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February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

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Presentation on theme: "February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -"— Presentation transcript:

1 February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing - Test & Inspection - Surface Treatment - Fluid Management

2 2 Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 Information in this presentation may contain forward-looking statements, as defined by this Reform Act. These statements are identified by words or phrases such as are expected to, will likely result, is anticipated, estimates, will continue, outlook, project, or similar expressions. These forward looking statements are based on current expectations and involve risks and uncertainties. Consequently, Nordson Corporations actual results could differ materially from the expectations expressed in the forward-looking statements. Factors that could cause the Companys actual results to differ materially from the expected results include, but are not limited to: fluctuations in currency exchange rates; a sales mix different from assumptions; deferral of orders; customer-requested delays in system installations; and unanticipated delays. DISCONTINUED OPERATIONS All numbers for years prior to FY 2006 in this presentation include results from discontinued operations unless otherwise noted.

3 Applied to Diverse Markets 3 Nordson Investment Summary Real technology differentiation Unparalleled application know-how Global direct sales & service Parts & consumables annuity Globally recognized brand 30+ countries, established and emerging Technology, consumer non-durables, consumer durables Emerging applications Sustainable Business Model Delivers Exceptional Results Strong top line growth 49 years of dividend increases Excellent margins and returns Strong cash flow for continued investment Top quartile total shareholder return

4 Nordson: Focused on Precision Technology Solutions Material Dispensing Dispensing, Coating Sealing, Finishing Spraying, Painting Extrusion Plastic Processing Extrusion Injection Molding Test and Inspection X-ray, optical inspection Bond test Surface Treatment UV curing Plasma treatment Fluid Management Components 4 Customer Value Proposition Reliability…uptime Speed…productivity…yield Efficiency…lower material usage Leading edge features Lower Cost of Ownership

5 End Markets: Consumer Non-Durables, Durables, Technology …. Every Day You Experience the Value We Bring Packaging, Nonwovens Product Assembly Plastic Processing 5 Adhesive Dispensing Advanced Technology Electronics, Medical Solar, LEDs Industrial Industrial Coating Appliances, Agriculture Automotive, Furniture Containers, Construction

6 6 Sales Distribution – FY2012 Operating Segments Product Type Geography Markets Served

7 7 Adhesive Dispensing Systems Income growth in emerging markets Increased use of disposable hygiene products Increased use of processed/ convenience foods Increased use of lightweight plastics Productivity investments Material, machinery and process innovations Food and beverage packaging Nonwovens / disposable hygiene Furniture and building products Paper converting Macro electronics General industrial assembly Alternative energy Medical devices Labeling Transportation 48% of FY12 sales Twelve Months Ending 1/31/2013: Sales: $728m Operating Margin: 29% Melting, filtering, pumping, transporting and deposition of adhesives, plastics and other materials in the manufacturing of a wide range of goods. End Markets Growth Drivers Flexible Packaging Rigid Packaging Typical Replacement Parts Nonwovens General Product Assembly Includes industry leading brands: Nordson XALOY & Nordson EDI

8 8 Advanced Technology Systems Mobile computing trend Device convergence / migration to flip chips Circuit shrinkage / new architectures New consumers in emerging markets Medical needs driven by aging population Alternative energy high volume manufacturing Semiconductor packaging, testing, inspection, surface prep Printed circuit board assembly General electronic assembly Medical devices and procedures General industrial assembly Solar LED 37% of FY12 sales Twelve Months Ending 1/31/2013: Sales: $525m Operating Margin: 27% High precision dispensing, fluid management, test, inspection and surface treatment products and systems for electronics, medical and general industrial markets Test & Inspection End Markets Growth Drivers Automated Dispensing Medical Dispensing Semi Automated Dispensing Includes industry leading brands: Nordson ASYMTEK, Nordson DAGE, Nordson EFD Nordson MARCH, Nordson MICROMEDICS, Nordson YESTECH, Value Plastics Consumable Tips, Cartridges & Connectors

9 9 Industrial Coating Systems 15% of FY12 sales Twelve Months Ending 1/31/2013: Sales: $228m Operating Margin: 14% Liquid Coating End Markets Growth Drivers Powder Coating Medical Dispensing Cold Material Dispensing Container Coating Typical Replacement Parts Growth in emerging markets Environmental advantages of powder coatings Productivity investments Lean manufacturing Quick color change Appliances Lawn and garden Metal container inside coating Automobile sealing & bonding Cold material dispensing Pipe coating and construction Woodworking General industrial Electronics / UV curing Precision equipment and systems to apply and cure paints, sealants, coatings, cold materials and other materials to a wide range of products Includes industry leading brand: Sealant Equipment & Engineering

10 10 Consistent Sales Growth Industry Leading Gross Margins Millions of $ Financial Highlights *FY09 excludes non-cash charges for impairment of goodwill and other long-lived assets. Strong Operating Margins FY12 = $1.4B 14 % YOY Growth 2003 – 2012 CAGR: 21% Strong EPS Growth Includes impact of Acquisitions

11 Cash Flow Self funding business model generates excess cash Low Working Capital Requirements Low Capital Expenditures (approx. 2.5% of sales) Strong free cash Cash Deployment Organic growth - Product/Application development - Channel expansion - Emerging markets Acquisitions Dividends/share repurchase Dividends per share Uses of Cash – 2007 to 2012 Dividend increased 49 consecutive years 15 th among US public companies Dividend increased 49 consecutive years 15 th among US public companies Disciplined Use of Cash 11 42% increase since 2009

12 12 Capital Management Four Acquisitions 10% Outstanding Stock Repurchase NET DEBT TO EBITDA Strong Cash Generation Lets Nordson De-lever Quickly NET DEBT TO EBITDA Strong Cash Generation Lets Nordson De-lever Quickly EFD Acquisition Net Debt to EBITDA calculated net of cash In millions $ DEBT POSITION at 1/31/2013 DEBT POSITION at 1/31/2013 Acquisitions & Share Repurchases Ends Feb - Ends June bps over Libor Amortizing-avg rate – 2.21% Avg. life – 3.58 years - Amortizing-avg rate – 2.93% - Initial avg. life – 8.26 years - Ends Dec bps over Libor at 10/31

13 Nordson Outperforms its Peers in Total Shareholder Return Year Total Return Source: Zacks Investment Research Nordson S&P 500 Industrial Machinery S&P Midcap 400 Industrial Machinery S&P Midcap 400 Assumes $100 invested on 11/1/2002, dividends reinvested, fiscal year ending 10/31/2012

14 14 FY2013 1Q Results Organic Volume growth 3% to 8% Acquisition Growth 16% Currency (1)% Total Sales Growth 18% to 23% GAAP Diluted EPS $0.78 to $0.87 2Q 2013 Guidance SOURCE: February 21, 2013 Press Release

15 2013 Global Economic Environment: A lot like 2012 Nordson Delivered 7.9% Organic Growth in 2012 January Global GDP Forecasts GDP & NDSN Organic Growth 1H13 NDSN forecast based on midpoint of guidance provided in Feb 22 press release

16 Going Forward: Multiple Paths for Profitable Growth Organic - target at mid-to-high single digits New Applications Emerging Market Penetration Strategic Acquisitions – target to bring total growth to double digits Technology Sales channels Core portfolio Product Innovation Adjacencies Step outs Asia Pacific and Latin America Sales (millions) Test & Inspection Plastics Processing Fluid Mgmt. (esp. medical) Cold Material Dispense Current areas of focus

17 Priorities consistent with FY2012 Enhance / Protect the Core Further Penetrate Emerging Markets Pursue Market Adjacencies Further Optimize Business Make Portfolio Adjustments Enhance / Expand Organizational Capability With particular focus on: Further development of Corporate Growth Strategy / Vision Acquisition integration and organizational development Increased Asia presence in Advanced Tech segment Prudence in view of uncertain economic backdrop Key Themes for FY Technology Continue to deliver top quartile performance for our shareholders

18 Appendix - Selected Organic Growth Opportunities - Currency Chart 18

19 Organic Growth: Recent Product Innovations Mini Blue II adhesive applicator Trilogy Guns expanded offering Select Coat conformal coating Spectrum jetting for LEDs RediFlex Hot melt hoses NexJet Automated dispensing X-Plane Test and inspection Artiste Medical dispensing Allegro Dispense nozzles StediFlo Coating pumps

20 Growth: Summary of Electronics Industry Forecasts* 20 CAGR = 32.4% CAGR = (0.4)% CAGR = 4.4% CAGR = 24.9% *Average of most recent forecasts to Jan 2013 compiled by Nordson. Includes data from Citibank, Digitimes, IC Insights, IDC, Henderson, iSuppli, Merrill, Prismark Nordson is well positioned in mobile devices, where growth is outpacing traditional applications

21 Organic Growth: Smart Phones & Tablets multiple Nordson applications 1.Micro coatings for moisture protection 2.Hot Melt for display assembly 3.CSP & PoP Underfill 4.Solder paste for RF shield attach & SIM card solder joints 5.Flip chip underfill for blue tooth module 6.Lens bonding & underfill for camera modules 7.Solder Paste & Silicone Encapsulation for MEMS microphones 8.Epoxy Flux, Liquid RF shielding 9.Test & inspection

22 Growth Opportunities: MEMS 22 Nordson opportunities in dispensing, test/inspection, plasma treatment

23 Growth Opportunities: LEDs Market Trend 23 Nordson opportunities in dispensing, test/inspection, plasma treatment March 2012 Dispensing for LEDs

24 Growth: Nonwovens Trends Favor Nordson Product Trends Thinner - more discrete Softer - more comfortable Stretch - improves fit and performance Fun - decorative printing Gender specific designs Production Trends 20% increase in production speed anticipated by 2015 Emerging Market Trends (China, SE Asia, Latin America,…) forecasting at or near double-digit growth rates Relatively low penetration of baby diapers and feminine care Increasing incomes 24

25 Growth: Solid Trends in Plastic Processing 25 Plastics Machinery Aftmkt Parts CAGR 4.8% Blow Molding Machinery CAGR 5.5% Extrusion Machinery CAGR 6.5% Injection Molding Machinery CAGR 6.0% Thermoforming and Other CAGR 6.6% Construction CAGR 6.5% Consumer & Industrial CAGR 6.0% Packaging CAGR 5.9% Other CAGR 5.8% Source: 2012 CAGR : China 8.1% CAGR : India 9.7% CAGR : China 8.1% CAGR : India 9.7%

26 Growth Opportunities: Medical 26 Medical Device Assembly Hearing Aids, Pacemakers Catheters, Stents Dental Glucose Test Strips Medical Electronics Biomaterial Dispensing Dispensing syringes and components Bleeding control Wound healing Bone graft material Aesthetic devices Medical Device Fluid Control Fittings & components Anesthesia equipment Cardiovascular surgery equipment Blood management equipment Advanced Technology segment Source: MedMarket Diligence, various 3 rd party reports, Nordson internal estimates

27 27 Growth: Asia Pacific Sales 2006 to 2012 Companys 43nd year of operation in Asia Direct in China for 17 years Percent of total revenue: : 16% : 29% Asia Pacific Revenue 20% CAGR Note: Nordson Asia Pacific sales exclude Japan, which is reported separately

28 28 $ (.10) (.11) (.19) (.20).04 (.10) (.20) (.10) (.23) (.11) Currency and Annual Sales Growth Volume Growth Currency Effect EPS Currency Effect '

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