revenue_blue.png

Revenue Q2 2019

564.7M EUR

+2.9%

ebita_blue.png

Adjusted EBITA

80.6M EUR

-8.2%

cash_flow_blue.png

Net oper. cash flow

28.6M EUR

+74.1%

Nova.png

NOVA

21.1M EUR

-32.2%

Control System

The consistent focus of all business activities on the central Group objectives is reflected in our internal control system, which relies on both financial and non-financial control parameters.

Financial Control Parameters

201820172016201520142013
Group sales (in EUR million)1,084.11,017.1894.9889.6694.7635.5
Adjusted EBITA margin (in %)16.017.217.617.617.517.7
Net operating cash flow (in EUR million)124.4132.9148.5134.7109.2103.9
NORMA Value Added (NOVA) (in EUR million)60.854.8n/an/an/an/a

The most important financial control parameters for NORMA Group include the following value-oriented indicators that are directly related to value creation at NORMA Group: Group sales, profitability (adjusted EBITA margin) and net operating cash flow.

Group sales
As a growth-focused company, we ascribe the increase of sales in each segment and in both distribution channels a key role. Therefore we strive to achieve a short and medium term growth in sales that exceeds the market average. All measures that contribute to sales growth, are valued regarding their potential to optimize the adjusted EBITA and the adjusted EBITA margin (EBITA related to sales).

Adjusted EBITA and adjusted EBITA-margin
The EBITA before one-off effects is our most important internal and external financial figure for the operating business activities. For a long-term comparison and in order to gain a deeper understanding of the business development, we adjust the operating result by certain one-off expenses. The adjusted EBITA margin – EBITA related to sales – shows the profitability of our business activities and is one of our central financial control parameters. In order to maintain the adjusted EBITA margin and thus the Group’s profitability at its usual high level, we constantly work on optimizing our purchasing and production processes with the objective to limit the increase of the relation of operating expenses to sales to a disproportionately low rate.

Net operating cash flow
In order to maintain financial independence and constant financial solvency of the Group, we also focus on the net operating cash flow. This includes the most important cash-effective items that can be influenced by the individual business units and provides information on whether we can finance our operating business out of our cash flow. The net operating cash flow is calculated on the basis of the adjusted EBITDA plus changes in working capital minus capital expenditures. The key approaches to improving net operating cash flow are therefore to increase sales, engage in sustained value-enhancing investment activity and to improve the operating result adjusted for special effects (EBITDA). In addition, consistent management of working capital also has a positive effect on net operating cash flow.

NORMA Value Added (NOVA)
NORMA Group’s goal is to use the capital provided by its shareholders and lenders as efficiently as possible in order to secure the Group’s long-term positive development. In order to manage this, NORMA Group determines the annual value creation in the form of the so-called NORMA Value Added (NOVA). NORMA Value Added is calculated on the basis of adjusted EBIT, the tax rate and the cost of capital. The cost of capital is defined by the weighted average cost of capital (WACC) and capital employed (equity plus net debt).

Non-financial Control Parameters

The most important non-financial control parameters for NORMA Group include the extent of market penetration, the Group’s power of innovation, the problem-solving behavior of our employees and the sustainable overall development of NORMA Group as a whole.

201820172016201520142013
Number of new patent applicationsn/an/a52749568
Number of invention applications*3233n/an/an/an/a
Defective parts per million (PMP)71632211724
Quality-related customer complaints per month798889

Market penetration
We always pursue the objective to sustainably expand our business. Measures to achieve this objective are the development of technological innovations, the identification of new application areas for existing products and the expansion of our product portfolio through selected acquisitions. The additional value generated by these measures is reflected in our organic growth which serves as indirect control parameter for our market penetration.

Power of innovation
NORMA Group considers ensuring an environment of sustainable innovation a key driver of future growth. We therefore measure and control the number of annual invention applications. Our employees submit invention applications as part of an internal formalized process upstream of the external process of new patent applications. NORMA Group promotes its employees’ innovation by establishing targeted internal incentive systems.

Problem solving behavior of employees
NORMA Group stands for the highest possible reliability and quality of service. The reputation of our brands and reliability of our products are key factors in our success. In developing and manufacturing products, we therefore rely on the highest quality standards. In order to minimize production losses and maximize customer satisfaction, we measure and manage the problem solving behavior of our employees by using two performance indicators:

  • the average number of customer complaints per month
  • defective parts per million of manufactured parts (parts per million/PPM).
Sustainable overall development
We consider it to be our main responsibility to bring the effects of our business activities into balance with the expectations and needs of society. For this reason, operational decisions are based on the principles of responsible company management and sustainable actions. Our strategy and goals are influenced by our corporate responsibility (CR) policies and described in detail on our Corporate Responsibility website and anchored in our CR roadmap 2020.

* – The number of invention applications has served as a key control parameter for measuring the Group’s innovative ability since mid-2016, replacing the number of patent applications, a figure that had lost significance in light of changes in the patent strategy. As the number of invention applications was recorded for the first time in fiscal year 2017, there are no comparative figures for 2016.

Questions?

Get in touch with us for more support.

Contact Us

To top