Enabling future Group results Q2 2014 Rolf Schwirz Michael Boy CEO CFO Munich, 30 July 2014
Disclaimer This document contains certain statements that related to future business and financial performance and future events or developments in relation to Kontron AG that may constitute forward-looking statements and expectations. Such statements are based on the current expectations and certain assumptions of the management of Kontron AG, and are, therefore, subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond Kontron AG’s ability to control or estimate precisely, such as future market and economic conditions, the behavior of other market participants, the ability to successfully integrate acquired businesses and achieve anticipated synergies and the actions of government regulators. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this presentation. Kontron AG does not undertake any obligation to publicly release any revisions to these forward- looking statements to reflect events or circumstances after the date of this presentation. Kontron AG neither intends, nor assumes any obligation, to update or revise these forward-looking statements in light of developments which differ from those anticipated. Information about risks and uncertainties affecting Kontron AG is included throughout our most recent annual and quarterly reports which are available on the website: www.kontron.com. Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. 2 The pulse of innovation
Results in line with full-year guidance Financial highlights Q2 2014 » Order intake of EUR 120.4 million (Q2/2013: EUR 113.8 million) » Revenue of EUR 116.1 million (Q2/2013: EUR 116.2 million) » Delivering on our focus areas Gross Margin exceeds 25% target: 25.9% (Q2/2013: 26.7%) » OPEX stable: EUR 26.8 million (Q2/2013: EUR 26.9 million) » EBIT up: EUR 2.0 million (Q2/2013: EUR 0.2 million) » Full-year guidance confirmed 3 The pulse of innovation - 3
Results in line with full-year guidance Operational highlights Q2 2014 Transition to Augsburg & Deggendorf: On track » » Production/warehouse Augsburg: Full certification for all new production facilities » Engineering and production teams from Roding are fully installed in Augsburg » New headquarters building: Permit issued, start of construction was in week 23 Revolving Credit Facility: Signed » » Amendment Agreement was signed on 26th of May » Financing of Kontron AG secured until 2017 Cost Reduction Program: On track » » Saving targets achieved as planned » Commitment to lower cost base by EUR 40 million p.a. from 2016 unchanged Opening of Japan office » » Expansion of global presence into a promising ECT growth market » Aim is to be closer to customers and to strengthen the relationships to local sales partners All corporate positioning activities on track 4 The pulse of innovation - 4
Generating top-line growth Change from revenue to royalty model » The change from a revenue to royalty model for two large customers in North America affects order entry and revenues for the last time in Q2 Order intake Q2 2014 Q2 2013* +/- (%) H1 2014 H1 2013* +/- (%) 120.4 113.4 6.2% 225.6 221.4 1.9% Revenues Q2 2014 Q2 2013* +/- (%) H1 2014 H1 2013* +/- (%) 116.1 105.8 9.7% 218.9 200.2 9.4% * Numbers in 2013 corrected by change to royalty model and by fx-effect 5 The pulse of innovation - 5
Development of Key Financials Revenue split for global business units » Reorganisation into three global business units completed Business Units Q2 2014 Q2 2013* +/- (%) Q1 2014 +/- (%) Industrial 49.2 47.3 4.0% 46.3 6.3% Communications 28.4 23.7 19.8% 26.2 8.4% Aerospace/ Transportation/ 35.8 32.1 11.4% 26.2 36.7% Defense Other 2.7 2.7 0.0% 4.1 (34.1)% * Numbers in 2013 corrected by change to royalty model and by fx-effect 6 The pulse of innovation - 6
Development of Key Financials „New Kontron” excl. discontinued operations (EUR m) / % Q2 2014 Q2 2013 +/- (%) Q1 2014 +/- (%) Order intake 120.4 113.8 105.2 5.8% 14.4% Order backlog 290.8 292.6 283.5 (0.6)% 2.6% Revenues 116.1 116.2 102.8 (0.1)% 12.9% Gross margin 30.1 31.0 26.5 (2.9)% 13.6% in % 25.9% 26.7% (0.8)ppt 25.8% 0,1 ppt Opex 26.8 26.9 25.3 (0.4)% 5.9% EBIT (adjusted) 3.7 4.3 1.2 (14.0)% 208.3% Restructuring costs 1.7 4.1 1.1 (58.5)% 54.5% EBIT (reported) 2.0 0.2 0.1 900% 1900% in % 1.7% 0.2% 1.5ppt 0.1% 1.6ppt Net income (reported) (0.5) (0.3) 0.1 (66.7)% (600)% 7 The pulse of innovation - 7
Steady Progress Kontron Outlook 6.6 - 11.1% on €445.6m EUR m in 2013 » Guidance 2014 unchanged ~24 500 − 400 Revenues: EUR 450 – 470 million 474-494 300 − Gross margin: >25% 450-470 200 − EBIT margin (pre restructuring costs): 100 low single-digit rate 0 Implied Expected Guidance 2014 » Cost reduction program guidance Royalties effect − will lower cost base by EUR 40 million p.a. from 2016 − will trigger a total of EUR 30-35 million restructuring costs » 2016 targets unchanged EUR m 600 − Revenues by 2016: >EUR 550 million 500 − Gross margin: >25% 400 − >650 EBIT margin: >6% 300 >550 200 100 0 "Old" ubitronix RTSoft RTSoft "New" Guidance (total) (total) (embedded, Kontron 2016 continuing Guidance business) 2016 8 The pulse of innovation - 8
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