Kendrion N : Minutes

Minutes

2022 Annual General Meeting of Shareholders ("AGM")

of Kendrion N.V. ("Kendrion" or the "Company")

held 11 on April 2022 at 2pm CET

at Novotel Amsterdam City in Amsterdam

1. Opening and notifications

The Chairman, Mr Frits van Hout, opened the AGM. Kendrion is pleased that the AGM can be held in person this year, but also offered the opportunity to follow the annual meeting through an online webcast.

The Chairman introduced the Executive Board, Mr Van Beurden (CEO) and Mr Hemmen (CFO), and the other members of the Supervisory Board, Mrs Mestrom and Mr Doll. Unfortunately, Supervisory Board member Mrs Van der Meijs could not attend the meeting in person and participated remotely.

In view of the annual audit procedures carried out by Deloitte Accountants, Mr Beemer of Deloitte Accountants is present at the meeting.

The notice, convening the AGM, was given in accordance with article 45 of the Articles of Association. This meant that valid resolutions could be adopted. The notice convening the general meeting of shareholders was published on the website of Kendrion on 28 February 2022. As of this date, the agenda and the explanatory notes to the agenda were available for inspection and could be obtained free of charge at the Company's head office and also via the website. The 2021 annual integrated report was published on the website on 25 February 2022. The record day was 14 March 2022. For those shareholders who were unable to attend or who preferred to be represented by a proxy, draft proxies were available at the Company. It was also possible this year to issue voting instructions via the e-voting tool on the website of ABN AMRO. This was also described in the notice of the meeting and in the notes to the agenda

Mrs Hélène Verhoeven was designated to prepare minutes of the meeting.

In this meeting 9,809,149 shares were represented, jointly representing 65.68% of the issued capital and 66.09% of the voting capital. The Chairman explained the voting procedure and mentioned that this year 6,231,830 votes were cast via e-voting.

Shareholders had been invited to submit their questions about the items on the agenda prior to the meeting. The deadline for the submission of these questions expired on 8 April 2022. No questions were received prior to the meeting. Questions could also be raised by shareholders attending the meeting via the online webcast.

The Chairman mentioned that the meeting language was English, as announced at the convocation. Some shareholders expressed difficulty with this and a preference for Dutch as meeting language. In response, the Chairman remarked that it had been clearly announced in the notice, but that shareholders are welcome to ask questions in Dutch. The questions will be answered in English.

2.a. Report by the Executive Board on financial year 2021 (for discussion)

Prior to the presentations Mr Van Beurdenemphasised that certain statements contained in the presentation and in the remarks during the meeting, constitute forward-looking statements. As these statements rely on a number of assumptions concerning future events and are subject to uncertainties and

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other factors, of which many are outside the Company's control, actual results can differ materially from such statements.

Mr Van Beurden first gave an overview of the organisation. Kendrion has global presence with manufacturing and sales locations in Asia, Europe and the United States. Kendrion has around 2,700 employees, a bit higher than before mainly because of some M&A activities. Normalised revenue was EUR 463.6 million of which 69% is from Europe, 15% from Asia and 16% from America. It used to be 75% from Europe, which means that Kendrion is generating its revenue from a more global base of customers. Since the acquisition of INTORQ the split between the automotive and the industrial parts of the Company is roughly 50/50, which used to be two thirds automotive and one third industrial. This means that the group is more balanced, both geographically and when it comes to the split between industrial and automotive

Kendrion has industrial and automotive activities. In Industrial, Kendrion has two business groups, Industrial Brakes ("IB") and Industrial Actuators and Controls ("IAC"), which is reflected in the management structure of the Company. The management team consists of (i) the Executive Board, (ii) the staff functions Group HR, IT and General Counsel and (iii) the COO, CCO and FD together responsible for the Automotive group, (iv) the business unit manager for IB, (v) the business unit manager for IAC, and (vi) the president Kendrion Asia/Strategic Purchasing.

Mr Van Beurden explained that Kendrion has limited direct exposure to the conflict in Ukraine. Kendrion has no production facilities in the Ukraine nor in Russia and has as well no material revenue exposure. Kendrion has adequate screening procedures in place to monitor compliance with all EU-sanctions. Of course, as a global active company, Kendrion is affected by the indirect effects, such as the impact on the overall economy and inflationary pressures affecting the prices of our raw materials and energy. The diversification of Kendrion's activities and the more balanced revenue picture the Company has, both between Industrial and Automotive, but also geographically, provide Kendrion with additional stability, but of course Kendrion is not immune to what is happening in the overall global economy. Kendrion also has a local-for-local supply chain for many years, which means that Kendrion is primarily sourcing the materials in the region where Kendrion is producing. This limits the exposure to long and complex supply chains. Further, Kendrion is working closely with all relevant stakeholders to mitigate the volatility and Kendrion has a strong financial position.

As COVID-19 is not yet over, Kendrion's COVID prevention measures remain in place in order to keep the employees and their families healthy and safe and to safeguard the group's continuity.

Mr Hemmenprovides an overview of the business performance in 2021. Kendrion realised EUR 463.6 million revenue, which is 17% more than in 2020, and the organic revenue growth, excluding the contribution of 3T, was 16%. All business groups contributed to this growth with Automotive growing 13%, IAC 16% and IB 21%. The revenues in the industrial groups also exceeded the pre-pandemic level of 2019 with 10%. Despite the strongly increasing material prices and transportation costs, Kendrion's added value margin remained relatively stable in 2021. The added value margin decreased twenty basis points as sales prices increased and a changed sales mix with a higher share of industrial business largely compensated the increase in material prices. Kendrion's total operating costs (including depreciation) increased with 11%, driven by abolishing the substantial temporary cost measures implemented in the pandemic year 2020 and and as well the increased activity level. This led to a normalised EBITDA increase of 25% and a normalised EBITA increase of 69%. Kendrion's EBITDA margin increased 70 basis points to 12%, which is another step towards Kendrion's long-term target of 15% by 2025. Driven by the 69% increase in EBITA, Kendrion's return on invested capital increased from 10.8% in 2020 to 15.6% in 2021, which is a good step towards the long-term target of 25% as from 2025.

In Q4 2021 Kendrion normalised in total EUR 3.3 million net of tax non-recurring costs compared to EUR

4.1 million in 2020. The most significant non-recurring cost item in 2021 concerned a non-cash impairment charge of EUR 3.4 million on production equipment. This impairment was triggered by a cancelled automotive project. Discussions for compensation with the customer are continuing and the nomination of

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a new project that will start production in 2024 has been considered as a partial compensation of this. Kendrion's reported net profit more than doubled to EUR 14.3 million in 2021.

In 2021 Kendrion realised a normalised free cashflow of EUR 3.5 million compared to EUR 31.5 million in 2020. The lower free cash flow was caused by three main reasons. First, substantial higher capital investments, including the start of the construction of Kendrion's new production facility in China. Second, the 16% higher activity level and increased share of industrial activities had an effect on the working capital and, third, buffer stocks in response to the increased shortages and order volatility. This meant that working capital as a percentage of revenue increased from 10.4% in 2020 to 13.8% in 2021. Kendrion's leverage ratio ended at 2.3, equal to the leverage ratio at the end of 2020, having fully absorbed the acquisition of 3T at the end of Q3 2021. At year-end, the group had around EUR 58 million availability in cash and undrawn facilities.

IB recorded 21% organic revenue increase driven by the general recovery of industrial activities worldwide, but also by the ongoing trend towards electrification and automation of industrial processes. Organic revenue of IAC increased with 16% and 3T has been fully integrated in IAC and contributed EUR 3.4 million revenue and a 19% EBITDA-margin since consolidating 3T as per September 2021. Despite the pressure on increased input prices, the industrial groups realised good operational leverage, resulting in a normalised EBITDA-margin of 16.8% compared to 15.3% in 2020.

The Automotive revenue growth of 13% was mainly driven by the start of production of projects won in previous years as the global car production only increased modestly with 2% in 2021. Normalised EBITDA in Automotive increased with 8%. Operational leverage in Automotive was reduced by the abolishment of the significant temporary pandemic related cost measures in 2021. EBITDA as a percentage of revenue ended at 7.2% compared to 7.5% in the previous year.

Mr Hemmen continued with Kendrion's dividend. Kendrion strives to pay out a dividend between 35% and 50% of its normalised net profit before amortization. Kendrion proposes to the meeting a dividend of EUR

0.69 per share, which represents a pay-out of 50%. As usual, this dividend will be payable in cash or in ordinary shares at the option of the shareholder. The pay out at the high-end of the policy underlines Kendrion's strong confidence in its business fundamentals.

Mr Hemmen continued with a financing update. Kendrion is in the final stages of agreeing to a refinancing of its existing EUR 162.5 million syndicated loan facility. This refinancing will consist of two instruments. Kendrion has successfully raised EUR 72.5 million in an inaugural transaction in the Schuldschein private placement market with settlement on 13 April 2022. EUR 52.5 million of this will have a maturity of five years and is priced at 125 basis points above Euribor and EUR 20 million has a maturity of three years and is priced at a level of 100 basis points above Euribor. Both loans are sustainability-linked with a discount or premium of five basis points based on the development of Kendrion's sustainability rating by EcoVadis. In addition to the Schuldschein, Kendrion has agreed on key terms with ING and HSBC on a EUR 102.5 million sustainability linked revolving credit facility with a maturity of three years plus two one- year extension options. With this total EUR 175 million financing package, Kendrion has extended its debt maturity profile, diversified its funding sources and has realised more competitive terms compared to its existing arrangements. Kendrion has requested a sustainability rating by the rating institute EcoVadis. Kendrion's initial rating has been determined at 58 points, out of a maximum of 100, and this gives Kendrion a silver medal in the EcoVadis universe, but it also puts Kendrion at the seventy-eighth percentile of all rated companies, which means that only 22% of all rated companies is better than Kendrion. In both new finance instruments, Kendrion targets to increase this level by ten points, which would put Kendrion in the top 5% of rated companies.

Mr Van Beurdencontinued with the strategic and operational update. In 2021 Kendrion delivered strong results under difficult market conditions. There was significant demand and supply volatility. Kendrion also faced shortages in many input materials, including semiconductors, steel and certain plastics, and Kendrion was dealing with price increases of many of its raw materials, putting pressure on its added value margin. Besides this, COVID-19 was still reality. Against this backdrop, Kendrion has had a good year with

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group revenue 17% higher than in 2020 and close to pre-pandemic levels, taking pro forma into account the Intorq acquisition. Kendrion's underlying EBITDA grew by 25% and Kendrion's normalised net profit before amortisation by 76%. Mr Van Beurden mentioned that he is extremely proud of what Kendrion's employees have achieved as a global team.

He continued with Kendrion's strategic house. He explained that the top of the building indicates Kendrion's strategic intent and there are various ways of verbalising that. One thing that is used internally is that Kendrion aspires to continuously grow revenue and profitability by investing in opportunities that help society become more sustainable with a lean and focused organisation and to provide a top-quality work environment to its employees. Another way of verbalising this, are Kendrion's long-term or medium- term financial targets for the year 2025.

Three pillars are underpinning the strategic goal. Automotive, representing about half of the group revenue, focussing on growth and especially on the opportunity they are developing in actuators for autonomous, connected, electrified and shared mobility (ACES). IB, representing around a quarter of group revenue, offers a full range of brakes and sees ample growth opportunities driven by the accelerating trends towards electrification, in robots, both industrial and collaborative, in wind power, in elevators and more. Hereto the focus is squarely on growth. IAC is focussing on profitability and cash generation, although in segments such as control technology, inductive heating, energy distribution and safety valves for nuclear power, more and more growth opportunities are seen. This means that Kendrion's cash engine is growing. And finally, Kendrion has its focus on China active in all three domains with the same intent, growth in Automotive and IB and profit in IAC. Kendrion has introduced this strategy and the related financial targets in September 2020 and has not been sitting still since the announcement.

Mr Van Beurden elaborated on the transformation of Kendrion over the past two pandemic disrupted years. Despite the pandemic, Kendrion has taken several bold steps to strengthen the company and improve its strategic position. In Q1 2020, Kendrion acquired INTORQ, substantially strengthening Kendrion's position in industrial brakes, as these brakes are mostly sold integrated with an electromotor. This is a play on the accelerating and broadening electrification in almost all markets like intralogistics, robotics, wind power and more. Two years later, Kendrion acquired 3T, which again strengthened Kendrion in a segment of significant growth, industrial control technology, and it also gives Kendrion critical mass in its ability to develop and deliver software and electronics, and this is strategically important for Automotive. These two acquisitions have changed the revenue profile of the group. Kendrion has become a more balanced company as Industrial and Automotive both represent around 50% of group revenue. In December 2021, Kendrion broke ground on a 28,000 square meter manufacturing facility in Suzhou to facilitate significant growth in Kendrion's project pipeline and the many more opportunities Kendrion is after. Over the past two years, Kendrion has invested around EUR 121 million, all in line with Kendrion's strategic intent. This is also reflected in the financials, which show that revenue is up 12% since 2019, despite the pandemic and despite the passenger car market shrinking over the past two years because of the pandemic and the EBITDA grew with 29% over the same period. This means that Kendrion grew and also improved the profitability as a percentage of revenue on the way to its target of 15% in 2025.

Mr Beurden continued with sharing some highlights of the past year, starting with IAC. IAC is active in around 30 different product market combinations and one of the tasks of IAC management is to invest in those segments that offer potential for growth while ensuring other segments are optimised for profitability and cashflow. In IAC some segments, especially the ones related to energy transition, are offering opportunities for substantial growth. On the actuator side, rotary solenoids for use in intralogistics and a newly developed rotary lock for industrial washing machines, are both growing fast with a lot more potential going forward. Kendrion has divested its 30% share in Newton but retained the exclusive manufacturing rights. The production for Newton's drink dispensing valves in Mishawaka, US, is starting. On the control side, the development of a 20-kilowatt inductive heating system has started, and inductive heating is again a play on the energy transition because it replaces gas- and oil-based heating systems. Kendrion had a record revenue year for the controls for inductive heating systems there. The 3T integration is going well, and the IAC-team is looking at opportunities in all markets and is finding more and more opportunities to

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grow while retaining its focus on cashflow and profitability. In summary, Kendrion's cash engine is progressing according to plan.

Mr Van Beurden elaborated on 3T. 3T offers a significant enhancement of IAC's control technology portfolio with substantial cross-selling opportunities. Kendrion has embedded the 3T organisation into IAC and 3T has hired the first automotive software and electronics engineers in Enschede. Software and electronics are becoming ever more important for industrial and automotive products. An fte-growth is foreseen in the coming years, so they have decided to open an office at the high-tech campus in Eindhoven as per 1 July 2022.

Mr Van Beurden continued with the highlights of IB. IB had a good year. Volumes were up substantially in almost all markets and segments driven by the accelerating electrification. Despite a difficult supply chain, Kendrion managed to deliver its key customers on time. Kendrion has also transitioned its UK-based service business to Villingen. On the product side, Kendrion continues to be successful with its new brake portfolio focused on robotics and the logistics market segment and it does not stop there. The IB-team has initiated Project Vision 2030 to define the direction and especially the product roadmap for the long term. In Suzhou, where they anticipate strong growth the coming years, Kendrion has started a project to further expand the manufacturing and R&D-capabilities. Mr Van Beurden mentioned Kendrion's local-for-local- strategy. Summarizing, Kendrion is doing well in Industrial. In some cases, IAC and IB are teaming up to develop commercial opportunities together.

Mr Van Beurden explained that an AGV is an Automated Guided Vehicle, a robot, mostly used in internal logistics to help with order collection, packaging, sorting and distributing. It is a growth market as more and more orders are being placed online, and more and more packages are being delivered from automated warehouses. These AGVs are globally proliferating and with IAC and IB Kendrion has a whole range of products to offer. For both businesses this is an interesting segment.

Mr Van Beurden continued with Automotive. The Automotive market has been negatively affected by the pandemic. According to IHS Markit, vehicle production in 2020 was 16% lower than in 2019 and in 2021, it was stable at 76 million cars. It is expected to take until 2024 to return to the 2018 production levels. Despite having not much growth in the number of cars, there is a significant opportunity in electrified vehicles (ACES), which are forecasted to grow with 44% per year. As the proportion of total vehicle production, the share of electrification is expected to rise from around 1% in 2018 to 26% in 2026. All major OEMs and tier ones are investing heavily in Autonomous, Connected, Electrified and Shared mobility (ACES). Kendrion is also investing in its product roadmap, its commercial organisation and its software and electronics capabilities to make full use of this important trend. Kendrion's acquisition of 3T is an example of that.

Mr Van Beurden explains that a new automotive era is arriving much faster than originally anticipated. Every day one of the leading OEMs, tier ones, new entrants, governments announce about investing in electrification of cars. In summary, the internal combustion engine is being superseded as the beating heart of a car by the electronics that control the safety and infotainment systems. This is a significant transition in which software and electronics are the major components of a vehicle. Carmakers will have to become more like technology firms. Kendrion aims to be part of this change.

Mr Van Beurden continued with the nominations in 2021. Kendrion is keeping track of the nature of the nominations in two categories, one related to the traditional combustion engine or the ICE (legacy) and the other independent of the propulsion method and directed towards the ACES. In 2019, Kendrion won EUR 305 million worth of new business, which represents a book-to-bill ratio of 1.3. 60% of these nominations is related to ACES and 40% to legacy. A major nomination driver were successful sound projects with Kendrion's Phantone product line, representing around EUR 120 million of nominations in 2021. Over the past four years Kendrion has won around EUR 1.25 billion in business, adjusted for the effect of some cancellation on the one hand and extensions of legacy revenue on the other. This represents on average a book-to-bill of 1.3 over the four years, and one begins to see it in Kendrion's revenue line.

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