Norma Group Ag Name Akt

Ladies and gentlemen, welcome to Norma Group's Analyst Conference Q1 2022. What about Norma Group's start in 2022? And I refer to our presentation page 2, where we give an overview about the key figures. In Q2, we generated sales of 304 million, which is an increase of 6.3%. and an organic growth of 2.2% versus Q1 2021. We generated out of these 304 million an adjusted EBIT of 30 million, which is a decrease of 17.8%. And we see in that decrease also the impact of supply shortages and higher raw material costs. With these 30 million, EBIT margin was at 10%. And out of that double-digit EBIT margin, we had a net operating cash flow of $16.7 million negative, which is part of the seasonal development of our cash flow in 2022 and according to our expectation. Benefit issues, we have an equity ratio of 44.6% and a net debt at $361 million. In terms of dividend, we will propose a dividend of 75 euro cents for the fiscal year 2021 to the annual general meeting, which will take place on May 17. I go to page 3 to give some more information on the top line development. As mentioned, we have an increase in net sales by 6.3% year-on-year in Q1 compared to $286 million in Q1 last year, and this is mainly due to our Americas business and some positive currency effects. Looking into the organic growth of 2.2%, we see a strong performance of our America's business, EJT sales decreased to 171 million, where we see an organic decline of 5.2%, mainly due to a weak automotive business in EMEA and a high comp space in APEC. The standard joining technology business showed a strong organic growth of 13.5%, which then led to 131.6 million in the first quarter. And this is mainly referring to the excellently developing US water business and even to the APEC region. As mentioned, we have some currency effects with a positive translation effect of 11.5 million, or in terms of percentage, 4% in Q1 2022. And you also can see the regional split of our sales. On the left-hand side, there we see 44% of our Q1 sales in Americas, 41% in EMEA, and 15% in APEC region. Going to our segment reporting on page four, in the first quarter 2022 in EMEA, we saw for EJT, an organic decline of 6.3% in comparison to a quite strong Q1 2021. Weaker automotive business, partly related to economic sanction measures in connection with the Russia and Ukraine war. And in the SJT business, standard joining technology, we saw 3.5% organic decline in the first quarter versus last year, while we had in the first quarter, 2021, a high positive impact from restocking sales in prior year. Americas, we saw in the EJT business an organic growth of 2.4% in the first quarter, which is also very positively impacted by the heavy duty business in the US. SJT business, standard joining technology, had a strong double-digit organic growth of more than 28%, 23%, 23.8%. In the first quarter, there we see the good contribution of the U.S. water business, which grew slightly more than 28%. The APIC region, an organic decline for the EJT business of 12.8%. where we see the difficult China business currently related to the COVID-19 restrictions and the lockdown situations in China. While we saw a good organic growth in the SJT business, 8% organic growth, also due to a quite positive business in Australia. Based on these sales developments, we had a margin development in the first quarter, which showed a good upswing versus Q3 and Q4 last year. So we are showing a double-digit EBIT margin, 10%, and an adjusted EBITDA margin of 14.5%. Looking into some margin details and cost information, I hand over to Annette, Thank you, Michael.

Well, then let's have a look to the profit and loss development of Q1 2022, which is, I would say for everybody for the time being, really in this volatile times, a challenge. Our material cost ratio increased by 300 basic points. and our gross profit ratio decreased by 430 basis points, mainly due to higher costs related to either global supply chain shortages or higher raw material costs. All in all, Q1 is dedicated to manage and countermeasure inflation, and we should not forget the permanent COVID impacts all over the world there. We achieved an improvement in our personnel cost ratio by 30 basic points, amounting to 25.6% due to the reduction in workforce of roughly 250 people. This is mainly shown in Germany and Serbia, where we downsized plants significantly, and that is an important achievement of our Get on Track transformation program. Focusing on OPEX, we can see that OPEX decreased by 400k euro to 41.4 million, leading to an improved ratio of 13.6% in relation to higher sales. This is also impacted by, on the one hand, a strict cost management and relatively lower temps compared to the sales. EBITDA decreased by 300 basic points to 14.5%, and our EBIT margin decreased by 219 basic points to 10%. Despite all the headwinds, everybody focuses for the time being in the market of global supply shortages, raw material costs, and the Ukraine-Russia crisis, to mention just the most important ones. Looking to slide seven and focusing on our operational adjustments, the message is always there. Norma doesn't adjust anything operational anymore. Our adjustments are purely dedicated to prior acquisition activities and therefore are PPA related. There we show a reported earning per share of 53 cents. The adjustment is out of that 13 cents and the adjusted earning per share is then 66 cents. On the next page we see the development of the EPS where we just looked to amounting in Q1 22 to 66 cents, the reported EPS to 53 cents and we see there a net income of 20.9 million and the reported net income of 16.7 million. We will propose a dividend of 75 cents to our AGM in May the 17th, which represents 33% of our adjusted group net profit, which is fully in line with our general dividend policy. Page 9 shows the evolution of our equity ratio, net debt, and debt ratio. Our net debt increased by 13.4% majorly due to increased business systemality, which is driven by the increase of our water business. The leverage shows a moderate increase by 2.2 due to higher net debt and lower EBITDA in this moment. And finally, we could stabilize our equity ratio of 44.6%. On page 10, we show the development of our cash flow. This is impacted majorly by, on the one hand, for sure, a lower EBITDA as ancients figure. We reduced our factoring programs by roughly 9 million euro to 53 million euro. Our working capital outflow of 54.7 million euro is majorly triggered by, on the one hand, higher business activities and And the growth, and there the major figure is accounts receivable in this moment due to higher growth majorly. CapEx, we realized 6.1 million compared to 9.2 million. That is the impact on our, this is a reduced CapEx compared to Q1 last year. This is resulting to a net operating cash flow of minus 16.7 million compared to 2.5 million in our Q1 21, where you can see that this is a typical picture of what we expected, normal seasonality in Q1. Page 11 shows the normal value added, which is normal for long-term strategic value. And there we decreased or declined from 9.3 million to 5.1 million. Having said that, I give over again to Michael Schneider in order to summarize.

Yes, thanks, Annette. Based on this development of the first quarter, we see the outlook for this year 2022 as we showed in our guidance and we confirmed the guidance. which means we expect organic sales in the medium to high single-digit organic group sales and increase, as mentioned, an adjusted EBIT margin based on that medium to high single-digit organic growth of around 11%. And based on that, sales and EBIT development, a net operating cash flow in the area of $100 million. And as Annette mentioned, normal value added is our strategic indicator. And we expect a normal value added between 20 and 40 million for 2022. That's the overview on the first quarter of this year. And of course, as every time, we are happy to go in Q&A with you.