Datalogic — Investor Presentation 2024

Oct 9, 2024

ITALIAN EXCELLENCES 2024

OCTOBER 09TH,2024

INTERNAL Datalogic Confidential

GROUP OVERVIEW

INTERNAL Datalogic Confidential

Datalogic at a glance

Global technology leader in the data capture and industrial automation, in the Retail, Manufacturing, Transportation & Logistics, and Healthcare industries.

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

450+ Engineers in 8 R&D centers and 3 DL Labs in Italy, USA, Vietnam, and China

12% Revenues invested in R&D

13 Manufacturing & Repair sites in: USA, Hungary, Slovakia, Italy, China, Vietnam, and Australia

50+ Years of Expansion

FOUNDATION • Established in Bologna		LISTING • Listed on the STAR segment of the ItalianStock Exchange		INNOVATION • Acquisition of Multiware Photonics SA • Partnership with CAEN RFID Srl		EXPANSION • Acquisition of M.D. Micro Detectors SpA		NON CORE BUSINESS DISPOSAL • Sale of 100% of Informatics Holdings, Inc.
1972	1997-1998	2001	2002-2011	2012-2015	2017-2020	2021	2022	2024
	EXPANSION • Escort Memory Systems Inc. • IDWaremobile Computing & Communications		EXPANSION • MinecAB • Laservall SpA • InformaticsInc. • PSC Inc. • Datasensor SpA • Evolution Robotic Retail Inc. • Accu-Sort	System Inc.	EXPANSION • Set up new OneDatalogic • Acquisition of SOREDI Touch Systems GmbH		ANNIVERSARY • 50th Years of innovation EXPANSION • Acquisition of Pekat Vision

• PPT Vision Inc.

Our Aim, our Dream, our Beliefs

"Shape the future with intelligence and innovation."

"We enable our customers to gain a competitive edge by offering the most advanced Data Capture and Industrial Automation products and solutions."

Our Strategy

Objective Scope Advantage

▪ Become a billion-revenue company in the long term with increasing profitability

• Enhance hardware offer with software, driving efficiency in Data Capture and Industrial Automation applications in Retail, T&L, Healthcare and Manufacturing verticals
• Consolidate position in EMEAI and become a strong player in the United States
• Grow our presence in APAC

▪ Leverage on a wide portfolio of products and services to provide Customers with innovative and easy-to-integrate solutions along the entire flow of operations

Datalogic Group portfolio: a comprehensive offering across two major products platforms to better address different application needs across verticals

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Copyright Datalogic 2023 – Confidential Proprietary Information

STRATEGY & OPERATING MODEL

INTERNAL Datalogic Confidential

Compelling long-term growth trends across all main Industries

	Main Sub-industries	Growth market trends
Retail ~45%	Grocery Non-grocery DIY	New self check-out including AI and MV to speed up operations, protecting retailers from loss and theft Improve customer experience to increase in-store traffic and shopping Inventory reliability and stock optimization solutions to support Omnichannel and e commerce
Manufacturing ~35%	Automotive Consumer electronics Packaging	Relocation/delocalization of production plants support new investments Government regulations spur traceability demands (e.g., pharma regulation, European Digital Product Passport) Flexible Industrial Automation: lean production lines to support customization and seasonality
Transportation & Logistics ~15%	Couriers Parcel E-commerce	Growing request for "same day delivery" in e-commerce Advanced Workflow Automation to overcome labor shortage and increase efficiency Airports and Air Companies invest to automate passenger management and improve luggage traceability
Healthcare ~5%	Hospitals (bed side care and warehousing)	Process digitalization to increase patient tracking and safety Real time data availability and sharing among all the relevant hospital staff Asset tracking and management to increase efficiency and reduce cost

A strategy which remains centered on our core identification offering as a solid foundation upon which to build a portfolio enhanced with complementary technologies and operating a solution ecosystem

• Be the unique player with a comprehensive presence and leadership positions in both DC and IA markets
• Keep focus on all of our verticals, catching the profitable opportunities coming from needs of digitalization and artificial intelligence
• Consolidate position in EMEAI, become a strong player in the United States and grow our presence in China on selective applications/offering

•	Protect and enhance leadership in core
	identification markets (FRS, HHS and
	SIS)

• Penetrate the biggest MOB and Sensor markets
• Enhance offer through a software ecosystem to provide innovative solutions
• Intensify cost optimization to fight hardware commoditization
• Easy-to-integrate solutions

MARKET POSITIONING PORTFOLIO INNOVATION & TECHNOLOGY

• Nurture MV-based SW and Deep Learning technology to tackle key emerging trends
• Enhance core decoding identification technology with complementary ones (e.g. RFID)
• Dominate key technology future trends (e.g. 5G, Wifi-6, Cybersecurity)
• Be a champion of Green Technology

The four pillars of Datalogic growth

Protect leadership in key identification markets, whilst penetrating mobile and sensors segments

		Market size (2023 est.), B€	CAGR '23-'27	Main Industries	Worldwide leader Main priorities
	MOB	2.3	+ 7-8%	• Retail • Manufacturing • T&L • Healthcare	• Become a relevant player in Mobile Market • Increase penetration of Retail and penetrate IA verticals (FA & LA)
DC	HHS	1.1	+ 3-4%	• Retail • Manufacturing • T&L • Healthcare	• Maintain leadership in EMEA, grow in US
	FRS	0.4	+ 4-5%	• Retail (Grocery, Specialty, Ho.Re.Ca.)	• Maintain leadership in bi-optics • Penetrate new verticals in SCO and Kiosk systems with presentation scanners
IA	SIS, LM,	7.5	+5-6%	• Manufacturing	• Increase market share in EMEA, accelerate penetration in US
	S&S, MV SIS			• T&L	• Keep leadership in Airports and MS in Currier Parcel
					• Double After sales Revenues
	Solution / Service

1. TOP LINE

Strong focus on efficiencies to drive structural profitability enhancement

	Main Goal	Priorities	Actions
INDUSTRIAL MARGIN	Increase Industrial Profitability YoY through Productivity, Mix and Fixed Cost Optimization	Manufacturing & Supply Chain Optimization	• Industrial & distribution footprint optimization • Procurement optimization - costs & flexibility • Supply Chain process optimization through the review of Demand Planning practices and sourcing flexibility
		New Products and Innovation Roadmap	• Review NPD processto secure high Customer value innovation while reducing time to market, product and project costs
		Service & Quality Distinction	• Review Service Business Model • Reduce total non-quality cost both in NDP and Operations processes

OPERATING	Focus on selective	Conscious cost approach & Optimization Projects in non- priority operations
	Opex Growth to
PROFITABILITY	support Business
	needs, whilst
	Pursuing
	Optimization Projects

Sustainability compliance road map

• New Double Materiality Analysis: 10 material topics identified through active involvement of relevant external stakeholders and key management and employees
• EU TAXONOMY: anticipation on a voluntary basis of eligibility and alignment for all the 6 objectives

FY 2023 FY 2024 FY 2025

• Company Sustainability Plan and setting of long-term Sustainability Goals based on new materiality analysis
• Scope 3: Turnover Energy and Emission intensity process, across the entire Value Chain
• Climatic Risk Assessment and DNSH

• Company Sustainability Plan implementation and Goal measurement

• First release of the ESRS compliant CSRD Reporting on 2024 results

Consistent ERM framework evolution and Internal Control process upgrading

Anticipation of European Taxonomy alignment on a voluntary basis

3. SUSTAINABILITY

Datalogic revenues, investments and operative expenses are considered «green» and deemed eligible mainly to the «Circular Economy Transition» objective

A «Taxonomy European sustainable activity» must:

Be eligible contributing to 1 of the 6 European Taxonomy Objectives

• Be aligned to the technical criteria for each eligible activity
• Not cause significant harm (DNSH) to other objectives

Be carried out in compliance with the international principles regarding the protection of work and human rights

3. SUSTAINABILITY Main ESG Accomplishments in 2023

4. M&A

Structured M&A Activity to Foster Group Strategy

Sound balance sheet and structural cash generation to leverage growth

• Structural operating cash flow generation year after year
• + €280m Cumulative Cash Flow before Capex generated in last 5 years
• A well-balanced capital allocation to maximize value creation
• Solid Balance Sheet with a conservative leverage below 0.5x and debt duration >3.5 years
• Approx 200M of unused available bank credit lines

FINANCIALS

H1 2024 & Q2 2024 Results

Q2 2024 Results, €m

H1 2024 Results, €m

Net Debt at €11.8M

Group Revenues by Geography and Market Segment

	EMEAI			AMERICAS			APAC			Total Datalogic
€m	H1 2024	H1 2023 restated*	Var %	H1 2024	H1 2023 restated*	Var %	H1 2024	H1 2023 restated*	Var %	H1 2024	H1 2023 restated*	Var %
Data Capture	82.8	101.1	(18.0%)	59.5	57.3	3.9%	17.2	19.5	(12.1%)	159.5	177.9	(10.3%)
Industrial Automation	56.9	62.5	(9.0%)	16.9	25.8	(34.3%)	11.3	22.8	(50.4%)	85.1	111.0	(23.4%)
Total Datalogic	139.7	163.5	(14.6%)	76.5	83.1	(8.0%)	28.5	42.3	(32.7%)	244.6	288.9	(15.3%)

% on Datalogic Revenues % on Datalogic Revenues

* Restatement with some commercial costs reclassified from S&D expenses to Revenues reduction

New Products Launches and Innovation

R&D cash out at 13.2%, +2.5 bps vs H1 2023 (10.6%). Investments in R&D continue in line with our plan to launch new products. Launched in Q2 2024 the first models of the new generation of Datalogic PDA mobile computers, the industrial fixed readers equipped with machine learning and AI, and new models of imaging presentation scanner offering

€ m	H1 2024	H1 2023 restated*	Var %
Revenues	244.6	288.9	(15.3%)
Gross Margin	99.5	119.6
% on Revenues	40.7%	41.4%	-0.7 pp
Operating expenses	(99.4)	(104.1)
% on Revenues	(40.6%)	(36.0%)	-4.6 pp
Adjusted EBITDA	15.5	31.5
% Adj. Ebitda margin	6.3%	10.9%	-4.6 pp
Adjusted EBIT	0.1	15.5
% Adj. Ebit margin	0.0%	5.4%	-5.3 pp
EBIT	(4.0)	11.2
% Ebit margin	(1.6%)	3.9%	-5.5 pp
Net Result from operations	10.5	11.0
% on Revenues	4.3%	3.8%	+0.5 pp
Results from discontinued operations	(1.2)	1.1

• Gross Margin at 40.7% (-0.7 pp YoY) affected by volumes contraction and negative price/mix, partially offset by positive productivity
• Operating expenses at €99.4m, down versus last year whilst preserving substantial investments in R&D and being disciplined with the cost base
• Adj. EBITDA margin at 6.3% (-4.6 pp YoY), due to highly negative volume impact on operating expenses
• Net Result from continuous operations at €10.5m thanks to the proceeds from the sale of 100% stake in Informatics Holdings, Inc.

EBITDA Adj: actual vs last year

€ m

BACKUP

FY 2023 P&L

€ m	FY 2023	FY 2022 restated*	Var %
Revenues	536.6	654.6	(18.0%)
Gross Margin	224.4	262.5
% on Revenues	41.8%	40.1%	+1.7 pp
Operating expenses	(207.5)	(213.4)
% on Revenues	(38.7%)	(32.6%)	-6.1 pp
Adjusted EBITDA	49.5	80.3
% Adj. Ebitda margin	9.2%	12.3%	-3.0 pp
Adjusted EBIT	16.9	49.1
% Adj. Ebit margin	3.1%	7.5%	-4.4 pp
EBIT	9.6	40.9
% Ebit margin	1.8%	6.3%	-4.5 pp
Net Result	9.5	30.1
% on Revenues	1.8%	4.6%	-2.8 pp

• Gross Margin at 41.8% (+1.7 pp YoY) thanks to positive pricing/mix and productivity offsetting negative volumes
• Lower operating expenses at €207.5m, but preserving continuous investments in R&D and S&D
• Adj EBITDA margin at 9.2% (-3.0 pp YoY), due to highly negative volume impact on operating expenses, partially offset by gross margin improvement
• Net Result at €9.5m vs €30.1m in 2022

Sale of 100% share capital in Informatics Holdings, Inc.

Informatics is a stand-alone company actively engaged in the non-core business of marketing and distributing software products and solutions tailored for small and medium-sized companies mainly in the US. The company was acquired in 2005 and it is based in Plano, Texas.

Buyer

On March 7, 2024, Datalogic S.p.A. sold its 100% stake in Informatics to an affiliate of the U.S. private equity firm Renovo Capital LLC.

• The disposal value was agreed upon at USD 34 million
• EV/EBITDA adj 2023 at around 10x

Rationale

• Divestment of a non-core asset to focus on the core business IA & DC
• Additional financial resources to support growth, both organically and through M&A

Sustainability: the 10 material topics and relevant existing KPIs

Research, development and innovation	Patents number; New Prod % Rev; R&D cash-out % on Rev; R&D employees Patents number; New Prod % Rev; R&D cash-out % on Rev; R&D employees
Product quality and safety	% defects on products; Nr. of non-conformities associated to products
Responsible Supply Chain	Nr. audited suppliers; Nr. certified suppliers
Responsible Business Conduct	Nr. Corruption incidents; Nr. Law-non-conformity; Board gender diversity
Customer centricity	NPS; Customer survey results; Customer average time resp and resolution
Materials sustainability	Average prod life; % Materials purchased from ESG suppliers; % recycled
Workers health and safety	Nr. accidents; accident frequency index; % safety training per employees
Energy and emissions	GJ consumed; % energy from renewable source; Scope 1, 2 (and 3) emissions
People well-being	% employee with health-insurance; % evaluated-employee; internal promotion
Waste and packaging	Waste tons; Packaging tons; % recyclable packaging

Contacts

IR CONTACTS

IR Manager

Alessandro D'Aniello Tel. +39 051 3147109 ir@datalogic.com Via Candini, 2 40012 Lippo di Calderara di Reno Bologna – Italy

IR Advisor

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 daniela.giglioli@datalogic.com

NEXT EVENTS

November 07, 2024 9M 2024 Results

DATALOGIC ON LINE

www.datalogic.com

THANK YOU

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

© 2024 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.

INTERNAL Datalogic Confidential

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 www.datalogic.com