Principles of the Group

Business model

NORMA Group is an international market and technology leader in advanced and standardized joining and fluid-handling technology. With its 26 production sites and numerous sales offices, the Group has a global network with which it supplies more than 10,000 customers in over 100 countries. NORMA Group’s product portfolio includes more than 40,000 high-quality joining products and solutions for many different cross-industry applications. The focus is on innovative solutions for promising end markets with a focus on the areas of Water, Industry Applications, Mobility and New Energy. With its products and solutions, NORMA Group actively supports its customers and business partners in responding to key global megatrends such as climate change and the increasing scarcity of resources. High customer satisfaction is the foundation of NORMA Group’s continued success. The main factors here are the company’s customer-specific system solutions and the global availability of its products, combined with reliable quality, delivery reliability and a strong brand image.

Organizational structure

Corporate legal structure

NORMA Group SE is the parent company of NORMA Group. The company has its headquarters in Maintal, near Frankfurt/Main, Germany. NORMA Group SE acts as the legal holding company for the Group. It is responsible for the strategic management of business activities. In addition, it is also responsible for communicating with the company’s most important target audiences as well as Legal and M&A, Compliance, Risk Management and Internal Auditing.

Group-wide central management responsibilities such as Information Technology (IT), Treasury, Group Accounting and Group Controlling, for example, are all based at the wholly owned subsidiary of NORMA Group SE, NORMA Group Holding GmbH, which is also located in Maintal. Three regional management teams based in Auburn Hills (USA), Maintal (Germany) and Singapore steer the specific holding activities for the three regions Americas (North, Central and South America), EMEA (Europe, Middle East and Africa) and Asia-Pacific (APAC).

As of December 31, 2021, NORMA Group SE holds shares in 50 companies that belong to NORMA Group either directly or indirectly and are fully consolidated.

There were no changes to the legal structure of the Group in fiscal year 2021.

Group Management

NORMA Group SE has a dual management system consisting of a Management Board and a Supervisory Board. The Management Board manages the company under its own responsibility and is advised and monitored by the Supervisory Board. The following personnel changes took place on the Supervisory Board in fiscal year 2021.

In accordance with the Articles of Association, the Supervisory Board of NORMA Group SE consists of six independent members elected by the shareholders at the Annual General Meeting. Günter Hauptmann is the Chairman of the Supervisory Board and Erika Schulte is Deputy Chairwoman. Miguel Ángel López Borrego was appointed to the Supervisory Board in fiscal year 2021. This position became vacant when Lars Berg resigned from office on August 31, 2020. The application for the court appointment of Mr. López to the Supervisory Board of NORMA Group was filed on March 3, 2021. The shareholders then elected Mr. López to the Supervisory Board of NORMA Group SE at the Annual Meeting on May 20, 2021. Mr. López has also been a member of the Audit Committee since April 1, 2021.

Mr. López is responsible for Siemens’ Spanish operations as CEO of Siemens S.A. in Madrid. He has also chaired the Board of Directors of Siemens Gamesa Renewable Energy S.A., a listed manufacturer of wind turbines in Zamudio, Spain, since 2018. He has international industrial experience in the automotive and new energies sectors as well as extensive expertise in finance.

Detailed information on the composition of the Management Board and Supervisory Board and their distribution of responsibilities among themselves can be found in the Corporate Governance Report, which forms part of this Annual Report. The Corporate Governance Report contains the Statement of Corporate Governance required by Section 289f and Section 315 b of the German Commercial Code (HGB), including the Declaration of Conformity pursuant to Section 161 of the German Stock Corporation Act (AktG), a description of the procedures of the Management Board and the Supervisory Board, as well as relevant information on significant corporate governance practices. Furthermore, the declaration on the diversity concept to be disclosed in accordance with the CSR Directive Implementation Act is also an integral part of the CORPORATE GOVERNANCE REPORT, which is part of this Annual Report and can also be found on the company website at WWW.NORMAGROUP.COM Detailed information on the development of the non-financial performance indicators can be found in the CR REPORT, which is also part of this Annual Report.

Operative segmentation by regions

NORMA Group’s strategy is focused, among other considerations, on regional growth targets. In order to achieve these, the operative business is managed by the three regional segments EMEA, the Americas and Asia-Pacific. All three regions have networked regional and cross-company organizations with different functions. For this reason, the Group’s internal management reporting and control system has a strong regional focus. Regional and local priorities are set in the area of sales and services.

Products and end markets

Two complementary distribution channels

NORMA Group supplies its customers through two different sales channels:

Engineered Joining Technology – EJT: directly to OEMs

and

Standardized Joining Technology – SJT: via wholesalers and sales representatives

The two sales channels differ in terms of the degree of specification of the products, but overlap in production and development. This enables cost advantages and at the same time ensures reliable high quality.

The Engineered Joining Technology (EJT) segment includes sophisticated, individually customized joining technology and is particularly characterized by close development partnerships with OEMs (original equipment manufacturers). NORMA Group’s central development departments and local resident engineers work together with the customer during multi-year project phases to develop solutions for specific industrial challenges. Thanks to the constant customer proximity in the area of EJT, NORMA Group’s resident engineers gain comprehensive knowledge and a deep understanding of the various challenges their end markets and customers face. As a result, they generate substantial added value for customers and contribute to their economic success. Such development partnerships result in holistic product and system solutions that meet both customer demands for efficiency and performance and take aspects such as weight reduction and quick assembly times into account.

The EJT segment includes the strategic business units Mobility and New Energy. The Mobility sub-segment is in turn divided into the two end markets Light Vehicles (passenger cars) and Heavy Vehicles (commercial vehicles and construction machinery). The New Energy sub-segment brings together numerous applications for the sustainable energy industry, innovative solutions for electromobility and renewable energies, for example.

NORMA Group markets a broad range of high-quality, standardized branded products via its Standardized Joining Technology (SJT) segment, which comprises the two strategic business units Water Management and Industry Applications. This also includes various solutions in the areas of storm water management and landscape irrigation and joining components for water infrastructure solutions. In addition to its own global distribution network, the company also relies on sales representatives, distributors and importers as multipliers. NORMA Group’s customers include distributors, specialized wholesalers, OEM customers in the spare parts market, do-it-yourself (DIY) stores and applications in smaller industries. The brands ABA^®, Breeze^®, Clamp-All^®, CONNECTORS^® FISH^®, Gemi^®, Kimplas^®, NDS^®, NORMA^®, Raindrip^®, R.G.RAY^®, Serflex^®, TRUSTLENE^® and TORCA^® represent technical expertise, high quality and delivery reliability and comply with the technical standards of the countries in which they are sold.

By combining expertise in the development of customized solutions for original equipment manufacturers (OEMs) in the area of EJT and the provision of high-quality standardized branded products via a global sales network (SJT), NORMA Group is not only able to achieve cross-selling effects, but also realizes numerous synergies in the areas of purchasing, production, logistics and sales. In addition, the Group benefits from significant economies of scale and scope due to the diversity of its product range and high volumes, which sets it apart from its smaller and generally more specialized competitors.

The consistent alignment in the strategic business areas established in 2020 is intended to ensure an optimized focus on the respective end markets and customers with their specific requirements.

Product portfolio

NORMA Group’s products can basically be divided into three main product categories across all business segments based on the technology used in the manufacturing process: Fluid (fluid systems and connectors), Fasten (fastening clamps and joining elements made of metal) and Water (applications in the area of water management).

The Fluid products are single or multiple layer thermoplastic plug-in connectors and fluid systems which, due to their special nature, reduce assembly times, ensure the reliable flow of liquids or gases and occasionally replace conventional products such as elastomer hoses. NORMA Group’s fluid products are already being used in thermal management systems in hybrid and electric vehicles.

The product group Fasten includes a wide range of clamp products and joining elements made of non-alloy steels or stainless steel and are mainly used to clamp and seal hoses as well as to affix metal and thermoplastic pipes.

The Water product portfolio includes solutions for applications in the fields of storm water management and landscape irrigation, but also joining components for infrastructure solutions in the area of water.

Engineered Joining Technology is used in all applications in which pipes, tubes and other systems need to be connected together. Because joining technology is an important component in nearly all industries, NORMA Group serves many different end markets. Besides the automotive, commercial vehicle and aviation industries, these include construction, mechanical engineering, pharmaceuticals and biotechnology. Other end markets include agriculture and the drinking water supply and irrigation industries. NORMA Group’s products are also used in consumer products such as home appliances, for example.

Although NORMA Group’s joining products account for a comparatively low value share in the customer’s end product, they are often mission-critical in use. Group-wide compliance with high quality standards and stringent quality management therefore play a crucial role for NORMA Group. QUALITY MANAGEMENT A strong brand strategy geared toward regional growth targets and ensuring first-class service quality and the availability of products at all times are also important success parameters. NORMA Group ensures this through its global sales network.

Market and competitive environment

NORMA Group provides solutions for a wide variety of industrial applications with its products. Thanks to the unique combination of expertise in both metal and plastics processing and the broad diversification of its product portfolio, the company is able to offer its customers a comprehensive portfolio of solutions to different problems from a single source. This differentiates the Group from competitors who predominantly specialize in individual product segments.

In the Engineered Joining Technology (EJT) segment, in particular the area of Fasten and Fluid, NORMA Group operates in a highly fragmented market that is characterized by a very heterogeneous structure due to the abundance of specialized industrial companies. In this environment, NORMA Group sees itself as a provider of customized value-creating solutions that are geared to the specific needs of the customer and are the result of long-term development partnerships. NORMA Group distinguishes itself from its mostly regional competitors with its international business alignment and its cross-industry customer base. Thanks to its strong focus on innovation, NORMA Group offers its customers products that are particularly resistant to temperature and pressure as well as optimized in terms of weight and assembly time that distinguish the company from its competitors.

In response to the structural changes that have been taking place in NORMA Group’s traditional core business, the automotive industry, for a number of years, the company positioned itself in the field of electromobility several years ago and is closely monitoring current developments and trends in order to be able to benefit from any positive developments. In the meanwhile, NORMA Group has a broad product portfolio with customized products and system solutions for applications in electric and hybrid vehicles that it produces for the most part at its existing production facilities and on the same equipment on which it also manufactures the traditional products for gasoline and diesel vehicles. Besides cooling systems for cars, trucks and charging infrastructure, these also include solutions for thermal management in batteries and media-carrying systems, fasteners and connectors for hydrogen vehicles.

In the much more standardized sales channel of Standardized Joining Technology (SJT), NORMA Group operates in mass markets and mainly competes with suppliers of comparable standardized products. It differentiates itself from them mainly through its well established brands in the market, which are the result of a targeted brand policy geared to the regional needs of customers. Furthermore, customers appreciate the high quality of service NORMA Group offers. The company provides its trade customers with a complete range of products that cover all end customer needs.

Strategy and goals

Increase in value

NORMA Group’s strategy includes increasing the value creation of the company as its main objective, building on the company’s successful entrepreneurial development and focusing on sustainable sales growth, profitability above the industry average and the efficient deployment of capital. On its way to achieving these goals, NORMA Group pursues a stakeholder-based approach that is both oriented towards the demands of its customers for innovative and value-creating solutions and to the interests of its shareholders, employees and suppliers. In order to achieve these goals, NORMA Group focuses on providing its workforce with an environment geared toward continuous improvement, thereby strengthening its position as the employer of choice. At the same time, NORMA Group considers it an integral part of its corporate responsibility to reconcile the effects of its business activities with the expectations and needs of society. Therefore, the principles of responsible corporate governance and sustainable action are observed in all entrepreneurial decisions. Corporate Responsibility (CR), NORMA Group’s responsibility towards people and the environment, is therefore seen by the Management Board as an integral part of the company strategy. CR REPORT

NORMA Group’s strategy for long-term value enhancement is based on the following key objectives and strategic

Profitable growth

NORMA Group’s primary objective is to increase the value of the company. Therefore, the focus in each regional segment is on the continuous profitable expansion of business activities. By continuously expanding application solutions with existing customers and identifying and acquiring new customers, business activities are being steadily expanded, thus increasingly strengthening its international presence. Making selective additions to the product portfolio, the expansion of the regional presence and the expansion of the market position in the strategic business fields of Water Management (Water), Industry Applications as well as Mobility and New Energy are at the core of NORMA Group’s growth strategy. In identifying its business areas, NORMA Group focuses on markets with attractive margins, sophisticated products, strongly growing sales potential and a fragmented competitive structure. In this context, NORMA Group benefits from key global megatrends: While climate change increases the demand for low-emission technologies, the increasing scarcity of resources offers NORMA Group attractive growth potential, for its water business, in particular.

Selective product portfolio

The technological requirements placed on the end products of NORMA Group customers are constantly changing. Increasing environmental awareness, scarcity of resources and growing cost pressures play a major role in nearly every sector of industry. Furthermore, there are binding legislative requirements that are becoming more stringent, particularly in the automotive and commercial vehicle industries, due to stricter emission regulations or special requirements for the materials used. This is also accompanied by increasing technological change, away from conventional combustion engines towards alternative drive technologies such as hybrid, electric and hydrogen drives. LEGAL AND REGULATORY INFLUENCING ASPECTS These framework conditions form the starting point for the development of new products. NORMA Group focuses on value-enhancing solutions that support its customers in reducing emissions, leakage, weight, space and assembly time. One main focus here is also on the area of thermal management for vehicles. RESEARCH AND DEVELOPMENT With its extensive product portfolio for applications in landscape irrigation, rainwater management and infrastructure solutions in the water sector, NORMA Group’s strategic business field Water Management helps its customers optimize their use of scarce resources in a targeted manner. Innovations play an important role in meeting the increasing customer demands that accompany each new production cycle. This is why NORMA Group’s more than 300 engineers and developers are constantly working on developing new products and optimizing the processes and systems currently in use.

In order to sustainably strengthen its innovative capability, the Group plans to spend around 3% of its sales on research and development activities each year. R&D expenditure mainly relates to developments in the areas of Mobility and New Energy and accounts for around 5% of sales in these areas. Nevertheless, as the Water Management field becomes increasingly important and more of a strategic focus, R&D activities are also being stepped up in this area. For this reason, NORMA Group includes these activities in the calculation of R&D expenses from reporting year 2020 on and uses total sales as a reference value to determine the R&D ratio. RESEARCH AND DEVELOPMENT

Selective acquisitions to supplement organic growth

By making targeted acquisitions, NORMA Group contributes to strengthening its growth and expanding its business. Acquisitions are therefore an integral part of the long-term growth strategy. The company continuously monitors developments in the strategic business units Water Management, Industry Applications, Mobility and New Energy and contributes to their consolidation through targeted acquisitions. 14 companies have been acquired since the IPO in 2011 and integrated into the Group. The main focus of M&A activities is always on companies that contribute to realizing NORMA Group’s strategic goals, strengthen its competitive position and/or generate synergies. Continued growth and high profitability also play an important role here. The search for attractive companies focuses on the water management and automotive sectors. Since acquiring the US company National Diversified Sales (NDS) that specializes in water management in fiscal year 2014, NORMA Group has built up an established market position in the fast-growing water industry, which is to be expanded through further acquisitions in this area.

Strategic and regional growth initiatives

In order to achieve the goals anchored in its strategy, NORMA Group is driving specific initiatives in the various regions and strategic business fields. These include, in particular, the concerted expansion of the water business in all regions. The activities that are already underway in the area of water management in the Americas are to be strengthened by further expanding the online and e-commerce channels. The focus is also on expanding the water business in the Asia-Pacific and EMEA regions. This will involve using current structures to further advance the water business in the Asia-Pacific region. Acquisitions in the area of water management in the EMEA region are also a distinct possibility.

In the area of Industry Applications, the focus is on active portfolio management and a targeted brand strategy. E-commerce initiatives, particularly in the EMEA region, are to also be strengthened in this field. By localizing production even further, selectively expanding the product range and focusing on fast-growing markets, the industrial business in Asia-Pacific is to be further expanded and at the same time made to be more profitable.

NORMA Group also intends to further expand its activities in the Mobility and New Energy sectors globally. Here, the company will focus on strategic and profitable applications. At the same time, NORMA Group will seek to defend its primary market position in all regions by constantly improving its cost structures.

Financial and liquidity management objectives and strategies

NORMA Group’s objectives and strategies with regard to central finance and liquidity management are unchanged compared to the previous year and are as follows:

1. Ensuring solvency at all times

The most important financial objectives are to maintain operating liquidity at all times, to hold sufficient strategic liquidity reserves and thus to ensure NORMA Group’s solvency in the long term. This also includes maintaining sufficient liquid funds for short- to medium-term acquisitions.

Regular rolling liquidity planning for all major Group companies, which is analyzed and aggregated by the centrally organized Group Treasury forms the main strategic cornerstone of NORMA Group’s financial management. This was also a valuable tool for measuring and managing liquidity risk during the corona pandemic.

Financing flexibility is ensured by maintaining the appropriate credit lines. These are negotiated loan commitments that can be drawn down within a very short period of time and can thus compensate for liquidity peaks. NORMA Group has a revolving credit line within its syndicated bank loan. This credit line can be drawn in various currencies and maturities up to an amount of EUR 50 million. In addition, NORMA Group arranged a liquidity line for another EUR 80 million in the course of the corona pandemic in June 2020 that was not prolonged any further in 2021, however. In order to increase flexibility, NORMA Group agreed on a further revolving credit line within the existing syndicated bank loan of EUR 50 million in October 2021, so that an additional credit line of EUR 100 million in total can be drawn from. NORMA Group uses asset-backed security (ABS), factoring and reverse factoring programs to manage liquidity, optimize working capital and improve the predictability of cash flows.

The financing measures undertaken in fiscal year 2021 are described in detail in the explanatory notes to the financial position. Financial position

1. Limiting financial risks

The Group Treasury division constantly identifies and assesses interest rate and currency risks and selects suitable hedging instruments to reduce these risks. Here, not only derivatives, but also the appropriate foreign currency financing, are used to reduce currency risks. The overall goal is to optimize the assets and liabilities side of the balance sheet with regard to currency risks. In addition, operating currency risks are reduced by using derivative financial instruments in the Group companies as of a defined threshold. Here, Group-wide, currency-differentiated liquidity planning is crucial to identifying and managing such risks.

To limit interest rate risks, NORMA Group’s objective is to devise a relatively high share of financing measures in such a way that they are subject to interest rates on a fixed interest basis or use interest rate swaps. On December 31, 2021, around 45% (2020: 49%) of all debt instruments had variable interest rates and were not hedged by interest rate swaps. In addition, current risk positions are monitored regularly by Group Treasury and assessed for their risk-bearing capacity. Group Treasury initiates appropriate countermeasures if the defined risk parameters are exceeded.

Key elements of the policy on limiting financial risks are the clear definition of process responsibilities, multi-stage approval processes and regular risk assessments.

1. Optimizing the Group’s internal liquidity

NORMA Group Holding manages its liquidity centrally and is responsible in particular for investing surplus liquidity as well as internal Group financing. The Group Treasury of NORMA Group constantly works on improving internal financing opportunities and bundling the Group’s liquidity in order to make it available for a wide variety of funding purposes. This is achieved by optimizing the allocation of cash and cash equivalents in NORMA Group Holding and at the same time ensuring the solvency of the respective individual companies at all times. A professional treasury management system is used for this purpose that provides a daily overview of the cash holdings of the most important subsidiaries. Regional cash pools have been installed to enable the technical implementation of liquidity centralization. Further cash concentrations are carried out at regular intervals. Manual pooling of funds makes it possible to ensure an optimized cash balance for all Group companies, whereby the local terms for international payments must be taken into account here, in particular.

Control system and key performance indicators

The consistent focus on the Group objectives mentioned is also reflected in the internal control system at NORMA Group, which relies on both financial and non-financial control parameters.

Important financial control parameters

NORMA Group’s most important financial performance indicators include the following value- and growth-oriented key figures, which have a direct impact on NORMA Group’s value creation: organic Group sales growth, adjusted EBIT (until 2021 also adjusted EBITA) and net operating cash flow. These key figures lead to the NORMA Value Added (NOVA) as the primary strategic performance indicator. NORMA Group uses these key figures to continuously monitor growth, profitability, liquidity and capital efficiency.

Organic sales growth

As a growth-oriented company, NORMA Group attaches particular importance to profitable sales growth. The Group seeks to achieve short- and medium-term growth above the market average. This refers to internal growth excluding currency effects. In addition, sales revenues from newly acquired companies are reported separately within the first 12 months of initial consolidation (sales revenues from acquisitions).

Due to the broad market structure in the area of joining technology, the Management Board is guided by internal analyses as well as studies by leading economic research institutes on the development of the gross domestic product of the respective regions and on the production and sales figures of the relevant customer industries in developing the forecast on the expected development of sales. In addition, the Management Board observes certain early indicators, such as customer order patterns in the retail business (Standardized Joining Technology) and the order book in the Engineered Joining Technology (EJT) segment.

Operating earnings indicators

Operating earnings (earnings before interest and taxes, EBIT) represent an important internal management and valuation indicator of the Group’s ongoing operating activities. The adjusted EBIT margin, which shows adjusted EBIT in relation to sales, provides information on the profitability of the business activities. In order to maintain the Group’s profitability at a high level, NORMA Group constantly strives to optimize its company processes and structures. In doing so, the company focuses primarily on sustainably reducing key cost factors.

In addition, adjusted EBIT forms the basis for the remuneration of the Management Board under the fundamentally revised and restructured Management Board contracts effective January 1, 2020. With the aim of standardization, the incentive bases in the contracts of the non-exempt workforce were also changed to the target figure of adjusted EBIT in fiscal year 2021 (previously: adjusted EBITA). In future, this process is also to be implemented with regard to the contracts of non-exempt employees. Against this backdrop, only adjusted EBIT and the adjusted EBIT margin will be used as key earnings and profitability indicators from now on.

For long-term comparison and for a better understanding of how the business is developing, NORMA Group adjusts the operating result for certain expenses. In contrast to previous years, since fiscal year 2020, only those expenses that relate to the acquisition of subsidiaries are adjusted. ADJUSTMENTS

Net operating cash flow

In order to maintain the Group’s financial independence and solvency at all times, NORMA Group is also guided by net operating cash flow in managing the company. This comprises the most important cash-effective items that can be influenced by the individual business units and provides information on whether NORMA Group can finance its operating business out of its cash flow. It is calculated on the basis of adjusted EBITDA plus changes in working capital, less investments from operations. The main starting points for improving net operating cash flow are therefore to increase sales, to improve the operating result (EBITDA) adjusted for special effects and to engage in sustained value-enhancing investment activity. In addition, consistent management of working capital focusing on continuous optimization also has a positive impact on net operating cash flow.

NORMA Value Added (NOVA) 

NORMA Group’s objective is to use the capital provided to it by its shareholders and lenders as efficiently as possible in order to ensure the long-term positive development of the Group. In order to manage this, NORMA Group determines the annual increase in value in the form of the so-called NORMA Value Added (NOVA). NOVA is calculated as adjusted EBIT less tax expenses and the cost of capital. The cost of capital is defined by the weighted average cost of capital (WACC) and the capital employed (equity plus net debt).

NOVA = (adjusted EBIT x (1 - s)) - (WACC x capital employed)

Bei der Berechnung des Kapitalkostensatzes werden folgende Annahmen und Berechnungen zugrunde gelegt:

The base interest rate is derived from the interest rate structure data of Deutsche Bundesbank (three-month average: October 1 to December 31, 2021). The market risk premium represents the difference between the expected return of a risky market portfolio and the risk-free interest rate. NORMA Group uses the recommendation of the Institut der Wirtschaftsprüfer in Germany (IDW) to determine this risk premium. The beta factor represents the individual risk of a share compared to a market index. It is first determined as the average value of the unindebted beta factors of the peer group and subsequently adjusted to NORMA Group’s individual capital structure. The cost of equity is calculated by adding the risk-free interest rate and the weighted country risk of NORMA Group with the product of the market risk premium and the indebted beta factor of the peer group. The credit spread used to calculate the cost of debt was determined on the basis of the terms of NORMA Group’s current external financing. Invested capital is calculated from consolidated equity plus net financial liabilities as of January 1 of the respective fiscal year.

The financial control parameters are planned and continuously monitored in the Group, but also for the most part at the segment and Group company levels. Deviations between planned and actually achieved figures are tracked in the local companies and aggregated at the regional segment level as part of the monthly analysis. Business development is regularly forecast on the basis of the available monthly and quarterly results and assuming various scenarios.

Important non-financial control parameters

NORMA Group’s most important non-financial control parameters include CO₂ emissions, the Group’s power of innovation, the problem-solving behavior of its employees and the sustainable overall development of NORMA Group.

CO2 emissions

Compliance with applicable environmental protection requirements and the avoidance of environmental risks are top priorities for NORMA Group. The company is guided by international standards and guidelines in this regard. Climate-relevant CO₂ emissions are a significant non-financial performance indicator in the area of the environment that has also been part of the Management Board’s remuneration system since January 2020. NORMA Group records the greenhouse gas emissions of all production sites resulting from gas consumption (Scope 1) and the purchase of electricity and district heating (Scope 2) and strives to continuously reduce these CO₂ emissions. For its own production processes, NORMA Group has set itself the target of reducing CO₂ emissions by around 19.5% by 2024 (reference year 2017). This target is based, among other criteria, on calculations of the Science-based Targets Initiative. climate protection

Invention applications

The sustainable safeguarding of its innovative capability is a key driver for the future growth of the Group. NORMA Group therefore measures the number of annual invention applications. NORMA Group employees submit invention applications as part of an internal formalized process upstream of the external process of new patent applications. By establishing targeted internal incentive systems, NORMA Group promotes its employees’ innovative thinking.

Quality figure

NORMA Group strives for high reliability and service quality. The reputation of its brands and reliability of its products are key factors in the company’s success. The Group therefore adheres to high quality standards in developing and manufacturing its products. In order to minimize production losses and maximize customer satisfaction, NORMA Group measures and manages the problem solving behavior of its employees by tracking the number of defective parts per million of manufactured parts (parts per million / PPM). This metric is collected and aggregated at the Group level on a monthly basis. QUALITY MANAGEMENT

Other non-financial performance indicators

Other non-financial performance indicators include employee and environmental indicators on occupational safety and healthcare within the Group. More information can be found in the CR REPORT.

The target figures for the financial and non-financial control parameters for 2022 and the assumptions underlying the forecast are presented in the FORECAST REPORT.