Investors Presentation Cautionary Statement Regarding Forward - PowerPoint PPT Presentation

August 2018 Investors Presentation

Cautionary Statement Regarding Forward Looking Statements 2

KEY DUAL-LISTED TECHNOLOGIES PROFITABLE GROWTH Optical & X-Ray NASDAQ / TASE Revenue Growth Facts 5Y CAGR – 18% EMPLOYEES METROLOGY Leading 650 Dimensions & Materials Operating Income Growth Metrology 5Y CAGR – 37% Innovator for Advanced Process Insight GLOBAL PRESENCE R&D SITES Cash Reserves $169M World wide offices USA & Israel * Non-GAAP Financials 3

$222 Success Tied to $149 $112 Revenue 2013 2015 2017 In Million $ $69 Diversified Portfolio Customers’ partnership $59 $45 X-ray & Optical Development to Manufacturing Dimensions & Materials Joint development programs Operating expenses In Million $ 2013 2015 2017 $63 Disruptive technologies Solid financial model Coupling SW & HW Operational efficiency $22 Emerging Metrology Growth by investment $14 Operating income In Million $ 2013 2015 2017 * Non-GAAP Financials 4

Track Record H1 2018 Highlights Revenue Growth 18% CAGR 5 Years $221 +13% YoY Q4 $57 Elevated R&D Investment Q3 $164 Operating Income - 27% $61 $149 Q3 $54 Revenue Diversification: $121 Q2 $62 China Memory Q2 $56 50 % 40 % Q1 Q1 $63 $54 2017: 35% 2017: 20% 2014 2015 2016 2017 2018 * Non-GAAP Financials In Million $ 5 *NON GAAP FINANCIAL

Innovative 300mm 10um 5nm 0.5Å Wafer Pad Pitch Precision Optical / X-Ray Semiconductor Dimensions / Materials Segments Parameters 6

Unique Complementary Software Dimensional Materials Services Physical & Stand Alone Install Base Integrated & Mathematical Models Standalone Materials Features and Fleet Data Properties Upgrades Critical Management Dimensions Hybrid Ecosystem Film Thickness 7

FLEET MANAGEMENT Hybrid Eco System CMP Lithography Interlacing HW & SW Inline solutions Deposition ETCH Monitor Retrain Physical Models Complementary Models NOVA MARS NOVA Fit 8

Digital Semi Market CAPEX 2017 60B GB 40% Human 2000 2010 2020 2025 Internet Mobile Internet Connected World Data Economy Connectivity Mobility Productivity Veracity 9

Multi Catalysts for Semiconductors Demand Smart Smart AI Cryptonomy Smart Autonomous AR / VR Cities Sensors Industry Vehicle 1 PB 4 TB 25% 30% 50% 30% 70% Per Car Per day CAGR CAGR CAGR CAGR CAGR Per Day 10

Smart Smart Sensors Industry Data Connected Management Sensors Smart Automotive City Semi GROWING Growth Demand AR / VR AI for Data Network Mobile Infrastructure Management Devices Cloud 5G & Computing Power Beyond Cryptonomy Smartphones Capacity Continuous demand for improvement Wearables Robots Performance Density Scaling Cost 11

Efficiency Performance Cost Economics Density Technology Scaling INFLECTION Points Materials Complex 3D Scaled Engineering structures Devices Metrology Growth Drivers 12

Growth Beyond Demand Metrology Intensity METROLOGY INTENSITY Scaled Devices Planar FinFet Nano-Wires Complex Structures 3D Profiles Materials Properties Multiple Parameters Planar NAND VNAND Gen-1 VNAND Gen-x DRAM Gen-1 DRAM Gen-X DRAM Gen-Y Complexity 13

Dimensional Services Materials M&A Metrology Metrology Inorganic Share Process Control > $50M Gains From $300M Nova200 to TAM Expansion 300 $200M Disruptive Organic Innovation $300M Reaching revenues $100M of $300M organically Intensity growth 2012 2017 Target $25M New Technology 14

Why do we CONTINUE GROWING? Diversification Customers Mix nodes Segments Technology Geography Growing Market Share in Growing TAM 15

Diversification - Customer Mix GLOBAL Target Model FOUNDRIES 14% TSMC GLOBAL TSMC 39% FOUNDRIES 23% 5 Large Customers 25% Additional Memory Hynix Customers 10% IDM Penetration 2014 2017 Foundry Exposure Memory Growth 2 major customers 4 major customers Samsung Others Others 27% 26% 36% 16

Diversification - Segment Mix Target Model Segments Balance Memory Growth Foundry leadership 2014 2017 Memory versus foundry / Logic 17

Diversification - Regional Mix Korea Target Model 11% Korea Taiwan 30% Balanced Territory 29% Taiwan mix - Taiwan, 47% Korea, China USA 3 Large Territories 24% 2014 2017 Taiwan Diversified Exposure Territory Mix USA 15% Others China 14% Others 21% China 5% 4% 18

Exposure Accelerating China Contribution % of total revenue Growth (In Million $) Tool of Record Position Dimensional and Materials Metrology Logic and Memory Domestic and global customers 2014 2017 $300M 2014 2017 $300M (Model) (Model) 19

R&D Investment Diversification - and Acquisition (in Million $) $150 $70 MATERIALS From single tool to ENGINEERING Fleet approach - infrastructure 2011-2013 2014-2016 Invest in Sustaining and Disruptive 2014-2017 innovation METROLOGY X-RAY OPTICAL Growth ECOSYSTEM CONVERSION 232% Compete with unique Coupled HW & SW solutions 84% lead the Emerging Metrology markets ADVANCED DATA LAB TO FAB Revenues Operating TECHNOLOGY ANALYTICS Income 20

Diversification – Nova Performance by Tech-Node $M 114 MIX nodes Trailing & Advanced 27 71 51 2014 2017 Advanced Nodes - 62% 21

Share in Growing Markets Addressable Market Market Share (In Million $) Unique Value $1,200 25% > Displacing Other Metrology Emerging Applications Disruptive Innovation 2014 2017 $300M 2014 2017 $300M model model Expanding TAM Gaining Market Share 22

Resilient Model Revenue Operating Profit Earnings Per ($M) ($M) Share ($) 2014 2016 2017 2014 2016 2017 2014 2016 2017 23 * Non-GAAP Financials

Financial 2017 YoY Growth Rate 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) Peer Group Nova Revenue Nova Op Inc 24 * Non-GAAP Financials ** Peer Group: KLAC; NANO; Other Metrology

Historical Outperformance 2012 - 2017 5 Years CAGR (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 25 * Non-GAAP Financials ** Peer Group: KLAC; NANO; Other Metrology

& Operating Margins Operating Margin(%) Gross Margin (%) Nova300 Model Nova300 Model 2014 2017 2014 2017 26 * Non-GAAP Financials

Investment R&D Investment plans: M&A plans: 2018-2020 Investments ~$250M 25% invested in new technologies Distinct market segments: (plan) Increased TAM of $200M by 2020 Criteria’s: R&D Investment Multiple Betas: EO2018/BO2019 Nova’s multiples and Acquisitions Revenue contribution - 2019 Immediate accretion From 2 main (6-12 months) technologies to >4 main technologies Targeting >$50M revenue contribution by 2020 Synergies 27

Solid Track Record Revenue Growth $M Expanded technology $222 base driving TAM increase Revenue Doubled Every 5 Years Diversified revenue stream driving wider market exposure $96 Solid operational model $58 $20 2002 2007 2012 2017 28