Novanta Inc. · NASDAQ:NOVT
Novanta — J.P. Morgan 42nd Annual Healthcare Conference 2024
22 slides from Novanta's conference presentation, Jan 10, 2024
Slide 1: A Trusted Technology Partner
@ Novanta A Trusted Technology Partner JANUARY 2024
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this presentation are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on current expectations and assumptions that are subject to risks and uncertainties. All statements contained in thi
Slide 3: A Trusted, Sole-Sourced Technology Partner to Leading Global OEMs
A Trusted, Sole-Sourced Technology >$878M Partner to Leading Global OEMs Revenue ~60% outside of the US We enable productivity improvement in healthcare and industrial markets with secular growth >$193M APPLICATION AREAS ADVANCED INDUSTRIAL MEDICAL Adjusted EBITDA +22% of sales Robotics & Minimally
Slide 4: Our Strategy
Our Strategy WHERE WE PLAY HOW WE PLAY AND WIN HOW WE ACCELERATE Win in High Innovation Novanta Culture– Disciplined Growth Segments Growth System Novanta Way Acquisitions CONFIDENTIAL AND PROPRIETARY
Slide 5: Where We Play & How We Win
Where We Play & How We Win Technology Asset light leadership in HGMs Growth Returns business model RE V E N U E CA S H F LO W Sticky business model Allocate based on with winning OEMs cash-on-cash return TAM expansion Expand gross through NPI and margins and Subsystems improve cash flow Accretive M&
Slide 6: The Novanta Transformation Journey
The Novanta Transformation Journey ~$1B 19 Capital deployed transactions for M&A ~$860M ~3.5X Revenue Growth ~50% Vitality Index Single ~25% of sales digits ~$240M ~50% ~90% ~10% Subsystem Sales 2012 Sales 2022 Sales Single ~30% of sales Medical Advanced Industrial digits CONFIDENTIAL AND PROPRIETAR
Slide 7: Precision Medicine and Manufacturing
Precision Medicine and Manufacturing SEGMENT OVERVIEW KEY METRICS KEY APPLICATIONS KEY TECHNOLOGIES SUBSYSTEMS ~$275M REVENUE Medical 48% Advanced LASER-BASED DNA ADJUSTED GM% Industrial MATERIAL SEQUENCE Optical Scan Heads PROCESSING DECODING Light Engine 8% COMPONENTS REVENUE CAGR SINCE 2016 MACRO
Slide 8: Subsystem Example: Intelligent Laser Beam Steering
Subsystem Example: HIGH-SINGLE-DIGIT Intelligent Laser Beam Steering LONG-TERM MARKET GROWTH RATE Never before possible throughput, precision and miniaturization Increasing $ content and stickiness with customers, through intelligent subsystem products EXAMPLE APPLICATIONS: LASER ADDITIVE MANUFACTUR
Slide 9: Robotics and Automation
Robotics and Automation SEGMENT OVERVIEW KEY METRICS KEY APPLICATIONS KEY TECHNOLOGIES SUBSYSTEMS ~$308M REVENUE Medical 49% Advanced ROBOTICS AND ROBOTIC Robotic Joints Mechatronics ADJUSTED GM% Industrial AUTOMATION SURGERY 23% COMPONENTS REVENUE CAGR SINCE 2016 MACROECONOMIC DRIVERS Controls & Pr
Slide 10: Converging Technology Solutions for Robotic Applications
Converging Technology Solutions DOUBLE-DIGIT for Robotic Applications LONG-TERM MARKET GROWTH RATE <25% PENETRATION OF ROBOTICS APPLICATIONS Strong presence, brand MOTION CONTROL Precise motion via motors, recognition and value drives, and mechatronics proposition Highly engineered, end- SENSING eff
Slide 11: Leading Technology Provider to Robotic Surgery Applications
Leading Technology Provider DOUBLE-DIGIT to Robotic Surgery Applications LONG-TERM MARKET GROWTH RATE Precision and proprietary technologies optimized for the most demanding applications <5% penetration of surgical robotics applications PRECISION MOTION AND FLUID / GAS MANAGEMENT SOLUTIONS FOR ROBOT
Slide 12: Medical Solutions
Medical Solutions SEGMENT OVERVIEW KEY METRICS KEY APPLICATIONS KEY TECHNOLOGIES Advanced SUBSYSTEMS ~$278M Industrial REVENUE 41% Medical MINIMALLY ROBOTIC ADJUSTED GM% INVASIVE SURGERY Endoscopic Insufflators iOR Surgical SURGERY Pumps Devices Displays 15% REVENUE CAGR SINCE 2016 COMPONENTS MACROE
Slide 13: Medical Growth Application: Surgical Smoke Removal
Medical Growth Application: DOUBLE-DIGIT Surgical Smoke Removal LONG-TERM MARKET GROWTH RATE APPLICATION CAPABILITY High growth medical market opportunity, estimated at 20% per year Integrated smoke evacuation increases safety, optimizes workflow and eliminates separate equipment INTEGRATED INSUFFLA
Slide 14: Intelligent Solutions for Advanced Diagnostics
Intelligent Solutions for HIGH-SINGLE-DIGIT Advanced Diagnostics LONG-TERM MARKET GROWTH RATE <5% OF WORLD’S DNA SEQUENCED BARCODE RFID READER (sample scanning) (reagent & sample tracking) Enabling automation and cutting-edge capabilities for advanced diagnostics equipment Supporting clinical adopti
Slide 15: Motion Solutions Acquisition has Attractive Secular Growth Profile
Motion Solutions Acquisition HIGH-SINGLE-DIGIT has Attractive Secular Growth Profile LONG-TERM MARKET GROWTH RATE ACCRETIVE TO NOVANTA’S LONG-TERM GROWTH PROFILE Motion Solutions serves large, attractive markets with strong, durable tailwinds LIFE SCIENCES HSD to LDD market growth outlook Transform
Slide 16: How We Operate: Novanta Way Culture
HOW WE OPERATE COHESIVE ENGAGED TEAMS EMPLOYEES Diverse, inclusive, Engage around a collaborative: shared vision and committed to win purpose Best Practices Owner Mindset Talent and Capital Novanta NOVANTA Business units with Leverage agility, speed, Allocation WAY CULTURE customer focus. Scale Nova
Slide 17: Delivering Consistent Financial Results
Delivering Consistent Financial Results REVENUE ADJUSTED EBITDA FINANCIAL $878M to FRAMEWORK $882M $193M to $861M $196M Mid to high single-digit $183M organic growth +12% Double-digit reported CAGR growth through +15% CAGR acquisitions 100 bps per year of $244M gross margin expansion $42M Strong fre
Slide 18: Delivering Where It Matters Most
Delivering Where It Matters Most Minimally Invasive Surgery Robotics and Automation Life Sciences In Vitro Diagnostics Robotic Surgery Patient Monitoring Laser Additive Manufacturing Ophthalmology Laser-based Material Processing CONFIDENTIAL AND PROPRIETARY
Slide 19: Novanta Operating Groups and Businesses
Novanta Operating Groups and Businesses PRECISION MEDICINE MEDICAL ROBOTICS AND AND MANUFACTURING SOLUTIONS AUTOMATION ~32% OF TOTAL ~32% OF TOTAL ~36% OF TOTAL COMPANY SALES COMPANY SALES COMPANY SALES DE TE C TIO N & A N A LYSIS MIN IMA LLY IN VA SIVE SURGE RY CONFIDENTIAL AND PROPRIETARY
Slide 20: Environment, Sustainability and Governance
Environment, Sustainability and Governance REPORTING ACCORDING TO SASB AND TCFD STANDARDS NOVANTA ESG TARGETS Long-term goal to achieve net zero 1 greenhouse gas (GHG) emissions by 2050 Provide employees with one day of paid time-off (PTO) 2 to volunteer at an approved non-profit organization 3 Expa
Slide 21: Use of Non-GAAP Measures
Use of Non-GAAP Measures The non-GAAP financial measures used in this presentation are Adjusted EBITDA and Adjusted Gross Profit Margin. The Company believes that these non-GAAP financial measures provide useful and supplementary information to investors regarding the operating performance of the Co
Slide 22: Non-GAAP Reconciliation
Non-GAAP Reconciliation NINE (in thousands of dollars) TWELVE MONTHS ENDED MONTHS ENDED Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec 31, Dec31, Dec 31, Sep 29, 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 REVENUE Revenue (GAAP) $243,796 $316,910 $364,706 $373,59
Novanta — J.P. Morgan 42nd Annual Healthcare Conference 2024 on 6ix