Zebra Technologies Corporation (ZBRA)

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Zebra Technologies Corp. (ZBRA)

NASDAQ OMX 29th Investor Program Conference Transcript

December 5, 2012 5:45 AM ET


Doug Fox - Vice President, Investor Relations and Treasurer



Unidentified Analyst

So next we have the pleasure of hearing from Zebra Technology Corporation. Doug Fox is the Vice President, Investor Relations and the current Treasurer. Let's welcome, Doug.

Doug Fox

Yeah. John couldn’t make it. I’m for this presentation here. Thank you, [Autumn], and thank you, everybody. It’s a real pleasure being here today. It's a real exciting time for Zebra. I think we are poised for a lot of continued growth in the company and we have a lot of ground to cover this morning. So let's get started.

Okay. The forward-looking statement as we are all use to. And for those of you who are unfamiliar with Zebra. We have been in business now for little more than 40 years. With throughout our history, a company with great amount of technological expertise and we are by far the market leader in our business. We are going to be close to a $1 billion and hopefully with a little bit of luck, bit over a $1 billion in sales this year.

And I think particularly in this environment where we have some challenging issues, business issues in Europe which are well known. We have a great diversity in our business across multiple dimensions, across products, across geographies, across channels, across a number, across industries.

And this has really enabled us to continue to gain share and to continue to extend our leadership in this relatively difficult time and to post relative to our competitors in particular some very -- some pretty strong numbers for the company.

Okay, getting to the meat of what we do, Zebra really helps improve our customer's business performance through solutions that really give a digital voice. The real value add to what we do to for our customers is to provide or enable them to gain greater visibility into their assets and what they can see, they can manage better and they can improve their overall performance.

So what we do is we help them identify, track and manage their valued assets, whether that’s people, whether its transactions, whether it's cars and a lot, whether it's inventory, what have you. And by far Zebra is the preeminent company in the industry that helps our customers do that.

We do this with a very broad portfolio of products. For those of you who know Zebra, you probably maybe thinking about us as a barcode label printer company and clearly, thermal printing is a very strong part of our heritage.

We do have a very robust line of printers. In addition to that overtime we’ve developed a very strong line of printer management and connectivity tools, printer consumables and services, primarily labels and ribbons that go through our printers.

In addition, we have a very strong position in the upcoming technology, emerging technology of radio frequency identification, which is starting to be rolled out by retailers in particular around the world, as well as real-time locating systems, which is essentially RFID with a battery that provides very close and accurate real-time location on over a wide area, such as a campus or a factory, or what have you.

And the real value, again, value to the customer is really at a very relatively low cost and high return. So the products in which, the solutions in which Zebra products are embedded might costs, maybe, at the most make perhaps a couple million dollars. The products, you might buy Zebra products that maybe a couple hundred thousand dollars and the pay back on these solutions might be six months to 18 months.

So unlike perhaps putting in an ERP system and wishing you knew what your return was on that investment. There is a very demonstrable return on the investment for Zebra either through operating more efficiently, improving customer service or even increasing safety and security. So there is, again a very measurable ROI on the products in which, on the solutions in which Zebra is embedded.

There some very strong powerful trends that are driving the growth for Zebra over a long period. First, you have the industrialization of emerging markets such as China, Brazil, India, places like that.

And as these emerging markets continue to develop, they are going to need great -- they are going to demand greater use of automatic identification solutions to that drive -- to drive the continued growth.

Increasing global competition as well, so which is driving productivity and one that is perhaps not as obvious but growing middle class take China for example, where historically that has been a very industrial or manufacturing-based economy, whereas today with a growing middle class, they're demanding more cars, more washing machines, more healthcare, more government services, which is driving the demand for more barcoding, more identification technology and again, driving demand for more Zebra solutions.

Also focus on granting -- gaining efficiencies and cost reductions in complex supply chains, example for Zebra, three or four years ago we were actually manufacturing our own products in our own factories, in the low cost areas of Chicago, Illinois and Los Angeles, California.

Today, it's 8000 miles away in Guangzhou, China and there is, that increasing complexity really demands greater understanding of where your assets are, more in real time and so therefore greater demand for the solutions.

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