Company Overview. August 2018

Transcription

1 Company Overview August 2018

2 Forward-Looking Statements Statements in this presentation contain forward-looking statements under the Private Securities Litigation Reform Act of These statements appear in a number of places in this report and may include statements regarding the intent, belief or current expectations of the Company, with respect to, among other things, our (i) future product and facility expansion, (ii) acquisition strategy, (iii) investments and new product development, (iv) growth opportunities related to awarded business and (v) operational expectations. Forward-looking statements may be identified by the words will, may, should, designed to, believes, plans, projects, intends, expects, estimates, anticipates, continue, and similar words and expressions. The forward-looking statements are subject to risks and uncertainties that could cause actual events or results to differ materially from those expressed in or implied by the statements. Important factors that could cause actual results to differ materially from those in the forwardlooking statements include, among other factors: the reduced purchases, loss or bankruptcy of a major customer or supplier; the costs and timing of business realignment, facility closures or similar actions; a significant change in automotive, commercial, off-highway, motorcycle or agricultural vehicle production; competitive market conditions and resulting effects on sales and pricing; the impact on changes in foreign currency exchange rates on sales, costs and results, particularly the Argentinian peso, Brazilian real, Chinese renminbi, euro, Mexican peso and Swedish krona; our ability to achieve cost reductions that offset or exceed customer-mandated selling price reductions; customer acceptance of new products; our ability to successfully launch/produce products for awarded business; adverse changes in laws, government regulations or market conditions, including tariffs, affecting our products or our customers products; our ability to protect our intellectual property and successfully defend against assertions made against us; liabilities arising from warranty claims, product recall or field actions, product liability and legal proceedings to which we are or may become a party, or the impact of product recall or field actions on our customers; labor disruptions at our facilities or at any of our significant customers or suppliers; the ability of our suppliers to supply us with parts and components at competitive prices on a timely basis, including the impact of potential tariffs and trade considerations on their operations and output; the amount of our indebtedness and the restrictive covenants contained in the agreements governing our indebtedness, including our revolving credit facility; capital availability or costs, including changes in interest rates or market perceptions; the failure to achieve the successful integration of any acquired company or business; risks related to a failure of our information technology systems and networks, and risks associated with current and emerging technology threats and damage from computer viruses, unauthorized access, cyber attack and other similar disruptions; and the items described in Part I, Item IA ( Risk Factors ) of our 10-K filed with the SEC. In addition, the forward-looking statements contained herein represent our estimates only as of the date of this release and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, whether to reflect actual results, changes in assumptions, changes in other factors affecting such forward-looking statements or otherwise. Rounding Disclosure: There may be slight immaterial differences between figures represented in our public filings compared to what is shown in this presentation. The differences are the a result of rounding due to the representation of values in millions rather than thousands in public filings. 2

3 About Stoneridge Founded 1965 NYSE: SRI 11 Manufacturing locations on 4 No end-market* comprises more than 1/3 continents of our year-to-date sales 2018 Revenue growth** 6% Q2 Adj. EPS growth 33% 5-year backlog*** $3.3 billion 5.3x 2017 OEM sales Stoneridge is an established, global company with a well diversified product portfolio, strong historical financial performance and a robust 5-year backlog 3 *End-markets include passenger car, light truck / SUV, commercial vehicle, aftermarket and other, including agriculture, off-highway vehicles, material handling, etc. ** 2018 revenue growth based on lower-end of guided range *** As of December 31, 2017

4 Global Reach Headquarters relocated to Novi, MI in 4Q16 to facilitate stronger customer relationships and attract and retain talent Global Headquarters Manufacturing Site Design Center Sales & Technical Support 11 Manufacturing Sites 10 Design Centers 4

5 Organization Overview 2018 Sales* : $870.0m Stoneridge, Inc. (NYSE: SRI) 50% of 2018 Q2 Sales 41% of 2018 Q2 Sales 9% of 2018 Q2 Sales Stoneridge CONTROL DEVICES High Performance Actuators Sensors: Particle Matter (Soot), Temperature, Speed, Position, Pressure, Fluid Level, Torque SCD Evaporative Emission Reduction and Solenoid Control Valves Stoneridge ELECTRONICS Driver Information Systems Vision Systems Telematics Systems Tachograph Systems Electronic Control Units (ECU) Electronic Logging Devices Power & Switch Modules SRE Track & Trace Telematics Safety & Security Electronic Modules Alarm & Remote Access Audio PST ELETRÔNICA (JV, BRAZIL) PST 5 *Based on lower end of full year guidance provided on Q earnings call on August 2, 2018 Advanced vehicle camera systems and displays Radar Stoneridge ELECTRONICS Video Recording

6 Building a Culture of Performance and Growth 6

7 Our Current Leadership New Hire or New Position since

8 Leadership Team Capable of Driving Global Growth Stoneridge has systematically assembled an executive team comprised of industry leaders capable of driving global, sustainable performance and growth 8 *Based on lower end of full year guidance provided on Q earnings call on August 2, 2018

9 Business Share by Segment and Region Business Segments (2017) Regions (2017)* We continue to diversify our product portfolio and geographic exposure through organic and inorganic growth opportunities 9 *Regional sales based on manufactured location.

10 China A Platform for Growth Strong financial performance Backlog suggests CAGR of over 20% from * World-class manufacturing facility in Suzhou Products, operations and engineering focused on Asia-for-Asia strategy Regulations creating emissions requirements Exhaust gas temperature (EGT) sensors (Control Devices segment) Local customers and content growth Commercial vehicle driver information systems (Electronics segment) Continuing to focus on opportunities to serve the local market and expand manufacturing and development in China as a catalyst for growth 10 *Based on September 2017 IHS; Q LMC

11 2018 Full Year Volume Outlook Sales by End Market (2017) Passenger Car* (Units in Millions) Stoneridge Vehicle Production E Sales** 2017E 2018E B/(W) 2017 Europe 5.0% % Asia 20.9% % North America 73.8% % South America 0.1% % Other 0.2% % Total 100.0% % Commercial Vehicle* (Units in Millions) Stoneridge Vehicle Production E Sales** 2017E 2018E B/(W) 2017 Europe 64.5% % Asia 4.9% % North America 30.3% % South America 0.2% % Other 0.1% % Total 100.0% % Stoneridge is well positioned to take advantage of strong performing regions and end markets 11 *Excluding Orlaco and PST ** Regional sales based on manufactured location SOURCE: Dec 2017 IHS; Q LMC, Company Data

12 Business Share by Customer (2017) We are well diversified in our customer exposure. Approximately 75% of sales are attributable to OEM customers which comprise forecasted backlog. 12 *Does not include revenue from Minda-Stoneridge JV,

13 Winning with Our Customers Over the past year we have been recognized for our excellence as both a passenger car and commercial vehicle supplier by some of the largest, global OEMs Received the 2016 Safe Pillar Award from Ford Motor Company for supplying a variety of advanced technology sensors and actuators Received the 2017 Partnership award from Daimler AG for the international roll-out of driver information systems for Mercedes-Benz Freightliner and FUSO Trucks You always go above-and-beyond to create the best body electronic, instrument and telematics components for our trucks and buses. This is why you take the award trophy home in the Partnership category. Dr. Marcus Shoenenberg Vice President of Procurement, Daimler Trucks and Buses, Daimler AG Deepening relationships with customers Positioning the Company for long-term success 13

14 14 Recent Financial Performance

15 2 nd Quarter 2018 Summary 2 nd Quarter 2018 Financial Results Sales of $220.6 million, an increase of 5% over Q Control Devices sales of $112.4 million, a decrease of 3% over Q Electronics sales of $100.1 million, an increase of 22% over Q PST sales of $20.3 million, a decrease of 13% over Q Adjusted operating income of $20.1 million, an increase of 8% over Q (9.1% operating margin) Control Devices adjusted operating income of $17.7 million, a decrease of 11% over Q (15.8% adjusted operating margin) Electronics adjusted operating income of $9.0 million, an increase of 61% over Q (9.0% adjusted operating margin) PST adjusted operating income of $1.3 million, a decrease of 3% over Q (6.4% adjusted operating margin) 2018 Performance and Guidance 2018 Q1 (Actual) 2018 Q2 (Actual) 2018 Full Year Guidance Sales $225.9 Million $220.6 Million $870 - $890 Million Gross Margin 30.1% 30.6% 31.0% % Adjusted Operating Margin 8.0% 9.1% 9.0% % Adjusted EPS $0.50 $0.55 $ $2.20 Adjusted EBITDA Margin 11.9% 12.8% 12.5% % 15 Segment level financial information includes intercompany sales. Due to centralizing certain procurement and operations functions we have allocated certain corporate costs to each segment that were not previously allocated. For purposes of our quarter over quarter comparisons we have adjusted these costs.

16 Financial Summary We continue to deliver profitable growth and margin improvement 16

17 Keys to 2018 Success Control Devices Deliver growth in sensing and actuation segments Drive operational efficiency Manage ramp-down of shift-by-wire programs (~Q4) Electronics Execute product launches Capture MirrorEye opportunities Refine engineering footprint and drive global capability PST Drive track & trace growth Leverage cost structure Capitalize on macroeconomic tailwinds We continue to execute and focus on our keys to 2018 success 17 *Based on lower end of full year guidance provided on Q earnings call on August 2, 2018

18 Control Devices Financial Performance Control Devices Overview Production volume reductions by our customers on key passenger car and light truck platforms contributing to flat revenue quarter-to-quarter Gross margin improvement of 130 basis points quarter-to-quarter as a result of continuous operational improvement Increased SG&A and design and development ( D&D ) initiatives offset some of gross margin expansion. Necessary for continued growth. Gross margin improvement offset by SG&A and D&D initiatives to drive future growth 18 Segment level financial information includes intercompany sales *Due to centralizing certain procurement and operations functions we have allocated certain corporate costs to each segment that were not previously allocated. For purposes of our quarter over quarter comparisons we have adjusted these costs.

19 Electronics Financial Performance Electronics Overview Revenue growth quarter-over-quarter remains strong Segment margin expansion muted by currency headwinds Orlaco continues to deliver strong top and bottom-line performance Continued strong revenue performance and margin expansion 19 Segment level financial information includes intercompany sales *Due to centralizing certain procurement and operations functions we have allocated certain corporate costs to each segment that were not previously allocated. For purposes of our quarter over quarter comparisons we have adjusted these costs.

20 PST Financial Performance PST Overview Challenging macroeconomic conditions in Brazil and Argentina. Currency headwinds limiting revenue growth and margin expansion. Cost structure optimized to remain stable with improved profitability despite flat revenue Potential for continued volatility in macroeconomic conditions for the remainder of 2018 Responding effectively to dynamic macroeconomic challenges 20 Segment level financial information includes intercompany sales *Due to centralizing certain procurement and operations functions we have allocated certain corporate costs to each segment that were not previously allocated. For purposes of our quarter over quarter comparisons we have adjusted these costs.

21 FY 2018 Outlook Midpoint of Current Guidance Lower End of Guidance Range Volume Reductions (North America and China) Commercial Vehicle Volumes Currency (~$0.04 $0.05 EPS remainder of 2018) Tariffs (~$0.03 $0.05 EPS remainder of 2018) Continued Margin Expansion Q1 Guidance Outlook Q2 Guidance Outlook Customer volume reductions on certain key platforms in China and North America Commercial vehicle volumes remain robust Movements in currency are creating headwinds, specifically in Europe and Brazil Recently announced tariffs have created $1 - $2 million gross headwind for the remainder of the year Margin progression expected to continue for the remainder of the year Maintaining full-year guidance range 21

22 FY 2018 Full-Year Guidance 2017 Actual Results 2018 Guidance Sales $824.4 Million $870 - $890 Million Adjusted Gross Margin Adjusted Operating Margin 30.3% 31.0% % 8.1% 9.0% % Adjusted EPS $1.57 $ $2.20 Adjusted EBITDA Margin 11.6% 12.5% % Lower-end of guidance range implies approximately 51% / 49% 1 st half / 2 nd half revenue split We are forecasting 4 th quarter revenue and EPS performance to exceed 3 rd quarter performance We expect Q3 to be lowest EPS and revenue quarter for 2018 due to customer production schedules Continued margin progression and forecasted revenue inline with Q1 and Q2 should result in stronger Q4 Consistent with historical results, timing of engineering recoveries is projected to contribute to strong Q4 performance Forecasting 4 th quarter performance stronger than 3 rd quarter 22

23 23 Focus on Growth

24 Focus on Growth Markets INTELLIGENCE 10% CAGR SAFETY & SECURITY 12% CAGR These megatrends are expected to grow 8% - 9% vs. global vehicle production growth of 2% - 3% from 2017 to 2023 FUEL EFFICIENCY 5% CAGR EMISSIONS 5% CAGR *Smart products include Stoneridge products with printed circuit boards and / or electronic content, including software We focus on industry megatrends that will drive growth 2-3x our underlying markets Migrating toward smart products will continue to drive growth through increased vehicle content 24 Source: Dec 2017 IHS; LMCA, ACT Research, Emerging Strategy and Company Data

25 Intelligence The market is demanding innovative display and vehicle communications solutions Stoneridge Solutions Instrument Clusters Telematics Electronic Control Units (ECUs) Electronic Shift-by-wire (SBW) Tachograph and Electronic Logging Device (ELD) Fully reconfigurable, high resolution displays Enhances vehicle diagnostics and efficiency Standard to highly customizable Replaces the mechanical shifter in automatic transmissions Advanced fleet management and driver information systems Stoneridge is helping customers move from electromechanical to electronic solutions that can leverage digital advantages Power Modules Stoneridge is applying our hardware & software solutions into adaptive systems driving vehicle / user interaction and data management Intelligent distribution and power control 25

26 Emissions Compliance requirements are driving increasingly sophisticated emissions products Recent emissions scandals are creating requirements for additional emissions testing products and more complex systems Stoneridge Solutions Soot Sensor Exhaust Gas Temperature Sensors Canister Vent Solenoid Particulate sensor monitors harmful emissions Controls and monitors critical aftertreatment systems and engine components protecting engine from critically high exhaust temperatures Reduces fuel vapor emissions Stoneridge has developed innovative technologies that enable compliance with increasingly stringent emissions regulations 26

27 Fuel Efficiency Stoneridge Solutions MirrorEye TM Front Axle Disconnect Turbo Actuator Telematics Reduces fuel consumption through enhanced aerodynamics Improves drivetrain efficiency Improves engine performance Enhances vehicle efficiency Market demand for fuel economy and performance has led OEMs to focus on delivering fuel savings without compromising performance Stoneridge is helping OEMs increase fuel economy through more effective engine management and performance enhancing technology Increased regulations and market demands have led to changes in vehicle systems 27

28 Safety and Security Driver safety becoming more autonomous through electronic safety and security solutions Stoneridge Solutions Track and Trace Tachograph and ELD MirrorEye TM Parking Assist Seat Track Position Speed Sensors Enhances driver safety and security of both vehicle and cargo Improves driver safety and enables compliance Eliminates driver blind spots and increases driver s awareness of surroundings Improves vehicle safety / reduces accidents Improves active restraint systems Enables ABS & vehicle stability Stoneridge is using our established network to track vehicle and goods for both driver and cargo safety and security as well as fleet management Stoneridge focuses on providing high reliability products for safety critical applications through robust design and testing 28

29 Stoneridge Passenger Car / Light Truck Content Ford F-Series Trailer Tow Connector, Canister Vent Valve, Rotary 4x4 Control Switch, Seat Track Position Sensor Exhaust Gas, Cylinder Head, Engine Coolant & Exhaust Gas Recirculation Temperature Sensors Jeep Cherokee Under Hood Security Switch, Coolant & Oil Temperature Sensors, Tailgate Release Switch, Exhaust Gas, Temperature Sensor, Trailer Tow Connector Cadillac XT5 Shift by Wire / Transmission Range Control Module, Canister Vent Solenoid, Trailer Tow Connector Ram Trucks Front Axle Disconnect Actuator, Trailer Tow Connector, Ram Box and Tailgate Actuators, Under Hood Switch, Coolant & Oil Temperature Sensors, Smart Bar Actuator Ford Fusion Shift by Wire / Transmission Range Control Module, Capacitive Keypad, Seat Track Position Sensor, Release Switches, Canister Vent Solenoid, Vapor Blocking Valve, Cylinder Head & Engine coolant Temperature Sensors Chevy / GMC Silverado / Sierra Front Axle Disconnect Actuator, Trailer Tow Connector, Canister Vent Solenoid Lincoln Continental Shift by Wire / Transmission Range Control Module, Capacitive Keypad, Seat Track Position Sensor, Vapor, Bypass Valve, Canister Vent Valve Buick LaCrosse Shift by Wire / Transmission Range Control Module, Canister Vent Solenoid Chevrolet Bolt Shift by Wire / Transmission Range Control Module, Park Lock 29

30 Stoneridge Commercial Vehicle Content Navistar Instrument Cluster, High Temperature Sensor, Switches, Power & Switch Module PACCAR Tachograph, High Temperature Sensor, Power & Switch Module John Deere Vision Systems Daimler Instrument Cluster, Tachograph, High Temperature Sensor, Power & Switch Module, Telematics Scania Instrument Cluster, Tachograph, Power & Switch Modules, Telematics Caterpillar Vision Systems MAN Instrument Cluster, Telematics, Tachograph, Power & Switch Module, ECU Volvo Instrument Cluster, Power & Switch Modules, ECU, Soot Sensor, Switches Crown Equipment Corporation Vision Systems 30

31 31 Recent Product Updates

32 Stoneridge - A Vehicle Technology Company Actuation Systems Our actuation technologies will drive growth in traditional drivetrains and the electrified drivetrains of the future Park-by-wire developed for hybrid and fully electric drivetrains as an extension of our shift-by-wire actuator that is in production on traditional drivetrains today Awarded contracts for our actuation technology on electrified axle (E-Axle) systems. Extension of our axle-based actuation technologies currently in production. Awards Announced in Q2 $31 million annual* park-bywire programs awarded in North America, Europe and Asia Announced in Q3 E-Axle development award on high-performance platform in North America Geographic expansion of actuation capabilities Exploration of complimentary actuation technologies (expand customers and capabilites) 2015 Launch shift-by-wire with multiple global OEMs 2016 Launch shift-bywire with parkby-wire functionality on Chevrolet Bolt 2017 Awarded $31 million* of park-by-wire global programs 2017 Awarded E-Axle development platform 2019 Park-by-wire platform launches in North America and Europe 2020 Park-by-wire platform launches in Asia 2021 E-Axle platform launch in North America Our actuation technologies will drive growth on traditional, hybrid and fully electric drivetrains today and in the future 32 *Peak annual revenue

33 Stoneridge - A Vehicle Technology Company Shift-by-Wire Update Shift-by-Wire (Current) Park-by-Wire (2019 and beyond) One of three global suppliers to receive a 2016 Safe Pillar Award from Ford for achieving excellence in quality, cost, performance and delivery related to actuation and sensors, including our Shift-by-Wire program Continue to pursue market opportunities with the existing Shift-by-Wire product, as well as product extensions Extension of Shift-by-Wire technology Replaces park function normally controlled by mechanical shifter Broad applications across all conventional engines as well as electric and hybrid-electric powertrains North America and Europe programs (2019 start-of-production) $24 million (peak annual revenue) awarded Asia programs (2020 start-ofproduction) $7 million (peak annual revenue) awarded Shift-by-Wire and related technologies remain a platform for growth 33 Image Sources: and

34 Stoneridge - A Vehicle Technology Company Electrified Drivetrain Front-Axle Disconnect (Current) Electric Axle (E-Axle) (2020+) Decouples the front-axle in a 4x4 vehicle allowing 4x2 operation on-the-fly Smart Bar (Current) Axle-mounted smart actuator allowing increased performance in off-road driving situations Stoneridge has developed actuators that will be included in E-Axle systems that will enable electric drive propulsion in either hybrid or fully electric vehicles Awarded E-Axle development on high-performance platform in North America with a planned start-ofproduction (SOP) in 2021 Developing solutions for multiple other OEM / Tier 1 applications Axle and suspension actuation technologies remain a platform for growth as drivetrains continue to evolve 34 Image Sources:

35 Stoneridge - A Vehicle Technology Company Driver Information Systems Commercial vehicle instrument clusters are following passenger car trends and becoming fully configurable, display-based driver information systems Stoneridge is one of the global leaders in commercial vehicle driver information systems Awards Recently announced $38 million annual* global award for hybrid and fully configurable systems Delivering commercial vehicle driver information systems solutions for 25+ years Additional functionality development and subsystem integration (data, infotainment, etc.) 2005 First color TFT diplay commercial vehicle instruement cluster award 2008 Launched first hybrid color display driver information system 2017 Awarded fullyconfigurable driver information system global program 2020 Launch fullyconfigurable driver information system Driver information systems are driving increased content per vehicle and future growth opportunities through additional functionality and sub-system integration 35 *Peak annual revenue

36 Connecting Drivers to Information Pending award for extension and expansion of our largest global Driver Information System program $38 million peak annual revenue $8 million expansion $3 million localization in Brazil Start-of-production 2021 Deepening our existing customer relationships First significant award utilizing our local Brazilian footprint serving our global customers more efficiently Driver Information Systems are a key global platform driving growth 36 Product image is an example of Stoneridge technology and may or may not be representative of the awarded production product

37 Enabling Intelligent Vehicles OEM and aftermarket connectivity and intelligence solutions for global commercial vehicle applications Hardware solutions that provide in-vehicle connectivity Software solutions that enable data compilation and analysis Our solutions enable improved fleet management, vehicle efficiency and compliance Pending award for one of our largest connectivity programs with global commercial vehicle OEM $24 million peak annual revenue Start-of-production Early 2019 Leading provider of commercial vehicle connectivity and intelligence solutions 37

38 MirrorEye TM Update Pending award for our first OEM MirrorEye TM program with a leading, global OEM $13 million peak annual revenue Start-of-Production 2020 FMCSA exemption in-process to allow for removal of traditional mirrors and replacement by MirrorEye TM systems American Truck Association (ATA) encouraging expeditiously approving any requests to allow mirrorless technology Expect MirrorEye TM retrofit revenue late 2018 Multiple development programs with additional global OEMs expecting additional OEM awards Awarded first OEM MirrorEye TM program Expect retrofit opportunities beginning late

39 MirrorEye TM Update MirrorEye TM fleet trials ongoing Over one million miles driven with major U.S. fleets including Schneider, Maverick and J.B. Hunt Schneider and J.B. Hunt publicly commented in support of the requested FMCSA exemption as have the Trucking Alliance and American Trucking Associations (ATA) Expecting decision on FMCSA exemption shortly MirrorEye TM featured on Starship Initiative Truck Partnered with Shell Lubricants and AirFlow Truck Company Cross-country drive resulted in 28.4% fuel economy improvement Expect to launch retrofit program late 2018 Not dependent on FMCSA exemption but exemption could provide additional market penetration and adoption MirrorEye TM commercialization progressing as planned FMCSA exemption could accelerate market penetration and adoption rate 39

40 Summary Stoneridge is a well-established, global, public automotive company Our business is well diversified among our segments, regions and served markets We have a robust backlog representing 5.3x 2017 OEM sales over the next five years We are positioned to outpace vehicle market growth by 2 3x over the next 5 years as we continue to focus on segments that outperform the underlying market 40

41 41 Appendix

42 2018 Q2 Adjustments Adjustment Expected Q After- Tax Impact (USD millions) Expected Q After- Tax EPS Impact Earn-out (PST) ($0.5) ($0.02) Business realignment costs ($0.3) ($0.01) Total ($0.9) ($0.03) The expense related to the step-up in the fair value of the earn-out related to the acquisition of the remaining 26% minority interest in PST was $0.5 million resulting in an EPS adjustment of $0.02 Expenses related to certain one-time business realignment costs have been adjusted to reflect normalized earnings. The after-tax impact of this adjustment was $0.3 million resulting in an EPS add-back of $

43 Income Statement CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) Three months ended Six months ended June 30, June 30, (in thousands, except per share data) Net sales $ 220,602 $ 209,111 $ 446,532 $ 413,422 Costs and expenses: Cost of goods sold 153, , , ,857 Selling, general and administrative 35,256 35,704 72,517 69,970 Design and development 12,981 12,034 26,842 23,755 Operating income 19,181 15,676 36,028 30,840 Interest expense, net 1,170 1,518 2,524 2,928 Equity in earnings of investee (665) (555) (1,186) (735) Other expense (income), net (264) 605 (863) 795 Income before income taxes Provision for income taxes 18,940 14,108 35,553 27,852 3,820 5,189 7,053 9,760 Net income 15,120 8,919 28,500 18,092 Net loss attributable to noncontrolling interest - (100) - (130) Net income attributable to Stoneridge, Inc. $ 15,120 $ 9,019 $ 28,500 $ 18,222 Earnings per share attributable to Stoneridge, Inc.: Basic $ 0.53 $ 0.32 $ 1.01 $ 0.65 Diluted $ 0.52 $ 0.32 $ 0.99 $ 0.64 Weighted-average shares outstanding: Basic 28,449 28,133 28,349 28,026 Diluted 28,978 28,517 28,907 28,531 43

44 Segment Financial Information 44 Three months ended Six months ended June 30, June 30, Net Sales: Control Devices $ 109,956 $ 114,001 $ 225,313 $ 232,874 Inter-segment sales 2,481 1,368 4,662 2,151 Control Devices net sales 112, , , ,025 Electronics 90,313 71, , ,415 Inter-segment sales 9,771 10,223 20,243 21,579 Electronics net sales 100,084 81, , ,994 PST 20,333 23,500 40,878 45,133 Inter-segment sales PST net sales 20,333 23,500 40,880 45,133 Eliminations (12,252) (11,591) (24,907) (23,730) Total net sales $ 220,602 $ 209,111 $ 446,532 $ 413,422 Operating Income (Loss): Control Devices $ 17,160 $ 19,924 $ 35,039 $ 39,008 Electronics 8,276 2,814 16,156 8,371 PST 735 1, ,702 Unallocated Corporate (6,990) (8,185) (16,052) (18,241) Total operating income $ 19,181 $ 15,676 $ 36,028 $ 30,840 Depreciation and Amortization: Control Devices $ 2,897 $ 2,687 $ 5,692 $ 5,386 Electronics 2,252 2,241 4,543 3,811 PST 1,740 2,096 4,245 4,184 Unallocated Corporate Total depreciation and amortization $ 7,088 $ 7,120 $ 14,876 $ 13,576 Interest Expense, net: Control Devices $ 18 $ 11 $ 37 $ 65 Electronics PST ,104 Unallocated Corporate ,898 1,715 Total interest expense, net $ 1,170 $ 1,518 $ 2,524 $ 2,928 Capital Expenditures: Control Devices $ 3,312 $ 4,347 $ 9,058 $ 7,795 Electronics 1,394 1,684 4,167 4,034 PST 696 1,041 1,955 1,925 Unallocated Corporate ,665 1,413 Total capital expenditures $ 6,340 $ 7,902 $ 16,845 $ 15,167

45 Balance Sheet CONDENSED CONSOLIDATED BALANCE SHEETS June 30, December 31, (in thousands) (Unaudited) ASSETS 45 Current assets: Cash and cash equivalents $ 58,965 $ 66,003 Accounts receivable, less reserves of $1,106 and $1,109, respectively 147, ,438 Inventories, net 80,232 73,471 Prepaid expenses and other current assets 29,056 21,457 Total current assets 315, ,369 Long-term assets: Property, plant and equipment, net 111, ,402 Intangible assets, net 66,006 75,243 Goodwill 37,389 38,419 Investments and other long-term assets, net 30,024 31,604 Total long-term assets 244, ,668 Total assets $ 560,646 $ 559,037 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of debt $ 3,184 $ 4,192 Accounts payable 84,461 79,386 Accrued expenses and other current liabilities 60,358 52,546 Total current liabilities 148, ,124 Long-term liabilities: Revolving credit facility 110, ,000 Long-term debt, net 1,790 3,852 Deferred income taxes 17,767 18,874 Other long-term liabilities 25,040 35,115 Total long-term liabilities 154, ,841 Shareholders' equity: Preferred Shares, without par value, 5,000 shares authorized, none issued - - Common Shares, without par value, 60,000 shares authorized, 28,966 and 28,966 shares issued and 28,483 and 28,180 shares outstanding at June 30, 2018 and December 31, 2017, respectively, with no stated value - - Additional paid-in capital 228, ,486 Common Shares held in treasury, 483 and 786 shares at June 30, 2018 and December , respectively, at cost (8,911) (7,118) Retained earnings 120,552 92,264 Accumulated other comprehensive loss (82,451) (69,560) Total shareholders' equity 258, ,072 Total liabilities and shareholders' equity $ 560,646 $ 559,037

46 Statement of Cash Flows CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six months ended June 30, (in thousands) OPERATING ACTIVITIES: Net income $ 28,500 $ 18,092 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 11,535 10,538 Amortization, including accretion of deferred financing costs 3,503 3,200 Deferred income taxes 1,765 5,450 Earnings of equity method investee (1,186) (735) Gain on sale of fixed assets (18) (4) Share-based compensation expense 2,838 4,065 Tax benefit related to share-based compensation expense (879) (758) Change in fair value of earn-out contingent consideration 1,417 2,347 Changes in operating assets and liabilities, net of effect of business combination: Accounts receivable, net (11,594) (13,494) Inventories, net (10,610) (6,739) Prepaid expenses and other assets (8,417) (4,174) Accounts payable 8,678 11,675 Accrued expenses and other liabilities 3,379 (2,442) Net cash provided by operating activities 28,911 27,021 INVESTING ACTIVITIES: Capital expenditures (16,845) (15,167) Proceeds from sale of fixed assets Insurance proceeds for fixed assets 1,403 - Business acquisition, net of cash acquired - (77,538) Net cash used for investing activities (15,401) (92,685) 46

47 Statement of Cash Flows (Cont.) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Six months ended June 30, (in thousands) FINANCING ACTIVITIES: Acquisition of noncontrolling interest, including transaction costs - (1,796) Revolving credit facility borrowings 26,500 84,000 Revolving credit facility payments (37,500) (19,000) Proceeds from issuance of debt 273 1,901 Repayments of debt (2,459) (6,174) Other financing costs - (61) Repurchase of Common Shares to satisfy employee tax withholding (4,242) (2,207) Net cash (used for) provided by financing activities (17,428) 56,663 Effect of exchange rate changes on cash and cash equivalents (3,120) 2,832 Net change in cash and cash equivalents (7,038) (6,169) Cash and cash equivalents at beginning of period 66,003 50,389 Cash and cash equivalents at end of period $ 58,965 $ 44,220 Supplemental disclosure of cash flow information: Cash paid for interest $ 2,679 $ 2,755 Cash paid for income taxes, net $ 7,967 $ 3,424 47

48 48 Reconciliations to US GAAP

49 Reconciliations to US GAAP This document contains information about Stoneridge's financial results which is not presented in accordance with accounting principles generally accepted in the United States ("GAAP"). Such non-gaap financial measures are reconciled to their closest GAAP financial measures in the appendix of this document. The provision of these non-gaap financial measures for 2017 and 2018 is not intended to indicate that Stoneridge is explicitly or implicitly providing projections on those non-gaap financial measures, and actual results for such measures are likely to vary from those presented. The reconciliations include all information reasonably available to the Company at the date of this document and the adjustments that management can reasonably predict. 49

50 Reconciliations to US GAAP Reconciliation of Adjusted Gross Profit (USD in millions) Q Q Q Gross Profit $ 63.4 $ 68.0 $ 67.4 Add: Pre-Tax Step-Up in Acquired Inventory from Orlaco 0.7 Adjusted Gross Profit $ 64.1 $ 68.0 $ 67.4 Reconciliation of Adjusted Operating Income (USD in millions) Q Q Q Operating Income $ 15.7 $ 16.8 $ 19.2 Add: Pre-Tax Step-Up in Acquired Inventory from Orlaco 0.7 Add: Pre-Tax Step-Up in Fair Value of Earn-Out (Orlaco) Add: Pre-Tax Step-Up in Fair Value of Earn-Out (PST) Add: Pre-Tax Business Realignment Costs Adjusted Operating Income $ 18.7 $ 18.0 $ 20.1 Reconciliation of Adjusted EBITDA (USD in millions) Q Q Q Income Before Tax $ 14.1 $ 16.6 $ 18.9 Interest expense, net Depreciation and amortization EBITDA $ 22.7 $ 25.8 $ 27.2 Add: Pre-Tax Step-Up in Acquired Inventory from Orlaco 0.7 Add: Pre-Tax Step-Up in Fair Value of Earn-Out (Orlaco) Add: Pre-Tax Step-Up in Fair Value of Earn-Out (PST) Add: Pre-Tax Business Realignment Costs Adjusted EBITDA $ 25.7 $ 26.9 $

51 Reconciliations to US GAAP Reconciliation of Control Devices Adjusted Operating Income (USD in millions) Q Q Q Control Devices Operating Income $ 19.9 $ 17.9 $ 17.2 Add: Pre-Tax Allocation of Centralized Procurement and Operations Functions Add: Pre-Tax Business Realignment Costs 0.1 Control Devices Adjusted Operating Income $ 19.9 $ 18.4 $ 17.7 Reconciliation of Electronics Adjusted Operating Income (USD in millions) Q Q Q Electronics Operating Income $ 2.8 $ 7.9 $ 8.3 Add: Pre-Tax Step-Up in Acquired Inventory from Orlaco 0.7 Add: Pre-Tax Step-Up in Fair Value of Earn-Out (Orlaco) Add: Pre-Tax Allocation of Centralized Procurement and Operations Functions Add: Pre-Tax Business Realignment Costs 0.3 Electronics Adjusted Operating Income $ 5.6 $ 8.8 $ 9.0 Reconciliation of PST Adjusted Operating Income (USD in millions) Q Q Q PST Operating Income $ 1.1 $ 0.2 $ 0.7 Add: Pre-Tax Step-Up in Fair Value of Earn-Out (PST) Add: Pre-Tax Business Realignment Costs 0.2 Add: Pre-Tax Allocation of Centralized Procurement and Operations Functions PST Adjusted Operating Income $ 1.3 $ 1.0 $

52 Reconciliations to US GAAP Reconciliation of Q Adjusted EPS (USD in millions) Q Q EPS Net Income Attributable to Stoneridge $ 15.1 $ 0.52 Add: After-Tax Step-Up in Fair Value of Earn-Out (PST) Add: After-Tax Business Realignment Costs Adjusted Net Income $ 16.0 $ 0.55 Reconciliation of Q Adjusted EPS (USD in millions) Q Q EPS Net Income Attributable to Stoneridge $ 13.4 $ 0.46 Add: After-Tax Step-Up in Fair Value of Earn-Out (Orlaco) Add: After-Tax Step-Up in Fair Value of Earn-Out (PST) Add: After-Tax Business Realignment Costs Adjusted Net Income $ 14.4 $ 0.50 Reconciliation of Q Adjusted EPS (USD in millions) Q Q EPS Net Income Attributable to Stoneridge $ 9.0 $ 0.32 Add: After-Tax Step-Up in Fair Value of Earn-Out (Orlaco) Add: After-Tax Step-Up in Fair Value of Earn-Out (PST) Add: After-Tax Step-Up in Acquired Inventory from Orlaco Adjusted Net Income $ 11.8 $