Slide 1: Knowles, May 2, 2022
« knowles May 2, 2022
Slide 2: Safe Harbor: Forward Looking Statements
Safe Harbor 4€ knowles Forward Looking Statements This presentation contains forward-looking statements within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, such as statements about our future plans, objectives, expectations, fi ied
Slide 3: Our Company
Our Company 4« knowles
Slide 4: A global technology leader and manufacturer
4« knowles A global technology leader and manufacturer. Knowles develops advanced micro-acoustic microphones and speakers, Founded: 1946 audio solutions, high performance capacitors and RF filters for the world’s Ha: Itasca, IL leading technology providers. NYSE: KN 2021 Revenue Precision Devices 10
Slide 5: Repositioned to drive improved financial performance
4€ knowles Repositioned to drive improved financial performance. Over the past five years, we have optimized our product and market portfolio to deliver higher growth, earnings and cash flow. We have built a highly sustainable business with unique capabilities in solving customers’ most complex tech
Slide 6: Management team experience
Electronics Experience 10 Years 24 Years 25 Years 18 Years 19 Years 28 Years 16 Years 29 Years 25 Years 26 Years In-House Counsel Experience
Slide 7: Business Transformation: shift in strategy to expand margins
Business Transformation Shift in strategy to expand margins. Revenue above Gross Profit Margin 4« knowles Achievements Since 2016, we have executed multiple initiatives to improve performance and shareholder value: d, lower margin speaker * Divested highly cyclical, lower margin timing device busine
Slide 8: Significantly improved financial performance from 2017 to 2021
4€ knowles We have significantly improved our financial performance from 2017 to 2021. Since implementing our strategy to more deeply invest in market segments that yield the most attractive margins and free cash flow, our financial performance has continued to improve year-over-year. REVENUE ($M) 8
Slide 9: remove the “mid- term target” time reference, just focus it on $2.50.
remove the “mid- term target” time reference, just focus it on $2.50.
Slide 10: Our Markets
Our Markets 4« knowles 10
Slide 11: Market Focus
Market Focus 4€ knowles Focusing on markets with the most attractive growth potential. While every one of our markets is experiencing favorable tailwinds, we are investing in those with the strongest growth and macro trends. Electric Vehicle @ Core Smartphone Industrial Compute
Slide 12: Shift in mix of markets drives higher gross margins
4€ knowles Shift in mix of markets drives higher gross margins. We have expanded the markets we serve beyond the smartphone industry. Today, our business is more diversified across the markets that yield higher gross margins. Electric Vehicle @ 1% Electric Vehicle @ 2% Defense @ 5% Defense @ 10% Ind
Slide 13: Our Products
Our Products 4« knowles 13
Slide 14: Innovate, Design, Differentiate, Deliver
Innovate Deliver Design Innovate a concept for differentiated, customer-driven features & functionality Design a high quality, high performance, cost-effective product Differentiate ourselves through unique manufacturing techniques & processes Enable our customers to consistently offer new products
Slide 15: Focus on value and specialization
4€ knowles Focus on value and specialization. We have redirected our innovation and manufacturing capabilities to focus on higher growth and financial return opportunities. We seek to amplify the success of our fastest growing segment, Precision Devices. Reduced Investments: * Commoditized products
Slide 16: Two platforms with industry-leading performance in every market
4€ knowles Two platforms with industry-leading performance in every market. g - 5 SAM rf CAPACITORS a z High Performance RF Filtering 4 ° : Capacitors Solutions 7 Q RF & MICROWAVE 2 High voltage, temp, reliability High frequency filtering = and capacitance/size. for next generation communication MEM
Slide 17: Capacitors and RF & Microwave: high voltage, high temp, high reliability
CAPACITORS RF & MICROWAVE 4« knowles Specializing in high voltage, high temp, high reliability capacitors for mission critical applications. Our unique high voltage, Mulpple ooretary Broad offering and highest The ability to solve manufacturing processes NEENG SHEE performance for the most | _custom
Slide 18: RF & Microwave solutions
4€ knowles nce Higher stability (K) in CustonTé Lapatilites to serve stfootprintenables |, Custom < <panded us 3 to expan Prer sin ed applications Performance CAGR 6 SAM PRODUCT LIST y Couplers Power Divic Gain Equalizers DE COMMUNI Bias Network:
Slide 19: Ear: enabling an unrivaled listening experience
EAR loT COMPUTE MEDTECH SMARTPHONE Enabling an unrivaled listening experience through groundbreaking innovation in ear-worn devices. Recognized as the leader in providing microphones and balanced armature speakers for high- performance all-day wear Size, power, robustness and audio performance Unmat
Slide 20: IoT: AI/machine learning voice control and communication
EAR loT COMPUTE MEDTECH SMARTPHONE Pushing the boundaries of Al/machine learning in loT devices offering voice control and communication. 4€ knowles f Broad Fae ot auton Proven field robust Solutions for audio ADVANTAGES Enabler of the Voice as a eooraton eden microphone architecture | applications
Slide 21: Compute: high quality communication from anywhere
EAR loT COMPUTE MEDTECH SMARTPHONE 4 —=-e"™ € knowles Enabling high quality communication from anywhere. Differentiated with compute | Performance to enable next | Enabling high performance Pioneering leader i lication expertise, generation compute form ADVANTAGES with a proven track apn rf . commun
Slide 22: MedTech: solutions to address hearing loss
EAR loT COMPUTI £ MEDTECH SMARTPHONE Delivering the highest performing solutions to address hearing loss. 4€ knowles ADVANTAGES An undisputed legacy in microphone and balanced armature speaker innovation for the hearing health market Leveraging audio and application expertise to address new use case
Slide 23: Smartphone: audio features for high volume providers
EAR loT COMPUTE MEDTECH SMARTPHONE Driving innovation to enable audio features for leading, high volume smartphone providers. 4€ knowles ADVANTAGES Industry leader with field proven technology for demanding smartphone applications Broad, unique portfolio to support price and performance levels acros
Slide 24: A steadfast commitment
A steadfast commitment. Striving to be an ethically, socially and environmentally responsible steward to the communities in which we live and work. Environmental Sustainability * Issued inaugural 2021 Corporate Sustainability Report + Continually investigating and evaluating new ways to reduce the m
Slide 25: Our Financials
4« knowles Our Financials
Slide 26: Track record of improved financial performance
Track record of improved financial performance. REVENUE Non-GAAP Non-GAAP OPERATING ADJUSTED EBIT GROSS PROFIT MARGIN* EXPENSE MARGIN MARGIN" ($m) (%) (%) (%) a7 25.4 20.1 868.1 4€ knowles Non-GAAP DILUTED EPS" ($) 1.53 14.9 = x 5 8 = 8 = Sg = 1 3 ° i) S fey fe) fey fo) Ss ° q 1 a a N a x q x x GAAP
Slide 27: Proven ability to deliver strong free cash flow
Proven ability to deliver strong free cash flow. Gross Margin Expansion FREE CASH FLOW* + Focused on markets that value our technology and ($M) manufacturing differentiation + Implemented a more disciplined approach to pricing * Divested lower gross margin businesses 133.5 * Completed acquisitions t
Slide 28: Strong cash flow and debt reduction enable shift in capital allocation
4« knowles Strong cash flow generation and debt reduction enables shift in future capital allocation priorities. Organic Growth * Continued investment of R&D spend to markets with optimal growth trends and products with better profit potential * Deploying Capital Expenditures to markets and products
Slide 29: Mid-term financial targets
Mid-term financial targets. Revenue Growth * Growth in the mid to Adjusted EBIT high single digit CAGR% Margin’ 22-24% Non-GAAP Gross Profit Margin* * Improve to 43% or more on mix and new product introductions ° Free Cash Flow Margin’ Non-GAAP Operating Expense* 1 5-1 7% + Efficiently leverage reso
Slide 30: Path to $2.50+ Non-GAAP Diluted EPS
Focusing on market segments with the most favorable tailwinds including Ear, IoT, MedTech, EV and Defense Successful debt reduction enables return of Free Cash Flow through increased share repurchases Innovating across complex customer needs to maximize differentiation Focusing CapEx on our attracti
Slide 31: Appendix
de. Spas cog ie 4« knowles 31
Slide 32: Non-GAAP reconciliation: gross profit, operating expenses and EBIT
July 28, 2021 (in millions, except per share amounts) 2021 2017 Gross profit 359.5$ 286.3$ Gross profit margin 41.4% 38.5% Stock-based compensation expense 1.6 1.8 Impairment charges - 1.4 Restructuring charges - 4.0 Production transfer costs (1) - 6.7 Other (2) 1.0 - Non-GAAP gross profit 362.1$ 30
Slide 33: Free cash flow reconciliation
(in millions) 2021 2020 2019 2018 2017 Cash provided by operating activities 182.1$ 128.1$ 123.9$ 98.5$ 92.9$ Less: Capital expenditures (48.6) (31.9) (41.2) (80.1) (51.6) Free cash flow (1) 133.5$ 96.2$ 82.7$ 18.4$ 41.3$ Free cash flow margin (1) 15.4% 12.6% 9.7% 2.2% 5.5% Years Ended December 31,