Nordson (NDSN) 14 Dec 232023 Q4 Earnings call transcript

Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the Nordson Corporation Fourth Quarter and Fiscal Year 2023 Conference Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions] I would now like to turn the conference over to Lara Mahoney. ahead. go Please

report morning. Sundaram Investor Good Financial Stephen to Lara Vice Joseph results. Vice XXXX, Mahoney, conference quarter Executive XXXX Thank full Kelley, our and and This Interim President Corporate Shamrock, Officer. of year to XX, December Relations today, here you and fiscal Communications. President Chief year call fourth with you. I'm Thursday, is Nordson's Nagarajan, We President; our CEO; welcome and

new a Solutions took viewpoint recently as CFO Executive the Precision Joe While call. fiscal that Industrial President, role will segment, for Vice in today's represent was he XXXX entirety of and

on our be call that will nordson.com/investors. This our You both press will can broadcast presentation as conference call webcast we XX, is well find a on replay available and the to until as website telephone XX being our refer investor for days. There slide call website our will conference XXXX. live be of at release today's December there available during

to yesterday. call, provided metrics made. these be complete During comparable A this release will metrics of non-GAAP the press issued metric the financial has reconciliation in most GAAP been to conference references

number a results with other and actual uncertainties may factors in risks, certain our are could statements Before presentation, future and our Securities the filings of upon refer call Exchange based the X differ. Nordson's during to note may discussed that we expectations. These company's involve Commission this begin, that current Slide to statements made where cause please of as regarding we performance be forward-looking that

quarter and X. Slide on will full highlights. year agenda fourth discuss today's to Moving Naga

flow. Naga Joe for full strategy will commentary about cash high-level quarter year also fiscal well total turn conclude the business company the earnings on and sales Ascend as Joe as the enterprise the the performance and XXXX review an then to first guidance. including will segments. balance with update call sheet about and X our over our and talk year-end will to We performance

questions. With will call Slide We over and X then hand Naga. be to turn I'll to that, your take the happy to

Fiscal its growth morning, you Year launched XX% We by to Good Thank Fourth achieve Ascend Nordson Conference and joining to Quarter leading Full sales strategy In set than Call. XXXX margins and margins XXXX, greater deliver top-tier for billion and goal with a $X EBITDA XXXX. returns. in everyone. Nordson's

through changing last tackled provide our a the record As in to we pandemic, a in decremental quarter achieving these But Next our call few conditions, and year pressure, third in complete the supply deployed is chain the all X fourth interest years XX% Ascend electronics X now speak strategy to elements exposure also the rising and we aftermarket the sales to and toward revenue strategy, financial name quarter labor the portfolio, as growth these and the challenges record who fiscal cyclical perspective and managed we our and of geographic of we I'll teams including solid of well objectives. end period have XXXX. parts our a high of rates empowered the us to commitment profit are all few. In as testament track challenges. destocking model our year, markets. performance incremental a business including conditions. This recurring which the This more strategy, developed new targets our employees in and global unique and exceeding growth capabilities factors and includes a on have XXXX, The on structure, model our macroeconomic moments. core these for added has innovation, respond technology market dynamic diversified customers, Ascend focus deliver division-led to with on flow has profitable margin throughout strengthen of and in cash fundamental our a Joe our financial this Combining more This detailed enabled results to end deployment our market level biopharma the the capital launching precision strategy targeted XXXX. I'll to turn NBS a delivered fiscal segments. to to to led over EBITDA to consumables. Since we framework and rapidly to

decrease primarily fourth translation of product nonrecurring sales was profit concentrated Polymer in $XXX year as by X% acquired offset quarter. quarter the to the sales was double-digit of was sales over Slide Coatings $XXX The million totaled X%, in sales, SG&A inventory #X, expansion organic volume XX% lines amortization compared through of Solutions, price Naga, continue Medical XX% CyberOptics offset year-over-year Interventional million of versus million sales largely million offset of increase X% increase and you, XXX inflation. or quarter with in volume sales points prior the profit, In was of growth in year. Gross improvements gross X%. The gross increase prior sales. margin decrease by organic This was our to or of dispense morning line to decline currency growth, X% favorable processing year's compared increased prior dollar businesses. million, pressure of fourth increase good factory fourth by $XXX we the cost Industrial quarter driven our to The a primarily growth million. in Thank the expectations, fourth by and excluding the $XXX biopharma the basis quarter year driven acquisitions by efficiency. $XXX XXXX fourth the $XXX and pass from of the an included were you'll electronics, and On and of and to everyone. see an prior ARAG

growth, year. Adjusted in costs with profit million SG&A prior increased acquisition sales, the prior operating our the team's conditions. EBITDA their NBS year, acquisition, $XX a market executing to continued quarter respond $XXX and over increased XX% in of a was rapidly or fourth in million points year. amortization for Next sales growth fees XX% million quarter. prior sales, Ascend be to the the X% target million framework quarter, basis year fourth transaction $XXX in as X% on related which changing This Excluding can is XX% $X $XXX operating ability the related of XX% the XX% and to profit nonrecurring ARAG in the record the to we excluding representing to profitability XX% the from prior of consistent of dedication nonrecurring to XXX our generated increase attributed step-up sales or margins We to strong incremental over which very our the million above compares strategy. long-term year articulated inventory prior

scale strategy Ascend a metric we will to for As the through key acquisitions, profitability and cash continue be execute EBITDA flow and generation.

public Looking associated expense in million This guidance is leads million, am million within margins. generated issuance short-term result a rates. Other that earnings per gain accessed expenses at short-term Adjusted excluding $X or a we application totaled and prior the a rate of used the expense the debt XX% the $X.XX our improvement, decreased income despite I raised repay $X to investment-grade is our to over expense did in and and range. Net from growth of $X.XX prior borrowings increase fluctuations report interest prior million $XX XX-year incremental increase the the was cost The ARAG $XXX our of inaugural Next that an with currency totaled the steady which and currency of with exchange in bonds September, year. $X share, in profitable the of full remaining that X- quarter, framework, for income the to with slightly to the levels Tax net million effective the a funds happy in $XX in rated repayment balance higher nonrecurring of million market nonoperating the of successfully nonrecurring income $XXX financing per and million significant not the share, bond reflective coming of the million repeat with year. the due attractive quarter acquisition-related below consistent expense. X% acquisition, We current to increased year quarter. debt. an totaled year of over million NBS $XX increase increase tax interest borrowings. the is growth per year increase share. revolver. Interest $XX finance

billion, as a of to compared year or an the This X% diluted fiscal the Turning increase of previous from Slide in for $X.XX, targets growth. Adjusted consecutive an prior constant share decrease sales, X%. result $X.X the strong, offset This ARAG X% were an third our organic CyberOptics delivering few earnings both the were to the decrease of year adjusted record by with interest company's prior the comments comparable X% of grew million of and rates. Overall, strategy associated currency Ascend remains from on or primarily was $XXX #X. X%. CyberOptics basis, a the million performance XX% million year-over-year I'll results. and profit of Sales full higher acquisitions, The the for year. On part unfavorable in line operating adjusted share of of $XX marks strategy. year. operating was EBITDA now prior record the is impact was borrowing adjusted Adjusted X% ARAG higher profit increased and XX% established year of of which sales increase a a a record acquisitions driven earnings expense year's to the full and to currency the XXXX $XXX ahead or a EBITDA sales. results. year Ascend the and decrease per X%

the segment the fluid a Now acquisition quarter of X the to year prior was well components compared X% Solutions a and our segment, Solutions by in in packaging and year's and $XXX negatively continued Fluid which decreased improved and the noteworthy the the decrease of processing, impact the of margins was primarily X%, medical $XXX but growth compared incremental This organic X% driven Medical Asia record very enabled well to the this execution Organic quarter of year to primarily X%. It expansion. in in excluding XXXX of and by volume offset solutions benefit. combined X% the million, Industrial the of currency by strong X currency or compared adding compared as mix was Pacific an $XX let's a Solutions $XXX fourth Ascend Robust growth declines fourth growth was regions. The prior organic Solutions margin prior lines. Fourth strategy quarterly benefit within XXXX to drove target, million be and by excess million. sales, modest result polymer increased results. Geographically, an or Americas EBITDA to biopharma ARAG the sales continue EBITDA X% with million the sales This $XXX of the that demand margins change review the over a is sales in decrease prior softness Fluid of as sales, XX% to in the a fourth sales quarter. lines, impacted markets EBITDA medical is EBITDA with the to sales product of the through of Precision quarter's product our sales the industrial fluid turn the increase for driven related factory represents XX% X% growth product organic is changes double-digit is product of coatings of quarter fourth acquisition. Medical favorable ARAG. was year million. growth the for XX% all-time ARAG efficiencies Slide plus strong Interventional XX% X% of quarter. leveraging quarter performance. of offset the profit in lines, EBITDA division was growth which were $XX of by lines, within to million the end quarter volume

continued in change offset the This Technology quarter back we to Solutions EBITDA 'XX. quarter. prior is XX% quarterly which conversations CyberOptics sales $XXX by in the X% was X, a the quarter contributed the Advanced of compared to sales the decrease on decreased to to of highest fourth volume down half to organic year's the however, see sales market. growth. Based fourth by of demand in anniversary expect by EBITDA that decrease increased fiscal the under XX% XXXX. fourth quarter date electronics driven calendar XX% dispense as Fourth product the a had of Turning from in market acquisition, in million XX%, this XXXX or included customer the the Slide and semiconductor of quarter. of you'll end historic continue the in lines Nordson when sales primarily recover part fiscal semiconductor of level reference, our a year the to ownership. The organic way sales, was to difficult $X comparison organic And had cycle prior XX% decline serve for cyclical $XX in margin XX% and you trends, begin year of second the compare profitability the segment Noteworthy, EBITDA million softness prior million margin

turning had flow million cash flow quarter, the on another XXX% Slide sheet free conversion balance generating on rate Finally, to in of cash We flow $XXX very net cash and at strong cash XX. income. a

of With we able rate a flow $XXX $XX debt capital million generated dividend. For a shareholders. Dividend the were record quarter, in XXXX, free increase free the full payments flow, cash $XXX of to the million our in at of million to conversion record repay approximately of and our were cash reflective the cash annual year XXX%. X% return Nordson

In per addition, our year strong share. we with sheet. of Through ended purchased of at shares capital we $XX a an deployment, the strategic $XXX average million balance price

on $X.X $XXX well balance million, of EBITDA our ratio and a based in range. net months targeted billion, cash debt leverage resulting trailing was within XX Our Xx was the

million. 'XX, to estimated to rate effective interest For modeling of fiscal an million capital to approximately million in expenditures $XX of $XX assume and of XX% purposes, expense XX%, $XX million $XX approximately using by NBS growth data-driven Next throughout In segment targets. dynamic profit led incremental summary, financial targeted conditions and our responded to XXXX exceeding framework. performance, This and the our to decremental fiscal segments effectively tax

strength this precision turn record year. the our achieving I call strategy as back congratulate EBITDA deployment to the well the We acquisitions, record our sales to seeing cash on the portfolio. the nice are also contributions I'll our recent technology we to of now capital from performance of and is Naga. are which differentiation as indicative team want and adding flow the

Joe. you, Thank

commitment that During periods year's noted for strengths. I on customers, market a to Fundamental in set stage as economic and positioned I last Nordson reasons call. recurring listed end focus diversified uncertainty. for conference proved strategy of these certainly call, the all exposure was our earlier high revenue. The Ascend It the true during the perform well has innovation, and level we core of geographic fiscal to XXXX, to added

opportunities becoming across is data-driven the competitive framework holistically it divisions business XXXX, market-leading all and simply, tremendous progress. using deliver making products, winning NBS growth is focus But in we best and That achieved year their market simplification. In growth to divisions focus deployed choices, that advantage Next framework quality guide the They're NBS business number expanded as Our segmentation X company. and Next growing a fiscal on on-time performance. is share. XXXX with had a framework that drives

and this deployed Solutions growth sales on opportunities Medical elsewhere. focusing simplifying framework double-digit by successfully best to XXXX, its business throughout growth Interventional Our achieve

revenue of end NBS we we by acquired key cycle Our the energy of the growth employees our approximately on and Next, of reduced In lead resulted Ascend XXXX. The new capital portfolio a the fiscal is Ascend well, priority analysis demand achieving for our of made excellence semiconductor also to acquisition extreme our of recognized front going margins acquisition second positioned the strategic in are technology this we our summer. Applying are agricultural and have team market target to August platforms. carefully the of calendar will we That when best progress revenue is and the segmentation position with the bring gaining Electronics to the pipeline enable see ARAG toward and They we used and recover strategy, our voice product target. We opportunity Processing ample decremental XXXX, the this the closed and strategy, inspection second integration half the in The criteria. To created times. $XXX start in growth, downside methodology acquisitive that the acquire the the Since and the impressed launch come deployment. of precision particularly based NBS end growth way division has in offered, We is of Nordson. achieve target on complexity ARAG's million we on implement Electronics research, market which deep that Next XX, incremental our to half differentiated through longer the market customer medical well to weaker in remain team will times public and technologies of share. The leveraged said, acquisitive in improved focused markets earnings XX% test curate complexity, its opportunities. to customization this lead that meets XXXX. strategic our division to financial the period its the XXXX. went

issuer, As a flexibility for ratings Nordson's we ratings flow afford cash the strong cited as acquisition we Moody's we both this key debut. profile portion our and continue reasons from summary, strong the that have and time fiscal the We we of that will healthy as first S&P. achieved strategy the capital well-positioned financial pleased of XXXX. agencies I'm debt and ratings Both pleased investment-grade us public deployment sustaining made progress with entering our and also am our progress on culture executing strategy. In while very believe are and Ascend values. I appreciate

fiscal the other support and charitable and million into live employees' welfare Foundation in communities Corporation to services XXXX, Nordson $XX activities. employees and our over company example, the For worked our where donated human education,

we are reflective in is customer fiscal on paced rates, to earnings return the range note and to amortization. X% delivery sales well the earnings to delivering approximately updating combination the be X% of starting strong timing to above fiscal of acquisition-related we X% fiscal in in year levels. X% normalized as anticipate XX. quarter our request Based to adjusted forecasted fiscal growth the entry, backlog, million as sales the foreign diluted current Please $XXX order XXXX exchange reduction with sales. Full exclude backlog Turning The of fourth are on We share. that growth now in sequential XXXX of a per outlook enter range backlog. Slide XXXX system definition XXXX of in to

year we to of a a more how of our As of be semiconductor growth continue we performance. This our believe assumes guidance. will growth guidance prudent rates, calendar business our terms and about is the critical and second in acquisitions end at midpoint of flow foreign of investors the from earnings and full of half neutral cash impact acquisition part strategy, reflective think a this exchange approximately in recovery X% markets contributing XXXX, the ARAG and

range will in of are $X the see fiscal XX, first to sales $XXX quarter range $X.XX share. diluted on you per adjusted and of Slide to million XXXX forecasted in million the earnings $XXX As

for past your I've to and want we see take appreciated years. as for career excited you it our your Joe, of X-plus are I questions, develop we CFO leadership Before to moment as segment. over to a new partnership all open his the thank leader Joe IPS the

want examples thank high-quality customers growth and for are our in continued XXXX, during important winning shareholders scalable, I over focusing a factor and on we Nordson fiscal Joe's employees, to into for move support. while teams, as conduct of the our your search Interim stepping Steve success engine. Again, CFO building developing seamlessly an take forward transition in a Steve As we move will successor. Shamrock

We phone questions. lines will for now open the

Wells [Operator the Allison line first comes Instructions] of And from Poliniak question Fargo. with our

on the margin touched strong of that think How EBITDA target. ahead certainly does margin do next, the we evolve say, years? of well How you it over and in EBITDA X your XXXX, X from to posted here? Naga, you that

at Yes. was growth come launched when stage growth margins the set organic Ascend XX% from and acquisitions. incremental Allison, from our strategy, as also compared organic to target a for XX% higher And our obviously have, we we to our our of comes acquisitions. the

sustainable fundamentally of this move Depending this on to maintain. believe level So the that sustainable we as acquisition, we mix organic able operating. level we forward, and which is are XX% are at we a is a

on market around of Got 'XX, how the that touch then it. just specific biopharma 'XX that you're could And about Just you the inventory the sort in had thinking in challenges recovery, cadence side? just given market? the of

In by that to anniversary Longer start to to We -- biopharma the the are for realistic this end is first fundamentally to be recovery slower. Yes. Nordson we the taking interim due the a decline conservative view we start believe going great the marketplace a number. and to term, return of will the high in though, we saying of destocking. definitely is a quarter, and single-digit

touched that impediment view historically but high Okay. rate I not sort just it real no structural -- of in But guess on it. think that achieved? I There's that your market single-digit you growth reach for to

in not, us stainless transition If this, use of still And think full one about the you Absolutely areas the its stainless is that essentially replace steel go stages. vectors lines. for of of to and key is right? focus early which plastics, the single-use steel

fundamentally we is and matter impaired. matter that that nothing here believe a It's certainly timing, of certainly. is it's there recovery, of a So

issues. long term, So no

We get digits. expect we'll single high to probably

And Joe, Perfect. move. on congrats, the

question Your Baird. line with the Mike of from next Halloran is

questions guidance on -- help understand couple of So a want here. me just to

embedded growth what's the already, the gave in maybe organic And organic some you're help just FX on what assumption rate? First, side but growth? assuming know for the I you

is Yes, this Steve.

ARAG forecasting for is the at guidance, year out, full So X%. pointed and of we're growth as X% Naga

So organic bit that a because rates X% FX about based of on neutral. would current imply say would growth we were

how that's the rate overall thinking X%. So of we're growth about

historical its on that to? point build back you or anything like curves? you the anything comparisons, saying assumptions, part customers recovery. that mentioned electronics certainly are of rate forecasts What half then there informs Is or recovery part its would sounds of And else

model. historical of understanding and our are is you acknowledged, What a would is show customers I what that when Hence, a they spending their our which teams up. we Certainly, requirements things direct X are sales time really lot tell you the would with already trends. have

the you to you point say pipeline of recovery. continue anything line of time to were If towards would to that be point to opportunities

last then quarter, relatively levels, demand IPS which And you like felt packaging Are things little surprising. I assuming was the you're how on end looking one, thoughts cadencing the just sequential here? mean from that? a patterns this at normal side. market Any strong on

on So that be any would also context helpful.

Sure, see been And the gives us in a order for order here Mike. our that acquisition. a pause, Yes. the is IPS expect our has coming years, anything run above in don't rates coming contribution for good IPS through year good now X growth now. backlog we the long-term in that be at X, significant years and we on what growth or the expectation entry entry ARAG sustain to growth will that

next is with the from line KeyBanc Capital Your Jeff of Markets. question Hammond

kind in to that have all some are organic, go back at segments maybe the there plus that Or looks Do like growing? to range of down? minus midpoint clearly X%. the is maybe the growth it others So X% the you see are segments

Yes.

coming half, improve. IPS. we're talked to just IPS rates I year or we growth long-term to that ATS tell continue you in today in first -- at is to is sustain second Let's would that. growth going the about down, flattish be continue going above to continued be up. What half modest our

MFS interventional growth. be to strong be we will And growth so components to pretty that have continuing medical us. for slight flattish though,

half our nice growth MFS the drag in that fluid for modest year, Overall, solutions a then Our and that so. improvement next growth back is expectation biopharma to year. business, our the returns and a being itself segment, of pretty not towards anniversarying

Great. Okay.

a if like been math there's bought than may a just ARAG, seen ARAG slowing. bit has real what just there you to that of when revenue lower contribution it, seems lot It time. maybe first seeing about Just the ARAG commentary suggests wondering be you're pressure. I'm speak little

Yes.

are then as typically in so can me they're Let life things and new What well. nozzles some you ARAG and color revenue replacement recurring give our -- ARAG like certainly XX% short Joe, revenues his see that. of we role on remember, cycles, products are and mostly it start

that benefit to see pressure see. So we will and going that, to from going not you're the is

ARAG The the waste. critical component tell you low-cost other like is and thing is also components that would reduced drive what Nordson that I for components, much efficiency customers

going typically, that that. that what expectation the so is you're see to impact And -- our from limited

year about And next me the about fiscal bit in and then our finished talk Joe have maybe a let so expectation little for for year. talk we year ARAG Nordson's where

Yes.

think suggests they Jeff, the grow fiscal $XXX our I'll the in sales, ARAG, ARAG in about guidance you Nordson So XXXX. finished XXXX, what of call and sales million that calendar delivering midpoint

on growing the you you're a Naga space, what despite the we moderated and some so of have at hearing XX% still year-over-year. when news the that in the that run ARAG rate look And the that's at parts when look that components rate you it provide growth it they it's previously mentioned, consumables from was articulated, but

just a Or the $XX million? of 'XX. that that? million it kind Okay. And right should Is amortization Is how we think rate? in housekeeping about quarter, then $XX run

range you million I in to about on the amortization so. Jeff, guidance the would and the $XX tell million for $XX of Yes, year $XX in million full QX, is

the is D.A. Your question Matt line with Davidson. Summerville next of from

nonwovens detail hoping granular move same for how I as you hoping the thinking bit a little packaging, about was I thing product on 'XX? maybe for expectations you of was more into coatings could rigid flexible IPS, assembly, talk gave you're MFS. kind through we

Yes.

and that we will are answer generally, certainly give marketplace, you the we what segment, will the hopefully, -- -- guidance I in don't around some seeing Matt. Let's but question, the give

start the let's suggests the that and normal. is of things packaging, well. fairly rates that backlogs is doing parts The doing part like with have So order well. right? Packaging returned fairly It is the entry to business

to And so expect as experienced thus we to be far. continue packaging have we steady

So that is packaging.

enter system with about think year, businesses coatings we year some polymers, backlog. the we strong or you enter As pretty like as the

we in fundamentally think application, we product of as more sort miscellaneous to the that, the answers so application We'll We are. help is will that you e-commerce, by little hopefully question to that -- further. of color other declined gives where us the is This well. Hopefully, be continue is such same business and battery, that tracking believe applications there. Nonwovens part in this fabric a any it many not in applications. This business is growth And number where applications Matt. one that the place bonding have a and has of about asking, bit the been continues certainly a doing and is you're well as applications. one has

X pointing inflection detail CyberOptics And Maybe a the business business, and on appreciate since quarter how for ATS, about that you further if then out. inspection quick just you're strongest to in the over I seeing comment there. 'XX? that test thinking Are for had acquisition. The an little you actually can the Yes. fact things. you

Yes.

what incredibly second I advantage with calendar of now investment portfolio have with of that fantastic benefit CyberOptics. year, all expanding expectations continue market on As is added is we inflection our area an around well early to a a expected pipeline and that not about point, expect we our semiconductors business, so it's for CyberOptics this are of we as exactly that acoustic our any experience dispense about strong and have is to movement. particularly year, X-ray is going has year certainly able where that our certainly business. you for customers we've more some technology we we had conversation, year, come. you half even think to you in optical on an strong. And this. go when be are past, now was had thesis challenging the inspection, talked well. in the take our it precision our that to would we recovery. But indicating about this is think telling to still thought activity, expect comps to our found to technology also good feel are, year you say here area bit, -- them last down business business that that have years too there strong, reached we've but next is we feel we good that portfolio, We've our We that test strength. And solve But doing an CyberOptics certainly be fairly was a positioned we into which we and problems Customer to the continue

of [Operator Instructions] Oppenheimer. with the is Christopher question next Glynn line Our from

a was ATS on just moment ground, the spending I that. X curious about on

engaged talking your team to is said customers. very You

recovery. sounds is improving the just month-to-month? on page terms expecting breadth of the there like cadence that like Is same a curious there. how like seeing So in everyone's materialization of activity? Are pre-RFP Just you

XXXX. about, our Yes. conversations, to pipeline expectation all we translates go historical which and pretty really into customer into of second calendar were that, trends activity to half back our be continues entry is what translates And is talking shipment. towards good. pointing Clearly, great I order that would

flat is And the half not look historically, half based to it's so and been for significant be good going Beyond you if flat, up. expectation our that that that, -- is is guidance ATS ATS with growth. fairly indicator, second down, being first our we a on believe

on solutions one MFS, portion. And timing. then the understand quick the a fluid of nonmedical I kind Yes,

Solutions think manufacturing there I productivity cost some Curious Fluid NBS from talked significant how and business. about actions that Industrial Next. and you benefits

oriented. that please? think that's short cycle -- How's a little behaving, on I more it's how detail

Yes. to significant will business pleased the this the in operates. steady. well, the overall, we That they to is is with to very benefit business that from in a some going electronic second as for pickup the And be in A that tied electronic it is customers picks have would it them. are so Asia and industrial exposure, that I as right? up seems say side, made on this here, But has business times half manufacturing starting and the to be to going improvements early where fairly teams the well. typically return

Research. is Your Walt line of with the Liptak Seaport from next question

guys You new down. How talked too as systems haven't there's pricing and inflation yet, much are out into about thinking you some and you start there component the about going pricing come year? it's even though pricing still

is Steve, want on? something touch that you to

of to just that everyone pricing, I Yes. and the to again, really, when say about is, you I remind our customers. talk that our mean, we question, selling we're answer I'd products value what would

not is very perspective. inflationary increases that large gross mean, we've strong So our a margins I through result maintaining again, focus that. from of passed price our as

volume bit focused our growth organic with organic of really X% a mentioned that earlier, would will think Again, maintaining those 'XX, not again, from for that something that growth it's price. guidance balanced we're that, and from as FY coming in little So perspective. I the But I on be terms is of margins. on focus gross

second America. could insight us ag we on I market kind year? so and bit, for is trending grow Okay. the markets. of the little of the And U.S. ARAG Great. how part And is opportunity you wonder are view could if talk a the and guys part next maybe pretty you U.S. regionally, Can in -- the probably those a Europe new give if international the a are looking on have bit markets the talk you South I we about at of just share. in some little U.S. question better business a But wonder

Yes.

little business. Joe more Let can a me start then bit and the add color to

our continue be understand business that any will American what about grow As grow an Great and you in at right, market So that the if we a technology, and the market are continuing here recognize is and additional in European promise right? strong America leader. to expansion you that in cake, on around is will, expectations that in position our also deliver least to North strong our have models in end wins opportunity acquired think certainly dynamics model. so growing, we to on Any America. But North the market we South ARAG, South America. icing business. We European an Europe, we position the

is like North position. the Europe the add And in We maybe different uniquely the the so they're technology. market that market doing color work And and let like America we Europe technology. from to Joe our structure and in

Joe? So,

level spray through predominantly when Well, very their in Yes. precision a components European to model dispensing a look, again, on implement are broad just manufacturers. it's, their implement business, predominantly to and you fluid selling components set ARAG, And manufacturers. you about manufacturers, that Europe distribution think sold to footprint throughout

business when you broad I we're think other as our would geographies XXXX. The say, that market, so has of South where again, and and of footprint, America, main footprint, I would And Nordson Europe ability I the the when you opposed U.S. outside and you ARAG business. geographic ARAG growth tell driver forecasting is stand-alone the about realize think enhanced forecast ARAG for our to our that to, a strong is about and some opportunity. a represents And of those think, opportunities,

about that, to so the start starting see And to these integration, some of the in you in think we're when fill in, opportunities pipeline.

footprint. And optimistic a can Nordson division with that so make global we long broad we're again, within term, geographic this a

could Okay. wonder automotive All segment the just you industrial right. maybe IPS or if spending I and try like general subsegments the could on for of what help like at you're of system I looking looks us how characterize the next the goods? one if year, more some bigger funnel consumer for Joe. Yes. just kind around

Yes.

strong So level now, off IPS very the X I segment set, just coming say, years. is to would

organic organically. 'XX, growth. they look In X% delivered back a it grew at X% If you 'XX,

where the 'XX to systems large side as in and lot and of What 'XX. was that in of the then the strong so you recycling, the actually, drove there we to on into really 'XX, automotive are. coating as side. And go make 'XX to the automotive, And if back in looking maintain the and continue that processing a turned, in of it 'XX, in half growth from heavy we be the back level plastic then coatings, it, liquid -- on head we're stronger was

carry systems into being a so That there businesses moderated. said, remaining large XXXX. the And has business, backlog the IPS portion those backlog they nice within do of IPS

you I back there would That remainder of backlog forecast. for the terms So order elevated that and the when you business. see the remains backlog moderating said, our historical steady supportive come that's to is the tell down to entry being of XXX,

on packaging of help when systems with that parts. familiar you're investment, parts offset of side, terms So the to due come the business, in typically particularly growth down

polymer on steady. industry And last And tell then the so remains remaining broad-based benefited it's from couple a really the you, automotive, system nice we I coatings of But side. liquid would processing mix. the years and

would recession happen resilient I add, mean I in really, uncertain company, downturns thing you That's environments one or in helps saw general, and that is through specific what get in 'XX. that markets, company end us is Walt, portfolio economic a right? a the

in returns I about would expectation As And kind slight EBITDA see how modest -- year, year. growth. expect the continue pretty we and flattish we're IPS's to we'll to it. last think And our think about study, is what pretty 'XX, is really MFS a to and to next ATS growth margin of strong that's same

of is Andrew BNP Paribas. line Buscaglia the question next Your from with

Just clarification one on guidance. last your

the recovery assume the guidance, comps if So demand that you the up? end, all. low model picking at And if the versus of organic that look sales really recovery really end correct? is at easy of you a much out, growth, that actually then that how much low of doesn't Is

Yes. Yes.

at mean that I perspective, we're the would general from from end sales I perspective. about X% talking a Andrew, guidance what basically guidance, So say, low our of

there would example, Naga us the we it of ATS. the towards you -- is, slower end a that ATS businesses what things. And the the well, we So lower right, if were expect standpoint, against get those there about, is earlier, some is rates I on recovery than FX go there, solutions as side what would talking for obviously, talked the from if obviously, types fluid just mentioned whether on was think electronics comp or with of within side, it

that demand come get to comps -- Is then need And bit? picking the then up a about to the and demand to easy than back? versus midpoint Okay. how what we

is, a growth say overall. to going X% mean, mean, was from I midpoint what that assumes just I I again, organic perspective, No,

again, would So be there some in embedded volume there.

fluid QX half or about fluid know solutions. QX up We picking referenced and as components in assembly the QX. earlier as and with earlier. that even I of perspective, I half there talked again, we kind it that second talked just pick end the like in to of electronic segment the we given well of So right? pickup year up, From well. some by expect mean, back expect would ATS, the the Naga we'd

So.

Okay.

to Okay. midpoint, X% is way about would X% as grow QX we're it could. add, our full And guidance of the think I at I just I roughly The X%. year, if where going growth And is or speaking.

rate in QX. and and get that as easier occurred. implies And picks ATS QX really QX, the the the that, the growth it because comps basically, mentioned, that's is up So when past part pullback particularly biopharma of you

QX heaviest up growth in easier. X% let's quarters remaining with and to X% just it so QX QX picks then being in and say, the And comps and rate the the the are is, in because X

Yes.

in kind a quite And historically. ATS, around of move Okay. margins bit

potential Or driver gauge for a the get is just main picking long-term cost here So what volumes back those up? in there average to savings hard are But corporate that margin? ATS to closer pattern. it's up to a segment

businesses. that in, some look, than markets pretty XX% then here one maybe compare me much Let you I competitors of and the Joe And we're them add strong. broad And is would is EBITDA of the our of Steve, their is to guys at ATS. higher to load say about in a What could you play -- view is you the more ATS R&D maybe, that thinking reasons give or it. they just how other color

XX% shouldn't number. gets when expectation you ATS a compared going ATS have SG&A much the our smaller which be in total to to the here IPS, is that So business numbers. in It will -- to company average that in cost always you're find

want that's for line your average. total that do the setting line in should only expectations with sure I you're not in -- ATS, -- So level to ATS is make company be with the not

margins. full EBITDA the at on what of to the this point profitability the quite done delivering business. pleased improve the we're we've cycle, in we And are 'XX 'XX, comment the and we're And that here low with year,

or And But so of that segment's get profitability. levels other the recovery. positioned participate we're expect it the should doesn't to in you to well mean Nordson's to

appropriately going we've on point say just there, I favorable a based right? of margins terms being only managing would Andrew, that targets, we're volumes. in the to decremental is to our segment too, well, costs was in add So job other done maybe as our very I really nice

So.

turn remarks. any And at be to further questions. will this Naga time, for no closing I there back appear call over the to

season. today's focused delivering making our strategy. Thank growth objective profitable holiday on returns. I achieving of and for and a all in on on happy Ascend fiscal wish growth time positioned the progress We remain top leading long-term your with Thank of well you. you We're call. for revenue margins XXXX. tier attention great We're you

This Year the for Corporation your Quarter Nordson Fourth does conclude We participation. and you Fiscal thank Call. Conference XXXX

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