24
See page 21 for full disclosures and analyst certification DATALOGIC Strong EBITDA Margin in New 3-Year Plan DATALOGIC - Key estimates and data Y/E December Y/E December Y/E December Y/E December 2010A 2010A 2010A 2010A 2011E 2011E 2011E 2011E 2012E 2012E 2012E 2012E 2013E 2013E 2013E 2013E Revenues EUR M 392.74 420.00 447.00 476.00 EBITDA EUR M 49.76 53.77 76.71 85.79 EBIT EUR M 34.68 30.37 60.69 69.65 Net income EUR M 18.03 14.54 40.01 48.37 Dividend ord. EUR 0.15 0.13 0.15 0.15 Adj. EPS EUR 0.31 0.25 0.68 0.83 EV/EBITDA x 8.47 7.66 4.85 3.88 Adj. P/E x 19.13 23.72 8.62 7.13 A: actual; E: estimates; Source: Company data and Intesa Sanpaolo Research New supply chain for Automatic Data Capturing (ADC). A key point in the new three- year plan will be the development of a new integrated global supply chain for the ADC segment, hinging upon: 1) locating manufacturing where it is logistically cost-effective, aiming at having a large part of production based in Vietnam by 2012; 2) simplifying manufacturing platforms; and 3) improving service levels to customers (e.g. on-time delivery), and proximity in terms of service and logistics. In management’s view, the new supply chain should require one-off costs of around EUR 11M (subject to union agreements). On the other hand, it should produce cost savings from 2012 onwards of around EUR 12.5M. Strategy and 3-year plan. Management indicated 4 key drivers in its plan presented at end- 2010, which are: 1) a strategic positioning focused on the ADC and IA markets; 2) an international expansion in BRIC through strategic alliances and foreign investments in large mature markets by addressing high-end products/solutions and higher technology businesses; 3) investing 7% of revenue in R&D, with a focus on Vision and Imaging technologies, and aiming to produce 25% of sales from new products; 4) efficiency and productivity through the adoption of best-in-class supply chain management and the development of economies of scale. The key points of the 3-year business plan are: 2013 organic revenues of EUR 470-480M, on top of this, external growth could bring a further EUR 100M in 2013; 2013 EBITDA of EUR 80-85M (from EUR 49.8M in FY10A), with a margin of 17-18% (from 12.7% in FY10A); and R&D investments of 7% of revenues per year; investment in capex stable at around 2% of revenues per year; a 2013 ROE target of 23-24%. Estimates and valuation. In our 2011E-13E estimates we assumed that: 1) revenue would increase at a CAGR 2010-13E of around 6.6%; 2) the 2011E EBITDA margin should be broadly in line with 2010, to incorporate supply chain restructuring one-off costs (12.8%), then rise to over 17% in 2012E, and to 18% in 2013E; and 3) we expect a strong cash generation bringing the 2013E net financial position to cash (EUR 12.2M in our estimates), driven by the abovementioned operating trends, by capex conservatively at 3% of revenue, and a trade working capital to revenue ratio broadly stable at around 16%. We valued Datalogic with a DCF model, an 8.1% WACC (risk-free rate of 4.75%, equity risk premium of 5.75%, gearing of approx. 32%), and a conservative 0% terminal value growth. We obtain a target price of EUR 9.55/share (EUR 7.15/share previously) and rate the company a BUY. On 2012E, P/E at current prices trades at an approx. 43% discount vs. peers, at our target price it would still trade at an around 8% discount on 2012E P/E. Key risks. The Datalogic reference market is fragmented and characterised by intense competition. To survive in these markets substantial R&D investments are needed (certain cost), the launch of successful innovative commercial products is uncertain. The ongoing delocalisation of some important clients could require entry to the Latin American and Asian (China and India) geographical markets. The company is exposed to foreign currency translation impacts: around 50% of revenues are non-EUR denominated. 28 June 2011 BUY Target Price: EUR 9.5 Target Price: EUR 9.5 Target Price: EUR 9.5 Target Price: EUR 9.55 (from EUR 7.15 (from EUR 7.15 (from EUR 7.15 (from EUR 7.15) IT & Technology Company Update Intesa Sanpaolo Research Department Alberto Francese Research Analyst +39 02 8794 9815 Price performance, -1Y 28/06/11 J A S O N D J F M A M J 3.00 3.50 4.00 4.50 5.00 5.50 6.00 6.50 7.00 DATALOGIC FTSE ITALIA ALL SHARE - PRICE INDEX Source: Thomson Reuters Data priced on 27.06.2011 Target price () 9.55 Target upside (%) 61.80 Market price () 5.90 52-week range () 6.5/3.3 Market cap (M) 344.83 No. of shares (M) 58.45 Free float (%) 24.6 Major shareholder (%) Hydra, 66.9 Reuters DAL.MI Bloomberg DAL IM FTSE It All Shares 20002 Performance % Absolute Rel. to FTSE All Sh -1M 3.6 -1M 11.0 -3M 0.2 -3M 11.8 -12M 78.2 -12M 80.6 Source: Intesa Sanpaolo Research estimates and Thomson Reuters Equity Company Note Corporate Broking Team Alberto Francese Marta Caprini Serena Polini

DATALOGIC analisti/Banca Imi_06… · 4 Intesa Sanpaolo Research Department Datalogic - Positioning in ADC market $100 M $300 M $950 M >30% >10%

  • Upload
    others

  • View
    0

  • Download
    0

Embed Size (px)

Citation preview

See page 21 for full disclosures and analyst certification

DATALOGIC

Strong EBITDA Margin in New 3-Year Plan

DATALOGIC - Key estimates and data

Y/E December Y/E December Y/E December Y/E December 2010A2010A2010A2010A 2011E2011E2011E2011E 2012E2012E2012E2012E 2013E2013E2013E2013E

Revenues EUR M 392.74 420.00 447.00 476.00 EBITDA EUR M 49.76 53.77 76.71 85.79

EBIT EUR M 34.68 30.37 60.69 69.65 Net income EUR M 18.03 14.54 40.01 48.37

Dividend ord. EUR 0.15 0.13 0.15 0.15

Adj. EPS EUR 0.31 0.25 0.68 0.83 EV/EBITDA x 8.47 7.66 4.85 3.88

Adj. P/E x 19.13 23.72 8.62 7.13 A: actual; E: estimates; Source: Company data and Intesa Sanpaolo Research

� New supply chain for Automatic Data Capturing (ADC). A key point in the new three-

year plan will be the development of a new integrated global supply chain for the ADC

segment, hinging upon: 1) locating manufacturing where it is logistically cost-effective, aiming

at having a large part of production based in Vietnam by 2012; 2) simplifying manufacturing

platforms; and 3) improving service levels to customers (e.g. on-time delivery), and proximity

in terms of service and logistics. In management’s view, the new supply chain should require

one-off costs of around EUR 11M (subject to union agreements). On the other hand, it should

produce cost savings from 2012 onwards of around EUR 12.5M.

� Strategy and 3-year plan. Management indicated 4 key drivers in its plan presented at end-

2010, which are: 1) a strategic positioning focused on the ADC and IA markets; 2) an

international expansion in BRIC through strategic alliances and foreign investments in large

mature markets by addressing high-end products/solutions and higher technology businesses;

3) investing 7% of revenue in R&D, with a focus on Vision and Imaging technologies, and

aiming to produce 25% of sales from new products; 4) efficiency and productivity through

the adoption of best-in-class supply chain management and the development of economies of

scale. The key points of the 3-year business plan are: 2013 organic revenues of

EUR 470-480M, on top of this, external growth could bring a further EUR 100M in 2013;

2013 EBITDA of EUR 80-85M (from EUR 49.8M in FY10A), with a margin of 17-18% (from

12.7% in FY10A); and R&D investments of 7% of revenues per year; investment in capex

stable at around 2% of revenues per year; a 2013 ROE target of 23-24%.

� Estimates and valuation. In our 2011E-13E estimates we assumed that: 1) revenue would

increase at a CAGR 2010-13E of around 6.6%; 2) the 2011E EBITDA margin should be

broadly in line with 2010, to incorporate supply chain restructuring one-off costs (12.8%),

then rise to over 17% in 2012E, and to 18% in 2013E; and 3) we expect a strong cash

generation bringing the 2013E net financial position to cash (EUR 12.2M in our estimates),

driven by the abovementioned operating trends, by capex conservatively at 3% of revenue,

and a trade working capital to revenue ratio broadly stable at around 16%. We valued

Datalogic with a DCF model, an 8.1% WACC (risk-free rate of 4.75%, equity risk premium of

5.75%, gearing of approx. 32%), and a conservative 0% terminal value growth. We obtain a

target price of EUR 9.55/share (EUR 7.15/share previously) and rate the company a

BUY. On 2012E, P/E at current prices trades at an approx. 43% discount vs. peers, at our

target price it would still trade at an around 8% discount on 2012E P/E.

� Key risks. The Datalogic reference market is fragmented and characterised by intense

competition. To survive in these markets substantial R&D investments are needed (certain

cost), the launch of successful innovative commercial products is uncertain. The ongoing

delocalisation of some important clients could require entry to the Latin American and Asian

(China and India) geographical markets. The company is exposed to foreign currency

translation impacts: around 50% of revenues are non-EUR denominated.

28 June 2011

BUY

Target Price: EUR 9.5Target Price: EUR 9.5Target Price: EUR 9.5Target Price: EUR 9.55555 (from EUR 7.15(from EUR 7.15(from EUR 7.15(from EUR 7.15))))

IT & Technology Company Update

Intesa Sanpaolo Research Department

Alberto Francese Research Analyst +39 02 8794 9815

Price performance, -1Y 28/06/11

J A S O N D J F M A M J

3.00

3.50

4.00

4.50

5.00

5.50

6.00

6.50

7.00

DATALOGIC

FTSE ITALIA ALL SHARE - PRICE INDEX

Source: Thomson Reuters

Data priced on 27.06.2011 Target price (€) 9.55 Target upside (%) 61.80 Market price (€) 5.90 52-week range (€) 6.5/3.3 Market cap (€ M) 344.83

No. of shares (M) 58.45

Free float (%) 24.6

Major shareholder (%)

Hydra, 66.9

Reuters DAL.MI

Bloomberg DAL IM FTSE It All Shares 20002

Performance % Absolute Rel. to FTSE All Sh

-1M 3.6 -1M 11.0 -3M 0.2 -3M 11.8

-12M 78.2 -12M 80.6

Source: Intesa Sanpaolo Research estimates and Thomson Reuters

Equity Company Note

Corporate Broking Team Alberto Francese Marta Caprini Serena Polini

DATALOGIC 28 June 2011

2 Intesa Sanpaolo Research Department

Contents

The Reference Markets 3

Strategy and Three-Year Plan 6

Change of Estimates 8

Financials 9

Valuation 10

Appendix I: Group Profile 12

Appendix II: Latest Results 18

DATALOGIC 28 June 2011

Intesa Sanpaolo Research Department 3

The Reference Markets

Datalogic’s reference markets are Automatic Data Capture (ADC) and Industrial Automation (IA).

The global trends in these markets are technological (from analogue to digital, penetration of

wireless technology), macroeconomic (globalisation, delocalisation), microeconomic (efficiencies

and cost-reduction in supply chains), and social (safety and security).

The challenge is to provide customers with better and faster information, to help improve real

time decisions, to grant reliable tools to make operations more efficient and less expensive, and

to increase safety, security and compliance.

ADC market

According to VDC Research, Datalogic ADC’s worldwide addressable market should grow by

8% per year in 2009-13, driven by:

� Mobility (outdoor application);

� New applications for government, healthcare and retail sectors;

� More data needed to effectively manage supply chains;

� Increased efficiency and the reduction of scanning errors at the point-of-sale;

� Adoption of core retail automation technologies in emerging country markets.

In particular, the POS retail scanner and handheld scanner segments should grow by around

5%, and mobile computers by around 9%.

ADC market trend 2009-13

0.3 0.4

0.6 0.8

1.9

2.7

0.0

1.0

2.0

3.0

4.0

2009 2013

USD Bn

USD Bn

USD Bn

USD Bn

POS retail scanners Hand Held scanner Mobile computers

2.92.92.92.9

3.93.93.93.9

Source: VDC Research data

Within this market, Datalogic holds an approx. 10% share (company data on 2009 market),

with some specific leaderships:

� POS Retail Scanners: worldwide leader with 31.5% share;

� Handheld Scanners: leader in EMEA with a 30.7% share, 3rd worldwide with a 15.9% share;

� Mobile Computers: ranking 4th in EMEA (7.9% share) and worldwide (4.0% share).

DATALOGIC 28 June 2011

4 Intesa Sanpaolo Research Department

Datalogic - Positioning in ADC market

$100 M $300 M $950 M

>30%

>10%

<2%

4%

$200 M

2009 Revenues

$50 M

Source: Company on VDC Research data

IA market

According to VDC Research, Datalogic’s IA worldwide addressable market should grow in 2009-

13 by 8% per year, with a potential additional market worth USD 3.2Bn.

Key demand drivers are:

� More demand for traceability of processes and goods, also due to delocalisation;

� Supply chain restructuring, to reduce costs and increase productivity and quality control;

� New regulations (e.g. traceability, safety and security);

� Adoption of technological solutions in industrial segments in emerging markets.

IA market trend 2009-13

0.3 0.41.0 1.10.3

0.60.30.40.4

3.2

0.6

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2009 2013

USD Bn

USD Bn

USD Bn

USD Bn

Stationary barcode scanner Sensor Safety Vision Lasermarking Additional markets

2.32.32.32.3

6.36.36.36.3

Source: VDC Research data

Within this market, Datalogic holds an approx. 4% share (company data on 2009 market), with

a leading position in Industrial Stationary Scanners, ranking 2nd in EMEA with a 29% share, and

3rd worldwide with a 14.6% share.

DATALOGIC 28 June 2011

Intesa Sanpaolo Research Department 5

Datalogic - Positioning in IA market

10%

>12%

5%

<2%

$50 M $100 M $200 M $300 M

2009 Revenues

Source: Company on VDC Research data

DATALOGIC 28 June 2011

6 Intesa Sanpaolo Research Department

Strategy and Three-Year Plan

Management indicated 4 key drivers in its end-2010 plan, and confirmed them in the new plan:

� Strategic positioning:

o Focus on Automatic Data Capture (ADC) and Industrial Automation (IA) markets;

o External growth mainly in IA.

� International expansion:

o Strategic alliances and foreign investments in BRIC countries;

o Increase penetration in large mature markets (Western Europe, North America) by

addressing high-end products/solutions and higher technology businesses.

� Innovation:

o Invest 7% of revenue in R&D;

o Become a value-added solution provider (e.g. software for intelligent products);

o Focus on Vision and Imaging technologies;

o 25% of sales from new products.

� Efficiency and productivity:

o Adoption of best-in-class supply chain management for world class performance;

o Improve operational efficiencies and leverage global footprint;

o Activate economies of scale.

The ADC market

Looking specifically at the ADC market, management plans to focus on the development of a

new integrated global supply chain, hinging upon:

� Locating manufacturing where it is logistically cost-effective, aiming at having a large part of

production based in Vietnam by 2012;

� Simplifying manufacturing platforms;

� Improving service levels to customers (e.g. on-time delivery) and proximity in terms of service

and logistics.

The new integrated supply chain is planned to be a seamless process, starting from the forecast

of sales and actual sales to customers, passing through the planning phase, the manufacturing

phase (scheduling and production) and sourcing (purchasing/procurement), to reach a

warehouse where order processing, shipment planning, transport and delivery are finalised.

The new supply chain will be located to optimise manufacturing, logistic & distribution (L&D)

and sourcing purposes:

� Slovakia (Trnava): Presence of a secondary manufacturing line and of the EMEA L&D centre;

� Ho Chi Minh (Vietnam): Presence of a primary manufacturing line and of the APAC L&D

centre. Sourcing from Asian low-cost countries;

� Eugene (US): Presence of the Americas L&D centre. Sourcing from high technology districts.

In management’s view, the new supply chain should require one-off costs of around EUR 11M

(subject to union agreements).

DATALOGIC 28 June 2011

Intesa Sanpaolo Research Department 7

On the other hand, it should produce cost savings from 2012 onwards of around EUR 12.5M.

Moreover, we think that the shift of a large part of ADC production to Vietnam should

determine a reduction in the tax rate (no more IRAP paid in Italy).

Management’s target is to outperform market growth in 2009-13, reaching a CAGR 2009-13 of

over 11% (vs. 8% of the market) by:

� Fully exploiting the new supply chain, leveraging on a larger critical mass and serving

customers’ needs more effectively and rapidly;

� Focusing of retail products, such as self-shopping solutions and evolution robotics;

� Focusing on vertical markers like healthcare and convenience;

� Increasing penetration in mobile computers by geography (Western Europe and North

America), by industry (retail, T&L), by applications (in-store, warehouse, field force

automation);

� Transforming R&D investments in breakthrough products, in particular in self-checkout

solutions and automatic scanning solutions.

The IA market

The IA reference market in 2013 is expected to be extremely large, over USD 6Bn as explained

above.

Within this market, management aims at developing vision and safety products, miniature/sub-

miniature technology for sensors, and new fibre laser technology.

As in the ADC segment, the adoption of state-of-the-art supply chain management should drive

efficiency gains and leverage on the global footprint.

Working capital management should improve, thanks to the rationalisation of SKUs and

warehouse processes re-engineering.

The new plan guidance

The key points in the 2011-13 business plan are:

� 2013 organic revenues of EUR 470-480M (from EUR 393M in FY10A). On top of this, external

growth could bring a further EUR 100M in 2013;

� 2013 EBITDA of EUR 80-85M (from EUR 49.8M in FY10A), with a margin of 17-18% (from

12.7% in FY10A);

� R&D investments of 7% of revenues per year;

� Stable investment in capex at around 2% of revenues per year;

� A 2013 ROE target of 23-24%.

Compared with the previous plan, for 2012 the new 3-year plan implies an improvement of

revenues of around 5%, mainly thanks to the improvement in supply chain efficiency, and

improved EBITDA and net profit of around 21% and 63% respectively, thanks also to the cost

savings related to ADC production delocalisation.

DATALOGIC 28 June 2011

8 Intesa Sanpaolo Research Department

Change of Estimates

In the table below we report the main changes to our 2011E-13E estimates. In particular:

� 2011E: We confirmed our old target of EUR 420M revenue, while we incorporated the effect

of the supply chain restructuring described above. In particular, we assumed an increase in

operating costs of around EUR 3.9M, which implied an EBITDA w/o non-recurring items

decrease of 6.8% to EUR 53.8M. We also posted EUR 7.5M non-recurring costs, thus implying

an overall reduction in EBIT by 27.5% to EUR 30.4M. Net income should be

EUR 14.5M vs. EUR 22.9M in previous estimates. Following the abovementioned one-off

costs, net debt should increase by 12.8% vs. previous estimates, to EUR 67.1M;

� 2012E-13E: We slightly revised upwards revenue (+1.6% in FY12E and + 3.5% in FY13E vs.

previous estimates) to better align with reference market trends. The delocalisation of

production should bring the EBITDA margin to over 17% in 2012E, and to 18% in 2013E.

Finally, we reduced the tax rate from 35% to 30% to incorporate a large shift in ADC

production to Vietnam (no more IRAP paid in Italy);

� We expect a strong cash generation bringing the 2013E net financial position to cash

(EUR 12.2M in our estimates), driven by the abovementioned operating trends, by a capex

conservatively at 3% of revenue and a working capital to revenue ratio stable vs. FY10A

(around 2%), thus implicitly assuming a trade working capital to revenue ratio broadly stable

at around 16%.

DATALOGIC - Change of estimates 2011E-13E

EUR MEUR MEUR MEUR M 2011E old2011E old2011E old2011E old 2011E new2011E new2011E new2011E new var. (%)var. (%)var. (%)var. (%) 2012E old2012E old2012E old2012E old 2012E new2012E new2012E new2012E new var. (%)var. (%)var. (%)var. (%) 2013E old2013E old2013E old2013E old 2013E new2013E new2013E new2013E new var. (%)var. (%)var. (%)var. (%)

Revenue 420.0 420.0 0.0 440.0 447.0 1.6 460.0 476.0 3.5

EBITDA w/o non-recurring 57.7 53.8 -6.8 61.4 76.7 24.9 65.2 85.8 31.6 EBITDA margin (%) 13.7 12.8 14.0 17.2 14.2 18.0

EBIT 41.8 30.4 -27.3 45.4 60.7 33.7 49.0 69.7 42.1 EBIT margin (%) 9.9 7.2 10.3 13.6 10.7 14.6 Net profit 22.9 14.5 -36.5 27.2 40.0 47.1 30.7 48.4 57.5

Net financial debt 59.5 67.1 12.8 36.0 27.1 -24.9 10.7 -12.2 NM Source: Intesa Sanpaolo Research estimates

DATALOGIC 28 June 2011

Intesa Sanpaolo Research Department 9

Financials

DATALOGIC - P&L

EUR MEUR MEUR MEUR M 2011E2011E2011E2011E 2012E2012E2012E2012E 2013E2013E2013E2013E

Revenue 420.0 447.0 476.0

Cost of sales -228.9 -230.2 -240.4 Gross profit 191.1 216.8 235.6 Other revenue 2.1 2.1 2.1

R&D expenses -31.5 -33.5 -35.7 Distribution -81.9 -82.7 -88.1 G&A -35.7 -35.8 -38.1

Other costs -2.0 -2.0 -2.0 EBITANR 42.1 65.0 73.9 on revenue (%) 10.0 14.5 15.5

Amortization &depreciation of assets -11.6 -11.8 -11.9 EBITDA w/o non recurring 53.8 76.7 85.8 EBITDA margin (%) 12.8 17.2 18.0

Non recurring costs and revenue -7.5 0.0 0.0 Depreciation & Amortisation for acquisitions -4.3 -4.3 -4.3 EBIT 30.4 60.7 69.7

EBIT margin (%) 7.2 13.6 14.6 Forex impact 0.0 0.0 0.0 Subsidiaries earnings 0.0 0.0 0.0

Net financial charges -8.0 -3.5 -0.6 Results from discontinued activities 0.0 0.0 1.0 Profit before tax/minorities 22.4 57.2 69.1

Taxes -7.8 -17.1 -20.7 Minorities 0.0 0.0 0.0 Net profit 14.5 40.0 48.4 Source: Intesa Sanpaolo Research estimates

DATALOGIC - -Balance sheet

EUR MEUR MEUR MEUR M 2011E2011E2011E2011E 2012E2012E2012E2012E 2013E2013E2013E2013E

Fixed assets 216.4 209.3 202.7

Trade working capital 67.2 71.5 76.2 Other working capital -71.4 -76.0 -80.9 Net invested capital 212.2 204.8 197.9

Group shareholders’ equity 145.0 177.8 210.1 Net financial debt 67.1 27.1 -12.2 Total cover 212.2 204.8 197.9 Source: Intesa Sanpaolo Research estimates

DATALOGIC - Cash flow

EUR MEUR MEUR MEUR M 2011E2011E2011E2011E 2012E2012E2012E2012E 2013E2013E2013E2013E

Net fin debt beg of year 76.5 67.1 27.1 Net income 14.5 40.0 48.4

Depreciation 15.9 16.0 16.1 Change in working capital -3.0 0.3 0.3 Operating cash flow 27.4 56.3 64.8

Capex -8.4 -8.9 -9.5 Investments -1.5 0.0 0.0 Disposals 0.0 0.0 0.0

Free cash flow 17.5 47.4 55.3 Dividends -8.2 -7.3 -16.0 Other movements 0.0 0.0 0.0

Cash flow 9.4 40.1 39.3 Net fin debt end of year 67.1 27.1 -12.2 Source: Intesa Sanpaolo Research estimates

DATALOGIC 28 June 2011

10 Intesa Sanpaolo Research Department

Valuation

We value Datalogic with a DCF model, using the following key assumptions in our valuation:

� An 8.1% WACC, incorporating a risk-free rate of 4.75% (4% in previous research) and an

equity risk premium of 5.75%;

� A gearing of around 32%;

� A conservative 0% terminal value growth;

� LT EBIT is calculated starting from 2013E EBITDA, and depreciation equals capex.

We obtain a target price of EUR 9.55/share (EUR 7.15/share previously) and rate the

company a BUY.

DATALOGIC – DCF calculation (2011E-13E)

EUR MEUR MEUR MEUR M 2011E2011E2011E2011E 2012E2012E2012E2012E 2013E2013E2013E2013E LTLTLTLT

EBIT 30.4 60.7 69.7 76.3

Tax -7.8 -17.1 -20.7 -26.5 Depreciation 15.9 16.0 16.1 0.0 NOPAT 38.4 59.6 65.1 49.8

WC -3.0 0.3 0.3 0.0 Capex -8.4 -8.9 -9.5 0.0 FCF 27.0 50.9 55.8 49.8

Discounted FCF 27.0 47.1 47.8 39.4 WACC (%) 8.1 TV growth (%) 0.0

Sum 122 TV 488 EV 610

Debt FY10A 76 Treasury shares 24 Equity 557

Shares 58.4 Share price 9.55 Source: Intesa Sanpaolo Research estimates

In the following table we show Datalogic’s peers’ key financial indicators and P/E and EV/EBITDA

multiples.

DATALOGIC - Key financial indicators

Price (EUR)Price (EUR)Price (EUR)Price (EUR) Mkt cap (EUR M)Mkt cap (EUR M)Mkt cap (EUR M)Mkt cap (EUR M) RevenueRevenueRevenueRevenue CAGR CAGR CAGR CAGR 10101010----12E12E12E12E EBITDA CAGREBITDA CAGREBITDA CAGREBITDA CAGR 10101010----12E12E12E12E Net income CAGRNet income CAGRNet income CAGRNet income CAGR 10101010----12E12E12E12E Debt/EBITDA 2011EDebt/EBITDA 2011EDebt/EBITDA 2011EDebt/EBITDA 2011E

Intermec 7.55 448 16.0 90.0 NM -1.6

Zebra Tech. 28.23 1,543 2.4 12.8 16.1 -0.7 Psion 0.99 140 5.3 45.2 115.3 -1.8

Zetes Industries 17.60 95 4.5 5.8 12.0 -0.3 Datalogic* 5.93 347 6.7 24.2 49.0 1.2 Source: Factset consensus *Intesa Sanpaolo estimates

Looking at peers, 2011E is affected by the one-off costs related to the supply chain

restructuring, but 2012E P/E trades at an around 43% discount. At our target price

(EUR 9.55/share), Datalogic would still trade at an around 8% discount on 2012E P/E.

DCF valuation

Multiples comparison

DATALOGIC 28 June 2011

Intesa Sanpaolo Research Department 11

DATALOGIC - Multiples comparison

EV/EBITDAEV/EBITDAEV/EBITDAEV/EBITDA P/EP/EP/EP/E xxxx Price (EUR)Price (EUR)Price (EUR)Price (EUR) Mkt cap (EUR M)Mkt cap (EUR M)Mkt cap (EUR M)Mkt cap (EUR M) 2011E2011E2011E2011E 2012E2012E2012E2012E 2011E2011E2011E2011E 2012E2012E2012E2012E

Intermec 7.5 448 6.9 4.6 21.4 15.2 Zebra Tech. 28.2 1,543 9.5 8.0 16.7 15.3

Psion 1.0 140 5.2 4.0 34.7 17.8 Zetes Industries 17.6 95 4.4 4.0 9.9 8.9 Median 6.0 4.3 19.0 15.2

Datalogic* 5.9 347 7.7 4.9 23.8 8.7 Premium/(Discount) vs. peers 28.0 12.4 25.2 -43.1 Source: Factset consensus *Intesa Sanpaolo estimates

DATALOGIC 28 June 2011

12 Intesa Sanpaolo Research Department

Appendix I: Group Profile

Datalogic is one of the most important producers of bar code readers, data collection mobile

computers, RFID and vision systems, offering innovative applications in the manufacturing,

transportation & logistics and retail industries.

The company had 2,000 staff members across Europe, the US, Asia and Oceania, with a strong

focus on R&D developed through 9 centres which produced a portfolio of 898 patents.

Datalogic has a direct presence in 30 countries around the world that sell to over 100 countries

and has over 1,000 partners worldwide.

The two reference markets are Automatic Data Capture (ADC) and Industrial Automation,

served through three divisions:

� Datalogic Scanning and Datalogic Mobile for the ADC market (68% of revenue);

� Datalogic Automation for the Industrial Automation market (23% of revenue).

To improve commercial efficiency, the scanning division CEO was recently also appointed CEO

of the mobile division.

Moreover, the BU Development (which includes the companies: Informatics, USA; Evolution

Robotics Retail, USA; and the Self-Shopping Solutions Business Unit, Italy) works transversally

with the abovementioned 3 divisions and develops new business platforms and values new

merger and acquisition opportunities.

In the graph below we show Datalogic’s geographical footprint. It is important to highlight the

concept of serving the local market through a local presence, in order to better perceive and

satisfy clients’ specific needs. The last R&D centre and manufacturing plant was opened in

Vietnam in 2009 to cover the entire Asian region.

DATALOGIC - Geographical footprint

Direct presence in 30 countries worldwide

7 Manufacturing Plants 9 R&D Centers

EUROPE 40%

ITALY 11%

NORTH AMERICA 29%

APAC 13%

ROW 7%

Direct presence in 30 countries worldwide

7 Manufacturing Plants7 Manufacturing Plants 9 R&D Centers9 R&D Centers

EUROPE 40%

ITALY 11%

NORTH AMERICA 29%

APAC 13%

ROW 7%

Source: Company data

DATALOGIC 28 June 2011

Intesa Sanpaolo Research Department 13

Revenue breakdown

Datalogic posted revenues of around EUR 393M in 2010, with the scanning segment taking the

lions share (around 46.2% of revenue), and automation and mobile representing 23% and

22.3%, respectively. Informatics weighed 8.5% of revenue.

Geographically, over 50% of revenues came from Europe (11% in Italy), North America weighed

around 28.8%, Asia Pacific and rest of the world weighed 12.6% and 7.8%, respectively.

DATALOGIC - Revenue by business units DATALOGIC - Revenue by geography

22.3%

23.0%46.2%

8.5%

Mobile Automation Scanning Informatics

11.0%

39.8%28.8%

12.6%

7.8%

Italy Europe North America Asia Pacific RoW

Source: Company data Source: Company data

Innovation and R&D

Innovation and R&D are the keys to gaining and maintaining clients in a very competitive

market. Datalogic’s track record in producing innovative products and making them a

commercial product is shown in the table below.

Datalogic - Product innovation trend Datalogic - Innovative commercial milestones

1974 1st grocery store scanner in the world

1978 1st industrial bar code reader in Europe

1984 1st airport application in Europe (Milano-Linate Airport)

1994 1st 360° scanner/scale

1997 1st industrial high speed bar code reader designed for sorting applications in the material handling sector with electronic

auto-focus and no moving parts

1999 1st RFID post office application in the world

Source: Company data Source: Company data

Datalogic spent EUR 26.3M on R&D in 2010, i.e. 6.7% of revenue (8% and 6.7% in 2009 and

2008, respectively). In particular:

Datalogic mobile: invested about EUR 5.8M in 2010 (6.7% revenues), which resulted in the

launch of some retail, warehouse and field force automation product lines, which will be largely

commercialised in the next few years.

Datalogic automation: invested EUR 6.6M in 2010, after the intense R&D investments carried

out in 2008 and 2009 (EUR 7.5M per year). The main outcomes were:

� Fixed scanners for the industrial market (USS): a new product for entry-level OEM (original

equipment manufacturer) applications, the re-engineering of existing products, aimed at

lowering production costs;

DATALOGIC 28 June 2011

14 Intesa Sanpaolo Research Department

� Radiofrequency readers (RFID): re-engineering of existing products, to rationalise and optimise

offerings across all the main product families, development of the electronic ticketing offering;

� Industrial marking products: focus on the full integration of the production offering for

industrial marking within the Automation division's portfolio, the development of laser

markers based on fibre technology;

� Photoelectric sensors and devices: development of large-format (MAXI) sensors, typically used

in long-distance applications/ extreme conditions, development of tubular products,

development of intelligent vision sensors (DataVS), an innovative project to build an artificial

vision research laboratory.

Datalogic scanning: invested EUR 12.2M ( 6.7% of revenues) in the two sectors in which the

Scanning division operates:

� Hand-held readers (HHR): new products in bluetooth technology and laser technology,

integrated deactivation of anti-shoplifting tags, products for industrial purposes and low-

energy applications, products made from antibacterial materials resistant hospital

disinfectants, the red/blue readers designed for applications requiring the reading of code

stamped with special and/or coloured inks;

� Checkout scanners: new systems able to capture images and read bar codes, even bi-

dimensional, directly on to mobile phones and PDAs.

The R&D department run by Datalogic, has a track record of innovative commercial milestones,

as shown in the following tables.

The acquisition of Evolution Robotics Retail, leader in the field of visual pattern recognition will

be a key technology building block in Datalogic industrial focused businesses.

The clients

Datalogic revenue is highly fragmented between clients, retail segment counts around 40% of

revenue, manufacturing segment around 30% and logistic around 20%.

Innovation and system reliability are key elements to start and maintain long relationship with

clients, such as:

� Identification solutions: at Roissy Charles de Gaulle and Fiumicino airports, respectively,

over 53M and 33M passengers and their baggage are handled each year;

� Scanners and camera systems: over 10 billion letters and packages delivered annually to 31

million Canadians by Canada Post;

� 2D Imagers: over 360k trays per day processed at United States Postal Service;

� Industrial/mobile PDA: several deliveries on behalf of several major third party parcel carriers

at the Isle of Man post office, PDAs to read RFID wristbands in a Milan hospital;

� Mobile computers: handling over 100k spectators at 2010 F1 Singapore Grand Prix;

� RFID products: just-in-time production method supported by RFID in a Mexican automotive

facility producing 400k trucks and cars;

� POS bar code scanners: installed in leading supermarket retailers in the US, with 140 stores

working 24 hours a day, 7 days a week;

� Scanning and security tag deactivation: installed in one of the US’ largest food retailers,

over 2,400 stores in 32 states;

� Mix of industrial handheld readers, scanners and mobile computers: management of

180k cubic meters of world’s largest warehouse of a famous Swedish furniture retailer.

DATALOGIC 28 June 2011

Intesa Sanpaolo Research Department 15

Key retailer clients Key banner clients

Source: Company data Source: Company data

Key postal/courier clients Key healthcare clients

Source: Company data Source: Company data

Key entertainer clients Key auto and tyre manufacturer clients

Source: Company data Source: Company data

DATALOGIC 28 June 2011

16 Intesa Sanpaolo Research Department

Key packaging and automated warehouse clients Key airport clients

������� ������������ ������������ ������������ ������������ ������������ ������������ ������������ ��������� ������ ��������� ������ ��������� ������ ��������� ������ ����������������� ����� ����� ����� ����� ������������������������� ������� �� ����������� ������� �� ����������� ������� �� ����������� ������� �� ������ �������������������������� ������������� ������������� ������������� ������� �������������������������� ��������� ��������� ��������� ��� ������� ��!�������� ��!�������� ��!�������� ��!���� "�� #$% �������� "�� #$% �������� "�� #$% �������� "�� #$% ��������� �����&� ��������� �����&� ��������� �����&� ��������� �����&� �����

�������������������� '���'���'���'��� ��������������������%���� ��!�� ������������ �����%���� ��!�� ������������ �����%���� ��!�� ������������ �����%���� ��!�� ������������ ���������� ���������� ���������� ���������� ���������� ���&�� ���������� ���&�� ���������� ���&�� ���������� ���&�� �������� ������ �������� ������ �������� ������ �������� ������ �����(!�(!�(!�(!� $��!�&��$��!�&��$��!�&��$��!�&�� ���������������������� �� ������� �� ������� �� ������� �� �������������� �������������� �������������� �������������� ������������ ������������ ������������ ������������ ������������ ������������ ������������ ������������ ��������� ������ ��������� ������ ��������� ������ ��������� ������ ����������������� ����� ����� ����� ����� ������������������������� ������� �� ����������� ������� �� ����������� ������� �� ����������� ������� �� ������ �������������������������� ������������� ������������� ������������� ������� �������������������������� ��������� ��������� ��������� ��� ������� ��!�������� ��!�������� ��!�������� ��!���� "�� #$% �������� "�� #$% �������� "�� #$% �������� "�� #$% ��������� �����&� ��������� �����&� ��������� �����&� ��������� �����&� �����

�������������������� '���'���'���'��� ��������������������%���� ��!�� ������������ �����%���� ��!�� ������������ �����%���� ��!�� ������������ �����%���� ��!�� ������������ ���������� ���������� ���������� ���������� ���������� ���&�� ���������� ���&�� ���������� ���&�� ���������� ���&�� �������� ������ �������� ������ �������� ������ �������� ������ �����(!�(!�(!�(!� $��!�&��$��!�&��$��!�&��$��!�&�� ���������������������� �� ������� �� ������� �� ������� �� �������������� �������������� �������������� �������������� ����� Source: Company data Source: Company data

The cost structure

The most relevant cost is sales, which in 2008-10 weighed around 55% of revenue, except in

2009 when the economic worldwide crisis produced a revenue contraction, which management

promptly dealt with, by implementing strong efficiency actions which commenced the

turnaround as soon as 1Q10.

Management regard procurement risks as limited, as components are usually sourced from

several suppliers. In the few cases when components are sourced from a single supplier,

adequate inventories of those components are maintained.

Datalogic - Cost breakdown

EUR MEUR MEUR MEUR M 2008A2008A2008A2008A 2009A2009A2009A2009A 2010A2010A2010A2010A

Cost of sales 211.8 181.6 213.5 R&D expenses 25.3 24.9 26.3

Distribution 77.2 68.1 77.2 G&A 38.8 29.6 37.7

Payroll* 104.0 104.1 114.1

Non-recurring costs and revenue 0.7 7.8 -0.8 Depreciation & Amortisation for acquisitions 3.9 4.0 4.3 Weight on revenue (%)Weight on revenue (%)Weight on revenue (%)Weight on revenue (%)

Cost of sales 55.8 58.2 54.4 R&D expenses 6.7 8.0 6.7 Distribution 20.3 21.8 19.7

G&A 10.2 9.5 9.6 Payroll* 27.4 33.4 29.1

Source: Company data *Payroll costs are allocated into the abovementioned cost items

The second most important cost is distribution, which weighed around 20% in the last 3 years

(slightly higher in 2009). Distribution costs include sales commissions and bonuses, transport

costs, travel and accommodation expenses and marketing expenses.

As previously mentioned, R&D is the key to producing innovative products able to gain and

maintain clients. The company invests around 6.7% of revenue in R&D.

G&A costs weighed between 9.5-10% of revenue.

Payroll costs, which are allocated to the abovementioned cost items, weighed 27.4% in 2008,

33.4% in 2009 (characterised by a revenue contraction) and 29.1% in 2010.

DATALOGIC 28 June 2011

Intesa Sanpaolo Research Department 17

Acquisitions and goodwill

Acquisitions made by Datalogic to support growth have produced EUR 106M of goodwill which

we detail below, together with the key parameters used for the impairment test.

Datalogic - Goodwill breakdown

Year of acquisitionYear of acquisitionYear of acquisitionYear of acquisition GoodwillGoodwillGoodwillGoodwill WACCWACCWACCWACC LT growthLT growthLT growthLT growth Revenue CAGR11Revenue CAGR11Revenue CAGR11Revenue CAGR11----15151515

PSC 2005 70.1

of which: scanning 2005 60.7 10.2 2 5.4 mobile 2005 9.4 10.2 2 5

Informatics 2005 11.8 10.2 2 7 Laservall 2004 5.1 12.9 2 2.8 Infra 2008 1.7 12.9 2 2.8

Idware 1998 3.4 12.9 2 5 Minec 2002 0.3 12.9 2 2.5 Evolution Robotics Retail 2010 13.7 10.2 2 59.3 Source: Company data

The shareholders’ structure

Datalogic’s main shareholder is Hydra, with a 67.3% stake. Hydra is chaired by Romano Volta,

the person who started Datalogic in the 70’s.

Datalogic owns 6.9% of own shares.

Datalogic - Shareholders’ structure

67.3%6.4%

2.0%

6.9%

17.4%

Hydra Tamburi Investment Partner D'Amico Treasury shares Free float

Source: Company data

DATALOGIC 28 June 2011

18 Intesa Sanpaolo Research Department

Appendix II: Latest Results

Datalogic has been growing since 2001 at a 15% CAGR, through organic growth and external

acquisitions.

Historical growth trend

Completed transformation into 3 divisions: Scanning, Mobile, and Automation

Acquisition of Datasensor SpA

Listing on the Milan Stock Exchange

Acquisition of MinecAB (Sweden)

Acquisition of Laservall SpA (AO, I)

Acquisition of Informatics Inc. (TX, U.S.A.)

Acquisition of PSC Inc. (OR, U.S.A.)

REVENUES: ~15% 2001-2010 CAGR

2010 SALES REVENUES (392.7 M Euro) UP BY 26% VS 2009

2001 2002 2003 20052004 2006 2007 2008 2009 2010

Acquisition of Evolution Robotics Retail, USA

Completed transformation into 3 divisions: Scanning, Mobile, and Automation

Acquisition of Datasensor SpA

Listing on the Milan Stock Exchange

Acquisition of MinecAB (Sweden)

Acquisition of Laservall SpA (AO, I)

Acquisition of Informatics Inc. (TX, U.S.A.)

Acquisition of PSC Inc. (OR, U.S.A.)

REVENUES: ~15% 2001-2010 CAGR

2010 SALES REVENUES (392.7 M Euro) UP BY 26% VS 2009

2001 2002 2003 20052004 2006 2007 2008 2009 20102001 2002 2003 20052004 2006 2007 2008 2009 2010

Acquisition of Evolution Robotics Retail, USA

Source: company data

The recent worldwide economic crisis has resulted in a contraction of Datalogic revenue in 2009

(17.9%), promptly recovered in 2010 with a 25.9% growth.

To sterilise results from non-recurring costs and revenue and administrative costs arising from

acquisitions, we have introduced EBITDA and EBIT net of these effects (EBITDANR and EBITANR,

respectively).

Datalogic - Key financial data 2008A-10A

EUR MEUR MEUR MEUR M 2008A2008A2008A2008A 2009A2009A2009A2009A 2222010A010A010A010A

Revenue 379.8 312.0 392.7

yoy gwt (%) -17.9 25.9 EBITDANR w/o non recurring 47.8 19.6 49.8

EBITDANR margin w/o non recurring (%) 12.6 6.3 12.7 EBITANR 35.3 6.2 38.1 EBITANR margin (%) 9.3 2.0 9.7

EBIT 30.7 -5.6 34.7 Net profit 17.8 -12.2 18.0 Capex 0.0 7.3 7.9

Investments 0.0 1.8 23.1 Net debt 106.9 100.5 76.5 Equity 135.8 116.7 140.2

Trade WC on revenue (%) 19.5 14.8 Source: Company data

Adjusted EBITDA margin, except for the negative 2009, was between 12.6% and 12.7% in

2008-10.

Adjusted EBIT margin, except for the negative 2009, was, between 9.3% and 9.7% in 2008-10.

Net income was around EUR 18M in both 2008 and 2010, but a EUR 12.2M loss in 2009.

Capex were broadly stable at EUR 7-8M, a significant investment was made in 2010 for the

acquisition of Evolution Robotics Retail for USD 25.5M, an American company with unique

DATALOGIC 28 June 2011

Intesa Sanpaolo Research Department 19

expertise in visual pattern recognition technology for use in retail loss prevention and

productivity applications, and which posted revenue of USD 5.1M and an EBITDA loss of USD

2.7M in 2009.

Net debt remained at approximately EUR 100M in 2008-09, then declined to EUR 76.5M in

2010, benefiting from a good control of trade working capital, whose ratio to revenue declined

from 19.5% in 2009 to 14.8% in 2010.

1Q11 results

In 1Q11 revenue grew by 17.2% to EUR 105M, driven by the scanning segment (48.5%

weighting on total revenue, 21% growth) and by the automation segment (23.3% weighting

on total revenue, 28.5% growth). Mobile and business development lagged behind in terms of

revenue growth (2.4% and 8.1%, respectively).

Datalogic - 1Q11A key financial data

EUR MEUR MEUR MEUR M 1Q10A1Q10A1Q10A1Q10A 1Q11A1Q11A1Q11A1Q11A % chg% chg% chg% chg

Revenue 89.5 105.0 17.2

Gross operating margin 40.5 49.4 22.1 Gross operating margin/revenue (%) 45.2 47.1

EBITDA 10.6 14.9 40.4 EBITDA margin 11.8 14.2 EBITANR 7.7 12.2 58.7

EBITANR margin 8.6 11.6 EBIT 6.7 11.1 65.2 Net income 4.1 5.7 36.9

Net debt 76.5 71.2 -7.0 Source: Company data

The EBITDA was EUR 14.9M, a 40.4% growth yoy, driven by the good performance of scanning

and automation segments, which posted strong revenue growth as previously explained, and

have margins higher than the group (15.7% and 14.8%).

Datalogic - Revenue and EBITDA margin by segments Datalogic - R&D and trade WC by segments

EUR MEUR MEUR MEUR M 1Q10A1Q10A1Q10A1Q10A 1Q11A1Q11A1Q11A1Q11A %%%% chg chg chg chg

RevenueRevenueRevenueRevenue

Total 89.5 105.0 17.2 Mobile 20.7 21.2 2.4

Automation 19.0 24.4 28.5 Scanning 42.1 50.9 21.0 Business dev. 7.9 8.6 8.1

EBITDA margin (%)EBITDA margin (%)EBITDA margin (%)EBITDA margin (%) Total 11.8 14.2 Mobile 12.6 10.8

Automation 6.8 14.8 Scanning 11.9 15.7 Business dev. 13.9 9.3

%%%% 1Q10A1Q10A1Q10A1Q10A 1Q11A1Q11A1Q11A1Q11A

R&D/revenueR&D/revenueR&D/revenueR&D/revenue

Total 6.8 6.5 Mobile 6.8 6.6

Automation 8.9 7.0 Scanning 6.7 6.1 Business dev. 0.1 5.8

Trade WC/revenueTrade WC/revenueTrade WC/revenueTrade WC/revenue Total 18.4 15.4 Mobile 13.7 11.3

Automation 28.8 20.8 Scanning 16.0 13.0 Business dev. 9.5 11.9

Source: Company data Source: Company data

Looking at R&D expenses, the group ratio to revenue was 6.5%, with slightly higher investments

in automation (7% of revenue) and slightly lower investments in scanning (6.1% of revenue).

In the quarter a good control of trade working capital was achieved, with a ratio to revenue

down from 18.4% in 1Q10 to 15.4% in 1Q11. In particular the control was particularly effective

in the automation segment (an 800bps reduction).

Net debt declined by 7% to EUR 71.2M, thanks to the good operating cash flow (EUR 9.5M)

and the positive effect of the exchange rate (EUR 2.9M) and taxes (EUR 2.5M).

DATALOGIC 28 June 2011

20 Intesa Sanpaolo Research Department

DATALOGIC - Key figures OrdinaryOrdinaryOrdinaryOrdinary RatingRatingRatingRating Sector IT & TechnologyIT & TechnologyIT & TechnologyIT & Technology Mkt price EUR/ShareMkt price EUR/ShareMkt price EUR/ShareMkt price EUR/Share 5.905.905.905.90 BUY REUTERS CODE DAL.MIDAL.MIDAL.MIDAL.MI TargetTargetTargetTarget price EUR/Share price EUR/Share price EUR/Share price EUR/Share 9.559.559.559.55 Values per share (EUR)Values per share (EUR)Values per share (EUR)Values per share (EUR) 2009A2009A2009A2009A 2010A2010A2010A2010A 2011E2011E2011E2011E 2012E2012E2012E2012E 2013E2013E2013E2013E No. ordinary shares (M) 58.45 58.45 58.45 58.45 58.45 No. NC saving/preferred shares (M) - - - - - Total no. of shares (M) 58.45 58.45 58.45 58.45 58.45 Adj. EPS -0.21 0.31 0.25 0.68 0.83 CFPS 0.09 0.58 0.52 0.96 1.10 BVPS 2.00 2.40 2.48 3.04 3.60 Dividend Ord - 0.15 0.13 0.15 0.15 Dividend SAV Nc - - - - - Income statemeIncome statemeIncome statemeIncome statement (EUR M)nt (EUR M)nt (EUR M)nt (EUR M) 2009A 2009A 2009A 2009A 2010A 2010A 2010A 2010A 2011E 2011E 2011E 2011E 2012E 2012E 2012E 2012E 2013E 2013E 2013E 2013E Sales 311.97 392.74 420.00 447.00 476.00 EBITDA 19.63 49.76 53.77 76.71 85.79 EBIT -5.58 34.68 30.37 60.69 69.65 Pre-tax income -12.84 28.18 22.37 57.15 69.09 Net income -12.16 18.03 14.54 40.01 48.37 Adj. net income -12.16 18.03 14.54 40.01 48.37 Cash flow (EUR M)Cash flow (EUR M)Cash flow (EUR M)Cash flow (EUR M) 2009A 2009A 2009A 2009A 2010A 2010A 2010A 2010A 2011E 2011E 2011E 2011E 2012E 2012E 2012E 2012E 2013E 2013E 2013E 2013E Net income before minorities -12.16 18.03 14.54 40.01 48.37 Depreciation and provisions 17.43 15.90 15.90 16.02 16.14 Change in working capital 11.51 20.53 -3.00 0.27 0.29 Operating cash flow 16.78 54.46 27.44 56.30 64.79 Capital expenditure -7.30 -7.86 -8.40 -8.94 -9.52 Other (uses of Funds) -1.10 -22.61 -1.53 - - Free cash flow 8.38 24.00 17.52 47.36 55.27 Dividends and equity changes -1.93 - -8.16 -7.27 -16.00 Net cash flow 6.45 24.00 9.36 40.09 39.27 Balance sheet (EUR M)Balance sheet (EUR M)Balance sheet (EUR M)Balance sheet (EUR M) 2009A 2009A 2009A 2009A 2010A 2010A 2010A 2010A 2011E 2011E 2011E 2011E 2012E 2012E 2012E 2012E 2013E 2013E 2013E 2013E Net capital employed 217.19 216.66 212.16 204.81 197.90 of which associates - - - - - Net debt/-cash 100.50 76.50 67.14 27.05 -12.22 Minorities - - - - - Net equity 116.70 140.16 145.02 177.75 210.12 Market cap 344.83 344.83 344.83 344.83 344.83 Minorities value - - - - - Enterprise value (*) 445.33 421.33 411.97 371.89 332.62 Stock market ratios (x) Stock market ratios (x) Stock market ratios (x) Stock market ratios (x) 2009A 2009A 2009A 2009A 2010A 2010A 2010A 2010A 2011E 2011E 2011E 2011E 2012 2012 2012 2012E E E E 2013E 2013E 2013E 2013E Adj. P/E -28.35 19.13 23.72 8.62 7.13 P/CEPS 65.45 10.16 11.33 6.15 5.35 P/BVPS 2.96 2.46 2.38 1.94 1.64 Dividend yield (% ord) - 2.54 2.14 2.54 2.54 Dividend yield (% sav) EV/sales 1.43 1.07 0.98 0.83 0.70 EV/EBITDA 22.68 8.47 7.66 4.85 3.88 EV/EBIT -79.88 12.15 13.57 6.13 4.78 EV/CE 2.05 1.94 1.94 1.82 1.68 D/EBITDA 5.12 1.54 1.25 0.35 -0.14 D/EBIT -18.03 2.21 2.21 0.45 -0.18 Profitability & financial ratios (%)Profitability & financial ratios (%)Profitability & financial ratios (%)Profitability & financial ratios (%) 2009A 2009A 2009A 2009A 2010A 2010A 2010A 2010A 2011E 2011E 2011E 2011E 2012E 2012E 2012E 2012E 2013E 2013E 2013E 2013E EBITDA margin 6.29 12.67 12.80 17.16 18.02 EBIT margin -1.79 8.83 7.23 13.58 14.63 Tax rate 5.24 36.03 35.00 30.00 30.00 Net income margin -3.90 4.59 3.46 8.95 10.16 ROE -10.42 12.86 10.03 22.51 23.02 Debt/equity ratio 0.86 0.55 0.46 0.15 -0.06 Growth (%)Growth (%)Growth (%)Growth (%) 2010A 2010A 2010A 2010A 2011E 2011E 2011E 2011E 2012E 2012E 2012E 2012E 2013E 2013E 2013E 2013E Sales 25.89 6.94 6.43 6.49 EBITDA 153.43 8.07 42.64 11.84 EBIT 722.10 -12.43 99.82 14.77 Pre-tax income 319.54 -20.62 155.49 20.89 Net income 248.21 -19.34 175.14 20.89 Adj. net income 248.21 -19.34 175.14 20.89 (*) EV = Mkt cap+ Net Debt + Minorities Value - Associates A: actual; E: estimates; Source: Company data and Intesa Sanpaolo Research

DATALOGIC 28 June 2011

Intesa Sanpaolo Research Department 21

Disclaimer

Analyst certification

The financial analyst who prepared this report, and whose name and role appear on the first page, certifies that:

(1) The views expressed on companies mentioned herein accurately reflect independent, fair and balanced personal views; (2) No direct or indirect

compensation has been or will be received in exchange for any views expressed.

Specific disclosures

1. Neither the analyst nor any member of the analyst’s household has a financial interest in the securities of the Company.

2. Neither the analyst nor any member of the analyst’s household serves as an officer, director or advisory board member of the Company.

3. The analyst named in the document is a member of AIAF.

4. The analyst named in this document is not registered with or qualified by FINRA, the U.S. regulatory body with oversight over Banca IMI Securities Corp. Accordingly, the analyst may not be subject to NASD Rule 2711 and NYSE Rule 472 with respect to communicates with a subject company, public appearances and trading securities in a personal account. For additional information, please contact the Compliance Department of Banca IMI Securities Corp at 212-326-1133.

5. The analyst of this report does not receive bonuses, salaries, or any other form of compensation that is based upon specific investment banking transactions.

6. The research department supervisors do not have a financial interest in the securities of the Company.

This research has been prepared by Intesa Sanpaolo SpA and distributed by Banca IMI SpA Milan, Banca IMI SpA-London Branch (a member of the London Stock Exchange) and Banca IMI Securities Corp (a member of the NYSE and NASD). Intesa Sanpaolo SpA accepts full responsibility for the

contents of this report and also reserves the right to issue this document to its own clients. Banca IMI SpA and Intesa Sanpaolo SpA, which are both part of the Intesa Sanpaolo Group, are both authorised by the Banca d'Italia and are both regulated by the Financial Services Authority in the conduct of designated investment business in the UK and by the SEC for the conduct of US business.

Opinions and estimates in this research are as at the date of this material and are subject to change without notice to the recipient. Information and opinions have been obtained from sources believed to be reliable, but no representation or warranty is made as to their accuracy or correctness. Past performance is not a guarantee of future results. The investments and strategies discussed in this research may not be suitable

for all investors. If you are in any doubt you should consult your investment advisor.

This report has been prepared solely for information purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any financial products. It should not be regarded as a substitute for the exercise of the recipient’s own judgment. No Intesa Sanpaolo SpA or

Banca IMI SpA entities accept any liability whatsoever for any direct, consequential or indirect loss arising from any use of material contained in this report. This document may only be reproduced or published together with the name of Intesa Sanpaolo SpA and Banca IMI SpA.

Intesa Sanpaolo SpA and Banca IMI SpA have in place a Joint Conflicts Management Policy for managing effectively the conflicts of interest which

might affect the impartiality of all investment research which is held out, or where it is reasonable for the user to rely on the research, as being an impartial assessment of the value or prospects of its subject matter. A copy of this Policy is available to the recipient of this research upon making a written request to the Compliance Officer, Intesa Sanpaolo SpA, 90 Queen Street, London EC4N 1SA. Intesa Sanpaolo SpA has formalised a set

of principles and procedures for dealing with conflicts of interest (“Research Policy”). The Research Policy is clearly explained in the relevant section of Intesa Sanpaolo’s web site (www.intesasanpaolo.com).

Member companies of the Intesa Sanpaolo Group, or their directors and/or representatives and/or employees and/or members of their

households, may have a long or short position in any securities mentioned at any time, and may make a purchase and/or sale, or offer to make a purchase and/or sale, of any of the securities from time to time in the open market or otherwise.

Intesa Sanpaolo SpA issues and circulates research to Qualified Institutional Investors in the USA only through Banca IMI Securities Corp., 1

William Street, New York, NY 10004, USA, Tel: (1) 212 326 1230.

Residents in Italy: This document is intended for distribution only to professional clients and qualified counterparties as defined in Consob

Regulation no. 16190 of 29.10.2007 either as a printed document and/or in electronic form.

Person and residents in the UK: This document is not for distribution in the United Kingdom to persons who would be defined as private

customers under rules of the FSA.

US persons: This document is intended for distribution in the United States only to Qualified Institutional Investors as defined in Rule 144a of the

Securities Act of 1933. US Customers wishing to effect a transaction should do so only by contacting a representative at Banca IMI Securities Corp. in the US (see contact details above).

Coverage policy and frequency of research reports

The list of companies covered by the Research Department is available upon request. Intesa Sanpaolo SpA aims to provide continuous coverage of

the companies on the list in conjunction with the timing of periodical accounting reports and any exceptional event that affects the issuer’s operations. The companies for which Banca IMI acts as sponsor or specialist are covered in compliance with regulations issued by regulatory bodies with jurisdiction. In the case of a short note, we advise investors to refer to the most recent company report published by Intesa Sanpaolo

SpA’s Research Department for a full analysis of valuation methodology, earnings assumptions, risks and the historical of recommendation and target price. Research is available on Banca IMI’s web site (www.bancaimi.com) or by contacting your sales representative.

DATALOGIC 28 June 2011

22 Intesa Sanpaolo Research Department

Valuation methodology (long-term horizon: 12M)

The Intesa Sanpaolo SpA Equity Research Department values the companies for which it assigns recommendations as follows:

We obtain a fair value using a number of valuation methodologies including: discounted cash flow method (DCF), dividend discount model (DDM), embedded value methodology, return on allocated capital, break-up value, asset-based valuation method, sum-of-the-parts, and multiples-based models (for example PE, P/BV, PCF, EV/Sales, EV/EBITDA, EV/EBIT, etc.). The financial analysts use the above valuation methods

alternatively and/or jointly at their discretion. The assigned target price may differ from the fair value, as it also takes into account overall market/sector conditions, corporate/market events, and corporate specifics (ie, holding discounts) reasonably considered to be possible drivers of the company’s share price performance. These factors may also be assessed using the methodologies indicated above.

Equity rating key: (long-term horizon: 12M)

In its recommendations, Intesa Sanpaolo SpA uses an “absolute” rating system, which is not related to market performance and whose key is reported below:

Equity rating key (long-term horizon: 12M)

LongLongLongLong----termtermtermterm rating rating rating rating DefinitionDefinitionDefinitionDefinition

BUY If the target price is 20% higher than the market price

ADD If the target price is 10%-20% higher than the market price HOLD If the target price is 10% below or 10% above the market price REDUCE If the target price is 10%-20% lower than the market price

SELL If the target price is 20% lower than the market price RATING SUSPENDED The investment rating and target price for this stock have been suspended as there is not a sufficient

fundamental basis for determining an investment rating or target. The previous investment rating and

target price, if any, are no longer in effect for this stock. NO RATING The company is or may be covered by the Research Department but no rating or target price is assigned

either voluntarily or to comply with applicable regulations and/or firm policies in certain circumstances,

including when Intesa Sanpaolo is acting in an advisory capacity in a merger or strategic transaction involving the company.

TARGET PRICE The market price that the analyst believes the share may reach within a one-year time horizon

MARKET PRICE Closing price on the day before the issue date of the report, as indicated on the first page, except where otherwise indicated

Historical recommendations and target price trends (long-term horizon: 12M)

Target price and market price trend (-1Y) Historical recommendations and target price trend (-1Y)

2

4

6

8

10

Jun-10 Oct-10 Feb-11 Jun-11

I:DAL(P) Target Price

DateDateDateDate RatingRatingRatingRating TPTPTPTP Mkt PriceMkt PriceMkt PriceMkt Price

25-May-11 BUY 7.15 5.60

Equity rating allocations (long-term horizon: 12M)

Intesa Sanpaolo Research Rating Distribution (at May 2011)

Number of companies Number of companies Number of companies Number of companies subject to recommendations: subject to recommendations: subject to recommendations: subject to recommendations: 94 94 94 94 (**)(**)(**)(**) BUYBUYBUYBUY ADDADDADDADD HOLDHOLDHOLDHOLD REDUCEREDUCEREDUCEREDUCE SELLSELLSELLSELL

Total Equity Research Coverage % 29 38 30 2 1

of which Intesa Sanpaolo’s Clients % (*) 78 56 50 100 - (*) Companies on behalf of whom Intesa Sanpaolo and the other companies of the Intesa Sanpaolo Group have provided corporate and Investment banking services in the last 12 months; percentage of clients in each rating category. (**) The total number of companies covered is 101

Valuation methodology (short-term horizon: 3M)

Our short-term investment ideas are based on ongoing special market situations, including among others: spreads between share

categories; holding companies vs. subsidiaries; stub; control chain reshuffling; stressed capital situations; potential extraordinary deals (including capital increase/delisting/extraordinary dividends); and preys and predators. Investment ideas are presented either in relative terms (e.g. spread ordinary vs. savings; holding vs. subsidiaries) or in absolute terms (e.g. preys).

The companies to which we assign short-term ratings are under regular coverage by our research analysts and, as such, are subject to fundamental analysis and long-term recommendations. The main differences attain to the time horizon considered (monthly vs. yearly) and

DATALOGIC 28 June 2011

Intesa Sanpaolo Research Department 23

definitions (short-term ‘long/short’ vs. long-term ‘buy/sell’). Note that the short-term relative recommendations of these investment ideas may differ from our long-term recommendations. We monitor the monthly performance of our short-term investment ideas and follow them until their closure.

Equity rating key (short-term horizon: 3M)

Equity rating key (short-term horizon: 3M)

ShortShortShortShort----term rating term rating term rating term rating DefinitionDefinitionDefinitionDefinition

LONG Stock price expected to rise or outperform within three months from the time the rating was assigned due to a specific catalyst or event

SHORT Stock price expected to fall or underperform within three months from the time the rating was assigned due to a specific catalyst or event

Company specific disclosures

Banca IMI discloses interests and conflicts of interest, as defined by: Articles 69-quater and 69-quinquies, of Consob Resolution No.11971 of 14.05.1999, as subsequently amended and supplemented; the NYSE’s Rule 472 and the NASD’s Rule 2711; the FSA Policy Statement 04/06

“Conflicts of Interest in Investment Research – March 2004 and the Policy Statement 05/03 “Implementation of Market Abuse Directive”, March 2005. The Intesa Sanpaolo Group maintains procedures and organisational mechanisms (Information barriers) to professionally manage conflicts of interest in relation to investment research. We provide the following information on Intesa Sanpaolo Group’s conflicts of interest:

1 The Intesa Sanpaolo Group has a conflict of interest inasmuch as it plans to solicit investment banking business or intends to seek

compensation from the Company in the next three months.

2 The Intesa Sanpaolo Group has an equity stake above 1% in DATALOGIC S.p.A.

DATALOGIC 28 June 2011

24 Intesa Sanpaolo Research Department

Intesa Sanpaolo Research Department – Head of Research Gregorio De Felice Head of Equity & Credit ResearchHead of Equity & Credit ResearchHead of Equity & Credit ResearchHead of Equity & Credit Research

Giampaolo Trasi +39 02 8794 9803 [email protected] Equity ResearchEquity ResearchEquity ResearchEquity Research

Monica Bosio +39 02 8794 9809 [email protected] Luca Bacoccoli +39 02 8794 9810 [email protected] Laura Carmignani +39 02 8794 9813 [email protected] Sergio Ciaramella +39 02 8794 9814 [email protected] Manuela Meroni +39 02 8794 9817 [email protected] Gian Luca Pacini +39 02 8794 9818 [email protected] Bruno Permutti +39 02 8794 9819 [email protected] Fabio M. Picardi +39 02 8794 9820 [email protected] Roberto Ranieri +39 02 8794 9822 [email protected] Corporate BrokingCorporate BrokingCorporate BrokingCorporate Broking ResearchResearchResearchResearch

Alberto Francese +39 02 8794 9815 [email protected] Marta Caprini +39 02 8794 9812 [email protected] Serena Polini +39 02 8794 9821 [email protected] Research ProductionResearch ProductionResearch ProductionResearch Production

Anna Whatley +39 02 8794 9824 [email protected] Cinzia Bovina +39 02 8794 9811 [email protected] Bruce Marshall +39 02 8794 9816 [email protected] Annita Ricci +39 02 8794 9823 [email protected] Banca IMI Institutional SalesInstitutional SalesInstitutional SalesInstitutional Sales

Nicola Maccario +39 02 7261 5517 [email protected] Carlo Cavalieri +39 02 7261 2722 [email protected] Francesca Guadagni +39 02 7261 5817 [email protected] Robert Meier +39 02 7261 2158 [email protected] Alberto Sartori +39 02 7261 5880 [email protected] Daniela Stucchi +39 02 7261 5708 [email protected] Mark Wilson +39 02 7261 2758 [email protected] Corporate BrokingCorporate BrokingCorporate BrokingCorporate Broking

Carlo Castellari +39 02 7261 2122 [email protected]

Virginia Mortari +39 02 7261 5853 [email protected] Laura Spinella +39 02 7261 5782 [email protected] US Institutional SalesUS Institutional SalesUS Institutional SalesUS Institutional Sales

Stephane Ventilato +1 212 326 1233 [email protected] Jack Del Duca +1 212 326 1234 [email protected] Barbara Leonardi +1 212 326 1232 [email protected] Gregory Halvorsen +1 212 326 1237 [email protected] Sales TradingSales TradingSales TradingSales Trading

Roberto Gussoni +39 02 7261 5929 [email protected] Claudio Manes +39 02 7261 5542 [email protected] Lorenzo Pennati +39 02 7261 5647 [email protected] Equity Derivatives Institutional SalesEquity Derivatives Institutional SalesEquity Derivatives Institutional SalesEquity Derivatives Institutional Sales

Andrea Martini +39 02 7261 5977 [email protected] Emanuele Manini +39 02 7261 5936 [email protected] Massimiliano Murgino +39 02 7261 2247 [email protected] Market Hub Market Hub Market Hub Market Hub –––– Brokerage & Execution Brokerage & Execution Brokerage & Execution Brokerage & Execution

Italian Equities - Sergio Francolini +39 02 7261 5859 [email protected] Foreign Equities - Francesco Riccardi +39 02 7261 2901 [email protected] Market Hub Market Hub Market Hub Market Hub –––– Exchange Traded Derivatives Exchange Traded Derivatives Exchange Traded Derivatives Exchange Traded Derivatives

Biagio Merola - Milan +39 02 7261 2420 [email protected] Market Hub Market Hub Market Hub Market Hub –––– @ sales @ sales @ sales @ sales

Giovanni Spotti +39 02 7261 2339 [email protected]

Banca IMI SpA

Largo Mattioli, 3 20121 Milan, Italy Tel: +39 02 7261 1

Banca IMI Securities Corp.

1 William Street 10004 New York, NY, USA Tel: (1) 212 326 1230

Banca IMI London Branch

90 Queen Street London EC4N 1SA, UK Tel +44 207 894 2600