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01 May 2024
Executive brings decades of experience from MKS Instruments and Coherent to the fiber laser company.
Fiber laser giant IPG Photonics has appointed a new CEO, with Mark Gitin set to take over from current chief Eugene Scherbakov in early June.
Currently executive VP and general manager of the photonics solutions division at MKS Instruments, Gitin led the integration of the former Newport business following its acquisition by MKS in 2016.
Prior to that, Gitin - whose PhD from Cornell University was focused on ultrashort pulses lasers - had worked in a number of management roles at Coherent.
Russia withdrawal
76-year-old Scherbakov, who was a co-founder of IPG alongside long-time CEO Valentin Gapontsev, had overseen the company’s withdrawal from manufacturing locations in Russia following the latter’s invasion of Ukraine.
“For more than three decades I have been committed to the growth and success of IPG, and it has been an honor to serve as CEO,” said Scherbakov, who will retain a position on the IPG board of directors, and as an advisor to Gitin.
“During the search process, it became clear that Dr. Gitin possessed a unique combination of relevant scientific expertise and a proven ability as a successful operator in our industry. We are thrilled to have secured Dr. Gitin as our next CEO, and I look forward to helping him to make this transition seamless for our customers and other stakeholders.”
In an IPG release announcing the switch, Gitin added: “I have long-admired IPG as an industry leader that has consistently been able to deliver innovative laser products while maintaining a strong reputation and identity as a science-led organization.”
Revealing the firm’s latest quarterly financial results alongside the CEO succession plan, Scherbakov reported a 27 per cent year-on-year decline in sales to $252 million - in line with prior expectations but still IPG’s lowest total since the early stages of the Covid-19 pandemic.
The outgoing CEO attributed that to a significant year-on-year decline in new battery investments in China, delays to electric vehicle (EV) projects in North America, and reduced demand for welding products.
“We are working with a number of leading automotive manufacturers on new fiber laser applications in batteries and general automotive assembly,” he said. “We remain optimistic that EV battery investments may increase again toward the end of 2024 into 2025.”
Light at the end of the tunnel
Discussing the latest developments with investors, company CFO Tim Mammen detailed a 38 per cent fall in revenues from China, but added that macroeconomic indicators do now seem to be improving.
“I think the first positive or slight glimmer of light perhaps at the end of the tunnel is the fact that book-to-bill was above one for the first time in a year,” he told an investor conference call. “So we've gone through a period of serious macroeconomic headwinds.”
But that anticipated recovery remains some way off, with the IPG team’s sales outlook of $240 million to $270 million for the current quarter suggesting only a slight uptick is likely before the second half of 2024.
The decline in sales saw IPG post an operating income of only $19 million for the opening quarter of this year, well down on the figure of $75 million this time last year.
• Following the latest results and news of Gitin’s appointment, IPG’s Nasdaq-listed stock price dropped in value by around 5 per cent. Now trading at around $84, the stock stands at its lowest valuation since 2016, and equivalent to a market capitalization of just under $4 billion.
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