Norma Group SE

08/04/2020 | Press release | Distributed by Public on 08/04/2020 23:10

NORMA Group sales and earnings affected by the corona pandemic in the first half of 2020 »

NORMA Group sales and earnings affected by the corona pandemic in the first half of 2020


• Corona pandemic affects business development in all regions
• Group sales down 21.2 percent in the first half of the year
• Positive net operating cash flow
• 'Get on track' transformation program making progress

Maintal, Germany, August 5, 2020 - NORMA Group, a global market leader in engineered joining technology, reports a 21.2 percent decline in sales to EUR 445.0 million in the first half of 2020 (H1 2019: EUR 564.7 million). Sales declined by 21.7 percent in organic terms. Currency effects had a slightly positive impact of 0.5 percent on Group sales. Adjusted earnings before interest, taxes and amortization of intangible assets (adjusted EBITA) fell by 94.3 percent year-on-year in the first half of 2020 to EUR 4.6 million (H1 2019: EUR 80.6 million). The adjusted EBITA margin was 1.0 percent (H1 2019: 14.3 percent). Adjusted earnings before interest and taxes (adjusted EBIT) amounted to EUR 0.5 million in the first half of 2020 (H1 2019: EUR 76.4 million). The adjusted EBIT margin was 0.1 percent (H1 2019: 13.5 percent). The operating result was strongly influenced by the effects of the corona pandemic in the first half of the year. In addition, the expenses incurred as part of the 'Get on track' transformation program had a negative impact on the operating result. The expenses from the program amounted to EUR 22.1 million in the first half of the year and were not adjusted.

'The first six months of the current year were dominated by the developments of the corona pandemic,' said Dr. Michael Schneider, CEO of NORMA Group. 'Like many other companies, we too had to partially shut down or interrupt our production. We are now gradually returning to a new working routine. However, due to the continuing high level of uncertainty regarding economic development and the corona pandemic, we cannot yet issue a forecast for the current fiscal year.'

Sales decline in the three regions EMEA, Americas and Asia-Pacific

Sales declined noticeably in all three regions EMEA (Europe, Middle East and Africa), Americas and Asia-Pacific. The decline in sales is mainly due to the restrictions associated with the corona pandemic. The automotive industry has been hit particularly hard by these. Among other areas, this affected NORMA Group's EJT business (Engineered Joining Technology). The Americas and EMEA regions were affected in particular, while business activities in the Asia-Pacific region recovered noticeably in the second quarter following the end of the lockdown in China.

The impact of the corona pandemic also affected NORMA Group's DS business (Distribution Services). All three regions recorded a decline in sales in this area in the first half of the year. Only the US subsidiary NDS, which specializes in water management, made a positive contribution to sales by recording organic sales growth of 4.4 percent in the first half of the year.

Positive net operating cash flow despite expenses for the 'Get on track' program

Net operating cash flow developed positively in the first half of 2020. It amounted to EUR 8.5 million (H1 2019: EUR 28.6 million) despite the non-cash expenses for the 'Get on track' program of around EUR 22.1 million (H1 2019: EUR 28.6 million) that have not yet been incurred and are not adjusted.

Implementation of the 'Get on track' transformation program proceeding well

The challenging market environment, especially in the automotive industry, was further exacerbated by the corona pandemic. These developments have further increased the urgency to implement the global 'Get on track' program decided in November 2019. In order to reduce costs and complexity and to maintain and increase the efficiency and competitiveness of NORMA Group, possible measures should therefore be brought forward. The responsible employee representatives are involved in accordance with the statutory participation rights.

NORMA Group SE in figures

* More information on adjustments can be found in the following financial reports: 2nd quarter 2020 (p. 13); 2nd quarter 2019 (p. 14); 2019 Annual Report (p. 148 f.); 1st quarter 2020 (p. 8).
** Net debt including hedging instruments; hedging instruments of H1/2020: EUR 2.1 million; H1/2019: EUR 1.1 million; FY 2019: EUR 0.9 million

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Further dates

Publication of the financial figures for the third quarter of fiscal year 2020 is scheduled for November 4.