Datalogic — Call Transcript 2016

Mar 4, 2016

FY 2015 Conference Call

March 4th, 2016

Agenda

FY 2015

Outlook

FY 2015

2015 Key Factors

* Are considered new products the products announced in the last 24 months

Highlights 4Q 2015

		+15.5% YoY to 143.8 mln Euro (+7.9% at constant exchange rate)
Revenues		mainly thanks to North America and Asia Pacific markets in Retail and T&L

• New products* accounted for 27.7% of quarterly revenues
• EBITDA +18.5% YoY to 20.7 mln Euro (+22.0% at constant exchange rate)
• EBITDA margin at 14.4% (15.8% at constant exchange rate)
• Net Profit Positive trend of financial costs due to refinancing
• Net profit almost doubled

€000	4Q2015	4Q2014	YoY%	3Q2015	QoQ %
Revenues	143,773	124,482	15.5%	133,810	7.4%
Gross Operating Profit	65,869	60,714	8.5%	62,963	4.6%
EBITDA	20,670	17,436	18.5%	18,752	10.2%
EBITDA Margin	14.4%	14.0%		14.0%
EBIT	14,856	9,756	52.3%	13,404	10.8%
Net Profit	10,125	5,177	95.6%	8,972	12.8%

2015: 4Q Best quarter in a row

Highlights FY 2015

Revenues

• +15.2% YoY to 535.1 mln Euro (+5.9% at constant exchange rate)
• Growth driven by ADC in North America, Greater China and Europe thanks to robust investments by retailers and the launch of technologically advanced products
• Industrial Automation exploits growth opportunities in Europe and Asia Pacific
• Strong increase of the booking : +17.6% YoY at 563.3 mln Euro
• +6.2% YoY to 73.7 mln Euro (+8.6% at constant exchange rate)
• EBITDA margin at 13.8% (15.3% at constant exchange rate) vs 14.9% in 2014
• Investment in R&D grew by 11.9% YoY with an incidence of 9% on revenues, continued to be crucial for the development of the Group

Net Profit

EBITDA

• Strong improvement of financial costs thanks to a cheaper financing contract
• Tax rate at around 21%
• Robust growth of net income

FY 2015 Profit and Loss

(€000)	FY2015		FY2014		Var %
Revenues	535,068	100.0%	464,546	100.0%	15.2%
COGS	(286,450)	(53.5%)	(236,101)	(50.8%)	21.3%
Gross Operating Profit	248,618	46.5%	228,445	49.2%	8.8%
Other Revenues	3,504	0.7%	2,239	0.5%	56.5%
R&D	(48,244)	(9.0%)	(43,108)	(9.3%)	11.9%
Distribution Costs	(101,095)	(18.9%)	(88,205)	(19.0%)	14.6%
Administrative Expensive	(39,521)	(7.4%)	(39,146)	(8.4%)	1.0%
Other operating expensive	(2,041)	(0.4%)	(2,206)	(0.5%)	(7.5%)
Total Operating expenses and other	(190,901)	(35.7%)	(172,665)	(37.2%)	10.6%
Depreciation	(7,812)	(1.5%)	(7,199)	(1.5%)	8.5%
Ammortisation	(4,715)	(0.9%)	(4,225)	(0.9%)	11.6%
EBITDA	73,748	13.8%	69,443	14.9%	6.2%
Non recurring costs/rev	(2,564)	(0.5%)	(5,618)	(1.2%)	(54.4%)
Amort. Intang. Assets from acquis.	(5,712)	(1.1%)	(5,493)	(1.2%)	4.0%
Operating Profit (EBIT)	52,945	9.9%	46,908	10.1%	12.9%
Financial (costs)/rev.	(4,448)	(0.8%)	(8,086)	(1.7%)	(45.0%)
Foreign exchange (cost)/rev	3,087	0.6%	357	0.1%	n.m
EBT	51,584	9.6%	39,179	8.4%	31.7%
Taxes	(11,037)	(2.1%)	(8,322)	(1.8%)	32.6%
Net Income	40,547	7.6%	30,857	6.6%	31.4%
Exchange Rate	1.1095		1.3285

Revenues Trend by Division

• ADC Division is the driver of the growth in all the reference markets (+17.5%, +8.2% at constant exchange rate).
• POS check out fixed scanners with the new imaging technology and hand held scanners are driving growth in Retail
• The Industrial Automation division is improving +12.1% (+4.7% at constant exchange rates) and net of the BU Systems, the division's revenues increased by 12.6% (+6.2% at constant exchange rates)
• BU Systems: revenues from Royal Mail's order to implement a new Parcel Sorting System (totaled €29 M) in UK started in 4Q.

REVENUES BY DIVISION (%)

REVENUES BY DIVISION

€mln	2015	2014	Var %
ADC	364.0	309.7	17.5%
IA	146.1	130.3	12.1%
- IA ex BU Systems	129.0	114.5	12.6%
Informatics	27.4	26.1	4.8%
Corporate and Adj.	(2.4)	(1.6)	n.m.
Total Revenues	535.1	464.5	15.2%

Revenues Trend by Country

REVENUES BY GEOGRAPHIC AREA

€mln	2015	2014	Var %
Europe	268.5	244.0	10.0%
North America	161.1	132.6	21.4%
Asia Pacific	71.5	57.3	24.7%
ROW	34.0	30.6	11.0%
Total Revenues	535.1	464.5	15.2%

• Europe continues to generate robust growth both in in ADC and IA, confirming the leadership of the Group
• North America: strong growth of ADC (+ 38.7%, + 15.9% at constant exchange rate) and recovery in IA in the second half of the year thanks to the launch of new products in FA and T&L
• Expansion in Asia Pacific continues with the launch of dedicated products
• Focus on Greater China up 37.1% (22.8% at constant exchange rate), with good performance in both divisions
• ROW driven by South Africa and Arab Emirates (over 50% growth), Russia (over 30%) partially offset by the economic downturn in Brasil

FY Segment Reporting: GOP and EBITDA

2014 2015

GOP BY DIVISION EBITDA* BY DIVISION

2014 2015

Gross Operating Profit	2015	2014	EBITDA* Margin	2015	2014
ADC	47.3%	50.8%	ADC	22.3%	23.9%
Industrial Automation	44.8%	45.7%	Industrial Automation	5.9%	5.9%
- IA ex BU Systems	50.1%	49.6%	- IA ex BU Systems	9.3%	7.8%
Informatics	43.7%	45.1%	Informatics	(0.1%)	4.9%
Total Group	46.5%	49.2%	Total Group	13.8%	14.9%

(*) With the purpose to better report the operating sectors economic performances, it was deemed appropriate to highlight the Divisional EBITDA as monitoring KPI.

FY Segment Reporting: R&D and TWC

R&D/Revenues	2015	2014
ADC	10.7%	9.7%
Industrial Automation	12.3%	11.3%
Informatics	4.3%	2.9%
Total Group	9.0%	9.3%

TWC/Annualized Revenues	2015	2014
ADC	5.1%	6.9%
Industrial Automation	13.7%	15.7%
Informatics	6.1%	12.5%
Total Group	6.8%	8.7%

R&D BY DIVISION TWC BY DIVISION

EBITDA: Actual vs Last Year

The Exchange rate variance is the result of the difference between Dec '15 YTD Actual (1.1095) and Dec '14 YTD Actual (1.3285) €/USD exchange rates.

Consolidated Balance Sheet at 31.12.2015

Outlook

2016 Outlook

• Revenue Growth well above Market Growth
• Double Digit Growth in North America and China, improving Market Share
• Strong Improvement of Operations Efficiency reducing weight of COGS on revenues thanks to the new Procurement Centre in China, to plants rationalisation (new Hungharian plant for IA) and insourcing of components
• Investment in R&D to increase up to 9.5% of revenues
• Strict control of Operating Expenses and reduction of G&A, thus improving operating leverage
• Maintain Strong performance on Cash

Contact

IR CONTACTS

CFO and IR Manager Sergio Borgheresi E-mail ir@datalogic.com

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

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

IR Consultant Vincenza Colucci CDR Communication Srl Tel. +39 335 6909547 vincenza.colucci@cdr-communication.it www.datalogic.com

NEXT EVENTS

March 15th , 2016 Star Conference Milan

May 13th, 2016 1Q results

August 4th, 2016 6M results

November 11th, 2016 9M results

DATALOGIC ON LINE

This presentation contains statements that are neither reported financial results nor other historical information. These statements are forwardlooking 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 E-mail corporate@datalogic.com