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Datalogic — Call Transcript 2021
Mar 10, 2021
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FY 2020 Results Conference Call
MARCH 10, 2021
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 affect any transaction or to conclude any legal act of any kind whatsoever.
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FY 2020 & Q4 2020 Results
December 31, 2019 economic data were restated following the classification of Solution Net Systems Inc. as discontinued operation as required by the accounting standard IFRS 5. 1
1
2020 Highlights: Strong Execution in the downturn
4
- ❑ Progressive Top line improvement during the Pandemic from -26.8% in Q2 to 5.4% in Q4. EMEAI and Americas affected. Solid Growth in APAC
- ❑ Strong execution both on tactical and operational efficiency delivering Second-Half Adj Ebitda margin back to pre-pandemic level at 16.0%
- ❑ Protected investment in Innovation with R&D spending* at ca. 13.1% and Vitality Index at 20.0%
- ❑ Cash Generation in Q4 delivering Net Financial Position positive at 8.2 M€
- ❑ Sound signs of rebound starting from Q4 in all geographies coupled with leaner cost base preparing return to profitable growth
- ❑ Strengthened position in Industrial Automation with the acquisition of MD Micro Detectors Group in Q1 2021
* Including capitalized R&D expenses and excluding D&A
Operating costs
Ebitda Margin
Group Revenues by Segment
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❑ Retail: Decline driven mainly by Americas and base effect from end of major FRS Roll-outs in 2019
❑ Manufacturing: 40.3% growth in APAC. EMEAI and Americas impacted by Covid particularly in Automotive
- ❑ T&L: Double digit growth in APAC . Tough comparison in Americas due to the conclusion of important multi-year contracts
- ❑ Healthcare: double digit growth in APAC, slight decrease in EMEAI and North America
- ❑ Channel: Distributors destocking and small/medium size business decline during the pandemic
| €m | FY 2020 | FY 2019 Restated* |
Var % vs. FY 2019 |
|---|---|---|---|
| Retail | 198.3 | 231.1 | (14.2%) |
| Manufacturing | 110.7 | 117.7 | (5.9%) |
| Transportation & Logistics | 53.9 | 74.4 17.7 |
(27.6%) (2.6%) |
| Healthcare | 17.2 | ||
| Channel | 84.5 | 127.3 | (33.6%) |
| Total DL Business | 464.6 | 568.1 | (18.2%) |
| Informatics | 16.4 | 18.7 | (12.3%) |
| Intra division | (1.2) | (1.1) | 7.4% |
| Total Datalogic | 479.8 | 585.8 | (18.1%) |
* December 31, 2019 comparative data have been restated to reflect the new allocation of Group's revenues to geographic areas and business sectors, as redefined by the " New Sales Organization" model launched in 2020 and the classification of Solution Net Systems Inc. as discontinued operation according to IFRS 5.
Group Revenues by Geography
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❑ EMEAI: performance affected by Covid-19 and phase-out of major Fixed Retail Scanners roll-outs. Signs of recovery in H2, with
❑ Americas: Most affected market during the pandemic. Restriction to mobility severely affected the development of the
- Q4 returning to growth driven by Italy achieving +12.4% vs Q4-2019 pre-Covid.
- costumer base
- ❑ APAC: Double digit growth in the second part of the year driven mainly by China in T&L and Manufacturing.
| €m | FY 2020 | FY 2019 Restated* |
Var % vs. FY 2019 |
|---|---|---|---|
| EMEAI | 254.8 | 307.1 | (17.0%) |
| Americas | 151.2 | 210.1 | (28.0%) |
| APAC | 73.8 | 68.5 | 7.7% |
| Total Datalogic | 479.8 | 585.8 | (18.1%) |
* December 31, 2019 comparative data have been restated to reflect the new allocation of Group's revenues to geographic areas and business sectors, as redefined by the " New Sales Organization" model launched in 2020 and the classification of Solution Net Systems Inc. as discontinued operation according to IFRS 5.
❑ Vitality Index (New products*/ sales) at 20.0% in line with 20.1% in 2019 ❑ R&D spending**, amounted to approximately € 63.0 m, reaching 13.1% as a percentage of Revenues compared to 10.8% in the 2019
New Product Launches and Innovation
FY 2020 P&L *
consecutive quarters
| € m | FY 2020 | FY 2019 Restated |
Variance Reported |
Constant F X |
|
|---|---|---|---|---|---|
| Revenues Gross Margin % on Revenues |
479.8 219.9 45.8% |
585.8 288.1 49.2% |
(18.1%) -3.4 pp |
(17.0%) | ▪ Gross Margin at 45.8%, decrease driven by lower volumes and price/mix effects ▪ Operating expenses at €185.8m down 14.7% executing cost reduction plans to protect margin: |
| Operating expenses % on Revenues Adjusted EBITDA % Adj. Ebitda margin |
(185.8) (38.7%) 58.3 12.2% |
(217.9) (37.2%) 92.1 15.7% |
-1.5 pp -3.5 pp |
✓ Continue investing in R&D (10.8% on revenues vs 10.0% in 2019) |
|
| EBIT % Ebit margin Net Result % on Revenues |
18.4 3.8% 13.9 2.9% |
62.7 10.7% 50.3 8.6% |
-6.9 pp -5.7 pp |
✓ S&D cost decreased by 21.2% due to both tactical savings and efficiencies ▪ Adj Ebitda at 12.2% in 2020 on Revenue, reaching |
|
| 15.9% in Q4 vs 14.5% in Q4-2019 pre-Covid ▪ Net Result at €13.9m consolidating recovery for three |
* December 31, 2019 economic data were restated following the classification of Solution Net Systems Inc. as discontinued operation as required by the accounting standard IFRS 5.
EBITDA Adj: actual vs last year
9
€ m
* December 31, 2019 economic data were restated following the classification of Solution Net Systems Inc. as discontinued operation as required by the accounting standard IFRS 5.
Net Debt & Cash Flow Analysis : Dec'19 – Dec'20
€ m
2021 Outlook
▪ In this unprecedent context, the Group has promptly reacted this fast-moving scenario implementing aggressive cost
▪ Encouraging signs of end markets recovery in all geographical areas, corroborated by a significantly improved trend in order intake versus early 2020. Despite high levels of uncertainty continues, under Covid emergency and shortage of some components in the short-term, Datalogic expects to see a gradual recovery in 2021 Revenues and an
- measures to protect business and profit
- improvement in the profit margin levels with respect to 2020
- while consolidating and repositioning its presence in the core markets
▪ In this context, the Group's strategy confirms its focus on innovation and investment in strategic market segments
M.D. Acquisition
MD Group
MD Geographic Revenue Breackdown
MD Products
DL Industrial Automation Market
- Large market \$7.7bn
- Industry 4.0 driving solid growth prospect
MD Acquisition
- Group Headquartered in Italy
- € 25M Revenue and €4m Ebitda in 2020
- Complementary Sensors offers for Industrial Automation applications and Synergetic distribution network
Contact
IR CONTACTS
IR Manager Laura Bernardelli Tel. +39 051 3147109
IR Advisor 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]
[email protected] Via Candini, 2 40012 Lippo di Calderara di Reno Bologna – Italy
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March 23-25, 2021 STAR Conference Milan
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May 13, 2021 Q1 2021 Results
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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 [email protected] ww.datalogic.com