Nordson Corporation · NASDAQ:NDSN
Nordson — Investor Presentation (February 2024)
38 slides from Nordson's investor presentation, Feb 22, 2024
Slide 1: Investor Presentation
Investor Presentation February 22, 2024 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 $2.6B $819M 7,900 35+ 3 *Sales and EBITDA for the full fiscal yea
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 3% 55% 29% 15% 2,100+ 60 yrs. Sales Growth Gross Margins EBITDA Margins Global Patents of Annual ROIC Held Di
Slide 5: Commitment to ESG
Commitment to ESG Diversified Board of Directors Strong Culture and Values Environmental Stewardship ▪ 4% diverse board (2 gender and 2 racially ▪ Nordson Impact – Invest 5% of domestic ▪ Product design improvements focused on or ethnically diverse) pretax earnings in communities reducing customers’
Slide 6: Diversified Sources of Sales
Diversified Sources of Sales FY2023 Profile - $2.6 Billion Product Type Geographies 30% Parts and Americas 47% Consumables 44% Europe 53% Systems Asia Pacific 26% High percentage of recurring Diversified geographic footprint. 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 27% of revenue 23% of revenue 22% of revenue 15% of revenue 13% of revenue ▪ Semiconductor packaging ▪ Box sealing ▪ Balloons, extrusions, delivery ▪ Construction and industrial ▪ Consumer durable catheter
Slide 8: How We Are Organized
How We Are Organized INDUSTRIAL PRECISION SOLUTIONS MEDICAL FLUID SOLUTIONS ADVANCED TECHNOLOGY SOLUTIONS Adhesives, Industrial Coatings Systems, Medical & Electronic Processing Systems Measurement and Control Solutions & Polymer Processing Systems Fluid Management & Test and Inspection 53% 25% 22%
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: Medical Fluid Solutions
What We Do Medical Fluid management solutions for medical, high- tech industrial and other diverse end markets. Fluid Related plastic tubing, balloons, catheters, syringes, cartridges, tips, and fluid connection components are used to dispense or control fluids Solutions within customers’ medical de
Slide 11: Advanced Technology Solutions
What We Do Advanced Design and develop proprietary technologies found in progressive stages of an electronics customer’s Technology production processes, such as surface treatment, precisely controlled dispensing of material and test and inspection to ensure quality and reliability. Solutions Long-T
Slide 12: Why Invest in Nordson?
Giordson Why Invest in Nordson?
Slide 13: 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 13
Slide 14: Driving profitable growth by selecting and investing in best opportunities
Driving profitable growth by selecting and investing disproportionately in the 14 best growth opportunities
Slide 15: Entrepreneurial division-led organization
Entrepreneurial division-led organization: ▪ Decisions close to the customer ▪ Autonomy + Accountability ▪ Clear line of sight to deploying NBS Next 15
Slide 16: 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 16
Slide 17: 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 18: 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 19: ARAG Acquisition Closed August 24, 2023
ARAG Acquisition Closed August 24, 2023 ACQUISITION FEATURES Fluid components ▪ Expands Nordson’s core dispense capabilities (Selected products) Multistage Chemical Tank Manual into high-growth precision agriculture end market Centrifugal Pumps Hopper Lids Ball Valves ▪ Strong growth drivers Injecti
Slide 20: 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 60 years ▪ Sustained investment in direct technologies of paying and increasing the sales model ▪ Financially disci
Slide 21: 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 ▪ Sustain
Slide 22: Recent Financial Results
CNordson Recent Financial Results
Slide 23: Total Company – 1Q 2024
Total Company – 1Q 2024 Sales 1Q 2024 Sales Bridge ▪ Reported sales of $633M, an increase of 4% ▪ 5% growth from ARAG acquisition; 0.5% favorable currency impact ▪ 2% organic decrease driven by electronics product lines, partially offset by industrial and medical product lines EBITDA* 1Q 2023 1Q 202
Slide 24: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow Strong Cash Flow with Sufficient Liquidity to Invest in Strategic Initiatives Net Debt Free Cash Flow ▪ Cash totaled $136 million ▪ Cash flow of $165 million, which is a conversion rate of 150% of net income ▪ 1.8 net debt leverage ratio based on trailing 12-month EBITDA
Slide 25: Full-Year Fiscal 2024 Guidance
Full-Year Fiscal 2024 Guidance Full-Year Sales Guidance $2,735 - $2,800 Narrowing guidance $2,590 $2,629 ▪ Backlog continues to normalize at $750 million ▪ Fiscal 2024 sales growth of 4% - 7% ▪ Adjusted earnings in the range of 2% to 7% growth 2022 2023 2024 Full-Year Adjusted EPS Guidance* $10.00 –
Slide 26: 2Q Fiscal 2024 Guidance
2Q Fiscal 2024 Guidance 2Q 2024 Sales Guidance Steady performance moving into $645-670 2Q $635 $650 ▪ 2Q 24 sales of $645 - $670 million ▪ 2Q 24 adjusted earnings per share in the range of $2.20 - $2.35 2Q 22 2Q 23 2Q 24 ▪ 2Q adjusted EPS guidance includes increased interest expense headwind of $0.1
Slide 27: Appendix 1: Product Innovation
Appendix 1: Product Innovation
Slide 28: 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 29: Our Role in the Semiconductor Process
Our Role in the Semiconductor Process 29
Slide 30: CyberOptics expands market opportunities
CyberOptics expands market opportunities Nordson T&I Division CyberOptics Optical Sensors & Systems 3D Optical semi market expected to grow ~15%+, 30 exceeding the broader ‘Wafer Fab Equipment’ market LSD ’23 – ’25 growth
Slide 31: Medical and Fluid Solutions
Medical and Fluid Solutions Fluid Solutions Interventional Solutions Fluid Components Precision Low-Volume Dispensing Medical balloons, catheters, cannulas Single-use components From benchtop dispensers to industry-best From specialty tubing, catheters, medical Proprietary single-use plastic jetting
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: ARAG at a Glance
ARAG at a Glance Leading in precision agricultural spraying with control systems and smart fluid components Control Company Founded 1976 boxes Tank lids Rate GNSS controller receivers 2023 Revenue $155M Monitor & displays Control units Gross Margins Nordson-like 2023E EBITDA Joystick ~38% Electronic
Slide 34: Appendix 2: Financial Exhibits
Appendix 2: Financial Exhibits
Slide 35: 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: ▪ EBITDA is
Slide 36: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Net Income to Adjusted EBITDA (Dollars in thousands) 36
Slide 37: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Adjusted Operating Profit and EBITDA (Dollars in thousands) 37
Slide 38: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Profitability (Dollars in thousands) 38