Slide 1: NORMA Group Third Quarter Results 2015
NORMA Group Third Quarter Results 2015 Maintal, 4 November 2015
Slide 2: Strong Q3 2015 with 31.9% y-o-y growth
Strong Q3 2015 with 31.9% y-o-y growth leads to Q1-3 2015 growth of 29.7% y-o-y Sales Sales at EUR 218.3 million in Q3 2015 (Q3 2014: EUR 165.5 million) EBITA Adjusted EBITA of EUR 39.3 million resp. +34.7% y-o-y (Q3 2014: EUR 29.2 million) Margin Strong adjusted EBITA margin of 18.0% of sales (Q3 2
Slide 3: Sales Development in EUR million
Sales Development in EUR million Sales 2014 2015 Change Change in % thereof thereof thereof organic acquistions currency Q1 177.8 221.5 43.7 24.6% -0.5% 16.8% 8.3% Q2 175.2 232.9 57.6 32.9% 0.5% 22.7% 9.7% Q3 165.5 218.3 52.8 31.9% 4.6% 21.7% 5.6% Q1-3 518.5 672.6 154.1 29.7% 1.5% 20.3% 7.9% Solid
Slide 4: Shift by region and by way-to-market mainly due to NDS acquisition
Shift by region and by way-to-market mainly due to NDS acquisition Sales breakdown by regions Sales breakdown by way-to-market 100% 100% 9%* 8%* 29% 80% 80% 39% 33% 45% 60% 60% 40% 40% 71% 58% 61% 47% 20% 20% 0% 0% Q1-3/2014 Q1-3/2015 Q1-3/2014 Q1-3/2015 EMEA Americas Asia-Pacific EJT DS * by dest
Slide 5: Adjusted EBITA and margin development
FY 2010: FY 2011: FY 2012: FY 2013: FY 2014: Q1-3 2015: 17.4% 17.7% 17.4% 17.7% 17.5% 17.9% 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% 20% 18.2% 18.3% 18.3% 18.1% 18.0% 18.0% 18.4% 17.
Slide 6: Material costs ratio improved by 90 basis points in Q3 2015
Material costs ratio improved by 90 basis points in Q3 2015 y-o-y and 160 basis points in Q1-3 2015 Personnel expense ratio improved by 150 basis points in Q3 2015 y-o-y, which leads to improved Q1-3 2015 y-o-y development Change of cost ratios also due to NDS with lower material costs and per
Slide 7: Operational adjustments due to acquisition of NDS
Operational adjustments due to acquisition of National Diversified Sales (NDS) Total adjustments of EUR 0.37 on EPS level include PPA adjustments in EUR million Reported Adjustments* Adjusted Sales 672.6 672.6 3.1 EBITDA 133.4 (incl. EUR 0.6 million integration costs 136.5 & EUR 2.5 million inve
Slide 8: Adjusted and Reported EPS
xxx xxx Adjusted EPS* (in EUR) Reported EPS* (in EUR) 2,5 2,5 2,0 2,0 1,5 1,5 2.10 1,0 1,0 1.68 1.73 1.36 0,5 0,5 0.54 0.65 0.55 0.45 0,0 0,0 Q3/2014 Q3/2015 Q1-3/2014 Q1-3/2015 Q3/2014 Q3/2015 Q1-3/2014 Q1-3/2015 Net income in 17.1 20.7 53.7 67.0 14.3 17.4 43.2 55.2 EUR million * based on number of
Slide 9: Operating net cash flow
Operating net cash flow in EUR million Q1-3/2014 Q1-3/2015 Variance Q3/2014 Q3/2015 Variance Adjusted EBITDA 104.6 136.5 +30.5% 33.4 44.5 +33.2% Δ ± Working capital* -14.8 -15.5 -4.5% -0.1 +8.5 n/a Operating net cash flow before investments 89.8 121.0 +34.8% 33.3 53.0 +59.0% from operating business
Slide 10: Strong net debt decrease compared to 30 Jun 2015
Strong net debt* decrease by EUR 30 million compared to 30 Jun 2015 due to excellent cash flow Equity ratio improved by 90 basis points compared to 31 Dec 2014 Leverage continues to improve post NDS acquisition to 2.0x** (Net debt / LTM EBITDA) Net Debt (in EUR million) Equity Ratio 600 31 Dec
Slide 11: 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 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® ~ 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 14: Environmental awareness continues to drive tightening emission regulations
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 15: 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 16: 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 17: Company history and milestones
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 Nordic Acquisition Chi
Slide 18: 1997 to 2014: 18 years of a successful growth story
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 18
Slide 19: Clear global market leader in clamp/connect
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 20: 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 21: Examples of NORMA Group's 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 22: Unique business model with 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 23: 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 23
Slide 24: Sales consolidation effects from 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 25: Acquisition of National Diversified Sales, Inc. (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 26: NDS: US market leader in water management solutions
One of the US-market leaders 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 performance and tangible organic growth Regulatory initiat
Slide 27: Broad diversification in 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 27
Slide 28: Highly 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 29: Water management to become a strong column within DS business
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 % organic growth Excellent margin profile co
Slide 30: Sales split by way-to-market and end-market
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 * FY 2014 (2013 in brackets); graphic includes full NDS sales for 2014
Slide 31: Production sites and distribution 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 32: Market leader in attractive engineering niche markets
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: Strategic priorities
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 34: Appendix Full Year Results 2014
Appendix Full Year Results 2014 Page 34
Slide 35: FY 2014 highlights: sales and EBITA
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 36: FY 2014 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 37: Regional sales development 2014
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 38: Organic growth slowed during the year as expected
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 39: Investments lead to slightly higher personnel costs in 2014
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 40: First time operational adjustments after NDS acquisition
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 41: Operational adjustments due to NDS 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 42: Adjustments FY 2014 to FY 2016
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 43: Reported and adjusted income statement
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 44: 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 45: 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 46: Equity ratio still solid after NDS acquisition
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 47: Promissory note financing 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 48: 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) Page 48
Slide 49: 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 (Net debt* / adjusted LTM EBITDA) Equity Ratio 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 50: Balance sheet 2013 and 2014
(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 51: Operating net cash flow 2011-2014
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 52: 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 695 406 600 636 605 371 581 344 300 323 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 53: Trade working capital and 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 54: Identified institutional shareholders
100% Identified institutional Shareholders* 75% 30% 50% 25% 7% 25% 12% 14% 12% 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 October 31, 2015 includes Ameriprise, USA 9.96%
Slide 55: Financial calendar and contact
Event Date Publication Preliminary Financial Figures 2015 17 February 2016 Publication Full Year Results 2015 23 March 2016 Publication Interim Results Q1 2016 04 May 2016 Annual General Meeting in Frankfurt/Main 02 June 2016 Publication Interim Results Q2 2016 03 August 2016 Publication Interim Res
Slide 56: 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