Annual Report 2019

To deliver maximum value for our shareholders, we build on a foundation of experience and innovation, we grow organically by providing outstanding solutions and service to our customers, and we expand to enter new markets and realize new opportunities.

Message from the CEO

A year ago, I wrote that I was excited by the early progress we had made in setting strategic priorities and initiating new processes to strengthen our organization and deliver increased value for both you and our customers.

This year, I’m pleased to report that 2019 brought an acceleration of that momentum and validation of our efforts with significantly stronger topline and bottom line performance in all key areas of the business.

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Photo of Andrew Hider

Equally encouraging is the way the Company is aligning around a continuous improvement mindset. I’ve had the opportunity to engage with ATS personnel in many different locations, and I’m repeatedly seeing evidence of their deepening commitment to the ATS Business Model (ABM).

As positive as that sounds, we are just getting started. In the past year, we took innovative steps to strengthen our technical capabilities, broaden our product and service offerings, and develop new sources of recurring revenue. We also acquired two companies, our first such deals in four years. And, after deploying the first sets of ABM problem-solving tools, we are now expanding our training network and developing new tools to extend its reach and impact. Heading into 2020, we’re confident that our 2019 growth story is a precursor of even greater value creation to come.

2019 Financial Performance

Last year’s macroeconomic environment was generally healthy, although trade disputes created some uncertainty and heightened nervousness in equity markets. From a results standpoint, our story was one of strong, double-digit 11% organic growth, with record revenues of almost $1.3 billion. Order Bookings grew 19% to a record $1.4 billion and Order Backlog at year-end was $904 million, up 21% over 2018 – setting us up well for fiscal 2020. The Company’s margin expansion program contributed to an improvement in gross margins and a 90-basis-point gain in operating margins. Working capital as a percentage of revenues remained below 10%.

Our two acquisitions had a modest impact on results in fiscal 2019, due primarily to timing, as they closed in the second half of the year. Both are significant for their strategic value. Comecer, which has its main production facility in Castel-Bolognese, Italy, is a leader in aseptic containment and processing systems for the nuclear medicine and pharmaceutical industries. It strengthens our customer offering in both pharma and biopharma and adds an innovative new platform in radiopharmaceuticals. KMW, a supplier of custom micro-assembly systems and test equipment solutions based in Koblenz, Germany, strengthens our offerings in the electric vehicle market.

The Comecer acquisition will further contribute to growth in our life sciences vertical, which surpassed 50% of the Company’s consolidated revenues in our fourth quarter. This reflects our strategy to build shareholder value by expanding in strong, higher-margin sectors and product areas with above-market growth potential that, while not immune to cyclical swings, should remain relatively attractive even when the economy is at a low point in its cycle.

From a results standpoint, our story was one of strong, double-digit 11% organic growth, with record revenues of almost $1.3 billion. Order Bookings grew 19% to a record $1.4 billion and Order Backlog at year-end was $904 million, up 21% over 2018 – setting us up well for fiscal 2020.

ATS Business Model

The foundation of a great business is having great people. It follows, then, that working to develop, engage, empower and energize our people is both a core ATS value and the first of our three pillars, followed by process, and then performance, at the foundation of the ABM.

The deepening commitment among our people to the ABM that I observed across the Company in 2019 isn’t merely anecdotal. It is reflected in engagement scores tracked in our employee surveys. And what it tells us is that the ABM – our playbook to achieve our business goals and objectives through disciplined, continuous improvement – is becoming ingrained in our Company’s culture. At the end of year two, it is much less of a management initiative and more a part of our DNA.

This success is a credit, in part, to our small ABM team, who developed the training methodology and initial problem-solving tools, and the growing number of local leaders who learned those tools and began taking co-workers through various projects. Most importantly, the success of the ABM is due to our workforce, who have participated in more than 40 Kaizen events and over 100 problem-solving exercises to drive continuous improvement.

For the ABM to deliver results as intended, it has to be led locally, with the quest for continuous improvement ultimately becoming part of every individual’s mindset. As the next section (“The ABM in Action”) shows, that’s not as big a stretch as it might seem. As soon as workers see process-oriented problem- solving exercises yielding efficiency gains of 50% or more, they’re on board and empowered. The principle of “measure, test, refine and repeat” becomes a simple tool like a hammer, and they start finding nails all over the place.

The ABM journey in 2020 will see us introduce additional measurement and process- improvement tools and apply them even more widely. We will also expand strategic planning at the business unit level to ensure ABM-led activities are closely linked to company goals.

We also expect to see more measurable evidence of the accumulating ABM-derived process improvements leading to higher profitability and generating greater shareholder value. From this standpoint, the ABM is an integral part of our overall capital allocation strategy – both in terms of direct returns on the internal investment and the added flexibility more rigorous control over our operations provides for external investment and potential acquisitions.

Looking Ahead

The widespread performance improvements and strong results we had in 2019 provide plenty of momentum heading into 2020.

I’m looking forward, in particular, to bringing our new acquisitions further into the fold and leveraging their potential across our offerings in important growth vertical markets.

From a product and technology development standpoint, the ATS innovation story will also be front and centre in 2020.

A key aspect here is the roll-out of IlluminateTM Manufacturing Intelligence, a powerful smart factory IIoT platform taking the place of the ATS ToolkitTM. Introduced in late 2019, it is a user-friendly upgrade that offers our factory automation customers more tools to operate their facilities more effectively. The built-in intelligence provides extensive analytics to track equipment performance and efficiency in real time, allows quick diagnosis of breakdowns and supports predictive maintenance.

Illuminate represents one of several tracks we’re following to grow our services business and to derive incremental revenues over the long term that provide some balance to the more cyclical nature of our project-oriented business.

All of these efforts tie back to driving value for our shareholders and our customers. I’m proud to lead a team that is so strongly focused and committed to that objective and I want to thank them for our success in 2019. We’re excited about where ATS is headed and I look forward to celebrating our achievements with you in 2020 and the years beyond.


Andrew Hider
Chief Executive Officer
ATS Automation

Financial Highlights
(in millions of dollars, except per share data)
Fiscal 2019 Fiscal 2018 Fiscal 2017
Revenues $ 1,253.6 $ 1,114.9 $ 1,010.9
Earnings from operations $ 114.8 $ 85.5 $ 71.9
Adjusted earnings from operations1 $ 142.8 $ 117.3 $ 97.1
EBITDA1 $ 157.2 $ 122.1 $ 106.5
Net income from continuing operations $ 70.8 $ 47.2 $ 35.0
Earnings per share – basic from continuing operations $ 0.76 $ 0.50 $ 0.38
Adjusted earnings per share1 $ 0.98 $ 0.74 $ 0.57
Order Bookings1 $ 1,408 $ 1,182 $ 1,134
Order Backlog1 $ 904 $ 746 $ 681

1 Non-IFRS measure. See Management’s Discussion and Analysis: Notice to Reader.

ATS is listed on the Toronto Stock Exchange under the symbol “ATA”.

ATS At-a-Glance
ATAToronto Stock Exchange $2.0B*market capitalization $1.3Brevenue
4,400+employees worldwide 23facilities 50+*offices 22countries

* As at June 24, 2019

Ours is a singularly driven company in a complicated world. We help customers in diverse industrial markets transform, streamline and optimize their manufacturing operations. Our advantages lie in industry-leading automation technology, the expertise and commitment of our people, and a performance-oriented culture built on continuous improvement and attention to detail. Explaining ATS to clients, investors and other stakeholders around the world, we stress three facets of our identity. The Company today is the sum of these parts:

A factory-automation systems and solutions integrator.

ATS is an end-to-end technology and automation solutions provider. Our single-source solutions can span the full project life cycle, from pre-automation, through automation and integration, to post-automation. From the outset, we put the right talent in front of the customer. This ensures we develop optimized manufacturing strategies and that we conceptualize, simulate and perfect comprehensive solutions before they’re installed. At implementation, we offer original, fully integrated custom solutions as well as standard automation products that drive breakthrough performance – conveyance systems, assembly platforms, advanced vision systems, aseptic processing and containment technologies, and more. Our post-automation expertise includes remote diagnostics, critical analysis, preventive maintenance and performance insights through IlluminateTM Manufacturing Intelligence, our new scalable Industrial Internet of Things software platform.

A diversified, growth-oriented multinational organization with a global footprint.

ATS has operations in more than 20 countries, keeping us close to customers in four key industrial markets: life sciences, energy, transportation, and consumer products and electronics. In life sciences, we support the manufacturing and automation efforts of leading medical device, pharmaceutical and biotechnology companies. This essential sector now makes up more than 50% of ATS’ total revenue stream. In energy, we have customers in nuclear, as well as in oil and gas, batteries and solar. In transportation, we’re focused on automotive, powertrain and aerospace customers, with particular emphasis on emerging electric and autonomous vehicle technology. Precision manufacturing and materials handling technology is also in demand from our customers in consumer products, electronics, and food and beverage markets.

A decentralized corporation with common purpose, approach and values aligned through the ATS Business Model.

ATS is a diverse, multifaceted organization that stresses the value of innovation. But there is a connective thread and clarity of purpose at our core – the ATS Business Model (ABM). Introduced to ATS two years ago, the ABM is a powerful business management system that enables us to achieve our business through a process of disciplined, continuous improvement. The ABM provides our people with key problem-solving tools and a template for eliminating waste and driving process improvement in all areas of responsibility, regardless of function. It empowers personnel, improves customer satisfaction and enhances our returns.

ATS Global Locations map
ATS Global Locations