Datalogic — Investor Presentation 2020

May 26, 2020

Virtual STAR Conference

26 MAY 2020

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 effect any transaction or to conclude any legal act of any kind whatsoever.

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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

1,200+ patents filed and more than 350 in approval

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

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

3,074 Employees in 28 countries: 20% Americas, 57% EMEAI, 23% APAC

Over 45 years of Technological Innovation

Solid long-term growth

Sales CAGR 2001-2019 +10%

• A history of growth in profitability 10%
• Strong improvements across key indicators reflecting investments in innovation, M&A and better efficiency and productivity
• Robust cash generation -20%

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 (May 22, 2020): 10.40 Euro

Market Cap (May 22, 2020): 608 mln Euro

Auditing Company: Deloitte

Strategy

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

OUR Strategy

needs of End Users in the following Industries: Retail, T&L, Factory Automation,

EMEA and become a strong

with a growing presence in

▪ Wide range of products 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

A wide range of products that is able to fulfill our customers' needs for both data collection and process automation

Most complete offer of barcode readers: from retail to industrial scanners, from hand held to mobile

Undisputed leadership on barcode readers

Complementary/Open doors products in the MFG Industry

Our products are key enablers of critical applications along our customers' supply chain

Self-Shopping Mark & Read Dimensioning & Weighing Systems

Complete Traceability Mark & Trace

Retail

• We meet the needs of retailers globally, from the distribution centers, through check-out, to the customer's 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

• Machine learning technology adoption to be ready for the next checkout POS investment cycle

• The main international players are experimenting new products and solutions to satisfy new shoppers' needs and improve efficiency of their operations: click & collect, drive & collect, online verification, in real time, of the availability and exact position within the shelves of the products in the store or in the warehouse, assisted selling, self scanning and self check-out

• Retailers are more and more interested in collecting customers' data to do analytics to better serve them
• Increase of distribution centers advanced automated logistics solutions to optimize online shopping

Datalogic Proposition

Manufacturing

Datalogic Proposition

• Leader in traceability thanks to the most complete and performing offer of stationary industrial scanners
• 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

• Market trends

• Industry 4.0
• DPM / Extended Traceability and Quality Inspection
• Robotics / AGV
• 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
• 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

Transportation & Logistics

Datalogic Proposition

• 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

• Historically leader in stationary industrial scanners and sorting solutions Datalogic has a big opportunity to seize in the T&L mobility space

• 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 9.4 Billion by 2020, at a CAGR of 8% from 2015 to 2020
• Strong demand for solutions beyond barcode
• Robotics & Automation: collaborative robots and automatic solutions to get higher productivity, zero-defects, reducing manual operations

Healthcare

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

• Hospital investments in patient safety are expected to grow significantly in the next 5 years: technology adoption to secure proper patients traceability and drug administration

• Drugs tracking to avoid counterfeit medications
• HC Emerging trends: Telemedicine/Telehealth. Health systems are more and more using digital health tools and telehealth platforms to better take care of patients after they leave the hospital

❑ FY2019 Vitality index of 20.1% of total sales compared to 15.0% in 2018. Q1 2020 Vitality Index* continues

improving to 22.2%

❑ 2019 R&D spending** amounted to approximately 65 m€ 10.6% on turnover, in line with the Group's strategy on

innovation

❑ 20 new patents filed in 2019 reaching 1,230 patents

Recent New Product Launches and Innovation

Mobile

Key Growth and Strategic Drivers

▪ RTL (\$ 4 bln): check out evolution, cross sell mobile, watch distribution centers carefully

M&A

• Keep focus on all of our 4 verticals
• MFG (\$8 bln): expand into new sectors to offset automotive crisis
• T&L (\$2 bln): cross sell complete offer SIS, Mobile, HHS
• Protect our leadership in SIS
• FRS: Be ready for the next generation/evolution not revolution
• portable data assistant (PDA)
• HHS: lead the shift to 2D technology
• Investing in complimentary technologies:
• Vision / Machine learning
• RFID
• Digital watermarking
• Investing in Android

▪ Mobile: increase market share completing and widening our offer of portable data terminal (PDT) and

▪ Continuous improvement of core technology (bar code reading) e.g. optics, decoding

▪ Selected target to accelerate our growth and/or to acquire critical technologies

Financials & Outlook

2019 Financials

2019 Financial Highlights

• ❑ Results in line with expectations despite tough market conditions in an uncertain environment.
• ❑ Growth in North America (+6.6%) in all industries, offset by slowdown in APAC (-19.6%) and EMEAI (- 4.7%) due to deterioration of 'end markets' mainly consumer electronics in China, automotive and packaging in Europe and tough compare due to FRS roll-outs in 2018 in Retail. Group Revenues declining low single digits (-2.9%) compared to last year.
• ❑ Solid EBITDA margin at 15.5% despite volume decrease.

• ❑ Increasing investments* in R&D at 64.7 m€ (+2.1% VS LY) reaching 10.6% on revenues, executing Group's innovation strategy.

• ❑ Cash Generation with a free cash flow at 32.6 m€ in FY2019.

• ❑ Net Cash position in line with last year excluding IFRS 16.
• ❑ Keep executing on the Group Strategy and Innovation Roadmap in key Markets (Mobile, Industrial Automation and T&L)
• ❑ Vitality index significantly improved from 15.0% in FY2018 to 20.1% in FY2019, mainly driven by Mobile Computing.

^* Total R&D spent Including capitalized R&D

2019 Group Revenues by Segment

DL Business decline -3.0%

❑ Retail: tough comparison due to major Fixed Retail Scanner rollouts with large clients in EMEAI in 2018. Positive

• ❑ T&L: strong growth driven by EMEAI and double digit growth NA.
• performance in APAC and Americas.
• consumer electronics (China).
• ❑ Healthcare: substantially flat with positive performance in EMEAI and NA.

❑ Manufacturing: double digit growth in North America, partially offset by slowdown in Automotive (EMEAI) and in

€ m	FY 2019	FY 2018	Var % vs. FY 2018	Constant FX
Retail	265.7	278.0	(4.4%)	(7.1%)
Manufacturing	157.4	169.9	(7.4%)	(8.6%)
Transportation & Logistics	75.0	68.6	9.5%	6.6%
Healthcare	20.0	20.1	(0.3%)	(3.2%)
Channel (Unallocated)	50.0	49.2	1.8%	0.4%
Total DL Business	568.1	585.7	(3.0%)	(5.2%)
Solution Net Systems	29.1	28.3	2.6%	(2.6%)
Informatics	18.7	19.6	(4.3%)	(9.3%)
Intra division	(3.4)	(2.6)
Total Datalogic	612.5	631.0	(2.9%)	(5.3%)

2019 Group Revenues by Geography

❑ EMEAI: growth in HC and T&L partially offsetting Retail downturn due to major FRS roll outs in 2018.

❑ North America: revenues show positive growth across all verticals. Excluding SNS and INF, NA Business grew 8.8%.

• ❑ APAC: China still impacted by the drop in Manufacturing, partially offset by positive performance of Australia and Japan.

			Var % vs. FY 2018	Constant FX
EMEAI	309.6	324.8	(4.7%)	(5.9%)
North America	219.4	205.9	6.6%	1.5%
APAC	67.4	83.8	(19.6%)	(20.1%)
Latin America	16.1	16.5	(2.5%)	(4.3%)
Total Datalogic	612.5	631.0	(2.9%)	(5.3%)

FY 2019 P&L

€ m	FY 2019	FY 2018	Variance	Constant
			Reported	F X
					▪ Revenues down 2.9% to €612.5 m (-5.3% Net FX);
Revenues	612.5	631.0	(2.9%)	(5.3%)
Gross Margin	293.1	306.0			▪ Gross Margin at 47.9%, flat Net FX
% on Revenues	47.9%	48.5%	-0.6 pp	+0.0 pp	▪ Operating expenses at €220.0 m:
Operating expenses	(220.0)	(215.6)
% on Revenues	(35.9%)	(34.2%)	-1.8 pp		✓ R&D on revenues in line with previous year
* EBITDA	95.0	105.5			✓ S&D on revenues from 17.8% to 19.7% due
% Ebitda margin	15.5%	16.7%	-1.2 pp	-0.6 pp
EBIT	65.5	83.5			to the carry over effects of commercial
% Ebit margin	10.7%	13.2%	-2.5 pp	-2.0 pp	organization investments from last year
Net Income	50.3	62.2			✓ G&A and other items kept under control
% on Revenues	8.2%	9.9%	-1.6 pp	-1.2 pp
EUR/USD FX Exchange Rate	1.12	1.18			from 6.6% to 6.5%

2019 EBITDA: FY actual vs last year

€ m

2019 Net Debt & Cash Flow Analysis : Dec'18 – Dec'19

€ m

Q1 2020 Updates

Q1 2020 Financial Highlights

• ❑ Significant Covid-19 impact on Revenue in APAC, next to already anticipated phase out of Retail and T&L projects in EMEAI and North America
• ❑ The restrictive measures adopted initially in APAC and subsequently in Europe and North America led to revenue slippage mainly due to Supply Chain and Demand slowdown

• ❑ Positive performance of Retail and Healthcare in the Americas. T&L affected by completion of large orders in US and installation postponement in EMEAI due to Covid-19

• ❑ Vitality index continue improving from 19.5% in Q12019 to 22.2% in Q12020, mainly driven by HHS and Mobile

• ❑ Adj EBITDA mainly affected by lower volume and increase in R&D to protect the Technology roadmap, partially offset by S&D cost reduction program launched in 2020.
• ❑ Free Cash Flow at negative €27.0 m due to the cash absorption from operations and increased safety stocks due to Covid-19

Covid-19 - Actions in a challenging environment

▪ Health and safety of our people is a priority. Sound health and safety protocols established for all facilities

▪ Strong commitment to guarantee optimal continuity to our customers and partners, whilst working

• Smart working established globally to the maximum extent possible
• Ensuring operations in production with highest health and safety standards in compliance with regulations
• remotely by hosting virtual meetings and demonstrations.
• ready to prevent Covid-19 infection and ensure correct patient identification.

• Cost management by:

• efficiency

▪ Donations and community support by providing to Italian hospitals antimicrobial devices, disinfectant

▪ Activation of Government social schemes and other employment support tools ▪ Sound Cost reduction plan on any discretionary spending while driving commercial

• Strong Financial Structure with Net Debt of €21.0 m. Additional credit lines available providing significant headroom to secure future investment for growth in uncertain environment.

Ready for post Covid-19 challenges

Mobile

Memor 10 Memor 20 Memor 1 Joya

Antimicrobial disinfectant-ready devices

• Datalogic supports the fight against Coronavirus • Outer shell of our devices made of antimicrobial plastic:
• repels pathogens and limits their infectious diffusion
• resilient to withstand numerous cleanings by harsh medical disinfectants approved by EPA, including disinfectants that are qualified for use against COVID-19

Stationary Industrial Scanners

• Number #1 in Industrial Scanners

• Complete offer for T&L and E-commerce applications

• E-commerce

• T&L

AV7000 AV500 AV900

Presentation Scanners

Q1 2020 P&L

€ m	Q1 2020	Q1 2019	Variance Reported	Constant F X	▪ Revenue -14,2% driven by large roll-outs in Q12019,
Revenues	124.2	144.6	(14.2%)	(15.0%)	T&L projects completion and overall Covid effect.
Gross Margin	58.0	70.2			▪ Gross Margin at 46.7%, decrease mainly due to
% on Revenues	46.7%	48.5%	-1.8 pp	-1.3 pp	volumes and lower absorption of fixed costs. Price
Operating expenses	(56.7)	(53.9)
% on Revenues	(45.7%)	(37.3%)	-8.4 pp		substantially in line with past trend
Adjusted EBITDA	7.3	21.6			▪ Operating expenses at €56.7 m:
% Adj. Ebitda margin	5.9%	15.0%	-9.1 pp	-8.5 pp
EBIT	(1.2)	14.8			✓ R&D expenses increased by 18.3% for strategic
% Ebit margin	(1.0%)	10.2%	-11.2 pp	-10.7 pp	investments
Net Income	(4.3)	12.6			✓ S&D €2.6m savings vs LY net of 2019 one-offs
% on Revenues	(3.4%)	8.7%	-12.1 pp	-11.6 pp
EUR/USD FX Exchange Rate	1.10	1.14			✓ G&A expenses in line with previous year
					▪ Financial charges impacted by unfavorable FX and
					negative fair value on cash equivalents investments at
					the lows of Q1 financial market

EBITDA Adj: actual vs last year

€ m

* Excluding Service and other non significant items

Q1 2020 Net Debt & Cash Flow Analysis

€ m

2020 Outlook

▪ Given the current crisis relating to the Covid-19, and the timing of a possible recovery, the Group believes it is not yet possible to estimate the overall impact it will have on the full year. The evolution of the pandemic, the resolutions of authorities regarding lockdowns, as well as market reactions and possible recessions imply negative growth forecasts for the first half of 2020 and

▪ The Group is implementing measures to mitigate the financial impact of Covid-19, focusing on solid cost reduction plans, while

• potentially for the remainder of the year
• protecting technology investments and strengthening the already sound financial structure
• in the medium and long term

▪ Despite the expected short-term negative trend, the solid economic and financial fundamentals will lead Datalogic to grow again

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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