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Nordson Corporation : The Global Leader in Precision Technologies for Manufacturers

Nordson Corporation : The Global Leader in Precision Technologies for Manufacturers. Dispensing – Surface Treatment – Test & Inspection. : NDSN. Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995.

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Nordson Corporation : The Global Leader in Precision Technologies for Manufacturers

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  1. Nordson Corporation: The Global Leader in Precision Technologies for Manufacturers Dispensing – Surface Treatment – Test & Inspection : NDSN

  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.

  3. Investment Highlights

  4. Nordson Today Who We Are Financials Profitable Future Growth

  5. Key Statistics • Founded: 1954 • FY2009 Sales: $819 million • Direct Operations: 30+ countries • Employees: 3,681 • Customers: 25,000+ • Headquartered in Cleveland, OH

  6. Nordson: Focused on Precision Solutions for Manufacturers Adjacent competency Adjacent competency Core Competency

  7. Markets Served – FY2009 Food Products Diapers, Paper Goods Etc. Appliances, Furniture Doors/Windows Etc.

  8. Sales Distribution – FY2009 GEOGRAPHIC DISTRIBUTION INDUSTRY SEGMENT PRODUCT TYPE

  9. Recognized Leader Across Industries • Procter & Gamble Best Supplier Award • Industry Week Best Plant Winner*** • PMT Packaging Line of the Year Supplier*** • Circuits Assembly Service Excellence Award*** • Global SMT & Packaging Technology Award *** • SMT China Vision Award*** • Electronics Manufacturing Asia Innovation Award ***Note: recognized multiple years

  10. Diversified Customer Portfolio No customer accounts for more than 5% of sales

  11. End markets Food and beverage packaging Nonwovens / disposable hygiene products Wood products & windows Paper converting General industrial assembly Applications Carton closing Case sealing Diaper assembly Window/solar cell assembly Bookbinding Furniture assembly Labeling 56% of FY09 sales Adhesive Dispensing Systems Twelve Months Ending 1/31/2010:Sales: $473m Operating Margin: 28% • Dispense and apply adhesives and other materials to a wide variety of products during manufacturing processes Drivers of growth • Income growth in Asia, Latin America, East Europe • Increased use of disposable hygiene products • Increased use of processed and convenience foods • Productivity investments • Material, machinery and process innovations

  12. End markets: Semiconductors Electronic assembly systems Life sciences General industrial assembly Solar Aerospace Specialty Applications: Flip chip underfill Semiconductor packaging Flat panel displays Printed circuit board assembly Disk drive assembly Semiconductor surface preparation Medical device assembly UV ink curing Bond testers and x-ray inspection Automated optical inspection (AOI) Two component dispensing 31% of FY09 sales Advanced Technology Systems Twelve Months Ending 1/31/2010:Sales $269m Operating Margin 14%* *excludes non-cash charges for impairment of goodwill and other long-lived assets • High precision dispensing, test, inspection and surface treatment technologies for electronics and other high tech markets. Drivers of growth: • Faster processors and memory chips • Circuit shrinkage in cell phones, PDA’s, etc. • Emerging consumers for products in BRIC countries • Growth in medical device market driven by aging population • Regulations eliminating lead solder • Alternative energy 12

  13. End markets: Appliance Office furniture Outdoor products Automobile assembly Food & beverage containers Disposable batteries Applications: Powder finishing Liquid finishing Metal container insidecoating Battery inside coating Control systems Automobile sealing & bonding 13% of FY09 sales Industrial Coating Systems Twelve Months Ending 1/31/2010:Sales $110m Operating margin (2)%* *excludes non-cash charge for impairment of goodwill and other long-lived assets • Equipment and systems to apply paints, sealants, coatings and other materials to a wide range of products Drivers of growth: • Environmental advantages of powder coatings • Productivity investments • Lean manufacturing • Growth in China

  14. Representative Products Nordson EFD – use once and dispose consumables Powder coating booth systems Standard adhesive dispensing systems Nordson DAGE – x-ray inspection system Nordson ASYMTEK – automated dispensing system

  15. Nordson Today Who We Are Financials Profitable Future Growth

  16. Annual Sales CAGR 1955 – 2009 13% Millions

  17. Annual Sales Growth '08 ‘09 '94 '93 '95 '07 '91 '92 '02 '04 '97 '98 '01 '06 '96 '00 '03 '99 '05 $ .11 .05 (.10) .01 .16 (.11 ) (.19) (.20) .04 (.10) (.20) .01 .30 . 27 .11 (.10) .18 .29 (.23) Volume Growth Currency Effect EPS Currency Effect

  18. Industry Leading Gross Margins Nordson Gross Margin – FY2002-FY2009 Long-term stability of high gross margin Gross Margin Comparison FY2009* Nordson outperforms industrial indices *Average TTM gross margin. source: Bloomberg December 10, 2009

  19. Operating Margin - 2001 to 2010 *excludes non-cash charges for impairment of goodwill and other long-lived assets.

  20. Diluted Earnings Per Share: 2002-2009 Effects of acquisitions. *excludes non-cash charges for impairment of goodwill and other long-lived assets.

  21. Lean Metrics • Reduced inventory; improved customer service; reduced waste • Consolidation of product lines and business operations • Supply chain management integrated with suppliers • Simplification of business processes • Lean part of the culture: from “top-down” to “bottom-up” Annual Growth Rate: 3% Annual Growth Rate: 10% Annual Growth Rate: 20% *Operating profit in FY2009 excludes non-cash charges for impairment of goodwill and other long-lived assets. Note: Based on average headcount per year

  22. Cash Flow Annual Growth Rate: 12% Annual Growth Rate: 13% Millions Free Cash Flow/Net Income: 192% 149% 122% 110% 112% 77% 212%* Free cash flow equals cash from operations less net capex. *Net income is before non-cash charges for impairment of goodwill and other long-lived assets.

  23. Uses of Cash – 2002 to 2009 Disciplined Capital Allocation $338 $180 $147 $210 $268 Total $1.1 billion NOTE: Working capital was a source of $64 million over the period.

  24. Capital Management NET DEBT TO CAPITAL DEBT MATURITY EFD ’01 Acquisition Completed Four Acquisitions Stock Repurchase $400 million committed facility Note: Revolver – drawn shown as of Q4 FY09 *includes non-cash charges for impairment of goodwill and other long-lived assets.

  25. Consistent DividendRecord Dividend increased for 46 consecutive years 16th among US public companies

  26. Fiscal 2010 Second Quarter Guidance • Volume growth 21% to 25% • Currency 5% • Sales growth 26% to 30% • Earnings per share* $0.81 to $0.89 (vs. $0.41 in 2nd Quarter Fiscal 2009) * includes an anticipated $0.01 per share charge for restructuring activities Source: Nordson February 23, 2010 quarterly earnings conference call with security analysts

  27. Nordson Today Who We Are Financials Profitable Future Growth

  28. Organic New applications New product innovation Globalization Customer service Acquisitions Market leaders Strong financial performers Complementary technologies Growth: Organic and Acquisitions Fund Increased InvestmentsThrough LEAN

  29. New Applications and Markets • Rapidly growing demand in Asia Pacific • Technology development in semiconductor and consumer electronics end markets – packaging architectures, smart phones, netbooks, etc • Life Science growth associated with catheters, stents, etc • High speed piezo-electric jet dispensing • Next generation flat panel displays (OLED and LCD) • Systems offering Lean productivity - quick color change, material reduction, etc. • X-ray and automated optical inspection • LED lighting, RFID, MEMS • Solar energy

  30. Adhesive Systems - New Applications and Markets Building & Construction Woodworking Windows Sector Expansion Solar Panels Wood Panels Personal Care Consumer Products Hygienic Packaging Sector Expansion Labeling Book Binding Wipes Surgical Tapes

  31. Advanced Technology - New Applications & Markets Microprocessors Cell Phones LED Lighting Alternative Energy NEW! NEW! Core Core LCD/OLED Life Science MEMS NEW! NEW! NEW! Aerospace Dental Pest Control NEW! NEW! NEW!

  32. Growth Driver: Migration to “flip chips“ in devices OLD - wire bonding Flip Chip Package Production • Smaller Size • Higher Speed • Greatest I/O Flexibility • Most Rugged • Lower Cost at high I/O 50.2%CAAGR Millions of wafers Chips with a perimeter gold wire connection to each pad NEW - flip chip Flip Chip Advantages Flip chips “face down”, array connected onto circuit boards or packages by conductive solder bumps Source

  33. Today’s handheld combines: Phone WLAN GPS Blue Tooth MP3 Camera 5 7 6 1 8 4 3 9 14 10 12 11 17 16 2 15 13 Growth Driver: Convergence of Devices 17 advanced packages in one device The more complexity, the more underfill opportunities for Nordson Every chip can require underfill

  34. Growth Opportunity: LED Market Outlook 24% CAGR $14.9 billion in 2013 1Source: Strategies Unlimited (Mountain View, CA) High-Brightness LED Market Review and Forecast—Sept 2009 2Source: Displaybank, LED Lighting Industry Growth Perspective - May 2009

  35. Nordson Applications: LED Manufacturing

  36. Industrial Coating & Automotive Systems New Applications and Markets Fast Line Speeds Quick Color Change NEW! NEW! Colored Glass Manufacturing NEW!

  37. Growth: Asia Pacific Sales 2002 to 2009 Sales (Millions) • Company’s 40th year of operation in Asia • Direct in China for 15 years • Percent of total revenue: - 2002: 7% - 2009: 18% 27% Average Annual Growth2002-2008

  38. Investment Highlights

  39. Appendix: GAAP Reconciliation

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