadvancedmaterials.com Capital Markets Event 2022

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