Investor Presentation Ju July 2020
Forward Looking Statements This presentation contains statements that are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, any financial or other guidance, statements that reflect our current expectations concerning future results and events, and any other statements that are not based solely on historical fact. Forward-looking statements are based on management's expectations, certain assumptions and currently available information. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and are based on various assumptions as to future events, the occurrence of which necessarily are subject to uncertainties. These forward-looking statements are made subject to certain risks, uncertainties and other factors, which could cause our actual results, performance or achievements to differ materially from those presented in the forward-looking statements. Examples of factors that may affect future operating results and financial condition include, but are not limited to: changes in the economy generally and in respect to the businesses in which CTS operates; unanticipated issues in integrating acquisitions; the results of actions to reposition our businesses; rapid technological change; general market conditions in the automotive, communications, and computer industries, as well as conditions in the industrial, defense and aerospace, and medical markets; reliance on key customers; unanticipated natural disasters, pandemics, or other events; the ability to protect our intellectual property; pricing pressures and demand for our products; unanticipated developments that could occur with respect to contingencies such as litigation and environmental matters as well as any product liability claims; and risks associated with our international operations, including trade and tariff barriers, exchange rates and political and geopolitical risks. Many of these, and other, risks and uncertainties are discussed in further detail in Item 1A. of CTS’ Annual Report on Form 10-K. We undertake no obligation to publicly update our forward-looking statements to reflect new information or events or circumstances that arise after the date hereof, including market or industry changes. The information provided in this presentation includes certain non-GAAP financial measures. These non-GAAP financial measures should not be considered in isolation or a substitute for the comparable GAAP financial measures. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures is included in the Appendix of this presentation. 2
Solid Foundation With Opportunities For Growth We aim to be a leading provider of sensing and motion devices as well as connectivity components, enabling an intelligent and seamless world. Telec ecom om Europe Eur & IT Aero ero & Defen ense 14% 14% 3% 3% 9% 9% Medical Nort orth 11% 11% America Am Asia Asia $418 $418 56% 56% 30% 30% Mill illio ion 57% 57% 20% 20% Indu ndust strial Sales es/T /Tec echn hnical Of Office Tran ansportation Manuf ufacturi ring g Faci cility Note: Sales by region and end market based on trailing twelve months sales as of June 30, 2020 3
Broad Product Portfolio Around Targeted Strategy ▪ ▪ ▪ Controls EMI/RFI Filters Piezoelectric Products ▪ ▪ Pedals Frequency Control ▪ Products Rotary Actuators ▪ Piezoelectric Products ▪ RF Filters ▪ Position Sensors ▪ Specialty Capacitors ▪ Switches ▪ Specialty Resistors ▪ Temperature Sensors ▪ Transducers 4
Transportation Market t Sect ctors Rele elevant Products Ele Electric/Hybrid Commercial Lig Light Vehicles Mot otorcycles Vehicles Vehicles/Off-Road ▪ Accelerator Pedals Key Cu Customers ▪ Position Sensors ▪ Temperature Sensors ▪ DPF RF Sensors ▪ Smart Actuator 5
Industrial Market t Sect ctors Rele elevant Products Inkjet Print Hea eads HVAC Systems Commercial Son Sonar Flo Flow Metering ▪ Piezoelectric Components Key Cu Customers ▪ Transducers ▪ Sensors & Controls ▪ Switches ▪ EMI/RFI Filters 6
Medical Market t Sect ctors Rele elevant Products Ultr ltrasonic Imag aging Therapeutic Ultr ltras asound De Dental Equi quipment Equ quipment Control Pan anel ▪ Piezoelectric Components Key Cu Customers ▪ Sensors & Controls ▪ Switches ▪ Frequency Control Products ▪ EMI/RFI Filters 7
Aero & Defense Market t Sect ctors Rele elevant Products Torp orpedo/Missi sile Airplane Airp Sonobuoys Son Hydrophones Control Communications ▪ Piezoelectric Components Key Cu Customers ▪ Transducers ▪ RF Filters ▪ Temperature Sensors ▪ Frequency Control Products 8
Telecom & IT Market t Sect ctors Rele elevant Products Mac acro Cell Sm Smal all Cel ell Satellite Sa Wir ireline/ Bas ase St Stations Bas ase St Stations Communication Network Swit itching ▪ Piezoelectric Components Key Cu Customers ▪ RF Filters ▪ EMI/RFI Filters ▪ Frequency Control Products ▪ Temperature Sensors 9
End Markets Growing Mid-Single Digits Tran anspor ortatio ion Ind ndustria ial Medic Med ical Aero & Ae & De Defense Tel elecom & & IT 3% 3% 9% 9% 11% 11% 57% 57% 20% 20% LV 30 30-50% 50% Goa oal 20 20-30% 30% 10 10-20% 20% 5-15 15% 10 10-20% 20% CV 10 10-20% 20% SAM $3.4B $3 $2.2B $2 $0 $0.4B $0 $0.9B $1.9B $1 ▪ Booked Business, Share Gains ▪ 3D and textile printing ▪ Medical 3D/4D ultrasound ▪ Hydrophones for sonar ▪ 5G infrastructure build out – applications massive MIMO and small cell ▪ Actuators – Asia/EU customers ▪ Applications in flow, level and ▪ HMI control for medical devices deployment ▪ Military communication temperature sensing ▪ RF Sensing for particulate filters ▪ Wireless pacing and ultrasound- ▪ High-speed wireline networks ▪ Up-integration into sensors ▪ Up-integration into sensors based drug delivery ▪ Increased Sensor Content ▪ Advanced fingerprint security, and transducers and transducers ▪ Increased temperature sensor haptics for mobile device ▪ Industrial automation and IOT ▪ Penetration into European needs applications defense market ▪ Dental and therapeutic ▪ Textured piezo material ultrasound applications Enhancing Sales And Product Management For Organic Growth 10
Strategic M&A Approach Enhance En Br Broa oaden Ex Expand Strengthen Str Tec echnology Geo Geographic ic Product Cus Customer Por ortf tfolio Rea each Range Ra Rela lationship ips Ca Case Stu tudy: Succ ccessfully ly Bu Built ilt Br Broad Pie iezoele lectric Ce Ceramic Growth Pla latf tform Pre 2016 2016 2016 2016 2017 2017 2018+ 2018 Singl Sin gle Crystal Tec echnology Tap ape Cas ast Tec echnology Bul ulk Tec echnology Rob obust Do Double-Digit Sin Singl gle-Digit Growth Double-Digi Dou git Growth Singl Sin gle-Digit Growth Growth Pla latform SAM AM : : $7 $714 14M SAM AM : : $9 $968 68M $1 $1.7B .7B (>2 (>2x SAM AM ) 11
QTI Sensing Solutions Acquisition Company Over Co erview Acq cquis isit ition Ratio tionale le ▪ ▪ Founded in 1977, facilities in Boise, ID and Tecate, Mexico Provides CTS a new core temperature sensing technology ▪ ▪ QTI Sensing Solutions is a leading designer and manufacturer Increases presence in growing industrial, aerospace, of high quality, high performance temperature sensors defense and medical end markets ▪ ▪ QTI has a broad product portfolio to measure temperature in Expands OEM customer base and enables cross-selling gas, liquid or solid mass to ensure equipment performance ▪ Potential to build a temperature sensing platform and reliability ▪ Global market opportunity of >$1.1 billion ▪ Portfolio includes thermistor and RTD based products with temperature sensing capabilities currently range from -200C to +450C Products Appli lications Cu Customers HVAC & & Aero rospace & & Med edic ical & & Prec ecis ision on Refr efrig igera ratio tion Defe fense Ins nstru trumen enta tati tion on Pool ool & & Spa pa Fo Food od Ser ervic ice Bo Boile lers rs & & Wa Water ter Heatin ting 12
Balanced Capital Deployment Approach Oper erati ting g Ca Cash Flo low 12-15% of Sales Retu turn Ca Capit ital to o Growth Sharehold lders Investment Acquisitions Dividends & Buybacks ~4% of Sales* 60-80% of Free Cash Flow 20-40% of Free Cash Flow *4.6% in 2019 Capital Ca l Stru tructure Leverage = 1.0x - 2.5x EBITDA Not adjusted for Covid-19 impact 13
Financial Performance Trend Sales les Adjusted Earnings Per er Share ($ Millions) $470 $469 $1.53 $423 $1.45 $1.23 $187 $0.35 2017 2018 2019 Q2 YTD 2 2020 2017 2018 2019 Q2 YTD 2 2020 Due Du e to o on ongoin ing market unce certain inti ties, management has with ithdrawn its its gu guid idance e for or 2020 14
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