Novanta Inc. · NASDAQ:NOVT
Novanta — Investor Presentation (January 2017)
26 slides from Novanta's investor presentation, Jan 10, 2017
Slide 1: Novanta Company Overview January 2017
Novanta Company Overview January 2017 Exhibit 99.1
Slide 2: Safe Harbor Statement and Non-GAAP Financials
Factors Affecting Future Performance & Non-GAAP Financials Safe Harbor Statement The statements in this presentation that relate to guidance, pro forma presentations, future plans, goals, business opportunities, events or performance are forward-looking statements that involve risks and uncertaintie
Slide 3: Company Overview
Company Overview Novanta is a trusted Technology Partner to Medical and Advanced Technology Equipment Manufacturers Headquartered in Boston, MA. Office locations in 7 countries +$384M in revenue, +$66M in Adjusted EBITDA, +$1.00 non-GAAP EPS* Global positions in a +$2.5 billion addressable market, w
Slide 4: The Novanta Transformation
The Novanta Transformation Portfolio re-alignment Growth investments Accelerated growth and outperformance 2020 2012 2014 2016 2018 Strategic Direction ü ü ü Drive performance Focus on differentiated OEM business model Divested 40% of portfolio Established performance culture with new team Strengthe
Slide 5: Doubling our company with leading positions in attractive growing markets
Doubling our company with leading positions in attractive growing markets 2020 Strategic Direction Breakthrough Scale Double in size and market cap Superior Profitability Deliver 20% Adj. EBITDA, with diversified businesses Consistent Growth 5-7% organic growth, 50% of revenue in medical markets Glo
Slide 6: Why Invest in Novanta
Why Invest in Novanta Multiple growth drivers in attractive medical focused end markets Market Expansion Leadership in Secular Growth Markets Diversified Business Model Strategic M&A Profitable niche leadership positions in attractive markets +45% of revenue in steadily growing Medical markets +55%
Slide 7: Focus on intelligent mission critical solutions for OEMs
Focus on intelligent mission critical solutions for OEMs Novanta Business Model Hardware components and subsystems Increasing offerings with software, connectivity & controls Precision Motion Vision Photonics Components Sub-Systems Software & Controls Systems Core Technologies Medical Advanced Indus
Slide 8: Strong position in diversified niche markets with secular growth drivers
Strong position in diversified niche markets with secular growth drivers Key Application Segments Served Material Processing Laser Marking & Coding Cutting & Welding Converting Micromachining 3D Printing Lab / Life Science Equipment Glucose Monitoring Blood Analysis DNA Sequencing Surface Sciences I
Slide 9: Novanta has a culture of innovation
Novanta has a culture of innovation Engineering Oriented Company Over 200 engineers, +350 patents R&D Investments of ~9% of revenue Deep Proprietary Technical Competencies Optoelectronics / Photonics Position and motion detection Control and analysis software algorithms Integration of hardware compo
Slide 10: Multinational company, with ~60% of revenue outside of the U.S.
Multinational company, with ~60% of revenue outside of the U.S. Strong Global Presence % of Sales Major R&D Site Major Manufacturing Site Major Sales & Service Site 41% Americas 32% EMEA 27% Asia Poole, UK Seattle, WA Syracuse, NY Munich, Germany Suzhou, China Shenzhen, China Tokyo, Japan Beijing, C
Slide 11: Driving Cash Flow Returns
Driving Cash Flow Returns Strong progress made, with stronger opportunity funnel ahead ROIC ROIC = After-Tax Profit Tangible Assets (NWC + PP&E) Cumulative Free Cash Flow Strong Cash Flow Generation Demonstrating improvements in Return on Invested Capital Continuous Improvement Program generating ~4
Slide 12: Recent Acquisitions Deepen Medical Presence
2 Recent Acquisitions Deepen Medical Presence Acquisition Description Strategic Rationale Photonics solutions provider to medical instrumentation OEMs Expand position in attractive DNA Sequencing and bio-photonics market, with strong subsystem, (hardware, software) capabilities Provider of Ultra Hig
Slide 13: Acquisition of Laser Quantum
Acquisition of Laser Quantum Expands photonics position in high growth life sciences markets Novanta Increases ownership to 76% Business Description Financial consideration Expected to add $25 million in full year 2017 revenue, growing double-digit £25.5 million purchase price for 35% additional sha
Slide 14: The Strategic Rationale for Laser Quantum
The Strategic Rational for Laser Quantum Accelerates & expands our Organic Growth opportunities Strong Strategic Fit with Medical Strategy Expands in double-digit growth next generation DNA Sequencing market and super-resolution microscopy markets Increases Novanta’s breadth and technology capabilit
Slide 15: Potential for cross selling of Laser Quantum solutions
Potential for cross selling of Laser Quantum solutions Key Application Segments Addressed Material Processing Laser Marking & Coding Cutting & Welding Converting Micromachining 3D Printing Lab / Life Science Equipment Glucose Monitoring Blood Analysis DNA Sequencing Surface Sciences In Vitro Diagnos
Slide 16: The Next Generation Sequencing Market
The Next Generation Sequencing Market DNA market poised to show double digit growth, with further upside $28B $102B $56B Key sequencing growth applications Population sequencing (biomedical research) Cancer Theranostics – sequencing guiding targeted therapy Cancer monitoring, prognosis and screening
Slide 17: Acquisition of Trimble RFID Assets
Acquisition of Trimble RFID Assets Deepens leadership position in fast growing medical RFID technologies Designs and supplies UHF RFID readers to OEMs and system integrators Broad UHF module product line-up complements Novanta’s existing strong HF RFID solutions Establishes leadership position in a
Slide 18: RFID Demand in Healthcare is Increasing
RFID use on Hospital Badges: RFID badges are more compatible with Healthcare workflow RFID is more secure with re-writable data so badges can be date coded for limited duration access RFID use on Patients: RFID wristbands on patients improves patient care - No need to disturb patient Pairing of Moth
Slide 19: Healthcare Passive RFID Reader Market
Healthcare Passive RFID Reader Market Positioned to be the world leading RFID OEM supplier in healthcare + $620M ~$400 million Global Passive RFID Reader Market in Healthcare in 2016 Passive readers do not have power source (e.g. Battery) Fixed Readers or Handheld Readers Initial Addressable Market
Slide 20: Driving revenue growth through mid-single digit organic and acquisitions
Driving revenue growth through mid-single digit organic and acquisitions Adjusted Revenue ~14% CAGR * Adjusted Revenue is a non-GAAP measure. The reconciliation to our most comparable GAAP measures is provided in the accompanying appendix. ** 2016 Outlook reflects guidance provided on November 2, 20
Slide 21: Driving predictable and sustainable income growth
Driving predictable and sustainable income growth Profitability +20% Adjusted EBITDA Adjusted E.P.S. ~14% CAGR +20% +22% CAGR *Adjusted EBITDA & Adjusted E.P.S. are non-GAAP measures. The reconciliation to our most comparable GAAP measures is provided in the accompanying appendix. ** 2016 Outlook re
Slide 22: About Novanta
Bringing The Innovation Advantage to everything we do About Novanta Novanta is a leading global supplier of core technology solutions that give advanced technology and healthcare OEMs a competitive advantage. We combine deep expertise at the intersection of photonics and motion with a proven ability
Slide 23: Appendix
APPENDIX 2 V/) Novanta
Slide 24: Use of Non-GAAP
Use of Non-GAAP The non-GAAP financial measures used in this presentation are non-GAAP Adjusted Revenue, Adjusted EBITDA, and Adjusted EPS from continuing operations. The Company believes that the non-GAAP financial measures provide useful and supplementary information to investors regarding the Com
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Revenue Twelve Months Ended December 31, 2012 December 31, 2013 December 31, 2014 December 31, 2015 (in thousands of dollars) Revenue (GAAP) $ 243,796 $ 316,910 $ 364,706 $ 373,598 JK Laser divestiture (19,200) (19,051) (22,425) (5,731) Acquisition fair value adjustm
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation *Adjusted EPS was not updated for the Scientific Lasers divestiture. Management determined that revising the Adjusted EPS figures would not have resulted in a material change. Adjusted EPS Twelve Months Ended December 31, 2012* December 31, 2013 December 31, 2014 December 31,