Datalogic

Investor Presentation • Oct 24, 2018

STAR Conference London 24 October 2018

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.

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Group Overview

Over 40 years of Technological Innovation

Escort Memory Systems Inc.

Italian Stock Exchange

Acquisition of

Acquisition of

PPT Vision Inc.

Minec AB

PSC Inc.

Laservall SpA Informatics Inc.

Datasensor SpA

Multiwave Photonics SA

Set up new One Datalogic

Soredi Touch Systems GmbH

Accu-Sort Systems Inc.

Partnership with CAEN RFID Srl

Evolution Robotics Retail Inc.

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 (October 19, 2018): 25.50 Euro Market Cap (October 19, 2018): 1.49 B Euro Auditing Company: EY

Strategy and Outlook

A clear strategy

THE OBJECTIVE

Keep constantly growing above market average, while significantly improving profitability

THE SCOPE

Remain a product company with new emphasis on solutions to satisfly the needs of End-Users in the following industries: Retail; Manufacturing; Transportation&Logistics; Healthcare.

THE ADVANTAGE

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

Unique Player across IA and ADC Markets

DATALOGIC is the only player across the Global competitive landscape who can boast a wide and consolidated experience in both the two fields of:

• Industrial Automation (dating back to the foundation of the company)
• Automatic Data Capture (leadership deriving from the acquisition of PSC USA )

AUTOMATIC DATA CAPTURE INDUSTRIAL AUTOMATION

A New Organization by Verticals…

Note: Figures represent the Revenues breakdown of the Datalogic division at H12018

w w w . d a t a l o g i c . c o m 11 Copyright Datalogic 2017 – Confidential& Proprietary Information

…with a Wide and Complementary Offer

Total Addressable Market

Total Addressable Market @ \$11 BN CAGR 2017-2021 +5.4%

We play in a growing market

Datalogic products and solutions are essential for the e-commerce, the robotics and the IoT revolution

There has never been a more exciting time as this to operate in the market we play in

Retail Bringing offline and online together

DATALOGIC 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 in Troy, Ohio to 2018 with the NRF exhibition in New York with the innovative frictionless shopping
• New Data capture products for Ecommerce and multichannel

Retail Bringing offline and online together

DATALOGIC RESULTS

• H1 2018 Revenues €141.6 mln (+2.5% YoY, +8.6% ex Forex), 50% of DL Division Revenues
• Double-digit growth in North America: 20% at constant forex. Steady growth in EMEA up +6% at constant Forex
• Big projects won in the US with Tier 1 Account related to check out and in store applications
• First roll out of our new Joya Android wireless charging mobile device
• Great success of our new check out retail scanner based on imaging technology on a global basis

MARKET OUTLOOK

• E-commerce drives change towards an omnichannel experience (brick and mortar – online shopping)
• 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.

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.
• Expanding into Intralogistic solutions and Robotic/AGV guidance

Manufacturing The factory of the future

DATALOGIC RESULTS

• H1 2018 Revenues €90.0 mln (+16.3% YoY, 19.7% ex Forex), 32% of DL Division Revenues
• Positive performance in all Geo Areas lead by China and Korea (+56%), N. America (+13% and above 25% in Q2) and EMEA (+11%) at constant Forex
• China: revenues doubled compared to 2016
• Top 3 customers of H1 are a leading consumer electronic company in Asia and two automotive players in Emea
• Great customers' feedback on the new SLS and double digit growth for our industrial bar code readers

MARKET OUTLOOK

• 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

Transportation & Logistics End to end visibility and real time tracking

DATALOGIC PROPOSITION

• 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

Transportation & Logistics End to end visibility and real time tracking

DATALOGIC RESULTS

• H1 2018 Revenues €31.1 mln (+21.0% YoY, 27.3% Ex Forex), 11% of DL Division' Revenues
• Growing double digits in EMEA, North America, and China & Korea: +28%, +32%, and +35% at constant Forex, respectively
• Growth driven by big projects award in the US and in Europe
• Start leveraging the cross selling of our new organization with large projects won on mobility
• New opportunities with leading e-commerce companies next to CEP

MARKET OUTLOOK

• Growth is driven by E-commerce: high speed sorting, ability to manage any size of parcel, and high flexibility
• Resolution 753 requires (from June 2018) IATA members to maintain an accurate inventory of baggage by monitoring the acquisition and delivery of baggage.
• Strong demand for solutions beyond barcode

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

Healthcare Meet regulations and Higher Patient Safety

DATALOGIC RESULTS

• H1 2018 Revenues €8.9 mln (-45.5% YoY, -42.0% ex Forex), 3% of DL Division' Revenues
• Decline in H1 due to the tough comparison with H1 2017, where major deals with 2 relevant US hospital chains occurred
• Strong expectation to recover by year end and next year thanks to the launch of dedicated products in Q4

MARKET OUTLOOK

• Drugs tracking to avoid counterfeit medications
• RTLS (Real Time Location System) System used to provide immediate or real-time tracking and management of medical equipment, staff and patients within all types of patient care environments
• HC Emerging trends: Telemedicine/Telehealth

2018 Outlook

• Grow in revenues at mid to high single digit rates
• Maintain a sound profitability through strong focus on gross operating margin improvements
• Further increase R&D investments & Distribution costs to improve our coverage and boost leadership in key areas (North America, APAC, Manufacturing)
• Keeping an EBITDA margin substantially in line with 2017
• Maintain a Cash Generation profile from operations
• Retail: improving growth rates in all main geographies mainly through new products and expanding sales organization
• Manufacturing: keep on steady growing in China and other main Geo Areas, backed by strong demand for automation and further investments in sales organization in key Geo areas
• T&L: keep growing in main Geo Areas, through new projects and new clients' acquisition
• HC: growth expectations mostly skewed toward H2
• Channel: strong recovery expected through the launch of new products particularly suitable for the channel

▪ Strong pipeline of new products to be launched in H2, ramp up of new products launched in the last 12 months in H2

Technologies and Products

Product Innovation and Development

• New product development process driven by customer needs
• A portfolio of more than 1.200 patents
• 9.1% of Revenues invested in R&D on a yearly basis, equal to over €55 million in 2017
• 11 Research & Development Centers
• 470 R&D resources, more than 450 Engineers, engaged in new product development and emerging technologies

Datalogic Technology Roadmap

Goal:

Identification – selection – protection development, of technologies needed to maintain the business performance in accordance with the company's objectives for the next 5 years

Methodology:

Define the technology stack, divided by:

• Core technologies: Not available on the market
• Product driven technologies: Used heavily in our products
• Solution driven technologies: Contribute to the consumer's experience

Market split by Technology

Datalogic can offer all the technologies available for products identification

Data Capture Technology

2D Imager 57%

OPTICAL 95% RFID 5%

includes only Hand Held Scanners, Industrial Stationary Scanners and Point of Sale Check Out Market Value: \$4.3 Bn

Laser Scanner 28%

Linear Imager 16%

H1 2018 Product Launches

MARVIS MARK READ VERIFY BLACKLINE COMPUTERS INTEGRATED SOLUTION

2D DECODER SCAN ENGINE

SH15 / SH21

STAR DONGLE – BOBTAIL

LANEHAWK LH5000 – SEAHAWK

SG4 FIELDBUS - ADVANCED MODEL

FALCON X4

JOYA TOUCH WITH ANDROID 7.1

SOTI MOBICONTROL ENTERPRISE MOBILITY MANAGEMENT

Financials

Investing R&D and S&D, whilst maintaining sound profitability

	€ m	1H2018	1H2017	Var%	▪	Revenues up 2.6% to €307.0 m (+7.9% at constant exchange rate)
Revenues		307.0	299.3	2.6%	▪	GOM showing steady improving
Gross Operating Margin		149.4	142.3	5.1%		trend at 48.7% (around +120 bps vs 1H 2017)
	%on Revenues	48.7%	47.5%		▪	R&D on revenues from 8.8% to
Operating expenses		(105.9)	(97.8)	8.3%		9.9% (from 9.1% to 10.4% Datalogic Business)
	%on Revenues	(34.5%)	(32.7%)		▪	S&D on revenues from 16.4% to
EBITDA		50.8	51.8	(1.9%)		17.4% (+9.1% YoY) due to strengthening of commercial
	Ebitda margin	16.6%	17.3%			organization
EBIT		40.3	41.2	(2.2%)	▪	EBITDA margin at 16.6%, where improved GOM offset by higher
	Ebit margin	13.1%	13.8%			R&D and distribution expenses
EBT		37.2	37.2	0.0%	▪	One off positive effects on financial expenses more than
Taxes		(8.2)	(7.9)	4.2%		offsetting negative forex in financial charges
Net Income		29.0	29.3	(1.1%)	▪	Tax rate at ~ 22%
	% on Revenues	9.4%	9.8%		▪	Net income at €29.0 m almost in
	Exchange Rate	1.2104	1.0830			line with 1H 2017

• (+7.9% at constant exchange rate)
• GOM showing steady improving trend at 48.7% (around +120 bps vs 1H 2017)
• R&D on revenues from 8.8% to 9.9% (from 9.1% to 10.4% Datalogic Business)
• S&D on revenues from 16.4% to 17.4% (+9.1% YoY) due to strengthening of commercial organization
• EBITDA margin at 16.6%, where improved GOM offset by higher R&D and distribution expenses
• One off positive effects on financial expenses more than offsetting negative forex in financial charges
• Tax rate at ~ 22%
• Net income at €29.0 m almost in line with 1H 2017

Group Revenues by country

REVENUES BY GEOGRAPHIC AREA

€ m	H1 2018	H1 2017	Var%	Var% Ex forex
EMEA	164.5	158.7	3.7%	4.8%
North America	91.8	95.0	(3.4%)	7.7%
Latin America	6.6	7.3	(10.6%)	0.9%
Asia Pacific	44.2	38.3	15.4%	22.9%
Total Revenues	307.0	299.3	2.6%	7.9%

• Sound growth net of forex
• Continuous growth in APAC driven by China and Korea (+27.3 and +34.3% net of forex)
• Keeping on growing in EMEA in all the main verticals
• NA positive net of forex, lead by double digit growth in T&L, Manufacturing and Retail
• Strong performance of Solution Net Systems, whilst Informatics still negative
• Latam slightly positive net of forex

Group Revenues & EBITDA by division

REVENUES BY DIVISION

€ m	1H2018	1H2017	Var%
Datalogic Business	284.3	279.2	1.8%
Solution Net Systems	14.2	10.6	34.5%
Informatics	9.7	11.2	(13.3%)
Adjustments	(1.3)	(1.7)	24.3%
Total Revenues	307.0	299.3	2.6%

• Datalogic driven at constant forex by growth of Fixed Retail and Stationary Industrial Scanners and Safety products, Scan Engines
• Solution Net Systems strong top line growth (+34.5%) thanks to new projects in postal and retail industries, and sound improvement in profitability
• Informatics top line still on downward trend but profitability turnaround continuing

EBITDA BY DIVISION
€ m	1H2018	1H2017
Datalogic	48.7	51.3
Solution Net Systems	1.9	0.8
Informatics	0.3	(0.3)
Total Group	50.8	51.8

Consolidated Balance Sheet

€ m

	Dec 2017	Jun 2018		Dec 2017	Jun 2018
Total Fixed Assets	347.9	351.3	Net Financial Position	(30.1)	(13.3)
Trade receivables	85.8	95.9
% on 12m rolling sales	14.2%	15.6%
Inventories	85.9	102.3
% on 12m rolling sales	14.2%	16.7%
Trade payables	(110.3)	(126.1)	Net Equity	353.0	348.2
% on 12m rolling sales	-18.2%	-20.6%
Trade Working Capital	61.5	72.0
% on 12m rolling sales	10.1%	11.7%
Other assets/liabilities	(86.5)	(88.4)
Net Invested Capital	322.9	334.9	Total Sources	322.9	334.9

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

NEXT EVENTS

November 13th, 2018 9M results

DATALOGIC ON LINE

www.datalogic.com