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The Board of Directors approved the draft and Consolidated Financial Statements for the year ended 31 December 2011

• Best results ever for the Datalogic Group:

o  Revenue up 8.3% to €425.5 million compared to €392.7 million for 2010; 

o  EBITDA up to €59.2 million compared to €49.8 million for the previous year, with an EBITDA margin of 13.9%;

o  Net profit up 44% to €25.9 million compared to €18 million for 2010; 

• Improved net debt position, which was down to €59.4 million, compared to €76.5 million at December 31, 2010

• Proposed dividend of €0.15 per share (34% payout) 

 

Bologna, 8th March 2012 – The Board of Directors of Datalogic S.p.A. (Borsa Italiana S.p.A.: DAL) - a company listed on the STAR segment of the Italian Stock Exchange (“Datalogic”) and leader in the market of bar code readers, data collection mobile computers, RFID and vision systems – approved today the draft and consolidated financial statements for the year ended 31 December 2011.

Financial year 2011 was the best ever in terms of revenues and profit, confirming the effectiveness of the strategies adopted in the last two years: consolidated net profit grew by about 44%, to €25.9 million, compared to €18 million for 2010. This result is even more significant if we consider that the Company incurred non-recurring costs for approximately €12 million, to implement the new Supply Chain of the ADC (Automatic Data Capture) division and to carry out the acquisitions of PPT Vision and Accu-Sort Systems. The latter was completed in January 2012.

Mauro Sacchetto, CEO of Datalogic, commented: “We are very pleased with the results achieved in 2011, the best ever for the Group, also considering that they have been obtained in an economic context still marked by uncertainty and while some internal strategic projects were conducted. The year ahead will be important, with the integration of the companies acquired to support the Group’s global growth and to achieve a more balanced international footprint.

In 2012 we will continue to expand our presence in high value-added and mature regions, such as the U.S. and Europe, where we have gained market share in the past few years, and will speed up growth in the BRICS area.

Lastly, I wish to emphasize that the changes introduced in the past year did not compromise the Group’s ability to grow organically, as witnessed by the excellent performance. In fact organic growth remains the strategic base on which to build our future expansion”.

In 2011 revenues amounted to €425.5 million, up 8.3% versus €392.7 million for the previous year. At constant Euro/USD exchange rates the increase on the previous year would have been at 11%.
 
EBITDA rose to €59.2 million, up 19%, compared to €49.8 million in 2010, and with an EBITDA margin at 13.9%, compared to 12.7% in the previous year. This result included operating costs for €150.2 million, reflecting an increase of 4.9% on the €143.2 million for 2010. 

Such costs included non recurring costs related to the acquisitions of PPT Vision and Accu-Sort Systems for €1.7 million and to the new Supply Chain of the ADC division for €1.9 million. This  project - which involved the integration of all the Operations processes (manufacturing and logistics) of Datalogic Scanning and Datalogic Mobile, which are now all combined in a single ADC (Automatic Data Capture) division – entailed non-recurring costs for €8.4 million. 

This new architecture of Operations at the international level will result in greater manufacturing productivity and will make it possible to take all growth opportunities, thanks to the expansion of the plant in Vietnam, which at year-end had 14 active product lines and over 500 employees. 

Research and Development costs amounted to €26.2 million, representing 6.2% of total revenue.

EBITANR  was €48.8 million, compared to €38.1 million in 2010. 

Financial charges totaled €6.9 million, compared to €6.7 million in 2010, while foreign exchange gains amounted to €3.3 million versus a foreign exchange loss of €0.2 million for the previous year. After taxes of €7.3 million, compared to €10.2 million in 2010, net profit for the period came in at €25.9 million vs €18 million for the preceding year.

Net financial debt at 31 December 2011 was €59.4 million, showing an improvement compared to €76.5 million at 31 December 2010, thanks to the significant cash flows generated during the year and despite the acquisition of PPT Vision, which took place in December and involved a cash outlay of €4.1 million. In particular, attention is called to the substantial cash flows from operating activities, amounting to €68.5 million, derived from the good EBITDA level.

At 31 December 2011, net working capital was €29.8 million, an increase of €2.6 million on the preceding year.
 
Also the fourth quarter of the year was affected by the positive trend, with revenues rising to €108.2 million (up 6.6% on the fourth quarter of 2010), EBITANR up 3%, to €8.2 million, and net profit more than doubled, to €8.7 million, compared to the fourth quarter of 2010. EBITDA was down 2.8%, to €10.6 million, owing to the impact of €1.8 million in non recurring costs related to the acquisitions carried out in the quarter.

[1] EBITANR – Earnings before interest, taxes, acquisition amortization and non-recurring items.

In the Industrial Automation division, Datalogic Automation - specialized in the production of automatic identification systems, safety, detection and marking solution for the Industrial Automation market, which accounts for 23% of consolidated revenues – grew by 6% on 2010, with revenues of €96.2 million (€23.5 million in the fourth quarter of 2011, down 9% on an annual basis). The year just ended was positive for fixed reader products, especially Matrix of the imager line, for the factory automation and transportation and logistics markets. Emphasis is placed on the good sales performance of industrial marking products, especially in the United States, in the engineering and automotive sectors.   
 
Within ADC, which starting in 2012 will operate as a single division, Datalogic Mobile – specialized in the production of mobile computers for professional use and accounts for 21% of consolidated revenues – grew by 9.9%, with revenues of €96.4 million (€31.4 million in the fourth quarter of 2011, up 27.6% on an annual basis). Datalogic Mobile ranked fifth worldwide in the hand held and PDA segments of the market for rugged mobile computers.
The new lines launched in the previous year, Elf™ and the new generation of Falcon™, were best-selling products in 2011. Also the Shopevolution™ family of products and Joya™, for the self-reading of barcodes and the optimization of the interaction between shop and customer, increased their sales in the retail sector, confirming Datalogic Mobile’s world leadership in the self-shopping segment.   
 
Datalogic Scanning - specialized in fixed barcode readers for the retail market and handheld scanners, accounting for nearly 50% of consolidated revenue - grew by 16.5%, with total revenue of €211.6 million (€56.9 million in the fourth quarter of 2011, up 31% on an annual basis).
In 2011 the Group was once again the unrivaled leader in fixed scanners for the retail market. In the manual reader sector, the Group firmed up its leadership position in the European market and achieved significant growth in the United States, driven by scanners for industrial applications.

The Business Development Division – which includes Informatics Inc. and Evolution Robotics Retail Inc. – posted a 10% increase in revenues, to €36.8 million.
 
The following table shows individual operating divisions’ sales (inclusive of intersegment revenues) and EBITANR (earnings before interest, acquisition amortization and non-recurring items) by segment for 2011.

All geographical areas grew in 2011, compared to the same period of last year, particularly North America (up 9%) and Rest of the World (up 25%). 
 

Events for the year

Financial year 2011 was definitely positive for the Datalogic Group, both in terms of financial performance and in terms of investments and projects carried out to drive future growth.

In 2011 the Group focused on its two reference markets, Industrial Automation (IA) and Automatic Data Capture (ADC), thanks to the reorganization of Datalogic Scanning,  Datalogic Mobile, Enterprise Business Solutions and Evolution Robotics Retail around their target markets, creating the new division ADC.
 
During the year the manufacturing, logistic and distribution model of Datalogic Scanning and Datalogic Mobile was redefined through a program (Supply Chain Project) designed to improve the operational processes and their impact on operating results and cash flows. Within the context of this transition to the new operating model on a global scale, the manufacturing plant in Vietnam became fully operational.

In June 2011, the 2011-2013 Business Plan was presented.

On 20 October 2011 a placement of 2,000,000 own shares, representing approximately 3.4% of the total outstanding, was completed through an accelerated bookbuilding procedure reserved to institutional investors. 
 
In the Industrial Automation market, growth was pursued also through acquisitions.
In November, Datalogic signed a preliminary agreement for the purchase of Accu-Sort Systems Inc., a leader in industrial automation.
In addition, on 20 December 2011, Datalogic acquired PPT Vision Inc., a company headquartered in Minnesota and equipped with a unique “machine vision” technology, with over 25,000 systems installed worldwide. The company has about 30 employees and an R&D center that has generated 4 exclusive patents. The purchase price was €5.2 million and was paid with internally generated resources.


Subsequent events

In January 2012 the new ADC Division commenced operations.
 
On 20 January 2012 the acquisition of Accu-Sort Systems Inc. and its subsidiaries was completed. Accu-Sort, a company headquartered in Telford, PA, United States, has about 80 patents, of which 57 registered in the United States, 250 employees, one manufacturing plant, two research centers – one in the US and one in Europe – and 8 sales offices. The acquisition of Accu-Sort will allow Datalogic to double its footprint in the industrial automation market. The agreed purchase price of USD 135 million (on a cash-free debt-free basis) includes estimated tax benefits for Datalogic resulting from an election to be made by the parties under section 338(h)(10) of the U.S. Internal Revenue Code to treat the stock purchase as an asset purchase for U.S. federal income tax purposes. Datalogic financed the acquisition with bank loans for 45 million Euro and with its own funds for the remainder.  

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At the ordinary shareholders’ meeting scheduled for 24th April 2012, the Board of Directors will propose the distribution of an ordinary dividend, gross of legal withholdings, of 15 euro cents per share, for a maximum amount of €8.8 million (with coupon detachment on 30th April 2012 and payment on 4th May 2012).

The Board of Directors also approved the Annual Corporate Governance Report. A copy of the report will be made available to the public in accordance with applicable law.

Note that the auditing of the draft financial statements has not yet been completed and that the independent auditors’ report will be made available within the deadlines set at law. The attached balance sheet and income statement are reclassified statements, and as such have not been subject to audit.

Finally, the Annual Financial Report (pursuant to article 154-ter of the Testo Unico della Finanza - TUF) of Datalogic S.p.A. will be made available to anyone who requests it at the company headquarters or at Borsa Italiana SpA, and may also be consulted on the company’s website www.datalogic.com (Investor Relations section), in accordance with the law and applicable regulations.

The manager responsible for preparing the company’s financial reports - Dott. Marco Rondelli – declares, pursuant to paragraph 2 of Art. 154-bis of the “Testo Unico della Finanza”, that the accounting information contained in this press release corresponds to the document results, books and accounting records.

 

Reclassified income statement at 31st December 2011 – Euro/1.000

Note: Following the introduction of IAS/IFRS, non-recurring or extraordinary costs are no longer shown separately in financial statements below the operating line but are included in ordinary operating figures. In order to ensure better representation of the Group’s ordinary profitability, we have preferred to show an operating result before the impact of non-recurring costs/income and acquisition-related amortization, which we have called "EBITANR - Earnings before interest, taxes, acquisition and non recurring". To allow for comparison with the financial statements, we have provided an additional intermediate profit margin (the "operating result"), which includes non-recurring costs/income and amortisation due to acquisitions, and matches the figure reported in the financial statements.

[1] EBITANR – Earnings before interest, taxes, acquisition and non recurring.

 [1] EBITDA - Earnings before interest, taxes, depreciation and amortization.

 

Reclassified Balance Sheet at 31st December 2011 – Euro/1.000

 

Net Financial Position at 31st December 2011 – Euro/1.000