Slide 1: Fourth Quarter and Full Year 2023 Results
Zebra Technologies Fourth Quarter and Full Year 2023 Results February 15, 2024
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 Q4 Summary and Actions 01 Bill Burns, CEO Q4 Financials and 2024 Outlook 02 Nathan Winters, CFO Advancing Our Enterprise Asset 03 Intelligence Vision Bill Burns, CEO Q&A 04 Bill Burns, CEO Nathan Winters, CFO ZEBRA TECHNOLOGIES
Slide 4: Fourth Quarter 2023 P&L Summary
Q4 Summary Fourth Quarter 2023 P&L Summary (1) • Challenging sales and earnings results, as expected, driven by continued broad-based softness across our end markets • Sales $1,009M, (33)% organic sales decline o Broad-based declines across all regions and major product categories o Distributor dest
Slide 5: Reducing Costs & Driving Sales to Mitigate Current Demand Environment
Actions Reducing Costs & Driving Sales to Mitigate Current Demand Environment • $120M net annualized opex savings (previously $100M) o Previously announced actions complete o New actions expected to be substantially complete by mid 2024 o Expect $130M total one-time charges from restructuring plans
Slide 6: Attractive Long-Term Growth Opportunities Across Our End Markets
Q4 Update Attractive Long-Term Growth Opportunities Across Our End Markets Market Opportunity Served • Improve profitability of e-commerce order fulfillment from stores Retail & • Enhance associate and customer experiences to drive preference and growth Sales Mix Ecommerce • Reimagining checkout, in
Slide 7: Agenda
Agenda Q4 Summary and Actions 01 Bill Burns, CEO Q4 Financials and 2024 Outlook 02 Nathan Winters, CFO Advancing Our Enterprise Asset 03 Intelligence Vision Bill Burns, CEO Q&A 04 Bill Burns, CEO Nathan Winters, CFO ZEBRA TECHNOLOGIES
Slide 8: Fourth Quarter P&L Summary
Q4 Financials Fourth Quarter P&L Summary(1) In millions, except per share data 4Q23 4Q22 Change SEGMENT ORGANIC SALES DECLINE(2) • EVM Segment (32.7)% • AIT Segment (33.6)% Net Sales $1,009 $1,503 (32.9)% REGIONAL ORGANIC SALES DECLINE(2) Organic Net Sales Decline(2) (33.1)% • North America (36)% Ad
Slide 9: Cash Flow & Balance Sheet
Q4 Financials Cash Flow & Balance Sheet Cash Flow: FY23 Strong Liquidity Position: FYE 2023 • Free cash flow of ($91M), $504M lower YoY • $137M cash & cash equivalents o Lower operating profits o Higher tax payments and interest costs • $2.2B total debt on balance sheet o Payments for restructuring
Slide 10: Outlook & Assumptions
2024 Outlook Outlook & Assumptions 1Q24 FY24 • Sales decline between 17% and 20% YoY • Sales change between -1% and +3% YoY o ~ 50bps favorable impact from FX o Negligible impact from FX • $15M favorable gross profit impact from • $20M favorable gross profit impact from lower premium supply chain lo
Slide 11: Agenda
Agenda Q4 Summary and Actions 01 Bill Burns, CEO Q4 Financials and 2024 Outlook 02 Nathan Winters, CFO Advancing Our Enterprise Asset 03 Intelligence Vision Bill Burns, CEO Q&A 04 Bill Burns, CEO Nathan Winters, CFO Right click on image to change picture ZEBRA TECHNOLOGIES
Slide 12: Zebra Digitizes & Automates the Front Line of Business
Advancing EAI Zebra Digitizes & Automates the Front Line of Business Transforming Workflows: Purpose-Built Hardware + Software + Cloud Analytics Real-Time Actionable Insights Our solutions remain essential to our customers’ operations, and we are well positioned to benefit from secular trends to dig
Slide 13: Zebra Optimizes Workflows for the On-Demand Economy
Advancing EAI Zebra Optimizes Workflows for the On-Demand Economy Trusted Strategic Partner to Industry Leaders Retail & Transportation E-Commerce & Logistics Manufacturing Healthcare Other Markets Elevated Customer Enhance Worker Productivity Production Throughput Safer Patient Outcomes Critical Co
Slide 14: The Modern Store by Zebra
Advancing EAI The Modern Store by Zebra Helping Retailers Solve Their Most Pressing Challenges Optimized Inventory Engaged Associates Elevated Customer Experience Easily locate products Reduce employee turnover Improve customer satisfaction scores Achieve inventory accuracy Reduce store labor spend
Slide 15: Agenda
Agenda Q4 Summary and Actions 01 Bill Burns, CEO Q4 Financials and 2024 Outlook 02 Nathan Winters, CFO Advancing Our Enterprise Asset 03 Intelligence Vision Bill Burns, CEO Q&A 04 Bill Burns, CEO Nathan Winters, CFO Right click on image to change picture ZEBRA TECHNOLOGIES
Slide 16: Q&A
Q&A ZEBRA TECHNOLOGIES
Slide 17: Appendix
Appendix ZEBRA TECHNOLOGIES 17
Slide 18: Use of Non-GAAP Financial Information
Use of Non-GAAP Financial Information This presentation contains certain Non-GAAP financial measures, consisting of “adjusted net sales,” “adjusted gross profit,” “adjusted gross margin,” “EBITDA,” “Adjusted EBITDA,” “Adjusted EBITDA margin,” “Adjusted EBITDA % of adjusted net sales,” “non-GAAP net
Slide 19: GAAP to Non-GAAP Organic Net Sales Decline Reconciliation
GAAP to Non-GAAP Organic Net Sales (Unaudited) Decline Reconciliation ZEBRA TECHNOLOGIES 19
Slide 20: GAAP to Non-GAAP Gross Margin Reconciliation
GAAP to Non-GAAP Gross Margin Reconciliation ZEBRA TECHNOLOGIES 20
Slide 21: GAAP to Non-GAAP Net Income Reconciliation
(In millions, except share data) GAAP to Non-GAAP Net Income Reconciliation (Unaudited) ZEBRA TECHNOLOGIES 21
Slide 22: GAAP to Non-GAAP EBITDA Reconciliation
GAAP to Non-GAAP EBITDA Reconciliation ZEBRA TECHNOLOGIES 22
Slide 23: GAAP to Non-GAAP Free Cash Flow Reconciliation
GAAP to Non-GAAP Free Cash Flow Reconciliation (In millions) (Unaudited) ZEBRA TECHNOLOGIES 23
Slide 24: About Zebra
About Zebra Zebra (NASDAQ: ZBRA) empowers the front line of business in retail, manufacturing, transportation and logistics, healthcare, and other industries to achieve a performance edge. We deliver industry-tailored, end-to-end solutions that intelligently connect people, assets and data to help o