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Highlights

  • In FY24, ATS' revenue surged 17.7% to CAD 3,032.8mn, driven by construction contracts and services
  • The company’s earnings from operations rose by around 42%
  • The company achieved a notable increase in net income, reaching CAD 194.1 million, in contrast to CAD 127.7 million in FY23

ATS Automation Tooling Systems Inc (TSX: ATS) is a Canadian firm specialising in automation systems. It is dedicated to designing and constructing tailored automated manufacturing and testing systems for clients, offering pre-and post-automation services. Predominantly, the company derives its revenue from the European and North American markets. Its market capitalization stands at CAD 4.70 billion.

In FY24, ATS recorded a significant 17.7% surge in revenue, reaching CAD 3,032.8mn compared to FY23. This increase was primarily attributed to elevated revenues from construction contracts and services. Consequently, the company saw a remarkable 41.8% rise in earnings from operations, which was partially offset by increased operating expenses. Further, income before income tax witnessed a substantial 54.4% upswing to CAD 246.6mn, primarily fueled by higher operating income and partially offset by higher net finance costs. Driven by these factors, ATS achieved a notable increase in net income at CAD 194.1 million, in contrast to CAD 127.7 million in FY23.

Moreover, ATS reported robust financial growth in FY24, coupled with a sequential enhancement in its operating margin profile, showcasing the company's resilience and adaptability.

Recent business update

On May 15, 2024, ATS announced its definitive agreement to acquire Paxiom Group, which specializes in packaging machinery for various industries. After the acquisition, Paxiom will merge into ATS's products and food technology segment.

Company outlook

In the first quarter of FY25, the company is expecting the conversion of order backlog to revenues to be in the range of 36% to 40%.

Top 10 shareholders

Collectively, the top 10 shareholders of ATS hold approximately 55.16% of the total shares. Mason Capital Management LLC and Capital Research Global Investors own maximum stake, at approximately 14.50% and 8.47%, respectively.

Stock performance

The stock price of ATS has witnessed a surge of around 3.26% over the last week and around 13.98% over the last 1 month. The stock has a 52-week high price of CAD 64.80 and a 52-week low price of CAD 41.12. Currently, it is trading lower than the average of this 52-week high-low range.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is May 17, 2024. The reference data in this report has been partly sourced from EODHD/Others.