Slide 1: Zebra Technologies Second Quarter 2023 Results
Click to enter Presentation Title Subhead Copy here Zebra Technologies Second Quarter 2023 Results August 1, Name Presenter 2023 Date
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 Q2 Summary and Actions 01 Bill Burns, CEO Q2 Financials and 2023 Outlook 02 Nathan Winters, CFO Advancing Our Enterprise Asset 03 Intelligence Vision Bill Burns, CEO Q&A Bill Burns, CEO 04 Nathan Winters, CFO Joe Heel, Chief Revenue Officer ZEBRA TECHNOLOGIES
Slide 4: Second Quarter 2023 P&L Summary
Q2 Summary and Actions Second Quarter 2023 P&L Summary (1) • Sales results unfavorable to outlook due to weakening end-market demand through the quarter, amplified by distributor destocking • Adjusted Net Sales $1,214M, down 16% o All regions declined, primarily driven by mobile computing o Lower sa
Slide 5: Actions to Address Challenges
Q2 Summary and Actions Actions to Address Challenges CHALLENGES ACTIONS • Macroeconomic uncertainty • $85M net annualized opex savings o Elongated sales cycles and deployments o Reduced spending across the organization o Capex budgets in flux o Expanded restructuring plans ($105M total charges) • Re
Slide 6: Agenda
Agenda Q2 Summary and Actions 01 Bill Burns, CEO Q2 Financials and 2023 Outlook 02 Nathan Winters, CFO Advancing Our Enterprise Asset 03 Intelligence Vision Bill Burns, CEO Q&A Bill Burns, CEO 04 Nathan Winters, CFO Joe Heel, Chief Revenue Officer ZEBRA TECHNOLOGIES
Slide 7: Second Quarter P&L Summary
Q2 Financials Second Quarter P&L Summary(1) In millions, except per share data 2Q23 2Q22 Change SEGMENT ORGANIC SALES GROWTH(2,3) • EVM Segment (23.6)% Adjusted Net Sales $1,214 $1,468 (17.3)% • AIT Segment +0.2% Organic Net Sales Growth(2,3) (16.0)% REGIONAL ORGANIC SALES GROWTH(2,3) $583 $675 (13.
Slide 8: Cash Flow & Balance Sheet
Q2 Financials Cash Flow & Balance Sheet Cash Flow: 1H23 Strong Balance Sheet: 2Q23 • Free cash flow of $(144)M, $267M lower YoY • $68M cash & cash equivalents o Higher use of working capital ▪ Higher cash taxes • $2.2B total debt on balance sheet ▪ Payments for inventory • Net-debt-to-adjusted-EBITD
Slide 9: Premium Supply Chain Costs & Gross Margin Impact
Q2 Financials Premium Supply Chain Costs & Gross Margin Impact -470 bps -430 bps -380 bps -310 bps -220 bps 68 63 -170 bps -150 bps 56 44 -110 bps -90 bps 30 25 21 -40 bps 15 12 0 bps 5 Premium Supply Chain Costs Net of Tariff Refunds ($M) Gross Margin Impact ZEBRA TECHNOLOGIES 9 Note: Premium suppl
Slide 10: Outlook & Assumptions
2023 Outlook Outlook & Assumptions 3Q23 FY23 • Net sales decline between 30% and 35% YoY • Net sales decline between 20% and 23% YoY o ~ 1 percentage point negative impact from o > 1 percentage point negative impact from foreign currency changes foreign currency changes o ~ 50 basis points additive
Slide 11: Agenda
Agenda Q2 Summary and Actions 01 Bill Burns, CEO Q2 Financials and 2023 Outlook 02 Nathan Winters, CFO Advancing Our Enterprise Asset 03 Intelligence Vision Bill Burns, CEO Q&A Bill Burns, CEO 04 Nathan Winters, CFO Joe Heel, Chief Revenue Officer 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 ZEBRA TECHNOLOGIES 12
Slide 13: Megatrends Supportive of Zebra's Long-Term Growth Trajectory
Advancing EAI Megatrends Supportive of Zebra’s Long-Term Growth Trajectory Digitization & IoT Analytics Automation Mobile & Cloud Computing 10% 10% 12% CAGR CAGR CAGR Ecommerce IoT Warehouse Footprint Logistics Revenues Spend On Demand Economy Artificial Intelligence 8% 18% CAGR CAGR Ecommerce AI Sa
Slide 14: Enterprise Mobile Computing Critical to Connecting and Empowering the Front-Line
Advancing EAI Enterprise Mobile Computing Critical to Connecting and Empowering the Front-Line Increase Collaboration Facilitate Faster & Labor Productivity Check-Out / Payments Real-Time Insights to Serve Emerging Applications Advancing Customers/Shoppers/Patients Efficiency, Inventory Accuracy, &
Slide 15: Spotlight on Select Adjacent and Expansion Markets
Advancing EAI Spotlight on Select Adjacent and Expansion Markets Higher-Growth Offerings Complement Our Core • Market leader in RFID solutions • Driving strong double-digit profitable sales growth • Serving new use cases beyond retail, into supply chain visibility Advanced Location Solutions • Machi
Slide 16: Agenda
Agenda Q2 Summary and Actions 01 Bill Burns, CEO Q2 Financials and 2023 Outlook 02 Nathan Winters, CFO Advancing Our Enterprise Asset 03 Intelligence Vision Bill Burns, CEO Q&A Bill Burns, CEO 04 Nathan Winters, CFO Joe Heel, Chief Revenue Officer ZEBRA TECHNOLOGIES
Slide 17: Q&A
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Slide 18: Appendix
Appendix ZEBRA TECHNOLOGIES 18
Slide 19: 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 20: GAAP to Non-GAAP Organic Net Sales Growth Reconciliation
GAAP to Non-GAAP Organic Net Sales Growth Reconciliation ZEBRA TECHNOLOGIES 20
Slide 21: GAAP to Non-GAAP Gross Margin Reconciliation
GAAP to Non-GAAP Gross Margin Reconciliation ZEBRA TECHNOLOGIES 21
Slide 22: GAAP to Non-GAAP Net Income Reconciliation
(In millions, except share data) GAAP to Non-GAAP Net Income Reconciliation (Unaudited) Three Months Ended Six Months Ended July 1, July 2, July 1, July 2, 2023 2022 2023 2022 GAAP Net income (loss) $ 144 $ (98) $ 294 $ 107 Adjustments to Cost of sales(1) Share-based compensation 2 1 3 2 Total adjus
Slide 23: GAAP to Non-GAAP EBITDA Reconciliation
GAAP to Non-GAAP EBITDA Reconciliation ZEBRA TECHNOLOGIES 23
Slide 24: GAAP to Non-GAAP Free Cash Flow Reconciliation
GAAP to Non-GAAP Free Cash Flow Reconciliation (In millions) (Unaudited) ZEBRA TECHNOLOGIES 24
Slide 25: 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