STRATEC SE

Investor Presentation • Apr 11, 2019

STRATEC FY 2018 Financial Results

Forward-looking statements involve risks.

This company presentation contains various statements concerning the future performance of STRATEC. These statements are based on both assumptions and estimates. Although we are convinced that these forward-looking statements are realistic, we can provide no guarantee of this. This is because our assumptions involve risks and uncertainties which could result in a substantial divergence between actual results and those expected. FY 2018 FINANCIAL RESULTS – APRIL 11, 2019 ²

It is not planned to update these forward-looking statements.

1. FY 2018 AT A GLANCE

• 1. FINANCIAL REVIEW 3. OUTLOOK AND STRATEGY 4. Q&A 5. APPENDIX
• FY 2018 FINANCIAL RESULTS APRIL 11, 2019 ³

• Organic sales decline of 5.9% to € 187.8 million as forecast; nominal: -9.5% (2017: € 207.5 million)

• Postponements (now overcome; e.g. US partner attained CE-IVD certification in March 2019)
• Negative effects from first time adoption of IFRS 15 (-2.2 ppts) and foreign exchange rates (-1.4 ppts)
• Improved order dynamics throughout Q4 2018
• Adjusted EBIT margin down by 360 bps yoy to 13.9% (FY 2017: 17.5%)
• Slightly above forecast of 11-13%
• Negative scale effects and increased expenses to process a large number of development projects
• Continuously growing project pipeline
• Number of employees up by 13.1% to 1,228 in the light of full project pipeline
• R&D employees now account for 54% of total workforce
• FY 2018 FINANCIAL RESULTS APRIL 11, 2019 • Implementation of group-wide ERP system - Successful "Go-Live" at Headquarters in Birkenfeld (GER) and production site in Beringen (CH) in January 2019 • Dividend proposal of € 0.82 per share (2017: € 0.80 per share) 15th consecutive increase

1. FY 2018 AT A GLANCE

• 1. FINANCIAL REVIEW 3. OUTLOOK AND STRATEGY 4. Q&A 5. APPENDIX
• FY 2018 FINANCIAL RESULTS APRIL 11, 2019 ⁵

FINANCIALS AT A GLANCE1

FINANCIAL REVIEW
FINANCIALS AT A GLANCE1
	2018	20173	Change
Sales (in € thousand)	187,820	207,478	-9.5%
(in € thousand)1 Adjusted EBITDA	36,190	43,405	-16.6%
Adjusted EBITDA in % of sales1	19.3	20.9	-160 bps
Adjusted EBIT (in € thousand)1	26,157	36,369	-28.1%
Adjusted EBIT in % of sales1	13.9	17.5	-360 bps
Adjusted consolidated net income (in € thousand)1, 4	20,238	28,855	-29.9%
Adjusted diluted earnings per share (in €)1, 4	1.68	2.41	-30.3%
Diluted earnings per share IFRS (in €)4	0.92	2.22	-58.6%
Dividend per share (in €)	0.822	0.80	+2.5%
bps = basis points 1 For comparison purposes, adjusted figures exclude amortization resulting from purchase price allocations in the context of acquisitions and the associated reorganization expenses, as well as other non-recurring effects. 2 Subject to approval by the AGM on May 29, 2019 3 Not retrospectively restated to reflect IFRS 9 and IFRS 15 (modified retrospective approach). Retrospectively restated to reflect the classification of the nucleic acid preparation business as a discontinued operation in accordance with IFRS 5. 4 Results from continuing operations.

SALES

In € million

2018 sales down 9.5% yoy

• Negative effects from foreign exchange rates (-1.4 ppts) and first-time adoption of IFRS 15 (-2.2 ppts) ppts = Percentage points 187.8

organic sales decline of 5.9%

• Postponement and delays (now overcome)
• Improving order dynamics throughout Q4 2018

As of December 31

SALES BY OPERATING DIVISIONS

In % of total sales

As of December 31

• Sales contribution from service parts and consumables at 33% of total sales
• Development and service sales down to16% of total sales versus 18% in 2017
• Tough comparison versus previous year and negative effect from firsttime adoption of IFRS 15

ADJUSTED EBIT AND EBIT MARGIN

2018 adjusted EBIT margin at 13.9%

• Margin decline of 360 bps yoy 20%
• 18%
• Negative scale effects - Increased expenses related to strong project pipeline 14% 16%
• 2018 margin slightly ahead of revised target range (11% to 13%) - Strong product mix in Q4 8% 10%
• 6%

As of December 31

SEGMENT PERFORMANCE

Instrumentation Diatron Smart Consumables Others In € million 2018 2017 yoy 2018 2017 yoy 2018 2017 yoy 2018 2017 yoy Sales 131.3 149.6 -12.2% 35.3 37.0 -4.6% 16.8 15.6 7.7% 4.4 5.2 -15.4% Adjusted EBIT 21.0 30.6 -31.4% 4.7 4.5 4.4% 0.2 0.9 -77.8% 0.3 0.4 -25.0% Adjusted EBIT margin 16.0% 20.5% -450 bps 13.3% 12.2% +110 bps 1.2% 5.8% -460 bps 6.8% 7.7% -90 bps • Postponements and delays • Higher development and software licensing • Signing of new development agreements sales • High number of market launches expected in 2019	SEGMENT PERFORMANCE	FINANCIAL REVIEW

CASH FLOW AND NET DEBT

FINANCIAL REVIEW
CASH FLOW AND NET DEBT
IFRS (€ million)	2018	2017	yoy
Cash flow – operating activities	12.0	30.0	-60.0%
Cash flow – investment activities	-10.8	-15.6	-30.8%
Cash flow – financing activities	-0.9	-16.0	-94.4%	launches
Free cash flow	1.2	14.4	-91.7%
IFRS (€ million)	2018	2017	Change	projects
Cash and cash equivalents at end of period	23.8	24.1	-1.2%
Net debt	53.1	48.8	8.8%

Cash and cash equivalents

• FY 2018 operating cash flow down to € 12.0 million (2017: € 30.0 million)
• Lower earnings levels - Higher inventories due to ERP system implementation and upcoming product launches
• Higher investment spending due to significant capacity expansion in Birkenfeld and increased investments in development projects

1. FY 2018 AT A GLANCE

• 1. FINANCIAL REVIEW 3. OUTLOOK AND STRATEGY 4. Q&A 5. APPENDIX
• FY 2018 FINANCIAL RESULTS APRIL 11, 2019 ¹²

OUTLOOK AND STRATEGY

FINANCIAL GUIDANCE 2019

• Group sales are expected to increase by at least 12% (at constant exchange rates)
• Several new product launches
• Strong sales growth can already be expected for the first quarter
• Adjusted EBIT margin of around 14% to 15% (2017: 13.9%)
• Positive scale effects
• First positive impact from already defined earnings improvement measures
• Adverse effects from continuing high development activities
• Investments in tangible and intangible assets of around 12% to 14% of sales (2017: 10.3%)
• Ongoing construction measures for significant capacity expansion
• Investments due to high number of development projects
• FY 2018 FINANCIAL RESULTS APRIL 11, 2019 Investment ratio will likely decline considerably from 2020 onwards once construction projects for capacity expansion have been completed

OUTLOOK AND STRATEGY

FOCUS IN 2019

• Reaccelerate top-line growth and reduce earnings volatility across business units
• Sign several new development and supply agreements
• Prepare path to efficiency gains following successful ERP system implementation in Q1
• Achieve significant number of product launches
• Repeatedly postponed system for US customer finally launched in March 2019
• FY 2018 FINANCIAL RESULTS APRIL 11, 2019 ¹⁴ Further expected launches within 2019 among others include a CLIA instrument, a blood banking instrument and a proprietary analyzer platform
• Drive results from defined earnings improvement initiative
• Expand development capacities including significant expansion of buildings

OUTLOOK AND STRATEGY

STRATEGIC PRIORITIES

• Enable customers and STRATEC to grow sustainably above the long-term market average

• Focus on high growth areas of application within in-vitro diagnostics and healthcare research
• Secure and further boost expertise and technology portfolio with intellectual property rights

• Broadening of product/value offering without entering into competition to partners

• Organically and via selective M&A transactions
• Widen offering in areas not perceived as core for/by our customers

• Increase proportion of service parts & consumables

• Utilize tailwind from increasing system complexity
• Further expand smart consumables business (microfluidic chips, cartridges, etc.)
• Utilize combined product offering of instruments, software and consumables to increase proportion of recurring sales

• Drive costumer diversification

• Utilize extended platform offering
• Extend components business
• Accelerate diversification (e.g. veterinary, translational research)

FY 2018 FINANCIAL RESULTS – APRIL 11, 2019 ¹⁶ QUESTIONS & ANSWERS

APPENDIX

ADJUSTMENTS

APPENDIX ADJUSTMENTS
EBIT		Consolidated net income
€ 000s	2018
Adjusted EBIT	26,157
Adjustments:
PPA amortization	-9,267	Adjustments:
Transaction-related expenses and associated restructuring expenses	-1,653
Impairment losses recognized on intangible assets	-642
Other positive one-off items	416
EBIT	15,011

EBIT Consolidated net income

€ 000s	2018
Adjusted consolidated net income	20,238
Adjusted earnings per share in € (basic)	1.70
Adjustments:
PPA amortization	-9,267
Transaction-related expenses and associated restructuring charges	-1,653
Impairment losses recognized on intangible assets	-642

Adjustments:

(basic)	1.70
Adjustments:
PPA amortization	-9,267
Transaction-related expenses and associated restructuring charges	-1,653
Impairment losses recognized on intangible assets	-642
Other positive one-off items	416
Current tax expenses	529
Deferred tax income	1,488
Consolidated net income	11,109
Earnings per share in € (basic)	0.93

CONTACT

STRATEC SE Gewerbestr. 37 75217 Birkenfeld Germany

www.stratec.com

CONTACT

Marcus Wolfinger CEO

Jan Keppeler, CFA Head of Investor Relations & Corporate Communications j.keppeler@stratec.com

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