INVESTOR PRESENTATION. March 2018

Similar documents
INVESTOR PRESENTATION. December 1, 2017

INVESTOR PRESENTATION. December 1, 2017

INVESTOR PRESENTATION

INVESTOR PRESENTATION

Terex Materials Processing & Mining

Trade Growth - Fundamental Driver of Port Operations and Development Strategies

3 rd QUARTER RESULTS INTERMONTE Dec.2 nd, Company Presentation

HALF YEARLY RESULTS STAR CONFERENCE October 2 nd, 3 rd, Company Presentation

Moving Towards Profitability

Annual results 2017 and strategy update. 09 March 2018

Market Update. Randy Tinseth Vice President, Marketing Boeing Commercial Airplanes. Copyright 2016 Boeing. All rights reserved.

CHAIRMAN S LETTER 1 INTRODUCTION 3 2 PROFILE AEGON PROFILE REPORT SCOPE 5

Europe June Craig Menear. Chairman, CEO & President. Diane Dayhoff. Vice President, Investor Relations

Finning Canada Investor Tour

2010 Credit Suisse Holiday Conference December 7, 2010

Presentation half-year results 2012

Web.com Completes Acquisition of Yodle Deal strengthens Web.com s portfolio of products that help small businesses compete and succeed online

Global Online Gambling Market: Industry Analysis & Outlook ( )

2005 EUROPEAN GAS LEADERS CONFERENCE- MERRILL LYNCH

Broadcasting International P7S1 Nordics Henrik Ravn, October 10, 2012

Brookfield Asset Management O AK T R E E ACQUISITION M A R C H 1 3,

North American Forging Shipment Forecast (Using FIA bookings information through December 2013)

Worldwide Laser Market Review & Forecast

2018 Semiconductor Equipment and Materials Market: Have we Reached an Inflection Point? Lara Chamness, Senior Market Analyst, Manager, SEMI

ROTH Capital Partners Infant, Juvenile & Toy Conference. December 14, 2010

SPECIAL DIVIDEND OF MUELLER INDUSTRIES, INC.

SPECIAL DIVIDEND OF MUELLER INDUSTRIES, INC.

Annual results Accell Group 2016

Paul Bingham Managing Director, Global Trade and Transportation February 18, 2009

Modest fall in December Orders Offset by 19% Gain in Annual Total over 2017

Q PRESENTATION 18 OCTOBER 2018

How to Explain Car Rental to Banks and Investors

NYU International Hospitality Industry Investment Conference

Manufacturers continue capacity expansion as technology orders grow

Investor Presentation Q4 FY 2018

Annual Meeting of Shareholders May 8, Oyu Tolgoi: world-class asset, development optionality, significant cash flow potential

Chief Economist s Report

Global Milking Robots Industry Report 2015

Laser Cutting. Nitrogen Solutions for

2018 Full Year Results Presentation. 31 August 2018

Toray s Global Operations. Share it...

An Overview of a Market Research Study on the Worldwide Coriolis Flowmeter Market

The U.S. Economy How Serious A Downturn? Nigel Gault Group Managing Director North American Macroeconomic Services

Smart Parking Limited ASX:SPZ Full Year Results Presentation. Paul Gillespie, CEO Richard Ludbrook, CFO August 2016

Energy Outlook Global and Domestic Trends and Challenges. Dr. John Caldwell Director of Economics, EEI 1

VERTICAL-CAVITY SURFACE-EMITTING LASERS (VCSEL): TECHNOLOGIES AND GLOBAL MARKETS

Mid-IR Lasers Market Review and Forecast 2010

Global SURF (Subsea Umbilicals, Risers and Flowlines) Market: 2018 World Market Review and Forecast to 2023

Steel: A Buyer s Market for the Worst of Reasons. John Anton Director, IHS Global Insight Steel Service August 2009

Half year results Accell Group 2017

Refining Industry Outlook

INDUSTRY OVERVIEW BOB WELLS SENIOR VICE PRESIDENT, CORPORATE COMMUNICATIONS & PUBLIC AFFAIRS FINANCIAL COMMUNITY PRESENTATION OCTOBER 3, 2017

Impacts of the Global Economy on Asia Pacific Travel. 29 June 2007 John Walker

5. Golf Industry Trends and Developments in the US 6. The US Macro Economy Factors and Impact over Golf Industry

Lucintel. Publisher Sample

Deutsche Telekom and OTE.

Webinar: Trends in renewable energy support

OptonPro. High-power laser up to 7000 mw. Laser therapy natural healing with the power of light

Chlor-Alkali Market Research Report- Forecast to 2022

Inland Empire International Trade Economic Forecast

WindProspector TM Lockheed Martin Corporation

April 3 rd, 2017 WrestleMania 33

Pacific Sunwear. 35th Annual Bank of America Consumer Conference

J.P. Morgan Ultimate Services Investor Conference November 15, 2016

Alaska s Natural Resource Commodities: A 10-Year Outlook

U.S. Overview. Gathering Steam? Tuesday, October 1, 2013

Goldman Sachs U.S. Emerging/SMID Cap Growth Conference. New York, New York

Cargo outlook Brian Pearce Chief Economist. 13 December 2018

Global Power Lawn Mower Market with Focus on Robotic Mower : Industry Analysis & Outlook ( )

ANNUAL MEETING OF SHAREHOLDERS. May 3, 2018

Henley Global Masterclasses 2017 Henley Business School, Greenlands, Henley-on-Thames Friday 12 May 2017

Quarterly report 1/2005. Fire-resistant birch panelling from Finnforest and Moelven in the Danish-Jewish Museum in Copenhagen.

Products and Presence. First quarter 2010 Four Seasons Hotel, New York City

Small Boats: Market Strategies and Forecasts, Worldwide,

WinterGreen Research, INC.

Fact Sheet for Q3 and January-September 2012 October 24, 2012

Warsaw, 15 March 2012

2018 Annual Economic Forecast Dragas Center for Economic Analysis and Policy

BC Pension Forum. Economic Outlook. Presented by: Ben Homsy, CFA Portfolio Manager

BMO Capital Markets New York Road Show New York, New York. December 5, 2013

Goldman Sachs Eighteenth Annual Agribusiness Conference New York, New York. March 12, 2014

India: Can the Tiger Economy Continue to Run?

Global Industry Perspective Greg Tyler, Vice President of Marketing USA Poultry & Egg Export Council

Global growth forecasts Key countries/regions,

BMO Capital Markets 2014 Farm to Market Conference New York, New York. May 21, 2014

Anti-snoring Devices and Snoring Surgery Market by Device Type (MADs, TRD, Nasal Dilator, Chin Strap, Position Control, Pillows, TSD, EPAP), Surgical

WinterGreen Research, INC.

RISI LATIN AMERICAN CONFERENCE. (São Paulo, 16 August 2016) The Latin American Economy: Some Successes, Many Disappointments

Handelsbanken Nordic Large Cap Seminar. September 16, 2015 President and CEO Ari Lehtoranta

Sidoti & Company, LLC West Coast Road Show. San Francisco, California

Authentic. Integrated. Innovative.

INTERIM FINANCIAL STATEMENTS

Accuracy under pressure.

Global Ice Hockey Mask Market Research Report 2017

Telling Canada s story in numbers Elizabeth Richards Analytical Studies Branch April 20, 2017

1Q15 Opportunity Day. 14th May 2015 Stock Exchange of Thailand

The transition to sustainable energy

France : Economic developments and reforms, where are we heading?

The Global Economy: Sustaining Momentum

CEO Presentation -- AGM 15 November 2018 (ASX: RZI) Raiz Invest Limited

Transcription:

INVESTOR PRESENTATION March 2018

Safe Harbor Statement The statements in this presentation that relate to future plans, market forecasts, events or performance are forward-looking statements. These statements involve risks and uncertainties, including, risks associated with the strength or weakness of the business conditions in industries and geographic markets that IPG serves, particularly the effect of downturns in the markets IPG serves; uncertainties and adverse changes in the general economic conditions of markets; IPG's ability to penetrate new applications for fiber lasers and increase market share; the rate of acceptance and penetration of IPG's products; inability to manage risks associated with international customers and operations; foreign currency fluctuations; high levels of fixed costs from IPG's vertical integration; the appropriateness of IPG's manufacturing capacity for the level of demand; competitive factors, including declining average selling prices; the effect of acquisitions and investments; inventory write-downs; intellectual property infringement claims and litigation; interruption in supply of key components; manufacturing risks; government regulations and trade sanctions; and other risks identified in the Company's SEC filings. Readers are encouraged to refer to the risk factors described in the Company's Annual Report on Form 10-K and its periodic reports filed with the SEC, as applicable. Actual results, events and performance may differ materially. Readers are cautioned not to rely on the forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. 2

Our Mission Making our fiber laser technology the tool of choice in mass production 3

Key Takeaways Global market leader in fiber laser technology across multiple end markets and applications Vertical integration, manufacturing scale, and technology driving industryleading margins Expanding multi-billion dollar addressable market opportunity Rapidly growing earnings and cash flow 4

Dual Secular Growth Strategies (1) Conversion from Non-Laser to Laser Technologies $100B Global Machine Tool Consumption in 2017: ~$78B Global Laser Systems for Materials Processing in 2017: ~$14B Laser Systems 18% of Worldwide Machine Tools and Growing (2) Conversion from Traditional to Fiber $3B Fiber a Growing Percentage of Annual Demand for High-Power Industrial Laser Sources $80B $60B Non-Laser Machine Tools $2B Other Laser Sources $40B $20B $1B Fiber Laser-Based Systems $0B 2004 2006 2008 2010 2012 2014 2016 2018 2020 $0B 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source: Oxford Economics, Optech Consulting and IPG Photonics Corporation Source: Optech Consulting and IPG Photonics Corporation 5

Broadest Portfolio of Fiber Any wavelength, mode of operation, power, beam quality or application 10 nm 400 nm 700 nm Diode 1.5 μm Holmium Fe:ZnSe/S 10 μm X-Ray Ultraviolet Visible Near-Infrared Mid-Infrared Far-IR EUV Excimer UV Blue, Green, Yellow, Orange, Red Ytterbium Erbium Thulium Cr:Zn/Se/S Peak Power (Megawatts) Peak Power: 120kW Applications: cutting, welding, soldering, drilling, brazing Pulse Rate: 0.05-50 ms Peak Power: 23kW Applications: cutting, welding, soldering, drilling, brazing, annealing Pulse Rate: 1-200 ns Peak Power: 1 MW Applications: scribing, thin-film ablation, via drilling and flex cutting, surface preparation, texturing, annealing, marking, drilling and scribing Pulse Rate: 0.7-5 ns Peak Power: >150 kw Applications: thinfilm ablation, low-k and silicon dicing, glass scribing Pulse Rate: ~2 ps Peak Power: >10 MW Applications: black marking, sapphire and glass scribing, solar thin films, OLED film cutting, scientific Pulse Rate: <500 fs Peak Power: >20 MW Applications: thin metal cutting and drilling, ophthalmic surgery, high precision, scientific Thick steel cut with a continuous wave laser Drilling using a quasi-continuous wave laser Surface Cleaning using a pulsed laser Continuous Wave Throughput Quasi- Continuous Wave Nanosecond Pulsed Nanosecond Pulsed Picosecond Pulsed Precision Femtosecond Pulsed Time Micromachining using an ultrafast laser 6

Advantages of Our Fiber Monolithic Design Highest Power Record Power Efficiency Beam Quality MOPA Configuration Reliability Modular / Scalable Architecture Faster Processing Speed Lower Operating Costs Easy Systems Integration Small Footprint Efficient Cooling 7

Significant Barriers to Entry Technology: IP & Process Know-How Business: Vertical Integration & Scale 8

Highest Volume, Lowest Cost Diode Producer 10,000,000 9,000,000 100% 90% Tested Chips Produced 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 80% 70% 60% 50% 40% 30% Packaged Diode Costs % Chg. 2,000,000 20% 1,000,000 10% 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 0% Tested Chip Production Cost/Watt Decrease (2009 Base Year) Source: IPG Photonics Corporation 9

Global Presence Oxford & Marlborough, MA, USA Wafer fab operation, chip-onsubmount assembly, wafer packaging, components and final assembly ~2,000 employees Clean Room Percent 650,000 sq. ft. Clean Room Percent 415,000 sq. ft. Burbach, Germany Components and final assembly ~1,300 employees Clean Room Percent 580,000 sq. ft. Fryazino, Russia Components and final assembly ~1,600 employees R&D 10% Contractors 7% G&A 6% Sales 5% 5,389 Current Employees Manufacturing 72% Other Asia 15% RoW 0% Sales by Region, 2017 US 12% Germany 8% Russia 29% Other China 6% 3% 5,389 Current Employees US 38% China 44% Other Europe 21% Germany 24% 10

Total Addressable Market $10B $9B $8B $7B Industrial $2.6B Estimated $6.5B Market in 2017 New Laser Applications $3.9B $6B $5B $4B $3B Metal $2B Processing $1B Source: Optech Consulting, Strategies Unlimited and IPG Photonics Corporation $0B 2015 2016 2017 2018 2019 2020 2021 2022 2023 11

Industrial Laser Market $4B $4B $3B $3B CO 2, Solid State and Diode $2B $2B $1B $1B Metal Processing Fiber 62% Market Share in 2017 $0B 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source: Optech Consulting, Strategies Unlimited and IPG Photonics Corporation $0B 2015 2016 2017 2018 2019 2020 2021 2022 2023 12

Metal Cutting $3B $2B $1B CO 2 & Other Installed Base of ~100,000 Laser Cutting Systems Worldwide Fiber $0B 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source: Optech Consulting and IPG Photonics Corporation 13

Metal Joining (Welding & Brazing) $800M $600M $400M $200M Laser Welding $0.7B >$5B Annual Demand For Welding Equipment Globally Traditional Welding Equipment, $4.6B $0M 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source: Optech Consulting, Freedonia Group and IPG Photonics Corporation 14

New Laser Applications $7B $6B $5B $4B $3B $2B $1B Sensors and Instruments R&D and Scientific Defense Non-Metal Micro Materials Processing $0B 2015 2016 2017 2018 2019 2020 2021 2022 2023 Source: Strategies Unlimited and IPG Photonics Corporation 15

Strong Growth and Industry-Leading Margins $1,500 $1,200 $1,409 100% 80% Revenue ($ Millions) $900 $600 37% $563 39% 60% 40% Operating Margin $300 20% $0 2012 2013 2014 2015 2016 2017 Revenue Operating Margin 0% 16

Rapidly Growing Cash Flow $450 $400 $350 $127 $ Millions $300 $250 $200 $150 $100 $50 $68 $107 $278 $0 2012 2013 2014 2015 2016 2017 Free Cash Flow Capex 17

Return Profile 45% 40% 35% 30% 43% 40% 25% 20% 15% 10% 5% 24% 19% 0% 2012 2013 2014 2015 2016 2017 Return on Equity Return on Invested Capital, Excluding Cash 18

Target Business Model Revenue Growth 16% CAGR 40% 10%-15% Market Growth Gross Margin 54% Average 57% 50%-55% 50%-55% Operating Margin 36% Average 39% 32%-37% 32%-37% 19