Norma Group Se · XETR:NOEJ
Norma — FY2015 Earnings Presentation
44 slides from Norma's earnings presentation, Mar 23, 2016
Slide 1: NORMA Group SE Full Year Results 2015
NORMA Group SE Full Year Results 2015 Maintal, 23 March 2016
Slide 2: Regional highlights EMEA, Americas, APAC
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 3: Income statement highlights 2015
Sales Record sales of EUR 889.6 million (2014: EUR 694.7 million) leads to growth of 28.0% Adjusted EBITA Record adjusted EBITA of EUR 156.3 million (2014: EUR 121.5 million) Margin Adjusted EBITA margin at 17.6% (2014: 17.5%); 6th year of sustainable margin higher than 17.0% Tax rate Improved tax r
Slide 4: Balance sheet, cash flow, dividend and guidance highlights
Strong balance sheet with an increased equity ratio by 270 basis points to 36.8% (2014: 34.1%) Equity despite dividend payment Net debt including derivative financial liabilities decreased to EUR 360.9 million (2014: EUR 373.1 Net Debt million), net debt excluding derivatives of EUR 357.5 million (2
Slide 5: Regional sales development
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 6: Sales development by quarter
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 7: Historic revenue development 1997 to 2015
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 7
Slide 8: Quarterly adjusted EBITA and margins
FY 2010: FY 2011: FY 2012: FY 2013: FY 2014: FY 2015: 17.4% 17.7% 17.4% 17.7% 17.5% 17.6% EUR million 21.1% 21.0% 21.3% 20.5% 20.5% 20.4% 20.4% 20.6% 20.8% 20.6% 19.9% 19.7% 19.7% 20.2% 20.1% 20.4% 20.4% 19.6% 19.2% 19.6% 50 19.1% 18.9% 19.0% 19.2% 18.9% 20% 18.2% 18.3% 18.3% 18.1% 18.0% 18.0% 18.4%
Slide 9: Sales consolidation effects
Date of Total Sales consolidation effects 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 Market consolidation heating and air conditioning clamps 5.2 Chien Jin Pl
Slide 10: Sales split by business and end 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 10 ** NDS, Malaysia & Australia
Slide 11: Cost ratios and adjusted EBITA
Higher plastic material content at NDS in combination with improvements from the Global Excellence programme leads to better material cost ratio Shift in cost ratios from decreased personnel costs to increased OPEX costs mainly due to favourable personnel costs at NDS and outsourced logistics at
Slide 12: Operational adjustments EBITA reconciliation
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 13: Operational adjustments NDS acquisition
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 14: PPA adjustments outlook
in EUR million FY 2015 FY 2016* FY 2017* EBITDA level 3.6 0 0 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. a
Slide 15: Dividend proposal and EPS
Dividend proposal to the shareholders at the AGM on 2 June 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 Divi
Slide 16: 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 17: Trade working capital ratio
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 18: Equity ratio development
Equity ratio on a solid level due to high profit despite increased dividend payment EUR million 500 12* 36.8% -24 400 34.1% 74 300 200 430 368 100 0 Equity 2014 Profit Dividend Others* Equity 2015 Balance 1,078 1,168 Sheet Total * mainly exchange differences on translation of foreign operations an
Slide 19: Net debt, leverage and gearing
Net Debt (in EUR million) excl. derivatives* incl. derivatives 353 358 373 361 500 500 20 3 400 400 300 300 437 458 Derivatives 458 200 200 437 Debt 100 Cash 100 0 0 -84 -100 -84 -100 -100 -100 31 Dec 14 31 Dec 15 31 Dec 14 31 Dec 15 Leverage 31 Dec 2014 31 Dec 2015 Gearing 31 Dec 2014 31 Dec 2015 (
Slide 20: Maturity profile
Maturity Profile (in EUR million) – Financial Instruments Promissory Note 2 Promissory Note 1 52 Bank Borrowings 110 52 81 34 45 35 5 5 5 5* 21 2016 2017 2018 2019 2020 2021 2022 2023 2024 Maturity Profile (in EUR million) – Currencies USD EUR 65 87 4 68 23 53 16 45 1 4 28 19 21 16 2016 2017 2018 20
Slide 21: Statement of financial position
in EUR million 31 Dec 2014 31 Dec 2015 in EUR million 31 Dec 2014 31 Dec 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 / liabilities
Slide 22: Operating net cash flow
Operating net 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% Operating net cash flow before 97.5 111.0 134.4 148.8 176.9 +18.9% investments from operating business Δ ± Investments
Slide 23: Growth strategy priorities
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 24: Macroeconomic and market outlook
in % 2015 2016e 2017e World +3.1 +3.4 +3.6 USA +2.4 +2.6 +2.6 China +6.9 +6.3 +6.0 Euro-zone +1.5 +1.7 +1.7 Germany +1.7 +2.2 +2.3 Source: International Monetary Fund, Institute for the World Economy (IfW) VDMA (German Engineering Federation) expects worldwide machine sales to grow by 1% in 2016
Slide 25: 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 Material Cost Approx. on the level of the previous years ratio Personnel Cost Approx. on the level of the previous years ratio Financial result Up to EUR -15 million T
Slide 26: Further targets 2016
Investments in Approx. 5% of EJT sales R&D Patents New patent applications > 80 p.a. Quality Proportion of defective parts in production to be below the value of 20 parts per million CAPEX Approx. 4.5% of sales rate Operating Net Slightly above the level of the previous year (2015: EUR 134.7 million
Slide 27: 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 3 in mission-critical components 4 St
Slide 28: Appendix
Appendix Full Year Results 2015 Page 28
Slide 29: 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 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: EU 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 32: 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 33: Global market leader in clamp and 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 34: Mission-criticality and premium pricing
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 35: 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 36: 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 37: 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 37
Slide 38: Company history and acquisitions
Integration 2015 National Diversified Sales, USA Foundation Acquisition Acquisition National 2014 NORMA China II Five Star, USA Diversified Sales, USA Acquisition Acquisition Variant, 2011 Acquisition Guyco, Foundation MDAX listing 2013 Davydick & Co, Australia Poland Australia NORMA Brazil Acquisit
Slide 39: Global footprint
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 40: Revenue, gross profit, personnel expenses, adjusted EBITA 2008-2015
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 41: Operating cash flow, trade working capital, capex
Adjusted Operating Net 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 42: Identified institutional shareholders
100% Identified institutional Shareholders* 75% 24% 50% 22% 7% 16% 25% 16% 15% 0% pre IPO post IPO Dec. 2012 Today Dec. 2011 Germany United Kingdom USA 3i MABA CYPRUS Ltd. old & existing management free float Nordic France Rest of World Free float per 9 March 2016 includes Ameriprise, USA 9.96% Alli
Slide 43: Financial calendar and contact
Event Date Publication Interim Results Q1 2016 4 May 2016 Annual General Meeting in Frankfurt / Main 2 June 2016 Publication Interim Results Q2 2016 3 August 2016 Publication Interim Results Q3 2016 2 November 2016 Contact: Andreas Troesch Vice President Investor Relations Phone: +49 6181 6102-741 F
Slide 44: 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