KLINGELNBERG AG
Precision gearing champion with Swiss and German heritage

Presentation for Analysts and Investors
Financial Report H1 2019/20
Zurich, November 2019
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Presentation for Analysts and Investors  Slide 2

November 2019

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 inthese statements. 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 forwardlooking statements. KLINGELNBERG Group assumes no responsibility to up-date forward-looking statements or to adapt them tofuture 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 financialstatements. 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

November 2019

Agenda1Introduction

2

Financial results

3

Enhanced efficiency program4

Outlook

5

Q&A

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Presentation for Analysts and Investors  Slide 4

November 2019

1 Introduction
KLINGELNBERG Group – 1st half-year 2019/20 with significant challenges

General Market Conditions: Globally, growth rates are slowing In numerous markets and key sectors, we are facing the onset of a recession
 Significant uncertainty relating to Brexit and trade disputes
 No guidelines from political authorities on the future of mobility
 Global decline in total industrial output – particularly automobile production
 Investment backlogs in the automotive industry

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Presentation for Analysts and Investors  Slide 5

November 2019

1 Major takeaways from the first half of the business year 2019/20

1Decline in sales and order intake

2Growth in Cylindrical Gears Unit despite market challenges

3

Operating half-year result down by EUR 5,3 million*4

KLINGELNBERG Group expects lower sales and lower EBITMargins as communicated per October 14, 20195

Full Year operational result expected to be positive

6

KLINGELNBERG Group will implement a comprehensive
program dedicated to enhancing efficiencies*Compared to previous half-year result
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Presentation for Analysts and Investors  Slide 6

November 2019

2 Lower sales and orders due to impaired dynamics of global economy
KLINGELNBERG Group – Net sales and order intake (in M€)Net sales

Net sales declined by EUR 10,7 millioncompared with the prior-year period, a reductionof 11%.



Order intake fell by EUR 19,2 million from thesame period last year, a decline of 15%.

120,0100,080,060,040,099,188,4

H1 2018/19

H1 2019/20

76,420,00,0
H1 2017/18

Order intake
140,0120,0100,080,060,0123,1124,5

H1 2017/18

H1 2018/19

105,340,020,00,0
H1 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 7November 2019

2 Net sales: Bevel Gear and Measuring Centers dropped
KLINGELNBERG Group – Product mix: Significant shift to Cylindrical Gears (in M€)Segments

Bevel GearCylindrical Gear
Measuring Centers
Drive Technology
OtherTotal

H1 FY 2018/19
41,018,730,14,94,399,141%
19%
30%
5%
4%
100%

H1 FY 2019/20
35,022,821,05,93,788,4

Net sales increased in Cylindrical Gear and Drive Technology



Substantial decline in sales in the Measuring Centers segment

40%
26%
24%
7%
4%
100%

Note: Unless otherwise indicated, all figures are rounded up or down to the nearest hundred thousand Euros.
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Deviations-6,04,1-9,1
1,0-0,7-10,7-15%
22%-30%20%-15%-11%

Presentation for Analysts and Investors  Slide 8

November 2019

2 Sales and result below previous year's level
KLINGELNBERG Group – Income statement (in M€)

Net sales from goods and services
Other operating income
Change in inventory of finished and unfinished goods
Material expense
Personnel expense
Depreciation on tangible fixed assets
Amortisation on intangible assets
Other operating expense
Share of profit of associates
Share of result from joint ventures
Operating result
Financial result
Profit before income taxes
Income taxes
Net profit

H1 2018/19

H1 2019/20

Deviations

99,1
2,5
22,1-54,9-48,7-3,1-0,2-21,60,00,2-4,7-1,7-6,4
1,6-4,888,40,922,7-50,5-50,9-2,6-0,2-18,00,00,2-10,0-1,4-11,4
3,3-8,1-10,7-1,60,64,4-2,1
0,4
0,0
3,6
0,0
0,1-5,30,3-5,0
1,7-3,3100%
3%22%-55%
-49%
-3%
0%
-22%
0%
0%-5%-2%-6%
2%-5%

Note: Unless otherwise indicated, all figures are rounded up or down to the nearest hundred thousand Euros.
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100%
1%
26%
-57%
-58%
-3%
0%
-20%
0%
0%
-11%
-2%
-13%
4%
-9%

-11%
-63%
3%
8%
-4%
14%
-1%
17%
35%
-115%
17%
-79%
111%
-68%

Presentation for Analysts and Investors  Slide 9November 2019

2 Personnel costs as expected, actions on the way
KLINGELNBERG Group – Income and cost development (in M€)Material expense

Personnel expense increased by EUR 2,1 million
54,950,549,845,3%

H1 2017/18

Personnel expense45,3%

H1 2018/19

in relation tototal operating
performancein %Tariff increase: collective bargaining agreement
for the metal and electrical engineering industry
that was concluded in February 2018



Number of FTEs increased from 1.309 to 1.340
due to the shift in product-mix

Actual: Reduction of loan work (about 30 FTEs)
and flexible work accounts

45,5%

H1 2019/20

EBIT50,948,7

in relation tototal operating
performance
in %

46,1

41,9%

H1 2017/18

40,2%

H1 2018/19

45,8%

H1 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

November 2019

2 Other operating expense ratio decreased slightly
KLINGELNBERG Group – Income and cost development (in M€)
Other operating income

The other operating income of the prior-year
period contained outgoing invoices to theemitting shareholder amounting EUR 1,2 million(IPO).

0,9The other operating expenses of the prior-year
period amounted to EUR 21,6 million, including
IPO expenses of EUR 2,2 million.

H1 2019/20

The other operating expense ratio decreased by
1,6 percentage points.

2,5
1,9

H1 2017/18

H1 2018/19

Other operating expense
21,618,4

18,0
in relation tototal operating
performance
in %

16,8%

H1 2017/18

17,8%

H1 2018/19

16,2%

H1 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 11

November 2019

2 EBIT below previous year’s figure
KLINGELNBERG Group – EBITDA & EBIT development (in M€)EBITDA-3,0%-1,4%

Due to the decline in net sales by EUR 10,7million compared with the previous year, both
EBITDA and EBIT significantly decreased.

In H1 2018/19 adjusted EBITDA amounted to
EUR -0,4 million and adjusted EBIT amounted
to EUR -3,7 million.

-8,1%-1,4-2,3
EBITDA inrelation tonet salesin %-7,1
H1 2017/18

H1 2018/19

H1 2019/20

EBIT-7,3%-5,5-4,7%-11,3%EBIT inrelation tonet sales
in %-4,7-10,0
H1 2017/18

H1 2018/19

H1 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 12

November 2019

2 Healthy liquidity and strong equity ratio
KLINGELNBERG Group – Balance sheet ratios (in M€)
Equity capital (H1 2017/18 inclusive loan from shareholder (subordinated))

104,8
Equitycapital ratio

43,5%

57,1%

H1 2018/19

Cash Flow H1 2019/20
The cash flow from operating activities totaled
EUR -24,1 million due to the increase ininventories of work in progress, which isnecessary to deliver the order backlog ofmachines for the second half of the financialyear.

The cash flow from investing activities remainedon a normal level

The cash flow from financial activities amounted
to EUR +4,6 million, while financial liabilities of
EUR +12,7 million were recorded, profit
distribution totaled EUR -8,1 million.

Overall, the net change in cash flow totaled
EUR -19,9 million in the first half of the year

H1 2019/20

6,3-4,9

59,5%Cash flow statement-1,8Equity rose by EUR 12,0 million. This increaseis mainly due to the allocation in retainedearnings.

148,9136,9

H1 2017/18



4,6-0,5-1,2-19,9-24,1

H1 2018/19

H1 2019/20

CF from operating activities
CF from financing activities

CF from investing activities
Net change in cash

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 13

November 2019

3 Enhanced efficiency program
KLINGELNBERG Group – Proactive in tackling challenges

Leanerproduct
portfolio

KLINGELNBERG Tradition

KLINGELNBERG Group will
launch a comprehensive
program to increase
efficiencies.

The company is very well
positioned to cope with theimpact of adverse conditions.



Proactive approach in tackling
the future challenges.

Reducing
costs

Pooling of
redundant
competencies

Reorientationof R&D andproduction
site

Expand sales
and services

Enhancedefficiency

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Exploringchange
opportunities

Presentation for Analysts and Investors  Slide 14

November 20194 Outlook
KLINGELNBERG Group – Financial Year 2019/20
 Sales are expected to be lower around 15-20%
 Operational: we expect a positive result Negotiations about possible efficiency program are on the way We will communicate any results, decisions and expected implications on
financials as soon as possible

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Presentation for Analysts and Investors  Slide 15

November 2019

Appendix

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Presentation for Analysts and Investors  Slide 16

November 2019

Strong equity ratio
KLINGELNBERG Group – Balance sheet (in M€)
2018-09-30
ACTUAL Q2

2019-09-30
ACTUAL Q2Deviations

Cash and cash equivalents

8,13%

8,73%

0,68%

Receivables from goods and services

49,921%

52,221%

2,35%

Inventories

103,143%

109,944%

6,87%

Other current assets

9,54%

9,54%

0,00%

Non-current assets

69,029%69,928%0,81%

Total assets

239,6100%

250,2100%

10,64%

Short-term financial liabilities

9,54%

15,16%

5,659%

Other long-term financial liabilities

5,52%

3,92%-1,6-28%

Payables from goods and services

18,68%

12,85%-5,8-31%

Other liabilities

69,129%69,528%0,41%

Total equity

136,957%

148,960%

12,09%

Total liabilities and equity

239,6100%

250,2100%

10,64%

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