Slide 1: Earnings Call Presentation Fourth Quarter 2022
Earnings Call Presentation Fourth Quarter 2022 February 14, 2023 10:00 am ET • By phone: 877-407-6184 in the US or 201-389-0877 internationally • A live webcast of the call will be available and archived on the investor relations section of the Company's website at investor.ipgphotonics.com © 2023 I
Slide 2: Note Regarding Forward Looking Statements and Use of Non-GAAP Financials
Note Regarding Forward Looking Statements and Use of Non-GAAP Financials Information and statements provided by IPG and its employees, including statements in this presentation, that relate to future plans, events or performance are forward-looking statements. These statements involve risks and unce
Slide 3: Q4 '22 Highlights
Q4 '22 Highlights • Strong growth in welding, e-mobility, renewable energy and medical offset by foreign THE WORLD currency headwinds, business divestiture and softer demand in industrial markets in LEADER IN FIBER LASERS China and Europe ◦ Strength in emerging growth products, which were 46% of tot
Slide 4: Financial Review
Financial Review • Gross margin decreased due to the In millions except per share Q4 '22 Q4 '21 Y/Y Q3 '22 Q/Q $74M inventory related charges in Russia, higher cost of product sold Revenue $333.5 $364.5 (8)% $349.0 (4)% offset by higher manufacturing cost absorption, inventory reserves, increased sh
Slide 5: Revenue by Power
Revenue by Power • High power (more than 1kW) sales declined due to softer 180 demand in cutting, partially offset by growth in welding applications; sales of ultra-high power lasers (more than 6kW) 160 represented 47% of high power lasers 140 • Pulsed lasers sales declined due to lower demand in cu
Slide 6: Revenue by Geography
Revenue by Geography 140 300 120 250 100 200 In millions In millions 80 150 60 100 40 20 50 0 0 North America Europe China Other Asia China RoW Q4 '21 Q3 '22 Q4 '22 Q4 '21 Q4 '22 • Sales decreased slightly in North America year over year, as growth in cutting, welding and medical applications was of
Slide 7: Balance Sheet and Cash Flow Summary
Balance Sheet and Cash Flow Summary In millions Q4 '22 • Returning capital to shareholders while maintaining a strong balance sheet Cash and Short-term Investments $1,178 • Inventories declined due to the inventory write-down Inventories $509 • Capital Allocation • Using cash to fund future growth o
Slide 8: Balance Sheet and Cash Flow Generation
Balance Sheet and Cash Flow Generation Operating Cash Flow and Capital Allocated Exceptional Balance Sheet 500 2,000 400 300 1,500 200 100 In millions In millions 0 1,000 -100 -200 500 -300 -400 -500 0 -600 -700 -500 2021 2022 Dec 2021 Dec 2022 YTD Cash from operations Cash and cash equivalents YTD
Slide 9: Financial Guidance
Financial Guidance Q1 '23 Outlook • Q4 book-to-bill was just below 1 • FX is expected to have a Revenue $310M - $340M negative impact on revenue in Q1 Gross Margin 41% - 43% Operating Expenses $76M - $78M EPS $0.90 - $1.20 Tax Rate ~26% Diluted common shares ~48M VERTICAL INTEGRATION PROVIDES COMPET
Slide 10: Vertical Integration Provides Competitive Edge
VERTICAL THE WORLD INTEGRATION LEADER IN PROVIDES FIBER LASERS COMPETITIVE EDGE EXPANDING ENABLING LASER & GREATER DISPLACING AUTOMATION NON-LASER APPLICATIONS STRONG HIGH ELECTRICAL MARGINS, EFFICIENCY ENABLES BALANCE SHEET LOWER CUSTOMER & CASH FLOW ENERGY USE © 2023 IPG Photonics 10
Slide 11: Appendix: Reconciliation of Non-GAAP Financial Measures
Appendix: Reconciliation of Non-GAAP Financial Measures (In thousands, except percentages) Q4 2022 Gross profit $60,824 18.2% Add: Inventory provision and related charges 74,055 Adjusted gross profit $134,879 40.4% Q4 2022 (In thousands, except per share data) Before Tax Tax Impact After Tax Per Dil
Slide 12: Thank you
Thank you © 2021 IPG Photonics