Slide 1: Fourth-Quarter and Full-Year 2019 Results
Zebra Technologies Fourth-Quarter and Full-Year 2019 Results February 13, 2020 ZEBRA TECHNOLOGIES
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 2019 Highlights Anders Gustafsson, CEO 02 4Q19 Financials and 2020 Outlook Olivier Leonetti, CFO 03 Progress on our Enterprise Asset Intelligence Vision Anders Gustafsson, CEO 04 Q&A Anders Gustafsson, CEO │ Olivier Leonetti, CFO │ Joe Heel, SVP Global Sales ZEBRA TECHNOLOGIES
Slide 4: Highlights
Highlights 4Q19 +4.8% 21.4% $3.56 Cortexica NET SALES ADJUSTED NON-GAAP EBITDA MARGIN DILUTED EPS ACQUISITION GROWTH Transaction closed Nov. 5 +4.6%(1) Organic +30bps YOY Improvement +14.8% from 4Q18 FY19 +6.3% 21.6% $12.94 $624M NET SALES ADJUSTED NON-GAAP FREE CASH GROWTH EBITDA MARGIN DILUTED EPS
Slide 5: Agenda
Agenda 01 2019 Highlights Anders Gustafsson, CEO 02 4Q19 Financials and 2020 Outlook Olivier Leonetti, CFO 03 Progress on our Enterprise Asset Intelligence Vision Anders Gustafsson, CEO 04 Q&A Anders Gustafsson, CEO │ Olivier Leonetti, CFO │ Joe Heel, SVP Global Sales ZEBRA TECHNOLOGIES
Slide 6: Fourth-Quarter P&L Summary
Fourth-Quarter P&L Summary(1) SEGMENT ORGANIC SALES GROWTH(2,3) In millions, except per share data 4Q19 4Q18 Growth EVM Segment +6.3% AIT Segment +1.2% Net Sales $1,192 $1,137 +4.8% REGIONAL ORGANIC SALES GROWTH(2,3) Organic Net Sales Growth(2,3) +4.6% North America +8% Adjusted Gross Profit $546 $5
Slide 7: Balance Sheet and Cash Flow Highlights
Balance Sheet and Cash Flow Highlights Cash Flow Liquidity and Debt • $624M free cash flow FY 2019 • $30M in cash & cash equivalents as of year-end 2019 • Higher use of working capital primary driver of • $1.3B total debt on balance sheet as of year-end 2019 $97M lower free cash flow vs FY 2018 • Ne
Slide 8: On Track to Mitigate Sec 301 Tariffs by Mid-2020
On Track to Mitigate Sec 301 Tariffs by Mid-2020 • Zebra has been manufacturing the majority of products in China, like many other tech companies • Sec 301 tariffs (customs duties) impact the U.S. imports of Chinese-sourced goods • Zebra continues to move forward with global product sourcing diversi
Slide 9: Outlook & Assumptions
Outlook & Assumptions 1Q20 FY20 • Net sales growth 4-7% assumes ~ 1 percentage point • Net sales growth of 4-6% vs. 2019; assumes ~ 30 basis point additive additive impact from recently acquired businesses(1) and impact from recently acquired businesses (1) and ~ 1 percentage point ~ 1 percentage po
Slide 10: Agenda
Agenda 01 2019 Highlights Anders Gustafsson, CEO 02 4Q19 Financials and 2020 Outlook Olivier Leonetti, CFO 03 Progress on our Enterprise Asset Intelligence Vision Anders Gustafsson, CEO 04 Q&A Anders Gustafsson, CEO │ Olivier Leonetti, CFO │ Joe Heel, SVP Global Sales ZEBRA TECHNOLOGIES
Slide 11: Transforming Workflows at the Enterprise Edge
Transforming Workflows at the Enterprise Edge Megatrends • On-Demand Economy • IoT • Cloud Computing Other Healthcare • Enterprise Mobility Markets • Intelligent Automation Retail & Manufacturing Ecommerce Transportation ZEBRA TECHNOLOGIES & Logistics 11
Slide 12: Enabling Intelligent Retail
Enabling Intelligent Retail Showcased our Innovative Solutions at the National Retail Federation Trade Show Improved Labor Accurate Inventory Efficiencies Management Hybrid Point-of-Sale Increased Employee Enhanced Asset Vision Collaboration Point-of-Sale Protection Better Business Faster Enhanced I
Slide 13: Agenda
Agenda 01 2019 Highlights Anders Gustafsson, CEO 02 4Q19 Financials and 2020 Outlook Olivier Leonetti, CFO 03 Progress on our Enterprise Asset Intelligence Vision Anders Gustafsson, CEO 04 Q&A Anders Gustafsson, CEO │ Olivier Leonetti, CFO │ Joe Heel, SVP Global Sales ZEBRA TECHNOLOGIES
Slide 14: Q&A
Q&A ZEBRA TECHNOLOGIES 14
Slide 15: Appendix
Appendix ZEBRA TECHNOLOGIES 3 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 (Unaudited) Three Months Ended December 31, 2019 AIT EVM Consolidated Reported GAAP Consolidated Net sales growth 3.3% 5.6% 4.8% Adjustments: Impact of foreign currency translation(1) 1.0% 1.1% 1.1% Impact of acquisitions(2) (3.1)% (0.4)% (1.3
Slide 18: GAAP to Non-GAAP Gross Margin Reconciliation
GAAP to Non-GAAP Gross Margin Reconciliation (In millions) (Unaudited) Three Months Ended December 31, 2019 December 31, 2018 AIT EVM Consolidated AIT EVM Consolidated GAAP Reported Net sales $ 379 $ 813 $ 1,192 $ 367 $ 770 $ 1,137 Reported Gross profit (1) 183 362 544 182 359 539 Gross Margin 48.3%
Slide 19: GAAP to Non-GAAP Net Income Reconciliation
GAAP to Non-GAAP Net Income Reconciliation (In millions, except share data) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, December 31, December 31, 2019 2018 2019 2018 Net income $ 169 $ 115 $ 544 $ 421 Adjustments to Cost of sales(1) Purchase accounting adjustments —
Slide 20: GAAP to Non-GAAP EBITDA Reconciliation
GAAP to Non-GAAP EBITDA Reconciliation (In millions) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, December 31, December 31, 2019 2018 2019 2018 Net income $ 169 $ 115 $ 544 $ 421 Add back: Depreciation 17 18 72 78 Amortization of intangible assets 19 26 103 97 Total O
Slide 21: GAAP to Non-GAAP Free Cash Flow Reconciliation
GAAP to Non-GAAP Free Cash Flow Reconciliation (In millions) (Unaudited) Twelve Months Ended December 31, December 31, 2019 2018 Net cash provided by operating activities $ 685 $ 785 Less: Purchases of property, plant and equipment (61) (64) Free cash flow (Non-GAAP)(1) $ 624 $ 721 (1) Free cash flo