Conference call, August 2015

H1 2015 Results

Oozi Cats, CEO

Yosi Fait, FD & President Telit Communications PLC

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Disclaimer

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• About Telit

• Financial results H1 2015

Agenda

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Oozi Cats, CEO

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A b o u t T e l i t

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The global leader in industrial internet

Founded in 2000

2014 Revenue: $294m (+22%)

H1 2015 Revenues: $156m (+13%)

Guidance for the full trading year of 2015*:

• Revenues: $347m-$354m (18%-20.5%)

• Adjusted EBITDA: $42m-$47m (21%-35%)

814 Employees

Telit Communications PLC (LSE: TCM.L)

* This guidance for the full year reflects current business indicators and expectations. Inherent in this guidance are risk factors that are described in greater detail in our regulatory filings. All figures are approximations based on management's current beliefs and assumptions and our actual results could differ from those presented above.

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Telit - Global Footprint

• Over 5,000 customers

• Top 10 customers comprise only 37% of the revenues

• 7 acquisitions in 4 years bolstering M2M/IoT focus

• 814 employees in 5 continents

• 8 R&D centers with over 500 engineers

• 35 sales offices & 60 exclusive distributors, covering 80 countries around the globe

• Sales force of about 350 including distributors

• 6 Outsourced EMSs

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IoT Portal - One Stop.One Shop

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SecurityEnergy

& Smart Meter

AssetManagement

Wearable industrialHealth CareTelemetry

P.O.STelematics

Industrial M2M Business Division

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Automotive Solutions Business Division

• By 2020 100M cars will be sold per year - most of which will

be connected

• In April 2014, Telit concluded the acquisition of ATOP

(Automotive Telematics on- board Unit Platform) business

from NXP

• Based on the acquisition Telit established the Automotive

Solutions Division which currently includes 120 employees

(100 in R&D)

• ATOP is a highly secure and connected automotive

telematics platform, that can serve as an application

runtime environment and includes a hardware based secure

element. The ATOP onboard security solution protects the

vehicle from malicious attacks to the core vehicle CAN-bus.

• Meaningful sales growth is expected in the next few years

Telit active projects with Tier-1 and

the OEM brands they service

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Platform as a Service

Telit runs a global-footprint MVNO

providing connectivity &

VAS solutions

In Sep 2013, Telit concluded the

acquisition of ILS Technology,

developer of industry's top

application enablement platform

for the m2m - deviceWISE –

for different verticals

GLOBAL MVNO Cloud Platform

as a Service

• Telit is investing intensely in it’s service

division including the development of its

“One Stop One Shop” concept. The 120-

employee division currently includes 100

in R&D

• Meaningful sales growth is expected in

the next few years

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Yosi Fait, FD & President

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Financial results H1 2015

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Continuous Growth & Profitability

* Adjusted EBITDA is defined as earnings before interest, tax, depreciation and amortization, share based payments and other non recurring expenses.

** Adjusted PBT is defined as profit before tax excluding share based payments, other non recurring expenses, amortization of intangible acquired.

Revenue (Million USD)

88.8

131.7

177.4

207.4

243.2

294

H1:138.2

H1: 156.3

0

25

50

75

100

125150

175

200

225

250

275

300

2009 2010 2011 2012 2013 2014 2015

Gross Profit (Million USD)

42.7

52.9

67.876.9

92.5

116.3

H1:54.6

H1: 62

0

20

40

60

80

100

120

2009 2010 2011 2012 2013 2014 2015

Adjusted EBITDA* (Million USD)

5.9

12.5 13.1

17.3

26.9

34.7

H1:17

H1: 21.8

0

5

10

15

20

25

30

35

40

2009 2010 2011 2012 2013 2014 2015

Adjusted PBT** (Million USD)

1.0

7.15.7

9.6

16.6

23.4

H1:11.1

H1: 13.9

0

5

10

15

20

25

2009 2010 2011 2012 2013 2014 2015

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H1 2015 - Financial Highlights

Key figures H1 2015In related to

revenuesH1 2014

In related to revenues

H1 2015Growth

$'000 % $'000 % %

Revenues 156,281 - 138,180 - 13.1%

Gross profit 62,043 39.7% 54,559 39.5% 13.7%

Adjusted EBIT1 15,748 10.1% 12,031 8.7% 30.9%

Adjusted EBITDA2 21,752 13.9% 17,022 12.3% 27.8%

Adjusted PBT3 13,898 8.9% 11,115 8.0% 25.0%

Adjusted net profit4

13,360 8.5% 9,992 7.2% 33.7%

Adjusted basic profit per share 5

11.7 cent - 9.0 cent - 29.6%

1 Adjusted EBIT is defined as operating earnings before amortization of intangibles acquired, share based payments and other non recurring expenses /income.2 Adjusted EBITDA is defined as earnings before interest, tax, depreciation and amortization, share based payments and other non recurring expenses /income.3 Adjusted PBT is defined as profit before tax excluding share based payments, other non recurring expenses/ income and amortization of intangible acquired.4 Adjusted net profit is defined as profit attributable to the owners of the company, before amortization of intangibles acquired, share based payments , other non recurring

expenses /income and change in deferred taxes.5 Adjusted basic profit per share is defined as adjusted net profit divided by basic weighted average number of equity shares

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Revenues

233.4

274

129145.2

1.6

9.8

20

2.4

9.211.1

0

20

40

60

80

100

120

140

160

180

200

220

240

260

280

300

2012 2013 2014 H1 2013 H1 2014 H1 2015

205.8

106.1

Revenues

• For the sixth year in a row, the Company has

recorded double-digit growth.

• Revenues generated from Telit’s IoT Platform

as a Service (PaaS) through its IoT service

division, increased in H1 2015 by 20.6%

compared to H1 2014.

Communication & positioning modules IoT platform as a service (PaaS)

(million USD)

Revenues Comments

156.3

294

138.2

108.5

243.2

207.4

+13.1%

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Revenues by Region

75.0105.2

135.7

45.765.9 64.8

36.2%

43.3%

46.1%

42.1%47.7% 41.5%

107.0

110.1

117.5

52.1

58.1 58.5

51.6%

45.3%

40%

48%

42% 37.4%

25.4

27.9

40.8

10.7

14.2

33.0

0

20

40

60

80

100

120

140

160

180

200

220

240

260

280

300

2012 2013 2014 H1 2013 H1 2014 H1 2015

APACAMERICAS EMEA

• Revenues in Americas was affected by the

strong components demand in the

smartphone industry, resulting in several

component supply constraints. The company

has overcome these challenges and expects

the full year revenue for this region to reflect

substantial growth compared to 2014.

• We continue to face modest growth in EMEA

due to the challenging conditions in the

Eurozone economy continued into 2015, with

the m2m/IoT market remaining flat with

virtually no growth. our growth rate in this

region is in-line with the regional market

growth rate.

• Revenues in APAC continued their strong

growth, reflecting the coming of age of this

market and the fruition of the Company’s

investment in its penetration.

Revenues by Regions Comments

207.4

243.2

294

108.5

138.2156.3

12.2%

11.4%

13.9%

9.9%

10.3% 21.1%

(Million USD)

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Comments

+13.6%

Gross Profit / Gross Margin

76.9

92.5

116.3

40.8

54.662

0

10

20

30

40

50

60

70

80

90

100

110

120

2012 2013 2014 H1 2013 H1 2014 H1 2015

Gross profit Gross margin

• Gross margin continued to improve,

from 37.6% in H1 2013 to 39.5% in H1

2014 and to 39.7% in H1 2015, due to

the Company’s strong positioning in the

M2M industry, further improvements in

the hardware business and the

increasing share of revenues from the

IoT platform as a service (PaaS) to the

business model, which contributes a

higher gross margin.

• Gross profit increased by 13.6% to $62

million (H1:2014: $54.6 million).

(million USD)

Gross profit / Gross margin

37.1%

38.02%

37.6%39.5%

30%

35%

40%39.7%

39.55%

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Comments

+6.5%

Gross Research & Development

24.9

31.4

48.8

12.7

22.9 24.4

0

10

20

30

40

50

60

2012 2013 2014 H1 2013 H1 2014 H1 2015

Research & Development % of revenues

• Gross research and development expenses

decreased, as percentage of revenues, from

16.6% in H1 2014 to 15.6% in H1 2015. In

absolute numbers these expenses increased

by $1.5 million to $24.4 million (H1 2014:

$22.9 million). we expect that the percentage

of gross R&D expenses out of the revenues

will decrease over the coming years.

(million USD)

Gross Research & Development expenses*

* Gross research & development expenses are defined as research & development expenses before capitalized development expenses and before

amortization of internally generated development costs.

0%

10%

20%

5%

15%

12.0%

12.9%

16.6%

11.7%

16.6%15.6%

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Sales & Marketing

30.5

38.6

50.4

18.4

23.526.4

0

10

20

30

40

50

60

2012 2013 2014 H1 2013 H1 2014 H1 2015

(million USD)

Sales & Marketing % of revenues

14.7%

15.9%

17.1%17.0% 17.0% 16.9%

Sales & Marketing Comments

0%

10%

20%

5%

15%

• Sales and marketing expenses

remained virtually unchanged as a

percentage of revenues. In absolute

numbers these expenses increased by

$2.9 million to $26.4 million (H1 2014:

$23.5 million). we expect that the

percentage of sales and marketing

expenses out of the revenues will

decrease over the coming years.

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General & Administrative

19.722.3

26.5

9.611.2 12.1

0

10

20

30

40

50

60

2012 2013 2014 H1 2013 H1 2014 H1 2015

General & Administrative % of revenues

(million USD)

General & Administrative

9.5% 9.2% 9.0%

8.8%8.1%

7.8%

Comments

0%

10%

20%

5%

15%

• General and administrative expenses

decreased, as a percentage of

revenues, from 8.1% in H1 2014 to

7.8% in H1 2015. In absolute numbers

these expenses increased by $0.9

million to $12.1 million (H1 2014: $11.2

million). we expect that the percentage

of general and administrative expenses

out of the revenues will decrease over

the coming years.

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Adjusted EBIT / Adjusted EBITDA

10.6

18.8

24.7

6.5

12.015.7

0

5

10

15

20

25

30

2012 2013 2014 H1 2013 H1 2014 H1 2015

Adjusted EBIT

17.3

26.9

34.6

10.0

17.0

21.8

0

5

10

15

20

25

30

35

40

2012 2013 2014 H1 2013H1 2014H1 2015

Adjusted EBITDA

(million USD) (million USD)

Adjusted EBIT

+30.8%

Adjusted EBITDA

+28.2%

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Adjusted PBT / Adjusted EPS

9.6

16.6

23.4

5.7

11.1

13.9

0

5

10

15

20

25

30

2012 2013 2014 H1 2013 H1 2014 H1 2015

Adjusted PBT

8.6

14.9

18.4

5.8

9.0

11.7

0

5

10

15

20

2012 2013 2014 H1 2013 H1 2014 H1 2015

Adjusted EPS

(million USD) (cent USD)

Adjusted PBT Adjusted EPS

+25.2% +30%

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12.7

11.7

3.98.1

14.6

Zero

5.4

25.4

46.1

11.2 12.7

20.7

2012 2013 2014 H1 2013 H1 2014 H1 2015

Balance Sheet & Cash Flow

Net Debt/Cash

($ Million)

+14.6M

Net Cash from

Operating Activities

($ Million)

+63%

31.12.2012 31.12.2013 31.12.2014 30.6.2013 30.6.2014 30.6.2015Zero

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Balance Sheet & Cash Flow

66.4

79.4

97.8

71.3

98.8

103.6

31.12.2012 31.12.2013 31.12.2014 30.6.2013 30.6.2014 30.6.2015

Equity/Net Assets

(Million USD) +4.9%

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Comments

Employees

519

641

794557

733814

0

100

200

300

400

500

600

700

800

900

1000

2012 2013 2014 H1 2013 H1 2014 H1 2015

Employees

• The number of employees of the group

on a geographic basis at the end of

June 2015, is as follow:

• EMEA – 461

• Americas – 165

• APAC - 188

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Statement of Financial PositionBalance Sheet Comments

1) Mainly due to increase in cash and in account receivables.

2) Net cash at 30.6.2015 was virtually zero ($5 thousand)

(31.12.2014: net debt of $3.9 million).

30.6.15 31.12.14 30.6.14

In $'000

Non-current assets 102,369 98,198 91,774

Current assets(1)141,300 127,023 131,943

Total assets 243,669 225,221 223,717

shareholders' equity 103,577 97,777 98,785

Non-current liabilities 32,500 24,808 27,656

Current liabilities 107,592 102,636 97,276

Total passive 243,669 225,221 223,717

Net Cash / (debt)(2) 5 (3,865) (14,615)

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Statement of Cash FlowsCash Flows Comments

1) Net cash generated from operating activities increased by

63% to $20.7 million.

2) During the period, the company received the second part of

the preferential rate loan granted by the Italian Ministry of

Economic Development in the amount of $11.5 million. The

third part of about $11 millions is expected during H1 2016.

Jan-June Full Year

2015 2014 2014

In $'000

Net cash generated from operating activities (1) 20,733 12,693 46,224

Net cash used in investing activities (17,798) (19,640) (40,871)

Net cash generated from financing activities(2) 11,458 4,771 1,842

Net (decrease)/increase in cash and cash equivalents

14,393 (2,176) 7,195

Cash and cash equivalents at beginning of period 25,399 23,886 23,886

Effect of exchange rate differences (3,218) (402) (5,682)

Cash and cash equivalents at end of period 36,574 21,308 25,399

Thank you

Yosi.fait@telit.com

Yosi FaitOozi Cats

Oozi.Cats@telit.com