Slide 1: Zebra Technologies First Quarter 2019 Results
Zebra Technologies First Quarter 2019 Results April 30, 2019 1
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 01 Q1 Highlights Anders Gustafsson, CEO 02 Q1 Financials and 2019 Outlook Olivier Leonetti, CFO 03 Progress on Strategic Priorities Anders Gustafsson, CEO 04 Q&A Anders Gustafsson, CEO │ Olivier Leonetti, CFO │ Joe Heel, SVP Global Sales ZEBRA TECHNOLOGIES 3
Slide 4: Q1 Financial Highlights
Q1 Financial Highlights +9.1% 21.1% $2.92 Acquired NET SALES ADJUSTED NON-GAAP Temptime Corporation GROWTH EBITDA MARGIN DILUTED EPS Transaction closed February 21, 2019 +7.9%(1) Organic +20bps YOY Improvement +14% from 1Q18 (1) Assumes constant FX to prior year period and excludes revenue from acqu
Slide 5: Agenda
Agenda 01 Q1 Highlights Anders Gustafsson, CEO 02 Q1 Financials and 2019 Outlook Olivier Leonetti, CFO 03 Progress on Strategic Priorities Anders Gustafsson, CEO 04 Q&A Anders Gustafsson, CEO │ Olivier Leonetti, CFO │ Joe Heel, SVP Global Sales ZEBRA TECHNOLOGIES 5 5
Slide 6: First-Quarter P&L Summary
First-Quarter P&L Summary(1) In millions, except per share data 1Q19 1Q18 Growth ORGANIC SEGMENT SALES GROWTH(2,3) EVM Segment +11.6% Net Sales $1,066 $977 +9.1% AIT Segment +1.2% Organic Net Sales Growth(2,3) +7.9% REGIONAL ORGANIC SALES GROWTH(2,3) Adjusted Gross Profit $503 $466 +7.9% North Ameri
Slide 7: Balance Sheet and Cash Flow Highlights
Balance Sheet and Cash Flow Highlights Cash Flow Liquidity and Debt • $27M free cash flow in 1Q19 • $61M in cash & cash equivalents as of 1Q19 • Higher use of working capital primary driver • $1.7B total debt on balance sheet as of 1Q19 of $71M lower free cash flow vs 1Q18 • Net-debt-to-adjusted-EBI
Slide 8: Outlook
Outlook 2Q19 FY19 ASSUMPTIONS • Net sales growth 7-9% vs. LY; assumes ~ 250-300 basis • Net sales growth of 5-8% vs. 2018; assumes ~ 2 percentage point point additive impact from recently acquired businesses(1,2) additive impact from recently acquired businesses(1,2), and and ~ 50 basis point negati
Slide 9: Agenda
Agenda 01 Q1 Highlights Anders Gustafsson, CEO 02 Q1 Financials and 2019 Outlook Olivier Leonetti, CFO 03 Progress on Strategic Priorities Anders Gustafsson, CEO 04 Q&A Anders Gustafsson, CEO │ Olivier Leonetti, CFO │ Joe Heel, SVP Global Sales ZEBRA TECHNOLOGIES 9
Slide 10: Strategic Focus
Strategic Focus Extend Leadership in Core Markets, Outpacing the Competition IMAGE AREA Drive Growth in Attractive 7.5” h x 6.9”w Adjacent Markets Advance Enterprise Asset Intelligence Vision Enhance Financial Strength and Flexibility ZEBRA TECHNOLOGIES
Slide 11: Zebra Enables Enterprise Asset Intelligence
Zebra Enables Enterprise Asset Intelligence SENSE ANALYZE ACT Apply Insight to Enable the Status | Condition | Location Best Next Move Real-Time Analytics Savanna Data Intelligence Platform Our Competitive Differentiation = Hardware + Software + Cloud ZEBRA TECHNOLOGIES
Slide 12: Enabling Enterprise Visibility at the Enterprise Edge
Enabling Enterprise Visibility at the Enterprise Edge Megatrends • IoT • Enterprise Mobility Option 01 • Cloud Computing • Intelligent Automation Option 04 • On-Demand Economy This is a sample text. This is a sample text. Healthcare Option 02 Option 03 Retail & Ecommerce This is a sample This is a s
Slide 13: Agenda
Agenda 01 Q1 Highlights Anders Gustafsson, CEO 02 Q1 Financials and 2019 Outlook Olivier Leonetti, CFO 03 Progress on Strategic Priorities Anders Gustafsson, CEO 04 Q&A Anders Gustafsson, CEO │ Olivier Leonetti, 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 press 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 “ad
Slide 17: GAAP to Non-GAAP Organic Net Sales Growth Reconciliation
GAAP to Non-GAAP Organic Net Sales Growth Reconciliation Three Months Ended March 30, 2019 AIT EVM Consolidated Reported GAAP Consolidated Net sales growth 1.4 % 13.4 % 9.1 % Adjustments: Impact of foreign currency translation (1) 1.0 % 0.8 % 0.9 % (2) Impact of acquisition (1.2 )% (2.6 )% (2.1 )% O
Slide 18: GAAP to Non-GAAP Gross Margin Reconciliation
GAAP to Non-GAAP Gross Margin Reconciliation Three Months Ended March 30, 2019 March 31, 2018 AIT EVM Consolidated AIT EVM Consolidated GAAP Reported Net sales $ 357 $ 709 $ 1,066 $ 352 $ 625 $ 977 (1) Reported Gross profit 184 318 501 183 282 465 Gross Margin 51.5 % 44.9 % 47.0 % 52.0 % 45.1 % 47.6
Slide 19: GAAP to Non-GAAP Net Income Reconciliation
GAAP to Non-GAAP Net Income Reconciliation Three Months Ended March 30, March 31, 2019 2018 Net income $ 115 $ 109 Adjustments to Cost of sales (1) Purchase accounting adjustments 1 — Share-based compensation 1 1 Total adjustments to Cost of sales 2 1 Adjustments to Operating expenses (1) Amortizati
Slide 20: GAAP to Non-GAAP EBITDA Reconciliation
GAAP to Non-GAAP EBITDA Reconciliation Three Months Ended March 30, March 31, 2019 2018 Net income $ 115 $ 109 Add back: Depreciation 19 20 Amortization of intangible assets 28 23 Total Other expenses, net 28 11 Income tax expense 16 24 EBITDA (Non-GAAP) 206 187 Adjustments to Cost of sales Purchase
Slide 21: GAAP to Non-GAAP Free Cash Flow Reconciliation
GAAP to Non-GAAP Free Cash Flow Reconciliation Three Months Ended March 30, March 31, 2019 2018 Net cash provided by operating activities $ 42 $ 116 Less: Purchases of property, plant and equipment (15) (18) Free cash flow (Non-GAAP)(1) $ 27 $ 98 (1) Free cash flow is defined as Net cash provided by