Desktop Metal — Merger or Acquisition (June 2023)
45 slides from Desktop Metal's merger presentation, Jun 20, 2023
Slide 1: Delivering superior value with Desktop Metal combination
Delivering superior value with Desktop Metal combination $ stratasys _—
Slide 2: Disclaimer: Forward-Looking Statements
Disclaimer Forward-Looking Statements. This document contains forwarc/Jooking statements that involve risks, uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the actual results of Stratasys Ltd. and its consolidated subsidiaries (“Stra
Slide 3: Disclaimer: Important Additional Information
Disclaimer Important Additional Information In connection with the proposed transaction, Stratasys filed with the SEC a registration statement on Form F-4 that includes a joint proxy statement of Stratasys and Desktop Metal and that also constitutes a prospectus of Stratasys. Each of Stratasys and D
Slide 4: Agenda: Assessing 3D Systems proposal
o : : is hi Assessing 3D Systems proposal Desktop Metal is a superior Ren S combination fo 3D Systems creates significant value Agenda
Slide 5: Desktop Metal is highly complementary to Stratasys with strong innovative growth drivers
Desktop Metal is highly complementary to Stratasys with strong innovative growth drivers Combining the best metal innovation company with the best Go-To-Market company to create an AM powerhouse @ stratasys' (‘SSYS") mission to lead the Additive Manufacturing ("AM") into mass production will be acce
Slide 6: Creating an AM powerhouse marked by innovation, operating efficiency and unmatched execution
Creating an AM powerhouse marked by innovation, operating efficiency and unmatched execution The first industrial AM company covering the full manufacturing lifecycle from design to mass production in both polymers and metal S§stratasys DDD. Cesktep Met) innovation lander eer oDtree Aleader in mass
Slide 7: Stratasys' mission to lead AM into mass production requires a metal manufacturing solution
Stratasys’ mission to lead AM into mass production requires a metal manufacturing solution alongside its robust polymer offering DM’s metal offering for mass production will double our addressable market for manufacturing in 2027 ADDITIVE SEGMENT BY MATERIAL AND APPLICATION ($B) '22 —’27 CAGR Low vo
Slide 8: DM has the best and most advanced technology for mass production
Through extensive analysis of the metal landscape, we believe DM has the best and most advanced technology for mass production DM BINDER JETTING .--RESULTING IN HIGH-GROWTH OFFERING... ...FULFILLS KEY REQUIREMENTS FOR MANUFACTURING METALS PORTFOLIO Examples ¥ +80% lower cost per part vs. DMLS" syste
Slide 9: SSYS has been interacting with DM for years and began reviewing its metal technology 2 years ago
SSYS has been interacting with DM for 8 years and began reviewing its metal technology 2 years ago 2015 2017 2024 2022 2023 2015: SSYS was one ofthe fist investors in DM, and Scott Crump, SSYS's founder and Chiet Innovation Officer, was a member of DM's Board through 2018 ‘May 2017: SSYS announced a
Slide 10: DM has a solid business foundation
DM has a solid business foundation DM has a leading position in ~70% of its business beyond metal ~70% |- Source: Management guidance Metals Industrial Photopolymer Dental Digital Castings $209M 2022 Revenue Key Technology technology position Key growth drivers Metal Binder P-50 is the game-changing
Slide 11: Fully complementary AM platform with minimal overlap
Fully complementary AM platform with minimal overlap TYPE TECHNOLOGY SFstratasys Dba, Desktop Metal PRIMARY USE CASES Metalmass Polymer mass Binder Jetting Me Mass production protection production Metal mass production Sand Binder Jetting v Mass production DLP Dental v Mass production DLP Large form
Slide 12: At the current valuations, DM's acquisitions are attractive
At the current valuations, DM’s acquisitions are attractive DM has made ~$1.1B of investments (cash and stock) to acquire several targets; SSYS merger with DM implies ~$0.6B value for entire DM business TOTAL PURCHASE PRICE ($B) KEY ACQUISITIONS ~$14 Digital Castings Dental Others Y ExOne envisionte
Slide 13: The DM combination will accelerate penetration into high-growth dental vertical
The DM combination together with our Covestro material roadmap will accelerate penetration into high-growth dental vertical COMBINATION SIGNIFICANTLY ENHANCES DENTAL OFFERING: , irci anti DM's chairside solutions doubles our pier adel tet Dental TAM, and facilitates our penetration TAM with AM into
Slide 14: Customers and partners are excited about new opportunities in AM
Customers and partners are excited about new opportunities in AM ‘As a long term customer of Stratasys and more recently Desktop Metal, we are very excited about the possibilty of what this merger will ring to change: the game in the additive manufacturing industry and increase it’s impact on lend u
Slide 15: Creating an at-scale growth AM company
Creating an at-scale growth AM company SFstratasys + MPa DeskeopMetat REVENUES: MMM SSYS STANDALONE Hl DM STANDALONE BASE CASE ($M) DOWNSIDE CASE ($M) REVENUE SYNERGIES 2024E 2025E 2026E 2024E 2025E 2026E + Prolonged delay in mass production metal roadmap + Dental CAGR' reduced by more than half + 8
Slide 16: High profitability across growth scenarios
High profitability across growth scenarios SFstratasys + Dbb Desktop Metal EBITDA: m™ ssys STANDALONE Ml DM STANDALONE + SYNERGIES BASE CASE ($M) DOWNSIDE CASE ($M) $337 $180 $219 $202 $37 jo | - Ea | $14 $111 2024E 2025E 2026E 2024E 2025E 2026E Pro forma 11% 16% 20% 7% 11% 14% margin = [ Additional
Slide 17: DM has realized 75% of its $100M cost savings plan
DM has realized 75% of its $100M cost savings plan QUARTERLY SPEND, $M TOTAL ANNUALIZED SAVINGS, $M $100 2 $75 Non product $20 COGS $53 $47 ele $17 OPEX $52 $35 $29 Q1’22 Q1’23 Q4'23 Q1’22 Q1'23 Q4'23 (Actual) (Actual) (Planned) (Actual) (Actual) (Planned) J DM has already captured $75M of its plann
Slide 18: Significant run-rate synergies expected across the business
In addition to DM’s $100M cost savings plan, significant run-rate synergies expected across the business ANNUAL RUN-RATE COST SYNERGIES' ANNUAL RUN-RATE REVENUE SYNERGIES" cocs Design, Research Manufacturing and Other Opex Leverage scale to and pre- mass production Synergies optimize production Tech
Slide 19: 2026E Gross Margin to be ~50%
2026E Gross Margin to be ~50%' v = year of execution COMBINED COMPANY GROSS MARGIN OVERVIEW 44% 47% 48% 50% Initiatives PF 2023 2024 2025 2026 Completion of DM standalone cost-out plan v Integration of DM’s acquisitions Consolidation of production sites v Reduction of raw material costs due to scale
Slide 20: Combined company will be led by SSYS management
Combined company will be led by SSYS management —___ DR. YOAV ZEIF EITAN ZAMIR CEO CFO Stratasys Stratasys cFO CEO and Director Combined Company Combined Company
Slide 21: Agenda: Desktop Metal is highly complementary and creates significant value
bz) Desktop Metal is highly complementary and creates significant value Agenda Assessing 3D Systems proposal Desktop Metal is a superior combination to 3D Systems
Slide 22: DDD proposal undervalues Stratasys
DDD proposal undervalues Stratasys SSYS Board has ‘ Offer does not address relative market valuation unanimously discount, despite risk to DDD’s growth outlook rejected 3D Systems proposal While DDD provides scale and significant cost synergies in the near-term, it lacks critical metal technology to
Slide 23: DDD's past opportunistic offers have failed to address the relative market valuation discount
DDD’s past opportunistic offers have failed to address the relative market valuation discount FV / NTM REVENUE MULTIPLES OF SSYS AND DDD © Trading revenue multiple differential (SSYS multiple less DDD muttiple)' Implied offer price today® 12.0x 44.0x 10/1/2022 Chairman of SSYS 10.0x 8/22/2022 reache
Slide 24: SSYS is undervalued while DDD trades at a full valuation
SSYS is undervalued while DDD trades at a full valuation ad aN s Stratasys 3D SYSTEMS Current Prem. to ; Current Prem. to . _ Broker Rating date Target price unaffected’ Rating Broker Rating date_ Target price __ unaffected’ Rating Needham 06/02/2023 $19.00 28% BUY Berenberg 05/23/2023 $9.00 8% HOLD
Slide 25: Unpacking DDD's Healthcare business
Unpacking DDD’s Healthcare business DDD market Revenue position outlook Commentary $261M Strong Mid term: t Long term: ? Strong t x Heavy exposure to recession sensitive consumer spend * pip technology may disrupt DDD’s SLA dental business over long term? V well positioned to succeed 2022A revenue S
Slide 26: Unpacking DDD's Industrial business
Unpacking DDD’s Industrial business DDD market position $277M Revenue outlook Commentary Weak Weak Strong in SLA and MJP jewelry Jy: Jy: t x Lacks technology needed to succeed in metal mass production * DDD's SLs technology not competitive in mass production vis-a-vis HSS technology v Well positione
Slide 27: There is risk to DDD's 2023 guidance
There is risk to DDD’s 2023 guidance, creating significant risk for the value of stock portion of the offer... DDD 2023E REVENUE GUIDANCE EVOLUTION OF DDD’S 2022 REVENUE GUIDANCE DDD missed FY’22 mid- Outlook $545 - $575M oo $630 eae point guidance provided at Midpoint Q1°22 by ~(11%) {| guidance’ o
Slide 28: DDD's repeated misses vis-a-vis Street expectations has been a concern
... DDD’s repeated misses vis-a-vis Street expectations has been a concern BEATING CONSENSUS Ad 3D SYSTEMS $ stratasys eal ie Revenue Adjusted EBITDA EPS Revenue Adjusted EBITDA EPS 2920 x Le | NIA x [ce | x Le | v v 3020 v NIA v v v v 4020 v x x v v v 1021 v v v v v v 2021 v v v v v v 3a21 v v v v
Slide 29: DDD transaction aims at scale
DDD transaction aims at scale 2023E MIDPOINT OF REVENUE GUIDANCE $1.2B AQ 3D SYSTEMS $ stratasys $0.2B $0.1B $0.1B Pro forma revenue Source: Management guidance, Company flings Note: Total may nat add up due to rounding DDD Ay Desktop Metal VELO” Z Markforged 2
Slide 30: Significant overlap creates cost save opportunities as well as potential dis-synergies
Significant overlap creates cost save opportunities as well as potential dis-synergies SLA \ DMLS \ \ PolyJet / Inkjet \ |Bloprinting aN 3D SYSTEMS FDM / FFF | § stratasys | isa a eae epee eee Potentially creates cost synergies of | Expected to have potential revenue dis-synergies $70M — 100M of up
Slide 31: Pro forma revenue estimate
Pro forma revenue estimate = stratasys = 43D SYSTEMS REVENUES: mm SSYS STANDALONE Mil DDD STANDALONE ‘7! REVENUE DIS-SYNERGIES COMPARISON OF DDD SCENARIOS M s! -s I Base Downside Commentary ¢ ‘ 1 0, 140%, \ 2020 ROR S 7 1 2022 $1,678 \ standalone Street Street 1 $1,576 Consensus”? Consensus”? $1,500
Slide 32: Pro forma EBITDA
Pro forma EBITDA $ stratasys + 4QX3DSYSTEMS EBITDA: mm sSsYs STANDALONE Mill DDD STANDALONE + SYNERGIES $m I $283 I I I I I 1 I I I I i I fl I I I I I 2024E 2025E 2026E Base case I 2026E Downside case ' Margin 9% 15% 17% 13% Source: SSYS Management, Research reports, ODD Base and Downside standalone
Slide 33: Agenda: Desktop Metal is a superior combination to 3D Systems
g © Desktop Metal is highly complementary Assessing 3D Systems proposal Desktop Metal is a and creates significant value . a ; superior combination to 3D Systems Agenda
Slide 34: DM offers a natural and highly compelling next step to SSYS journey
DM offers a natural and highly compelling next step to SSYS journey: DM offers superior value creation DM merger creates more attractive business mix with robust . ; manufacturing-based portfolio and superior metal offerings relative to DDD’s proposal. DM offers higher growth as well as profitabilit
Slide 35: A merger with DM creates a more attractive business mix
A merger with DM creates a more attractive business mix with greater exposure to mass production and manufacturing 2022A PRO FORMA BUSINESS MIX COMPARISON BY REVENUE 1 Low volume mass production HB High volume mass production Prototyping . ay SFstratasys + Wh desktopaetat Sstratays + ,, 2. “ Prototy
Slide 36: DM addresses wide range of metal mass manufacturing applications
DM addresses wide range of metal mass manufacturing applications; 3D Systems offers niche metal solution Comparison of key capabilities Phd. Desktop Metal 4d 3D SYSTEMS Low cost per part High variety of materials Ability to cover large variety of geometries End to end manufacturing workflow Consiste
Slide 37: DM has more comprehensive and superior metal offering
Photopolymers DM has more comprehensive and superior metal offering DM PORTFOLIO (2022 REVENUE) DDD PORTFOLIO" (2022 REVENUE) METAL SALES TRAJECTORY COMPARISON Metal Metal y Digital castings Other {___DM has higher metal revenues with significant growth (4250% } 2018 2022 2018 2022 ID DAL Desktop Me
Slide 38: Significant technology overlap with 3D Systems could lead to revenue dis-synergies
Significant technology overlap with 3D Systems could potentially lead to revenue dis-synergies $ stratasys IDDD, Desktop Metar — Metal Sheet Forming DLP Dental Wood Binder Jetting Sintering Bioprinting Fully complementary | Significant overlap
Slide 39: DM's innovative portfolio and strong IP stands out relative to DDD's aging IP portfolio
DM’s innovative portfolio and strong IP across applications stands out relative to DDD’s aging IP portfolio DM’S YOUNG PATENT PORTFOLIO IS MANUFACTURING FOCUSED DM CONTINUES TO DEVELOP INNOVATIVE TECHNOLOGIES Active patents Core technology MBJ Binders Furnace DLP per Software DDD, Desktop Metal a $
Slide 40: Combination with DM provides SSYS with superior financial profile
Combination with DM provides SSYS with financial profile that is superior to combination with DDD m= DM+SSYS @= DDD+SSYS Ml SSYS STANDALONE 2026E EBITDA ($M) °22A —’26E REVENUE CAGR 19% $337 Base Downside 2026E EBITDA MARGIN 20% 17% 5 Base Downside Base Downside Source: Management guidance, Company
Slide 41: Merger with DM provides greater ownership by SSYS in a combined company
Merger with DM provides greater ownership by SSYS in a combined company with better growth and profitability EBITDA ($M) PF OWNERSHIP 1 $337 I stratasys * $219 1 cn : $127 $ ’ BDDAL Desktop Metal , $211 | $80 $137 I | snr | 1 ~63% SSYS ownership’ 2024E 2025E 2026E Base case | 2026E Downside case I 1
Slide 42: On a relative basis DM merger creates higher value to Stratasys shareholders
On a relative basis DM merger creates higher value to Stratasys shareholders VALUE CREATION ANALYSIS ($B) 947 $0.7 os 63%? SSYS equity! DM equity* Net cost Revenue ‘synergies? synergies FVITAE aay NM. 15x° 15x? EBITDA SFstratasys + Wd desktopmett ~$30 per share" $2.2 em | ~$24 per share PF Equity Il
Slide 43: Potential to achieve additional upside from multiple re-rate
Potential to achieve additional upside from multiple re-rate due to business mix shift 2022A-2026E PRO FORMA REVENUE CAGR‘ 3D PRINTING TRADING MULTIPLES — 2023E FV / REVENUE AND GROWTH SSYS + DM combination deserves a higher pro forma trading multiple 19% 10% SSYS + DM SSYS + DDD 2023E-2024E Street
Slide 44: Transaction with DM results in a stronger PF balance sheet
Transaction with DM results in a stronger PF balance sheet PRO FORMA NET CASH ($M) Sstratasys + [Db Desktop Metat $ stratasys 4N 3D SYSTEMS Pro forma leverage: ~6x* 50M lustre tudes . net cash includes $544M cash consideration paid to Stratasys shareholders, $33M Desktop Metal termination oe, and $5
Slide 45: A transaction with DM is the most compelling option for SSYS shareholders
A transaction with DM is the most compelling option for SSYS shareholders given it creates the highest value vs. alternatives TOTAL VALUE TO SSYS SHAREHOLDERS ~$24 — $30 / SSYS Share ~$21 / SSYS Share $18 / SSYS Share’ Desktop Metal Ay NANO S88 Dh. 4N 3D SYSTEMS NENSIOT Partial tender offer Estimate