Entegris, Inc. · NASDAQ:ENTG
Entegris — Investor Day (February 2024)
31 slides from Entegris's investor day presentation, Feb 14, 2024
Slide 1: Analyst Update 2024
Proprietary and Confidential Draft Analyst Update 2024 February 14, 2024
Slide 2: Safe Harbor
SAFE HARBOR This presentation contains forward-looking statements. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “forecast,” ”outlook,” “project,” “should,” “may,” “will,” “would” or the negative thereof and similar expressions are intended to identify such forward-looking state
Slide 3: 2023 Year in Review
2023 YEAR IN REVIEW 6 points 27% of topline outperformance EBITDA divested $1.3B 3 businesses debt paid off 3
Slide 4: Agenda
AGENDA 1 Entegris at a Glance 2 Competitive Advantage 3 Sales Growth Algorithm 4 Divisional Overview Speakers Bertrand Loy, President and CEO 5 Capital Structure Linda LaGorga, CFO 6 Financial Targets 4
Slide 5: Entegris is a Value Compounder
TAKEAWAYS 1 2 3 4 Entegris is a Value 5 6 Compounder 5
Slide 6: Entegris at a Glance
AT A GLANCE 1966 Founded Our To help our customers improve their productivity, performance and technology by providing enhanced materials and process solutions Mission v for the most advanced manufacturing environments Billerica, MA Headquarters One Platform – Three Divisions1,2 Diverse Customer Bas
Slide 7: Competitive Advantage
COMPETITIVE ADVANTAGE Customer Collaboration World-Class End-to-End Flywheel Capabilities Offerings We learn about customer challenges Technology Global Operational Portfolio Infrastructure Excellence Slurries pCMP We support We formulate and Pads Cleans high-volume manufacturing A trusted hypothese
Slide 8: Semi Industry to Reach $1 Trillion by 2030
~$1T 5 SEMI INDUSTRY TO REACH $1 Trillion by 2030 Digitization of everything Mobile Internet PC 1982 1997 2008 2016 2023 2030E AUTO IC MARKET1 AI PROCESSOR MARKET2 TRANSISTORS IN A CHIP3 SiC POWER IC4 2021 2030 2023 2027 2023 2030 2022 2028 $50B $150B $45B $400B 200B 1T 31% CAGR 1 McKinsey. 2 AMD. 3
Slide 9: Unique Capabilities Driving Unique Customer Value
UNIQUE CAPABILITIES DRIVING UNIQUE CUSTOMER VALUE Entegris Capabilities Entegris Outperformance Drivers Materials Spend per Wafer (indexed)1 Materials Enabling New Architectures Science Patterning Logic 3D NAND 3.0 Customer Deposition 1.6 2.4 1.6 Value 1.0 1.0 Polishing Materials Solutions Formulate
Slide 10: New Growth Opportunities for Entegris in the Next Decade
NEW GROWTH OPPORTUNITIES FOR ENTEGRIS IN THE NEXT DECADE EUV 3D Device Gate All Around Backside Power Network Advanced Packaging SiC and Auto © imec Dry resist Dry/Wet etch CMP New Materials CMP/CVD SiC CMP EUV pod ALD/CVD Implant CMP New carrier Implant Filtration CMP Selective etch ALD/CVD Cleans
Slide 11: Organic Sales Growth Algorithm
ORGANIC SALES GROWTH ALGORITHM 2x GDP Semi Unit Growth + 3 to 6 Points Growth Above Market Traditional demand drivers (e.g., PC) Higher Entegris Content Per Wafer • More layers and process steps New demand drivers (e.g., AI) 10 CAGR - 12% • More novel materials Digitalization of everything 2023-2026
Slide 12: Innovation and Capacity: Critical to Capture Growth
INNOVATION AND CAPACITY: CRITICAL TO CAPTURE GROWTH Annual R&D Spend Annual Capital Spend R&D Spend CapEx Spend 14% 13% R&D % Revenue 9% CapEx % Revenue 8% 8% 7% 7% 7% 10% 9% 7% 7% v v 2019 2020 2021 2022 2023 2024-26E 2019 2020 2021 2022 2023 2024-26E Major R&D Filtration, deposition Regional Advan
Slide 13: Materials Solutions (MS)
What Customer Enable new device architectures Our New innovative materials (e.g. MATERIALS SOLUTIONS Problems Are We Capabilities Molybdenum) Trying to Solve? (MS) Improve device performance End-to-end offerings (deposition to cleans) Accelerate node transitions Proven quality and operational Lower
Slide 14: Advanced Materials Handling (AMH)
What Customer Safe delivery and handling of Our Polymer science applied to ADVANCED MATERIALS Problems Are We chemicals Capabilities advanced packaging Trying to Solve? HANDLING (AMH) Protect chemicals from contamination Advanced metrology Prevent wafer contamination Driving industry standard wafer
Slide 15: Microcontamination Control (MC)
What Customer Maximize yield Our Industry leading separation MICROCONTAMINATION Problems Are We Capabilities technology Trying to Solve? Accelerate time to yield CONTROL (MC) Deep applications knowledge Removal of process across ecosystem contaminants Ensure a contamination Strong materials science
Slide 16: Solid Capital Structure
SOLID CAPITAL STRUCTURE $4.7B Total Debt December 31, 2023 Debt Portfolio Facts ~5.1% Blended rate Senior Secured Notes 2029 ~5.1% ($ in millions) (4.75%) Blended Rate ~0% variable interest rate exposure1 No debt maturities until 2028 Debt is well structured No maintenance covenants2 and de-risked 1
Slide 17: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES SHORT-TERM PRIORITY: Debt Paydown and Deleveraging1 Long-term Priorities Net leverage Gross leverage 5.1x 5.0x Value Accretive Acquisitions 4.4x 4.5x Small bolt-on acquisitions <4.0x <3.5x Large-scale acquisitions Debt: $6.1B Debt: $4.7B Cash Return to Shareholders Divi
Slide 18: Annual Target Model
ANNUAL TARGET MODEL Key Assumptions (Excludes divestitures and PIM business1) (for all scenarios) 40% External Target Model2 Flow-through to EBITDA For Illustrative Purposes Only – Does Not Reflect Actual Guidance Depreciation: ~5.5% Revenue ($ in millions) $3,500 $4,000 $4,500 $5,000 of revenue Adj
Slide 19: Entegris is a Value Compounder
CAGR 2023–2026 Entegris is a Value Compounder Sales Growth1 EBITDA Growth1,2 EPS1,3 (ex-divestitures/PIM) (ex-divestitures/PIM) (ex-divestitures/PIM) ~11% 1.4x ~$4.2B (2026) revenue growth rate ~15% ~31% Margin (2026) 1.7x EBITDA growth rate 5 >$5.00 (2026) 40% EBITDA ~160M flow-through Annual Inter
Slide 20: Q&A
Q&A Entegris®, the Entegris Rings Design®, and other product names are trademarks of Entegris, Inc. as listed on entegris.com/trademarks. All product names, logos, and company names are trademarks 20 or registered trademarks of their respective owners. Use of them does not imply any affiliation, spo
Slide 21: Appendix
Appendix 21
Slide 22: Consolidated (as reported) Summary Financials 2023 Non-GAAP
Consolidated (as reported) Summary Financials 2023 Non-GAAP $ in millions 1Q23 2Q23 3Q23 4Q23 FY2023 Net Sales $922 $901 $888 $812 $3,524 Adjusted Gross Margin % 44.3% 42.6% 41.4% 42.4% 42.7% Non-GAAP Operating Expenses $204 $183 $172 $176 $736 Adjusted Operating Income $205 $201 $196 $168 $770 Adju
Slide 23: Consolidated (excluding divestitures & PIM) Summary Financials 2023
Consolidated (excluding divestitures & PIM)1 Summary Financials 2023 Non-GAAP $ in millions 1Q23 2Q23 3Q23 4Q23 FY2023 Net Sales $778 $766 $756 $765 $3,066 Adjusted Gross Margin % 48.3% 45.6% 44.0% 43.4% 45.3% Non-GAAP Operating Expenses $198 $177 $166 $174 $715 Adjusted Operating Income $178 $172 $
Slide 24: Segment (as reported) Financials 2023 Non-GAAP
Segment (as reported) Financials 2023 Non-GAAP $ in millions 1Q23 2Q23 3Q23 4Q23 FY2023 Sales : MS $448 $441 $436 $365 $1,689 MC 269 284 286 288 1,128 AMH 219 190 180 169 759 Inter-segment elimination (14) (14) (14) (10) (52) Total Sales $922 $901 $888 $812 $3,524 Adjusted Segment Profit: MS $80 $76
Slide 25: Segment (excluding divestitures & PIM) Financials 2023 Non-GAAP
Segment (excluding divestitures & PIM)1 Financials 2023 Non-GAAP $ in millions 1Q23 2Q23 3Q23 4Q23 FY2023 Sales : MS $304 $305 $303 $318 $1,231 MC 269 284 286 288 1,128 AMH 219 190 180 169 759 Inter-segment elimination (14) (14) (14) (10) (52) Total Sales $778 $766 $756 $765 $3,066 Adjusted Segment
Slide 26: Reconciliation of Net Sales to Net Sales Non-GAAP
Reconciliation of Net Sales (as reported) to Net Sales Non-GAAP (excluding divestitures & PIM)1 $ in millions 1Q23 2Q23 3Q23 4Q23 FY2023 Net sales $922 $901 $888 $812 $3,524 Divestitures 2 (144) (135) (132) (47) (458) Adjusted net sales Non-GAAP $778 $766 $756 $765 $3,066 Reconciliation of Adjusted
Slide 27: Reconciliation of GAAP Operating Expenses to Non-GAAP
Reconciliation of GAAP Operating Expenses (as reported) to Operating Expenses (excluding divestitures & PIM)1 Non-GAAP $ in millions 1Q23 2Q23 3Q23 4Q23 FY2023 GAAP Operating Expenses $388 $117 $250 $244 $998 Adjustments to operating expenses: Goodwill impairment 6 89 — 16 10 115 Deal and transactio
Slide 28: Reconciliation of GAAP Net Income to Adjusted Operating Income and EBITDA
Reconciliation of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA $ in millions 1Q23 2Q23 3Q23 4Q23 FY2023 Net Sales $922 $901 $888 $812 $3,524 Net (loss) Income (88) 198 33 38 181 Net (loss) income - as a % of net sales (9.6%) 21.9% 3.7% 4.7% 5.1% Adjustments to net income: Income
Slide 29: Reconciliation of Adjusted Operating Income and EBITDA
Reconciliation of Adjusted Operating Income (as reported) to Adjusted Operating Income (excluding divestitures & PIM)1 Non-GAAP $ in millions 1Q23 2Q23 3Q23 4Q23 FY2023 Adjusted (excluding divestitures & PIM)1 Net Sales 3 $778 $766 $756 $765 $3,066 Adjusted Operating Income 17 205 201 196 168 770 Di
Slide 30: Reconciliation of Segment Sales and Profit
Reconciliation of Segment Sales (as reported) to Segment Sales (excluding divestitures & PIM)1 Non-GAAP $ in millions 1Q23 2Q23 3Q23 4Q23 FY2023 Sales : MS Segment $448 $441 $436 $365 $1,689 Adjusted (excluding divestitures & PIM)1 EBITDA (144) (135) (132) (47) (458) MS Segment (excluding divestitur
Slide 31: Footnotes
Footnotes 1. Excludes the impact of the 2023 divestitures of EC, QED, termination of Alliance Agreement and the planned divestiture of PIM. 2. Adjusted for the full year impact of Net Sales from divestitures of EC, QED, termination of Alliance Agreement and the planned divestiture of PIM. 3. See Rec