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We'll have an opportunity as I said to revisit the show following the presentations and the Q&A as well as the short break that we are going to have in the middle during this morning. This is a very good time to have an Investor Day for Zebra. A lot has happened over the last four years and we look forward to sharing what those changes are, what those changes have been, but more important, we look forward to talking to you about Zebra's future.Several executives will be making presentations today to provide an in-depth look at the business and Zebra's future and I'd like to introduce them and if they could please stand when I recognize them. First, we have CEO, Anders Gustafsson. He will start out by providing an overview of our business strategy and how Zebra is positioned for growth and shareholder value creation. Following Anders' presentation, we'll hear from Mike Terzich. And Mike will be talking about Zebra's sales and marketing initiatives. We'll then hear from some of our customers and a channel partner, Debbie Murphy, will lead a panel that we expect will give you a valuable perspective on Zebra, and after a short break, Hugh Gagnier and Mike Millman will give us an update on operations and product innovation. Finally, we'll hear from CFO, Mike Smiley and we'll conclude with an open Q&A session with our senior executives. I want to recognize other Zebra executives who are with us today, Lou Chauvin, who is our Vice President of Engineering for Location Solutions; Mike Cho, Vice President of Corporate Development; Ashley Ford, Vice President of North American Sales; Phil Gerskovich, Senior Vice President for new growth platforms; Keith Lefebvre, Vice President of Product Management; and last but not least, Joanne Townsend, Vice President of Human Resources.
Before I introduce Anders, first, a word from our attorneys, certain statements, I am not going to read the whole thing, don't worry, but certain statements we will make on this presentation will relate to future events or circumstances and therefore will be forward-looking statements within the meaning of the Securities and Litigation Reform Act of 1995. Words such as expect, believe, and anticipate are a few examples of words identifying a forward-looking statement. Forward-looking information is subject to various risks and uncertainties, which could significantly affect expected results. Risk factors noted in the presentation are also described in Zebra's 10-K for the year ended December 31, 2010, which is on file with the Securities and Exchange Commission. We expect to file 2011 10-K tomorrow.Now, it’s my privilege to introduce CEO, Anders Gustafsson. Anders Gustafsson – Chief Executive Officer Thank you, Doug. And let me also welcome all of you to our Investor Day presentation today. I very much appreciate you all spending a day with us to get to know our story a little better. Our performance, our strategy and how we are position to continue to drive significant revenue growth and create shareholder value. Some of you think of us as a barcode company, but we are so much more than that. We are involved in mobile applications, kiosk, we put barcodes, wristbands on patients. We have technology in some of the most leading edge retail stores and we track food from farm to fork, and we are committed to continuing to grow these universal applications. Investor Day’s create the unique opportunity for both investors and analysts to get to know us better and I know many of you has have know us very well and have been with us since our IPO, 20 years ago, but others are new to our story and the investment opportunity. So, the presentation is today have a little bit of something to help everyone, but there are few things I hope you will all takeaway from today’s presentations.
First a better understanding of Zebra’s financial and operational performance and some of our key achievements over the past several years. A key trends that are driving our business today and into the future, our strategic focus both near term and longer term to deliver profitable growth and significant value for shareholders. And finally a chance to meet more of our management team, our strong management team that will be responsible for implementing and executing on all our strategic imperatives.So, let me begin with our track record and some of our key achievements. So, as you can see the last few years have been very successful for Zebra, albeit a bit more turbulent and we expected. But we are in most companies, we are pulling back in the downturn, we were able to leverage our strong financial position to continue and maintain investments in the most promising opportunities for Zebra. So, at the bottom of the 2009 recession, we moved quickly to more offensive posture and that enabled us to accelerate market share gains and further consolidate our leadership position in the industry. And based on our strong execution of our strategies and these investments, we have been able to drive significant top and bottom line growth. And in addition, our financial strengths and flexibility has enabled us to return a significant amount of capital to our shareholders in the form of an aggressive buyback program. And our strong financial performance is a direct result of executing well on a number of operational objectives and very well defined strategy. As I mentioned since 2009, we have invested significantly in new product development, expanding into new geographies and further penetrating from attractive vertical markets and these investments have been very productive. We launched a record number of new products last year and our international revenues have grown by 47% over the past two years.
In 2011, we also divested two businesses, Navis and Proveo. After careful consideration, we determined that these two businesses were no longer tightly aligned with our going forward strategy. We therefore took our medicine and divested them, but we were able to obtain very attractive prices, which generated a capital gain of over $68 million for the company and we now have much more sharper focus on our core business.So, then we also have been able to totally transform our supply chain with the outsourcing of our operations – of our manufacturing operations. This is a project I am very proud of how we executed. Our supply chain today is much more robust, flexible, and cost effective, and this is a project that delivered between 3.5 and 4 percentage points of gross margin improvement and that's ahead of our original expectations. So, these investments combined with our strong execution has enabled us to continue to extend our leadership position in the industry and positioned us nicely for continued top and bottom line growth. So, let me now briefly talk about some of our core strengths and how they provide us with a competitive advantage. It might be a little bit unusual to start with a brand, but if the brand is the promise a company makes to its customers. Zebra is wholeheartedly succeeding in being a trusted partner. We routinely hear from our customers and channel partners across the world that our products are reliable. And if you're in charge of a supply chain for a billion dollar company, you know that reliability will also be on top of your priority list. Our customers also know that our products have a very rapid payback, and in these economic times, that is an increasingly attractive value proposition. But our leadership position ultimately stems from the strength of our product portfolio. And we have the broadest product portfolio of anybody in the industry ranging from barcode printing, card printers, supplies, passive and active RFID, and a variety of software and services solutions. So, we definitely have the product and solutions to enable our customers to improve their business operations and to increase visibility into their supply chains.
We also have the most extensive global customer base and the most comprehensive go-to-market channel network. So, let me put that in context for you. So, the vast majority of the Global Fortune 500 companies are our customers, the top 10 manufactures, the top 10 retailers, the top 10 transportation, and logistics companies.And finally, Zebra is in a very solid financial footing with high margins, low CapEx requirements. We have the ability to generate significant free cash flow and that gives us flexibility to both invest in new growth opportunities to ensure we stay ahead in technology and also to generate attractive returns for our shareholders. So these strengths position us well to capitalize on attractive new growth trends in the industry. So there are a number of important trends that have been supporting our growth historically and they continue to remain robust. First, as supply chains continue to stretch out and become more global. Companies are investing in technology such as barcoding to enable them to better manage their increasingly complex supply chains. Next, companies have always invested in productivity-enhancing technologies, but with the recent economic turmoils, there is a heightened interest in investing in solutions that create more flexible or automated operations to enable companies to better cope with the ups and downs of an economic cycle. And I believe this is a significant growth driver for Zebra. And China is the most visible example of the speed and scope by which emerging markets can become industrialized. But there are number of other countries in Southeast Asia, Latin America, Central and Eastern Europe. They are still in the early days of economic development. And as you show in China, barcoding goes hand-in-hand with industrialization. So, beyond these current trends, we're also starting to see a number of new and important trends that open up tremendous opportunities for Zebra to deliver much more value to our customers over the longer term.
First, with the saturation of wireless networks and the abundance of cheap bandwidth, there is an opportunity to leverage barcoding and other sensor technologies to provide much more real time visibility into supply chains. Next, there is about 35 billion devices connected to the internet today and that number is expected to grow to well over a trillion in the next several years. And every connected device creates an opportunity to provide a much richer set of information about critical events that are happening in supply chains. And our passive and active RFID solutions play an active role in this.Next, as data from these connected devices is growing exponentially, there are new tools, new analytical tools being developed to help process this information more timely, more quickly, and provide real insights to customers or companies to be able to in order to make them be able to take quicker and more relevant business decisions. And lastly cloud computing, it provides an instantly available and scalable architecture to capture, analyze, and process and store the avalanche of information coming from all these connected devices. And today, in our innovation fair over there, we have a nice application that really demonstrates this. We are taking a traditional handheld scanner connected it via Bluetooth to one of our mobile printers, that's running a price markdown application in the cloud. So, I believe that the convergence of these mutually reinforceable trends create the revolution really in how companies will leverage technology and information to create the step function change in the improvements of their operations. And I'm particularly excited about how well Zebra is positioned to participate in this revolution? And these trends help to create the smarter or connected global business community and that's the basis for our vision. So, as we look to the future, it's important to understand Zebra's vision and where we're heading. So, our vision is together with partners create the smarter, more connected global business community. I wish you remember this is a vision, so it's not limited to what we do today, but rather more focused on what our customers needs are in the future, solutions that enable the smarter, more connected global business community.
As you know, Zebra is a very partner-focused organization and we will continue to leverage our extensive partner network to continue to grow and develop our business. And our vision is tied to our mission. I am particularly proud of our mission statement as it makes it abundantly clear that we want to do nothing short of delighting our customers. We don't really want to satisfy them. We aspire to delight our customers with the ability to take smarter actions through innovative products and solutions that enable visibility. This really embodies everything we do today and what we aspire to do in the future.It explains how we extend – help our customers extend visibility into their supply chains by providing a digital voice to their assets and people. And this allows our customers to know what their assets are, where they are, and its conditions. It gives our customers the critical information they need to make quicker and smarter decisions. It enables our customers to see more and do more, which is our new tagline. So, how will we accomplish our vision and mission and how we drive revenue? So, when we think about the next several years, there are five core pillars to our growth strategy. You will see from each pillar that we have a comprehensive set of strategies and initiatives that are guiding our day-to-day activities and positions us for profitable growth and long-term success. Our first strategy is to further penetrate our traditionally largest geographic markets, North America and Western Europe. In these markets, we've already established very strong presence in manufacturing, retail, healthcare, but over last couple of years, we have also invested in market research, which has really reconfirmed the attractiveness of these markets to us. We are absolutely convinced that these markets continue to hold attractive growth opportunities for Zebra. And we intend to drive this growth by having the sharper focus on our competitive instincts and more emphasis on first, taking share in our traditional markets; second, expanding the range of new applications that we serve; and three, further penetrating attractive vertical markets.
And we will be executing on these opportunities by investing in new relationships with key influencers in our ecosystem such as ISVs and system integrators. By partnering with ISVs, we can bring together a much more – much broader set of hardware and software capabilities that we can combine in different ways to offer solutions to our customers that will truly delight them. We are also building a stronger high touch sales capability. This will enable us to forge much stronger ties with our most important strategic accounts. And this initiative should also enable us to generate more demand.Our next strategy is about accelerating growth in fast growing emerging markets. As I mentioned earlier in 2009 at the bottom of the recession, we moved to more offensive posture. We leveraged our financial strength to accelerate investments into a select number of high growth countries. We initially targeted China, India, Brazil, Turkey, and the Middle East and later on we added on Russia and few countries in Southeast Asia, but we took a fundamentally different approach to doing this how we run about this historically. Read the rest of this transcript for free on seekingalpha.com