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| 8-K - 8-K - MATERION Corp | d8k.htm |
 Investor Presentation
August 2011
Materion Corporation
Exhibit 99.1 |
 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 cause the actual results of the Company to
differ materially from the results expressed or implied by these statements,
including health issues, litigation and regulation relating to our business,
our ability to achieve and/or maintain profitability,
significant
cyclical
fluctuations
in
our
customers’
businesses,
competitive
substitutes for our products, risks associated with our international operations,
including foreign currency rate fluctuations, energy costs and the
availability and prices of raw materials, the timing and ability to achieve
further efficiencies and synergies resulting from our name change and
product line alignment under the Materion name and brand, and other factors
disclosed in periodic reports filed with the Securities and Exchange
Commission. Consequently these forward-looking statements should be regarded as
the Company’s current plans, estimates and beliefs.
The Company does not undertake and specifically declines any obligation to publicly
release the results of any revisions to these forward-looking statements
that may be made to reflect any future events or circumstances after the
date of such statements or to reflect the occurrence of anticipated or
unanticipated events. 2 |
 M A
T E R I O N T O D A Y : New Name, Same Impressive
Performance 3
19%
CAGR
Sales
growth
(2005 –
2010)
30%
CAGR
Operating profit
growth
(2005 –
2010)
Successful
Repositioning
of company |
 T H
E S I S Positioned to Deliver Long-Term, Sustainable Growth
4
A company
with a strong
platform… |
 The
Repositioning of Materion Prior to 2002
2002 –
2010
2011 +
Metals and
mining focus
Repositioning
Sustained
growth
5 |
 Successful
Repositioning
–
Snapshot
6
2002
2010
Revenues
$373M
$1.3B
Revenue % in
Advanced Materials
47%
75%
Sales per employee
(thousands)
$200
$524
Debt-to-Debt-Plus-Equity
43%
18%
Working capital
% of sales
41%
25%
Cyclicality
High
Low |
 Operating Businesses are Well-Positioned and Growing
7
Business
End Markets
(Examples)
Products
(Examples)
Sales Growth
(2002-2010)
Advanced Materials
•
Wireless
•
LED
•
Optical
•
Medical
•
Alternative
energy
•
PVD targets
•
Optical / medical
coatings
•
Electronic packaging
•
Inorganic powders
453%
75% of revenues
Integrated Metals
•
Wireless
•
Oil & gas
•
Aerospace
•
Heavy equipment
•
Defense
•
Electronic connectors
•
Directional drilling
components
•
Optical structures
•
Bushings and bearings
68%
25% of revenues |
 Growth
Defense
Commercial Aerospace
Medical
Devices
Disk Drives
Optics
Telecom
Infrastructure
LED’s
Alternative
Energy
LCD
Space /
Science
Notebooks
Cellular phones
(smartphones),
Tablet computers
Heavy
Equipment
Positioned in Diverse Set of High-Growth Markets
Entered multiple leading-edge growth markets since 2002
8 |
 High
Operating Margins Operating
Profit %
Operating Profit % of
Value-Added
(1)
Integrated Metals
11 –
13%
14 –
16%
Advanced Materials
5 –
7%
22 –
24%
Company
5 –
7%
13 –
15%
9
Removing High Value Metals Clarifies True Margins
2010
Note (1): Excludes high value metals from sales |
 A
Global Platform Operations in US
and 11 Countries
Significant and Expanding
International Sales
2010
28%
“Direct”
International
Sales
10
Customers in >50 countries
Expect “direct”
international sales
to be 40 -
50% in 3-5 years |
 T H
E S I S Positioned to Deliver Long-Term, Sustainable Growth
11
A company
with a strong
platform…
…
Leveraging a
high value-added
business
model…
…
Executing
a focused
growth plan |
 High Value-Added Business Model
12
1.
Target high growth
markets
2.
Own fast growing
niches
3.
Expand with
innovative
products
4.
Add synergistic
acquisitions
5.
Ensure
financial
discipline |
 1.
Target High Growth, Leading-Edge Markets 13
Market
Q2 2011
% of Value-
Added Sales
2011
Trends
Key Drivers
Consumer Electronics
23%
•
Smartphone growth
•
Tablet computers & LEDs
•
Miniaturization
Industrial Components &
Commercial Aerospace
16%
•
New airplane builds & retrofits
•
Increasing air travel
•
Heavy equipment builds
Defense & Science
14%
•
DoD & foreign military budgets
•
Demand for communications satellites
•
High performance optical devices
Automotive Electronics
9%
•
Increasing global car production
•
HEV/EV lithium ion battery components
•
Engine control & electronic systems
Telecommunications
Infrastructure
8%
•
Global 3G/4G builds
•
Base stations
•
Undersea fiber-optics expansion
Energy
7%
•
Directional drilling
•
Rig counts
•
Solar, batteries & smart grid devices
Medical
6%
•
Glucose testing
•
Diagnostics equipment |
 1.
Target High Growth, Leading-Edge Markets 14
Reportable Segments
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
Beryllium and Beryllia Ceramic
Products
Specialty Strip Metal
Products
CONSUMER
ELECTRONICS
INDUSTRIAL
COMPONENTS &
COMM. AEROSPACE
DEFENSE & SCIENCE
AUTOMOTIVE
ELECTRONICS
TELECOM
INFRASTRUCTURE
ENERGY
MEDICAL |
 2.
Own The Niche – Examples
•
Only fully integrated producer of beryllium
–
one-of-a-kind business
15
Leading position
in niche
•
Unique
copper-nickel
material
ToughMet
–
multiple advanced applications growing at
over 30% annually
•
Optical coatings
–
highly sophisticated uses for defense
and medical applications
•
Smartphone applications
–
currently in 95% of all smartphones,
expected to grow 50% in 2011
TM |
 3.
Continually Develop Innovative Products •
Customer-centric product development
•
Active research programs
•
New product areas include
–
LEDs
–
Medical
–
Commercial Optics
–
Disk drive arms
–
Solar
–
Batteries
–
Science
–
Commercial Aerospace
16 |
 4.
Synergistic Acquisitions
–
Strong
Record
Add complementary
products / technology
Expand market
position
Accretive in
year 1
OMC –
shield kit cleaning
TFT –
thin film coatings
CERAC –
inorganic chemicals
Techni-Met –
thin film coatings
Barr –
thin film coatings
Academy –
precious metals
17
By 2010, added over $300M to sales and approximately 25% of company profit
Acquisitions 2005-2010
–
Impact |
 4.
Synergistic Acquisitions Case Study of Growing a Niche Business
–
Optical Filters and Medical Coatings
(Revenues)
18
2010
•
Revenues of $91M
•
78% CAGR
•
Positioned in $1.2B+
market growing at
11% annually
$9M
$82M
Barr
(2009)
Barr
(2009)
Techni-
Met
(2008)
Techni-
Met
(2008) |
 5.
Ensure Financial Discipline 19
Maintain strong
balance sheet
Debt-to-Debt-Plus-Equity
Strong
cash flow
•
Cash flow from operations
$30M -
$75M annually for
the past five years
•
Capex below depreciation
•
Reduction in working
capital goal to <20% sales
Resources to
finance
acquisitions of
$50M to $100M
annually
After $175M in acquisitions (net)
21%
18%
0%
10%
20%
30%
2005
2010
Maximum 30% |
 T H
E S I S Positioned to Deliver Long-Term, Sustainable Growth
20
A company
with a strong
platform…
…
Leveraging a
high value-added
business
model…
…
Executing
a focused
growth plan
1
2
3 |
 Financial Goals Next 3-5 Years
2010
Next 3-5 years
Revenue growth –
organic
35%
>10%
Acquisitions
$21M
$50 -
$100M
per year
Margins (OP % VA)
14%
14% -
18%
Working capital % sales
25%
<20%
Debt to Debt-Plus-Equity
18%
<30%
ROIC (pre-tax)
17%
>20%
21 |
 Continuing to Execute Three Point Strategy
22
1
Grow and diversify revenue base
2
Expand margins
3
Improve fixed and
working capital utilization
Increasing Shareholder Value |
 S T
R A T E G Y # 1 : G R O W T H Expand and Diversify Revenue
Base •
Targeting expansion in growth markets including:
–
smart mobile devices, 3G / 4G, commercial aerospace, oil & gas, alternative
energy, optics, LED / LCD
•
Ongoing global expansion
–
Asia
•
Strategic acquisition
fast accretion
–
Technology
–
Global reach
23 |
 S T
R A T E G Y # 1 : G R O W T H Strategy in Action: Outgrowing
Growth Markets Growth of Materion
Oil and Gas Sales vs. Market
Growth of Materion
Aerospace Sales vs Market
24 |
 S T
R A T E G Y # 2 : M A R G I N S Expand
Margins
–
Key
Drivers
25
1
Lean Sigma
operating
efficiency
2
Higher value
added products
3
Cost
reductions
Margin
Today
12 -
14%
Target
Margin
14 -
18%
(OP % VA) |
 Improve Fixed and Working Capital Efficiency
26
Lean Sigma
•
Cycle time reduction
•
Yield improvement
•
On-time shipments
Based on 2011 projected sales, each 5% of working capital efficiency = $43M of
cash Improve Working Capital
Efficiency
Working capital % of sales
41%
25%
<20%
2002
2010
Target
S T
R
A
T
E
G
Y
# 3 :
C
A
P
I
T
A
L
E
F
F
I
C
I
E N C Y |
 2011 Outlook and Guidance
Revenues
($B)
EPS
($)
27
$2.25
2010
2011(F)
$1.3B
2010
2011(F)
$1.55B
$2.35 -
$2.60 |
 I
N S U M M A R Y Why Invest in Materion Corporation
28
Positioning
Niche leader in high-growth markets
Performance
Strong performance record
Growth
Executing three point strategy
•
Global player, strong secular market drivers
•
Sustainable long-term growth
•
Proven business model
•
Target, expand, then own niche
•
Clear financial goals, performance
continuing to improve |
 Appendix |
 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 Solutions for SAW
•
Refining / Recycling
•
Precision Parts Cleaning
Other Smart Phone Applications:
•
Circuit Board and IC Inspection
•
RoHS Compliance Assurance
•
Cellular Infrastructure with High Power
RF Packaging
Internal Electronics
•
Precursor materials for GaAs
wafer production
Applications: Smart Phones
A-1 |
 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
Jumpseat Spring
Safety Slide
Mechanism
Other Aerospace Applications:
•
Baggage Inspection
•
Nondestructive Evaluation (Cracked
Component Detection)
A-2
Applications: Aerospace |
 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
Coatings
•
Night Vision System Optics
A-3 |
 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
Hybrid Vehicle Motor &
Module Connectors
Window and Door
Switches
Fuel Pump and Fuel
Level Sensors
Battery
Terminals
Engine Ignition and
Control Modules
Battery & Relay Control
Modules
Turn Signal and Emergency
Flasher Relays
On Board
Telematics
Applications: Automotive Electronics
A-4 |
 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 preventers,
hydraulic actuators, control fluid couplings
Applications: Oil & Gas
A-5 |
 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 solar cell architecture. N and P
type Cadmium Semiconductor materials
TCO Transparent Conductive Oxide layers
Front and Back-contact layers
Technology: Copper Indium
Gallium Selenide (CIGS)
Thin Film (PVD) Materials as
well as Powders for Printing
CIGS applications
Copper Indium Gallium Selenide
thin film and screen printing
applications for flexible and rigid
solar cells.
Technology: Concentrator Photovoltaic (CPV)
Thin Film (PVD) Materials
Solar technology based on concentrating Solar rays
into a semiconductor device via large lens.
Anti-Reflection Coating Materials
Precious metal contact materials
Micro Electronic Packaging Products:
Bonding Ribbon -
Au & Ag
Lead-free Solders
Metallized Ceramic Substrates
Technology:
Flexible
Solar
Cells
/
Building
Integrated Photovoltaic:
Thin Film Services:
Solar cells built in flexible substrates to accommodate
applications such as roofing tiles or defense.
Technology: Crystalline
Silicon (Si)
Interconnect Materials
Front and backplane systems for
high efficiency designs.
Applications: Solar Energy
A-6 |
 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
A-7 |
 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)
External Glucose Analysis
•
Subcutaneous sensors for glucose measurement
Subcutaneous Glucose Analysis
•
Thin Film Coatings –
Electrode Monitoring device
Radiation Therapy –
Neutron Reflectors
X-Ray Mammography
Other Medical Applications:
•
CT Scan
•
Diagnostic X-Rays
•
Advanced Drug Delivery Components
•
Diagnostic Electronic Components
•
Anesthesia Monitoring Components
•
Operating Instruments
Applications: Medical
A-8 |
 Value-Added Sales: Advanced Material Technologies
A-9 |
 Value-Added Sales: Performance Alloys
A-10
Q2 2011 |
 Value-Added Sales: Beryllium and Composites
A-11 |
 Value-Added Sales: Technical Materials
A-12 |
 New
Product and Technology Development Advanced Material Technologies
–
Optics Coating Materials and Large Format Components
–
Precision Optical Thin Film Coatings (specialty filters)
–
Thin Film Electrodes (medical diagnostics)
–
Optical package for New Photonics applications
–
RF packages for the latest transistor technology (3G and 4G infrastructure)
–
Expanded
refining/chamber
services
–
Compliment
to
Thin
Film
Materials
&
Coating businesses
–
Large format Thin Film Materials for large area coatings ( Energy, Solar )
–
Solar Panel Thin Film, Concentrator Materials and Barrier Film Coatings
–
MEMS and Photovoltaic Packaging Materials
–
Nanotechnology Materials
–
Materials for High Brightness LEDs
–
Specialty Inorganic Compounds (Solar, Security)
–
Precious
Metal
Materials
–
rod,
bar,
sheet,
slugs,
etc.
–
Refining and Metal Recovery and Management Services
A-13 |
 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
Beryllium and Composites
–
Nearer net shape fabrication (hot isostatic pressing)
–
Truextent™
speaker diaphragms
–
Coatings
–
Nuclear beryllium materials
Technical Materials
–
Li lon Battery Interconnects
–
Power Electronics
–
Solar Leadframe Application
–
Medical Applications
–
Hard Drives
A-14 |
 Investor Presentation
August 2011
Materion Corporation |