Slide 1: NORMA Group First Quarter Results 2015
NORMA Group First Quarter Results 2015 Maintal, 6 May 2015
Slide 2: Very strong start into 2015 with growth of 24.6%
Very strong start into 2015 with growth of 24.6% Sales Sales at EUR 221.5 million (Q1 2014: EUR 177.8 million) EBITA Record adjusted EBITA of EUR 39.2 million resp. +20.2% y-o-y (Q1 2014: EUR 32.6 million) Margin Adjusted EBITA margin on a sustainable level of 17.7% of sales (Q1 2014: 18.4%) Equity
Slide 3: Sales Development in EUR million
Sales Development in EUR million Sales 2014 2015 Change Change in % thereof thereof thereof organic acquistions currency Q1 177.8 221.5 43.7 24.6% -0.5% 16.8% 8.3% Flat organic growth as expected due to strong base in Q1 2014 (Q1 2014: +12.6% y-o-y) Acquisitive growth of 16.8% from 2014 acquisit
Slide 4: Shift by region and by way-to-market mainly due to NDS acquisition
Shift by region and by way-to-market mainly due to NDS acquisition Q1 2015 (2014) sales breakdown Q1 2015 (2014) sales breakdown by regions by way-to-market 8%* (9%) 37% (30%) 48% (57%) 63% (70%) 44% (34%) Distribution Services EMEA Americas Asia-Pacific Engineered Joining Technology * 12% by dest
Slide 5: Adjusted EBITA and margin development
17.4% 17.7% 17.4% 17.7% 17.5% EUR million 50 21.1% 21.0% 21.3% 20.5% 20.5% 20.4% 20.4% 20.6% 20.8% 20.6% 20.2% 19.9% 19.7% 19.7% 20.1% 19.6% 19.2% 19.6% 19.1% 18.9% 19.0% 19.2% 20% 45 18.2% 18.3% 18.3% 18.1% 18.0% 18.0% 18.4% 17.4% 17.5% 18.0% 17.2% 17.8% 17.1% 17.4% 17.6% 17.7% 40 16.2% 16.6% 16.0%
Slide 6: Material costs ratio improved by 240 basis points
Material costs ratio improved by 240 basis points Improved material costs compensate higher personnel expenses Personnel expense ratio increased mainly due to high sales base effect, weaker EMEA region in comparison to previous year and ramp-up of China and Brazil production Adjusted Material
Slide 7: Operational adjustments due to acquisition of NDS
Operational adjustments due to acquisition of National Diversified Sales (NDS) Ongoing PPA adjustments plus one-offs from NDS lead to EUR 0.16 adjustments on EPS level in EUR million Reported Adjustments* Adjusted Sales 221.5 0 221.5 2.5 EBITDA 42.0 (incl. M&A adjustments EUR 0.1 million 44.5 &
Slide 8: Adjusted EPS and Reported EPS
xxx xxx Adjusted EPS* (in EUR) Reported EPS* (in EUR) 0,8 0,8 0,6 0,6 0,4 0,4 0.72 0.61 0.56 0,2 0,2 0.42 0 0 Q1/2014 Q1/2015 Q1/2014 Q1/2015 net income in 19.6 22.9 13.6 17.9 EUR million * based on number of shares of 31.9 million Page 8
Slide 9: Operating net cash flow
Operating net cash flow in EUR million Q1/2015 Q1/2014 Variance Adjusted EBITDA 44.5 36.7 +21.2% Δ ± Working capital* -22.4 -12.2 -82.5% Operating net cash flow before investments from operating 22.1 24.5 -9.5% business Δ ± Investments from operating business -10.5 -6.4 -64.1% Operating net cash flo
Slide 10: Net debt at EUR 377 million
Net debt* at EUR 377 million, increased by EUR 24 million mainly due to FX effects and higher receivables due to excellent sales in March Leverage at 2.3x (Net debt / LTM EBITDA**) Net Debt (in EUR million) Equity Ratio 600 31.03.2015 31.12.2014 xxx 353* 377* xxx 500 Equity Ratio (Equity / 34.9%
Slide 11: Guidance 2015
Sales Solid organic growth of approx. 4% to 7%, plus approx. EUR 110 million from recent acquisitions 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 11
Slide 12: Appendix Strategy
Appendix Strategy Page 12
Slide 13: NORMA Group products
NORMA Group products Specific customer requirements driven by megatrends NORMACLAMP® ~ 45% of sales Emission Next global level of emission reduction ramps up in 2013 / reduction 2014 with EURO 6 in Europe and 2014 in USA (EPA 15) Weight Ongoing trend in many industries especially addressed by NORMA
Slide 14: Environmental awareness drives tightening emission regulations 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 15: 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 16: Global Comparison of Fuel Economy
Global Comparison of Fuel Economy Region Target Target Duration Fleet Fleet Change CAGR year year in years Target year 1 Target year 2 in % in % 1 2 according to according to converted** converted** national law national law EU 2015 2021 6 130 g/km ~130 g/km 95 g/km ~95 g/km ~ -27% -5.1 US 2016 2025
Slide 17: Company history and acquisitions
Foundation Acquisition Acquisition National 2014 NORMA China II Five Star, USA Diversified Sales, USA Acquisition Acquisition Variant, Acquisition Guyco, Foundation MDAX listing 2013 Davydick & Co, Australia Poland Australia NORMA Brazil Acquisition Connectors 2011 Acquisition Nordic Acquisition Chi
Slide 18: 1997 to 2014: 18 years of a successful growth story
Historic revenue development in EUR million 695 636 605 581 490 458 385 277 330 229 242 198 207 174 182 138 150 121 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 HGB IFRS 1997 to 2014: 18 years of a successful growth story Page 18
Slide 19: 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 695 Joining Technology market 700 above market growth 600 ~31% Fluid 500 Passenger vehicles add. 2- 4% 400 ~69% Clamp (45%) / Connect (24%) Commercial vehicles add
Slide 20: 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. € 21-26 Technology Quality Charged air c. € 20-25 Innovation Fuel and oil s
Slide 21: Examples of NORMA Group's 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 22: Unique business model with two distinct 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 23: 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 23
Slide 24: Sales consolidation effects of acquisitions
Sales consolidation effects in EUR Date of million acquisition Total 2014 2015 Market entry in connecting technology in Connectors Verbindungstechnik AG, Switzerland 04/12 16.6 - - Pharma & Biotec Market consolidation heating and air Nordic Metalblok S.r.l., Italy 07/12 5.2 - - conditioning clamps M
Slide 25: Acquisition of National Diversified Sales, Inc. (NDS)
M&A Acquisition of National Diversified Sales, Inc. (NDS) in October 2014 Business A leading supplier of water management solutions, including products for storm water management, Model efficient landscape irrigation and flow management History In the market for more than 40 years. Based in Woodland
Slide 26: NDS: US leader in water management solutions
One of the US-market leaders in innovative water management solutions, headquartered in Woodland Hills, CA, USA Robust business model due to broad diversification in terms of end industries, customers and products Sustained financial performance and tangible organic growth Regulatory initiat
Slide 27: 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 27
Slide 28: 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 29: Water management to become a strong column within DS business
Water management to become a strong column within the NORMA Groups DS business Including Malaysia & Australia water management is expected to yield approx. EUR 121 million of Group sales Driven by megatrends NORMA Group aims to a mid-term 5 % to 7 % organic growth Excellent margin profile co
Slide 30: Sales split by way-to-market and end market
thereof water management** thereof industrial 18% (4%) supplier 25% (30%) DS 42% (30%) EJT 58% (70%) thereof general distribution 8% (10%) products 24% (26%) thereof commercial vehicle OEM 25% (30%) thereof passenger vehicle OEM * 2013 in brackets; graphic includes full NDS sales for 2014 Page 30 **
Slide 31: 22 production sites, 23 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 32: Investment highlights
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 in mission-critical 3 components 4 St
Slide 33: Strategic priorities: international expansion
1 Continue international expansion of sales network 2 Continue to explore business opportunities in APAC including emission standard change in China 3 Ramp up of second China plant to enable further expansion into domestic and APAC markets 4 Continuous ramp up of plant in Brazil according to volume
Slide 34: Macroeconomic and end-market growth expectations
in % 2014 2015e 2016e USA* +2.4 +3.6 +3.3 China* +7.4 +6.8 +6.3 Euro-zone* +0.8 +1.2 +1.4 Germany* +1.6 +1.7 +1.9 World* +3.3 +3.5 +3.7 VDMA (German Engineering Federation) expects worldwide machine sales to grow by 5% in 2015 Euroconstruct expects solid growth path of +2.1% for the European con
Slide 35: Appendix Full Year 2014
Appendix Full Year 2014 Page 35
Slide 36: Record sales and adjusted EBITA in 2014
Sales Record sales of EUR 694.7 million (2013: EUR 635.5 million) lead to growth of 9.3% Adjusted EBITA Record adjusted EBITA of EUR 121.5 million (2013: EUR 112.6 million) Margin 5th year of high and sustainable adjusted EBITA margin of 17.5% (2013: 17.7%) Financial Result Successful refinancing le
Slide 37: Strong balance sheet, dividend and guidance
Strong balance sheet with an equity ratio of 34.1% (2013: 38.8%) despite dividend payment and higher Equity debt level after two US acquisitions Net Debt Net debt* increased to EUR 352.8 million from EUR 138.2 million mainly due to acquisitions Leverage Net debt* / adj. EBITDA leverage with 2.5 x (2
Slide 38: Regional development 2014
EMEA: flat European environment and shrinking heavy truck production is outperformed by higher content due to EURO 6 introduction while DS sales were slightly soft in difficult economies - this leads to a growth of +1.7% Americas reported favourable growth of +24.1% including strong organic grow
Slide 39: Sales development by quarter 2014
Organic growth slowed down during the year as expected due to higher previous year comparables NDS contributed already with EUR 13.9 million in Q4 2014 Weakening of the Euro during the year leads to flat full year FX effects after headwinds in H1 Sales Development in EUR million Sales 2013 201
Slide 40: Cost development 2014
Investments into regions, products and plants lead to slightly higher personnel costs in 2014 Improved material costs compensates higher personnel expenses in 2014 Cost ratios expected to stay approx. on level of previous years in 2015 Adjusted Material Costs (in EUR million) Personnel Expense
Slide 41: Operational adjustments after NDS acquisition
First time operational adjustments after large NDS acquisition in 2014 in EUR million 2010 2011 2012 2013 2014 Reported EBITA 64.9 84.7 105.2 112.1 113.3 + Restructuring Costs 1.3 1.8 0 0 0 + Non-recurring/non-period-related 15.5 14.8 0 0 6.9 items* + Other group and normalized items 0.7 0.2 0 0 0
Slide 42: Adjustments due to acquisition of NDS
First time operational adjustments due to acquisition of National Diversified Sales, Inc. Ongoing PPA adjustments plus one offs from NDS acquisition leads to EUR 0.52 adjustments on EPS level in EUR million Reported Adjustments Adjusted Sales 694.7 0 694.7 6.9 EBITDA 131.5 (incl. M&A adjustments
Slide 43: Expected adjustments FY 2015 and 2016
in EUR million FY 2014 FY 2015* FY 2016* 6.9 ~5 EBITDA level (incl. M&A adjustments EUR 4.7 million (incl. M&A adjustments / Integration costs 0 & Inventory-Step-Ups EUR 2.2 million) & Inventory-Step-Ups ~ EUR 2.5 million) EBITA level 8.2 ~7 ~2 (incl. EUR 1.3 million depreciation PPA) (incl. ~ EUR 2
Slide 44: Reported and adjusted income statement
in EUR million 2013 2014 reported adjusted reported adjusted Sales 635.5 635.5 694.7 694.7 Gross Profit 371.4 371.4 403.4 405.6 EBITDA 129.3 129.3 131.5 138.4 EBITA 112.1 112.6 113.3 121.5 in % 17.6 17.7 16.3 17.5 EBIT 99.5 107.7 97.8 116.2 in % 15.7 16.9 14.1 16.7 Financial Result -15.6 -15.6 -14.5
Slide 45: Dividend proposal EUR 0.75
Dividend proposal to the shareholders at the AGM on 20 May 2015: EUR 0.75 per share (2014: EUR 0.70) Pay-out of EUR 23.9 million for 31,862,400 shares equals 33.4% of adjusted net income of EUR 71.5 million General dividend policy of 30% to 35% of adjusted net income Adjusted EPS Reported EPS
Slide 46: Trade working capital
Higher distribution inventory of NDS Improvement in ‘old’ working capital structure (reverse factoring etc.) – lowest level ever TWC including higher NDS inventories again on a good level of 18.1% EUR million 20% 300 18.3% 18.5% 18.1%* 18.1% 17.4% 250 15.8%** 15% 200 108 15.5% 150 90 14.2% 81
Slide 47: Equity ratio after NDS acquisition
Equity ratio still solid even on higher balance sheet total after NDS acquisition 38.8% 34.1% EUR million 400 -22 15* 55 300 200 368 320 100 0 Equity 2013 Profit Dividend Others* Equity 2014 Balance 824 Increase mainly from NDS 1,078 Sheet Total * Exchange differences on translation of foreign ope
Slide 48: Promissory note financing
Targets achieved Terms Maturity: Long-term oriented well balanced repayment Volume EUR 209 million schedule Tenor 3, 5, 7 and 10 years Balanced fixed and floating tranches 4fold oversubscribed Significant portion issued in USD – Natural hedge of BBB+ / A- internal bank rating achieved
Slide 49: Net Debt
Net Debt (in EUR million) 138* 353* 400 22 39 232 437 (debt) 200 332 (debt) 0 -84 (cash) -194 (cash) -200 31. Dec 13 M&A Dividend Repayments 31. Dec 14 * excludes non cash / non P&L derivative financial liabilities of EUR 20.2 million (31.12.2013: EUR 15.3 million) Page 49
Slide 50: Equity / Debt Ratios and maturity profile
Equity / Debt Ratios 31.12.2013 31.12.2014 excluding derivatives* 31.12.2013 31.12.2014 Leverage 1.1 x 2.5 x (Net debt* / adjusted LTM EBITDA) Equity Ratio 38.8% 34.1% (Equity / Balance Sheet Total) Gearing 0.4 x 1.0 x (Net debt* / equity) Pro Forma Maturity Profile (in EUR million) net of SFA repay
Slide 51: Balance sheet
(all amounts in EUR million) 31 Dec 2013 31 Dec 2014 (all amounts in EUR million) 31 Dec 2013 31 Dec 2014 Assets Equity and liabilities Non-current assets Equity Goodwill / Other intangible assets Total equity 319.9 368.0 441.5 741.5 / Property, plant & equipment Non-current and current Other and de
Slide 52: Operating net cash flow
Operating net cash flow in EUR million 2011 2012 2013 2014 Variance EBITDA 117.0 120.8 129.3 138.4 +7.1% Δ ± Working capital -19.5 -9.8 5.1 4.4 -13.6% Operating net cash flow before investments 97.5 111.0 134.4 142.8 +6.3% from operating business Δ ± Investments from operating business -30.7 -30.0 -
Slide 53: Revenue, gross profit, personnel expenses, adjusted EBITA
Revenue (in EUR million) Gross profit (in EUR million) 750 450 56.0% 57.0% 58.4% 58.4% 54.9% 55.3% 55.5% 60% of sales 695 406 600 636 605 371 581 344 300 323 40% 450 490 458 275 251 300 330 150 182 20% 150 0 0 0% 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 Personnel expense
Slide 54: Trade working capital and Capex
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% 18.1%* 20% of sales 200 108 100 81 79 90 100 70 10% 49 46 115 54 45 65 67 74 80 0 -19 -30 -41 -38 -46 -59 -81 80 -100 0% 2008 2009 2010 2011 2012 2013 2014 60 Trade receivable
Slide 55: Identified institutional shareholders
100% Identified institutional Shareholders* 75% 27% 50% 23% 7% 15% 13% 25% 15% 0% pre IPO post IPO Dec. 2012 Today Dec. 2011 Germany United Kingdom USA Nordic France Rest of World 3i MABA CYPRUS Ltd. old & existing management free float Free float per April 30, 2015 includes Ameriprise, USA, incl. T
Slide 56: Financial calendar and contact
Event Date Annual General Meeting in Frankfurt / Main 20 May 2015 Publication Interim Results Q2 2015 05 August 2015 Publication Interim Results Q3 2015 04 November 2015 Contact Andreas Troesch Vice President Investor Relations Phone: +49 6181 6102-741 Fax: +49 6181 6102-7641 Email: Andreas.Troesch@
Slide 57: 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