Coherent Corp. · NYSE:COHR
Coherent — II-VI — FY2017 Earnings Presentation
16 slides from Coherent's earnings presentation, Aug 10, 2017
Slide 1: August 2017
August 2017 Exhibit 99.1
Slide 2: Introductions
Company: II-VI Incorporated Presenting:Dr. Vincent D. (Chuck) Mattera, Jr President and CEO Mary Jane Raymond Chief Financial Officer INTRODUCTIONS
Slide 3: Safe Harbor Statement
Matters discussed in this presentation may contain forward-looking statements that are subject to risks and uncertainties. These risks and uncertainties could cause the forward-looking statements and II-VI Incorporated’s (the “Company’s”) actual results to differ materially. In evaluating these forw
Slide 4: Reported Segments and Company Overview
Reported Segments FY16 Revenue FY17 Revenue FY17 Op Margin YOY 12 Months Revenue Growth Industrial Fiber Optic & Wireless Comm. Military Semi Cap Life Science, Consumer, Other Laser Solutions $303M $339M GAAP 9% (incl $30M investment) 12% 69% 13% 4% 5% 9% Photonics $326M $419M 15% 28% 9% 84% 0% 3% 4
Slide 5: Fiber Optics and Wireless Communications
Fiber Optics and Wireless Communications Enabling growing demand for intelligent networks Optical Components for Communications Market CAGR (’16-’20): 11% - Source: Ovum Key drivers: China Broadband Metro in several regions worldwide Data center growth including subsea CATV Sources of Competitive Ad
Slide 6: High Power Lasers and Optics
High Power Lasers and Optics Leader in industrial material processing Laser Processing Heads & Beam Delivery Components Market CAGR (‘14-’19): 22% Source: Strategies Unlimited Experts in development of new materials for diodes and optics for lower cost of ownership Industrial laser components 25-35%
Slide 7: EUV Lithography
EUV Source System Beam Transport System CO2 System Structural Ceramic Subsystems Seed Laser Power Amplifiers Focusing Optics EUV Lithography System 1500 nm 800 nm 90 nm 65 nm 45 nm 22 nm 20nm 14 nm 10 nm 7 nm 5 nm Evolution of Semiconductor Technology 1982 1993 2003 2009 2010 2012 2014 Future Source
Slide 8: Semiconductor Laser Technology Enabling Opto-electronic Devices
Optical Communications Internet of Things Semiconductor Laser Technology Enabling Opto-electronic Devices for advanced functionality e.g. 3D sensing II-VI is rapidly ramping its capacity and capability to serve the growing opto-electronic device market Early driver is growing demand for VCSELS - TAM
Slide 9: Silicon Carbide Substrates/Devices
II-VI is a world leading supplier of SiC substrates Large diameter (150mm) wafers enable economies of scale SiC for High Power Electronics Market CAGR (‘17-’21): 23% Source: Yole Other High Power Applications Green Energy (Windmill / Solar) Smart Grid Power Switching SiC for High Frequency GaN Elect
Slide 10: Vertically Integrated Manufacturing
Products on an Optical Line Card Laser Chip-on-Carrier Assembly Thermoelectric Cooler Optics Vertically integrated manufacturing footprints on world class products Vertically integrated manufacturing - Key to Scale, Quality, Functionality and Profitability 980 nm pump laser Optical channel monitor O
Slide 11: Acquisition of Integrated Photonics
Background Spun from AT&T Bell Labs Murray Hill as Magneto Optic Materials Group in 2000 Size: ~100 people located in Hillsborough, NJ World leader in Faraday rotator crystals Strategic Rationale Further penetration of key end markets: Data center upgrades: Web 2.0 & Cloud Global Optical Network Upg
Slide 12: Acquisition of Kaiam Laser Limited
Acquisition of Kaiam Laser Limited Background 300,000 sq.ft facility with a 100,000 sq.ft clean room Located in near Newcastle U.K. 6” wafer fab for GaAs, SiC and InP devices capabilities Now known as II-VI Compound Semiconductor Part of the Laser Solutions segment Strategic Rationale Multi-purpose
Slide 13: Financial Trends
www.ii-vi.com Financial Trends Financials Expectations Gross Margin 40% 38.5%-41% EBITDA 19.5% 18.5%-22% Operating Margin 11.9% 11%-14% FY17 FY18 Cash and Equivalents Cash Flow from Operations Long-Term Debt (Including current portion) FY16 FY14 FY15 Shareholder’s Equity $218M $175M $174M $123M $95M
Slide 14: Key Investment Considerations
Industry-Experienced Team with Deep Innovation Skills Leading Market Positions in Diverse End Markets 1 Vertically-Integrated and Scalable Manufacturing Successful Return on Investment Within 12-24 months 3 4 Significant Competitive Strengths and Differentiation for Emerging Markets 5 2 www.ii-vi.co
Slide 15: Reconciliation Tables
Reconciliation Tables $Millions (Unaudited) Three Months Ended Twelve Months Ended Jun 30, 2017 Mar 31, 2017 Jun 30, 2016 Jun 30, 2017 Jun 30, 2016 Operating Income $35.7 $29.0 $28.9 $115.5 $91.8 Interest expense 2.3 1.9 1.1 6.8 3.1 Other expense(income), net (0.4) (2.1) (0.4) (10.1) (1.3) Income ta
Slide 16: Materials That Matter
IVI MATERIALS THAT MATTER