Coherent Corp. · NYSE:COHR
Coherent — II-VI — Investor Presentation (June 2020)
33 slides from Coherent's investor presentation, Jun 30, 2020
Slide 1: June 2020 Investor Presentation
June 2020 Investor Presentation Exhibit 99.1
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements relating to future events and expectations that are based on certain assumptions and contingencies. The forward-looking statements are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Ref
Slide 3: Today's Presenters
Today’s Presenters Dr. Vincent (‘Chuck’) D. Mattera, Jr. CEO Mary Jane Raymond CFO
Slide 4: Company Overview
Transaction Overview Company Overview
Slide 5: II-VI at a Glance
II-VI at a Glance “TWO SIX” Refers to groups II and VI of the Periodic Table of Elements Revenue by End Markets 7% Aerospace and Defense 6% Consumer Electronics 5% Semi Cap Equipment 2% Life Sciences 1% Other Core Competency: Engineered Materials Addressing Multiple End Markets Vertically Integrated
Slide 6: Thousands of Market Leading Customers Across Diverse Markets
Sampling of representative customers based on approvals for public release Thousands of Market Leading Customers Across Diverse Markets
Slide 7: Our Vision
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 Electric & Autonomous Vehicles Intelligent Mobile Electric Proliferati
Slide 8: A Leader in Engineered Materials and Optoelectronic Devices
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 sensing Infrastructure Core Competency Innovation Strategy Engineered Mater
Slide 9: Enabling Electrification & Mobility
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 Enabling Electrification & Mobility Ramping silicon carbide substrate cap
Slide 10: Advantages of Large Diameter Substrates
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 200 mm silicon wafer fab lines can be used for SiC devices manufacturing 2’
Slide 11: Strategic Arrangement Accelerates Positioning in SiC
Strategic Arrangement Accelerates Positioning in SiC Expertise in Materials Expertise in Devices, Modules, and Systems The strategic arrangement will capture the expertise needed to drive successful adoption of high value power electronic applications Vertically Integrated Business Model SiC Epi-Waf
Slide 12: History of Insightful Targeting and Successful Integration of Acquisitions
10 Years of continuous revenue growth(1) 4 Transformative Acquisitions Optical Network & China Market InP Technology Platform Epitaxial Wafer and SiC Electronic Device Platform GaAs Technology Platform 2010 2013 2016 2019 History of Insightful Targeting and Successful Integration of Strategic Acquis
Slide 13: Addressing Multiple and Strong Growing Markets
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, undersea, wireless optical infrastructure and datacenters 14% CY20-25
Slide 14: Growth Opportunities in 5G Mobile Infrastructure
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 Bidi DWDM TRx 100G BH TRx 25G FH TRx HPC WSS Coherent TRx DWDM Filters
Slide 15: Indium Phosphide Devices: Upside to TAM and Gross Margins
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 Dual High-Speed Coherent Detectors Leveraging our existing sales channels in the
Slide 16: 3D Sensing & LiDAR
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, TX: Completed qualification and begun shipping Vertically integrated: Epitaxial
Slide 17: Aerospace & Defense: New Opportunities Ahead
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 Surveillance & Reconnaissance IR sensors Windows and lenses Sapphire
Slide 18: Financial Overview
Transaction Overview Financial Overview
Slide 19: Summary Financial Highlights
Summary Financial Highlights Rapid Revenue Growth at Scale 1 Strong Customer Engagement Driving Continued Momentum 2 Attractive and Increasing Gross and Operating Margins 3 Rapid Synergy Realization Ahead of Plan 4 Increasing Q4 FY2020 Revenue Guidance 5
Slide 20: Rapid Revenue Growth at Scale
Rapid Revenue Growth at Scale Strong Revenue Growth(1) (Pre-Finisar Acquisition) Continued Momentum Midpoint of Q4 FY20 Guidance(2) Midpoint of the revised Q4 FY20 Guidance 11% 18% 19% 18% Note: Dollars in millions. Figures prior to FY2019 do not reflect the adoption of ASC 606. (2) Provided during
Slide 21: Attractive and Increasing Gross and Operating Margins
Attractive and Increasing Gross and Operating Margins All non-GAAP amounts exclude certain adjustments for share-based compensation, acquired intangible amortization expense, certain one-time transaction expenses, fair value measurement period adjustments and restructuring and related items. See App
Slide 22: Finisar Integration and Synergy Realization Ahead of Plan
Finisar Integration and Synergy Realization Ahead of Plan Annual Est Synergies Within 36 months(1) Cost of Goods Sold Supply chain management - Procurement Infeed - Internal supply of enabling materials and components ~$85 M Research & Development More efficient R&D with scale Complementary engineer
Slide 23: Increasing Q4 FY2020 Revenue Guidance
Increasing Q4 FY2020 Revenue Guidance Revenue $650mm - $700mm GAAP Operating Margin Previous Guidance Updated Guidance $710mm - $740mm Guidance Today 9%-11%
Slide 24: Key Takeaways
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 Insightful Targeting and Successful Integration of Strategic Acquisiti
Slide 25: Appendix
Transaction Overview Appendix
Slide 26: COVID-19 Has Accelerated II-VI's Secular Tailwinds
COVID-19 Has Accelerated II-VI’s Secular Tailwinds Note: Stats for the period ended and as of Q3 FY2020, as applicable. Driving Increasing Demand for Connectivity and High-Performance Infrastructure is enabling the convergence of communications, computing, and sensing Video Conferencing Content Stre
Slide 27: II-VI Has Managed COVID-19 Effectively To Date
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 Manufacturing facilities essential and now all operating Office work transitioned
Slide 28: Reconciliation of GAAP Measures to Non-GAAP Measures
Reconciliation of GAAP Measures to Non-GAAP Measures Note: Dollars in millions.
Slide 29: Reconciliation of GAAP Measures to Non-GAAP Measures
Note: Dollars in millions. Q1 FY20 represents quarter ending October July 28, 2019. Reconciliation of GAAP Measures to Non-GAAP Measures
Slide 30: End Market Distribution of Full Year FY19 Revenue
End Market Distribution of Full Year FY19 Revenue Reported Segments FY19 Revenue FYY19 Op Margin – GAAP / Non-GAAP FY19/FY18 Revenue Growth Industrial (Automotive) Fiber Optic & Wireless Comm. Military Semi Cap Life Science, Consumer, Other Photonic Solutions $639M 13% / 17% 31% 9% 82% 0% 3% 6% Comp
Slide 31: End Market Distribution of Q3FY20 QTD Revenue
End Market Distribution of Q3FY20 QTD Revenue Reported Segments Q3FY19 Revenue Q3FY20 Revenue Q3FY20 Op Margin – GAAP / Non-GAAP Q3FY20/ Q3FY19 Revenue Growth Pro Forma* Revenue Change FY20 Q3/ FY19 Q3 Industrial (Automotive) Fiber Optic & Wireless Comm. Military Semi Cap Life Science, Consumer, Oth
Slide 32: Reconciliation of GAAP Measures to Non-GAAP Measures
Note: Dollars in millions. Reconciliation of GAAP Measures to Non-GAAP Measures
Slide 33: II-VI: Materials That Matter
IVI MATERIALS THAT MATTER