Datalogic

Investor Presentation • Jan 30, 2020

Italian Stock Market Opportunities

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 their directors, officers, employees, advisers or agents (the "Group Representatives") accepts any responsibility for/or makes any representation or warranty, express or implied, as to the accuracy, timeliness or completeness of the information set out herein or any other related information regarding the Group, whether written, oral or in visual or electronic form, transmitted or made available.

This document may contain forward-looking statements about the Company and/or the Group based on current expectations and opinions 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 Company and/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 and regulations, the Company assumes no obligation to provide updates of any of the aforesaid forward-looking statements. Under no circumstances shall the Group and/or any of the Group Representatives be held liable (for negligence or otherwise) for any loss or damage howsoever arising from any use of this document or its contents or otherwise in connection with the document or the aforesaid forward-looking statements.

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Corporate Overview

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

Datalogic at a glance

1,200 patents filed and more than 350 in approval

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

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

Over 45 years of Technological Innovation

Solid long-term growth

• A history of growth in profitability
• Strong improvements across key indicators reflecting investments in innovation, M&A and better efficiency and productivity
• Robust cash generation

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A Wide Geographical Footprint

Stock and Governance

Market Segment: STAR MTA

Reuters Code: DAL.MI

Bloomberg Code: DAL IM

Outstanding Shares: 58,446,491

Share Par-Value: 0.52 Euro each

Ticker: DAL

Price (January 27, 2020): 16.1 Euro

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

Auditing Company: Deloitte

Strategy

Rehearsing our Strategy

needs of End Users in the following Industries: Retail, T&L, Factory Automation,

EMEA and become a strong

with a growing presence in

▪ Moving from a product to a Customer-Centric company, leveraging on our wide range of products that is able to fulfill our Customers' needs for both data collection and process automation and providing end-to-end solutions across the entire flow of operations

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 to industrial scanners, from hand held to mobile

Undisputed leadership on barcode readers

Complementary/Open doors products in the MFG Industry

Our products are key enablers of critical applications along our customers' supply chain

Self-Shopping Mark & Read Dimensioning & Weighing Systems

Complete Traceability Mark & Trace

Global Retail Trends

13

• E-commerce is rising fast (+15% Y/Y) but it is not laying off physical stores (+3% Y/Y)
• China is set to surpass the US in terms of total retail sales and it dominates also the e-commerce market
• The industry is undergoing an unprecedented change in customer expectations, which is pushing for new types of stores, requiring new technological solutions
• Customer Experience (CX) and Engagement are the new targets for retailers
• From traditional check-out to multiple options to fully automated check-out

Channel	CAGR 2017-2023e	Sales Added 2017- 2023e (USD)	Share of Sales Added 2017-2023e
Ecommerce	14.4%	1,778bn	53%
11233559 Store-based	4.0%	1,563bn	47%

Retail Our value proposition

• We satisfy globally the Retailers business needs, 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

DATALOGIC PROPOSITION APPLICATIONS

MARKET OUTLOOK

▪ Online retailers are opening brick-and-mortar stores, while traditional retailers are converting

▪ 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

- physical store locations into semi-distribution hubs

• 90% of transactions are still completed in-store
• Distribution Centers automatization increase
• commerce trend

▪ Retailers are looking for advanced logistics solutions to be able to satisfy the needs of the E-

Retail Our value proposition

Manufacturing The factory of the future

DATALOGIC PROPOSITION

• Unique portfolio provider of smart, interconnected devices able to protect, identify, sense, check and mark
• Datalogic is providing multi-product portfolio to serve all the major manufacturing clients: Automotive, Food and Beverage, Automated Machinery and Electronics, and Intralogistics
• Keep investing in SIS to protect our leadership leveraging on complimentary products to SIS (LM, VS, S&S)

APPLICATIONS

MARKET OUTLOOK

Manufacturing The factory of the future

• 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 interoperability and 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

DATALOGIC PROPOSITION

Transportation & Logistics End to end visibility and real time tracking

• We ensure Data Collection to Courier-Express-Parcels, Airports and Logistics
• Datalogic is at the forefront of the development of airport systems, since 1984 with the first automatic reading station in Milan, to the recent contract with a main European hub in compliance with new IATA requirements
• Datalogic's proven capabilities are reflected by the recent "Platinum" supplier qualification granted by a world leader in the shipping and logistics sector

APPLICATIONS

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, and high flexibility. E-Commerce is driving the industry growth

▪ Resolution 753 requires (from June 2018) IATA members to maintain an accurate inventory of baggage 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 CAGR

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• of 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

Healthcare Meet regulations and Higher Patient Safety

DATALOGIC PROPOSITION

• We empower the entire Healthcare ecosystem from drug production to patient care
• Datalogic is the sole company providing unique product features for the HC industry such as: Anti-microbial enclosures, Inductive charging technology for battery recharge, and Green spot good match to ensure positive medicine-patient identification

APPLICATIONS

Healthcare Meet regulations and Higher Patient Safety

MARKET OUTLOOK

▪ Bedside care: adopt technology to secure the correct drug administration to patients and real

• Drugs tracking to avoid counterfeit medications
• time saving with no mistakes of clinical data
• as well as those most at risk of returning

▪ 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,

• 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.
• strategy on innovation.

• DL Business R&D spending amounted to approximately 11% of DL Business turnover, in line with the Group's

Q3 New Product Launches and Innovation

Mobile Computers

* New Products: products launched in the last 24 months

Hand Held Scanners

Digimarc Models

Joya Touch A6 With Megapixel Scan Engine

Factory Automation	Solutions
Identification	Machine Vision
Matrix 300N 2MP Sensor	MX-E90 Vision Processor	Websentinel PLUS
Matrix 120/220 with Digimarc and	IMPACT 12.2 Software: focus on guidance

OPC UA

and traceability

Total Addressable Market

• Fixed retail scanners #1 WW: >35% market share
• Stationary industrial scanners #1 WW: >20% market share
• Handheld Scanners #3 WW: ≈ 20% market share

DATALOGIC MKT SHARE

TAM: ~ 14 bln USD

Key Growth and Strategic Drivers

▪ 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

M&A

- Keep focus on all of our 4 verticals

• T&L (\$2 bln): cross sell complete offer SIS, Mobile, HHS
• Protect our leadership in SIS
• FRS: Be ready for the next generation/evolution not revolution
• HHS: lead the shift to 2D technology
• Investing in complimentary technologies:
  • Vision / Machine learning
  • RFID
  • Digital watermarking
• Investing in Android

▪ Mobile: increase market share widening our offer PDT/PPA, our big growth engine for the next year

▪ Continuous improvement of core technology (bar code reading) e.g. optics, decoding

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

Financials & Outlook

9M Key Facts

• Results in line with guidance with revenues declining 1% compared to last year. Despite tough market conditions revenues grew in North America.
• Vitality index improved from 13.8% in 9M2018 to 20.8% in 9M2019, accelerating to 22.0% in Q3 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 the innovation priorities.

9M 2019 P&L

€ m	9M 2019	9M 2018	Variance Reported	Constant F X	▪
Revenues	461.4	466.1	(1.0%)	(3.8%)	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 % on Revenues	223.5 48.4%	226.7 48.6%	-0.2 pp	+0.6 pp	▪ Gross Margin almost flat at 48.4%, improved by 0.6% net of FX
Operating expenses % on Revenues	(166.3) (36.1%)	(160.3) (34.4%)	-1.7 pp	-1.8 pp	▪ Operating expenses to €166.3 m: ✓ R&D on revenues increased from 10.1% to
* EBITDA % Ebitda margin	73.3 15.9%	77.5 16.6%	-0.8 pp	-0.0 pp	10.3%; ✓ S&D on revenues from 17.6% to 19.3% due
EBIT % Ebit margin	52.0 11.3%	61.1 13.1%	-1.8 pp	-1.1 pp	to due to carry over effects of sales organization from last year
Net Income % on Revenues	39.7 8.6%	43.6 9.3%	-0.7 pp	-0.1 pp	✓ G&A and other items at 7.0% on revenues, flat vs last year
EUR/USD FX Exchange Rate	1.12	1.19			▪ Net income at €39.7 m or 8.6% on revenues (almost flat Net FX vs last year)

Group Revenues Breakdown

DL Business: Substantially in line with 9M 2018 (-0.6%); growth in T&L and HC, partially offsetting the decline of RTL and MFG performance in LA and APAC.

• Retail: Tough comparison with the previous year due to major Fixed Retail Scanner rollouts with large clients in EMEAI and NA in 2018. Positive
• 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.

€ m	9M 2019	9M 2018	Var % vs. 9M 2018	Constant FX
Retail	196,7	203,2	(3,2%)	(6,3%)
Manufacturing	118,1	125,3	(5,7%)	(7,2%)
Transportation & Logistics	58,3	49,6	17,6%	14,2%
Healthcare	15,0	13,6	10,6%	7,1%
Channel (Unallocated)	40,5	39,4	2,6%	1,0%
Total DL Business	428,6	431,1	(0,6%)	(3,1%)
Solution Net Systems	21,7	22,4	(3,0%)	(8,7%)
Informatics	13,7	14,6	(6,3%)	(11,8%)
Intra division	(2,6)	(2,0)
Total Datalogic	461,4	466,1	(1,0%)	(3,8%)

Group Revenues by Geography

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.

€ m	9M 2019	9M 2018	Var % vs. 9M 2018	Constant FX
EMEAI	233.4	240.4	(2.9%)	(3.5%)
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%)

EBITDA: 9M actual vs last year

€ m

* Excluding Service and other non significant items

Net Debt & Cash Flow Analysis : Dec'18 – Sep'19

NFP at 30 September 2018 equal to +€10.9 million

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 product development strategy, while keeping costs under control. In current market conditions, the Group expects to close the year substantially in line with the first nine months, save for any deferral of investment decisions by customers, which may impact the forecasted performance.

Contact

IR CONTACTS

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

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

ir@datalogic.com Via Candini, 2 40012 Lippo di Calderara di Reno Bologna – Italy

March 19, 2020 FY 2019 Results

March 26, 2020 STAR Conference Milan

April 30, 2020 Shareholders' Meeting

May 11, 2020 Q1 2020 Results

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