www.ipgphotonics.com

Investor Presentation March 2017

Tim Mammen

Chief Financial Officer

The 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.

Safe Harbor Statement

2

Key Takeaways

3

Our Mission

4

Making fiber lasers the tool

of choice in mass production

Materials Processing

5

Cutting Welding Brazing Drilling

Cladding

Additive

Manufacturing Marking

Surface

Treatment

Semiconductor

& Electronics

Additive

Manufacturing

Aerospace

Automotive

General

Manufacturing

& OEM

Heavy

Industry

IPG

Others

$0.0

$0.5

$1.0

$1.5

Reven

ue

in

Bill

ions Fiber Lasers

Fiber Laser Leader

6

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

2016 2017 2018 2019 2020 2021

Reven

ue

in

Bill

ions

Fiber Lasers CO2 & Other Lasers

Metal-Based Materials Processing

Source: IPG Photonics and Laser Markets Research, 2017

IPG Lasers Cover More Applications

7

(1) Any Wavelength

Fe:ZnSe/S

Lasers

UV Lasers

Ultra-violet

Blue, Green, Yellow ,

Orange, Red Lasers

Ytterbium

Lasers

Visible Near-Infra-red

0.4 mm (10 -6 meters) 0.7 mm 1.5 mm

Diode

Lasers Erbium

Lasers

Thulium,

Holmium

Lasers

Cr:Zn/Se/S

Lasers

> 5 mm

Mid-Infra-red

(2) Any Pulse Duration (3) Any Power

CW (Continuous Wave): laser is on all the time

% of Laser Sales = Majority

QCW (Quasi-Continuous Wave): laser is modulated

% of Laser Sales = <10%

Pulsed: laser switched on for 10-9 seconds

Includes ultrafast picosecond 10-12 and femtosecond 10-15

% of Laser Sales = 10% to 15%

Laser power: from several watts to hundreds of KW

% of CW Laser Sales by power level: <1 KW = ~25%

1 to 5 KW = ~50%

>5 KW = ~25%

1 mm

Higher Power

Faster Performance

Compact Footprint

Versatility & Flexibility

Higher Reliability

Lower Maintenance

Lower Energy Consumption

IPG Fiber Laser – Technology Advantages

8

Significant Barriers to Entry

9

Technology:

IP & Process

Know-How

Business:

Vertical

Integration

& Scale

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

2009 2010 2011 2012 2013 2014 2015 2016

Packag

ed

Dio

de C

osts

% C

hg.

Teste

d C

hip

s P

rod

uced

Tested Chip Production Cost/Watt Decrease (2009 Base Year) Annual Cost Decrease

Highest Volume, Lowest Cost Producer of Pump Diodes

10

Headquarters,

Manufacturing,

R&D, Sales, Service

Manufacturing

R&D, Sales, Service

Sales, Service

Global Manufacturing Scale, Sales & Service Capability

11

$6 Billion Addressable Market

12

Core Materials Processing Applications ($2.6B)

Cutting / Welding / Brazing / Drilling / Marking

Cladding / Additive Manufacturing / Surface Treatment

Micro Materials Processing Applications ($0.8B)

$0.3B: Semi, PC Board / Non-Metal Processing / Solar

$0.5B: Excimer Lasers for FPD

New Applications ($2.4B)

Cinema and Displays / Sensors and Inspection / R&D /

Defense / Medical / Mid-IR Spectroscopy

Source: Laser Markets Research, 2017

Fiber Lasers Other Lasers

Growth Opportunities – New Applications & Products

13

Beam

Delivery

Ultraviolet

Fiber Lasers

Ultrafast

Lasers

Laser

Systems

Medical

Additive

Manufacturing

Laser Ablation

Cinema &

Display

Strong Growth & Industry-Leading Operating Margin

14

$474

$1,006

37% 37%

0%

20%

40%

60%

80%

100%

$0

$300

$600

$900

$1,200

2011 2012 2013 2014 2015 2016

Op

era

tin

g M

arg

in

Reve

nu

e (

$ M

illio

ns)

Revenue Operating Margin

Rapidly Growing Operating Cash Flow

15

$87

$296

$0

$50

$100

$150

$200

$250

$300

$350

2011 2012 2013 2014 2015 2016

$ M

illio

ns

Free Cash Flow Capex

Target Business Model

16

Revenue Growth 12% 10%-14% (1) Market Growth

Gross Margin 55% 50%-55% (2) 50%-55%

Operating Margin 37% 32%-37% (2) 32%-37%

(1) Foreign exchange headwind ~3 percentage points in 2017 (2) Targeting upper half of the range

www.ipgphotonics.com

Thank You

NASDAQ: IPGP

Questions? Contact Investor Relations:

Web: investor.ipgphotonics.com

Email: jhillier@ipgphotonics.com

Phone: (508) 373-1467