World Leadership in High Power Fiber Lasers

www.ipgphotonics.com

IPG Photonics CorporationThe Fiber Laser Company

(NASDAQ: IPGP)

2015 Bank of America Merrill Lynch

Global Technology Conference

June 2015

Safe Harbor Statement

2

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.

IPG Overview

Global leader in industrial fiber lasers

FY 2014 sales of $770 million; YOY growth of 19%

$3.79 diluted EPS; up 28% YOY

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 3,000 employees

3

Investment Highlights

Expanding $4.7 billion opportunity for all lasers Approximate average annual growth rate of 6%

Recognized leader in the rapidly growing fiber laser market Estimated 15% CAGR from 2015 to 2019

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 (54.1% GM in FY 2014)

Broad geographies, end markets and applications Asia & Australia 52%, Europe 33%, North & South America 15%

4

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

All Lasers Fiber Lasers All Lasers Fiber Lasers

2014 2019

Forecast

Materials Processing Advanced Applications Medical

5

Rapidly Taking Share in Large, Existing Laser Markets

$4,670

$1,090

$6,300

$2,200

____________________

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

Fiber, 23%

2014

Fiber, 35%

2019Forecast

(000)

Materials Processing Diverse End Uses and Customers

6

Automotive

General

Manufacturing

Heavy Industry

Aerospace

Semi/

Electronics

Consumer

7

Materials Processing Laser Market

____________________

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

Opportunity for Continued Fiber Laser Market Share Gain is Significant

$1,420

$1,850

$430

$560

$390

$580

$400

$590 $550

$1,250

$280

$400

$110

$310

$30

$150 *

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

2014 2019 2014 2019 2014 2019 2014 2019

High Power Marking Fine Processing Addressable Micro Processing

All Lasers Fiber Lasers

(US$ mm)

(Excludes lithography)

*2019 Micro Processing is IPGP estimate

based on fiber laser potential to penetrate

25% of overall market.

Fiber Laser Penetration of High Power Applications

8

7%

9%

17%

40%

27%

Welding Applications

Power Train

Tube Welding

Car Body ScannerWelding

Car Body SeamWelding / Brazing

Other

81%

3% 16%

Cutting Applications

Flat SheetCutting

Tube Cutting

3D Cutting

$410

$970

$140 $280

$710

$440

$160

$160

0%

10%

20%

30%

40%

50%

60%

70%

80%

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2014 2019 2014 2019

Cutting Welding

Fiber Lasers All Other Lasers Fiber Market Share

____________________

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

(US$ mm)

Other Applications Provide Potential Additional Longer

Term Growth Opportunities

9

$160 $140

$60

$320

$340

$730

Displays & Light Shows

Sensors, LIDAR &Instruments

Mid-IR Spectroscopy

R&D

Defense

Medical

2014

$510

$210

$100

$340

$440

$1,120

Displays & Light Shows

Sensors, LIDAR &Instruments

Mid-IR Spectroscopy

R&D

Defense

Medical

2019

(US$ mm)

____________________

Source: Strategies Unlimited, IPG 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 these products.

A Diverse Mix with Year-over-Year Growth

10

$134.9

$344.1

$53.3

$13.8 $21.5

$131.4

$426.0

$79.7

$13.3

$34.9 $29.9

$114.3

$21.9

$3.5 $10.0 $0

$50

$100

$150

$200

$250

$300

$350

$400

$450

Pulsed High-Power Medium-Power Low-Power QCW

($US mm)

IPG Sales by Product Lines

2013 2014 YTD 2015

Comparison: Cutting with Fiber & CO2 Lasers

11

0.5 mmGALVANIZED

1 mmSTAINLESS

STEEL

2 mmZINC

COATED

3 mmSTEEL

5 mmCOPPER

5 mmSTAINLESS

STEEL

18 mmSTEEL

3 kW Fiber4 kW CO2

+150%

+130%

+110%

+50%

Faster Cutting Speed Fibers higher absorption and

excellent beam quality

enable:

Faster cutting speed

with less power

Processing of a wider

variety of materials

____________________

Source: Salvagnini

3kW Fiber 4kW CO2

Energy Consumables Cutting Gas

Maintenance Compressed Air Laser Gas

-55%

Improved productivity and

significantly less energy

consumption = lower cost

per part

Lower Processing Costs

New spectral ranges (wavelengths) and ultra-short pulse

durations U.V. & higher power Green

Nano, Pico & Femto-Second Lasers at different wavelengths with high peak powers

Mid Infra-Red

Improved reliability

Improved electrical efficiency Eco Laser for material processing with electrical efficiency greater than 40%

New optical delivery systems Welding & Cutting Heads

Compact Switches

Couplers

Collimators

Macro-systems Materials Processing

Opens up new applications and revenue streams starting for 2014 and longer term

New Product Introductions

12

415477

525577

635

70

85

92

99

107

120

135

146

157

170

0

200

400

600

800

1000

2012 2013 2014 2015 2016

Kt

of

Ste

el

China & Korea

North America

Europe

Copyright Arcelor Mittal 24.01.2011

13

Adoption of High Strength Steel

Adoption of HSS drives laser sales for cutting and welding application due to productivity

gains and process improvement

HSS wears out traditional machine tool dies used in traditional stamping processes

Weld quality and strength is improved with fiber laser as compared to traditional

welding technologies

Additive Manufacturing (3D Printing)

Selective Laser Melting or Sintering (SLM/SLS) of metals and metallic alloys are the fastest

growth segments in additive manufacturing (AM) industry

Previous growth in this market has come from plastics whereas metal processes are starting to gain significant traction

Fiber lasers are a critical component of SLS/SLM additive manufacturing equipment with IPG