MAGAL SYSTEMS Focused Solutions for the World’s Security Needs Kobi Vinokur, CFO

March 2020 1 / SAFE HARBOR/

Statements concerning Magal Security’s business outlook or future economic performance, product introductions and plans and objectives related thereto, and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are "forward-looking statements'' as that term is defined under U.S. federal laws. Forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements.

These risks, uncertainties and factors include, but are not limited to: the effect of global economic conditions in general and conditions affecting Magal Security’s industry and target markets in particular; shifts in supply and demand; market acceptance of new products and continuing products' demand; the impact of competitive products and pricing on Magal Security’s and its customers' products and markets; timely product and technology development/upgrades and the ability to manage changes in market conditions as needed; the integration of acquired companies, their products and operations into Magal Security’s business; and other factors detailed in Magal Security’s filings with the Securities and Exchange Commission. Magal Security assumes no obligation to update the information in this release.

Estimated growth rates and other predictive statements represent Magal Security’s assumptions and expectations in light of currently available information. Estimated growth rates and other predictive statements, are based on industry trends, circumstances involving clients and other factors, and they involve risks, variables and uncertainties. Magal Security’s actual performance results may differ from those indicated in this presentation. Consequently, no guarantee is presented or implied as to the accuracy of specific forecasts, projections or predictive statements contained herein.

In addition, there is uncertainty about the spread of the COVID19 virus and the impact it will have on the Company’s operations, the demand for Company’s products, global supply chains and economic activity in general.

2 / MAGAL AT A GLANCE /

Market Cap: $58M 2019 Total Revenue: $86.8M Technology Focus Global Presence Israel Recurring 11% 22% Revenue Europe Enterprise R&D & 13% Products ~20% Total Value Technicians North America Net Cash 40% Employees $11m 175 South and Latin America $51m Projects 420 9% 22% 60% Africa

23% Others

7% of revenues spent on R&D • Leader in customized security products and turnkey solutions with decades of experience • Growing presence with focus on key vertical markets • Two operating divisions • Magal Security global provider of turnkey projects • Senstar recognized tech-rich product brand • Scalable model – near-term goal to increase revenue by 50% and increase EBITDA margin from 9% to 14%

* Financial metrics reflect calendar year as of 12/31/2019

3 / MAGAL DELIVERS SOLUTIONS IN HIGHEST GROWTH SEGMENT /

Security is a Global Problem Projected to Grow at a CAGR of 10% to Over $526 Billion by 2026*

Industry Growth Drivers

• Increasing security threats to and populations • Increasing government regulation to fight terrorism • Rising labor costs driving tech-based solutions Magal operates in one of the highest growth market segments - to safeguard people, places and materials

Electronic Access Control VMS Video Surveillance System Integration Perimeter Intrusion Remote Detection Monitoring Systems

4 * Source: Verified Market Research, Global Security Solutions Market report October 2018 / CORE MAGAL MARKET - PERIMETER INTRUSION PROTECTION /

Protecting While Meeting Operational and Regulatory Requirements

Electronic VMS Command and Access Control Video Analytics Control EAC Symphony FORTIS Fence Mounted Sensor FlexZone / FiberPatrol Covert Sensor OmniTrax

VMS Video Analytics Intelligent Lighting / Symphony Fence Sensor Senstar LM100

Volumetric Sensor XField

Microwave Sensor UIltraWave

5 / TARGETING KEY VERTICAL MARKETS /

Characteristics Have unique security AIRPORT BORDERS OIL & GAS CORRECTIONS requirements suited to Magal’s capabilities • Vulnerable - readily accessible to public REGULATED CRITICAL • Increasingly use tech- CANNABIS SAFE CITY INFRASTRUCTURE LOGISTICS centric products • Require tailored solutions

MILITARY VIP SITES FACILITIES SMART CITY SEAPORTS

6 / MAGAL’S TWO OPERATING DIVISIONS/

~40% of ~60% of Revenues revenues

Product division – tech-rich, proprietary Project division - turnkey security projects globally • Perimeter intrusion detection systems (PIDS) • Perimeter intrusion protection for critical • Advanced Video Management Software (VMS) infrastructure security • Intelligent Video Analytics (IVA) • Comprehensive solutions offering • Electronic Access Control (EACS) • Leverages Magal/Senstar’s full suite of products • Symphony - security and information • Features proprietary Fortis 4G Command & management platform Control platform

• Sells to system integrators and distribution channels • Global sales directly to end users or to large-scale contractors • Fastest growing division with highest contribution margins • Large, variable sales to defined customer base with high barriers to entry

7 / GLOBAL FOOTPRINT TO SUPPORT OPERATIONS / / MAIN FACILITIES /

TWO OPERATING DIVISIONS SUPPORTED GLOBALLY Israel / Yehud  Security products under the Senstar brand Corporate HQ & Magal Israel Projects Canada / Ottawa & Waterloo  Security solutions and turnkey projects under the Magal brand PIDS & VMS R&D Centers Manufacturing Mexico / Cuernavaca Projects and Products United States / Philadelphia Fiber Optic Technologies R&D Center Philippines / Clark Technical support center Germany/ Ravensburg and Hanau Product distribution - Europe

8 / PROJECT DIVISION - CORE COMPETENCIES /

Consulting

Analyze and identify Turnkey Security Projects For Maintenance, security concerns Governments And Enterprises Support & Design Training • Comprehensive offering Full suite of support New projects or existing • Recurring revenue from maintenance, options system upgrades or support and training replacements • Customized solutions capabilities Core Project Division Competencies Installation Integration

Over 50 years Full-service systems installation Project integrator experience Management & Supervision

Manage every stage through completion 9 / PROJECT DIVISION – PROPRIETARY INTERGATED SOLUTIONS/

Cyber Security Access Control External Data

FORTIS Proprietary Command and Control Perimeter Systems Facial • Centralized proprietary Physical Security Recognition Information Management (PSIM) monitoring • Holistic integrations for all security and Robots & Drones and Balloons operational systems Anti-drone • Vendor agnostic • Effective decision making on real-time events Integrated by Smart Gates FORTIS 4G Thermal Imaging • Future delivery as cloud solution IVA & LPR CCTV/Cameras Public Address Mobile Forces

10 / PROJECT DIVISON DELIVERS COMPREHENSIVE EFFECTIVE SOLUTIONS /

Project division executes construction and installation using sensors and tech-rich products

11 / SENSTAR PRODUCTS LEVERAGING CORE EXPERTISE TO NEW MARKETS /

Recognized Brand Leader in Security Products VMS • Ranked one of 2019’s top 10 growth brands in Video global physical security sector * Management Competitive advantages – performance, reliability $3.7B and quality IP-rich Proprietary Technology EACS Electronic • 24 issued patents and 8 patents pending Access Control PIDS $550 M • Annual R&D investment of ~$5.5 million $7.5B Expanded addressable market with ESC and VMS acquisitions (2018, 2016) Cross-selling drives growth

* ASMAG.com 2019 a&s Security 50 December 2019 Source: Markets & Markets, June 2018

12 / SENSTAR’S INTRUSION DETECTION FOR UNIQUE SECURITY NEEDS / Case Study

Perimeter security requirements for a critical cargo Challenge – Secure a five-mile airport perimeter subject to airport in North American … harsh weather conditions and surrounded by busy roads, pedestrian traffic and public transportation Solution –Multilayered Perimeter Intrusion Detection Technology • Fiber optic fence-mounted and buried intrusion detection systems • Senstar’s Network Manager software to manage alarms from the multiple systems Outcome – High praise for Senstar’s solution with …where traditional PIDS and video surveillance improved security through improved system management proved ineffective, expensive and unmanageable and lower cost with reduced nuisance alarm rate (NAR)

13 / PRIORITIZING RESOURCES ON FOUR KEY VERTICALS FOR 2020/

• Rapid growth of security needs in these verticals benefit Product and Project divisions • Able to leverage core capabilities, market leadership, new products and high standards • Investing in BD and Sales; targeting for M&A opportunities

Core vertical for product High growth industry division with PIDS for new operational needs - VMS analytics for logistics to track damaged good, and reduce lost CRITICAL LOGISTICS items INFRASTRUCTURE

Market leader in the Magal’s differentiated U.S. with momentum to capabilities and high increase market share standards of quality for security align with this capital-intensive sector’s CORRECTIONS OIL & GAS unique needs

14 / EXECUTING A STRATEGY TO DRIVE GROWTH /

Growth Drivers Divisional Revenue 2017 - 2019 • 2020 focus on growth in key verticals ($ in millions) • Selling core security solutions and Not including divisional eliminations products

• Augmenting with adjacent solutions and $61.0 $52.4 products $28.5 $38.2 $34.9 $36.6 • Continued focus on increasing Senstar 2017 2018 2019 revenue as a percentage of total revenue • Division has delivered consecutive Senstar Product Division Magal Integration Division annual growth past three years • Scalable revenue with higher margin Divisional Revenue and Margin Breakdown contribution • Higher level of investment in R&D 2019 Combined Senstar (*) Magal (*) • Driver of corporate EBITDA growth R&D 7% 14% 2%

Gross Margin 45% 63% 32%

EBITDA Margin 9% 14% 8%

(*) Divisional Contribution

15 / OPERATING LEVERAGE DRIVES CASH FLOW TO SUPPORT GROWTH /

Revenues & Operating Expense EBITDA & EBITDA Margin1 ($ in millions) ($ in millions) 9.4%

7.5% $92.6 $86.8 $8.1

$64.3 $7.0 +44% -6%

1.0% OPEX $32.6 $36.5 $32.7 +12% -10% ($ in millions) $0.6 2017 2018 2019 2017 2018 2019

• Revenue growing faster than expenses • $51.6 million in net cash on balance sheet as of December 31, 2019 • $24 million raised in 2016; currently generating cash • Primary targeted use of cash to acquire new technology, expand geographic presence, gain expertise and/or relationships from M&A

Disclaimer: This is not guidance or a forecast. This information is meant as a representation of the Company operating model targets only. 1. Refer to EBITDA reconciliation table found on Appendix slide 26

16 / M&A STRATEGY TO BOOST REVENUE AND EBITDA /

Magal Acquisition Sweet Spot M&A Strategy • Add synergistic products in growth markets Product New • Leverage existing platform Oriented Geographies • Complete at least one acquisition by year- end 2020 • Support growth goals ~$15 M Revenue Revenue Adjacent To Existing Solutions Revenue • Augment organic low to mid single digit Synergistic Geographies revenue growth with inorganic growth Low $30m adding additional revenue and • Increase EBITDA growth and expand EBITDA margin with operating leverage Existing Project Geographies Oriented

17 / MID-TERM OPERATING MODEL /

Operating Metric Targets* $150 M+ 2019 Versus Target

73%

45 ~40%-45% $86.8 M %

14% 9% +56%

Revenue Gross Margin EBITDA Margin

Continued growth from Senstar Revenue mix from Senstar Higher margin contribution from Product Division, revenue upside Product Division and Magal Senstar Product Division, from Magal Integrated Solutions Integrated Solutions acquisition synergies and and strategic M&A operating expense control

* Reference Magal’s safe harbor statement regarding estimated growth rates and predictive statements

18 / INVESTOR TAKEAWAYS /

• Serving global industry growth with strong macro backdrop in one of fastest growing segments – physical security

• Management team executing a strategy to grow revenue, improve margins and increase profitability

• New focus for 2020 on key high growth verticals leveraging core capabilities and benefiting both business divisions

• Profitable with strong balance sheet and generating cash to fund M&A and investment

19 APPENDIX

20 / SUMMARY BALANCE SHEET/

16.7

21 / SUMMARY BALANCE SHEET/

16.7

22 / SUMMARY INCOME STATEMENT/

16.7

23 / EBITDA RECONCILIATION/

24 / COMPANY HISTORY /

Founded Magal’s Acquisition of Acquisition of within IPO on the CYBERSEAL & AIMETIS Israeli NASDAQ OPTELLIOS Aircraft Industries

/ 1969 / 1984 / 1993 / 1997 / 2013 / 2014 / 2016 / 2018 /

FIMI Magal acquires becomes controlling Acquisition a private Acquisition stake of of control of company of SENSTAR Magal ESC BAZ

25 / MANAGEMENT TEAM PROFILES/

Dror Sharon - CEO Joined Magal in June 2018. Kobi Vinokur – Chief Financial Officer Joined Magal in 2016. Previously president and CEO at Controp Previously chief financial officer of Miya (Arison Precision Technology Ltd., a company Group), a global provider of comprehensive specializing in developing, manufacturing water efficiency solutions and a water utilities and selling Electro Optical and Precision operator. Motion Control Systems for the global Prior to that, he served in several key leadership defense and homeland security markets. positions at Brink's Company; as an executive Controp’s revenue grew significantly while director at Shapira Films, one of the leading film maintaining high profit margins. distribution and production companies in Israel; Prior to that, served in various positions and as head of treasury at the Ministry of including president & CEO at Opgal Defence of Israel. Optronics Ltd. Received CFO Excellence award. Certified public accountant in the United States Doron Kerbel – Vice President, and Israel. General Counsel & Company Secretary Joined Magal in July 2015. Previously, served for more than eight years as legal counsel at Elbit Systems Ltd. Aerospace Division. Extensive experience in advising on variety of commercial legal issues, M&A, and PFI and BOM projects, both locally and internationally. Prior to that, associate lawyer in M. Firon & Co. and as senior legal counsel for International Law at the Israeli Embassy to Fabien Haubert – Senstar Managing Arnon Bram – General Manager Magal the Netherlands. Director Integrated Solutions Joined Magal in 2018 Joined Magal in February 2020. Previously Regional Director at a Previously, served as DIRCM (Directional major UK-based video security Infrared Counter Measures) Business Unit solution provider Manager at Elbit Systems. Prior to that, worked with several Prior to that, CEO of UAV Tactical Systems, companies in the areas of video a JV between Elbit Systems and Thales in management, IP video surveillance, the UK. intrusion detection, access control and Extensive experience in international sales, system integration. multi-year strategy setting and execution, Extensive experience in sales international customers management, management with many years of multi-disciplinary engineering responsibility for the EMEA region. He development, programs, production and speaks French, English, Spanish, and large scale supply chain management. Italian, and has a working knowledge of Dutch. THANK YOU

Investor Relations Contact: Brett Maas Hayden IR (646) 536-7331 [email protected]

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