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Nordson Corporation

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Title: Nordson Corporation


1
The World Leader in Precision Application of
Materials
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
    Corporations actual results could differ
    materially from the expectations expressed in the
    forward-looking statements. Factors that could
    cause the Companys 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.

3
Nordson Today
  • Market leader in nearly all businesses
  • Unusually global leading presence in fast
    growing Asian markets
  • Direct field sales and service organization a
    unique and major competitive strength
  • Technology leader continual stream of new
    products
  • High degree of operating and capital efficiency
    through Lean
  • Excellent margins and free cash flow

4
Nordson Overview
  • 2005 sales 839 million
  • 3,650 employees
  • Operating directly in 30 countries
  • Manufacturing facilities
  • United States
  • Germany
  • Netherlands
  • U.K.
  • China
  • Headquarters Cleveland, Ohio
  • 25,000 Nordson customers
  • Diverse end markets largest industries
  • Food, beverage, soaps and other household
    products
  • Disposable baby diapers and other nonwoven
    products
  • Semiconductors
  • Appliances
  • Office Furniture
  • Cell phones electronic devices
  • Medical devices

5
Sales Distribution First Half - 2006
INDUSTRY SEGMENT
Advanced Technology 27
Finishing and Coating 16
Adhesive Dispensing 58
PRODUCT TYPE
GEOGRAPHIC DISTRIBUTION
Americas 8
Engineered Systems 21
Parts 38
United States 33
Europe 35
Standard Product 41
Asia Pacific 15
FY 2005
6
Markets Served - 2005
7
Nordson Corporation Sales 1955 to 2005
Millions
  • Annual Growth Rate
  • 1965 2005 13

8
Annual Sales Growth
'05
1st Half '06
'91
'92
'93
'94
'95
'96
'97
'99
'00
'01
'98
'02
'03
'04
.11 .05 (.10) .01 .16 (.11 )
(.19) (.20) .04 (.10) (.20) .01 .30
. 27 .11 (.10)
EPS Currency Effect
Volume Growth
Currency Effect
9
Dividend Record
  • Dividend increased for 43 consecutive years
  • This record ranks us 20th among US public
    companies

2005
10
Twelve Week Order Rate Percent
Change from Prior Year Constant
Currency
8
Dec-02
Feb-06
Dec-05
Dec-03
Dec-05
Dec-04
11
First Half Fiscal 2006 Results
First Half Fiscal 2005
First Half Fiscal 2006
Percent Change
Record sales, earnings and earnings per share

12
Fiscal 2006 Third Quarter Guidance
  • Volume growth 8 to 10
  • Sales growth (incl. currency) 8 to 10
  • Earnings per share .54 to
    .59
  • (vs. .50 in 3rd Quarter 2005)
  • Source Nordson May 26, 2006 guidance given
    during quarterly earnings
  • conference call with security
    analysts.

13
Adhesive Dispensing Systems
14
Adhesive Dispensing Systems
58 of total sales
  • Applications
  • Carton closing
  • Case sealing
  • Diaper assembly
  • Window assembly
  • Edge banding
  • Envelope construction
  • Nonwoven fabric construction
  • Automotive sealing
  • Furniture assembly
  • Labeling
  • End markets
  • Food and beverage packaging
  • Disposable nonwoven products
  • Wood products and architectural windows
  • Nonwoven fabrics
  • Automotive
  • Paper converting
  • General industrial assembly

Brands
15
Adhesive Dispensing Systems
  • Drivers of growth
  • Income growth in Asia, Latin America, East Europe
  • Increased use of disposable products globally
  • Increased use of processed foods
  • Productivity investments
  • Material, machinery and process innovations

  • Fiscal Year 2005
  • Sales 502
  • Operating margin 19
  • First Half 2006
  • Volume Growth 7
  • Operating margin 19
  • Characteristics of business
  • Excellent margins
  • High market share

16
Adhesive Systems New Growth Markets
Filters
Windows
Labeling
Transportation
Wood
17
Wood Market
  • Slot technology replacing wheels and solvents
  • Elimination of solvent recovery systems and
    disposal costs
  • Reduce adhesive use for veneer bonding by 20
    30
  • Increase production line speeds by up to 200
  • Reduce maintenance costs by 75

18
Labeling Market
  • Wrap around labeling
  • Successful new application
  • Patented technology for roll fed labels (larger
    part of market)
  • 6-12 months payback on capital investment
  • Speed increase of up to 100
  • Adhesive savings of 20 30

19
Rapid Growth of Chinese Middle Class
Driving China Nonwovens Market
Utilization rate of disposable diapers by babies
aged 0 to 2 in China
20
Advanced Technology Systems
21
Advanced Technology Systems
27 of total sales
  • 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
  • End markets
  • Semiconductors
  • Electronic assembly systems
  • Life sciences
  • General industrial assembly
  • Graphic arts

Brands
22
Advanced Technology Systems
  • Drivers of growth
  • Semiconductor innovations
  • Circuit shrinkage in cell phones, PDAs, etc.
  • Drive for yield and quality improvements
  • Productivity investments
  • Entry into Life Sciences
  • Growth in China
  • Received Intels Supplier Continuous Quality
    Improvement Award for 3rd straight year
  • Fiscal Year 2005
  • Sales 197m
  • Operating margin 21
  • First Half 2006
  • Volume Growth 29
  • Operating margin 25
  • Characteristics of business
  • World leader in rapidly growing flip chip
    underfill microprocessor assembly
  • Growing opportunities in flat panel displays
  • Rapid growth in life sciences


23
Microprocessors
Auto
Cell Phones
Memory chips
Graphics chips
Asymtek MAJOR APPLICATIONS
24
Microprocessors
Auto
Cell Phones
Memory chips
LED Lighting
New
New
Graphics chips
Asymtek MAJOR APPLICATIONS
CMOS Imaging
MEMS
New
Micro Hard Drives
New
LCD/OLED
RFID
New
Life Science
New
New
25
  • FlexTRAK Markets
  • Semiconductor Packaging
  • Flip Chip
  • QFN
  • BGA
  • Life Sciences
  • Pace Makers
  • Catheters
  • Ocular Products

Growth Markets
  • Semiconductor Wafers
  • Wafer Cleaning
  • Wafer Etching

26
  • FlexTRAK Product Line

OEM Integration
Semiconductor Packaging System
Wafer Treatment System
Base Plasma Product
27
Nordson CoolWave UV Product Line Providing Entry
to Wafer Fab Markets
  • Patented technology up to 25 cooler on heat
    sensitive substrates

28
Finishing and Coating Systems
29
Finishing and Coating Systems
  • Applications
  • Powder finishing
  • Liquid finishing
  • Metal container inside coating
  • Battery inside coating
  • Control systems

16 of total sales
  • End markets
  • Appliance
  • Office furniture
  • Outdoor products
  • Automotive components
  • Food and beverage containers
  • Disposable batteries

Brands
30
Finishing and Coating Systems
  • Fiscal Year 2005
  • Sales 140m
  • Operating margin 1
  • First Half 2006
  • Volume Growth 4
  • Operating margin --
  • Characteristics of business
  • Emphasis on industrial powder paint systems
  • Highly profitable beverage container and alkaline
    battery business
  • Restructuring improving margins

  • Drivers of growth
  • Environmental advantages of powder coatings
  • Productivity investments
  • Lean
  • Growth in China

31
Finishing Coating Systems New Prodigy
Technology Providing Rapid Color Change
Capability to Lean Manufacturers
  • Purgeable design provides ultra-fast 30-second
    color change
  • Softer spray at gun tip delivers higher first
    pass transfer efficiency for improved powder
    savings
  • Efficient coating at faster line speeds,
    increases production output
  • Color-on-Demand system accommodates up to 28
    colors at one time for more frequent color
    changes per shift

32
Asia Pacific Sales 2002 to 2005
  • Companys 36th year of operation in region
  • Direct in China for 12 years
  • 34 annual sales growth 2002 - 2006
  • Percent of total revenue
  • 2002 7
  • 2nd Qtr. 2006 17

34 average annual growth
33
Nordson Strategy
  • Accelerate revenue growth through sales to new
    applications and new markets
  • Fuel sales growth through increased investment in
    new application and market development
  • Fund increased investments through Lean

34
Strategic Focus New applications and markets
  • Product and business development, and other
    product support expenditures targeted at 9 of
    revenue
  • Investments targeted at new applications and new
    markets
  • 1,792 active patents worldwide
  • 20 of revenue generated from new products

35
Strategic Focus Fund Increased Investments
Through Lean
  • Excellent start
  • Inventory reduced by 50
  • Consolidating product lines simplifying
    processes
  • Continuing to drive operational and functional
    excellence across entire corporation
  • Supply chain management
  • Information systems
  • Support staffs
  • Sales, service and distribution

36
Improving Productivity from Lean
All data is four-quarter moving average.
37
Capital Structure
Debt
(net of cash)
Equity
1st Half 06
  • - EFD acquired beginning of FY 2001
  • - Purchase of 10 of outstanding shares in FY
    2005

38
Business Wrap-Up
  • Market leader in every segment
  • High margins strong, growing cash flow
  • Positioned to profit from emerging market growth
  • Robust internal product development investment
  • Growth rates and performance above average
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