Q1 2017 Conference Call

May 16th, 2017

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.

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Q1 2017 Highlights

	 New organization - Datalogic, Informatics and Solution Net Systems up and running since January 1st, without any repercussion on results
NEW ORGANIZATION	4 Customer Centric Industries – Retail, T&L, Manufacturing and Healthcare – within ONE DATALOGIC DIVISION
	Positive customer feedbacks drive performance in all geographic  areas, despite planned go-live shipment stop

	 Revenues up 4.6% YoY to 141.5 mln Euro; Datalogic Division up 6.3%
	Bookings in the quarter at Euro 161 million, up by 14.8% compared to  the first quarter of 2016
FINANCIALS	 EBITDA: 20.8 mln Euro (+10.3% YoY) - EBITDA Margin at 14.7% vs 13.9%
	 Net Income: 11.9 mln Euro (+18.2%)
	Net Debt at 10.5 mln Euro due to Q1 seasonality 

	R&D investments continue to increase: 13.2 mln Euro (+9.1% YoY) 
INNOVATION	 New products on sales at 18,7%* due to strong pipeline of "breakthrough" cross industries products in H2, and the 2016 focus on industry specific products
	 Breakthrough innovation presented at the New York NRF
	New solutions in RFID launched in Q1 

* new products refer to products announced in the last 24 months

Financials

Improvements across the whole P&L

€000	Q12017	Q12016	Var%
Revenues	141,524	135,353	4.6%
Gross Operating Margin	66,195	62,090	6.6%
%on Revenues	46.8%	45.9%
Operating expenses	(49,605)	(47,018)	5.5%
%on Revenues	(35.1%)	(34.7%)
EBITDA	20,764	18,820	10.3%
Ebitda margin	14.7%	13.9%
EBIT	15,255	14,210	7.4%
Ebit margin	10.8%	10.5%
EBT	13,986	12,259	14.1%
Taxes	(2,080)	(2,186)
Net Income	11,906	10,073	18.2%
% on Revenues	8.4%	7.4%
Exchange Rate	1.0648	1.1020

Sales up by 4.6% to 141.5 mln Euro
Booking confirming its strong growth: +14.8% at 161 mln Euro
R&D increasing at 13.2 mln Euro (9.3% on sales)
Robust growth of EBITDA by +10.3% to 20.8 mln Euro
EBITDA margin to 14.7% from 13.9%, notwithstanding Negative EUR USD Exch. rates
Net Income +18.2% to 11.9 mln Euro

Best first quarter over the last ten years

REVENUES

Group Revenues by country

REVENUES BY GEOGRAPHIC AREA

€ mln	Q1 2017	Q1 2016	Var%
Europe	78.5	73.1	7.3%
North America	39.0	39.6	(1.5%)
Asia Pacific	17.0	14.9	14.6%
ROW	7.0	7.8	(9.9%)
Total Revenues	141.5	135.4	4.6%

Europe continues to generate robust growth with a +7.3% increase vs Q1 2016. Italy accounting for 8.9% of revenues globally
North America down only due to Informatics Division
North America ex Informatics and Solution Net Systems, + 9%
Asia Pacific the fastest growing region entirely driven by China growing above 30%

* IA excluding BU Systems

Group Revenues & EBITDA by division

REVENUES BY DIVISION

€ mln	Q12017	Q12016	Var%	Informatics 4% Solution Net
Datalogic	131.5	123.7	6.3%	Systems 3%
Solution Net Systems	5.0	4.7	5.5%
Informatics	6.0	7.4	(19.1%)
Adjustments	(0.9)	(0.4)	108.3%
Total Revenues	141.5	135.4	4.6%	Datalogic

Datalogic Division, the group's stronghold with positive performances in Europe, North America and particularly - China
Solution Net Systems, + 5,5% continuing to benefit from Royal Mail's order
Informatics still in a downward trend due to the change in the business model

EBITDA BY DIVISION

	Q12017	Q12016	Var%
Datalogic	21.15	18.76	12.7%
Solution Net Systems	0.09	(0.22)	140.7%
Informatics	(0.45)	0.30	(250.7%)
Adjustments	(0.03)	(0.01)	(78.6%)
Total Group	20.76	18.82	10.3%

Focus on Datalogic Division

(*)The Channel (Unallocated) includes revenues not directly attributable to the 4 identified industries.

EBITDA*: actual vs last year

(*) Ordinary Operating: Profit before non recurring costs/revenues and depreciation & amortization (EBITDA)

Note:

The Exchange rate variance is the result of the difference between March'17 YTD Actual (1.0648 ) and March'16 YTD Actual (1.1020 ) €/USD exchange rates.

Consolidated Balance Sheet

	Dec 2016	Mar 2017		Dec 2016	Mar 2017
Total Fixed Assets	371.7	371.1	Net Financial Position	(3.5)	10.5
Trade receivables	75.5	82.3
% on 12m rolling sales	13.1%	14.1%
Inventories	82.3	89.7
% on 12m rolling sales	14.3%	15.4%
Trade payables	(104.6)	(90.8)	Net Equity	336.4	346.8
% on 12m rolling sales	-18.1%	-15.6%
Trade Working Capital	53.2	81,.2
% on 12m rolling sales	9.2%	13.9%
Other assets/liabilities	(92.1)	(95.0)
Net Invested Capital	332.9	357.3	Total Sources	332.9	357.3

New products

Q1 2017 New Products

Product name	Launch date	Description
PowerScan Retail	January 13th	The new PowerScan 9500 Retail series targets the most demanding POS check out environments, where the handheld scanner is used to compliment fixed scanners, bottom-of-the-basket items, loyalty cards and capable of reading 2D bar codes from Smartphones. The outstanding robustness and higher depth of field create the ideal solution for Grocery, Hypermarket/ Superstore, Cash & Carry, Wholesalers and Home Improvement stores
RFID solution	February 3rd	Datalogic enters the RFID market with a full range of products: Buetooth® Reader, Desktop Reader, Temperature Logger for the following target markets: • Retail non-food: Product localization, real-time inventory and security checkout in apparel, footwear and accessories • Transportation & Logistics: Manual or automatic inventory restocking, Shipping/Receiving, Luggage sorting at airports • Healthcare: Pharmaceuticals and blood traceability • Manufacturing: Automatic detection on conveyor belts
Impact 11.10 release	March 9th	A new version of the powerful IMPACT software, version 11.10, that increases performance and capabilities of the Pattern Sorting Tool (PST), a unique machine vision tool able to recognize thousands of products. Product Identification in Manufacturing: Bar codes are not present or visible at every single stage of the production process. The PST provides identification without bar codes enabling full product traceability, quality and safety. Product Identification in Logistics: In automated warehouses and distribution centers, the PST enables the safe handling of hazardous materials and reduces incorrect shipment rates enabling HazMat label detection and cross-check applications
MATRIX 300N™ POLARIZED	March 23rd	MATRIX 300N™ POLARIZED, an ultra-compact 2D imager featuring a built-in polarizing filter. The Matrix 300N™ Polarized is ideal for Electronics, Automotive and Packaging industries. It is a top performing, compact 2D imager offering extreme reading performance at high speed and in DPM applications.

Outlook

2017 Outlook

Further benefits from the reorganization expected mainly in the second half of 2017

Major Industries drivers:

T&L: strong booking in all Geo Areas, thanks to ecommerce & CEP
Retail: benefits from new products roll out for the check out, exploiting potential of non-food area
HC: enlarging customer base in North America
Manufacturing: strong demand from China
Keep on growing in revenues over market average, with a major focus in NA and APAC
Increasing R&D investments to maintain leadership in the market
Strong focus on all gross operating margin levers to maintain a sound profitability
Maintain Cash Generation

Contact

IR CONTACTS

IR Manager Vincenza Colucci CDR Communication Srl Tel. +39 335 6909547 [email protected]

IR Assistant Daniela Giglioli Tel. +39 051 3147109 Fax +39 051 3147205 E-mail [email protected]

Via Candini, 2 40012 Lippo di Calderara di Reno Bologna – Italy

NEXT EVENTS

August 3rd, 2017 6M results

November 13th, 2017 9M results

AI Terminal

Datalogic

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