Slide 1: Materion Corporation – Investor Presentation
August 2012 Materion Corporation – Investor Presentation 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 (MTRN)
Materion (MTRN) • An Advanced Material Company – Lighter, stronger, faster, smaller, reliable • Strong Global Positions in Attractive and Growing Markets • Solid Record of Long-term Growth • Strong Value Added* Margins • Market Cap: $410 Million • Annual Sales: $1.4 Billion (Forecast 2012) • Strong
Slide 4: Identify High Growth Secular Markets
Identify High Growth Secular Markets Key Drivers Trends Q2 2012 % of Value- added Sales Market • Global 3G/4G builds • Base stations • Undersea fiber-optics expansion 6% Telecommunications Infrastructure • Glucose testing • Blood analysis test coating for medical diagnosis • Diagnostics equipment 8%
Slide 5: Unique Global Positions – Advanced Materials
Unique Global Positions – Advanced Materials • Only Fully Integrated Producer of Beryllium and Beryllium Alloys in the World – Over 75 years of reserves at Utah Leading Global Position • Unique Copper-Nickel-Tin Material ToughMet® – Multiple advanced applications growing at over 30% annually • Preci
Slide 6: Materion Today: New Name, Same Impressive Performance
M A T E R I O N T O D A Y : New Name, Same Impressive Performance Sales growth (2005 – 2011) Operating profit growth (2005 – 2011) Repositioning of company 12%* CAGR 19% CAGR Successful *Excluding pass-through metal
Slide 7: High Operating Margins
High Operating Margins Operating Profit % Operating Profit % of Value-Added (1) Advanced Materials 3% - 5% 16% – 18% Integrated Metals 6% - 8% 8% – 10% Company 3% – 5% 10% – 12% Removing High Value Metals Clarifies Margins 2011 (1) Value added sales excludes metal pass-through
Slide 8: Successful Repositioning – Snapshot 2002 2011
Successful Repositioning – Snapshot 2002 2011 Revenue $373M $1.5B Revenue % in Advanced Materials 47% 76% Debt-to-Debt-Plus-Equity 43% 17% Working capital * % of sales 41% 23% Cyclicality High Lower Growth Low Higher * A/R, Inventory & A/P
Slide 9: High Value-Added Business Model
High Value-Added Business Model 1. Identify high growth secular markets 2. Target the fastest growing niches of those markets 3. Expand with innovative products 4. Add synergistic acquisitions 5. Ensure financial discipline
Slide 10: A Global Platform
A Global Platform 38% Operations in US and 11 Countries Significant International Sales* Q2 2012 • Customers in >50 countries • Expanded presence in Asia *Percentage of value added sales
Slide 11: Continually Develop Innovative Products
Continually Develop Innovative Products • Leveraging customer-centric product development • Active research programs to take advantage of secular trends • Key product areas include – LEDs – Medical – Commercial Optics – Computer Hard Drives – Energy – Science – Commercial Aerospace – Hybrid & Electr
Slide 12: A Strong Record of Synergistic Acquisitions
A Strong Record of Synergistic Acquisitions Added over $440M to sales and approximately 30% of company profit in 2011 Acquisitions 2005 - 2012 Add complementary products / technology Expand market position Accretive in year 1 Impact OMC – shield kit cleaning – 2005 TFT – thin film coatings – 2005 CE
Slide 13: Ensure Financial Discipline
Ensure Financial Discipline Resources to finance organic growth and acquisitions while returning cash to shareholders Maximum 30% 21% 17% 12% 0% 10% 20% 30% 2005 2011 2012(F) Maintain strong balance sheet Strong cash flow • Cash flow from operations $30M - $75M annually for the past five years • Cap
Slide 14: Financial Goals Next 3-5 Years
Financial Goals Next 3-5 Years 14 Past 3- 5 Years Next 3- 5 years Revenue growth – organic >10% Acquisitions $35M - $40M Per year $50 - $100M Per Year Margins (OP % VA) 10% - 14% 14% - 18% Working capital % sales 23% - 25% <20% Debt to- Debt Plus Equity 16% - 18% <30% ROIC (pre tax) 9% - 12% >20% 12
Slide 15: Positioned to Deliver Long-Term, Sustainable Growth
Positioned to Deliver Long-Term, Sustainable Growth A company with a strong platform… … Leveraging a high value-added business model… … Executing a focused growth plan T H E S I S Revenue Base Margins Capital Eff.
Slide 16: In Summary: Why Invest in Materion Corporation?
Positioning Performance Growth I N S U M M A R Y Why Invest in Materion Corporation? A leader in high-growth markets Strong performance record Executing three point strategy • Global player, strong secular market drivers • Sustainable long-term growth • Proven business model • Target, capture niche,
Slide 17: Slide 17
Slide 18: Target High Growth, Leading-Edge Markets
Target High Growth, Leading-Edge Markets 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 and Beryllium Hydroxide B
Slide 19: Value Added Sales: Materion
Value Added Sales: Materion Q2 2012 Consumer Electronics 26% Industrial Components & Commercial Aerospace 19% Defense & Science 11% Automotive Electronics 10% Energy 8% Medical 8% Telecom Infrastructure 6% Services 4% Appliance 3% Other 5%
Slide 20: Value Added Sales: By Segment
Value Added Sales: By Segment Q2 2012 Technical Materials 6% Advanced Material Technologies 43% Performance Alloys 42% Beryllium & Composites 9%
Slide 21: Value Added Sales: Advanced Material Technologies
Value Added Sales: Advanced Material Technologies Q2 2012
Slide 22: Value Added Sales: Performance Alloys
Value Added Sales: Performance Alloys Q2 2012
Slide 23: Value Added Sales: Beryllium and Composites
Value Added Sales: Beryllium and Composites Q2 2012
Slide 24: Value Added Sales: Technical Materials
Value Added Sales: Technical Materials Q2 2012
Slide 25: Core Technologies
Core Technologies 1. High Purity Gold and Silver for Industrial Applications 2. Powder Science and Processing (Vacuum, Hot and Cold Isostatic Pressing ) … Metal and Chemical 3. Full Metal Processing Technology (Melting, Casting, Rolling, Extrusion) 4. Selective Electroplating 5. Light Wave Managemen
Slide 26: Continuing to Execute Three Point Strategy
Continuing to Execute Three Point Strategy Grow and diversify revenue base Expand margins Improve fixed and working capital utilization Increasing Shareholder Value
Slide 27: Materion
m MATERION
Slide 28: Expand Margins – Key Drivers
Expand Margins – Key Drivers 1 2 3 S T R A T E G Y # 2: M A R G I N S Lean Sigma operating efficiency Higher value added products Cost reductions Margin Today 10 - 12% Target Margin 14 - 18% (OP % VA)
Slide 29: Improve Fixed and Working Capital Efficiency
Improve Fixed and Working Capital Efficiency Based on 2012 projected sales, each 5% of working capital efficiency = $50M of cash S T R A T E G Y # 3 : C A P I T A L E F F I C I E N C Y Lean Sigma • Cycle time reduction • Yield improvement • On-time shipments Improve Working Capital Efficiency Workin
Slide 30: Strategy in Action: Outgrowing Growth Markets
Strategy in Action: Outgrowing Growth Markets Growth of Materion Oil and Gas Sales vs. Market Growth of Materion Aerospace Sales vs. Market Materion Sales Materion Sales Global Rig Count Aircraft Delivered +512% +85% +349% +80%
Slide 31: Synergistic Acquisitions: Growing a Niche Business
Synergistic Acquisitions Barr (2009) Techni- Met (2008) TFT EIS Optics (2011) Case Study of Growing a Niche Business – Optical Filters and Medical Coatings (Pro-Forma Revenues) • Positioned in $1.2B+ market growing at 11% annually • Markets served include: defense, aerospace, medical, energy, semico
Slide 32: New Product and Technology Development
New Product and Technology Development Advanced Material Technologies Materials – Optics Coating Materials and Large Format Components – Thin Film Electrodes (medical diagnostics) – Expanded refining/chamber services – Complement to Thin Film Materials & Coating businesses – Nanotechnology Materials
Slide 33: New Product and Technology Development
New Product and Technology Development Advanced Material Technologies Coatings Packaging – Precision Optical Thin Film Coatings (specialty filters) – Large format Thin Film Materials for large area coatings (Energy, Solar) – Solar Panel Thin Film, Concentrator Materials and Barrier Film Coatings – O
Slide 34: New Product and Technology Development
New Product and Technology Development Performance Alloys – ToughMet® Alloy for High Volume Bearing Applications – BrushForm 158 for Voice Coil Motor (VCM) applications – Materion R270 Strip – “Next Generation” Alloy for Oil & Gas Beryllium and Composites – Nearer net shape fabrication (hot isostati
Slide 35: Positioned in Diverse Set of High-Growth Markets
Positioned in Diverse Set of High-Growth Markets 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 computer
Slide 36: Applications: Smart Phones
Applications: Smart Phones I/O Connector Contacts Battery Contacts Internal Antenna Contacts Grounding Clips and Audio Jacks Micro Mezzanine Connectors for LCD Screen Internal Electronics and LED • Thin Film Materials – Power amplifiers, LED, SAW and BAW devices, filters, and ICs • Hermetic Solution
Slide 37: Applications: Aerospace
Applications: Aerospace Avionics/Electrical Systems Airframe Structure Landing Gear Attachments Engine and Pylon Attachments Flight Control Mechanisms Horizontal Stabilizer & Rudder Attachments Hydraulic Systems Fuel Systems Wing Attachments Doors & Hatches Landing Gear Components Flight Attendant J
Slide 38: Applications: Oil & Gas
Applications: Oil & Gas Under Water Wellhead Equipment Directional Drilling Equipment MWD, LWD, MPT Systems Drill Bits Structural Rig Components Wellhead Control Equipment Other Oil & Gas Applications: • Artificial Lift Equipment • Elemental Analysis • Down Hole X-Ray Inspection ROV’s, blow out prev
Slide 39: Applications: Solar Energy
Applications: Solar Energy Technology: Amorphous Silicon (a-Si, tandem and multi-junction) Thin Film (PVD) Materials Silicon based photovoltaic cells Front and back contact layers TCO Transparent Conductive Oxide layers Technology: Cadmium Telluride (CdTe) Thin Film (PVD) Materials Cadmium based sol
Slide 40: Applications: Medical
Applications: Medical Cardiac Rhythm Management • Electronic Interconnects/Components • Niobium/Titanium Electron Beam Weld Insulin Pump • EMI Shielding and Grounding • Electrical Terminals in Connectors Seizure Control • Thin Film Deposition Implantable Electrode – Parkinson's disease (R&D) Subcuta
Slide 41: Applications: Telecommunications Infrastructure
Applications: Telecommunications Infrastructure Base Stations • Coaxial Connectors • High Power Amplifiers Local Area Networks • Shielding • Modular Jacks • PCB Sockets • Processor Sockets Other Telecommunications Infrastructure Applications • Undersea Repeater Housings
Slide 42: Applications: Automotive Electronics
Applications: Automotive Electronics Lithium Ion Battery Interconnects Battery Management Resistors Electronic Power Steering Modules ABS Leadframes Engine Efficiency Oxygen Sensors Mirror & Windshield Electronic Connections Air Bag Sensors Lamp Socket Connectors Auto Dimming Mirror Connectors Hybri
Slide 43: Applications: Defense
Applications: Defense • Infrared Sensors for Fighter Jet and UAV Optical Targeting • Electronic Packaging for Defense Avionics, Radar and Electronic Countermeasure Systems • Structural and Electronic Components for Satellites • X-ray Windows in Security Imaging Systems • Laser Protection Optical Coa
Slide 44: EBITDA: Reconciliation to GAAP
EBITDA: Reconciliation to GAAP Net Income $31.1 to $33.4 Income Taxes 15.0 to 15.7 Interest Expense 3.0 to 2.8 Depreciation & Amortization 40.9 to 43.1 EBITDA* $90.0 to $95.0 2012 Forecast (Millions) * Earnings before interest, taxes, depreciation and amortization