Italian Stock MarketOpportunities

30 JANUARY 2020

Disclaimer
This document has been prepared by Datalogic S.p.A. (the "Company") for use during meetings with investors and financial analysts
and is solely for information purposes. The information set out herein has not been verified by an independent audit company.
Neither the Company nor any of its subsidiaries, affiliates, branches, representative offices (the “Group”), as well as any of theirdirectors, officers, employees, advisers or agents (the “Group Representatives”) accepts any responsibility for/or makes any
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This document may contain forward-looking statements about the Company and/or the Group based on current expectations andopinions developed by the Company, as well as based on current plans, estimates, projections and projects of the Group. These
forward-looking statements are subject to significant risks and uncertainties (many of which are outside the control of the Companyand/or the Group) which could cause a material difference between forward-looking information and actual future results.
The information set out in this document is provided as of the date indicated herein. Except as required by applicable laws andregulations, the Company assumes no obligation to provide updates of any of the aforesaid forward-looking statements.
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2Corporate Overview

3

Datalogic at a glance
Global technology leader in the automatic data capture and process
automation markets, in the Retail, Manufacturing, Transportation &Logistics, and Healthcare industries
Founded in 1972, listed on the Italian Stock Exchange since 2001

1,200 patents filed and more than 350 in approval

500 engineers in 11 R&D centers and 3 DL Labs
in: Italy, USA, Vietnam, China, and Germany
3,157 Employees in 27 countries:
21% Americas, 56% EMEA, 23% APAC

10 Manufacturing and Repair facilities in:
US, Brazil, Hungary, Slovakia, Italy, China,Vietnam and Australia

4

Over 45 years of Technological Innovation
EXPANSION

1972

EXPANSION▪ Escort Memory SystemInc.
▪ IDWare mobile
Computing&Comm.

2001▪ Minec AB▪ Laservall SpA▪ Informatics Inc.
▪ PSC Inc
▪ Datasensor SpA▪ Evolution Robotic
Retail Inc.
▪ Accu-Sort System Inc.
▪ PPT Vision Inc.

FOUNDATIONLISTING▪ Established in Bologna▪ Listed on the STARsegment of the Italian
Stock Exchange

1988
1997

52012
2015

NEW STRATEGY▪ Set up new One
Datalogic▪ New organization byverticals▪ Soredi acquisition

INNOVATION

20022011▪ Acquisition ofMultiware Photonics SA▪ Partnership with CAEN
RFID Srl

2017

Solid long-term growth
Sales CAGR 2001-2018 +11%

€ mln

1000

16% 17% 16%
14% 14%900

10%12% 13%

700

4%

5%

8%

6%

4%

382 404 380

400

5%
-4%

393

6%

6%

7%

2%

8%
535

8%
577

10% 10%606 631462 451 465
426

312

300
100

5%

1%

1%

500

200

15%

6%

800
600

15%
14%
14%
14% 13%
13%

16% 17% 17%

206

10% ▪
5%

▪ Strong improvements across0%
key indicators reflecting-5%
investments in innovation,
M&A and better efficiency and-10%
productivity
-15%
-20%

146132118
112-25%0-30%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Revenues

EBITDA margin

Net Income margin

6A history of growth inprofitability▪ Robust cash generation

A Wide Geographical Footprint
10 Manufacturing & Repair sites
11 R&D Centers, 3 DL Labs
Direct presence in 30 countries
Percent on H1 2019 Revenues

EMEAI
51%

North America
36%

APAC
11%

Latin America
2%

Revenues breakdown at 9M 20197Stock and GovernanceMarket Segment: STAR MTA

Ticker: DAL

Reuters Code: DAL.MIPrice (January 27, 2020): 16.1 Euro

Bloomberg Code: DAL IM

Market Cap (January 27, 2020): 941 mln Euro

Outstanding Shares: 58,446,491

Auditing Company: Deloitte

Share Par-Value: 0.52 Euro each
DATALOGIC PRICE PERFORMANCESHAREHOLDERS’ STRUCTURE

140

33.2%

130

120
110

64.8%

100

DAL.MIFTSEMIB.MIITSTAR.MI

90
80
70

Hydra SpA
Treasury Shares
Free-Float

605002/01/2019

2.0%
02/04/2019

02/07/2019

02/10/2019

02/01/2020

8Strategy9Rehearsing our Strategy
Objective

Scope

Advantage▪

▪

Remain a product company
with new emphasis onsolutions to satisfy theneeds of End Users in thefollowing Industries: Retail,T&L, Factory Automation,Healthcare▪

▪

Consolidate our position in
EMEA and become a strong
player in NA▪

Further establish in APAC
with a growing presence in
China

Grow above market
average, while expanding
profitability

10

Moving from a product to a
Customer-Centriccompany, leveraging on
our wide range of productsthat is able to fulfill ourCustomers’ needs for bothdata collection and process
automation and providing
end-to-end solutions
across the entire flow ofoperations

A wide range of products that is able to fulfill our customers’
needs for both data collection and process automation
Most complete offer of barcode readers: from retail toindustrial scanners, from hand held to mobile

Complementary/Open doors products inthe MFG Industry

Undisputed leadership on barcode readers11Our products are key enablers of criticalapplications along our customers’ supply chain

Self-ShoppingMark & Read

Complete Traceability

Dimensioning & Weighing
Systems

Mark & Trace
12

Global Retail Trends▪

E-commerce is rising fast (+15% Y/Y) but it is notlaying off physical stores (+3% Y/Y)▪

China is set to surpass the US in terms of total retailsales and it dominates also the e-commerce market▪

The industry is undergoing an unprecedented change
in customer expectations, which is pushing for newtypes of stores, requiring new technologicalsolutions▪

Customer Experience (CX) and Engagement are thenew targets for retailers▪

From traditional check-out to multiple options tofully automated check-out13

RetailOur value proposition
APPLICATIONSDATALOGIC PROPOSITION▪ We satisfy globally the Retailers businessneeds, from Distribution Center to Check
Out and Shoppers’ Home
▪ Market Leader along the Retail supply
chain from 1974 with the first scanner
ever sold to a grocery store in Troy, Ohio
up to now with the innovative frictionless
shopping solution presented at the 2019
NRF exhibition in New York▪ Machine learning technology adoption to
be ready for the next checkout POS
investment cycle

14RetailOur value proposition
MARKET OUTLOOK▪ Online retailers are opening brick-and-mortar stores, while traditional retailers are converting
physical store locations into semi-distribution hubs
▪ Retailers who collect customer data on every step of the journey are headed in the right direction▪ Retail E-commerce sales worldwide posted solid gains in 2017, rising 23.2% to $2.290 trillion *, but
90% of transactions are still completed in-store▪ Distribution Centers automatization increase▪ Retailers are looking for advanced logistics solutions to be able to satisfy the needs of the Ecommerce trend* Source: eMarketer

15

Manufacturing

The factory of the future
APPLICATIONSDATALOGIC PROPOSITION▪ Unique portfolio provider of smart,interconnected devices able to protect,
identify, sense, check and mark▪ Datalogic is providing multi-productportfolio to serve all the major
manufacturing clients: Automotive, Foodand Beverage, Automated Machinery andElectronics, and Intralogistics▪ Keep investing in SIS to protect ourleadership leveraging on complimentary
products to SIS (LM, VS, S&S)

16

Manufacturing

The factory of the future
MARKET OUTLOOK▪ Market trends▪ Industry 4.0▪ Robotics / AGV▪ DPM / Extended Traceability and Quality Inspection▪ New segments due to new technology (i.e. Electric car)▪ Industry 4.0 is pushing for multi-technology adoption, product interoperabilityand enhancement self diagnostic capabilities▪ The adoption of key digital technologies shows a strong growth over the next 5 years▪ 267 Billion USD investment in the next 5 years directed towards IoT*
▪ The Industrial Robotics Market stands at 13.9 billion USD with an 11.8% growth *** Source: IoT Analytics** Source: International Federal of Robotics (IFR) data and Loup Ventures

17

Transportation & Logistics

End to end visibility and real time tracking
APPLICATIONSDATALOGIC PROPOSITION▪ We ensure Data Collection to CourierExpress-Parcels, Airports and Logistics▪ Datalogic is at the forefront of thedevelopment of airport systems, since
1984 with the first automatic reading
station in Milan, to the recent contract
with a main European hub in compliancewith new IATA requirements▪ Datalogic’s proven capabilities arereflected by the recent “Platinum”
supplier qualification granted by a world
leader in the shipping and logistics sector

18

Transportation & Logistics

End to end visibility and real time tracking
MARKET OUTLOOK▪ Growth is driven by E-commerce: high speed sorting, ability to manage any size of parcel, andhigh flexibility. E-Commerce is driving the industry growth▪ Resolution 753 requires (from June 2018) IATA members to maintain an accurate inventory ofbaggage by monitoring the acquisition and delivery of baggage▪ The baggage handling system market* is projected to reach USD 9.36 Billion by 2020, at a CAGRof 7.8% from 2015 to 2020
▪ Strong demand for solutions beyond barcode▪ Robotics & Automation: collaborative robots and automatic solutions to get higher
productivity, zero-defects, reducing manual operations*Source: IATA19

Healthcare

Meet regulations and Higher Patient Safety
APPLICATIONSDATALOGIC PROPOSITION▪ We empower the entire Healthcare
ecosystem from drug production topatient care
▪ Datalogic is the sole company providing
unique product features for the HCindustry
suchas:Anti-microbial
enclosures, Inductive charging technology
for battery recharge, and Green spot good
match to ensure positive medicine-patient
identification

20

Healthcare

Meet regulations and Higher Patient Safety
MARKET OUTLOOK▪ Drugs tracking to avoid counterfeit medications▪ Bedside care: adopt technology to secure the correct drug administration to patients and realtime saving with no mistakes of clinical data
▪ HC Emerging trends: Telemedicine/Telehealth. Health systems are more and more using digital
health tools and telehealth platforms to better care for patients after they leave the hospital,
as well as those most at risk of returning21

Q3 New Product Launches and Innovation
Hand Held Scanners

PowerScan
9501 AR
Cordless
ModelsMobile Computers

Joya Touch A6
With Megapixel
Scan Engine

Gryphon 4500
Digimarc Models

Factory Automation

Identification

Machine Vision

Matrix 300N
2MP Sensor

MX-E90 Vision
Processor

Matrix 120/220
with Digimarc andOPC UA

IMPACT 12.2
Software:focus on guidanceand traceability

Solutions

Websentinel PLUS

• 3Q New product* net sales account for 22.0% of total sales improved from 15.2% in Q3 2018
• R&D expenses up 1.2% to €47.5 million vs 9M2018.

• DL Business R&D spending amounted to approximately 11% of DL Business turnover, in line with the Group's
strategy on innovation.
* New Products: products launched in the last 24 months

22

Total Addressable Market
TAM:~ 14 bln USD

Healthcare

DATALOGIC MKT SHARE

T&L
12%

Healthcare
4%•Fixed retail scanners#1 WW: >35% market share•

Stationary industrial scanners#1 WW: >20% market share•

Handheld Scanners#3 WW: ≈ 20% market share

T&L
RetailManufacturing

Retail25%Manufacturing
59%

2018
Source: VDC, other market researches and Management estimates

23

Key Growth and Strategic DriversIndustry▪
▪
▪
▪

Keep focus on all of our 4 verticals
RTL ($ 4 bln): check out evolution, cross sell mobile, watch carefully DCs
MFG ($8 bln): expand into new sectors to offset automotive and consumer electronics
T&L ($2 bln): cross sell – complete offer SIS, Mobile, HHSProducts▪
▪
▪
▪

Protect our leadership in SIS
FRS: Be ready for the next generation/evolution not revolution
Mobile: increase market share widening our offer PDT/PPA, our big growth engine for the next year
HHS: lead the shift to 2D technology

Technology▪ Continuous improvement of core technology (bar code reading) e.g. optics, decoding▪ Investing in complimentary technologies:▪ Vision / Machine learning▪ RFID▪ Digital watermarking▪ Investing in Android

M&A▪ Selected target to accelerate our growth and/or to acquire critical technologies

24

Financials &Outlook25

9M Key Facts▪ Results in line with guidance with revenues declining 1% compared to last year. Despite toughmarket conditions revenues grew in North America.
▪ Vitality index improved from 13.8% in 9M2018 to 20.8% in 9M2019, accelerating to 22.0% inQ3 2019 mainly driven by Mobile Computing.
▪ T&L growing organically double digit at +14.2% and HC at +7.1% in 9M2019. Retail declining.
Solid performance of Manufacturing in Q3 in a declining market.

▪ Gross Margin almost flat at 48.4%, improved by 0.6% net of FX.
▪ EBITDA margin at 16.6% net of FX, after cost management.
▪ R&D investment at 10.3% on revenues compared to 10.1% last year, in line with theinnovation priorities.
26

9M 2019 P&L€m

9M 2019

9M 2018Revenues
Gross Margin% on Revenues
Operating expenses% on Revenues
EBITDA *% Ebitda margin
EBIT% Ebit margin
Net Income% on Revenues

461.4
223.5
48.4%
(166.3)(36.1%)
73.3
15.9%
52.0
11.3%
39.7
8.6%

466.1
226.7
48.6%
(160.3)(34.4%)
77.5
16.6%
61.1
13.1%
43.6
9.3%

EUR/USD FX Exchange Rate

1.12

1.19

* Impacted by IFRS 16: Positive impact of €3.5 million on EBITDA

Variance
ReportedConstantFX(1.0%)(3.8%)-0.2 pp+0.6 pp▪ Revenues down 1.0% to €461.4 m (-3.8% Net FX);DL Business revenues at €428.6 m (-0.6%, -3.1%Net Fx)▪ Gross Margin almost flat at 48.4%, improved by
0.6% net of FX▪ Operating expenses to €166.3 m:-1.7 pp-1.8 pp-0.8 pp-0.0 pp-1.8 pp-1.1 pp✓ S&D on revenues from 17.6% to 19.3% due
to due to carry over effects of salesorganization from last year

-0.1 pp✓ G&A and other items at 7.0% on revenues,flat vs last year

-0.7 pp✓ R&D on revenues increased from 10.1% to10.3%;▪ Net income at €39.7 m or 8.6% on revenues(almost flat Net FX vs last year)

27Group Revenues Breakdown€mVar %
Constant FX
vs. 9M 2018

9M 2019

9M 2018

RetailManufacturing

196,7
118,1

203,2
125,3

(3,2%)(5,7%)(6,3%)(7,2%)

Transportation & Logistics

58,3

49,6

17,6%

14,2%

Healthcare
Channel (Unallocated)
Total DL Business

15,0
40,5
428,6

13,6
39,4
431,1

10,6%
2,6%
(0,6%)

7,1%
1,0%(3,1%)

Solution Net Systems
Informatics
Intra division
Total Datalogic

21,7
13,7(2,6)
461,4

22,4
14,6(2,0)466,1(3,0%)(6,3%)(8,7%)(11,8%)(1,0%)% on DL Business Revenues
Channel9%
Healthcare
3%
T&L
14%
Retail46%

Manufacturing28%(3,8%)DL Business: Substantially in line with 9M 2018 (-0.6%); growth in T&L and HC, partially offsetting the decline of RTL and MFG
Retail: Tough comparison with the previous year due to major Fixed Retail Scanner rollouts with large clients in EMEAI and NA in 2018. Positive
performance in LA and APAC.
Manufacturing: Slowdown continued in automotive (EMEAI) and consumer electronics (China), partially offset by double digit growth in US.
T&L: Double digit growth driven by a strong performance in NA and EMEAI.
Healthcare: Positive performance with double digit growth in EMEAI and NA.

28

Group Revenues by Geography% on Group Revenues€mAPAC11%

Var %Constant FX
vs. 9M 2018
(2.9%)(3.5%)

9M 2019

9M 2018

EMEAI

233.4

240.4

North America

164.7

153.2

7.5%

1.2%

APAC

52.4

62.0

(15.5%)(17.7%)

Latin America

10.8

10.5

2.9%(0.3%)

Total Datalogic

461.4

466.1

(1.0%)(3.8%)

LA
2%

EMEAI
51%

NA36%

EMEAI: double digit growth in HC and T&L partially offsetting Retail downturn due to major FRS roll outs in 2018.
North America: Datalogic Business revenues show positive double digit growth across all verticals except Retail also impacted
by FRS roll outs in 2018.
APAC: China still impacted by slow down in Manufacturing, partially offset by positive performance of Australia and Japan.

29

EBITDA: 9M actual vs last year
€m

4.3

77.5

73.3

7.8(11.8)

(1.1)

(1.0)

(1.2)

FX

Structure

SNS/INF(1.2)-3.2% on DL
Business 2018
revenues*

9M 2018

Price

VolumeMix

Productivity

16.6% on Group
Revenues

9M 2019
15.9% on Group
Revenues

Positive Items* Excluding Service and other non significant items

30

Negative Items

Net Debt & Cash Flow Analysis : Dec’18 – Sep’19
73.3(34.7)(22.2)

23.8(15.6)(2.6)(28.7)(2.8)
NFP
Dec 18

EBITDA

Ch TWC

Capex

Taxes

Purchase
Own Shares

NFP at 30 September 2018 equal to +€10.9 million

31Dividend
PaymentOther(9.4)(10.0)NFPIFRS 16
Sep 19NFP Impact
excl. IFRS 16(19.5)NFP
Sep 192019 Outlook
The positive performance of the Group's business in North America and growth in the turnover of new
products confirm that the Group’s strategy is solid. The particularly difficult economic situation in China
and the slowdown to the main segments in which the Group operates in Europe, are expected to continue

also in the fourth quarter.
Despite the uncertainty of the economic environment, the Group will continue to execute its new productdevelopment strategy, while keeping costs under control.
In current market conditions, the Group expects to close the year substantially in line with the first ninemonths, save for any deferral of investment decisions by customers, which may impact the forecastedperformance.

32

Contact
NEXT EVENTSIR CONTACTS
IR Manager
Vincenza Colucci
CDR Communication Srl
Tel. +39 335 6909547
vincenza.colucci@cdr-communication.it

March 19, 2020
FY 2019 Results

IR AssistantDaniela Giglioli
Tel. +39 051 3147109
Fax +39 051 3147205
E-mail daniela.giglioli@datalogic.com

April 30, 2020
Shareholders’ Meeting

March 26, 2020STAR Conference Milan

May 11, 2020
Q1 2020 Results

ir@datalogic.com
Via Candini, 240012 Lippo di Calderara di Reno
Bologna – Italy

DATALOGIC ON LINE
www.datalogic.com

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