Zumtobel Group AG Annual Financial Results 2017/18 & Update on strategy development process

28 June 2018

title of presentation (change at 1st slide inside the slide master)|| xx.xx.xxxx Thomas Tschol – Chief Financial Officer (CFO) of

Education

Toulouse Business School – France Double degree program with the TU – Germany Degree in business administration

Business Experience

Oct 2017 – Mar 2018 Konzern Industrie-Anlagenbau/montage – Restructuring Manger Apr 2017 – Sept 2017 Asamer Baustoffe AG – Austria Chief Financial Officer Jan 2013 – Mar 2017 Mayr-Melnhof Holz Holding AG – Austria Chief Financial Officer Oct 2011 – Mar 2012 KLH UK Ltd. – United Kingdom Finance Manager Feb 2010 – Aug 2011 Trenkwalder International AG – Austria Chief Financial Officer Since 2001 Management Factory Corporate Advisory GmbH – Austria Co-founder, Managing Director 1997 – 2001 Cap Gemini Ernst & Young AG – Austria Consultant

Annual Financial Results & Outlook on strategy development process||28.06.2018 2 Weak revenues dynamic leads to lower profitability Financials FY 2017/18 at a glance

. Group revenues 8.2% below prior year, UK and negative FX effects are the biggest drivers for this decline

. Group adj. EBIT decreases from EUR 72.4 million to EUR 19.7 million driven by:

. missing contribution from revenues growth

. ongoing intense price competition

. Corrective actions initiated - fix costs (selling, development & administrative expenses) favourable influenced by saving measures

. Net profit falls to minus EUR 46.7 million (PY: plus EUR 25.2 million) – no dividend is planned for the 2017/18 financial year

. Construction of the new production plant in Serbia on plan

. The new strategy as well as revised medium-term goals will be presented in connection with Q1 2018/19 results

Annual Financial Results & Outlook on strategy development process ||28.06.2018 3 Significant decline in revenues as well as in adjusted EBIT Lighting Segment – Revenue and EBIT development

Lighting Segment

Revenues Adjusted EBIT1)

-11.8% 9.1% -1.6% (fx-adj. -10.4%) -15.0% 6.3% (fx-adj. +0.1%) -7.9% (fx-adj. -12.1%) (fx-adj. -5.5%) 2.8% 2.8% 266.0 5.4% 252.9 -0.2% 248.7 244.7 234.7 232.4 24.1 0.5% -2.1% 214.1 214.8 15.7 13.2

6.6 7.0

-0.4 1.2 -4.5

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Revenues 2016/17 Revenues 2017/18 Adjusted EBIT 2016/17 Adjusted EBIT 2016/17 In EUR million In EUR million Adjusted EBIT 2017/18 Adjusted EBIT 2017/18 in EUR million as a % of revenues Revenues FY 2017/18 EUR 908.3 million (minus 9.2%) Adjusted EBIT FY 2017/18 EUR 9.4 million (margin of 1.0%) Revenues FY 2016/17 EUR 999.9 million Adjusted EBIT FY 2016/17 EUR 53.5 million (margin of 5.3%) 1) Reported EBIT adjusted for special effects

Annual Financial Results & Outlook on strategy development process ||28.06.2018 4 Negative growth dynamic but sound profitability Components Segment – Revenue and EBIT development Components Segment

Revenues Adjusted EBIT1)

-8.7% 13.6% -6.9% 11.3% (fx-adj. -6.6%) -3.4% -7.0% 10.3% (fx-adj. -3.3%) 9.2% (fx-adj. -0.9%) (fx-adj. -3.8%) 9.0% 9.9% 97.3 8.1% 93.4 90.2 91.1 95.5 6.1% 88.8 84.8 88.9 12.7 10.1 8.8 8.9 9.3 8.8 7.2 5.2

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Revenues 2016/17 Revenues 2017/18 Adjusted EBIT 2016/17 Adjusted EBIT 2016/17 In EUR million In EUR million Adjusted EBIT 2017/18 Adjusted EBIT 2017/18 in EUR million as a % of revenues Revenues FY 2017/18 EUR 352.7 million (minus 6.5%) Adjusted EBIT FY 2017/18 EUR 31.4 million (margin of 8.9%) Revenues FY 2016/17 EUR 377.2 million Adjusted EBIT FY 2016/17 EUR 39.6 million (margin of 10.5%) 1) Reported EBIT adjusted for special effects

Annual Financial Results & Outlook on strategy development process ||28.06.2018 5 Profitability hit by lower volume and pricing pressure Zumtobel Group – Revenue and EBIT development

Zumtobel Group

Revenues Adjusted EBIT1)

-2.6% -10.1% 9.4% -12.7% (fx-adj. -0.7%) (fx-adj. -8.3%) -7.3% (fx-adj. -9.5%) 6.2% (fx-adj. -4.5%) 3.3% 3.1% 341.6 330.5 5.7% 325.7 317.2 0.7% 307.3 306.1 283.7 288.4 32.0 0.1% -0.3%

20.1 18.2

10.0 10.4 2.1 0.2 -0.8

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Revenues 2016/17 Revenues 2017/18 Adjusted EBIT 2016/17 Adjusted EBIT 2016/17 In EUR million In EUR million Adjusted EBIT 2017/18 Adjusted EBIT 2017/18 in EUR million as a % of revenues Revenues FY 2017/18 EUR 1,196.5 million (minus 8.2%) Adjusted EBIT FY 2017/18 EUR 19.7 million (margin of 1.6%) Revenues FY 2016/17 EUR 1,303.9 million Adjusted EBIT FY 2016/17 EUR 72.4 million (margin of 5.6%) 1) Reported EBIT adjusted for special effects

Annual Financial Results & Outlook on strategy development process ||28.06.2018 6 Simplified illustration to highlight main building blocks of the adj. EBIT development Zumtobel Group – adj. EBIT FY 2016/17 vs. FY 2017/18

Lower volume as well as increasing price pressure lead to lower absolute contribution margin (more than 80% is attributable to the lighting segment). Result of cost Primarily lower cutting initiative income from 72.4 - 74.0 licenses

Efficiency gains through group-wide bundling of R&D capacities

+ 16.2 -3.9 19.7

+ 9.0

Adj. EBIT ∆ Gross Profit R&D Selling & Other income Adj. EBIT FY 2016/17 (before R&D) Administrative FY 2017/18 [in EUR million]

Annual Financial Results & Outlook on strategy development process ||28.06.2018 7 Net profit at minus EUR 46.7 million Zumtobel Group – Income statement

in EUR million FY 2017/18

Adjusted EBIT 19,7 Special effects related to adjustments to the as a % of revenues 1,6 global plant network, streamlining of management and impairment charges Special Effects -27,0

EBIT -7,3

s a % of revenues -0,6

Financial results -16,4 Deferred taxes of EUR 18.2 mio resulted Profit before tax -23,7 primarily from higher valuation discounts Income taxes -23,0 for deferred taxes on loss carryforwards.

thereof current taxes -4,9

thereof deferred taxes -18,2

Net result for the period -46.7

Annual Financial Results & Outlook on strategy development process ||28.06.2018 8 Free cash flow at minus EUR 23.9 million Zumtobel Group – Cash flow statement

in EUR million FY 2017/18 FY 2016/17 Free cash flow development Cash flow from operating results 53.5 114.1 (cumulative figures in EUR million) Change in working capital 18.8 6.5 Change in other operating items -16.8 -8.0 Taxes paid/received -5.8 -5.1 69.4 Cash flow from operating activities 49.7 107.5 Inflows form the disposals of property, plant and equipment 4.2 5.0 41.5 40.6 Inflows form the sale of associates 0.5 0 Outflows for the purchase of property, plant and equipment -69.0 -45.2 and other intangible assets 7.4 Outflows for the acquisition of associates -3.5 0

Change in current and non-current financial assets -2.7 2.1 -26.4 -22.5 -23.9 Change in liquid funds from changes in the consolidation range -3.2 0 -39.3 Cash flow from investing activities -73.6 -38.1 -39.3 Free cash flow -23.9 69.4 Q1 H1 Q1-Q3 FY Cash flow from financing activities 23.5 -66.7 FY 2016/17 FY 2017/18

Annual Financial Results & Outlook on strategy development process ||28.06.2018 9 Continued solid balance sheet structure and secured liquidity position Zumtobel Group – Key balance sheet data

in EUR million 30 April 2018 30 April 2017 . Net debt totalled EUR 146.3 million as of 30 April 2018 (30 April 2017: EUR 91.0 million) Total assets 986.1 1,019.6

Net debt 146.3 91.0 . Secure liquidity position backed by: Debt coverage ratio 2.70 0.86  Syndicated credit facility with a term ending November 2022 and a current max. volume of EUR 250 million Equity 268.3 334.0 (EUR 115 million drawn by 30 April 2018) Equity ratio in % 27.2 32.8  Two bilateral bank credit agreements of EUR 40 million each with a term extending to September 2018 respectively Gearing in % 54.5 27.2 January 2020 (fully drawn by 30 April 2018) Investments 69.0 45.2  Uncommitted lines of credit totalling EUR 84.5 million as of

Working capital 188.1 220.1 30 April 2018

As a % of rolling 12 months 15.7 16.9 revenues

Annual Financial Results & Outlook on strategy development process ||28.06.2018 10 Revenues decline in most major markets, particularly in UK Zumtobel Group – Regional revenue distribution

Q4 2017/18 FY2017/18 Change in % Revenues in Change in Revenues in EUR million % EUR million nominal FX adjusted

D/A/CH 83.2 -10.5 357.7 -6.3 -4.6

Northern 67.2 -24.6 271.8 -20.4 -17.3

Benelux & Eastern Europe 43.9 +9.8 182.8 +10.4 +12.1

Southern Europe 45.0 0.0 178.9 -2.3 -2.3

Asia & Pacific 26.1 -20.2 120.4 -5.2 +0.2

Middle East & Africa 16.7 -1.1 55.3 -9.7 -5.5

America 6.4 -54.2 29.7 -32.2 -27.6

Total 288.4 -7.3 1,196.5 -8.2 -5.8

Annual Financial Results & Outlook on strategy development process ||28.06.2018 11 Development of the construction industry in Europe Latest estimates: Growth continues but at lower pace – UK shrinking

New construction 7,8% Renovation

6,0%

3,8%

2,2% 2,0% 1,9% 1,8% 1,5% 1,3% 1,2% 1,4% 1,4% 0,8% 0,9%

2014 2015 2016 2017 20182019 2020

Quelle: Euroconstruct Konferenz Helsinki (Nr.85) – 8. Juni 2018 (Forecon)

Annual Financial Results & Outlook on strategy development process ||27.06.2018 12 Zumtobel Group Outlook Update on strategy development process

Target: . To strengthen the focus on customers while reducing complexity and costs . Re-establish a stable foundation for profitable growth in the future

Short Term Priorities – stabilising the business: . Stabilise sales development . Lean structures – focus on streamlining management and administrative functions . Efficiency improvements in operations / supply chain

Strategy development process: . All structures and corporate processes as well as business areas, markets, brands and product portfolios are currently analysed in an open discussion . External consultant supports the management team . Results will be presented, at the latest, in connection with Q1 release on 4 September 2018

Annual Financial Results & Outlook on strategy development process ||28.06.2018 13 Zumtobel Group Outlook Cautious optimism for the 2018/19 financial year

. We see 2018/19 as a year of transition in which we must do everything to stabilise the operating business and, at the same time, re-establish a stable foundation for profitable growth in the future.

. The forecast for revenues and earnings in the 2018/19 financial year is connected with substantial uncertainty due to the upcoming major changes in the company, the generally aggressive price competition in the lighting industry and the noticeable deterioration in the operating environment in Great Britain, the Zumtobel Group’s most important market.

. We expect a further decline in revenues, especially during the first half-year. For the full 2018/19 financial year, the Management Board has set a goal to generate a slight year-on-year improvement in adjusted Group EBIT (FY 2017/18: EUR 19.7 million). Further non-recurring charges from the strategic reorientation are also highly probable in the coming quarters.

Annual Financial Results & Outlook on strategy development process ||28.06.2018 14 Back-up The Management Board The reorganisation of the Management Board is completed

Management Board

Alfred Felder Thomas Tschol Bernard Motzko Chief Executive Officer Chief Financial Officer Chief Operating Officer

Annual Financial Results & Outlook on strategy development process ||28.06.2018 16 ZGS revenues grow by 11.6% to EUR 179.0 million in FY 2017/18 Zumtobel Group – ZGS revenue development

Zumtobel Group

ZGS revenues . Evolved customer needs drive new integral +17.5% +9.5% service offerings +8.4% +9.9% . ZGS bundles all services of the Zumtobel 53.5 45.6 Group within one business unit 43.3 39.5 41.0 41.2 37.8 37.5 . Turn Key solutions as well as connectivity systems (incl. emerging lighting) are the biggest revenues drivers within the ZGS offering

Q1 Q2 Q3 Q4 ZGS revenues 2016/17 ZGS revenues 2017/18 In EUR million In EUR million

Annual Financial Results & Outlook on strategy development process ||28.06.2018 17 LED share of group revenues increases to 79.6% (PY: 73.6%) Zumtobel Group – LED revenue development

Zumtobel Group

LED revenues . LED revenues in FY 2017/18 declined by 0.8% to

+8.0% -0.7% -7.0% EUR 952.0 million -3.0% . LED share of group revenues increases to 79.6% 245.8 251.1 249.4 250.5 233.0 (PY: 73.6%) 227.7 230.7 223.9 . Lighting Segment sales with LED products decline by 2.6% to EUR 713.4 million (LED Penetration 78.5%)

. LED sales in Components Segment grow by 2.6% to EUR 298.5 million (LED Penetration 84.6%)

Q1 Q2 Q3 Q4 LED revenues 2016/17 LED revenues 2017/18 In EUR million In EUR million

Annual Financial Results & Outlook on strategy development process ||28.06.2018 18 Working capital below prior year level Zumtobel Group – Working capital

Working capital

in % of rolling 12-month revenues

. Working capital at EUR 188.1 million as of

20.4% 20.1% 30 April 2018 (PY: EUR 220.1 million) 18.7% 19.2% 18.9% 18.0% 18.2% 17.9% 17.3% 17.0% 16.9% . In % of rolling 12-month revenues, working 15:7% capital down to 15.7% (PY: 16.9%)

Q1 Q2 Q3 Q4

FY 2015/16 FY 2016/17 FY 2017/18

Annual Financial Results & Outlook on strategy development process ||28.06.2018 19 Supplement data on Special Effects Zumtobel Group – Special Effects

Special Effects: EUR 27.0 million

Adjusted EBIT in EUR million FY 2017/18 FY 2016/17

Reported EBIT -7.3 45.8

Thereof special effects -27.0 -26.6

Adjusted EBIT 19.7 72.4

Major positions: . Impairment charges: EUR 9.7 million, thereof EUR 6.9 million for write-down to a subsidiary in Great Britain . Restructuring: EUR 15.1 million . Thereof EUR 5.8 million with respect to the sales of the plant in Les Andelys . Thereof EUR 3.7 million with respect of the streamlining of the management . Thereof EUR 1.1 million for restructuring of the plant in Guangzhou . Thereof EUR 0.8 million for the shutdown of the plant in Usingen

Annual Financial Results & Outlook on strategy development process ||28.06.2018 20 Five-Year Overview

in EUR million 2017/18 2016/17 2015/16 2014/15 2013/14 Revenues 1,196.5 1,303.9 1,356.5 1,312.6 1,246.8 Adjusted EBIT 19.7 72.4 58.7 66.5 47.6 as a % of revenues 1.6 5.6 4.3 5.1 3.8 Net profit/loss for the period -46.7 25.2 11.9 11.9 -4.8 as a % of revenues -3.9 1.9 0.9 0.9 -0.4 Total assets 986.1 1,019.6 1,068.6 1,086.3 1,006.6 Equity 268.3 334.0 333.2 322.6 327.6 Equity ratio in % 27.3 32.8 31.2 29.7 32.5 Net debt 146.3 91.0 134.8 148.2 126.2 Cash flow from operating results 53.5 116.8 84.8 103.1 79.5 Investments 69.0 45.2 58.4 76.6 65.6 as a % of revenues 5.8 3.5 4.3 5.8 5.3 R&D total 73.4 82.4 87.9 79.0 71.8

as a % of revenues 6.1 6.3 6.5 6.0 5.8

Headcount incl. contract worker (full-time equivalent) 6,224 6,562 6,761 7,234 7,291

Annual Financial Results & Outlook on strategy development process ||28.06.2018 21 Financial Calendar

. June 28, 2018 Annual Results 2017/18 (1 May 2017 – 31 April 2018)

. July 17, 2018 Record Date fort he Annual General Meeting

. July 27, 2018 42nd Annual General Meeting

. July 31, 2018 Ex-Dividend Day

. August 1, 2018 Record Date Dividende

. August 2, 2018 Dividend Payout Day

. September 4, 2018 Report on the First Quarter 2018/19 (1 May 2018 – 31 July 2018)

. December 4, 2018 Report on the First Half-year 2018/19 (1 May 2018 – 31 October 2018)

. March 5, 2019 Report on the First Three Quarters 2018/19 (1 May 2018 – 31 January 2019)

Annual Financial Results & Outlook on strategy development process ||28.06.2018 22 Many thanks for your attention!

title of presentation (change at 1st slide inside the slide master)|| xx.xx.xxxx Disclaimer

The facts and information contained herein constitute forward-looking statements as of the date they were made and based upon assumptions as to future events or circumstances that may not prove to be complete or accurate. By their nature, these statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and are difficult to predict. Therefore, actual outcomes or results may differ materially from what is expressed, implied or forecasted in these statements. Neither Zumtobel Group AG nor any of its directors, officers, employees or advisors nor any other person makes any representation or warranty, expressed or implied, as to the accuracy or completeness of the facts and information contained in this document or the related oral presentation thereof, including responses to questions following the presentation. Neither Zumtobel Group AG nor any of its directors, officers, employees and advisors nor any other person shall have any liability whatsoever for loss howsoever arising, directly or indirectly, from any use of this document, the facts and/or information.

Whilst all reasonable care has been taken to ensure the facts stated herein are accurate and that the assumptions and opinions contained herein are fair and reasonable, this document is selective in nature and is intended to provide an introduction to, and overview of, the business of Zumtobel Group AG as of the date this document was made. Where any information and statistics are quoted from any external source, such information or statistics should not be interpreted as having been adopted or endorsed by Zumtobel Group AG as being accurate.

Contacts: Investor Relations Tel.: +43 (5572) 509-1125 [email protected] www.zumtobelgroup.com

Annual Financial Results & Outlook on strategy development process ||28.06.2018 24