Based on preliminary figures, sales increased 6.6% to €1.084 billion in 2018. Organic sales increased 7.7%, but currency effects reduced sales growth by 2.8%. Adjusted EBITA margin fell to 16%, from previous year readings above 17%.
Strong sales growth in Engineered Joining Technology (EJT) in the Americas and Asia-Pacific regions contributed to the increase, driven by good order volumes in the US commercial vehicle and agricultural machinery markets, as well as in the Chinese automotive industry. The Distribution Services (DS) division also showed solid growth, particularly due to the positive development of NDS’s water business and the acquisitions of Fengfan and Kimplas, the latter contributing 1.6% to growth.
“2018 was a challenging but successful year for NORMA Group,” said Bernd Kleinhens, CEO of NORMA Group. “Although the tense situation on the raw material markets had an impact on earnings and margins, our strong organic growth shows that our products are increasingly in demand worldwide.”
NORMA increased Group sales in the fourth quarter 2018 by 5.3% to €267 million (Q4 2017: €253.6 million). As expected, organic growth declined at the end of 2018, to 1.7%. Acquisitions contributed 2.4% and positive currency effects 1.2% to Group sales growth in the quarter.
2018 adjusted EBITA decreased 0.8% year-on-year to €173.2 million (2017: €174.5 million). Adjusted EBITA margin was 16.0% (2017: 17.2%), with the difficult situation on the international raw material markets the main reason for the decline. NORMA identified higher alloy surcharges, force majeure in important plastic components and punitive US steel tariffs having a negative impact. Increasing shortage of materials and the strong sales growth temporarily led to variable special costs in purchasing, production and logistics.
NORMA Group started a ‘rightsizing’ program in the fourth quarter 2018, intended to help optimise the production landscape, which has grown rapidly as a result of acquisitions, among other developments, and organisational structures, but also to further harmonize processes and systems worldwide. The program extend across all divisions and regions to consistently develop the business model further to meet the requirements of future strategic growth areas such as electromobility and water management. The program is expected to cost €13 million - €15 million over two years, resulting in a positive earnings contribution of around €10 million - €15 million annually from 2021 on. In fiscal 2018, €2.2 million in costs were incurred and reflected in adjusted EBITA, together with €1.2 million acquisition related costs and €0.6 million integration costs.
All figures are preliminary, un-audited and not yet approved by the NORMA Supervisory Board.
Having held senior management roles in leading automotive and fastener businesses, Phil joined Fastener + Fixing Magazine as editor in 2002. Convinced there is no substitute for ‘being there’, over 15 years of visits and interviews around the world means he has accumulated an extraordinary knowledge and perspective of the global fastener industry, reflected in his incisive and thought provoking reporting.