World Leadership in High Power Fiber Lasers

www.ipgphotonics.com

IPG Photonics CorporationThe Fiber Laser Company

(NASDAQ: IPGP)

2016 Investor Day

May 11, 2016

World Leadership in High Power Fiber Lasers

www.ipgphotonics.com

Welcome and Overview

Tim Mammen

Chief Financial Officer and Senior Vice President

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.

3

Agenda

4

Welcome and Overview ..Tim Mammen

Current and Future Market Opportunities. Trevor Ness

Accessories Felix Stukalin

Strategic Growth ProjectsYuri Erokhin

Medical Gregory Altshuler

TelecomMark Cannata

Manufacturing

Devices and Components.. Eugene Scherbakov

Diodes..Alex Ovtchinnikov

Break

China Trevor Ness

Financial Review.. Tim Mammen

Summary and Growth Strategy............................................................................ Valentin Gapontsev

Q&A Session

Tours and Lunch

IPG Overview

Global leader in industrial fiber lasers

FY 2015 sales of $901 million; YOY growth of 17%

$4.53 diluted EPS; up 20% YOY

Q1 2016 sales of $207.2 million; YOY growth of 4%

$0.99 diluted EPS; up 2% YOY excluding foreign

exchange transaction loss/gain

Growing acceptance of fiber lasers replacing traditional lasers

Products are sold to OEMs, systems integrators and end

users for use in many industries

Global operations with over 3,700 employees

5

Investment Highlights

Expanding $4.8 billion opportunity for all lasers Approximate average annual growth rate of 6%

Recognized leader in the rapidly growing fiber laser market Estimated 12% CAGR from 2015 to 2020

Significant competitive advantages First mover advantage

Performance, product range and reliability

Lowest cost (vertically integrated model)

Strong IP position

Vertical integration and direct sales model drives industry-leading

margins (54.6% GM in FY 2015, 55.2% GM in Q1 2016)

Broad geographies, end markets and applications Asia & Australia 51%, Europe 33%, North & South America 15%

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The technology leader and most profitable

company in the rapidly growing fiber laser market

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

All Lasers Fiber Lasers All Lasers Fiber Lasers

2015 2020

Forecast

Materials Processing Advanced Applications Medical

7

Rapidly Taking Share in Large, Existing Laser Markets

$4,800

$1,480

$6,751

$2,600

____________________

Source: Laser Focus World, Industrial Laser Solutions, Strategies Unlimited, Optech Consulting and IPGP estimates.

(000)

Fiber, 31%

2015 - Share of Total Laser Market

Fiber, 39%

2020 - Share of Total Laser Market

Materials Processing Diverse End Uses and Customers

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Automotive

General Manufacturing

Heavy Industry

Oil & Gas

Shipbuilding

Nuclear

Construction

Aerospace

Shipbuilding

Semi/

Electronics

Displays

Consumer

Expand addressable market and enhance future growth opportunities by

addressing new application and customer specific requirements

Recent & New Product Introductions

9

Marking & Engraving

Cutting

Welding

Fine Processing

Additive Manufacturing

Brazing

Drilling

Welding of Alloys and Specialty Materials

Cladding & Deposition

Ablation

Display & Imaging

3D-Cinema

Entertainment and Projection

Micro-processing

Medical Devices

Bio-Medical

Sensing & LIDAR

CURRENT FUTURE

Future Opportunities in Micro-processing

10

Semi/PC Board/Display, $153

Solar/LED/ Other, $367

Excimer/DUV ,$719

CO2/EUV , $193

Addressable Market,

36%Other Applications,

64%

Significant area of growth for ultra-fast pulsed lasers, and shorter

wavelength lasers at the green and ultra-violet wavelengths

Other Applications Provide Potential Additional Longer

Term Growth Opportunities

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____________________

Source: Strategies Unlimited, IPGP estimate of potentially addressable market.

Fiber participation is relatively low in these other applications. Longer term opportunity will depend

on successful product development and market acceptance of fiber laser products.

2015 2020

(US$ mm)

$192

$161

$67

$455

$372

$628

Displays & Light Shows

Sensors, LIDAR & Inspection

Mid-IR Spectroscopy

R&D

Defense

Medical

$569

$236

$108

$594 $524

$1,042

IPGs Defensible Laser Position

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Strong IP Portfolio

Vertical Integrated Business Model

Manufacturing Scale

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Three Distribution Channels

OEMs/Integrators Direct Sales Representatives

End User

End User

End User

End User

End User

End User

End User

End User

Factory 1

Factory 2

Factory 3

End User

OEM

Large Manuf.

OEM

Integrator

Representatives

Direct Sales

Direct Sales

Direct Sales

Leveraged Sales Model Maximizes Market Reach

World Leadership in High Power Fiber Lasers

www.ipgphotonics.com

Current and Future Market Opportunities

Trevor Ness

Senior Vice President, World Wide Sales and Marketing

IR Lasers

UV Laser

Ultrafast

Visible Fiber Lasers

Systems

Accessories (Felix Stukalin)

Strategic Growth Projects (Dr. Yuri Erokhin)

Medical Applications (Dr. Greg Altshuler)

Telecom (Mark Cannata)

Diverse Product Lines and Market Opportunities

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World Leadership in High Power Fiber Lasers

www.ipgphotonics.com

IR Lasers

IPG Laser Wavelengths, Mode of Operation and Power

Wavelength

Mode of Operation

Laser Power

Fe:ZnSe/S

3.4 -5.2 mm

IPG manufactures lasers with average

power ranging from a few Watts to

hundreds of kW (virtually unlimited)

UV ~0.36 mm

Ultra-violet

Blue, green, yellow , orange and red 0.45-0.73 mm Ytterbium ~1.07 mm

Visible Near-Infra-red

400 nm 700 nm 1.5 mm

Diode

~0.98 mmErbium

~1.5 mm

Thulium,

Holmium

~2 mm

Cr:Zn/Se/S

1.8-3.4 mm

> 5 mm

Mid-Infra-red

CW: the laser is ON all the time

Quasi-CW: the laser is modulated in ms to ms range

Pulsed: the laser is switched on for 10-9 s

Ultrafast: the laser is switched on for 10-12 t0 10-15 s

Any wavelength, any

pulse duration, any

average power:

ANY APPLICATION

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Overview:

IR fiber lasers are the laser of choice in

materials processing applications

Strategy:

IPG fiber lasers have the broadest product

range, the highest performance and

reliability, the lowest cost of ownership and

offer unmatched integration capabilities

Margin Profile:

Vertical integration and direct sales model

drives industry-leading margins

Growth Targets:

Fiber lasers forecast to outpace laser market

growth, with CAGR of 15% though 2019

IR Lasers Overview

18Source: Optech Consulting and IPGP estimates.

IPGs Core Existing Applications

$1,453

$1,867

$569 $662

$385 $431 $520

$718 $644

$1,323

$278 $352

$219 $333

$144 $183

2015 202