Proposed acquisition of Sparton Corporationandassociated equity placing

7 July 2017

SLIDE 2

© 2017 Ultra Electronics: Proprietary Data

Overview

• Acquisition of Sparton Corporation for $23.50 per share for a total equity value of $234.8m

– FY2016 EV/EBITDA multiple of 7.6x adjusting for targeted cost savings

• Ultra has 50/50 Sonobuoy Joint Venture with Sparton’s Engineered Components and Products division (ECP)

• Compelling strategic rationale

– The ECP division is an excellent strategic fit with Ultra’s existing activities in a segment in which the UltraGroup has extensive experience and well established customers

– Enhances Ultra’s continuing relationship with a major customer

– Increases exposure to the growing sonobuoy segment

– Attractive financial returns for Ultra

– Allows Ultra to secure an important revenue and earnings stream

• Potential to achieve $9m of cost savings

– ECP’s 2016 pro forma operating margin was below Ultra’s USSI equivalent

• Prudent financing structure, including 9.9% equity placing, with pro-forma FY 2016 expected leverage of2.4x1, targeting c1.5x by end 2018

Strategically and financially attractive acquisition that“preserves the status quo”

1 - Prior to disposal of MDS

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© 2017 Ultra Electronics: Proprietary Data

Sparton and ECP divisionSparton Revenue

$109m $136m $155m

$246m$264m

$282m

$0m

$100m

$200m

$300m

$400m

$500m

2014 2015 2016ECP MDS

Sparton Adjusted EBITDA

Geographical revenue split (year-ended 3 July 2016)

Sparton

• NYSE-listed Sparton is comprised of two divisions

– Engineered Components & Products (ECP)

– Manufacturing & Design Services (MDS) – Ultra is in advanced discussions withseveral interested parties to dispose of MDS by the end of Q1 2018

– Sparton's adjusted EBITDA was split 65% ECP and 35% MDS2

ECP

• Serves US DoD and allied foreign militaries, civil government agencies, primecontractors and tier 1 suppliers

• ERAPSCO has a long-standing position as a provider of all current productionsonobuoys to the US Navy

– Sonobuoy revenues account for 76% of ECP’s revenues in year-ended June 2016

– Ruggedised displays and sensor sales accounted for the remainder

– Sales to the US Navy accounted for 61% of ECP’s revenues in year-ended June 2016

• Operates three facilities located across Eastern North America, including facilityin De Leon Springs, Florida, with approximately 600 employees

88%

12%US Revenue

Non-USRevenue

$29m

$16m

0

10

20

30

40

50

2014 2015 2016ECP MDS Group Adjusted EBITDA

$35m $34m

$34m*

* Includes $11m of corporate overhead

Source: Sparton SEC filing

Source: Sparton SEC filings

Source: Sparton SEC filings

2 – Sparton SEC filing year-ended 3 July 2016

SLIDE 4

© 2017 Ultra Electronics: Proprietary Data

Ultra’s position in the sonobuoy segment

• Sonobuoys are a critical part of the Anti-Submarine Warfare mission

– An expendable device used to detect, identify, localise and track submarines

– Typically air-launched from aircraft

– Significant barriers to entry to the sonobuoy segment

• Ultra is a frontrunner in the US, UK and Canadian sonobuoy segment

– Operating in the technology field for decades

– Sonobuoys are one of Ultra’s largest capabilities and sit within Underwater Warfare segment which represents 25% of 2016 Group revenue

• ERAPSCO – 50/50 JV between Ultra and ECP since 1998

– Awarded a sole source five year IDIQ contract for US Navy sonobuoy production

– Purchase orders of $664m in first 4 years with $160m expected to be added in FY18

– All current production US Navy sonobuoys are jointly produced by Ultra and ECP

– Works closely with the US Navy to value engineer the sonobuoy designs, a relationship not easily replicated

• Ultra’s existing US sonobuoy activities have delivered material annual revenue growth over the three years to 31 December 2016

SLIDE 5

© 2017 Ultra Electronics: Proprietary Data

• Excellent strategic fit with Ultra’s existing activities in a segment in which the Ultra Group has extensive experience and well established customers

– Acquisition of ECP will enhance Ultra’s core capability in the design, manufacture and sale of sonobuoys

– Given existing relationship, Ultra Board is confident about the integration of ECP

– Maintain all ECP manufacturing sites to ensure security of supply for US Navy

– Creation of a centre of design excellence following the Acquisition

• Enhances Ultra’s continuing relationship with a major customer

– ERAPSCO JV provides extensive knowledge, experience and proven performance to its major customer, the US DoD

– The US Congress has expressed concerns over supply from a non-allied country; the acquisition of Spartonpreserves the status quo for the US Navy and ensures delivery of critical assets is not interrupted

Compelling strategic rationale

SLIDE 6

© 2017 Ultra Electronics: Proprietary Data

$174m

$184m

$191m

$195m$199m

$160m

$170m

$180m

$190m

$200m

$210m

2018F 2019F 2020F 2021F 2022F

Compelling strategic rationale (contd)

• Increases exposure to the growing sonobuoy segment

– Growing demand for sonobuoys in response to rising global tensions

– The US Navy P-8 Maritime Patrol Aircraft (MPA) is being sold in increasing numbers to US allies, and is only compatible with US sonobuoys

– Potential international competitors face significant barriers to entry

– Ultra’s current US operations have an addressable budget estimated at approximately $80m

• Attractive financial returns for Ultra

– Expected to be earnings enhancing in year-ending 31 December 2018

– Post-tax ROIC in excess of Ultra’s cost of capital in year-ending 31 December 2019

• Allows Ultra to secure an important revenue and earnings stream

– Supports Ultra’s position in the Underwater Warfare segment

US Government Sonobuoy budget

Source: US President’s budget 2017

SLIDE 7

© 2017 Ultra Electronics: Proprietary Data

Transaction highlights

Deal structure

• Class 1 transaction for Group so Ultra shareholder approval (>50%) required. Circular to be posted in due course

• Sparton shareholder approval threshold >66.6%

• Completion of Acquisition is targeted by 1 January 2018

– Obtain approvals from relevant regulators and antitrust authorities (incl. HSR, CFIUS)

Approvals, terms and timing

• Ultra to enter into conditional merger agreement to acquire Sparton

– US$23.50 per share, total equity value of US$234.8m

• Ultra intends disposing of Sparton’s MDS division by the end of Q1 2018 and is in advanced discussions with several interested parties

Ultra equity placing

Ultra Class 1 circular

published

Ultra GM to approve

acquisition

Regulatory approvals (HSR,

CFIUS)

Spartonshareholder

approval

Completion targeted by 1 January 2018

SLIDE 8

© 2017 Ultra Electronics: Proprietary Data

Potential to achieve $9m of cost savings

• Total identified cost savings of c$9m by year-ending 31 December 20193

• $6m of cost savings to be achieved in 2018, rising to a total of $9m in cost savings by the end of 2019

• Enable Ultra Directors to target operating margin for ECP above the Ultra Group’s average margins

• One-off exceptional cost to achieve cost savings of approximately $4m

• Reporting into Maritime and Land Division, under leadership of its Divisional President

Category Cost Savings($m)

Headcount 3.4Legal/professional fees 2.3Facilities 0.8Board related costs 0.5Other costs 2.0Total 9.0

3 - This assumes Ultra disposes of MDS by the end of Q1 2018. Should the disposal of MDS not occur, or take materially longer than expected, the level of anticipated costs savings will be lower in the year-ending 31 December 2018. The date of disposal of MDS is not expected to reduce the level of earnings accretion.

SLIDE 9

© 2017 Ultra Electronics: Proprietary Data

Financial impacts of acquisition of ECP

Expected financial effects

• Combined impact of acquisition and subsequent disposal of MDS expected to be accretive to underlying earnings per share in year-ending 31 December 2018

• Post-tax ROIC in excess of Ultra’s WACC expected in year-ending 31 December 2019

Other financial information

• Increases in Ultra’s capital expenditure, depreciation, research & development, and finance charge are expected to be £2m, £2m, £2m and £1m, respectively for the year-ending 31 December 2018

• Combined Group effective tax rate expected to increase from 21.5% to 22.8%

ECP• Targeting operating margin above the Ultra Group’s average margin

• Targeting revenue growth in ECP of approximately 3% over the medium term

Cash generation• Sparton has, on average, been cash generative in recent years

• Ultra’s objective of returning to a through-cycle target of 85% cash conversion in the medium term unchanged

Dividend policy • Subject to satisfactory trading prospects, future dividends will continue to be covered by between 2.5 to 3.0 times underlying earnings

£644m

£142m

SLIDE 10

© 2017 Ultra Electronics: Proprietary Data

Funding

Equity funding

• Approximate 9.9% equity placing to raise approximately £133.7m net proceeds

• Issuance of up to 7.0m new Ultra shares, to rank pari passu with existing ordinary shares

• Not conditional on Acquisition; if Acquisition of Sparton does not complete, the Board would consider whether appropriate to retain the funds for general corporate purposes or other capital investments, or to return to shareholders

Debt funding• Balance funded from Ultra’s existing debt facilities

• $250m forward contract to be put in place. If Acquisition does not complete, use to repay part of Ultra’s dollar borrowings or closed out

Resultant leverage • Targeting net debt / EBITDA of c1.5x by end 2018

SLIDE 11

© 2017 Ultra Electronics: Proprietary Data

Current trading

Sparton

• ECP

– Improved trading performance in the 3rd Quarter ended 2 April 2017

– Margin benefits of increased foreign sonobuoy sales offset by weaker performance inrugged electronics

• MDS

– Medical facilities continued to perform well

– Certain Mil/Aero and Industrial facilities experienced delays in a couple of customerprogrammes

• Sparton expects revenues for the 4th quarter ended 30 June 2017 of between $97m and $101m at a gross margin of approximately 18%4

Ultra

• Half-year trading in line with management expectations

• As previously stated, 2017 will be more heavily weighted H2 than normal

• No changes to foreign exchange assumptions

• Full year cash conversion in-line with previous guidance

• Positive order intake momentum – book-to-bill ratio at 1.1x at end May 2017

4 – Please refer to Appendix 4 of the Announcement detailing the basis of preparation of this statement

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© 2017 Ultra Electronics: Proprietary Data

Summary

Attractive financial returns

• Opportunity to deliver significant cost savings

• Accretive to underlying earnings per share in year-ending 31 December 2018

• Post-tax ROIC in excess of Ultra’s WACC expected in 2019

Strong strategic fit

• Excellent strategic fit with Ultra's existing activities in a segment in which theUltra Group has extensive experience and well established customers

• Enhances Ultra’s continuing relationship with a major customer

• Increases exposure to the growing sonobuoy segment

• Allows Ultra to secure an important revenue and earnings stream

Sensibly financed• Funded by approximate £133.7m equity placing and drawdown of existing debt

facilities

• Targeting 2018 year-end net debt / EBITDA of c1.5x

SLIDE 13

© 2017 Ultra Electronics: Proprietary Data

Appendices

1. Geographic footprint

2. ECP products

3. Sparton financials

4. MDS overview

SLIDE 14

© 2017 Ultra Electronics: Proprietary Data

Schaumburg, ILSegment Sparton

Headquarters

Geographic footprint

MT

WY

ID

WA

OR

NV

UTCA CO

AK

HI

AZNM

TX

OKAR

LA

KY

TN

MS AL GA

FL

SC

NC

VAWV

CT RI

MA

ME

VTNH

ND

SD

NE

KS MO

IA

MN

WI

IL INOH

MI

NY

PA

MD

DE

NJ

3

2

1

4

Woodbridge, ONSegment ECP

End Markets Ind

Square Feet 21,000

Birdsboro, PASegment ECP

End Markets Marine / Defence/Ind

Square Feet 41,000

De Leon Springs, FLSegment ECP

End Markets Defense

Square Feet 183,000

Columbia City, INSegment USSI

End Markets Marine

1

2

3

4

5

Schaumburg, IL Headquarters

5

Source: Sparton SEC Filings

SLIDE 15

© 2017 Ultra Electronics: Proprietary Data

ECP Products

Brands

Precision Sensing & MeasurementUndersea Warfare Solutions Rugged Electronics

Example Products

Selected Customers

Sono

buoy

s an

d U

nder

sea

War

fare

Pr

oduc

ts

Iner

tial

Sen

sors

Rug

ged

Elec

tron

ics

Direct Foreign Sales

SLIDE 16

© 2017 Ultra Electronics: Proprietary Data

Sparton – Group financials

2016 2015 2014$m $m $m

Net Sales 419.4 382.1 336.5Cost of goods sold (339.2) (307.3) (271.6)

Gross Profit 80.1 74.8 65.0Selling and administrative expenses (55.2) (47.0) (35.7)Internal research and development expenses (2.3) (1.5) (1.2)Amortisation of intangible assets (9.6) (6.6) (3.4)Restructuring charges (2.2) 0.0 (0.2)

Reversal of accrued contingent consideration 1.5 0.0 0.0Impairment of goodwill (64.2) 0.0 0.0Legal settlement 0.0 (2.5) 0.0Environmental rememediation 0.0 0.0 (4.2)

Operating (loss) income (51.8) 17.3 20.3Total other expense, net (3.7) (2.3) (0.6)(Loss) income before income taxes (55.5) 15.0 19.6Income taxes 17.2 (4.0) (6.6)

Net (loss) income (38.3) 11.0 13.0

Weighted average shares of common stockBasic 9,786,315 9,874,441 10,109,915 Diluted 9,786,315 9,885,961 10,141,395

$ $ $Basic (3.91) 1.11 1.28Diluted (3.91) 1.11 1.28

Other financial dataTotal assets 246.0 337.6 199.0Working capital 68.2 117.0 75.4Debt (including capital leases) 97.8 154.5 41.0Shareholders' equity 78.6 116.9 110.1

Source: Sparton SEC Filings

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© 2017 Ultra Electronics: Proprietary Data

MDS overview

• Vertically integrated manufacturing, engineering and design services partner focused on low volume, highlycomplex products

– Primarily serves OEM customer with highly regulated or demanding manufacturing requirements

• Operates in three core business areas – Medical & Biotech, Military and Aerospace and Industrial

• Provides services across the entire EMS value-chain, often becoming embedded with OEM R&D departments at theinitial concept development stage

• Nine facilities in the US and one in Vietnam

MDS Revenue growth

$208m

$246m$264m

$282m

$0m

$50m

$100m

$150m

$200m

$250m

$300m

2013 2014 2015 2016

RevenueSource: Sparton SEC filings

SLIDE 18

© 2017 Ultra Electronics: Proprietary Data

Important notice

NOT FOR RELEASE, PRESENTATION, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OF AMERICA,AUSTRALIA, NEW ZEALAND, CANADA, THE REPUBLIC OF SOUTH AFRICA, HONG KONG, SINGAPORE OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO MAY BEPROHIBITED OR UNLAWFUL.This document, any ancillary documents relating to it, any oral presentation and any question or answer session (together, the “Materials”) have been prepared by Ultra Electronicsplc ( “Ultra") solely for informational purposes in connection with a presentation to be held in connection with the proposed acquisition by Ultra of Sparton Corporation (“Sparton”)by way of merger (the “Acquisition”) and the associated proposed equity placing of new ordinary shares in the capital of Ultra (the "Offering").By attending this presentation and/or accepting a copy of this document, you agree to be bound by the following limitations and, in particular, will be taken to have represented,warranted and undertaken that you have read and agree to comply with the contents of this notice including without limitation the obligation to keep the Materials and theircontents confidential.This document is not, and should not be construed as, a prospectus and along with the other Materials does not constitute, and should not be construed as, an offer to sell or issuesecurities, or otherwise constitute an inducement, invitation, commitment, solicitation or recommendation to any person to purchase, subscribe for, or otherwise acquire securitiesin Ultra or any of its affiliates, or constitute an inducement to enter into any investment activity in any jurisdiction. You are encouraged to seek individual advice from yourpersonal, financial, legal, tax and other advisers before making any investment or financial decision in respect of, or subscribing for or purchasing, any securities. Nothingcontained in the Materials is intended to, nor shall it, form the basis of, or be relied on in connection with, any contract or commitment whatsoever and, in particular, must not beused in making any investment decision.The Materials are strictly confidential and are only being made available to, and are only directed at, persons to whom such information may lawfully be communicated. TheMaterials may not be (in whole or in part) reproduced, published, distributed, stored, introduced into a retrieval system of any nature or disclosed or presented in any way to anyother person. You shall treat and safeguard as private and confidential all information contained in the Materials and take all reasonable steps to preserve such confidentiality. Anyfailure to comply with these restrictions may constitute a violation of applicable securities laws.The information contained in the Materials, some of which is from public or third party sources, has not been independently verified and some of the information is still inpreliminary or draft form. No person is under any obligation to verify, update or keep current the information contained in the Materials. No reliance may or should be placed byany person (whether or not attending the presentation) for any purposes whatsoever on the information contained in this document or any of the other Materials, or on itscompleteness, accuracy or fairness. To the fullest extent permitted by law, none of Ultra nor Investec Bank plc (nor their respective shareholders, subsidiaries, affiliates orassociates, nor their respective directors, officers, employees, agents, representatives or advisers) (the “Relevant Parties”) nor any other person accepts any liability whatsoeverfor any errors, omissions or inaccuracies in the information or opinions contained or referred to in any of the Materials or for any loss, cost, liability or damage suffered or incurredhowsoever arising, directly or indirectly, from any use of the Materials or their contents or otherwise in connection with the subject matter of the Materials or any transaction. Theinformation contained in the Materials is not to be relied upon for any purpose whatsoever.None of the Relevant Parties or any other person makes any representation or warranty, express or implied, as to the accuracy or completeness of the information or opinionscontained in the Materials. Nothing contained in the Materials should be relied upon as a promise or representation as to the future. None of the Relevant Parties nor any otherperson accepts any obligation or responsibility to advise any person of changes in the information contained or referred to in the Materials after the date hereof.Investec Bank plc, which is authorised by the Prudential Regulation Authority and regulated in the UK by the Prudential Regulation Authority and the Financial Conduct Authority, isacting exclusively for Ultra and for no one else in respect of the Acquisition, the Offering, the content of the Materials and other matters described in the Materials. Investec willnot regard any other person as its client in relation to the Acquisition, the Offering, the content of the Materials and other matters described in the Materials and will not beresponsible to anyone other than Ultra for providing the protections afforded to its clients or for providing advice in relation to the Acquisition, the Offering, the content of theMaterials and other matters described in the Materials. Further, Investec Bank plc has not authorised the contents of, or any part of, the Materials.In addition, the Materials may contain forward looking statements with respect to Ultra or Sparton. These forward-looking statements sometimes contain words such as 'anticipate','target', 'expect', 'intend', 'plan', 'goal', 'believe', 'may', 'might', 'will', 'could' or other words of similar meaning. By their nature, forward-looking statements involve known andunknown risks and uncertainties because they relate to future events and circumstances and because they are based on certain key assumptions. As a result, the actual futurefinancial condition, performance and/or results of Ultra and/or Sparton may differ materially from those expressed or implied by the plans, goals and expectations set forth in anyforward-looking statements, and persons receiving this presentation should not place reliance on forward-looking statements.

SLIDE 19

© 2017 Ultra Electronics: Proprietary Data

Important noticeThe Materials are only addressed to, and are only directed at, persons: (a) in member states of the European Economic Area that are “qualified investors” within the meaning ofArticle 2(1)(e) of the Prospectus Directive 2003/71/EC (“Qualified Investors”); (b) in the United Kingdom that are (i) Qualified Investors and (ii) who have professional experiencein matters relating to investments who fall within the definition of "investment professionals" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion)Order 2005, as amended (the "FPO") and/or to high net worth bodies corporate, unincorporated associations and partnerships and trustees of high value trusts as described in Article49(2)(a) to (d) of the FPO and; (c) to those persons to whom it may otherwise be lawfully communicated (all such persons in (a), (b) and (c), together being referred to as“Relevant Persons”). 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Recipients of the Materials should not deal or encourage any other any otherperson to deal in Ultra’s securities whilst they remain in possession of such inside information and until the transaction described in the Materials is announced. Dealing in Ultra’ssecurities when in possession of inside information could result in liability under the insider dealing restrictions set out in the Criminal Justice Act 1993 or the Market AbuseRegulation ("MAR"). The Materials may contain information which is not generally available, but which, if available, would or would be likely to be regarded as relevant whendeciding the terms on which transactions in Ultra’s shares should be effected. 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Accordingly, figures shown for the same category presented in different tables may varyslightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.The companies in which Ultra directly and indirectly owns investments are separate entities. In the presentation (including this notice) “Ultra” is sometimes held for conveniencewhere references are made to Ultra and its subsidiaries and subsidiary undertakings in general. Similar references may be made to “Sparton” with similar logical application.