NORMA Group with strong organic growth in the first quarter of 2018
- Sales of EUR 272.6 million 6.9 percent higher in the first quarter of 2018 than in the same quarter of the previous year
- Strong organic sales growth of 13.6 percent
- Adjusted EBITA of EUR 45.7 million
- Sales forecast for fiscal year 2018 increased
Maintal, Germany, May 9, 2018 – NORMA Group achieved sales growth of 6.9 percent to EUR 272.6 million in the first quarter of 2018 compared to the first quarter of the previous year (Q1 2017: EUR 254.9 million). Organic growth was at 13.6 percent. Fengfan, the company acquired in the second quarter of 2017, contributed an additional EUR 2.5 million to growth. Negative currency effects hampered sales growth by 7.6 percent. Adjusted earnings before interest, taxes, depreciation and amortization of intangible assets (adjusted EBITA) rose by 1.6 percent to EUR 45.7 million in the first three months of 2018 compared to the same period of the previous year (Q1 2017: EUR 45.0 million). The adjusted EBITA margin was 16.8 percent (Q1 2017: 17.7 percent). This was mainly influenced by high raw material prices. This related in particular to alloy surcharges and price increases for engineering plastics as a result of market shortages. Net operating cash flow fell by EUR 18.3 million to EUR -13.8 million (Q1 2017: EUR +4.5 million). This was mainly due to disproportionately high changes in working capital as of the reporting date due to strong growth as well as to the year-on-year increase in expenditures for investments from operating business.
“We achieved strong organic growth in the first quarter of 2018,” says Bernd Kleinhens, Chairman of the Management Board of NORMA Group. “This shows that our products are in high demand on the market and is reflected in the increased sales forecast for 2018. However, high raw material prices and negative currency effects had a negative impact on earnings. We want to sustainably strengthen our market position in the future. That is why we are continuing to invest in new technologies and markets. Our recent acquisition of the Indian water management solutions specialist Kimplas is another step toward ensuring steady growth in one of our focus areas.”
The acquisition of 100 percent of the shares in Kimplas Piping Systems Ltd. is expected to be completed in mid-2018. Kimplas products include compression fittings, sprinklers and drippers, valves, filters and electrofusion fittings such as tapping tees for gas and water pipes.
Growth in all three regions
In the EMEA (Europe, Middle East and Africa) region, sales rose by 3.4 percent to EUR 132.2 million in the first quarter of 2018 compared to the same period of the previous year (Q1 2017: EUR 127.9 million). This growth is due in particular to the good business in the automotive sector, which is attributable to the generally good environment in the industry with rising production and sales figures.
In the Americas region, NORMA Group increased sales in the first quarter of 2018 by 7.7 percent to EUR 107.3 million compared to the same period of the previous year (Q1 2017: EUR 99.7 million).
The market for commercial vehicles and agricultural machinery significantly recovered, leading to a good order situation in the automotive industry. The Water Management division also developed very positively after weather-related weaknesses in fiscal year 2017.
In the Asia-Pacific region, sales grew significantly by 20.9 percent to EUR 33.1 million from January to March 2018 compared to the first quarter of 2017 (Q1 2017: EUR 27.4 million). Growth was driven primarily by strong customized solutions business for the automotive industry, which benefited from the high demand for joining technology, particularly in China.
Equity ratio rises again
Group equity amounted to EUR 552.6 million on March 31, 2018, an increase of 3.4 percent compared to the end of last year (December 31, 2017: EUR 534.3 million). The equity ratio rose to 42.3 percent (December 31, 2017: 40.7 percent). Net debt, including hedging instruments, as of March 31, 2018, amounted to EUR 361.4 million (December 31, 2017: EUR 344.9 million). This was mainly due to a decline in cash and cash equivalents due to cash outflows from operating and investing activities. As of the reporting date, March 31, 2018, NORMA Group employed a total of 8,120 employees worldwide, including temporary workers (December 31, 2017: 7,667).
Sales forecast for fiscal year 2018 increased
NORMA Group has grown stronger than expected in the first three months of 2018. On the basis of group sales from January until April 2018 as well as the expected group sales until year end the Management Board of NORMA Group SE increased its sales forecast for fiscal year 2018 on May 7, 2018. The company thus expects sales to rise organically by around 5 to 8 percent in 2018 compared to 2017. The Management Board previously expected a solid organic growth of around 3 percent to 5 percent. In addition, revenues of around EUR 5 million are expected from the acquisition of Fengfan. The goal is to achieve a sustained adjusted EBITA margin at the same level of previous years of over 17 percent (2017: 17.2 percent, 2016: 17.6 percent 2015: 17.6 percent).
NORMA Group in figures
*Adjustments: Q1/2018 for acquisition-related costs (EUR 0.5 million) and step-up effects from purchase price allocations (EUR 0.9 million); in Q1/2017 by integration costs, step up effects from purchase price allocations and depreciation from purchase price allocations; Q4/2017 for integration costs, step-up effects from purchase price allocations, reimbursement of transaction taxes and depreciation from purchase price allocations
**Net debt including hedging instruments (hedging instruments EUR 1.9 million on 03/31/2018; EUR 2.3 million on 03/31/2017; EUR 1.4 million on 12/31/2017)
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