INVESTOR PRESENTATION August 13, 2019 IIVI
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 ability of II-VI Incorporated (“II-VI”) and Finisar Corporation (“Finisar”) to complete the proposed transaction on the anticipated terms and timing or at all, (ii) potential litigation relating to the proposed transaction, (iii) inherent risks and costs associated with the integration of the businesses and achievement of the anticipated synergies, (iv) potential disruptions from the proposed transaction that may harm the parties’ respective businesses, (v) the ability of the parties to retain and hire key personnel, (vi) adverse legal and regulatory developments or determinations that could delay or prevent completion of the proposed transaction, and (vii) the ability of II-VI to consummate financing related to the transaction. Additional risks are described under the heading “Risk Factors” in II- VI’s Annual Report on Form 10-K for the year ended June 30, 2018, filed with the U.S. Securities and Exchange Commission (the “SEC”) on August 28, 2018, and in Finisar’s Annual Report on Form 10-K for the year ended April 28, 2019, filed with the SEC on June 14, 2019. These risks, as well as other risks associated with the proposed transaction, are more fully discussed in the joint proxy statement/prospectus included in the registration statement on Form S-4 (File No. 333-2290520) filed by II-VI with the SEC in connection with the proposed transaction. Neither II-VI nor Finisar assumes any obligation to publicly provide revisions or updates to any forward looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. Page 2
II-VI At a Glance
II-VI Overview Refers to groups II and VI of “ TWO SIX ” the Periodic Table of Elements 19% 23% 24% Regions Segments Markets 47% 49% 41% Q4 FY2019 Q4 FY2019 Q4 FY2019 24% Revenue Revenue Revenue 10% 6% 27% 13% Core Competency 12,000 + 14 362.7M 52 ENGINEERED MATERIALS Countries Q4 FY2019 Worldwide employees Worldwide Locations Revenue Page 4
Our Core & Growth Markets Core Markets New Growth Markets • • Optical Communications EUV Lithography • • Industrial Lasers SiC for Wireless • • Military SiC for EV • 3D Sensing Page 5
20+ Years of Tremendous Value Creation by Integration of Acquisitions $1,159 $972 $827 $742 $683 $487 $516 $551 $316 $292 $333 $74 $123 $114 $128 $143 $187 $224 $225 $61 $62 $53 NASDAQ $38 $28 S&P 500 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 IPO 1987 Optical ZnSe Compound Semi. Micro-optics Optical Amplifiers Micro-optics UV Filters Selenium Channel Growth Wafer Fab Photop Technologies Oclaro Optical Amplifier Refinery VIrgo Optics Laser Power Corp Monitors Laser Power Corp Kaiam Laser Limited(U.K. Pacific Rare Metals Fab) Aegis Lightwave Micro- Metal Matrix Epiwafer Thermo-electric Coolers Silicon Carbide optics Foundry Components Litton SIC Group Marlow Industries Lighting Optical M Cubed Technologies Epiworks Laser Processing Conformal Patterning Semiconductor Lasers Faraday Rotator Acquisition History Heads Max Levy Autograph Oclaro Semiconductor Laser Integrated Photonics Highyag Military & Aerospace Direct Diode Lasers Optical Systems Direct Diode LightWorks Optics IIVI Advanced Coatings GaAs & GaN-SiC Devices Oclaro Optical Coatings Anadigics Page 6
Proven Integration Playbook Focused on Operational Improvements and Investing for Growth Oclaro Semiconductor Laser Business Case Study Transaction Overview II-VI Laser Enterprise Revenue and Operating Margin Target had a high unit Then (@ Acquisition) Now cost structure 60% 1 With vertical integration and wide applicability in optical and industrial (45%) markets, II-VI drove margin expansion over Semiconductor Laser business subsequent years FY14 FY19 Revenue Op. Margin 1. Oclaro’s semiconductor laser business was acquired in FY2014. Page 7
Acquisition of Finisar
A Powerful Combination $2.5B 7 Target End Markets Pro Forma Revenue 1 $570M $22B Pro Forma EBITDA 1 Addressable Market Size 2 70 24K+ Total Employees Worldwide Locations Worldwide Diversified Global Footprint Note: Pro forma Revenue and EBITDA represents LTM 09/30/2018 for II-VI and LTM 07/29/2018 for Finisar. 1. Represents LTM 09/30/2018 for II-VI plus LTM 07/29/2018 for Finisar and includes $150mm run-rate synergies for EBITDA. EBITDA excludes amortization of intangibles, the impact of SFAS 123(R) stock-based compensation expense and one-time charges. 2. 2022 estimated market size. Includes 3D Sensing, Power Devices for Automotive and Wireless RF size from Yole, Optical Communications from Lightcounting and Ovum, Industrial Processing, Military, Life Sciences from Strategies Unlimited. Page 9
Strategic Window of Opportunity Now Combined broad base of talent, technology and manufacturing enhances our ability to hit market windows today Right Technology + Right Team + Right Time TAM ($B) Disruptive Megatrends Inflection Point CAGR 20% $20 $15 CAGR 16% Proliferation of Electric & Cloud Services $10 3D Sensing Autonomous Vehicles Window of Opportunity 1 $5 $- Increased Data and Accelerated deployments in 2018 2019 2020 2021 2022 Video Consumption Mobile & 5G Communications Datacom TRx Telecom TRx ROADM 3DS & LiDAR RF Electronics Power Electronics Note: Market size forecast from Lightcounting, Ovum and Yole. Page 10
Irreversible Megatrends I Addressing Multiple Strong and Growing Markets 3D Sensing Optical RF Electronics in Power Electronics & LiDAR Communications Wireless For Green Energy GaAs | InP GaAs | InP | Si Photonics GaAs | GaN/SiC | Diamond SiC For electric vehicles For 3D sensing in For terrestrial, For 4G remote radio consumer electronics submarine & wireless heads, 5G beam (EV/HEV), smart grid power switching, solar & LiDAR in automotive optical infrastructure forming antennas & and wind energy and datacenters RF electronics $1.1B 2022 Market $2.9B $12.1B $1.2B 2018-22 CAGR 26% 60% 13% 27% Source: 3D Sensing & LiDAR, Wireless RF and Power Electronics for Green Energy from Yole, Optical Communications from Lightcounting and Ovum. Page 11
Finisar Brings Significant Next-Generation Technologies For Communications, 3D Sensing, and LiDAR Enabling New Market Growth InP Datacom Transceiver Technology Telecom Transceiver Technology ROADMs WSS GaAs Optics I-Temp Tunable Tunable Laser High-Speed GaAs VCSEL High-Speed InP DML LCoS DBR Laser + MZ Mod + InP Modulator 3D Sensing Coherent Tx+Rx Coherent Diffraction Assemblies Tunable Laser Gratings 2D VCSEL Array Laser Driver Transimpedance Clock & Data Silicon Photonics Integrated Circuits Amplifier Recovery PIC + EIC Page 12
Most Compelling Platform for 3D Sensing & LiDAR II-VI’s GaAs Platform + Finisar’s InP Platform = Enhanced competency in 3D Sensing and LiDAR Optimization of R&D, Capital and Asset Utilization = Faster Time to Market Vertically integrated 6 inch GaAs compound semiconductor platform, one of the largest in the world = RF Devices and advanced optoelectronic device integration The iPhone Is Just The Tip of the Iceberg For Potential Applications Auto Security / VR / AR Video Game eCommerce LIDARs Tablets Biometrics Consoles VCSEL Arrays For 3D Sensing & LiDAR CAGR (’18-22): +60% Source: Yole Page 13
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