INDUS business model We are passionate about SMEs

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3 INDUS business model We are passionate about SMEs * As of 1 October 2017, the Group has 45 instead of 46 investments. This is the result of the integration of the FICHTHORN investment in the SELZER Group. 3

4 INDUS business model Broad portfolio as a core strategic element

5 INDUS business model Long-term oriented company model Short to medium-term return-driven investments Large Caps: Apax, Blackstone, KKR Mid Caps: DBAG, 3i, Odewald Small Caps: MBB Industries BUY and SELL TURN- AROUND BUY and HOLD Long-term investments without exit orientation INDUS Holding Aalberts Industries Gesco Greiffenberger MAX Automation Phoenix Mecano Haniel Possehl SKion Investments in companies in special situations with no long-term intention Aurelius Bavaria Industriekapital Gigaset Mutares Orlando Management 5

6 INDUS business model Investment criteria of INDUS Holding Double digit operating profit margin Broadly diversified customer base Niche position Own industrial added value Equity rate >30% Growth perspectives, also internationally EBIT EUR 2-10 million Cash flow orientation Sales of EUR million Low level/ no liabilities to banks 6

7 INDUS business model External growth in our industries of the future * Two examples for growth acquisitions in FY

8 INDUS business model Accompanying SME hidden champions in the long term Property, plant and equipment Investments Development Innovation Acquisitions Know-how Strategic sparring Networking Knowledge transfer Financing tasks in shareholder management Accounting, taxation and law at the holding level 8

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10 Strategic report Strategic growth with COMPASS

11 Strategic report Taking stock of Q AURORA: EE Electronic Equiment, Weert (NL) OFA: Trading company for medical aids (DE) Increased drawdown of development bank s offer Currently 15 development bank projects Thereof 3 new projects in Q Intensification of the support offered to the portfolio companies (cooperations and network) AURORA now also has a presence in NL through strategic addition EE Electronic Equipment SCHÄFER started operations with US subsidiary SELZER and SMA have started building up a joint production site in Romania 11

12 Growth acquisitions Strengthening of portfolio Strategic report Investments Portfolio further strengthened in 2018 TR Metalltechnik WIESAUPLAST- PMC de México* OFA acquires trading company for medical aids * Acquisition of the remaining shares (55%) 12

13 Strategic report Innovation Focus remains on innovation in Q

14 Strategic report Internationalization Strengthening the portfolio through internationalization 14

15 Strategic report Internationalization Portfolio companies meanwhile have a presence in 30 countries million 7, million 1, million 1,312 Sales and employee figures as at 12/2017, locations as at 05/2018, Europe = EU and Switzerland 15

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17 INDUS in figures A look back at Q Portfolio companies continue to benefit from good economic situation Operating result adversely affected by growing cost of e energy, materials and personnel expenses, among other factors One strategic addition each for AURORA and OFA (closing in Q2 2018) Porfolio companies continue expanding internationally Both repositionings proceeding to plan; first successes of the measures taken are visible in the Metals Technology segment Guidance for 2018 confirmed 17

18 INDUS in figures Q at a glance Sales EBITDA EBIT EBIT margin (in %) pp Total assets 1, , Equity capital Equity ratio (in %) pp Net debt EBIT adj. (after acquisition effects) EBIT margin adj. (in %) pp EBT Earnings after taxes Operating cashflow >100 Cash flow from operating activity Earnings per share (in EUR) Employees (on average) 10,529 9, Beteiligungen (number) Cash flow from investing activity Cash flow from financing activity Cash and cash equivalents

19 INDUS in figures Income statement from Revenues again at record level EBIT margin: 8.7% Adjusted EBIT margin: 9.3% incl. repositionings, depreciation/ amortization, increased cost of materials and personnel expenses Reduced interest expenses Slightly lower tax rate +0.0% (in EUR millions) 19

20 INDUS in figures Reconciliation to adjusted operating result (adj. EBIT) (in EUR milions) * Depreciation/Amortization from fair value adjustments relate to identified assets at fair value in connection with acquisitions made by the INDUS Group. ** Impacts of fair value adjustments in inventory assets/order backlog relate to identified added value, included in the purchase price allocation and recognized after initial consolidation. 20

21 INDUS in figures Consolidated statement of cash flows Working capital increased to effectively build up inventories (due to rising materials purchasing prices) Almost halved on quarterly basis (Q incl. acquisition of M+P); investments in property, plant and equipment as well as intangible assets slightly below comparable period Moderate increase, incl. cash received from borrowings, cash paid for redemption of loans and of contingent purchase price liabilities (in EUR millions) 21

22 INDUS in figures Segments: Overview Q Sales with external third parties EBITDA Depr./Amortization EBIT EBIT margin (in %) Capital expenditure Employees 1,764 3,549 1,966 1,650 1,564 22

23 INDUS in figures Construction/Infrastructure Q Sales revenues and earnings stay at very high level as economic activity remains good Exclusively organic revenue growth Digital infrastructure is a strong section Slightly disproportionate increase in operating result Capital expenditure (exclusively for property, plant and equipment) slightly below prior year level Sales with external third parties EBITDA Depr./Amortization EBIT EBIT margin (in %) pp Capital expenditure

24 INDUS in figures Automotive Technology Q Revenue growth in line with expectations Operating result clearly below previous year; result adversely affected by expected operating losses of the portfolio company undergoing a repositioning exercise, unfavourable seasonal sales of carbide studs, increased prices in steel sector (increased cost of materials) Target margin of 5-7% remains challenging Capital expenditure incl. acquisition of EE Electronic Equipment for AURORA Sales with external third parties EBITDA Depr./Amortization EBIT EBIT margin (in %) pp Capital expenditure

25 INDUS in figures Engineering Q Strong increase in sales revenues Mostly inorganic growth due to new acquisitions M+P and PEISELER (fully consolidated for first time in Q1 2018) Operating result increases at only slightly disproportionately lower rate for billing-related reasons Capital expenditure exclusively for property, plant and equipment (Q incl. M+P acquisition) Sales with external third parties EBITDA Depr./Amortization EBIT EBIT margin (in %) pp Capital expenditure

26 INDUS in figures Medical Engineering/Life Science Q Segment is on an even keel Moderate increase in sales revenues Operating result on a par with comparable quarter Experience has shown that margin tends to improve in the course of the fiscal year Capital expenditure on a par with comparable quarter Sales with external third parties EBITDA Depr./Amortization EBIT EBIT margin (in %) pp Capital expenditure

27 INDUS in figures Metals Technology Q Increase in revenues mainly driven by carbide tools and mining (chisel production) First successes of the ongoing repositioning are visible Clearly disproportionate increase in operating result; EBIT margin thus back on track for full year (8-10%) Capital expenditure still below previous year Sales with external third parties EBITDA Depr./Amortization EBIT EBIT margin (in %) pp Capital expenditure

28 Outlook 2018 The world economy While growth will be slightly less dynamic, the economic environment remains generally positive in the current fiscal year. Geopolitical hotspots, the threat of a trade war and the potential risk of a hard Brexit are putting a damper on the German economy. But economic data and indicators confirm solid growth for German companies. 28

29 Outlook 2018 INDUS sectors Economic framework remains very good; capacities restricted by shortage of skilled labour; construction and security technology are sectors of the future for INDUS OEMs increase their investment budgets again; pre-series suppliers remain under margin pressure; rising steel prices put margins under additional pressure Situation remains positive; hard Brexit is a risk factor; development potential for logistics sector; targeting growth through acquisitions Environment remains positive in spite of increasing regulation; prospects in demographic area; acquisitions desired (but not at excessive prices) Moderately positive underlying trend; rising energy, material and wage costs have a limiting effect 29

30 Outlook 2018 INDUS Group COMPASS 2020 strategy to be continued in 2018 Continued sharpening of strategic priorities such as innovation and digitization Continuation of the investment drive (EUR 88 million planned for property, plant and equipment and intangible assets) Further acquisitions planned (planned investment volume of EUR 50 million) 30

31 Outlook 2018 Guidance for the Group confirmed Sales EUR 1,640.6 million EUR billion EBIT EUR million EUR million Acquisitions 2 growth acquisitions 2 growth acquisitions Investments in property, plant, EUR 79.0 million EUR 88 million and equipment and intangible assets Equity ratio 40,8% >40% Ratio of net debt to EBITDA 1.9 years years 31

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33 Share and dividend Reliable participation in success Dividend of EUR 1.50 per share proposed for FY 2017 (EUR 1.35 in previous year). INDUS Holding AG s profit distribution would thus total EUR 36.7 million, which would be equivalent to 43.9% of the distributable profit (42.7% in previous year). The remaining amount is to be reinvested to strengthen the Group. 33

34 Share and dividend Very stable shareholder base WKN/ISIN /DE Established/IPO 1986/1995 Fiscal year Capital stock Number of shares EUR 63,6 milion Last capital increase Free float approx. 72% Stock exchanges Index Designated Sponsors 24,450,509 no-name bearer shares XETRA, Düsseldorf, Frankfurt (regulated market) Tradegate Exchange, Berlin, Hamburg, Hanover, Munich, Stuttgart (open market) SDAX Bankhaus Lampe, Commerzbank, HSBC Trinkaus & Burkhardt 34

35 Share and dividend Analysts estimates and target prices INDUS share currently covered by eight banks and investment firms. Most recently, Equinet Bank started equity research on INDUS again in August The average target price currently stands at EUR

36 Share and dividend Price performance Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 INDUS Holding AG DAX Index SDAX Performance Index INDUS Holding AG DAX Index SDAX Performance Index 36

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38 INDUS in figures Performance in the past five years 1, , , , , % 10.1% 9.8% 10.0% 9.3% % 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0%

39 INDUS in figures Performance of the segments in the past five years 39

40 Financial calendar Publication and capital market dates in May 2018 Interim Report on Q Publication 24 May 2018 Annual Shareholders' Meeting Cologne 29 May 2018 Roadshow Zurich 12 July 2018 Roadshow Rhineland 14 August 2018 Interim Report on H1/Q Publication 16 August 2018 Roadshow Frankfurt am Main 29 August 2018 Commerzbank Sector Conference Frankfurt am Main 5 September 2018 Zurich Capital Market Conference Zurich 20 September 2018 Roadshow Paris 10 October 2018 Roadshow Stuttgart 18 October 2018 Roadshow London 14 November 2018 Interim Report on 9M/Q Publication 21 November 2018 Roadshow Munich 27 November 2018 Deutsches Eigenkapitalforum Frankfurt am Main 40