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SITE TOUR; CONSIDERABLE RUNWAY FOR GROWTH IN LIFE SCIENCES AND FOOD & BEVERAGE

THE TD COWEN INSIGHT

We cannot rule out the risk of more EV related bad news in the near-term, but we believe most of the EV pain has already been absorbed. We think investors should pivot their attention to ATS' recent bookings success, which signals a return to growth. Q1/F25 bookings were the second highest on record, Q4/F24 bookings were the fourth highest, and the life sciences backlog is a record ~$1bln.

Event

ATS hosted investors on a European site tour.

Impact: SLIGHTLY POSITIVE; we came away with a deeper appreciation of ATS' strong franchise in life sciences and evolving platform in food & beverage, both markets with high economic resiliency and significant growth potential (organically/via M&A).

Life Sciences: ATS is uniquely positioned in life sciences and is a leader in its key focus areas 1) medical devices, 2) diagnostics; 3) general/radiopharma; 4) pharmacies/labs; and 5) academia/government. ATS' history is in custom automation for commercial production, but it has been integrating backwards, and can now support customers from basic R&D to at-scale manufacturing. The acquisition of Avidity, which designs/ manufactures automated water purification systems, expands ATS' portfolio in the research space, and exemplifies the company's strategy. ATS' Munich site supplies automated manufacturing solutions for the assembly/handling of medical devices. GLP-1 auto-injectors have been a key source of growth, but on a scale that we feel

is manageable (~10% of total backlog). ATS' SymphoniTM platform is core to its value proposition in auto-injectors. SymphoniTM can provide 2x the speed/output in 1/2 the physical footprint, giving ATS a meaningful competitive advantage. ATS' acquisition of Comecer was not initially well-received by investors, largely due to the going-in multiple (~14x TTM EBITDA), but Comecer is arguably ATS' best-ever acquisition, because it provided entry into the strictly regulated radiopharma market, which would have been difficult/impossible to penetrate organically. Demand for radiopharmaceuticals, used to diagnose/treat cancer, is growing at a double-digit rate, with new isotopes coming to market every year (see Figure 7).

Food & Beverage: ATS originated a food and beverage platform in late-2019 and is now a leader in select niches 1) primary and secondary processing of produce (mainly tomatoes); and 2) beverage processing, filling, & packaging (mainly beer). Automation is at a relatively early stage of adoption in food and beverage, but demand is being driven by labour shortages, climate change, and energy cost pressures, among other factors.