Novanta Inc. · NASDAQ:NOVT
Novanta — Investor Presentation (February 2018)
22 slides from Novanta's investor presentation, February 2018
Slide 1: A Trusted Technology Partner to Medical and Advanced Technology Equipment Manufacturers
A Trusted Technology Partner to Medical and Advanced Technology Equipment Manufacturers February 2018 Matthijs Glastra, Chief Executive Officer NASDAQ: NOVT 1
Slide 2: Safe Harbor Statement
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 uncertainties, including risks associated with business and economic c
Slide 3: Company Overview: Leader in Mission Critical Technologies
COMPANY OVERVIEW Leader in Mission Critical Technologies to Medical & Advanced Industrial Markets $ $585M $117M $3.5B Annual Revenue in Adjusted EBITDA Addressable Market with 60% Outside the US $1.85 Non-GAAP EPS with 5%–7% CAGR Note: Revenue, Adjusted EBITDA and Non-GAAP EPS figures are based on t
Slide 4: The Novanta Transformation
The Novanta Transformation SCALE UP Double Annual Revenue to $750M STRENGTHEN CORE Emphasis on Medical M&A +50% Invest for Organic Growth of revenue in Medical DRIVE PERFORMANCE +50% Divested 40% of Portfolio of revenue in Medical and hired new team <10% of revenue in Medical 2012 2014 2016 2017 201
Slide 5: Strategic Direction
2020 1 Breakthrough Scale Double Annual Revenue to $750M STRATEGIC DIRECTION Global Market Leadership 2 Leader in Intelligent “Top 2” Share Position Globally Mission Critical and Enabling Technologies Superior Profitability 3 Deliver 20% Adj. EBITDA, with Diversified Businesses 4 Consistent Growth 5
Slide 6: Why Invest in Novanta?
WHY PROFITABLE INVEST IN LEADERSHIP IN NOVANTA? SECULAR GROWTH MARKETS Proprietary STRATEGIC M&A Technologies Disciplined and “Sticky” and Cash Returns- Highly Engineered Focused Solutions EXPANDING MARKET REACH Product Innovation DIVERSIFIED BUSINESS MODEL Increasing Content with OEMs Balanced acro
Slide 7: Novanta Has A Culture Of Innovation
Novanta Has A Culture Of ~400 Engineers Innovation With Deep Proprietary Technical Competencies ~9% Revenue Invested in R&D +400 Patents 7
Slide 8: Playing in Attractive Growth Markets
Playing in Attractive Growth Markets 49% ADVANCED 51% MEDICAL INDUSTRIAL Key Application Minimally Invasive Material Segments Served Surgery Processing Critical Care Metrology Equipment Robots and Ophthalmology Automation Lab / Life Science Equipment 8
Slide 9: Playing in Attractive Growth Markets: Additive Manufacturing
Playing in Attractive Growth Markets 49% ADVANCED ADDITIVE MANUFACTURING +$5 Billion Systems Market INDUSTRIAL • Growing +20% CAGR Material Novanta is a leading supplier Processing of laser beam steering subsystems inside laser Metrology additive manufacturing Robots and equipment Automation 9
Slide 10: Playing in Attractive Growth Markets: Precision Robotics
Playing in Attractive Growth Markets 49% ADVANCED PRECISION ROBOTICS The share of manufacturing tasks INDUSTRIAL performed by robots to rise from 10% to 25% by 2025(1) Material • Robots already an economically Processing viable alternative to human labor in many industries(1) Metrology Novanta deliv
Slide 11: Mobile Device Trends; Impact on Manufacturing
Mobile Device Trends; Impact on Manufacturing Rapid increase in smart components(1) and flexible circuitry in mobile devices COMPONENT COUNT 700 30%+ 5-7x THE CHALLENGE THE SOLUTION THE GROWTH Rapid throughput, Lightning II scan head Growth in Lighting II precision and capacity is enabling the most
Slide 12: Playing in Attractive Growth Markets: DNA Sequencing
Playing in Attractive Growth Markets DNA SEQUENCING $28 Billion Systems Market 51% MEDICAL • Growing +15% CAGR • Clinical acceptance and Minimally Invasive adoption accelerating Surgery through new applications Critical Care Novanta is a leading provider Equipment of laser and beam delivery subsyste
Slide 13: Playing in Attractive Growth Markets: Endoscopy & Robotic Surgery
Playing in Attractive Growth Markets ENDOSCOPY & ROBOTIC SURGERY 51% MEDICAL $20 Billion Systems Market • Mid to high single digit growth rates Minimally Invasive • Conversion from open to minimally Surgery invasive procedures Critical Care • Long term 8-10% annual procedure Equipment growth Novanta
Slide 14: Novanta Operating Groups
Novanta Operating Groups (Pro Forma for Completed Acquisitions) 40% 40% 20% PHOTONICS VISION PRECISION MOTION Laser beam Detection & Analysis Precise position steering measurement & RFID and sensing Intelligent laser Machine Vision and beam delivery Integrated motion Minimally Invasive subsystems so
Slide 15: Novanta Operating Model
Novanta Operating Model Owner and Team and Differentiated Strategic Continuous Organization OEM Business Re-investment Improvement Development Model of Cash Mindset Supplier of Mission Critical Autonomous Business Institutionalized Organic Aligned and Application Specific Units Focused on Growth Pro
Slide 16: Driving Cash Flow Returns
Driving Cash Flow Returns ROIC ~4% After-Tax Profit / Tangible Assets (*NWC + **PP&E) 38% 2017 results diluted by Net Productivity 37% WOM acquisition (or +$7 million) per year 30% 28% 23% 25% 15% of sales by 2020 Net Working Capital 2012 2013 2014 2015 2016 2017 *Defined as Inventory, Accounts Rece
Slide 17: Delivering Consistent Financial Results
Delivering Consistent Financial Results ADJUSTED REVENUE ADJUSTED EBITDA NON-GAAP EPS $117M–$122M $1.85–1.96 $585M–$600M +19% +18% CAGR CAGR +27% Includes Impact CAGR Includes Impact from New from U.S. Tax Law Revenue Change of Recognition Rule $0.10 to $0.13 $225M $42M $0.45 2012 2018 2012 2018 201
Slide 18: About Novanta
About Novanta Novanta is a leading global supplier of core technology solutions that give healthcare and advanced industrial original equip ment manufacturers (“OEMs”) a competitive advantage. We combine deep proprietary technology expertise in photonics, vision, and precision motion technologies wi
Slide 19: Appendix
APPENDIX NASDAQ: NOVT
Slide 20: 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 Diluted EPS from continuing operations. The Company believes that these non-GAAP financial measures provide useful and supplementary information to investors regardi
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation Twelve Months Ended December 31, 2012 December 31, 2013 December 31, 2014 December 31, 2015 December 31, 2016 December 31, 2017 ADJUSTED REVENUE (in thousands of dollars) Revenue (GAAP) $243,796 $316,910 $364,706 $373,598 $384,758 $521,290 JK Lasers divestiture (19,200) (19,0
Slide 22: Non-GAAP Reconciliation
Non-GAAP Reconciliation Twelve Months Ended December 31, 2012* December 31, 2013 December 31, 2014 December 31, 2015 December 31, 2016 December 31, 2017 ADJUSTED DILUTED EPS (in thousands of dollars or shares, except per share amounts) Net income (loss) attributable to Novanta Inc., $22,474 $9,977 $