WE LEAD THE FUTURE

ANNUAL GENERAL MEETING I May 23, 2018

REPORT OF THE EXECUTIVE BOARD

SUCCESSES 2017, BUSINESS DEVELOPMENT 2018

Dr. Mathias Gollwitzer, CFO

SUCCESSES 2017 We increased our company value by 50 % in 2017

SUCCESSES 2017 2017 above plan, profitability increased at lower revenues

Sales in € million EBIT margin in %

SUCCESSES 2017

The major part of the business is shaped by customers from industry

SUCCESSES 2017 Germany & Europe stay important markets, USA & China are growing

SUCCESSES 2017 Slight increase of staff cost, virtually constant FTE

Wages and salaries in € milion

Distribution of employee functions

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SUCCESSES 2017 Other operating expenses reduced

in € million

Other operating expenses

Top 5 cost items 2017

SUCCESSES 2017 Expanded investments in tangible assets & intangible assets

SUCCESSES 2017 Improved liquidity, reduced depts

in € million

SUCCESSES 2017 Net profit: We want our shareholders to participate in our success

BUSINESS DEVELOPMENT 2018

Q1 behind expectations due to SAP, compensation during the year

Growth indicators remain positive BUSINESS DEVELOPMENT 2018

in € million

Order backlog

Incoming orders

NBOs

BUSINESS DEVELOPMENT 2018 Improved profitability with revenue growth at 8.5 %

REPORT OF THE EXECUTIVE BOARD

STRATEGY FOR PROFITABLE GROWTH & GROWTH DRIVER AUTONOMOUS DRIVING Dr. Dirk Rothweiler, CEO

STRATEGY FOR PROFITABLE GROWTH We generate and utilize economies of scale

STRATEGY FOR PROFITABLE GROWTH 1st pillar : Focus on our target markets

STRATEGY FOR PROFITABLE GROWTH 2nd pillar: Expansion of key products and key customers

2ND PILLAR: EXPANSION OF KEY PRODUCTS AND KEY CUSTOMERS Advantages of concentration on higher volumes

Single respective product developments result in relatively large quantities and therefore sales volumes.
Sales per head in both sales and engineering increases our existing team will be able to handle larger revenue streams.
"Mix & Noise" in operations are decreased due to reduced parts variety and transactions per revenue.
Our supply chain and own production will gain in productivity and can be managed with fewer resources per revenue.
With higher quantities per part our purchasing power will increase.
With more varietal purity we increase the stability of our value creation process.
Lead time, on time delivery and quality will improve as a result.

Our growth becomes more scalable and our profitability increases.

EXPANSION OF THE KEY PRODUCTS BUSINESS Increase of number and sales revenues with key products

EXPANSION OF THE KEY CUSTOMERS BUSINESS Increase of number and sales revenues with key customers

STRATEGY FOR PROFITABLE GROWTH 3rd pillar: Accelerate forward integration

3RD PILLAR: ACCLERATE FORWARD INTEGRATION Based on clear roadmaps we expand our expertise

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STRATEGY FOR PROFITABLE GROWTH 4th pillar: Continuous internationalization

4TH PILLAR: CONTINUOUS INTERNATIONALIZATION We concentrate internationalization on growing regions

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STRATEGY FOR PROFITABLE GROWTH The Fundament: focus on operative excellence

Our current core initiatives THE FUNDAMENT: FOCUS ON OPERATIVE EXCELLENCE

THE FUNDAMENT: FOCUS ON OPERATIVE EXCELLENCE Portfolio consolidation: Casestudy for one selected product family

		PRODUCTS
		A products	B products	C products
S R E M O T S U C	ers m o	11 % products	8 %	5 %
	ust A c	69 % sales	6 %	> 1 %
	ers m o ust B c	6 %	12 %	17 %
		12 %	9 %	1 %
	ers m o ust C c	> 1 %	3 %	38 %
		> 1 %	> 1 %	2 %

Top Measures
	Threshold order quantities for new products
	Minimum order quantities for existing products
	Bundling of demand
	Recommendation of product alternatives
	Last call options if necessary

STRATEGY FOR PROFITABLE GROWTH Objective: We generate and utilize economies of scale

STRATEGY FOR PROFITABLE GROWTH Autonomous driving is a driver of our growth strategy

AUTONOMOUS DRIVING AS GROWTH DRIVER Main reason for accidents are preventable human mistakes

AUTONOMOUS DRIVING AS GROWTH DRIVER Cars on higher autonomous levels need more sensors

Autonomous Levels	Level 1	Level 2	Level 3	Level 4	Level 5
	Assisted Driving	Partly Automated	Highly Automated	Fully Automated	Driverless
Fuctionality	Active Cruise Control (ACC) Lane departure warning system (LDWS)	Lane Keep Assist (LKA) Park Assist (PA)	Automatic Emergency Brake (AEB) Driver Monitoring (DM) Traffic Jam Assist (TJA)	Autopilot on Highway (AP)	Autopilot everywhere
Sensors	+ Ultrasonic Radar (long range) Front Camera	+ Surround Camera	+ + Radar (short range) Driver Camera LIDAR	SENSOR Fusion	SENSOR Fusion

AUTONOMOUS DRIVING AS GROWTH DRIVER We focus on LIDAR and camera applications

AUTONOMOUS DRIVING AS GROWTH DRIVER LIDAR and camera are irreplaceable for surround view

On Board Sensor Capability		LIDAR (Detection & ranging)	V2X & Cellular* (Information)
Detection	Road users	Car / Truck
performance		Motorcycle
		Bicycle
		Pedestrian
		Animal
		Scree
	Traffic infrastructure	Road marking
		Signals
		Streetlights
	Street condition	Curves
		Crash barriers

		Wall / Barrier	Dynamic	Static
	360° view
Insensivity		Rain / Snow
		Fog
		Darkness
				* Depends on coverage

LIDAR: Our APD is an important component for more than 10 years AUTONOMOUS DRIVING AS GROWTH DRIVER

AUTONOMOUS DRIVING AS GROWTH DRIVER Camera: Volume production of a new generation just started

LIDAR AND CAMERA Automotive and industrial applications are versatile

"OUR INNOVATION AND EXCELLENCE IS YOUR SUCCESS." WE APPROXIMATE THIS ASPIRATION GRADUALLY.

As a leading international sensor manufacturer, we will achieve 10% average growth and a 10% EBIT margin with tailor-made customer-specific sensor solutions and innovative platform-based standard products, thereby creating added value for our customers, investors and employees. Our corporate values of innovation, excellence and proximity form the compass for our actions.