KLINGELNBERG AG
Precision gearing champion with Swiss and German heritage

Presentation forAnalysts and Investors
Financial Report 2019/20
Zürich, June 2020

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Presentation for Analysts and Investors  Slide 2

June 2020

Disclaimer
This presentation may contain specific forward-looking statements, e.g., statements including terms like "believe", "assume","expect", "forecast", "project", "may", "could", "might", "will" or similar expressions. Such forward-looking statements are subject toknown and unknown risks, uncertainties and other factors which may result in a substantial divergence between the actualresults, financial situation, development or performance of Klingelnberg Group and those explicitly or implicitly presumed in thesestatements. Such factors include, but are not limited to, future global economic conditions, changed market conditions,competition from other companies, effects and risks of new technologies, costs of compliance with applicable laws, regulations
and standards, diverse political, legal, economic and other conditions affecting markets in which the Klingelnberg Group operates,and other factors beyond its control. Against the background of these uncertainties, readers should not rely on forward-lookingstatements. Klingelnberg Group assumes no responsibility to up-date forward-looking statements or to adapt them to future
events or developments.
This presentation may contain certain measures that are not measures defined by Swiss GAAP FER. These non-Swiss GAAP
FER financial measures have limitations as analytical tools and should not be viewed as indicators of, or alternatives to, theGroup’s results or any performance or liquidity measures under Swiss GAAP FER, as set forth in its consolidated financial
statements. The non-Swiss GAAP FER financial measures should therefore be considered as supplementary information to, andread only in conjunction with, the consolidated financial statements of the Group. Since not all companies compute these or othernon-Swiss GAAP FER financial measures in the same way, the manner in which the Klingelnberg Group’s management haschosen to compute the non-Swiss GAAP FER financial measures presented herein may not be comparable with similarly definedterms used by other companies. As a result, you are cautioned not to place undue reliance on any non-Swiss GAAP FER
financial measures and ratios included herein.

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Presentation for Analysts and Investors  Slide 3

June 2020Agenda

1

Introduction and Key facts

2

Financial results

3

KL2025 and corona-induced measures

4Q&A

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Presentation for Analysts and Investors  Slide 4

June 2020

1 Key facts 2019/20

1Net sales of EUR 212,1 million (-23,8%)2

Order intake fell by EUR 70,7 million (-26,7%) to
EUR 194,5 million

3

EBIT amounted to EUR -18,8 million; excluding the one-off
costs of the efficiency enhancement program of
EUR 14,0 million, KLINGELNBERG is reporting a loss of EUR
4,8 million.

4Equity ratio solid at 53,7%

5Proposal to suspend Dividend

6Efficiency Enhancement Program in full execution

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Presentation for Analysts and Investors  Slide 5

June 2020

2 Sales and order intake declined significantly
KLINGELNBERG Group – Sales and orders (in €m)

Net sales

Order intake

300,0300,0250,0250,0200,0200,0150,0100,0231,0257,0150,0278,2212,1100,0263,2265,2194,550,050,00,00,0
2016/172017/18

2018/19

2016/172019/20

Order backlog
140,0100,0130,7118,2

40,0100,720,00,0
2016/17KLINGELNBERG Tradition

2017/18

2018/192019/20

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2018/192019/20

Net sales decreased by 23,8% compared to theprevious year.

Order intake fell by EUR 70,7 million to
EUR 194,5 million.

Despite Corona, the order backlog still amounts
to EUR 100,7 million.

80,0124,9

2017/18

120,060,0253,4

Presentation for Analysts and Investors  Slide 6June 2020

2 Decline in machine sales - aftersales business stable
KLINGELNBERG Group – Sales (in €m)

Net sales split by…
(2019/20)

CAGR-9,2%machines and services

278,2257,030%

68,3

212,1

212,160,370%

64,2sales region

209,9

196,7

147,8

23%

212,1

2017/18

2018/19

Net sales from machines

Net sales from services, tools and fixtures

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2019/20

36%

41%

EMEA

Americas

APAC

Presentation for Analysts and Investors  Slide 7

June 2020

2 Bevel Gear segment faces a broad range of global challenges
Bevel Gears development (in €m)
Net sales

Order intakeNettoumsatz

CAGR
Auftragseingang-24,0%

CAGR-17,6%

124,8

122,5

112,3

110,3

84,7

2017/18

2018/1964,9

2019/20

2017/18

2018/192019/20

Order backlog

AuftragsbestandThe increasing urgency of reducing emissions
in the context of climate policy is prompting
economic policymakers to accelerate theswitch from the combustion engine to otherforms of drive.

In contrast, the order situation in the bevel
gear service area continued to develop stable.

CAGR-31,3%

61,749,2
29,1

2017/18

2018/192019/20

Note: Unless otherwise indicated, all figures are rounded up or down to the nearest hundred thousand Euros.
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Presentation for Analysts and Investors  Slide 8June 2020

2 Measuring Centers business is making further progress
through a broader diversification
Precision Measuring Centers development (in €m)
Net sales

Order intake

CAGR
Auftragseingang-13,8%

CAGR-11,5%

Nettoumsatz

73,2

80,4

77,276,057,357,3

2017/18

2018/192017/18

2019/20

2018/192019/20

Order backlog

CAGR
Auftragsbestand
-9,8%

24,1

19,619,6

2017/18

2018/192019/20Compared to the previous year, the Measuring
Center segment recorded a decrease in net
sales of EUR 23,1 million or 28,8%.

Order intake of EUR 57,3 million showed asignificant sales drop of EUR 18,7 million. But
the segment was able to successfully position
itself in new markets (e.g. robotics industry).

Note: Unless otherwise indicated, all figures are rounded up or down to the nearest hundred thousand Euros.
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Presentation for Analysts and Investors  Slide 9June 2020

2 Cylindrical Gear business achieved respectable results
Cylindrical Gears development (in €m)

Net sales

Order intake

Nettoumsatz

CAGR
Auftragseingang
3,2%

CAGR
13,3%

53,1

49,451,1

2018/192019/20

2017/18

57,754,4

2018/192019/20

38,4

2017/18

Order backlog

Auftragsbestand
CAGR

Due to the restrictions imposed in connection
with the coronavirus pandemic a slight coolingin net sales from EUR 53,1 million in 2018/19
to EUR 49,4 million (-7,0%) is noticeable.

With an decrease to EUR 54,4 million, thelevel of incoming orders was slightly belowthat of the previous year (EUR 57,7 million).

13,1%

34,5

2017/18

39,1

2018/19

44,1

2019/20

Note: Unless otherwise indicated, all figures are rounded up or down to the nearest hundred thousand Euros.
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Presentation for Analysts and Investors  Slide 10

June 2020

2 Drive Technology exceeded the previous year
Drive Technology development (in €m)
Net sales

Order intake

Nettoumsatz

CAGR
Auftragseingang
-8,7%

CAGR
1,9%

13,2

13,3

13,7

14,2

2017/18

2018/192019/20

2017/18

13,3

2018/19

11,8

2019/20

Order backlog

AuftragsbestandThe Drive Technology segment was able tooutperform the previous year. Net salesincreased from EUR 13,3 million toEUR 13,7 million (+2,6%).

Due to persistent overcapacities in global
cargo shipbuilding, sales impulses are
increasingly coming from the mining sector.

CAGR-11,9%

8,4

2017/18

8,4

2018/19

6,5

2019/20

Note: Unless otherwise indicated, all figures are rounded up or down to the nearest hundred thousand Euros.
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Presentation for Analysts and Investors  Slide 11June 2020

2 Operating result declined due to economic slowdown
Income statement KLINGELNBERG GroupThe significant decline in net sales combined with the one-off costs for the efficiency enhancement program led to adecrease in the adjusted EBIT margin to -8,9%.

Excluding these one-off costs, KLINGELNBERG is reporting an operating loss of EUR 4,8 million.

Unless otherwise indicated, all figures are rounded up or down to the nearest hundred thousand Euros.

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Presentation for Analysts and Investors  Slide 12June 2020

2 Other operating income and expense decreased over time
Income and cost development of the KLINGENBERG Group (in €m)Other operating income

Other operating income decreased by EUR 4,6million compared to the previous financial year.
This is mainly due to the capitalization of alower number of rental and demonstration
machines (especially measuring equipment andSpeed Viper; EUR -3,3 million).



Other operating expense amounted to EUR
37,7 million at the end of the financial year,
EUR 1,0 million less than the adjusted otheroperating expense (without IPO costs) in theprevious year.

The adjusted other operating expense ratio
amounted to 16,9% at the end of the financialyear, 3,0 percentage points above the previousyear. This was due to the significant decrease intotal operating performance of EUR 55,1million.

CAGR
-1,8%

7,4

2,92,82017/18

2018/192019/20

Adjusted other operating expense
CAGR
EBIT
-3,8%

40,738,737,7in relation tototaloperating
performance
in %

15,5%

2017/18

13,9%

2018/19

16,9%

2019/20

Note: Unless otherwise indicated, all figures are rounded up or down to the nearest hundred thousand Euros.
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Presentation for Analysts and Investors  Slide 13June 2020

2 Personnel expense burdened by one-off costs
Income and cost development of the KLINGENBERG Group (in €m)Material expense
CAGR-5,2%

Driven by lower operating performance,material expenses decreased by EUR 17,7
million. Due to the increase in the change ininventories and one-off costs arising from theefficiency enhancement program, theKLINGELNBERG Group’s materials ratio roseto 40,7% – 1,7 percentage points above theprevious year’s level.

Personnel expenses amounted to EUR 110,6
million at the end of the financial year, higher byEUR 9,4 million over the previous year. Thisdevelopment is primarily due to a provision for
personnel expenses by KLINGELNBERG
GmbH in the amount of EUR 8,6 million in thecontext of the efficiency enhancement program.

108,3

100,9

90,6

38,4%

2017/18

39,0%

2018/19

Personnel expense

in relation to
total
operatingperformance
in %
40,7%

2019/20EBITCAGR
8,0%

110,6

101,2

94,8

in relation to
total
operatingperformance
in %
36,1%

2017/18

36,4%

2018/1949,7%

2019/20

Note: Unless otherwise indicated, all figures are rounded up or down to the nearest hundred thousand Euros.
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Presentation for Analysts and Investors  Slide 14

June 2020

2 EBIT in line with economic development
Adjusted EBITDA & EBIT development (in €m)
Adjusted EBITDA

Thereof EUR-14 million
one-off costs

EBITDAEBITDA inrelation tonet sales
in %

37,5
29,311,4%

2017/18

13,5%

2018/19

Adjusted EBIT

-12,9

2019/20

31,1

11,2%

2018/19



The measures of the efficiency enhancement
program impacted the operating result in thefinancial year 2019/20 with one-off costs ofEUR 14,0 million. These finally resulted in an
operating result of EUR -18,8 million.

EBIT 3 inrelation tonet sales
in %

22,8

2017/18

As there were no IPO costs this financial year,
the EBIT / EBITDA was equal to the adjusted
EBIT / EBITDA.

-6,1%

EBIT

8,9%



-18,8 -8,9%Thereof EUR-14 million
one-off costs

2019/20

Note: Unless otherwise indicated, all figures are rounded up or down to the nearest hundred thousand Euros.
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Presentation for Analysts and Investors  Slide 15

June 2020

2 Cash flow…from operating activities amounts EUR -2,2 million
A significant decrease in thecapitalization of rental anddemonstration machines ofEUR 3,3 million led to adecrease in capital
expenditures.

The cash flow from operating
activities fell by EUR 29,8
million compared to the financialyear 2018/19. This decline wasmainly due to the change in net
profit from EUR 19,2 million in
the financial year 2018/19 toEUR -25,4 million.

Capital expenditures on tangible fixed assets (in €m)
CAGR
0,6%

7,35,52017/18

5,4

2018/192019/20

Cash Flow (in €m)
27,6

2018/192019/20
20,1

Cash flow from operating activities

15,4
10,0

Cash flow from investing activities
Cash flow from financing activities

0,2

1,1

Currency translation effects
Net change in cash

-2,2-2,2-4,2-5,6
Note: Unless otherwise indicated, all figures are rounded up or down to the nearest hundred thousand Euros.
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Presentation for Analysts and Investors  Slide 16

June 2020

2 KLINGELNBERG Group continues to have a stable financial position
Balance sheet ratios (in €m)
Trade Working Capital
132,6137,672,271,0



Not capitalized R&D costs amounted to EUR 24,9million, which represented 11,7% of net sales.

Financial liabilities increased significantly due to thefinancing of inventories in line with the shift in sales aswell as the increase in cash.

Equity fell by EUR 31,4 million. This decline is due, on
the one hand, to the lower net profit and, on the other
hand, to the distribution of dividends from capitalreserves.

125,447,2in % of net
sales

89,082,976,251,6%

49,5%

59,1%

-15,8-16,3-10,8

2017/18

2018/192019/20

Inventories

Receivables from g/s

Payables from g/s

Financing structure

Equity capital
CAGR
4,6%

163,0
28,7

38,7

131,6

120,3

8,6-6,5-28,3

2017/18

Equitycapital ratio-30,1

2018/19

Cash and cash equivalents

51,2%

2019/20
Financial liabilities

2017/18

63,8%

2018/19

Note: Unless otherwise indicated, all figures are rounded up or down to the nearest hundred thousand Euros.
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53,7%

2019/20

Presentation for Analysts and Investors  Slide 17

June 2020

3 KL 2025 and Corona-induced short term measures
KL 2025 – structural measures
KLINGELNBERG Efficiency Enhancement Program: Ramp down facility Györ/Hungary an focussing production in Hungary () Ramp down Ettlingen, focussing production and mechanical engineering inHückeswagen () Strengthening sales activities by announcing CSO () Resulting with one-of cost of EUR 14,0 million () Full-Year-Effect around EUR 10 million in FY 2021/22

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Presentation for Analysts and Investors  Slide 18

June 2020

3 KL 2025 and Corona-induced short term measures
Corona-induced short term measures for a stable Cash-Position

 Strict cost-discipline Optimization of inventories
 Hiring freeze Implementation of short-time work in Hückeswagen and Zürich
 Restrictive approval of investments
 Intensive tracking of Supply Chain

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Presentation for Analysts and Investors  Slide 19

June 2020

4 Thank you! – Q+A

Join us:
Knowledge in compact format: KLINGELNBERG webinar series Webinars
Knowledge of current topics in the gear industry – that's what machine manufacturer KLINGELNBERG is nowoffering in a series of live sessions running 60 minutes each. Industry experts will be speaking on a broad array oftopics in the areas of measuring technology, cylindrical gear and bevel gear technology, and drive technology.

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Presentation for Analysts and Investors  Slide 20

June 2020

Appendix

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Presentation for Analysts and Investors  Slide 21

June 2020

KLINGELNBERG Group
Balance sheet (in €m)
FY 2018/19
ACTUALFY 2019/20
ACTUAL

Deviations

Cash and cash equivalents

28,711%

38,716%

10,035%

Receivables from goods and services

71,028%47,219%-23,8-34%

Inventories

82,932%

89,036%

6,17%

Other current assets

6,83%

6,93%

0,11%

Non-current assets

66,026%

63,126%-2,9-4%

Total assets

255,4100%

244,9100%-10,5-4%

Short-term financial liabilities

1,71%

27,111%25,3Other long-term financial liabilities

4,72%

3,01%

-1,7-37%

Payables from goods and services

16,36%

10,84%-5,5-34%

Other liabilities

69,727%72,530%2,84%

Total equity

163,064%

131,654%-31,4-19%

Total liabilities and equity

255,4100%

244,9100%-10,5-4%Note: Unless otherwise indicated, all figures are rounded up or down to the nearest hundred thousand Euros.
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