INVESTOR PRESENTATION November 12, 2019 II-VI Incorporated CONFIDENTIAL - Export Control Classification EAR99
Safe Harbor Statement This communication contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” similar expressions, and variations or negatives of these words. Forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Important factors that may cause such a difference include: ((i) the failure of any one or more of the assumptions stated above to prove to be correct; (ii) the risks relating to forward-looking statements and other “Risk Factors” discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2019; (iii) the purchasing patterns of customers and end-users; (iv) the timely release of new products, and acceptance of such new products by the market; (v) the introduction of new products by competitors and other competitive responses; (vi) the Company’s ability to assimilate recently acquired businesses, and risks, costs and uncertainties associated with such acquisitions; and/or (vii) the Company’s ability to devise and execute strategies to respond to market conditions. The Company disclaims any obligation to update information contained in these forward-looking statements whether as a result of new information, future events or developments, or otherwise. Page 2 II-VI Incorporated CONFIDENTIAL - Export Control Classification EAR99
II-VI Today
Overview Refers to groups II and VI of “ TWO SIX ” the Periodic Table of Elements Aerospace & Defense 13% Life Sciences 23% 6% 28% FY2019 FY2019 Semi.Cap. FY2019 Revenue 4% Revenue 72% 72% Revenue Equip 43% Regions Segments Markets All other 17% 6% 11% 24,000 2.6B 69 18 Core Competency Pro Forma Revenue Worldwide Worldwide Countries ENGINEERED MATERIALS employees Locations LTM 06/30/2019 for II-VI and LTM 07/28/2019 for Finisar. Page 4 II-VI Incorporated CONFIDENTIAL - Export Control Classification EAR99
Our Core & Growth Markets EUV Optical Lithography Communications Industrial SIC for 3D Sensing Lasers EV Core Markets Growth Markets Aerospace & SIC for Defense Wireless Page 5 II-VI Incorporated CONFIDENTIAL - Export Control Classification EAR99
Over 1000 Customers Across Diverse Markets *Sampling of representative customers based on approvals for public release Page 6 II-VI Incorporated CONFIDENTIAL - Export Control Classification EAR99
20+ Years of Tremendous Value Creation by Integration of Acquisitions 1995 - 2010 2011 - 2015 2016 - 2019 Micro-optics Semiconductor Lasers InP Platform Photop Technologies Oclaro Semiconductor Laser Finisar Laser Processing Heads Optical Amplifiers High Energy Lasers Highyag Oclaro Optical Amplifier Redstone Aerospace Optonicus Selenium Refinery Advanced Coatings Wavelength Selective Switch Pacific Rare Metals Oclaro Optical Coatings CoAdna Aerospace & Defense Optical Systems Thermo-electrics LightWorks Optics Compound Semiconductor Wafer Fab Marlow Industries Kaiam Laser Limited(U.K. Fab) Precision Ceramics Ultraviolet Filters Faraday Rotator M Cubed Technologies Laser Power Corp Integrated Photonics Optical Channel Monitors Silicon Carbide Substrates Aegis Lightwave Direct Diode Lasers Litton SIC Group Direct Photonics Conformal Patterning ZnSe Platform Max Levy Autograph GaAs & GaN-SiC Platform Laser Power Corp Anadigics Micro-optics Epitaxial Wafers Lighting Optical Epiworks Micro-optics Virgo Optics Page 7 II-VI Incorporated CONFIDENTIAL - Export Control Classification EAR99
Revenue Growth & Transformative Acquisitions 10 Years of continuous revenue growth 4 Transformative Acquisitions 2019 $1,362 2016 2013 $1,050 $972 2010 InP Technology $827 Platform $742 Vertical $683 Integration & GaAs Scale Technology $551 $516 Platform $487 Optical Network & China Market $333 The picture can't be displayed. 5G NASDAQ S&P 500 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Stock charts represent relative growth in value since 1987 Page 8 II-VI Incorporated CONFIDENTIAL - Export Control Classification EAR99
Proven Integration Playbook Focused on Operational Improvements and Investing for Growth Oclaro Semiconductor Laser 1 Business Case Study Transaction Overview Operational Excellence Target had a high unit cost structure II-VI Laser Enterprise Revenue and Operating Margin FY14 With vertical integration and wide applicability in optical and industrial 60% markets, II-VI drove margin expansion over Then (@ Acquisition) subsequent years (45%) FY14 FY19 1. Oclaro’s semiconductor laser business was acquired in FY2014. Revenue Op. Margin Page 9 II-VI Incorporated CONFIDENTIAL - Export Control Classification EAR99
Acquisition of Finisar
Strategic Window of Opportunity Now Disruptive Megatrends Inflection Point TAM ($B) $20 CAGR 20% 3D Sensing $18 $16 Electric & Autonomous Vehicles $14 CAGR 16% $12 Proliferation of Cloud Services $10 $8 Window of $6 Increased Data and Video Consumption Opportunity 1 $4 $2 Accelerated deployments in Mobile & $- 5G Communications 2018 2019 2020 2021 2022 Datacom TRx Telecom TRx ROADM 3DS & LiDAR RF Electronics Power Electronics Combined broad base of talent, technology and Right Technology + Right Team + Right Time manufacturing enhances our ability to hit market windows today Note: Market size forecast from Lightcounting, Ovum and Yole. Page 11 II-VI Incorporated CONFIDENTIAL - Export Control Classification EAR99
Significant Value Creation Potential from Synergies Annual Estimated Synergies Achieved Within 36 months Supply chain management - Procurement Cost of Goods Sold ~$85 million Infeed - Internal supply of enabling materials and components More efficient R&D with scale Research & Development Complementary engineering and design teams Consolidation of overlapping corporate costs ~$65 million General & Administration Optimization of operating model Sales & Marketing Savings from scale ~$150 million Total Page 12 II-VI Incorporated CONFIDENTIAL - Export Control Classification EAR99
Completed Acquisition of Finisar on September 24, 2019 This completes our largest acquisition to date Total price of $2.9B consisting of $1.9B cash and $1.0B stock We expect to file the related pro forma financial information on or about December 9, 2019. Page 13 II-VI Incorporated CONFIDENTIAL - Export Control Classification EAR99
A Powerful Combination
Addressing Multiple Strong and Growing Markets Power Electronics 3D Sensing & LiDAR Optical Communications RF Electronics in Wireless For Green Energy GaAs | InP | Si Photonics GaAs | GaN/SiC | Diamond SiC GaAs | InP For electric vehicles (EV/HEV), For 3D sensing in consumer For terrestrial, submarine & For 4G remote radio heads, electronics & LiDAR in 5G beam forming antennas & smart grid power switching, wireless optical infrastructure solar and wind energy automotive and datacenters RF electronics $1.1B 2022 Market $2.9B $12.1B $1.2B 60% 26% 13% 2018-22 CAGR 27% Source: 3D Sensing & LiDAR, Wireless RF and Power Electronics for Green Energy from Yole, Optical Communications from Lightcounting and Ovum. Page 15 II-VI Incorporated CONFIDENTIAL - Export Control Classification EAR99
Finisar Brings Significant Next-Generation Technologies For Communications, 3D Sensing, and LiDAR Enabling New Market Growth Datacom Transceiver Technology Telecom Transceiver Technology ROADMs I-Temp Tunable DBR Laser + MZ Mod High-Speed GaAs VCSEL High-Speed InP DML Tunable Laser + InP Modulator LCoS 3D Sensing 2D VCSEL Array Coherent Tunable Laser Coherent Tx+Rx Assemblies Diffraction Gratings GaAs InP WSS Optics Integrated Circuits Transimpedance Amplifier Clock & Data Recovery Silicon Photonics PIC + EIC Laser Driver Page 16 II-VI Incorporated CONFIDENTIAL - Export Control Classification EAR99
#1 in Optical Communications A highly complementary and complete portfolio of leading-edge products Long Haul, Metro, and Datacenter Interconnects Datacom Telecom Subsea ROADMs Transmission * Finisar WSS business operated separately Page 17 II-VI Incorporated CONFIDENTIAL - Export Control Classification EAR99
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