Slide 1: NORMA Group Full Year Results 2014
NORMA Group Full Year Results 2014 Maintal, 25 March 2015
Slide 2: Operational highlights 2014 by region and acquisitions
Successful introduction of new products for EURO 6 emission standard for passenger vehicles and EMEA trucks Americas Start of production for automotive and commercial vehicle industry in new facility in Brazil APAC Start of production in second plant in China to serve domestic and regional customers
Slide 3: Financial highlights: sales, adjusted EBITA, EPS
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 4: Balance sheet, cash flow, 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 5: 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 6: 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 7: 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 2011 Acquisition Connectors Acquisition Nordic Acquisition Chi
Slide 8: Sales split by business and customer group
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 8 **
Slide 9: Regional sales development
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 10: Quarterly sales development
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 11: Adjusted EBITA and margin by quarter
17.4% 17.7% 17.4% 17.7% 17.5% EUR million 40 21.1% 21.0% 21.3% 20.6% 20.8% 20.6% 20.5% 20.5% 20.4% 20.4% 19.9% 19.6% 19.7% 19.2% 19.6% 19.7% 20.2% 19.2% 19.1% 18.9% 19.0% 20% 35 18.2% 18.3% 18.0% 18.3% 18.1% 17.8% 18.0% 18.0% 18.4% 17.4% 17.5% 17.2% 17.1% 17.4% 17.6% 16.2% 16.6% 16.0% 15.9% 30 15% 2
Slide 12: Cost development: material, personnel, other
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 13: Operational adjustments to EBITA
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 14: Adjustments from National Diversified Sales acquisition
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 15: Expected adjustments FY2015 and FY2016
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 16: Income statement reported and adjusted
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 17: Dividend proposal EUR 0.75 per share
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 18: 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 19: Equity ratio development
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 20: Promissory note refinancing terms
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 21: 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) 21 Page
Slide 22: 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 Equity Ratio (Net debt* / adjusted LTM EBITDA) 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 23: Consolidated statement of financial position
(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 24: 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 25: Strategic priorities 2015
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 26: Macroeconomic and end-market outlook
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 27: 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 Material Cost Approx. on the level of the previous years ratio Personnel Cost Approx. on the level of the previ
Slide 28: Guidance 2015: R&D, capex, cash flow, dividend
Investments in Approx. 5% of EJT sales R&D CAPEX Approx. 4.5% of sales rate Operating net Slightly above the level of the previous years Cash Flow Dividend Approx. 30% to 35% of Group adjusted net profit Page 28
Slide 29: Appendix
Full Year Results 2014 Appendix Page 29
Slide 30: 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 31: Identified institutional shareholders
Identified institutional Shareholders 100% 75% 32% 50% 18% 8% 16% 13% 25% 13% 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 March 9, 2015 includes Ameriprise, USA incl. Thre
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: 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 34: Global market leader in clamp/connect, growth outlook
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 35: 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 36: 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 37: 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 38: 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 38
Slide 39: 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 40: Acquisition of Connectors Verbindungstechnik
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 distributing connecting elements that History me
Slide 41: Acquisition of Nordic Metalblok
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 sectors. For more than 40 years the company
Slide 42: Acquisition of Chien Jin Plastic
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. Also produces components for sanitary applia
Slide 43: Increase in ownership of Groen Bevestigingsmaterialen
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 in Belgium, the Netherlands and Luxembourg. Moreover, Mod
Slide 44: Acquisition of Davydick & Co.
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 Model PUMPMASTER. More than 700 customers
Slide 45: 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 clients Model include home improvement stores, garages and specialist retailers for automotive supplies. History Distribution partner of NORMA Group f
Slide 46: 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 distribution, Business irrigation, agricultural, plumbing and industrial market sectors. It supplies over 700 customers in Model Australia and New Zealand.
Slide 47: Acquisition of Five Star
M&A Acquisition of Five Star in April 2014 Business Distribution and production of high-quality clamps to customers in over 50 different industries. Model History In the market for more than 25 years. Based in Crest Hill, Illinois, USA Sales Approx. USD 5 million sales in financial year 2012 Consoli
Slide 48: Acquisition of National Diversified Sales (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 49: 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 50: 1997 to 2014: 18 years of growth
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 50
Slide 51: 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 695 406 600 636 605 371 581 300 344 323 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 52: Operating net cash flow, trade working capital, 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 53: Financial calendar and contact
Event Date Publication Interim Results Q1 2015 06 May 2015 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
Slide 54: Forward-looking 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