MAGAL SECURITY SYSTEMS

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

January 20201

/ SAFE HARBOR/

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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 securities 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.

/ MAGAL AT A GLANCE /

• 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 double EBITDA margin from 7% to 14%

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Total Revenue: $89M (LTM*)

Projects62%

Products38%

Recurring Revenue

~20%

Market Cap: $95M

Net Cash$51m

EnterpriseValue$45m

8% of revenues spent on R&D

R&D & Technicians

175

TotalEmployees

440

Technology Focus15%

15%

26%

28%

8%9%

Global Presence

Israel

Europe

North America

South & Latin America

Africa

Others

* LTM 2019 - Latest twelve months as of September 30, 2019

/ FOCUSED ON HIGH GROWTH SEGMENTS IN A GROWTH INDUSTRY /

Security Industry Growth Drivers • Increasing security threats to infrastructure and people• Increasing government regulation to fight terrorism• Rising labor costs driving tech-based solutions

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Source: Verified Market Research, Global Security Solutions Market report October 2018** Kenneth Research Perimeter Intrusion Detection System (PIDS) Market Analysis, Size, Share, Growth, Trends and Forecast to 2025

Magal targets the highest growth segments in physical security products

and solutions market– PIDS and VMS –

forecast to grow at a 11% and 23% CAGR respectively by 2025**

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

Billion by 2026*

VMSVideo Analytics

Symphony

Volumetric SensorXField

Covert SensorOmniTrax

Fence Mounted Sensor

FlexZone / FiberPatrol

Microwave Sensor

UIltraWave

Intelligent Lighting / Fence Sensor

Senstar LM100

/ CORE MAGAL MARKET - PERIMETER INTRUSION PROTECTION /

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VMSVideo Analytics

Symphony

Protecting Critical Infrastructure While Meeting Operational and Regulatory Requirements

Command and Control FORTIS

Electronic Access Control

EAC

// TARGETING KEY VERTICAL MARKETS

SEAPORTSVIP SITESMILITARY FACILITIES SMART CITY

REGULATED CANNABIS

BORDERSAIRPORT

SAFE CITY

OIL & GAS

LOGISTICS

CORRECTIONS

CRITICALINFRASTRUCTURE

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Each with unique security requirements suited to Magal’sbroad scope of capabilities

• Vulnerable - readily accessible to public

• Security issues unique to country or industry

• Increasingly use tech-centric products

• Require tailored solutions

Magal serves over XXX government and leading enterprise customers in EMEA, North and Central America, and Asia

/ MAGAL’S TWO OPERATING DIVISIONS/

Product division – tech-rich, proprietary • Perimeter intrusion detection systems (PIDS)• Advanced Video Management Software (VMS)• Intelligent Video Analytics (IVA)• Electronic Access Control (EACS)• Symphony - security and information

management platform

• Sells to system integrators and distribution channels

• Fastest growing division with highest contribution margins

Project division - turnkey security projects globally• Perimeter intrusion protection for critical

infrastructure security• Comprehensive solutions offering• Leverages Magal/Senstar’s full suite of products • Features proprietary Fortis 4G Command &

Control platform

• Global sales directly to end users or to large-scale contractors

• Large, variable sales to defined customer base with high barriers to entry

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~40% of Revenues

~60% ofrevenues

/ GLOBAL FOOTPRINT TO SUPPORT OPERATIONS /

Israel / Yehud

Corporate HQ & Magal Israel

Canada / Ottawa & Waterloo

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

/MAIN FACILITIES/

TWO OPERATING DIVISIONS SUPPORTED GLOBALLY

Security products under the Senstar brand

Security solutions and turnkey projects under the Magal brand

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/ PROJECT DIVISION - CORE COMPETENCIES /

Turnkey Security Projects For Governments And Enterprises

• Comprehensive offering

• Recurring revenue from maintenance, support and training

• Customized solutions capabilities

Consulting

Design

Integration

Project Management & Supervision

Installation

Maintenance, Support & Training

Analyze and identify security concerns

New projects or existing system upgrades or

replacements

Full-service systems integrator

Manage every stage through completion

Over 50 years installation experience

Full suite of support options

Core Project Division

Competencies

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Project division executes construction and installation

using sensors and tech-rich products

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/ PROJECT DIVISON DELIVERS COMPREHENSIVE EFFECTIVE SOLUTIONS /

/ PROJECT DIVISION – PROPRIETARY INTERGATED SOLUTIONS/

External Data

Cyber Security

Public Address

IVA & LPR

Robots & Balloons

CCTV/Cameras

Facial Recognition

Thermal Imaging

Perimeter Systems

Mobile Forces

Smart Gates

Access Control

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FORTIS Proprietary Command and Control

• Centralized proprietary Physical Security Information Management (PSIM) monitoring

• Holistic integrations for all security and operational systems

• Vendor agnostic

• Effective decision making on real-time events

• Future delivery as cloud solution

Drones and Anti-drone

Integrated by FORTIS 4G

/ SENSTAR PRODUCTS LEVERAGING CORE EXPERTISE TO NEW MARKETS /

Recognized Brand Leader in Security Products

• Ranked one of 2019’s top 10 growth brands in global physical security sector *

Significantly expanded addressable market with ESC and VMS acquisitions (2018, 2016)

Competitive advantages – performance, reliability and quality

IP-rich Proprietary Technology

• 24 issued patents and 8 patents pending

• Annual R&D investment of ~$5.5 million

Cross-selling drives growth

EACSElectronic

Access Control

$7.5B

VMSVideo

Management

$3.7B

Source: Markets & Markets, June 2018

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* ASMAG.com 2019 a&s Security 50 December 2019

PIDS$550 M

/ SENSTAR’S INTRUSION DETECTION FOR UNIQUE SECURITY NEEDS /

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Challenge – Secure a five-mile airport perimeter subject to 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 improved security through improved system management and lower cost with reduced nuisance alarm rate (NAR)

Perimeter security requirements for a critical cargo airport in North American …

…where traditional PIDS and video surveillance proved ineffective, expensive and unmanageable

Case Study

/ PRIORITIZING RESOURCES ON FOUR KEY VERTICALS FOR 2020/

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• 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

CRITICALINFRASTRUCTURE

Core vertical for product division with PIDS

CORRECTIONS

Currently market leader in the U.S. with momentum to increase market share

LOGISTICS

High growth industry for new operational needs - VMS analytics for logistics to track damaged good, and reduce lost items

OIL & GAS

Magal’s differentiated capabilities and high standards of quality for security align with this capital-intensive sector’s unique needs

/ EXECUTING A STRATEGY TO DRIVE GROWTH /

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Growth drivers• 2020 focus on growth in key verticals• Continued focus on growing Senstar revenue

• Scalable with higher margin contribution• Higher level of investment in R&D• Drives corporate EBITDA growth

Revenue and Margin Breakdown

* LTM 2019 - Latest twelve months as of September 30, 2019

LTM 2019 Combined Senstar (*) Magal (*)

R&D 8% 15% 4%

Gross Margin 43% 66% 30%

EBITDA Margin 7% 12% 6%

(*) Divisional Contribution

/ OPERATING LEVERAGE DRIVES CASH FLOW TO SUPPORT GROWTH /

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OPEX($ in millions)

• $54.6 million in net cash on balance sheet as of September 30, 2019

• $24 million raised in 2016; currently generating cash

• Significant operating leverage with revenue growing faster than expenses

• Primary targeted use of cash to acquire new technology, expand geographic presence, gain expertise and/or relationships from M&A

* Refer to EBITDA reconciliation table found on Appendix slide 26** LTM 2019 - Latest twelve months as of September 30, 2019

+44%

+12%

-2%

-4%

*

****

M&A Strategy• Add synergistic products in growth markets

• Leverage existing platform

• Complete at least one acquisition by year-end 2020

• Support growth goals

• Augment organic low to mid single digit revenue growth with inorganic growth adding additional revenue and

• Increase EBITDA growth and expand EBITDA margin with operating leverage

/ M&A STRATEGY TO BOOST REVENUE AND EBITDA /

~$15 M Revenue Adjacent To Existing Solutions

Synergistic Geographies

NewGeographies

ProjectOriented

Revenue$30m

RevenueLow

ProductOriented

Magal Acquisition Sweet Spot

ExistingGeographies

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14%

EBITDA Margin

/ MID-TERM OPERATING MODEL /

Estimated Growth Rates*2019 LTM** Versus Target

$150 M+

Revenue

~40%-45%

Gross Margin

43%

7%

$89 M+

+50%

+100 BPS

+100%

Senstar growth with higher margin

contribution will drive EBITDA

18 * Reference Magal’s safe harbor statement regarding estimated growth rates and predictive statements**LTM 2019 - Latest twelve months as of September 30, 2019

• 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

/ INVESTOR TAKEAWAYS /

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APPENDIX

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16.7

/ SUMMARY BALANCE SHEET/

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16.7

/ SUMMARY BALANCE SHEET/

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16.7

/ SUMMARY INCOME STATEMENT/

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/ EBITDA RECONCILIATION/

/ COMPANY HISTORY /

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

FoundedwithinIsraeliAircraft Industries

Magal’s IPO on the NASDAQ

Acquisition of CYBERSEAL & OPTELLIOS

Acquisition of AIMETIS

Magalbecomesa privatecompany

Acquisition of SENSTAR

FIMI acquires controlling stake of Magal

Acquisition of control of ESC BAZ

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Kobi Vinokur – Chief Financial OfficerJoined Magal in 2016.Previously chief financial officer of Miya (ArisonGroup), a global provider of comprehensive water efficiency solutions and a water utilities operator. Prior to that, served in several key leadership positions at Brink's Company; as an executive director at Shapira Films, one of the leading film distribution and production companies in Israel; and as head of treasury at the Ministry of Defence of Israel.Received CFO Excellence award.Certified public accountant in the United States and Israel.

Dror Sharon - CEOJoined Magal in June 2018.Previously president and CEO at Controp Precision Technology Ltd., a company specializing in developing, manufacturing and selling Electro Optical and Precision Motion Control Systems for the global defense and homeland security markets. Controp’s revenue grew significantly while maintaining high profit margins. Prior to that, served in various positions including president & CEO at Opgal Optronics Ltd.

Fabien Haubert – Senstar Managing Director Joined Magal in 2018Previously Regional Director at a major UK-based video security solution providerPrior to that, worked with several companies in the areas of video management, IP video surveillance, intrusion detection, access control and system integration. Extensive experience in sales management with many years of responsibility for the EMEA region. He speaks French, English, Spanish, and Italian, and has a working knowledge of Dutch.

Doron Kerbel – Vice President, General Counsel & Company SecretaryJoined 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 the Netherlands.

/ MANAGEMENT TEAM PROFILES/

THANK YOUInvestor Relations Contact:Brett MaasHayden IR(646) 536-7331brett@haydenir.com

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