Advanced Energy Industries, Inc. · NASDAQ:AEIS
Advanced Energy Industries — Investor Presentation (January 2022)
24 slides from Advanced Energy Industries's investor presentation, January 2022
Slide 1: A Best-in-Class Industrial Growth Enterprise
A Best-in-Class Industrial Growth Enterprise January 2022 1
Slide 2: Safe Harbor
SAFE HARBOR The company’s guidance with respect to anticipated financial results for future periods, potential future growth and profitability, future business mix, expectations regarding future market trends, future performance within specific markets and other statements herein that are not histor
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 power ensures Track record of growing share, adding content sustainable advantage and scale and broadening market reach PROPIETARY SOLUTIONS ACCELERATING EARNINGS Lead with dif
Slide 4: We Are the Pure Play Power Leader
Key Messages 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 5: Our Leadership Enables Solid Financial Performance
Key Messages OUR LEADERSHIP ENABLES SOLID FINANCIAL PERFORMANCE Large & Diversified Growing Market L4Q Reported Results SEMICONDUCTOR INDUSTRIAL & EQUIPMENT MEDICAL $1.43 billion $226 million $9.0B REVENUE NON-GAAP OP PROFIT(1) Combined SAM Operating margin 15.8% TELECOM & DATA CENTER NETWORKING COM
Slide 6: 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 • High density memory in • Smart manufacturing mobile devices & servers • Telemedicine, remote • New device architectures 5G diagnostics a
Slide 7: 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 7
Slide 8: 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 9: Semiconductor: Extending Our Leadership
Semiconductor SEMICONDUCTOR: EXTENDING OUR LEADERSHIP MARKET LEADER WITH PROVEN TRACK RECORD MAXStreamTM Process Power Market Share ~2X vs. Next Competitor(1) 16% 10-year Semi Product Revenue CAGR (2) eVoSTM TARGET TO CONTINUE TO OUTGROW OUR MARKET >1.2X AE Targeted Revenue CAGR over WFE CAGR (1) RF
Slide 10: 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 ACCELERATE INVESTMENTS TO OF STANDARD PRODUCTS TO RANGE OF NICHE OPPORTUNITES DRIVE GROWTH DELIVER CUSTOM SOLUTIONS Large SAM of $3.2B Engineering General AC-DC
Slide 11: Data Center Computing: From Fast Follower to Technology Leader
Data Center Computing DATA CENTER COMPUTING: FROM FAST FOLLOWER TO TECHNOLOGY LEADER GROWING INVESTMENTS MORE HIGH VALUE CONTENT AE TECHOLOGY LEADERSHIP ($ in billions) Hyperscale CAPEX(1) 98% Industry-Leading $140 96% Best Power Conversion 94% Efficiency $120 Good $100 Mainstream $80 2X Power Conte
Slide 12: Telecom & Networking: Targeting 5G Infrastructure
Telecom & Networking TELECOM & NETWORKING: TARGETING 5G INFRASTRUCTURE 5G INFRASTRUCTURE MARKET GROWTH Powering many of the largest wireless networks across the world GROWTH TREND STRATEGY Wireless infrastructure Spend (1) • Win proprietary designs in 5G radio High reliability ruggedized power ($ in
Slide 13: 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 Deployed ~$560M adding >$760M of Core AE 2014 2017 2018 2019 2021 pro forma revenue(1) Thyro Acquired Power Control Module Busi
Slide 14: Reaccelerating Earnings Growth as Supply Improves
Platform for growth REACCELERATING EARNINGS GROWTH AS SUPPLY IMPROVES $7.50 2023 $0.40-$0.60 Aspirational Margin Non-GAAP $0.90-$1.10 (1) Improvement EPS Goal Additional $6.00 Revenue Q4’22 Growth $0.20-$0.30 Annualized Shenzhen Target(1) $1.30-$1.70 Exit $0.60-$0.80 Improved Supply & Cost Backlog T
Slide 15: A Framework to Achieve Our Long-term Vision
Long-term Vision A FRAMEWORK TO ACHIEVE OUR LONG-TERM VISION 3-YEAR LONG-TERM INORGANIC LONG-TERM ASPIRATIONAL ORGANIC FINANCIAL GROWTH VISION GOALS FRAMEWORK ASSUMPTIONS (6-8 YEARS) Revenue ($M) $1,650 5-6% Net CAGR Add ~$500M $2,500 Non-GAAP OPEX at ½ rev. CAGR >10% acquired 21% 21% Operating Marg
Slide 16: 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 2020 Total • Maintain gross debt leverage at 1.0-1.5x, and comfortable raising to 2.5X • Ample liquidity with
Slide 17: Q3 2021 Financial Highlights
Recent Results Q3 2021 FINANCIAL HIGHLIGHTS REVENUE NON-GAAP EPS(1) NON-GAAP GROSS MARGIN(1) $346 million $0.89 36.1% Down 4% Q/Q Above target of $0.80 Down 190 bps Q/Q BACKLOG OPERATING CASH FLOW NON-GAAP OP MARGIN(1) $771 million $18.3 million 11.9% Up 44% Q/Q 5.3% of sales Down on lower sales, GM
Slide 18: 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 power ensures Track record of growing share, adding content sustainable advantage and scale and broadening market reach PROPIETARY SOLUTIONS ACCELERATING EARNINGS Lead with dif
Slide 19: Thank You
THANK YOU Copyright © 2022 Advanced Energy 19
Slide 20: 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, minority interest, and non-recurring items such as acquisition- related costs and restruc
Slide 21: Q4 2021 Guidance
Q4 2021 GUIDANCE Q4 2021 Revenue $355M +/- $20M GAAP EPS from continuing operations $0.62 +/- $0.25 Non-GAAP* EPS $0.92 +/- $0.25 * non-GAAP measures exclude the impact of non-cash related charges such as stock-based compensation, amortization of intangible assets and unrealized foreign exchange gai
Slide 22: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Twelve months ended December 31, 2017 2018 2019 2020 Revenue $ 671.0 $ 718.9 $ 788.9 $ 1,415.8 GAAP Operating Income $ 200.8 $ 171.6 $ 54.4 $ 176.0 Add back: Restructuring Charges - 4.2 5.0 13.2 Acquisition-related Costs 0.2 2.3 20.3 15.6 Stock-based Compensation 12.5 9.7 7.3
Slide 23: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Reconciliation of Non-GAAP measure - Reconciliation of Non-GAAP measure - operating expenses and operating income excluding certain items Three Months Ended Nine Months Ended income, excluding certain items Three Months Ended Nine Months Ended September 30, June 30, September
Slide 24: Reconciliation of Q4 2021 Guidance
RECONCILIATION OF Q4 2021 GUIDANCE Low End High End Revenue $335M - $375M Reconciliation of non-GAAP* earnings per share GAAP earnings per share $0.37 - $0.87 Stock-based compensation $0.11 - $0.11 Amortization of intangible assets $0.14 - $0.14 Restructuring and other $0.10 - $0.10 Tax effects of e
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