Norma Group Ag Name Akt

Ladies and gentlemen, a warm welcome to Norma Group's analyst conference call Q1 2021. I will give, together with my colleague, Annette Stiebe, our CFO, an overview on the development in the first quarter. And of course, we then are happy to take your questions. Overall, looking on the page two of the distributed presentation, facts and figures. Overall, in view of the still critical crisis situation, we had a good Q1 2021. We are overall well on track and we will give a couple of comments on that. If you look on the sales growth in the first quarter, we grew our sales by 13% to a level of 286 million. which is an organic growth of 17.8% and a currency effect of 4.9%. We generated out of these 286 million of sales an adjusted EBITDA of nearly 40 million, 39.5 million, which is an increase of more than 45%. and a EBIT-R margin, EBIT-A margin adjusted of 13.8%. We steadily go to a more, let's say common figure, adjusted EBIT. Adjusted EBIT is at nearly 37 million, which is an increase of 47% and the margin of nearly 13%, 12.9% in the first quarter, 2021. The net operating cash flow, typically weak in the first quarter of a year, is at 2.5 million in Q1. The balance sheet ratios, equity ratio, further improved to more than 42%, 42.5%, which is a slight increase also versus December 31st. And our net debt is at 352 million, which is a slight increase. Increase versus the status in in December last year Regarding dividend we will propose a dividend of 70 cent per share Which will be confirmed has to be confirmed at the annual general meeting which takes place on May 20 in a couple of days going a bit more in detail to the top line on page 3 and We see once again these 286 million that we reach in Q1. Overall, an increase of 32.9 million plus 13%. And the organic growth of 13.8% that I mentioned is due to a significant contribution by all regions in all areas. The EJT sales, engineered joining technology, showed a good recovery versus last year Q1 and increased by 17.5%. And also the standardized products, standardized joining technology also shows a very good development, a very good recovery, meaning an increase of 18.3% in the first quarter. While we have, as mentioned, negative currency effects, of minus 12.3 million, which is 4.9%, minus 4.9% of sales. You see on that page three also the regional split, where we see an increase in regional sales in percentage of the group sales in Asia Pacific, and a slight reduction in Americas, where the stake of the EMEA business is quite stable. If you look on page four, a little bit more detailed in the sales per segment, sales per region, we see for EMEA that we have net sales in the first quarter of 132 million, which is an increase of 12.4% and an organic growth of 12.2%. Both each IT and standardized products showed a double digit growth. due to an increase in production in both business areas, which is a very good development to the overall group level. In Americas, on the right-hand side, we saw 109 million in the first quarter in sales, an increase of 5.1%, organically 15.6%. So we have a significant negative currency effect in Americas. and a very good high single digit growth in demand in the EJT business, and a very strong double digit standard joining technology growth, which includes especially the NDS water management sales that increased versus last year by nearly 30%, 29.9%. APEC region, we have especially strong recovery of APEC region after the Q1 2020, which was in APEC already impacted by the COVID-19 related lockdown. And so far, we saw a steep increase in the first quarter, 40.3%. sales increase, which is on an organic basis more than 45%, 45.4%. In terms of margin, just a general overview before I hand over to Annette. The margin in Q1, EBIT A margin, 13.8%. EBIT margin, 12.9%, which is good development versus last year which shows we are together with the sales increase well on track for the first quarter and the economic recovery and a strict cost control resulting in a relatively strong Q1 margin and a confirming of our guidance for the full year is on a very good track and so far With that, I will hand over to Annette, our CFO, who will now give a more detailed view on some financial figures. Annette.

Thank you, Michael. Thank you. So let's have a look, a bit closer look to our P&L development and to the ratios. So first of all, concentrating on the material cost, we could achieve to keep the material cost ratio absolutely stable and the gross profit ratio almost stable, despite an increasing material price environment and really a tough market environment in general, which shows at the end that our sales and purchase departments did all a tremendous job in the recent months but also years in order to prepare a position like this. Personal expenses, we could improve the personal cost ratio there, mainly due to less full-time workers and personnel. In this case, having a look to the OPEX, to our OPEX ratio, you could see that we here slightly increased. This is mainly due to a higher number of temp workers and extraordinary costs like, for example, extra shifts, mainly due to, on the one hand, the higher growth, and on the other hand, we are in an ongoing restructuring activity. Well, all in all, this economic recovery and also, in particular, the strict cost management brought us in a position to really deliver for Q1 a relatively strong EBIT margin of 13.8% and a strong EBIT margin of 12.9%. Our operational adjustments show now that on EBITDA level we don't have any adjustments anymore, which means we have really, because our Get on Track change program is not adjusted anymore, or we don't adjust that, So this brings us to the position that we have in the adjustments we are showing here. This is all referring to prior M&As and classical ones like depreciation, amortization, or tax effects. When I look now to the earnings per share, you could see that we stepped up in the adjusted earning per share in Q1 21 compared to the prior period from 49 cents to 76 cents in terms of our reported EPS from 34 to 63 cents. And Michael already spoke about our dividend. In the last year, we issued this minimum dividend of $0.04, and we propose now a dividend of 70% to our AGM, which means this is 92% of the adjusted group net profit income. But at the end, it's also an average of both of the years of roughly something around 47%. Our net debt and equity ratio shows a very strong and solid position. Our net debt slightly increased, mainly due to a decrease in cash, which is seasonal for the first quarter. So therefore, we can see here anyway that we still have a very strong cash position on the balance sheet of $177 million. This is, so in this case, really due to a financing of a remarkable growth. Looking to our equity ratio, we could improve the equity ratio from 41.7% to 42.5%. Our leverage is improved in this moment from 3.4 to 3.1. And the most important leverage for us is, in this case, the financing leverage is where we, in this case, adjust our get-on-track cost and this brings us in a position that we show now a leverage for financing contracts and covenants of 2.5. All in all, in a nutshell, we can say here I think we are very well prepared for any kind of future operating business and the motto can be all eyes on 21 and beyond. The cash flow development of Q1 shows we are starting with a 15.1 million higher EBITDA. Our trade working capital outflow increased due to a strong growth, and this is mainly at the end the step up in accounts receivables due to higher sales in the months before and not at all due to higher overdues, which is very important for us. Our investment initiatives increased as well, so increased investments from operating business reflect that we go higher in business activities, and this is showing our CapEx, which already started in Q4 2020. This is impacted by a very slight increase in supply chain financing of 0.9 million, so 900K increase, so we kept supply chain financing nearly stable compared with the year end. Concentrating on our normal value added, which is normal long-term strategic target, we could improve from minus 2.5 to 9.3. These are the main financial figures and I'm happy to give over to Michael to bring you through.

Thanks, Annette. Ladies and gentlemen, as I mentioned earlier, Q1 2021 shows that we are well on track and we also show that in the company guidance that we confirm And so far, overall, we see organic sales for the full year in the low double-digit area. An adjusted EBITDA margin of more than 13%, and referring to the EBIT margin, more than 12%. The net operating cash flow of 110 million plus, and the normal value added between 10 and 25 million. After the first quarter, we are very confident that we will go that way to be on track, and the Q1 confirms that we are on a good way to reach our guidance and our targets. Thank you very much so far, and all of you on our situation, Q1 2021. And of course, happy to get your questions and discuss with you.