NOVT
A Trusted
NOVEMBER 2024
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 this news release that do not relate to matters of historical fact should be considered forward-looking statements, and are generally identified by words such as "expect," "intend," "anticipate," "estimate," "believe," "future," "could," "should," "plan," "aim," and other similar expressions. These forward-looking statements include, but are not limited to, statements regarding anticipated financial performance and financial position, including our financial outlook for the full year of 2024; expectations for our end markets and market position; our competitive position, including our positioning for long-term growth and other statements that are not historical facts.
These forward-looking statements are neither promises nor guarantees, but involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including, but not limited to, the following: economic and political conditions and the effects of these conditions on our customers' businesses, capital expenditures and level of business activities; risks associated with epidemics, pandemics or other public health crises, such as the COVID-19 pandemic; our dependence upon our ability to respond to fluctuations in product demand; our ability to continuously innovate, to introduce new products in a timely manner, and to manage transitions to new product innovations effectively; customer order timing and other similar factors; disruptions or breaches in security of our or our third-party providers' information technology systems; risks associated with our operations in foreign countries; our increased use of outsourcing in foreign countries; risks associated with increased outsourcing of components manufacturing; our exposure to increased tariffs, trade restrictions or taxes on our products; violations of our intellectual property rights and our ability to protect our intellectual property against infringement by third parties; risk of losing our competitive advantage; our failure to successfully integrate recent and future acquisitions into our business; our ability to attract and retain key personnel; our restructuring and realignment activities; product defects or problems integrating our products with other vendors' products; disruptions in the supply of certain key components and other goods from our suppliers; our failure to accurately forecast component and raw material requirements leading to additional costs and significant delays in shipments; production difficulties and product delivery delays or disruptions; our exposure to extensive medical device regulations, which may impede or hinder the approval, certification or sale of our products and, in some cases, may ultimately result in an inability to obtain approval or certification of certain products or may result in the recall or seizure of previously approved or certified products; potential penalties for violating foreign and U.S. federal and state healthcare laws and regulations; impact of healthcare industry cost containment and healthcare reform measures; changes in governmental regulations related to our business or products; actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards, and other requirements; our failure to implement new information technology systems successfully; changes in foreign currency rates; our failure to realize the full value of our intangible assets; our reliance on original equipment manufacturer customers; increasing scrutiny and changing expectations from investors, customers, governments and other stakeholders and third parties with respect to corporate sustainability policies and practices; the effects of climate change and related regulatory responses; our exposure to the credit risk of some of our customers and in weakened markets; being subject to U.S. federal income taxation even though we are a non-U.S. corporation; changes in tax laws and fluctuations in our effective tax rates; any need for additional capital to adequately respond to business challenges or opportunities and repay or refinance our existing indebtedness, which may not be available on acceptable terms or at all; our existing indebtedness limiting our ability to engage in certain activities; volatility in the market price for our common shares; and our failure to maintain appropriate internal controls in the future.
Any or all of our forward-looking statements may turn out to be inaccurate, and there are no guarantees about our performance. The factors identified above are not exhaustive. We operate in a dynamic business environment in which new risks may emerge frequently. Accordingly, you should not place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. In addition, results for prior periods are not necessarily indicative of results that may be expected for any future period.
Other important risk factors that could affect the outcome of the events set forth in these statements and that could affect the Company's operating results and financial condition are discussed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as updated by our Quarterly Report on Form 10-Q for the quarter ended September 27, 2024 and as further updated by our subsequent filings with the Securities and Exchange Commission. Such statements are based on the Company's beliefs and assumptions and on information currently available to the Company. The Company disclaims any obligation to publicly update or revise any such forward-looking statements as a result of developments occurring after the date of this document except as required by law.
In this presentation, we present the non-GAAP financial measure of Adjusted EBITDA and Adjusted Gross Profit Margin. Please see "Use of Non-GAAP Financial Measures" in the accompanying appendix and our second quarter 2024 earnings press release for the reasons why we use this measure, a reconciliation of this measure to the most directly comparable GAAP measures, and other information relating to this measure.
CONFIDENTIAL AND PROPRIETARY
2
We enable productivity improvement in healthcare and industrial markets with secular growth
~$948M
Revenue
~50% outside of the US
MEDICAL
Medical Device
Technologies
Minimally Invasive Surgery
Surgical Robotics
Integrated OR
Precision Medicine
Genomics / Proteomics
IVD
Microscopy
BUSINESS
Robotics and
SEGMENTS
Automation
(% OF SALES)
~30%
APPLICATION AREAS
~55% ~45%
(% OF SALES)
Precision Medicine
and Manufacturing
~30%
ADVANCED INDUSTRIAL
Robotics & Automation
Factory / Warehouse
Unmanned Vehicles
EV/Battery Production
Precision Manufacturing
Micromachining
3D Printing / LAM
D/EUV
Medical
Solutions
~40%
~$208M
Adjusted EBITDA +22% of sales
~$6B
addressable market with 5%-7% CAGR
~3,000
employees
~750
patents
CONFIDENTIAL AND PROPRIETARY
Note: The Company neither updates nor confirms 2024 Full Year
3
outlook provided on November 5, 2024.
Our Strategy
Win in High Growth
Asset light
Segments
business model
Sticky business model with
Allocate based on cash-
winning OEMs
on-cash return
TAM expansion through
Expand gross margins
Innovation and Subsystems
and improve cash flow
Cash Accretive
Acquisitions
CONFIDENTIAL AND PROPRIETARY
4
The Novanta Transformation Journey
~$880M
~3.5X
Revenue
~45%
Growth
~$240M
~55%
~90%
~10%
2012 Sales
2023 Sales
Medical
Advanced Industrial
~$1.1B
20
Capital deployed for
transactions
M&A
Vitality Index
Single
Double Digit
digits
% of sales
Subsystem Sales
Single
~30% of sales
digits
CONFIDENTIAL AND PROPRIETARY
5
Precision Medicine and Manufacturing
SEGMENT OVERVIEW
KEY METRICS
~$283M
REVENUE
Medical
50%
Advanced
ADJUSTED GM%
Industrial
7%
REVENUE CAGR SINCE 2016
MACROECONOMIC DRIVERS
Industry 4.0
Personalized Medicine
KEY APPLICATIONS
KEY TECHNOLOGIES
SUBSYSTEMS
LASER-BASED
DNA SEQUENCE
MATERIAL
DECODING
Optical Light
Scan Heads
PROCESSING
Engine
COMPONENTS
OCT PROCEDURES METAL-BASED ADDITIVE
Galvonometers
Drives &
CO2 Lasers
Controls
MANUFACTURING
CONFIDENTIAL AND PROPRIETARY
6
Note: Adjusted Gross Profit Margin is a non-GAAP measure. Please refer to the non-GAAP reconciliation in our Form 8-K filed with the SEC on February 28, 2024. Non-GAAP
reconciliations are also available in the Financial Tables page of the Investors section of our website at www.novanta.com.
Subsystem Example: Intelligent Laser Beam Steering
EXAMPLE APPLICATIONS: LASER ADDITIVE MANUFACTURING,
MICROMACHINING AND OPHTHALMOLOGY
HIGH-SINGLE-DIGIT
LONG-TERM MARKET
GROWTH RATE
Never before possible throughput, precision and miniaturization
Increasing $ content and stickiness with customers, through intelligent subsystem products
CONFIDENTIAL AND PROPRIETARY
7
Robotics and Automation
SEGMENT OVERVIEW
KEY METRICS
~$273M
REVENUE
Medical
50%
Advanced
ADJUSTED GM%
Industrial
18%
REVENUE CAGR SINCE 2016
MACROECONOMIC DRIVERS
Manufacturing Automation
Penetration of Robotics
KEY APPLICATIONS
ROBOTICS AND
ROBOTIC
AUTOMATION
SURGERY
METROLOGY AND
LAB
INSPECTION
EQUIPMENT
KEY TECHNOLOGIES
SUBSYSTEMS
Robotic Joints
Mechatronics
COMPONENTS
Controls &
Precision Motors Robotic Tool
Drives
Changer
Inductive
Optical Encoders Force / Torque
Encoders
Sensor
CONFIDENTIAL AND PROPRIETARY
8
Note: Adjusted Gross Profit Margin is a non-GAAP measure. Please refer to the non-GAAP reconciliation in our Form 8-K filed with the SEC on February 28, 2024. Non-GAAP
reconciliations are also available in the Financial Tables page of the Investors section of our website at www.novanta.com.
Converging Technology Solutions for Robotic Applications
MOTION CONTROL
Precise motion via motors, drives, and mechatronics
SENSING
Measuring position and providing a sense of touch
ROBOTIC CHANGING SYSTEMS
Giving robots flexibility to change tools during the production process
ROBOTICS IS A KEY ENABLER TO FACTORY 4.0 GOALS OF
AUTOMATING TO IMPROVE SAFETY, QUALITY AND PRODUCTIVITY
DOUBLE-DIGIT
LONG-TERM MARKET
GROWTH RATE
<25% PENETRATION OF ROBOTICS APPLICATIONS
Strong presence, brand recognition and value proposition
Highly engineered, end- effector technologies
Strong multi-tech integration capabilities
CONFIDENTIAL AND PROPRIETARY
9
Leading Technology Provider to Robotic Surgery Applications
PRECISION MOTION AND FLUID / GAS MANAGEMENT SOLUTIONS FOR ROBOTIC SURGERY
DOUBLE-DIGIT
LONG-TERM MARKET
GROWTH RATE
Precision and proprietary technologies optimized for the most demanding applications
<5% penetration of surgical robotics applications
CONFIDENTIAL AND PROPRIETARY
10
Disclaimer
Novanta Inc. published this content on November 13, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on November 13, 2024 at 12:04:23.310.