Good morning, and welcome to the 2023 Jefferies Industrials Conference. My name is Asha Taylor, and it is my pleasure to introduce Andrew Hider, CEO of ATS Corporation.
Thanks. Good morning, everyone. That's a quiet start. How about I bore you with the disclaimer for a little bit? So we all know this. I'll walk into a little bit about the business. So for those of you who don't know ATS, this is a little bit of a background of who we are and how we operate. But to start, to give you a context, and I'm gonna take this off, we are a decentralized corporation, all aligned with a central operating system. We call it our ATS Business Model, or ABM. It's been our focus and our constant drive, and how we talk at ATS is we talk people and culture, and getting those things right. And then I'm gonna walk a little bit about the story of our business. The last trailing twelve months, we did roughly around $2.6 billion in revenue.
Now, over a 5-year period, organically, it's a little over 8% growth year-over-year, and over 18% with inorganic. But as importantly, or more importantly, is our EBITDA growth over that same period of time is close to 24%. So we've continued to execute and really drive around profitable growth. And I'll get into a bit around the why behind that and really where we dug into to align the business around markets and technologies that we view are gonna continue to add value for our shareholders. Just a few more data points. We're now a little over 6,500 dedicated, focused employees that are really aligned on the journey of making ATS the best we can be. We're over 60 facilities, 80 offices, and we do business in over 20 countries.
We've also launched, and we're now traded on the Toronto Stock Exchange and the New York Stock Exchange under the ticker symbol ATS. So what do we do? We're involved in system integration, we're involved in standard products and standard machines, and we're involved in services and digital. And if you look at that, and these are a little bit dated, but the layout of the business has really shifted over this time. Our system integration is now roughly a little over 40%. Our standard products and standard machines is closer to 30% now, and our services and digital is closer to 30% now. And to give you in its simplest form, if you're a life sciences customer and you invented this, you developed this, and this is a drug that treats something, it treats cancer, and you've had 1,000 prototypes.
And now you need to go from 1,000 prototypes to 1,000 a minute because you just got FDA approval, and your gross margin on this product is 70%, and your demand is through the roof. You come to ATS. Now, what matters to you is. This is an injectable device, so it goes direct into your bloodstream. So for you, you need to make sure there's no defects. So quality is gonna be on the top of your mind, no risk. Launching the product on time, on budget, on target, is gonna be important to you, 'cause remember, this is a 70% gross margin product, and for you, your demand continues to grow. You come to ATS, and we do the full system, building it out, so you can produce this product on your site.
We also have now acquired more and more standard products and machines that also fill, move, inspect, and really also align around serving and supporting over the life of the equipment. So we're with you for a long period of time. And I say that because we're one of the leaders in system integration. We often have very deep relationships with our customers, and when we meet with them and we acquire a new company, they'll often reach out to us and say: "When can we talk about this new technology?" So it's really been a strategic advantage for us to be able to continue that journey. Additionally, we're in pre-automation. We align to understand what it's gonna take to get your product to market, and we're also involved in really planning your business or helping you plan your business.
So some of the challenges our customers will face is they've got labor shortages, they've got cost of labor increases, as well as when you look at the markets we serve, oftentimes the regulatory environment continues to be more stringent, more challenging. We're involved in all those steps. So one example of a customer is a company by the name of Insulet, and they do the Omnipod, and this is a wearable device in the treatment of diabetes. It's an insulin pump, but it's wearable, and it's a really amazing device where you can wear it, and if you have diabetes and you're playing sports, you can wear it while you're playing sports, and if it gets knocked off, you can put it right back on.
Well, they were producing their product out of China, and this was well before onshoring, reshoring, well before supply chain de-risking, and they moved their product from China to Boston. So think about low-cost region to. And I lived in Boston, pretty high-cost region. And they went with ATS on the full breadth of solution, both from the total integration-... to the products we serve, to the to the life of the equipment with our services and, and, and digital capabilities. And they moved their gross margin from 45% to 65%.
So I, I walk through that example because while we wanna walk through and talk about all the dynamics that are going on in the world, that was done before all this happened, and automation enabled them to not only get their mar-- their product to market and meet the increasing demand, but also help them in their journey on their gross margin expansion. So we're now, largest segment of our business is life sciences. And to give you some context of the growth we've had in this space, it's a little over 40%, almost close to 50. Life sciences now, today, is bigger than the ATS I inherited. So it's continued to grow. It's continued to line around strategic niches that we view of high value. So we're in medical devices, we're in pharma, we're in radiopharma.
We constantly focus on areas that we view have long-term trends that align with how our business operates. We like to call these markets more resilient, high consequence of failure. We're involved in transportation, and more specifically, this is really the EV shift, electrification of vehicles. If you went back to ATS ten years ago, you would know that this is pretty much our largest market, and it was primarily ICE, which is internal combustion engine. We've now largely exited that. We've now grown more and more into EV, and we've sold off an asset that was our ICE asset. We're involved in food and beverage. This is primary processing, so think produce processing, tomato from the vine to puree. But we're also involved in sorting and inspection.
So the next time that you have a bag of, whether it's frozen fruit or shrimp, you can know that there's no foreign objects in that bag 'cause it goes across a system like ours. We're also in consumer, and these are niche spaces within consumer. It's warehouse automation, it's personal care and cosmetics. Think creams, think, the toothpaste you used this morning most likely was filled by an IWK machine. And then lastly, we're in energy, and this has been a unique area for us, in that we support the nuclear space, and nuclear has had a continued view being a greener energy. And we're around, CANDU reactors, we do decommissioning, and we're also involved in small modular reactors and the potential growth in that space. This shift, this focus was intentional.
When I started almost seven years ago, I can't believe time flies that fast, but we really looked deeply on the markets that we wanna be a part of ATS for the long term, where we wanna focus our energy and efforts. And so we've consciously shifted this to be in areas that we view have longer term trends that align to shareholder value. And underpinning this, and really the foundation of everything we do, is our ATS Business Model, our ABM, and it starts with people. Having the best team and winning as a team. And then it's process, but being formal and disciplined, aligning around when something's broken, have the short-term and long-term fix on it.
And I'll tell you, I was asked a lot of questions around the supply chain when there was a massive challenge in the supply chain area, and one of the things we drove was that short-term thinking around understanding where we're off and how do we get back on track now. But then additionally, long term, what do we do about the challenging components that we need to change suppliers, or we need to move, or we need to outsource, or we need to design out? So those suppliers know that if we get challenged often, we can move. We have the capability to do that. And lastly, performance, and it's that setting the expectation. I like to always say we're ex-athletes at ATS. We like a scoreboard. We set those targets, and when we're off, what do we do about it? How do we get back on track?
But it's that constant challenge for performance and setting the targets. Then over to the right is really how we operate, how we implement this. Strengthen our core, customer first mindset, taking our annual targets, deriving it into performance management. If we set it for the business, how do we align that with our leaders? It's about deliver growth, customer success, 'cause if they succeed, we succeed. It's also about talent development, and when I talk about M&A here, and I talk about future and deployment of capital, if we have to pay up for leadership teams, we don't like that. So we're constantly challenging ourselves on building our teams, so when we acquire businesses, if we need to deploy our leaders in, we've got a bench strength. Last on the right is pursuit of excellence, and you'll notice long-term shareholder value is the target here.
Each of these categories starts with a customer first mindset. Then it goes to things like strategic planning, looking out for the next three to five years, and really understanding what the markets are gonna do. Goal deployment. That alignment to stretch targets. Then lastly, what I'll talk on here is innovation. Making it part of not only everyday lives, but setting the tone to constantly outpace our competition. Utilizing and continuing to have innovation as part of our future. This is our repeatable model, this is our playbook, and how we operate every one of our businesses. So we have eight value drivers. I won't get into a lot around these, but these are the critical eight. It starts with bookings, revenue, margin expansion, and working capital, your financial metrics. Any division, any business, any site is gonna start with these eight value drivers.
And then there are two around customer, 'cause when we talk to our customers, it's very simple: if you're giving my product on time, the highest level of quality, I want to buy more from you. So we target those, we drive those, we challenge ourselves in getting better in those areas. And then people, turnover and internal fill rate. Both lagging indicators, but really insightful on, are we keeping the best talent, and are we developing the best talent? So, and I've walked through, but some of the barriers around this, we're in regulated environments, we're in technology-intensive areas. We constantly focus on complex processes. If you think about that, that example I used of the Omnipod, there was over 70 components, and it's an insulin pump, so if you pump too much or too less, you have real problems. Those are the spaces we play in.
Additionally, there's a lot of market dynamics that we view favor automation. We talk about labor shortages. One of our customers talked to me, and they were very candid about, they have 66,000 employees, and over the next three years, a third of them are going to retire. A third. They didn't know what to do with it. They basically said, "The new generation, they swipe. They don't turn, they swipe. You have to help us!" And they were using automation or looking to automation to solve a lot of those challenges. Additionally, EV challenges, new frontiers, factory automation, digitization around not just a dashboard, but making it actionable insights. These are all areas that we play in and really support our customers on.
So our enablers, innovation, as when we started this journey, we really drove innovation in our business, but we constantly challenge on how do we get better? How do we invest more? It's now greater than 1% of our revenue, but it's a constant drive for us on every day. I was recently touring a facility, and one of the engineers, and she said to me, "You know, Andrew, we're taking the challenges of our customer. We're utilizing our vision application, along with our Symphony platform, which is our movement of product, as well as AI, to identify defects earlier in the process, so our customers don't have higher levels of waste." We're constantly doing that to really set ourselves apart. We have digital growth.
We are one of the leaders in the automation space, in the integration space, so we know what goes into making this product. So when we take the data off and we can understand what the data tells us, we know how to drive actionable insights. Whether it's around Digital Twin, predictive maintenance, or other areas, we have the capability to really implement that. Strategic M&A, as well as margin improvement, and if you've seen our numbers, you know we target margin improvement. It's about supply chain, it's about growing in areas that we have higher value for customers. It's about really leveraging our cost structure. It's about the ABM, as well as standardization. Breaking our products down to know when do we need to redesign or when can we just outsource?
So some of the examples, we've acquired several businesses in key markets, key technologies, key areas. SP, they do lyophilization. It's turning a liquid to a powder that allows you to have longer shelf life on the product itself. So think about a pharmaceutical that needs to be shipped around the world. If you turn it into a powder, it's gonna last a lot longer. A key enabler, they also do aseptic filling, which is aligned around injectable drugs. CFT, bigger penetration into the food space, really aligned around the optical sorting as well as primary processing. And then Comecer, and Comecer supports radiopharmaceuticals, the identification and treatment of cancer, and this has been a growing area. There's new and exciting avenues around the drugs that they're launching, around identifying, but then also treating, and we're a key player in that.
We have four criteria we measure every M&A target on, every business on. It starts with the market, understanding, deeply understanding the market and where they position themselves, where they play. Strategic rationale around the technology, geographic shift, services. Operational fit, our assessment of the leadership. Do they know how to run a continuous improvement program? How fast can we launch the ABM? And then lastly, our financial return, which we start with ROIC. We always want that to be greater than our, our cost to capital. We also look at EPS accretion. We look at recurring revenue, we look at margin potential. And just an example, and I walked through the CFT. CFT, since we've acquired them a little over two years ago, have expanded their bottom line by over 500 basis points.
It's a meaningful shift, but it's also the alignment of our playbook and how we launch the ABM. So I walked through the results. You can see the team is very focused, laser-focused on markets that we view have long-term trends, as well as executing and continuing to focus on out-executing our competition in the space we serve. But additionally, driving that value creation, not only for our customers, but also our shareholders. We're fairly CapEx light intensity business, which allows us to continue to deploy capital back into the business for new innovation, new areas of investment or M&A. Strong leadership team. You know, we held a meeting yesterday. It was our investor day, and our leadership team got to walk through their journey about their penetration, their drive. It's the strongest team we've had in place. They're passionate about where we're going.
They're passionate about the targets, and how we're gonna continue to drive the business forward. So as I summarize, we have a solid foundation. We're constantly focused on building and reassessing and really driving the ABM in everything we do. That is our model. That is how we operate. That's our culture, our DNA. We're well-positioned. We have strong markets that support a long-term growth trajectory. We also have diversified within those markets to not only be system integration, but also continue to have those higher technology areas review, we can offer more and more value. We're expanding on services. Services over COVID has gone from a nice-to-have to mission-critical. I remember speaking to a customer, and they were in the UK, and they were talking to me, and the CEO said to me, she said, "Andrew, you have to help us.
W e're not involved in the COVID fight, but our technology reduces the pain of a patient by half the time. If they don't have it, the length of their suffering is gonna last this amount of time, so you have to help us." And because we focused on shifting our services business and building it out, we could support them, and we launched new tools where we could do on-support demand. That's gonna be a continued enabler for us. So it's gone from a nice to have to mission-critical for our customers. We're driving innovation in everything we do. It's a focus on how do we continue to build out capability for our customers, expand our penetration, but also expand the value creation. And lastly, you know, when we talk about M&A, we have our flywheel.
Our leadership team, this has gone from corporate-led initiative to how our leaders think. They now cultivate, and we have a mantra at ATS, ABC, Always Be Cultivating, and our leaders are now cultivating. They're leading a lot of the deals. We have deployed over $1.4 billion in 19 targets have added, and they're great businesses, strong brands, strong technology, and when they come to ATS, we help them achieve more. We help them achieve their aspirations. So with that, I will now open it up to questions. Please. Yeah, so I will, and our rough spend on innovation is a little over 1%. Exactly the number is? 1.06% to be specific. And we do have Vitality Index. We have not published those.
We target areas in the one and three-year vitality, and you're gonna see more and more from that from us, but we have businesses that are in the mid-thirties. We have businesses that are lower than that. The challenge with vitality, and people can get wrapped up with vitality, is if you change a part number, it can put it in your vitality. So you can fluff those up, and we don't like that, 'cause if you fluff something up, it's not real actionable. And so we really challenge ourselves on what innovation is driving revenue and driving expansion. And so some of our businesses, it's clear on vitality. Some of our businesses with custom automation, we challenge ourselves much harder on what that would be. So that's why we don't really publish it, 'cause it can get a little bit muddy in that area.
Thanks, Andrew. A couple questions on nuclear. What is your role in with Ontario Hydro, with SMR, and is Ontario mandating a certain percentage of production to be in Ontario?
So we don't talk about many of our customers, which you know, and you do also know that Bruce Power is a big, big customer of ours and, and partner. We are involved with the key players around SMR, and that has brought us—that has got us involved with many of the customers that are in that space. As far as Ontario Power, you know, when we last looked at this, it, it's a fascinating shift for especially Canada, but they've been such a leader in CANDU reactors and, and the technology that's wrapped around it. So what we've seen is they're, they're constantly looking at how to utilize nuclear and the energy developed from nuclear process to really build out their energy needs. And so we've seen them expand on, on CANDU reactors throughout. We've also seen them really invest in SMR.
So I do think this is gonna continue to unfold. SMR is the big area, and I get asked a lot of questions around the potential, and the potential is very big, but it's gotta be proven. And so we really have lined up with some of the key leaders around this to help them prove out the technology. We do think it's viable. We do think it's really something that's gonna take off, but timing is one of the ones that we just are careful on when we announce what that could mean for ATS.
Quick follow-up. If a nuclear facility was going to be decommissioned, but then they decide to extend its life by 10-20 years, what happens to your business? What's your role on extending the life?
So this is a, I don't wanna say good question, but this is a very good question, especially because we do, we do decommissioning, and then we do refurbishment. And if you look at the process of refurbishment, it's roughly decommissioning and then recommissioning, and so decommissioning is only half that. So if a company were to extend the life, that's actually a big value for us. That's actually a bigger value for us because we're one of the larger players in this refurbishment process, and when you look at the tool players in that space, we are one of the bigger players around that. So if they were to go that route, and they were to extend, that would actually be a big benefit for ATS and one that we would be well-positioned to support.