Kontron AG (formerly S&T AG) — Earnings Release 2022

Aug 4, 2022

Q2 EARNINGS CALL

DI Hannes Niederhauser, CEO

August 4th, 2022

HIGH- AND LOWLIGHTS Q2-2022

• › Q2-2022:
• › Plus 8.0% in Revenues vs. Q2-2021
• › Plus 23.0% in Net Income vs. Q2-2021
• › Strong order entry proceeding for the 6th quarter
• › Book to bill of 1.22 EUR 405 Mio. order entry in Q2-2022
• › Russia: major divestments started
• › 35 cent dividend paid for 2021 2.5% dividend yield

HIGHLIGHTS LOWLIGHTS

• › Chip shortage impact:
• › EUR 127 Mio. of not delivered orders as of 30.06.2022
• › Operating CF burdened by EUR 59 Mio. increased inventory
• › North America increased in revenues still weak in margin
• › Impacts of Russian deconsolidation in Q2 (RT Soft)
• › EUR 6.1 Mio. (-43%) reduction in Revenues

KPI´S Q2-2022 GOOD RESULTS IN ALL PARAMETERS

Strong improvement in EPS (+25%) and Net Income (+23.0%)

117.0 0 20 40 60 80 100 120 Q2-2021 | Q2-2022 + 8.0% +7.5% (in EUR Mio.)

GROSS PROFIT

CASH AND CASH EQUIVALENTS

(in EUR Mio.)

31.12.2021 | 30.6.2022

NET INCOME AFTER NCI

KPI´S HY1-2022 GOOD RESULTS IN ALL PARAMETERS

233.1 245.9 0 50 100 150 200 250 6M 2021 | 6M 2022 (in EUR Mio.)

EBITDA

(in EUR Mio.)

NET INCOME AFTER NCI

OPERATING CASH FLOW

(in EUR Mio.)

GROSS PROFIT

CASH AND CASH EQUIVALENTS

(in EUR Mio.)

10% growth after H1 | We reiterate our FY 2022 guidance of EUR 1.5 Bn. revenues @ EUR 150 Mio. EBITDA

KONTRON GROUP BALANCE SHEET

Mio EUR	30/06/2022	31/12/2021		30/06/2022	31/12/2021
NON-CURRENT ASSETS	511 0 ,	519 0 ,	CAPITAL AND RESERVES	432 5 ,	423 3 ,
Fixed Assets	469 8 ,	478 8 ,	Equity	432 5 ,	423 3 ,
as of , plant and Property equipment	124 7 ,	132 5 ,	as of shares Treasury	0 0 ,	-46 8 ,
as of Goodwill	209 4 ,	208 3 ,	NON-CURRENT LIABILITIES	326 0 ,	348 2 ,
Other Assets	2 41 ,	40 2 ,	loans and borrowings Long-term	231 6 ,	238 4 ,
ASSETS CURRENT	752 8 ,	833 2 ,	Other Liabilities Non-Current	94 4 ,	109 8 ,
Inventories	246 2 ,	187 3 ,	CURRENT LIABILITIES	505 4 ,	580 7 ,
Trade receivables	216 4 ,	232 5 ,	Trade payables	215 7 ,	270 0 ,
from Contract Assets Customers	35 1 ,	32 8 ,	Liabilities from Contract Customers	87 8 ,	85 0 ,
Cash and cash equivalents	167 6 ,	296 5 ,	Short-term loans and borrowings	70 2 ,	72 3 ,
Other receivables and prepayments	87 5 ,	83 9 ,	Other Liabilities Current	131 6 ,	153 4 ,
Total Assets	1 263 8 ,	1 352 1 ,	Total Liabilities & Equity	1 263 8 ,	1 352 1 ,

Equity Ratio	2% 34 ,	3% 31 ,
Cash/Net Debt* Net	-134 2 ,	-14 2 ,
Working Capital excluding 15** IFRS	246 8 ,	149 9 ,

EUR 59 Mio. Inventory build up to cover chip shortage| Equity Ratio improved

* 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)

APPENDIX ADDITIONAL DISCLOSURES IN Q2

IN TEUR	EBIT ADJUSTMENTS
17,664	STATED EBIT
- 345	Additional cost for intensified auditing
1.634	FX profits
-685	Settlement on a legal claim in AT
90	Electricity subsidy in SLO
-643	PPVs paid due to chip crisis and not recovered
449	ONE TIME PROFIT EFFECTS
5,633	R&D Capitalization
-3,587	R&D Amortization
2,046	IMPACT R&D CAPITALIZATION
-2,165	PPA Amortization
17,334	ADJUSTED EBIT BEFORE PPA

403	ADJUSTED OP. CASH FLOW
11.477	Decrease in A/R factored from 31.3.2022 to 30.06.2022
-11,074	STATED OP. CASH FLOW
IN TEUR	OP. CASH FLOW ADJUSTMENTS

ORGANIC GROWTH
in TEUR	Q2/21	Q2/22
Stated revenues	306,490	331,012
Divestment (RT Soft, PSB, MD)		9,341
FX adjustment		-2,661
ORGANIC GROWTH		10.2%

GEOGRAPHICAL SPLIT Q2/22
(in %)	Revenue	EBITDA
Europe	84.2%	102.5%
North America	9.8%	1.4%
Asia	4.9%	3.3%
RUS/BY/MD	2.9%	-7.2%

IOT SOLUTIONS EUROPE

"IoT Solutions Europe" growth driven by 5G technology and strong market / order growth

* 3 rd Party revenue including intercompany revenue in Mio. EUR

** EBITDA before charged management fees from Kontron AG (part of IT Services Segment); EBITDA after management fees: MEUR 34.0 (6M 21), MEUR 39.1 (6M 22)

*** HQ-fee adjusted EBITDA in % of external revenue

IOT SOLUTIONS AMERICA

Order entry and growth recovering, back to 5% EBITDA in 2022 and double digit in 2023

• * 3 rd Party revenue including intercompany revenue in Mio. EUR
• ** EBITDA before charged management fees from Kontron AG (part of IT Services Segment); EBITDA after management fees: MEUR 0.08 (6M 21), MEUR 0.1 (6M 22)
• *** HQ-fee adjusted EBITDA in % of external revenue

IT SERVICES

20.5 19.6 10.0% 243.0 › Regional target DACH + CEE in European Union › IT Services East Europe accounts for 71% and DACH for 29% of total IT services › Strong organic growth of 13% in H1 2022, profit margins down as we shipped more Hardware in H1 to cover supply chain risks › IT Services DACH: focus on Germany, EE nearshoring; 2021 EUR 75 Mio. grows to FC 2023 > EUR 100 Mio. › Ongoing advanced negotiations to decide on divestment of IT service division ADJ. EBITDA MARGINS*** EBITDA (MEUR) BEFORE HQ FEE** REVENUE* (MEUR) 6M 2021 | 6M 2022 6M 2021 | 6M 2022 6M 2021 | 6M 2022

IT services less hit by chip shortage

• * 3 rd Party revenue including intercompany revenue in Mio. EUR
• ** EBITDA before charged management fees from Kontron AG (part of IT Services Segment); EBITDA after management fees: MEUR 24.2 (6M 21), MEUR 23.3 (6M 22)
• *** HQ-fee adjusted EBITDA in % of external revenue

UPDATE GLOBAL CHIP SHORTAGE

• › Chip shortage impact:
• › EUR 127 Mio. of not delivered orders in Q2 2022
• › Our revenues are delayed but not lost (hard to replace)
• › Business Impact:
• › KEU EUR 66.5 Mio., KNA EUR 38.0 Mio., rest EUR 22.7 Mio.
• › Software and Transportation divisions not impacted
• › Mainly KEU, KNA and ODM impacted
• › We did redesign products to replace critical chips
• › We increased inventory by EUR 59 Mio. in 2022 for
• › emergency stock of critical chips
• › not shippable semi-finished products
• › In Q2/22 we paid EUR 9.3 Mio. higher prices to chip brokers and passed on to customers EUR 8.7 Mio. – impact on EBITDA EUR 0.6 Mio.
• › Outlook:
• › We will solve most problems in 2022 but higher chip prices
• › Inventory (and op. CF) will be closer to normal end of 2022

WAR UKRAINE IMPACTS AND STRATEGY

• › 2020 we decided to stop investments in Russia and CIS countries
• › Q2/2022 we divested several investments in Russia (RT Soft SE, RT Soft SWD, RT Soft EC, RT Soft Project)
• › EUR 4 Mio. provision formed as of 2.3 Mio. used
• › Q3/2022 we will step out of Belarus and Moldova
• › Q4/2022 further divestments in Russia 14 CIS companies reduced to 2
• › Russian Engineers already transferred to Europe or replaced in Europe
• › CIS Impacts on Kontron Q2/2022
• › EUR 4 Mio. provisions accrued for divestment losses (2.3 Mio. used in Q2/2022)
• › Russian Revenues reduced by EUR 6.1 Mio. (43%)
• › Total 2022 impact will exceed EUR 30 Mio. but is included in guidance

Russia/CIS share in 2021 (Rev 6% - EBITDA 4%) is minor, as of today no need to adjust our current Guidance 2022

SHORT AND MIDTERM GOALS | VISION 2030

GUIDANCE 2022

Revenues: EUR 1,500 Mio. – EBITDA EUR 150 Mio.

AGENDA 25	2018act	2022fc	2018*	2025p*
Revenue	990 Mio.	1500 Mio.	541 Mio.	2000 Mio.
EBITDA	91 Mio.	150 Mio.	64 Mio.	260 Mio.
* without IT services

VISION 2030

Based on the actual order backlog we confirm our targets for 2022

SUMMARY

ACHIEVEMENTS

› Organic Revenue growth of 10% in Q2 2022

› Strong order intake – book-bill 1.22 in Q2

› Strong Improvement Net Income (+23.0) and EPS (+25%)

TARGETS

• › Guidance 2022:
• › Revenue > EUR 1.5 Bn.
• › EBITDA ~ EUR 150 Mio.
• › EUR 2 Bn. IIoT Revenues at > 13% EBITDA in 2025
• › Reduce overdue shipments of EUR 127 Mio.

RISKS

• › Chip shortage
• › Ukrainian war (limited risk)
• › Address right technology trends

OPPORTUNITIES

• › Project "Focus": leading player in the growing IIoT market
• › Significant funds to grow in America + China
• › 5G connectivity for machines

APPENDIX KONTRON KEY FIGURES

In Mio. EUR	2017	2018	2019	2020	2021	H1 2022
Revenues	882.0	990.9	1,122.9	1,254.8	1,342.0	660.7
Gross Profit	315.0	346.5	407.5	455.8	490.2	245.9
Gross Margin	35.7%	35.0%	36.3%	36.3%	36,5%	37.2%
EBITDA	68.1	90.5	111.7	130.0	126.3	62.6
EBITDA Margin	7.7%	9.1%	9.9%	10.4%	9.4%	9.5%
EBIT before PPA amortization	47.9	67.3	67.2	81.7	75.8	36.7
Net Income after NCI	29.4	48.5	49.1	55.6	48.3	24.4
EBITDA Interest Coverage Ratio*	9.8	14.5	12.4	14.0	12.6	11,84
Net Cash **	101.8	52.7	29.5	20.3	-14.2	-134.2
Working Capital ***	121.5	156.4	153.9	154.3	14.9	246.8
Equity Ratio	41.2%	43.3%	31.4%	32.8%	31.3%	34.2%
Operating Cash flow	44.9	35.5	83.4	140.8	95.3	-71.1
Employees	3,849	4,248	4,934	6,067	6,206	5,991

* Definition EBITDA Interest Coverage Ratio: EBITDA divided by interest expenses (excl. interest expenses related to leasing liabilities according to IFRS 16)

** 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)

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.

S&T AG

Industriezeile 35

A-4020 Linz

www.kontron.ag

IR Contact:

ir@kontron.com

+43 (1) 80191 - 1196