OERLIKON AM. Jeff Schultz PhD MBA, Global Head of AM Strategy & Corp. Dev. Andreas Schwarzwaelder, Head of Investor Relations. New York, May 10, 2018

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1 OERLIKON AM Jeff Schultz PhD MBA, Global Head of AM Strategy & Corp. Dev. Andreas Schwarzwaelder, Head of Investor Relations New York, May 10, 2018

2 Disclaimer OC Oerlikon Corporation AG, Pfäffikon, (together with its affiliates hereinafter referred to as Oerlikon ) has made great efforts to include accurate and up-to-date information in this document. However, Oerlikon makes no representation or warranties, expressed or implied, as to the truth, accuracy or completeness of the information provided in this document, Neither Oerlikon nor any of its directors, officers, employees or advisors, nor any other person connected or otherwise associated with Oerlikon, shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this document. The contents of this document, including all statements made therein, is based on estimates, assumptions and other information currently available to the management of Oerlikon. This document contains certain statements related to the future business and financial performance or future events involving Oerlikon that may constitute forward-looking statements. The forward-looking statements contained herein could be substantially impacted by risks, influences and other factors, many of which are not foreseeable at present and/or are beyond Oerlikon s control, so that the actual results, including Oerlikon s financial results and operational results, may vary materially from and differ than those, expressly or implicitly, provided in the forward-looking statements, be they anticipated, expected or projected. Oerlikon does not give any assurance, representation or warranty, expressed or implied, that such forward-looking statements will be realized. Oerlikon is under no obligation to, and explicitly disclaims any obligation to, update or otherwise review its forward-looking statements, whether as a result of new information, future events or otherwise. This document, including any and all information contained therein, is not intended as, and may not be construed as, an offer or solicitation by Oerlikon for the purchase or disposal of, trading or any transaction in any Oerlikon securities. Investors must not rely on this information for investment decisions and are solely responsible for forming their own investment decisions. Page 2

3 Oerlikon s strategic portfolio priorities Additive Manufacturing embedded in Surface Solutions CHF 2,847 million sales (2017) Surface Solutions Segment CHF 1,377 million World market leader with widest ranging portfolio of surface technologies, advanced materials, coating equipment and services Manmade Fibers Segment CHF 740 million From melt to yarn, fibers and nonwovens - world market leader for systems / plants used in the production of manmade fibers Drive Systems Segment CHF 730 million Worldwide leading supplier of complete drive systems as well as gear systems and single components for transmissions Creating a global surface solutions and advanced materials powerhouse Organic investments: innovation, markets, applications and technologies Additive Manufacturing M&A Manage market cycle Execution of capacity increase on a variable basis to capture opportunities from recovery Maintain technology and market leadership Repositioning successful and effects visible (growth and profitability) Drive innovation and market share Benefit from end market recovery REDEPLOY CASH AND BALANCE SHEET IN PROFITABLE GROWTH EVALUATE ALL VALUE CREATING OPTIONS Page 3

4 LEVERAGING OERLIKON S CORE TO DEVELOP THE AEROSPACE AM VALUE CHAIN OERLIKON S AM SOLUTIONS AM-specific metal powders including, Ni, Co, Cu, Fe, Ti & Al alloys Application engineering and R&D supporting customer s AM development Qualification Programs supporting production readiness Series production of advanced metallic components using AM and state of the art post-processing technologies DELIVERING ADVANCED MATERIALS & COMPONENTS GLOBALLY HELPING OUR CUSTOMERS REALIZE THE VALUE OF ADDITIVE MANUFACTURING Atomization & Materials AM Equipment Applications Engineering Additive Production Post Processing Testing & Assembly Inspection & Quality Page 4

5 AM VALUE CHAIN SIGNIFICANT VALUE IS GENERATED OUTSIDE THE BOX AM Powders Post-Processing Machining Heat Treat, HIP Coating & Finishing Page 5

6 OERLIKON AM: VERTICALLY INTEGRATED DEVELOPMENT & PRODUCTION OF AEROSPACE Post Processing Materials Development AM Process Optimization Oerlikon AM Charlotte Facility Oerlikon AM Expertise Technical Support Aerospace Qualification Process Page 6

7 OERLIKON AM: EXECUTING PROJECTS ACROSS VALUE CHAIN Current Status / Examples Assessment / Outlook Evaluation / Development Test and qualification programs for aerospace/defense Next generation AM platform Boeing strategic partnership GE Additive technical preferred partnership Partner in industrialization consortium (Airbus / Safran) Space launch company 5 year program 5 year program 4 year program 2 year program Materials Differentiated portfolio of printtested AM powders Installation of VIGA / EIGA1 equipment to boost quality and capacity Aerospace customer qualified Ni-based powder European machine manufacturer distributing Oerlikon powders Specialty Ni-based alloy being developed with Scoperta technology for Power Generation industry Expected growth of over 30 % Strong growth over 3 years Potential 2 year contracts possible for Ni-alloy in US Series Production Major defense customer Major power generation customer Army helicopter program / current program Antenna program for defense / in development Combustion components / current Combustion cover plates / future 5 year program 500+ units / p.a. 8 year program 800+ units / p.a. 5 year program units / p.a. 5 year program 600 units / p.a. Page 7

8 OERLIKON AM QUALIFICATION FOR AEROSPACE Single Part Qualification (e.g. US Army Rotorcraft Component) Part Qualification One powder One machine One location One part Aero and Def Ongoing programs with multiple OEMs Specific Qualification (e.g. Equivalence: Boeing Collaboration Project) Family Part Qualification One powder Multiple machines Multiple locations Multiple parts Developing design allowables Long term shift to AM Full Spectrum Approach to Qualification Powder Lifecycle Management Handling & Equipment Recovery Certification Traceability Design & Build Prep. EB & LB Nest Orientation & Configuration DFAM Guidelines Process Parameters linked to part families AM Processing & NDT M2M Variability & Stability In-process monitoring to validate process Define NDT methods Post Processing Part breakout Inspection (Machine & component) Thermal processing (Inc. HIP) Machining and Finishing Page 8

9 OERLIKON COMPUTATIONAL AM MATERIALS DEVELOPMENT Challenge Cracking in Ni 230 during AM processing Iteration Cracking in AM Phase Fraction of Deleterious Phase 1500K Phase Fraction of Deleterious Phase 1300K AE11076A Yes 0.79% 1.61% Post Processing Materials Development AE11641 Yes 1.11% 2.16% Solution Use computational thermodynamic tools to minimize formation of deleterious phases. AE11643 No 0.41% 1.09% AE11645 Yes 1.88% 3.44% AE11647 Yes 1.06% 2.17% AM Process Optimization Impact Page 9

10 AEROSPACE COMPONENT: ANTENNA BRACKET FOR SENTINEL SATELLITES Challenge Optimize design for strength and weight Produce test components Static and vibration testing Reliability testing Project management, design optimization & testing Additive production Project Partners Test articles validated static and vibration test requirements Solution Consolidation into robust single part design Validation made possible through production of two antennas, 30 tensile pieces and other test items on single build at Magdeburg facility EOS M400 ~40cm long antenna bracket AISi10Mg L-PBF Impact Certified product for space application Minimum strength requirements exceeded by >30% Highly uniform stress distribution 40% weight reduction achieved with topology optimization 40% weight reduction Lowered system costs and fuel consumption AM application expertise Increased reliability Failure reduction Effective timetable Cost optimization Weight reduction Page 10

11 Turbine Blade Case Study Hollow Turbine Blade Mass reduction is a key driver to reduce creep in blades Challenge Efficient cooling is a key driver to operate blades at higher temperatures Inconel 718 Complex geometries can only be manufactured by additive manufacturing Topology optimized design for mass reduction Use of high-performing AM materials Solution Topology optimization inside the blade Combined solution to coat AM component for erosion, corrosion and thermal barrier protection Reduced mass and creep Surface coating: - METCO Thermal Barrier Coating - BALZERS Balinit Turbine Pro CNC machining of the base to tolerance Improved cooling Impact Complex geometry and improved functionality Increased lifetime and efficiency of the turbine Metallurgical expertise AM application expertise Supplier integration Effective timetable Cost optimization Oerlikon can improve the performance of the component, allow complex geometries design and mass reduction, plus provide combined solutions to coat AM components for erosion, corrosion, and thermal barrier protection

12 AEROSPACE COMPONENT: IMPELLER FOR ROCKET TURBOPUMP Challenge Transform conventional design constraints Component must withstand high centrifugal/axial loads & oxidizing environment Short manufacturing lead-time critical Low manufacturing cost critical Preferred material choice enabled through AM PBF-LB/M Material 316L Solution Selected Oerlikon s 316L Stainless Steel powder Design for Additive Manufacturing (DFAM), build & post-processing completed at Oerlikon Impact Enabled customer preferred material to be used (previously prevented by conventional brazing limitations) Supply chain simplified Multiple parts consolidated into one monolithic component using DFAM Material compatible with liquid oxidizer Cost reduced Design to finished part in 10 days Metallurgical expertise AM application expertise Supplier integration Effective timetable Cost optimization Page 12

13 KEY FACTS Aerospace Making aerospace safer, more powerful and more efficient INDUSTRY CHALLENGES Focus on turbine efficiency: both cost and 2020 emission reduction goals drive the reduction of the specific fuel consumption Engine trends: Lighter weight materials have to withstand erosion, corrosion and extreme temperatures (>1500 C) Enhanced gas path sealing to increase safety and efficiency with less emissions Stringent process and material certification to ensure safety SOLUTIONS Customized solution of materials and equipment for better performance, greater efficiency and absolute reliability for our customers Thermal spray and thin film coatings extend part lifetime and improve efficiency and safety of jet engines Thermal barrier coatings on blades and vanes allow for higher temperature in the turbine Abradable coatings are used in engines to seal the gas path and improve performance and efficiency PVD coatings for wear protection in structure parts and landing gears 13% of FY17 Surface Solutions revenue Expected growth rate 4-5% Oerlikon covers all coating needs of the industry - from powder development and application engineering to equipment and process know-how Decorative coatings for cockpit and interior components Client needed to increase turbine efficiency while at the same time reducing their service intensity Using a combination of thermal spray and thin film coating improves performance Oerlikon delivered materials and equipment for thermal spray and provided coating services Achievements Fan Turbine 5% Combustion chamber Compressor overall efficiency increase in engine at improved safety Page 13

14 OERLIKON AM S TECHNICAL BREADTH AND VERTICAL INTEGRATION PROVIDE AEROSPACE CUSTOMERS A TRUSTED PARTNER Post Processing Materials Development Atomization & Materials AM Equipment Applications Engineering Additive Production Post Processing Testing & Assembly Inspection & Quality AM Process Optimization Advanced Materials Application Engineering & Design Production & Post- Processing Oerlikon AM Expertise Technical Support Aerospace Qualification Process 80+ years of experience Global sales and logistics network Comprehensive metal powder portfolio Superior quality and traceability Design and optimization of new and custom alloy chemistries for pilot atomization and AM validation In-house design shop with team in EU and the USA. Swift response and design times, as well as the agility needed to work with a wide range of design files and equipment Expertise on the best possible combination of materials, design, production methods, and postprocessing. From rapid prototyping to small or large volume series production Integrated full-service provider or a production JV partner Extensive AM equipment options We can help you achieve the end functionality, geometric accuracy, and final mechanical characteristics your application demands Page 14

15 Thank you. Page 15

16 INVESTOR RELATIONS CONTACT OC Oerlikon Management AG, Pfäffikon Churerstrasse 120 CH 8808 Pfäffikon SZ Switzerland Andreas Schwarzwälder Head of Investor Relations Senior Vice President Phone: Mobile: Page 16

17 OERLIKON AM CONTACT Oerlikon AM US, Inc Interstate North Drive Suite A Charlotte, NC Jeff Schultz, PhD MBA Global Head of AM Strategy & Corp. Dev. Phone: jeffery.schultz@oerlikon.com Page 17