Slide 1: Second Quarter 2021 Results
Zebra Technologies Second Quarter 2021 Results August 3, 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 Q2 Highlights 01 Anders Gustafsson, CEO Q2 Financials and 2021 Outlook 02 Nathan Winters, CFO Advancing our Enterprise Asset 03 Intelligence Vision Anders Gustafsson, CEO Q&A 04 Anders Gustafsson, CEO Nathan Winters, CFO Joe Heel, Chief Revenue Officer
Slide 4: Second Quarter 2021 Highlights
Second Quarter 2021 Highlights (1) • Delivered sales, EBITDA margin, and earnings per share results that exceeded our outlook, as customers prioritize investment in our solutions to compete effectively in an increasing on-demand economy • 40% Organic Net Sales growth ‒ Double-digit growth across all
Slide 5: Agenda
Agenda Q2 Highlights 01 Anders Gustafsson, CEO Q2 Financials and 2021 Outlook 02 Nathan Winters, CFO Advancing our Enterprise Asset 03 Intelligence Vision Anders Gustafsson, CEO Q&A 04 Anders Gustafsson, CEO Nathan Winters, CFO Joe Heel, Chief Revenue Officer
Slide 6: Second Quarter P&L Summary
Second Quarter P&L Summary(1) In millions, except per share data 2Q21 2Q20 Change SEGMENT ORGANIC SALES GROWTH(2,3) • EVM Segment +35.1% Adjusted Net Sales $1,380 $956 +44.4% • AIT Segment +51.2% Organic Net Sales Growth(2,3) +39.8% REGIONAL ORGANIC SALES GROWTH(2,3) Adjusted Gross Profit $663 $422
Slide 7: Cash Flow & Balance Sheet Highlights
Cash Flow & Balance Sheet Highlights Cash Flow: YTD 2Q21 Strong Liquidity Position: 2Q21 • $514M free cash flow • $318M in cash & cash equivalents – $192M higher free cash flow YoY primarily • $1.0B total debt on balance sheet due to higher net income • Nearly $1.0B capacity under revolving credit •
Slide 8: Global Premium Freight Costs Continue to Escalate Through Pandemic
Global Premium Freight Costs Continue to Escalate Through Pandemic Expected to Abate as Component Supply and Freight Capacity Improves Estimate YoY 45 45 2H21 increase in In Millions Transitory COGS items of ~ $85M and negative 21 impact on GM of 17 ~ 3 points 11 10 8 12 2 -3 ZEBRA TECHNOLOGIES 8
Slide 9: Outlook & Assumptions
Outlook & Assumptions(1) 3Q21 FY21 • Adjusted net sales growth ~ 21-25% YoY • Adjusted net sales growth ~ 23-25% YoY – ~ 3 percentage point additive impact from recently acquired – ~ 3 percentage point additive impact from recently business(2) and FX acquired business (2) and FX • Adj. EBITDA margin
Slide 10: Agenda
Agenda Q2 Highlights 01 Anders Gustafsson, CEO Q2 Financials and 2021 Outlook 02 Nathan Winters, CFO Advancing our Enterprise Asset 03 Intelligence Vision Anders Gustafsson, CEO Q&A 04 Anders Gustafsson, CEO Nathan Winters, CFO Joe Heel, Chief Revenue Officer
Slide 11: Zebra Digitizes & Automates the Front Line of Business
Zebra Digitizes & Automates the Front Line of Business Transforming Workflows: Purpose-Built Hardware + Software + Cloud Analytics ZEBRA TECHNOLOGIES 11
Slide 12: Zebra Optimizes Workflows for the On-Demand Economy
Zebra Optimizes Workflows for the On-Demand Economy IoT / Cloud Computing Retail & Other Markets Ecommerce Intelligent Automation Enterprise Mobility Transportation & Healthcare Logistics ZEBRA TECHNOLOGIES 12 Manufacturing
Slide 13: Investing To Advance Our Enterprise Asset Intelligence Vision
Investing To Advance Our Enterprise Asset Intelligence Vision Entering Expansion Markets: Intelligent Automation in Manufacturing and the Warehouse Fixed Industrial Scanning & Machine Vision Autonomous Mobile Robots (AMRs) Orchestrated Workflow Execution ® Zebra FulfillmentEdge TM Now Part of (Pendi
Slide 14: Agenda
Agenda Q2 Highlights 01 Anders Gustafsson, CEO Q2 Financials and 2021 Outlook 02 Nathan Winters, CFO Advancing our Enterprise Asset 03 Intelligence Vision Anders Gustafsson, CEO Q&A 04 Anders Gustafsson, CEO Nathan Winters, CFO Joe Heel, Chief Revenue Officer
Slide 15: Q&A
Q&A ZEBRA TECHNOLOGIES 15
Slide 16: Appendix
Appendix ZEBRA TECHNOLOGIES 16
Slide 17: 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 18: GAAP to Non-GAAP Organic Net Sales Growth Reconciliation
GAAP to Non-GAAP Organic Net Sales Growth Reconciliation (Unaudited) Three Months Ended July 3, 2021 AIT EVM Consolidated Reported GAAP Consolidated Net sales growth 54.2 % 40.4 % 44.0 % Adjustments: Impact of foreign currency translation (1) (3.0)% (2.7)% (2.6)% Impact of acquisitions (2) — % (2.6)
Slide 19: GAAP to Non-GAAP Gross Margin Reconciliation
(In millions) GAAP to Non-GAAP Gross Margin Reconciliation (Unaudited) Three Months Ended July 3, 2021 June 27, 2020 AIT EVM Consolidated AIT EVM Consolidated GAAP Reported Net sales (1) $ 421 $ 959 $ 1,377 $ 273 $ 683 $ 956 Reported Gross profit (1) 201 460 658 125 296 419 Gross Margin 47.7 % 48.0
Slide 20: GAAP to Non-GAAP Net Income Reconciliation
(In millions, except share data) (Unaudited) GAAP to Non-GAAP Net Income Reconciliation Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, 2021 2020 2021 2020 Net income $ 219 $ 100 $ 447 $ 189 Adjustments to Net sales(1) Purchase accounting adjustments 3 — 6 — Total adjustments t
Slide 21: GAAP to Non-GAAP EBITDA Reconciliation
(In millions) GAAP to Non-GAAP EBITDA Reconciliation (Unaudited) Three Months Ended Six Months Ended July 3, June 27, July 3, June 27, 2021 2020 2021 2020 Net income $ 219 $ 100 $ 447 $ 189 Add back: Depreciation (excluding exit and restructuring costs) 18 17 36 35 Amortization of intangible assets
Slide 22: GAAP to Non-GAAP Free Cash Flow Reconciliation
(In millions) GAAP to Non-GAAP Free Cash Flow Reconciliation (Unaudited) Six Months Ended July 3, June 27, 2021 2020 Net cash provided by operating activities $ 539 $ 355 Less: Purchases of property, plant and equipment (25) (33) Free cash flow (Non-GAAP)(1) $ 514 $ 322 ZEBRA TECHNOLOGIES 22