Slide 1: Investor Presentation
Investor Presentation March 2012 Materion Corporation Exhibit 99.1
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 ca
Slide 3: Materion Today: New Name, Same Impressive Performance
MATERION TODAY: New Name, Same Impressive Performance Sales growth (2005 – 2011) Operating profit growth (2005 – 2011) Repositioning of company 12%* CAGR 20% CAGR Successful * Excluding pass-through metal
Slide 4: Thesis: Positioned to Deliver Long-Term, Sustainable Growth
THESIS Positioned to Deliver Long-Term, Sustainable Growth A company with a strong platform… … Leveraging a high value-added business model… … Executing a focused growth plan
Slide 5: The Repositioning of Materion
The Repositioning of Materion Prior to 2002 2002 – 2011 + Metals and mining focus Repositioning Sustained growth
Slide 6: Successful Repositioning – Snapshot 2002 2011
Successful Repositioning – Snapshot 2002 2011 Revenues $373M $1.5B Revenue % in Advanced Materials 47% 76% Sales per employee (thousands) $200 $506 Debt-to-Debt-Plus-Equity 43% 17% Working capital * % of sales 41% 23% Cyclicality Higher Lower Growth Lower Higher * A/R, Inventory & A/P
Slide 7: Operating Businesses are Well-Positioned and Growing
Operating Businesses are Well-Positioned and Growing Business End Markets (Examples) Products (Examples) Advanced Materials • Wireless • LED • Optical Coatings • Medical • Alternative energy • PVD targets • Optical / medical coatings • Electronic packaging • Inorganic powders 76% of revenues Integra
Slide 8: Positioned in Diverse Set of High-Growth Markets
Positioned in Diverse Set of High-Growth Markets Growth Entered multiple leading-edge growth markets since 2002 Defense Commercial Aerospace Medical Devices Optics Telecom Infrastructure LED’s LCD Space / Science Notebooks Cellular phones (smartphones), Tablet computers Heavy Equipment Disk Alternat
Slide 9: High Operating Margins
High Operating Margins Operating Profit % Operating Profit % of Value-Added (1) Removing High Value Metals Clarifies True Margins (1): Value added sales excludes metal pass through Advanced Materials 3 – 5% 16 – 18% Integrated Metals 6 – 8% 8 – 10% Company 3 – 5% 10 – 12%
Slide 10: A Global Platform
A Global Platform 37% Operations in US and 11 Countries Significant and Expanding International Sales* Customers in >50 countries * Percentage of value added sales
Slide 11: Thesis: Positioned to Deliver Long-Term, Sustainable Growth
THESIS Positioned to Deliver Long-Term, Sustainable Growth A company with a strong platform… … Leveraging a high value-added business model… … Executing a focused growth plan
Slide 12: High Value-Added Business Model
High Value-Added Business Model 1. Identify high growth secular markets 2. Target the fastest growing niches of those markets 3. Expand with innovative products 4. Add synergistic acquisitions 5. Ensure financial discipline
Slide 13: 1. Target High Growth, Leading-Edge Markets
1. Target High Growth, Leading-Edge Markets Market FY 2011 % of Value- Added Sales 2012 Trends Key Drivers 23% 16% 15% 8% 8% 8% 7% Consumer Electronics • Smartphone growth • Tablet computers & LEDs • Miniaturization Industrial Components & Commercial Aerospace • New airplane builds & retrofits • Inc
Slide 14: 1. Target High Growth, Leading-Edge Markets
1. Target High Growth, Leading-Edge Markets ADVANCED MATERIAL TECHNOLOGIES PERFORMANCE ALLOYS BERYLLIUM & COMPOSITES TECHNICAL MATERIALS Key Markets Precious, Non-precious, Specialty Metal and Inorganic Materials; Electronic Packages and Components Bulk and Strip Form Products and Beryllium Hydroxid
Slide 15: 2. Targeting The Niche – Examples
2. Targeting The Niche – Examples • Only fully integrated producer of beryllium – one-of-a-kind business Leading position in niche • Unique copper-nickel material ToughMet® – multiple advanced applications growing at over 30% annually • Optical coatings – highly sophisticated uses for defense, therm
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 – Computer Hard Drives – Alternative Energy – Science – Commercial Aerospace – Hybrid & Electric Vehicles – Wireless
Slide 17: 4. Synergistic Acquisitions – Strong Record
4. Synergistic Acquisitions – Strong Record Added over $440M to sales and approximately 30% of company profit in 2011 Acquisitions 2005-2011 – Impact Add complementary products / technology Expand market position Accretive in year 1 OMC – shield kit cleaning TFT – thin film coatings CERAC – inorgani
Slide 18: 4. Synergistic Acquisitions
4. Synergistic Acquisitions Barr (2009) Techni- Met (2008) TFT EIS Optics (2011) Case Study of Growing a Niche Business – Optical Filters and Medical Coatings (Pro-Forma Revenues) • Positioned in $1.2B+ market growing at 11% annually • Markets served include: defense, aerospace, medical, energy, sem
Slide 19: 5. Ensure Financial Discipline
5. Ensure Financial Discipline Maintain strong balance sheet Debt-to-Debt-Plus-Equity Maximum 30% Strong cash flow • Cash flow from operations $30M - $75M annually for the past five years • Capex below depreciation • Reduction in working capital goal to <20% sales Resources to finance acquisitions o
Slide 20: Thesis: Executing a Focused Growth Plan
THESIS Positioned to Deliver Long-Term, Sustainable Growth … Executing a focused growth plan A company with a strong platform… … Leveraging a high value-added business model…
Slide 21: Financial Goals Next 3-5 Years
Financial Goals Next 3-5 Years 2011 2014-2016 Next 3-5 years Revenue growth – organic 2% >10% Acquisitions $24M $50 - $100M per year Margins (OP % VA) 10 - 12% 14% - 18% Working capital % sales 23% <20% Debt-to -Debt-Plus-Equity 17% <30% ROIC (pre-tax) 12% >20%
Slide 22: Continuing to Execute Three Point Strategy
Continuing to Execute Three Point Strategy Grow and diversify revenue base Expand margins Improve fixed and working capital utilization Increasing Shareholder Value
Slide 23: Strategy #1: Growth – Expand and Diversify Revenue Base
STRATEGY #1: GROWTH 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 fast accretion – Technology – Glo
Slide 24: Strategy in Action: Outgrowing Growth Markets
STRATEGY #1: GROWTH Strategy in Action: Outgrowing Growth Markets Growth of Materion Oil and Gas Sales vs. Market Growth of Materion Aerospace Sales vs. Market Materion Sales Materion Sales Global Rig Count Aircraft Delivered +512% +85% +349% +80%
Slide 25: Strategy #2: Margins – Expand Margins – Key Drivers
STRATEGY #2: MARGINS Expand Margins – Key Drivers 1 2 3 Lean Sigma operating efficiency Higher value added products Cost reductions Margin Today 10 - 12% Target Margin 14 - 18% (OP % VA)
Slide 26: Strategy #3: Improve Fixed and Working Capital Efficiency
STRATEGY #3: CAPITAL EFFICIENCY Improve Fixed and Working Capital Efficiency Based on 2012 projected sales, each 5% of working capital efficiency = $50M of cash Lean Sigma • Cycle time reduction • Yield improvement • On-time shipments Improve Working Capital Efficiency Working capital % of sales 41%
Slide 27: 2012 Outlook and Guidance
2012 Outlook and Guidance Revenues (Billions) EPS $1.60-$1.68 $1.5 2012 (F) $2.05-$2.25 $1.93 2012 (F)
Slide 28: In Summary: Why Invest in Materion Corporation
IN SUMMARY Why Invest in Materion Corporation Positioning Performance Growth A leader in high-growth markets Strong performance record Executing three point strategy • Global player, strong secular market drivers • Sustainable long-term growth • Proven business model • Target, expand, then own niche
Slide 29: Appendix
Appendix
Slide 30: Applications: Smart Phones
Applications: Smart Phones I/O Connector Contacts Battery Contacts Internal Antenna Contacts Grounding Clips and Audio Jacks Micro Mezzanine Connectors for LCD Screen Internal Electronics and LED • Thin Film Materials – Power amplifiers, LED, SAW and BAW devices, filters, and ICs • Hermetic Solution
Slide 31: Applications: Aerospace
Applications: Aerospace Avionics/Electrical Systems Airframe Structure Landing Gear Attachments Engine and Pylon Attachments Flight Control Mechanisms Horizontal Stabilizer & Rudder Attachments Hydraulic Systems Fuel Systems Wing Attachments Doors & Hatches Landing Gear Components Flight Attendant J
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 Lithium Ion Battery Interconnects Battery Management Resistors Electronic Power Steering Modules ABS Leadframes Engine Efficiency Oxygen Sensors Mirror & Windshield Electronic Connections Air Bag Sensors Lamp Socket Connectors Auto Dimming Mirror Connectors Hybri
Slide 34: Applications: Oil & Gas
Applications: Oil & Gas Under Water Wellhead Equipment Directional Drilling Equipment MWD, LWD, MPT Systems Drill Bits Structural Rig Components Wellhead Control Equipment Other Oil & Gas Applications: • Artificial Lift Equipment • Elemental Analysis • Down Hole X-Ray Inspection ROV’s, blow out prev
Slide 35: Applications: Solar Energy
Applications: Solar Energy Technology: Amorphous Silicon (a-Si, tandem and multi-junction) Thin Film (PVD) Materials Silicon based photovoltaic cells Front and back contact layers TCO Transparent Conductive Oxide layers Technology: Cadmium Telluride (CdTe) Thin Film (PVD) Materials Cadmium based sol
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 Cardiac Rhythm Management • Electronic Interconnects/Components • Niobium/Titanium Electron Beam Weld Insulin Pump • EMI Shielding and Grounding • Electrical Terminals in Connectors Seizure Control • Thin Film Deposition Implantable Electrode – Parkinson's disease (R&D) Externa
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 A-10 Industrial Components & Commercial Aerospace 20% Consumer Electronics 21% Energy 13% Telecommunications Infrastructure 13% Automotive Electronics 11% Appliance 10% Defense & Science 3% Other 7% Medical 2%
Slide 40: Value-Added Sales: Beryllium and Composites
Value-Added Sales: Beryllium and Composites A-11 Defense & Science 52% Industrial Components & Commercial Aerospace 23% Other 9% Medical 9% Telecommunications Infrastructure 6% Energy 1%
Slide 41: Value-Added Sales: Technical Materials
Value-Added Sales: Technical Materials A-12
Slide 42: New Product and Technology Development
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
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