Consolidated financial statements

Transcription

1 Consolidated financial statements 31st March 2008

2 DATALOGIC GROUP Consolidated Financial Report at March 31, 2008 GROUP STRUCTURE pag. 1 COMPOSITION OF CORPORATE GOVERNANCE BODIES pag. 2 MANAGEMENT REPORT pag. 3 QUARTERLY FINANCIAL STATEMENTS Balance Sheet Assets pag. 15 Balance Sheet Liabilities pag. 16 Profit & Loss Account pag. 17 Consolidated cash flow summary pag. 18 Statement of Changes in Equity pag. 19 NOTES TO THE CONSOLIDATATED FINANCIAL STATEMENTS Accounting standards and policies pag. 20 Balance Sheet information pag. 28 Information on P&L account pag. 46 ANNEXES

3 GROUP STRUCTURE Datalogic S.p.A. 90% 100% 100% 100% 100% Informatics Inc. (USA) Datalogic Automation Srl (Italia) Datalogic Shared Services Srl (Italia) Datalogic Mobile Srl (Italia) Datalogic Scanning Group Srl (Italia) Idec Datalogic Co Ltd (Giappone) 50% 100% Laservall S.p.A. (Italia) Datalogic Mobile Asia Ltd (HK) 100% 100% 100% Datalogic Scanning Slovakia Sro (Slovacchia) Datalogic Scanning Holdings, Inc. (USA) Datalogic 100% Automation Asia Ltd (HK) Laservall Asia Co Ltd (HK) 50% 100% Datalogic Mobile UK Ltd (UK) Datalogic Scanning, Inc. (USA) 100% 100% Datalogic Scanning GmbH (Germania) Datalogic 100% Automation UK Ltd (UK) Datalogic Automation Inc. (USA) 100% 100%. 100% Laservall Asia Futian Co Ltd (Cina) 100% 100% Datalogic Automation France SA (Francia) Datalogic Mobile Pty Ltd (Australia) Datalogic Mobile Inc. (USA) 100% Datalogic Scanning Sarl (Francia) 100% 100% Datalogic Scanning Eastern Europe GmbH (Germania) Datalogic Scanning Ltd (UK) Datalogic Automation Iberia SA (Spagna) Datalogic Holding AB (Svezia) Datalogic Automation AB (Svezia) 100% 100% Datalogic Automation Gmbh (Germania) 100% 100% 100% Datalogic Automation Pty Ltd (Australia) 100% Datalogic Automation BV (Olanda) 100% Datalogic Automation Gmbh (Austria) Datalogic Scanning SpA (Italia) Datalogic Scanning do Brasil Ltda (Brasile) Datalogic Scanning Pty Ltd (Australia) 100% 100% Datalogic Scanning KK (Giappone) 100% 100% Datalogic Scanning Singapore Pte. Ltd (Singapore) 100% 100% Datalogic Scanning de Mexico Srl (Messico) We would like to highlight that on the minority share equal to 10% of Informatics Inc., a member of the Board of Directors signed a put option contract (exercise date 15th August th August 2010). According to IAS this transaction was accounted for as a minority acquisition. 1

4 COMPOSITION OF CORPORATE GOVERNANCE BODIES Board of Directors (1) Romano Volta Chairman (2) Roberto Tunioli Vice Chairman and C.E.O. (3) Pier Paolo Caruso Director Alberto Forchielli Director Giancarlo Micheletti Director Umberto Paolucci Director Elserino Piol Director Gabriele Volta Director Valentina Volta Director John O Brien Director Angelo Manaresi Director Giovanni Tamburi Director Lodovico Floriani Director Board of Statutory Auditors (4) Stefano Romani President Massimo Saracino Standing auditor Mario Stefano Luigi Ravaccia Standing auditor Patrizia Passerini Alternate auditor Stefano Biordi Alternate auditor Indipendent auditing firm PricewaterhouseCoopers SpA (1) The Board of Directors will remain in office until the shareholders meeting that approves financial statements for the year ending on December 31st 2008 (2) Powers of legal representation of the company vis-à-vis third parties (3) Powers of legal representation of the company vis-à-vis third parties (4) The Board of Statutory Auditors will remain in office until the shareholders meeting that approves financial statements for the year ending on December 31st

5 DATALOGIC GROUP MANAGEMENT REPORT AT 31 MARCH 2008 REPORT ON OPERATIONS Shareholders, The quarterly report for the period ending on 31 March 2008, which we submit to you for review, has been prepared in compliance with the requirements indicated in the instructions accompanying the Regulation issued by Borsa Italiana S.p.A. More specifically, the consolidated financial statements apply the approach set forth by the international accounting standards (IAS/IFRS) adopted by the European Union. OPERATING AND FINANCIAL RESULTS The following table summarises the Datalogic Group s key operating and financial highlights at 31 March 2008, comparing them with the figures from the same period 2007: Datalogic Group 31/03/ /03/2007 Change % Change ( 000) Total revenues 96, ,065-8, % EBITDA (*) 11,581 14,006-2, % % of total revenues 12.1% 13.5% Group net profit/loss 4,296 4, % % of total revenues 4.5% 4.1% Net Financial Position (NFP) -69,390-54,115-15, % (*) EBITDA is a performance indicator not defined under IFRS. However, Datalogic s management uses it to monitor and assess the company s operating performance as it is not influenced by the volatility due to the various valuation criteria used to determine taxable income, by the total amount and nature of the capital involved or by the related depreciation and amortization policies. We define it as Profit/loss for the period before amortization of tangible and intangible assets, non-recurring costs, financial income and expenses and income taxes. Consolidated quarterly report at 31/03/2008 Management Report 3

6 At 31 March 2008, the Datalogic Group recorded revenues of million (vs million in the first three months of 2007), detailed as follows: million in revenue from the sale of products; million in revenues from services. These revenues decreased by 7.7% over the same period of the previous year. At constant Euro/Dollar exchange rates, the decrease would have been 3%. The first quarter 2007 was particularly positive in terms of revenue, since the Company had planned start up of a major reorganization on 2 April and, to reduce to a minimum the number of possible customer disservices, numerous orders originally anticipated for April were brought forward to March. In April 2008, sales were more than 29 million, up by 37% with respect to the 21.2 million earned in the same month in Overall, sales revenue reported in the first four months of the year came to 125 million, essentially in line with the 126 million earned in the same year of At constant Euro/US dollar exchanges, growth would have been 5%. Group EBITDA was million, for a margin on total revenues of 12.1%. The decrease over the same period of the previous year totals million of revenue (-17.3% over the million of revenue of 31 March 2007). Net Group profit at 31 March 2008 was million (in line with the million at 31 March 2007) Consolidated quarterly report at 31/03/2008 Management Report 4

7 ANALYSIS OF RECLASSIFIED INCOME STATEMENT DATA The following table shows the main income statement items for the Datalogic Group compared with the same period in the previous year: ( 000) 31/03/ /03/2007 change % change TOTAL REVENUES 96, % 104, % (8,048) -7.7% Cost of sales (52,208) -54.4% (58,051) -55.8% 5, % Gross profit 43, % 46, % (2,205) -4.8% Other revenues (*) % % (75) -15.8% R&D costs (6,081) -6.3% (7,007) -6.7% % Distribution expenses (19,181) -20.0% (19,862) -19.1% % General & administrative expenses (9,702) -10.1% (7,303) -7.0% (2,399) 32.8% Other operating costs (*) (570) -0.6% (1,373) -1.3% % Earnings before non recurring income and costs and amortization from acquisitions (EBITANR) 8, % 10, % (2,269) -20.7% Non-recurring costs and revenues 0 0.0% (1,225) -1.2% 1, % Depreciation & amortization due to (962) -1.0% (1,054) -1.0% % acquisitions (**) Operating result (EBIT) 7, % 8, % (952) -11.0% Net financial income (expenses) (1,223) -1.3% (972) -0.9% (251) 25.8% Subsidiaries' earnings/(losses) % % % Foreign exchange earnings/(losses) % (199) -0.2% 241 no data Pre-tax profit 6, % 7, % (910) -12.0% Income taxes (2,361) -2.5% (3,205) -3.1% % Net profit/(loss) for period 4, % 4, % (66) -1.5% Minority interests' share of net profit 0.0% (46) 0.0% % GROUP NET PROFIT/LOSS 4, % 4, % (20) -0.5% Depreciation of property plant & equipment (1,866) -1.9% (2,109) -2.0% % Amortization of intangible assets (1,041) -1.1% (954) -0.9% (87) 9.1% EBITDA 11, % 14, % (2,425) -17.3% (*) The items Other revenues and Other operating costs at 31 March 2007 have been reclassified to make them homogenous at 31 March Details of these reclassifications are included in the attachment. (**) This item includes extraordinary costs for amortization arising from acquisitions of the companies Laservall, Informatics, Datalogic Scanning INC, and Datalogic Mobile INC. In order to assure better representation of the Group s ordinary profitability, we have preferred in all tables in this management report to show operating result before the impact of non-recurring costs/income and of depreciation and amortization due to acquisitions, which we have called EBITANR (Earnings before interests, taxes, acquisition and not recurring. To permit comparison with financial statements, we have in any case included a further intermediate profit margin (called Operating result ) that includes non-recurring costs/revenue and depreciation and amortization due to acquisitions and matches the figure reported in the financial statements. Consolidated quarterly report at 31/03/2008 Management Report 5

8 Depreciation & amortization arising from acquisitions (equal to 962 thousand) are made up of: thousand pertaining to Laservall, thousand pertaining to Informatics, thousand pertaining to Datalogic Scanning INC thousand pertaining to Datalogic Mobile INC At 31 March 2008, operating costs included 652 thousand of leaving incentives which were not classified under "non-recurring costs and revenue" since they were the result of the normal movement of managers and not of extraordinary reorganization/restructuring operations. EBIT came to million, for a margin on sales of 8%, down by 11% over the same period of the previous year. The table below shows the comparison between the key economic figures for the first quarter 2008 and the same period in st quarter st quarter 2007 change % change TOTAL REVENUES 96, % 104, % -8, % EBITDA 11, % 14, % -2, % EBITANR 8, % 10, % -2, % OPERATING RESULT (EBIT) 7, % 8, % % Consolidated quarterly report at 31/03/2008 Management Report 6

9 PERFORMANCE BY BUSINESS Segment information A business segment is a group of assets and operations the aim of which is to provide products or services and which is subject to risks and returns that differ from those of other business segments. A geographical segment refers to a group of assets and operations that provides products and services within a particular economic environment and is subject to risks and returns that are different from those of segments operating in other economic environments. Business segments are considered as primary (see IAS 14), while geographical segments have been considered secondary. Our segment information reflects the Group s internal reporting structure. The amounts used for intersegment transfers of components or products are the Group s effective intercompany selling prices. Segment information includes both directly attributable costs and those allocated on a reasonable basis. Business segments In April 2007, the Group completed a restructuring project which, among other things, involved the reorganization of Datalogic s segments. Up to 31 March 2007, the business segments of significance for information purposes were as follows: Data Capture: this is Datalogic's traditional business and includes the development, production and sale of the following products: HHR (hand-held readers), USS (fixed scanners for the industrial market) and MC (mobile computers), and fixed scanners for the retail market. Business Development: this division includes the business areas with high development potential within the scope of Datalogic s traditional offer (radio frequency scanners or RFID and self scanning solutions) or those representing adjacent areas to the Group s traditional areas consisting of industrial marking products and the distribution of products for automatic identification. These latter two activities are operated by the subsidiaries Laservall S.p.A. and Informatics Inc. As from April 2007, following completion of the Group s reorganization plan, its business segments are as follows: Mobile includes the Mobile Computers (MC) product lines Automation includes the product lines related to: fixed scanners for the industrial market (USS), industrial marking products and radio frequency scanners or RFID. Scanning includes the product lines related to: HHR (hand-held readers) and fixed scanners for the retail market. Business Development includes the remaining product lines, i.e. the self-scanning solutions and the distribution of products for automatic identification. These business segments correspond to the Group s new operating divisions. Following the significant impact resulting from the restructuring process, it has not been possible to make a reliable classification of the final figures for the first quarter 2007 and the previous period based on the new business segments. Consolidated quarterly report at 31/03/2008 Management Report 7

10 Consequently, segment information has been divided as follows: - the economic data for the first quarter of the financial year of the new Mobile, Automation, Scanning and Business Development business segments; - in addition, the data in the first three months of 2008, reclassified based on the previous structure (Data Capture and Business Development) and compared to the results achieved during the same period in 2007 (as they are uniform), in order to ensure comparison. The economic results of the primary segments, revised based on the new business structure, for the period January to March 2008 are as follows: Mobile Automation Business Dev. Scanning Datalogic S.p.A. (*) Adj. total group External sales 20,075 19,131 11,548 45, ,017 Intersegment sales 1, ,196 (7,725) 0 TOTAL REVENUES 21,955 19,678 11,552 45,361 5,196 (7,725) 96,017 Cost of goods sold (12,365) (10,256) (6,140) (26,175) (1) 2,729 (52,208) Gross profit 9,590 9,422 5,412 19,186 5,195 (4,996) 43,809 % of revenues 43.7% 47.9% 46.8% 42.3% 100.0% 64.7% 45.6% Others revenues (568) 399 R&D expenses (1,029) (1,791) (196) (2,917) (150) 2 (6,081) Distribution expenses (5,131) (4,432) (2,367) (9,749) (1) 2,499 (19,181) General expenditure (2,290) (2,870) (823) (3,561) (3,496) 3,338 (9,702) Other operating costs (85) (157) (18) (224) (25) (61) (570) Total operating costs (8,535) (9,250) (3,404) (16,451) (3,672) 5,778 (35,534) % of revenues -38.9% -47.0% -29.5% -36.3% -70.7% -74.8% -37.0% EBITANR 1, ,020 2,876 1, ,674 % of revenues 5.4% 3.3% 17.5% 6.3% 33.4% -2.8% 9.0% Extraordinary revenues Amortization arising from acquisitions (88) (324) (134) (416) 0 0 (962) Operating result ( EBIT) 1, ,886 2,460 1, ,712 % of revenues 5.0% 1.7% 16.3% 5.4% 33.4% -2.8% 8.0% Net financial income (expenses (1,181) Net profits of associated 126 companies Income taxes (2,361) Net profit/loss 4,296 % of revenues 4.5% (*) This column also includes the costs and revenues relating to Datalogic Shared Services S.r.l. (respectively for 13 thousand and 7 thousand), no longer operational since 10 January 2008 and currently in the process of liquidation. Consolidated quarterly report at 31/03/2008 Management Report 8

11 The economic results of the primary segments at 31 March 2008, presented according to the previous structure, compared with the results at 31 March 2007, are as follows: Data Capture Business Development Costs/Revenues not attributed Adjustments Consolidated segment 31/03/08 31/03/07 31/03/08 31/03/07 31/03/08 31/03/07 31/03/08 31/03/07 31/03/08 31/03/07 External sales 74,690 83,431 21,327 20, , ,065 Intersegment sales 2, (2,283) (49) 0 0 Total revenues 76,973 83,454 21,327 20, (2,283) (49) 96, ,065 Cost of goods sold (40,871) (47,440) (11,337) (10,611) (52,208) (58,051) Intersegment cost of goods sold (1,822) (10) 1, Gross profit 36,102 36,014 8,168 10, (461) (39) 43,809 46,014 % of revenues 46.9% 43.2% 38.3% 48.6% 20.2% 79.6% 45.6% 44.2% Others revenues (24) (45) R&D expenses (5,020) (5,949) (1,061) (1,058) (6,081) (7,007) Distribution expenses (16,062) (16,384) (3,324) (3,478) 205 (19,181) (19,862) General (5,795) (4,157) (2,051) (1,494) (2,136) (1,692) (9,702) (7,303) expenditure Other operating costs (370) (540) (200) (107) (726) (570) (1.373) Total operating cost (27,247) (27.030) (6,636) (6,137) (2,136) (2,418) (35,534) (35.545) % of revenues -35.4% -32,4% -31.1% -29.7% -21.2% -81.6% -37.0% -34,2% EBITANR 9,230 9,415 1,580 3,990 (2,136) (2,418) 0 (44) 8,674 10,943 % of revenues 12.0% 11.3% 7.4% 19.3% 0.0% 89.8% 9.0% 10.5% (Allocable nonrecurring costs/revenues 0 (1,225) (1,225) Amortization due to acquisitions (505) (577) (457) (477) 0 0 (962) (1,054) OPERATING RESULT (EBIT) 8,725 7,613 1,123 3,513 (2,136) (2,418) 0 (44) 7,712 8,664 % of revenues 11.3% 9.1% 5.3% 17.0% 0.0% 89.8% 8.0% 8.3% Net financial income (expenses) (1,181) (1,171) (1,181) (1,171) Share of associates profit Income taxes (2,361) (3,205) (2,361) (3,205) NET PROFIT/LOSS 8,725 7,613 1,123 3,513 (5,552) (6,720) 0 (44) 4,296 4,362 % of revenues 11.3% 9.1% 5.3% 17.0% 0.0% 89.8% 4.5% 4.2% Third party gains and losses (46) 0 (46) GROUP NET PROFIT/LOSS 8,725 7,613 1,123 3,513 (5,552) (6,766) 0 (44) 4,296 4,316 % of revenues 11.3% 9.1% 5.3% 17.0% 0.0% 89.8% 4.5% 4.1% Consolidated quarterly report at 31/03/2008 Management Report 9

12 The cost of goods sold decreased as a percentage of sales from 55.8% in the same period in 2007 to 54.4% in The decrease reported is the result of a percentage contraction of the cost of goods sold for the Data Capture Division (decreasing from 56.9% of sales, at 31 March 2007, to 53.1% of the same period 2008) and an increase in the cost of goods sold for the Business Development Division (decreasing from 51.4% of sales at 31 March 2007, to 61.7% in the same period 2008). The contribution margin increased from million (at 31 March 2007) to million at 31 March 2008 with a decrease of 4.8%. Operating costs attributable to the divisions amounted to million at 31 March 2008 (increasing by 2% from the million reported for the same period 2007, of which million were incurred by the Data Capture Division and million refer to the Business Development Division (+8% compared to million reported in 2007), gross of interdivisional operating costs (- 485 thousand). In particular, the Data Capture Division reported: a 15.6% decrease in research and development costs, which totalled 5.02 million at 31 March 2008, equal to 6.5% of total sales for the division. a 2% decrease in distribution expenses from the million of the first quarter of 2008 compared to the million at 31 March a 39% increase in allocable G&A costs, which amounted to million in 2008 vs million reported a year earlier. This increase is attributed largely to expenses for consulting and the new classification of the management incentive plan. In particular, the Business Development Division reported: a slight increase in research and development costs, which totalled million at 31 March 2008, equal to 5% of total sales for the division; a decrease in distribution expenses from the million of the first quarter of 2008 to million reported in the same quarter 2007; an increase of 37.3% in attributable general expenses, amounting to million during the period under review, compared to million recorded in the previous period. This increase is due chiefly to the costs incurred for leaving incentives in the amount of 347 thousand. EBITDA (without considering general expenses and other non-attributable operating costs), came to 9.23 million for the Data Capture Division, slightly down compared with the million recorded in EBITDA of the Business Development Division was 1.58 million, down against the 3.99 million reported in Segment results do not include the million for general, non-attributable costs/revenues ( million at 31 March 2007). Consolidated quarterly report at 31/03/2008 Management Report 10

13 BALANCE SHEET BY BUSINESS SEGMENT The balance sheet by business segment presented according to the new structure is as follows: Mobile Automation Business Dev. Scanning Datalogic S.p.A. (*) Adjustments Consolidated segment /000 Mar-08 Dec-07 Mar-08 Dec-07 Mar-08 Dec-07 Mar-08 Dec-07 Mar-08 Dec-07 Mar-08 Dec-07 Mar-08 Dec-07 Attributed assets Interests in subsidiaries booked at equity Not attributed assets Total assets Attributed liabilities Nonattributed liabilities Equity Total liabilities Amort, and deprec. (net of amort. arising from acquisitions) 61,740 62,009 61,241 61,701 19,273 20, , ,987 45,843 52,309 (34,710) (42,285) 318, , ,632 1,472-3,636 3, , ,861 (157,497) (157,766) 1,632 1,472 74,043 86,306 61,740 62,009 62,873 63,173 19,273 20, , , , ,170 (192,207) (200,051) 394, ,392 23,498 22,363 20,519 24,918 7,833 9,427 53,497 55,375 11,007 13,018 (32,464) (34,736) 83,890 90, , ,545 28,350 29,335 39,917 40,352 8,712 9,372 75,752 77, , ,283 (156,861) (157,083) 163, ,482 51,848 51,698 60,436 65,270 16,545 18, , , , ,301 (189,325) (191,819) 394, , NO DATA 730 NO DATA 81 NO DATA 1,186 NO DATA 268 NO DATA 5 NO DATA 2,907 3,063 (*) This column also includes the costs and revenues relating to Datalogic Shared Services Srl, no longer operational since 10 January 2008 and currently in the process of liquidation. Consolidated quarterly report at 31/03/2008 Management Report 11

14 ANALYSIS OF FINANCIAL AND CAPITAL DATA At 31 March 2008, our net financial position was negative by million and featured the following breakdown: Datalogic Group 31/03/ /12/ /03/2007 (Euro/000) A. Cash and banks 49,598 54,669 75,182 B. Other liquid assets b1. Restricted cash C. Securities held for trading c1. Current 0 0 c2. Non-current D. Cash & Cash equivalents (A) + (B) + (C) 50,072 55,107 75,552 E. Current financial receivables F. Other current financial assets f1. Hedging transactions G. Bank overdrafts H. Current portion of the non-current debt 23,863 26,006 29,805 I. Other current financial liabilities 1, i1. Hedging transactions 1, J. Current financial debt (G) + (H) +(I) 25,132 26,692 29,933 K. Current financial debt, net (J) - (D) - (E) - (F) (25,216) (28,792) (45,825) L. Non-current bank borrowing 91,292 87,845 97,443 M. Bonds issued 0 0 N. Other non-current liabilities 3,314 3,491 2,497 n1. Financial liabilities vs BoD member 3,314 3,491 2,497 O. Non-current financial debt (L) + (M) + (N) 94,606 91,336 99,940 P. Net financial debt (K) + (O) 69,390 62,544 54,115 The net financial position at 31 March 2008 was million and has worsened compared with 31 December 2007 ( million) and versus 31 March 2007 ( ). This decrease (equal to million) is primarily due to a couple of events that took place in the quarter that have more than offset the cash flow generated by current operations: - the purchase of treasury shares for million (treasury shares in the portfolio amount to million at 31 March 2008 and are not included in the net financial position) - the first installment of the managerial incentive plan was distributed in the amount of 4.9 million. The Group also made investments of million. Working capital at 31 March 2008 came to million and increased by million with respect to 31 December 2007 ( million) and million vs. 31 March 2007 ( million). Consolidated quarterly report at 31/03/2008 Management Report 12

15 The reconciliation between the parent company's net equity and profit and the corresponding consolidated amounts is shown below: 31 March December 2007 Total net equity Result of the period Total net equity Result of the period Datalogic S.p.A. net equity and profit 164, ,704 7,840 Difference between consolidated companies' net equity and their carrying value in Datalogic S.p.A.'s statement; effect of equitybased valuation 6,980 9,714 9,962 23,555 Reversal of dividends 0 (5,785) 0 (9,017) Laservall acquisition (4,856) (324) (4,532) (1,295) Amortization of new Datalogic AB consolidation difference (239) (239) Elimination of capital gain on sale of business branch (2,199) 0 (2,199) (1,980) Effect of eliminating intercompany transactions (2,575) (170) (2,405) (560) Sundry income (247) 28 (275) 117 Transfer of Know How (2,392) 357 (2,749) (2,749) Minec goodwill impairment (254) (51) (203) (203) Deferred income tax 4,225 (193) 4,418 2,375 Group portion of net equity 163,130 4, ,482 18,083 Minority interests Total net equity 163,130 4, ,482 18,083 FINANCIAL MANAGEMENT Financial management was negative for million and the result is detailed as follows: ( 000) 31/03/2008 Financial income/expenses (1,110) Net foreign exchange losses 42 bank charges (137) Sundry income 24 Total net financial expenses (1,181) Consolidated quarterly report at 31/03/2008 Management Report 13

16 OUTLOOK FOR CURRENT YEAR AND SUBSEQUENT EVENTS The company believes that in light of the market performance and the company plans underway, this year should bring better profit and earnings than last year which will be in line with company plans. Continuation of the Euro / US dollar exchange rate at 1.5 will lead to a decrease in Group revenue with respect to the budget (approximately 35% of revenue is expressed in US dollars and the exchange rate used for the budget was 1.36) but without negative effects on expected company profitability (as part of the cost of goods sold and operating costs are also expressed in US dollars). On 20 February 2008, the General Meeting of Datalogic S.p.A. approved a decrease in share capital by voiding 5,409,981 treasury shares (equal to 8.472% of the share capital) held by the Company. As from 27/05/2008, the transaction will lead to a decrease in the share capital of 2,813, and release of unavailable reserves for own shares for an amount of 33,403, SECONDARY OFFICES Pursuant to the aforementioned reorganization, as of April the parent company will no longer have secondary locations. Consolidated quarterly report at 31/03/2008 Management Report 14

17 DATALOGIC S.p.A. CONSOLIDATED BALANCE SHEET Note Euro/000 ASSETS Euro/000 Euro/000 A) NON-CURRENT ASSETS ( ) ) Tangible non-current assets Land Buildings Other tangible assets Assets in progress and payments on account ) Investment property ) Intangible non-current assets Goodwill Development costs Other intangible assets ) Equity interests in associate companies ) Available-for-sale financial assets (non-current) Equity investments Treasury stock Securities ) Trade and other receivables ) Deferred tax credits from parent company 8) Crediti tributari B) CURRENT ASSETS ( ) ) Inventories Raw & auxiliary materials plus consumables Work in progress and semiprocessed goods Finished products and goods for resale ) Job-order work in progress ) Trade and other receivables Trade receivables Within 12 months After 12 months 7 32 Amounts receivable from associates Amounts receivable from subsidiaries 7 Amounts receivable from parent company Amounts receivable from related parties Other receivables - Accrued income/prepaid expenses ) Tax credits from parent company ) Available-for-sale financial assets (current) Securities Loans to subsidiaries ) Hedging instruments ) Cash & cash equivalents TOTAL ASSETS (A+B)

18 DATALOGIC S.p.A. CONSOLIDATED BALANCE SHEET LIABILITIES Note Euro/ Euro/ Euro/000 A) TOTAL NET EQUITY ( ) ) Share capital ) Reserves ) Retained earnings/(losses carried forward) ) Profit/(loss) for period ) Minority interests B) NON-CURRENT LIABILITIES ( ) ) Borrowing from related parties ) Tax payables ) Deferred tax liabilities ) Employee severance indemnity and retirement provision ) Long-term provisions for risks and expenses ) Other non-current liabilities C) CURRENT LIABILITIES ( ) ) Trade and other payables Trade payables Within 12 months After 12 months 16 Amounts payable to associates Amounts payable to parent company 16 0 Amounts payable to related parties Accrued liabilities and deferred income Other current payables ) Taxes payable from parent company ) Short-term provisions for risks and expenses ) Hedging instruments ) Short-term borrowing TOTAL LIABILITIES (A+B+C)

19 DATALOGIC S.p.A. CONSOLIDATED PROFIT & LOSS ACCOUNT Note Euro/ Euro/ Euro/000 1) TOTAL REVENUES Revenues from sale of products Revenues from services ) Cost of goods sold of which non-recurring (*) GROSS PROFIT (1-2) ) Other operating revenues of which non-recurring (*) ) R&D expenses of which non-recurring (*) ) Distribution expenses of which non-recurring (*) ) General & administrative expenses of which non-recurring (*) of which amort. pertaining to acquisitions (*) ) Other operating expenses of which non-recurring (*) Total operating costs ( ) OPERATING PROFIT ) Financial income ) Share of associate companies' profits PRE-TAX PROFIT/(LOSS) Taxes NET PROFIT FOR PERIOD Minority interests' share of net profit GROUP NET PROFIT Earning per share (Euro) 22 0,0732 0,0690 0,2938 Diluted earning per share (Euro) 22 0,0732 0,0688 0,

20 DATALOGIC S.p.A. CONSOLIDATED CASH FLOW STATEMENT Euro/ Euro/000 Pre-tax profit Depreciation & amortisation Employee severance indemnity provision Bad debt provisions Net financial costs/revenues included foreign exchange Write-down of financial assets Cash flow from operating before change in working capital Trade receivables Inventories Other current assets Other medium-/long-term assets Trade payables Other current liabilities Other medium-/long-term liabilities Provisions for risks and expenses Trade foreign exchange Taxes Interests and bank expenses Operating cash flow (A) (Increase)/decrease in intangible non-current assets net of exchange rate (Increase)/decrease in tangible non-current assets net of exchange rate Exchange rate Unconsolidated equity investments Investment cash flow (B) LT/ST financial receivables LT/ST financial payables and derivates Financial exchange rate Purchase tresury share Reserves Capital increase with exercise stock options 736 Capital increase with issue of new shares Dividend distribution Finance cash flow ( C) Change in net financial position (A+B+C) Short term net financial position at beginning of period Short-term net financial position at end of period

21 DATALOGIC S.p.A. STATEMENT OF CHANGES IN NET EQUITY Description Share capital cash flow hedge reserve Translation reserve Other reserves Financial liabilities reserve Total Other reserves Consolidation reserve Retained earnings Merger surplus Net profit for previous years Capital grant reserve Legal reserve Treasury share reserve IFRS reserve Total Net profit for period Net equity Minority Equity Profit allocation Capital increase Translation reserve Increase in IFRS reserve Sale of treasury shares Fair value adjustment Capital increase charges Extraordinary dividend - - Other changes Net profit as at Profit allocation Capital increase Translation reserve Increase in IFRS reserve Sale of treasury shares Fair value adjustment Capital increase charges Extraordinary dividend Other changes Net profit as at Profit allocation Capital increase Translation reserve Increase in IFRS reserve Sale of treasury shares Fair value adjustment Capital increase charges Extraordinary dividend Other changes Net profit as at

22 INTRODUCTION Datalogic Group S.p.A. (hereinafter Datalogic, the Parent company or the "Company ) is a company formed under Italian law. The consolidated quarterly report for the period ending on 31 March 2008 comprises Datalogic S.p.A. and its subsidiaries (hereinafter defined as "the Group") and the relevant share of associate companies' profits. The Group deals with the production and marketing of handheld barcode readers, fixed scanners for the industrial market, mobile computers and fixed scanners for the retail market. The company also deals with radiofrequency scanners (RFID), self scanning solutions and products for industrial marking and for the distribution of products for automatic identification. The parent company is a joint-stock corporation listed on the Star section of the Milan Stock Exchange and is based in Italy. The address of its registered headquarters is: Via Candini 2, Lippo di Calderara (BO), Italy. The parent company is a subsidiary of Hydra S.p.A., also based in Bologna, which is in turn controlled by the Volta family. This report was approved by the Board of Directors on 14 May ACCOUNTING STANDARDS AND POLICIES (a) Accounting standards The consolidated quarterly report at 31 March 2008 has been prepared in an abridged form in compliance with IAS 34 "Interim Financial Reporting", providing the summary notes set forth by the international accounting standard, integrated where possible to provide a higher level of disclosure where necessary. The present quarterly report must be read jointly with the consolidated financial statements and the respective explanatory notes at 31 December (b) Basis of presentation The accounting standards adopted in preparing the financial statements for the year comply with those adopted at 31 December 2007, which should be referred to for additional information. However, it is important to remember that the process of drafting and homologating International Accounting Standards led the Group to redraft some of its documents and/or introduce new documents in the last months of 2007 and the first three months of 2008 that would subsequently enter into force at the closure of the financial statements at 31 March 2008 which, despite having already entered into force, are not mandatorily applicable for drafting this quarterly report. The table below demonstrates the new documents and changes to documents existing and issued in the last months of 2007 and in the early months of 2008 and their impact on the quarterly report as per IAS 8: Consolidated quarterly report at 31/03/2008 Explanatory notes 20

23 Document Title Description and impact on the company IFRS 8 Operating Segments Replaces IAS 14 Segment Reporting Requires entities to base segment reporting on information that is used by management to make operating decisions (internal reports for performance analysis) IAS 23 Borrowing costs Removal of the option whereby entities can immediately recognize as an expense borrowing costs that relate to assets that take a substantial period of time to get ready for use or sale. IFRIC 13 Customer loyalty programme IFRIC 14 The Limit on a Defined Benefit Asset Minimum Funding Requirements and their Interaction IFRIC 13 forbids recognition of provision for liabilities against a customer loyalty programme. Only in cases when the cost of meeting the obligation exceeds deferred revenue does the company have an onerous contract against which it must recognise an additional liability based on IAS 37. IFRIC 14 defines in which circumstances companies can recognise a pensionfund asset; specifies in which cases a minimum funding requirement reduces pension-fund assets; and indicates in which cases a minimum funding requirement requires recognition of a liability and how this liability must be measured Effective date 30 November 2006 Date of application by the company 1 January March January July 2008 Not applicable to the Group 1 January January 2008 Consolidated quarterly report at 31/03/2008 Explanatory notes 21

24 Segment information Segment information A business segment is a group of assets and operations the aim of which is to provide products or services and that is subject to risks and returns that are different from those of other business segments. A geographical segment refers to a group of assets and operations that provides products and services within a particular economic environment and is subject to risks and returns that are different from those of segments operating in other economic environments. We consider business segments to be primary (see IAS 14), while geographical segments have been considered secondary. Our segment information reflects the Group s internal reporting structure. The amounts used for intersegment transfers of components or products are the Group s effective intercompany selling prices. Segment information includes both directly attributable costs and those reasonably allocable. Business segments In April 2007, the Group completed a restructuring project which, among other things, involved the reorganization of Datalogic s segments. Up to 31 March 2007, the business segments of significance for information purposes were as follows: Data Capture: this is Datalogic's traditional business and includes the development, production and sale of the following products: HHR (hand-held readers), USS (fixed scanners for the industrial market) and MC (mobile computers), and fixed scanners for the retail market. Business Development: this division includes the business areas with high development potential within the scope of Datalogic s traditional offer (radio frequency scanners or RFID and self scanning solutions) or those representing adjacent areas to the Group s traditional areas consisting of industrial marking products and the distribution of products for automatic identification. These latter two activities are operated by the subsidiaries Laservall S.p.A. and Informatics Inc. As from April 2007, following completion of the Group s reorganization plan, its segments are as follows: Mobile includes the Mobile Computers (MC) product lines. Automation includes the product lines related to: fixed scanners for the industrial market (USS), industrial marking products and radio frequency scanners or RFID. Scanning includes the product lines related to: HHR (hand-held readers) and fixed scanners for the retail market. Business Development includes the remaining product lines, i.e. the self scanning solutions and the distribution of products for automatic identification. These business segments correspond to the Group s new operating divisions. Following the significant impact resulting from the restructuring, it has not been possible to make a reliable classification of the final figures for the first quarter 2007 and the previous period based on the new business segments. Consequently, segment information with reference to the business sector segment has been divided as follows: Consolidated quarterly report at 31/03/2008 Explanatory notes 22

25 - the economic data for the first quarter of the financial year of the new Mobile, Automation, Scanning and Business Development business segments; - in addition, the data in the first three months of 2008, reclassified based on the previous structure (Date Capture and Business Development) and compared to the results achieved during the same period in 2006 (as they are uniform), in order to ensure the principle of comparability. The economic results for the primary segments, revised based on the new business structure, for the first quarter 2008 are as follows: Mobile Automation Business Dev. Scanning Datalogic S.p.A. (*) Adj. TOTAL Group External sales 20,075 19,131 11,548 45, ,017 Infrasegment sales 1, ,196 (7,725) 0 TOTAL REVENUES 21,955 19,678 11,552 45,361 5,196 (7,725) 96,017 Cost of sales (12,365) (10,256) (6,140) (26,175) (1) 2,729 (52,208) Gross profit 9,590 9,422 5,412 19,186 5,195 (4,996) 43,809 % of revenues 43.7% 47.9% 46.8% 42.3% 100.0% 64.7% 45.6% Others revenues (568) 399 R&D expenses (1,029) (1,791) (196) (2,917) (150) 2 (6,081) Distribution expenses (5,131) (4,432) (2,367) (9,749) (1) 2,499 (19,181) General expenditure (2,290) (2,870) (823) (3,561) (3,496) 3,338 (9,702) Other operating costs (85) (157) (18) (224) (25) (61) (570) Total operating costs (8,535) (9,250) (3,404) (16,451) (3,672) 5,778 (35,534) % of revenues -38.9% -47.0% -29.5% -36.3% -70.7% -74.8% -37.0% Ordinary operating income (EBITANR) 1, ,020 2,876 1, ,674 % of revenues 5.4% 3.3% 17.5% 6.3% 33.4% -2.8% 9.0% Non-recurring costs and revenues Amortization arising from acquisitions (88) (324) (134) (416) 0 0 (962) Operating result ( EBIT) 1, ,886 2,460 1, ,712 % of revenues 5.0% 1.7% 16.3% 5.4% 33.4% -2.8% 8.0% Net financial income (expenses) (1,181) Net profits of associated companies 126 Income taxes (2,361) Net profit/loss 4,296 % of revenues 4.5% (*) This column also includes the costs and revenues relating to Datalogic Shared Services S.r.l. (respectively for 13 thousand and 7 thousand), no longer operational since 10 January 2008 and currently in the process of liquidation. Consolidated quarterly report at 31/03/2008 Explanatory notes 23

26 The economic results of the primary segments at 31/03/2008, presented according to the previous structure, compared with those at 31/03/2007, are as follows: Data Capture Business Development Costs/Revenues not attributed Adjustments Consolidated segment 31/03/08 31/03/07 31/03/08 31/03/07 31/03/08 31/03/07 31/03/08 31/03/07 31/03/08 31/03/07 External sales 74,690 83,431 21,327 20, , ,065 Intersegment sales 2, (2,283) (49) 0 0 TOTAL 76,973 83,454 21,327 20, (2,283) (49) 96, ,065 REVENUES Cost of goods sold (40,871) (47,440) (11,337) (10,611) (52,208) (58,051) Intersegment cost of goods sold (1,822) (10) 1, Gross profit 36,102 36,014 8,168 10, (461) (39) 43,809 46,014 % of revenues 46.9% 43.2% 38.3% 48.6% 20.2% 79.6% 45.6% 44.2% Others revenues (24) (45) R&D expenses (5,020) (5,949) (1,061) (1,058) (6,081) (7,007) Distribution expenses (16,062) (16,384) (3,324) (3,478) 205 (19,181) (19,862) General (5,795) (4,157) (2,051) (1,494) (2,136) (1,692) (9,702) (7,303) expenditure Other operating costs (370) (540) (200) (107) (726) (570) (1.373) Total operating cost (27,247) (27.030) (6,636) (6,137) (2,136) (2,418) (35,534) (35.545) % of revenues -35.4% -32,4% -31.1% -29.7% -21.2% -81.6% -37.0% -34,2% Ordinary operating income (EBITANR) 9,230 9,415 1,580 3,990 (2,136) (2,418) 0 (44) 8,674 10,943 % of revenues 12.0% 11.3% 7.4% 19.3% 0.0% 89.8% 9.0% 10.5% Allocable nonrecurring costs/revenues 0 (1,225) (1,225) Amortization due to acquisitions (505) (577) (457) (477) 0 0 (962) (1,054) OPERATING RESULT (EBIT) 8,725 7,613 1,123 3,513 (2,136) (2,418) 0 (44) 7,712 8,664 % of revenues 11.3% 9.1% 5.3% 17.0% 0.0% 89.8% 8.0% 8.3% Net financial income (expenses) (1,181) (1,171) (1,181) (1,171) Share of associates profit Income taxes (2,361) (3,205) (2,361) (3,205) NET PROFIT/LOSS 8,725 7,613 1,123 3,513 (5,552) (6,720) 0 (44) 4,296 4,362 % of revenues 11.3% 9.1% 5.3% 17.0% 0.0% 89.8% 4.5% 4.2% Share of net income (loss) (46) 0 (46) GROUP NET PROFIT/LOSS 8,725 7,613 1,123 3,513 (5,552) (6,766) 0 (44) 4,296 4,316 % of revenues 11.3% 9.1% 5.3% 17.0% 0.0% 89.8% 4.5% 4.1% Consolidated quarterly report at 31/03/2008 Explanatory notes 24

27 The balance sheet by business segment presented according to the old structure, in order to make a comparison with figures at 31 December 2007, is as follows: Mobile Automation Business Dev. Scanning Datalogic S.p.A.. (*) Adjustments Consolidated segment /000 Mar-08 Dec-07 Mar-08 Dec-07 Mar-08 Dec-07 Mar-08 Dec-07 Mar-08 Dec-07 Mar-08 Dec-07 Mar-08 Dec-07 Attributed assets Interests in subsidiaries booked at equity Not attributed assets Total assets Attributed liabilities Nonattributed liabilities Equity Total liabilities Amortization and depreciation (net of amortization arising from acquisitions) 61,740 62,009 61,241 61,701 19,273 20, , ,987 45,843 52,309 (34,710) (42,285) 318, , ,632 1,472-3,636 3, , ,861 (157,497) (157,766) 1,632 1,472 74,043 86,306 61,740 62,009 62,873 63,173 19,273 20, , , , ,170 (192,207) (200,051) 394, ,392 23,498 22,363 20,519 24,918 7,833 9,427 53,497 55,375 11,007 13,018 (32,464) (34,736) 83,890 90, , ,545 28,350 29,335 39,917 40,352 8,712 9,372 75,752 77, , ,283 (156,861) (157,083) 163, ,482 51,848 51,698 60,436 65,270 16,545 18, , , , ,301 (189,325) (191,819) 394, , NO DATA 730 NO DATA 81 NO DATA 1,186 NO DATA 268 NO DATA 5 NO DATA 2,907 3,063 (*) This column also includes the costs and revenues relating to Datalogic Shared Services S.r.l. no longer operational since 10 January 2008 and currently in the process of liquidation. STRUCTURE OF THE GROUP Consolidated financial statements include the statements of the direct parent company and of the companies in which the former directly or indirectly holds the majority of voting rights. The companies consolidated on a 100% line-by-line basis as at 31 March 2008 were the following: Consolidated quarterly report at 31/03/2008 Explanatory notes 25

28 Company Head office Share capital Total equity ( 000) Profit/loss for the period ( '000) % ownership Datalogic S.p.A. holding Bologna - Italy Euro 33,205, , Datalogic Shared Services S.r.l Bologna - Italy Euro 20,000 2, % Informatics Plano Texas - U.S.A. $USA 15,100,000 14, % Datalogic Automation S.r.l. Bologna - Italy Euro 10,000,000 31,549 4, % Datalogic Automation France Paris - France Euro 2,227,500 3, % Datalogic Automation Iberia Madrid Spain Euro 60, % Datalogic Automation Germany Erkenbrechtsweiler - Euro 1,025,000 4, % GmbH Germany Datalogic Automation Austria Guntramsdorf - Austria Euro 72,673 1, % GmbH Datalogic Automation UK Limited Redbourn - England GBP 3,500,000 4, % Datalogic Holding AB Malmö - Sweden KRS 1,400,000 1, % Datalogic Automation AB Malmö - Sweden KRS 200, % Datalogic Automation INC Hebron, KY - USA $USA 463,812 3, % Datalogic Automation PTY LTD Mount Waverley $AUS 2,300, % (Melbourne) - Australia Datalogic Automation BV Nieuwegein - Euro 18, % Netherlands Laservall S.p.A Donnas (AO) - Italy Euro 900,000 11,230 1, % Datalogic Asia Limited Hong Kong - China HKD 10, % Datalogic Mobile S.r.l. Bologna - Italy Euro 10,000,000 24,955 1, % Datalogic GMBH Mobile (branch) Darmstadt - Germany Euro % Datalogic Sweden Mobile Malmö - Sweden KRS % (branch) Datalogic France Mobile (branch) Paris - France Euro % Datalogic Spain Mobile (branch) Madrid Spain Euro % Datalogic Austria Mobile (branch) Wiener Neudorf Euro % (Vienna) Austria Datalogic Denmark Mobile Horsholm - Denmark Euro % (branch) Datalogic Mobile Asia Hong Kong - China HKD 100, % Datalogic Mobile UK Redbourn - England GBP 15, % Datalogic Mobile INC Eugene, OR - U.S.A. $USA , % Datalogic Mobile PTY Mount Waverley $AUS % (Melbourne) - Australia Datalogic Scanning Group S.R.L Bologna - Italy Euro 10,000,000 91, % Datalogic Scanning Slovakia Trnava - Slovakia SKK 2,000,000 12,209 2, % Datalogic Scanning Holdings Inc. Eugene, OR - U.S.A. $USA , % Datalogic Scanning Inc. Eugene, OR - U.S.A. $USA 10 32, % Datalogic Scanning do Brazil Sao Paulo - Brazil R$ 159, % Datalogic Scanning Mexico Colonia Cuauhtemoc - $USA % Mexico Datalogic Scanning UK Ltd Watford - England GBP 191, % Datalogic Scanning Sarl Paris - France Euro 653, % Datalogic Scanning GmbH Darmstadt - Germany Euro 306,775 1, % transaction Datalogic Scanning IBERIA Madrid - Spain Euro % Datalogic Scanning Eastern Darmstadt - Germany Euro 30, % Europe GmbH Datalogic Scanning S.p.A Milan Italy Euro 110, % Datalogic Scanning PTY Sydney - Australia $ AUD % Datalogic Scanning Japan Tokyo - Japan JPY 151,437, % Datalogic Scanning Singapore Singapore SGD 100, % Datalogic Scanning Scandinavia (branch) Malmö - Sweden KRS % Consolidated quarterly report at 31/03/2008 Explanatory notes 26