Zebra Technologies Corporation · NASDAQ:ZBRA
Zebra Technologies — Q3 2020 Earnings Presentation
22 slides from Zebra Technologies's earnings presentation, Nov 3, 2020
Slide 1: Zebra Technologies Third Quarter 2020 Results
Zebra Technologies Third Quarter 2020 Results November 3, 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 Q3 Highlights Anders Gustafsson, CEO 02 Q3 Financials and Q4 Outlook Nathan Winters, Acting CFO 03 Advancing our Vision, Market Trends Anders Gustafsson, CEO 04 Q&A Anders Gustafsson, CEO │ Joe Heel, SVP Global Sales │ Nathan Winters, Acting CFO ZEBRA TECHNOLOGIES
Slide 4: Third-Quarter 2020 Highlights
Third-Quarter 2020 Highlights • Our teams executed well in an environment that has disproportionately impacted our smaller customers and certain end-markets • Pleased to deliver sales, EBITDA margin, and earnings per share results that exceeded our outlook, as many enterprise customers prioritized t
Slide 5: Agenda
Agenda 01 Q3 Highlights Anders Gustafsson, CEO 02 Q3 Financials and Q4 Outlook Nathan Winters, Acting CFO 03 Advancing our Vision, Market Trends Anders Gustafsson, CEO 04 Q&A Anders Gustafsson, CEO │ Joe Heel, SVP Global Sales │ Nathan Winters, Acting CFO ZEBRA TECHNOLOGIES
Slide 6: Third-Quarter P&L Summary
Third-Quarter P&L Summary(1) SEGMENT ORGANIC SALES GROWTH(2,3) EVM Segment 4.0% In millions, except per share data 3Q20 3Q19 Change AIT Segment (7.1)% Adjusted Net Sales $1,134 $1,130 0.4% REGIONAL ORGANIC SALES GROWTH(2,3) Organic Net Sales Growth(2,3) 0.3% North America 6% Adjusted Gross Profit $4
Slide 7: Balance Sheet and Cash Flow Highlights
Balance Sheet and Cash Flow Highlights Cash Flow Liquidity and Debt • $482M free cash flow through YTD 3Q20 • $39M in cash & cash equivalents as of 3Q20 – Lower use of working capital, including benefit from • $1.6B total debt on balance sheet as of 3Q20 accounts receivable factoring initiative, the
Slide 8: Zebra Successfully Navigating a Challenging Global Environment
Zebra Successfully Navigating a Challenging Global Environment • Fortress Balance Sheet – $1B revolving credit facility maturing Aug 2024 supported by diversified bank group with strong ratings – 1.8x net debt to adjusted EBITDA ratio – Share repurchase authorization a flexible mechanism to return c
Slide 9: Outlook & Assumptions
Outlook & Assumptions (1) 4Q20 FY20 • Expect net sales decline ~2% vs. FY19 (based on Q4 outlook) entirely due to global • Expect net sales to increase 3-7% as economic impact from pandemic customers continue to recover from the peak of – ~ 70 basis point additive impact from recently acquired busin
Slide 10: Agenda
Agenda 01 Q3 Highlights Anders Gustafsson, CEO 02 Q3 Financials and Q4 Outlook Nathan Winters, Acting CFO 03 Advancing our Vision, Market Trends Anders Gustafsson, CEO 04 Q&A Anders Gustafsson, CEO │ Joe Heel, SVP Global Sales │ Nathan Winters, Acting CFO ZEBRA TECHNOLOGIES
Slide 11: Building on Zebra's Foundational Capabilities to Elevate Our Value Proposition
Building on Zebra’s Foundational Capabilities to Elevate Our Value Proposition Focused on Scaling Solutions that Drive Actionable Insights CUSTOMER BENEFIT End-To-End Workflow Optimization Zebra MotionWorks® EDGE SOLUTIONS INTELLIGENT Powered by Zebra SavannaRM Workforce/Task Management Zebra Data S
Slide 12: Zebra Optimizes Workflow Execution Through Real-Time Contextual & Unified Tasking
Zebra Optimizes Workflow Execution Through Real-Time Contextual & Unified Tasking Offers Retailers Unmatched ‘Solutions as a Service’ (Subscription-based automated aisle/shelf visibility) (Prescribe best next-action based on retail system data) Workforce Management (Self-directed physical inventory
Slide 13: Mixed Demand Impacts in our Diversified End Markets
Mixed Demand Impacts in our Diversified End Markets Market Served Current Key Drivers Longer-Term Opportunity Clinical care treatment remains critical • Our purpose-built solutions are critical Our solutions used for COVID-19 response: drive • Strong supplies offerings in Wristband and Temptime Heal
Slide 14: Agenda
Agenda 01 Q3 Highlights Anders Gustafsson, CEO 02 Q3 Financials and Q4 Outlook Nathan Winters, Acting CFO 03 Advancing our Vision, Market Trends Anders Gustafsson, CEO 04 Q&A Anders Gustafsson, CEO │ Joe Heel, SVP Global Sales │ Nathan Winters, Acting CFO ZEBRA TECHNOLOGIES
Slide 15: Q&A
Q&A ZEBRA TECHNOLOGIES 15
Slide 16: Appendix
Appendix ZEBRA TECHNOLOGIES 3 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 September 26, 2020 AIT EVM Consolidated Reported GAAP Consolidated Net sales growth (7.2) % 4.1 % 0.2 % Adjustments: Impact of foreign currency translation (1) 0.1 % 0.6 % 0.4 % Impact of acquisitions (2) — % (0.
Slide 19: GAAP to Non-GAAP Gross Margin Reconciliation
GAAP to Non-GAAP Gross Margin Reconciliation (In millions) (Unaudited) Three Months Ended September 26, 2020 September 28, 2019 AIT EVM Consolidated AIT EVM Consolidated GAAP Reported Net sales (1) $ 346 $ 788 $ 1,132 $ 373 $ 757 $ 1,130 Reported Gross profit (1) 162 334 493 187 351 535 Gross Margin
Slide 20: GAAP to Non-GAAP Net Income Reconciliation
(In millions, except share data) (Unaudited) GAAP to Non-GAAP Net Income Reconciliation 1. Presented on a pre-tax basis. ZEBRA TECHNOLOGIES 2. Represents adjustments to the GAAP income tax expense commensurate with pre-tax non-GAAP adjustments (including the resulting impacts to U.S. BEAT/GILTI prov
Slide 21: GAAP to Non-GAAP EBITDA Reconciliation
GAAP to Non-GAAP EBITDA Reconciliation (In millions) Three Months Ended Nine Months Ended (Unaudited) September September September 26, September 28, 26, 28, 2020 2019 2020 2019 Net income $ 116 $ 136 $ 305 $ 375 Add back: Depreciation (excluding exit and restructuring costs) 16 18 51 55 Amortizatio
Slide 22: GAAP to Non-GAAP Free Cash Flow Reconciliation
GAAP to Non-GAAP Free Cash Flow Reconciliation (In millions) (Unaudited) Nine Months Ended September 26, September 28, 2020 2019 Net cash provided by operating activities $ 531 $ 420 Less: Purchases of property, plant and equipment (49) (44) Free cash flow (Non-GAAP)(1) $ 482 $ 376 1. Free cash flow