Norma Group Se · XETR:NOEJ
Norma — Q3 2013 Earnings Presentation
48 slides from Norma's earnings presentation, Nov 6, 2013
Slide 1: NORMA Group Third Quarter Results 2013
NORMA Group Third Quarter Results 2013 Maintal, 6 November 2013 Customer Value through Innovation
Slide 2: Highlights Q3 2013
Highlights Q3 2013 Sales growth of 6.9% leads to EUR 159.9 million including favourable organic growth in Europe Sales also driven by EURO 6 introduction (Q3 2012: EUR 149.6 million) Adjusted EBITA of EUR 28.8 million compared to EUR 25.7 in Q3 2012 represents highest level EBITA in 2013 Margin Adju
Slide 3: Third Quarter Organic Growth Showed Strong Sequential Improvement
Third Quarter Organic Growth Showed Strong Sequential Improvement Sales Development in EUR million Sales 2012 2013 Change Change in % thereof thereof thereof organic acquisitions currency Q1 159.7 159.3 -0.4 -0.3% -6.1% +6.0% -0.2% Q2 158.0 163.5 +5.5 +3.5% +0.5% +3.6% -0.6% Q3 149.6 159.9 +10.3 +6.
Slide 4: Sales by Regions and by Way-to-Market
Sales by Regions and by Way-to-Market Asia-Pacific gains share due to successful acquisitions Split by way-to-market at 70% EJT and 30% DS Latest acquisition in Australia included in DS (Guyco - from July 2013) Q1-3 2013 (2012) sales breakdown Q1-3 2013 (2012) sales breakdown by regions by way
Slide 5: Sustainable Margin Development Continues in 2013
Sustainable Margin Development Continues in 2013 17.4% 17.7% 17.4% 17.6% EUR million 40 21.1% 21.0% 21.3% 20.6% 20.5% 20.5% 20.4% 20.4% 19.9% 19.6% 19.7% 19.6% 19.1% 18.9% 19.0% 19.2% 20% 35 18.2% 18.3% 18.3% 18.1% 17.8% 18.0% 17.4% 17.5% 18.0% 17.2% 17.1% 16.0% 16.2% 15.9% 30 15% 25 20 10% 15 28.4
Slide 6: Excellent Margin Improvement in Q3 2013
Excellent Margin Improvement in Q3 2013 Material consumption improved to 43.0% in Q1-3 2013 Personnel costs improved in Q3 by 80 BPS Tight cost control in OPEX despite extra costs for change to SE and various M&A activities Flat ratio of value-added costs (personnel expenses + Opex): Q3 2013
Slide 7: No Operational Adjustments
No Operational Adjustments in EUR million (Q1-3 2013) Reported PPA adjustments adjusted Sales 482.7 482.7 EBITDA 97.5 No operational adjustments 97.5 EBITDA margin 20.2% 20.2% EBITA 84.8 0.2 85.0 EBITA margin 17.6% 17.6% EBIT 75.5 6.2 81.7 EBIT margin 15.6% 16.9% Net Profit 43.0 4.1 47.1 Net Profit
Slide 8: EPS Development influenced by Currency and Taxes
EPS Development influenced by Currency and Taxes adjusted EPS* (in EUR) reported EPS* (in EUR) 2,00 2,00 1.59 1.48 1.48 1.35 0.50 0.43 0.46 0.39 1,00 1,00 0.55 0.51 0.51 0.46 0.54 0.54 0.51 0.50 0,00 0,00 Q1-3/2012 Q1-3/2013 Q1-3/2012 Q1-3/2013 net income in 50.7 47.1 47.2 42.9 EUR million * based o
Slide 9: Excellent Operating Net Cash Flow
Excellent Operating Net Cash Flow Operating net cash flow in EUR million Q1-3 2012 Q1-3 2013 Variance Thereof Q3 2013 EBITDA 94.4 97.5 +3.2% 33.0 Δ ± Working capital -26.6 -8.7 -67.2% +0.1 Operating net cash flow before investments from operating 67.8 88.8 +30.9% 33.1 business Δ ± Investments from o
Slide 10: Net Debt, Financing and Equity Ratios improved on a pro forma basis
Net Debt, Financing and Equity Ratios improved on a pro forma basis (net of promissory note) Equity / Debt Ratios Net Debt (in EUR million) 30.09.2013 31.12.2012 174* 162* 162* Equity Ratio 400 37.4% 41.7% (Equity / Balance Sheet Total) 300 Equity Ratio 44.1% 41.7% pro forma (net of promissory note)
Slide 11: Outlook 2013 – Company Guidance Confirmed
Outlook 2013 – Company Guidance Confirmed Sales* Moderate growth, plus approx. EUR 26 million from recent acquisitions EBITA margin On the level of the three previous years, more than 17% Dividend Approx. 30% to max 35% of Group adjusted net profit * amended due to acquisitions 11
Slide 12: Appendix Strategy
Appendix Strategy Customer Value through Innovation 12
Slide 13: Proven Business Model Addressing Key Megatrends
Proven Business Model Addressing Key Megatrends NORMA Group products Specific customer requirements driven by megatrends NORMACLAMP® ~ 53% of sales Emission Next global level of emission reduction ramps up in 2013 reduction with EURO 6 in Europe and 2014 in USA (EPA 2015) NORMACLAMP TORRO Weight Ong
Slide 14: Tighter Emission Regulations Drive Increased Joining Technology Content
Tighter Emission ContentRegulations Drive Increased Joining Technology Today EURO 5 EURO 6 Europe EURO 4 EURO 3 EPA '10 EPA '15 NAFTA EPA '04 EPA '07 EPA '00 JPN '09 JPN '14 J. '19 Japan JPN '98 JPN '02 JPN '05 EURO 3 EURO 5 EURO 6 Brazil EURO 2 EURO 1 EURO 3 EURO 4 EURO 5 Russia EURO 1 EURO 2 EURO
Slide 15: 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 e
Slide 16: Premium Pricing through Technology and Innovation Leadership
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 Coolin
Slide 17: Convincing Growth Prospects
Convincing Growth Prospects Clear global market leader in clamp/connect Excellent growth outlook across end-markets Sales €m End-market Additional growth 605 (year) 600 (2013-18 CAGR) production unit for Joining growth technology market ~25% 500 Fluid Passenger vehicles +5% add. 2-4% 400 Commercial
Slide 18: Successful Acquisition Strategy Continues into 2013
Successful Acquisition Strategy Continues into 2013 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. Bhd. 11/12
Slide 19: Acquisition of Connectors Verbindungstechnik AG
Acquisition of Connectors Verbindungstechnik AG M&A Acquisition 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 20: Acquisition of Nordic Metalblok S.r.l.
Acquisition of Nordic Metalblok S.r.l. M&A Acquisition 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 sect
Slide 21: Acquisition of Chien Jin Plastic Sdn. Bhd.
Acquisition of Chien Jin Plastic Sdn. Bhd. M&A Acquisition of Chien Jin Plastic, Malaysia, in October 2012 Specialised in joining elements for plastic and iron pipe systems for different application areas, esp. Business drinking and domestic water distribution. Also produces components for sanitary
Slide 22: 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 23: 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 Mo
Slide 24: 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 25: 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 26: 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 (P, D) Sweden (P, D) Switzerland (P, D) Turkey (D) United Kingdom (P, D) Americas Brazil (D) Mexico (P) USA (P, D) Asia-Pacific Australia (D) China (P,
Slide 27: 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 28: Historic Growth Track Record
Historic Growth Track Record Historic revenue development (1997 – 2012) EUR million 605 600 581 490 483 500 458 385 400 1 330 277 300 229 242 198 207 200 174 182 138 150 121 100 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q1-3 2013 HGB IFRS 1997 to 2012: 16 year
Slide 29: 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 / infrastructure / Engines Commercial vehicles Passenger vehicles Construction equipment water management Wholesalers & Technical Agricultural equipment Sh
Slide 30: 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) ~71%
Slide 31: 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 32: 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 starti
Slide 33: Appendix Full Year 2012
Appendix Full Year 2012 Customer Value through Innovation 33
Slide 34: Record sales of EUR 604.6 million including acquisitions and positive currency effects
Record sales of EUR 604.6 million including acquisitions and positive currency effects Weaker European economic environment visible in 2nd half year Globalisation strategy pays off with positive currency effects Sales Development in EUR million Sales 2011 2012 Change Change in % thereof thereof
Slide 35: Sales by regional reporting segments
Sales by regional reporting segments Reporting segment Asia-Pacific recorded direct sales of 7% in 2012 or 10% including all NORMA exports into the region (sales by destination) Excellent double-digit growth in Americas and Asia-Pacific Weaker European environment is outperformed by higher con
Slide 36: 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, trai
Slide 37: No Operational Adjustments in 2012
No Operational Adjustments in 2012 No operational adjustments despite recent acquisitions in Switzerland, Italy, Malaysia and Netherlands Ongoing PPA adjustments at EUR 0,16 on EPS level in EUR million Reported PPA adjustments adjusted Sales 604.6 0 604.6 EBITDA 120.8 No operational adjustments
Slide 38: Overview on Adjustments in prior years
Overview on Adjustments in prior years Adjustments in 2011 and 2010 mainly from IPO costs (major part concluded in Q1 2011) Only minor PPA adjustments in 2012 on EBITA level in EUR million 2010 2011 2012 Reported EBITA 64.9 84.7 105.2 + Restructuring Costs 1.3 1.8 0 + Non-recurring/non-period-re
Slide 39: EPS – Dividend Proposal EUR 0.65 per share
EPS – Dividend Proposal EUR 0.65 per share Dividend proposal to the shareholders at the AGM on 22 May 2013: EUR 0.65 per share = 3.1% dividend yield* Pay-out of EUR 20.7 million for 31,862,400 shares equals 33.5% of adjusted net income of EUR 61.8 million pro forma EPS Adjusted EPS Reported EPS
Slide 40: Profit & Loss (adjusted & reported)
Profit & Loss (adjusted & reported) in EUR million 2012 2011 reported adjusted reported adjusted Sales 604.6 604.6 581.4 581.4 Gross Profit 344.4 344.4 322.6 322.6 EBITDA 120.8 120.8 100.2 117.0 EBITA 105.2 105.4 84.7 102.7 in % 17.4 17.4 14.6% 17.7% EBIT 94.4 101.9 76.6 99.7 in % 15.6 16.9 13.2% 17
Slide 41: Slight temporary increase in TWC through acquisitions in Distribution Services
Slight temporary increase in TWC through acquisitions in Distribution Services. Optimization ongoing in 2013 18.5% at sales run EUR million rate of EUR 625 m 200 19.1% 20% 18.1% 18.3% 150 15% 79 14.3% 81 13.9% 13.1% 100 70 10% 50 65 13.2% 67 11.5% 74 12.3% 5% 0 -9.4%* -41 -7.1% -38 -6.3% -46 -2 -50
Slide 42: Solid development of Balance Sheet
Solid development of Balance Sheet (all amounts in EUR million) 31 Dec 2012 31 Dec 2011 (all amounts in EUR million) 31 Dec 2012 31 Dec 2011 Assets Equity and liabilities Non-current assets Equity Goodwill / Other intangible assets Total equity 288.3 256.0 436.8 401.0 / Property, plant & equipment N
Slide 43: Very Strong Operating Net Cash Flow in 2012
Very Strong Operating Net Cash Flow in 2012 Operating net cash flow in EUR million 2011 2012 Variance EBITDA* 117.0 120.8 3.3% Δ ± Working capital -19.5 -9.8 -50.1% Operating net cash flow before investments from 97.5 111.0 13.9% operating business Δ ± Investments from operating business -30.7 -30.0
Slide 44: Continuation of Growth Track and Sustainable Margin into 2012
Continuation of Growth Track and Sustainable Margin into 2012 Revenue (in EUR million) Gross profit (in EUR million) 400 54.9% 55.3% 56.0% 55.5% 57.0% 60%of sales 581 605 600 458 490 300 450 344 40% 330 323 200 300 275 251 20% 182 150 100 0 0 0% 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Pers
Slide 45: 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) 200 18.5% 18.0% 18.1% 18.3% 18.5%* 20% of revenues 80 150 100 70 81 79 49 45 10% 50 74 54 45 65 67 60 0 -19 -30 -46 -41 -38 -50 0% 2008 2009 2010 2011 2012 40 81 Trade r
Slide 46: Shareholder Structure
Shareholder Structure Identified institutional Shareholders 100% 75% 27% 50% 25% 27% 11% 25% 10% 0% pre IPO post IPO Dec. 2012 Today Germany United Kingdom USA Nordic Rest of World Dec. 2011 3i MABA CYPRUS Ltd. old & existing management free float Free float per November 2013 includes: Ameriprise, U
Slide 47: Financial Calendar and Contact
Event Date Preliminary Financial Figures 2013 19 February 2014 Publication Full Year Results 2013 27 March 2014 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 201
Slide 48: 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 “