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Manufacturing’s Next Chapter September 8, 2017

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Page 1: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

Manufacturing’s Next Chapter

September 8, 2017

Page 2: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

Safe Harbor Statement

THIS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS

Forward-looking statements are made based upon management's good faith expectations and beliefs concerning future developments and their potential effect upon the Company

These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements, including the risks and uncertainties set forth under our full disclosure located at the end of this presentation and included in our SEC filings

The Company assumes no obligation to update our forward-looking statements

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Page 3: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

Barnes Group at a Glance

3 1 2016 Revenue. 2 Consecutive years of paying a dividend.

Page 4: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

Doing Business in Connecticut 160 Years

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A LONG HISTORY OF INNOVATION

Page 5: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

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A Remarkable Legacy of Success

Closing Bell – New York Stock Exchange – July 19, 2017 Pictured from left to right: Scott Mayo, Mike Beck, Dawn Edwards, JoAnna Sohovich, Hans-Peter Männer, Thomas Barnes, Dr. Hassell McClellan, Patrick Dempsey, William Morgan, Jim Byrne

(NYSE), Gary Benanav, Mylle Mangum, Elijah Barnes, Chris Stephens, Kristine Murphy

Page 6: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

New Vision and Strategy Driving Major Portfolio Transformation

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1 2010 Sales, Operating Income and Operating Margin are “as reported” in the Company’s 2010 10-K. 2010 Sales Mix re-calculated to reflect three segments – Aerospace, Industrial & Distribution vs. the original two reported segments of Precision Components & Logistics and Manufacturing Services. 2 References to adjusted financial results for 2016 are non-GAAP measures. You will find a reconciliation table on our website as part of our February 17, 2017 press release and in

the Form 8-K submitted to the SEC. This information should be read in conjunction with this reconciliation table.

Page 7: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

TSR Performance Since 2010

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STRATEGY EXECUTION DRIVING REAL VALUE

Page 8: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

Focus: Differentiated Technologies / IP

Molding Solutions

Nitrogen Gas Products

Engineered Components

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Barnes Industrial

Page 9: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

Focus: Differentiated Technologies / IP

OEM

MRO

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Barnes Aerospace

Page 10: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

Diverse and Global Customer Base Aligned with Industry Leaders

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Page 11: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

Portfolio Aligned with Macro Trends

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Page 12: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

Our Global Presence

12 1 Percent of 2016 Destination Sales. Company estimates.

Page 13: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

Manufacturing’s Next Chapter

Industry 4.0:

Leveraging Virtual/Digital Technology to

Improve Operational Efficiency and

Deliver New Customer Value

“INDUSTRY 4.0” DISRUPTING TRADITIONAL MANUFACTURING; COMPANIES AND LOCAL LEGISLATORS NEED TO ADAPT

- Cybersecurity

- Augmented Reality

- Big Data

- Autonomous Robots

- Additive Manufacturing

- Simulation

- System Integration

- Cloud Computing

- Internet of Things

Source: DFKI

Source: I’scoop.eu

Page 14: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

Barnes Group in Connecticut

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Bristol

Corporate Headquarters

Farmington

Bristol Windsor

Engineered Components Aerospace OEM

East Granby

Aerospace MRO

Page 15: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

Making Investments in New Manufacturing Technologies

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NEW TECHNOLOGIES REQUIRE ENHANCED MANUFACTURING SKILLS; LOCAL HIGH SCHOOLS, TECHNICAL SCHOOLS MUST PROMOTE STEM WITH STUDENTS

Page 16: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

Making Investments in Digitalization

DIGITALIZATION REQUIRES LEADING EDGE ENGINEERING AND TECHNICAL SKILLS; LOCAL UNIVERSITIES MUST ALIGN WITH INDUSTRY NEEDS

Page 17: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

Deploying Innovative Ways to Attract & Develop the Next Generation of Talent

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In Connecticut, we cultivate Internships, Co-Ops and

Apprenticeships through linkage with several schools, colleges,

universities and programs

ALL CONSTITUENCIES MUST WORK CLOSELY TOGETHER: LEGISLATORS, BUSINESSES AND LEARNING INSTITUTIONS

Page 18: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

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Initiated Apprenticeship Programs and Outreach

MANUFACTURING DAY 2017 Barnes Group will participate in its 5th

National Manufacturing Day to celebrate our current employees and

promote our apprenticeship programs at several of our U.S. locations.

Page 19: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

Supporting Our Communities

Our employees are active in community involvement, and our Foundation supports local

organizations/affiliates in Connecticut!

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Page 20: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

Connecticut Opportunities / Challenges

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Opportunities

Aerospace - New Programs

Automotive - Transmissions

Innovation - Technology

Connectivity with Local

Schools/Universities

Challenges

Ease of Doing Business

Access to Diverse and

New Skillsets

Cost of Living

Page 21: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

160 Year Legacy of Continued Growth and Transformation as Global Provider of Engineered Products and Innovative Solutions

Technological Advancements are Disrupting Traditional Manufacturing Approaches. New and Diverse Workforce Skills are Required to Succeed

Manufacturing Companies Must Actively Engage and Partner with Learning Institutions (high schools, universities and colleges) and Legislators to Stay Relevant and Competitive

Barnes Group in Connecticut Summary

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Page 22: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

Questions?

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Page 23: Manufacturing’s Next Chapter · Barnes Aerospace . Diverse and Global Customer Base Aligned with Industry Leaders 10 . Portfolio Aligned with Macro Trends 11 . Our Global Presence

Forward-Looking Statements

This presentation contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements often address our expected future operating and financial performance and financial condition, and often contain words such as "anticipate," "believe," "expect," "plan," "estimate," "project," and similar terms. These forward-looking statements do not constitute guarantees of future performance and are subject to a variety of risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements. These include, among others: difficulty maintaining relationships with employees, including unionized employees, customers, distributors, suppliers, business partners or governmental entities; failure to successfully negotiate collective bargaining agreements or potential strikes, work stoppages or other similar events; difficulties leveraging market opportunities; changes in market demand for our products and services; rapid technological and market change; the ability to protect intellectual property rights; introduction or development of new products or transfer of work; higher risks in global operations and markets; the impact of intense competition; acts of terrorism, cybersecurity attacks or intrusions that could adversely impact our businesses; uncertainties relating to conditions in financial markets; currency fluctuations and foreign currency exposure; future financial performance of the industries or customers that we serve; our dependence upon revenues and earnings from a small number of significant customers; a major loss of customers; inability to realize expected sales or profits from existing backlog due to a range of factors, including changes in customer sourcing decisions, material changes, production schedules and volumes of specific programs; the impact of government budget and funding decisions; changes in raw material or product prices and availability; integration of acquired businesses; restructuring costs or savings; the continuing impact of prior acquisitions and divestitures; and any other future strategic actions, including acquisitions, divestitures, restructurings, or strategic business realignments, and our ability to achieve the financial and operational targets set in connection with any such actions; the outcome of pending and future legal, governmental, or regulatory proceedings and contingencies and uninsured claims; future repurchases of common stock; future levels of indebtedness; and numerous other matters of a global, regional or national scale, including those of a political, economic, business, competitive, environmental, regulatory and public health nature; and other risks and uncertainties described in documents filed with or furnished to the Securities and Exchange Commission ("SEC") by the Company, including, among others, those in the Management's Discussion and Analysis of Financial Condition and Results of Operations and Risk Factors sections of the Company's filings. The Company assumes no obligation to update its forward-looking statements.