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Transcript of IPG Photonics /media/Files/I/Ipg-Photonics... · PDF file · 2016-08-11FY 2015...

  • World Leadership in High Power Fiber Lasers

    www.ipgphotonics.com

    IPG Photonics CorporationThe Fiber Laser Company

    (NASDAQ: IPGP)

    Canaccord Genuity 36th Annual Growth Conference

    August 11, 2016

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

    $4.53 diluted EPS; up 20% YOY

    Q2 2016 sales of $252.8 million; YOY growth of 8%

    $1.25 diluted EPS; up 9% 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 3,700 employees

    3

  • 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, 54.5% GM in Q2 2016)

    Broad geographies, end markets and applications Asia & Australia 51%, 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

    $8,000

    All Lasers Fiber Lasers All Lasers Fiber Lasers

    2015 2020

    Forecast

    Materials Processing Advanced Applications Medical

    5

    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)

    Fiber31%

    2015 - Share of Total Laser Market

    Fiber39%

    2020 - Share of Total Laser Market

  • Materials Processing Diverse End Uses and Customers

    6

    Automotive

    General Manufacturing

    Heavy Industry

    Oil & Gas

    Shipbuilding

    Nuclear

    Construction

    Aerospace

    Shipbuilding

    Semi/

    Electronics

    Displays

    Consumer

  • IPGs Core Existing Applications

    $1,453

    $1,867

    $569 $662

    $385 $431 $520

    $718 $644

    $1,323

    $278 $352

    $219 $333

    $144 $183

    2015 2020 2015 2020 2015 2020 2015 2020

    High Power Marking Fine Processing Micro Processing

    All Lasers Fiber Lasers

    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(US$ mm)

    (Excludes lithography)

    New Applications

    7

  • IR Laser Applications

    Welding

    Additive ManufacturingCladding

    Cutting Brazing Drilling

    Marking Surface Treatment

    8

  • $462

    $967

    $182 $356

    $591

    $364

    $219

    $180

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    80%

    $-

    $200

    $400

    $600

    $800

    $1,000

    $1,200

    $1,400

    2015 2020 2015 2020

    Cutting Welding & Other High Power

    Fiber Lasers All Other Lasers Fiber Market Share

    Fiber Laser Penetration of High Power Applications

    9

    7%9%

    17%

    40%

    27%

    Welding Applications

    Power Train

    Tube Welding

    Car Body ScannerWeldingCar Body Seam Welding/ BrazingOther

    81%

    3% 16%

    Cutting Applications

    Flat SheetCutting

    Tube Cutting

    3D Cutting

    (US$ mm)

    Welding

    Opportunity -

    potentially

    much more

    significant

  • Niche Welding Applications

    Transitions in Welding Medium and Long Term

    10

    High Strength Steel

    Aluminum

    Titanium

    Alloys

    Thick Materials

    Automotive

    Aerospace Construction

    Heavy Equipment

    Railways

    Shipbuilding

    Transportation & Storage

    Decreasing cost of laser welding, new laser welding technologies, know-how,

    software & algorithms

    In many instances strength of the laser weld > welded material

    Diverse Materials Diverse Industries Limited Materials

    Aircraft

    Autos

    Bridges

    Buildings

    Pipelines

    Rails

    Railcars

    Ships

    Storage Tanks

    Trucks

    Diverse Products

    FUTURECURRENT

  • A Diverse Mix with Year-over-Year Growth

    $135.3

    $344.1

    $53.8

    $13.3 $21.5

    $131.6

    $426.1

    $81.0

    $13.2

    $34.9

    $124.8

    $499.6

    $99.5

    $13.8

    $56.5 $65.2

    $259.6

    $49.7

    $6.1 $24.8

    $0

    $50

    $100

    $150

    $200

    $250

    $300

    $350

    $400

    $450

    $500

    $550

    Pulsed High-Power Medium-Power Low-Power QCW

    ($US mm)

    IPG Sales by Product Lines

    2013 2014 2015 YTD 2016

    11

  • 17,600

    20,900 21,200

    24,800

    32,800

    3,400

    4,800

    7,100

    9,900

    14,200

    200 500 1,000

    2,100

    4,100

    0

    5,000

    10,000

    15,000

    20,000

    25,000

    30,000

    35,000

    2011 2012 2013 2014 2015

    Un

    its

    & K

    W o

    f P

    ow

    er

    So

    ld

    Total Units Sold*

    Kilowatts of High Power and Medium Power Lasers

    Kilowatts of QCW Lasers

    Acceptance Drives High-Power Growth

    ____________________*Units excludes telecom components and component PLDs.

    12

    2011 2015 Total Units Sold CAGR: 17%

    2011 2015 KW Power Sold (Medium and HP) CAGR: 43%

    2011 2015 KW Power Sold (QCW) CAGR: 113%

    KW

    KW

    KW

    KW

    KW

    KW

    KW

    KW

    KW

    KW

  • Diode Production a Significant Advantage

    13

    High volume production levels of pump diodes, proprietary processes

    and use of unique chip and package designs allows IPG to increase

    yields, lower component costs and assure high quality

    ____________________

    Source: IPGP estimates.

    -40%

    -20%

    0%

    20%

    40%

    60%

    80%

    100%

    120%

    -

    1,000,000

    2,000,000

    3,000,000

    4,000,000

    5,000,000

    6,000,000

    2009 2010 2011 2012 2013 2014 2015

    % C

    han

    ge in

    Pac

    kage

    d D

    iod

    e C

    ost

    Test

    ed

    Ch

    ips

    Pro

    du

    ced

    Diode Production and Cost Trends

    Tested Chip Production Cost/watt % decrease (base yr 2009) Annual cost decrease %

  • Expand addressable market and enhance future growth opportunities by

    addressing new application and customer specific requirements

    Recent & New Product Introductions

    14

    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

  • Coupler Shutter Multi-Channel

    BEAM

    SWITCHES

    HIGH-POWER

    COLLIMATORS

    SCANNING

    HEADS

    CUTTING HEADS

    WELDING

    HEADS

    Highest Power Handling