Materion Corporation · NYSE:MTRN
Materion — Investor Presentation (May 2011)
29 slides from Materion's investor presentation, May 9, 2011
Slide 1: Investor Presentation May 2011
Investor Presentation May 2011 Materion Corporation (Formerly Brush Engineered Materials) Exhibit 99.1
Slide 2: Forward-Looking Statements
Forward-Looking Statements These slides contain (and the accompanying oral discussion will contain) "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks, uncertainties and other factors that could ca
Slide 3: Materion Today: New Name, Same Impressive Performance
MATERION TODAY: New Name, Same Impressive Performance 3 19% CAGR Sales growth (2005 - 2010) 30% CAGR Operating profit growth (2005 - 2010) Successful Repositioning of company
Slide 4: Thesis: Positioned to Deliver Long-Term, Sustainable Growth
THESIS Positioned to Deliver Long-Term, Sustainable Growth 4 ... Leveraging a high value-added business model... A company with a strong platform... ... Executing a focused growth plan 1 2 3
Slide 5: The Repositioning of Materion
The Repositioning of Materion Prior to 2002 2002 - 2010 2011 + Metals and mining focus Repositioning Sustained growth 5
Slide 6: Successful Repositioning - Snapshot
Successful Repositioning - Snapshot 6 2002 2010 Revenues $373M ? $1.3B Revenue % in Advanced Materials 47% ? 75% Sales per employee (thousands) $200 ? $524 Debt-to-Debt-Plus-Equity 43% ? 18% Working capital % of sales 41% ? 25% Cyclicality High ? Low
Slide 7: Operating Businesses are Well-Positioned and Growing
Operating Businesses are Well-Positioned and Growing 7 Business End Markets (Examples) Products (Examples) Sales Growth (2002-2010) Advanced Materials Wireless LED Optical Medical Alternative energy PVD targets Optical / medical coatings Electronic packaging Inorganic powders 453% 75% of revenues In
Slide 8: Positioned in Diverse Set of High-Growth Markets
Positioned in Diverse Set of High-Growth Markets 8 Growth Entered multiple leading-edge growth markets since 2002 Defense Commercial Aerospace Medical Devices Disk Drives Optics Telecom Infrastructure LED's Alternative Energy LCD Space / Science Notebooks Cellular phones (smartphones), Tablet comput
Slide 9: High Operating Margins
High Operating Margins Operating Profit % Operating Profit % of Value-Added(1) Integrated Metals 11 - 13% 14 - 16% Advanced Materials 5 - 7% 22 - 24% Company 5 - 7% 13 - 15% 9 Removing High Value Metals Clarifies True Margins 2010 Note (1): Excludes high value metals from sales
Slide 10: A Global Platform
A Global Platform Operations in US and 11 Countries Significant and Expanding International Sales 2010 28% "Direct" International Sales 10 Customers in >50 countries Expect "direct" international sales to be 40 - 50% in 3-5 years
Slide 11: Thesis: A Company with a Strong Platform
THESIS Positioned to Deliver Long-Term, Sustainable Growth 11 A company with a strong platform... ... Leveraging a high value-added business model... ... Executing a focused growth plan 1 2 3
Slide 12: High Value-Added Business Model
High Value-Added Business Model 12 Target high growth markets Own fast growing niches Expand with innovative products Add synergistic acquisitions Ensure financial discipline
Slide 13: 1. Target High Growth, Leading-Edge Markets
1. Target High Growth, Leading-Edge Markets 13 Market Q1 2011 % of Value- Added Sales 2011 Trends Key Drivers Consumer Electronics 26% Smartphone growth Tablet computers & LEDs Miniaturization Industrial Components & Commercial Aerospace 14% New airplane builds & retrofits Increasing air travel Heav
Slide 14: 1. Target High Growth, Leading-Edge Markets: Reportable Segments
1. Target High Growth, Leading-Edge Markets 14 Reportable Segments ADVANCED MATERIAL TECHNOLOGIES PERFORMANCE ALLOYS BERYLLIUM & COMPOSITES TECHNICAL MATERIALS Key Markets Precious, Non-precious, Specialty Metal and Inorganic Materials; Electronic Packages and Components Bulk and Strip Form Products
Slide 15: 2. Own The Niche - Examples
2. Own The Niche - Examples Only fully integrated producer of beryllium one-of-a-kind business 15 Leading position in niche Unique copper-nickel material ToughMetTM multiple advanced applications growing at over 30% annually Optical coatings highly sophisticated uses for defense and medical applicat
Slide 16: 3. Continually Develop Innovative Products
3. Continually Develop Innovative Products Customer-centric product development Active research programs New product areas include LEDs Medical Commercial Optics Disk drive arms Solar Batteries Science Commercial Aerospace 16
Slide 17: 4. Synergistic Acquisitions - Strong Record
4. Synergistic Acquisitions - Strong Record Add complementary products / technology Expand market position Accretive in year 1 OMC - shield kit cleaning u u u TFT - thin film coatings u u u CERAC - inorganic chemicals u u u Techni-Met - thin film coatings u u u Barr - thin film coatings u u u Academ
Slide 18: 4. Synergistic Acquisitions: Growing a Niche Business
4. Synergistic Acquisitions Case Study of Growing a Niche Business - Optical Filters and Medical Coatings (Revenues) 18 Today (2010) Revenues of $91M 78% CAGR Positioned in $1.2B+ market growing at 11% annually $9M $82M Barr (2009) Techni- Met (2008)
Slide 19: 5. Ensure Financial Discipline
5. Ensure Financial Discipline 19 Maintain strong balance sheet Debt-to-Debt-Plus-Equity Maximum 30% Strong cash flow Cash flow from operations $30M - $75M annually Capex below depreciation Reduction in working capital goal to <20% sales Resources to finance acquisitions of $50M to $100M annually Af
Slide 20: Thesis: Executing a Focused Growth Plan
THESIS Positioned to Deliver Long-Term, Sustainable Growth 20 A company with a strong platform... ... Leveraging a high value-added business model... ... Executing a focused growth plan 1 2 3
Slide 21: Financial Goals Next 3-5 Years
Financial Goals Next 3-5 Years 2010 Next 3-5 years Revenue growth - organic 35% >10% Acquisitions $21M $50 - $100M per year Margins (OP % VA) 14% 14% - 18% Working capital % sales 25% <20% Debt to Debt-Plus-Equity 18% <30% ROIC (pre-tax) 17% >20% 21
Slide 22: Continuing to Execute Three Point Strategy
Continuing to Execute Three Point Strategy 22 1 Grow and diversify revenue base 2 Expand margins 3 Improve fixed and working capital utilization Increasing Shareholder Value
Slide 23: Strategy #1: Growth - Expand and Diversify Revenue Base
STRATEGY #1: GROWTH Expand and Diversify Revenue Base Targeting expansion in growth markets including: smart mobile devices, 3G / 4G, commercial aerospace, oil & gas, alternative energy, optics, LED / LCD Ongoing global expansion Asia Strategic acquisition ? fast accretion Technology Global reach 23
Slide 24: Strategy in Action: Outgrowing Growth Markets
STRATEGY #1: GROWTH Strategy in Action: Outgrowing Growth Markets Growth of Materion Oil and Gas Sales vs. Market Growth of Materion Aerospace Sales vs. Market 24 1.00 2.00 3.00 4.00 5.00 6.00 02 Index numbers 2002 = 1.00 Materion sales Rig count 04 06 08 10 12-F 14-F +450% +80% 1.00 2.00 3.00 4.00
Slide 25: Strategy #2: Margins - Expand Margins
STRATEGY #2: MARGINS Expand Margins - Key Drivers 25 1 Lean Sigma operating efficiency 2 Higher value added products 3 Cost reductions Margin Today 12 - 14% Target Margin 14 - 18% (OP % VA)
Slide 26: Strategy #3: Capital Efficiency
STRATEGY #3: CAPITAL EFFICIENCY Improve Fixed and Working Capital Efficiency 26 Lean Sigma Cycle time reduction Yield improvement On-time shipments Based on 2011 projected sales, each 5% of working capital efficiency = $43M of cash Improve Working Capital Efficiency Working capital % of sales
Slide 27: 2011 Outlook and Guidance
2011 Outlook and Guidance Revenues ($B) EPS ($) 27 $1.55B $2.35 - $2.60
Slide 28: In Summary: Why Invest in Materion Corporation
IN SUMMARY Why Invest in Materion Corporation 28 Positioning Niche leader in high-growth markets Performance Strong performance record Growth Executing three point strategy Global player, strong secular market drivers Sustainable long-term growth Proven business model Target, expand, then own niche
Slide 29: Materion Corporation (Formerly Brush Engineered Materials)
Investor Presentation May 2011 Materion Corporation (Formerly Brush Engineered Materials)