Slide 1: Zebra Technologies Second Quarter 2019 Results
Zebra Technologies Second Quarter 2019 Results July 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 Q2 Highlights Anders Gustafsson, CEO 02 Q2 Financials and 2019 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 3
Slide 4: 2Q19 Highlights
2Q19 Highlights +8.4% 21.2% $3.02 Profitect Inc. NET SALES ADJUSTED NON-GAAP ACQUISITION GROWTH EBITDA MARGIN DILUTED EPS Transaction closed May 31, 2019 +7.0%(1) Organic +150bps YOY Improvement +21.8% from 2Q18 (1) Assumes constant FX to prior year period and excludes revenue from acquisitions clos
Slide 5: Agenda
Agenda 01 Q2 Highlights Anders Gustafsson, CEO 02 Q2 Financials and 2019 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 5 5
Slide 6: Second-Quarter P&L Summary
Second-Quarter P&L Summary(1) In millions, except per share data 2Q19 2Q18 Growth SEGMENT ORGANIC SALES GROWTH(2,3) EVM Segment +9.2% Net Sales $1,097 $1,012 +8.4% AIT Segment +2.9% Organic Net Sales Growth(2,3) +7.0% REGIONAL ORGANIC SALES GROWTH(2,3) North America +7% Adjusted Gross Profit $523 $4
Slide 7: Balance Sheet and Cash Flow Highlights
Balance Sheet and Cash Flow Highlights Cash Flow Liquidity and Debt • $165M free cash flow 1H19 • $27M in cash & cash equivalents as of 2Q19 • Higher use of working capital primary driver • $1.7B total debt on balance sheet as of 2Q19 of $68M lower free cash flow vs 1H18 • Net-debt-to-adjusted-EBITD
Slide 8: Outlook
Outlook 3Q19 FY19 ASSUMPTIONS • Net sales growth 3-5% assumes ~ 2 percentage point • Net sales growth of 5-8% vs. FY18; assumes ~ 2 percentage point additive impact from recently acquired businesses(1,2,3) additive impact from recently acquired businesses(1,2,3), and and ~ 1 percentage point negativ
Slide 9: Agenda
Agenda 01 Q2 Highlights Anders Gustafsson, CEO 02 Q2 Financials and 2019 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 9
Slide 10: Zebra Enables Enterprise Asset Intelligence
Zebra Enables Enterprise Asset Intelligence Recent investments/M&A advance our vision Act Direct Best Next Move Developer Ecosystem Analyze Savanna Real-Time Analytics Data Services Data Intelligence Platform Sense Status | Condition | Location Improving Global Health ZEBRA TECHNOLOGIES 10
Slide 11: Enabling Visibility at the Enterprise Edge
Enabling Visibility at the Enterprise Edge Megatrends • IoT • Enterprise Mobility • Cloud Computing Healthcare • Intelligent Automation Other • On-Demand Economy Markets Manufacturing Retail and Ecommerce Transportation and Logistics 11
Slide 12: Agenda
Agenda 01 Q2 Highlights Anders Gustafsson, CEO 02 Q2 Financials and 2019 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 12
Slide 13: Q&A
Q &A ZEBRA TECHNOLOGIES 13
Slide 14: Appendix
Appendix ZEBRA TECHNOLOGIES 14
Slide 15: 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 16: GAAP to Non-GAAP Organic Net Sales Growth Reconciliation
GAAP to Non-GAAP Organic Net Sales Growth Reconciliation Three Months Ended June 29, 2019 AIT EVM Consolidated Reported GAAP Consolidated Net sales growth 5.4% 10.0% 8.4% Adjustments: Impact of foreign currency translation(1) 1.0% 1.1% 1.1% Impact of acquisitions (2) (3.5)% (1.9)% (2.5)% Organic Net
Slide 17: GAAP to Non-GAAP Gross Margin Reconciliation
GAAP to Non-GAAP Gross Margin Reconciliation Three Months Ended June 29, 2019 June 30, 2018 AIT EVM Consolidated AIT EVM Consolidated GAAP Reported Net sales $ 370 $ 727 $ 1,097 $ 351 $ 661 $ 1,012 Reported Gross profit (1) 182 340 520 173 299 472 Gross Margin 49.2% 46.8% 47.4% 49.3% 45.2% 46.6% Non
Slide 18: GAAP to Non-GAAP Net Income Reconciliation
GAAP to Non-GAAP Net Income Reconciliation Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, 2019 2018 2019 2018 Net income $ 124 $ 70 $ 239 $ 179 Adjustments to Cost of sales(1) Purchase accounting adjustments 2 — 3 — Share-based compensation 1 1 2 2 Total adjustments to Cost
Slide 19: GAAP to Non-GAAP EBITDA Reconciliation
GAAP to Non-GAAP EBITDA Reconciliation Three Months Ended Six Months Ended June 29, June 30, June 29, June 30, 2019 2018 2019 2018 Net income $ 124 $ 70 $ 239 $ 179 Add back: Depreciation 18 20 37 40 Amortization of intangible assets 30 23 58 46 Total Other expenses, net 31 25 59 36 Income tax expen
Slide 20: GAAP to Non-GAAP Free Cash Flow Reconciliation
GAAP to Non-GAAP Free Cash Flow Reconciliation Six Months Ended June 29, June 30, 2019 2018 Net cash provided by operating activities $ 195 $ 266 Less: Purchases of property, plant and equipment (30) (33) Free cash flow (Non-GAAP)(1) $ 165 $ 233 (1) Free cash flow is defined as Net cash provided by