Slide 1: Slide 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 (MTRN)
Materion (MTRN) • An Advanced Material Company – Lighter, stronger, faster, smaller, reliable • Strong Global Positions in Attractive and Growing Markets • Solid Record of Long-term Growth • Strong Value-added* Margins • Market Cap: $486 Million 9/28/12 • Shares Outstanding: 20.7 million • Annual EP
Slide 4: Identify High Growth Secular Markets
Identify High Growth Secular Markets
Slide 5: Unique Global Positions – Advanced Materials
Unique Global Positions – Advanced Materials • World’s Only Fully Integrated Producer of Beryllium and Beryllium Alloys – Over 75 years of reserves at Utah Leading Global Position • Unique Copper-Nickel-Tin Material ToughMet® – Multiple advanced applications growing at over 30% annually • Precision
Slide 6: 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 19% CAGR Successful *Excluding metal pass-through
Slide 7: Broadening our Reach Through Acquisitions and Materials Innovation
Broadening our Reach Through Acquisitions and Materials Innovation Beryllium and Alloys Industrial Precious Metals and Microelectronics Packaging Beryllium and Alloys Industrial Precious Metals and Microelectronics Packaging New Non-Be Alloys and Composites Optical and Medical Coatings Specialty Che
Slide 8: High Operating Margins
High Operating Margins Removing High Value Metals Clarifies Margins (1) Value-added sales excludes metal pass-through
Slide 9: Successful Repositioning – Snapshot
Successful Repositioning – Snapshot * A/R, Inventory & A/P
Slide 10: 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 11: A Global Platform
A Global Platform 40% Operations in US and 11 Countries Significant Direct International Sales* Q3 2012 • Customers in >50 countries • Expanded presence in Asia *Percentage of value-added sales
Slide 12: Continually Develop Innovative Products
Continually Develop Innovative Products • Leveraging customer-centric product development • Active research programs to take advantage of secular trends • Key product areas include – LEDs – Wireless – Medical – Commercial Aerospace – Energy – Commercial Optics – Hybrid & Electric Vehicles – Computer
Slide 13: A Strong Record of Synergistic Acquisitions
A Strong Record of Synergistic Acquisitions Added over $440M to sales and approximately 30% of company profit in 2011
Slide 14: Ensure Financial Discipline
Ensure Financial Discipline Maintain strong balance sheet Debt-to-Debt-Plus-Equity 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 organic growth and acquisitio
Slide 15: Financial Goals Next Years
Financial Goals Next 3 - 5 Years
Slide 16: Positioned to Deliver Long-term, Sustainable Growth
THESIS Positioned to Deliver Long-term, Sustainable Growth
Slide 17: 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 in strong secular growth markets • Sustainable long-term growth • Proven business model • Target, capture niche, then
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Slide 19: Target High Growth, Leading-edge Markets: Reportable Segments
Target High Growth, Leading-edge Markets Reportable Segments
Slide 20: Value-added Sales: Materion
Value-added Sales: Materion Q3 2012
Slide 21: Value-added Sales: By Segment
Value-added Sales: By Segment Q3 2012
Slide 22: Value-added Sales: Advanced Material Technologies
Value-added Sales: Advanced Material Technologies Q3 2012
Slide 23: Value-added Sales: Performance Alloys
Value-added Sales: Performance Alloys Q3 2012
Slide 24: Value-added Sales: Beryllium and Composites
Value-added Sales: Beryllium and Composites Q3 2012
Slide 25: Value-added Sales: Technical Materials
Value-added Sales: Technical Materials Q3 2012
Slide 26: Core Technologies
Core Technologies 1. High Purity Gold and Silver for Industrial Applications 2. Powder Science and Processing (Vacuum, Hot and Cold Isostatic Pressing ) … Metal and Chemical 3. Full Metal Processing Technology (Melting, Casting, Rolling, Extrusion) 4. Selective Electroplating 5. Light Wave Managemen
Slide 27: 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 28: Strategy #1: Growth – Expand and Diversify Revenue Base
STRATEGY #1: GROWTH Expand and Diversify Revenue Base • Targeting expansion in secular 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 – Technolo
Slide 29: 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 30: Strategy #3: Capital Efficiency
STRATEGY #3: CAPITAL EFFICIENCY Improve Fixed and Working Capital Efficiency Each 5% of working capital efficiency = $65M of cash Lean Sigma • Cycle time reduction • Yield improvement • On-time shipments Improve Working Capital Efficiency Working capital % of sales
Slide 31: Strategy in Action: Outgrowing Growth Markets
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 32: Synergistic Acquisitions: Growing a Niche Business
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 with significant long-term growth potential • Markets served include: defense, aerospace, med
Slide 33: New Product and Technology Development
New Product and Technology Development Advanced Material Technologies – Optics Coating Materials and Large Format Components – Thin Film Electrodes (medical diagnostics) – Expanded Refining/Chamber Services – Complement to Thin Film Materials & Coating Businesses – Nanotechnology Materials – Materia
Slide 34: New Product and Technology Development
New Product and Technology Development Advanced Material Technologies Coatings Packaging Precision Optical Thin Film Coatings (specialty filters) Large format Thin Film Materials for Large Area Coatings (energy, solar) Solar Panel Thin Film, Concentrator Materials and Barrier Film Coatings Optical P
Slide 35: 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 – “Next Generation” Alloy for Oil & Gas – ToughMet® Alloy for High Volume Automotive Gearboxes Beryllium and
Slide 36: Positioned in Diverse Set of High-growth Markets and Product Applications
Positioned in Diverse Set of High-growth Markets and Product Applications Entered multiple leading-edge growth markets since 2002
Slide 37: 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 38: 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 39: 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 40: 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 41: 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 42: 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
Slide 43: 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 44: 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