#1G PHOTONICS INVESTOR PRESENTATION 2020 IPG Photonics#2Safe Harbor Statement Statements in this presentation that relate to future plans, market forecasts, events or performance are forward-looking statements. These statements involve risks and uncertainties, including, risks associated with the strength or weakness of the business conditions in industries and geographic markets that IPG serves, particularly the effect of downturns in the markets IPG serves; uncertainties and adverse changes in the general economic conditions of markets; IPG's ability to penetrate new applications for fiber lasers and increase market share; the rate of acceptance and penetration of IPG's products; inability to manage risks associated with international customers and operations; foreign currency fluctuations; high levels of fixed costs from IPG's vertical integration; the appropriateness of IPG's manufacturing capacity for the level of demand; competitive factors, including declining average selling prices; the effect of acquisitions and investments; inventory write-downs; intellectual property infringement claims and litigation; interruption in supply of key components; manufacturing risks; government regulations and trade sanctions; and other risks identified in the Company's SEC filings. Readers are encouraged to refer to the risk factors described in the Company's Annual Report on Form 10-K and its periodic reports filed with the SEC, as applicable. Actual results, events and performance may differ materially. Readers are cautioned not to rely on the forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. © 2020 IPG Photonics G PHOTONICS 2#3PRODUCTS ACROSS ALL INDUSTRIES G are made better AND at lower cost with IPG FIBER LASERS 3#4☐ ☐ Revolutionizing the Laser Industry Traditional Lasers Lamp-Pumped Nd:YAG Carbon Dioxide (CO2) Ty G PHOTONICS Ultra High Power Continuous Wave (CW) Lasers High Peak Power Lasers with Quasi CW (QCW) Option Adjustable Mode Beam and QCW Lasers High Power Nanosecond Pulsed Pico and Femtosecond Pulsed Expensive Bulky Unreliable ■ Difficult to Operate ◉ © 2020 IPG Photonics ■ Inefficient ☐ Frequent Maintenance ☐ Higher Productivity Compact ☐ Efficient ☐ Costly Consumables Reliable ☐ Minimal Maintenance No Consumables Not Scalable ☐ Robust ☐ Scalable P G PHOTONICS 4#5Key Takeaways 1 3 Global market leader in fiber laser technology across multiple end markets and applications Expanding multi-billion dollar addressable market opportunity CO 2 4 Vertical integration, manufacturing scale and technology driving best-in-class margins Industry-leading earnings and cash flow © 2020 IPG Photonics 6 G PHOTONICS 5#6Industrial Lasers for Materials Processing $100 Billion CUTTING WELDING BRAZING DRILLING $50 Billion Non-Laser Machine Tools 20160225 20160229 $0 Billion 2008 CLADDING ADDITIVE MFG MARKING SURFACE TREAT. © 2020 IPG Photonics 2010 2012 2014 Source: Oxford Economics, Optech Consulting and IPG Photonics Corporation 2016 Laser Systems 2018 2020 2022 PG PHOTONICS 6#7Addressable Market for Laser Sources Industrial Lasers $10 billion Market Estimate New Laser Applications Source: Optech Consulting, Strategies Unlimited and IPG Photonics Corporation © 2020 IPG Photonics $13 Billion Medical Digital Cinema and Enterprise Displays Sensors and Instruments R&D and Scientific Defense Microelectronics Processing Additive Manufacturing Marking and Engraving Precision Processing High-Power Cutting and Welding $0 Billion 2018 2019 2020 2021 2022 PG 2023 PHOTONICS 7#8$9 Billion $0 Billion 2018 Emerging Growth Opportunities 2019 Source: Optech Consulting, Strategies Unlimited and IPG Photonics Corporation © 2020 IPG Photonics Digital Cinema and Enterprise Displays Medical Sensors and Instruments R&D and Scientific Defense Microelectronics Processing 2020 2021 2022 2023 PG PHOTONICS 8#9Micromachining for Microelectronic and Electronic Parts © 2020 IPG Photonics IPG Laser Systems Multi-Axis Workstations for Industrial Parts Precision Workstations for Medical Parts Robotic Workcells for Larger Parts G PHOTONICS 9#10Advantages of IPG Fiber Lasers Leading- Monolithic Design Highest Power Record Power Efficiency Edge Beam Quality Best-In-Class Industry- Product Leading Portfolio Reliability Architecture Modular / Scalable © 2020 IPG Photonics Faster Processing Operating Speed Costs Lower Easy Systems Smallest Efficient Integration Footprint Cooling G PHOTONICS 10#11Broadest Portfolio of Fiber Lasers Any wavelength, mode of operation, power, beam parameters or application Diode 10 nm 400 nm 700 nm Lasers X- Ultraviolet Visible Near-Infrared Ray UV Lasers Blue, Green, Yellow, Orange, Red Lasers Ytterbium Lasers 1.5 μm Holmium Lasers Fe:ZnSe/S Lasers Mid-Infrared Erbium Lasers Thulium Cr:Zn/Se/S Lasers Lasers 10 μm Thick steel cut with a continuous wave laser Peak Power (Megawatts) Peak Power: 120kW Applications: cutting, welding, soldering, drilling, brazing Pulse Duration: 0.05-50 ms Peak Power: 23kW Applications: cutting, welding, soldering, drilling, brazing, annealing Pulse Duration: 1-200 ns Peak Power: 1 MW Applications: scribing, thin-film ablation, via drilling and flex cutting, surface preparation, texturing, annealing, marking, drilling and scribing Pulse Duration: 0.7-5 ns Pulse Duration: -2 ps Peak Power: >150 kW Peak Power: >10 MW Applications: thin-film ablation, low-k and silicon dicing, glass scribing Applications: black marking, sapphire and glass scribing, solar thin films, OLED film cutting, scientific Pulse Duration: <500 fs Peak Power: >20 MW Applications: thin metal cutting and drilling, ophthalmic surgery, high precision, scientific Continuous Wave Throughput www Nanosecond Time Quasi- Continuous Wave Pulsed Nanosecond Pulsed Picosecond Pulsed Femtosecond Pulsed Precision Drilling using a quasi-continuous wave laser Far-IR Surface Cleaning using a pulsed laser Micromachining using an ultrafast laser PHOTONICS 11#12☐ Adjustable Mode Beam (AMB) Broadest range of beam profile tune-ability: independent and dynamic control of the size and intensity ☐ of the core and ring beams enabling high-quality, high-speed, uniform welding Virtually eliminates welding spatter: molten material is deflected towards the bottom of the weld pool which is stabilized with large keyhole openings allowing molten vapor to escape Increases welding quality: consistently high weld seam quality, pore and crack free ☐ ☐ High-speed welding for e-Mobility and automotive + core ring applications: 300 mm/s or higher speeds welding Al battery enclosures and drivetrains Maximizes uptime: less rework of parts, drastically reduces sensor contamination 6000/9000 YLS-AMB = cle Any combination of a small-spot high intensity bright core and a larger ring-shaped beam © 2020 IPG Photonics AMB beam G PHOTONICS 12#13LOW PEAK POWER HPP High Peak Power (HPP) 2X Peak Power: Pierce CLEANER 1X PULSE ☐ CUTTING ☐ 1 - Cut FASTER Low Peak Power piercing is SLOW SPATTER becomes welded to the surface Cutting is DELAYED Parts require significant REWORK 2X PEAK POWER CUTTING TIME SAVED HIGH PEAK POWER (HPP) piercing is FAST Minimal spatter Cutting begins much FASTER Drilling holes are CLEAN and CONSISTENT 23000 YLS-OCW SHORTER Lead-ins for DENSER Part Nesting Saves up to 25% on material © 2020 IPG Photonics G PHOTONICS 13#14Weld Quality Monitoring Using real-time inline coherent imaging (ICI) the LDD-700 weld monitoring system consolidates weld results into concise and actionable quality data from a single system Workpiece Height Measures distance between material and optics Transverse Profile Measures the finished weld bead transverse profile Finished Weld Surface Measured behind melt pool captures bead height Keyhole Depth Measured inside hole to determine depth in real time Seam Profile Looks for joint position on the workpiece © 2020 IPG Photonics G PHOTONICS 14#15IPG Vertical Integration Fab Operations Semiconductor wafer growth Diode processing, chip mounting & burn-in Laser Diode Packaging Up to 120-watts of power INTEGRATED SYSTEMS ABLATION | WELDING DRILLING | CLADDING DEEP IN TECHNOLOGY DEEP IN EXPERIENCE © 2020 IPG Photonics Process Heads, Monitoring and Switches All fiber beam delivery Laser Sources Coupling | Final burn in | Shipment 1000/8000 Components Optical Preform Silica based glass MCVD method Dope with rare earth ions Bragg Gratings | Isolators | Couplers Modules Up to 2000 Watts P G PHOTONICS 15#16Diode Chips Produced Diodes: the Power Behind the Fiber Laser 12 Million 100% 90% 10 Million -85% COST 80% 70% 8 Million 60% 6 Million 50% 40% 4 Million 30% Diode Cost Reduction 20% 2 Million 10% 0 Million 0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Tested Chip Production ••••Cost/Watt Decrease (2009 Base Year) Source: IPG Photonics Corporation IPG diodes are the lowest cost in the industry, empowering our Customers with © 2020 IPG Photonics • the HIGHEST power fiber lasers for the LOWEST cost per Watt In 2019 IPG transitioned to a new higher power chip reducing cost per watt and the level of required production to support a given level of revenue G PHOTONICS 16 A#17Toronto, Canada Minneapolis, MN Nashua. NH Santa Clara, CA Marlborough, MA Birmingham, AL Oxford, MA Santa Catarina, Mexico Other Asia 15% N. America 21% China 38% $1.3 Billion Sales © 2020 IPG Photonics Global Presence Allershausen, Germany Burbach, Germany Bristol, UK Milan, Italy Istanbul, Turkey R&D 11% G&A 7% Sales 6% 6,000 Employees Europe 26% São Pablo, Brazil Mfg 76% Gliwice, Poland Fryazino, Russia Moscow, Russia Delhi, India Daejeon, Korea Shanghai, China Beijing, China Wuhan, China Shenzhen, China Yokohama, Japan Other China 8% 4% US 38% Russia 29% 6,000 Employees Germany 21% G PHOTONICS 17#18Financial Performance and Target Model GAAP Metrics 2012-17 2018 2019 Long-Term Revenue Growth 20% Double Digit 4% (10%) CAGR Growth * Gross 55% 55% 46% 45%-50% * Margin Average Operating Margin 37% Average 36% 18% 25%-30% * * Revenue growth and margins can be below long-term targets during periods of macroeconomic weakness that give rise to lower demand for our products © 2020 IPG Photonics G PHOTONICS 18#19Operating Cash Flow Strong Cash Returns 2019 Return on Equity 1 $257 Capital Expenditures $70 $324 $134 2015 2016 2017 2018 2019 © 2020 IPG Photonics 10% 2019 Return on Invested Capital 12 18% 1 excludes Q4 2019 increase to inventory reserves and charges related to Impairment of goodwill and other long-lived assets and restructuring 2 excludes cash G PHOTONICS 19#2020000 YLS The IPG Difference FUTURE GROWTH OPPORTUNITIES HIGH QUALITY SOLUTIONS BROADEST PORTFOLIO FIBER LASERS WORLD LEADER FIBER LASERS INDUSTRY LEADING MARGINS STRONG BALANCE SHEET © 2020 IPG Photonics G PHOTONICS 20#21G PHOTONICS THANK YOU