Despite the strained situation on the global raw material markets, uncertainties in the energy sector and higher inflation, NORMA Group has significantly improved its sales compared to the prior year period.
In the period from April to June 2022, NORMA Group generated Group sales of €317.9 million – a year-on-year increase of 12.9% (Q2 2021: €281.7 million). Organic sales growth was 5.3%. Positive currency effects, particularly in connection with the US dollar, contributed an additional 7.5% to sales growth. Adjusted earnings before interest and taxes (adjusted EBIT) was €22.3 million (Q2 2021: €36.1 million). The adjusted EBIT margin was 7% (Q2 2021: 12%). Net operating cash flow in the second quarter of 2022 was about €26.4 million and was thus well below the prior year figure (Q2 2021: €36.8 million).
“We grew again in the second quarter,” says Dr Michael Schneider, CEO at NORMA Group. “Thanks in particular to strong business with water supply, irrigation and drainage products in America, we achieved robust results despite unexpectedly high burdens from the impact of the Ukraine war, Corona restrictions in China and general inflation. We managed to partially offset our increased material and logistics service costs through higher selling prices.”
In the EMEA business region, NORMA Group generated sales revenues of €121.6 million in the second quarter of 2022, corresponding to a year-on-year decline of 1.3% (Q2 2021: €123.1 million). This was attributable to the continued decline in customer demand in the European automotive market as well as lower sales of standardised joining technology.
In the America region, sales were up 29.7% to €155.3 million in the period from April to June 2022 (Q2 2021: €119.7 million). Roughly half of this strong growth was driven by organic growth and half by positive currency effects. Business with water management solutions for stormwater management and efficient irrigation was again very positive.
In the Asia-Pacific region, sales amounted to €41.1 million in the second quarter of 2022, an increase of 5.8% compared to the previous year period (Q2 2021: €38.8 million). The increase was the result of positive currency effects; organically, sales declined by 2.8%. In particular, modest demand from the Chinese automotive industry for joining solutions as a result of Corona-related lockdowns had a negative impact. By contrast, the water management business in India, Malaysia and Australia developed positively.
Sound growth in the first half of 2022
In the first six months of the current financial year, Group sales were €622.3 million, an increase of 9.5% compared to the prior year period (H1 2021: €568.1 million). Organically, sales grew by 3.8% in the six month period. The main contributors to this positive development included good business with water management solutions in the Americas region, positive currency effects and price effects from increased selling prices.
In the period from January to June 2022, adjusted earnings before interest and taxes (adjusted EBIT) amounted to €52.7 million (H1 2021: €73 million). The adjusted EBIT margin was 8.5% (H1 2021: 12.8%). At €9.8 million, net operating cash flow in the first half of 2022 was significantly lower than in the previous year (H1 2021: €39.3 million). In addition to reduced earnings, this development is attributable to a build-up of inventories, some at higher prices, of components and materials for example.
Second quarter earnings 2022 in the EMEA region were negatively impacted by lower sales, higher material prices and temporarily higher costs in the course of moving some product lines from a plant in Thuringia to existing plants in Germany and the Czech Republic. NORMA Group has initiated a range of measures in order to improve profitability. In the EMEA region in particular, the company intends to increase the productivity of its plants, carefully scrutinise operating costs and offset higher material prices even more consistently with price increases.
“Our joining solutions are in demand worldwide, and our order books are well filled. I am confident that we can meet this demand more profitably than we are currently in a position to do. With targeted measures, we will initially leverage short-term savings potential and also further improve both our efficiency and processes in the medium term. Our long-term goal of sustainably profitable growth remains in place,” says Michael Schneider.
NORMA Group has been focusing its activities on the business areas of water management, general industry applications as well as mobility and new energy since 2021. These areas will be further expanded in the future.
Having spent a decade in the fastener industry experiencing every facet – from steel mills, fastener manufacturers, wholesalers, distributors, as well as machinery builders and plating + coating companies, Claire has developed an in-depth knowledge of all things fasteners.
Alongside visiting numerous companies, exhibitions and conferences around the world, Claire has also interviewed high profile figures – focusing on key topics impacting the sector and making sure readers stay up to date with the latest developments within the industry.
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