Slide 1: Materion Corporation 1Q 2022 Earnings Call
Materion Corporation 1Q 2022 Earnings Call April 28, 2022
Slide 2: Agenda
Agenda Tigers (teil) 7 John Zaranec — Vice President, Corporate Controller and Investor Relations Opening Remarks & * : F ‘ , Business Update Jugal Vijayvargiya — President and Chief Executive Officer Shelly Chadwick — Vice President and Chief Financial Officer eview Question and Answer Session XN M
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
y J Opening Remarks & Business Update YA fof Jugal Viieywaraiya President and Chief Executive Officer LSPS Lf ae 4 A Pf e vA Jf J Pd : ye
Slide 5: Q1 2022 Highlights
Q1 2022 Highlights Record Value-Added Sales, Adjusted EBITD EPS Delivered record value-added (VA) sales of $266.8 million, up 34% year-over-year First full quarter of HCS-Electronic Materials (HCS); VA sales contribution and integration progress exceeding expectations Continued strong end-market dem
Slide 6: End Market Performance
End Market Performance Q1 2022 FY 2022 Growth Q1 Comments Outlook" alt 7 oy = Demand remains strong led by end market strength and increasing customer applications a0 Semiconductor $89.2 t 103% | | 20% increase wi HCS ttt = Industrial market recovery driving expansion across all products with more c
Slide 7: New Segment Names Reflect Transformation
New Segment Names Reflect Transformation * Operating Segment name changes better reflect our strong portfolio of products to support customers and end markets = Reinforces our growth strategy, alignment with global megatrends like smart devices, high-speed connectivity, autonomous driving and Al = M
Slide 8: Precision Clad Strip Project
Precision Clad Strip Project Initial Project a2 202 a3 2021 a4 2021 « Continuing to build on strong customer partnership | Qi 2022 = On track to complete qualification at new facility in Q2 ‘Qualetion > « Expect meaningful contribution to 2H results cy Expansion « Customer now expecting higher level
Slide 9: Key Takeaways
Key Takeaways = Achieved outstanding first quarter results = Record value-added sales for Materion, Performance Materials and Electronic Materials = Outpaced challenges from inflation, supply chain, labor availability and COVID related absences and closures * Record adjusted EBITDA and EPS = Deliver
Slide 10: Financial Review
Aff, Financial Review SAS Wy Shelly Chadwick - ig Vice President and Chief Financial Officer ae,
Slide 11: Q1 2022 Operating Performance
Q1 2022 Operating Performance Value-added Sales ($M) FeV] $266.8 $198.6 a1 2021 Q1 2022 Value-added sales were $266.8 million, up 34% from prior year = Strong demand across key end markets led by semiconductor, industrial, aerospace and energy + Meaningful contribution from organic initiatives pipel
Slide 12: Q1 2022 Financial Comparison
Q1 2022 Financial Comparison Record adjusted EBITDA of $44.6 million or 16.7% of VA sales compared with $30.0M or 15.1% of VA sales in $10.4 $44.6 the prior year period $1.4 + Significant increase in adjusted zee — $(3.6) i EBITDA driven by strong volumes, meaningful price / mix / performance $(3.7)
Slide 13: Performance Materials Segment
Performance Materials Segment Value-added sales of $129.1 million, up 28% from prior year Value-added Sales ($M) +28% | $129.1 Q1 2021 Q1 2022 Q1 Performance by End Market t Industrial t Aerospace & Defense a | Automotive Adj. EBITDA ($M) +64% | $27.5 $16.8 21.3% 16.7% Q1 2021 Q1 2022 t Energy Telec
Slide 14: Electronic Materials Segment
Electronic Materials Segment Value-added sales of $109.9 million, up 74% from prior year Value-added Sales ($M) Adj. EBITDA ($M) $189 - All-time quarterly record for organic VA sales delivering +74% | g109.9 +73% i 16.4% growth, exceeding previous record set in Q4 2021 + HCS-Electronic Materials int
Slide 15: Precision Optics Segment
Precision Optics Segment Value-added Sales ($M) Adj. EBITDA ($M) 9 -709 $386 -20% ry 70% $28.5 21.9% $2.4 Qt 2021 Q1 2022 Q1 2021 Q1 2022 Q1 Performance by End Market y Consumer Electronics t Industrial y Aerospace & Defense t Automotive y Medical measures. Certain data presented above has been roun
Slide 16: Cash, Debt and Liquidity
Cash, Debt and Liquidity ($M) Q1 2021 | Q1 2022 Short-term Debt $1.5 $15.4 Proforma leverage remains within target range of 1.5x — 3x eendtenn Debt ol 4708 Approximately $127 million available on existing Total Debt $52.9 | $495.2 credit facility 3 + Meaningful available liquidity remains to Cash &
Slide 17: Full Year 2022 Guidance
Full Year 2022 Guidance 2022 Guidance Raising adjusted EPS to $5.50 - $5.90, an increase of 40% from 2021, at the midpoint - Expect $3-4M of plant start-up costs in Q2 Adj. EPS Guidance +40% $5.50 - $5.90 + Increasing capex for new Precision Clad Strip expansion; 2/3 to be <a funded by customer || 2
Slide 18: 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 19: Appendix
Slide 20: Reconciliation for Value-added Sales
Reconciliation for Value-added Sales (S in millions) Q1 2022 Q1 2021 Net Sales Performance Materials $ 1496 $ 114.1 Electronic Materials 270.8 204.7 Precision Optics 28.6 35.6 Other = = Total $ 4490 $ 354.4 Less: Pass-through Metal Costs Performance Materials $ 205 $ 13.3 Electronic Materials 160.9
Slide 21: Reconciliation for Non-GAAP Measures
Reconciliation for Non-GAAP Measures (S in millions) Qi 2022 Q1 2021 Operating Profit (Loss) Performance Materials $ 191 $ 13.5 Electronic Materials 8.0 8.9 Precision Optics (0.7) 46 Other (68) 7.3 Total $ 196 $ 19.7 Non-Operating (Income) Expense Performance Materials $ 02 $ 01 Electronic Materials
Slide 22: Reconciliation for Non-GAAP Measures (Cont.)
Reconciliation for Non-GAAP Measures (Cont.) (Sin millions) Q1 2022 Q1 2021 Special Items Performance Materials $ 27 = $ — Electronic Materials 68 <= Precision Optics 02 03 Other 1.0 0.1 Total $ 107 $ 04 Adjusted EBITDA Excluding Special Items Performance Materials $ 275 $ 16.8 Electronic Materials
Slide 23: Reconciliation for Non-GAAP Measures (Cont.)
Reconciliation for Non-GAAP Measures (Cont.) (Sin millions) Q1 2022 Qi 2021 Q1 2022 TTM Q1 2021 TTM GAAP as Reported Net income $ 14.0 $ 16.8 $ 69.7 $ 36.1 Income tax expense (benefit) 3.0 35 44 (2.7) Interest expense 37 07 79 44 Depreciation, depletion, and amortization 13.2 86 487 36.4 Consolidate
Slide 24: Reconciliation for Non-GAAP Measures (Cont.)
Reconciliation for Non-GAAP Measures (Cont.) Performance Materials Electronic Materials Three Months Three Months Three Months Three Months Ended Ended Ended Ended (Millions) April, 2022 %eofVA__ April2,2021_ eof VA_ Millions) April 1, 2022 %eofVA_ April, 2021 _% of VA Net sales $ 149.6 $ 141 Net sa
Slide 25: Reconciliation for Non-GAAP Measures (Cont.)
Reconciliation for Non-GAAP Measures (Cont.) Three Months Three Months Ended Diluted Ended Diluted (Millions) Aprill,2022_ EPS __ April2,2021__EPS Net income and EPS $s 140 $ 068 $ 168 $ 081 Special items Restructuring and cost reduction 11 03 Merger and acquisition costs 9.6 01 Provision for income