Slide 1: NORMA Group SE Third Quarter Results 2016
NORMA Group SE Third Quarter Results 2016 Maintal, November 2, 2016
Slide 2: Sales at EUR 216.6 million in Q3 2016
Sales at EUR 216.6 million in Q3 2016 (Q3 2015: EUR 218.3 million) Sales Q3 2016 with -0.7% y-o-y led to Q1-3 growth of 1.0% y-o-y Adjusted EBITA Adjusted EBITA of EUR 38.7 million resp. -1.5% y-o-y (Q3 2015: EUR 39.3 million) Margin Stable adjusted EBITA margin of 17.9% of sales (Q3 2015: 18.0%) Eq
Slide 3: Sales Development in EUR million
Sales Development in EUR million Sales 2015 2016 Change Change in % Thereof Thereof organic currency Q1 221.5 226.6 5.1 2.3% 2.4% -0.1% Q2 232.8 236.2 3.4 1.4% 3.3% -1.9% Q3 218.3 216.6 -1.7 -0.7% -0.1% -0.6% Q1-3 672.6 679.4 6.8 1.0% 1.9% -0.9% Flat organic growth at -0.1% in Q3 2016 led to organ
Slide 4: Sales breakdown by region and way-to-market
Weakness in US truck and heavy industry market with a simultaneous excellent growth in EJT Europe led to an Americas/EMEA sales shift of 2 percentage points Q1-3 2016 (Q1-3 2015) Sales Breakdown by Region Q1-3 2016 (Q1-3 2015) Sales Breakdown by Way-to-Market 8%* (8%) 40% 49% (39%) 43% (47%) 60% (
Slide 5: Adjusted EBITA and margin development
FY 2010: FY 2011: FY 2012: FY 2013: FY 2014: FY 2015: Q1-3 2016: 17.4% 17.7% 17.4% 17.7% 17.5% 17.6% 18.0% EUR million 21.1% 21.0% 21.3% 20.5% 20.5% 20.4% 20.4% 20.6% 20.8% 20.6% 20.8% 20.4% 19.9% 19.7% 19.7% 20.2% 20.1% 20.4% 20.4% 20.0% 19.6% 19.2% 19.6% 50 19.1% 18.9% 19.0% 19.2% 18.9% 20% 18.5%
Slide 6: Material cost ratio improved; cost ratios
Material cost ratio improved by 130 basis points in Q3 2016 and 170 basis points in Q1-3 2016 Personnel expense ratio increased by 120 basis points in Q3 2016 and 90 basis points in Q1-3 2016 Stable adjusted EBITA margin at 17.9% in Q3 2016 and 18.0% in Q1-3 2016 Adjusted Material Costs (in EU
Slide 7: Operational adjustments due to acquisition of Parker Autoline
Operational adjustments due to acquisition of Parker Autoline Total adjustments of EUR 0.32 on EPS level include PPA in EUR million Reported Adjustments* Adjusted Sales 679.4 679.4 1.5 EBITDA 137.2 (Acquisition costs for Parker Autoline) 138.7 EBITDA margin 20.2% 20.4% 3.2 EBITA 119.4 (incl. EUR
Slide 8: Reported and Adjusted EPS
Adjusted EPS* Reported EPS* EUR EUR 2,40 2,40 2,40 2,40 1,80 1,80 1,80 1,80 1,20 1,20 1,20 1,20 2.10 2.21 1.73 1.89 0,60 0,60 0,60 0,60 0.65 0.71 0.55 0.61 0,00 0,00 0,00 0,00 Q3/2015 Q3/2016 Q1-3/2015 Q1-3/2016 Q3/2015 Q3/2016 Q1-3/2015 Q1-3/2016 Net income in EUR million 20.7 22.5 67.0 70.3 17.4 1
Slide 9: Maturity Profile (in EUR million)
Maturity Profile (in EUR million) – Financial Instruments Promissory Note 3* Promissory Note 2 Promissory Note 1 29 Bank Borrowings 108 65 79 42 33 26 45 42 2 35 5 5 5 21 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Maturity Profile (in EUR million) – Currencies USD EUR 85 63 51 12 23 4 51
Slide 10: Improved net debt compared to Dec 31, 2015
Improved net debt* compared to Dec 31, 2015 despite dividend payment due to strong cash flow Decreased equity ratio due to financing of Parker Autoline acquisition and related temporarily higher balance sheet total Net Debt (in EUR million) Equity Ratio 750 Dec 31, 2015 Sep 30, 2016 xxx 358* 331
Slide 11: Net operating cash flow
Net operating cash flow in EUR million Q1-3 2015 Q1-3 2016 Variance Q3 2015 Q3 2016 Variance Adjusted EBITDA 136.5 138.7 +1.6% 44.5 44.1 -0.9% Δ ± Working capital -15.5 -21.2 -37.1% +8.5 +0.6 -93.5% Net operating cash flow before investments 121.0 117.5 -2.9% 53.0 44.7 -15.7% from operating business
Slide 12: Guidance 2016
Sales Solid organic growth of around 2% to 5% Adjusted EBITA Sustainable margin level as in previous years of more than 17.0% margin Dividend Approx. 30% to 35% of group adjusted net profit Page 12
Slide 13: Appendix: Strategy
Appendix Strategy Page 13
Slide 14: NORMA Group products and customer requirements
NORMA Group products Specific customer requirements driven by megatrends NORMACLAMP® 37% of sales Continuous new developments on a global level in order to Emission fulfill fleet consumption regulations and cope with increased reduction awareness in public perception Weight Ongoing trend in many ind
Slide 15: Emission regulations tightening globally
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 5 India EURO 1 EURO 2 EURO 3 EURO 4 EURO 4+ China EURO 1 EURO 2 EURO 3
Slide 16: EU legislation required CO2 fleet average limits
EU legislation required CO2 fleet average limits 2007 2015 2020 2021 158.7 g/km 130 g/km 95 g/km ~ 6.8 l/100km* ~ 5.6 l/100km* ~ 4.1 l/100km* [95%] [100%] Reduction from Reduction of 27% during 6 years 2007 to 2015 (5.1% p.a.) only 18% in 8 triggers high efforts in emission reduction across years (2
Slide 17: Global Comparison of Fuel Economy
Global Comparison of Fuel Economy Region Target Target Duration Fleet Fleet Change CAGR year year in years Goal year 1 Goal year 2 1 2 under under converted** converted** national laws national laws EU 2015 2021 6 130 g/km 130 g/km 95 g/km 95 g/km -27% -5.1% USA 2016 2025 9 37.8 mpg 139 g/km 56.2 mp
Slide 18: Company history and acquisitions
Acquisition 2016 Parker Autoline, France 2011 Integration 2015 National Diversified Sales, USA Foundation Acquisition Acquisition National 2014 NORMA China II Five Star, USA Diversified Sales, USA Acquisition1972 Acquisition Acquisition Foundation MDAX listing 2013 Davydick & Co, Australia Variant,
Slide 19: Sales consolidation effects of acquisitions
Date of Total Sales Sales consolidation effects in EUR million acquisition EUR million Connectors Verbindungstechnik AG, Switzerland 04/12 Market entry in connecting technology in Pharma & Biotech 16.6 Nordic Metalblok S.r.l., Italy 07/12 Market consolidation heating and air conditioning clamps 5.2
Slide 20: Agreement to acquire Parker Autoline
Agreement to acquire all assets of the Autoline business from Parker’s Fluid System Connectors M&A Division (‘Parker Autoline’) in June 2016 Business Global supplier of quick connectors for all types of automotive fluid line applications Model Based in Guichen, France, with production sites in Franc
Slide 21: Broad diversification in application areas and products
Broad diversification in terms of application areas and products Stormwater Management Efficient Landscape Irrigation Flow Management ~ 50 % ~ 30 % ~ 20 % Large target markets for all NDS application areas nationwide and international International expansion with mid-term focus Page 21
Slide 22: Highly differentiated distribution and service model
Highly differentiated distribution and service model More than 5,000 products Over 7,700 customer locations (retail and wholesale customers) Two production sites (CA), six warehouses in the US, more than 500 employees Overnight shipment for wholesale orders 98% on-time delivery Over 7,700
Slide 23: Sales split by segment and market
thereof water management thereof industrial supplier 19% (18%) 26% (25%) DS 39% (42%) EJT 61% (58%) 20% 8% thereof general distribution thereof (24%) (8%) products commercial vehicle OEM 27% (25%) thereof passenger vehicle OEM * FY 2015 (2014 in brackets) Page 23
Slide 24: Historic revenue development
Historic revenue development in EUR million 890 695 636 605 581 490 458 385 330 277 229 242 182 198 207 150 174 121 138 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 HGB IFRS 1997 to 2015: 19 years of a successful growth story Page 24
Slide 25: Clear global market leader in Clamp / Connect
Clear global market leader in Clamp / Connect Excellent growth outlook across EJT market Sales in EUR million (year) Additional growth for 1000 Joining Technology market 890 above market growth 800 ca. Fluid Passenger vehicles add. 2- 4% 40% 600 Commercial vehicles add. 2- 4% ca. 60% Clamp (ca. 37%)
Slide 26: Mission-criticality: small relative cost, high impact
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 water c. EUR 21-26 Technology Quality Charged air c. EUR 20-25 Innovation Fuel and o
Slide 27: Key end markets
Examples of NORMA Group’s key end markets Construction / infrastructure / Engines Commercial vehicles Passenger vehicles Construction equipment water management Wholesalers & Technical Agricultural equipment Shipbuilding White goods Pharma & Biotech distributors More than 35,000 products, manufact
Slide 28: Unique business model with two ways-to-market
Unique business model with two distinct ways-to-market Significant economies of scale in production Resident engineers with close contact to international EJT customers No. 1 national and international DS service level and DS product portfolio Engineered Joining Technology (EJT) Distribution S
Slide 29: A world without NORMA Group
A world without NORMA Group Customer impact Reputation loss Image loss Warranty costs Non-compliance with legal requirements/regulations Loss of end-customers Page 29
Slide 30: Global footprint: production sites and countries
EMEA Czech Republic (P) France (P, D) Germany (P, D) Italy (D) Netherlands (D) Poland (P, D) Russia (P, D) Serbia (P) 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) India (P, D) Indonesia (
Slide 31: Market leader in attractive engineering niche markets
1 Market leader in attractive engineering niche markets with strong growth prospects 2 Enhanced stability through broad diversification across products, end markets and regions Engineered products with premium pricing through technology and innovation leadership 3 in mission-critical components 4 St
Slide 32: Regional strategy achievements
Introduction of new products supports customers in meeting fleet fuel consumption requirements EMEA per OEM until 2020/21 Americas Successful integration of National Diversified Sales, Inc. into North America region Start of cross selling of Distribution Service parts into sales channels of National
Slide 33: Continue international expansion
1 Continue international expansion 2 Continue to explore business opportunities in APAC to expand regional business and further improve profitability 3 Further ramp up of second China plant to enable further expansion into domestic and APAC markets 4 Expanding water business in the US as well as exp
Slide 34: Appendix: Full Year Results 2015
Appendix Full Year Results 2015 Page 34
Slide 35: Regional sales: EMEA, Americas, Asia-Pacific
EMEA: Solid growth in EJT includes favourable automotive business while DS sales were slightly negative in challenging economies – this leads in total to a growth of +5.5% Americas: Growth of 66.3% strongly supported by NDS acquisition and favourable currency Asia-Pacific: Strongly increased d
Slide 36: Organic growth accelerated during the year
Organic growth accelerated during the year as expected due to lower previous year comparables and inclusion of NDS starting in November NDS contributed 16.6% of growth in 2015 Weakening of the Euro against most major currencies leads to sales increase of 7.7% Sales Development in EUR million S
Slide 37: Operational adjustments after NDS acquisition
Operational adjustments after major NDS acquisition for 2014 and ending in 2015 Only EUR 3.6 million integration costs for NDS in 2015 No further operational adjustments planned in 2016 (except for ongoing PPA adjustments) in EUR million 2010 2011 2012 2013 2014 2015 Reported EBITA 64.9 84.7 1
Slide 38: Adjustments due to acquisition of NDS
Operational adjustments due to acquisition of National Diversified Sales, Inc. EUR 0.47 adjustments on EPS level in EUR million Reported Adjustments Adjusted Sales 889.6 0 889.6 3.6 EBITDA 173.9 (incl. EUR 1.1 million integration costs & EUR 2.5 million Inventory-Step-Ups) 177.5 EBITDA margin 19
Slide 39: Expected PPA effects 2016 and 2017
in EUR million FY 2015 FY 2016* FY 2017* EBITDA level 3.6 EBITA level 5.8 ca. 2 ca. 2 (incl. EUR 2.2 mio. depreciation PPA) (depreciation PPA) (depreciation PPA) EBIT level 23.1 ca. 19 ca. 19 (incl. EUR 17.3 mio. amortization PPA) (incl. ca. EUR 17 mio. amortization PPA) (incl. ca. EUR 17 mio. amort
Slide 40: Dividend proposal EUR 0.90 per share
Dividend proposal to the shareholders at the AGM on June 2, 2016: EUR 0.90 per share (2015: EUR 0.75) Pay-out of EUR 28.7 million for 31,862,400 shares (32.3% of adjusted net income of EUR 88.7 million) General policy: dividend of 30% to 35% of adjusted net income Adjusted EPS Reported EPS Div
Slide 41: Income statement adjusted and reported
in EUR million adjusted reported 2014 2015 2014 2015 Sales 694.7 889.6 694.7 889.6 Gross Profit 405.6 533.1 403.4 530.6 EBITDA 138.4 177.5 131.5 173.9 in % 19.9 20.0 18.9 19.5 EBITA 121.5 156.3 113.3 150.5 in % 17.5 17.6 16.3 16.9 EBIT 116.2 147.9 97.8 124.8 in % 16.7 16.6 14.1 14.0 Financial Result
Slide 42: Trade Working Capital Ratio improved
Trade Working Capital Ratio further improved to 17.1% of sales Increased ratio in 2014 due to structurally higher inventory levels at NDS more than offset in 2015 Inventories and trade receivables improved, trade payables showed stable ratio EUR million 18.5% 20% 300 18.1% 18.3% 18.1%* 17.4% 1
Slide 43: Balance sheet Dec 31, 2015
in EUR million Dec 31, 2014 Dec 31, 2015 in EUR million Dec 31, 2014 Dec 31, 2015 Assets Equity and liabilities Non-current assets Equity Goodwill / Other intangible assets / Total equity 368.0 429.8 741.5 784.8 Property, plant & equipment Non-current and current Other non-financial assets / liabili
Slide 44: Net operating cash flow 2011-2015
Net operating cash flow in EUR million 2011 2012 2013 2014 2015 Variance Adjusted EBITDA 117.0 120.8 129.3 138.4 177.5 +28.2% Δ ± Working capital -19.5 -9.8 +5.1 +10.4 -0.6 -106.3% Net operating cash flow before 97.5 111.0 134.4 148.8 176.9 +18.9% investments from operating business Δ ± Investments
Slide 45: Revenue, gross profit, personnel expenses, adjusted EBITA
Revenue (in EUR million) Gross profit (in EUR million) 1000 600 54.9% 55.3% 56.0% 55.5% 57.0% 58.4% 58.4% 59.9% 60% of sales 890 533 750 400 40% 695 406 500 605 636 371 581 323 344 458 490 275 200 251 20% 250 330 182 0 0 0% 2008 2009 2010 2011 2012 2013 2014 2015 2008 2009 2010 2011 2012 2013 2014 2
Slide 46: Trade working capital and capex
Adjusted net operating cash flow (in EUR million) Trade working capital (in EUR million) 400 18.5% 18.3% 18.1% 18.3% 18.5% 17.4% 18.1%* 17.1% 20% of sales 150 300 200 108 123 79 90 10% 125 100 49 46 70 81 80 115 130 54 45 65 67 74 0 -19 -30 -46 -41 -38 -59 -81 -101 100 -100 0% 2008 2009 2010 2011 20
Slide 47: Identified institutional shareholders
Identified institutional Shareholders* Apr 2011 IPO with ca. 36% free float 20% Jun 2011 SDAX listing 6% 25% 20% Since 13% 100% free float Jan 2013 16% Mar 2013 MDAX listing Germany United Kingdom USA Nordic France Rest of World Free float per Nov 1, 2016 includes Ameriprise, USA 6.65% Mondrian, UK
Slide 48: Financial calendar and contact
Event Date Publication Preliminary Results 2016 February 15, 2017 Publication Full Year Results 2016 March 22, 2017 Publication Interim Results Q1 2017 May 10, 2017 Annual General Meeting in Frankfurt/Main May 23, 2017 Publication Interim Results Q2 2017 August 9, 2017 Publication Interim Results Q3
Slide 49: Future-oriented statements 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 ‘should’ or