First Sensor AG

Investor Presentation • May 14, 2019

Sensing Innovations

Company Presentation

Our Profile

OUR PROFILE

We are a german-based expert in sensor technologies

• − Founded in 1991 and grown through series of acquisitions and organically
• − Headquartered in Berlin
• − Production and developmentsites in 4 countries
• − Sales in 33 countries in Europe,Americas andAsia
• − About 1,000 employees
• − €155,1 m sales in 2018

• − Unique capabilities in photonics,pressure sensors and advancedelectronics
• − Proven know-how to capture, filter and interpret physical parameters
• − Long-term experience in industrializing differentiatedtechnologies
• − Solution-oriented andstandard products for B2B customers
• − Serving three distinct growthmarkets: Industrial, Medical, Mobility

OUR PROFILE We offer chip & packaging expertise

SEMICONDUCTOR PRODUCTION

MICROELECTRONIC PACKAGING

Berlin-Oberschoeneweide 1

• − Headquarters with central company departments
• − Specialized in semiconductor production
• − Chips on 4 and 6 inch silicon wafers
• − IATF 16949 certificate (Automotive Industry)

Berlin-Weissensee 2

• − Focus on packaging technologies
• − Specialized in the packaging of electronic microsystems for pressure, flow and optical sensors

Dresden-Alberstadt 3

• − Expertise in customer-specific system development
• − Production focus on pressure, flow and optical sensors as well as system solutions
• − Automotive certified (IATF 16949) high volume production

− Focus on packaging technologiesfor

− Specialist for hybrid circuits,electronic modules and power electronics − Products forsafety- relevant process steps with a high quality requirements

actuators (incl. emitters)

5

Dresden-Klotzsche 4

• − Design and connection technology of electronic microsystems
• − Customer-specific miniaturization of optical sensors and pressure sensors
• − Integrated Manufacturing Services (IMS)
• − IATF 16949 certificate (Automotive Industry)

Ulm 6

• − Primarily sells FIS standard products
• − Small share of third party product distribution to complement portfolio
• − Engineering and specification competence

Munich

OUR PROFILE We are clearly on a path of profitable growth

Note: ¹ Based on sales excl. this Automotive customer sales. ²Decrease in 2017 due to expired order of a special Automotive customer(~€12m) which was mostly compensated for by new clients (~€7m).

OUR COMPETENCIES

We are a sensor expert for photonics, pressure & advanced electronics

		Core technologies in which First Sensor is particularly strong	Next measures	Strategic objectives
S M E M	" e r u ess Pr "	− Full control of entire value chain including chip know-how − Focus on highest-end performance sector to differentiate through accuracy and product quality	− Next generation H series − Expanding pressure business in Asia with H and K series	Drive market expansion of senseEdge technology for mobility, industrial and medical applications and strengthen low pressure and flowplatforms
D P A	cs" ni o ot h P "	− Leading in APD technology that is key for fast growing applications such as LiDAR − Lowest noise amongst competitors, significantly improving detection quality − Superior design and process technology	− New APD generation for autonomous machines − Strengthening photonic business in North America	Furtherstrengthen our leading position in APD/LiDAR
eras m Ca	cs" ni o ot h P "	− Ability to program and control the cameradirectly − Specialist for harsh environments and low-light applications − Design suited for easily connecting othersensors – basis for sensor fusion	− Sensor fusion with Embedded ECU & software competencies − Growth with commercial & special vehicles	Establish a sustainable position in the future growth market for advanced driver-assistance systems and autonomousdriving

Technologically leading pressure and optical components along the sensor value chain

OUR COMPETENCIES

We provide customer-specific sensor solutions and standard products

OUR MARKET POSITION We are internationally positioned

OUR MARKET POSITION We focus on three growing B2B markets

¹Based on Yole estimates for the global MEMS and sensor market. ²Includes LiDAR estimates for the automotive segmentonly.

Our Strategy

STRATEGY FOR PROFITABLE GROWTH

We generate and utilize economies of scale in 4 dimensions

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

DIMENSION 1: CLEAR FOCUS ON OUR TARGET MARKETS We grow in megatrend driven target markets

• INDUSTRY 4.0
• SMART CITIES
• INTERNET OF THINGS
• DIGITIZATION & CONNECTIVITY
• E-HEALTH & TELEMEDICINE
• MINIATURIZATION
• AMBIENT ASSISTED LIVING
• AUTONOMOUS DRIVING
• GREEN MOBILITY

DIMENSION 1: CLEAR FOCUS ON OUR TARGET MARKETS and focus on applications with most relevant contributions to growth

OUR STRATEGY FOR PROFITABLE GROWTH Our next measures: Novelties, targeted sales & expanded capacities

Grow with pressure in Asia

New APD generation for autonomous machines

Expand imaging in North America

Next generation H series

Increase production capacities

Grow with optical packaging

Sensor fusion with Embedded ECU & software competencies

Volume production with new camera family

Conquer the truck market

OUR STRATEGY FOR PROFITABLE GROWTH

Dimension 2: Clear focus on key customers and key products

DIMENSION 2: CLEAR FOCUS ON KEY CUSTOMERS We have significantly increased sales with our key customers

	2014	2015	2016	2017	2018
Total number of customers	3,658	3,565	3,288	3,022	2,696
# of key customers (sales >€1m p.a.)	23	28	33	36	37
Total sales from key customers	€64m	€77m	+50% €95m	€93m	€96m
	2014	2015	2016	2017	2018

DIMENSION 2: CLEAR FOCUS ON KEY CUSTOMERS Sales with our key products has grown since rollout of our strategy

OUR STRATEGY FOR PROFITABLE GROWTH Dimension 3: Clear focus on forward integration

DIMENSION 3: CLEAR FOCUS ON FORWARD INTEGRATION System expertise along the value chain is a strong basis for our offering

DIMENSION 3: CLEAR FOCUS ON FORWARD INTEGRATION We use 3 key growths drivers to expand our market position

	MEMS / Pressure	APD / LiDAR	Camera Systems
s c e gi v e ti t c a e r bj t S o	Drive market expansion by strengthening low and high pressure business and flow platforms	Furtherstrengthen leading position, strongly increasing sales	Establish sustainable and defendable position for ADAS and autonomous driving
	− Focus on sensEdge technology	− Automotive-quality LiDAR receiver	− Expand portfolio for cameras
p a m d a o r r u O	− Enhance pressure & transmitter products − New liquid quality mobility sensors − High dynamic range sensor family − Gas property sensors	− APD-array-chips for 905nm on 6'' − Scalable low cost packagingplatform − System-in-package receivers + ASIC − Laser assemblies with pulse driver −	2 − Further develop camera systems 3 − Implement modular approach to new product and system development − Concentrate on special & commercial vehicles, mobile machinery
	− Oil filled technologies	Reference systemdesigns	− Specialize in surround view and emergency breaking applications

STRATEGY FOR PROFITABLE GROWTH

Dimension 4: Clear focus on internationalization

DIMENSION 4: CLEAR FOCUS ON INTERNATIONALIZATION We expand our vertical and regional sales worldwide

Cross selling between solution & distribution sales Expand private label agreement

Leverage strong customer base

Cross selling between solution & distribution sales

Accelerate distribution business with local channel partners

Strengthen sales channel in Israel

Enrich direct sales with additional product/industry focused experts

Focus on identified prospective key accounts

Strengthen distribution partners for standard product sales

Higher volume of standard products via partner network

Stay focused on dedicated subset of target markets

Products & services fitting the market requirements

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STRATEGY FOR PROFITABLE GROWTH Foundation: Operative Excellence

FOUNDATION: OPERATIVE EXCELLENCE Introduction of 6 inch wafer will substantially enhance productivity

FOUNDATION: OPERATIVE EXCELLENCE We actively utilize outsourcing for a flexible production network

STRATEGY FOR PROFITABLE GROWTH

We generate and utilize economies of scale in 4 dimensions

Our Key Figures 2018

FINANCIAL RESULT 2018: AT A GLANCE

We further succeed in implementing our strategy for profitable growth

Note: 1 Based on sales excl. this automotive customer sales. 2 Decrease in 2017 due to expired order of a special automotive customer (~€12m) which was mostly compensated for by new clients (~€7m).

FINANCIAL RESULT 2018: AT A GLANCE

Top-line growth & margin improvement based on dedicated measures

¹Based on sales excl. sales of a special automotive customer

.

FINANCIAL RESULT 2018: P+L STATEMENT

Significant improvement of all relevant key figures has been achieved

In € million	2017	2018	Change
1. Revenues	147.5	155.1	7.6
Other operating income	3.3	2.6	-0.7
Change in inventory	-1.5	4.5	6.0
Other own work capitalized	2.5	2.0	0.5
Cost of material	-69.3	-76.1	-6.8
2. Gross profit	82.5	88.1	5.6
3. Personnel expenses	-46.6	-49.0	-2.5
4. Other operating expenses	-16.3	-17.8	-1.5
Operating result (EBITDA)	19.6	21.3	1.6
Depreciation and amortization	-6.8	-6.8
Operating result before goodwill amortization (EBITA)	12.8	14.5	1.7
Goodwill amortization	-2.3	-2.2
5. Earnings before interest and tax (EBIT)	10.6	12.2	1.7
6. Financial result	-3.4	-1.8	1.6
Income before tax (EBT)	7.1	10.4	3.3
Taxes	-2.8	-2.9	-0.1
Net income	4.4	7.5	3.1
	2.96%	4.85%

P+L STATEMENT:REVENUES

We continue in implementing our strategy for profitable growth

P+L STATEMENT: REVENUES

We further strengthen our international presence

Sales in € million

+2.1	-1.6	+4.5	+0.7
147.5	+1.9		155.1
2017	Rest of Europe	Asia	Rest of World
DACH region	North America		2018
DACH region − Growth + 2.8% − Germany remains the biggest market	Rest of Europe − Sales decrease in Hungary − Sales increase in Switzerland	North America − Growth + 11.3% − Sales increase in USA and Canada	Asia − Growth + 30.2% − Sales increase in China

P+L STATEMENT: REVENUES

Growth drivers: photonic and pressure sensors

Sales share product groups in % Commentary

Photonics Pressure Advanced Electronics

Photonics

• − LiDAR receivers for driver assistance systems, robots and drones
• − Customer-specific camera modules for industrial inspection and aerial surveillance
• − Embedded electronic control unit (ECU) for driver assistance systems

Pressure

• − Customer-specific pressure sensor component for industrial transmitters
• − Gas property sensor system for fast and efficient detection of gas mixtures

P+L STATEMENT: GROSS PROFIT

Gross profit with 52.9% slightly decreased due to higher inventories

In € million	Commentary
Other Operating Income 2.6 2018 -0.7	− Other operating income: investment grants and changes in provisions
2017 3.3
Change in Inventory 2018 +1.4 Raw Material: 3.0 WIP: 1.4 2017 2017 WIP: 0.0 Raw Material: -1.5	− Inventories: increase because of significantly improved order situation/ the necessity of safeguarding supply capability
Other Own Work Capitalized 2.0 -0.5 2018	− Capitalized costs: development costs pursuant to IAS 38 accounted for €1.6 million of this sum
2.5 2017 Cost of Material 76.1 +6.8 2018	− Cost of Material: rose due to increase in total operating performance
69.3 2017	− Gross Profit: 52.9% (previous year: 53.3%)

P+L STATEMENT: PERSONNEL EXPENSES

Increased FTE through investing in production and R&D for growth

Employees in FTE

P+L STATEMENT: OTHER EXPENSES

Other operating expenses increase slightly by € 1.5 million

In € million
Other Expenses 2018	17.8	+1.5
2017	16.3
Breakdown 2018, Top 5
Cost of premises	2.6
Maintenance and repairs Sales & marketing expenses	2.2 1.6
IT-costs	1.2
Travel expenses	1.2

Commentary

• − Increased costs for maintenance of buildings and production equipment
• − Increased recruitment costs for hiring qualified staff
• − Higher R&D expenses for investing in new product generations
• − More travel expenses due to internationalization
• − Warranty expenses decrease by 45.6%
• − Legal and accountancy fees decrease by 32.8%

P+L STATEMENT: EBIT EBIT increased by 16%

EBIT in € million

P+L STATEMENT: FINANCIAL RESULT

Foreign currency policy leads to improved financial result

FINANCIAL RESULT 2018: BALANCE SHEET Equity ratio rose by 1.4%

BALANCE SHEET

Investments in capacities and new equipment for growth

Bookings

• Capacity expansion
• Rationalisation
• New Technology
• Legal need
• Other

In € million Commentary

• − Renovation of the sites Berlin-Weißensee, Oberdischingen and Dresden Klotzsche
• − New equipment for our Fab in Berlin-Oberschöneweide
• − 6-Inch-Equipment mainly implemented in 2017
• − Selected insourcing of production processes in Berlin

BALANCE SHEET: NET WORKING CAPITAL

DSO slightly improved due to reductions of overdues and factoring

BALANCE SHEET: CASHFLOW Group's liquidity position remains comfortable

In € million

Cash Flow	2017	2018
Operating CF	16.0	15.9
Investing CF	-12.5	-9.6
Free CF	3.5	6.3
Financing CF	-1.7	-3.4
Total CF	1.8	2.9
Cash	25.5	28.5

Commentary

• − Operating cash flow on same level as previous year
• − Cash flow from investing activities still reflects the high level of investment required by First Sensor
• − Investments largely related to new machinery and equipment (expanding vertical integration, process improvements and increasing capacity)
• − Cash flow from financing activities included the dividend distribution of €1.6 million

Our Key Figures Q1 2019

Q1 RESULT Solid sales growth

Total sales in € million Comments

Further strengthening First Sensor's core business Photonics (+€3.5 million) and Pressure (+€3.5 million)

Growing demand for Imaging solutions and standard products of our H series

Q1 RESULT Strong demand in Industrial and Medical target markets

Q1 RESULT

Increased sales with key customers and key products

Q1 RESULT

Expanded activities in North America & Asia show further results

Q1 RESULT Order intake Q1 at €42.3 million, backlog at €98.4 million

Order backlog remains at a high level of €98.4 million 70% are scheduled for 2019

Q1 RESULT

Continuous improvements lead to 9.9% EBIT margin

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

OUTLOOK Executive Board confirms the Guidance for 2019

OUTLOOK Chances and risks for sales and profitability

	Sales	Profitability
s e c n a h C	− Strong sensor technology market: − Global market for optical and pressure sensors with average growth rate approx. 7-8% to 2022 − High order backlog €97.6m, 80% to ship in 2019	− Economies of Scale − Continuous measures to improve operational excellence: − Rising sales with value-add products
s k s Ri	− Slowing economic growth − Volatility in key trade-related decisions − Shortage in materials supply − Order behavior of large customers	− Changes in product mix − Sales related decrease in economies of scale delays transition to 6-Inch production − Increases in purchase prices, wages and salaries

Our Shareholder Structure

SHAREHOLDER STRUCTURE Consideration of DPE to sell ist shares is going on

October 31, 2018

• − Adhoc: DPE considers to sell its shares in First Sensor AG
• − As a result, it is possible that a possible acquirer will be obliged to submit a takeover bid
• − First Sensor AG intends to play an active role in shaping the possible process

November 12, 2018

− Goldman Sachs assists First Sensor during the further process

Sensing Innovations

Company Presentation

May 2019

First Sensor AG www.first-sensor.com ir@first-sensor.com

This presentation contains forward-looking statements. This presentation does not represent any solicitation to purchase shares of First Sensor AG. Rather it is intended exclusively for information purposes with regard to possible future developments at the company. All future-oriented information in this presentation was produced on the basis of probability-based planning and represents statements regarding the future which cannot be guaranteed. Rounding differences may occur.