Slide 1: First-Quarter 2018 Results
Zebra Technologies First-Quarter 2018 Results May 8, 2018
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: Q1 Highlights
Q1 Highlights Anders Gustafsson, CEO Q1 Financials and Outlook Olivier Leonetti, CFO Progress on Strategic Priorities Anders Gustafsson, CEO Q&A Anders Gustafsson, CEO │ Olivier Leonetti, CFO │ Joe Heel, SVP Global Sales
Slide 4: First-Quarter 2018 Highlights
First-Quarter 2018 Highlights • Net Sales growth of 13% (+10%(1) organic) • Strong growth in both operating segments • Growth across all regions, particularly EMEA and N.A. • Adjusted EBITDA margin of 20.9%, a 370 bps year-over-year improvement over 1Q17 • Record profitability; highest gross margin
Slide 5: Q1 Financials and Outlook
Q1 Highlights Anders Gustafsson, CEO Q1 Financials and Outlook Olivier Leonetti, CFO Progress on Strategic Priorities Anders Gustafsson, CEO Q&A Anders Gustafsson, CEO │ Olivier Leonetti, CFO │ Joe Heel, SVP Global Sales
Slide 6: First-Quarter P&L Summary
First-Quarter P&L Summary(1) • 9.8% Organic Net Sales Growth(2) ‒ EVM Segment +11.7% In millions, except per ‒ AIT Segment +6.4% 1Q18 1Q17 Growth share data • Regional Sales Performance Adjusted Net Sales $977 $866 +12.8% ‒ North America +9% ‒ EMEA +13%(2) Organic Net Sales Growth(2) +9.8% ‒ Asia Pa
Slide 7: Balance Sheet and Cash Flow Highlights
Balance Sheet and Cash Flow Highlights • $64M in cash & cash equivalents as of the end of 1Q18 • $2.1B total debt on balance sheet at quarter end Liquidity o $1.8B Term Loan B and Term Loan A & Debt o $273M borrowed on $500M revolver o $86M drawn on $180M A/R financing facility Debt • $95M in debt p
Slide 8: Excellent Progress on Acquisition Debt Reduction
Excellent Progress on Acquisition Debt Reduction $1.1 Billion of Debt Principal Paydown Net-Debt-to- Adjusted EBITDA $3.25B Target: 2.0x-2.5x $3.09B 4.8x leverage $2.70B 4.1x leverage $2.25B $2.15B 3.2x leverage 2.8x leverage 2014 2015 2016 2017 1Q 2018 NOTE: Total debt before unamortized discounts
Slide 9: Outlook
Outlook • Net sales growth of 9-12% vs. LY; assumes ~3 percentage point favorable impact from FX 2Q18 • Adjusted EBITDA margin range of 18.5-19.0% • Adjusted diluted EPS range of $2.10 to $2.30 • Net sales growth of 6-9%; assumes ~2 percentage point favorable impact from FX • Adjusted EBITDA margin
Slide 10: Progress on Strategic Priorities
Q1 Highlights Anders Gustafsson, CEO Q1 Financials and Outlook Olivier Leonetti, CFO Progress on Strategic Priorities Anders Gustafsson, CEO Q&A Anders Gustafsson, CEO │ Olivier Leonetti, CFO │ Joe Heel, SVP Global Sales
Slide 11: Strategic Focus
Strategic Focus Extend Leadership in Core Markets, Outpacing the Competition Drive Growth in Attractive Adjacent Markets Advance Enterprise Asset Intelligence Solutions Enhance Financial Strength and Flexibility 11
Slide 12: Zebra's Value Proposition
Zebra’s Value Proposition GLOBAL REACH & SCALE LEADING PORTFOLIO TRACK RECORD VERTICAL MARKET PARTNER ECOSYSTEM OF INNOVATION EXPERTISE Launching Zebra’s New Brand Positioning This Summer Highlighting Zebra’s Differentiation in Marketplace 12
Slide 13: Enabling Visibility Across Vertical Markets
Enabling Visibility Across Vertical Markets MANUFACTURING HEALTHCARE RETAIL/ TRANSPORTATION E-COMMERCE & LOGISTICS 13
Slide 14: Q&A
Q1 Highlights Anders Gustafsson, CEO Q4 Financials and Outlook Olivier Leonetti, CFO Progress on Strategic Priorities Anders Gustafsson, CEO Q&A Anders Gustafsson, CEO │ Olivier Leonetti, CFO │ Joe Heel, SVP Global Sales
Slide 15: Q&A
Q&A
Slide 16: Appendix
i. APPENDIX ZEBRA
Slide 17: 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,” “EBITDA,” “Adjusted EBITDA,” “Non-GAAP net income,” “Non-GAAP earnings per share,” “free cash flow,” “organic net sales growth,” and “adj
Slide 18: GAAP to Non-GAAP Organic Net Sales Growth Reconciliation
GAAP to Non-GAAP Organic Net Sales Growth Reconciliation Three Months Ended March 31, 2018 AIT EVM Consolidated Reported GAAP Consolidated Net sales growth 9.3 % 14.9 % 12.9 % Adjustments: Impact of foreign currency translation (1) (2.9 )% (3.2 )% (3.1 )% Organic Net sales growth 6.4 % 11.7 % 9.8 %
Slide 19: GAAP to Non-GAAP Gross Margin Reconciliation
GAAP to Non-GAAP Gross Margin Reconciliation 19
Slide 20: GAAP to Non-GAAP Net Income Reconciliation
GAAP to Non-GAAP Net Income Reconciliation Three Months Ended March 31, April 1, 2018 2017 Net income $ 109 $ 8 Adjustments to Net sales(1) Purchase accounting adjustments — 1 Total adjustment to Net sales — 1 Adjustments to Cost of sales(1) Share-based compensation 1 — Total adjustments to Cost of
Slide 21: GAAP to Non-GAAP EBITDA Reconciliation
GAAP to Non-GAAP EBITDA Reconciliation Three Months Ended March 31, April 1, 2018 2017 Net income $ 109 $ 8 Add back: Depreciation 20 19 Amortization of intangible assets 23 50 Total Other expenses, net 11 42 Income tax expense 24 (10) EBITDA (Non-GAAP) 187 109 Adjustments to Net sales Purchase acco
Slide 22: GAAP to Non-GAAP Free Cash Flow Reconciliation
GAAP to Non-GAAP Free Cash Flow Reconciliation Three Months Ended March 31, April 1, 2018 2017 Net cash provided by operating activities $ 116 $ 117 Less: Purchases of property, plant and equipment (18) (13) Free cash flow (Non-GAAP)(1) $ 98 $ 104 (1) Free cash flow is defined as Net cash provided b