Norma Group Ag Name Akt

Very warm welcome to all of you. Good afternoon, good morning to this year's Earnings Call 2025 for Norma Group. With me today, I have Okan Celica, our Acting Group CFO. Very warm welcome to you, Okan. It's Okan's second day, so I'm convinced Okan will present the financials in a very good manner and will ask and answer your questions. Please be patient with Okan. So today we will include basically three points. We will review our results 2025. We will provide the outlook for 2026. And we will, number three, give a sneak preview for our strategy for the new norma group. So on the next page you see our usual disclaimer. One important thing to note is that we have continuing and discontinued operations due to our divestment of the water business and we have marked this clearly as former norma or new norma in the presentation going ahead. So we will see here a summary of our achievements in 2025. So basically, we see the closing of the water management, the divestment on the top right corner, which really marks a milestone for us at NOMA Group, where we achieved 650 million of net proceeds, and this is a great enabler to build new NOMA. We will propose a dividend of 14 cents per share at the next AGM this year. Also, we delivered on our guidance. However, it was a very tough and challenging year for new norma, what we will review shortly. We have conducted this public share buyback, you are aware, and this was successfully concluded. Tonight we will publish the results on our internet and you can review them. So, we entered 2026 with a net debt-free situation after the water management sale and we give significant return to our shareholders. So this is a sharp focus, what we have now, this strategic realignment, and it opens the doors and gives the foundation to become really an industrial powerhouse for connecting solutions. The preview of the strategy will come later in this presentation. So let's now start with a brief recap of our financials. You have received the preliminary results in February this year already. Okan will later on give you some more details on the financials. So again, new norma reflects the parameters without water management going forward and the 2024 revenues we have restated accordingly for new norma. So let's look at the summary. Net sales total to 821.7 million lower than last year. The adjusted EBIT at 6.3 million, again significantly lower than last year, and the adjusted EBIT margin at 0.8%, also lower than last year. Of course, this is not what we want. This was a very tough year. And from this, we have to reset in this year to build new norma and to really go forward. and grow in all our parameters here. Net operating cash flow, again, this is the former normal view, so we achieved 95.8 million euro in 2025. So also we have delivered in guidance. Again, this is challenging for us. It was very challenging. However, now with the divestment, with the new situation, with the new strategy, we will have a good basis for a new norma. And therefore, we are going to reset and start with this new setup. For the next financial topics, I will hand over to Oka, please.

Thank you very much Birgit and hello also from my side. Very well, a warm welcome. I'm very excited to take over this role and I'm also very much looking forward to engage with all of you going forward. So let's look at the details of our financial development on the next slides. um starting with our net sales and our jump of base in 2024 for new norma was at 882 million euros throughout the year we saw a volume impact of 37 million as well as a price impact of 4 million mainly coming especially the volume impact from a weakening market demand Then on top of that, we had a negative impact from the currency and the exchange rates here primarily impacted by the US dollar exchange rate totaling to roughly 19 million euros. which overall got us then to 821, 22 million euros for the full year new normal, which is in line with our guidance given in October last year. Let's look at the next page, please. So, again, we are looking at the net sales, this time focused on the strategic business units. Also, again, of course, new normal. I'm starting with the left side, the industry applications business unit. Our net sales in the industry applications business increased year over year by 8%. However, this includes a reallocation of the mobility and new energy business of 34 million roughly on a like for like basis. This means our sales declined by 6%. to 252 million. Also inside this development is a volume and price impact of 8.7 million and a currency impact of 6 million. Now I'm moving on to the right side, to the mobility and new energy business. Our net sales year over year declined by minus 12%. Of course, again, also here, including reallocation, this time from the other way around, basically for mobility to industry application. That means like for like, the sales reduction was at 7% in the mobility and energy business. And the corresponding volume and price impact was at 33 million, currency impact 13 million. This gets us to the 570 million 2025 net sales mobility and new energy business. All right, next page. So on the next page, we are looking at the breakdown. by regions. Again, we are looking at, obviously, Neonorma. I'm starting with the left side, America's region. The net sales declined in the America's region by 8% year over year. We've been able to counteract and balance that a little bit due to initiated cost improvement initiatives. in order to cover the inflation overall that got us then to a EBIT margin, adjusted EBIT margin of 3.8% for the Americas region. I'm moving on to the EMEA region in the middle of this chart. In the EMEA region, our sales declined by 7% year over year and the adjusted EBIT margin declined by roughly 5%, mainly impacted by extraordinary impacts in the ML region in the year 2025. The APEC region, the net sales development was at minus 6% year over year, with a stable, basically very positive adjusted EBIT development from 9.5% to 10.8%, mainly driven by positive product mix impacts in the APEC region. Also important to mention here, In the future, we will focus more on the strategic business units and also the reporting of the strategic business units. This is just as an FYI here in our presentation. And with that, we can also move to the next slide. So on our next slide, we are looking at our adjusted EBIT development. Our jump off base adjusted EBIT new normal 2024 is 33 million. Throughout the year, we saw already mentioned strong volume and price impact reflected in the EBIT margin with minus 18%. However, we've been able to balance that a little bit with positive developments in the material cost area due to sourcing effects, positive sourcing effects basically that supported a positive development of the material costs. On the other hand side, we also had our first transformation program savings kicked in in the personal cost area, but this was negatively overcompensated, especially in the direct area of our personal costs. Other OPEX and depreciation and amortization have been largely stable. And with an FX rate impact of minus 6 million, we achieved a total adjusted EBIT of 6.3 million in 2025. So let's move on to the next slide. On the next slide, we see the EBIT margin development. So the 33 million that we saw on the previous page is in percentage 3.7%. And with all the impacts that I've just described on the previous slide, we consequently achieved a EBIT margin of 0.8%, which is also in line with our guidance given in last year, which was between zero to 1% EBIT margin. All right, so let's look at our operational adjustments in 2025 and 2026. I'm gonna start with the EBITDA And the adjustments on EBITDA level full year 2025 are mainly related to transformation, to our transformation program and in that area related to primarily the severance payments and amounts to 32 million. For 2026, we expect another adjustment on EBITDA level, again, out of our transformation program of another 24 million. which basically represents an acceleration of our transformation program. So we are basically pulling forward initiatives defined in our transformation program that we initially planned to conduct in the outer years into 2026. On the EBIT level, we see an adjustment of in total roughly 90 million on top of the 30 million that i've just mentioned in 2025 we we have here another 55 million of ppa amortization of which 50 million is related that we undertook in the mr region and communicated also in november last year In 2026, we are expecting another 29 million approximately. In addition to the 24 million that I've mentioned earlier, this includes 5 million of additional PPA amortization out of historical M&A transactions that we undertook. We expect this 5 million to stay with us for the next couple of years, but on a slightly declining level. Net profit, overall on the net profit level, the adjustment is a total of 80 million roughly, which includes a 10 million tax impact compared to the adjustment on the EBIT level. For the earnings per share, then consequently we achieve 2.45 euro cents in the full year 2025. And due to the fact that we are currently planning a capital increase, which is subject to the approval during the annual general meeting, we decided to pause the earnings per share guidance for 2026. Okay, so next page is and we can see our dividend development. So for the dividend purposes, we are looking at our adjusted net income of former norma. So that includes the continuing and discontinued business. as well as the adjusted earnings per share again for Forma Norma. So the adjusted net income in 2025 for Forma Norma was at 14.3 million and the adjusted earnings per share was at 0.45 Eurocent and with the dividend of 0.40 Eurocent that we proposed that was mentioned initially by Biogrid, This results in a payout ratio of 31% for our dividend 2025, which is again in line with our dividend policy of 30 to 35%. So on the next slide, we see the cashflow development for full norma or former norma, again important to mention here. So we are starting with our adjusted EBPA of 125 million for the continuing and discontinued business 2025, which already represents a reduction compared to 2024 of roughly 19 million. From there, our net operating cash flow for the full year 2025 is at 96 million, which basically is just a decline of 9%. So how did we manage to reduce the decline compared to the EBITDA decline? primarily to a positive trade working capital impact, which is resulting from a positive impact out of the inventory management and also a lower supply chain financing program, roughly 5 million, which also contributed here in that area. And related to our CapEx, we've been quite disciplined, and this also helps us to reach that net operating cash flow of 96 million. Together with the payments for interest and for tax, we achieved for the former NOMA in 2025 an external free cash flow of 52 million. Let's look at the next page where we will walk you through our full year net debt development. important to mention here in the beginning on the left hand side, we are looking at former normal on the right hand side to be looking at new normal. So starting with the left side, our net debt in the beginning of 2025 slash end of 2024 was at 330 million. Roughly, we've managed to reduce our net debt. Despite the challenging environment, we've been in by roughly 13 million. And this was supported, again, by the external free cash flow that I've just walked you through of 52 million. On top of that, we had dividend payouts and also other developments, let's say, within our net debt. That got us ultimately then to the 316 million. So if we now move to... to our expected net debt for 2026. We adjusted in the first step our baseline for 2026. And why is that? Because we had a net debt portion that we deducted, which is attributable to the water business amounting to roughly 10 million. And with that, our new baseline is at 306 million. Based on our guidance, which Birgit will share in a few with you, we also expect an external free cash flow in a range of plus 10 to minus 10 million in 2026. And another dividend payout that we've just described of 4 million. And then, of course, we have the big impact out of the net proceeds from the water management sale of 650 million, as well as the shareholder return of 260 million, which then overall gets us to a positive net cash position expected for 2026 in a range of 70 to 90 million. And with that, I hand over again to you Birgit.

Thank you, Okan, for sharing this with us. You're welcome. And with this, we leave the year 2025 behind us. It was a really challenging year for NOMA and we move ahead looking into 2026. What have we organized for 2026? What have we planned for 2026? It was a very good start with the divestment and the closing of the water management. We could reset our balance sheet and the whole year 2026. is a year of reset. So what will this look like? So let's look at the outlook. So we see here the net sales. So we foresee a growth in the area of 0 to 2%, so very slight. We look at the adjusted EBIT margin and we see the range of 2 to 4%. So, and we are confident to run this. This is based on our forecast, our internal forecast. We have the full two months in this year already completed and March is actually by to date and also completed. So this was leading us to this adjusted EBIT margin outlook. Looking at the net operating cash flow, we see the range of around 10 million to around 20 million euro. If you compare with 2025, please reconsider, as explained before, that this is not comparable with the new norma, but it's based on the former norma basically. we think this is also a reasonable and good range for us. In terms of dividend policy, I want to make you aware that in the first sentence we confirmed the dividend policy. We have added one important point for us that this dividend is subject that the Norma Group SE reports a net profit in its annual financial statements and this together brings us the updated dividend policy. In terms of target vision for the outer years, we will provide a strategy update in the second half of 2026. This will include the content of our strategy and also our target ambition for the outer years. So we move on now to the assumptions we have taken to come to our guidance. So starting with the top line. So we looked at the markets and we are all aware of the situation in passenger cars and commercial vehicles. Passenger cars slightly negative, commercial vehicles slightly positive. Mechanical, a flat market and in construction some moderate growth depending on the regions. So we have also included net sales from our business between industrial applications and ADS. This is the buyer of our water management business in 2026, which is really planned to end by the end of the year 2026. A further important assumption is that stable geopolitical impacts like tariffs and so on. Of course, it's the question what is coming this year, but we concluded that this is the best assumption that we can take for the moment. Of course, we are watching and monitoring very carefully and very diligently what's going to happen, and we will manage in our best possible opportunity any changes which are coming. Looking at the bottom line, we see the 16 million one-off cost from 2025, which we have reported. So, we see also the 15 million from the transformation program, as you are aware, and we have reported. The personnel cost inflation we kept on a stable level compared to the last year, and we also assumed stable energy and raw material prices. Again, here we see maybe some impact, but this was the best assumption we could use for our outlook for this year. We have some cash flow drivers. So the net operating cash flow is lower than in 2025 because of the closing of the water management sale. And also important, we have now lower effects from supply chain financing, again, due to the water management sale compared to last year. And of course, we have cash-related expenses from the transformation. FX assumptions are stable, so same FX rate in our planning for the US dollar and the CNY, basically. So with this we move on to some housekeeping topics. I'm not going to all the details here. Maybe one point is important, the interest income. We have an income of 5 million euro, however net it's 1.5 million. as a result of the net state free position and depending on the interest rate. The others I think you will read yourself and basically we have explained the mechanism already for this one. Now we are moving on and this is really the new normal update. New Norma being the strategy for the outer years and here we are very excited to see on the next page what we have done for the foundation. So basically we focused our business, we focused our business towards this industrial powerhouse, which is industrial application and M&E mobility and new energy. What does this mean? We can deliver our connecting solutions to a very wide range of industries and we have huge potential. So the focus makes absolute sense. We have an improved capital structure, as we've just explained, and this gives us very good flexibility to build new norma. We are simplifying our organization. Are we there yet? No, we are on a good way. We are making very nice progress. So this means that we reduce our SG&A to a competitive level, which is very important. And we also bring our organization in a situation that we can make fast decisions and we have a very business-oriented steering for new norma. Our footprint optimization which has delivered very good results. We closed two factories in China already and this is a great outcome here. We see very good operations. We are in the process and focusing our operations in Mexico further and we will go on and continue our footprint optimization. So we see on the next page what are our enablers. This is the strategic focus. So we prioritize attractive markets. Now you may say, what are these markets? And we are in the evaluation just to give you some insights. We are talking about white goods. We are talking about aerospace. We are talking about life sciences, data centers, all of these markets, very attractive markets. And I can say we have the right products. And maybe to give you some insights about my first months in Norma, I've met many of our customers in the meantime, and they confirm that we have the right products. which is very good for us. However, for many of these industries, we have currently very low market share. So why is this the case? Because our focus was before not on these industries. Now with New Norma, we focus on the right markets, and I'm absolutely confident we will have great results and great progress there. Execution disciplines or cost management and the cost management for all our cost elements is what we are improving, what we are driving daily. Of course, working capital focus and operationally to have accountability, to have a performance culture in our operations will really contribute to new normal. Implementation speed, again, with the reshaped organization, we will accelerate our decision-making and we will focus on the SBUs. This means we will take business-driven decisions. We will take market and customer-oriented decision where we also focus our decision-making, our responsibilities on the business, on the business units. So what does this mean now coming really to the core of our strategy? You see four pillars and these four pillars are the core basically and to give you some early insights. So to the left you will see restructuring. You are aware of our transformation program as we have communicated and we are fully implementing. and we will go on with SG&A improvements. We currently know that our SG&A are not so much competitive, so we will bring them with the restructuring program on a really competitive level and we'll bring performance orientation inside new Norma. The second pillar is the footprint and with the footprint we talk about plants and we talk about sites. So, as just mentioned, we are on a good track here, however, we will go ahead. So, end of the day we will have Phonoma plants and sites which fits to our business, to the size of our business and also to the nature of our business, following our customers and our products. So we will have a target operating model again, which really fits the new norma with our connecting solutions. The third pillar is a sales push. So we will and we want to have new business wins. This means to grow our order book. So with this, we have been working already and we will further work on our commercial situation, our pricing strategy, and with this to increase the plant utilization across new normal. So focus really on the customers, on the end markets, and we have started already to bring a target costing life in Joma, meaning that we are competitive, we understand the markets very nice, and we have target costs, and we run the measures to meet these targets. The fourth pillar is about growth. So currently we are evaluating markets and market segments where we foresee a very good growth, organic growth and inorganic growth. And this is currently again an evaluation. An update will come in the second quarter for our strategy update. So with this we go ahead and talk about a timeline because I'm sure you are curious when this will be all executed. This year, 2026, is the year of the reset. We strengthen this foundation and we build it. As Okan also said, we are working also on reporting, on steering the business, really focusing on the customers, on the markets, on our business. It will be detailed in the strategy update next half of 2026. The year 2027 will be the year of optimizing. So we will see performance improvement already there. And the year 2028 and further out will be the years of growth where we have really positioned our structural opportunities. So and then we go ahead and I say a big thank you for listening to us. And we are looking forward to receive and answer your questions.

Thank you. To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To ensure that the session runs as smoothly as possible and is easy for all participants to follow, we kindly ask that you raise your questions one at a time. In other words, if you have more than one question, please wait for the answer to the current question before moving on to your next question. Once again, it is star one and one to ask a question. Thank you. We will now go to our first question. One moment, please. And our first question is from the line of Nikita Papachiyo from Deutsche Bank. Please go ahead.

Yeah, hi. Thanks for taking my questions. I would have three and we'll go through them one by one. The first one, Thanks for clarifying on the restructuring program and the higher cost this year because of your pushing forward the measures as I understood. Could you maybe elaborate a bit more which measures these are and how the timeline is then for 2027 and beyond, especially also on the savings side?

Okay, so I will start with the restructuring program. There's basically the transformation program as we have announced already. This is in full execution sort of and we will really in the strategy look at the whole restructuring requirements and answer this then in the second half. For the known transformation program we can give already the numbers and maybe Okan you give us some insights.

Yeah, exactly. So as already mentioned, we achieved savings according to our plan that we've communicated last year with regard to the transformation program in terms of savings in 2025, four and a half million and in 2026, 15 million. And that's what we are planning, what we are expecting. And to add to Birgit's answer for 2027, yes, due to the pull forward of specific initiatives, of course, we do also expect a slightly earlier kick in for certain initiatives. And as also mentioned by Birgit, we will take that into our planning, which will be the new basis for us going forward and will be presented in H2 this year.

And the second question is on your midterm outlook. I mean, I understood fully that you are giving us a strategy update in H2, but I was thinking about you, especially on your mobility business. For now, you are seeing no growth in this business. I understood that you are trying to gain more market share, especially in the APEC region. Any indication how to achieve 10% margin or more in this segment? I mean, with the increase in volume, potentially you would see a decline in prices, right?

I just repeat your question because it was a little bit broken. So, I understand that you are asking especially for our mid-term outlook, especially focus on the APEC region where we see a 10% margin. So, I mean, yes, as you rightly saw, we have currently a good margin in the APEC region in 2025. We had really some improvement and we are very happy about this. For the midterm outlook, we are still working on this. Regions are all different. The markets are different. They are going in different direction. So, we will get the midterm outlook then as part of our strategy update to ensure we have a good evaluation of data we are giving and then we can present this with a high confidence level to you.

Thanks. The question was regarding the mobility. segment and its target of 10% margin overall, you know, so it's not on APEC in specific but globally.

Okay, thanks to clarify this. For the mobility segment, I mean, it's the same. It's also one of our industry segments. And there we are also assessing this. There is also an impact what we will achieve with the restructuring, what we will achieve with the footprint. This all has an impact, of course. Also, our commercial update has an impact on the offerings, on our competitiveness. So, and this will also have a significant impact, of course, on the market level also in the mobility segment. So, here we are also in a very detailed and deep evaluation and we'll give an update also here in the second half of 2026.

Okay, understood. Final question for me. I mean, you mentioned that you're assuming stable supply chains and tariffs and so on. What is the current situation with regards to Middle East? Any impacts you're seeing, indirect or direct?

So thanks for this question, the impact in the Middle East. So basically we have no own operations in Norma. In Middle East we have a business which is roughly 1 million euro of revenue. So we see for sure in the freights and so on some impact, some delays, which is getting more complex. some increased cost, of course, also in the energy. But further on for the moment, we do not see any severe impact on our operations. However, we are monitoring very closely and we are also preparing the different scenarios, what we can do and how we can manage the situation.

Okay, thank you very much.

Thank you.

Thank you.

Thank you. As a reminder, if you would like to ask a question, please press star 1 and 1 on your telephone keypad. That is star 1 and 1 to ask a question. You will then hear an automated message advising your hand is raised. We have a question via text message. I'm just going to read that for you. It is from Herr Ringo from OdoBHF. What are the underlying assumptions for the upper and lower end of the guidance ranges?

Let me take that. So, yeah, I think we've, of course, consciously decided to give our guidance with ranges this year, of course, due to the, let's say, situation we see on a geopolitical side and also on an economical side. I think in general our expectations and assumptions Birgit just shared in the housekeeping part of the presentation. So there is not really something that we have to add to these assumptions that we took and baked into our guidance. So it includes stable material prices, it includes stable FX rates. We've been, however, a little bit cautious, as said, due to the developments that we see, especially geopolitically these days. But other than that, we feel very confident with our guidance and all the three elements of our guidance.

Thank you. Once again, if you would like to ask a question, please press star 1 and 1 on your telephone keypad. That is star 1 and 1 to ask a question. We have just received another question. One moment, please. And your next question comes from the line of Andres Gujan from Carnot Capital. Please go ahead.

Yes, hello. Thanks for taking the question. Can you please describe what the situation is in the discussions with the unions in your factories and what the main discussion points are and how confident you are to achieve an agreement?

Yes, thank you for this question. It's about what is the discussion with the unions. First of all, we have, of course, different situations in different sites, in different plants, there's different unions. I start about Maintal, about our plant in Germany, where we have achieved just before Christmas in 2025 a very a good agreement with the union, with our works council on this voluntary leave-up program and I can share also the process a bit. It was a very constructive, a very positive process where we all shared basically the same targets and also the timeline until we could conclude was very positive. It was concluded obviously before Christmas so we could get all our employees, our colleagues the opportunity to take the time over Christmas and it's going extremely well, so this is basically fully booked, so this is a very positive result. So, and some other plans in some other sites, we are also in good discussions on the way ahead with the unions, however, it's very individual and in very different stages.

Okay, thank you very much.

Thank you. Thank you. As a final reminder, if you would like to ask a question, please press star 1 and 1 on your telephone keypad. That is star 1 and 1. We have a follow-up question. One moment, please. And the follow-up question comes from Nikita Papachio from Deutsche Bank. Please go ahead.

Nikita, is your line on mute?

Oh, yeah. Can you hear me now? Yes, yes. Okay, perfect. So another question is on your share buyback program. It's just concluded, you said. Any indications for the cash return going forward in 2026?

Well, so as you said, yes, it was just concluded and we met the target here. We will and we plan currently to propose to the AGM a capital reduction so that it totals together with the share buyback in the range of up to 260 million. So this is what we are currently planning.

Thank you. Thank you. Thank you. I will now hand the call back to Birgit Sieger for closing remarks.

Thank you. Thanks for attending our this year's call. Thanks for your interest and your great question. I'm looking forward to have the discussion in other forums or on our next Q1 call, which I'm looking forward to. And have a great day. And thanks for your interest and for contribution to New Norma. Thank you. Thank you very much.