Datalogic

Investor Presentation • Aug 8, 2019

H1 2019 Results Conference Call

8 AUGUST 2019

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. This document does not constitute an offer to sell or a solicitation to buy or subscribe to Company shares and neither this entire document or a portion of it may constitute a recommendation to effect any transaction or to conclude any legal act of any kind whatsoever.

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H1 2019 Highlights

Net Debt position at €17.8

H1 2019 Results

€ m

H1 Key Facts

• North America and New Products delivered resilient Financial performance despite slowdown in key reference market and geographies
• Vitality index improved from 13.5% in H1 2018 to 20.2% in H1 2019 mostly thanks to Mobile Computing
• Gross Margin at €147.9m improved by 0.9% Net of Forex
• EBITDA margin remained almost flat Net of Forex at 16.6%
• R&D investment reached 11% in line with the Innovation priorities

Group Revenues Breakdown

-

DL Business: Substantially in line with H1 2018 (-0.6%); double digit growth in NA and LA, partially offsetting the softness in EMEAI and APAC Retail: Tough comparison with the previous year due to major rollouts with large clients in EMEAI in 2018 Manufacturing: Double digit growth in NA offset by slowdown in automotive and packaging markets in EMEAI and consumer electronics market in APAC

T&L: Double digit growth driven by a strong performance in NA and maintained position with largest parcel companies worldwide Healthcare: Returned to positive growth driven by EMEAI and NA

Channel: Strong growth driven by small and medium customers

€ m	H1 2019	H1 2018	Var % vs. H1 2018	Constant FX
Retail	129.5	134.5	(3.7%)	(6.9%)
Manufacturing	79.0	86.5	(8.7%)	(10.3%)
Transportation & Logistics	34.4	30.4	13.2%	9.4%
Healthcare	10.0	8.8	13.7%	10.0%
Channel (Unallocated)	29.7	24.1	23.3%	21.2%
Total DL Business	282.6	284.3	-0.6%	-3.3%
DL Business	282.6	284.3	(0.6%)	(3.3%)
Solution Net Systems	14.5	14.2	2.2%	(4.4%)
Informatics	9.3	9.7	(4.6%)	(10.9%)
Intra division	(1.9)	(1.3)
Total Datalogic	304.5	307.0	-0.8%	-3.8%

Group Revenues by Geography

EMEAI: decreased 3.7% due to a market slowdown particularly in Automotive sector, partially offset by growth in HC and in the Small Medium Business

North America: Datalogic Business revenues show positive growth, +19% mainly driven by double digit growth in T&L and

Manufacturing

APAC: Negative trend driven by China in all the sectors due to trade war.

€ m	H1 2019	H1 2018	Var % vs. H1 2018	Constant FX
EMEAI	159.9	165.9	(3.7%)	(4.4%)
North America	104.4	91.8	13.7%	6.1%
APAC	33.1	42.7	(22.5%)	(24.6%)
Latin America	7.2	6.5	10.2%	7.2%
Total Revenues	304.5	307.0	-0.8%	-3.8%

• First Half New products* net sales account for 20.2% of total sales improved from 13.5% in H1 2018

• Positive acceptance of new products by our Customers

New Product Launches and Innovation

* New Products: products launched in the last 24 months

1H 2019 P&L

€ m	H1 2019	H1 2018	Variance Reported	Constant F X	▪ Revenues down 0.8% to €304.5 m (-3.8% Net FX);
Revenues	304.5	307.0	(0.8%)	(3.8%)	DL Business revenues at €282.6 m (-0.6%, -3.3% Net Fx)
Gross Margin % on Revenues	147.9 48.5%	149.4 48.7%	-0.1 pp	+0.9 pp	▪ Gross Margin almost flat at 48.5%, improved by 0.9% net of FX
Operating expenses % on Revenues * EBITDA	(110.8) (36.4%) 47.7	(105.9) (34.5%) 50.8	-1.9 pp	-2.0 pp	▪ Operating expenses to €110.8 m: ✓ R&D on revenues increased from 9.9% to 10.3%;
% Ebitda margin EBIT	15.7% 33.9	16.6% 40.3	-0.9 pp	+0.0 pp	✓ S&D on revenues from 17.4% to 19.4% due to investment in commercial organization
% Ebit margin Net Income	11.1% 25.3	13.1% 29.0	-2.0 pp	-1.1 pp	✓ G&A and other items decreased from 7.1% to 6.6% on revenues
% on Revenues EUR/USD FX Exchange Rate	8.3% 1.13	9.4% 1.21	-1.1 pp	-0.4 pp	▪ Net income at €25.3 m at 8.3% (-0.4% at Net FX)

50.8	(8.3)	(0.8)	5.2	3.5	(1.2)	(1.6)	0.1	47.7
	-3.3% on DL Business 2018 revenues*
H1 2018	Price	Volume	Mix	Productivity	FX	Structure	SNS/INF	H1 2019
16.6% on Group Revenues	(2.7%)	(0.3%)	1.7%	1.1%	(0.4%)	(0.5%)	0.0%	15.7% on Group Revenues
							Positive Items	Negative Items

EBITDA: actual vs last year

€ m

Assets Analysis

Net Invested Capital increased by €31 m (excluding IFRS 16 impact of €10.9 m)

Main drivers are footprint rationalization in EMEAI and seasonality:

• Fixed Assets net increase of about €5 m
• Inventory increased to support cross-over of the new logistic and industrial European footprint (€7 m) and seasonality (about €7 m)
• VAT Tax credit from new logistic set up of €12 m

€ m	Jun-19	Dec-18
Total Fixed Assets	384.4	369.7
Trade receivables	92.2	90.4
% on 12m rolling sales	14.7%	14.3%
Inventories	109.7	95.8
% on 12m rolling sales	17.4%	15.2%
Trade payables	(118.4)	(117.1)
% on 12m rolling sales	(18.8%)	(18.6%)
Trade Working Capital	83.5	69.1
% on 12m rolling sales	13.3%	11.0%
Other assets/liabilities	(74.0)	(86.9)
Net Invested Capital	393.9	352.0

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

NFP at 30 June 2018 equal to €13.3 million

2019 Outlook

In light of the continuing uncertainty in the macroeconomic scenario, we expect to close the year in line with the performance recorded in the first half.

However, robust growth was seen in North America, and the new products launched during the half-year, as a result of increased investments in R&D, were positively received – indicators that confirm the Group's growth potential in a less uncertain and more uniform macroeconomic scenario across its various markets of operation.

September 4, 2019 Industrial Day 2019 – Borsa Italiana

November 13, 2019 9M Results

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

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This presentation contains statements that are neither reported financial results nor other historical information. These statements are forward-looking statements. These forward-looking statements rely on a number of assumptions and are subject to a number of risks and uncertainties, many of which are outside the control of Datalogic S.p.A., that could cause actual results to differ materially from those expressed in or implied by such statements, such as future market conditions, currency fluctuations, the behavior of other market participants and the actions of governmental and state regulators

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Datalogic S.p.A.

Via Candini, 2 - 40012 Lippo di Calderara di Reno - Bologna (Italy) Tel. +39 051 3147011 | Fax +39 051 3147205 corporate@datalogic.com ww.datalogic.com