Advanced Energy Industries, Inc. · NASDAQ:AEIS
Advanced Energy Industries — Investor Presentation (July 2022)
27 slides from Advanced Energy Industries's investor presentation, July 2022
Slide 1: A Best-in-Class Industrial Growth Enterprise
A Best-in-Class Industrial Growth Enterprise July 2022 1
Slide 2: Safe Harbor
SAFE HARBOR The company’s guidance with respect to anticipated financial results, potential future growth and profitability, guidance on possible future results, future business mix, expectations regarding future market trends, future performance within specific markets and other statements herein o
Slide 3: Key Messages: Precision Power Leader for the Digital Economy
Key Messages PRECISION POWER LEADER FOR THE DIGITAL ECONOMY PURE PLAY POWER LEADER OUTPERFORMING MARKETS Strategic focus on precision power ensures Track record of broadening market reach, sustainable advantage and scale growing share and adding content PROPIETARY SOLUTIONS ACCELERATING EARNINGS Lea
Slide 4: Advanced Energy at a Glance
Introduction ADVANCED ENERGY AT A GLANCE INDUSTRIAL & SEMICONDUCTOR MEDICAL Headquartered in Denver Colorado, EQUIPMENT 23% 49% Advanced Energy (NASDAQ: AEIS) is a global $1.50B leader in design and manufacture of highly TTM Sales engineered precision power conversion, measurement and control soluti
Slide 5: We Are the Pure Play Power Leader
Introduction WE ARE THE PURE PLAY POWER LEADER AE provides precision power conversion and control solutions for a wide range of high value and long life-cycle SEMICONDUCTOR INDUSTRIAL & DATA CENTER TELECOM & applications EQUIPMENT MEDICAL COMPUTING NETWORKING Grid Power Process Custom Server Radio P
Slide 6: Our Leadership Enables Solid Financial Performance
Introduction OUR LEADERSHIP ENABLES SOLID FINANCIAL PERFORMANCE Large & Diversified Growing Market 2021 Reported Results SEMICONDUCTOR INDUSTRIAL & EQUIPMENT MEDICAL $1.46 billion $211 million $9.4B RECORD NON-GAAP OP PROFIT(1) Combined SAM REVENUE Operating margin 15% TELECOM & NETWORKING DATA CENT
Slide 7: Digital Economy Drives Growth Across Our Verticals
Secular Drivers DIGITAL ECONOMY DRIVES GROWTH ACROSS OUR 4 VERTICALS • Leading-edge capacity for • Accelerating adoption of AI & 5G processors process automation • Digital Transformation and IoT • Smart manufacturing drives demand in trailing-edge • Telemedicine, remote • Sovereign investments 5G di
Slide 8: A History of Innovation and Technology Leadership
Technology Leadership A HISTORY OF INNOVATION AND Transforms how power TECHNOLOGY LEADERSHIP is delivered Direct Control of Ion Energy with eVoSTM AE leads with generations of power delivery innovations Copyright © 2022 Advanced Energy 8
Slide 9: Focus on Proprietary Designs to Accelerate Growth
Growth Strategies FOCUS ON PROPRIETARY DESIGNS TO ACCELERATE GROWTH AE TARGETED GROWTH STRATEGIES GROW SHARE Across Mission-Critical Precision Power Verticals Semiconductor: Industrial & Medical: Extending Our Expanding Our Portfolio of Leadership Proprietary Solutions Invest in INNOVATION and Techn
Slide 10: Semiconductor: Extending Our Leadership
Semiconductor SEMICONDUCTOR: EXTENDING OUR LEADERSHIP MARKET LEADER WITH PROVEN TRACK RECORD MAXStreamTM Market share every year for No.1 over 10 years in Process Power and RF Power(1) 16% 10-year Semi Product Revenue CAGR (2) eVoSTM TARGET TO CONTINUE TO OUTGROW OUR MARKET AE targeted Semi revenue
Slide 11: Industrial & Medical: Expanding Our Portfolio of Proprietary Solutions
Industrial & Medical INDUSTRIAL & MEDICAL: EXPANDING OUR PORTFOLIO OF PROPRIETARY SOLUTIONS LEVERAGE BROAD PORTFOLIO LARGE MARKET WITH WIDE ACCELERATING INVESTMENTS OF STANDARD PRODUCTS TO RANGE OF NICHE OPPORTUNITES TO DRIVE GROWTH DELIVER CUSTOM SOLUTIONS Large SAM of $3.6B Engineering AC-DC RF Ge
Slide 12: Data Center Computing: From Fast Follower to Technology Leader
Data Center Computing DATA CENTER COMPUTING: FROM FAST FOLLOWER TO TECHNOLOGY LEADER GROWING INVESTMENTS MORE HIGH VALUE CONTENT AE TECHOLOGY LEADERSHIP ($ in billions) Hyperscale CAPEX(1) 98% Industry-Leading $140 96% Best Power Conversion 94% Efficiency $120 Good $100 Mainstream $80 2X Power Conte
Slide 13: Telecom & Networking: Targeting 5G Infrastructure
Telecom & Networking TELECOM & NETWORKING: TARGETING 5G INFRASTRUCTURE 5G INFRASTRUCTURE MARKET GROWTH Powering many of the largest wireless networks across the world GROWTH TREND STRATEGY Wireless infrastructure Spend (1) • Win proprietary designs in 5G radio High reliability ruggedized power ($ in
Slide 14: Inorganic Growth: Growing Scope and Leveraging Scale
Inorganic Growth INORGANIC GROWTH: GROWING SCOPE AND LEVERAGING SCALE Acquired Electrostatic Acquired Embedded Business Power Business Track Record 2014 2014 2018 2018 2020 2022 Deployed >$700M Across 11 Acquisitions Core AE 2014 2017 2018 2019 2021 All Accretive Thyro Acquired Power Control Module
Slide 15: SL Power Acquisition Brings Many Strategic Benefits
Inorganic Growth SL POWER ACQUISTION BRINGS MANY STRATEGIC BENEFITS FOCUSED ON MEDICAL STRATEGIC BENEFITS Revenue Mix by Market(1) • Expands AE’s addressable market in industrial and medical by > $400 million Semi • Complements AE’s medical portfolio with low operating power, low emission (EMI/EMC),
Slide 16: Q1 2022 Results Surpassed High End of Guidance
Recent Results Q1 2022 RESULTS SURPASSED HIGH END OF GUIDANCE REVENUE NON-GAAP GROSS MARGIN* NON-GAAP EPS* $397 million 36.6% $1.24 Up 0.1% Q/Q Up 110 bps Q/Q Down 9% Q/Q on tax BACKLOG NON-GAAP OP MARGIN* CASH & INVESTMENTS $1,012 million 14.5% $524 million Up 9% Q/Q Up 70 bps Q/Q Net Cash of $136
Slide 17: Strong Demand and Record Backlog
Strong Demand STRONG DEMAND AND RECORD BACKLOG STRONG DEMAND HIGHLIGHTED BY RECORD BACKLOG STRENGTH OF THE BACKLOG • Vast majority of the backlog consists of proprietary designs Ending Backlog and Backlog as % of Revenue ($ in millions) • ~ 60% is immediately shippable as soon as we can build $1,200
Slide 18: Reaccelerating Earnings Growth on Supply Improvement
Earnings Growth REACCELERATING EARNINGS GROWTH ON SUPPLY IMPROVEMENT EARNINGS AND MARGINS TO ACCELERATE AS SUPPLY IMPROVES COST & SUPPLY MITIGATION ACTIONS ($ per share) Non-GAAP EPS vs. Gross Margins • Recover a portion of high material premiums from $2.00 44% customers, which temporary impacts mar
Slide 19: Pre-Supply Constraint Financial Framework
Financial Framework PRE-SUPPLY CONSTRAINT FINANCIAL FRAMEWORK 3-YEAR LONG-TERM INORGANIC LONG-TERM ASPIRATIONAL ORGANIC FINANCIAL GROWTH VISION GOALS FRAMEWORK ASSUMPTIONS (6-8 YEARS) Revenue ($M) $1,650 5-6% Net CAGR Add ~$500M $2,500 Non-GAAP OPEX at ½ rev. CAGR >10% acquired 21% 21% Operating Mar
Slide 20: Capital Allocation Plan
Capital Allocation CAPITAL ALLOCATION PLAN Allocation of Free Cash Flow GROWTH: ~75% Capital Allocation Track Record • M&A Engine with a disciplined process • Building a solid funnel 2014 to 2021 Total • Maintain gross debt leverage at 1.0-1.5x, and comfortable raising to 2.5X • Ample liquidity with
Slide 21: Key Messages: Precision Power Leader for the Digital Economy
Key Messages PRECISION POWER LEADER FOR THE DIGITAL ECONOMY PURE PLAY POWER LEADER OUTPERFORMING MARKETS Strategic focus on precision power ensures Track record of broadening market reach, sustainable advantage and scale growing share and adding content PROPIETARY SOLUTIONS ACCELERATING EARNINGS Lea
Slide 22: Thank You
THANK YOU Copyright © 2022 Advanced Energy 22
Slide 23: Guidance
GUIDANCE Q2 2022 Guidance Revenue $395M +/- $25M GAAP EPS from continuing operations $0.65 +/- $0.30 Non-GAAP EPS* $1.05 +/- $0.30 * Detailed explanations of non-GAAP financials and reconciliations of GAAP to non-GAAP financials can be found at the end of this presentation Copyright © 2022 Advanced
Slide 24: Quarterly Non-GAAP Financials
QUARTERLY NON-GAAP FINANCIALS* Quarterly Trend All figures from Continuing Operations (figures in $ millions, except percentage and EPS) 2020 2020 2020 2020 2021 2021 2021 2021 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Backlog 300.1 280.1 281.5 290.7 405.7 534.7 771.4 927.8 1,012.4 Revenue 315.5 339.9 389.5 3
Slide 25: Non-GAAP Measures
NON-GAAP MEASURES Advanced Energy’s non-GAAP measures exclude the impact of non-cash related charges such as stock-based compensation and amortization of intangible assets, as well as discontinued operations, and non-recurring items such as acquisition-related costs and restructuring expenses. The n
Slide 26: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Reconciliation of Non-GAAP measure - operating Reconciliation of Non-GAAP measure - income expenses and operating income, excluding certain items Three Months Ended excluding certain items Three Months Ended (in thousands) (in thousands) March 31, December 31, March 31, Decem
Slide 27: Reconciliation of GAAP to Non-GAAP Guidance
RECONCILIATION OF GAAP TO NON-GAAP GUIDANCE Reconciliation of Q2 2022 Guidance Low End High End Revenue $370 million $420 million Reconciliation of non-GAAP earnings per share GAAP earnings per share $ 0.35 $ 0.95 Stock-based compensation 0.15 0.15 Amortization of intangible assets 0.14 0.14 Restruc
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