NORMA Group increased its Group sales | FASTENER EURASIA MAGAZINE
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NORMA Group increases its sales in first nine months of 2019

NORMA Group, a global market leader in engineered joining technology, increased its sales by 2.6 percent to EUR 838.6 million in the period from January to September 2019 (Q1-Q3 2018: EUR 817.1 million). Organic sales declined by 1.6 percent in the first nine months of 2019 compared to the same period of the previous year. The acquisitions Kimplas and Statek contributed 1.6 percent or EUR 13.3 million to sales. Positive currency effects contributed 2.6 percent or EUR 21.1 million to sales growth. The adjusted EBITA margin was 14.2 percent in the period from January to September 2019 (Q1–Q3 2018: 16.0 percent). The decline in the margin is mainly attributable to the significantly lower production volumes in the automotive industry, an increase in personnel costs and costs resulting from the introduction of an ERP system at a site in Latin America. Net operating cash flow increased by EUR 26.6 million to EUR 66.0 million in the first nine months of 2019 (Q1–Q3 2018: EUR 39.4 million).
 
NORMA Group increased its Group sales by 2.2 percent to EUR 274.0 million in the third quarter of 2019 (Q3 2018: EUR 268.1 million). In organic terms, sales declined by 0.1 percent. Acquisitions contributed 0.2 percent or EUR 0.4 million to sales in the third quarter. Currency effects had a positive impact of 2.1 percent or EUR 5.7 million. The adjusted EBITA margin in the third quarter of 2019 was 14.1 percent (Q3 2018: 16.0 percent). Net operating cash flow amounted to EUR 37.5 million (Q3 2018: EUR 23 million).
 
“The tense situation on the global automobile market still poses a challenge for us,” said Dr. Michael Schneider, member of the Management Board of NORMA Group. “The positive development of our water management division, however, underscores the fact that NORMA Group is in a stable and sustainable position thanks to its broad range of products and services and its strategic focus on the future markets of water management and electromobility.”
 
Adjustment of the annual forecast for 2019
 
On the basis of the figures for the third quarter of 2019 and the expected sales for full year 2019, NORMA Group revised its forecast for organic sales growth and “NORMA Value Added” (NOVA) on October 17, 2019. The main reason for this is a sharp slump in the EJT business in the US, due in part to strikes at customers in the passenger car and truck sectors. The EMEA and Asia-Pacific regions also lagged slightly behind expectations. Therefore, the company expects to achieve organic sales growth in fiscal year 2019 within the corridor of around -4 percent to -2 percent (previously: within the corridor of around -1 percent to 1 percent). For the EMEA region, NORMA Group expects a moderate organic sales decline (previously: moderate organic growth). A noticeable organic sales decline is expected in the Americas region (previously: moderate organic decline). In Asia-Pacific a moderate organic sales decline is expected (previously: moderate organic growth). For NOVA, NORMA Group now anticipates a range of between EUR 20 million and EUR 30 million for full year 2019 (previously: between EUR 30 million and EUR 40 million). In addition, the company is sticking to its forecast issued on July 19 for fiscal year 2019 and continues to expect an adjusted EBITA margin of over 13 percent.
 
Development in the EMEA, Americas and Asia-Pacific regions
 
In the EMEA region (Europe, Middle East and Africa), sales in the period from January to September 2019 fell by 0.9 percent compared to the previous year to EUR 372.3 million (Q1–Q3: EUR 375.7 million). In organic terms, sales in the region declined by 1.6 percent. The decline is attributable to lower production and sales figures as a result of the ongoing restrained business in the automotive sector. The acquisition of Statek made a positive contribution of 0.8 percent to growth. Currency effects made a negative contribution to sales of -0.1 percent.
 
In the Americas region, sales rose to EUR 352.2 million in the first nine months of 2019. This represents an increase of 5.4 percent compared to the same period of the previous year (Q1–Q3 2018: EUR 334.3 million). This growth is mainly due to NDS’s strong water business and positive currency effects, which contributed 6.1 percent to sales growth. Organic sales declined by 0.8 percent mainly due to the weak business in the EJT division. 
 
In the Asia-Pacific region, sales increased by 6.6 percent to EUR 114.2 million in the period from January to September 2019 (Q1-Q3 2018: EUR 107.2 million). While the EJT division recorded a decline due to the continued weak environment in the Chinese automobile sector, additional sales were generated in the DS business, in particular through the acquisition of Kimplas. A decline in organic sales of 4.1 percent was offset by positive currency effects of 1.0 percent and acquisition-related sales contributions of 9.6 percent.
 
As of the reporting date September 30, 2019, NORMA Group had 8,731 employees worldwide, including temporary staff (December 31, 2018: 8,865).
 
Transformation program “Get on track” launched 

NORMA Group resolved its transformation program entitled “Get on track” on November 5, 2019, to position itself more efficiently in today’s volatile times. The program comprises various measures to be implemented in the years ahead in order to enhance NORMA Group’s flexibility and profitability: capacities at its locations worldwide are to be optimized. The product portfolio will be streamlined and managed more actively. Improvements will also be made in the area of purchasing. The transformation program will lead to sustained cost savings starting in 2020. From 2023 on, the company expects to achieve annual savings of EUR 40 million to EUR 45 million. The total costs over the entire period to implement these measures through 2023 are expected to be around EUR 45 million to EUR 50 million. The costs incurred under the program are to be reported unadjusted.