Research & Analysis: Materion Corporation (NYSE: MTRN)

Back To Basics

This week we will be returning to the industrials industry, particularly with materials and value-added production. We will be reviewing Materion Corporation, a US-based supplier of beryllium, a material that is blended with other metals to create an alloy used across multiple market nodes, including the semiconductor industry, automotive, aerospace & defense, and others. When blended with copper and aluminum, beryllium is said to strengthen metals while enhancing conductivity.

Materion has faced some headwinds in FY24 as the markets served faced various challenges, including inventory destocking, slower production, and a slower-than-expected recovery. Despite these challenges, management has taken the appropriate efforts to rightsize operations, sell off unprofitable assets, and enhance its lagging optics segment.

Thematically, Materion will be a turnaround & growth investment as the firm takes part in multiple megatrends, including the growing data center footprint.

Materion Corporation (NYSE: MTRN)

Materion Operations

Materion is in the business of developing advanced engineered materials across a multitude of end-markets, with its largest market being the semiconductor industry. In addition to this, the firm caters to other areas of technology, including consumer electronics, telco, & data center, the energy industry, and the broader industrials sector like automotive and aerospace & defense.

The firm mines beryllium as part of its operations with both direct sales of the material and value-added engineered products. As of FY23, Materion has a mine life of 27 years.

Materion sells its products on a global basis with about 50% of net sales being in the US. Beryllium alloy is said to provide significant strength and can be corrosion-resistant.