Slide 1: NORMA Group Third Quarter Results 2014
NORMA Group Third Quarter Results 2014 Maintal, 5 November 2014 Customer Value through Innovation
Slide 2: Highlights Q3 2014
Highlights Q3 2014 Sales at EUR 165.5 million resp. +3.5% y-o-y (Q3 2013: EUR 159.9 million) Sales Third quarter with organic growth of 2.4% (acquisitions +0.9%; FX +0.2%) EBITA Adjusted EBITA of EUR 29.2 million resp. +1.3% y-o-y (Q3 2013: EUR 28.8 million) Margin Adjusted EBITA margin on a strong
Slide 3: Strong Q1-3 2014 confirms Full Year Guidance
Strong Q1-3 2014 confirms Full Year Guidance Sales Development in EUR million Sales 2013 2014 Change Change in % thereof thereof thereof organic acquistions currency Q1 159.3 177.8 +18.5 +11.6% +12.6% +1.6% -2.6% Q2 163.5 175.2 +11.7 +7.2% +8.0% +1.9% -2.8% Q3 159.9 165.5 +5.6 +3.5% +2.4% +0.9% +0.2
Slide 4: Nineteen Quarters of Sustainable Margin Development
Nineteen Quarters of Sustainable Margin Development 17.4% 17.7% 17.4% 17.7% 17.8% EUR million 40 21.1% 21.0% 21.3% 20.6% 20.8% 20.6% 20.5% 20.5% 20.4% 20.4% 20.2% 19.9% 19.6% 19.7% 19.6% 19.7% 19.1% 18.9% 19.0% 19.2% 20% 35 18.2% 18.3% 18.3% 18.1% 18.0% 18.0% 18.4% 17.4% 17.5% 18.0% 17.8% 17.4% 17.6
Slide 5: Good Margin Trend despite Costs for Expansion in China & Brazil
Good Margin Trend despite Costs for Expansion in China & Brazil as well as Plant Closing in Italy Excellent material costs ratio in Q3 2014 as well as Q1-3 2014 Personnel expenses for permanent employees in 2014 slightly higher due to acquisitions and plant closure Transaction costs for NDS ac
Slide 6: First operational Adjustment since the IPO due to Successful Large Acquisition of NDS
First operational Adjustment since the IPO due to Successful Large Acquisition of NDS Costs for new plants in China and Brazil as well as plant closure in Italy are not adjusted Financial result adjusted by one-off costs due to favourable repayment of SFA in January 2014 in EUR million adjusted
Slide 7: Strong Development of adjusted EPS in Q1-3 2014
Strong Development of adjusted EPS in Q1-3 2014 Excellent growth by 24.4% for adjusted EPS Q3 2014 Stable reported EPS Q1-3 2014 including historic PPA and transaction costs for NDS adjusted EPS* (in EUR) reported EPS* (in EUR) 2 1.5 1 1.68 1.48 1.35 1.36 0.5 0.43 0.54 0.45 0.39 0 Q3/2013 Q3/201
Slide 8: Solid Operating Net Cash Flow
Solid Operating Net Cash Flow Operating net cash flow in EUR million Q1-3/2013 Q1-3/2014 Variance EBITDA 97.5 104.6 +7.3% Δ ± Working capital -8.7 -19.5 +123.5% Operating net cash flow before investments from 88.8 85.1 -4.2% operating business Δ ± Investments from operating business -16.0 -23.8 +22.
Slide 9: Net Debt, Financing and Equity Ratios
Net Debt, Financing and Equity Ratios Net debt only slightly up despite dividend payment of EUR 22.3 million in May 2014 Repayment of EUR 101.4 million SFA in January 2014 funded by low interest rate promissory note Record equity ratio and very solid debt ratios allow for NDS acquisition Net D
Slide 10: Net Debt, Financing and Equity Ratios incl. Pro Forma NDS Acquisition
Net Debt, Financing and Equity Ratios incl. Pro Forma NDS Acquisition Acquisition of NDS adds approx. EUR 225 million debt Equity and debt ratio incl. NDS back to IPO levels Record equity ratio and very solid debt ratios allow for NDS acquisition Net Debt (in EUR) Equity Ratio 500 149* 384* 30
Slide 11: Outlook 2014 – Company Guidance
Outlook 2014 – Company Guidance Solid organic growth of approx. 4% to 7%, plus approx. EUR 20 million from recent acquisitions Sales (incl. NDS of up to EUR 12 million for November and December 2014) EBITA margin Sustainable margin level as in previous years of more than 17% Financial Up to EUR 20 m
Slide 12: NORMA Group after NDS acquisition
NORMA Group after NDS acquisition Customer Value through Innovation 12
Slide 13: NDS serves Three Main Application Areas
NDS serves Three Main Application Areas Stormwater management NDS products When not permeating properly into the ground, stormwater can lead NDS provides solutions to severe damage of building foundations and water pollution to collect water and To avoid environmental effects, regulation forces
Slide 14: Successful Acquisition Track Record Continues with NDS
Successful Acquisition Track Record Continues with NDS Sales consolidation effects in EUR million Date of acquisition Total Thereof 2014 Market entry in connecting technology in Connectors Verbindungstechnik AG, Switzerland 04/12 16.6 - Pharma & Biotec Market consolidation heating and air Nordic Met
Slide 15: Regional Split
Regional Split Regions – NORMA Group Regions – NORMA Group (incl. NDS) 9% 8% 30% 39% 53% 61% EMEA Americas APAC EMEA Americas APAC Regional Split (pre M&A) Regional Split (incl. NDS) 2013 Total % 2013 Total % EMEA 388 61 EMEA 388 53 Americas 192 30 Americas 288 39 APAC 56 9 APAC 56 8 Total 636 100 T
Slide 16: Two Strong Distribution Channels
Two Strong Distribution Channels NORMA Group NORMA Group (incl. NDS) 30% 39% 61% 70% Engeneered Joining Technology Distribution Services Engeneered Joining Technology Distribution Services Two strong distribution channels (pre M&A) Two strong distribution channels (incl. NDS) DS in EUR in EUR thereo
Slide 17: Two Strong Distribution Channels*
Two Strong Distribution Channels* thereof water management** 16% (4%) thereof industrial supplier 26% (30%) DS EJT 39% (30%) 61% (70%) thereof general distribution 23% (26%) products 9% (10%) thereof commercial vehicle OEM 26% (30%) thereof passenger vehicle OEM * Pre-transaction numbers in brackets
Slide 18: Acquisition NDS
Acquisition NDS Customer Value through Innovation 18
Slide 19: Overview – Deal Structure
Overview – Deal Structure Share NORMA Group acquires 100% of National Diversified Sales Inc., (NDS), Woodland Hills, CA, USA A leading supplier of water management solutions, including products for storm water management, Business Model efficient landscape irrigation and flow management Sales Approx
Slide 20: NDS addresses Multi Billion Dollar Water Management Market
NDS addresses Multi Billion Dollar Water Management Market One of the US-market leader 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 pe
Slide 21: 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 Stormwater Management Efficient Landscape Irrigation Flow Management ~ 50 % ~ 30 % ~ 20 % Large target markets for all NDS application areas nationwide and international Internati
Slide 22: NDS has Deep and Longstanding Customer Relationships
NDS has Deep and Longstanding Customer Relationships 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 fo
Slide 23: Water Management supports DS Development
Water Management supports DS Development • 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 % or
Slide 24: New NORMA Group (incl. NDS)
New NORMA Group (incl. NDS) Sales Pro forma sales 2013 approx. EUR 732 million Diversification Pro forma shift of DS share from 30% to 39% (EJT: 61% from 70%) Regional Split Pro forma shift of Americas share from 30% to 39% (EMEA: 53% from 61%; APAC: 8% from 9%) Organic growth Organic growth profile
Slide 25: New NORMA Group (incl. NDS)
New NORMA Group (incl. NDS) Margin profile Sustainable EBITA margin above 17% Acquisition Up to EUR 5 million (all in financial year 2014) costs Integration Approx. EUR 5 million within the first 4 quarters costs Financing costs Approx. EUR 2 million (one-offs, all in financial year 2014) PPA To be
Slide 26: Appendix Strategy
Appendix Strategy Customer Value through Innovation 26
Slide 27: Proven Business Model Addressing Key Megatrends
Proven Business Model Addressing Key Megatrends NORMA Group products Specific customer requirements driven by megatrends NORMACLAMP® ~ 52% 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 i
Slide 28: 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 29: Tighter Emission Regulations Drive Increased Joining Technology Content
Tighter Emission Regulations Drive Increased Joining Technology Content 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
Slide 30: Fleet Efficiency Europe: Innovation Rate must Double
Fleet Efficiency Europe: Innovation Rate must Double 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 (4.5 % p.a.) only 18 % in 8 tri
Slide 31: OEMs Well on Track to Meet CO2 Emission Targets
OEMs Well on Track to Meet CO2 Emission Targets 140 EU Fleet CO2 emissions (g/km) 130 EU-regulatory target 2015 120 g/km 110 100 EU-regulatory target 2021 90 BMW Daimler Fiat Peugot Renault VW Group GM From 2019 manufacturers have to pay an excess emissions premium for each car registered which am
Slide 32: Convincing Growth Prospects
Convincing Growth Prospects Clear global market leader in clamp/connect Excellent additional growth across EJT market Sales EUR million (year) Additional growth for 700 Joining technology market 636 above market growth 600 ~26% Fluid 500 Passenger vehicles add. 2-4% ~74% Clamp (52%) / Connect (22%)
Slide 33: 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 34: 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 35: 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 Resident engineers with close contact to international EJT customers No. 1 national and international DS service level and DS product portfolio En
Slide 36: Building NORMA Group
Building NORMA Group 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 N
Slide 37: NORMA Group Worldwide
NORMA Group Worldwide EMEA Czech Republic (P) France (P, D) Germany (P, D) Italy (D) Netherlands (D) Poland (P) Russia (P, D) Serbia (P, D) 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) In
Slide 38: Historic Growth Track Record
Historic Growth Track Record Historic revenue development in EUR million 636 605 581 490 458 385 330 277 229 242 198 207 174 182 138 150 121 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 HGB IFRS 1997 to 2013: 17 years of a successful growth story 38
Slide 39: Outlook 2014 - Strategy
Outlook 2014 - Strategy 1 Continue international expansion of sales network and production footprint 2 Continue to explore business opportunities in APAC 3 Open second China plant to enable expansion into domestic and APAC markets 4 Open plant in Brazil to serve local customers 5 Increase business o
Slide 40: 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 41: Appendix Financials
Appendix Financials Customer Value through Innovation 41
Slide 42: Working Capital - Historical Low Level of 17.4% of Sales
Working Capital - Historical Low Level of 17.4% of Sales Successful implementation of reverse factoring and optimizing TWC processes boosts trade accounts payables Trade receivables on a slightly higher level due to excellent sales in Q4 2013 EUR million 250 20% 18.3% 18.5%** 18.1% 17.4% 200 15%
Slide 43: Another Record Operating Net Cash Flow in 2013
Another Record Operating Net Cash Flow in 2013 Operating net cash flow in EUR million 2011 2012 2013 Variance EBITDA 117.0 120.8 129.3 +7.0% Δ ± Working capital -19.5 -9.8 5.1 n.a. Operating net cash flow before investments 97.5 111.0 134.4 21.0% from operating business Δ ± Investments from operatin
Slide 44: Continuation of Growth Track and Sustainable Margin into 2013
Continuation of Growth Track and Sustainable Margin into 2013 Revenue (in EUR million) Gross profit (in EUR million) 605 636 400 56.0% 57.0% 58.4% 581 54.9% 55.3% 55.5% 60% of sales 600 490 371 458 300 450 344 40% 330 323 200 300 275 251 182 20% 150 100 0 0 0% 2008 2009 2010 2011 2012 2013 2008 2009
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) 18.5% 18.3% 18.1%* 18.3% 18.5%** 17.4% 20% of 200 revenues 150 81 79 90 100 70 100 49 46 50 10% 54 45 65 67 74 80 0 -19 -30 -46 -41 -38 -59 80 -50 -100 0% 2008 2009 2010
Slide 46: Shareholder Structure
Shareholder Structure Identified institutional Shareholders 100% 75% 28% 25% 50% 10% 15% 12% 10% 25% 0% pre IPO post IPO Dec. 2012 Today Germany United Kingdom USA Dec. 2011 Nordic France Rest of World 3i MABA CYPRUS Ltd. old & existing management free float Free float per September, 2014 includes:
Slide 47: Financial Calendar and Contact
Event Date Preliminary Financial Figures 2014 18 February 2015 Publication Full Year Results 2014 25 March 2015 Publication Interim Results Q1 2014 06 May 2015 Annual General Meeting in Frankfurt / Main 20 May 2015 Publication Interim Results Q2 2014 05 August 2015 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 “