Nordson Corporation · NASDAQ:NDSN
Nordson — Investor Day (October 2024)
81 slides from Nordson's investor day presentation, Oct 3, 2024
Slide 1: Nordson Corporation
Nordson Corporation October 3, 2024
Slide 2: Important Investor Information
Important Investor Information Safe Harbor Statement for Forward Looking Statements Any statement in this presentation and accompanying oral report that is not historical is a forward-looking statement within the meaning of the Private Securities Litigation Reform Act of 1995. Forward looking statem
Slide 3: Today's Speakers
Introduction Today’s Speakers Sundaram Nagarajan Daniel Hopgood Jim DeVries Lara Mahoney President and Executive Vice President and Executive Vice President, Vice President, Chief Executive Officer Chief Financial Officer NBS Next, Investor Relations & Supply Chain Management Corporate Communication
Slide 4: Today's Speakers
Introduction Today’s Speakers Joseph Kelley Stephen Lovass Srini Subramanian Justin Hall Dave Zgonc Executive Vice President, Executive Vice President, Executive Vice President, Vice President, Vice President, Industrial Precision Medical and Advanced Technology Electronic Processing Medical Interve
Slide 5: Today's Agenda
Introduction Today’s Agenda Business Overview and Advanced Technology 1:05 PM 2:40 PM Portfolio Transformation Solutions Overview Long-Term Financial 1:40 PM NBS Next Journey 3:00 PM Targets Industrial Precision 2:00 PM 3:10 PM Q&A Session Solutions Overview Medical & Fluid 2:20 PM 3:45 PM Closing R
Slide 6: Business Overview
Business Overview Sundaram Nagarajan President and Chief Executive Officer
Slide 7: Key Messages
Business Overview Key Messages Ascend Strategy is delivering results and has ample runway to accelerate Ongoing portfolio transformation is a key ingredient in our success NBS Next is a competitive advantage that sustains growth in core and acquired businesses Organic growth strategy is built on our
Slide 8: Nordson is a growth compounder with unique competitive advantages
2024 TTM Revenue* 2024 TTM EBITDA* $ 2.7 B 31% Nordson is a growth Employees Countries compounder with unique competitive advantages 8,600 35+ Patents Dividends 2,500+ 61 years (consecutive annual 8 increases) * 2024 is NDSN Q3 TTM as reported
Slide 9: What We Do
Business Overview What We Do Precision Dispensing & Processing Medical Solutions Test and Inspection Long-Term Growth Enabled By: ▪ Secular trends, including electric vehicle ▪ Aging population ▪ AI / big data / auto electronics / battery, sustainability (recycling, solar), autonomous vehicles / hig
Slide 10: How We Are Organized
Business Overview How We Are Organized INDUSTRIAL PRECISION SOLUTIONS MEDICAL & FLUID SOLUTIONS ADVANCED TECHNOLOGY SOLUTIONS Adhesives, Industrial Coatings Solutions, Interventional Solutions, Fluid Components Electronic Processing Systems Measurement and Control Solutions & Polymer Processing Syst
Slide 11: Diversified Sources of Revenue
Business Overview Diversified Sources of Revenue End Market Diversification Product Diversification Geographic Diversification 14% 27% Americas Systems Electronics 27% 15% 44% Asia Medical 44% 56% Parts / Nondurables Europe 22% Consumables 29% 23% Industrial Other Balanced end market mix with Growin
Slide 12: 2025 Financial Targets
Business Overview 2025 Financial Targets Revenue EDITDA $3B+ 30% 12 Core belief: Growth is Nordson’s best value creation opportunity
Slide 13: Ascend Strategy Delivers
Business Overview Ascend Strategy Delivers Revenue ($) Ascend 2025 = $3B EBITDA ($) Ascend 2025 = 30% $1,000 $3.0 $900 31% 31% 31% $2.8 30% $800 $2.6 $2.4 $700 Millions 27% Billions $2.2 27% $600 $2.0 $500 $1.8 $1.6 $400 $1.4 $300 $1.2 $1.0 $200 2019 2020 2021 2022 2023 2024* 2019 2020 2021 2022 202
Slide 14: Strong Shareholder Returns
Business Overview Strong Shareholder Returns Total Shareholder Return 100 NDSN ~98% 80 S&P Industrials ~77% % Total Shareholder Return 60 40 20 0 -20 2019 2020 2021 2022 2023 2024 NDSN S&P 500 Industrials Generating cumulative shareholder returns of ~98% since August 2019
Slide 15: Transforming the Portfolio
Transforming the Portfolio Sundaram Nagarajan President and Chief Executive Officer Dave Zgonc Vice President Medical Interventional Solutions
Slide 16: M&A Strategy
Transforming the Portfolio M&A Strategy Programmatic capital deployment creating significant value Estimated Contribution of Acquisitions to Enterprise Value Selected Portfolio $7B Enhancements ▪ Expanded test and measurement technologies ▪ Entered precision agriculture platform ▪ Created scaled med
Slide 17: Medical Platform Evolution
Transforming the Portfolio Medical Platform Evolution Anchor acquisitions of differentiated technologies complemented with product tuck-ins over ~15 years 2011 2016 2017 2018 Clada Medical Value Plastics LinkTech Vention Medical Balloon & Single-use fluid Quick couplings Balloons, precision balloon
Slide 18: Medical Platform Evolution
Transforming the Portfolio Medical Platform Evolution Acquisitions enable access into adjacent niche markets and therapies providing new organic growth trajectories Cardiovascular, Neurovascular, Gastroenterology, Surgical, Biopharm, Structural Heart Patient Care minimally invasive therapy fluid del
Slide 19: Medical Platform Evolution
Transforming the Portfolio Medical Platform Evolution Medical platform has delivered consistent and profitable growth Nordson Medical Portfolio Annual Contribution $450M +Atrion Fluortek Value Clada Medical Plastics Vention $300M Avalon LinkTech $150M Micromedics $0M 2010 2024 19 Sales $
Slide 20: Holding Our Portfolio to a High Standard
Transforming the Portfolio Holding Our Portfolio to a High Standard NBS Next portfolio assessment criteria: Strategic criteria ▪ Differentiated products ▪ Attractive markets Financial criteria ▪ Growth ▪ Profitability 20 Portfolio change resulted in: IPS margin expansion and sharper focus on higher
Slide 21: A Growth Portfolio Ready to Accelerate
Transforming the Portfolio A Growth Portfolio Ready to Accelerate 2014 (FY Revenue $1.7B) 2024 (TTM Revenue $2.7B) 39% Systems 44% Systems Parts / Service 56% 61% Parts / Service Growth Growth 29% End Markets 49% End Markets 14% 24% 23% 27% Electronics Electronics 15% 6% Medical Medical 5% Nondurabl
Slide 22: Competitive Advantages
Transforming the Portfolio Competitive Advantages Strong Growth High Recurring Diversified, Niche End Portfolio Revenue Markets Differentiated NBS Next Growth Direct to Customer Products Framework Leadership position in niche end markets 22 with differentiated products
Slide 23: 2025-2029 Financial Targets
Transforming the Portfolio 2025-2029 Financial Targets Growth Compounder Revenue Adjusted EPS Growth Growth 6-8% 10-12% Average annual growth Engaged Employees Driven by Nordson Values 23
Slide 24: NBS Next Growth Framework
NBS Next Growth Framework Jim DeVries Executive Vice President, NBS Next, Supply Chain Management and Environmental Health & Safety Justin Hall Vice President, Electronic Processing Systems
Slide 25: Ascend Strategy
NBS Next Growth Framework Ascend Strategy The heart of the Ascend Strategy 25
Slide 26: Driving Sustainable, Profitable Growth
NBS Next Growth Framework Driving Sustainable, Profitable Growth Use data to identify and invest in best growth end market niches and differentiated products “Direct to Customer” model drives revenue growth Engaged, agile employees that adapt to deliver top tier results in a dynamic market landscape
Slide 27: Market Leading Performance Drives Profitable Growth
NBS Next Growth Framework Market Leading Performance Drives Profitable Growth Excellence in NBS Next metrics… …accelerates profitable growth ▪ Customer Success: ▪ Organic Revenue Growth % Key account revenue growth ▪ Gross Margin % ▪ Product Innovation: ▪ Operating Income Growth % New product revenu
Slide 28: Our NBS Next Journey: Where We Are Now
NBS Next Growth Framework Our NBS Next Journey: Where We Are Now Year 1 Years 2 - 3 Years 3 - 4 Years 5+ CREATE DEPLOY ACCELERATE ASCEND ▪ Create and launch ▪ Deploy across all divisions ▪ Launch Accelerator training ▪ Deliver sustainable market framework ▪ Monthly business reviews ▪ Drive to market
Slide 29: NBS Next: How We Run the Company
NBS Next Growth Framework NBS Next: How We Run the Company ▪ A consistent way to operate the company with a growth focus ▪ Creates competitive advantage based on market leading performance in innovation, quality and delivery ▪ Provides clarity on what winning looks like in a diversified portfolio of
Slide 30: NBS Next in Action
NVESTOR DAY NBS Next in Action
Slide 31: Driving Growth in Fluid Components
NBS Next Growth Framework Driving Growth in Fluid Components OPPORTUNITY: RESULTS: Strategic Discipline Division revenue Skyrocketing ▪ Used data to make choices and focus on growth markets doubled demand for (i.e., biopharma) vaccines during ▪ Simplify product offering EBITDA margin expanded the pa
Slide 32: Positioning for Growth in Electronics Solutions
NBS Next Growth Framework Positioning for Growth in Electronics Solutions Strategic Discipline CHALLENGE: RESULTS: ▪ Choices and focus on the best opportunities in a Lead times dropped from up to Slowing demand in difficult market situation the semiconductor ▪ Simplified and outsourced less value-ad
Slide 33: NBS Next Enables Us To…
NBS Next Growth Framework NBS Next Enables Us To… Determine what Empower Strengthen we do well leaders our talent pipeline along with where we to make informed to sustain win and why choices to simplify our growth and redeploy resources Leverage our Drive growth in strengths our best to capture shar
Slide 34: Industrial Precision Solutions
Industrial Precision Solutions Joseph Kelley Executive Vice President, Industrial Precision Solutions
Slide 35: Key Messages
Industrial Precision Solutions Key Messages Market leading business with differentiated products and diversified end markets and geographies Global service and direct sales business model provides solutions-oriented competitive advantage High-level of recurring revenue bolsters resilient portfolio N
Slide 36: 2024 Overview
Industrial Precision Solutions 2024 Overview TTM Revenue* TTM EBITDA* Strategic Focus $1.5B 36% ▪ New applications for secular trends, including electric vehicle battery, advanced packaging, automotive electronics and solar Geographic Diversification Historical 5 Yr. Sales CAGR ▪ Material, machinery
Slide 37: Growth Drivers
Industrial Precision Solutions Why IPS Wins Growth Drivers ▪ Precision, speed and quality enable Growing Middle Income high-volume manufacturing of both durable and nondurable goods ▪ Reduce expense and volume of costly Automation raw materials ▪ Customer product advancements push Sustainability / E
Slide 38: End Markets
Industrial Precision Solutions End Markets % of Revenue / Applications / Growth Rates CONSUMER NONDURABLE INDUSTRIAL OTHER 40% of IPS Sales 35% of IPS Sales 25% of IPS Sales ▪ Corrugated and carton packaging ▪ Industrial manufacturing machinery ▪ Consumer durable (appliance / wood) ▪ Food and bevera
Slide 39: Divisions and Products
Industrial Precision Solutions Divisions and Products % OF PRODUCT DIVISION PRODUCTS SALES TYPE Precision ▪ Melters that heat, pressurize and dispense adhesives Adhesives Dispensing 50% ▪ Proprietary heated hoses ▪ High-speed precision applicators for heated polymers Industrial ▪ Connected electrost
Slide 40: Nonwovens – Harmony Applicator
Industrial Precision Solutions Nonwovens – Harmony Applicator Product Differentiation ▪ Customer challenges with automation and efficiency drove innovation ▪ Nonwovens core competencies around precision dispense and applicator design uniquely solve a critical customer problem around line speed and m
Slide 41: Product Assembly – Solar Application
Industrial Precision Solutions Product Assembly – Solar Application Product Differentiation ▪ Solar market innovation led to the need to dispense a high viscosity and corrosive material ▪ Product Assembly application engineers were able to solve the customer’s problem and enabled them to grow ▪ The
Slide 42: NBS Next Driving Growth in ICS
Industrial Precision Solutions NBS Next Driving Growth in ICS Choices + Focus + Simplify ICS Powder Coating Product Simplification NBS Next Financial Impact (2019-TTM Q3 2024) Product Design Simplification ▪ Moved from engineered to configured to order Industrial Coatings ▪ Replaced custom design wi
Slide 43: Medical & Fluid Solutions
Medical & Fluid Solutions Stephen Lovass Executive Vice President, Medical and Fluid Solutions
Slide 44: Key Messages
Medical & Fluid Solutions Key Messages Premium provider to med-tech, life science & precision technology markets We have the breadth of innovative products, technical capabilities, scale and performance to serve leading OEM’s / providers globally Attractive end markets support MSD+ organic growth ov
Slide 45: 2024 Overview
Medical & Fluid Solutions 2024 Overview TTM Revenue* TTM EBITDA* Strategic Focus $846M 34% ▪ Differentiated single-use component solutions and devices: • Surgical solutions, including minimally invasive Geographic Diversification Historical 5 Yr. Sales CAGR* • Medical fluid management $846 component
Slide 46: Growth Drivers
Medical & Fluid Solutions Why Nordson Wins in Medical Growth Drivers Aging population and chronic illness ▪ Breadth of innovative solutions and Technology advancements ability to “value add” including minimally invasive ▪ Technical capabilities of products when treatment options, biopharma, superior
Slide 47: End Markets
Medical & Fluid Solutions End Markets % of Revenue / Applications / Growth Rates SPECIALTY MEDICAL MINIMALLY INVASIVE SURGICAL INDUSTRIAL TECHNOLOGY 40% of MFS Sales 36% of MFS Sales 24% of MFS Sales Surgical, ECMO, Biopharma, Patient Cardiovascular, Structural Heart, Electronics and Wireless, EV, I
Slide 48: Minimally Invasive Surgical Solutions / Surgical Solutions
Medical & Fluid Solutions MINIMALLY INVASIVE MEDICAL FLUID SURGICAL SOLUTIONS MANAGEMENT COMPONENTS Cardiovascular Drug Infusion Structural Heart Patient Care Neurovascular Surgical Gastroenterology Biopharma SURGICAL MEDICAL DEVICE SOLUTIONS MANUFACTURING Myocardial Protection Catheters Cardiac Sur
Slide 49: Divisions and Products
Medical & Fluid Solutions Divisions and Products % OF PRODUCT DIVISION PRODUCTS SALES TYPE ▪ Engineered shafts and interventional delivery systems Interventional Solutions 47% ▪ Medical tubing, balloons, balloon inflators, nitinol ▪ Cardiovascular cannula, biomaterial delivery ▪ Drug delivery / need
Slide 50: Nordson Medical Solutions
Medical & Fluid Solutions Nordson Medical Solutions 50
Slide 51: NBS Next Driving Growth in MFS
Medical & Fluid Solutions NBS Next Driving Growth in MFS Strengthening customer-facing performance and refocusing resources on growth Salem, New Hampshire Medical Facility NBS Next Financial Impact (2019-TTM Q3 2024) Strategic Discipline Interventional ▪ Simplified portfolio and re-focused on greate
Slide 52: Advanced Technology Solutions
Advanced Technology Solutions Srini Subramanian Executive Vice President, Advanced Technology Solutions
Slide 53: Key Messages
Advanced Technology Solutions Key Messages End-market and application-specific growth drivers enabling Nordson’s future performance Expanding customer and application portfolio in semiconductor manufacturing Remaining invested in the next generation of technology 53
Slide 54: 2024 Overview
Advanced Technology Solutions 2024 Overview TTM Revenue* TTM EBITDA* Strategic Focus $503M 21% ▪ Semiconductor front-end manufacturing process ▪ Semiconductor advanced packaging Geographic Diversification Historical 5 Yr. Sales CAGR process ▪ Automotive electronics market 4% $503 15% $412 ▪ Deploy N
Slide 55: Growth Drivers
Advanced Technology Solutions Why Nordson Wins in Advanced Electronics Growth Drivers ▪ Broad and market leading technology portfolio AI, IoT & 5G driving significant ▪ Monitoring of complex front-end wafer growth in semiconductor market manufacturing process with WaferSense® sensors ▪ Industry lead
Slide 56: End Markets
Advanced Technology Solutions End Markets % of Revenue / Applications / Growth Rates SEMICONDUCTORS AUTOMOTIVE ELECTRONICS GENERAL ELECTRONICS 50% of ATS Sales 14% of ATS Sales 36% of ATS Sales ▪ Process control for wafer processing ▪ PCBA inspection and metrology for ▪ PCBA inspection and metrology
Slide 57: Best-in-Class Portfolio for Semiconductor
Advanced Technology Solutions Best-in-Class Portfolio for Semiconductor Facilitating Process Productivity and Yield Improvement X-ray inspection of Wire Bond Inspection X-Ray inspection of Acoustic Shear/Pull Test Acoustic inspection of inspection of chips of bumps Bumps & TSV Chips Void/Delaminatio
Slide 58: Advances in Semiconductor Packaging
Advanced Technology Solutions Advances in Semiconductor Packaging 2D Architecture 2.5D Architecture 3D Architecture Demand for data requires more complex chip architecture. 58 Nordson’s technologies play a key role.
Slide 59: Divisions and Products
Advanced Technology Solutions Divisions and Products % OF PRODUCT DIVISION PRODUCTS SALES TYPE Electronics ▪ Precision automated dispense solutions Processing Solutions 37% ▪ Conformal coating solutions ▪ Plasma surface treatment platforms (EPS) X-Ray & Test ▪ Automated X-ray metrology systems Syste
Slide 60: XM8000 Pro Inspection System
Advanced Technology Solutions XM8000 Pro Inspection System XM 8000 XM 8000 Pro Detector size 2 Mpixel 6.5 Mpixel Resolution 0.2µ/pixel 0.13µ/pixel Accuracy 3µ 2µ Speed 1x 2x X-ray dose monitoring No Yes X-ray image of wafer bumps 3D reconstruction Standard Enhanced Next generation automated X-ray me
Slide 61: XM8000 Pro Product Video
Advanced Technology Solutions XM8000 Pro Product Video 61
Slide 62: NBS Next Driving Growth in ATS
Advanced Technology Solutions NBS Next Driving Growth in ATS Strategic discipline identifies growth opportunities Quadra Pro Manual X-ray Inspection NBS Next Financial Impact (2019-TTM Q3 2024) Product Innovation X-Ray & Test ▪ Voice of the customer research identified: Division • Demand for superio
Slide 63: Long-Term Financial Targets
Long-Term Financial Targets Daniel Hopgood Executive Vice President and Chief Financial Officer
Slide 64: Key Messages
Long-Term Financial Targets Key Messages Ascend strategy is delivering results and we have runway to accelerate Portfolio transformation has positioned us for accelerated growth Superior cash generation provides the strategic flexibility to execute our strategy Growth-biased capital deployment while
Slide 65: Accelerating Profitable Growth
Long-Term Financial Targets Accelerating Profitable Growth Building on the success of NBS Next and our Ascend Strategy $3.8 2019 – 2024(3) 2024 - 2029 $3.4 6% - 8% Annual Sales $3.0 Growth(1)(2) 5% 6-8% $2.7 $2.6 Annual EBITDA $2.2 Growth(2) 8% 8-10% $2.2 $1.8 31% 32% - 34% Annual Adj EPS 27% Growth
Slide 66: Well-Positioned to Deliver Organic Growth
Long-Term Financial Targets Well-Positioned to Deliver Organic Growth Electronics Consumer Nondurable Medical Industrial Remaining Markets Growth Rate: Growth Rate: Growth Rate: Growth Rate: Growth Rate: MSD LSD MSD+ LSD MSD 25% of Revenue 21% of Revenue 27% of Revenue 14% of Revenue 13% of Revenue
Slide 67: Disciplined Approach to M&A
Long-Term Financial Targets Disciplined Approach to M&A ▪ Strategic Criteria Financial Criteria ▪ Serving attractive end market niches and ▪ Growth at or above market rates with Nordson- applications like gross margins ▪ Differentiated product technologies/solutions ▪ EBITDA ~20+% with margin expans
Slide 68: Growth Algorithm
Long-Term Financial Targets Growth Algorithm Revenue Adjusted EPS 3% - 4% 4% 6%-8% $2.7B 3% - 4% 10%-12% $9.67 6% - 8% 0 rganic 0 0 ncremental rofit NBS Next 0 68 *Figures based on TTM Q3 fiscal 2024
Slide 69: Strong Capital Deployment
Long-Term Financial Targets Strong Capital Deployment Invested for growth and returned cash to shareholders Capital Deployment 2019 – 2024 Investing in organic growth ▪ $0.3B organic capital 8% ▪ $0.5B product development 11% Organic Capital Share Repurchases While deploying strategic capital Divide
Slide 70: Superior Conversion / Deployment of Cash Flows
Long-Term Financial Targets Superior Conversion / Deployment of Cash Flows Generation of ~ $4.1B in operating cash flows through 2029 Capital Deployment through 2029 Cash Flow Deployment Priorities ▪ Fund organic growth 7% ▪ Return to shareholders thru dividends and Organic Capital routine stock rep
Slide 71: Maintaining Targeted Leverage
Long-Term Financial Targets Maintaining Targeted Leverage Significant flexibility to deliver accelerated growth and maintain targeted leverage ▪ Target leverage ratio of 2-2.5X $2.1B - $4.1B + $4.4B = $2.4B ▪ Projected to remain within target leverage ratio inclusive of acquisitions 1.9X ▪ Retain in
Slide 72: 2025-2029 Financial Targets
Long-Term Financial Targets 2025-2029 Financial Targets Growth Compounder Revenue Adjusted EPS Growth Growth 6-8% 10-12% Average annual growth Engaged Employees Driven by Nordson Values 72
Slide 73: Closing Remarks
Closing Remarks Sundaram Nagarajan President and Chief Executive Officer
Slide 74: What You Heard Today
Closing Remarks What You Heard Today Ascend Strategy is delivering results and has ample runway to accelerate NBS Next is a competitive advantage that sustains growth in core and acquired businesses Organic growth strategy is built on our leadership in diversified, niche markets with differentiated
Slide 75: Appendix
INVESTOR DAY 2024 Appendix Cordson
Slide 76: 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 investors in evaluating company performance for the periods presented and consistently across periods. These non-GAAP measur
Slide 77: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation Twelve Months Ended October 31, 2019 October 31, 2020 October 31, 2021 October 31, 2022 October 31, 2023 July 31, 2024 Net income $337,091 $249,539 $454,368 $513,103 $487,493 $472,893 Income taxes 94,013 51,950 119,808 136,176 127,846 125,096 Interest expense - net 4
Slide 78: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation Twelve Months Ended July 31, 2024 October 31, 2019 OPERATING PROFIT Industrial precision solutions $ 475,755 $ 329,054 Medical and fluid solutions 191,508 166,813 Advanced technology solutions 92,293 38,796 Corporate (79,409) (51,550) Total operating profit $ 680,147
Slide 79: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation *Figures based on TTM Q2 fiscal 2024, excluding $5M of non-recurring acquisition related expenses 79
Slide 80: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation Twelve Months Ended July 31, 2024 October 31, 2019 GAAP AS REPORTED Operating profit $ 680,147 $ 483,113 Other / interest expense - net (82,158) (52,009) Net income 472,893 337,091 Diluted earnings per share $ 8.21 $ 5.79 Shares outstanding - diluted 57,620 58,202 OP
Slide 81: Non-GAAP Reconciliation
Appendix Non-GAAP Reconciliation As of and for TTM July 31, 2024 Total debt $ 1,638,559 Cash and cash equivalents (140,524) Net debt 1,498,035 Shareholder's equity 2,710,998 Net income 472,893 Net interest after tax 65,294 Return on invested capital 13% 81