Control System
The consistent focus on the Group objectives mentioned is also reflected in the internal control system at NORMA Group, which relies on both financial and non-financial control parameters.
Financial Control Parameters
NORMA Group’s most important financial performance indicators include the following value- and growth-oriented key figures, which have a direct impact on NORMA Group’s value creation: Group sales, adjusted EBIT margin and net operating cash flow. These key figures lead to the NORMA Value Added (NOVA) as the primary strategic performance indicator. NORMA Group uses these key figures to continuously monitor its success in terms of growth, profitability, liquidity and capital efficiency.
|
| 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|
| Group sales | in EUR million | 1,155.1 | 1.222,8 | 1.243,0 | 1,091.9 | 952.2 | 1,100.1 | 1,084.1 | 1,017.1 |
| Adjusted EBIT1 | in EUR million | 92.3 | 97.5 | 99.0 | 113.8 | 45.3 | 136.1 | 164.5 | 166.0 |
| Adjusted EBIT margin1 | in % | 8.0 | 8.0 | 8.0 | 10.4 | 4.8 | 12.4 | 15.2 | 16.3 |
| Net operating cash flow | in EUR million | 105.4 | 87.3 | 65.3 | 99.8 | 78.3 | 122.9 | 124.4 | 132.9 |
| NORMA Value Added (NOVA) | in EUR million | -38.8 | -43,6 | 27.1 | -16.0 | 46.4 | 17.3 | 60.8 | 54.8 |
Group sales
As a growth-oriented company, NORMA Group attaches particular importance to profitable sales growth. The Group seeks to achieve short- and medium-term growth above the market average. In contrast to previous years and since the fiscal year 2024, the Group is providing an absolute range when it comes to the targeted Group sales figure as part of its forecast.
Due to the broad market structure in the area of joining technology, the Management Board is guided by internal analyses as well as studies by leading economic research institutes on the development of the gross domestic product of the respective regions and on the production and sales figures of the relevant customer industries in developing the forecast on the expected development of sales. In addition, management is including selected leading indicators such as customer order behavior in the trading business (formerly Standardized Joining Technology/SJT distribution channel = strategic business units “Water Management” and “Industry Applications”) and the order backlog in the formerly Engineered Joining Technology division (EJT = strategic business unit “Mobility & New Energy”) in its forecast.
Adjusted EBIT and adjusted EBIT margin
The adjusted EBIT margin, which shows the adjusted EBIT (earnings before interest and taxes) in relation to sales, provides information on the profitability of business activities and represents a key internal management and evaluation indicator of the Group’s ongoing operating activities. In addition, adjusted EBIT forms the basis for the remuneration of the Management Board and the incentives for non-pay-scale employees. In order to maintain the Group’s profitability at a high level, NORMA Group constantly strives to optimize its company processes and structures. In doing so, the Company focuses primarily on sustainably reducing key cost factors.
For a long-term comparison and a better understanding of the business development, NORMA Group adjusts the operating result for certain expenses and income in connection with realized M&A transactions.
Net operating cash flow
In order to maintain the Group’s financial independence and solvency at all times, NORMA Group is also guided by net operating cash flow in managing the Group. This comprises the most important cash-effective items that can be influenced by the individual business units and provides information on whether NORMA Group can finance its operating business out of its cash flow. It is calculated on the basis of adjusted EBITDA plus changes in working capital, less investments from operations. The main starting points for improving net operating cash flow are therefore to increase sales, to improve the operating result (EBITDA) adjusted for special effects and to engage in sustained value-enhancing investment activity. In addition, consistent management of working capital focusing on continuous optimization also has a positive impact on net operating cash flow.
NORMA Value Added (NOVA)
NORMA Group’s objective is to use the capital provided to it by shareholders and lenders as efficiently as possible in order to ensure the long-term positive development of the Group. In order to manage this, NORMA Group determines the annual increase in value in the form of the so-called NORMA Value Added (NOVA). NOVA is calculated from adjusted EBIT less taxes and the cost of capital. The cost of capital is defined by the weighted average cost of capital (WACC) and the capital employed (equity plus net debt).
NOVA = (adjusted EBIT x (1 – s)) – (WACC x capital employed)2
Non-financial Control Parameter
CO2 emissions
Compliance with applicable environmental protection requirements and the avoidance of environmental risks are key priorities for NORMA Group. The company adheres to international standards and guidelines in this regard.
Since fiscal year 2023, only CO2 emissions which have also been a target figure within Management Board remuneration for determining part of the long-term Management Board remuneration (ESG LTI) since 2020, have been considered a key non-financial performance indicator. The CO2 emissions for the target value were reported in the control system in accordance with the GHG Protocol (market-based, Scope 1 and Scope 2) until the end of fiscal year 2024. Scope 1 includes only emissions from natural gas and liquefied petroleum gas, and Scope 2 includes emissions from purchased electricity and district heating. Only emissions related to the production sites were taken into account when recording emissions. Since January 2022, NORMA Group has sourced electricity from renewable energies at all production sites. For this purpose, NORMA Group purchases "Energy Attribute Certificates." These are also included in the target.3
The Group strives to continuously reduce these emissions. NORMA Group’s target of reducing CO2 emissions from its production processes by 19.5% by 2024, compared to the reference year 2017, was already overachieved considerably in 2022. In the 2024 fiscal year, CO2 emissions amounted to 4,171 t CO2eq (2023: 5.064 t CO2eq).3
|
| 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|
| CO2 emissions | (Scope 1 and 2 in t CO2e) 3 | 4,171 | 5,064 | 4,879 | 43,449 | 49,813 | 54,494 | 51,018 | n/a |
Other non-financial performance indicators
Other important non-financial indicators include the Group’s innovative capacity, measured by the number of invention applications, the problem-solving behavior of employees, expressed in defective parts per million parts produced (parts per million/PPM), and the accident rate, measured in accidents per 1,000 employees. The detailed set of personnel and environmental key figures as well as key figures on occupational health and safety in the Group can be found in the CR Report.
* Since 2020: adjusted for acquisition-related costs only; up until and including 2019: adjusted for acquisition-related costs and non-recurring expenses.
** Since 2020, CO2 emissions have been a target figure for determining part of the long-term Executive Board remuneration and have therefore been included in the management system for the first time. In total, emissions from Scope 1 and 2 (method: market-based) were 3.8% higher than in the previous year (2022: 4,879 tons). Since January 2022, NORMA Group has been purchasing electricity from renewable energies at all production sites through "Energy Attribute Certificates". NORMA Group's CO2 emissions are reported in accordance with the GHG Protocol (market-based, Scope 1 and Scope 2). Scope 1 includes only emissions from natural gas and LPG and Scope 2 emissions from purchased electricity and district heating. When recording emissions, only emissions relating to the production sites are taken into account; 2019 and 2018 recalculated values due to the integration of the acquired companies Kimplas and Statek into environmental reporting in 2020. For calculation, see Greenhouse Gas Protocol, chapter 5; The key figures for 2019 and earlier were audited with limited assurance.