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STRATEC SE Investor Presentation 2021

May 11, 2021

416_ip_2021-05-11_f06d1b8c-cafb-47f3-828d-c58782841bcf.pdf

Investor Presentation

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BERENBERG DIAGNOSTICS CONFERENCE

May 11, 2021

Forward-looking statements involve risks.

This company presentation contains various statements concerning the future performance of STRATEC. These statements are based on both assumptions and estimates. Although we are convinced that these forward-looking statements are realistic, we can provide no guarantee of this. This is because our assumptions involve risks and uncertainties which could result in a substantial divergence between actual results and those expected.

It is not planned to update these forward-looking statements.

  • 2.THE IVD MARKET
  • 3.FINANCIALS

4. OUTLOOK AND STRATEGY

STRATEC AT A GLANCE

  • • Leading OEM player for automation solutions for the diagnostics industry and translational research
  • • Three decades of experience in highly regulated healthcare markets and growing technology pool

  • • Around 1.300 employees worldwide

  • More than 50% allocable to R&D

  • • Production sites in Germany (HQ), Switzerland, Hungary and Austria

  • •High number of systems installed globally

    • More than 13,000 medium to high throughput systems

  • More than 25,000 low throughput systems

  • •Sales of € 250.1 million in 2020
    • CAGR sales since IPO in 1998: ~15%
  • •Dividend payments raised over 17 consecutive years*

UNIQUE MARKET POSITION STRATEC IN THE IVD VALUE CHAIN

BUSINESS MODEL

STRATEC provides instrumentation, consumables, software and automation solutions

  • OEM development and manufacturing
  • Around 8,000 fully automated analyzer systems and modules manufactured annually
  • Wide range of intellectual property rights

Extensive collaboration with partner during design phase

  • STRATEC: Engineering / automation, software, QM
  • Partner: System / reagent / market requirements

Systems have long market lifecycles

  • Product lifecycles typically in an area of 12 to 15 years
  • Leads to longstanding partnerships
  • Expanding installed base of systems
  • Product enhancement and extension drives value

SECURING RETURN ON INVESTMENT

Sales

Long-term agreements with partners

  • Milestone payments during development stage
  • Operating sales during series production stage
  • Recurring sales from service parts & consumables sales

Minimum volume commitment

Firm purchase orders

STRATEC an integral part of partners' plans

Reliable partnership

  • Shortened development time
  • Integration of analyzer system and reagents
  • Agreed development budget & transfer price
  • High commitment by both partners

INDICATIVE SALES CHARACTERISTICS OF AN ANALYZER OEM PROJECT

THE IVD MARKET

THE IVD MARKET

IVD MARKET SEGMENTS / IVD MARKET: ~ 85 BILLIONUSD IN 2020

Total instrumentation market ~ 17 billion USD

Growth drivers

  • Aging world population
  • Rising prevalence of chronic diseases

Expansion in healthcare systems, especially in emerging markets

New technologies broadening scope of IVD applications (e.g. oncology, personalized medicine or non-invasive prenatal testing)

Increasing automation

Source: MarketsandMarkets: "In vitro diagnostics market – forecast to 2025", Oct 2020

BERENBERG DIAGNOSTICS CONFERENCE - MAY 11, 2021

OUTSOURCED VS IN HOUSE INSTRUMENTATION MARKET

•The majority of instrumentation equipment in the IVD market is still developed in-house by diagnostics companies

  • •Share of outsourced developments has already increased significantly over the last couple of years

  • •Trend of outsourcing towards specialized players set to continue, due to:

    • Engineering of automation solutions often not core competence of diagnostics companies

  • Shorter development timeframes due to already existent technology pools

  • Guaranteed project budget and firm transfer prices
  • Keeping up with regulatory developments easier for specialized players
  • Structured processes in order to address end customer needs, such as ease of use, user experience, workflow efficiencies, remote access, serviceability and preventive maintenance

PROPORTION OF OUTSOURCED INSTRUMENTION DEVELOPMENTS

A SELECTION OF STRATEC CUSTOMERS

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Not a STRATEC customer

Source: IVD News / non-public companies estimated / non-reported sector sales estimated

Sales

CAGR ~9%

in € million

KEY FIGURES - TRACK RECORD

102 116.6 122.7 128 144.9 146.9 184.9 207.5 187.8 214.2 250.1 0 50 100 150 200 250 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

1 Figures adjusted for comparison; adjusted for depreciation and amortization from purchase price allocation for acquisitions, related integration expenses and other extraordinary effects. Reconciliation to IFRS figures can be found in the respective annual report.

BERENBERG DIAGNOSTICS CONFERENCE - MAY 11, 2021

KEY FIGURES - TRACK RECORD

Net income in € million CAGR ~10%

Dividend per share in € CAGR ~6%

1 Figures adjusted for comparison; adjusted for depreciation and amortization from purchase price allocation for acquisitions, related integration expenses

and other extraordinary effects. Reconciliation to IFRS figures can be found in the respective annual report.

2 Subject to AGM approval

FINANCIALS AT A GLANCE Q1 20211

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1 For comparison purposes, adjusted figures exclude amortization resulting from purchase price allocations in the context of acquisitions.

2 Result from continuing operations.

SALES Q1 2021

In € million

As of March 31

Q1 2021 sales up 27.4% yoy to € 72.0 million +32.5% at constant currency

(+) Continuously high demand for molecular and immunoassay solutions

Strong business with Systems as well as Service parts & Consumables

(+) Single-digit growth with Development and Services sales

(-) Ramp-up curve of newly launched products tampered by pandemic-driven reallocation of priorities

ADJUSTED EBIT AND EBIT MARGIN Q1 2021

Q1 2021 adjusted EBIT up by 109.5% yoy to € 16.0 million

Q1 2021 adjusted EBIT margin up by 870 bps yoy to 22.3%

  • (+) Economies of scale
  • (+) Sales/product mix
  • (+) Efficiency enhancements

As of March 31

CASH FLOW AND NET DEBT Q1 2021

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  • •Strong improvement in operating cash flow dynamics but still elevated inventory needs
  • • Lower investment spending following completed construction work for expansion of building capacity at HQ (investment ratio1 at 6.0% of sales)
  • •Net debt down by 8.5% Net debt / LTM EBITDA of 1.2x

1 Total investments in intangible and tangible assets in % of sales LTM = Last twelve months

Sales in € million

SALES BYOPERATING DIVISIONS FY 2020

In % of total sales

Others Development and ServicesService Parts & ConsumablesSystems

As of December 31

CER= Constant exchange rates

BERENBERG DIAGNOSTICS CONFERENCE - MAY 11, 2021

OUTLOOK AND STRATEGY

OUTLOOK AND STRATEGY

UPDATE COVID-19 PANDEMIC

Several STRATEC customers are at the forefront of containing the COVID-19 pandemic

-Significant proportion of genetic COVID-19 testing is performed on systems developed and manufactured by STRATEC

  • -Additional demands for immunoassay solutions due to antibody screening and lab-based antigen tests
    • Still unprecedented demand levels and strong order trends strong business performance expected for H1 2021

Various factors set to influence H2 2021 demand levels:

  • -Magnitude of replacement potential triggered by elevated utilization levels of installed base
  • -Uplift of serological and other testing (e.g. full respiratory panels)
  • -Overall testing volumes and penetration of genetic versus rapid antigen tests
  • -Impact of significant expanded installed base on Service parts & Consumables business
    • Catch up potential of non-COVID-related product lines

Expected longer-term dynamics:

  • -Improved perception of IVD methods and further increase in STRATEC brand awareness
  • -Allocation of research budgets into infectious diseases
  • -Renaissance of decentralized testing capacities (more testing againin hospitals)
  • -Increased and sustainable public investments in healthcareinfrastructures
    • Sustainable additional testing demand (e.g. Long COVID, respiratory panels, other screening tests)

FINANCIAL GUIDANCE FOR FISCAL YEAR 20211

  • •Constant-currency sales growth in at least a high single-digit percentage range
  • •Adjusted EBIT margin of around 17.5% to 18.5% (2020: 16.7%)
  • •Investments in tangible and intangible assets combined of around 6.0% to 8.0% of sales

1 Due to the COVID-19 pandemic, STRATEC continues to observe higher volatility in its customers' order behavior. In the first quarter of 2021, the company witnessed an overall rise in order forecasts for the second half of 2021. Due to the additional forecasting uncertainty resulting from the pandemic, however, the higher order forecasts for the fourth quarter of 2021 in particular are still not incorporated in the above financial guidance.

OUTLOOK ANDSTRATEGY

STRATEGIC PRIORITIES

SELECTION OF ESG TOPICS AND LATEST ACHIEVEMENTS

•Challenges of COVID-19 pandemic successfully managed

  • Employee health top priority (new shift system, extended options for remote working, increased working hours flexibility, early and strict travel restrictions)
  • Business continuity (supply chain, production, logistics, development and business operations)

•Strong commitment to combat climate change

Science based reduction target (SBT) in line with Paris agreement to limit global warming to less than 2.0°C

30% absolute reduction of scope 1 and 2 emissions by 2030 (versus 2019)

  • Expanded disclosure: Scope 3 emissions to be reported from 2020 onwards
  • Compensation of unavoidable Scope 1 and 2 emission (certified emission reduction projects)
  • •Employer attractiveness and talent management
    • Further employee surveys conducted in 2020

Roll-out of new group-wide talent development program

•New ESG initiatives

E.g. new waste reduction program initiated in 2020

APPENDIX

APPENDIX

KEY FIGURES AT A GLANCE1

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1 Figures adjusted for comparison; adjusted for depreciation and amortization from purchase price allocation for acquisitions, related integration expenses and other extraordinary effects. Reconciliation to IFRS figures can be found in the respective annual report.

2 From continuing operations

3 Retrospectively adjusted to account for the recognition of the Data Solutions business unit as a discontinued operation pursuant to IFRS 5.

*Subject to approval by AGM 2021

BERENBERG DIAGNOSTICS CONFERENCE - MAY 11, 2021

APPENDIX

ADJUSTMENTS

EBIT

€
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Consolidated net income

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1 Results from continuing operations

SHAREHOLDER STRUCTURE (AS OF: JUNE 2020)

SHARE

I
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1
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1.
3
b
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n

Aug. 1998 € 108.6 € 1.3 billon Fixed and family ownership (incl. their investment companies)

Free float

Institutional investors > 3%: Allianz Global Investors

Ameriprise Financial Juno Investment Partners

CONTACT

STRATEC SE Gewerbestr. 37 75217 Birkenfeld Germany

Phone +49 7082 7916-0 Fax +49 7082 7916-999 www.stratec.com

CONTACT

Jan Keppeler, CFA Head of IR & CC Phone +49 7082 7916-6515

[email protected]

THANK YOU FOR YOUR ATTENTION

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