Datalogic — Investor Presentation 2019

Sep 4, 2019

Italian Industrial Day Borsa Italiana

4 SEPTEMBER 2019

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.

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Corporate Overview

Global technology leader in the automatic data capture and process automation markets, in the Retail, Manufacturing, Transportation & Logistics, and Healthcare industries

Founded in 1972, listed on the Italian Stock Exchange since 2001

Datalogic at a glance

More than 1,200 patents filed

10 Manufacturing and Repair facilities in: US, Brazil, Hungary, Slovakia, Italy, China, Vietnam and Australia

500 engineers in 11 R&D centers and 3 DL Labs in: Italy, USA, Vietnam, China, and Germany

3,157 Employees in 27 countries: 21% Americas, 56% EMEA, 23% APAC

Over 45 years of Technological Innovation

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 (September 2, 2019): 12.74 Euro Market Cap (September 2, 2019): 0.74 B Euro Auditing Company: Deloitte

Strategy

A Clear Strategy

Keep constantly growing above market average, while significantly improving profitability

Remain a product company with new emphasis on solutions satisfying the needs of the End-Users in the following industries: Retail, Manufacturing, Transportation&Logistics and Healthcare

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

Unique Positioning

• WIDE AND COMPLEMENTARY OFFER • CUSTOMER CENTRIC ORGANIZATION BY VERTICALS

Uniquely positioned to address customers' needs in both data capture and process automation along their entire value chain.

Total Addressable Market

• Fixed retail scanners #1 WW: >35% market share
• Stationary industrial scanners #1 WW: >20% market share
• Handheld Scanners #3 WW: ≈ 20% market share

DATALOGIC MKT SHARE

TAM: ~ 14 bln USD

Retail Bringing offline and online together

• 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 ever sold to a grocery store in Troy, Ohio up to now with the innovative frictionless shopping solution presented at the 2019 NRF exhibition in New York
• New Data capture products for Ecommerce and multichannel

DATALOGIC PROPOSITION APPLICATIONS

Retail Bringing offline and online together

MARKET OUTLOOK

▪ Online retailers are opening brick-and-mortar stores, while traditional retailers are converting

▪ Retailers who collect customer data on every step of the journey are headed in the right direction

▪ Retail E-commerce sales worldwide posted solid gains in 2017, rising 23.2% to \$2.290 trillion *, but

- physical store locations into semi-distribution hubs

• 90% of transactions are still completed in-store
• Distribution Centers automatization increase
• commerce trend

▪ Retailers are looking for advanced logistics solutions to be able to satisfy the needs of the E-

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

APPLICATIONS

MARKET OUTLOOK

Manufacturing The factory of the future

• Market trends
  • Industry 4.0

  • Robotics / AGV

  • DPM / Extended Traceability and Quality Inspection ▪ New segments due to new technology (i.e. Electric car)
• 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
• 267 Billion USD investment in the next 5 years directed towards IoT*
• The Industrial Robotics Market stands at 13.9 billion USD with an 11.8% growth **

* Source: IoT Analytics

** Source: International Federal of Robotics (IFR) data and Loup Ventures

DATALOGIC PROPOSITION

Transportation & Logistics End to end visibility and real time tracking

• 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

APPLICATIONS

Transportation & Logistics End to end visibility and real time tracking

MARKET OUTLOOK

▪ Growth is driven by E-commerce: high speed sorting, ability to manage any size of parcel, and high flexibility. E-Commerce is driving the industry growth

▪ Resolution 753 requires (from June 2018) IATA members to maintain an accurate inventory of baggage by monitoring the acquisition and delivery of baggage

▪ The baggage handling system market* is projected to reach USD 9.36 Billion by 2020, at a CAGR

-

• of 7.8% from 2015 to 2020
• Strong demand for solutions beyond barcode
• productivity, zero-defects, reducing manual operations

▪ Robotics & Automation: collaborative robots and automatic solutions to get higher

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

APPLICATIONS

Healthcare Meet regulations and Higher Patient Safety

MARKET OUTLOOK

▪ Bedside care: adopt technology to secure the correct drug administration to patients and real

• Drugs tracking to avoid counterfeit medications
• time saving with no mistakes of clinical data *
• as well as those most at risk of returning

▪ HC Emerging trends: Telemedicine/Telehealth. Health systems are more and more using digital health tools and telehealth platforms to better care for patients after they leave the hospital,

* Source: PILETTI

Focus on Innovation

• R&D expenses up 3.2% to €31.4 million (€30.5 million in the first half of 2018).
• Total R&D spending, gross of capitalizations amounted to approximately 11% of turnover, in line with the Group's strategy on innovation.

R&D Evolution (€ mln)

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

• First Half New product* net sales account for 20.2% of total sales improved from 13.5% in H1 2018

• Positive acceptance of new products by our Customers

H1 2019 New Product Launches

* New Products: products launched in the last 24 months

Financials & Outlook

H1 2019 Key Facts

• North America and New products delivered resilient Financial performance despite slowdown in key reference market and geographies
• Vitality index improved from 13.5% in H1 2018 to 20.2% in H1 2019 mostly thanks to Mobile Computing
• Gross Margin at €147.9m improved by 0.9% Net of Forex
• EBITDA margin remained almost flat Net of Forex at 16.6%
• R&D investment reached 11%* in line with the Innovation priorities

Group Revenues Breakdown

-

DL Business: Substantially in line with H1 2018 (-0.6%); double digit growth in NA and LA, partially offsetting the softness in EMEAI and APAC Retail: Tough comparison with the previous year due to major rollouts with large clients in EMEAI in 2018 Manufacturing: Double digit growth in NA offset by slowdown in automotive and packaging markets in EMEAI and consumer electronics market in APAC

T&L: Double digit growth driven by a strong performance in NA and maintained position with largest parcel companies worldwide Healthcare: Returned to positive growth driven by EMEAI and NA

Channel: Strong growth driven by small and medium customers

€ m	H1 2019	H1 2018	Var % vs. H1 2018	Constant FX
Retail	129.5	134.5	(3.7%)	(6.9%)
Manufacturing	79.0	86.5	(8.7%)	(10.3%)
Transportation & Logistics	34.4	30.4	13.2%	9.4%
Healthcare	10.0	8.8	13.7%	10.0%
Channel (Unallocated)	29.7 24.1		23.3%	21.2%
Total DL Business	282.6	284.3	-0.6%	-3.3%
DL Business	282.6	284.3	(0.6%)	(3.3%)
Solution Net Systems	14.5	14.2	2.2%	(4.4%)
Informatics	9.3	9.7	(4.6%)	(10.9%)
Intra division	(1.9)	(1.3)
Total Datalogic	304.5	307.0	-0.8%	-3.8%

Group Revenues by Geography

EMEAI: decreased 3.7% due to a market slowdown particularly in Automotive sector, partially offset by growth in HC and in the Small Medium Business

North America: Datalogic Business revenues show positive growth +19% mainly driven by double digit growth in T&L and

Manufacturing

APAC: Negative trend driven by China in all the sectors due to trade war.

€ m	H1 2019	H1 2018	Var % vs. H1 2018	Constant FX
EMEAI	159.9	165.9	(3.7%)	(4.4%)
North America	104.4	91.8	13.7%	6.1%
APAC	33.1	42.7	(22.5%)	(24.6%)
Latin America	7.2	6.5	10.2%	7.2%
Total Revenues	304.5	307.0	-0.8%	-3.8%

1H 2019 P&L

€ m	H1 2019	H1 2018	Variance Reported	Constant F X	▪ Revenues down 0.8% to €304.5 m (-3.8% Net FX);
Revenues	304.5	307.0	(0.8%)	(3.8%)	DL Business revenues at €282.6 m (-0.6%, -3.3% Net Fx)
Gross Margin % on Revenues	147.9 48.5%	149.4 48.7%	-0.1 pp	+0.9 pp	▪ Gross Margin almost flat at 48.5%, improved by 0.9% net of FX
Operating expenses	(110.8)	(105.9)			▪ Operating expenses to €110.8 m:
% on Revenues * EBITDA	(36.4%) 47.7	(34.5%) 50.8	-1.9 pp	-2.0 pp	✓ R&D on revenues increased from 9.9% to 10.3%;
% Ebitda margin EBIT	15.7% 33.9	16.6% 40.3	-0.9 pp	+0.0 pp	✓ S&D on revenues from 17.4% to 19.4% due to investment in commercial organization
% Ebit margin Net Income	11.1% 25.3	13.1% 29.0	-2.0 pp	-1.1 pp	✓ G&A and other items decreased from 7.1% to 6.6% on revenues
% on Revenues	8.3%	9.4%	-1.1 pp	-0.4 pp	▪ Net income at €25.3 m at 8.3% (-0.4% at Net FX)
EUR/USD FX Exchange Rate	1.13	1.21

50.8				3.5
	(8.3) -3.3% on DL Business 2018 revenues*	(0.8)	5.2		(1.2)	(1.6)	0.1	47.7
H1 2018	Price	Volume	Mix	Productivity	FX	Structure	SNS/INF	H1 2019
16.6% on Group Revenues	(2.7%)	(0.3%)	1.7%	1.1%	(0.4%)	(0.5%)	0.0%	15.7% on Group Revenues
						Negative Items Positive Items

EBITDA: actual vs last year

€ m

Net Debt & Cash Flow Analysis : Dec'18 – Jun'19

NFP at 30 June 2018 equal to €13.3 million

2019 Outlook

In light of the continuing uncertainty in the macroeconomic scenario, we expect to close the year in line with the performance recorded in the first half.

However, robust growth was seen in North America, and the new products launched during the half-year, as a result of increased investments in R&D, were positively received – indicators that confirm the Group's growth potential in a less uncertain and more uniform macroeconomic scenario across its various markets of operation.

November 13, 2019 9M Results

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

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This presentation contains statements that are neither reported financial results nor other historical information. These statements are forward-looking 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

© 2019 Datalogic S.p.A. and/or its affiliates - All rights reserved. • Without limiting the rights under copyright, no part of this documentation may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means, or for any purpose, without the express written permission of Datalogic S.p.A. and/or its affiliates • Datalogic and the Datalogic logo are registered trademarks of Datalogic S.p.A. in many countries, including the U.S. and the E.U. • All other trademarks and brands are property of their respective owners.

Datalogic S.p.A.

Via Candini, 2 - 40012 Lippo di Calderara di Reno - Bologna (Italy) Tel. +39 051 3147011 | Fax +39 051 3147205 corporate@datalogic.com ww.datalogic.com