Norma Group Ag Name Akt

Ladies and gentlemen, welcome to our analyst call Q3 2022. Overall, we grew in Q3 and made a turbulent market environment. We had sales that increased net sales by 19.9% to 318.6 million, which reflects an organic growth of 10.3%. We generated a adjusted EBIT in Q3 2022 of 27 million, which increased by 18.3% at a margin of 8.5% versus Q3 2021 of 8.6%. We had a net operating cash flow in Q3 of minus 3.8 million, And an equity ratio of 45.7, which improved slightly versus end of last year. We have net debt of nearly 400 million, 396.6 million. And the leverage at end of September 2022 at 2.5, based on a solid maturity profile with next larger refinancing in 2026. which we will see later on. Going to page three of our presentation regarding the top-line development, we see that the increase in net sales by 19.9% to $380.6 million in top-line. The organic growth of 10.3% in Q3 shows a strong performance, especially in Americas and EMEA. The EJT sales increased to 181.8 million, and this reflects an organic growth of 16.5% due to a strong performance in all regions and mainly driven by price increases, while our price activities run very well in 2022. In our standardized joining technology, we saw sales increase to 134.6 million. This reflects an organic growth of 2.5% with a high single-digit organic growth in America and a decreased business in the near and epic also due to some restocking effects in previous years. The currency effect also impacts our sales development, and we saw a positive translation effect of 25.5 million, or in terms of percentage, 9.6% in the third quarter. Looking into the segment reporting on page four, we see that the regional splits for the first three quarters of 2022 increased the analogous to 47% of our sales in the first nine months, while we have the stake of EMEA sales at 39% and 14% in APEC. And we also see on that chart the increase of America's sales overall, 27.7%, EMEA sales plus 0.9%, and sales in APEC region plus 6.5%. We have a deeper look on the sales development on page five. For Enea, we see for the EJT business, Engineered Joining Technology, a very strong double-digit organic growth of 20% in Q3, which is mainly due to the positive pricing effect and also higher volumes. And in the SJT business, Standardized joint technology, we had a 7.9% organic decline in EMEA in Q3 2022 due to lower volumes, partly compensated by good pricing developments in the third quarter. Moving to Americas, we saw a strong double-digit organic growth of 14.6% in the EJT business, where we also see the good pricing effects in that area. And also in the SJT business, 8.9% organic growth in the third quarter, which is primarily a result of a very positive pricing effect. Coming to APEC, organic growth of 9.4% for EJT in Q3 with higher volumes while pricing have a slightly positive contribution. and standardized joining technology organic decline of 7.7% in Q3 due to lower volumes, but overall compensated by some positive pricing effects. Looking into the margin development on page six, we see that in the third quarter of 2023, we are showing a EBIT margin of 8.5% and a EBITDA margin of 13.1%. So we catch up versus Q2 to these figures. And regarding some details on the margins, I hand over to Annette Stieve, our CFO.

Yes, thank you, Michael. So let's have a closer look to the profit-loss development We can see that our gross profit ratio decreased into 322 by 210 basic points. This is mainly due to higher material costs related to global supply chain shortages and high inflation, and it is in particular in EMEA already also still caused by the Ukrainian war. We see an improvement in our personal cost ratio by 230 basic points to 24.1% in Q3. We could reduce our average headcount by roughly 260 headcounts. Looking to our net expenses, we see that our OPIS puts increased by €10.2 million to €51.6 million. This leads to 16.2%, mainly due to, on the one hand, operational inefficiencies in EMEA, on higher lease tests, in particular in URS and Tijuana, so it's Mexico and India, and higher IT implementation costs. Consequently, our adjusted EBITDA margin decreased by 50 basic points to 13.1%, and our adjusted EBITDA margin amounts to 8.5%. The next slide, there we come to our operational adjustments. So nothing happened there since the last quarter. The message is that on our EBTA level, we don't adjust anything. So our adjustments may refer to PPAs, and these are our only adjustments. They are focusing on net profit. We can see a reported net profit of 36.1 million, adjustments of 12.5 million. That results then in an adjusted net profit of 48.6 million. I go already to the next slide because the EPS, we can see they are much better. Our EPS development is visible there. So when we look to year-to-date, our adjusted earnings per share amount to €1.52, and this corresponds to a net income of €48.6. And our reported earnings per share amounts... amounts to €1.13 and this corresponds to net income of €36.1 million. Referring to our balance sheet developments, you can see on the next page that our net debt increased by 24.5%, mainly due to the dividend payment of roughly €24 million. and in May and our business seasonality. Our leverage increased to 2.5 due to higher net depth and to a lower EBITDA. Our equity ratio increased by 110 basic points to 45.7. Michael already pronounced that or emphasized that on the very first page. We look to a very solid maturity profile, and we have in the next years no significant refinancing to do before 2026. That brings us in the situation that the currently increasing interest rates are not touching the general business of the company. Coming to the next page, to our net operating cash flow development, we decreased our factoring programs by 57 million compared to the year end of last year of 62 million. Our trade working capital outflow is at 81.6 million euros. mainly due to higher inventory levels increase and increase receivables that is majorly in EMEA. Our lower adjusted EBITDA with higher working capital also leads to a decreased net operating cash flow before CAPEX of 41.3 million euros and our CAPEX spending of 35.3 million euros It's a little bit higher compared to last year of 30.6 million. This results all in a net operating cash flow of 6 million compared to last year of 70.5 million. I would like to emphasize that I described here the operational cash flow. For sure, we have also financial cash flow. The last two conferences, I've been asked to that. So therefore, we have financial cash flow. There are also minus 37 million, and this you can follow up in our detailed interim statement where all this is well published on our ER site. So having said that, we come to our NOVA. Our NOVA amounts currently to minus 4.7 million, which is a delta to last year of minus 26.3. By this, I would like to give back to Michael Schneider.

Michael, thank you very much. Following our short presentation regarding the performance improvement plan, of course, we have additional measures to further improve and just to mention here that we have three phases of that and the phase for 2022 is the stabilization measures short term for making sure that we get to our profit guidance and in the next years we have additional efficiency measures, structural measures to further improve. From a guidance perspective, And you all know that we adjusted our guidance. We have organic sales growth that we expect to be in the medium to high single digit organic group sales at an adjusted EBIT margin of around 8%, generating a net operating cash flow of 60 million, around 60 million, and a normal value added that we expect in the range of minus 20 to plus 10 million for 2022. With that, that's our short overview on Q3 and the E3 figures. And of course, happy to take your questions.