Photronics, Inc. · NASDAQ:PLAB

Photronics — 24th Annual Needham Growth Conference 2022

22 slides from Photronics's conference presentation, Jan 13, 2022

  1. Slide 1: Global Merchant Photomask Leader

    Global Merchant Photomask Leader 24% Annual Needham Growth Conference January 14, 2022 PHOTRONICS, INC.

  2. Slide 2: Safe Harbor Statement

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. Safe Harbor Statement This presentation and some of our comments may contain projections or other forward-looking statements regarding future events, our future financial performance, and/or the future performance of the indus

  3. Slide 3: Leading merchant with unmatched global presence

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. Leading merchant with unmatched global presence PLAB A B CFPD D E Largest Merchant Photomask Manufacturer ($M) IC Sources: SEMI 2020 Photomask Characterization Study; internal estimates1/14/22 IC FPDIC & FPD Unmatched Global F

  4. Slide 4: Investment Strategy

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. Investment Strategy Revenue GrowthWin lion’s share of “Made in China 2025” TAM growthSupplement new factories with point tool investmentsCapitalize on technology leadership in AMOLED to continue improving mixLeverage global fo

  5. Slide 5: Investment strategy is working

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. Investment strategy is working 535 551 610 664 2018 2019 2020 2021 66 52 64 95 2018 2019 2020 2021 1/14/22 Growing Operating Income ($M)High-teens operating margin run-rate at year end 2021 Converting Investments Into Revenue

  6. Slide 6: Illustrative Target Model

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. Illustrative Target Model $M (except EPS) 2019 2020 2021 12/2020 Illustrative FY2023 Target Model Revenue $551 $610 $664 $7005% CAGR $7256% CAGR $7507% CAGR Gross Margin 22% 22% 25% 24-26% 26-28% 27-29% Operating Margin 9% 10%

  7. Slide 7: Growing China business

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. Growing China business 100 248 2018 2021 China Revenue ($M) We have growing business in ChinaStrong annual growth rate37% of total revenue 2021Local manufacturing accelerated growthCustomer contracts fosters sustainable result

  8. Slide 8: "Made in China 2025" driving growth - China FPD Mask TAM

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. “Made in China 2025” driving growth - China FPD Mask TAM ($M)500400300We’re aligned with fastest growingsectors: AMOLED & G10.5+200100 2021E 2023EG8 G6 LTPS/AMOLED G10.5+ 2019G5Source: Internal Estimates 1/14/22 Forecast falli

  9. Slide 9: Technology leadership improves FPD business mix

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. Technology leadership improves FPD business mix 119 204 2018 2021Mainstream FPD Revenue ($M) High-End Investments aligned with secular growth trendsAMOLED & LTPS for mobileNew OLED TV technologiesG10.5+Partners with largest pa

  10. Slide 10: Technology leadership improves FPD business mix

    Technology leadership improves FPD business mix FPD Revenue ($M) + Investments aligned with secular growth trends & 204 *« AMOLED & LTPS for mobile + New OLED TV technologies * G10.5+ + Partners with largest panel makers High-End: + Runway left for advanced display growth + Mobile platforms + Advanc

  11. Slide 11: Growth in Legacy Foundry = Dynamic Mainstream Mask Market

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. Growth in Legacy Foundry = Dynamic Mainstream Mask Market Demand far outstripping supplyDelivery times expanding from days to monthsCannot add new lines cost effectivelyRebirth of the ASIC mask marketMoore’s law no longer work

  12. Slide 12: Financial Discipline Improves Shareholder Value

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. Financial Discipline Improves Shareholder Value Targeted investments drive top-line growth in excess of marketOperating leverage and cost reductions expand marginsTarget operating margins high-teensTarget incremental margins 5

  13. Slide 13: 2021 Summary

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. 2021 Summary Completed FPD capacity expansion ahead of schedule Another year with record revenue and improved performance in a challenging environment Revenue was a record$663.8M up 9% IC and FPD both achieved record revenue,

  14. Slide 14: Q4 2021 Summary

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. Q4 2021 Summary IC (+7% Q/Q, +18% Y/Y) andFPD (+6% Q/Q, +29% Y/Y)both achieved record revenueRecord revenue to China, up 26% Q/Q and 55% Y/Y Strategic investments driving long-term, profitable growth $38M generated from operat

  15. Slide 15: Income Statement Summary

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. Income Statement Summary $M (except EPS) Q421 Q321 Q/Q Q420 Y/Y Revenue $ 181.3 $ 170.6 6% $ 149.3 21% Gross Profit $ 51.9 $ 45.3 15% $ 31.9 63% Gross Margin 28.7% 26.6% 210 bps 21.4% 730 bps Operating Income $ 33.5 $ 28.5 18%

  16. Slide 16: IC Photomask Revenue

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. $M Q421 Q321 Q/Q Q420 Y/Y High-End* $ 42.6 $ 42.4 1% $ 38.2 12% Mainstream $ 82.9 $ 75.4 10% $ 67.8 22% Total $ 125.4 $ 117.8 7% $ 105.9 18% Q421 Revenue by Technology High-End* 34% Mainstream 66% IC Photomask Revenue *28nm an

  17. Slide 17: FPD Photomask Revenue

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. Q421 Revenue by Technology High-End* 73% Mainstream 27% FPD Photomask Revenue *≥G10.5, AMOLED and LTPS1/14/22 High-end improved on mobile demandMainstream recovery continuesFull quarter benefit of new litho toolsOutlookDynamic

  18. Slide 18: Select Financial Data

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. Select Financial Data $M Q421 Q321 Q420 Cash $ 277 $ 283 $ 279 Debt $ 112 $ 118 $ 69 Net Cash* $ 165 $ 165 $ 210 Operating Cash Flow $ 38 $ 55 $ 65 Capital Expenditures $ 17 $ 19 $ 34 Share repurchase $ 13 $ 13 $ 18 Debt is US

  19. Slide 19: Summary

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. Summary 4th consecutive year of record revenue, growing 10% CAGR over that period Our leadership position is expanding – growing more quickly than markets With a business model demonstrated to deliver increasing shareholder va

  20. Slide 20: A Compelling Investment Thesis

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. A Compelling Investment Thesis A GLOBAL LEADERin the merchant photomask industryDelivering growthby leveraging core competenciesGrowing more quickly than the market *Upper range of fiscal year 2023 target model compared with f

  21. Slide 21: For Additional Information

    .CN IS,C ION RHOTP .CN IS,C ION RHOTP .CN IS,C ION RHOTP PHOTRONICS, INC. For Additional Information: John P. JordanExecutive Vice President & CFO 203.740.5671jjordan@photronics.com Thank you for your interest!

  22. Slide 22: Thank you for your interest!

    Thank you for your interest! For Additional Information: John P. Jordan Executive Vice President & CFO 203.740.5671 jiordan@photronics.com PHOTRONICS, INC.

Photronics — 24th Annual Needham Growth Conference 2022 on 6ix