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ANNUAL REPORT 2023

| ON THE COVER: INNOVATION WITH HEART Our ideas and our microelectronic solutions shape the future. We strive for the well-being of everyone, by creating a safer, more comfortable and greener world. That’s what inspires us. That’s what we call innovation with heart.

TABLE OF CONTENTS

1 | Letter to our shareholders | 3
2 | Who we are | 6
3 | What we do | 12
4 | What we stand for | 23
5 | Our strategy | 27
6 | Our sustainability report | 33
7 | Our corporate governance | 71
8 | Financial report | 89
9 | Shareholder information | 143
10 | Excerpts from the Melexis nv statutory | 145
11 | Glossary | 150
12 | List of used acronyms | 151
13 | GRI content index | 153
14 | About this report | 157

2 | Melexis Annual Report 2023

1 | LETTER TO OUR SHAREHOLDERS

“We embrace the change and capture the opportunities” |

Dear shareholders,
2023 was another successful year for Melexis. The
automotive sector moved towards a more balanced supply
and demand and we made great strides in electrification,
comfort and safety.
Today, we are witnessing a transformation in the global
automotive industry. While European carmakers are
adapting to the electrification trend, Asia is emerging as a
dominant force, with high production and sales volumes,
fueled by a growing middle class. Adapting to the
expectations of Asian customers, who prioritize speed, cost
efficient solutions and specific product requirements, is
crucial. In order to do this, we are already actively building
strong connections in Asia. The inauguration of our new
facility in Malaysia in the summer of 2024 will give us extra
impact in the entire region.
I would like to commend our colleagues in Kyiv for their
outstanding work in very difficult conditions. They
delivered a major project for a key customer with
excellence. In 2024, they are working on another very
important project for another key customer with
impressive commitment. We are immensely proud of our
people in Ukraine for their resilience and motivation. They
inspire us all at Melexis.
Embrace the change and capture the opportunities
During our Capital Markets Day in November, we
presented our new strategy and long-term financial targets.
The automotive industry is our main market, with 90% of
our revenue from chip sales to carmakers. Electrification,
premiumization and ADAS in new EV platforms lead to an
ever-increasing number of chips per car. Our current focus
is spread over five domains which are related to these
trends and offer significant market growth: electrification
of the powertrain, thermal management, lighting, e-brake,
e-steering and battery. Our goal is to achieve a 10%
compound annual growth in the automotive domain until
2030.
We are developing specific products to expand our
presence in the emerging markets of sustainable world,
alternative mobility, robotics, and digital health. These four
areas headed under the 'beyond automotive' category
make up 10% of our turnover. We selected these domains
because we anticipate that they will grow significantly in
the coming years thanks to trends like aging, population
growth and electrification. We aim for a 15% or higher
annual sales growth in these areas between now and 2030.
Innovation and product development at a fast pace are
essential for us to stay relevant in the next decade.
Together, we are welcoming change and pursuing
opportunities.

Melexis Annual Report 2023 | 3

As the CEO of Melexis, my responsibility is to prepare
Melexis for the future and adapt to change. It is my role
within the company to enable my teams to perform at their
best. I believe in clarifying the purpose of our actions and
empowering the team to choose their methods, which
fosters self-motivation. By creating this entrepreneurial
mindset, we are boosting innovation and forward thinking.
As enabler for productive and successful innovation,
diversity in all the teams and departments of the company
is also a key element that I want to strengthen in the next
years.
If we want to continue riding the crest of the wave, we need
to invest in both 'automotive' and 'beyond automotive'. The
strategy has been set, the execution has been launched.
Sustainability in all its facets
Sustainability is at the core of all our strategic decisions.
One of our key contributions to a more sustainable world is
our wide product range that supports vehicle
electrification. This helps lowering CO2 emissions.
In terms of our emissions as a company, since 2021 we have
been reporting on Scope 1 (direct emissions from energy
and heat) and Scope 2 (indirect emissions from purchased
electricity, heat, steam or cooling). In 2023, we voluntarily
decided to take another step in assessing our total carbon
footprint and started measuring our Scope 3 emissions
(indirect emissions from our value chain). This will allow us
to further define our environmental strategy.
Sustainability and Environment Social Governance (ESG)
go beyond the climate and nature. One example on the
social side is that we keep promoting a gender-diverse and
multicultural workforce, resulting today in no less than 56
nationalities. Having such a diverse workforce enriches our
discussions and perspectives and is a key factor for the
strength and success of Melexis.
To support Melexis and the Executive Management in
steering our ESG strategy and in defining priorities, an ESG
committee has been established at the Board of Directors’
level. Furthermore, to ensure continuous and aligned
progress in our ESG journey, a dedicated cross-functional
ESG team is working on the identified goals and projects.
In 2023, we took a pulse check with our entire workforce
through an employee listening survey. This comprehensive
internal assessment delved into their motives and
motivations. We were delighted to see that 'innovation',
'sustainability' and 'people' scored the highest. This aligns
perfectly with the vision of management and the Board of
Directors.
Financial performance
Sales for the full year 2023 were 964.3 million EUR, an
increase of 15% compared to the previous year.
Electrification and the growing need for comfort and safety
applications were once again the driving forces behind
these results. The outperforming product lines of 2023
were current sensors, embedded motor drivers and
pressure sensors. The magnetic position sensors product
line continued to thrive in absolute numbers as well.
For the full year 2024, we expect sales to be around 1
billion euro, with a gross profit margin above 44% and an
operating margin above 25%. Backed by another solid
design win performance in 2023, we look forward to a
promising future.
The Board of Directors approved to propose to the annual
shareholders’ meeting a total dividend of EUR 3.70 gross

4 | Melexis Annual Report 2023

per share over the result of 2023, a 6% increase compared
with 2022 and a 4% gross dividend yield compared with the
share price at year’s end 2023.
Looking ahead
With the clear definition of 'automotive' and 'beyond
automotive', we have launched a two-pronged strategy
that should ensure Melexis’s success for the medium-term
future. We are ready to face new challenges that may
emerge. It is crucial that we stay close to our customers in
all our operational activities and understand the needs of
society. We are flexible, proactive and effective, delivering
fast and innovative technological solutions. We have also
launched initiatives to adapt our culture toward even more
entrepreneurship, autonomy and effective decision making.
By combining this with the development of disruptive
technological solutions and recruiting talented people, I am
more than confident about the future.
Thank you for trusting and supporting our vision and
strategy. I look forward to sharing our achievements with
you.
Yours sincerely,
Marc Biron
On behalf of the entire Melexis team

Melexis Annual Report 2023 | 5

2 | WHO WE ARE

Melexis is a limited liability company headquartered in
Ieper, Belgium, and incorporated under Belgian law.
Melexis designs, develops, and delivers edge sensor and
driver solutions with a heart for people and planet.
We sell our products to a wide customer base in Europe,
Asia and North America. This introductory chapter
provides an organizational profile of Melexis.
2.1 WE ENGINEER THE BEST
IMAGINABLE FUTURE
Melexis is a global supplier of microelectronic
semiconductor solutions. Our company represents
engineering that enables the best imaginable future - a
future that is safe, comfortable and sustainable. Because
we care. We care about our planet, about our customers
and about our colleagues. All of these aspects are
reflected in the multitude of applications that our
technology empowers.

CELEBRATING MELEXIS’ INCLUSION IN THE BEL20, THE BELGIAN BENCHMARK STOCK MARKET In March 2023, we celebrated Melexis’re-entry in the BEL20, the most important stock market index in Belgium, containing 20 shares selected by Euronext. “We are proud of this important moment and are grateful for all the fabulous people at Melexis who are behind this success!”, concludes Chairwoman Françoise Chombar. |