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USF Student Managed Investment Fund 1
Nordson Corporation (NASDAQ: NDSN)
Industrial Equipment
Executive Summary
Nordson Corporation is a dominant industry leader in the provision of
dispensing equipment, fluid management technology, and industrial
coating systems. Nordson’s operating segments are positioned in rapidly
growing niche and emerging markets providing the optimal scenario for
Nordson to capitalize on growth opportunities. Mega-trends such as
increasing demand for automation, miniaturization, an aging population,
and ongoing technological innovation provide tailwinds for their key end
markets. Strategic initiatives focusing on significant margin expansion and a
multi-faceted growth strategy will exemplify their status as a cash cow
generating superb free cash flows equating to 100% of their net income. On
a relative and absolute basis, the current price of $134.80 provides a
favorable entry point to capture the double-digit return Nordson offers that
has generally been overlooked by the market due to its mid-cap market
value.
Investment Thesis
➢ Multi-facet strategic growth strategy
➢ Dominant market position and pricing power
➢ Margin expansion
➢ Restructuring and consolidation initiatives
➢ Attractive dividend policy
➢ Supporting mega-trends and macro tailwinds
➢ Relative and absolute undervaluation
-25.0%
0.0%
25.0%
50.0%
75.0%
100.0%
125.0%
Feb-13 Feb-14 Feb-15 Feb-16 Feb-17
S&P 500 NDSN
March 6th, 2018
Recommendation: Buy
Current and Target Price:
Current Price (March 2nd, 2017) $134.80
Intrinsic Value $168.31
2-Year Target Price $205.54
52-Week Range $151.84 – 107.16
Beta 1.51
Market Data:
Shares Outstanding (M) 57.72
Avg. Daily Trading Vol. 243,230
Market Cap. (M) $8,029.0
Book Value (Report date) $20.02
Dividend/Yield $1.11/0.88%
ROA 10.1%
ROE 29.5%
ROIC 14.0%
FCF/Share $4.78
EPS $5.08
P/E 24.94
P/BV 6.33
LT Debt (M)/% Total Cap $1,256/46.0%
Company Description:
Nordson Corp. engages in the engineering,
manufacture, and market of products and
systems used for adhesives, coatings, sealants,
biomaterials, and other materials. It operates
through three segments: Adhesive Dispensing
Systems, Advanced Technology Systems, and
Industrial Coating Systems. The company was
founded by Eric T. Nord, Evan W. Nord, and
Walter G. Nord in 1954 and is headquartered in
Westlake, OH.
Analysts:
Matthew Gladdish, [email protected]
Rafael Grigoryan, [email protected]
Maithilee Pagay, [email protected]
Mark Smyslov, [email protected]
Source: FactSet
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 2
Income Statement
Nor
dson
Cor
p. -
Inco
me
Stat
emen
tFY
08A
FY09
AFY
10A
FY11
AFY
12A
FY13
AFY
14A
FY15
AFY
16A
FY17
AFY
18E
FY19
EFY
20E
FY21
EFY
22E
($ in
mill
ions
)
Tota
l Sal
es1,
124.
881
9.2
1,04
1.6
1,23
3.2
1,40
9.6
1,54
2.9
1,70
4.0
1,68
8.7
1,80
9.0
2,06
7.0
2,31
02,
472.
62,
642.
22,
818.
12,
999.
9
Sale
s Gro
wth
-27.
2%27
.1%
18.4
%14
.3%
9.5%
10.4
%-0
.9%
7.1%
14.3
%11
.7%
7.1%
6.9%
6.7%
6.5%
Adh
esiv
e Di
spen
sing
Syst
ems
580.
746
0.7
525.
361
1.9
684.
179
3.5
899.
783
6.1
879.
691
6.0
972.
81,
031.
21,
091.
01,
152.
11,
214.
3
% o
f Sal
es51
.6%
56.2
%50
.4%
49.6
%48
.5%
51.4
%52
.8%
49.5
%48
.6%
44.3
%42
.1%
41.7
%41
.3%
40.9
%40
.5%
Adv
ance
d Te
chno
logy
Sys
tem
s36
7.4
242.
236
9.4
438.
651
6.0
516.
356
1.8
593.
967
6.3
897.
61,
075.
61,
172.
41,
274.
41,
381.
51,
493.
4
% o
f Sal
es32
.7%
29.6
%35
.5%
35.6
%36
.6%
33.5
%33
.0%
35.2
%37
.4%
43.4
%46
.6%
47.4
%48
.2%
49.0
%49
.8%
Indu
stria
l Coa
ting
Syst
ems
176.
811
6.2
146.
818
2.6
209.
523
3.2
242.
525
8.7
253.
125
3.3
261.
226
9.0
276.
828
4.6
292.
3
% o
f Sal
es15
.7%
14.2
%14
.1%
14.8
%14
.9%
15.1
%14
.2%
15.3
%14
.0%
12.3
%11
.3%
10.9
%10
.5%
10.1
%9.
7%
Cost
of S
ales
(494
.4)
(350
.2)
(419
.9)
(484
.7)
(586
.3)
(676
.8)
(758
.9)
(774
.7)
(815
.5)
(928
.0)
(1,0
27)
(1,0
88.0
)(1
,151
.0)
(1,2
15.4
)(1
,280
.8)
% o
f Sal
es44
.0%
42.8
%40
.3%
39.3
%41
.6%
43.9
%44
.5%
45.9
%45
.1%
44.9
%44
.4%
44.0
%43
.6%
43.1
%42
.7%
Adh
esiv
e Di
spen
sing
Syst
ems
(255
.2)
(197
.0)
(211
.8)
(240
.5)
(284
.5)
(348
.1)
(400
.7)
(383
.6)
(396
.5)
(411
.3)
(432
.4)
(453
.7)
(475
.3)
(496
.9)
(518
.4)
Adv
ance
d Te
chno
logy
Sys
tem
s(1
61.5
)(1
03.6
)(1
49.0
)(1
72.4
)(2
14.6
)(2
26.5
)(2
50.2
)(2
72.4
)(3
04.9
)(4
03.0
)(4
78.1
)(5
15.9
)(5
55.2
)(5
95.8
)(6
37.6
)
Indu
stria
l Coa
ting
Syst
ems
(77.
7)(4
9.7)
(59.
2)(7
1.8)
(87.
1)(1
02.3
)(1
08.0
)(1
18.7
)(1
14.1
)(1
13.7
)(1
16.1
)(1
18.4
)(1
20.6
)(1
22.7
)(1
24.8
)
Gros
s Pro
fit63
0.4
468.
962
1.6
748.
482
3.3
866.
194
5.1
914.
099
3.5
1,13
9.0
1,28
31,
384.
61,
491.
21,
602.
81,
719.
1
Gros
s Mar
gin
56.0
%57
.2%
59.7
%60
.7%
58.4
%56
.1%
55.5
%54
.1%
54.9
%55
.1%
55.6
%56
.0%
56.4
%56
.9%
57.3
%
Selli
ng a
nd A
dmin
istra
tive
Expe
nses
(374
.5)
(285
.5)
(338
.3)
0.0
(422
.3)
(461
.4)
(493
.5)
(472
.9)
(477
.7)
(535
.6)
(597
.5)
(638
.8)
(681
.5)
(725
.8)
(771
.5)
% o
f Sal
es33
.3%
34.8
%32
.5%
0.0%
30.0
%29
.9%
29.0
%28
.0%
26.4
%25
.9%
25.9
%25
.8%
25.8
%25
.8%
25.7
%
Rese
arch
and
Dev
elop
men
t(3
3.6)
(25.
5)(2
3.8)
(27.
0)(3
6.5)
(48.
0)(4
7.5)
(46.
7)(4
6.2)
(52.
5)(6
0.1)
(64.
3)(6
8.7)
(73.
3)(7
8.0)
% o
f Sal
es3.
0%3.
1%2.
3%2.
2%2.
6%3.
1%2.
8%2.
8%2.
6%2.
5%2.
6%2.
6%2.
6%2.
6%2.
6%
Oth
er E
xpen
ses
(5.6
)(2
59.4
)(2
.0)
(3.4
)(4
.6)
(1.1
)(2
.6)
(11.
4)(1
0.8)
(2.4
)(1
.0)
0.0
0.0
0.0
0.0
EBIT
DA21
6.8
(101
.5)
257.
571
8.0
359.
935
5.6
401.
638
2.9
458.
754
8.5
624
681.
674
1.0
803.
786
9.6
EBIT
DA M
argi
n19
.3%
-12.
4%24
.7%
58.2
%25
.5%
23.0
%23
.6%
22.7
%25
.4%
26.5
%27
.0%
27.6
%28
.0%
28.5
%29
.0%
Depr
ecia
tion
& A
mor
tizat
ion
(26.
4)(2
6.3)
(22.
6)(2
0.8)
(24.
5)(3
1.8)
(34.
4)(6
5.2)
(70.
3)(9
0.9)
(98.
3)(9
7.6)
(96.
6)(9
0.7)
(86.
2)
EBIT
190.
3(1
27.8
)23
4.8
697.
333
5.5
323.
836
7.1
317.
738
8.4
457.
752
658
4.0
644.
471
3.0
783.
4
Ope
ratin
g M
argi
n16
.9%
-15.
6%22
.5%
56.5
%23
.8%
21.0
%21
.5%
18.8
%21
.5%
22.1
%22
.8%
23.6
%24
.4%
25.3
%26
.1%
Tota
l Oth
er In
com
e / E
xpen
se(1
0.6)
0.6
(3.5
)(1
.0)
(9.2
)(1
2.7)
(14.
6)(1
6.9)
(19.
9)(3
7.4)
(30.
6)(3
3.2)
(37.
3)(3
7.9)
(39.
6)
Int
eres
t Exp
ense
- N
et(1
5.5)
(7.3
)(5
.4)
(4.5
)(1
0.7)
(14.
4)(1
4.5)
(17.
5)(2
0.6)
(35.
5)(3
0.6)
(33.
2)(3
7.3)
(37.
9)(3
9.6)
EBT
179.
8(1
27.2
)23
1.3
696.
332
6.3
311.
135
2.5
300.
936
8.5
420.
349
5.6
550.
860
7.1
675.
074
3.8
EBT
Mar
gin
16.0
%-1
5.5%
22.2
%56
.5%
23.1
%20
.2%
20.7
%17
.8%
20.4
%20
.3%
21.5
%22
.3%
23.0
%24
.0%
24.8
%
Inco
me
Taxe
s(6
2.3)
(32.
9)(6
3.3)
(92.
2)(1
01.4
)(8
9.3)
(105
.7)
(89.
8)(9
6.7)
(124
.5)
(123
.9)
(137
.7)
(151
.8)
(168
.8)
(185
.9)
Net
Inco
me
117.
5(1
60.1
)16
8.0
604.
122
4.8
221.
824
6.8
211.
127
1.8
295.
837
1.7
413.
145
5.3
506.
355
7.8
YoY
Grow
th-2
36.2
%-2
05.0
%25
9.5%
-62.
8%-1
.3%
11.3
%-1
4.5%
28.8
%8.
8%25
.7%
11.1
%10
.2%
11.2
%10
.2%
Net P
rofit
Mar
gin
10.4
%-1
9.5%
16.1
%49
.0%
16.0
%14
.4%
14.5
%12
.5%
15.0
%14
.3%
16.1
%16
.7%
17.2
%18
.0%
18.6
%
Basic
Sha
res O
utst
andi
ng67
.567
.168
.467
.664
.464
.263
.760
.757
.157
.556
.054
.252
.751
.750
.3
Dilu
ted
Shar
es O
utst
andi
ng68
.667
.168
.468
.465
.164
.964
.361
.257
.558
.256
.654
.953
.452
.451
.1
Tota
l Sha
res O
utst
andi
ng67
.467
.467
.965
.664
.364
.262
.457
.457
.357
.756
.254
.754
.153
.352
.3
Per S
hare
EPS
(Bas
ic)
$1.7
4($
2.38
)$2
.46
$8.9
3$3
.49
$3.4
5$3
.88
$3.4
8$4
.76
$5.1
4$6
.64
$7.6
2$8
.64
$9.8
0$1
1.09
EPS
(Dilu
ted)
$1.7
1($
2.38
)$2
.46
$8.8
3$3
.45
$3.4
2$3
.84
$3.4
5$4
.73
$5.0
8$6
.56
$7.5
3$8
.53
$9.6
6$1
0.92
Divi
dend
s per
Sha
re$0
.37
$0.3
7$0
.39
$0.4
4$0
.53
$0.6
3$0
.76
$0.9
0$0
.99
$1.1
1$1
.51
$1.8
1$2
.16
$2.5
7$3
.06
Divi
dend
Pay
out R
atio
(%)
21.3
%0.
0%15
.9%
4.9%
15.2
%18
.2%
19.6
%25
.9%
20.8
%21
.6%
22.7
%23
.8%
25.0
%26
.2%
27.6
%
Book
Val
ue p
er S
hare
$8.5
1$5
.51
$7.3
8$8
.45
$10.
40$1
3.83
$14.
21$1
0.88
$14.
92$2
0.09
$22.
58$2
5.62
$30.
71$3
5.64
$40.
42
Cash
Flo
w p
er S
hare
$1.6
9$2
.51
$2.0
5$3
.65
$4.2
6$4
.18
$4.5
3$4
.32
$5.8
0$6
.08
$6.9
5$7
.81
$8.8
2$9
.94
$10.
97
Free
Cas
h Fl
ow p
er S
hare
$1.2
8$2
.33
$1.8
4$3
.31
$3.7
4$3
.41
$3.8
0$3
.27
$4.7
0$4
.78
$6.1
7$7
.05
$8.1
1$9
.24
$10.
28
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 3
Scenario Analysis
To accurately capture the growth that we expect within each segment of Nordson based on our
research and analysis, we established bear, base, and bull scenarios for each segment as a multiple of
global GDP growth. Global GDP was used due to Nordson’s substantial exposure to international and
emerging markets. In our base case scenario, the ADS, ATS, and ICS segments will grow at 2x, 3x, 1x
global GDP respectively. Further through our scenario analysis, we can see how each growth rate
assumption affects overall sales growth, operating margins for the respective year.
Growth Outlook FY18E FY19E FY20E FY21E FY22E
Global GDP 3.1% 3.0% 2.9% 2.8% 2.7%
Scenario Analysis FY18E FY19E FY20E FY21E FY22E
ADS
Bull 4.0x 4.0x 4.0x 4.0x 4.0x
Base 2.0x 2.0x 2.0x 2.0x 2.0x
Bear 1.0x 1.0x 1.0x 1.0x 1.0x
ATS
Bull 6.0x 6.0x 6.0x 6.0x 6.0x
Base 3.0x 3.0x 3.0x 3.0x 3.0x
Bear 1.5x 1.5x 1.5x 1.5x 1.5x
ICS
Bull 2.0x 2.0x 2.0x 2.0x 2.0x
Base 1.0x 1.0x 1.0x 1.0x 1.0x
Bear 0.5x 0.5x 0.5x 0.5x 0.5x
Scenario Case Base
ADS 6.2% 6.0% 5.8% 5.6% 5.4%
ATS 9.3% 9.0% 8.7% 8.4% 8.1%
ICS 3.1% 3.0% 2.9% 2.8% 2.7%
Source: World Bank
Scenario Analysis FY18E FY19E FY20E FY21E FY22E
Sales ($MM)
Bull $2,458 $2,806 $3,194 $3,625 $4,101
Base $2,310 $2,473 $2,642 $2,818 $3,000
Bear $2,236 $2,314 $2,393 $2,472 $2,551
Sales Growth (%)
Bull 18.9% 14.2% 13.8% 13.5% 13.1%
Base 11.7% 7.1% 6.9% 6.7% 6.5%
Bear 8.2% 3.5% 3.4% 3.3% 3.2%
Operating Margin (%)
Bull 23.0% 24.1% 25.0% 26.0% 26.9%
Base 22.8% 23.6% 24.4% 25.3% 26.1%
Bear 22.6% 23.3% 24.0% 24.8% 25.6%
EPS (Diluted)
Bull $7.09 $8.78 $10.70 $12.95 $15.61
Base $6.56 $7.53 $8.53 $9.66 $10.92
Bear $6.30 $6.93 $7.55 $8.25 $9.01
Intrinsic Value ($) Upside (%)
Bull $195.01 44.7%
Base $168.57 25.1%
Bear $154.70 14.8%
Average $172.76 28.2%
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 4
Investment Thesis
Multi-facet Strategic Growth Strategy. Nordson possesses a multi-facet growth strategy that is
strategically comprised of both organic and acquisitive growth. In 2017 organic growth and acquisitive
growth accounted for 7.9% and 6.9% of annual revenue growth respectively. Guidance estimates
organic growth to be 2x global GDP growth in the years leading to 2022 falling in line with historical
performance. Our analysis confidently concludes that due to secular trends from aging populations,
ongoing technological advances, and a growing middle class in emerging markets the growth guidance
is set to continue over a longer time frame and at greater multiple, with revenue and net income
growing by 5-year CAGRs of 7.73% and 13.53% respectively in the years leading to 2022. Additional
growth unaccounted for in our projections could potentially arise from further acquisition activity.
Based on our analysis, complementing analyst and company guidance, NDSN will be able incrementally
increase sales by $60-100 million, roughly 3% to 5% of the current revenue base, annually via M&A.
This incremental increase translates into $0.35 –$0.55 improvement in normalized earnings power.
1,688.7 1,809.0 2,067.0
2,310 2,472.6
2,642.2 2,818.1
2,999.9
y = 191.83x + 1487.7R² = 0.9947
0.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
3,500.0
4,000.0
FY15A FY16A FY17A FY18E FY19E FY20E FY21E FY22E
Revenue ($mm)
211.1 271.8 295.8
371.7 413.1
455.3 506.3
557.8
y = 49.038x + 164.7R² = 0.9952
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
FY15A FY16A FY17A FY18E FY19E FY20E FY21E FY22E
Net Income ($mm)
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 5
Dominant Market Position and Pricing Power. Favorable conditions in Nordson’s three core operating
segments will allow Nordson to capture further a dominant market position that will provide pricing
power 15-25 % greater than the corresponding market. Nordson is a market leader in all three
operating segment markets with the most significant presence in the adhesive dispensing market,
controlling greater than 70 %. Contributing factors to Nordson’s market dominance include:
➢ Operating in fragmented and decentralized markets with few competitors. Market competition
is comprised of small divisions of larger organizations and miniscule regional competitors.
➢ A competitive advantage derived from innovation and specialization in niche markets.
➢ Great scale that provides substantial resources to reinvest into innovation and growth
initiatives allowing Nordson to service end customers that are unreachable by its competitors.
Through our analysis, ROIC is expected to increase to 15.7% by 2021 reflecting further efficiency
in allocating capital far beyond its peers.
Margin Expansion, Restructuring, and Consolidation Initiatives. Since 2001 Nordson has notably
improved its profitability by 1,600 bps through the adoption of its LEAN/Six Sigma Principles which
increased productivity by removing waste in the business process. Additional margin expansion began
in 2012 as Nordson invested $580 million into five acquisitions for its polymer business and had
successfully integrated each to improve profitability. Through our analysis, further operational
efficiencies will prevail as Nordson completes consolidation efforts of U.S. dye facilities from 3 to 1 and
a 2 to 1 consolidation of its polymer
operations in Europe in 2018.
Additionally, the restructuring of
business segments towards higher
margin operations will provide
tailwinds for margin expansion.
Currently, Nordson is investing heavily
in its higher margin medical equipment
operations, such as its recent
acquisition of Vention Medical while
phasing out operations in lower margin
segments such as industrial coating
systems. These strategic consolidations
and restructuring initiatives are a
critical driver for the expansion of
operating margins from 22.1% to 26.1% by 2022 providing greater profitability and therefore greater
cash that can be returned to shareholders.
18.8%
21.5% 22.1% 22.8% 23.6% 24.4%25.3% 26.1%
y = 0.0093x + 0.1891R² = 0.9513
0.0%
3.0%
6.0%
9.0%
12.0%
15.0%
18.0%
21.0%
24.0%
27.0%
30.0%
FY15A FY16A FY17A FY18E FY19E FY20E FY21E FY22E
Operating Margin
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 6
Attractive Dividend Policy. Nordson
Corporation prides itself on being
one of the only 15 public companies
that have increased their dividends
for more than 50 consecutive years.
As of 2017, the company has paid
54 years of consecutively increasing
dividends with a current dividend
payout ratio of 21.9 and a dividend
ratio of 1.11. In 2017, the company
paid a dividend of $0.30 per share.
This trend shows the company’s
consistent focus on shareholder
returns.
Mega-trends and Macro Tailwinds. Nordson’s three core business segments operate in numerous key end
markets with growth characteristics that are supported by underlying mega-trends and macro tailwinds.
➢ The disposable hygiene products market is expected to grow significantly due to increased consumer
spending due to increase in disposable income, increasing concerns for safety, convenience, and
hygiene, and increasing penetration in developing countries like India and China.
➢ Growing demand for ready-to-eat meals, frozen foods, and dried processed food is expected to drive
the industry growth. The recent shift to flexible packaging and the expected 2.9% CAGR growth in the
➢ The Advanced Technology Systems segment is expected to achieve an organic growth of 2 to 3 times
that of global GDP due to the growing mobile computing industry, rapidly evolving minimally invasive
medical technology, and the increasing demand for semiconductors, circuit shrinkage, and flexible
circuit demand.
➢ The minimally invasive technology market is expected to grow at a CAGR of 11.3% to 2024 and the
aging population is expected to grow significantly with 1.045 billion people expected to fall in the age
group of 60 years and above. These trends will increase the sales for Nordson’s minimally invasive
catheters and fluid management systems.
➢ The semiconductor industry is expected to grow at a CAGR of 5.11% over the period of 2015-2020 with
the global semiconductor packaging market growing with a CAGR of 15.7% during the same period.
0
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/20
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Dividend Per Share
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 7
Mega-trends and Macro Tailwinds
➢ The growing e-sports industry and the resulting demand for advanced graphics chips will contribute to
growth in Nordson’s packaging and adhesive dispensing systems.
➢ The increase in demand for wearable electronics and smart devices is rapidly increasing the need for
flexible packaging and printed circuit board assembly will drive the advanced technology systems
segment substantially.
➢ The Industrial Coating Systems segment is expected to grow organically at a rate higher than the
global GDP growth rate due to the growing aerospace industry, and increased focus on light-weighting
of vehicles.
➢ The aerospace coating market is expected to reach $2433 million by 2023 through a CAGR of 6.3%.
Moreover, the need for regular maintenance of aircrafts and the benefits of light-weighting will
continue to drive this demand. An increased defense spending acts as a subordinate tailwind to this
growth.
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 8
Relative Valuation and Absolute Valuation
P/E Multiple Model
At a current price of $134.80, NDSN is trading at 19.0x FY18 earnings as compared to a historical forward
earnings multiple of 17.7x. The consideration of the P/E Multiple Contraction Model implies that Nordson is
trading slightly higher as compared to its historical multiples. Based upon this model, we established the two-
year price target of Nordson at $205.54.
A sensitivity analysis was conducted to reflect the variation in stock price due to fluctuation in both EPS and
the P/E multiple.
P/E Multiple Model FY15A FY16A FY17A FY18E FY19E FY20E FY21E FY22E
($ in millions)
Revenue 1,689 1,809 2,067 2,310 2,473 2,642 2,818 3,000
Sales Growth 7.1% 14.3% 11.7% 7.1% 6.9% 6.7% 6.5%
EPS $3.48 $4.76 $5.14 $6.64 $7.62 $8.64 $9.80 $11.09
YoY Growth 36.9% 7.9% 29.2% 14.8% 13.4% 13.4% 13.2%
P/E Multiple 20.1x 20.7x 24.5x 26.8x 24.3x 23.8x 23.3x 22.8x
Stock Price $70.10 $98.77 $126.15 $178.21 $185.01 $205.54 $228.48 $253.44
Trailing PEG Ratio 0.55 0.56 3.10 0.92 1.64 1.78 1.74 1.73
Fwd PEG Ratio 0.55 2.62 0.84 1.82 1.82 1.77 1.77
$6.08 $6.13 $6.17 $8.64 $6.26 $6.30 $6.35
20.8x $126.4 $127.4 $128.3 $179.6 $130.1 $131.0 $132.0
21.8x $132.5 $133.5 $134.4 $188.3 $136.4 $137.3 $138.3
22.8x $138.6 $139.6 $140.6 $196.9 $142.6 $143.6 $144.6
23.8x $144.7 $145.7 $146.8 $205.54 $148.9 $149.9 $151.0
24.8x $150.8 $151.9 $153.0 $214.2 $155.2 $156.2 $157.3
25.8x $156.9 $158.0 $159.1 $222.8 $161.4 $162.5 $163.7
26.8x $162.9 $164.1 $165.3 $231.5 $167.7 $168.9 $170.0
13.8% 13.9% 14.0% 14.1% 14.2% 14.3% 14.4%
EPS
P/E Sensitivity Analysis 2020 - Base Case
P/E
Mu
ltip
le
Net Income Margin
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 9
EV/EBITDA Multiple Model
At a current price of $134.80, NDSN is trading at 12.1x FY18 earnings as compared to a historical average of
11x. The consideration of the EV/EBITDA Multiple Model imply that Nordson is trading slightly higher as
compared to its historical multiples.
A sensitivity analysis was conducted to reflect the variation in stock price due to fluctuation in both EBITDA
and the EV/EBITDA multiple.
EV/EBITDA Multiple Model FY15A FY16A FY17A FY18E FY19E FY20E FY21E FY22E
($ in millions)
Revenue 1,689 1,809 2,067 2,310 2,473 2,642 2,818 3,000
Sales Growth 7.1% 14.3% 11.7% 7.1% 6.9% 6.7% 6.5%
EBIT 318 388 458 526 584 644 713 783
Operating Margin 18.8% 21.5% 22.1% 22.8% 23.6% 24.4% 25.3% 26.1%
Depreciation & Amortization (65) (70) (91) (98) (98) (97) (91) (86)
EBITDA 383 459 549 624 682 741 804 870
EBITDA Margin 22.7% 25.4% 26.5% 27.0% 27.6% 28.0% 28.5% 29.0%
EV/EBITDA Multiple 13.8x 14.2x 15.4x 15.0x 14.4x 13.8x 13.3x 12.7x
Enterprise Value 5,294 6,511 8,424 9,367 9,815 10,243 10,655 11,068
Less: Debt 1,093 943 1,256 1,362 991 1,052 534 652
Plus: Cash 50 67 90 90 93 87 91 91
Market Cap 4,251 5,636 7,258 8,095 8,916 9,278 10,212 10,506
Shares Outstanding 60.7 57.1 57.5 56.0 54.2 52.7 51.7 50.3
Equity Value / Share $70.10 $98.77 $126.15 $144.63 $164.51 $176.07 $197.67 $208.92
701.4 714.6 727.8 741.0 754.2 767.4 780.6
10.8x $125.7 $128.5 $131.2 $133.9 $136.6 $139.3 $142.0
11.8x $139.1 $142.0 $145.0 $147.9 $150.9 $153.9 $156.8
12.8x $152.4 $155.6 $158.8 $162.0 $165.2 $168.4 $171.7
13.8x $165.7 $169.1 $172.6 $176.1 $179.5 $183.0 $186.5
14.8x $179.0 $182.7 $186.4 $190.1 $193.8 $197.6 $201.3
15.8x $192.3 $196.3 $200.2 $204.2 $208.2 $212.1 $216.1
16.8x $205.6 $209.8 $214.0 $218.3 $222.5 $226.7 $230.9
26.5% 27.0% 27.5% 28.0% 28.5% 29.0% 29.5%
EBITDA Margin
EBITDA
EV/EBITDA Sensitivity Analysis 2020 - Base Case
EV/E
BIT
DA
Mu
ltip
le
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 10
Discounted Cash Flow Model
After a thorough analysis of Nordson’s keys drivers including the
consolidation and restructuring of its key operations, margin expansion,
and it multi-facet strategic growth strategy, Nordson’s free cash flows
were forecasted through 2022. The discounted cash flow model
determines that Nordson has an intrinsic value of $168.57, representing
a 25% upside. Fundamental assumptions in our forecasts include a long-
term growth rate of 3% reflecting the growth rate characteristic of
emerging markets, cost of debt at 3% to reflect the possible fluctuation in
Nordson’s variable rate debt facilities, accompanied by a 13.57% cost of
equity to arrive at our WACC assumption of 7.03%.
A price sensitivity was conducted to depict how the effects of variation in
both the future growth assumption and the WACC assumption would
affect the intrinsic value of Nordson.
Discounted Cash Flow FY08A FY09A FY10A FY11A FY12A FY13A FY14A FY15A FY16A FY17A FY18E FY19E FY20E FY21E FY22E
($ in millions) 1 2 3 4 5
Sales 1,125 819 1,042 1,233 1,410 1,543 1,704 1,689 1,809 2,067 2,310 2,473 2,642 2,818 3,000
Sales Growth -27.2% 27.1% 18.4% 14.3% 9.5% 10.4% -0.9% 7.1% 14.3% 11.7% 7.1% 6.9% 6.7% 6.5%
COGS (494) (350) (420) (485) (586) (677) (759) (775) (815) (928) (1,027) (1,088) (1,151) (1,215) (1,281)
% of Sales 43.95% 42.76% 40.32% 39.31% 41.59% 43.86% 44.54% 45.88% 45.08% 44.90% 44.45% 44.00% 43.56% 43.13% 42.70%
Gross Profit 630 469 622 748 823 866 945 914 993 1,139 1,283 1,385 1,491 1,603 1,719
SG&A (414) (570) (364) (30) (463) (511) (544) (531) (535) (590) (659) (703) (750) (799) (849)
% of Sales 36.8% 69.6% 35.0% 2.5% 32.9% 33.1% 31.9% 31.4% 29.6% 28.6% 28.5% 28.4% 28.4% 28.4% 28.3%
EBIT 190 (128) 235 697 335 324 367 318 388 458 526 584 644 713 783
EBIT Margin 16.9% -15.6% 22.5% 56.5% 23.8% 21.0% 21.5% 18.8% 21.5% 22.1% 22.8% 23.6% 24.4% 25.3% 26.1%
D&A (26) (26) (23) (21) (24) (32) (34) (65) (70) (91) (98) (98) (97) (91) (86)
EBITDA 217 (101) 257 718 360 356 402 383 459 549 624 682 741 804 870
EBITDA Margin 19.3% -12.4% 24.7% 58.2% 25.5% 23.0% 23.6% 22.7% 25.4% 26.5% 27.0% 27.6% 28.0% 28.5% 29.0%
Increase in NWC (21) 30 (74) (9) (4) (19) (34) (30) (28) (57) (81) (87) (87) (83) (93)
CAPEX (22) 5 (14) (20) (19) (40) (43) (61) (58) (64) (67) (66) (66) (65) (64)
CapEx/Depreciation 0.8x -0.2x 0.6x 1.0x 0.8x 1.2x 1.2x 0.9x 0.8x 0.7x 0.7x 0.7x 0.7x 0.7x 0.7x
25.0% Unlevered Tax (EBIT) (48) (32) (59) (174) (84) (81) (92) (79) (97) (114) (132) (146) (161) (178) (196)
FCFF 127 (99) 112 515 253 216 232 213 276 314 345 382 427 477 517
DF 93.44% 87.30% 81.57% 76.22% 71.21%
PV of FCFF 322.58 333.60 348.69 363.64 368.08
Sum of FCFF 1,736.60$
Terminal Value
LT Growth Rate 3.00%
WACC 7.03%
FCF (T+1) 516.9 Terminal Value 13,225.6 Discount Factor 71.21%
PV of TV $9,418.48
EV To Equity Value
Enterprise Value 11,155.1
Less: Net Debt 1,608.2
Equity Value (M. Cap) 9,546.8
Diluted Shares Outstanding 56.63
Equity Value/Share $168.57
WACC
Cost of Debt 3.00%
After-Tax Cost of Debt 2.25%
Cost of Equity 13.57%
Debt Weighting 57.8%
Equity Weighting 42.2%
WACC 7.03%
Tax Rate 25.00%
CAPM
Risk-Free Rate 2.62%
Beta 1.51
Market Premium 7.25%
CAPM 13.57%
$168.57 2.00% 2.25% 2.50% 2.75% 3.00% 3.25% 3.50% 3.75% 4.00%
5.83% $186.7 $200.0 $215.3 $233.1 $254.0 $279.0 $309.4 $347.1 $395.1
6.03% $175.8 $187.7 $201.2 $216.9 $235.1 $256.6 $282.3 $313.8 $352.9
6.23% $165.9 $176.5 $188.6 $202.5 $218.5 $237.1 $259.2 $285.8 $318.3
6.43% $156.9 $166.5 $177.4 $189.7 $203.8 $220.2 $239.3 $262.0 $289.4
6.63% $148.7 $157.4 $167.2 $178.2 $190.8 $205.2 $221.9 $241.6 $265.0
6.83% $141.1 $149.1 $157.9 $167.8 $179.1 $191.9 $206.6 $223.8 $243.9
7.03% $134.2 $141.4 $149.5 $158.5 $168.6 $180.0 $193.1 $208.1 $225.7
7.23% $127.8 $134.4 $141.8 $149.9 $159.1 $169.3 $181.0 $194.3 $209.7
7.43% $121.9 $128.0 $134.7 $142.1 $150.4 $159.7 $170.1 $182.0 $195.6
7.63% $116.3 $122.0 $128.1 $134.9 $142.5 $150.9 $160.3 $170.9 $183.1
7.83% $111.2 $116.4 $122.1 $128.3 $135.2 $142.9 $151.4 $161.0 $171.8
8.03% $106.4 $111.2 $116.5 $122.2 $128.6 $135.5 $143.3 $152.0 $161.7
8.23% $102.0 $106.4 $111.3 $116.6 $122.4 $128.8 $135.9 $143.7 $152.5
Price Sensitivity - Base Case
Future Growth
WA
CC
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 11
Relative Valuation
At a current price of $134.80, NDSN is trading at 26.9x FY2017 earnings, which is relatively expensive
compared to the past 5-year range of 19.9x-21.2x, and at forward 19.0x FY2018 earnings. Relative to
peers, the company is trading at a slight 4.1% discount to group’s average of 28.0x FY2017 P/E and a
great 10.9% discount to group’s average of trading at 21.3x FY2018 earnings.
At the same time, NDSN is currently trading at 15.4x FY2017 EV/EBITDA compared to a 5-year historical
average of 13.1x, ranging from 11.6x-14.2x. Compared to its peer group, NDSN is trading at an
attractive 15.4% discount to the pier group average 18.2x FY2017 EV/EBITDA multiple.
Company Ticker Price (USD) Mkt. Cap ($mm) EV/EBITDA TTM P/E FWD P/E P/S
Nordson NDSN $134.80 7,916 15.4x 26.9x 19.0x 3.9x
AMETEK AME $74.52 17,757 17.3x 26.1x 22.4x 4.2x
Graco GGG $44.08 7,625 18.5x 31.0x 22.6x 5.4x
IDEX IEX $137.45 10,733 19.1x 32.2x 24.8x 4.8x
Lincoln Electric LECO $86.73 6,021 17.6x 22.1x 16.5x 2.5x
Roper Technologies ROP $268.01 28,778 21.4x 29.9x 22.4x 6.3x
Peer Average $124.27 13,139 18.2x 28.0x 21.3x 4.5x
Premium/(Discount) vs. Peers 8.5% (39.7%) (15.4%) (4.1%) (10.9%) (14.3%)
Median $110.77 9,325 18.0x 28.4x 22.4x 4.5x
Source: FactSet, Yahoo Finance
Peer Group: Comps FY17
Company EBITDA FCF Gross Margin Gross Margin ROA ROE
Nordson 27.4% 13.5% 55.1% 55.1% 10.1% 29.5%
AMETEK 25.9% 17.6% 37.1% 37.1% 9.1% 18.7%
Graco 28.3% 20.2% 53.8% 53.8% 19.3% 38.9%
IDEX 25.7% 17.0% 48.2% 48.2% 10.3% 19.7%
Lincoln Electric 14.6% 10.8% 34.3% 34.3% 13.0% 32.6%
Roper Technologies33.7% 25.7% 62.2% 62.2% 6.8% 15.4%
Average 25.9% 17.5% 48.5% 48.5% 11.4% 25.8%
vs. Peers 5.7% (22.7%) 13.7% 13.7% (11.7%) 14.3%
Median 26.7% 17.3% 51.0% 51.0% 10.2% 24.6%
Source: Company's Guidance, FactSet
Peer Group: Margins & Returns FY17
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 12
Business Breakdown
Nordson Corporation engineers, manufactures and
markets customized and differentiated products and
systems that are used to dispense and apply a
controlled amount of adhesives, coatings, sealants,
biomaterials, polymers and other fluids. The company
also produces systems used to test and inspect for
quality and to treat and cure surfaces. Through these
products and services, it taps into multiple markets
and industries that diversify industry and market
specific risks. Constant innovation in the technology
sector and Nordson’s increasing investment in
Research and Development allows the company to
experience recurring revenues from parts and
consumables to form 47% of Nordson’s total revenues.
Nordson’s production operations include machining,
molding, and assembly. It manufactures specially
designed parts and assembly components into finished
equipment. This niche secures Nordson’s recurring
stream of revenue as technological innovation prompts
customers to periodically change parts and
components of their machinery instead of replacing
the whole unit.
Nordson Corporation operates through three major
operating segments - Adhesive Dispensing Systems,
Advanced Technology Systems and Industrial Coating
Systems contributing 44.3%, 43.4%, and 12.3% to total revenue in 2017.
The Adhesive Dispensing Systems segment formed 44% of Nordson’s $2.1 billion revenue in FY2017. This
segment represents Nordson’s cutting-edge precision dispensing and processing technology to diverse
markets like the medical, electronics, and automobile industry, to name a few.
The Advanced Technology Systems is the company’s fastest-growing segment that formed 44% of Nordson’s
total revenue in FY2017, and under this segment, the company produces electronic systems, fluid
management systems, and test, and inspection systems.
The Industrial Coating Systems segment formed 12% of the company’s revenues in FY2017. It provides
standard and customized equipment used in the application of paint, coatings, finishes, and sealants and the
drying and curing of the dispensed material.
PCB Assembly10%
Semiconductors5%
Electronic components
10%
Medical13%
Automotives9%
Industrial11%
Consumer Durables
10%
Consumer Non-
Durables32%
Diverse End Markets
Engineered systems
18%
Standard Product
35%
Parts & Consumerables
47%
Product Type (2017)
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 13
Mega Trends (Detailed)
The Adhesive Dispensing Systems is expected to achieve organic growth of 1.5 to 2 times that of global GDP
due to the increased use of disposable hygiene products, increased use of packaged convenience foods, and
increased use of plastics.
➢ The disposable hygiene products market is expected to grow significantly due to increased consumer
spending due to increase in disposable income, increasing concerns for safety, convenience, and
hygiene, and increasing penetration in developing countries like India and China.
➢ Growing demand for ready-to-eat meals, frozen foods, and dried processed food is expected to drive
the industry growth. The recent shift to flexible packaging and the expected 2.9% CAGR growth in the
market will further boost Nordson’s sales during the forecasted period.
The Advanced Technology Systems segment is expected to achieve an organic growth of 2 to 3 times that of
global GDP due to the growing mobile computing industry, rapidly evolving minimally invasive medical
technology, and the increasing demand for semiconductors, circuit shrinkage, and flexible circuit demand.
➢ The minimally invasive technology market is expected to grow at a CAGR of 11.3% to 2024 and the
aging population is expected to grow significantly with 1.045 billion people expected to fall in the age
group of 60 years and above. These trends will increase the sales for Nordson’s minimally invasive
catheters and fluid management systems.
➢ The semiconductor industry is expected to grow at a CAGR of 5.11% over the period of 2015-2020 with
the global semiconductor packaging market growing with a CAGR of 15.7% during the same period.
The growing e-sports industry and the resulting demand for advanced graphics chips will contribute to
growth in Nordson’s packaging and adhesive dispensing systems.
➢ The increase in demand for wearable electronics and smart devices is rapidly increasing the need for
flexible packaging and printed circuit board assembly will drive the advanced technology systems
segment substantially.
The Industrial Coating Systems segment is expected to grow organically at a rate greater that the global GDP
growth rate due to the growing aerospace industry, and increased focus on light-weighting of vehicles.
➢ The aerospace coating market is expected to reach $2433 million by 2023 through a CAGR of 6.3%.
Moreover, the need for regular maintenance of aircrafts and the benefits of light-weighting will
continue to drive this demand. An increased defense spending acts as a subordinate tailwind to this
growth.
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 14
Macro Trends (Detailed)
Aging Population
Globally, population aged 60 or
over is growing faster than all
younger age groups. In 2017,
there are an estimated 962
million people aged 60 or above is
growing at a rate of about 3% per
year. Currently, Europe has the
greatest percentage of the
population aged 60 or over,
roughly at 25%. The number of
older persons in the world is
projected to be approximately
1.4 billion in 2030 and 2.1 billion in 2050.
Global GDP
According to data from the World
Bank, Global GDP from 2016 to
2022 is increasing at a low but
stable percentage and then
expects to see a slight easing in
2020 and remain at the 2.9%
through 2022.
962
991
1021
1051
1083
1115
850
900
950
1000
1050
1100
1150
2017 2018 2019 2020 2021 2022
Global Population >60(Millions)
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 15
Consumer Spending in Emerging Markets
Over the next five years, consumer spending in emerging markets is expected to grow three times faster than
in developed nations, reaching a total of $6 trillion by 2020. Despite concerns of near-term slowing over the
next 20 years, emerging markets are expected to contribute more than 70% of global GDP growth, with
emerging markets consumer spending growing to $30 trillion annually - representing nearly half of all global
spending.
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 16
Risks
1) Currency exchange rates
Nordson has a direct presence in over 35 countries worldwide, and this leaves it exposed to unpredictable
fluctuations in foreign currency exchange rates, particularly with respect to the Euro, the Japanese Yen,
the Chinese Yuan, and the Great British Pound. In case of a notable change in the value of the currencies,
from the countries that conduct business with Nordson against the US dollar, can harm the company’s
financial results. A drastic change could diminish the company’s ability to effectively sell its products in the
competitive market and fail to provide an accurate picture of the company’s financial situation and result
of operations.
2) Failure to create consumer-preferred and technologically relevant products
In an ever-evolving industrial sector, Nordson maintains its market share through continuous innovation
that allows it to capture emerging markets and keep pace with the changing consumer and market
preferences. Nordson focuses on maintaining its position as a leading provider of precision technology
solutions for the industrial equipment market. However, it is vulnerable to unpredictable delays and
difficulties in research, development, and production of new products. Moreover, the company also faces
the risk of a possible lack of acceptance of new products and technologies which can drastically affect its
sales and competitive position in the market.
3) Political relations between countries
Nordson Corporation conducts its operations including manufacturing, sales, and distribution all over the
world. This exposes the company to risks related to conducting business outside the United States.
International operations are subject to economic and governmental instability, taxation policies, labor and
political disturbances, and exchange and trade restrictions. Such events can disrupt operations and reduce
demand for the company’s products and services. Thus, harming it’s operating and financial performance.
Stable international operations depend on favorable trade relations between the U.S. and foreign
countries.
4) Safety of intellectual property
Nordson technologies depend on its proprietary products and trademarks to maintain its competitive edge
in the industry. Its innovative products and technologies ensure long-term growth and a consistent market
share. However, like any other company with propriety products, Nordson is exposed to the risk of
misappropriation of trademark technology. A third party could copy or obtain and use Nordson’s product
without authorization. This can be a severe threat to the company’s financial performance and can lead to
a diversion of its efforts due to resulting litigation. To safeguard its technological innovation, Nordson
relies on a combination of patents, copyright, trademark and patent laws, and third-party non-disclosure
agreements.
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Supplementary Data
Revenue Drivers & Margin Considerations
Adhesive Dispensing Systems
The Adhesive Dispensing Systems segment formed
44% of Nordson’s $2.1 billion revenue in FY2017.
This segment represents Nordson’s cutting-edge
precision dispensing and processing technology to
diverse markets like the medical, electronics, and
automobile industry, to name a few. The segment
focusses explicitly on nonwovens, packaging,
polymer processing, and product assembly. Most of
its applications focus on optimizing the use of
adhesives and improving bonding and sealing
performance through its products. Moreover, the
systems also focus on reducing material
consumption, increasing line efficiency, and enhancing product strength, durability, appearance, and brand.
Advanced Technology Systems
The Advanced Technology Systems is the company’s fastest-growing segment that formed 44% of Nordson’s
total revenue in FY2017, and Under this segment, the company produces electronic systems, fluid
management systems, and test, and inspection systems. The products focus on processes such as surface
treatment, accurately controlled automated, semi-automated or manual dispensing of material, bond testing,
and optical and X-ray inspection to ensure quality. These systems are more customized to specifically serve
the needs of the medical, electronics and related high-tech industries.
Industrial Coating Systems
The Industrial Coating Systems segment formed 12% of the company’s revenues in FY2017. It provides
standard and customized equipment used in the application of paint, coatings, finishes, and sealants and the
drying and curing of the dispensed material. This segment primarily serves the consumer durables market that
forms 10% of the total markets covered by the company. The ICS segment is comprised of several smaller
businesses. Roughly 40% of the business provides equipment that dispenses powder coating onto durable
goods (i.e., appliances, patio furniture, grills, bike frames). Approximately 25% of the business is its cold
materials business – which is similar to the ADS segment except the equipment dispenses ambient
temperature materials (vs. hot melts for ADS) and is better suited for stronger bonding capabilities. The
remaining businesses include liquid painting, container coating, and UV Curing. Looking at the portfolio of
businesses, cold materials and container coating appear to be the most attractive businesses from a market
position and margin standpoint.
44%
44%
12%
Operating Segments (2017)
Adhesive Dsipensing Advanced Technology
Industrial Coating
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Geographic Exposure (Clients and Suppliers)
Nordson Corporation drives a significant amount
of its organic growth by introducing new and
innovative products and capturing rapidly
expanding opportunities in emerging geographies.
Additional growth is also acquired through
acquisitions of companies that serve international
growth markets. Because of the company’s
strategically planned growth structure, it has
successfully achieved direct presence in over 35
countries in FY2017. In 2017, nearly 70% of
Nordson’ total revenues were sourced outside the
United States. The top three contributors of revenue were USA (31%), Asia Pacific (29%), and Europe (26%).
However, it is important to note that no single customer accounted for 10% or more of sales. Nordson’s
individual customer base spans over multiple sectors and industries with 30% of the revenues contributed by
the consumer non-durables industry. Such a consumer base which is spread across countries and markets
significantly reduces Nordson’s vulnerability to country-specific or industry-specific risks.
Nordson relies on external suppliers for raw materials used to manufacture specially designed parts and
assembly components. To reduce its reliance on a single supplier or client and the risk that comes along with
it, Nordson is not reliant on a lone supplier for any of its materials and no single client consisting of more than
10% of revenues. Through a competitive selection based on service, quality, and cost, Nordson ensures
availability of multiple sources for all its raw materials
Segments (Detailed)
Adhesive Dispensing Systems
Nordson’s Adhesive Dispensing Systems segment manufactures and distributes products to melt, filter, pump,
transport, dispense, and deposit adhesives, polymers and other materials in the manufacturing of wide range
of products. It is an industry leader in recession-resistant, consumer non-durable end markets. In 2017, the
Adhesive Dispensing Systems achieved worldwide sales of $916 million. This revenue was a result of an
increase in sales in all geographic regions except Europe. Nordson controls a dominant (>70%) market share
position in the sale of core hot melt adhesive dispensing systems used in the packaging, nonwovens, and
general product assembly end markets. It also has a leadership position in polymer (plastic) processing with
market share >20%, though this business is relatively new for Nordson. With its product portfolio now
complete, management believes it can execute a similar combination of technological superiority and boots
on the ground service through a technically trained sales force to drive market share steadily towards its
legacy businesses.
29%
7%
26%
7%
31%
International Exposure
Asia Pacific Japan Europe Americas USA
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Growth in product lines serving rigid & flexible packaging, consumer non-durables, disposable hygiene and
general product assembly end markets resulted in an increase in sales of 4.1% from 2016. The segment has a
2012-17 sales CAGR of 6.0% and a 2012-17 average annual operating margin of 26.6%.
The current trend shows that
Nordson’s customers are
increasingly demanding products
that can dispense smaller quantities
in tighter and more difficult to reach
spaces and hence, the company
now plans to focus on attaining such
sophistication as a solution provider
through innovation. The global
dispensing systems market is
expected to grow at a CAGR of 5.1% to 2020 including the automated medication dispensing market which is
expected to grow at a CAGR of 7.0% during the same period. Nordson stands to benefit from this growth that
is supported by the positive trends in the use of disposable hygiene products, packaged convenience foods,
and plastics.
Advanced Technology Systems
Nordson’s Advanced Technology Systems segment manufactures precision dispensing, fluid management,
test, inspection, and surface treatment products for medical, electronics, and general industrial markets. It is
considered an industry leader for these products in the rapidly growing electronics, medical and related
markets. In 2017, the Advanced Technology Systems segment accounted for worldwide sales of $897 million.
This sales increase of 32.7% from 2016, consisted of 15.1% organic and 18.3% acquisition-driven growth. The
segment has a 2012-17 sales CAGR of 11.7% and a 2012-17 average annual operating margin of 24.1%.
The current trend shows that the industrial equipment industry is increasingly moving towards flexible and
small packaging and X-ray based inspection which provided a strong boost to the demand for Nordson’s
related products. The company is positioned to benefit from the growing demand for mobile computing,
circuit shrinkage, medical devices, and solar-powered devices.
Industrial Coating Systems
Nordson’s works with manufacturers to provide equipment for the precise application and curing of powder
coatings, liquid paint, food and beverage container production, and ambient temperature adhesives and
sealants. In 2017, this segment gained a total revenue of $253 million after a sales volume increase of 0.8%.
This increase was driven by demand for liquid and UV curing, powder coating and container product lines
serving industrial end markets. The segment has a 2012-2017 sales CAGR of 3.9% and 2012-2017 average
0
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2000
3000
4000
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
North America Automated Dispensing Market ($mm)
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annual operating margin of 15.5%. Nordson targets an organic growth of at least 2 times the global GDP for
this segment in 2018. The company aims to focus the growth in lean manufacturing, emerging markets like
aerospace, and light-weighting of vehicles to drive growth in this industry.
Future Drivers & Catalysts
Semiconductors Packaging
The global semiconductor packaging market is expected to grow at a CAGR of 5.11% over the period of 2015-
2020. A growing focus on 3D stacking creates a strong growth opportunity for Nordson to accelerate margins
in Advanced Technology Segment. Global 3D semiconductor packaging market size is estimated to reach $8.9
billion by 2022, growing at a CAGR of 15.7 % from 2016 to 2022.
Internet of Things (IoT) is also expected to have a significant impact on the advanced semiconductor packaging
market. Hence, new packaging technologies supporting IoT driven semiconductor industry are being
introduced. An imminent requirement for size reduction in electronic devices, improved efficiency, and less
power consumption drive the adoption of 3D semiconductor packaging in microelectronic devices and
consequently navigates the growth in 3D semiconductor packaging industry. Its advantages over other
packaging technologies, lower cost, smaller size, and enhanced efficiency will drive this growth. With Nordson
semiconductor manufacturing equipment, including bond testers, dual dispensers, and UV curing ovens,
customers can create packaging to protect against impact and corrosion. Additionally, Nordson’s wafer
processing equipment will help you find efficiencies in cleaning and etching wafers.
Overall, miniaturization of devices and thermal dissipation are leading towards the growth of the advanced
semiconductor packaging market. Meanwhile, the requirement for less power consumption, improved
efficiency is driving the adoption of 3D packaging in the advanced semiconductor packaging market.
Additionally, a macro trend our analysis has
discovered which benefits this segment is the
electronic sports. The E-Sports industry is
currently hovering above 1.5 billion and is
expected to reach nearly 2.5 Billion by 2022.
Hence, increased demand for advanced and
miniaturized graphics chips will drive the
demand for Nordson’s adhesive dispensing,
inspection, and flexible packaging systems.
0
1
2
3
2017 2018 2019 2020 2021 2022
Worldwide Esports Revenue (Billions)
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Aerospace Industry
Global Aerospace Coatings Market was
valued at $1,587 million in 2016 and is
expected to garner $2,433 million by
2023, registering a CAGR of 6.3%
during the forecast period 2017 - 2023.
Aircrafts are subjected to high climatic
stress that causes wear & tear of metal
surfaces, which results in frequent
maintenance and repair. Aerospace
coatings offer high resistance against
corrosion, solar heat & ultra violet rays,
fog, and other adverse weather conditions. Along with high protection, it also reduces the weight of aircrafts,
and thus helps reduce CO2 emissions. Increase in number of aircrafts due to growth of aviation industry in the
emerging markets such as China, and India is expected to propel the demand for aerospace coatings. Airline
mergers are of significant interest for aerospace coatings manufacturers, which is expected to fuel the growth
of aerospace coatings market during the forecast period.
Commercial aviation is the most lucrative market for aerospace coatings and is expected, to grow at the
significant CAGR during the forecast period. Rise in number of air travelers, increase in cargo traffic, and
growth in international trade has led to the development of commercial aviation industry, which fuels the
market. Military aviation is the second most attractive market for Nordson due to the increase in investment
in military & defense sector in countries such as U.S., Mexico, China, India, and Russia.
Nordson Aerospace Applications
From wings and spars to external doors and overhead compartments, Nordson’s technology plays a crucial
part in aerospace manufacturing. Nordson’s applications include:
Aerospace Materials Manufacturing - Improve quality
and simplify production when manufacturing
compressible or difficult to mix sealant materials
Cartridge Dispensing - Reduce aircraft weight and
increase production speed with the automated
application of sealant from pre-mixed cartridges
Composite Material Edge Sealing - Automated
application of two-component epoxies used to seal
unfinished edges of fiber-reinforced aerospace
composite structures. Solvent Based Coatings Water Based Coatings
Powder Coatings Others
0
500
1000
1500
2000
2500
3000
2017 2018 2019 2020 2021 2022 2023
Global aerospace coatings market by 2023 to reach $2.4 billion by 2023
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Mix-On-Demand Dispensing - Reduce material handling complexities and prevent material damage
by dynamically mixing wide ratio, syntactic two component materials at point of application
Nordson is one of the world’s largest manufacturers of equipment used to precisely apply and cure paint,
powder coatings, adhesives, and sealants in a wide range of aerospace applications. Growth in this industry is
expected to benefit these applications significantly through increased demand for sealing and dispensing
products. The rise in defense spending will further lead to increased revenue.
Consumer Non-Durables
Rigid and Flexible Packaging
Rigid Packaging
The rigid packaging industry is expected to witness a growing demand from emerging economies such as
China and India. Growing end-use industries such as food & beverages, pharmaceuticals, and personal care in
these countries are expected to be major drivers of the market in this region. The global rigid packaging
market size was valued at USD 472.19 billion in 2015. Growing demand for packaged food such as ready-to-eat
meals, frozen foods, and dried processed foods is expected to further drive industry growth.
The packaging industry is increasingly moving towards flexible packaging and Nordson plans to focus its efforts
to benefit from this emerging market.
Flexible Packaging
The Flexible Packaging industry had 31.3
Billion in sales in the United States in 2014. It
is the second largest segment in the U.S.
garnering about 19% of the U.S. $164 Billion
packaging market. The largest market for
flexible packaging is food (retail and
institutional), accounting for about 60 percent
of shipments. Other markets for flexible
packaging include retail non-food at 12
percent; industrial applications at 6 percent;
consumer products at 10 percent;
institutional non-food at 3 percent, and
medical and pharmaceutical at 9 percent.
32%
31%
27%
10%
Global Flexible Packaging Market Revenue by Geography as of 2016
Asia Pacific America Europe Others
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Future drivers in the packaging segment
Firstly, Nordson’s Industrial packing and packaging solutions include:
➢ Hot melt adhesive dispensing systems which includes paper-based and rigid packaging. Nordson’s
packing equipment includes equipment that manages sealing, attachment, confectionary and small
packs, tray making, labeling and palletizing.
➢ Polymer processing, extrusion and laminating components for flexible industrial packaging including
pouches, wraps, films, and coated papers.
The growing flexible packaging market
will help Nordson pump through more
plastic-based flexible packaging
increasing that part of the segment
with at least 2x GDP especially with
stronger export growth to emerging
markets and clients requiring more
and wanting to pay less. Flexible
packaging offers a powerful solution
that will have a cost benefit from the
manufacturer (NDSN) to institutional
clients to individual consumers.
Secondly, the impending consolidation in NDSN’s polymer plants is aimed at supporting sturdy growth and
margins. NDSN will be adding advanced engineering and manufacturing systems, a new warehouse and
inventory system, a dedicated aftermarket section, and an expanded technology center. Some emerging
markets Nordson is responsible for in the polymer products business include Europe, the Middle East, Africa
and a growing China. Not only will this demand in polymer products increase margins, but it will also help
increase support for customers throughout the world by expanding their capabilities in manufacturing,
processing trails, startup assistance, technical service, spare parts, and refurbishment of all Nordson melt
processing equipment.
The Asia Pacific is expected to experience the highest demand for flexible packaging. Escalating demand for
pharmaceutical products, packaged food, and retail non-products along with changing consumption habits
and altering lifestyles will lead to this growth in the Asia Pacific market that forms 29% of Nordson’s consumer
base.
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Disposable Hygiene Products Market
The disposable hygiene products market is witnessing an annual growth of nearly 607% due to increased
consumer spending on personal care products globally benefitting Nordson because of a growing middle class
in emerging markets globally. In addition, the demand for improvised comfort, performance, and efficient
absorbent hygiene products is expected to drive demand for disposable hygiene products in the near future.
Concerns for safety, convenience and hygiene are identified as key factors affecting growth of disposable
hygiene products market.
Furthermore, rising consumption of products such as sanitary pads, wipes, and baby products across the globe
is anticipated to drive demand for disposable hygiene products market in near future. Among the developing
economies, increasing population and manufacture of such products in countries such as India and China and
low penetration of these products is expected to open opportunities for growth of the market for Nordson.
Moreover, industry-sophistication is expected to fuel the demand for disposable hygiene products in Brazil.
Economic development particularly in countries such as China and India is a key factor contributing towards
substantial growth of disposable hygiene products market in the region.
Overall, increasing disposable income, rising expenditure or consumer spending on personal hygiene and
increasing hygiene concerns are expected to fuel demand for disposable hygiene products over the next 3 to 5
years.
Mobile Computing, Internet of Things
Industry Market research forecasts the global mobile computer market share to grow moderately at a CAGR of
more than 4% by 2020. Key factors driving this growth is the increased internet penetration and the growing
utilization of devices like tablets, smartphones, laptops, and notebooks. Especially with a strong rise in lower
end mobile tablets in elementary and middle schools substituted for hard copy books. It is important to note
that the augmented demand for mobile computers in small businesses and point-of-sale systems have been
adopting at a higher rate than in previous years.
Global fluid dispensing systems market is expected to reach USD 55.09 billion by 2024. Growing electronic
components manufacturing in Southeast Asia is expected to drive this growth. The trend towards
miniaturization of electronic components and industry automation are key growth driving factors for the
global fluid dispensing systems market. Recent innovations aimed at improving production processes due
to high consumer demand and gradually reducing turn-around times have led to manufacturers adopting
automated systems for applying adhesives, sealants, coatings, and lubricants during their processes.
Adhesives & sealants and lubricants dominated dispensing system types and accounted for nearly 60% of
the global revenue in 2015. Lubricant dispensers have been gaining wide spread popularity owing to their
diverse applications in automotive, electrical & electronics, construction.
Electrical & electronics applications promise high growth opportunities for fluid dispensing systems with
their usage in printed circuit boards and semiconductor packaging as well.
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This directly links to our analysis on
Nordson because each component
used in manufacturing smartphones,
tablets, wearables, and other
devices has a diverse set of
requirements for fluid handling,
placement, and application.
Nordson’s precision fluid dispensing
systems deliver the accuracy,
consistency, and speed required to
meet consumer demand for thinner,
lighter, and more sophisticated
Internet-Connect devices at a lower
price.
Medical equipment
Nordson’s Medical segment, which formed 13% of its total revenues, designs, manufactures and distributes
medical products including medical tubing, fluid management components, biomaterial delivery devices,
catheters, cannulae, and complex nitinol components. This segment stands to benefit from the medical
sector’s move towards minimally invasive technology with the market growing at a CAGR of 11.3% into 2024.
The world population is estimated to be 7.758 billion by 2020 with 1.045 billion people in the age group of 60
years and above while the number of people aged 85 and above is expected to be 6.6 million by 2020. This
changing demographic plus an increasing aging population will aid Nordson’s medical devices segment
significantly.
Medical Electronics and Device Manufacturing Sub-Segment
The global automated dispensing machines market was valued at USD 2.9 billion in 2015 and is projected to
grow at a lucrative CAGR of over 7% over the forecast period of 7 years towards 2022. Growing government
initiatives to support healthcare institutes and pharmacists with the deployment of technologically advanced
medication dispensing system to reduce medication errors is expected to boost the usage rate during the
forecast period.
Fluid Dispensing Equipment Market in millions (U.S. only)
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Medical Disposables
The medical industry uses nonwoven products as a
sterile solution to reduce infections and not only
does the structure of nonwoven material provide a
protective barrier, but protection can be enhanced
by an antimicrobial surface treatment.
Surgical/medical garments should also be well-
fitted, lightweight and allow for freedom of
movement. Use of precise Nordson material
dispensing systems supports the stretch, hand and
thinner/lighter substrates to meet the growing
industry needs for safe and convenient medical
disposables.
The global medical disposable market is expected to reach USD 329.9 billion by 2024. The propelling factors of
this sector comprise of constantly rising hospital visits, surgeries, and the growing need for healthcare
assistance owing to the escalating geriatric population.
In addition, rising demand for minimally invasive surgeries is spurring the demand for needles and drug
delivery devices, which is resulting in the high revenue generation of the segment. With the introduction of
advanced technology and growing demand for accurate diagnostic methods, the diagnostic and laboratory
disposables segment are expected to show the second fastest growth during the forecast period.
Growing economies and government-led initiatives are expected to drive the growth of the medical
disposables sector in the Asia Pacific region. The segment is expected to witness a lucrative CAGR of over 7%
during the forecast period.
47%
33%
20%
Global Medical Disposable Market Geographical Segmentation by
revenue (Billions)
Americas EMEA APAC
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Automation
Industrial Automation Market
The global industrial automation market is anticipated to reach a valuation of US$352.02 billion by the end of
2024 from US$182.64 billion in 2015. Between the forecast years of 2016 and 2024, the global market is
expected to expand at a CAGR of 6.6%. The overall robotics market is expected to increase with a CAGR of
more than 9% and the growth in Industrial
sector is expected to be the biggest
contributor of this growth.
In terms of geography, the global market is
segmented into North America, South
America, Asia Pacific, Europe, the Middle
East and Africa, and rest of Latin America. Of
these, Europe is anticipated to lead the
global market in the coming years. By the
end of 2024, the Europe industrial
automation market is projected to acquire a
share of 29.9% in the global market.
Nordson has a strong presence in this region and is focused on its polymer and manufacturing plant
consolidation to meet the growth and demand while reducing operational efficiencies which will impact net
operating margins in an accretive way driving the number from 27 to slightly over 30%.
The global industrial automation market is expected to witness a significant spike in the coming years as the
manufacturing industry is on the cusp of revolutionizing its operations. The introduction of modern
technologies that permits manufacturing industries to speed up their processes and ensure utmost efficiency
are expected propel the growth of the overall market. Analysts project that industrial automation is expected
to witness substantial growth in areas of automotive and transportation paper industries
Automotive
In 2017, Auto electronics formed 15% of the total Advanced Technology systems. The global electric vehicles
market is estimated to grow in volume at a CAGR of 38.3% from 2017 to 2026 with the automated guided
vehicle market expected to reach $2.68 billion by 2022. With the automotive industry moving towards smaller,
more efficient and compact vehicles, Nordson is expected to benefit through an increase in demand for its
testing and inspection products. In an attempt to align with this trend, Nordson recently acquired Sonoscan
which allows the firm to broaden its non-destructing test and inspection capabilities.
0
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30
40
50
60
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80
2000 2005 2010 2015 2020E 2025E
Worldwide Spending on Robotics is expected to reach $67 billion by 2025
Industry
Commercial
Military
Personal
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PCB Assembly
The Printed Circuit Board (PCB) assembly market formed 10% of Nordson’s total revenues in 2017. Nordson’s
ASYMTEK that focuses on PCB assembly offers precise dispensing, jetting, and conformal coating solutions that
makes Nordson the industry leader at every point in the evolution of fluid dispensing for PCB assembly. The
North American PCB market saw a 39% year of year increase in bookings in the last quarter of 2017 leading to
an increase in backlog for the year 2018. The rise in the demand for smart consumer devices with smaller,
more tightly packed PCB is expected to
drive the demand for the market. The
miniaturization of components as well as
the increasing demand for wearable
technology will benefit the PCB market
in the coming years. The wearable
technology market is expected to grow
into a $160 billion market by 2028 and
the growth of the automotive sector
with a predicted CAGR of 6% over 2017-
2021; both these markets are expected
to push the PCB assembly growth
exponentially. The industry is increasingly moving towards stretchy PCB boards especially for wearable
electronics and this will further increase the market size to $27 billion with a CAGR of 10.6% through 2024.
Newly innovated 3D printing of PCB’s will allow the market to match the rapidly growing demand successfully.
Overall, Nordson is expected to substantially benefit from the shift to machine assembly, and the rapidly
increasing demand for flexible PCB board, virtual and augmented reality, and wearable smart devices.
Organic and Acquisition-Driven Growth
Nordson Corporation achieves organic growth by introducing new products and technology, providing high
levels of customer service, leveraging existing technology into new applications, and capturing rapidly
expanding opportunities in newly emerging markets and geographies. Capital Allocation is used to support this
organic growth. New and innovative applications that are expected to drive organic growth include sensor
assembly, LED assembly, wearable electronics, micro-materials testing, aerospace assembly, and minimally
invasive catheters. Moreover, the company also attains additional growth through the acquisition of small
companies on the frontier of technological innovation. It acquires companies that serve international growth
markets, share similar business model characteristics, and have the ability to leverage Nordson’s global
infrastructure. In FY2017, the total sales volume increase consisted of 7.9% from organic growth, and 6.9%
from acquisitions. Acquisition related dilution generally results in a less than 5% decrease in operating margins
for the company. As of 2017, Nordson has achieved a Return on Invested Capital of 14%.
0
5
10
15
20
25
30
35
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Global Flexible Printed Circuit Board Market Size in billions
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The Acquisition Effect
Nordson’s acquisitions are
focused on the addition of both
capacity and capability to
company’s expansion. The
company emphasizes on a
combination of continuous
improvement activity, increasing
levels of upgrading, and
automation to increase
efficiency. A Nordson-acquired
company is a strategic fit to the
parent, a strong industry performer, has a high percentage of recurring revenue, and a growth rate that is
equal to or higher that of Nordson Corporation. The acquired company either allows Nordson to enter a new
industry or provides it exclusive excess to new and innovative technology in the industrials sector.
An example of Nordson’s ideal acquisition is Sonoscan, Inc. In January 2018, Nordson Corporation acquired
Sonoscan, Inc., an Illinois-based designer and manufacturer of acoustic microscopes and sophisticated acoustic
micro imaging systems that are used in a variety of automotive, aerospace, microelectronic, and industrial
electronics assembly applications. Nordson acquired Sonoscan to broaden its test and inspection capabilities
for the electronics markets. Nordson aims to grow its Electronics Systems business in the advanced semi-
conductor packaging and automotive electronics markets. It was announced that this acquisition transaction
was not material to Nordson Corporation.
0%
5%
10%
15%
20%
25%
30%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
The Acquisition EffectDilutive effect
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Strategic Acquisition History and Impact
Value Plastics
Value Plastics, a Nordson Company, manufactures and markets an innovative line of fluid management
components designed specifically for flexible tubing. Value Plastics products find global application in
demanding healthcare OEM, research and specialty industrial applications. Value Plastics has generated
outstanding growth over an extended period by providing differentiated, single-use, precision molded plastic
components that are delivered through a highly efficient sales process and supported by exceptional customer
service. This model represents the same highly successful approach that NDSN employs within their Nordson
Engineered Fluid Dispensing (EFD) product line. Value Plastics supports Nordson’s strategic objective of
building upon our medical and life sciences platform and complements our existing growing positions in
biomaterial delivery devices and medical device assembly. The $250 million purchase price was financed with
availability under an existing $400 million revolving credit facility. The transaction was accretive to Nordson’s
earnings in the first full year of acquisition. Additionally, the Value Plastics acquisition expanded Nordson’s
medical offering with a more robust geographic reach. The company’s single-use fluid connection components
are critical to applications including anesthesia, cardiovascular surgery, cataract surgery, and blood
management. Nordson witnessed multiple new geographic and industrial opportunities to accelerate Value
plastics’ strong record of double digit growth, and several soon to be introduced products will significantly
expand their addressable market. In 2011, this acquisition was accretive by increasing Advanced Tech Systems
Sales from 2010 to 2011 by 3% and by 4% in 2012.
Company Sales EBITDA Sales EBITDA ADS ATS ICS
Vention Medical 4/3/2017 705 150 48 4.7x 14.7x x
Plas-Pak Industries 2/1/2017 71 28 8 2.5x 9.4x x
InterSelect GmbH 2/15/2017 5 12 2 1.6x 10.7x
Ace Production Technologies 1/6/2017 14
LinkTech 9/1/2016 43 4 x
Matrix 9/1/2015 54 5 x
WAFO 8/3/2015 7 1 x
Liquidyn 5/15/2015 15 1 x
Dima Group 5/29/2014 6 1 x
Avalon Labs 8/8/2014 180 34 16 5.3x 11.0x x
Nellcor Assets 9/27/2013 6 1 x
Kreyenborg 8/30/2013 170 80 14 2.1x 12.1x x
Kordama 11/8/2012 1 0 x
Sealan Equpt & Eng. 8/1/2012 44 4 x
EDI Holdings 5/14/2012 200 80 21 2.5x 9.6x x
Xaloy 5/21/2012 200 114 20 1.8x 10.0x x
Value Plastics 5/25/2011 258 27 15 9.6x 16.9x x
Verbuggen 5/30/2011 13 10 1 1.3x x
Micromedics 11/1/2010 21 2 x
Total Since 2010 2,014 165 12.2x
Source: Company Fillings
Pre-Synergy
Segment
M&A Date Purchase ($mm)
Historical Acquisition Activity
Multiples($mm)
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 31
Vention Medical
Vention Medical Advanced Technologies is a leading designer, developer and manufacturer of minimally
invasive interventional delivery devices, catheters and advanced components for the global medical
technology market. Nordson’s Medical product portfolio continued to grow organically at a high rate, and
Nordson doubled the size of this business with the acquisition of Vention Medical. This highly complementary
addition enhances Nordson’s strategic capabilities, expands relationships with multiple blue chip medical
technology customers, and is accretive to the firm’s margins.
Nordson acquired Vention for an aggregate purchase price of $705 Million excluding cash. The acquisition was
funded primarily through a new term loan facility, as well as through cash and borrowings on Nordson’s credit
facility. The purchase price was allocated to the underlying assets acquired and liabilities assumed based upon
their estimated fair values at the date of acquisition. Vention represented 6 percent of Nordson’s consolidated
net sales and 4 percent of its net income for 2017.
Backlog
Nordson recognizes revenues upon shipment.
As of October 31, 2017, the company’s backlog
increased to $402 million from $278 million
last year. This growth is primarily a result of
growth within the Advanced Technology
Systems segment. All the current backlog is
expected to be shipped by the end of 2018 as it
has done historically, it will continue with the
status quo if not expedited sooner because of
the removal of redundancy and operational
inefficiencies scheduled to be completed by the end of FY 2018.
Recurring Revenue
Nordson Corporation enjoys a strong and consistent
stream of recurring revenue through parts and
consumables due to constant innovation in the
market and the need for manufacturers remain to
technologically current in terms of machinery.
0
100
200
300
400
500
2010 2011 2012 2013 2014 2015 2016 2017
Backlog ($mm)
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 32
ELROI DCF Valuation
Implementing our analyzed projections with the ELROI DCF Valuation, you will notice the numbers selected for
the forecasting period were derived from our own analysis with a holistic average of five forecasted years
from our Pro-Forma Statements. After inputting our projected figures, we discovered ELROI’s implied return of
32.5% is slightly above our base case scenario of 25%.
Ticker: NDSN
Ticker:NDSN 12 months
CompanyName:NORDSON CORP Ending Projection
Date: 10/17 Type 1Year 3Year 5Year 1 2 3 4 5 6
Revenues 2067 Growth 14.26% 6.65% 7.96% Select 8.00% 2232.36 2410.95 2603.82 2812.13 3037.1 3280.07
COGS 834
Gross Profit 1233 Margin 59.67% 58.82% 59.02% Select 56.00% 1250.12 1350.13 1458.14 1574.79 1700.78 1836.84
Gross Margin 60% Change 87bps 71bps -189bps
EBITDA 548 Margin 26.50% 24.89% 24.88% Select 28.00% 625.06 675.07 729.07 787.4 850.39 918.42
EBITDA Margin 26% Change 106bps 142bps -20bps
EBITDA per Share $9.52 Growth 18.07% 12.36% 10.26% $10.78 $11.65 $12.58 $13.58 $14.67 $15.84
Depreciation 91
Interest Expense 37
PreTax Income 420 Margin 20.33% 19.51% 19.87%
Growth 14.06% 6.04% 5.20%
Earnings Before Interest and Taxes (EBIT) 457
Tax Rate (t) 29.62% Average 29.62% 28.56% 28.88%
EBIT*(1-t) 322 Margin 15.56% 14.90% 14.97% Select 24.00% 535.77 578.63 624.92 674.91 728.9 787.22
EBIT*(1-t) Per Share $5.55 Growth 11.82% 7.72% 6.70% $9.24 $9.98 $10.78 $11.64 $12.57 $13.58
+Depreciation 91 Depr/Capx Ratio 126.96% 115.83% 119.98% Select 65.00% 36.28 39.18 42.32 45.7 49.35 53.3
-Capital Expenditures 72 as % sales -3.46% -3.50% -3.22% Select -2.50% -55.81 -60.27 -65.1 -70.3 -75.93 -82
+Non-Cash Working Capital Change -110 NC Wcap Ch/Sales -5.30% -3.03% -2.74% Select -6.00% -133.94 -144.66 -156.23 -168.73 -182.23 -196.8
-Chg in Receivables 77
-Chg in Inventory 44
+Chg in Accts Payable 11
Free Cash Flow to the Firm(FCFF) 231.3 382.3 412.88 445.91 481.58 520.09 561.72
FCFF Per Share $3.99 $6.59 $7.12 $7.69 $8.31 $8.97 $9.69
Capital Structure
Total Equity 1152
Total Debt 1597
Total Capital 2749
%Debt 58.11% Debt/Tcap 58.11% 58.01% 52.78%
%Equity 41.89% Eq/Tcap 41.89% 41.99% 47.22%
High Growth Period
Length - 5 years
Cost of Capital (WACC) 6.60% Select 6.60%
PV of FCFF 358.63 363.34 368.11 372.94 377.83 382.8
Sum of PV FCFF (High Growth) 1840.85
Stable Growth Period
Terminal Growth Rate=10yrBond 2.50% 2.50%
Terminal WACC 6.60% Select 6.60%
FCFF(Year 6) 561.72
Terminal Value of FCFF(Yr6) 13700.49
PV of Terminal Value 9952.91
Value of Operating Assets 11793.76
(PV of High G + PV TermVal)
Less:
TotalDebt 1597
Plus:
Cash 90.38
Value of Equity 10287.14
Shares Outstanding 57.97
Equity Value/Share 177.46
Current Price (3/1/2018) 133.9
Implied Return 32.53%
Valuation
Free Cash Flow to the Firm Workout
Historical Averages
Use To Project
Period Forecasts
Operating Data and Forecasts
$millions, Except per share
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 33
Executive Officers
Michael F. Hilton- President and Chief Executive Officer
Mike Hilton is the President and CEO of Nordson Corporation. He joined the firm in 2010 and since his
arrival has led the company to new record sales and earnings results through a depend focus on
innovative products, emerging markets, continuous improvement, and strategic acquisitions. His
decorated background prior to joining Nordson came from his time at Air Products & Chemicals, Inc.
serving as their Senior Vice President and General Manager in Global Electronics.
Gregory A. Thaxton- Executive Vice President and Chief Financial Officer
Greg Thaxton is responsible for overseeing the corporate accounting and reporting, tax, treasure,
internal audit and investor relations function. Prior to his current title, Thaxton was previously elected
as a Nordson Corporate Vice President in 2008. His experience prior to his current role at Nordson
came derived from his time as a group controller for the Pacific South Division and the Finishing and
Coating Systems Segment. He also spent time with the Automotive Systems and UV Curing systems
businesses. He joined Nordson in 1989.
John J. Keane-Executive Vice President
John Keane is Executive Vice President of Nordson Corporation, with extensive experience within all
three of the company's global operating segments. His current duties include the continued
integration and optimization of acquired polymer processing product lines within the company's
Adhesive Dispensing Systems segment. Mr. Keane joined Nordson in 1992 as a project engineer in the
converting product line
James E. DeVries- Executive Vice President, Continuous Improvement
Jim E. DeVries serves as Nordson’s Executive Vice President, Continuous Improvement, reporting
directly to Nordson President and CEO Michael F. Hilton. Mr. DeVries’ current responsibilities include
leadership of a global team tasked with setting productivity goals, defining key metrics, ensuring
overall process consistency across the company, and leading large enterprise step-change projects. He
Joined Nordson in 2010
Gregory P. Merk- Executive Vice President
Greg P. Merk is the Executive Vice President of Nordson Corporation, with global responsibility for the
Packaging, Nonwovens, Product Assembly and Web Coating product lines within the Adhesive
Dispensing Systems segment.
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 34
Balance Sheet No
rdso
n Cor
p. - B
alanc
e She
etFY
08A
FY09
AFY
10A
FY11
AFY
12A
FY13
AFY
14A
FY15
AFY
16A
FY17
AFY
18E
FY19
EFY
20E
FY21
EFY
22E
($ in
milli
ons)
Tota
l Ass
ets
1,166
.789
0.798
6.41,3
04.5
1,829
.52,0
53.2
2,280
.12,3
60.5
2,420
.63,4
14.5
3,418
3,445
.53,4
67.8
3,506
.13,5
48.2
Tot
al Cu
rrent
Ass
ets
384.3
346.7
451.0
477.0
586.6
602.1
672.7
711.6
745.6
888.4
914.4
972.2
1,023
.71,0
86.7
1,146
.2
Ca
sh an
d Mar
keta
ble S
ecur
ities
11.8
18.8
50.2
37.4
41.5
42.4
42.3
50.3
67.2
90.4
89.6
92.5
87.2
91.4
90.5
Re
ceiva
bles
- Net
224.8
191.2
243.8
254.3
324.6
308.7
365.8
389.6
428.6
505.1
518.9
555.5
593.6
633.1
674.0
In
vent
ories
- Net
118.0
97.6
117.7
141.9
169.6
198.4
210.9
225.7
220.4
264.3
274.2
290.6
307.5
324.7
342.1
Ot
her C
urre
nt A
ssets
29.7
39.0
39.4
43.3
51.0
52.6
53.7
46.1
29.4
28.6
31.7
33.6
35.5
37.5
39.5
PP&
E, Ne
t13
3.811
8.311
6.413
0.917
5.020
1.122
4.424
9.927
3.134
6.436
9.839
3.041
5.943
8.646
1.1
Oth
er A
sset
s, Ne
t64
8.542
5.741
8.969
6.61,0
67.9
1,250
.01,3
83.0
1,398
.91,4
01.9
2,179
.82,1
33.6
2,080
.32,0
28.1
1,980
.81,9
41.0
Tota
l Liab
ilities
and S
hare
hold
ers’
Equi
ty1,1
66.7
890.7
986.4
1,304
.51,8
29.5
2,053
.22,2
80.1
2,360
.42,4
20.6
3,414
.63,4
183,4
45.5
3,467
.83,5
06.1
3,548
.2
Tot
al Cu
rrent
Liab
ilities
204.0
156.4
191.9
182.2
343.7
236.8
370.9
290.8
331.5
647.8
447.9
711.8
435.8
761.6
476.5
No
tes P
ayab
le an
d Deb
t Due
With
in O
ne Ye
ar46
.45.6
16.4
5.710
5.714
.411
6.924
.040
.232
6.691
.832
6.223
.232
5.618
.3
C
urre
nt M
atur
ities
of Lo
ng-T
erm
Deb
t4.3
4.314
.35.7
55.7
10.8
10.8
22.8
38.1
326.6
91.8
326.2
23.2
325.6
18.3
Ac
coun
ts Pa
yabl
e and
Acc
rued
Liab
ilities
157.6
150.8
175.5
176.5
238.0
222.4
253.9
266.8
291.3
321.2
356.1
385.6
412.5
436.0
458.2
A
ccou
nts P
ayab
le42
.933
.440
.346
.467
.462
.168
.568
.275
.186
.097
.010
4.311
0.411
6.512
2.8
In
com
e Tax
es Pa
yabl
e6.1
12.3
24.3
15.3
27.4
14.5
16.6
28.6
22.8
22.3
26.4
30.5
35.4
36.3
39.5
A
ccru
ed Li
abilit
ies96
.592
.396
.110
1.311
7.411
0.513
7.014
0.916
2.817
3.418
7.320
2.721
5.722
9.123
8.6
C
usto
mer
Adv
ance
d Pay
men
ts7.5
8.811
.09.4
20.9
28.3
25.6
22.9
26.2
34.7
40.4
43.3
46.2
49.3
52.5
C
urre
nt O
bliga
tions
Und
er Ca
pita
l Lea
ses
4.64.0
3.84.1
4.95.5
5.14.9
4.44.8
5.04.8
4.84.8
4.8
Lon
g-ter
m D
ebt
238.6
152.3
96.0
313.5
528.0
638.2
682.9
1,092
.694
2.81,2
56.4
1,361
.899
1.21,0
52.4
534.4
652.4
Oth
er Li
abilit
ies15
0.021
2.019
3.423
7.528
8.029
0.432
1.631
7.029
4.735
4.934
4.035
4.136
1.436
9.138
6.9
Pe
nsio
n Obl
igatio
ns66
.913
3.110
3.312
3.116
1.410
3.812
4.111
8.113
0.411
1.711
7.612
0.411
9.611
9.911
7.8
De
ferre
d Inc
ome T
axes
2.30.0
9.717
.426
.289
.587
.189
.861
.813
4.112
0.712
6.413
5.114
2.916
2.1
Po
stret
irem
ent O
bliga
tions
35.4
50.8
53.9
71.9
69.9
59.8
68.3
66.7
70.4
73.6
67.8
69.3
69.6
70.1
70.1
Ob
ligat
ions
Und
er Ca
pita
l Lea
ses
6.13.0
3.35.2
10.9
10.1
11.0
9.79.7
9.710
.010
.09.8
9.99.9
Ot
her L
iabilit
ies39
.425
.223
.119
.919
.727
.231
.132
.822
.325
.927
.928
.027
.426
.327
.1
Tot
al Sh
areh
olde
rs' E
quity
574.1
370.0
505.1
571.3
669.8
887.9
904.8
660.0
851.6
1,155
.51,2
64.1
1,388
.41,6
18.2
1,841
.02,0
32.4
Co
mm
on Sh
ares
12.3
12.3
12.3
12.3
12.3
12.3
12.3
12.3
12.3
12.3
12.3
12.3
12.3
12.3
12.3
Ca
pita
l in Ex
cess
of St
ated
Valu
e24
4.124
1.525
5.627
2.928
7.630
4.532
8.634
9.037
6.641
2.843
7.646
3.849
1.651
6.254
2.0
Re
tain
ed Ea
rnin
gs84
0.965
6.179
7.799
0.21,1
81.2
1,362
.61,5
61.0
1,717
.21,9
32.6
2,164
.62,4
52.0
2,766
.83,1
08.3
3,481
.73,8
85.9
Ac
cum
ulat
ed O
CI(4
0.8)
(55.5
)(6
6.3)
(80.0
)(1
04.2)
(57.4
)(1
03.2)
(144
.7)(1
68.2)
(134
.4)(1
38.6)
(148
.4)(1
58.5)
(169
.1)(1
80.0)
Co
mm
on Sh
ares
in Tr
easu
ry, a
t Cos
t(4
82.3)
(484
.4)(4
94.2)
(624
.1)(7
07.1)
(734
.1)(8
93.8)
(1,27
3.8)
(1,30
1.7)
(1,29
9.7)
(1,49
9.2)
(1,70
6.1)
(1,83
5.5)
(2,00
0.1)
(2,22
7.7)
Leve
rage
(%)
LT D
ebt/T
otal
Capi
tal
8.6%
29.0%
15.9%
35.4%
40.9%
41.7%
40.3%
61.5%
51.6%
46.0%
51.9%
41.7%
39.4%
22.5%
24.3%
Net D
ebt/T
otal
Capi
tal
32.6%
27.3%
11.1%
32.4%
46.1%
40.2%
45.0%
60.4%
50.4%
54.7%
48.4%
37.8%
36.1%
18.7%
20.9%
Tota
l Deb
t/Tot
al Ca
pita
l34
.0%30
.8%19
.1%36
.5%49
.2%42
.9%47
.4%63
.2%54
.0%58
.0%55
.4%55
.4%40
.3%36
.2%25
.0%
Nordson Corp. | NASDAQ: NDSN | Company Brief | March 6, 2018
USF Student Managed Investment Fund 35
Cash Flow Statement and Ratios
Nor
dson
Cor
p. -
Cash
Flo
w S
tate
men
tFY
08A
FY09
AFY
10A
FY11
AFY
12A
FY13
AFY
14A
FY15
AFY
16A
FY17
AFY
18E
FY19
EFY
20E
FY21
EFY
22E
($ in
mill
ions
)
Net
Cas
h Pr
ovid
ed b
y O
pera
ting
Activ
ities
114.
016
8.7
140.
224
6.7
274.
426
8.4
288.
226
2.0
331.
234
9.7
389.
242
3.4
465.
051
3.6
551.
4
Inc
ome
from
Con
tinui
ng O
pera
tions
117.
5(1
60.1
)16
8.0
222.
422
4.8
221.
824
6.8
211.
127
1.8
295.
837
1.7
413.
145
5.3
506.
355
7.8
Dep
reci
atio
n an
d Am
ortiz
atio
n32
.231
.428
.928
.839
.054
.459
.865
.270
.390
.998
.397
.696
.690
.786
.2
Cha
nges
in O
pera
ting
Asse
ts a
nd Li
abili
ties
(20.
9)30
.1(7
3.6)
(8.7
)(4
.5)
(19.
0)(3
4.4)
(29.
5)(2
7.8)
(56.
6)(8
0.8)
(87.
3)(8
6.9)
(83.
4)(9
2.7)
Net
Cas
h us
ed in
/ Pr
ovid
ed b
y In
vest
ing
Activ
ities
(31.
9)(3
.9)
(41.
3)(3
05.5
)(4
66.8
)(2
20.5
)(2
30.5
)(1
38.5
)(1
02.2
)(8
78.0
)(6
6.9)
(66.
2)(6
5.5)
(64.
9)(6
4.2)
Cap
Ex, N
et(2
4.0)
(3.9
)(1
4.0)
(20.
1)(2
4.8)
(43.
4)(4
3.3)
(61.
5)(5
9.6)
(67.
6)(6
6.9)
(66.
2)(6
5.5)
(64.
9)(6
4.2)
Net
Cas
h us
ed in
/ Pr
ovid
ed b
y Fi
nanc
ing
Activ
ities
(103
.0)
(161
.0)
(79.
5)50
.819
6.5
(52.
4)(5
3.4)
(110
.7)
(210
.3)
547.
8(3
23.1
)(3
54.3
)(4
04.9
)(4
44.4
)(4
88.0
)
To
tal D
ebt,
Net
(61.
6)(1
27.3
)(4
5.1)
206.
731
4.6
15.7
153.
832
5.5
(130
.2)
602.
2(3
9.3)
(49.
0)(1
61.8
)(1
46.9
)(1
06.7
)
Pur
chas
e of
Tre
asur
y Sh
ares
(35.
6)(7
.1)
(24.
9)(1
38.0
)(8
8.5)
(33.
4)(1
66.4
)(3
83.9
)(3
3.4)
(3.2
)(1
99.5
)(2
06.9
)(1
29.3
)(1
64.7
)(2
27.6
)
Div
iden
ds P
aid
(25.
0)(2
4.7)
(26.
7)(2
9.8)
(34.
1)(4
0.5)
(48.
4)(5
4.6)
(56.
5)(6
3.9)
(84.
3)(9
8.3)
(113
.8)
(132
.9)
(153
.7)
Incr
ease
/ De
crea
se in
Cas
h an
d Ca
sh E
quiv
alen
ts(1
9.4)
7.0
23.5
(4.9
)3.
81.
1(0
.1)
8.0
17.0
23.1
(0.8
)3.
0(5
.4)
4.2
(0.8
)
Cash
and
Cas
h Eq
uiva
lent
s Beg
inni
ng o
f Per
iod
31.1
11.8
18.8
42.3
37.4
41.2
42.4
42.3
50.3
67.2
90.4
89.6
92.5
87.2
91.4
Cash
and
Cas
h Eq
uiva
lent
s End
of P
erio
d11
.818
.842
.337
.441
.242
.442
.350
.367
.290
.489
.692
.587
.291
.490
.5
Ratio
sFY
08A
FY09
AFY
10A
FY11
AFY
12A
FY13
AFY
14A
FY15
AFY
16A
FY17
AFY
18E
FY19
EFY
20E
FY21
EFY
22E
Prof
itabi
lity
(%)
Gros
s Mar
gin
56.0
%57
.2%
59.7
%60
.7%
58.4
%56
.1%
55.5
%54
.1%
54.9
%55
.1%
55.6
%56
.0%
56.4
%56
.9%
57.3
%
SG&
A to
Sal
es33
.3%
34.8
%32
.5%
0.0%
30.0
%29
.9%
29.0
%28
.0%
26.4
%25
.9%
25.9
%25
.8%
25.8
%25
.8%
25.7
%
Ope
ratin
g M
argi
n16
.9%
-15.
6%22
.5%
56.5
%23
.8%
21.0
%21
.5%
18.8
%21
.5%
22.1
%22
.8%
23.6
%24
.4%
25.3
%26
.1%
Pret
ax M
argi
n16
.0%
-15.
5%22
.2%
56.5
%23
.1%
20.2
%20
.7%
17.8
%20
.4%
20.3
%21
.5%
22.3
%23
.0%
24.0
%24
.8%
Net
Mar
gin
10.4
%-1
9.5%
16.1
%49
.0%
16.0
%14
.4%
14.5
%12
.5%
15.0
%14
.3%
16.1
%16
.7%
17.2
%18
.0%
18.6
%
Free
Cas
h Fl
ow M
argi
n7.
8%19
.1%
12.1
%18
.4%
17.3
%14
.3%
14.4
%11
.8%
14.9
%13
.5%
16.8
%17
.1%
17.6
%18
.2%
18.4
%
Retu
rn o
n As
sets
9.6%
-15.
6%17
.9%
52.7
%14
.3%
11.4
%11
.4%
9.1%
11.4
%10
.1%
10.9
%12
.0%
13.2
%14
.5%
15.8
%
Retu
rn o
n Eq
uity
21.3
%-3
3.9%
38.4
%11
2.2%
36.2
%28
.5%
27.5
%27
.0%
36.0
%29
.5%
30.7
%31
.1%
30.3
%29
.3%
28.8
%
Retu
rn o
n To
tal C
apita
l13
.4%
-22.
8%29
.0%
29.2
%20
.3%
15.4
%15
.1%
12.0
%14
.9%
12.9
%20
.0%
24.5
%24
.1%
30.0
%29
.2%
Retu
rn o
n In
vest
ed C
apita
l19
.4%
-27.
3%29
.8%
29.8
%21
.4%
16.2
%15
.7%
12.6
%15
.2%
14.0
%10
.9%
13.2
%12
.8%
15.7
%15
.1%
Valu
atio
n (x
)
Pric
e/Sa
les
1.1x
2.2x
2.6x
2.6x
2.7x
3.0x
2.9x
2.6x
3.2x
3.6x
3.3x
3.0x
2.7x
2.5x
2.3x
Pric
e/Ea
rnin
gs10
.8x
--15
.9x
14.3
x17
.1x
21.1
x19
.9x
20.7
x21
.2x
26.9
x20
.3x
17.7
x15
.6x
13.8
x12
.2x
Pric
e/Bo
ok V
alue
2.2x
4.8x
5.2x
5.3x
5.7x
5.2x
5.3x
6.2x
6.7x
6.3x
6.0x
5.3x
4.4x
3.8x
3.3x
Pric
e/Fr
ee C
ash
Flow
14.5
x11
.3x
21.2
x14
.0x
15.8
x21
.2x
20.1
x21
.8x
21.3
x26
.5x
22.1
x19
.4x
16.8
x14
.8x
13.3
x
Ente
rpris
e Va
lue/
EBIT
DA6.
7x11
.8x
10.2
x9.
6x11
.6x
13.9
x12
.9x
13.1
x14
.2x
15.6
x12
.1x
10.7
x9.
6x8.
7x7.
8x
DuPo
nt A
naly
sis
Ass
et T
urno
ver (
x)0.
9x0.
8x1.
1x1.
1x0.
9x0.
8x0.
8x0.
7x0.
8x0.
7x0.
7x0.
7x0.
8x0.
8x0.
9x
x P
reta
x Mar
gin
(%)
16.0
%-1
5.5%
22.2
%25
.5%
23.2
%20
.2%
20.7
%17
.8%
20.4
%20
.3%
21.5
%22
.3%
23.0
%24
.0%
24.8
%
= P
reta
x Ret
urn
on A
sset
s (%
)14
.8%
-12.
4%24
.7%
27.5
%20
.8%
16.1
%16
.3%
13.0
%15
.4%
14.4
%14
.5%
16.0
%17
.6%
19.4
%21
.1%
x T
ax R
ate
Com
plem
ent (
1-Ta
x Rat
e)65
.4%
--72
.7%
70.7
%68
.9%
71.3
%70
.0%
70.2
%73
.8%
70.4
%75
.0%
75.0
%75
.0%
75.0
%75
.0%
= R
etur
n on
Ass
ets (
%)
9.6%
-15.
6%17
.9%
19.4
%14
.4%
11.5
%11
.4%
9.1%
11.4
%10
.1%
10.9
%12
.0%
13.2
%14
.5%
15.8
%
x E
quity
Mul
tiplie
r (As
sets
/Equ
ity)
2.2x
2.2x
2.2x
2.1x
2.5x
2.5x
2.4x
3.0x
3.2x
2.9x
2.7x
2.5x
2.1x
1.9x
1.7x
= R
etur
n on
Equ
ity (%
)21
.26%
-33.
91%
38.4
1%41
.32%
36.2
3%28
.48%
27.5
3%26
.98%
35.9
7%29
.48%
29.4
%29
.9%
28.2
%27
.7%
27.6
%
Cove
rage
(x)
Net
Deb
t/EB
ITDA
1.2x
0.9x
0.3x
0.8x
1.6x
1.7x
1.8x
2.7x
2.0x
2.7x
2.2x
1.8x
1.3x
1.0x
0.7x
Net
Deb
t/(E
BITD
A-Ca
pex)
1.4x
1.0x
0.3x
0.9x
1.8x
1.9x
2.0x
3.3x
2.3x
3.1x
2.4x
2.0x
1.5x
1.0x
0.7x
Tota
l Deb
t/EB
ITDA
1.3x
1.0x
0.5x
0.9x
1.7x
1.8x
1.9x
2.9x
2.1x
2.8x
2.3x
1.9x
1.5x
1.1x
0.8x
FCF/
Tota
l Deb
t0.
3x1.
0x1.
1x0.
7x0.
4x0.
3x0.
3x0.
2x0.
3x0.
2x0.
2x0.
3x0.
4x0.
6x0.
8x
Forw
ard