Slide 1: Positioning Cree for Long-Term Growth – Divestiture of LED Products Business
Positioning Cree for Long-Term Growth – Divestiture of LED Products Business October 19, 2020 CREE CONFIDENTIAL & PROPRIETARY © 2020 Cree, Inc. All rights reserved. Cree®, the Cree logo, Wolfspeed®, and the Wolfspeed logo are registered trademarks of Cree, Inc.
Slide 2: Forward-Looking Statements & Non-GAAP Measures
Forward-Looking Statements & Non-GAAP Measures Note on Forward-Looking Statements This presentation includes forward-looking statements about Cree’s business outlook, future financial results and targets, product markets, plans and objectives for future operations, and product development programs a
Slide 3: Forward-Looking Statements & Non-GAAP Measures
Forward-Looking Statements & Non-GAAP Measures The forward-looking statements in this presentation were based on management’s analysis of information available at the time the presentation was prepared and on assumptions deemed reasonable by management. Our industry and business is constantly evolvi
Slide 4: LED Divestiture – Next Step In Creating Semiconductor Powerhouse
LED Divestiture – Next Step In Creating Semiconductor Powerhouse Allows company to focus on industry transition to silicon carbide Creates a pure-play global semiconductor powerhouse for silicon carbide and gallium nitride devices, as well as materials Bolsters Cree’s efforts to penetrate $10B oppor
Slide 5: Transaction Summary
Transaction Summary LED Products divestiture accelerates Cree’s ability to create long-term shareholder value • SMART Global Holdings (NASDAQ: SGH), a global leader in specialty memory, Acquirer storage and high-performance computing solutions serving the electronics industry for over 30 years • SMA
Slide 6: Focus on High-Growth Wolfspeed Business
Focus on High-Growth Wolfspeed Business Powering the next generation of semiconductors with superior silicon carbide technology Materials Power RF • Maintaining leading global • Converting high voltage (>600V) • Driving value with vertical market share power market to silicon carbide integration and
Slide 7: Updated FY24 Target Operating Model Post-Divestiture
Updated FY24 Target Operating Model Post-Divestiture Building a high-growth, high-margin, and significant cash generating business FY2024 FY2024 Previous Model Current Model Target Model Assumptions As of 11/20/19 As of 10/19/20 • Wolfspeed BEV Adoption to ~5%, 5G roll out Revenue $2.1B $1.5B • Grow
Slide 8: Wolfspeed – Positioned for Long-Term Growth
Wolfspeed – Positioned for Long-Term Growth FY22 represents inflection point as EV deployments commence and MHV Fab comes online ~$1.5B $1.5B MHV Fab Ramps CY22 $1.0B Accelerated Growth $0.5B Inflection Investing for Point Growth $0.0B FY2020 - 2021 FY2022 - 2023 FY2024+ Transform Ramp Execute ✓ Dev
Slide 9: Transition to Pure Play Semiconductor Powerhouse
Transition to Pure Play Semiconductor Powerhouse Well-positioned to support Wolfspeed growth Strong balance sheet $1B+ in liquidity to support CAPEX / capacity expansion, R&D, and Sales and Marketing investments FY2021 peak CAPEX investment year at ~$0.4B subject to variability depending on Mohawk V
Slide 10: Our Path Forward
Our Path Forward Pure-play semiconductor powerhouse well-positioned to benefit from significant growth opportunities Expanding our leading position Executing well against our with strong barriers to entry during transformational strategy to the market transformation from become a powerhouse silicon
Slide 11: Appendix
Appendix 11 CREE CONFIDENTIAL & PROPRIETARY © 2020 Cree, Inc. All rights reserved. Cree®, the Cree logo, Wolfspeed®, and the Wolfspeed logo are registered trademarks of Cree, Inc.
Slide 12: Appendix - Non-GAAP Measures Reconciliation FY24
Appendix - Non-GAAP Measures Reconciliation FY24 Non GAAP Margin Gross Margin Reconciliation FY2024 FY2024 Previous Model Current Model GAAP GM% 43%-46% 49%-53% Stock based compensation 1% 1% Non-GAAP GM% 44%-47% 50%-54% GAAP OPEX% 24% 30% Stock based compensation 2% 3% Amortization of intangibles 0
Slide 13: CREE CONFIDENTIAL & PROPRIETARY © 2020 Cree, Inc. All rights reserved. Cree®, the Cree
CREE CONFIDENTIAL & PROPRIETARY © 2020 Cree, Inc. All rights reserved. Cree®, the Cree logo, Wolfspeed®, and the Wolfspeed logo are registered trademarks of Cree, Inc.