INVESTOR PRESENTATION ZEBRA TECHNOLOGIES CORPORATION

Transcription

1 INVESTOR PRESENTATION ZEBRA TECHNOLOGIES CORPORATION AUGUST 2014

2 FORWARD-LOOKING STATEMENT Statements made in this presentation which are not statements of historical fact are forwardlooking statements and are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of Actual results may differ from those expressed or implied in the company s forward-looking statements. Zebra may elect to update forwardlooking statements but expressly disclaims any obligation to do so, even if the company s estimates change. 2 These forward-looking statements are based on current expectations, forecasts and assumptions and are subject to the risks and uncertainties inherent in Zebra s industry, the Enterprise Business, market conditions, general domestic and international economic conditions, and other factors. These factors include the completion of the acquisition of the Enterprise Business from Motorola Solutions, including the successful financing of the transaction, the successful integration of the operations by Zebra, and Zebra s ability to implement plans, forecasts and other expectations with respect to the Enterprise Business after the acquisition is completed. Customer acceptance of Zebra s products and solutions and competitors product offerings, and the potential effects of technological changes are inherent risks associated with the combined business. Foreign exchange rates and uncertainty over future global economic conditions will have an effect on financial results. These and other factors could have an adverse effect on Zebra s sales, gross profit margins and results of operations. Descriptions of the risks, uncertainties and other factors that could affect the company s future operations and results can be found in Zebra s filings with the Securities and Exchange Commission. In particular, please refer to Zebra s latest filing of its Form 10-K.

3 ZEBRA POSITIONED FOR GROWTH More than 40 years of technology expertise, innovation and industry leadership Sales of $1 billion in a high-margin business Diverse customer base, products and solutions, and geographies Diverse, growing channels that are expanding opportunities 3

4 FOUNDATIONAL STRENGTHS Leading global brand Broadest product line Global reach Large, diversified customer base Technology leadership Business scale Financial strength 4

5 FINANCIAL BENEFITS OF GLOBAL LEADERSHIP High growth High profitability Gross margin of 48-50% Operating margin in mid to high teens Strong free cash flow generation >$100M annually $468M in cash and investments (at 1Q14) $250M untapped line of credit; zero debt 5

6 LEADING GLOBAL BRAND High performance printers Midrange printers Label design software Performance class card printers ZXP Series 8 Retransfer card printer Networking products Mobile printers Desktop printers Printer management software ZXP Series 3 card printers Card printer supplies RFID printer/encoders Kiosk printers Print engines Specialty supplies Aftermarket Location Solutions

7 GEOGRAPHIC DIVERSITY Sales into approximately 100 countries around the world Higher growth in emerging markets 20-25% of sales into emerging markets 44% 15% 10% 31% EMEA Asia Pacific Latin America North America 7

8 STRONGEST GLOBAL CHANNELS Primarily an indirect go-to-market distribution model Value-added resellers, distributors, independent software vendors, system integrators Approximately 20% direct to retailers and small package delivery Distributors fulfill customer demand from via thousands of VARs OEMs Channel VAR Zebra Distributor VAR End-User Customer Alliance System Integrator 8

9 EXPANDING RANGE OF VISIBILITY PRODUCTS AND SOLUTIONS Core products and services Thermal label and card printers Printer management, connectivity and asset management software Printer supplies and services Emerging solutions Radio frequency identification Real time location Mobile POS and tablet-based applications 9

10 Zebra improves customers business performance through solutions that give their assets a digital voice Enable visibility into the extended supply chain. Identify, track and manage assets, transactions and people. 10

11 VALUE TO THE CUSTOMER Operate more efficiently Improve customer experience Increase safety, security and compliance Improved Business Performance Measurable, sustainable ROI Increase asset throughput and velocity Deeper customer engagement and loyalty 11

12 GLOBALIZATION DRIVING GROWTH Industrialization of emerging markets Increasing global competition driving productivity Growing middle class in emerging markets Focus on gaining efficiencies and cost reductions in increasingly complex supply chains Demand for real-time information 12

13 INNOVATING FOR GROWTH

14 PARTNERING WITH THE NFL Install Zebra s real-time player tracking solution in 17 NFL stadiums in 2014 Measure and track location, speed and direction with high levels of accuracy for Next Gen Stats Help teams improve training, scouting and evaluation through increased knowledge of player performance Enhance the fan experience 14

15 LINK-OS ECOSYSTEM New software environment that makes Zebra printers easier to integrate, manage and maintain Enhances ability manage devices over global networks Makes Zebra devices more mobile, intelligent and connected to the Cloud Reduce costs on deployment, administration and troubleshooting Further differentiates Zebra printers Opportunities for new revenue sources 15

16 GROWTH IN HEALTHCARE Attractive, under-penetrated vertical Compliance and patient safety driving growth Proprietary, patented wristbanding products Strong relationships with hospital purchasing organizations -- LaserBand Leveraging Zebra s global distribution to accelerate sales growth 16

17 ZATAR Zatar is a cloud based, software as a service Zatar allow users to connect and control devices Zatar makes it easy to connect devices to Enterprise Applications and third party Apps. Zatar is designed to be intuitive to use, but powerful enough for enterprise applications 17

18 HART SYSTEMS CUSTOM INVENTORY SOLUTIONS The leading provider of technology-driven physical inventory solutions to the retail industry worldwide delivering greater accuracy, program control and significant savings. HART s Robust Solutions Creating a Highly Efficient Physical Inventory Process Lean Event Driven Physical Inventory Process Design Support Improves Efficiency And Productivity 18

19 ACQUISITION OF ENTERPRISE BUSINESS OF MOTOROLA SOLUTIONS

20 ACQUISITION HIGHLIGHTS Announced on 15 April Acquisition of the Enterprise Business of Motorola Solutions Excludes iden, the professional commercial radio product line Includes ~3,700 issued and pending patents Includes ~4,500 employees Attractive financial proposition for shareholders Complete transaction by end of

21 TRANSACTION DETAILS All-cash transaction of $3.45 billion Fund with $3.25 billion in debt and $200 million of cash on hand Efficient use of off-shore cash Fully underwritten financing commitment from Morgan Stanley Significant free cash flow generation Long-term expectations 4-5% sales growth, before sales synergies 18-20% EBITDA margin 21

22 FOUR SEGMENTS TO THE ENTERPRISE BUSINESS 2013 Revenues of $2.5 billion Mobile Computing Data Capture Wireless LAN Services Industrial Mobility Customer Facing Field Mobility RFID Hands free Handheld Engines Transit, Public Safety, Metro Wi-Fi Power over Broadband, Snap-on Wall Plate Aps Support Services Managed Services Integration Services Security & Location Platform Intelligent Infrastructure: Platforms, Controllers & AP Source: Motorola Solutions Management Materials

23 WE ARE UNITING LEADERS IN SIX KEY TECHNOLOGIES Mobile Computing Barcode & Card Printing Data Capture and Scanning RFID Location and Motion Sensing Cloud-Based Device Management 23

24 CREATING THE GLOBAL LEADER IN ENTERPRISE ASSET INTELLIGENCE Motorola Solutions Enterprise Business Global leader in specialty printing, RFID and location & motion tracking solutions Enabling businesses to translate the physical into digital insights Culture of innovation CIO s first call for enterprise asset intelligence Solutions for the smart enterprise Riding well-defined secular growth waves Established leader in mobile enterprise computing, data capture and RFID Strong services component Scale in procurement, manufacturing and logistics Strong and broad global partner network 24

25 OVERWHELMINGLY POSITIVE CUSTOMER RESPONSE It s the best news I ve heard in years. Everyone on my team is smiling. This should have happened years ago. 25

26 RECENT FINANCIAL HIGHLIGHTS

27 Net Sales (in mils) PF EPS STRONG TRACK RECORD OF SUCCESS $1,200 Sales and EPS $3.00 $1,000 $2.50 $800 $2.00 $600 $1.50 $400 $1.00 $200 $0.50 $ Net Sales $760 $860 $910 $738 $894 $983 $996 $1,036 PF EPS $0.99 $1.63 $1.80 $0.93 $1.85 $2.43 $2.58 $2.80 Historical figures adjusted for the sales of Navis and proveo. $

28 FIRST HALF 2014 HIGHLIGHTS Record financial results Sales up 18% to a record $577 million Proforma EPS up 62% to $1.81 Strength across the diversity of our business More enterprise deals Sustained strong run-rate business Record sales in North America and EMEA Positive contribution from Hart Systems (acquired in December 2013) 28

29 SOLID FINANCIAL CONDITION (At 28 June 2014; in millions) Assets Cash and S-T investments $526.0 Receivables, net Inventories Liabilities and Stockholders Equity Oth. curr. assets 41.7 Current liabilities $ Current assets $859.2 Other liabilities 47.6 L-T investments 2.6 Total liabilities Other assets Stockholders equity 1,048.1 Total assets $1,219.0 Tot. liabilities and stockholders equity $1,

30 POSITIONED FOR GROWTH AND HIGHER RETURNS Following a proven, winning strategy Opportunity for further operating leverage Maintain high gross margins Manage growth in operating expenses Growing benefit of investments in new, innovative products and solutions Focus on capital allocation 30

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