Voltabox AG — Investor Presentation 2018

Aug 21, 2018

Investor/Analyst Presentation

H1 2018 - Group Interim Report

Executive Summary: Highlights H1/2018

↗ € 18.1 million

↗ 144 employees

Revenues (previous year: € 10.6 m)

(June 30, 2017: 78)

On the way to a new level

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7 \in 1.7 \text{ million}^{7758}
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EBITDA (previous year: € 0.2 m)

↗ € 0.1 million

EBIT (previous year: € -0.7 m)

Agenda

• Introduction of Voltabox
• Business Overview
• Financials

Corporate Development

• Mother company paragon founded by Klaus Dieter Frers (as private ownership)
• Certification as automotive Tier 1 for electronics
• IPO of paragon AG (now paragon GmbH & Co. KGaA) at Frankfurt Stock Exchange
• Market entry into Lithium-Ion Batteries: E-Mobility launched as a new business segment of paragon AG
• Foundation of Voltabox as legal entities in Germany and the US (100% subsidiaries of paragon AG)
• Voltabox IPO in Frankfurt after change of legal form into a stock corporation with Voltabox of Texas, Inc. as a 100% subsidiary 2017
• Acquisitions of Concurrent Design, Inc. and of Navitas Systems, LLC. as achieved key milestones in the expansive M&A growth strategy
• Rearrangement of intralogistics partner agreement required for targeted market leadership / Start of direct sales activities in the intralogistics market

1988

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2011

2014

2018

Management Team

Management Board

Jürgen Pampel, CEO

• Former Head of Electromobility business unit at paragon
• Various leadership positions at paragon since 2004
• Design Engineering graduate

Andres Klasing, CFO

• Joined Voltabox in 2017
• Former Head of Accounting & Controlling at paragon since 2016
• Various finance positions for Bertelsmann group
• Business administration (VWA) / Engineer (FH) graduate

Klaus D. Frers, Chairman

• Founder / majority owner & CEO of Automotive Tier 1 paragon GmbH & Co. KGaA
• Former CEO of Voltabox
• Received numerous awards for entrepreneurial activities
• Leadership positions at AEG-Telefunken and Nixdorf Computer
• Mechanical Engineering graduate

Supervisory Board

Prof. Dr. Martin Winter, (Deputy Chairman)

• Professor at the Institute of Physical Chemistry at the University of Münster
• One of the most renowned German scientists in the energystorage field with a focus on Lithium-Ion batteries

Hermann Börnemeier

• Shareholding director of Treu-Union Treuhandgesellschaft mbH, a tax consultancy
• Long-term advisor to the parent company paragon GmbH & Co. KGaA

Agenda

• Introduction of Voltabox
• Business Overview
• Financials

E-Mobility Pure Play

Li-Ion vs. Lead-Acid Technology

Additional advantages:

• No memory effect (opportunity charging)
• Very low self-discharge
• No maintenance
• Full functionality at low temperatures
• Optimum control and (remote) monitoring

Li-Ion-Battery Technology Overview

• Li-Ion chemistries are replacing the leading battery technologies of the past like Nickel-Metal Hydride, Nickel Cadmium and Lead-Acid
• Future technological developments are also carefully tracked and evaluated by Voltabox
• New lithium based technologies like Li-Air, Li-Sulfur and Lithium Solid State cells are expected to achieve market readiness around 2023

Available Li-Ion Cell Chemistry Li-Ion Cell Chemistry Types used by Voltabox

Lithium Iron Phosphate (LFP)

• Nominal cell voltage: 3.2 V to 3.3 V
• No risk of thermal runaway (in case of an accident)
• High cycle stability of up to 4,000 cycles at 80% DoD
• Large operating temperature range -20/+ 55 °c
• High energy density (125 Wh/kg and 292 Wh/l)
• Using only a small portion of rare earths

Nickel Manganese Cobalt (NMC)

• Nominal cell voltage: 3.6 V to 3.7 V
• High cycle stability of at least 6,000 cycles at 80% DoD
• Great operating temperature range of -30/+ 60 °C
• High energy density (136 230 Wh/kg and at least 309 Wh/l)

Lithium Titanium Oxide (LTO)

• Nominal cell voltage: 2.3 V
• Highest cycle stability of up to 30,000 cycles at 80% DoD
• High level of safety thanks to LTO anode
• Great operating temperature range of -30/+ 55 °C
• Energy density of 96 Wh/kg or 202 Wh/l
• Great SoC range useable with the highest performances

Agnostic Approach to Cell Types

A spirally wound design (jelly-roll). Designated by size, e.g. 26650 cylindrical battery (Diameter: 26mm, length: 65.2 mm; code for cylindrical shape: 0)

A prismatical design indicate a flat battery design. The stacks can be wound (as shown in the photo) or stacked (with alternating cathode/separator/anode structure). The stacks are usually inserted into rigid casing to form prismatic

Rather than rigid metallic casing, conductive foil-tabs are welded to the electrodes and seal the battery fully. The tacks inside can be wound or stacked. Swelling and gassing could be a concern for pouch cells

Cell Package	Impedance	Thermal	Tabbing	Cell Cost	Battery Cost
Cylindrical	Poor	Poor	Minimal	Medium	High
Prismatical (Wound)	Poor	Poor	Minimal	Medium	Medium
Prismatical (Stacked)	Good	Poor	High	High	Medium
Pouch (Wound)	Poor	Good	Minimal	Medium	High
Pouch (Stacked)	Good	Good	High	High	High

Source: IDTechEx

Li-Ion Battery System Supplier for Industrial Applications

• Many years of experience in development and production of electronic components (via parent company paragon GmbH & Co. KGaA)
• Exceptional integration power (experience in automotive interfaces)
• Mindset focus on applications (authentic added value solutions)
• Superior realization processes (short time-to-market with modular kit)

Market Penetration by Voltabox

	 Q4 2016: Expansion of intralogistics market with batteries for Automated Guided Vehicles
	 Q3 2017: First selected mass market entry with starter batteries for motorbikes
	 Q4 2017: First strategic partnership in the area of agriculture and construction
	 Q1 2018: Acquisition of the engineering services provider Concurrent Design  Q2 2018: Strategically important rearrangement of intralogistics partner agreement
	 Q2 2018: Takeover of Navitas systems and entry into production of customized battery cells
Today:	Significant future growth prospects backed by strong 60-month order backlog of € 740 million* weighted 100 percent

• Q2 2014: First major US-contract for battery systems in trolleybuses

• Q2 2016: Exclusive strategic partnership with leading mining equipment provider

• Q2 2018: Takeover of Navitas systems and entry into production of customized battery cells

• Significant future growth prospects backed by strong 60-month order backlog of € 740 million* weighted 100

* As of June 30, 2018

Roadmap for Electrifying the Komatsu Fleet

New Agreement for Targeted Market Leadership

In June 2018 Voltabox rearranged the strategically important agreement with Triathlon for a close partnership in order to supply the market with innovative and technologically advanced Lithium-Ion batteries.

Early implementation of a differentiation strategy with three essential manufacturing and sales players: Voltabox, Triathlon, Navitas

Ensuring an accelerated market penetration at Voltabox' own pace in Europe and the USA in order to achieve market leadership

Creating competitive advantages through technological know-how transfer

Creating barriers to market entry for competitors by securing access to specific resources/components

Time and cost advantages compared to own development work

Additional development of the (shared) margins from the end customer business (compared to the previous module sales)

Market Potential for Voltabox

Overall usage of batteries will increase due to e -mobility mega trend Ongoing substitution of lead acid batteries resp. diesel generators by lithium -ion batteries in occupied submarkets 11% global market growth expected for battery systems in current Voltabox end markets in 2018 Current Voltabox end markets HEV/PHEV buses over 5 meters, forklift/intralogistics, mining vehicles/equipment Future Voltabox end markets Construction & agriculture, Pure Electric Buses over 5 meters, Airport, Car (hybrid) – PHEV, microEV, etc. Further potential Voltabox end markets Delivery trucks & other on road excl. buses, indoor cranes/platform lifters, pedelecs/e -bike, motorbike, etc. Others Pure electric cars (premium & mainstream), microEV – 3 wheel & rickshaw, wearables, consumer, military, etc. Source: IdTechEx (2017)

*Partly Lead Acid and Li Ion

Voltabox Growing Into a New Dimension

Multiple Growth Paths

USPs of Voltabox

60-Months Order Backlog (Q2 2018 – Q2 2023)

• Total 60-months order backlog amounts to more than € 1bn*.
• Thereof approx. 74% signed orders and framework agreements (weighted with 100%)
• Estimated order backlog is weighted according to the expected lifetime and the probability of occurrence
• Serves as base for planning
• Evaluation system in place since inception in 2011

60-months order backlog with 100% weighting as of H1/2018

* As of Jun. 30, 2018

Agenda

• Introduction of Voltabox
• Business Overview
• Financials

Key Figures for the Group from H1 Report 2018

• Equity ratio of 91.5 % (equity: € 154.9 million)
• Liquid funds of € 74.2 million
• Balance Sheet Total: € 169.2 million

Strong Financial Background Dynamic Growth in all areas

• Group revenue increased 71 % to € 18.1 million

• FTE up 45.5 % to 144 (excl. 25 temporary employees)

• EBITDA increased 758 % to € 1.7 million

• EBIT margin at 0.6 %

Profitability on track Successful Execution of Growth Strategy

• Entry into direct sales activities in Intralogistics
• Auspicious Takeover of Navitas Systems for € 37 million incl. excellent market access in the US
• Investments of € 3.5 million as expected

Top Line Growth with Increasing Profitability

H1 2017 H1 2018

H1/2018 Cash Flow Statement

• Large increase in trade receivables owing to very good business development in the Voltapower segment and sales financing support for main Voltabox partner (limited to 2018)
• Other non-cash expenses increased due to currency effects
• Significant decrease in trade payables and other liabilities of € 7,798m
• Slightly increased amortization of noncurrent fixed assets

New R&D Capabilities: Takeover of Concurrent

Concurrent Design is an engineering services provider located in Austin, Texas with proven and long-standing expertise in R&D

More than 20 highly skilled

employees, mostly engineers, software developers & project managers

Expertise from more than 1,700

successfully completed projects

Multiple boost of

velocity for Voltabox by additional resources

Concurrent Design was the first acquisition for Voltabox in this field since its successful IPO. The whole team has been integrated into the structures of Voltabox of Texas and is now mainly working on projects for Komatsu.

On Way to Market Leadership: Acquisition of Navitas

Profitability broadly similar to Voltabox

Expected revenues of around €25m in 2018

Voltabox took over Navitas Systems for €40m in order to accelerate market penetration in the market segments of particularly rapid growth.

Navitas has established a market-leading position in the region with its "Starlifter" batteries.

With the acquisition, Voltabox have come a great deal closer to the goal of becoming the global market leader in the field of battery systems for intralogistics.

Navitas opens up new applications and thus completely new prospects

in the North American market.

Performance of Voltabox Share (VBX)

Updated Forecast 2018

↗ € 65-70 m

Revenues 2018 (e)*

* In the course of the acquisition of Navitas System – expected initial consolidation in Q3 2018

↗ ca. 7 %

EBIT margin 2018 (e)**

**Considering € 2m add. expenses from rearrangement of intralogistics partner agreement

Forecast and Analyst Consensus

Financial performance indicators of Voltabox AG	2017			2018
[in € million / as indicated]	Forecast	Results	Forecast (old)		Forecast (new)
Group revenue	25	27*	Approx. 60		Approx. 65-70**
EBIT margin	Slightly positive	2.1%	Approx. 10%		Approx. 7%***
Analyst estimates	2017		2018
Group revenue	25.5		58.2
EBIT margin	0.8%	10.1%
	* Thereof around € 2 million with parent company paragon AG (now paragon GmbH & Co. KGaA) In the course of the acquisition of Navitas System – expected initial consolidation in Q3 2018 *Considering € 2m add. expenses from rearrangement of intralogistics partner agreement

Financials - Appendix

H1/18: Revenues & EBIT Margin Development

H1/18: Significant Changes of Group's Assets

• Increase in noncurrent assets by € 6.4m
• Intangible Assets up € 3.0m owing own work capitalized
• Increased Goodwill as a consequence of the Concurrent Design acquisition
• Decrease in current assets by € 7.9m
• Increase in Trade Receivables about € 11.7m due to sales supporting activities in intralogistics
• Other assets up € 8.2m due to the capitalization of the one-time investment subsidy for capacity expansion granted by Voltabox due to the revised cooperation agreement with the partner Triathlon
• Liquid funds went down about € 28.4m mainly through operating expenses in connection with the dynamic growth strategy

H1/18: Significant Changes of Equity and Liabilities

• Equity remained nearly unchanged at € 154.895m
• Noncurrent provisions and liabilities slightly increased to € 8.818m
• Current provisions and liabilities decreased about € 1.9m to € 5.507m
• Liabilities to related parties went down about € 0.9m
• Other current liabilities reduced about € 0.7m

H1/18: Investing in Further Growth

• CAPEX breakdown: € 10.9 million in Germany and € 2.5 million in the US
• Capitalized development costs expected to increase by 6.6%
• Investments year-to-date at € 3.5m (thereof € 2.8m Intangible Assets)
• Own work capitalized mainly in the Voltapower segment – increased R&D in the Voltmation segment

*Property, Plant and Equipment

FY17: Highlights

• Equity ratio of 90.8 % (equity: € 154,990 million)
• Liquid funds of € 102.7 million

Strong Financial Position Dynamic Top Line Growth

Group revenue increased 88.2 % to € 27.3 million

• EBITDA increased 240,9 % to € 3 million
• EBIT margin at 2.1 %

Increasing Profitability Set for Future Growth

• Launch of a new R&D site in Aachen
• € 5.2 million internal R&D (R&D ratio 19.0 %)

FY17: Top Line Growth with Increasing Profitability

Selected parameters from the consolidated income statement of Voltabox AG

FY17: Investments as a Key Factor

Free

Cashflow:

€ -20.9m (2016: € 0.4m)

FY17: Cash Flow Statement

• Significant increase in trade receivables owing to strong revenue in Q4/17
• Reduction in trade payables as planned in consequence of the IPO
• Increase in payments for investments in intangible assets by 9.0% amounting to € 5.3 million (prior year: € 4.9 million)
• Increased amortization of noncurrent fixed assets
• Cash and cash equivalents increased to € 102.7 million as of the end of the reporting period (prior year: € 0.9 million)

€	€	€
-15.0m	-6.0m	122.7m
(2016: €	(2016: €	(2016: €
6.6m)	-6.2m)	-0.2m)
Cash flow	Cash flow	Cash flow
from	from	from
operating	investment	financing
activities*	activities*	activities*

FY17: Investment Plan 2018

• Total investment volume of € 13.4m in 2018
• Thereof € 10.9m in Germany and € 2.5m in the US
• Capitalized development costs expected to increase by 6.6%

Financial Calendar

	Oddo
Jan. 11/12,	Forum, Lyon

• Feb. 1, Bankhaus Lampe German Corporate Conference, London
• Feb. 21/22, 12. Oddo-BHF German Corporate Conference, Frankfurt am Main
• Mar. 13, Annual report 2017
• Apr. 18-20, Bankhaus Lampe Deutschlandkonferenz, Baden-Baden
• May 8, Interim release as of March 31 3 months
• May 9, Annual general meeting, Delbrück
• May 16, Berenberg Investor Forum at The Battery Show, Hannover
• Jun. 7, quirin Champions 2018, Frankfurt am Main
• Jun 21/22, Berenberg Pan-European Discovery Conference
• Aug. 21, Interim release as of June 30 6 months
• Sep. 3/4, Equity Forum Fall Conference, Frankfurt am Main
• Oct. 25 Berenberg Discovery USA Conference, New York
• Nov. 13, Interim release as of September 30 9 months
• Nov. 26-28, Deutsches Eigenkapitalforum 2018, Frankfurt am Main

Disclaimer

This presentation is given to you in strict confidence. By attending the presentation, you agree that no part of this presentation or disclaimer may be disclosed, distributed or reproduced to any third party without the consent of Voltabox AG ("Voltabox").

This presentation is being provided for the sole purpose of providing the recipients with background information about Voltabox's business. This presentation, including the information contained in this disclaimer, does not constitute an offer, invitation or recommendation to subscribe for or purchase any security and neither the presentation, disclaimer nor anything contained in them forms the basis of any contract or commitment. This presentation does not purport to summarize all information that an investor should consider when making an investment decision. It should be read in conjunction with Voltabox's other continuous disclosure announcements. Before making an investment decision you should consider whether it is suitable for you in light of your own investment profile and objectives and financial circumstances and the merits and risk involved.

No representation, express or implied, is made as to the fairness, accuracy, completeness or correctness of information, opinions and conclusions contained in this presentation, including the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects, returns or statements in relation to future matters contained in the presentation ("forward-looking statements"). Such forward-looking statements are by their nature subject to significant uncertainties and contingencies and are based on a number of estimates and assumptions that are subject to change (and in many cases are outside the control of Voltabox and its Directors) which may cause the actual results or performance of Voltabox to be materially different from any future results or performance expressed or implied by such forward-looking statements. Forward looking statements are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance.

To the maximum extent permitted by law, neither Voltabox nor its related corporations, directors, employees or agents, nor any other person, accepts any liability, including, without limitation, any liability arising from fault or negligence, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it.

You represent and confirm by attending and/or retaining this presentation, that you accept the above conditions.

Company Contact

Voltabox AG

Investor Relations

Dr. Kai Holtmann

Artegastraße 1

D-33129 Delbrück

Phone: +49 (0) 5250 9930-964

E-Mail: investor@voltabox.ag