Coherent Corp. · NYSE:COHR
Coherent — II-VI — Investor Presentation (August 2020)
33 slides from Coherent's investor presentation, Aug 13, 2020
Slide 1: August 2020 Investor Presentation
Copyright 2020, II - VI Incorporated. All rights reserved. August 2020 Investor Presentation
Slide 2: Safe Harbor Statement
Page 2 Copyright 2020, II - VI Incorporated. All rights reserved. Safe Harbor Statement This presentation contains forward - looking statements relating to future events and expectations that are based on certain assum ptions and contingencies. The forward - looking statements are made pursuant to t
Slide 3: Company Overview
Company Overview
Slide 4: II-VI at a Glance
Page 4 Copyright 2020, II - VI Incorporated. All rights reserved. II - VI at a Glance All data as of 6/31/2020 or quarter then ended FY20 Revenue $2.6B Cash & Equivalents $493M YTD Free Cash Flow $160M Vertically Integrated Model “TWO SIX” Refers to groups II and VI of the Periodic Table of Elements
Slide 5: Our Vision
Page 5 Copyright 2020, II - VI Incorporated. All rights reserved. Our Vision A world transformed through innovative materials vital to a better life today and the sustainability of future generations Adoption of 3D Sensing Increased Data and Video Consumption Deployment of 5G Wireless Growth in Elec
Slide 6: Core Strategy: Engineered Materials Differentiation
Page 6 Copyright 2020, II - VI Incorporated. All rights reserved. Diversified per Platform Capital Intensive Markets ▪ A Leader in engineered materials and optoelectronic devices ▪ Differentiated lasers, optics, and integrated circuits ▪ Enabling the convergence of communications, computing, and sen
Slide 7: Ten Years of Continuous Revenue Growth and Acquisitions
Page 7 Copyright 2020, II - VI Incorporated. All rights reserved. $487 $516 $551 $683 $742 $827 $972 $1,159 $1,362 $2,380 $2,638 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY20PF 10 Years of continuous revenue growth (1) 4 Transformative Acquisitions Optical Network & China Market InP Technol
Slide 8: Thousands of Market Leading Customers Across Diverse Markets
Page 8 Copyright 2020, II - VI Incorporated. All rights reserved. Sampling of representative customers based on approvals for public release Thousands of Market Leading Customers Across Diverse Markets
Slide 9: II-VI Has Managed COVID-19 Effectively To Date
Page 9 Copyright 2020, II - VI Incorporated. All rights reserved. Early Warning from China Footprint ▪ Early China impacts forced supply chain adjustment in fiscal Q3 ▪ Prepared early and company - wide contingency plans across global footprint Swift Reaction to Rapidly Changing Situation ▪ Manufact
Slide 10: Q4 FY20 Overview
Page 10 Copyright 2020, II - VI Incorporated. All rights reserved. Q4 FY20 Overview $341 $599 $666 $627 $746 Q1 Q1PF* Q2 Q3 Q4 * Pro Forma Revenue Three Months Ened 09/30/2019 for II - VI and Three Months Ended 10/28/2019 for Finisar. FY20 Revenue by Quarter ($M) 9% 72% Revenue by End Market 5% Semi
Slide 11: Rapid Revenue Growth at Scale
Page 11 Copyright 2020, II - VI Incorporated. All rights reserved. $827 $972 $1,159 $1,362 FY2016 FY2017 FY2018 FY2019 Rapid Revenue Growth at Scale Strong Revenue Growth (1) (Pre - Finisar Acquisition) Continued Momentum 11% 18% 19% 18% Note: Dollars in millions. (1) Figures prior to FY2019 do not
Slide 12: Enabling Mobility & Electrification
Page 12 Copyright 2020, II - VI Incorporated. All rights reserved. Remote Radio Head Beam - forming Antenna 5G WIRELESS 4G WIRELESS Bi - Directional Converter/ Inverter/ Electric Motor DC - DC Converter Electric Charger / HV Battery EV/HEV GREEN ENERGY Solar & Wind Energy Smart Grid Power Switching
Slide 13: Advantages of Large Diameter Substrates
Page 13 Copyright 2020, II - VI Incorporated. All rights reserved. Advantages of Large Diameter Substrates ▪ Large diameter substrate fabrication cost (per unit area) is reduced significantly ▪ Large diameter wafer availability has helped move SiC - based devices from niche to mainstream ▪ Existing
Slide 14: Vertically Integrated SiC Technology Platform
Page 14 Copyright 2020, II - VI Incorporated. All rights reserved. Vertically Integrated SiC Technology Platform Recent Strategic Activities: • II - VI licenses technology for SiC from GE (6/29/20) • II - VI to acquire Ascatron (8/13/20) • II - VI to acquire the outstanding interests of the owners o
Slide 15: Addressing Multiple and Strong Growing Markets
Page 15 Copyright 2020, II - VI Incorporated. All rights reserved. Addressing Multiple and Strong Growing Markets Aerospace & Defense RF and Power Electronics Optical Communications 3D Sensing & LiDAR $7.5B CY25 Market For 3D sensing in consumer electronics & LiDAR in automotive For terrestrial, und
Slide 16: Growth Opportunities in 5G Mobile Infrastructure
Page 16 Copyright 2020, II - VI Incorporated. All rights reserved. 5G RADIO ACCESS 5G OPTICAL ACCESS Backbone Network Front - & Backhaul Network Base Stations Handsets Photonic Solutions Segment Compound Semiconductors Segments GaAs RF GaN/SiC RF Line Cards Amplifiers OCM/OTDR LPC WSS Subsystems Bid
Slide 17: Indium Phosphide Devices: Upside to TAM and Gross Margins
Page 17 Copyright 2020, II - VI Incorporated. All rights reserved. Datacom Components Telecom Components ▪ 25G and 50G DFB Lasers ▪ 50G and 100G EML ▪ Lasers for Silicon Photonics Externally Modulated Laser (EML) Externally Modulated Tunable Laser ▪ 10G and 25G Tunable Lasers ▪ InP IQ Modulators ▪ D
Slide 18: 3D Sensing & LiDAR
Page 18 Copyright 2020, II - VI Incorporated. All rights reserved. ▪ Market drivers • Face biometrics, augmented reality, automotive in - cabin & LiDAR, machine vision ▪ Two U.S. based compound semiconductor wafer fabs • Warren, NJ: Shipped hundreds of millions of 3D sensing VSCEL arrays • Sherman,
Slide 19: Lasers for Materials Processing & EUV
Page 19 Copyright 2020, II - VI Incorporated. All rights reserved. CO2 LASER OPTICS FUSED SILICA LASER OPTICS SAPPHIRE LASER OPTICS DEFORMABLE MIRORS LASER MODULES LASER BARS DIRECT DIODE LASERS LASER LIGHT CABLES CUTTING HEADS WELDING HEADS Lasers for Materials Processing & EUV Strong demand for la
Slide 20: Aerospace & Defense
Page 20 Copyright 2020, II - VI Incorporated. All rights reserved. Significant new opportunities ahead with strong channels to the market STRONG ABILITY TO DIFFERENTIATE THE END SOLUTION Advanced Materials Semiconductor Lasers Electro - Optic Subsystems MARKETS PRODUCTS DIFFERENTIATORS Intelligence
Slide 21: Life Sciences: Gene Sequencing and COVID-19 Testing
Page 21 Copyright 2020, II - VI Incorporated. All rights reserved. Life Sciences Gene Sequencing and Testing for COVID - 19 with Lasers, Optics, and Thermoelectrics II - VI plays an important role in the supply chain for Polymerase Chain Reaction (PCR) Instruments that can determine the outcome of p
Slide 22: COVID Has Accelerated II-VI's Secular Tailwinds
Page 22 Copyright 2020, II - VI Incorporated. All rights reserved. COVID - 19 Has Accelerated II - VI’s Secular Tailwinds Driving Increasing Demand for Connectivity and High - Performance Infrastructure Video Conferencing Life Sciences / Diagnostics Content Streaming 5G Smart Power Energy Efficiency
Slide 23: Financial Overview
Financial Overview
Slide 24: Attractive and Increasing Gross and Operating Margins
Page 24 Copyright 2020, II - VI Incorporated. All rights reserved. Attractive and Increasing Gross and Operating Margins (1) All non - GAAP amounts exclude certain adjustments for share - based compensation, acquired intangible amortization expense, certain one - time transaction expenses, fair valu
Slide 25: Significant Value Creation Potential from Synergies
Page 25 Copyright 2020, II - VI Incorporated. All rights reserved. Significant Value Creation Potential from Synergies Annual Est Synergies Within 36 month s Yr 1 Annual Run Rate Synergies Achieved 75% through Yr 1 Cost of Goods Sold ▪ Supply chain management - Procurement ▪ Infeed - Internal supply
Slide 26: Key Takeaways
Page 26 Copyright 2020, II - VI Incorporated. All rights reserved. Key Takeaways One of the Largest Photonics and Compound Semiconductor Companies 1 Materials Expertise Drives Differentiation in Multiple Growing Markets 2 Vertically Integrated, Diverse Global Manufacturing Footprint 3 History of Ins
Slide 27: Transaction Overview Appendix
Page 27 Copyright 2020, II - VI Incorporated. All rights reserved. Transaction Overview Appendix
Slide 28: End Market Distribution of Q4 FY20 Revenue
Page 28 Copyright 2020, II - VI Incorporated. All rights reserved. End Market Distribution of Q3FY20 QTD Revenue Reported Segments Q4FY19 Revenue Q4FY20 Revenue Q4FY20 Op Margin – GAAP / Non - GAAP Q4FY20/ Q4FY19 Revenue Growth Pro Forma* Revenue Change FY20 Q4/ FY19 Q4 Industrial (Automotive) Fiber
Slide 29: End Market Distribution of Full Year FY20 Revenue
Page 29 Copyright 2020, II - VI Incorporated. All rights reserved. End Market Distribution of Full Year FY20 Revenue Reported Segments FY20 Revenue FYY20 Op Margin – GAAP / Non - GAAP FY20/FY19 Revenue Growth Industrial (Automotive) Fiber O ptic & Wireless Comm. Military Semi Cap Life Science, Consu
Slide 30: Reconciliation of GAAP Measures to Non-GAAP Measures
Page 30 Copyright 2020, II - VI Incorporated. All rights reserved. Finisar Q1 FY20 Revenue $285.0 GAAP Gross Profit $85.3 Amortization of required technology $0.5 Stock Compensation $2.9 Impairment of long-lived/intangible assets $1.7 Reduction in force costs $0.0 Write off of discontinued product i
Slide 31: Reconciliation of GAAP Measures to Non-GAAP Measures
Page 31 Copyright 2020, II - VI Incorporated. All rights reserved. Reconciliation of GAAP Measures to Non - GAAP Measures Note: Dollars in millions.
Slide 32: Reconciliation of GAAP Measures to Non-GAAP Measures
Page 32 Copyright 2020, II - VI Incorporated. All rights reserved. Note: Dollars in millions. Reconciliation of GAAP Measures to Non - GAAP Measures
Slide 33: Materials That Matter
IVI MATERIALS THAT MATTER