ROFIN-SINAR Technologies Nasdaq RSTI US 7750431022 FY 2013 / 3 Months Investor Presentation
SAFE HARBOR STATEMENT Safe Harbor Statement Under the Private Security Litigation Reform Act During the course of this presentation, we will make projections or other forward-looking statements regarding future events or the future financial performance of the Company. We wish to caution you that such statements reflect only our current expectations, and that actual events or results may differ materially. We refer you to the risk factors and cautionary language contained in the documents that the Company files from time to time with the Securities and Exchange Commission, including the Company s Annual Report on Form 10-K for the fiscal year ended September 30, 2012. Such documents contain and identify important factors that could cause our actual results to differ materially from those contained in our projections or forward-looking statements. We undertake no obligation to update such projections or such forward-looking statements in the future.. Page 2
THE COMPANY Company is a global leader in the design, manufacture and marketing of industrial lasers and laser-based products used in material processing applications Overview Headquartered in Plymouth, MI, and Hamburg (Germany) Worldwide > 2,200 employees Over 4,000 customers worldwide Global sales & service network Revenues FY 2013/3 M: $142.2 million FY 2012: $540.1 million Macro 34% Components 12% Micro & Marking 54% Split by application Q1/FY2013 Installed base of over 45,000 laser units Revenues with service & spare parts > 25% of revenues Asia 39% Europe 42% North America 19% Split by region Q1/FY2013 Page 3
MARKETS + GROWTH DRIVERS Company Total Net Sales: FY 2013/3M: $142.2 million (thereof laser-related: $89.4 million) FY 2012: $540.1 million (thereof laser-related: $328.7 million) Primary Markets Current Market Situation As percentage of laser-related sales Machine tool 30% Automotive & Sub-Suppliers 8% Consumer electronics Photovoltaics 33% Semiconductor Medical device industry Flexible packaging 29% Jewelry China: currently stable; potential for fiber lasers Stable business/potential in Asia; Outlook: restrained demand in Europe; potential for welding applications CE: project based; business depends on new product introductions Opportunity: efficiency and capacity increase in China Slower demand; market expects pick-up in summer Good level in key regions (especially US); increased demand from Asia; potential for new technology Food & packaging industry: slower demand; project based Stable; depends on consumer climate Others (i.e. M&D, SmartCard, Watch) M&D: fiscal cliff?; SmartCard: identity documents!; Watch industry: swiss-based Page 4
FOCUSED SALES - LASERS + LASER SYSTEMS Company MACRO Cutting, Welding, Surface Treatment ROFIN BRAND MARKING Vector-Marking MICRO Fine Cutting Fine Welding Micro Structuring Perforating OEM Machine Tool Polymers Tool & Die Glass & Displays Surfaces Automotive & Sub-Suppliers Electronics Jewelry Photovoltaic Packaging Smart Cards Labels Medical Device Consumer Goods Semicon/Electronics PRC Laser Lee Laser NELC ADDITIONAL GROUP BRANDS - LASERS - CO 2 laser sources Laser sources CO 2 laser sources Page 5
FOCUSED SALES - LASER COMPONENTS Company ADDITIONAL GROUP BRANDS - COMPONENTS - Laser diodes, diode technology Fibers, fiber laser technology Optics, beam deliveries, power supplies Primary markets Primary markets Primary markets Avionics / Aerospace Defense Image Recording Instrumentation Industrial Laser Industry Medical Spectroscopy Laser Industry Medical Industrial Scientific Avionics / Aerospace Defense Industrial Laser Industry Medical Scientific Industrial Laser Industry Laser Industry (Mainly high-power laser manufacturers) Laser Industry Page 6
Key Financials Historical Overview 700 600 500 Revenue Order Entry Order Backlog In Mio. USD 511 480 575 602 475 598 612 540 _ Net Income* In Mio. USD Q1/2013 534 70 60 50 430 421 424 400 323 336 375 379 350 40 300 200 100 73 76 85 117 143 294 88 139 153 147 Net Income: 8.9 million 142 137142 30 20 10 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013/3M US$/Euro: 0,83 0,79 0,81 0,75 0,67 0,74 0,74 0,72 0,77 0,77 0 * Attributable to RSTI Page 7
FINANCIAL KEY FIGURES Financials KEY FIGURES (in US$ million) 2007 2008 2009 2010 2011 2012 2013/3M Revenue 479.7 575.3 349.6 423.6 597.8 540.1 142.2 Cost of goods sold 276.3 326.9 217.5 257.3 365.7 343.8 92.1 Gross profit 203.4 248.4 132.1 166.3 232.1 196.4 50.1 Selling, general & administrative * 84.7 105.1 88.9 89.9 107.5 101.1 25.2 Research & development 27.8 41.1 31.5 30.1 38.3 42.6 11.0 Income from operations 86.6 95.5 8.1 44.0 83.7 50.4 13.4 Interest expense net (5.0) (3.0) 0.3 0.4 (0.1) 0 0 Taxes 31.8 33.5 5.2 15.4 26.1 17.2 4.0 Net income (attributable to RSTI) 55.3 63.8 9.2 29.8 60.0 34.5 8.9 EPS diluted** 1.74 2.09 0.31 1.02 2.06 1.20 0.32 Order entry 511.4 602.1 293.7 474.9 612.1 533.9 137.3 Order backlog 116.6 143.4 87.6 138.9 153.2 147.0 142.1 Weighted average s/o in million** 31.8 30.4 29.2 29.2 29.1 28.7 28.2 CASH FLOW (in US$ million) 2007 2008 2009 2010 2011 2012 2013/3M Cash flow from operations 67.9 32.6 55.4 36.8 50.0 22.0 22.0 Cash flow from investing (29.5) 52.2 (18.2) (8.3) (28.5) (39.4) (7.8) Thereof Capex (9.0) (14.5) (7.8) (8.6) (21.8) (27.3) (4.6) Depreciation/Amortization 11.0 16.4 13.0 11.6 13.0 13.9 3.7 EARNINGS GUIDANCE (subject to safe harbor statement) Q2/2013 FY2013 Revenues $132- $137 million $550 - $560 million Gross profit (in percentage of net sales) 35-36% approx. 37% Period expenses (in percentage of net sales, incl. intangible amortization) approx. 27% approx. 26-27% EPS $0,26 - $0,28 * Excl. intangibles amortization - ** Figures reflect stock split in 2007 Page 8
FINANCIAL MODEL Financials KEY FIGURES (as percentage of net sales) 2007 2008 2009 2010 2011 2012 2013/3M Revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Cost of goods sold 57.6% 56.8% 62.2% 60.7% 61.2% 63.6% 64.7% Gross profit 42.4% 43.2% 37.8% 39.3% 38.8% 36.4% 35.3% Selling, general & administrative 17.7% 18.3% 25.4% 21.2% 18.0% 18.7% 17.7% Research & development 5.8% 7.1% 9.0% 7.1% 6.4% 7.9% 7.7% Income from operations 18.1% 16.6% 2.3% 10.4% 14.0% 9.3% 9.4% Interest expense / (Income) (1.0)% (0.5)% 0.1% 0.1% 0.0% 0,0% 0,0% Net income (attributable to RSTI) 11.5% 11.1% 2.6% 7.0% 10.0% 6.4% 6.3% Effective Tax Rate 36.6% 34.4% 36.1% 34.1% 29.9% 32.8% 30.7% Revenue from service, training, spare parts 26% 25% 30% 30% 26% 28% 25% Revenue from components 9% 10% 12% 10% 10% 12% 12% EBIT 17.1% 16.4% 4.2% 10.8% 14.4% 9.6% 9.1% EBITDA 19.4% 19.2% 7.9% 13.5% 16.6% 12.1% 11.7% RETURN ANALYSIS 2007 2008 2009 2010 2011 2012 ROE*** 12.2% 15.8% 2.2% 7.2% 12.7% 7.1% ROWC 16.0% 24.7% 3.3% 10.4% 18.0% 10.8% *** Equity excl. Minority interest Page 9
STRONG BALANCE SHEET Financials ASSETS in US$ million 12/31/2012 09/30/2012 Total current assets 449,360 439,522 Including: Topic Four Cash, cash equivalents & short term investments 115,147 101,163 Trade accounts receivable, net 109,295 107,935 Inventories, net 199,484 202,188 Total non-current assets 217,426 213,010 Total assets 666,786 652,532 LIABILITIES + STOCKHOLDERS EQUITY Total current liabilities 122,439 120,695 Including: Short-term debt 16,304 16,883 Trade accounts payable 22,627 26,644 Total non-current liabilities 38,313 37,918 Including: Long-term debt 5,517 5,662 Net stockholders' equity 506,034 493,919 Total liabilities and stockholders equity 666,786 652,532 Days Sales Outstanding 70 73 Equity Ratio 76% 76% Page 10
GLOBAL INDUSTRIAL LASER MARKET Laser Market Global Laser Revenues 2012 ~ US$ 2.1 billion* + 7% Global Laser Revenues 2013 E ~ US$ 2.2 billion* + 2% Thereof: Thereof: CO 2 48% 4% FL 27% SSL 21% CO 2 46% 5% FL SSL 21% 28% Other Other ROFIN is present in all technologies with the exception of Other! Sources: Industrial Laser Solutions / Laser Focus World / January 2013 Page 11
TECHNOLOGIES Technology Technologies Primary Applications Gas lasers: CO 2 lasers Solid-state lasers: Fiber lasers Lamp + diode-pumped lasers Semiconductor lasers: Diode lasers Cutting, welding, surface treatment (i.e. structuring), perforating, drilling, marking Cutting, welding, surface treatment (i.e. ablation, structuring, cleansing), drilling, marking Heat conduction welding, brazing, hardening, soldering Technology Page 13
ROFIN s FIBER LASER TECHNOLOGY TECHNOLOGY - FIBER LASER Technology PRODUCTION OF DIODES Vertical Integration for ROFIN s Fiber Laser Series! Page 14
THE GROUP s OWN FIBER LASER PORTFOLIO Technology The Group s Comprehensive Range of Fiber Lasers Fiber laser-related figures FY2013/3M Sales: 383 Units (USD 22.3 million) Order Entry: 154 Units (USD 14.6 million) Backlog: 340 Units (USD 29.4 million) Page 15
ROFIN s FIBER LASER CONCEPT Technology Pump Module + Fiber Laser Module 12 x 135 W fiber-coupled pump modules 1 kw Fiber Laser Module Power scaling by power combining Schematic 1 kw Single-Mode diagrams Fiber of fiber Laser Units laser combiners 3-port-fiber combiner Fiber Laser Combiner 4-port-fiber combiner... x-port-fiber combiner Compact modular unit All Fiber design: efficient, reliable, modular Phasing-in 8 x 200 W instead of 12 x 135 W pump modules; targeting 300 W pump modules in 2014 Uses technology proprietary to RSTI 1.5 kw fiber laser module realized and in production; targeting 2 kw fiber laser modules in 2014 Technology Page 16
LASER TECHNOLOGY TRENDS - USPLs Technology Potential for Cold Ultrashort Pulse Lasers Femto- and Pico-Second Lasers Open Up New Applications in Various Markets, i.e. in the Medical Device, Semiconductor or Solar Sector Suitable for bio-absorbable polymers So-called cold lasers process materials faster than energy can diffuse within the atomic lattice. Therefore no heat is transferred to the surrounding material, which eliminates any recast and burr. Dramatically reduced post-processing is the consequence. Technology Page 17
LASERS IN THE ID-Card + TAG INDUSTRY Special Markets Forgery-Proof, High-Speed Laser Marking + Laser Perforating Perforation of Passports Marking of ID Cards Marking of Identification IDENTITY Plates CARDS DRIVING LICENCES and many more PASSPORTS IDENTIFICATION PLATES Special Markets Page 18
LASERS IN MEDICAL DEVICES Special Markets Finest Cuts, Biocompatible Joining + Durable Marking of Medical Devices Fine Welding of Endoscopes Presicion Cutting of Medical Wires & Hyper Tubes Cutting WELDING of OF Hip MICROPROBES Rasps & Other Medical Instruments STENT CUTTING (BIO-ABSORBABLE) INSULIN TUBE CUTTING MEDICAL SYRINGE MARKING MARKING OF PACEMAKERS Market Opportunities Through Expansion of Medical Insurance & Improved Healthcare The world s population growth and longer life expectancy are resulting in a greater need for sophisticated manufacturing solutions to realize the possibilities of advances in medical care. As emerging economies develop, residents in populous countries, such as China and India, are increasingly demanding improved health services. Special Markets Page 19
LASERS IN CONSUMER ELECTRONICS Special Markets Laser Applications in Consumer Electronics Other Applications Include for Example: Degating of Polycarbonate Displays KEYBOARD MARKING Post Sandblast Laser Cleaning of Housings CASING SPOT WELDING KEYPAD SEPARATING BATTERY MARKING TFT PANEL PATTERNING µsd CARD CUTTING Special Markets Page 20
LASERS IN PHOTOVOLTAICS Special Markets High Laser Potential in Cristalline, Thin-Film + Roll-to-Roll Solar Cell Production Edge Ablation SiN Ablation Structuring Laser Applications on 1 st & 2 nd Generation Solar Cells: Separating, structuring, micro drilling, decoating, and marking of solar cells 3rd Generation Solar Cells: Rofin offers solutions for roll-to-roll processed flexible solar cells Laser Doping Mono-/polycristalline solar cells/wafers Thin-film solar cells & carrier materials Laser Scribing and many other Page 21
OPPORTUNITIES IN GREEN TECHNOLOGIES Special Markets Laser Marking is an Important Step in Manufacturing LEDs LEDs are used for backlighting of flat panel TVs, mobile phones & the interior lighting of cars LEDs are expected to develop to one of the predominant light sources over the coming decades. Page 22
GROWTH STRATEGY Strategy Key Items Focus on new markets & applications 1 2 3 4 5 6 Capitalize on our global presence to attract new customers Develop new laser products through technological innovation Further expansion in emerging regions Offer customized solutions based on standard platforms Acquire complementary business operations, products or technologies Page 23
COMMON STOCK Share ROFIN s Common Stock Nasdaq: since 1996 RSTI Frankfurt Stock Exchange: since July 2001 ISIN: US7750431022 Indices: Russell 2000, S&P SmallCap 600 Shares O/S (diluted, after split): ~ 28.2 million (FY2013 / 3M) Float: ~ 100% Share distribution: ~ 85% USA, ~ 15% Europe/ROW Fiscal year ends Sept. 30 Earnings results 2 nd quarter FY 2013: May 2, 2013 ROFIN-SINAR Technologies Inc. Investor Relations Contact: c/o ROFIN-SINAR Laser GmbH Katharina Manok Berzeliusstrasse 87 Tel.: ++49-40-73363-4256 22113 Hamburg, Germany Fax: ++49-40-73363-4138 email: ir@rofin.com www.rofin.com Common Stock Page 24
COMPANY HISTORY - MILESTONES Appendix 1975 - Founding of Rofin-Sinar Laser 1987 - Acquired by Siemens 1988 - Acquisition of Spectra Physic s Industrial Laser Division in the US 1989 - Acquisition of Laser-Optronic in Germany (laser marking systems) 1996 - Spun off from Siemens (IPO on Nasdaq Stock Exchange) 1997 - Acquisition of Dilas Diodenlaser, Germany 1998 - Acquisition of Palomar Technology UK (today Rofin-Sinar UK) 2000 - Acquisition of Carl Baasel Lasertechnik, Germany 2001 - Acquisition of Z-Laser S.A., Spain 2001 - Secondary listing at the Frankfurt Stock Exchange (TecDAX 2004-2010) 2002 - Expansion in Asia; Founded subsidiaries in Taiwan and Korea 2004 - Acquisition of Optoskand, Sweden 2004 - Secondary offering of 2.86 Mio shares at $28 2004 - Acquisition of PRC and Lee Laser, USA 2005 - Founded subsidiaries in China, Canada and USA (Dilas Diode Laser, Inc.) 2007 - Acquisition of Corelase Oy, m2k-laser GmbH, ES Technology 2008 - Acquisition of Nufern, USA (fibers and fiber laser technology) 2008 - Foundation of ROFIN-BAASEL Swiss AG 2008 - Formed Nanjing Eastern Technologies and Dilas Diodelaser China 2009 - Closed acquisition of China-based NELC 2010 - Acquired LASAG AG (Thun/Switzerland) and its worldwide activities 2011 - Formed subsidiary in India Appendix - Company Page 25
GLOBAL PRODUCTION, SALES & SERVICE NETWORK Appendix - More than 20 production facilities in North America, Europe & Asia - Customer service support in over 50 countries - Approx. 140 sales engineers & about 400 customer service personnel - Regional & industry specialized sales engineers Appendix - Company Page 26
SELECTED MARKETS & APPLICATIONS Appendix Automotive Machine Tool Semicon & Electronics Medical Dental Cutting Car body parts Tubes & profiles Circuit boards Insulin tubes Welding Injection nozzles Heat exchanger Switches Microprobes Marking Car tires Blades LED displays Endoscopes Other Decoating of tailored blanks Mold cleaning Soldering Perforating of plaster foils Page 27
SELECTED MARKETS & APPLICATIONS Appendix Jewelry Photovoltaic Consumer Goods Other Cutting Puzzle chains Solar cell wafers Paper Ice-cream packaging Card boxes Welding Jewel settings Soldering contacts Golf clubs Aircraft stringers Marking Rings Data matrix on solar cells Writing utensils Driving licenses Other Jewel repair Wafer drilling Glass blasting Capsule scribing Page 28
PRODUCT PORTFOLIO Appendix CO 2 Laser Sources Diode Lasers Sealed-Off Laser 100-600 W CO 2 Laser Systems Diffusion-Cooled CO 2 - Laser 1,000 8,000 W Fast-Axial-Flow CO 2 -Laser 1,000 8,000 W StarShape CO 2 High-Power Diode Laser 700-3,600 W Low-Power Diode Laser 120-400 W Diode Lasers Systems Remote Welding System Profile Welding System Laser Perforation System StarPerfo CO 2 Laser Marking System Multiscan Marker MINI Diode Laser System COMPACT Diode Laser System Page 29
PRODUCT PORTFOLIO Appendix Solid-State Laser Sources Q-Switched Laser 500-1,000 W High-Power Fiber Laser 500-4,000 W StarFiber 100-600 W StarPulse Laser 40-500 W StarFiber OEM Green Nd:YAG Laser Diode-End-Pumped Lasers Picosecond Fiber Laser X-Lase Solid-State Laser Systems Stent Cutting System StarCut Tube Scanner Welding System Universal Laser Welding System Modular Processing System (MPS) for fine cutting & welding Manual Welding Laser System Select Manual Welding All-in-one Laser End-Pumped Fiber Laser Laser System Solid-State Laser Marker Performance Marking System CombiLine Cube Marking System PowerLine Prime Desktop Marker Page 30
GROUP STRUCTURE Appendix ROFIN-SINAR Technologies Inc. Plymouth, USA 80 % 80 % Lee Laser, Inc. Orlando, USA Corelase Oy Tampere, Finland PRC Laser Corp. Landing, USA Nufern East Granby, USA Nanjing Eastern Technologies Co.Ltd. Nanjing, China Nanjing Eastern LASER Co., Ltd. Nanjing, China ROFIN-SINAR, Inc. Plymouth, USA PRC Europe NV Oudenaarde, Belgium ROFIN-SINAR Technologies Europe S.L., Barcelona, Spain DILAS Diode Laser, Inc. Tucson, USA ROFIN-BAASEL Canada Ltd., Toronto, Canada ROFIN-BAASEL UK Ltd. Daventry, UK ROFIN-SINAR Laser GmbH Hamburg / Munich, Germany ES Technology Ltd. Oxford, UK ROFIN-BAASEL Lasertech GmbH & Co. KG Starnberg, Germany 1 % ROFIN-BAASEL, Inc. Devens / Chandler, USA WB-PRC Laser Service GmbH Zorneding, Germany PMB Elektronik GmbH Starnberg, Germany Employees as per Dec. 31, 2012: 2,233 OPTOSKAND AB Gothenburg, Sweden 90% RASANT-ALCOTEC Besch. GmbH Overath, Germany m2k-laser GmbH Freiburg, Germany 100% ROFIN-BAASEL China Co., Ltd. Shanghai, China 88 % ROFIN-BAASEL Japan Corp. Atsugi, Japan 99 % ROFIN BAASEL Laser India Pvt. Ltd. Mumbai, India ROFIN-LASAG AG Thun, Switzerland ROFIN-BAASEL Swiss AG Biel, Switzerland ROFIN-BAASEL Singapore Pte. Ltd. Singapore ROFIN-BAASEL Taiwan Ltd. Taipei, Taiwan ROFIN-BAASEL Korea Co., Ltd. Seoul, Korea 95 % 95 % DILAS Diodenlaser GmbH Mainz, Germany Dilas Diodelaser China Co. Ltd., Nanjing, China ROFIN-BAASEL Italiana S.r.l. Monza, Italy ROFIN-BAASEL France S.A. Paris, France ROFIN-SINAR UK Ltd. Willerby, UK ROFIN-BAASEL Espana S.L. Pamplona, Spain ROFIN-BAASEL Benelux B.V. Ablasserdam, Netherlands Page 31