Slide 1: Third Quarter Results 2017
NORMA Group SE Third Quarter Results 2017 Maintal, November 8, 2017
Slide 2: Q3 2017 highlights
Sales Q3 2017 sales up by 12.8 % to EUR 244.4 million (Q3 2016: EUR 216.6 million) Adjusted EBITA EUR 42.7 million resp. +10.4% y-o-y (Q3 2016: EUR 38.7 million) Margin Sustainable adjusted EBITA margin of 17.5% (Q3 2016: 17.9%) Equity ratio increased to 36.9% (Dec 31, 2016: 36.2%) including dividen
Slide 3: Sales Development in EUR million
Sales Development in EUR million Sales 2016 2017 Change Change in % Thereof Thereof Thereof organic acquisitions currency Q1 226.6 254.9 28.3 12.5% 4.6% 6.5% 1.4% Q2 236.2 264.1 27.9 11.8% 4.9% 5.9% 1.0% Q3 216.6 244.4 27.8 12.8% 8.6% 7.3% -3.1% Q1-3 679.4 763.4 84.0 12.4% 6.0% 6.6% -0.2% Solid or
Slide 4: Sales breakdown by region and way-to-market
Very strong organic and acquisitive growth in Asia-Pacific led to increase of sales ratio from 8% to 11% Strong organic and acquisitive growth in EJT led to increase of sales ratio from 60% to 62% Q1-3 2017 (Q1-3 2016) sales breakdown by region Q1-3 2017 (Q1-3 2016) sales breakdown by way-to-mar
Slide 5: Adjusted EBITA and margin development
FY 2010: FY 2011: FY 2012: FY 2013: FY 2014: FY 2015: FY 2016: Q1-3 2017: 17.4% 17.7% 17.4% 17.7% 17.5% 17.6% 17.6% 17.6% EUR million 21.1%21.0% 21.3% 20.5% 20.5%20.4% 20.4% 20.6%20.8%20.6% 20.8%20.4% 19.9% 19.6% 19.7% 19.7% 20.2% 20.1%20.4%20.4% 20.0% 20.1%20.0%20.0% 60 19.1%18.9% 19.2% 19.6% 19.2%
Slide 6: Adjusted cost ratios
Adjusted material cost ratio up by 130 basis points in Q3 2017 due to higher alloy surcharges and consolidation of Autoline (already better than Q1 2017 resp. Q2 2017: 250 basis points resp. 160 basis points) Adjusted personnel expense ratio down by 110 basis points in Q3 2017 Better adjusted
Slide 7: Adjustments from reported to adjusted figures
Integration costs and inventory-step-ups for recent acquisitions plus ongoing PPA led to EUR 0.44 adjustments on EPS level in EUR million Reported Adjustments* Adjusted Sales 763.4 763.4 2.6 EBITDA 150.3 (incl. EUR 2.0 million integration costs & EUR 1.1 million inventory-step-ups & 152.9 EUR -0.5
Slide 8: Reported and adjusted EPS
Adjusted EPS* Reported EPS* EUR EUR 3,0 3,0 3,0 3,0 2,5 2,5 2,5 2,5 2,0 2,0 2,0 2,0 1,5 1,5 1,5 1,5 2.51 1,0 1,0 2.21 1,0 1,0 2.07 1.89 0,5 0,5 0,5 0,5 0.71 0.77 0.61 0.60 0,0 0,0 0,0 0,0 Q3/2016 Q3/2017 Q1-3/2016 Q1-3/2017 Q3/2016 Q3/2017 Q1-3/2016 Q1-3/2017 Net income (in EUR million) 22.5 24.4 70
Slide 9: Net debt and equity ratio
Net debt* at EUR 397 million, only increased by 1.1% despite dividend and acquisition payments Equity ratio increased to 36.9% (Dec 31, 2016: 36.2%) Slightly improved leverage at 2.0x (Net debt* / adjusted LTM EBITDA) Net Debt* (in EUR million) Equity Ratio 392* 397* Dec 31, 2016 Sep 30, 2017
Slide 10: Net Operating Cash Flow
Net Operating Cash Flow in EUR million Q1-3 2016 Q1-3 2017 Variance Q3 2016 Q3 2017 Variance Adjusted EBITDA 138.7 152.9 +10.2% 44.1 48.8 +10.5% Δ ± Working capital -21.2 -50.0 +135.5% +0.6 -4.5 n/a Net operating cash flow before investments 117.5 102.9 -12.4% 44.7 44.3 -1.0% from operating business
Slide 11: Guidance 2017
Organic growth of around 4% to 7%, additionally around EUR 55 million from acquisitions of Autoline, Sales Lifial & Fengfan Adjusted EBITA Sustainable at the same 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® 34% 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 14: Tightening emission regulations globally
Today Europe Euro 3 Euro 4 Euro 5 Euro 6 Euro 7 NAFTA EPA ‘00 EPA ‘04 EPA ‘07 EPA Tier 3 – Clean Air Act Brazil Euro 1 Euro 2 Euro 3 Euro 4 Euro 5 Euro 6 Russia Euro 1 Euro 2 Euro 3 Euro 4 Euro 5 Euro 6 India Euro 1 Euro 2 Euro 3 Euro 4 Euro 5 Euro 6 Euro 7 China Euro 1 Euro 2 Euro 3 Euro 4 Euro 5 E
Slide 15: 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 16: 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 17: Growth perspectives
Battery Thermal Management Growth perspectives Coolant Systems Power Electronics and Motors Cooling HVAC / Heat Pump Systems NORMA Group will benefit from a graduated Content per engine type hybridization ICE, Hybrid & EV development* Content Production volume in million Hy- Hy- 100 brid brid 100% I
Slide 18: New business from electrification
Battery Electric Vehicle Hybrid Gasoline Exhaust system and combustion engine parts being replaced with new business opportunities for thermal management and other Additional products e.g. for thermal management components Exhaust system Thermal Other Cooling system Other Thermal Engine management a
Slide 19: Company history and acquisitions
Acquisition Acquisition 2017 Lifial, Portugal Fengfan, China Acquisition 2016 Autoline Business, France Foundation Acquisition Acquisition National 2014 NORMA China II 2011 Five Star, USA Diversified Sales, USA Acquisition Acquisition Variant, Acquisition Guyco, Foundation MDAX listing 2013 Davydick
Slide 20: 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 21: Acquisition of Fengfan, China
M&A Acquisition of 80% of Fengfan Fastener (Shaoxing) Co., Ltd. (‘Fengfan’), China Business Manufacturer of joining products made of stainless steel, nylon and specialty materials Model Based in Shaoxing City, China Founded in 1988, the company has been manufacturing cable ties, fastening elements a
Slide 22: Acquisition of Lifial, Portugal
M&A Acquisition of Lifial – Indústria Metalúrgica de Águeda, Lda. (‘Lifial’), Portugal, in January 2017 Business Manufacturer of metal clamps for the use in industry and agriculture (distribution business) Model Based in Águeda, Portugal For more than 28 years the company has been manufacturing heav
Slide 23: Acquisition of Autoline business
M&A Acquisition of all assets of the Autoline business from Parker Hannifin in November 2016 Business Global supplier of quick connectors for all types of automotive fluid line applications Model Based in Guichen, France, with production sites in France, Mexico and China For more than 20 years the c
Slide 24: NDS 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 24
Slide 25: 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 26: Sales split by business and end market
thereof water management thereof industrial supplier 19% (19%) 29% (26%) DS 40% (39%) EJT 60% (61%) 21% thereof general distribution thereof (20%) products 5% commercial vehicle OEM (8%) 26% (27%) thereof passenger vehicle OEM * FY 2016 (2015 in brackets) Page 26
Slide 27: Historic Revenue Development
Historic Revenue Development in EUR million 890 895 695 636 605 581 490 458 385 330 277 229 242 182 198 207 150 174 121 138 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1997 to 2016: 20 years of a successful growth story Page 27
Slide 28: Global market leader in Clamp / Connect
Clear global market leader in Clamp / Connect Excellent growth outlook across EJT market Sales in EUR million (year)1 Additional growth for 1000 Joining Technology market 895 above market growth 800 ca. Fluid Passenger vehicles add. 2- 4% 42% 600 Commercial vehicles add. 2- 4% ca. 58% Clamp (ca. 34%
Slide 29: Mission-criticality: small relative costs, high impact
Mission-criticality: Small relative costs – high impact Basis for premium pricing Market leadership Technology Quality Innovation Tailor-made solutions ca. EUR 66 in the exhaust system ca. EUR 95 in other ca. EUR 30 application in the exhaust ca. EUR 6 areas system in other ca. EUR 10 application ar
Slide 30: 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 31: 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 32: 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 32
Slide 33: Global production and distribution footprint
EMEA Czech Republic (P) - Hustopece France (P, D) – Briey, Guichen Germany (P, D) – Maintal, Gerbershausen, Marsberg Italy (D) Netherlands (D) Poland (P, D) - Pilica Portugal (P) - Águeda Russia (P, D) - Togliatti Serbia (P) - Subotica Spain (D) Sweden (P, D) - Anderstorp Switzerland (P, D) - Tagels
Slide 34: Market leader in engineering niche markets
1 Market leader in attractive engineering niche markets with long term 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 S
Slide 35: Strategic achievements 2017
Successful acquisition of the global quick connector business from Autoline with locations in France, M&A China and Mexico Successful acquisition of Lifial, Portugal, who has been manufacturing metal clamps for 28 years for M&A use in industry and agriculture Continuing cross selling of Distribution
Slide 36: Continue international expansion
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 con
Slide 37: Appendix – Full Year Results 2016
Appendix Full Year Results 2016 Page 37
Slide 38: FY 2016 highlights
Sales Sales of EUR 894.9 million (2015: EUR 889.6 million) leads to growth of 0.6% Adjusted EBITA Adjusted EBITA of EUR 157.5 million (2015: EUR 156.3 million) Margin Adjusted EBITA margin stable at 17.6% (2015: 17.6%); 7th year of sustainable margin higher than 17.0% Adjusted Improved adjusted tax
Slide 39: FY 2016 balance sheet, cash flow and guidance
Strong balance sheet with an equity ratio of 36.2% (2015: 36.8%) despite dividend payment and higher Equity balance sheet total due to the Autoline acquisition Net debt* increased moderately to EUR 392.0 million (2015: EUR 357.5 million) despite the Autoline Net Debt* acquisition and dividend paymen
Slide 40: Regional sales development
EMEA: Solid growth in EJT includes favorable automotive business while DS sales were slightly negative – this led in total to a growth of +3.8% including negative currency effects and start of consolidation of Autoline. Americas: Strong decline in EJT sales due to downturn of commercial vehicle,
Slide 41: Sales Development 2016
Organic growth slowed down during the year mainly due to lower than expected US commercial vehicles, agricultural and construction machinery sector including aftermarket Autoline has been consolidated since December 2016 and contributed 0.4% of growth in 2016 Only minor currency changes in 201
Slide 42: Adjusted cost ratios 2016
Favorable material costs in combination with improvements from the Global Excellence Program led to a better material cost ratio Higher personnel expenses ratio mainly due to weak commercial vehicle, agricultural and construction machinery business in the US and investments into Asia-Pacific S
Slide 43: Operational adjustments after Autoline acquisition
Operational adjustments after the Autoline acquisition in 2016 EUR 4.8 million costs related to Autoline in 2016 Further operational adjustments planned in 2017 for Autoline and for ongoing PPA adjustments in EUR million 2010 2011 2012 2013 2014 2015 2016 Reported EBITA 64.9 84.7 105.2 112.1 1
Slide 44: Adjustments on EBITDA level 2016
Operational adjustments on EBITDA level due to the acquisition of Autoline EUR 0.58 adjustments on EPS level in EUR million Reported Adjustments Adjusted Sales 894.9 894.9 4.8 EBITDA 174.6 (incl. EUR 1.7 million transfer taxes; EUR 2.1 million acquisition costs; 179.4 EUR 0.4 million integration
Slide 45: Adjustments FY 2016 to FY 2018
in EUR million FY 2016 FY 2017* FY 2018* ca. 4 EBITDA level 4.8 (integration costs and inventory-step-ups for 0 Autoline) EBITA level 7.1 ca. 8 ca. 2 (incl. EUR 2.3 million depreciation PPA) (incl. ca. EUR 4 million depreciation PPA) (depreciation PPA) EBIT level 27.7 ca. 29 ca. 23 (incl. EUR 20.6 m
Slide 46: Dividend proposal EUR 0.95 per share
Dividend proposal to the shareholders at the AGM on May 23, 2017: EUR 0.95 per share (2016: EUR 0.90) Pay-out of EUR 30.3 million for 31,862,400 shares (32.0% of adjusted Group net profit of EUR 94.6 million) General policy: dividend of 30% to 35% of adjusted Group net profit Adjusted EPS Repo
Slide 47: Adjusted and reported income statement
in EUR million Adjusted Reported 2015 2016 2015 2016 Sales 889.6 894.9 889.6 894.9 Gross profit 533.1 545.6 530.6 544.9 EBITDA 177.5 179.4 173.9 174.6 in % of sales 20.0 20.0 19.5 19.5 EBITA 156.3 157.5 150.5 150.4 in % of sales 17.6 17.6 16.9 16.8 EBIT 147.9 147.7 124.8 120.0 in % of sales 16.6 16.
Slide 48: Trade working capital ratio
Trade working capital ratio further improved to 16.1% of sales Improvement to 15.5% achieved including pro forma sales of Autoline On pro forma sales: trade receivables and trade payables improved, inventories showed slight increase EUR million 18.5% 20% 18.1% 18.3% 18.1%* 400 17.4% 17.1% 16.1
Slide 49: Equity development
Equity increased by EUR 54 million with strong profit of EUR 76 million Equity ratio slightly decreased due to higher balance sheet total from the Autoline acquisition and dividend payment EUR million 600 36.8% 36.2% 500 7* -29 76 400 300 484 200 430 100 0 Equity 2015 Profit Dividend Others* Equ
Slide 50: Net Debt
Net Debt* (in EUR million) 358 392 600 Leverage** Dec 31, 2015 Dec 31, 2016 400 (Net debt* / adjusted LTM EBITDA) 2.0 x 2.1 x 458 558 200 0 Gearing Dec 31, 2015 Dec 31, 2016 -100 -166 (Net debt* / equity) 0.8 x 0.8 x -200 Dec 31, 2015 Dec 31, 2016 Cash Debt * excl. derivative financial liabilities o
Slide 51: Maturity Profile
Maturity Profile (in EUR million) – Financial Instruments Promissory Note 3 Promissory Note 2 67 Promissory Note 1 Bank Borrowings 36 113 78* 43 5 35 5 26 5 5 29 45 42 21 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Maturity Profile (in EUR million) – Currencies USD EUR 117 90 12 4 4 24 64 52 1
Slide 52: Balance sheet
in EUR million Dec 31, 2015 Dec 31, 2016 in EUR million Dec 31, 2015 Dec 31, 2016 Assets Equity and liabilities Non-current assets Equity Goodwill / Other intangible assets / Total equity 429.8 483.6 784.8 865.5 Property, plant & equipment Non-current and current Other non-financial assets / liabili
Slide 53: Net Operating Cash Flow 2011-2016
Net Operating Cash Flow in EUR million 2011 2012 2013 2014 2015 2016 Variance Adjusted EBITDA 117.0 120.8 129.3 138.4 177.5 179.4 +1.1% Δ ± Working capital -19.5 -9.8 +5.1 +10.4 -0.6 +17.0 n/a Net operating cash flow before investments from operating 97.5 111.0 134.4 148.8 176.9 196.4 +11.1% busines
Slide 54: Revenue, gross profit, personnel expenses, adjusted EBITA
Revenue (in EUR million) Gross Profit (in EUR million) 1000 600 58.4% 58.4% 59.9% 61.0% 54.9% 55.3% 56.0% 55.5% 57.0% 60% of sales 890 895 533 546 750 400 695 406 40% 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 2016 2008 2009 2010 20
Slide 55: Cash flow, working capital and CAPEX
Net Operating 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%* 17.1% 20% of sales 16.1% 400 150 15.5%* 200 108 123 124 81 79 90 10% 49 70 125 54 46 45 65 67 74 80 115 130 140 0 -46 -41 -38 -59 -81 -101 -120 -19 -30 100 -200 0% 2008 2009 201
Slide 56: Milestones and Free float Changes
Milestones and Free float Changes Identified Institutional Shareholders* Apr 2011 IPO with ca. 36% free float 26% 20% Jun 2011 SDAX listing 5% 21% 15% Since 100% free float 13% Jan 2013 Mar 2013 MDAX listing Germany United Kingdom USA Nordic France Rest of World Free Float per October 31, 2017 inclu
Slide 57: Financial calendar and contact
Event Date Publication Preliminary Results 2017 February 14, 2018 Publication Full Year Results 2017 March 21, 2018 Publication Interim Results Q1 2018 May 9, 2018 Annual General Meeting 2018 in Frankfurt/Main May 17, 2018 Publication Interim Results Q2 2018 August 1, 2018 Publication Interim Result
Slide 58: Future-oriented 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