Norma Group

Organic sales of NORMA Group down in the first half of 2019

Maintal, Germany, August 6, 2019NORMA Group, a global market leader in engineered joining technology, increased its sales by 2.9 percent to EUR 564.7 million in the first half of 2019 (H1 2018: EUR 549.0 million). While sales fell organically by 2.3 percent, Kimplas and Statek, the companies acquired in 2018, contributed 2.3 percent and EUR 12.9 million respectively. Currency effects had a positive effect of 2.8 percent or EUR 15.4 million on sales. Adjusted earnings before interest, taxes and amortization of intangible assets (adjusted EBITA) fell by 8.2 percent year-on-year in the first half of 2019 to EUR 80.6 million (H1 2018: EUR 87.7 million). The adjusted EBITA margin was 14.3 percent (H1 2018: 16.0 percent). The lower organic sales volume and the costs of introducing an ERP system at a site in Latin America, among other factors, had a negative impact. Net operating cash flow increased by EUR 12.2 million to EUR 28.6 million (H1 2018: EUR 16.4 million).

Sales increased by 4.6 percent to EUR 289.0 million in the second quarter of 2019 (Q2 2018: EUR 276.4 million). Organic sales declined by 0.4 percent. Kimplas and Statek, the companies acquired in 2018, contributed 2.4 percent to sales growth, while currency effects contributed 2.5 percent. Adjusted earnings before interest, taxes and amortization of intangible assets (adjusted EBITA) fell by 2.6 percent year-on-year in the second quarter of 2019 to EUR 40.9 million (Q2 2018: EUR 42.0 million). The adjusted EBITA margin was 14.2 percent (Q2 2018: 15.2 percent). Net operating cash flow fell by EUR 1.4 million to EUR 28.8 million (Q2 2018: EUR 30.2 million).

Revision of the annual forecast for 2019 and personnel changes in the Management Board

Based on the figures for the second quarter of 2019 and the results expected for the full year 2019, NORMA Group has revised its forecast for organic sales growth, the adjusted EBITA margin and net operating cash flow. The company expects to achieve organic sales growth within the corridor of around -1 to around 1 percent in fiscal year 2019 (previously: 1 to 3 percent). In addition, an adjusted EBITA margin of over 13 percent (previously: at the lower end of the corridor between 15 percent and 17 percent) and net operating cash flow of EUR 90 million (previously: EUR 100 million) are expected for fiscal year 2019.

Bernd Kleinhens, CEO of the NORMA Group, left the Management Board by mutual agreement with the Supervisory Board on July 31, 2019. As of August 1, 2019, Dr. Michael Schneider has temporarily assumed the responsibilities of Chief Executive Officer in addition to his position as Chief Financial Officer.

“Primarily in view of the weaker than expected market environment in the global automotive business, we have revised our forecast on how business will develop in 2019,” said Dr. Michael Schneider, member of the Management Board of NORMA Group. “In addition, the global trade disputes and sanctions are having a negative impact. The resulting reluctance to invest and market weakness are reflected in a continued decline in business in the EMEA and Asia-Pacific regions, China and India in particular. A recovery in the second half of 2019 is not foreseeable from what we know today. Despite the current challenging conditions, we believe that with our diversified product range and our focus on the future markets of electromobility and water management, we remain well positioned to benefit from global megatrends in the future.”

Development in EMEA, the Americas and Asia-Pacific

In the EMEA region (Europe, Middle East and Africa), sales declined by 1.4 percent year-on-year in the first half of 2019 to EUR 254.6 million (H1 2018: EUR 258.1 million). This drop in sales was mainly due to weaker business in the Engineered Joining Technology segment as a result of the continuing decline in production volumes in the European automotive industry. On the other hand, NORMA Group’s Distribution Services business generated sales momentum. The acquisition of Statek in Germany also made a positive contribution to sales. For fiscal year 2019, NORMA Group continues to anticipate moderate organic growth in the EMEA region.

In the Americas region, sales from January to June 2019 rose by 6.6 percent year-on-year to EUR 237.3 million (H1 2018: EUR 222.7 million). The water management segment in particular posted strong growth in the first six months of 2019. While business with commercial vehicles and agricultural machinery continued to develop positively, production figures in the North American automotive sector remained noticeably down. For the full year 2019, a moderate organic decline is expected in the Americas region (previously: moderate organic growth).

In the Asia-Pacific region, NORMA Group increased its sales by 6.7 percent year-on-year in the first half of 2019 to EUR 72.8 million (H1 2018: EUR 68.2 million). The acquisition of Kimplas in India made a positive contribution to sales revenues. By contrast, the persistently weak environment in the Chinese automotive sector had a negative effect. In the Asia-Pacific region, NORMA Group anticipates moderate organic growth for 2019 as a whole (previously: strong organic growth).

As of June 30, 2019, NORMA Group had 8,890 employees worldwide, including temporary staff (December 31, 2018: 8,865 employees).

NORMA Group SE in figures

*More information on adjustments can be found in the following financial reports: 2nd quarter 2019 (p. 14); 2nd quarter 2018 (p. 37); 2018 Annual Report (p. 142 f.); 1st quarter 2019 (p. 13)
** Net debt including hedging instruments; hedging instruments in H1/2019: EUR 1.1 million; H1/2018: EUR 1.4 million; FY 2018: EUR 0.8 million

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Further dates
Publication of the financial figures for the third quarter of fiscal year 2019 is scheduled for November 6.