NORMA Group AG on course for solid growth

NORMA Group AG (“NORMA Group”), an international market and technology leader in engineered joining technology, remains on course for solid growth after a successful third quarter in 2012. Group sales increased by 5.8% between January and September 2012 to EUR 467.3 million (previous year: EUR 441.7 million). The acquisitions of the Swiss company Connectors Verbindungstechnik AG in April 2012 and of the Italian company Nordic Metalblok S.r.l. in July 2012 contributed to this. NORMA Group’s adjusted operating earnings (adjusted EBITA) rose to EUR 83.5 million, an increase of 4.3% over the EUR 80.1 million achieved in the same period last year. The adjusted EBITA margin remained high at 17.9% (previous year: 18.1%).

“We are satisfied with the growth that we achieved through the end of the third quarter. Our figures confirm that our business model is robust. We were able to continue our growth path, particularly in the Americas and the Asia-Pacific region,” said Werner Deggim, CEO of NORMA Group. The order backlog totaled EUR 221.4 million at the end of the third quarter of 2012, a slight decrease compared to the previous quarter (EUR 229.3 million). “However, we also notice that Europe’s economic environment has become more difficult. This challenging economic situation has made our customers more cautious. They are expecting more headwinds for the rest of this year. Hence, we have revised our forecast for 2012.”

Growth in the Americas and Asia-Pacific, challenging environment in the EMEA region

Performance varied significantly across our three regional reporting segments EMEA (Europe, Middle East, Africa), the Americas and Asia-Pacific. In our EMEA region, sales were down slightly in the first nine months of 2012 because of the more challenging conditions in the second half of the year. Sales in this region decreased by 1.5% to EUR 282.5 million (previous year: EUR 286.9 million). NORMA Group expanded its distribution network and added a new distribution center in Moscow in July this year inorder to meet the increasing demand for NORMA Group product solutions in Russia and Eastern Europe. This will keep the company on course for expansion and strengthen our relationships with local customers. In September NORMA Group put a new assembly facility into operation at its German plant in Gerbershausen. This was related to a major order for exhaust pipe connections from a leading automotive group. This underlines the continuous demand for NORMA Group’s innovative product solutions.

In the Americas, NORMA Group continued to benefit from a very good demand. Sales increased by 18.3% in the first nine months of 2012 to EUR 152.4 million (previous year: EUR 128.8 million).

The Asia-Pacific region also performed very well over the first nine months of 2012. Sales went up by 24.1% to EUR 32.4 million (previous year: EUR 26.1 million). NORMA Group is still looking to benefit from the potential of the dynamic markets in this region and is continuously expanding its presence. In October 2012, the company made its first acquisition in the Asian market – an 85% stake in Malaysia’s Chien Jin Plastic Sdn. Bhd. The company has 150 employees and has for over 20 years produced thermoplastic joining elements, the majority of which are used in drinking and domestic water supply systems, irrigation technology and sanitary appliances. In this way, NORMA Group is building on its expertise in the area of infrastructure and will contribute to using water efficiently. On 27 October 2012, NORMA Group inaugurated a new plant in Talegaon near Pune, India in order to increase its production capacities in line with the growing demand for joining elements in India and Asia.

Equity position further improved

As at 30 September 2012, NORMA Group’s financial statements showed equity of EUR 281.4 million, representing an increase of almost 10% compared to year end 2011 (31 December 2011: EUR 256.0 million). This resulted in an equity ratio of 40.7%, compared to 39.5% on 31 December 2011. As at 30 September 2012, net debt remained almost stable compared to year end 2011 even after the payment of a dividend and two acquisitions. Net debt excluding hedging instruments amounted to EUR 183.0 million at the end of the third quarter of 2012 (31 December 2011: EUR 176.7 million).

Earnings per share increased by 9%

NORMA Group improved the pro forma adjusted earnings per share on the basis of the outstanding shares as at 30 September 2012 by around 9% or EUR 0.13 to EUR 1.59 compared to the previous year. The free float of the NORMA Group share increased from 65.3% in the second quarter to 83.3% at the end of the third quarter of 2012.

The number of employees in the company went up again due to acquisitions as well as the expansion of existing and the establishment of new locations. NORMA Group had 4,502 employees as at 30 September 2012 (including temporary employees), 201 more than a year before. In Germany NORMA Group had 889 employees as at the end of the third quarter. 

Forecast for 2012 adjusted

The forecast for the 2012 financial year included in the 2011 financial report was adjusted on the basis of the preliminary sales figures for October 2012 and taking into account the weakening and increasingly intransparent economic development in Europe. NORMA Group expects sales to grow by 1% in 2012 compared to 2011 (previous forecast: between 3% and 6%). On top, the consolidation of the Group’s acquisition of Connectors Verbindungstechnik will result in additional sales of EUR 10 million. A further EUR 3 million will be contributed by the consolidation of the acquisition of Nordic Metalblok. Chien Jin Plastic will only be consolidated after completion of the transaction. Despite a decrease in sales growth and the expansion of NORMA Group’s activities particularly in the Asia-Pacific region, the 2012 EBITA margin is expected to be around 17.0% (previous forecast: at least on par with the two previous years of 17.4% (2010) and 17.7% (2011)).

NORMA Group AG – in figures