Slide 1: Zebra Technologies Third-Quarter 2016 Results
ZEBRA TECHNOLOGIES THIRD-QUARTER 2016 RESULTS November 15, 2016
Slide 2: Presenters: Anders Gustafsson and Mike Smiley
Anders Gustafsson Mike Smiley Chief Executive Officer Chief Financial Officer 2
Slide 3: 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 4: Third-Quarter 2016 Highlights
Third-Quarter 2016 Highlights • Executing well in a period of rapid change and transformation • Adjusted sales of $906M, flat to 3Q15 in constant currency • Enterprise segment increase driven by growth in services and data capture • Pre-transaction Zebra sales decrease due to a primarily one-time pr
Slide 5: Third-Quarter P&L Summary
Third-Quarter P&L Summary(1) • Adj. Net Sales approx. flat(3) In millions, except per ‒ Enterprise sales up 1%(3) 3Q16 3Q15 Change share data ‒ Pre-transaction Zebra sales down 3%(3,4) Adjusted Net Sales (2) $906 $919 (0.3)%(3) • Regional breakdown ‒ North America down 2% Adj. Gross Margin (%)(2) 45
Slide 6: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow • $163M in cash as of 3Q16 • Tax efficient repatriation of excess foreign cash in 2016 Liquidity • Zero borrowings on $250M revolver; no financial covenant unless >$50M draw down • Reducing required minimum operating cash on hand this year through Enterprise integration i
Slide 7: Debt Reduction is Top Priority
Debt Reduction is Top Priority Financed October 2014 Enterprise acquisition with $3.25B of debt 5 Total Debt 4 $3.01B ↓~ $650M 3Q16 3 $2.79B 2 1 0 YE 2015 YE 2016 YE 2017 3Q16 Cash & Cash Equivalents $192M $163M Net-Debt-to- 2x-3x 3Q16 Target Range 4.8x 4.4x Adjusted EBITDA 77
Slide 8: Outlook
Outlook • Net sales (4)% to (1)% vs. 4Q15, representing (3)% to 0% in constant currency; assumes ~ 3% impact from October sale of 4Q16 WLAN business; expect to achieve organic growth • Adj. EBITDA margin range of 19 to 20% • Adj. EPS range of $1.65 to $1.85 • Sales within the range of previously • N
Slide 9: Focused on Strategic Priorities in 2016
Focused on Strategic Priorities in 2016 • Our technology is vital as customers pursue their strategic goals Deliver Profitable • Leverage expertise and expand vertical presence Growth • Continued focus on innovation and new product introductions • Improve performance in the services business • Reali
Slide 10: Zebra: Global Leader of Enterprise Asset Intelligence
Zebra: Global Leader of Enterprise Asset Intelligence Providing the smart, visionary solutions to see the big picture Zebra’s innovative solutions makes businesses smarter and more connected, enabling real- time: • Visibility into people and things; • Analysis of operational data; and • Critical ins
Slide 11: Long-Term Outlook
Long-Term Outlook Positioned for Success NET-DEBT- TO- ADJUSTED ADJUSTED INTERNET CLOUD MOBILITY OF THINGS EBITDA EBITDA MARGIN (1) 2x – 3x SALES improvement target range GROWTH to 18 – 20% 4 – 5% (annual) by annualized the end of growth over 2017 a cycle 1) Assumes no material change to the macroec
Slide 12: Questions?
\ QUESTIONS? ZEBRA
Slide 13: Appendix
We APPENDIX ZEBRA
Slide 14: Reconciliation of GAAP to Non-GAAP Net Income
Reconciliation of GAAP to Non-GAAP Net Income Three Months Ended Nine Months Ended October 1, October 3, October 1, October 3, 2016 2015 2016 2015 Net (loss) income $ (83) $ (29) $ (154) $ (131) Income tax expense (benefit) $ 6 $ 4 $ 5 $ (5) Share-based compensation $ 9 $ 9 $ 21 $ 26 Acquisition and
Slide 15: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Three Months Ended Nine Months Ended October 1, October 3, October 1, October 3, EBITDA Reconcilation 2016 2015 2016 2015 Operating (loss) income $ (24) $ 25 $ 9 $ 31 Depreciation $ 21 $ 20 $ 56 $ 51 Amortization of intangible assets $ 59 $ 59 $ 178 $ 190 EBITDA (Non-
Slide 16: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation (Amounts in millions) ADJUSTED NET SALES DECLINE Three Months Ended October 1, 2016 Reported net sales decline (1.3) % Purchase accounting adjustments (0.1) % Exclusion of foreign currency translation impact 1.1 % Adjusted net sales decline in constant currency (0.3)