NORMA increased Group sales by 7.0% to EUR 817.1 million in the first nine months of 2018. Organic growth was strong at 9.7%. However, its EBITA margin slipped to 16.0%, impacted by raw material inflation and US tariffs.
The acquisitions of Fengfan, Kimplas and Statek contributed 1.4% to Group sales growth. Negative currency effects reduced sales growth by 4.1%. Third quarter sales increased 9.7% year on year to EUR 268.1 million, with organic growth at 7.1%. Currency effects had a slightly positive effect in the quarter for the first time in 2018.
“We continued our strong organic growth in the third quarter of 2018,” said NORMA Group CEO Bernd Kleinhens. “Demand for our products remains high. However, the tense situation on the raw materials markets continues to have an impact on earnings and margins.”
Nine-month sales in Europe, Middle East and Africa grew 1.8% to EUR 375.7 million, including contribution from the acquisition of Statek in August. Growthweakened in the third quarter, mainly due to the generally difficult situation in the European automotive sector with declining production figures.
American sales rose 7.9% to EUR 334.3 million buoyed by good order volume in the commercial vehicles and agricultural machinery business in the US. In the Asia-Pacific region, nine-month sales rose by 26.5% year-on-year to EUR 107.2 million. This reflected very good business performance in the Engineered Joining Technology division, with additional contributions from the acquisition of Kimplas.
Adjusted EBITA declined by 2.9% in the first nine months to EUR 130.5 million. The adjusted EBITA margin was 16.0% - down from 17.6% in the same period 2017. Norma says the main reason for the decline in earnings and margin was the tense situation on the international raw material markets. Higher prices for stainless steel and alloy surcharges, force majeure in the area of important plastic components and the US punitive tariffs on steel had a negative impact. Raw material shortages temporarily generated variable special costs in procurement, production and logistics.
NORMA is sticking to its adjusted forecast, published in July, for fiscal year 2018. It is targeting the upper end of an expected 5 to 8% year-on-year organic increase in Group sales. NORMA expects a full year adjusted EBITA margin between 16 and 17% and net operating cash flow of around EUR 130 million. However, tit has adjusted its EMEA forecast, reflecting weaker third quarter sales growth and decreasing production volumes in the European automotive industry.
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 17 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.
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