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Nordson Corporation Precision Technology Solutions

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

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 Corporation’s actual results could differ materially from the expectations expressed in the forward-looking statements. Factors that could cause the Company’s 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. 2

3 Nordson Investment Summary
Sustainable Business Model Applied to Diverse Markets Delivers Exceptional Results 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 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 Injection Molding Test and Inspection X-ray, optical inspection Bond test Surface Treatment UV curing Plasma treatment Fluid Management Components Customer Value Proposition Reliability…uptime Speed…productivity…yield Efficiency…lower material usage Leading edge features About 75% of our business involves precision dispensing, and 25% is in precision testing, inspection, surface treatment or components Our solutions involve fundamental technology, application support, technical sales, and extensive field service We create value for our customers every day by lowering their cost of ownership, by Providing robust products that operate longer than the competition – uptime Enabling a customer’s line to move faster – productivity / yield Being more efficient…using less of the dispensed product, and Enabling the most advanced features in a customers product That’s why we’re the brand of choice…why we get the first call from customers Lower Cost of Ownership 4

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

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

7 Adhesive Dispensing Systems
Twelve Months Ending 1/31/2013: Sales: $728m Operating Margin: 29% Nonwovens 48% of FY12 sales Melting, filtering, pumping, transporting and deposition of adhesives, plastics and other materials in the manufacturing of a wide range of goods. Rigid Packaging Growth Drivers End Markets 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 Flexible Packaging General Product Assembly Includes industry leading brands: Nordson XALOY & Nordson EDI Typical Replacement Parts

8 Advanced Technology Systems
Twelve Months Ending 1/31/2013: Sales: $525m Operating Margin: 27% Automated Dispensing 37% of FY12 sales High precision dispensing, fluid management, test, inspection and surface treatment products and systems for electronics, medical and general industrial markets Test & Inspection Growth Drivers End Markets 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 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 Industrial Coating Systems
Twelve Months Ending 1/31/2013: Sales: $228m Operating Margin: 14% Powder Coating 15% of FY12 sales Liquid Coating Precision equipment and systems to apply and cure paints, sealants, coatings, cold materials and other materials to a wide range of products Growth Drivers End Markets Appliances Lawn and garden Metal container inside coating Automobile sealing & bonding Cold material dispensing Pipe coating and construction Woodworking General industrial Electronics / UV curing Growth in emerging markets Environmental advantages of powder coatings Productivity investments Lean manufacturing Quick color change Container Coating Medical Dispensing Cold Material Dispensing Includes industry leading brand: Sealant Equipment & Engineering Typical Replacement Parts

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

11 Disciplined Use of Cash
Uses of Cash – 2007 to 2012 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 Dividend increased 49 consecutive years 15th among US public companies 42% increase since 2009 Dividends per share 11

12 Capital Management NET DEBT TO EBITDA
Strong Cash Generation Lets Nordson De-lever Quickly DEBT POSITION at 1/31/2013 EFD Acquisition Acquisitions & Share Repurchases 10% Outstanding Stock Repurchase In millions $ Four Acquisitions Ends Feb 2013 @4.98% - Ends Dec 2016 bps over Libor at 10/31 - Ends June 2013 - 100 bps over Libor - Amortizing-avg rate – 2.93% - Initial avg. life – 8.26 years Net Debt to EBITDA calculated net of cash Amortizing-avg rate – 2.21% Avg. life – 3.58 years 12

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

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

15 2012 GDP & NDSN Organic Growth
2013 Global Economic Environment: A lot like 2012 Nordson Delivered 7.9% Organic Growth in 2012 2012 GDP & NDSN Organic Growth Global GDP Forecasts 2013 As we think about 2013, here is a current view of the macroeconomic environment. At this time, most economists expect global GDP in 2013 to grow at a very similar rate to 2012, that is, a little above 2%. Emerging markets should continue to grow more rapidly than developed ones. In 2012, we delivered full year organic growth of about 8%. If 2013 does indeed follow the pattern of 2012, Nordson would expect to deliver similar kind of organic growth again in 2013. The good news is that Nordson is well positioned to capture growth wherever we may find it, and our combination of best in class technology, application expertise, and direct sales and service remains unique among our competitors. 15 January 2013 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 Product Innovation New Applications Emerging Market Penetration Asia Pacific and Latin America Sales (millions) Strategic Acquisitions – target to bring total growth to double digits Technology Sales channels Core portfolio When we think about growth, we focus on both organic and acquisitive growth Our goal is to consistently deliver about 8% organically Key areas of focus include, the product itself Which not only keeps us ahead of the pack and protects our margin, but also creates demand Top left is our mini-blue 2 product, which offers our customers a 20-30% reduction in adhesive use by stitching or dotting and still meeting their packaging strength needs We also buy or support new applications The left picture is bottle labeling, which historically occurred by rolling the bottle in a bath of glue. We are helping the industry use 20-30% less adhesive by spraying the bottle at the labels leading edge, and coating the edge at the end of the label, with no glue in between. The right picture is LED…used in e.g. cars today, but white LEDs are used in TV's and ultimately to replace the incandescent lamps A big focus of organic growth is emerging markets…we’re making good progress – but emerging markets could grow to half our business in the next five years from the mid 30’s today. We also plan to supplement growth by at least 2% points through acquisitions of a variety of types Adjacencies Step outs Plastics Processing Test & Inspection Current areas of focus Fluid Mgmt. (esp. medical) Cold Material Dispense

17 Continue to deliver top quartile performance for our shareholders
Key Themes for FY2013 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 Technology Continue to deliver top quartile performance for our shareholders 17

18 - Selected Organic Growth Opportunities - Currency Chart
Appendix - Selected Organic Growth Opportunities - Currency Chart 18

19 Organic Growth: Recent Product Innovations
Allegro Dispense nozzles RediFlex Hot melt hoses Spectrum jetting for LEDs Select Coat conformal coating NexJet Automated dispensing A significant part of our growth has come organically. We’ve developed a number of new products this year and other products from recent years continue to gain momentum. Artiste Medical dispensing X-Plane Test and inspection StediFlo™ Coating pumps Mini Blue II adhesive applicator Trilogy Guns expanded offering

20 Growth: Summary of Electronics Industry Forecasts*
Nordson is well positioned in mobile devices, where growth is outpacing traditional applications CAGR ’12-’15 = 32.4% CAGR ’12-’15 = 24.9% CAGR ’12-’15 = 4.4% CAGR ’12-’15 = (0.4)% 20 *Average of most recent forecasts to Jan 2013 compiled by Nordson. Includes data from Citibank, Digitimes, IC Insights, IDC, Henderson, iSuppli, Merrill, Prismark

21 Organic Growth: Smart Phones & Tablets multiple Nordson applications
Micro coatings for moisture protection Hot Melt for display assembly CSP & PoP Underfill Solder paste for RF shield attach & SIM card solder joints Flip chip underfill for blue tooth module Lens bonding & underfill for camera modules Solder Paste & Silicone Encapsulation for MEMS microphones Epoxy Flux, Liquid RF shielding Test & inspection Smart phones have many different fluid dispensing applications. Dispensing solder paste for MEMs microphone attach Flip chip underfill on blue tooth module CSP and PoP underfill Camera lens attach….and so on But the application that is driving a large number of recent orders is precise coating, shown in the upper left We will have 40 Mil dollars this year tied to SmartPhones in 2011 So I figured, how can I show you the detailed dispense application without tearing this thing apart Next Slide

22 Growth Opportunities: MEMS
MEMs- micro electromechanical systems Nordson opportunities in dispensing, test/inspection, plasma treatment 22

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

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

26 Growth Opportunities: Medical
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 Source: MedMarket Diligence, various 3rd party reports, Nordson internal estimates Medical Device Assembly Hearing Aids, Pacemakers Catheters, Stents Dental Glucose Test Strips Medical Electronics Advanced Technology segment 26

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

28 Currency and Annual Sales Growth
'91 ’92 ’ 93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ‘12 $ (.10) (.11) (.19) (.20) .04 (.10) (.20) (.10) (.23) (.11) 28 Volume Growth Currency Effect EPS Currency Effect

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