Slide 1: Materion Corporation 1Q 2024 Earnings Presentation
Materion Corporation 1Q 2024 Earnings Presentation May 1, 2024 © 2024 Materion Corporation
Slide 2: Agenda
Agenda Introduction Kyle Kelleher – Director, Investor Relations and Corporate FP&A Opening Remarks & Jugal Vijayvargiya – President and Chief Executive Officer Business Update Financial Shelly Chadwick – Vice President and Chief Financial Officer Review Q&A Question and Answer Session © 2024 Materi
Slide 3: Forward-looking Statements and Non-GAAP Financial Information
Forward-looking Statements and Non-GAAP Financial Information These slides contain (and the accompanying oral discussion will contain, where applicable) “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown
Slide 4: Opening Remarks & Business Update
Opening Remarks & Business Update Jugal Vijayvargiya President and Chief Executive Officer © 2024 Materion Corporation 4
Slide 5: Q1 2024 Highlights
Q1 2024 Highlights Operational Challenges and Softer Demand Impact Q1 Results; Cost Improvement Initiatives Protect Margins Value-added (VA) sales of $257.8 million ▪ VA sales down 14% from prior year driven largely by continued weakness in semiconductor and industrial end markets ▪ Temporary operat
Slide 6: End Market Performance
End Market Performance Q1 2024 Market VA Sales vs. Q1 2023 Q1 Comments ▪ Continued inventory correction and customer destocking Semiconductor $64.0 -25% ▪ Q1 expected to be the low point with quarterly sequential improvement ▪ Twelfth consecutive quarter of growth in Aerospace led by significant con
Slide 7: Key Takeaways
Key Takeaways Top line headwinds drove lower results ▪ Continued weakness in the semiconductor and industrial end markets; softer demand in commercial aerospace and EV ▪ Performance Materials impacted by temporary operational challenges Significant cost actions helping to mitigate headwinds and deli
Slide 8: Financial Review
Financial Review Shelly Chadwick Vice President and Chief Financial Officer © 2024 Materion Corporation 8
Slide 9: Q1 2024 Operating Performance
Q1 2024 Operating Performance Value-added Sales ($M) Adj. EBITDA ($M) Adj. EPS $298.6 -14% $53.4 -15% -28% $257.8 $1.34 $45.2 $0.96 17.9% 17.5% Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Value-added sales were $257.8 million, down Adjusted EBITDA was $45.2 million, margin of Adjusted EPS of $0.
Slide 10: Q1 2024 Financial Comparison
Q1 2024 Financial Comparison Adjusted EBITDA of $45.2 million, or 17.5% of VA Sales ▪ EBITDA margin strong despite sales volume decline ▪ Positive price partially offset by unfavorable mix ▪ Cost improvement initiatives helping offset headwinds © 2024 Materion Corporation 10 See appendix for reconci
Slide 11: Performance Materials Segment
Performance Materials Segment Value-added Sales ($M) Adj. EBITDA ($M) Value-added sales of $155.6 million $168.0 ▪ Decrease due to temporary operational challenges and -7% -17% market softness led by industrial, automotive and $155.6 $42.8 commercial aerospace $35.7 ▪ Strong demand seen in the space
Slide 12: Electronic Materials Segment
Electronic Materials Segment Value-added Sales ($M) Adj. EBITDA ($M) Value-added sales of $77.6 million ▪ Continued significant weakness in the semiconductor $103.9 -25% 1% market $14.4 $14.5 ▪ Energy and industrial markets remain challenged $77.6 Adjusted EBITDA of $14.5 million, 18.7% ▪ Operationa
Slide 13: Precision Optics Segment
Precision Optics Segment Value-added Sales ($M) Adj. EBITDA ($M) Value-added sales of $24.6 million ▪ Strength in aerospace & defense, offset by reduced $26.7 -8% $24.6 -85% demand in industrial and automotive ▪ Operational challenges delayed some shipments $2.9 Adjusted EBITDA of $0.4 million 1.8%
Slide 14: Cash, Debt and Liquidity
Cash, Debt and Liquidity ($M) Q1 2023 Q1 2024 Leverage at midpoint of target range of 1.5x – 3x Short-term Debt $27.7 $46.6 Approximately $130 million available on existing credit facility Long-term Debt $405.5 $428.7 ▪ Adequate liquidity remains to support growth Total Debt $433.2 $475.3 initiative
Slide 15: Full Year 2024 Guidance
Full Year 2024 Guidance Adj. EPS Guidance $5.60 - $6.20 2024 Guidance ~5% ▪ Updating full year adjusted EPS to $5.60-$6.20, an $5.64 increase of 5% from 2023 at the midpoint 2023 2024E 2024 Modeling Assumptions Capital Expenditures $90M Interest Expense $32M Precision Clad Strip Plant – Phase Two $2
Slide 16: Invest in Materion as We Advance Our Strategy
Invest in Materion as We Advance Our Strategy Becoming a global leader in high-performing advanced materials serving diverse and attractive markets well aligned with megatrends Building robust pipeline with investments in R&D as we focus on developing innovative solutions for our customers Leveragin
Slide 17: Appendix
Appendix © 2024 Materion Corporation 17
Slide 18: Reconciliation for Value-added Sales
Reconciliation for Value-added Sales The cost of gold, silver, platinum, palladium, copper, ruthenium, iridium, rhodium, rhenium, and osmium is passed through to customers and, therefore, the trends and comparisons of net sales are affected by movements in the market price of these metals. The use o
Slide 19: Reconciliation for Non-GAAP Measures
Reconciliation for Non-GAAP Measures We have adjusted the results for certain special items such as restructuring and cost reduction initiatives (i.e., severance) and additional start up resources and © 2024 Materion Corporation 19 scrap from the applicable GAAP financial measure. Management reviews
Slide 20: Reconciliation for Non-GAAP Measures (Cont.)
Reconciliation for Non-GAAP Measures (Cont.) We have adjusted the results for certain special items such as restructuring and cost reduction initiatives (i.e., severance) and additional start up resources and © 2024 Materion Corporation 20 scrap from the applicable GAAP financial measure. Management
Slide 21: Reconciliation for Non-GAAP Measures (Cont.)
Reconciliation for Non-GAAP Measures (Cont.) We have adjusted the results for certain special items such as restructuring and cost reduction initiatives (i.e., severance) and additional start up resources and © 2024 Materion Corporation 21 scrap from the applicable GAAP financial measure. Management
Slide 22: Reconciliation for Non-GAAP Measures (Cont.)
Reconciliation for Non-GAAP Measures (Cont.) We have adjusted the results for certain special items such as restructuring and cost reduction initiatives (i.e., severance) and additional start up resources and © 2024 Materion Corporation 22 scrap from the applicable GAAP financial measure. Management
Slide 23: Reconciliation for Non-GAAP Measures (Cont.)
Reconciliation for Non-GAAP Measures (Cont.) We have adjusted the results for certain special items such as restructuring and cost reduction initiatives (i.e., severance) and additional start up resources and © 2024 Materion Corporation 23 scrap from the applicable GAAP financial measure. Management
Slide 24: Reconciliation for Non-GAAP Measures (Cont.)
Reconciliation for Non-GAAP Measures (Cont.) ($ in millions) Q1 2024 Q1 2023 Q1 2024 TTM Q1 2023 TTM GAAP as Reported Net income $ 13.4 $ 25.6 $ 83.5 $ 97.6 Income tax expense (benefit) 1.2 4.6 8.8 18.7 Interest expense 8.3 7.5 32.1 25.7 Depreciation, depletion, and amortization 16.2 15.1 62.7 55.3
Slide 25: Materion enables what's next
Materion enables what’s next ™ Materion Corporation +1 216.486.4200 http://www.materion.com Connect With Us © 2024 Materion Corporation