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

February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation

Nordson CorporationPrecision Technology Solutions

: NDSN

Dispensing - Processing - Test & Inspection - Surface Treatment - Fluid Management

Page 2: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

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 OPERATIONSAll numbers for years prior to FY 2006 in this presentation include results from discontinued operations unless otherwise noted.

Page 3: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

Applied to Diverse Markets

3

Nordson Investment Summary

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

Sustainable Business Model

Delivers Exceptional Results

Strong top line growth

49 years of dividend increases

Excellent margins and returns

Strong cash flow for continued investment

Top quartile total shareholder return

Page 4: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

Nordson: Focused on Precision Technology Solutions Material Dispensing

Dispensing, Coating Sealing, Finishing Spraying, Painting Extrusion

Plastic Processing Extrusion Injection Molding

Test and Inspection X-ray, optical inspection Bond test

Surface Treatment UV curing Plasma treatment

Fluid Management Components

4

Customer Value PropositionReliability…uptime

Speed…productivity…yield

Efficiency…lower material usage

Leading edge features

Lower Cost of Ownership

Page 5: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

End Markets: Consumer Non-Durables, Durables, Technology

….Every Day You Experience the Value We Bring

Packaging, Nonwovens

Product Assembly

Plastic Processing

5

Adhesive Dispensing Advanced Technology

Electronics, Medical

Solar, LEDs

Industrial

Industrial Coating

Appliances, Agriculture

Automotive, Furniture

Containers, Construction

Page 6: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

Engineered Systems

20%

Standard Product

38%

Parts & Consumables

42%

Industrial Coating15%

Adhesive Dispensing

48%

Advanced Technology

37%

6

Sales Distribution – FY2012

Americas8%

Europe27%

Japan9%

Asia Pacific29%

United States27%

Operating SegmentsOperating Segments

Product TypeProduct Type GeographyGeography

Consumer Non-Durables

43%

Consumer Durables

18%

Industrial4%

Automotive4%

Medical7%

Electronic Components

6%

Semiconductor9%

Circuit Board Assembly

10%

Markets ServedMarkets Served

Page 7: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

7

Adhesive Dispensing Systems

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

48% of FY12 sales

48% of FY12 sales

Twelve Months Ending 1/31/2013:Sales: $728m Operating Margin: 29%

Melting, filtering, pumping, transporting and deposition of adhesives, plastics and other materials in the manufacturing of a wide range of goods.

End MarketsEnd MarketsGrowth DriversGrowth Drivers

Flexible PackagingFlexible Packaging

Rigid PackagingRigid Packaging

Typical Replacement PartsTypical Replacement Parts

NonwovensNonwovens

General Product AssemblyGeneral Product Assembly

Includes industry leading brands:Nordson XALOY & Nordson EDI

Page 8: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

8

Advanced Technology Systems

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

37% of FY12 sales

37% of FY12 sales

Twelve Months Ending 1/31/2013:Sales: $525m Operating Margin: 27%

High precision dispensing, fluid management, test, inspection and surface treatment products and systems for electronics, medical and general industrial markets

Test & InspectionTest & Inspection

End MarketsEnd MarketsGrowth DriversGrowth Drivers

Automated DispensingAutomated Dispensing

Medical DispensingMedical Dispensing

Semi Automated DispensingSemi Automated Dispensing

Includes industry leading brands:Nordson ASYMTEK, Nordson DAGE, Nordson EFDNordson MARCH, Nordson MICROMEDICS, Nordson YESTECH, Value Plastics

Consumable Tips, Cartridges Consumable Tips, Cartridges & Connectors& Connectors

Page 9: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

9

Industrial Coating Systems

15% of FY12 sales

15% of FY12 sales

Twelve Months Ending 1/31/2013:Sales: $228m Operating Margin: 14%

Liquid CoatingLiquid Coating

End MarketsEnd MarketsGrowth DriversGrowth Drivers

Powder CoatingPowder Coating

Medical DispensingMedical Dispensing

Cold Material DispensingCold Material Dispensing

Container CoatingContainer Coating

Typical Replacement PartsTypical Replacement Parts

Growth in emerging markets Environmental advantages of powder coatings Productivity investments Lean manufacturing Quick color change

Appliances Lawn and garden Metal container inside coating Automobile sealing & bonding Cold material dispensing Pipe coating and construction Woodworking General industrial Electronics / UV curing

Precision equipment and systems to apply and cure paints, sealants, coatings, cold materials and other materials to a wide range of products

Includes industry leading brand:Sealant Equipment & Engineering

Page 10: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

10

Consistent Sales Growth

$0

$300

$600

$900

$1,200

$1,500

'55 '62 '69 '76 '83 '90 '97 '04 '11

0%

10%

20%

30%

40%

50%

60%

70%

03 04 05 06 07 08 09 10 11 12

Industry Leading Gross Margins

Mill

ions

of

$Financial Highlights

0%

5%

10%

15%

20%

25%

30%

02 03 04 05 06 07 08 09* 10 11 12

*FY09 excludes non-cash charges for impairment of goodwill and other long-lived assets.

Strong Operating Margins

FY12 = $1.4B 14 % YOY Growth

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

'03 '04 '05 '06 '07 '08 '09* '10 '11 12

2003 – 2012 CAGR: 21%

Strong EPS Growth

Includes impact of Acquisitions

Page 11: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

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

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

1964 1972 1980 1988 1996 2004 2012

Div

iden

ds p

er s

hare

Uses of Cash – 2007 to 2012Uses of Cash – 2007 to 2012

Dividend increased 49 consecutive years15th among US public companies

Dividend increased 49 consecutive years15th among US public companies

Disciplined Use of Cash

Share Repurchases

$303 17%

Dividends$163 9%

Acquisitions$1,089

61%

PP&E / Capital Leases$136 8%

Working Capital

$93 5%

11

42% increase since 2009

Page 12: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

12

Capital Management

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

FourAcquisitions

10% Outstanding Stock Repurchase

$50 $50$70

$200$252

$248

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

Prudential Bridge Loan NYLIM Shelf Private Placement

Syndicated Revolver

Drawn Available

NET DEBT TO EBITDAStrong Cash Generation Lets Nordson

De-lever Quickly

NET DEBT TO EBITDAStrong Cash Generation Lets Nordson

De-lever Quickly

EFD Acquisition

Net Debt to EBITDA calculated net of cash

In m

illio

ns $

DEBT POSITIONat 1/31/2013

DEBT POSITIONat 1/31/2013

Acquisitions &Share

Repurchases

Ends Feb [email protected]%

- Ends June 2013- 100 bps over Libor

Amortizing-avg rate – 2.21%Avg. life – 3.58 years

- Amortizing-avg rate – 2.93%- Initial avg. life – 8.26 years

- Ends Dec 2016- 87.5 bps over Liborat 10/31

Page 13: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

Nordson Outperforms its Peers in Total Shareholder Return

13

10 YEAR TSR 5 YEAR TSR 3 YEAR TSR 1 YEAR TSRNORDSON CORP 18.03% 19.05% 32.18% 31.94%S&P 400 MIDCAP INDEX 9.99% 3.58% 15.81% 15.93%S&P 400 INDUSTRIAL MACHINERY INDEX 12.09% 3.23% 17.31% 12.93%S&P 500 INDUSTRIAL MACHINERY INDEX 11.30% 4.47% 16.58% 22.89%Bloomberg November 2012 - Annualized - Periods beginning 11/1 and ending 10/31

10 Year Total ReturnSource: Zack’s Investment Research

Nordson

S&P 500Industrial Machinery

S&P Midcap 400 Industrial Machinery

S&P Midcap 400

Assumes $100 invested on 11/1/2002, dividends reinvested, fiscal year ending 10/31/2012

Page 14: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

14

FY2013 1Q Results

Organic Volume growth 3% to 8%

Acquisition Growth 16%

Currency (1)%

Total Sales Growth 18% to 23%

GAAP Diluted EPS $0.78 to $0.87

1Q FY13 1Q FY12Sales $347m $276m

Earnings per share $0.65 $0.58

26% total8% organic 18% acquisitions

12%

Y-O-Y Growth

2Q 2013 Guidance

SOURCE: February 21, 2013 Press Release

Page 15: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

2013 Global Economic Environment: A lot like 2012Nordson Delivered 7.9% Organic Growth in 2012

January 2013

15

1.94%

3.55%

-0.17%

2.12%

-0.02%

7.96%

5.82%

2.17%

6.60%

2.20%

7.90%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

US Latin America

European Monetary

Union

Eastern Europe

Japan China India World 2013

NDSN Organic Growth

1H13 FCST

World 2012

NDSN Organic Growth

2012

Global GDP Forecasts 20132012 GDP &

NDSN Organic Growth

1H13 NDSN forecast based on midpoint of guidance provided in Feb 22 press release

Page 16: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

Going Forward: Multiple Paths for Profitable Growth

Organic - target at mid-to-high single digits

New Applications Emerging Market Penetration

Strategic Acquisitions – target to bring total growth to double digits Technology Sales channels Core portfolio

Product Innovation

Adjacencies Step outs

Asia Pacific and Latin America Sales (millions)

$0

$100

$200

$300

$400

$500

1990 2000 2012

Test & InspectionPlastics

Processing

Fluid Mgmt. (esp. medical)

Cold Material Dispense

Current areas of focus

Page 17: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

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

Key Themes for FY2013

17

Continue to deliver top quartile

performance for our shareholders

Continue to deliver top quartile

performance for our shareholders

Page 18: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

Appendix

- Selected Organic Growth Opportunities

- Currency Chart

18

Page 19: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

Organic Growth: Recent Product Innovations

Mini Blue II adhesive applicator

Trilogy Gunsexpanded offering

Select Coatconformal coating

Spectrum jetting for LEDs

RediFlexHot melt hoses

NexJetAutomated dispensing

X-PlaneTest and inspection

ArtisteMedical dispensing

AllegroDispense nozzles

StediFlo™ Coating pumps

Page 20: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

Growth: Summary of Electronics Industry Forecasts*

20

CAGR ’12-’15 = 32.4%

CAGR ’12-’15 = (0.4)%CAGR ’12-’15 = 4.4%

CAGR ’12-’15 = 24.9%

*Average of most recent forecasts to Jan 2013 compiled by Nordson. Includes data from Citibank, Digitimes, IC Insights, IDC, Henderson, iSuppli, Merrill, Prismark

Nordson is well positioned in mobile devices, where growth is outpacing traditional applications

Page 21: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

Organic Growth: Smart Phones & Tablets multiple Nordson applications

1. Micro coatings for moisture protection

2. Hot Melt for display assembly

3. CSP & PoP Underfill

4. Solder paste for RF shield attach & SIM card solder joints

5. Flip chip underfill for blue tooth module

6. Lens bonding & underfill for camera modules

7. Solder Paste & Silicone Encapsulation for MEMS microphones

8. Epoxy Flux, Liquid RF shielding

9. Test & inspection

Page 22: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

Growth Opportunities: MEMS

22

Nordson opportunities in dispensing, test/inspection, plasma treatmentNordson opportunities in dispensing, test/inspection, plasma treatment

Page 23: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

Growth Opportunities: LEDs Market Trend

23

Nordson opportunities in dispensing, test/inspection, plasma treatment

Nordson opportunities in dispensing, test/inspection, plasma treatment

March 2012

Dispensing for LEDs

Page 24: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

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

Page 25: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

Growth: Solid Trends in Plastic Processing

25

Plastics Machinery Aftmkt Parts CAGR 4.8%

Blow Molding Machinery CAGR 5.5%

Extrusion Machinery CAGR 6.5%

Injection Molding Machinery CAGR 6.0%

Thermoforming and Other CAGR 6.6%

Construction CAGR 6.5%

Consumer & Industrial CAGR 6.0%

Packaging CAGR 5.9%

Other CAGR 5.8%

Source: 2012

CAGR 2011-15: China 8.1%CAGR 2011-15: India 9.7%

CAGR 2011-15: China 8.1%CAGR 2011-15: India 9.7%

Page 26: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

Growth Opportunities: Medical

26

Medical Device AssemblyHearing Aids, PacemakersCatheters, StentsDentalGlucose Test StripsMedical Electronics

Biomaterial DispensingDispensing syringes and componentsBleeding controlWound healingBone graft materialAesthetic devices

Medical Device Fluid Control Fittings & components Anesthesia equipment Cardiovascular surgery equipment Blood management equipment

Advanced Technology segment

Source: MedMarket Diligence, various 3rd party reports, Nordson internal estimates

Page 27: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

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: 16%- 2012: 29%

Asia Pacific Revenue

20% CAGR2006-2012

Note: Nordson Asia Pacific sales exclude Japan, which is reported separately

Page 28: February 21, 2013 | First Quarter Fiscal 2013 Investor Presentation Nordson Corporation Precision Technology Solutions : NDSN Dispensing - Processing -

28

-30%

-20%

-10%

0%

10%

20%

30%

$.11 .05 (.10) .01 .16 (.11) (.19) (.20) .04 (.10) (.20) .01 .30 . 27 .11 (.10) .18 .29 (.23) .15 .16 (.11)

Currency and Annual Sales Growth

Volume Growth Currency Effect EPS Currency Effect

'91 ’92 ’ 93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ‘12


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