SLM : Investor Presentation on H1 report 2020

1H 2020 Earnings Presentation

August 13th, 2020

Disclaimer

This Presentation has been produced by SLM Solutions Group AG (the "Company"), has not been verified independently, and is provided for information purposes only.

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2

2Q/1H 2020 - What went well and what did not?

• Continue to grow revenue in COVID-19 environment. Sales up 90% increase y-o-y in H1
• Taking active measures to improve order backlog
• Minimum impact on the company during shutdown and during short-time work
• Improved cost and cash position
• NextGen on schedule and the launch is set for November 2020
• More customer activities after month of May and improved visibility

• Delayed customers' projects due to COVID-19
• Limited in-person customer interaction; some will remain working remotely through 2020
• Aviation and Oil & Gas industries with prolonged recovery (likely post 2021)
• Machines order intake -38%y-o-y due to COVID-19 crisis
• Orders impacted by timing

While COVID-19 has weighed on SLM's business in H1 2020, the global crisis has increased the visibility of AM to

facilitate reshoring of mass manufacturing and de-risking of supply chains

3

Financial Performance

Continued turnaround of business despite significant challenges due to COVID-19

Financial KPIs

in €m	2Q20	VPY		1H20	VPY
Orders -1)
10.7	(38)%	13.7	(34)%
Backlog -1)	19.2	31%

Commentary

• Order-intakein 1H20 impacted by COVID-19 restrictions while backlog remained healthy despite adjustments (see separate page), experienced uptick in activity at the end of 2Q20

Revenue	13.3	47%	31.2	90%
Machines	10.3	93%	23.8	F
After Sales	3.1	(18)%	7.4	6%
Total Output	13.6	45%	32.1	75%
Gross Profit Margin	57%	12pt	56%	14pt
Personnel expenses	(7.6)	(18)%	(17.4)	(1)%
Other Exp. & Income	(2.9)	(49)%	(6.7)	(24)%
EBITDA	(3.0)	(72)%	(6.0)	(68)%
EBITDA %	(22)%	93pt	(19)%	84Pt
Op. Cash-flow	(2.3)	U	(3.9)	U
Working Capital	37.3	(22)%

• Revenue almost doubled in 1H20 VPY driven by machines sales, after sales impacted by reduced machine run-time due to COVID-19 lockdowns
• Gross Profit improvement driven by better pricing discipline for new deals & supply chain improvements
• Personnel expenses ↓ in 2Q20 driven by state aid programs in Germany & US (€1.2M)
• Improvement in other expenses in 2Q20 mainly driven by lower A/R write-offs (€1.1M), reduced travel expenses (€0.5M) and more focused marketing spend (€0.3M)
• Op. Cash-Flow in 1H19 mainly driven by A/R improvement
  (€16.4M)
• Working Capital ↓ demonstrating better operational rigor across inventory & A/R (see separate page)

1) Related to machines sales, corresponding revenue will be partially recorded as after sales revenue	4
F = Favorable (change >100%); U = Unfavorable (change <(100)%)

Order Backlog

New process implemented to adjust backlog to give investors better indicator of near-term performance

Backlog Walk from 1Q20 to 2Q20	Commentary
in €M	▪ Implemented new process to continuously review order backlog
	▪ If customer down-payment is overdue, assessment of financial
	health, payment history & overall deal structure (i.e. public
	funds) is performed
	▪ If customer cancellation or inability to pay are assessed with a
	probability of at least 75%, order is removed from backlog
	▪ Removed orders totaling 6 machines and €5.6M overall value
	mainly based on customer liquidity concerns despite no order
	cancellations received
	▪ Orders might be re-added to backlog if required down-payments
	are received
	▪ Adjusted backlog will provide investors with a better insight of
	future performance

Despite the challenging times and the performed corrections, backlog increased 31% if compared to the level at 30 June 2019

5

Working Capital

More operational rigor already visible in financials, expect further improvements going forward

Working Capital Development

90%
			83%
80%	82%
		78%
70%		71%

47.7 46.9

60%	42.1	59%

50%	38.4	37.3
40%
30%
20%
10%

0%

2Q19	3Q19	4Q19	1Q20	2Q20
		Working Capital (€m)			Working Capital Intensity 1)

What Has Changed vs. the Past

70.0 Accounts Receivables

• Focus on upfront screening of customer health & improved

60.0 payment terms with higher down-payment amounts

50.0 ▪ Weekly past due calls w/ better coordination across departments

• Process adjustments to improve billing quality driven by system

40.0 limitations

Inventory

30.0 ▪ Moved from Make-to-Stock to Build-to-Order process in 2H19

20.0 ▪ Improved rigor in inventory management focusing on safety stock levels, lead times & supplier relationships

10.0 ▪ Line-by-line review & definition of action plans for aging items

0.0 ▪ Implementation of Tableau dashboards to allow real-time monitoring

Accounts Payables

• Achieved price & payment terms improvement with key suppliers

WC intensity significantly improved over last year driven by more efficient operations despite not all changes yet reflective in numbers

• Started to centralize indirect spend to improve payment terms, # suppliers & overall spend
• Lower A/P balance VPY driven by better control of direct material spend

1) Working capital intensity calculated as working capital divided by revenue in the last twelve months	6

NextGen Machine Will Deliver Game-changing Revolution in the Application of Metal AM Into Mass Manufacturing

NextGen Machine to Pave the Way for AM Industrialization

Exceptional performance with state-of-the-artmulti-laser technology and numerous innovations beyond current standards

Superior productivity on large format with square build plate

Setting new industry standard enabling cost efficient mass production

First time a metal AM printer enables	Driving transformation of supply
cost efficient mass manufacturing	chains serving the increasing demand
paving the way for an industrialization	for localization and flexibility of
of the technology	production capacities

Global launch event in November 2020

Multichannel Launch1)

• Digital launch event from SLM Headquarters with global reach
• VIP events for customers, press and financial community
• Digital marketing campaigns

Combination of global digital launch

event and booth presence at FormNext1)

1) Depending on further development of COVID-19 situation	7

Summary Highlights and Guidance

	COVID-19 slowed our plans, but we
1	are well positioned for growth
	when the market picks up
	Current environment likely to
2	accelerate demand for AM in the
long-term to facilitate reshoring and
	flexibility of mass manufacturing

3	SLM's NextGen machine on track for
launch in November 2020
4	Great progress on products'
industrialization with availability >90%

Guidance	2019	Change	2020
Sales	€49m	Significant improvement	20%+ VPY-1)
EBITDA	Negative €26m	Significant improvement	Negative €13-18m

Assuming no drastic deterioration of the current COVID-19 situation.

1) Versus prior year	8

Q&A