Slide 1: Fourth Quarter and Full Year 2020 Results
Zebra Technologies Fourth Quarter and Full Year 2020 Results February 11, 2021
Slide 2: Safe Harbor Statement
Safe Harbor Statement Statements made in this presentation which are not statements of historical fact are forward-looking statements and are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Actual results may differ from those expressed or impli
Slide 3: Agenda
Agenda 2020 Highlights 01 Anders Gustafsson, CEO 4Q20 Financials and 2021 Outlook 02 Nathan Winters, CFO Advancing our Enterprise Asset Intelligence Vision 03 Anders Gustafsson, CEO Q&A 04 Anders Gustafsson, CEO Nathan Winters, CFO Joe Heel, SVP Global Sales ZEBRA TECHNOLOGIES 3
Slide 4: Exceptional Finish to a Challenging Year
Exceptional Finish to a Challenging Year 4Q20 +10.2% 23.5% $4.46 ADJUSTED NET ADJUSTED NON-GAAP SALES GROWTH EBITDA MARGIN DILUTED EPS +8.3%(1) Organic +210bps YoY +25% YoY FY20 (0.7)% 20.5% $12.80 $895M ADJUSTED NET ADJUSTED NON-GAAP FREE CASH SALES GROWTH EBITDA MARGIN DILUTED EPS FLOW (0.9)%(1) O
Slide 5: Agenda
Agenda 2020 Highlights 01 Anders Gustafsson, CEO 4Q20 Financials and 2021 Outlook 02 Nathan Winters, CFO Advancing our Enterprise Asset Intelligence Vision 03 Anders Gustafsson, CEO Q&A 04 Anders Gustafsson, CEO Nathan Winters, CFO Joe Heel, SVP Global Sales ZEBRA TECHNOLOGIES 5
Slide 6: Fourth Quarter P&L Summary
Fourth Quarter P&L Summary(1) SEGMENT ORGANIC SALES GROWTH(2,3) In millions, except per share data 4Q20 4Q19 Change • EVM Segment +5.6% • AIT Segment +14.0% Adjusted Net Sales $1,313 $1,192 10.2% Organic Net Sales Growth(2,3) 8.3% REGIONAL ORGANIC SALES GROWTH(2,3) • North America +6% Adjusted Gross
Slide 7: 2020 Cash Flow & Balance Sheet Highlights
2020 Cash Flow & Balance Sheet Highlights FY20 Cash Flow Strong Liquidity Position YE 2020 • $895M free cash flow FY20 – $271M higher free cash flow YoY • $168M in cash & cash equivalents – Exceptionally high free cash flow conversion o Timing of customer collections and vendor payments • $1.25B tot
Slide 8: Outlook & Assumptions
Outlook & Assumptions (1) 1Q21 FY21 • Expect 25-29% adjusted net sales growth YoY • Expect 10-14% adjusted net sales growth YoY – ~ 300-350 basis point additive impact from recently – ~ 3 percentage point additive impact from recently acquired business(1) and FX acquired business (1) and FX • Adjust
Slide 9: Agenda
Agenda 2020 Highlights 01 Anders Gustafsson, CEO 4Q20 Financials and 2021 Outlook 02 Nathan Winters, CFO Advancing our Enterprise Asset Intelligence Vision 03 Anders Gustafsson, CEO Q&A 04 Anders Gustafsson, CEO Nathan Winters, CFO Joe Heel, SVP Global Sales ZEBRA TECHNOLOGIES 9
Slide 10: Elevating Our Value Proposition
Elevating Our Value Proposition Focused on Scaling Solutions that Drive Actionable Insights CUSTOMER BENEFIT End-To-End Workflow Optimization TM Zebra MotionWorks® EDGE SOLUTIONS Workforce/Task Management INTELLIGENT Powered by Zebra SavannaRM Zebra Data Services TECHNOLOGIES ENABLING Artificial Com
Slide 11: Enabling Retail Transformation
Enabling Retail Transformation Zebra Solutions Help Deliver a Superior Omnichannel Shopping Experience ✓ Better Visibility & Insights ✓ Give Associates Information They Need To ✓ Increase Employee Help the Shopper Collaboration and Labor Productivity ✓ Empower the Customer to Shop the Way They Want
Slide 12: Zebra Optimizes Workflows for the On-Demand Economy
Zebra Optimizes Workflows for the On-Demand Economy Intelligent Automation Retail & Other Markets Ecommerce Enterprise Mobility IoT / Cloud Computing Transportation & Logistics Healthcare ZEBRA TECHNOLOGIES 12 Manufacturing
Slide 13: Agenda
Agenda 2020 Highlights 01 Anders Gustafsson, CEO 4Q20 Financials and 2021 Outlook 02 Nathan Winters, CFO Advancing our Enterprise Asset Intelligence Vision 03 Anders Gustafsson, CEO Q&A 04 Anders Gustafsson, CEO Nathan Winters, CFO Joe Heel, SVP Global Sales ZEBRA TECHNOLOGIES 13
Slide 14: Q&A
Q&A ZEBRA TECHNOLOGIES 14
Slide 15: Appendix
Appendix ZEBRA TECHNOLOGIES 15
Slide 16: Use of Non-GAAP Financial Information
Use of Non-GAAP Financial Information This earnings release contains certain Non-GAAP financial measures, consisting of “adjusted net sales,” “adjusted gross profit,” “EBITDA,” “Adjusted EBITDA,” “Non-GAAP net income,” “Non-GAAP earnings per share,” “free cash flow,” “organic net sales growth,” and
Slide 17: GAAP to Non-GAAP Organic Net Sales Growth Reconciliation
GAAP to Non-GAAP Organic Net Sales Growth Reconciliation (Unaudited) Three Months Ended December 31, 2020 AIT EVM Consolidated Reported GAAP Consolidated Net sales growth 14.5 % 8.1 % 9.7 % Adjustments: Impact of foreign currency translations (1) (0.5)% (0.1)% (0.2)% Impact of acquisitions (2) — % (
Slide 18: GAAP to Non-GAAP Gross Margin Reconciliation
(In millions) GAAP to Non-GAAP Gross Margin Reconciliation (Unaudited) (1) Consolidated results include corporate eliminations related to business acquisitions that are not reported in segment results. (2) Adjusted Gross profit excludes purchase accounting adjustments, share-based compensation expen
Slide 19: GAAP to Non-GAAP Net Income Reconciliation
(In millions, except share data) GAAP to Non-GAAP Net Income Reconciliation (Unaudited) ZEBRA TECHNOLOGIES 19
Slide 20: GAAP to Non-GAAP EBITDA Reconciliation
(In millions) GAAP to Non-GAAP EBITDA Reconciliation (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, December 31, December 31, 2020 2019 2020 2019 Net income $ 199 $ 169 $ 504 $ 544 Add back: Depreciation (excluding exit and restructuring costs) 16 17 67 72 Amortization
Slide 21: GAAP to Non-GAAP Free Cash Flow Reconciliation
(In millions) GAAP to Non-GAAP Free Cash Flow Reconciliation (Unaudited) Twelve Months Ended December 31, December 31, 2020 2019 Net cash provided by operating activities $ 962 $ 685 Less: Purchases of property, plant and equipment (67) (61) Free cash flow (Non-GAAP)(1) $ 895 $ 624 (1) Free cash flo