Mks Inc. · NASDAQ:MKSI
Mks — MKS Instruments — Debt Investor Presentation (April 2022)
27 slides from Mks's debt investor presentation, Apr 5, 2022
Slide 1: Lender Presentation April 2022
Exhibit 99.1 Lender Presentation April 2022 MKS Instruments,Inc.
Slide 2: Safe Harbor for Forward-Looking Statements
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding the proposed acquisi
Slide 3: Financial Information; Use of Non-GAAP and Non-IFRS Financial Measures
FINANCIAL INFORMATION; USE OF NON-GAAP AND NON-IFRS FINANCIAL MEASURES Financial Information; Presentationof Pro Forma Combined Information Except as otherwise indicated, all financial information of MKS has been reported in accordance with U.S. generally accepted accounting principles (“GAAP”) and
Slide 4: Today's Presenters
Today’s Presenters John T. C. Lee Seth H. Bagshaw President & Senior Vice President, Chief Executive Officer Chief Financial Officer & Treasurer 14+ years at MKS 16+ years at MKS MKS PROPRIETARY 4
Slide 5: Transaction Overview
Transaction Overview st • On July 1 , 2021, MKS Instruments, Inc. (“MKS”) announced it entered into an agreement to acquire Atotech, Ltd. (“Atotech”) (1) for an equity value of ~$5.1B • $16.20 in cash per share and 0.0552 of a share of MKS common stock for each Atotech common share st • On April 1 ,
Slide 6: Sources & Uses and Pro Forma Capitalization
Sources & Uses and Pro Forma Capitalization Sources of funds ($M) Uses of funds ($M) (1) Cash from Balance Sheet $576 Purchase of equity $4,824 (1) Equity to Atotech shareholders 1,625 Refinance MKS debt 824 New Term Loan A 1,000 Refinance Atotech debt 1,570 New USD Term Loan B 3,810 Total transacti
Slide 7: Summary Terms and Conditions
Summary Terms and Conditions MKS Instruments, Inc. (the “Borrower”) Borrower Guarantors Borrower’s direct and indirect domestic material subsidiaries, subject to exceptions usual and customary for transactions of this type (no change) n Perfected first lien priority security interest on substantiall
Slide 8: Financing Timeline
Financing Timeline April 2022 S M T W T F S 2 1 3 4 5 6 7 8 9 15 10 11 12 13 14 16 19 20 17 18 21 22 23 24 25 26 27 28 29 30 Key transaction date Date Event th n Global lender call at 10am ET April 5 th n Term Loan A and Term Loan B commitments due at 10am ET April 8 n Closing and funding following
Slide 9: Strategic Rationale
Strategic Rationale John T.C. Lee
Slide 10: MKS: Years of Leadership in Enabling Miniaturization
MKS: 60 Years of Leadership in Enabling Miniaturization The Next Frontier in Miniaturization and Complexity is the Interconnection of chips, sensors, and devices ● Broadens MKS’ capabilities in Advanced Markets ‒ Atotech is a global leader in electronics chemistry ● Positions MKS to accelerate custo
Slide 11: Chemistry Is Critical Enabler in the Markets MKS Serves
Chemistry Is Critical Enabler in the Markets MKS Serves Semiconductor Advanced Markets MINIATURIZATION / FORM-FACTOR MINIATURIZATION Smaller Geometries (nm) Finer Features (µm) COMPLEXITY Vertical Scaling Higher Density CHEMISTRY CHEMISTRY CHEMISTRY Novel Materials Novel Materials N No ov ve el M l
Slide 12: Diversifies Revenue & Provides Recurring Stable Cash Flows
Diversifies Revenue & Provides Recurring Stable Cash Flows MKS Standalone Pro Forma $4.4B $2.9B Total Revenue Semiconductor Semiconductor 38% 41% 59% Revenue mix Advanced Markets 62% Advanced Markets 13% Consumables Services 29% Services Equipment Revenue streams 61% 10% 87% Equipment Revenue contri
Slide 13: Update on Regulatory Approval and Q4 2021 Performance
Update on Regulatory Approval and Q4 2021 Performance
Slide 14: Update on China Regulatory Approvals
Update on China Regulatory Approvals ● MKS has agreed with Atotech to extend the date for completing MKS’ previously announced and pending acquisition of Atotech to September 30, 2022 from March 31, 2022 ‒ At the request of China’s State Administration for Market Regulation (“SAMR”), we filed the ex
Slide 15: MKS Performance Update
MKS Performance Update ● MKS reported a record year of revenue and profitability despitewell-known global challenges in 2021. Fourth quarter 2021 results included: – Net revenues were a record $764 million, up 16% year-over-year and up 3% sequentially – Net revenues in the Semiconductor Market set a
Slide 16: Atotech Performance Update
Atotech Performance Update ● Atotech earned record revenue in the fourth quarter driven by strong growth in advanced electronics chemistry and equipment solutions ● Total revenue was $387 million for the fourth quarter of 2021, an increase of 6% over the prior-year period. Total organic revenue, whi
Slide 17: Combined Pro Forma Financial Profile
Combined Pro Forma Financial Profile Revenue Adj. Gross profit (Non-GAAP) $inmillions MKS Atotech $4,449 % PF growth MKS Atotech % PF margin $2,122 $3,564 $1,709 $1,499 $3,088 $742 $1,518 $1,234 $655 $1,188 $680 $2,950 $1,380 $2,330 $1,054 $1,900 $838 2019 2020 2021 2019 2020 2021 (6)% 15% 25% 49% 4
Slide 18: MKS Historical Financial Performance
MKS Historical Financial Performance (1) Revenue Gross margin (Non-GAAP) ($ in millions) % grow th 47% $2,950 45% 44% $2,330 $1,900 2019 2020 2021 2019 2020 2021 (8)% 23% 27% (1) (1),(2) Adj. EBITDA (Non-GAAP) Free cash flow (Non-GAAP) $879 ($ in millions) ($ in millions) % margin $553 $597 $428 $41
Slide 19: Atotech Historical Financial Performance (IFRS Basis)
Atotech Historical Financial Performance (IFRS Basis) Revenue Gross Margin (Excluding Depreciation & Amortization) ($ in millions) % grow th $1,499 59% 55% $1,234 $1,188 51% 2019 2020 2021 2019 2020 2021 (2)% 4% 21% (1) (1)(2) Adj. EBITDA (IFRS-basis) Adj. EBITDA less Capex % margin ($ in millions)
Slide 20: Appendix
Appendix
Slide 21: Bridge to Pro Forma 2021 Adjusted EBITDA
Bridge to Pro Forma 2021 Adjusted EBITDA Pro forma EBITDA (in millions) $794.0 $358.4 $1,152.3 Stock-based compensation 36.7 - 36.7 COVID-19related net adjustment - 0.9 0.9 Acquisition and integration costs 29.8 - 29.8 Restructuring and other 11.1 (0.6) 10.5 Transaction related costs - 19.9 19.9 Cur
Slide 22: MKS Adj. Gross Margin Reconciliation (GAAP to Non-GAAP)
MKS Adj. Gross Margin Reconciliation (GAAP to Non-GAAP) (in millions) 2019 2020 2021 Gross Profit $830.4 $1,049.5 $1,380.2 COVID-19 related net costs – 0.3 - Acquisitioninventorystep-up 7.6 – – Inventory charge related to exit of productgroups – 3.9 - Non-GAAP Adj. Gross profit $838.0 $1,053.7 $1,38
Slide 23: MKS Adj. EBITDA Reconciliation (GAAP to Non-GAAP)
MKS Adj. EBITDA Reconciliation (GAAP to Non-GAAP) (in millions) 2019 2020 2021 Q4 2021 Net income $140.4 $350.1 $551.4 $150.2 Interestexpense, net 38.7 27.7 24.8 6.1 Provisionfor income taxes 37.4 72.9 114.1 28.4 Depreciation 41.3 44.0 48.4 12.8 Amortization 67.4 55.2 55.3 15.2 EBITDA $325.2 $549.9
Slide 24: MKS Free Cash Flow Reconciliation (GAAP to Non-GAAP)
MKS Free Cash Flow Reconciliation (GAAP to Non-GAAP) (in millions) 2019 2020 2021 Net cash provided by (used in) operating activities $244.5 $513.2 $639.5 Less: Purchase of property, plant and equipment 63.9 84.9 86.7 Free cash flow $180.6 $428.3 $552.8 MKS PROPRIETARY 24
Slide 25: Atotech Adj. EBITDA Reconciliation (IFRS to Non-IFRS)
Atotech Adj. EBITDA Reconciliation (IFRS to Non-IFRS) (in millions) 2019 2020 2021 Q4 2021 Consolidated net income (loss) $7.6 $(289.4) $7.5 $30.1 Interestexpense, net 148.1 142.0 97.2 9.9 Income taxes 54.8 64.3 76.6 18.7 Depreciation andamortization (excluding impairment charges) 165.4 166.4 177.1
Slide 26: Atotech Financial Adjustments
Atotech Financial Adjustments (in millions) 2019 2020 2021 Revenue $1,187.8 $1,234.3 $1,499.2 Reported gross profit (ATC-basis) $699.6 $676.3 $767.4 Reported gross margin(ATC-basis) 59% 55% 51% Less: Depreciation Reallocated to COGS (11.9) (11.2) (14.8) Less: ExternalWarehousing CostReallocated to C
Slide 27: Pro Forma Schedule
Pro Forma Schedule (in millions) 2019 2020 2021 MKS Revenue 1,900 2,330 2,950 Atotech Revenue 1,188 1,234 1,499 Total Revenue $3,088 $3,564 4,449 %Growth (6%) 15% 25% MKS Adj. Gross Profit (Non-GAAP) 838 1,054 1,380 Atotech Adj. Gross Profit (MKS-basis) 680 655 742 Total Adj. Gross Profit $1,518 $1,
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