WE LEAD THE FUTURE

FINANCIAL STATEMENT PRESS CONFERENCE & CAPITAL MARKET DAY

MARCH 22, 2018

AGENDA (MORNING)

WELCOME, DR. DIRK ROTHWEILER
RESULTS 2017, DR. MATHIAS GOLLWITZER
STRATEGY & OUTLOOK 2018, DR. DIRK ROTHWEILER
Q&A SESSION
LUNCH

AGENDA (AFTERNOON)

FIRST SENSOR'S LIDAR AND CAMERA STRATEGY, MARTIN KÜMMEL
FIRST SENSOR'S PRESSURE SENSOR FAMILY, DR. MARC SCHILLAGLIES
INSIGTHS IN OUR PRODUCTION STRATEGY & SITES, DR. MATTHIAS PESCHKE

FINANCIAL STATEMENT 2017

MILESTONE ON OUR WAY TOWARDS PROFITABLE GROWTH

DR. MATHIAS GOLLWITZER, CFO

FINANCIAL STATEMENT 2017

2017 = Milestone for further sustainable growth and profitablity

OPERATIVE ACTIONS FIS KPI´s: Interface to non-financial performance indicators

KPI - Umsatz Sales - Book To Bill Sales - Neukundengeschäft Sales - Leads / Auftragseingang Sales - Lead/Angebote Sales - Angebote/Auftragseingang Sales - NBO / Angebote Sales - NBO conversion rate Sales - Umsatz / FTE CCD - Innovationskraft CCD - Time To Market	KPI - Fixkosten IT - Beanspruchungsgrad IT - Bearbeitungsgrad IT - Reaktionszeit IT - Betreuungsrate IT - Verfügbarkeit IT - Kosten/Umsatz CCD - Produktivität Einkauf - Lieferqualität KPI - Vorräte
KPI - Betriebsnotwendiges AV CCP - Anlagenverfügbarkeit KPI - Deckungsbeitrag Ausbeute	Einkauf - Liefermengentreue Einkauf - Liefertermintreue KPI - Forderungen Sales - Liefertreue Finanzen - DSO KPI - Verbindlichkeiten aus LL
Materialeinsatz Fertigungszeit Auftragsdurchlaufzeit Leistung pro Mitarbeiter Beschäftigungsgrad Weiterbildungsquote Fehlzeitenquote Reklamationsquote Qualität Krankheitsquote Ungewollte Fluktuationsquote	Finanzen - DPO

OPERATIVE ACTIONS

Financial Statements indicate different "Need for actions"

P+L STATEMENT

EBIT improved, one-time effect in financial results reduce net income

In € million	2016	2017
Revenues	150.1	147.5
Other operating income	2.9	3.3
Change in inventory	-1.2	-1.5
Other own work capitalized	1.4	2.5
Cost of material	-72.4	-69.3
Gross profit	80.8	82.5
Personnel expenses	-44.1	-46.6
Other operating expenses	-17.3	-16.3
Operating result (EBITDA)	19.4	19.6
Depreciation and amortization	-7.0	-6.8
Operating result before goodwill amortization (EBITA)	12.4	12.8
Goodwill amortization	-2.4	-2.3
Earnings before interest and tax (EBIT)	10.0	10.6
Financial result	-1.3	-3.4
Income before tax (EBT)	8.7	7.1
Taxes	-2.6	-2.8
Net income	6.1	4.3

P+L STATEMENT Order backlog and sales funnel improved

in € million

Sales Standard products Sensor Solutions		Comments
42.2 105.3 2017 41 109.1 2016 0 20 40 60 80 100 120 140 160 Order Income 163.7 2017 132.9 2016 0 20 40 60 80 100 120 140 160	-1.7%   180  +23.2% 180	Industrial target market: Growth of 3.6% Medical target market: customer based postponements Mobility target market: almost compensated major order of approximately €10 million which expired last
Order Backlog
92.6 2017 82.2 2016	+12.7%	Actions
0 20 40 60 80 100 120 140 160 New Billing Opportunities 253.6 2017 182.8 2016 0 50 100 150 200 250	 180   +38.7%  300	Focus on selected New Target Accounts Improving Cross-selling on existing Customer Base New Product Launches (HTD/L-Serie und Inertial) Enlargement of Distribution Product Portfolio

P+L STATEMENT 2017 EBIT impact by pricing, scale effects and personnel costs

Launch of "MEMS" and "OPTO" projects

Insourcing of certain processes in semiconductor production
Production layout follows product value chain
Make "and" buy decision in operations

P+L STATEMENT Moderate increase in salaries/wages

In € million

Salary/Wages		Comments
2017 2016 0,0 10,0 20,0	46.6 +5.6% 44.1 30,0 40,0 50,0	 Performance-related components in all types of remuneration  "Brain drain" especially in Dresden
Breakdown 2017
wage/salary adj.	0.8
indemnity	0.6
new hire	0.6
0,0 0,2 0,4	0,6 0,8 1,0	Actions
FTE 2017 YE 798 (PY 804)	Personnel Cost in % Sales	
Production	476 14.1%	Activities for employee retention and recruitment
133 others	8.3%
96 Sales	5.0%
93 Development	4.2%
0 100 200 300	400 500

P+L STATEMENT Other expenses slightly reduced

In € million

17.3 16.3 2016 2017 Other Expences Breakdown 2017 Comments Decrease in consultancy fees Actions Maintenance: negotiation of service contracts IT-Cost: Hosting and maintenance for SAP to be levelled out by IT Savings in other domains -5.5% 1.1 1.1 1.7 2.5 2.8 IT-costs Legal and consultancy fees Maintenance and repairs Sales /marketing/travel expenses Costs of premises

P+L STATEMENT One-time effect due to closing of hedging contracts and swaps

In € million

Financial Result			Comments
-3.4		2017
	-1,3	2016
-4,0 -3,0 -2,0	-1,0	0,0

Breakdown 2017

-2.3		currency; interest other financial cost expenses
-1.2	hedging		Actions
-0.4	swap		 Natural hedging
	0.5	other financial income

BALANCE SHEET Coverage: Equity and loans > 1 y. / assets* = 85 %

180 In € million

+31.2 % 10.4 % 7.7 % 10.1 % 7.7 % Comments Equity + Long Term loans (> 1 y) = 114.1 Mio. € Equity ratio 2017: 51.3% Net working capital Ratio 2017: 25.1% 90 days Actions Repayment of promissory notes: 12 Mio. € 12/2018 Agreement for a long term loan (€ 13 million; 2027; interest rate 1.15 %)

*(w/o cash and cash equivalents)

www.first-sensor.com | 14

BALANCE SHEET – INTANGIBLE ASSETS Investment in SAP / conservative booking of strategic projects

In € million

Intagible Assets

Comments

Breackdown 2017

Actions

Footprint in FLOW and OPTO Projects
Project Controlling: Stage Gate Process

BALANCE SHEET Investments: 7.1 million for new technologies & production capacity

Rationalisierungsmaßnahmen

gesetzliche Notwendigkeit

Kapazitätserweiterung

neue Technologie

sonstige

Ersatzinvest

In € million

Equipment

Bookings 2017

Comments

Workload 2017 based on "planned capacity":

OPTO: 49%
MEMS: 97%
AVT: 80 %

Actions

Investments 2018: € 8- 10 million:
Insourcing
6 Inch
Automatisation

www.first-sensor.com | 16

BALANCE SHEET Net working capital ratio 2017: 25.1% / 90 days

In € million

Inventory					Comments
2017 2016 0,0 Receivables	Raw Material 11.2 10.7 5,0 10,0	Unfinished Goods 6.3 6.5 15,0	Finished Goods 7.1 8.7 20,0 25,0	-4.8% DIH -9 30,0	Current assets:  Inventory: Shut down production -> SAP  Receivables: Overdue > 30 days: 11.8%
2017 2016 0	5 10	20.8 18.4 15	20 25	+13.0% DSO +1 30	Actions
Liablilities	Supplier				 KVP-Targets
2017 2016 0	7.9 8.6 5 10	15	20 25	-8.4% DPO 0 30

CASHFLOW STATEMENT Free cashflow amounts to € 3.5 million

	2016	2017	Comments
CF Operations	16.6	16.0	 Open credit line: €11.1 million
CF Investments	-6.5	-12.5	 Currently no factoring 
Free CF	10.0	3.5	Covenants:  EBITDA/Net Debt: 1.16 cap 3.5
CF Financing	-7.8	-1.7	 EBITDA/Interest: 11.04 cap 4.25
Total CF	2.3	1.8
Cash	23.8	25.5

SUMMARY Priorities 2018ff

Top Initiatives

Product portfolio / DB 40

Further improvements by lead time and on-time delivery

STRATEGIC PERSPECTIVE FOR PROFITABLE GROWTH

RESULTS 2017 & OUTLOOK 2018

DR. DIRK ROTHWEILER, CEO

STRATEGIC PERSPECTIVE FOR PROFITABLE GROWTH We generate and utilize economies of scale in 4 dimensions

STRATEGIC PERSPECTIVE FOR PROFITABLE GROWTH Dimension 1: Clear focus on our target markets

DIMENSION 1: CLEAR FOCUS ON OUR TARGET MARKETS Our target markets are growth markets

DIMENSION 1: CLEAR FOCUS ON OUR TARGET MARKETS We participate in market growth

PERSPECTIVE FOR PROFITABLE GROWTH Dimension 2: Clear focus on key customers & key products

DIMENSION 2: CLEAR FOCUS ON KEY CUSTOMERS & PRODUCTS Why is this efficient?

Our growth becomes more scalable and our profitability increases.

DIMENSION 2: CLEAR FOCUS ON KEY CUSTOMERS In 2017, we increased number of and sales with key customers

www.first-sensor.com | 28

DIMENSION 2: CLEAR FOCUS ON KEY PRODUCTS In 2017, we increased number of and sales with key products, too

www.first-sensor.com | 32

www.first-sensor.com | 34

PERSPECTIVE FOR PROFITABLE GROWTH Dimension 3: Clear focus on forward integration

DIMENSION 3: CLEAR FOCUS ON FORWARD INTEGRATION We base our forward integration initiatives on clear product roadmaps

FORWARD INTEGRATION One example is a multi sensor system for HVAC applications

Strategic Perspective for Profitable Growth

PERSPECTIVE FOR PROFITABLE GROWTH Dimension 4: Clear focus on internationalization

Strategic Perspective for Profitable Growth

DIMENSION 4: CLEAR FOCUS ON INTERNATIONALIZATION We generated further growth in our key sales regions

DIMENSION 4: CLEAR FOCUS ON INTERNATIONALIZATION We have set up our sales force for accelerating growth

PERSPECTIVE FOR PROFITABLE GROWTH The Fundament: focus on operative excellence

Our current core initiatives THE FUNDAMENT: FOCUS ON OPERATIVE EXCELLENCE

Continued focus on portfolio optimization and consolidation 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
	ers m o	11 % products	8 %	5 %
	ust A c	69 % customers	6 %	> 1 %
S R E M O	ers m o	6 %	12 %	17 %
T S U C	ust B c	12 %	9 %	1 %
	ers m o	> 1 %	3 %	38 %
	ust C c	> 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

PERSPECTIVE FOR PROFITABLE GROWTH We generate and utilize economies of scale in 4 dimensions

Strategic Perspective for Profitable Growth

OUR GUIDANCE 2018 Improving our profitability remains our focus

www.first-sensor.com | 46

OUR GUIDANCE 2018 Expected sales level of €150 million to €160 million

Good order backlog
Ramp up of customer-specific solutions projects
Increased demand for standard products
Late order placement may result in 2019 shipments
Customer demand may vary
Product launches of customers may delay
Risks associated with our One ERP project

OUR GUIDANCE 2018 Expected EBIT margin level of 7 to 9 percent

Opportunities Risks

Economies of scale: focus on key products and key customers
Forward integration: higher level of value add
Operative Excellence: continuous improvement
Higher marketing expenses for the introduction of new technologies and products, e.g. inertial sensors, senseEdge
Effects such as fluctuations in purchase prices, risks in process stability, increases in wages and salaries
Risks associated with our One ERP project

STRATEGY FOR PROFITABLE GROWTH OUR ASPIRATION

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.

Q&A SESSION

AGENDA (AFTERNOON)

FIRST SENSOR'S LIDAR AND CAMERA STRATEGY, MARTIN KÜMMEL
FIRST SENSOR'S PRESSURE SENSOR FAMILY, DR. MARC SCHILLAGLIES
INSIGTHS IN OUR PRODUCTION STRATEGY & SITES, DR. MATTHIAS PESCHKE

FROM SENSOR INTEGRATION TO SENSOR FUSION

FIRST SENSOR'S LIDAR AND CAMERA STRATEGY FOR DRIVER ASSISTANCE & AUTONOMOUS DRIVING

MARTIN KÜMMEL, PRODUCT MANAGER

FRAMEWORK CONDITIONS Intensified interest in driver assistance & autonomous driving

PERSPECTIVES

Demand for driver assistance systems for special & commercial vehicles significantly increased
Higher interest in self-driving vehicles, in particular commercial vehicles
New players in the automobile sector: Connection with environment & other vehicles (e.g. Google, Apple)
Increasing electrification is changing the market: Consolidation, M&A & technology boom

Market Society & Politics Competition

Customer requirements (especially with regard to comfort & security) force development of new products
Legal requirements for commercial vehicles: Optional ADAS equipment becomes new standard

Passenger cars

Cameras: Tier1 with own design; produced in-house or by EMS provider
Complete systems provided by Tier 1

Special & commercial vehicles

Smaller Tier1 (Customers / competitors)
Cooperation opportunities with system development

The camera & LIDAR market is expected to reach \$52,5B in 2032

OVERALL OBJECTIVES

Provider of innovative sensors and sensor systems in vehicle business

Positioning as focused provider of innovative sensors and sensor systems in OEM & Tier 1 vehicle business

Expanding product portfolio and increase of added value in the LiDAR and cameras segments

Market expansion

Market entry into special & commercial vehicles with selected applications and systems

From sensor to system Camera, LIDAR >> advanced driving assistance systems (ADAS) & sensor fusion

1. EXPANDING OUR PRODUCT PORTFOLIO

For autonomous driving a combination of sensors ist necessary

1. EXPANDING OUR PRODUCT PORTFOLIO We concentrate on LiDAR and camera applications

1. EXPANDING OUR PRODUCT PORTFOLIO LiDAR: We differentiate through 8 key respects

1	2	3
20+ years experience in APD production	Customizing capability for die, package and modules in-house	ISO TS 16949 certified production and testing	Sensor only company
5	6	7	8
Lowest noise	Highest sensitivity for 905nm	AEC-Q 101 qualified APD arrays	Innovative roadmap

LIDAR

We have a long standing experience and expertise

LIDAR

Next steps: Securing and further developing our competitive advantage

"First LiDAR": Crossfunctional tiger team for enhanced impact Marketing/Sales/Solution/Development

Alliances with complimentary suppliers for extended reach Solutions/Development

Innovative product roadmap and forward integration to ensure market leadership Solutions/Development

Cost down to meet future requirements of volume markets Production

LIDAR Our activities are aimed at automotive and industrial applications

Safety, comfort and cost reduction infrastructure drive development of partly or fully autonomous vehicles
First adaptation: special vehicles
Large volume: passenger car
Mix of mature and emerging applications
Industrial area applications include
Unmanned guided vehicles (UGV)
Security scanners
Mapping applications
Range finding (Point measurement)

1. EXPANDING OUR PRODUCT PORTFOLIO Camera: We differentiate through 8 key respects

1	2	3
Long-standing camera experience	Automotive network in new markets	Specialist for harsh environment and low light applications	Tailor maid solutions also possible in small scale production

5	6	7	8

CAMERA Our volume production of a new camera generation has started

CAMERA

Next steps: Increase market presence

Expand "Blue Next" camera family 1 Development and industrialization of "Blue Next" camera solutions

Worldwide sales offensive Enter identified target customers

Potential in related markets Use existing market position in industrial area

2. MARKET EXPANSION Today, car OEM & Tier 1 account for the majority of sales

2. MARKET EXPANSION

We can develop further potential with commercial & special vehicles

Segments Customers	LIDAR	Cameras	Camera Systems	ADAS Systems Multiple Sensors Sensor Fusion
Car OEM & Tier 1	Components	Customized cameras
Commercial & Special vehicles OEM & Tier 1	Components, Subsystems and Manufacturing services	Standard cameras, tailor made solutions	Surround view, Mirror replacement, Blind spot detection	Turn assist, Break assist, Platooning, Pedestrian recognition, Autonomous driving

2. MARKET EXPANSION

Our focus is on target customers & leads with significant annual sales

€500.000 per project / product 2

Car OEM & Tier 1 Trucks Bus Special vehicles

(agriculture, mining

machines, fork lifters)

2. MARKET EXPANSION We focus on the European truck market

Mediocre annual growth of Truck sales 3 % p.a. BUT double digit growth of revenue expected
Focus on innovations; trend to fully or partly autonomous driving
European key manufacturers: ~50% market share

2. MARKET EXPANSION

Next steps: Target market for commercial & special vehicles

1

Expand products experience with car OEM & Tier 1 Offer products for trucks, buses and special vehicles

Initial focus on European market Sales team targets key manufacturers

Innovate according to market specific requirements Basis for future orders

Sensor fusion and system expertise Groundwork for long term market presence

3. FROM SENSOR TO SYSTEM The trend is towards the fusion of different sensors

Autonomous Level	Level 1	Level 2	Level 3	Level 4	Level 5
	Assisted Driving	Partly Automated	Highly Automated	Fully Automated	Driverless
Functionality	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

3. FROM SENSOR TO SYSTEM The sensor fusion has already begun

automotive

based on modular platform designed for volume production, ASIL-conform

Multi purpose Embedded System for various applications Scalable processer family ASIL-conform

Base software with application specific modules: Area view

Object recognition

…

Sensor fusion: Camera, Radar, LIDAR, US

3. FROM SENSOR TO SYSTEM We are taking part with our Embedded ECU

Sensor Fusion

Camera
Radar
Ultrasonic
LiDAR

Target Applications

Area View
Mirror Replacement
Turn Assist
Object/Sign Recognition

3. FROM SENSOR TO SYSTEM

Next steps: We lay the foundations for sensor fusion

Extend software capabilities Form a dedicated software team

Entry into systems market Strategic customers worldwide

Partnerships with customers and suppliers Identify and strengthen alliances

Development of software platform Modular software on system-, com- and application-level

STRATEGY FOR DRIVER ASSISTANCE & AUTONOMOUS DRIVING Summary

Q&A SESSION

NEXT PRESSURE GENERATION

EXPANSION OF FIRST SENSOR´S PRODUCT FAMILIES

DR. MARC SCHILLGALIES, VP DEVELOPMENT

Next Pressure Generation: Expansion of First Sensor´s Product Families

FRAMEWORK CONDITIONS Continual growth of MEMS pressure sensor market

MEMS and sensors revenue market in B\$

Source: Status of the MEMS Industry 2017, Yole Development, June 2017

2015-2021 MEMS market forecast in US\$B

Source: Status of the MEMS Industry report, Yole Development, May 2017

MEMS pressure sensors business is driven by megatrends

Pressure measurement is extremely versatile

We have extensive experience in MEMS sensor technology

OVERALL OBJECTIVES Further strenghtening our pressure sensor footprint

Positioning as a provider of high-precision sensors for ultra-low to high pressure measurement that are suitable for the toughest conditions

1 2

Expand pressure platforms for ultra-low to high pressure: For applications in the industrial, medical and mobility target markets

Forward Integration: All from a single source – from sensor chips to complex sensor systems

Next Pressure Generation: Expansion of First Sensor´s Product Families

1. EXPAND PRESSURE PLATFORMS

We cover a broad range from ultra-low to high pressure sensors

Next Pressure Generation: Expansion of First Sensor´s Product Families

1. EXPAND PRESSURE PLATFORMS

We strenghten our platforms with new pressure sensors

1. EXPAND PRESSURE PLATFORMS L-Family: Our platform for ultra-low pressure measurement

Market requirements	New Technologies	New Products
 High accuracy  High resolution  Miniaturization  Customized calibration	 Rapid customer-specific platform adjustments  New materials (e.g. adhesives, caps)  Flow-based differential pressure sensor technology	 LMI  Expansion of existing platforms

L-FAMILY

Based on micro-flow: LMI series for ultra-low differential pressure

Innovative micro-flow technology

Extreme miniaturization: Micro-flow channel integrated within the silicon sensor chip

Extremely low production tolerances and cost-effective mass production

Immunity to both dust-laden and humid air

Excellent sensitivity, accuracy, offset long term stability and long service life

L-FAMILY LMI sensors are ideal for HVAC and medical device applications

1. EXPAND PRESSURE PLATFORMS H-Family: Our low & mid pressure platform

Market requirements

High accuracy
High resolution
Miniaturization
Customized calibration

New Technologies

Rapid customer-specific platform adjustments
New materials (e.g. adhesives, caps)
Newest piezoresistive chip technologies

New Products

HTD

Expansion of existing platforms

H-FAMILY

Piezoresistive measurement: HTD series for low differential pressure

Distribution of licenced standard products

Piezoresistive measurement in addition to LMI micro-flow series

Very small and flat: 8 x 13 mm, height <7 mm Ideal for space-saving manifold assemblies

SPI interface with 15 bit resolution

High-accuracy and long-term stability

H-FAMILY HTD sensors are also suitable for HVAC & medical device applications

1. EXPAND PRESSURE PLATFORMS SensEdge sensors: Our high pressure platform

Market requirements	New Technologies	New Products
 High accuracy  High stability  Media resistance  High temperature  Temperature signal  Costs	 sensEdge  Glass soldering process  High temperature  Temperature signal	 sensEdge sensors for hydraulic applications  sensEdge sensors for mobility applications

SENSEDGE SENSORS

Pinpoint reading: Our technology for high pressure

Piezoresitive sensor elements manufactured separately from the main body section

Can be used to generate a pinpoint reading of mechanical stress

Very small: 0,8 x 0,8 mm

High measuring sensitivity

Not sensitive to heat

SENSEDGE SENSORS We develop sensors for hydraulic & green mobility applications

Next Pressure Generation: Expansion of First Sensor´s Product Families

1. EXPAND PRESSURE PLATFORMS

Our roadmap leads to the expansion of our pressure platforms

2. FORWARD INTEGRATION

From chip to system: We are able to offer all from a single source

2. FORWARD INTEGRATION One example is a multi sensor system for HVAC

EXPANSION OF FIRST SENSOR´S PRODUCT FAMILIES Summary

Pressure measurement is extremely versatile. We cover a broad range from ultra-low to high pressure sensors

First Sensor is focused on high-precision pressure sensor platforms

We strenghten our platforms with new pressure sensors

5 We use our pressure platforms and forward integration to grow with key products & customers

EXPANSION OF FIRST SENSOR´S PRODUCT FAMILIES Milestones 2018

Standard products & solutions Distribution of standard sensors Focus on key technologies & platforms

Moving up the value chain

Q&A SESSION

MEET FIRST SENSOR Financial calendar 2018

When?	What?
14.05.2018	Q1 Interim Report
15.05. 2018	German Spring Conference, Frankfurt am Main
23.05.2017	Annual Meeting 2018, Penta Hotel, Grünauer Str. 1, 12557 Berlin
13.08.2017	6-Month Financial Report
12.11.2017	Q3 Interim Report
26.-28.11.2017	Analyst' Conference: German Equity Forum, Frankfurt am Main