Norma Group Se · XETR:NOEJ
Norma — FY2013 Earnings Presentation
51 slides from Norma's earnings presentation, Mar 27, 2014
Slide 1: NORMA Group Full Year Results 2013
NORMA Group Full Year Results 2013 Investors’ & Analysts’ Conference Frankfurt, 27 March 2014 Customer Value through Innovation
Slide 2: Highlights 2013 - Strategy
Highlights 2013 - Strategy Successful introduction of new products for EURO 6 emission standard leads to outperformance of EMEA volume trend Americas New production facility in Brazil founded APAC Further expansion of regional business into new markets and customers APAC Open second plant in China t
Slide 3: Highlights 2013 – Financials (I)
Highlights 2013 – Financials (I) Sales Record sales of EUR 635.5 million (2012: EUR 604.6 million) lead to growth of 5.1% Adjusted EBITA Record adjusted EBITA of EUR 112.6 million (2012: EUR 105.4 million) Margin Sustainable record-level EBITA margin of 17.7% (2012: 17.4%) Financial Result Successfu
Slide 4: Highlights 2013 – Financials (II)
Highlights 2013 – Financials (II) Strong balance sheet with an equity ratio of 38.8% (2012: 41.8%) Equity despite dividend payment and increased balance sheet total due to temporarily higher cash Net debt* lowered to EUR 138.2 million from EUR 174.2 million in 2012 despite payments Net Debt for divi
Slide 5: Tighter Emission Regulations Drive Increased Joining Technology Content
Tighter Emission Regulations Drive Increased Joining Technology Content Today Europe EURO 3 EURO 4 EURO 5 EURO 6 NAFTA EPA '00 EPA '04 EPA '07 EPA '10 EPA '15 Japan JPN '98 JPN '02 JPN '05 JPN '09 JPN '14 J. '19 Brazil EURO 1 EURO 2 EURO 3 EURO 4 EURO 5 EURO 6 Russia EURO 1 EURO 2 EURO 3 EURO 4 EURO
Slide 6: History of Excellence
History of Excellence Acquisition Acquisition Variant, Acquisition Guyco, Foundation MDAX listing 2013 Davydick & Co, Australia Poland Australia NORMA Brazil Acquisition Connectors Acquisition Nordic Acquisition Chien Acquisition Groen 2012 Verbindungstechnik, Switzerland Metalblok, Italy Jin Plasti
Slide 7: Sales by regional reporting segments
Sales by regional reporting segments Weaker European environment is outperformed by higher content due to EURO 6 introduction which leads to +5.6% growth Americas reported favourable organic growth of +2.4% which translated into slight negative EUR amounts due to weaker USD Asia-Pacific recorded str
Slide 8: Record sales of EUR 635.5 million including Acquisitions
Record sales of EUR 635.5 million including Acquisitions Sequential improvement through the year as expected Strong Q4 2013 with 10.6% organic growth Sales Development in EUR million Sales 2012 2013 Change Change in % thereof thereof thereof organic currency acquisitions Q1 159.7 159.3 -0.4 -0.3% -6
Slide 9: Sustainable Margin Development Continues in 2013
Sustainable Margin Development Continues in 2013 17.4% 17.7% 17.4% 17.7% EUR million 21.1% 21.0% 21.3% 20.8% 40 20.5% 20.5% 20.6% 20.4% 20.4% 19.9% 19.7% 19.6% 19.6% 19.1% 18.9% 19.0% 19.2% 20% 18.2% 18.3% 18.3% 18.1% 18.0% 18.0% 35 17.4% 17.5% 18.0% 17.8% 17.2% 17.1% 16.0% 16.2% 15.9% 30 15% 25 20
Slide 10: Strong improvement of Material consumption
Strong improvement of Material consumption Investments into regions, products and plants lead to slightly higher personnel costs and OPEX Improved material costs overcompensates higher personnel expenses and OPEX: Margin improved Material Costs (in EUR million) Personnel Expenses (in EUR million) 30
Slide 11: No Operational Adjustments in 2013
No Operational Adjustments in 2013 No operational adjustments despite recent acquisitions in Poland / Australia and change into SE Ongoing PPA adjustments at EUR 0.21 on EPS level in EUR million Reported PPA adjustments adjusted Sales 635.5 0 635.5 EBITDA 129.3 No operational adjustments 129.3 EBITD
Slide 12: No Operational Adjustments 2013
No Operational Adjustments 2013 Only minor PPA adjustments in following years on EBITA level in EUR million 2010 2011 2012 2013 Reported EBITA 64.9 84.7 105.2 112.1 + Restructuring Costs 1.3 1.8 0 0 + Non-recurring/non-period-related 15.5 14.8 0 0 items* + Other group and normalized items 0.7 0.2 0
Slide 13: Profit & Loss (adjusted & reported)
Profit & Loss (adjusted & reported) in EUR million 2012 2013 reported adjusted reported adjusted Sales 604.6 604.6 635.5 635.5 Gross Profit 344.4 344.4 371.4 371.4 EBITDA 120.8 120.8 129.3 129.3 EBITA 105.1 105.4 112.1 112.6 in % 17.4 17.4 17.6 17.7 EBIT 94.4 101.9 99.5 107.7 in % 15.6 16.8 15.7 16.
Slide 14: EPS – Dividend Proposal EUR 0.70 per share
EPS – Dividend Proposal EUR 0.70 per share Dividend proposal to the shareholders at the AGM on 21 May 2014: EUR 0.70 per share (2013: EUR 0.65) Pay-out of EUR 22.3 million for 31,862,400 shares equals 36.0% of adjusted net income of EUR 62.1 million Adjusted EPS Reported EPS Dividend per Share EUR E
Slide 15: Working Capital - Historical Low Level of 17.4% of Sales
Working Capital - Historical Low Level of 17.4% of Sales Successful implementation of reverse factoring and optimizing TWC processes boosts trade accounts payables Trade receivables on a slightly higher level due to excellent sales in Q4 2013 EUR million 250 20% 18.1% 18.3% 18.5%** 17.4% 200 15% 150
Slide 16: Equity increased by EUR 31 million due to High Profit
Equity increased by EUR 31 million due to High Profit even including Dividend Payment Repayment of the parts of the SFA in January 2014 increases equity ratio to ~ 44.2% on a pro forma basis 41.8% 38.8% (~ 44.2%*) EUR million -21 56 -4** 300 35 31 200 320 289 289 289 289 100 0 Equity 2012 Profit Div
Slide 17: Successful Issuance of Promissory Note (Schuldschein) in July 2013
Successful Issuance of Promissory Note (Schuldschein) in July 2013 Targets achieved Schuldschein Maturity: Mid-term oriented well balanced Volume EUR 125 million repayment schedule Interest terms improved by ~2% More diversified mix of financing instruments Financial result improves starting 2014 Ba
Slide 18: Successful Repayment of SFA leads to Substantial Interest Cost Savings
Successful Repayment of SFA leads to Substantial Interest Cost Savings Net Debt (in EUR million) 174* 138* 138 400 200 332 Repayment 246 ~232 ~ EUR 100 million 0 SFA -72 ~ -94 -194 -200 31. Dec 12 31. Dec 13 pro forma Jan 14 cash debt Repayment of ~ EUR 100 million SFA funded by low interest rate pr
Slide 19: Equity Debt Ratios and Maturity Profile
Equity Debt Ratios and Maturity Profile Equity / Debt Ratios 31.12.2012 31.12.2013 excluding derivatives* 31.12.2012 31.12.2013 Equity Ratio Leverage 41.8% 38.8% 1.4 x 1.1 x (Equity / Balance Sheet Total) (Net debt* / adjusted LTM EBITDA) Equity Ratio Gearing 41.8% ~ 44.2% 0.5 x 0.4 x pro forma (net
Slide 20: Solid Balance Sheet
Solid Balance Sheet Liquid assets and current liabilities temporarily inflated due to refinancing of SFA Repayment of EUR 101.4 million in January 2014 already done EUR million 824 824 1000 800 non-current assets 54.7% 320 total equity 38.8% 600 451 400 262 current assets 21.7% non-current liabiliti
Slide 21: Another Record Operating Net Cash Flow in 2013
Another Record Operating Net Cash Flow in 2013 Operating net cash flow in EUR million 2011 2012 2013 Variance EBITDA 117.0 120.8 129.3 +7.0% ∆ ± Working capital -19.5 -9.8 5.1 n.a. Operating net cash flow before investments 97.5 111.0 134.4 21.0% from operating business ∆ ± Investments from operatin
Slide 22: Cash Flow Statement
Cash Flow Statement Adjusted operating net cash flow strongly improved by 290 BP to 16.3% of sales (2012: 13.4%) 13.4% of sales 16.3% of sales EUR million 0 100 15 8 8 8 80 60 104 40 81 81 81 81 20 0 adjusted operating ∆ adjusted EBITDA ∆ Working Capital ∆ investments from operating net cashflow 201
Slide 23: Outlook 2014 - Strategy
Outlook 2014 - Strategy 1 Continue international expansion of sales network and production footprint 2 Continue to explore business opportunities in APAC 3 Open second China plant to enable expansion into domestic and APAC markets 4 Open plant in Brazil to serve local customers 5 Increase business o
Slide 24: Outlook 2014 – Macroeconomic Forecast – GDP Growth
Outlook 2014 – Macroeconomic Forecast – GDP Growth in % 2013 2014e 2015e USA* +1.9 +2.8 +3.0 China* +7.7 +7.5 +7.3 Euro zone* -0.4 +1.0 +1.4 Germany* +0.4 +1.7 +2.0 World* +3.0 +3.7 +3.9 VDMA (German Engineering Federation) expects production increase of 5% in 2014 Euroconstruct expects trend revers
Slide 25: Outlook 2014 – Company Guidance
Outlook 2014 – Company Guidance Sales Solid organic growth of approx. 4% to 7%, plus approx. EUR 5 million from recent acquisitions EBITA margin Sustainable margin level as in previous years of more than 17% Investments in Approx. 4% of EJT sales R&D Material ratio Approx. on the level of the two pr
Slide 26: Thank you for your attention
NORMA Group Full Year Results 2013 Investors’ & Analysts’ Conference Frankfurt, 27 March 2014 Thank you for your attention Customer Value through Innovation
Slide 27: Shareholder Structure
Shareholder Structure Identified institutional Shareholders 100% 75% 26% 24% 50% 21% 10% 7% 12% 25% 0% pre IPO post IPO Dec. 2012 Today Germany United Kingdom USA Dec. 2011 Nordic France Rest of World 3i MABA CYPRUS Ltd. old & existing management free float Free float per March 12, 2014 includes: Am
Slide 28: NORMA Group – Key Investment Highlights
NORMA Group – Key Investment Highlights 1 Market leader in attractive engineering niche markets with strong growth prospects 2 Premium pricing through technology and innovation leadership in mission-critical components 3 Enhanced stability through broad diversification across products, end-markets a
Slide 29: Proven Business Model Addressing Key Megatrends
Proven Business Model Addressing Key Megatrends NORMA Group products Specific customer requirements driven by megatrends NORMACLAMP® ~ 52% of sales Emission Next global level of emission reduction ramps up in 2013 reduction with EURO 6 in Europe and 2014 in USA (EPA 15) Breeze Constant Torque Weight
Slide 30: Strong Content Growth based on EURO 6
Strong Content Growth based on EURO 6 EURO 6 introduction for trucks and passenger vehicles in 2014 triggers new engine generations and ramp-up in 2013 Market for joining technology is expected to outgrow the respective end-markets, driven by megatrends including Additional components in new engines
Slide 31: Convincing Growth Prospects
Convincing Growth Prospects Clear global market leader in clamp/connect Excellent growth outlook across EJT market Sales EUR million (year) Additional growth for 700 (2013-18 CAGR) Joining technology market 636 above market growth 600 ~26% Fluid 500 Passenger vehicles add. 2-4% ~74% Clamp (52%) / Co
Slide 32: Premium Pricing through Technology and Innovation Leadership in Mission-Critical Components
Premium Pricing through Technology and Innovation Leadership in Mission-Critical Components Mission-criticality: Small relative cost – high impact Ability to achieve premium pricing Approx. value of Basis for premium pricing: Example: joining technology Harvester content Market leadership Cooling wa
Slide 33: Enhanced Stability through Broad Diversification Across Products, End-Markets and Regions
Enhanced Stability through Broad Diversification Across Products, End-Markets and Regions Examples of NORMA Group’s key end-markets Construction / infrastructure / Engines Commercial vehicles water management Passenger vehicles Construction equipment Agricultural equipment Shipbuilding White goods P
Slide 34: Good Balance in the Two Distinct Ways-to-Market
Good Balance in the Two Distinct Ways-to-Market Unique business model with two distinct ways-to-market Significant economies of scale in production Close contact to international EJT customers Knowledge transfer from EJT to DS Engineered Joining Technology (EJT) Distribution Services (DS) ~70% of 20
Slide 35: NORMA Group Provides Mission-Critical Products and Solutions with Clear Added-Value
NORMA Group Provides Mission-Critical Products and Solutions with Clear Added-Value A world without NORMA Group Customer impact Reputation loss Image loss Warranty costs Non-compliance with legal requirements/regulations Loss of end-customers 35
Slide 36: Successful Acquisition Track Record Continues Plus 4.4% of Sales
Successful Acquisition Track Record Continues Plus 4.4% of Sales Sales consolidation effects in Date of EUR million Acquisition Country 2012 2013 2014** Total Connectors Verbindungstechnik AG 04/12 Switzerland 11.5 5.1 - 16.6 Nordic Metalblok S.r.l. 07/12 Italy 2.3 2.9 - 5.2 Chien Jin Plastic Sdn. B
Slide 37: Acquisition of Connectors Verbindungstechnik AG
Acquisition of Connectors Verbindungstechnik AG M&A Acquisiton of Connectors Verbindungstechnik AG, Switzerland, in April 2012 Business Connectors specialises in connecting systems for the pharmaceutical and biotechnology industry. Model For more than 25 years the company has been manufacturing and
Slide 38: Acquisition of Nordic Metalblok S.r.l.
Acquisition of Nordic Metalblok S.r.l. M&A Acquisiton of Nordic Metalblok S.r.l., Italy in July 2012 Business Company specialises in manufacturing clamps for various applications particularly for the heating, Model ventilation and air conditioning industry and the agricultural and construction secto
Slide 39: Acquisition of Chien Jin Plastic Sdn. Bhd.
Acquisition of Chien Jin Plastic Sdn. Bhd. Acquisiton of Chien Jin Plastic, Malaysia, in October 2012 M&A Closing expected toward year end 2012 Specialised in joining elements for plastic and iron pipe systems for different application areas, esp. Business drinking and domestic water distribution. A
Slide 40: Increase in Ownership in Groen Bevestigingsmaterialen BV
Increase in Ownership in Groen Bevestigingsmaterialen BV M&A 60% increase in ownership to 90% in Groen Bevestigingsmaterialen B.V. in December 2012 Wholesale supplier of hose and pipe clamps and coupling to the industrial, construction, agriculture, Business plumbing, hardware and automotive sector
Slide 41: Acquisition of Davydick & Co. Pty Ltd.
Acquisition of Davydick & Co. Pty Ltd. M&A Acquisition of Davydick & Co. in January 2013 Distribution for various elements in the transportation of water in irrigation systems. Specialised in Business supplying a comprehensive range of rural irrigation fittings, valves, and pumps under the brand Mod
Slide 42: Acquisition of Variant S.A.
Acquisition of Variant S.A. M&A Acquisition of Variant S.A. in May 2013 Business Sells joining products and cable ties to over 1,000 retailers and wholesalers across Poland. End Model clients include home improvement stores, garages and specialist retailers for automotive supplies. History Distribut
Slide 43: Acquisition of Guyco Pty. Limited
Acquisition of Guyco Pty. Limited M&A Acquisition of Guyco Pty. Limited in June 2013 Specializes in the design, manufacture and distribution of fittings and valves for freshwater Business distribution, irrigation, agricultural, plumbing and industrial market sectors. It supplies over 700 Model custo
Slide 44: NORMA Group Worldwide
NORMA Group Worldwide EMEA Czech Republic (P) France (P, D) Germany (P, D) Italy (P, D) Netherlands (D) Poland (P) Russia (P, D) Serbia (P, D) Spain (D) Sweden (P, D) Switzerland (D) Turkey (D) United Kingdom (P, D) Americas Brazil (P, D) Mexico (P) USA (P, D) Asia-Pacific Australia (D) China (P, D)
Slide 45: Historic Growth Track Record
Historic Growth Track Record Historic revenue development in EUR million 636 605 581 490 458 385 330 277 229 242 198 207 174 182 138 150 121 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 HGB IFRS 1997 to 2013: 17 years of a successful growth story 45
Slide 46: Sales by Way-to-Market and by Industries
Sales by Way-to-Market and by Industries Stable breakdown by way-to-market: Acquisitions included in Distribution Services Majority of sales goes to non-automotive industrials, distributors as well as general tiers Sales to industrial suppliers include various industries , e.g. airplanes, trains, bu
Slide 47: Continuation of Growth Track and Sustainable Margin
Continuation of Growth Track and Sustainable Margin into 2012 Revenue (in EUR million) Gross profit (in EUR million) 605 636 400 56.0% 57.0% 58.4% 60% of sales 581 54.9% 55.3% 55.5% 600 490 371 458 300 450 344 40% 330 323 200 300 275 251 182 20% 150 100 0 0 0% 2008 2009 2010 2011 2012 2013 2008 2009
Slide 48: Pro-active FCF Management to be Continued
Pro-active FCF Management to be Continued Adjusted Operating Net Cash Flow (in EUR million) Trade working capital (in EUR million) 18.5% 18.3% 18.1%* 18.3% 18.5%** 17.4% 20% of 200 revenues 150 81 79 90 100 70 100 49 46 10% 50 65 67 74 80 54 45 0 -19 -30 -38 -46 -41 -59 80 -50 -100 0% 2008 2009 2010
Slide 49: Solid development of Balance Sheet
Solid development of Balance Sheet (all amounts in EUR million) 31 Dec 2012 31 Dec 2013 (all amounts in EUR million) 31 Dec 2012 31 Dec 2013 Assets Equity and liabilities Non-current assets Equity Goodwill / Other intangible assets Total equity 289.2 319.9 436.8 441.5 / Property, plant & equipment N
Slide 50: Event Date / Contact
Event Date Publication Interim Results Q1 2014 07 May 2014 Annual General Meeting in Frankfurt / Main 21 May 2014 Publication Interim Results Q2 2014 06 August 2014 Publication Interim Results Q3 2014 05 November 2014 Contact Andreas Troesch Vice President Investor Relations Phone: +49 6181 6102-741
Slide 51: Disclaimer
Disclaimer This presentation contains certain future-oriented statements. Future-oriented statements include all statements which do not relate to historical facts and events and contain future-oriented expressions such as “believe”, “estimate”, “assume”, “expect”, “forecast”, “intend”, “could” or “