[PPT] - Investors Presentation Cautionary Statement Regarding Forward PowerPoint Presentation

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Investors Presentation

August 2018

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Forward Looking Statements

Cautionary Statement Regarding

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KEY

Facts

Leading Metrology Innovator for Advanced Process Insight

DUAL-LISTED EMPLOYEES GLOBAL PRESENCE TECHNOLOGIES METROLOGY R&D SITES PROFITABLE GROWTH NASDAQ / TASE 650 World wide offices Optical & X-Ray Dimensions & Materials USA & Israel Revenue Growth 5Y CAGR – 18% Operating Income Growth 5Y CAGR – 37% Cash Reserves $169M

* Non-GAAP Financials

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Success Tied to

Customers’ partnership Diversified Portfolio Disruptive technologies Solid financial model X-ray & Optical Dimensions & Materials Coupling SW & HW Emerging Metrology Operational efficiency Growth by investment Development to Manufacturing Joint development programs

Revenue Operating expenses Operating income

$112 $149 $222 2013 2015 2017 $45 $59 $69 2013 2015 2017 $14 $22 $63 2013 2015 2017 In Million $ In Million $ In Million $ * Non-GAAP Financials

SLIDE 5 Q1 $54 Q1 $63 Q2 $56 Q2 $62 Q3 $54 Q3 $61 Q4 $57

$121 $149 $164 $221 2014 2015 2016 2017 2018

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Track Record

18% CAGR 5 Years

H1 2018 Highlights

Revenue Growth +13% YoY Elevated R&D Investment Operating Income - 27% Revenue Diversification: Memory China

2017: 35% 2017: 20%

50% 40%

In Million $ *NON GAAP FINANCIAL * Non-GAAP Financials

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Innovative

Optical / X-Ray Semiconductor Segments Dimensions / Materials Parameters

10um Pad 5nm Pitch 0.5Å Precision 300mm Wafer

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Unique Complementary

Software

Physical & Mathematical Models Fleet Data Management Hybrid Ecosystem

Dimensional

Integrated & Standalone Critical Dimensions Film Thickness

Materials

Stand Alone Materials Properties

Services

Install Base Features and Upgrades

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Interlacing HW & SW solutions

CMP Deposition ETCH Lithography FLEET MANAGEMENT

Hybrid Eco System

Physical Models

NOVA MARS

Complementary Models

NOVA Fit

Inline Monitor Retrain

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Digital

Semi Market CAPEX

2000 2010 2020 2025

Internet Mobile Internet Connected World Data Economy

Connectivity Mobility Productivity Veracity

2017

60B GB 40% Human

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Multi Catalysts for Semiconductors Demand

Smart Cities

25%

CAGR Smart Sensors

30%

CAGR AI

50%

CAGR Cryptonomy

30%

CAGR Smart Industry

1 PB

Per day Autonomous Vehicle

4 TB

Per Car Per Day AR / VR

70%

CAGR

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GROWING Demand for Data Management & Computing Power

Data Management Network Infrastructure Beyond Capacity Connected Sensors

Semi Growth

Smart Sensors Smart Industry Smart City Automotive AI AR / VR 5G Cloud Cryptonomy Smartphones Wearables Robots

Continuous demand for improvement

Performance Density Scaling Cost

Mobile Devices

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Technology INFLECTION Points

Cost

Economics Performance Scaling Efficiency

Materials Engineering Complex 3D structures Scaled Devices

Metrology Growth Drivers

Density

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Growth Beyond Demand

Metrology Intensity Complexity

Planar FinFet Nano-Wires Planar NAND VNAND Gen-1 VNAND Gen-x DRAM Gen-1 DRAM Gen-X DRAM Gen-Y

METROLOGY INTENSITY

Scaled Devices Complex Structures 3D Profiles Materials Properties Multiple Parameters

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From Nova200 to

300

Reaching revenues

f $300M organically

Share Gains TAM Expansion Disruptive Innovation Intensity growth

Dimensional Metrology Services M&A Materials Metrology $300M $200M $100M

Inorganic Process Control > $50M Organic

$300M

2012 2017 Target $25M New Technology

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Customers Segments Mix nodes Technology Geography Growing Market Share in Growing TAM

Diversification

Why do we CONTINUE GROWING?

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Diversification -

Customer Mix

Target Model

5 Large Customers Additional Memory Customers IDM Penetration Others 36% GLOBAL FOUNDRIES 25% TSMC 39%

2014

Foundry Exposure 2 major customers

Others 26% Samsung 27% Hynix 10% GLOBAL FOUNDRIES 14% TSMC 23%

2017

Memory Growth 4 major customers

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Diversification -

2014 2017

Segment Mix

Memory versus foundry / Logic

Target Model

Segments Balance Memory Growth Foundry leadership

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Diversification -

Target Model

Balanced Territory mix - Taiwan, Korea, China 3 Large Territories

Regional Mix

Others 14% USA 24% Korea 11% Taiwan 47% China 4%

2014

Taiwan Exposure

Others 5% USA 15% Korea 30% Taiwan 29% China 21%

2017

Diversified Territory Mix

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Exposure

China Contribution

(In Million $)

% of total revenue

2014 2017 $300M (Model) 2014 2017 $300M (Model)

Accelerating Growth

Tool of Record Position Dimensional and Materials Metrology Logic and Memory Domestic and global customers

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Diversification -

84% 232%

Revenues Operating Income

$70 $150

2011-2013 2014-2016

R&D Investment and Acquisition

(in Million $)

2014-2017 Growth

From single tool to Fleet approach - infrastructure Invest in Sustaining and Disruptive innovation Compete with unique Coupled HW & SW solutions lead the Emerging Metrology markets

X-RAY OPTICAL CONVERSION ADVANCED DATA ANALYTICS LAB TO FAB TECHNOLOGY METROLOGY ECOSYSTEM MATERIALS ENGINEERING

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Advanced Nodes - 62%

Nova Performance by Tech-Node

$M 2014 2017 71 114 27 51

MIX nodes Trailing & Advanced

Diversification –

21

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Share in Growing Markets

Unique Value

Displacing Other Metrology Emerging Applications Disruptive Innovation

Addressable Market

(In Million $)

Market Share

Expanding TAM Gaining Market Share

$1,200

2014 2017 $300M model

25%

2014 2017 $300M model

>

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Resilient Model

2014 2016 2017

Revenue ($M)

* Non-GAAP Financials

Operating Profit ($M) Earnings Per Share ($)

2014 2016 2017 2014 2016 2017

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Financial

2017

Achieved 2X the Peer Group Growth Rate Grew Operating Income at 3X Revenue Delivered >76% EPS Growth Year Over Year Generated >$55M Free Cash Flow

(25% of revenue)

* Non-GAAP Financials ** Peer Group: KLAC; NANO; Other Metrology

2017 YoY Growth Rate

Peer Group Nova Revenue Nova Op Inc

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Historical Outperformance

5 Years CAGR (2012-2017)

* Non-GAAP Financials ** Peer Group: KLAC; NANO; Other Metrology

2012 - 2017

Achieved >3X Process Control CAGR Grew operating income at >2X Revenue CAGR Delivered 30% Non-GAAP EPS CAGR Generated >$120M in Operating Cash Flow Process Control Nova Revenue Nova Op Inc

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& Operating Margins

2014 2017

Gross Margin (%) Operating Margin(%) Nova300 Model Nova300 Model

2014 2017

* Non-GAAP Financials

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Investment

R&D Investment plans: M&A plans:

25% invested in new technologies Increased TAM of $200M by 2020 Multiple Betas: EO2018/BO2019 Revenue contribution - 2019 Distinct market segments: Criteria’s: Nova’s multiples Immediate accretion (6-12 months) Targeting >$50M revenue contribution by 2020 Synergies

2018-2020 Investments ~$250M

(plan) R&D Investment

and Acquisitions From 2 main technologies to >4 main technologies

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Solid Track Record

Revenue Growth $M

Revenue Doubled

Every 5 Years

Expanded technology base driving TAM increase Diversified revenue stream driving wider market exposure Solid operational model $20 $58 $96 $222

2002 2007 2012 2017

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