Nordson Corporation · NASDAQ:NDSN
Nordson — Q3 2022 Earnings Presentation
36 slides from Nordson's earnings presentation, Aug 23, 2022
Slide 1: Investor Presentation
Investor Presentation August 23, 2022 Nasdaq: NDSN NBS NEXT OWNER MINDSET WINNING TEAMS
Slide 2: Safe Harbor Statement
Safe Harbor Statement Click to edit title Under the Private Securities Litigation Reform Act of 1995 Certain statements contained in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by
Slide 3: Nordson is an innovative precision technology company
Nordson is an innovative precision technology company that leverages a scalable growth framework to deliver top tier growth with leading margins and returns. Company Founded *Sales *EBITDA Employees Countries with Direct Presence 1954 $2.4B $719M 6,800+ 35+ 3 *Sales and EBITDA for the full fiscal ye
Slide 4: By the Numbers
By the Numbers Demonstrated Consistent Record Disciplined focus Differentiated Consistent value to Value to Solid Returns of Growth on profitability Product Portfolio* shareholders Customers 6% 55% 28% 18% 1,804 58 yrs. Sales Growth Gross Margins EBITDA Margins Global Patents of Annual ROIC Held Div
Slide 5: Commitment to ESG
Commitment to ESG Diversified Board of Directors Strong Culture and Values Environmental Stewardship ▪ 56% diverse board (3 gender and 2 ▪ Nordson Impact – Invest 5% of domestic ▪ Product design improvements focused on racially or ethnically diverse) pretax earnings in communities reducing customers
Slide 6: Diversified Sources of Sales
Diversified Sources of Sales FY2021 Profile - $2.4 Billion Product Type Geographies 33% Parts and Americas 41% 45% Consumables Europe 55% Systems Asia Pacific 26% High percentage of recurring Nearly 67% of sales outside USA. sales from parts and Direct presence in over consumables. 35 countries. 6
Slide 7: Diversified End Markets
Diversified End Markets Electronics Consumer Non-Durables Medical Industrial Remaining Markets 29% of revenue 24% of revenue 21% of revenue 14% of revenue 12% of revenue ▪ Semiconductor packaging ▪ Box sealing ▪ Balloons, extrusions, delivery ▪ Farm, construction and ▪ Consumer durable catheters and
Slide 8: How We Are Organized
How We Are Organized 47% 53% INDUSTRIAL PRECISION SOLUTIONS ADVANCED TECHNOLOGY SOLUTIONS Polymer Processing Industrial Coatings Electronic Processing Test and Fluid Adhesives Medical Solutions Solutions Systems Inspection Management 8 *Segment average mix for the full fiscal year ended 10/31/21
Slide 9: Industrial Precision Solutions
What We Do Industrial Product lines reduce material consumption, increase line efficiency, and enhance product Precision brand and appearance. Components are used for dispensing adhesives, coatings, paint, finishes, sealants and other materials. This business Solutions primarily serves the industria
Slide 10: Industrial Precision Solutions
Industrial Precision Solutions FY2021 Profile – Diverse end markets 9% End markets include: ▪ Consumer Non-Durable: beverage, disposable hygiene, 10% food, paper, textiles, non-wovens, packaging ▪ Industrial: aerospace, chemical, construction, defense, 7% 48% energy, farm and construction machinery,
Slide 11: Advanced Technology Solutions
What We Do Advanced Precision dispense, fluid management, test, inspection, surface treatment and proprietary Technology solutions for medical, electronics and general industrial markets. Solutions 5%+ CAGR Long-Term Growth Driven By: ▪ Medical – Aging population, trends toward non- invasive surgica
Slide 12: Advanced Technology Solutions
Advanced Technology Solutions FY2021 Profile – Diverse End Markets 2% 2% 8% End markets include: ▪ Medical: minimally invasive interventional delivery devices, 13% catheters, medical balloons, fluid connection components, specialty 39% tubing ▪ Electronics: electronic components (i.e., computing; co
Slide 13: Why Invest in Nordson?
Giordson Why Invest in Nordson?
Slide 14: A Diversified Precision Technology Company
A Diversified Precision Technology Company ▪ Sustained organic ▪ Data drives action ▪ Enhance depth REVENUE EBITDA growth ▪ Entrepreneurial, and diversity ▪ Accelerate acquisitions accountable ▪ Enrich inclusive culture $3B+ 30% Long-term 2025 financial targets 14
Slide 15: Driving profitable growth by selecting and investing in best opportunities
Driving profitable growth by selecting and investing disproportionately in the 15 best growth opportunities
Slide 16: Entrepreneurial division-led organization
Entrepreneurial division-led organization: ▪ Decisions close to the customer ▪ Autonomy + Accountability ▪ Clear line of sight to deploying NBS Next 16
Slide 17: Key ingredient to successful execution of the Ascend strategy
A key ingredient to successful execution of the Ascend strategy: ▪ Leaders inspiring trust and building followership in the organization ▪ Focus on inclusion and diversity in everything we do ▪ Create an engaging culture that attracts and retains top talent 17
Slide 18: Long-Term Financial Targets
Long-Term Financial Targets Top-tier growth with attractive margins and returns $3,500 35% $3,000 + 2015 - 2020 2020 - 2025 $3,000 30% $2,500 $2,121 30% Sales CAGR 5% 7%+ $2,000 $1,688 27% 25% $1,500 24% EBITDA CAGR 7% 10% $1,000 20% $500 Ending ROIC % 13% 13%+ $0 15% 2015 2020 2025 Sales EBITDA % 1
Slide 19: Disciplined M&A Strategy
Disciplined M&A Strategy Strategic Criteria Financial Criteria ▪ Differentiated precision technology based ▪ Attractive organic growth rate with Nordson-like product portfolio gross margins ▪ Serving attractive high-growth end market ▪ EBITDA ~20% with clear margin expansion applications opportuniti
Slide 20: CyberOptics Acquisition Announced August 8, 2022
CyberOptics Acquisition Announced August 8, 2022 ACQUISITION FEATURES: ▪ Strategic fit for test and inspection division, which includes Systems x-ray, acoustic and optical applications Metrology and Inspection ▪ Expands Nordson’s optical portfolio into sensor technology Systems for Wafer-Level and A
Slide 21: CyberOptics expands market opportunities
CyberOptics expands market opportunities Nordson T&I Division CyberOptics Optical Sensors & Systems 3D Optical semi market expected to grow ~15%+, 21 exceeding the broader ‘Wafer Fab Equipment’ market LSD ’23 – ’25 growth
Slide 22: Capital Allocation Priorities
Capital Allocation Priorities SUSTAINED INVESTMENT TO DRIVE DISCIPLINED M&A RETURN OF CAPITAL ORGANIC GROWTH ▪ Increased R&D investment ▪ Differentiated precision ▪ Strong history with 57-year of ▪ Sustained investment in direct technologies paying and increasing the sales model ▪ Financially discip
Slide 23: Investment Thesis
Investment Thesis 1. Strong growth drivers enabling Nordson’s future profitable growth performance 2. Proprietary precision technologies remain a competitive advantage 3. NBS Next is the framework driving our profitable growth 4. Ascend Strategy will deliver top tier financial performance ▪ Sustaine
Slide 24: Q3 F22 Financial Results
CNordson Q3 F22 Financial Results
Slide 25: Total Company – 3Q 2022
Total Company – 3Q 2022 3Q 2022 Sales Bridge Quarterly Sales Results ▪ Reported sales increased 2% $23 ▪ Constant currency sales increased 7%, driven by 4% organic growth plus the acquisition impact ▪ Record sales of $662 million driven by strong demand across most end markets, particularly in elect
Slide 26: Cash Flow and Balance Sheet
Cash Flow and Balance Sheet Strong Cash Flow with Sufficient Liquidity to Invest in Strategic Initiatives Net Debt Free Cash Flow ▪ Cash totaled $129 million ▪ 78% conversion on net income ▪ Net debt was $675 million ▪ Board approved 27% increase in annual dividend ▪ 0.9X leverage ratio based on tra
Slide 27: Full-Year Fiscal 2022 Guidance
Full-Year Fiscal 2022 Guidance Full-Year Sales Guidance Full-Year Growth from Record 2021 $2,551 - $2,575 $2,563 $2,362 ▪ Fiscal 2022 sales growth of ~8-9% $2,121 ▪ Adjusted earnings growth to ~18-21%. ▪ Midpoint of guidance implies 4Q 2022 sales growth of 10% and earnings growth of 20% compared to
Slide 28: Appendix 1: Product Innovation
Appendix 1: Product Innovation
Slide 29: Our Electronics Industry Position
Our Electronics Industry Position Surface Mount Manufacturing Solder paste Flux spray Optical Inline Systems Plasma Underfill, Optical X-ray Conformal inspection coating inspection surface encapsulation inspection inspection coating treatment or precise coating Solder paste Component placement Reflo
Slide 30: Our Role in the Semiconductor Process
Our Role in the Semiconductor Process 30
Slide 31: Advanced Technology – Fluid Management
Advanced Technology – Fluid Management Life Sciences Precision Low-Volume Dispensing Optimum® Syringe Barrels and Tips Fluid Management Components From benchtop dispensers to industry-best Optimum® components are designed as a From specialty tubing, catheters, jetting valves and automated dispensing
Slide 32: Core Adhesives Innovative Technology
Core Adhesives Innovative Technology Auto-fill Tankless Variable Dispense Foaming Jetting Precision dispense Technology Technology Technology Technology technology Adhesive fill systems Delivering different Maintains bond strength Dispenses adhesive Increases production monitor and maintain add-on r
Slide 33: Appendix 2: Financial Exhibits
Appendix 2: Financial Exhibits
Slide 34: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Adjusted Operating Profit and EBITDA (Dollars in thousands) 34
Slide 35: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Profitability (Dollars in thousands) 35
Slide 36: Non-GAAP Definitions
Appendix Non-GAAP Definitions This presentation contains references to non-GAAP financial information. Although these are non-GAAP measures, we believe that they are useful to an investor in evaluating the company performance for the period presented. These non-GAAP definitions include: ▪ Adjusted o