Agenda 9:35 AM Driving Shareholder Value Yuval Wasserman, President & Chief Executive Officer 10:00 AM Growing with Precision Power Products Randy Heckman, SVP Precision Power Products 10:40 AM Unlocking the Value of Inverter…
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Driving Shareholder Value February 26, 2015 Yuval Wasserman, President & CEO
Management Team Yuval Wasserman Danny Herron Tom McGimpsey PRESIDENT & CEO EVP & CFO EVP & GC Randy Heckman Norbert Apfel Bates Marshall Dave McCarron SVP PRECISION POWER SVP INVERTER PRODUCTS & SVP SALES MARKETING SVP Global…
Driving Shareholder Value Grow & Diversify Revenue Base Generate & Deploy Cash Expand Margins Note: Please note that hypothetical scenarios regarding revenue growth, EBITDA, EPS, cash generation, acquisitions, aspirational…
Highly Competitive Model GROWTH Precision Power Conversion Focus, OPINC Leadership & Talent CASH FLOW Operational Excellence Global Footprint, Diverse Markets, Critical Applications 9
Business Trajectory Accelerate Growth Bring Inverter Grow & Diversify Through Strategic Products to Precision Power Acquisitions in Profitability Products Precision Power 10
Vision for Growth Value Products IP and knowhow content Highly-engineered Leverage core competencies Design-in long term customer relationships Mission and Enabler of performance High stake applications high cost of failure…
Precision Power Solutions Enable Critical Applications PRECISION MATERIAL PROCESSING AC INDUSTRIAL POWER CONTROLLABLE DC MEDICAL DIAGNOSTICS STABLE RF / TREATMENT CLEAN HV ACCURATE ANALYTICAL PCM EQUIPMENT…
Precision Power Conversion Markets INDUCTION HEATING HIGH TAM: 1.0B CUSTOM HV TAM: POWER 1.5B TAM: 2.0B MED SEMI TAM: 0.5B MOTION CONTROL & POWER INDUSTRIAL TAM: 1.4B TAM: 0.4B INCREASING GROWTH INCREASING MED…
Unlocking Value for AE Strategic options for Inverters Advisor engaged Looking at various opportunities Optimizing product line during process 14
Unlocking Value: 2014 Without Inverters EPS Increases by 64% Revenue Declines by 38% 15
Growing with Precision Power Products February 26, 2015 Randy Heckman, SVP Precision Power Products
Precision Power Solutions Enable Mobile Technology EMI Coatings Camera Optics Coating AMOLED or TFT Display HBLED Light Glass Coating Logic: Processor Capacitive Touchscreen Memory: NAND & DRAM Thin Film Battery MEMS…
Precision Power Products Provide highly-engineered, precision power conversion solutions for high-value, mission-critical applications Different power conversion technologies AC power LV DC and HV DC Radio frequency Common…
Revenue Growth Vision Solvix Power Control Modules NEW New Markets, New Solutions HiTek Power and UltraVolt MARKETS Non-Plasma Applications High Voltage, High Power, Industrial Applications, Instrumentation, Environmental, Custom…
Precision Power Today Revenue outpaced growth of major served applications Increased share in core applications/technology Expanded served applications with new acquisitions Increased product development speed and efficiency 22
Revenue Outpaced Growth of CAGR 2012-2014 Major Served Applications AE Precision Power Semi WFE 18%1 3.3%2 120.0 Power/Reactive Gas 12.4%3 Quarterly Revenue (in millions) 100.0 80.0 60.0 40.0 20.0 0.0 Q1…
Increased Share in Core Applications/Technology Applications Leader 1 in RF/DC Subsystems* All 8pt gain over previous year AE Others Why We Win 38% 43% Leading product performance Highest product quality Next Comp Localized…
Expanded Served Applications With New Acquisitions PCM, from AEG Power Solutions 2.5B TAM 2 in PCM in heating/furnace applications Heavy Industry Industrial Coatings Aerospace HiTek Power & Defense THIN FILM 1 position in HV for…
Increased Product Development Speed and Efficiency Revamped product development process (PDP) Localized and distributed R&D Shenzhen engineering for fast NPI Net impact: Faster solutions to our customers Reduced product development…
Precision Power Tomorrow: Strategy for Growth INDUSTRIAL THIN FILMS Core Applications Share gain Enabling inflection points SEMICONDUCTOR New Applications Increase SAM Increasing footprint ANALYTICAL INDUSTRIAL TEST HEAVY…
Capitalizing on Semi Inflection Points OEM SOLUTIONS WHAT THIS MEANS FOR AE Multi-patterning Exponential growth of etch LITHOGRAPHY below 32nm node and PECVD systems More sophisticated etch Precision control and agility 3D…
Growth Strategy in Semiconductor Extend leadership in growth applications Capitalize on AEs advanced RF pulsing solutions for Etch Expand AEs 2MHz RF systems into Etch/PVD Create new process sources for etch/deposition/PEALD…
Growth Strategy in Thin Films Industrial APPLICATIONS STRATEGY Energy Efficiency Drive fast adoption of advanced bipolar technology Superior film performance Superior cost of ownership Display Technologies Retrofit large installed…
Expanding into New Applications: Heavy Industry Expand PCM presence through global distribution channels Partner with Industrial Automation leaders in US, Europe, and Asia Develop custom integrated power control solutions in India and…
Expanding and Diversifying Target Applications ELECTROPHORESIS MASS SPECTROMETER CAT SCAN ANALYTICAL INSTRUMENTS DNA SEQUENCER LASER SCALPEL MEDICAL SEMICONDUCTOR 1.5B High Voltage TAM SEMICONDUCTOR TOOLS Diversified…
Strategy for Growing in New Applications with HV Leverage combination of two acquired HV companies for R&D and fast product development Accelerate share growth through AEs global sales channel Focus on key growth applications with new…
Accelerate Growth Organically and Inorganically Continue to grow faster than the applications we serve Maintain industry leadership in our core application space Grow in new applications increase TAM Preserve leadership position…
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Unlocking the Value of Inverter Products February 26, 2015 Bates Marshall, SVP Sales, Marketing & Service
Unlocking Value of Inverters Inverter model distinctly different than Precision Power Market dynamics dependent on government tariffs Different margin structure and business model Operational model Pursuing strategic options for…
Market Dynamics Changing Competitive Landscape PRECIPITOUS SCALE OR VERTICAL NEW ASIAN COMPETITORS ASP DECLINES INTEGRATION REQUIRED Preference for local Increasing Leaders at massive content commoditization scale or vertically…
Divergence of Key Market Segments Utility market facing ITC cliff Elimination of 30% ITC at end of 2016 Increasing number of suppliers contending for shrinking pool of opportunities Commercial market booming with better fundamentals…
Rationalized Portfolio & Regional Deployment Retiring legacy product lines 3-phase 1000 Volt string inverter platform for solutions up to 48 kW Targeting rooftop and distributed generation in Americas, EMEA, Japan Focused portfolio…
Optimized Portfolio Two Core Platforms 3TL NX 3-Phase string Bi-Polar central Scalable, flexible, global High performance UL & IEC for commercial UL utility-scale and utility 41
Product Development Plan Introduce UL 48 kW 3TL for N. American market Complete Introduce 24 kW 3TL for Japanese market 3-phase string Introduce cost-reduced Gen 3 worldwide Cost-reduction Supply-chain optimization derivatives…
Supply Chain Initiatives to Reduce Costs COMPLETE MATERIAL RESOURCING COST REDUCTIONS WITH EXISTING TO LOW-COST REGIONS SUPPLIERS LOWER VALUE ANALYSIS / LOGISTICS COSTS VALUE ENGINEERING 43
PRODUCT LINE RATIONALIZATION Key Takeaways COMPLETED COST REDUCTION Inverter model distinctly different than PROGRAM UNDERWAY Precision Power Pursuing strategic options for Inverters UNLOCKING VALUE OF R&D PROGRAMS Driving…
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Financial Review February 26, 2015 Danny Herron, EVP & CFO
Actions Over Last Four Years 2014 Acquired Acquired Acquired Rationalized Power Control Modules HiTek Power Group UltraVolt Group Solar Inverter Products Q114 Q214 Q314 Q414 2013 Acquired 3-phase String Product Accelerated…
Performance Trends Versus Competitors Showing Significant Improvement 48
Non-GAAP Earnings Per Share vs. Peers Q3 2011 Q4 2014 0.80 ADVANCED ENERGY 0.70 0.60 0.50 0.40 0.30 0.20 0.10 - Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 2012 2013 2014 COMPETITOR A COMPETITOR B COMPETITOR C 0.80…
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