Industry News

Despite a challenging market environment, NORMA Group still managed to achieve a robust margin in financial year 2023. Thanks to increased levels of efficiency in production and logistics, the company achieved profitability at the prior year level despite a slight decline in sales.

Group sales in the 2023 financial year amounted to €1,222.8 million (2022: €1,243 million). The company achieved organic growth of 0.7% over the previous year. There was, however, a 2.4% burden on sales growth from negative currency effects in connection with the US dollar and the Chinese renminbi yuan. Overall, Group sales were down slightly, declining 1.6% compared to the previous year. Growth momentum came from business with joining technology for vehicles (Mobility & New Energy) in Europe.

What was at times weaker demand in key customer industries in America had a negative impact: In the first half of the year, business with water management products in the US was weaker due to extreme weather conditions. Strikes that took place in the fall and the subsequent production stoppages at major American automotive manufacturers had a negative impact on the automotive joining technology business.

“Despite the difficult market conditions, we achieved robust profitability that was in line with our forecast. With our ‘Step Up’ improvement program, we have succeeded in making ourselves more efficient and achieved an important interim goal. We will continue to systematically implement the program and are now putting a stronger focus on additional growth opportunities. The recently completed acquisition of the Italian irrigation specialist Teco represents an important step forward in the expansion of our water management solutions business in Europe,” comments Guido Grandi, CEO at NORMA Group.

In financial year 2023, adjusted earnings before interest and taxes (adjusted EBIT) totalled €97.5 million (2022: €99 million). The adjusted EBIT margin was 8% (2022: 8%). Earnings and margin were impacted by factors such as higher personnel costs. In addition to inflation related wage increases, there were additional expenses for extra shifts and temporary workers especially in the first half of the year to reduce production backlogs at European plants. Reduced material costs had a positive effect. Overall, more efficient management of production and logistics capacities were key to achieving robust profitability. Especially in the fourth quarter, the adjusted EBIT margin of 8% was well above the level of the prior year (Q4 2022: 6.4%).

The net operating cash flow of €87.3 million was well above the prior year figure (2022: €65.3 million). The equity ratio was higher compared to the previous year at 46.4% as of the balance sheet date for financial year 2023 (December 31, 2022: 45.2%). Net debt was €345.4 million at the end of December 2023, a slight decrease of 1.2% compared to the previous year (December 31, 2022: €349.8 million).

Organic growth in Europe and Asia, decline in the Americas

In the Americas region, sales in 2023 declined organically by 4.5% year-on-year while currency effects reduced sales growth by an additional 2.4%. Overall, sales in the region reached €534.5 million (2022: €574.2 million), down 6.9% compared with the previous year. In the first half of the year, the US water business was weaker than in the same period of the previous year due to a weather-related one-off effect, but recovered again over the course of the year. Business with joining technology for industry applications declined. Sales of joining technology for passenger cars and commercial vehicles were also lower, partly as a result of strikes at US vehicle manufacturers that lasted several weeks in the fall.

In the EMEA region (Europe, Middle East and Africa), sales in 2023 grew organically by 5.7%. Negative currency effects reduced growth marginally by 0.5%. Overall, sales in the region grew by 5.2% compared to the previous year to €514.7 million (2022: €489.2 million). The Mobility & New Energy business with joining solutions for cars with all types of drive systems increased significantly by 6.8%. In Industry Applications, sales rose by 0.6% thanks to improved product availability.

In the Asia-Pacific region, there was organic sales growth of 4.0 percent in 2023. Demand for joining technology from Chinese automotive manufacturers in particular increased compared with the previous year, leading to higher business volumes in the region. The sales increase was, however, offset by negative currency effects (-7.4 percent), meaning that sales in the region fell by 3.3 percent overall to EUR 173.6 million (2022: EUR 179.6 million).