Materion Corporation · NYSE:MTRN
Materion — Brush Engineered Materials — Jefferies 3rd Annual Industrial CEO Summit 2007
38 slides from Materion's conference presentation, Aug 8, 2007
Slide 1: Jefferies 3rd Annual Industrial CEO Summit
Jefferies 3rd Annual Industrial CEO Summit August 15, 2007 .... a leader in creating innovative engineered material solutions and services to make our customers competitive on a global basis .... while enhancing earnings growth and stability by broadening technology, market, and geographic reach
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: Brush Engineered Materials Inc. Profile
Brush Engineered Materials Inc. Profile A leading manufacturer of high performance specialty engineered materials and services ... an enabling materials technology company Operations, service centers and major office locations in North America, Europe and Asia Serving long-term growth oriented globa
Slide 4: Collaborating with customers worldwide to solve material application challenges
Brush Engineered Materials Collaborating with customers worldwide to solve material application challenges ... with a focus on enabling technology and services "Own" a Niche orientation ... non-commodity Focus on global growth and service Realigning product and service portfolios towards favorable t
Slide 5: Company Overview
Company: Brush Engineered Materials Inc. founded 1931, publicly traded since 1956 NYSE Ticker: BW Shares Outstanding: Approximately 20.7million at 6/30/07 Market Cap: Approximately $900 million at 6/30/07 Component of: S&P Super Composite 1500 Russell 2000 S&P Small Cap 600 Annual Revenue: $763 mill
Slide 6: Second Quarter 2007 Recap
Second Quarter 2007 Recap Quarterly Revenue Up $46.5 million or 25% compared to second quarter 2006 The eighteenth consecutive quarter where sales were higher than the comparable quarter the previous year Metal prices accounted for approximately 3% of the sales increase and organic growth was 22% In
Slide 7: First Half 2007 Recap
First Half 2007 Recap Sales up 36% to $484 million Earnings per share of $1.50 compares to prior year's $0.62 Sales growth, adjusting for metal price increased 31% A new first half sales high, even after adjusting for metal price inflation Seven consecutive quarters of greater than 20% growth Operat
Slide 8: Strong conditions in key markets driving solid sales growth
Strong conditions in key markets driving solid sales growth Strong sales growth driven by Broad based demand increase and new products Added sales from acquisitions Higher metal prices Consumer electronics a primary factor Portable devices, such as cell phones Hard disk drives/data storage Gaming de
Slide 9: Strong customer collaboration
Strong customer collaboration ... providing enabling technology solutions and service Materials that meet design challenges requiring - Strength - Reliability - Electrical conductivity - Miniaturization - Weight reduction - Corrosion resistance - Reflectivity - Thermal conductivity Targeting growth
Slide 10: Typical End Uses
Typical End Uses Magnetic Data Storage for hard disk drives Industrial products For Oil & Gas and Mining Medical Devices Cellular phones, I-Pods and other wireless communication devices Notebook and network computers Electronic components in cars and trucks Commercial Aerospace Defense
Slide 11: Global Leader in High Performance Engineered Materials: Q2 07 Revenue by Market
Global Leader in High Performance Engineered Materials Q2 2007 Revenue by Market Other Telecommunications Magnetic & Data Storage Industrial Components Aerospace & Defense Automotive Appliance 0.07 0.4 0.26 0.08 0.07 0.07 0.05 Other Appliance Aerospace & Defense Industrial Components Data Storage Au
Slide 12: Global Sales and Distribution Network
Global Sales and Distribution Network Operations in the U.S. and eleven foreign countries Q-2 2007 International sales were 42% and growing Act globally ... service locally! ?-------------- Asia / Pacific ------------? ? ---------------- Europe -------------- ? ? - Exports from USA -? Singapore Kore
Slide 13: Targeting Growth Applications in Growing Markets
BEM - Targeting Growth Applications in Growing Markets Mobile Telecommunications Disk Drive Head Demand 2001 2002 2003 2004 2005 Est. 2006 2007 2008 2009 Pico 640 634 713 885 1180 1385 1580 1666 1687 Build Schedule for Boeing/Airbus O&G - Rotary Rig Count
Slide 14: Major Business Units
Brush Engineered Materials - Major Business Units Alloy Be Products TMI Other WAM East 0.33 0.07 0.07 0.01 0.52 West North Williams Advanced Materials PVD Targets Optical Coatings Refining Electronic Packaging 52% Alloy (Cu based Be and Ni Alloy) Electronic Connectors Industrial Components 33% Be Pr
Slide 15: 2006 Revenue by Market
BEM- 2006 Revenue by Market Other Telecommunications Magnetic & Data Storage Automotive Aerospace & Defense Industrial Components Appliance 0.11 0.42 0.12 0.1 0.1 0.09 0.06 Other Appliance Aerospace & Defense Industrial Components Data Storage Automotive Telecommunication & Computer Market growth >
Slide 16: Advanced Material Technologies and Services Business Structure
AMTS Corporate Thin Film Products Electronic Packaging Products Advanced Material Technologies and Services Business Structure Today and Evolving Thin Film Services Fab Services Specialty Inorganic Materials Ireland Czech Republic Wheatfield, NY Brewster, NY Buffalo, NY Buffalo, NY Singapore Philipp
Slide 17: Williams Advanced Materials broad capabilities
Williams Advanced Materials also has broad capabilities in precious and non-precious materials Comprehensive product line High purity / proprietary PVD targets Micro-electronic packaging materials Specialty inorganic chemicals Strong end use markets Data storage Wireless/handsets semiconductor Optic
Slide 18: Key Markets - Magnetic Head and Media
Thin film materials for both the read/write head and disc platter. Chamber Services complement materials offering. Applications growing into many commercial and mobile electronic products. Key Markets - Magnetic Head and Media
Slide 19: Key Markets - Wireless and Photonics
Key Markets - Wireless and Photonics Thin Film and Packaging materials for varied wireless and photonic applications including RF Power Amplifiers, HBT's, SAW Devices, Light Emitting Diodes (LEDs), Laser Recorders and Micro Electro Mechanical Systems (MEMS)
Slide 20: Key Markets - Semiconductor Wafer Fabrication
Key Markets - Semiconductor Wafer Fabrication Thin film materials and chamber services for silicon wafer and UBM (Under Bump Metallization) technologies. Numerous commercial and military microelectronic applications.
Slide 21: Key Markets - Semiconductor Packaging
Key Markets - Semiconductor Packaging High reliability semiconductor packaging materials. Applications focused in space, military and satellite market segments.
Slide 22: New Product and Technology Development
New Product and Technology Development Magnetic Media and Head Materials Under Bump Metallization (UBM) for Flip Chip FCCL Materials Wireless and Photonics Visi-Lid(tm) - A transparent lid for New Photonics applications Expanded refining/chamber services supporting the thin film materials business S
Slide 23: Physical Vapor Deposition (PVD) Process
Physical Vapor Deposition (PVD) Process
Slide 24: World's only Fully Integrated Beryllium Producer
World's only Fully Integrated Beryllium Producer Bertrandite Ore Mining & Extraction Delta, UT Casting, Rolling & Finishing Elmore, OH Thin Gauge Rolling & Finishing Reading, PA Service & Distribution Centers Global Network Also, new High Be Pebbles Plant underway with DOD Title III funding
Slide 25: Strip Alloy Applications
Strip Alloy Applications (strength, conductivity, spring characteristics ... typically 1% to 2% Beryllium) Current Carrying Springs and Relays Integrated Circuitry Sockets Electrical and Electronic Connectors Air Bag Sensors Pressure Responsive Devices Fire Extinguisher Sprinkler Heads Reliability a
Slide 26: Bulk Alloy Applications
Bulk Alloy Applications (strength, corrosion resistance, non-galling, conductivity ... typically 1% to 2% Beryllium) Aircraft Bushings Heavy Equipment Bearing and Wear Applications Oilfield well drilling, completion and production equipment Plastic Injection & Blow Molds Power Generation Undersea/Ma
Slide 27: Toughmet - a new unique solution for challenging wear and load conditions
Toughmet(r) - a new unique solution for the most challenging wear and load conditions Oil & Gas...deeper drilling...tougher conditions Rotary steering drills Sour well drilling and completion tools Sub-sea control valves Blow-out preventions Heavy equipment ... larger equipment ... critical uptime H
Slide 28: Beryllium Products - Applications
Beryllium Products - Applications (lightweight, strength, dimensional, stability...typically 40% to 100% Beryllium) - - Optical mirrors for NASA space-based telescopes - - Infrared sensors for fighter jet optical targeting, radar and navigation/guidance systems and special ops (FLIR) -Structural and
Slide 29: Technical Materials Inc. - engineered strip metals
Technical Materials Inc. - solving customers' problems with engineered strip metals Mill Products Specialty cladding and inlay Electron beam welding of dissimilar materials Profiling shapes by milling and/or grinding Close tolerance rolling Electroplating Precious and non-precious metals Overall and
Slide 30: BEM - Execution Initiatives
BEM - Execution Initiatives Organic growth through new products, applications, and services Close collaboration with customers Expansion of international base and sales Broaden markets and technology Leverage above through "smart" acquisitions No let up in manufacturing excellence ... Lean Sigma pro
Slide 31: New Products - Growing Applications in Growing Markets
New Products - Growing Applications in Growing Markets (all >10% long-term growth expected) ... examples Product Market Driver Division PVD Magnetic Media Hard Disk Drive Increase storage capacity WAM PVD - UMB Consumer Electronics Miniaturization WAM PVD - Evap Pro Compound Semiconductor Miniaturiz
Slide 32: Annual Revenue: Historical
2000 2001 2002 2003 2004 2005 2006 2007 564 473 373 401 496 541 763 1100 Annual Revenue: Historical In 2001, the telecommunications and computer market declined; In 2003, our revenue growth began to return to historical rates Growth % 24% -16% -21% +8% +24% +9% +41% +30-35% Est. Telecom Crash
Slide 33: Value creation initiatives in three key areas
Our on-going value creation initiatives are focused in three key areas Growth Expanding and diversifying the revenue base Targeting niche growth applications in growing markets New product innovation and service Ongoing global expansion Strategic acquisitions Margin Improvement Lean sigma-driven ope
Slide 34: Margins have improved through cost reduction and productivity initiatives
Margins have improved through cost reduction and productivity improvement initiatives Historical Gross Margin Trends Margin % Sales ($MM) (1) Represents approximate G.P.% at 2004 metal prices 2000 2001 2002 2003 2004 2005 2006 0.21 0.14 0.13 0.18 0.22 0.2 0.23 564 473 373 401 496 541 763 0.039 0.017
Slide 35: Q-3 2007 Outlook
Q-3 2007 Outlook Third quarter 2007 sales are expected to be in the range of $240.0 to $250.0 million Up 20% to 25% compared to the prior year Eighth consecutive quarters of greater than 20% growth Third quarter 2007 earnings are expected to be in the range of $0.45 to $0.55 per share Up 30% to 55%
Slide 36: In Summary
In Summary, we are ... Encouraged by conditions in our key markets and our initiatives to grow sales Confident about progress we're making with our margin improvement initiatives Seeing a strong second half of 2007 and solid momentum moving into 2008
Slide 37: Strategic Highlights
Strategic Highlights Strong, diverse set of markets served Global market reach New products and services ... a culture of innovation Niche oriented product offerings Acquisitions adding to growth and earnings Focus on operational excellence paying dividends Strong cash flow Strong balance sheet prov
Slide 38: Material Solutions for the World's Leading Companies
Brush Engineered Materials - Material Solutions for the World's Leading Companies
Brush Engineered Materials — Jefferies 3rd Annual Industrial CEO Summit 2007 on 6ix