NORMA Group Achieves Solid Results and Improved Profitability in the First Quarter of 2024
NORMA Group Achieves Solid Results and Improved Profitability in the First Quarter of 2024
- Adjusted operating result (EBIT) increased by 13.9 percent to 25.7 million euros
- Adjusted EBIT margin increased by 1.1 percentage points to 8.3 percent
- Sales in Q1 2024 fell slightly by 2.0 percent compared to the same quarter of the previous year to 308.5 million euros
- Step Up improvement program has a positive effect
NORMA Group started the 2024 financial year with improved profitability. The company was more profitable compared to both the previous quarter and the same period last year.
Group sales fell slightly by 2.0 percent to 308.5 million euros compared to the same quarter of the previous year . Organically, sales fell by 1.0 percent in the first three months of 2024. Negative currency effects reduced sales by an additional 1.1 percent compared to the previous year. The recently acquired water management company Teco made a positive contribution to sales growth of 0.1 percent.
Adjusted earnings before interest and taxes (adjusted EBIT) rose significantly by 13.9 percent in the first quarter of 2024 compared to the same quarter of the previous year to 25.7 million euros . The adjusted EBIT margin was 8.3 percent and also improved significantly. More efficient production and declining inflation in material costs had a positive impact on the margin. However, higher personnel costs as a result of inflation-related wage increases and the reduction of production backlogs as well as higher interest rates were challenging. The operating net cash flow was -2.3 million euros in the period January to March 2024, significantly above the value of the comparable quarter of 2023 .
CEO Guido Grandi: “We started the year successfully and have significantly improved our profitability. Our robust business model with three business areas offers us attractive opportunities even in a mixed economic environment. With the Step Up program launched a year ago, we have set the right course and become more efficient, especially in Europe. We will continue to build on this to ensure sustainable, profitable growth for NORMA Group.”
Heterogeneous development in the business units
In the EMEA region (Europe, Middle East and Africa), sales fell slightly by 1.2 percent to 136.5 million euros in the first quarter of 2024 . The three customer industries developed differently. Sales in Industrial Applications fell due to the subdued economic situation in Europe. The business with water management solutions, however, grew significantly in the region. Among other things, the acquisition of the Italian water specialist Teco, completed in February 2024, ensured positive momentum. In the area of connection technology for vehicles (Mobility & New Energy), sales remained stable at the same level as in the same period last year. Profitability in the EMEA region continued to improve in the first quarter of 2024: Despite the slight decline in sales, adjusted EBIT rose to 10.6 million euros . The adjusted EBIT margin was 7.4 percent, significantly higher than the same quarter of the previous year . The higher profitability is based on the one hand on lower costs for energy and materials and on the other hand on internal improvement measures in production and logistics.
In the Americas region, sales revenue fell slightly by 1.6 percent to 135.4 million euros in the first quarter of 2024 compared to the same period last year. The main reason for the decline is negative currency effects in connection with the US dollar (-1.1 percent). In the Industry Applications area, postponements in investment decisions due to an expected, but still pending, interest rate cut depressed demand. Business in the water management area, on the other hand, grew noticeably in the period January to March 2024. In the Mobility & New Energy division, the business volume was below the previous year’s figure. Adjusted EBIT in the Americas region was 15.2 million euros in the first quarter of 2024, slightly below the comparable value . The adjusted EBIT margin, however, showed a slightly positive development at 11.1 percent.
In the Asia-Pacific region, sales in the first quarter amounted to 36.6 million euros (Q1 2023: 39.1 million euros). Organic sales fell by 1.5 percent; Negative currency effects reduced sales growth by an additional 4.9 percent. In the Industry Applications area, the continued hesitant economic recovery in China in general and the tense situation in the construction sector in particular led to reduced demand. In Water Management, sales were also below the figure for the same quarter of the previous year. Business was stable in the Mobility & New Energy sector, which in the region is primarily driven by the Chinese automotive industry. Despite lower sales, the adjusted EBIT in the Asia-Pacific region was 2.7 million euros in the first quarter of 2024 (Q1 2023: 2.6 million euros). The adjusted EBIT margin improved to 6.9 percent (Q1 2023: 6.3 percent).
Efficiency measures are having an impact
NORMA Group launched the global growth and efficiency program Step Up in spring 2023. So far, over 1,300 individual measures have been identified, more than half of which are currently being implemented or have already been completed. The measures are divided into growth plans for the three strategic business units Industry Applications, Water Management and Mobility & New Energy and measures to increase operational efficiency. NORMA Group will identify and implement further measures in the coming years.
Annual General Meeting in attendance
The NORMA Group’s general meeting will take place on May 16, 2024 as a face-to-face event in Frankfurt am Main. Among other things, the re-election of Supervisory Board Chairman Mark Wilhelms is on the agenda. Mark Wilhelms has been a member of the committee since 2018 and has been chairman since May 2023.
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