Coherent Corp. · NYSE:COHR
Coherent — II-VI — Investor Presentation (March 2022)
37 slides from Coherent's investor presentation, Mar 24, 2022
Slide 1: March 2022 Investor Presentation
March 2022 Investor Presentation Exhibit 99.1
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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 Litigatio
Slide 3: II-VI at a Glance
II-VI at a Glance as of June 30, 2021 FY21 Revenue $3.1B Cash & Equivalents $1.6B FY21 Free Cash Flow (1) $428M Vertically Integrated Model 18 Countries 73 Locations 3,800+ Employees Core Competency Engineered Materials 1971 Year Founded 22,000+ Employees 2,200+ Patents Engineering & Technology (1)
Slide 4: Q2 FY22 Financial Highlights
Communications Industrial Q2 FY22 Financial Highlights Semiconductor Capital Equipment Life Sciences Consumer Electronics Aerospace & Defense Japan Other North America Automotive & Other Revenue by Region Revenue by End Market Revenue $807M Europe China Q2 FY22 GAAP Non-GAAP Operating Income $98.2M
Slide 5: History of Insightful Targeting and Successful Integration of Strategic Acquisitions
History of Insightful Targeting and Successful Integration of Strategic Acquisitions 10 Years of Continuous Revenue Growth CAGR 20% 2010 - Optical networks & China market 2013 - Gallium arsenide technology platform 2016 - Epitaxial wafer and SiC electronic devices 2019 - Indium phosphide technology
Slide 6: 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, debt extinguishment expense, fair value measurement period adjustments and restructuri
Slide 7: Building Momentum for Years
Building Momentum for 50 Years One of the largest photonics and compound semiconductor companies Materials expertise drives differentiation in multiple growing markets Vertically integrated, diverse global manufacturing footprint History of insightful targeting and successful integration of strategi
Slide 8: A Leader in Engineered Materials
A Leader in Engineered Materials Aerospace & Defense Semiconductor Equipment Life Sciences Automotive Datacom, Telecom & Wireless Communications 3D Sensing/Consumer Industrial Leveraging a broad range of differentiated materials and devices across 7 strategic markets: II-VI engineered materials are
Slide 9: Addressing Multiple and Strong Growing End-Markets
Addressing Multiple and Strong Growing End-Markets Optical Communications Sources: Omdia, LightCounting, Cignal AI, 650 Group, Yole, Internal Estimates CY26 Market CY21-26 CAGR 10.5 % $26.9 B Datacenter and telecom networks Wireless Sources: Yole, Internal estimates 37 % $8.5 B 4G/5G RF base station
Slide 10: Two Decades of SiC Materials Innovation
Demonstrated Demonstrated Manufacturing 100 mm Wafer 150 mm Wafer World’s First 200 mm Wafer Two Decades of SiC Materials Innovation 200 mm Wafer Manufacturing 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 24 Years High-Quality Wafer Demonstrated Manufacturing 3’’ Wafer Back-end Processing i
Slide 11: GE Technology II-VI (3DSiC) Vertical Integration
GE Technology II-VI (3DSiC®) II-VI and GE Technology II-VI and GE Technology II-VI Vertical Integration New Ventures & Wide-Bandgap Electronics Technology Significant SiC Market Opportunity(1) ($bn) 50%+ CAGR (1) Internal company estimates. Includes module and device TAM. $0.5 $30+ 2020 2030 A verti
Slide 12: II-VI to Acquire Coherent
II-VI to Acquire Coherent
Slide 13: Coherent Transaction Overview
Coherent Transaction Overview Transaction Details Coherent stockholders to receive $220.00 per share in cash and 0.91 of a II-VI common share for each Coherent share At closing, Coherent stockholders to own approximately 15% of the common shares of combined company Projected Synergies & Financial Im
Slide 14: Significant Value Creation Potential from Coherent Synergies
Significant Value Creation Potential from Coherent Synergies Expected Synergies within 3 years Cost of Goods Sold Supply chain management – procurement Infeed – Internal supply of enabling materials and components Operational efficiencies at scale $150M Operating Expenses More efficient R&D with sca
Slide 15: Well Capitalized for Future Growth
Well Capitalized for Future Growth Rapid deleveraging post-closing from strong EBITDA and cash flow generation External Financing Sources Debt $4.00 billion senior secured facility allocated and priced $990 million notes issued Convertible Preferred Equity $2.15 billion commitment from Bain Capital,
Slide 16: Key Transaction Details
$4.1B Revenue2 Communications Semi. Cap. Equip. Materials Proc. Life Sci. Aero Cons. 48% 16% 6% 9% 15% 6% Key Transaction Details Fully-Diluted Shares II-VI basic shares 105.8M Stock comp shares 5.8M Series A preferred debt 8.9M Convertible debt 7.3M Shares issued to Coherent 22.3M Series B preferre
Slide 17: Summary of Strategic Rationale
Summary of Strategic Rationale Greater exposure to megatrends from larger operational scale Sustained growth from increased diversification Higher growth and margins through complementary technology platforms Improved competitiveness from greater scale across the value chain Sales synergies by utili
Slide 18: End Markets and Applications
End Markets and Applications
Slide 19: Datacom
Datacom #1 provider of datacom solutions Materials I Components I Transceiver modules The most innovative leader in datacom transceivers Co-packaged Transceiver Pluggable Board-Mount ROSA IC (TIA, LD, CDR) Polarization Beam Splitter Laser PIC DSP Garnet Lenses Isolators Mux/DeMux TOSA High Speed Det
Slide 20: Well poised for disaggregation
Well poised for disaggregation Telecom Optical Monitoring System (OMS) Pluggable Optical Line System (POLS) A market mover in ROADM technology and coherent transmission Growing share in coherent optics 400G IC-TROSA 400G QSFP-DD
Slide 21: Industrial – Materials Processing
Industrial – Materials Processing Laser processing in electric vehicles Automation: Remote laser welding heads assisted by machine vision software Electric vehicle battery manufacturing: Laser processes adapted to most joining tasks on the cell, module, pack, and frame levels Welding battery cells,
Slide 22: 3D Sensing & LiDAR
3D Sensing & LiDAR Face biometrics, auto-focus, augmented reality, automotive in-cabin & LiDAR, machine vision Roadmap to integrating functionality in modules leveraging broad portfolio of lasers, detectors, optics, and integrated circuits
Slide 23: Ceramics and Composites for Wafer Fab Equipment
Ceramics and Composites for Wafer Fab Equipment Aluminum-Reinforced SiC Metal Matrix Composites Reaction Bonded SiC Diamond Ceramics Silicon Carbide Particles Aluminum Diamond Particles Silicon Carbide Silicon Metals Ceramics and metal matrix composites for front end of line (FEOL) to back end of li
Slide 24: Life Sciences
Life Sciences II-VI plays an important role in the medical diagnostics markets that have a vital role in PCR, sequencing and diagnostic platforms, which are critical for disease testing and research, and lead to new medicines Thermoelectrics Vertically integrated subassemblies & systems Biotechnolog
Slide 25: Automotive
Automotive Key Trends Green Optics & optoelectronics Connectivity & Entertainment Safety Capabilities & Expertise HEV/EV Telematics, information & comfort LiDAR/OMS/DMS SiC substrates & devices Li/S batteries MMC Broad and deep portfolio in optics & optoelectronics (VCSELS, Edge Emitting Lasers, Mir
Slide 26: Financial Appendix
Financial Appendix
Slide 27: End Market Distribution of Q2FY22 QTD Revenue
End Market Distribution of Q2FY22 QTD Revenue Reported Segments Q2FY21 Revenue Q2FY22 Revenue Q2FY22 Op Margin – GAAP / Non-GAAP Q2FY22/ Q1FY22 Revenue Growth Communica-tions Industrial Aerospace & Defense Semi Cap Life Sciences, Consumer, Automotive, Other Photonic Solutions $483M $525M 10% / 15% 9
Slide 28: End Market Distribution of H1FY22 QTD Revenue
End Market Distribution of H1FY22 QTD Revenue Reported Segments H1FY21 Revenue H1FY22 Revenue H1FY22 Op Margin – GAAP / Non-GAAP H1FY22/ H1FY21 Revenue Growth Communica-tions Industrial Aerospace & Defense Semi Cap Life Sciences, Consumer, Automotive, Other Photonic Solutions $981M $1,061M 10% / 15%
Slide 29: End Market Distribution of Full Year FY21 Revenue
End Market Distribution of Full Year FY21 Revenue Reported Segments FY21 Revenue FY21 Op Margin – GAAP / Non-GAAP FY21/FY20 Revenue Growth Proforma(1) FY21/FY20 Revenue Growth Communica-tions Industrial Aerospace & Defense Semi Cap Life Sciences, Consumer, Automotive, Other Photonic Solutions $2,038
Slide 30: Hypothetical Illustration of EPS Calculation
Hypothetical Illustration of EPS Calculation
Slide 31: Reconciliation of GAAP Measures to Non-GAAP Measures
Reconciliation of GAAP Measures to Non-GAAP Measures
Slide 32: Reconciliation of GAAP Measures to Non-GAAP Measures
Reconciliation of GAAP Measures to Non-GAAP Measures
Slide 33: Reconciliation of GAAP Measures to Non-GAAP Measures
Reconciliation of GAAP Measures to Non-GAAP Measures
Slide 34: 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 Three Months Ended 7/28/19 (Last Finisar Stand Alone Report)
Slide 35: Reconciliation of GAAP Measures to Non-GAAP Measures
Reconciliation of GAAP Measures to Non-GAAP Measures
Slide 36: Reconciliation of GAAP Measures to Non-GAAP Measures
Reconciliation of GAAP Measures to Non-GAAP Measures
Slide 37: Materials That Matter
IVI MATERIALS THAT MATTER