Slide 1: NORMA Group SE Full Year Results 2018
NORMA Group SE Full Year Results 2018 Maintal, March 20, 2019 1
Slide 2: Highlights 2018 – Strategy
Highlights 2018 – Strategy Successful acquisition of Kimplas Piping Systems Ltd., India, a manufacturer of thermoplastic M&A connection solutions based in Nashik with own production site. Successful acquisition of Statek Stanzereitechnik GmbH, Maintal, Germany, a producer of contact M&A and stamped
Slide 3: Highlights 2018 – Financials (I)
Highlights 2018 – Financials (I) Sales Sales of EUR 1,084.1 million (2017: EUR 1,017.1 million) leads to growth of 6.6%. Adjusted Adjusted EBITA of EUR 173.2 million (2017: EUR 174.5 million). EBITA Margin Adjusted EBITA margin at 16.0% (2017: 17.2%). Strong adjusted EPS of EUR 3.61 (2017: EUR 3.29)
Slide 4: Highlights 2018 – Financials (II)
Highlights 2018 – Financials (II) Strong balance sheet with an equity ratio of 40.9% (2017: 40.7% ) despite dividend and acquisition Equity payments and higher balance sheet total. Net debt increased to EUR 399.6 million (2017: EUR 343.5 million) including dividend and acquisition Net Debt payments.
Slide 5: Sales of EUR 1,084.1 million with excellent Organic Growth of 7.7%
Sales of EUR 1,084.1 million with excellent Organic Growth of 7.7% Sales Development in EUR million Sales 2017 2018 Change Change in % Thereof Thereof Thereof organic acquisitions currency Q1 254.9 272.6 17.7 6.9% 13.6% 1.0% -7.6% Q2 264.1 276.4 12.3 4.6% 8.5% 0.7% -4.5% Q3 244.4 268.1 23.7 9.7% 7.1
Slide 6: Sales by Region
Sales by Region Net Sales Organic Growth • EMEA: Positive EJT and DS sales, (in EUR million) (in EUR million) negative currency effects and the EMEA AM APAC consolidation of Statek led to a total EMEA AM APAC growth of 1.8%. 500 485.9 494.8 60 441.5 51.2 411.3 2017 2017 • AM: Solid increase in EJT s
Slide 7: Historic Growth Track Record
Historic Growth Track Record Historic Revenue Development in EUR million Thereof Organic Growth in EUR million 1200 year € % 1,084 1,017 2011 65.6 13.4% 1000 890 895 2012 -10.8 -1.9% 800 2013 15.1 2.5% 695 605 636 2014 41.3 6.5% 581 600 458 490 2015 25.9 3.7% 385 400 330 2016 7.6 0.9% 2017 77.0 8.6%
Slide 8: Margin Development
Margin Development EUR million 160 20.8% 20.4% 20.2% 20.1% 20.0% 20.3 19.9% 20.1% 20.4% 20.4% 20.0% 20.1% 20.0% 20.0% 18.9% 18.9% 19.1% 18.7% 18.9% 20% 18.5% 18.5% 17.7% 18.1% 18.0% 140 17.9% 17.4% 17.7% 17.4% 17.7% 17.5% 17.7% 17.7% 17.7% 17.5% 17.6% 16.4% 16.8% 16.2% 15.8% 16.0% 16.0% 120 15.2% 15
Slide 9: NORMA Group well on Track for Coming E-Mobility Developments
NORMA Group well on Track for Coming E-Mobility Developments NORMA Group will benefit from a hybridization and Battery Thermal Management maintain its growth trend with ICE and BEV Growth Coolant Systems perspec- Power Electronics and Motors Cooling tives HVAC / Heat Pump Systems Combustion engine T
Slide 10: Tighter Emission Regulations Drive Increased Joining Technology Content
Tighter Emission Regulations Drive Increased Joining Technology Content • Environmental awareness continues to drive tightening emission regulations globally, including in emerging markets. • Low-emission alternatives require significantly higher joining technology content at a substantially increas
Slide 11: Water Business at NORMA Group
Water Business at NORMA Group Scarce Resource Calling for Water Handling Products • 17.3% of sales or EUR 187.5 million • Production and distribution sites in Australia, Malaysia, the US and India • Expanding Water Business organically and through M&A transactions Acq.: Chien Jin Plastic (MYS) Acq.:
Slide 12: Acquisition of Kimplas Piping Systems Ltd.
Acquisition of Kimplas Piping Systems Ltd. M&A Closing of Kimplas Piping Systems Ltd., India, in July 2018. Business Leading Indian manufacturer of thermoplastic connection solutions Model Based in Nashik, India, with own production site. Since 1996 the company has been developing and manufacturing
Slide 13: Acquisition of Statek Stanzereitechnik GmbH
Acquisition of Statek Stanzereitechnik GmbH M&A Closing of Statek Stanzereitechnik GmbH, Maintal, Germany, in August 2018. Business Producer of contact and stamped parts, housings, wave springs and other products for electrical Model engineering and industry purposes. Founded in 1980, Statek has man
Slide 14: 14 Acquisitions since the IPO in 2011
14 Acquisitions since the IPO in 2011 representing 46% of Sales in 2011 Sales Consolidation Effects Date of Total (in EUR million) Acquisition Sales CONNECTORS Verbindungstechnik AG, Switzerland 04/12 Market entry in connecting technology in Pharma & Biotech 16.6 Nordic Metalblok S.r.l., Italy 07/12
Slide 15: Balanced Industry Mix with Two Strong Ways to Market
Balanced Industry Mix with Two Strong Ways to Market* thereof water management thereof industrial supplier 17% (18%) 33% (32%) DS 37% (37%) EJT 20% 63% (63%) (19%) thereof general thereof distribution products commercial vehicle OEM 10% (10%) 20% (21%) thereof passenger vehicle OEM * FY 2018 (2017 i
Slide 16: Adjusted EBITA Development
Adjusted EBITA Development Adjusted Material Costs Adjusted Gross Profit Adjusted Personnel Expenses (in EUR million and % of sales) (in EUR million and % of sales) (in EUR million and % of sales) 800 70% 59.1% 57.8% 500 41.2% 43.6% 45% 600 40% 500 26.5% 25.9% 50% 250 473.1 400 601.3 626.6 250 20% 4
Slide 17: Operational Adjustments on EBIT and EBITA level
Operational Adjustments on EBIT and EBITA level • Operational adjustments from the Kimplas and Statek acquisitions of EUR 2.2 million and rightsizing costs of EUR 2.2 million in 2018 . in EUR million 2010 2011 2012 2013 2014 2015 2016 2017 2018 Reported EBITA 64.9 84.7 105.2 112.1 113.3 150.5 150.4
Slide 18: Margin Development Adjusted and Reported since IPO
Margin Development Adjusted and Reported since IPO 22% 20% 17.7% 17.7% 17.5% 17.6% 17.6% 18% 17.4% 17.4% 17.2% 16.0% 16% 14% 12% 10% 2010 2011 2012 2013 2014 2015 2016 2017 2018 EBITDA adjusted EBITDA reported EBITA adjusted EBITA reported EBIT adjusted EBIT reported 18
Slide 19: Operational Adjustments 2018
Operational Adjustments* 2018 • Operational adjustments on EBITDA level due to the recent acquisitions and rightsizing program. • Additional PPA adjustments including an extraordinary amortization of a capitalized customer list at Fengfan (EUR 1.4 million) leading to a total adjustment per share aft
Slide 20: Outlook on Adjustments 2019 – 2020
Outlook on Adjustments 2019 – 2020 in EUR million FY 2018 FY 2019* FY 2020* 4.4 EBITDA level (incl. EUR 0.6 million integration costs & EUR 0.4 million ca. 8-13 0 inventory-step-ups, EUR 1.2 million acquisition costs and EUR 2.2 million Rightsizing costs) 8.4 ca. 11-16 ca. 3 EBITA level (incl. EUR 4
Slide 21: EPS – Dividend Proposal of EUR 1.10 per Share
EPS – Dividend Proposal of EUR 1.10 per Share • Dividend proposal to the shareholders at the AGM on May 21, 2019: EUR 1.10 per share (2018: EUR 1.05). • Pay-out of EUR 35.0 million for 31,862,400 shares (30.5% of adjusted Group net profit of EUR 114.8 million). • General policy: dividend of approx.
Slide 22: Profit & Loss (adjusted & reported)
Profit & Loss (adjusted & reported) in EUR million Adjusted Reported 2017 2018 2017 2018 Sales 1,017.1 1,084.1 1,017.1 1,084.1 Gross Profit 601.3 626.6 600.2 626.2 EBITDA 199.7 201.4 196.3 197.0 in % of sales 19.6% 18.6% 19.3% 18.2% EBITA 174.5 173.2 166.8 164.8 in % of sales 17.2% 16.0% 16.4% 15.2%
Slide 23: Working Capital Development
Working Capital Development Working capital incl. (Reverse-) Factoring and ABS programs • Increase in working capital to EUR million sales ratio in 2018 due to 18.1% 18.3% 18.5% 18.1**% challenging environment in 400 17.4% 20% 17.1% 16.1% 16.5% supplies and consequently 15.6% 300 production and inve
Slide 24: Equity Ratio on Strong Level of 40.9%
Equity Ratio on Strong Level of 40.9% • Equity increased by EUR 68 million with strong profit of EUR 92 million. • Equity ratio flat despite dividend payment and higher balance sheet total caused by acquisitions. EUR million 700 -34 11* 600 40.7% 40.9% 92 500 400 300 602 534 200 100 0 Equity 2017 Pr
Slide 25: Net Debt and Net Debt Ratios
Net Debt and Net Debt Ratios • Leverage increases to 1.9 (2017: 1.7) and net debt increases by 16.3% to EUR 400 million including dividend payment of EUR 34 million and the acquisition payment for Kimplas and Statek. Net Debt* (in EUR million) Debt Ratios in EUR million Dec 31, 2017 Dec 31, 2018 343
Slide 26: Solid Maturity Profile
Solid Maturity Profile Maturity Profile (in EUR million) – Financial Instruments Promissory Note 3 Promissory Note 2 Promissory Note 1 Bank Borrowings 170 64 106 42 5 5 29 5 34 45 42 21 2019 2020 2021 2022 2023 2024 2025 2026 Maturity Profile (in EUR million) – Currencies USD EUR 54 82 54 11 116 4 2
Slide 27: Longterm solid Debt, Leverage and Gearing
Longterm solid Debt, Leverage and Gearing EUR million 392 400 339 353 358 343 600 591 5 558 4.3 177 174 498 500 138 437 458 4 369 3.4 400 332 3 300 245 246 2.5 2 2.0 2.1 200 1.7 1.9 1.5 1.4 1.1 1 100 0.7 1.0 0.8 0.8 0.7 0.5 0.4 0.6 0 0 -30 -68 -72 -84 -100 -100 -166 -155 -190 -1 -194 -200 -2 2010 20
Slide 28: Balance Sheet Total increased mainly due to Acquisitions
Balance Sheet Total increased mainly due to Acquisitions in EUR million Dec 31, 2017 Dec 31, 2018 in EUR million Dec 31, 2017 Dec 31, 2018 Assets Equity and liabilities Non-current assets Equity Goodwill / Other intangible assets / 817.6 916.2 Total equity 534.3 602.4 Property, plant & equipment Oth
Slide 29: Cash Flow Development 2011 - 2018
Cash Flow Development 2011 - 2018 Net Operating Cash Flow in EUR million 2011 2012 2013 2014 2015 2016 2017 2018 Variance (2018 to 2017) Adjusted EBITDA 117.0 120.8 129.3 138.4 177.5 179.4 199.7 201.4 +0.9% Δ ± Trade Working capital -19.5 -9.8 +5.1 +10.4 -0.6 +17.0 -19.1 -13.7 -28.3% Net operating c
Slide 30: NORMA Value Added (NOVA) and ROCE
NORMA Value Added (NOVA) and ROCE NORMA Value Added • NORMA Group‘s long term strategic target is in EUR million 2017 2018 NORMA Value Added (NOVA) Adjusted EBIT after taxes 116.2 123.5 • In order to manage this, NORMA Group determines the annual value creation in the form Capital Cost (WACC x CE pe
Slide 31: Comparison of Guidance and Actual Results
Comparison of Guidance and Actual Results Results in 2017* March 2018 May 2018 July 2018 Results in 2018 7.7% organic 8.6% organic growth, solid organic growth of around organic growth of around 5% Solid organic growth of around 5% to 8% Organic Growth of Group growth, additionally additionally acqu
Slide 32: Rightsizing Program launched
Rightsizing Program launched Optimization of the production landscape, which has grown rapidly as a result of acquisitions, Rightsizing organizational structures and further harmonization of processes and systems worldwide. Scope The optimization measures are to extend across all divisions and regio
Slide 33: Outlook 2019 – Strategy
Outlook 2019 – Strategy 1 Continue to develop product and service solutions for 2 Expanding water business. Continue to explore business opportunities particularly in Asia-Pacific to expand regional business and 3 further improve profitability. 4 Continue dialogue with potential M&A targets in vario
Slide 34: Outlook 2019 – Macroeconomic Forecast – GDP Growth
Outlook 2019 – Macroeconomic Forecast – GDP Growth* in % 2018 2019e 2020e World +3.7 +3.5 +3.6 USA +2.9 +2.5 +1.8 China +6.6 +6.2 +6.2 Euro zone +1.8 +1.6 +1.7 Germany +1.5 +1.3 +1.6 • VDMA (German Engineering Federation) expects worldwide machine sales to grow by 2% in 2019. • Euroconstruct expects
Slide 35: Outlook 2019 – Company Guidance
Outlook 2019 – Company Guidance* Moderate organic growth of around 1% to 3%, additionally around EUR 13 million from Sales acquisitions. Adjusted EBITA Between 15.0% and 17.0%. Margin Adjusted Material Cost Ratio Roughly at the same level as in previous years. Adjusted Personnel Cost Ratio Roughly a
Slide 36: Outlook 2019 – Company Guidance
Outlook 2019 – Company Guidance Investments in Around 5% of EJT sales. R&D Innovations More than 20 invention applications. Quality Proportion of defective parts in production to be below the value of 20 parts per million. Quality Number of quality-related customer complaints per month to be below 8
Slide 37: NORMA Group – Key Investment Highlights
NORMA Group – Key Investment Highlights 1 Market leader in attractive engineering niche markets. 2 Strong development and growth opportunities in e-mobility and water management. 3 Enhanced stability through broad diversification across products, end markets and regions. Engineered products with pre
Slide 38: Appendix
Appendix 38
Slide 39: NORMA Group’s Key Facts
NORMA Group’s Key Facts Specific customer requirements driven by megatrends Global market and technology Offers more than 40,000 NORMAFLUID ® innovative joining solutions in Delivers to more than leader in joining and fluid handling technology. 42% product categories: three 10,000 customers in 100 c
Slide 40: Proven Business Model Addressing Key Megatrends
Proven Business Model Addressing Key Megatrends Specific customer requirements driven by megatrends • Continuous new developments on a • Superior service level through Product Emission global level in order to fulfill fleet worldwide presence and regional consumption regulations and cope sales hubs.
Slide 41: Convincing Growth Prospects
Convincing Growth Prospects Clear global market leader in Clamp / Connect Excellent growth outlook across EJT market Sales in EUR million (year)* Additional growth for Joining Technology 1,084 market above market growth 1000 800 ca. 47% Fluid Passenger vehicles 600 Commercial vehicles ca. 360 Clamp
Slide 42: Premium Pricing through Technology and Innovation Leadership
Premium Pricing through Technology and Innovation Leadership in Mission-Critical Components Mission-criticality: Small relative costs – high impact Basis for premium pricing Market leadership Technology Quality Innovation Tailor-made solutions ca. EUR 224 content per vehicle in total ca. EUR 95 in o
Slide 43: Enhanced Stability through Broad Diversification
Enhanced Stability through Broad Diversification Across Products, End Markets and Regions Examples of NORMA Group’s key end markets Construction / Engines Commercial vehicles infrastructure / water Passenger vehicles Construction equipment management Wholesalers & technical Agricultural equipment Sh
Slide 44: Good Balance in the Two Distinct Ways to Market
Good Balance in the Two Distinct Ways to Market Distribution Services (DS) Engineered Joining Technology (EJT) ca. 37% of 2018 sales ca. 63% of 2018 sales High quality, branded and standardized Innovation and product solution partner joining products provided at competitive for customers, focused on
Slide 45: NORMA Group Provides Mission-Critical Products and Solutions
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 45
Slide 46: History of Excellence
History of Excellence Acquisition Acquisition 2018 Kimplas, India Statek, Germany Acquisition Acquisition 2017 Lifial, Portugal Fengfan, China Acquisition 2016 Autoline Business, France Foundation Acquisition Acquisition National 2014 NORMA China II 2011 Five Star, USA Diversified Sales, USA Acquisi
Slide 47: NDS Provides Full Breadth of Water Management Solutions
NDS Provides Full Breadth of Water Management Solutions Broad diversification in terms of application areas and products Efficient Landscape Stormwater Irrigation Management ca. 27% ca. 55% Flow Management and Others ca. 18% Large target markets for all NDS application areas nationwide and internati
Slide 48: NDS has deep and longstanding Customer Relationships
NDS has deep and longstanding Customer Relationships Highly differentiated distribution and service model • More than 4,100 products • Over 7,500 customer locations (retail and wholesale customers) • Two production sites (CA), six warehouses in the US, more than 500 employees • Overnight shipment fo
Slide 49: Acquisition of the Autoline business from Parker Hannifin
Acquisition of the Autoline business from Parker Hannifin M&A Acquisition of all assets of the Autoline business from Parker Hannifin in November 2016. Business Global supplier of quick connectors for all types of automotive fluid line applications Model Based in Guichen, France, with production sit
Slide 50: NORMA Group Worldwide
NORMA Group Worldwide EMEA Czech Republic (P) France (P, D) Germany (P, D) Italy (D) Netherlands (D) Poland (P, D) Portugal (P) Russia (P, D) Serbia (P) Spain (D) Sweden (P, D) Switzerland (P, D) Turkey (D) United Kingdom (P, D) Americas Brazil (P, D) Mexico (P, D) USA (P, D) Asia-Pacific Australia
Slide 51: Management Board of NORMA Group SE
Management Board of NORMA Group SE Bernd Kleinhens Dr. Michael Schneider Dr. Friedrich Klein • Chief Executive Officer (CEO) of NORMA Group SE • Member of the Board, CFO of NORMA Group SE • Chief Operating Officer (COO) of NORMA Group SE since since January 1, 2018 since July 1, 2015 October 1, 2018
Slide 52: Continuation of Growth Track and Sustainable Margin in 2018
Continuation of Growth Track and Sustainable Margin in 2018 Revenue (in EUR million) Gross Profit (in EUR million) of sales 800 61.0% 62% 1200 59.9% 700 59.1% 58.4% 58.4% 57.8% 60% 900 600 57.0% 58% 500 56.0% 55.5% 400 54.9% 55.3% 56% 600 1,017 1,084 890 895 300 601 627 533 546 54% 300 605 636 695 2
Slide 53: Pro-active Cash Management Continued in 2018
Pro-active Cash Management Continued in 2018 Net Operating Cash Flow (in EUR million) Trade Working Capital (in EUR million) 160 of sales 140 400 18.1% 18.3% 18.5% 17.4% 18.1% 17.1% 20% 16.1% 15.6% 16.5% 120 300 100 153 143 15% 200 123 124 80 149 108 60 135 133 124 100 70 81 79 90 10% 104 109 130 14
Slide 54: Longterm Dividend Policy
Longterm Dividend Policy: approx. 30% to 35% of adj. Net Profit of the Period Dividend in EUR 1,2 1.2 1,0 1.0 0.8 0,8 0.6 0,6 1.05 1.10* 0.90 0.95 0,4 0.4 0.75 0.65 0.70 0.60 0,2 0.2 IPO 0 0,0 0.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 * Proposal to AGM on May 21st 2019 54
Slide 55: Milestones and Current Shareholder Structure
Milestones and Current Shareholder Structure Milestones and Free Float Changes Identified Institutional Shareholders* Jun 2011 Mar 2013 26.7% 19.0% IPO with ca. 100% free 36% free SDAX listing float MDAX listing 5.6% float 21.0% 14.1% 13.5% Apr 2011 Since Jan 2013 Germany United Kingdom USA Nordic F
Slide 56: Index-based Share Price Performance compared with MDAX & DAX
Index-based Share Price Performance compared with MDAX & DAX 30 20 10 0 -10 -20 -30 Jan-17 Dec-17 Feb-18 Apr-18 Jun-18 Aug-18 Oct-18 Dec-18 NOEJ MDAX DAX 56
Slide 57: Contact & Event Calendar
Contact & Event Calendar Event Date Publication Interim Results Q1 2019 May 8, 2019 Annual General Meeting in Frankfurt / Main May 21, 2019 Publication Interim Results Q2 2019 August 6, 2019 Publication Interim Results Q3 2019 November 6, 2019 Contact Andreas Troesch Vice President Investor Relation
Slide 58: 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 ‘