Kontron AG (formerly S&T AG)

Investor Presentation • Nov 3, 2023

Explore the Kontron Group

We are a fast-moving multinational technology leader.

Earnings Call Q3 2023

November 3rd, 2023

Kontron: Q3 Results & Company Highlights

Results Highlights

› Strong improvement in profitability

Q3/23 vs Q3/22 EBITDA +74%; net income* +250%

• › Solid revenue growth of 14.4%
• › Strong order intake in Q3 Stable book-to-bill ratio of 1.19 Backlog of EUR 1.7bn
• › EUR 292m of liquidity +EUR 59m payable by Vinci

Company Highlights

• › Net income guidance raised to EUR >72m (before: EUR >66m)
• › 3 M&A transactions in progress Hartmann + Altimate + Bsquare to strengthen "Software + Solutions" segment

› "Share Buyback Programm II 2023"

Up to 4 million shares (6.26% of current share capital) with a Q3 maximum amount of EUR 70m -23

KPIs Q3 2023

KPIs 1-9M 2023

Kontron Group Balance Sheet

Equity and liquidity very strong

in m EUR	9/30/2023	12/31/2022
NON-CURRENT ASSETS	447.5	412.1
Fixed Assets	415.9	379.0
as of Property, plant and equipment	104.0	95.5
as of Goodwill	199.8	189.4
Other Assets	31.5	33.1
CURRENT ASSETS	3:39.2	1,028.8
Inventories	250.0	192.6
Trade receivables	167.3	148.1
Contract Assets from Customers	57.7	54.2
Cash and cash equivalents	292.3	437.8
Other receivables and prepayments	121.7	189.7
assets classified as held for sales	0.0	6.3
Total Assets	1,336.6	1,440.9

in EUR m	9/30/2023	12/31/2022	in EUR m	9/30/2023	12/31/2022
NON-CURRENT ASSETS	447 5	412 1	EQUITY	617 6	635 7
Fixed Assets	415 9	379 0	accumulated results	439 7	449 6
of , plant and equipment Property as	104 0	95 5	of shares Treasury as	-9 6	0 0
of Goodwill as	199 8	189 4	NON-CURRENT LIABILITIES	138 6	252 6
Other Assets	31 5	33 1	loans and borrowings Long-term	64 1	193 8
CURRENT ASSETS	889 2	1 028 8 ,	Other Liabilities Non-Current	74 5	58 9
Inventories	250 0	192 6	CURRENT LIABILITIES	580 4	552 6
Trade receivables	167 3	148 1	Trade payables	228 2	226 3
from Contract Assets Customers	57 7	54 2	Liabilities from Contract Customers	73 9	78 5
Cash and cash equivalents	292 3	437 8	Short-term loans and borrowings	155 6	125 7
Other receivables and prepayments	121 7	189 7	Other Liabilities Current	122 7	3 117
classified held for sales assets as	0 0	6 3	liabilities classified held for sale as	0 0	4 8
Total Assets	1 336 6 ,	1 440 9 ,	Total Liabilities & Equity	1 336 6 ,	1 440 9 ,
			Equity Ratio	46 2%	44 1%
			Cash/(Net Total Debt)* Net	72 7	118 3
			Working Capital excluding 15** IFRS	189 1	114 4
			Working Capital excluding IFRS 15** (31.9.2022):	211.0

Strong cash position: EUR 292m cash + EUR 59m open payment from Vinci (despite EUR 73m dividend + SBB and EUR 108m debt paid)

* Definition Net Cash: Cash and cash equivalents less non-current and current financing liabilities (excl. liabilities from leasing according to IFRS 16) ** Definition Working Capital: Inventories plus trade receivables less trade payables (excl. IFRS 15 contract assets and liabilities) 5

Additional disclosures Q3

Liquidity amounts to approx. EUR 501 m

• › EUR 292m cash on hand by September 2023
• › EUR 59m current receivables from Vinci
• › EUR 150m non-utilized lines

EUR 320m potential cash usage (next 12 months)

• › EUR 30m open payments for acquisitions 2023 net
• › Up to EUR 200m for potential acquisitions 2024
• › EUR 20m further debt reduction
• › EUR 70m share buyback

Refinancing of EUR 124m SSD due in April 24

Europe: Biggest segment

Target is to increase EBITDA margin in 2025 to 12%

• * EBITDA before Intercompany HQ fees (part of Europe Segment)
• ** EBITDA before HQ fee in % of external revenue

Global: Back to normal profitability

Today 20% of revenues in North America + Asia; target 30% midterm driven by superior technology

• * EBITDA before Intercompany HQ fees (part of Europe Segment)
• ** EBITDA before HQ fee in % of external revenue

Software & Solutions: Fast growing

Will be the biggest segment by 2025

• * EBITDA before Intercompany HQ fees (part of Europe Segment)
• ** EBITDA before HQ fee in % of external revenue

Macro trends driving IoT business in the mid-term

5G	• Lower investment & lifecycle costs • Intelligent modules offer security • Shift from GSM-R/4G/Wi-Fi to 5G • 5G private networks for factories	• Nearshoring/factories coming back Smart • Robots increase automation budget Factories • Connected IoT production machines
Auto nomous Driving	• Unmanned trains, construction machines, harvesters save cost • Increase security of traffic	• Recovery of travel Aerospace • Technological shift to orbit and • NATO goal: 2% GDP defense budget defense • Perception shift in Europe
Medical	• Aging population • Pressure on healthcare systems • Ambitious projects (e.g., US "Moonshot" for curing cancer)	• EU "Green deal": expand high-speed High tracks from 11,000 to 33,000km speed • Technological shift from GSM-R to FRMC trains and from FRMC to 5G
Global ization	• China and USA show higher growth than Europe but compete with each other • Kontron may serve both markets with leading technology	• High computational requirements of running complex AI models Artificial • Taking over human tasks like defect Intelligence detection

Strongest brainpower in the industry

susietec® IoT software framework

• › Extending susietec® portfolio by Bsquare SquareOne
• › Release of KontronOS (highest security standard)
• › EUR 100m pure software revenues

Mission-critical control systems for high-speed trains

• › European Train Control System Level 3 Approval
• › New standard FRMCS will accelerate migration and requires 5G

Artificial Intelligence

• › HAILO chips for customized scalable applications
• › NVIDIA full stack standard solutions
• › Full stack industrial applications: video surveillance, defect detection, response time edge cloud, robotics
• › EUR 29m in design wins

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M&A strategy

Replace sold IT segment by strategic IoT acquisitions

M&A is a core competence of Kontron M&A activities

• › Replace EUR 387m of sold IT business with IoT acquisitions
• › Target: High synergies with Kontron → 12% EBITDA within 2 years
• › Complementary IoT technologies to improve portfolio
• › Finance by existing cash and cash flow not shares

5 IoT technology acquisitions signed in 2023

• › Carve out Telit (DE): 5G modules for data connection of IOT
• › Comlab (CH): Data repeaters and communication for trains
• › Hartmann (CH): VPX systems for the Defense market
• › Altimate (RO): Public transport solutions
• › Bsquare (USA): Software for IOT connections

Kontron M&A pipeline for 2024

› Currently 3 acquisition projects

We will replace our sold IT services by high growth IoT technology

The New Kontron

Backlog and Design wins

3.41

(in EUR bn) Backlog Design wins

2.97

3.61

Top Design Wins in 9M 2023	Country	Volume EUR
Railway	FR	150m
Avionics	US	90m
Medical	DE	60m
Railway/Security	FR	60m
Telecommunication	AT	50m
Medical	DE	50m
Defense	US	42m
Railway	SK	40m
Industrial	US	35m
Defense	US	34m

The New Kontron

Net profit guidance increased to EUR >72m (before: EUR >66m)

Vision 2030: Transformation to IoTaaS / SLAs will boost Net Earnings close to 10%

Summary

Achievements Q3-23

• › Strong order intake of EUR 356m (book-bill 1.19x)
• › Significantly improved net income of EUR 18.9m Q3-23) vs. EUR 5.4m (Q3-22)
• › Three M&A transactions signed

Targets

• › FY2023 Guidance increased:
  • › Net income EUR >72m (before: EUR >66m)
  • › Revenue EUR 1,200m
• › EUR 2,000m at EUR 140m net income in 2025
• › Further M&A transactions planned in 2024

Risks

• › Economical climate
• › Political instability
• › External risks are greater than internal risks

Opportunities

• › Sufficient cash for acquisitions
• › One of only a few European technology players
• › 5G connectivity for machines
• › Artificial intelligence applications

Explore the Kontron Group

We are a fast-moving multinational technology leader.

Q&A Session – Q3 2023 Earnings Call

November 3rd, 2023

Disclaimer

This document includes 'forward-looking statements'. Forward-looking statements are all statements, which do not describe facts of the past, but containing the words "believe", "estimate", "expect", "anticipate", "assume", "plan", "intend", "could", and words of similar meaning. These forward-looking statements are subject to inherent risks and uncertainties since they relate to future events and are based on current assumptions and estimates of Kontron AG, which might not occur at all or occur not as assumed. They therefore do not constitute a guarantee for the occurrence of future results or performances of Kontron AG. The actual financial position and the actual results of Kontron AG, as well as the overall economic development and the regulatory environment may differ materially from the expectations, which are assumed explicitly or implicitly in the forward-looking statements and do not comply to them. Analysts and investors, and any other person or entity that may need to take decisions or prepare or release opinions about the shares / securities issued by Kontron AG are cautioned not to place undue reliance on those forward-looking statements, which speak only as of the date of this document. Past performance cannot be relied upon as a guide to future performance.

Except as required by applicable law, Kontron AG undertakes no obligation to revise these forward-looking statements to reflect events and circumstances after the date of this presentation, including, without limitation, changes in Kontron's business or strategy or to reflect the occurrence of unanticipated events. The financial information and opinions contained in this document are unaudited and are subject to change without notice. This document contains summarized information or information that has not been audited. In this sense, this information is subject to, and must be read in conjunction with, all other publicly available information, including if it is necessary, any fuller disclosure document published by Kontron AG. None of the Company, its subsidiaries or affiliates or by any of its officers, directors, employees, advisors, representatives or agents shall be liable whatsoever for any loss however arising, directly or indirectly, from any use of this document its content or otherwise arising in connection with this document.

This document or any of the information contained herein do not constitute, form part of or shall be construed as an offer or invitation to purchase, subscribe, sale or exchange, nor a request for an offer of purchase, subscription, sale or exchange of shares / securities of Kontron AG, or any advice or recommendation with respect to such shares / securities. This document or a part of it shall not form the basis of or relied upon in connection with any contract or commitment whatsoever.

This document does not constitute an offer to purchase securities in the United States, Canada, Australia, South Africa and Japan. Securities, including the bond of Kontron AG may not be sold or offered for sale within the United States or to or for the account of / in favor of US citizens (as defined in Regulation S under the U.S. Securities Act of 1933 in the current version (the "Securities Act") unless they are registered under the regulations of the Securities Act or unless they are subject to an exemption from registration. Neither Kontron AG nor any other person intend to register the offer or a part thereof in the United States or to make a public offer of the securities in the United States.