Nordson Q3 2025 slides: 12% revenue growth, portfolio realignment underway

Introduction & Market Context

Nordson Corporation (NASDAQ:NDSN) presented its investor presentation on August 21, 2025, following the release of its Q3 2025 financial results. The company’s stock surged 5.9% in premarket trading, reflecting positive investor sentiment toward the strong quarterly performance and strategic initiatives outlined in the presentation.

Nordson, founded in 1954, has established itself as a growth-focused company with a diversified portfolio across multiple end markets. With over 8,000 employees across more than 35 countries, the company has built a strong reputation for delivering consistent growth and shareholder value.

As shown in the following overview, Nordson has developed unique competitive advantages that have enabled it to maintain strong financial performance:

Q3 2025 Performance Highlights

Nordson reported impressive Q3 2025 results, with sales reaching $742 million, representing a 12% increase compared to the same period last year. This growth exceeded the mid-point of the company’s prior guidance range and was driven by multiple factors, including 8% growth from the Atrion acquisition, a favorable currency impact of 2%, and 2% organic sales growth.

The company’s EBITDA performance was equally strong, reaching $239 million, up 15% year-over-year. This resulted in an EBITDA margin of 32%, representing a 70 basis point improvement compared to the prior year. The margin expansion was attributed to higher sales volume and improved SG&A leverage.

The following chart details Nordson’s Q3 2025 financial performance:

Nordson’s cash flow generation remained robust, with Q3 2025 free cash flow of $226 million, representing a conversion rate of 180% of net income. The company strategically deployed this cash toward net debt reduction ($109 million), share repurchases ($71 million), dividend payments ($44 million), and capital investments ($12 million).

The balance sheet remains healthy, with cash totaling $148 million and a net debt leverage ratio of 2.2x based on trailing 12-month EBITDA, well within the company’s targeted leverage range:

Strategic Portfolio Realignment

A key highlight of the presentation was Nordson’s strategic portfolio realignment initiative. The company announced the divestiture of select portions of its contract manufacturing product lines within the medical interventional solutions business. This decision aligns with Nordson’s strategy to focus resources on differentiated technology and proprietary medical components.

The divestiture, which is expected to close in early Q4 fiscal 2025, is anticipated to improve the company’s growth outlook and be accretive to the Medical (TASE:BLWV) Fluid Solutions segment’s EBITDA margins. Management emphasized that this move prioritizes above-market growth in proprietary medical components, with the remaining approximately $800 million medical and fluid solutions product lines expected to benefit from strong customer demand.

This strategic shift is part of Nordson’s broader portfolio evolution, as illustrated in the following comparison of the company’s revenue mix between 2014 and 2024:

Long-Term Growth Strategy

Nordson outlined its 2025-2029 financial targets, aiming for 6-8% annual revenue growth and 10-12% adjusted EPS growth. These targets are supported by three strategic pillars: NBS Next (LON:NXT) (Growth Framework), Owner Mindset (Division-Led), and Winning Teams (Talent Strategy).

The company’s growth strategy is built on a disciplined approach to both organic growth and M&A. For acquisitions, Nordson applies strict strategic criteria (attractive end markets, differentiated technologies) and financial criteria (growth above market rates, EBITDA of 20%+ with margin expansion opportunities, and returns exceeding cost of capital).

The following chart visualizes Nordson’s growth algorithm, breaking down the components of its revenue and adjusted EPS targets:

Nordson’s organizational structure is designed to support this growth strategy, with three main segments: Industrial Precision Solutions (55% of revenue), Medical Fluid Solutions (26%), and Advanced Technology Solutions (19%). Each segment serves diverse end markets, providing stability and multiple growth avenues:

The company’s end market diversification is a key strength, with exposure to medical (27%), electronics (25%), consumer non-durable (21%), industrial (14%), and other markets (13%). This diversification helps mitigate risks associated with market-specific downturns:

Financial Position and Outlook

Nordson reaffirmed its fiscal 2025 full-year guidance, with sales tracking slightly below the mid-point of the $2,750-$2,870 million range and adjusted EPS tracking slightly above the mid-point of the $9.70-$10.50 range. Management noted that this outlook contemplates the completion of the announced divestiture in Q4 2025.

The company’s backlog, though down 5% from a strong Q3 2025, continues to support the full-year outlook. Management emphasized that Nordson’s diverse portfolio and operational excellence are driving solid execution in a dynamic environment.

Looking beyond 2025, Nordson expects to generate approximately $4.1 billion in operating cash flows through 2029, with a disciplined capital deployment strategy:

Nordson’s key financial metrics underscore its strong market position and operational efficiency, with 55% gross margins, 30%+ EBITDA margins, 13% ROIC, and an impressive 61-year track record of annual dividend increases:

In conclusion, Nordson’s Q3 2025 investor presentation showcased a company with strong current performance, a clear strategic direction, and compelling long-term growth prospects. The portfolio realignment initiative demonstrates management’s commitment to focusing on higher-value growth opportunities, while the consistent financial performance highlights the resilience of Nordson’s business model across diverse end markets.

Full presentation:

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