Datalogic — Investor Presentation 2018

Mar 27, 2018

STAR Conference Milan 27 March 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.

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.

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Group Overview

Over 40 years of Technological Innovation

1972	FOUNDATION	Established in Bologna
1988 1997	EXPANSION	Escort Memory Systems Inc. IDWare Mobile Computing&Comm.
2001	LISTING	Listed on the STAR segment of Italian Stock Exchange
2002 2011	EXPANSION	Minec AB Laservall SpA Informatics Inc. PSC Inc. Datasensor SpA Evolution Robotics Retail Inc.
		Accu-Sort Systems Inc. PPT Vision Inc. Acquisition of
2012 2015	INNOVATION	Multiwave Photonics SA Partnership with CAEN RFID Srl
2017	EXPANSION	Set up new One Datalogic Acquisition of Soredi Touch Systems GmbH

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 (March 22, 2018): 28.95 Euro Market Cap (March 22, 2018): 1.70 B Euro Auditing Company: EY

Strategy and Outlook

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 )

A New Organisation by Verticals…

…with a Wide and Complementary Offer…

…Innovative Solutions…

…and a state of the art Customer Service

Copyright Datalogic 2017 – Confidential & Proprietary Information

Total Addressable Market

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

Source: VDC 2017 and Management estimates

We play in a growing market

RETAIL E-COMMERCE WAREHOUNSING

2016:1.86 trillion USD

2021:4.48 trillion USD

AND LOGISTICS ROBOTICS

2016: 1.9 billion USD

2021: 22.4 billion USD

2025:11.1 trillion USD

2016: 3.9 trillion USD

IoT

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 Connecting People, Processes and Technology

DATALOGIC PROPOSITION

• 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
• Datalogic was the first company to introduce the full imaging bi-optic POS scanner and to conceive a fully automated portal scanner
• New Data capture products for E-commerce and multichannel
• Data analytics for location based services, indoor navigation, customer tracking either for path and time spent in front of shelves

MARKET OUTLOOK	DATALOGIC RESULTS
90% of transactions are still completed in ▪ store	▪ 2017 Revenues €278.6 mln (-1.6% YoY), 49% of Revenues
▪ E-commerce drives change towards an omnichannel experience (brick and mortar – online shopping)	▪ Double digit steady growth in EMEA, whilst NA heavily affected by forex effect
▪ RFID, video analytics, digital and interactive signage…are emerging technologies	▪ Significant growth in APAC led by China

Manufacturing The factory of the future

DATALOGIC PROPOSITION

• With more than 45 years of experience, Datalogic is a world-class product & solutions provider for track & trace processes and quality control systems
• Datalogic is providing multi-product portfolio to serve all the major manufacturing clients: Automotive, Food and Beverage, Automated Machinery and Electronics, and Intralogistics.

• Wide-range offer adapting to every customer

• Safety Laser Sentinel

• Traceability Identification products and Laser marking
• Quality Control Machine Vision
• Expanding into Intralogistic solutions and Robotic/AGV guidance

MARKET OUTLOOK

• Industry 4.0 is pushing for multitechnology adoption, product interoperability and enhancement self diagnostic capabilities
• The adoption of key digital technologies shows a strong growth over the next 5 years

MARKET OUTLOOK DATALOGIC RESULTS

• Unique portfolio provider of smart, interconnected devices able to protect, identify, sense, check and mark
• 2017 Revenues €150.5 mln (+10.1% YoY), 27% of Revenues
• Performance driven by China (+ 64% YoY)

Nine out of ten companies are investing in DIGITAL FACTORIES

Transportation & Logistics Visibility and interaction with the customer

DATALOGIC PROPOSITION

• Datalogic sensors and vision systems guarantee the optimal traceability of packages and shipments
• The first generations of self-driving vehicles (autonomous shuttles and forklifts), used in controlled areas of the warehouse are being developed
• 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.

MARKET OUTLOOK	DATALOGIC RESULTS
▪ Growth is driven by E-commerce: high speed sorting, ability to manage any size of parcel, and high flexibility ▪ Stationary Industrial, Vision Systems and Sensor&Safety are the fastest growing	▪ 2017 Revenues €65.8 mln (+12.9% YoY), 12% of Revenues North America and APAC ▪ leading growth ▪ Double digit growth in the second half of the year

Transportation & Logistics

w w w . d a t a l o g i c . c o m 21 Copyright Datalogic 2017 – Confidential & Proprietary Information

DATALOGIC PROPOSITION Healthcare Meet regulations and Higher Patient Safety

• Datalogic is the only company able to empower the entire Healthcare ecosystem from drug production to patient care or point of sale.
• Datalogic is the sole company providing unique product features for the HC industry such as:
• Anti-microbial enclosures to enhance protection against germs and bacteria
• Inductive charging technology for battery recharge avoiding maintenance cost related to contact damaging/wearing
• Green spot good match to ensure positive medicine-patient identification
• LAB Analysis is also working to ensure the reliability of data based on the patient

MARKET OUTLOOK	DATALOGIC RESULTS
Growing global population above the age of ▪ 65 are driving demand for personalized	2017 Revenues €27.5 mln ▪ (+38.8% YoY), 5% of Revenues
care and services	▪ The fastest growing sector in 2017
▪ Counterfeit is a global problem, placing Datalogic's precision at a high advantage	▪ Double digit growth in North America

A clear strategy

THE OBJECTIVE THE SCOPE THE ADVANTAGE

Keep on constantly growing, above market average, while significantly improving profitability

Remain a product company with new emphasis on solutions to satisfy the needs of End Users in the following Industries: Retail, Healthcare, T&L and Manufacturing

Become a significant player in North America and further establish in APAC with a growing presence in China

Consolidate our position in EMEA

Moving from a product to a Customer-centric Company, leveraging on our wide range of products that is able to fulfill our customers' needs for both data collection and process automation and providing end-to-end solutions across the entire flow of operations

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)
• Maintain a Cash Generation profile
• T&L: keep growing in main Geo Areas, capturing ecommerce & CEP trends
• Retail: growth recovery in the Americas through new products and expanding sales organization
• HC: keep on substantially growing, both in North America & EMEA
• 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

▪ Good response of customers on new products launched in 2017; a solid pipeline of new products launches expected in 2018

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
• 13% of sales come from new products*
• 11 Research & Development Centers
• 470 R&D resources, more than 450 Engineers, engaged in new product development and emerging technologies

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

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%

2017 (base year 2016)

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%

2017 New Products Introduction

Financials

Best ever results in Datalogic history Q4 RESULTS €25.4 EBITDA (+7%) 16.4% EBITDA MARGIN (+1.1 p.p.) REVENUES €155.3 +0.4% (+3.7% at constant FX) €15.0 NET INCOME (+202%) FY2017 RESULTS €103.3 EBITDA (+14.3%) 17.0% EBITDA MARGIN (+1.3 p.p.) REVENUES €606.0 +5.1% (+6.0% at constant FX) €60.1 NET INCOME (+31%) Net Cash position at €30.1 € m

Improvements across the whole P&L

	€ m	FY2017	FY2016	Var%
	Revenues	606.0	576.5	5.1%
Gross Operating Margin		288.4	265.1	8.8%
	%on Revenues	47.6%	46.0%
	Operating expenses	(202.7)	(192.3)	5.4%
	%on Revenues	(33.5%)	(33.4%)
	EBITDA	103.3	90.4	14.3%
	Ebitda margin	17%	15.7%
	EBIT	82.9	70.2	18.0%
	Ebit margin	13.7%	12.2%
	EBT	75.5	66.9	12.8%
	Taxes	(15.4)	(21.0)	-27.0%
	Net Income	60.1	45.8	31.0%
	% on Revenues	9.9%	8%
	Exchange Rate	1.1297	1.1069

• Revenues up 5.1% to €606.0 m (+6.0% at constant exchange rate)
• GOM showing steady improving trend at 47.6% (around +160 bps vs 2016)
• R&D on revenues from 8.7% to 9.1% (from 9% to 9,5% for Datalogic Business)
• Timing effects & efficiencies on distribution costs (+2.3% YoY)
• EBITDA margin at 17% mainly thanks to improvement in the GOM
• Unfavorable forex and higher gross debt on financial costs
• Tax rate at ~ 20%
• Impressive growth of net income +31% to €60.1 m

Group Revenues by country

REVENUES BY GEOGRAPHIC AREA

€ m	FY 2017	FY 2016	Var%
EMEA	327.5	304.5	7.5%
North America	171.4	178.3	(3.8%)
Latin America	27.5	30.0	(8.5%)
Asia Pacific	79.6	63.6	25.1%
Total Revenues	606.0	576.5	5.1%
Latin America 5%	APAC 13%		EMEA 54%

• Strong growth in APAC driven by China (+55%) in Manufacturing mainly
• Confirming leadership in EMEA led by Retail (+11%)
• NA growth driven by T&L (+11%) and Healthcare (+97%); strong performance of Solution Net Systems. Retail and Informatics negatively offsetting performance
• LA heavily impacted by FX and 2016 large deals

North America 28%

Group Revenues & EBITDA by division

REVENUES BY DIVISION

				Informatics
	€ m	FY2017	FY2016	Var%	Solution Net Systems	3%
Datalogic		564.0	534.2	5.6%	4%
Solution Net Systems		24.7	20.2	22.5%
Informatics		20.6	24.4	(15.5%)
Adjustments		(3.3)	(2.3)	42.2%
Total Revenues		606.0	576.5	5.1%			Datalogic

• Datalogic driven by growth of Fixed Retail Scanners, Identification and Hand Held products. Strong growth through Channel towards SMEs (+14.2%)
• Solution Net Systems strong top line growth (+22.5%) and sound turnaround in profitability
• Informatics top line still on downward trend but profitability turned positive

Consolidated Balance Sheet

€ m

	Dec 2016	Dec 2017		Dec 2016	Dec 2017
Total Fixed Assets	371.7	347.9	Net Financial Position	(3.5)	(30.1)
Trade receivables	75.5	83.2
% on 12m rolling sales	13.1%	13.7%
Inventories	82.3	85.9
% on 12m rolling sales	14.3%	14.2%
Trade payables	(104.6)	(107.7)	Net Equity	336.4	353.0
% on 12m rolling sales	-18.1%	-17.8%
Trade Working
Capital	53.2	61.5
% on 12m rolling sales	9.2%	10.1%
Other assets/liabilities	(92.1)	(86.5)
Net Invested Capital	332.9	322.9	Total Sources	332.9	322.9

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

May 9th, 2018 1Q results

May 23rd , 2018 Shareholders' meeting

August 9th, 2018 6M results

November 13th, 2018 9M results

DATALOGIC ON LINE

www.datalogic.com