Future development of NORMA Group
NORMA Group places a strategic focus on sustainable value creation. Key objectives include steady sales growth, profitability above the industry average, and the most efficient use of capital. In addition, NORMA Group pursues specific sustainability goals to meet its own commitment to responsible treatment of people and the environment. This includes, among other things, reducing CO2 emissions. STRATEGY AND GOALS
NORMA Group's financial performance indicators include consolidated sales, adjusted EBIT and the adjusted EBIT margin, and net operating cash flow. These indicators also contribute to the so-called NORMA Value Added (NOVA). CO2 emissions have been considered a key non-financial performance indicator since fiscal year 2023. Since 2020, these emissions have also been a target for determining part of the Management Board's long-term compensation (ESG-LTI). CONTROL SYSTEM AND KEY PERFORMANCE INDICATORS.
The expected development of the key financial performance indicators and the CO2 emissions target for fiscal year 2025 are set out below. The following should be noted in particular: NORMA Group's following forecast is based on the reporting structure valid as of December 31, 2024, and expected for the time being in 2025. The reasons for this are as follows: on November 28, 2024, NORMA Group announced its decision to sell the global activities of the Water Management business unit. The outcome and result of the sales process initiated in January 2025 are still open at the time of approval of the consolidated financial statements (March 18, 2025) and will also be influenced by external factors. From the current perspective, the criteria that would justify classifying the business activities as "discontinued" are therefore not met at the aforementioned date. The sales and earnings contributions of the global activities of the Water Management business unit are therefore included in NORMA Group's following forecast.
Overall statement by the Management Board on the expected development in fiscal year 2025
Based on the assessments of relevant economic research institutes and industry associations presented in the outlook report, the Management Board of NORMA Group expects that overall economic development will remain challenging in fiscal year 2025. In particular, ongoing geopolitical tensions are creating uncertainty and high volatility in the market environment. An increasingly looming trade war due to protectionist measures by the US government – such as the introduction of punitive tariffs and the corresponding consequences worldwide – is seen as a potentially negative factor. Negative impulses for global economic development are also still expected from further developments in the Ukraine war and the Middle East, as well as the associated impacts on global value and transport chains. Given the continuing difficult environment, the Management Board of NORMA Group SE is approaching fiscal year 2025 with the necessary caution.
Development of Group sales in 2025
Given the persistently volatile environment, NORMA Group's Management Board expects business development to continue to be characterized by subdued demand, particularly in the first half of 2025. In contrast, the second half of 2025 is expected to see a revival of business in some of NORMA Group's relevant customer industries. Taking the factors mentioned here into account, the Management Board anticipates Group sales for the 2025 fiscal year in the range of approximately EUR 1.1 billion to approximately EUR 1.2 billion. However, this forecast is based on the assumption that no further negative factors arise worldwide during 2025 that could place significant pressure on NORMA Group's business development.
Adjusted EBIT margin
One of NORMA Group's main focuses is maintaining and expanding profitability. Accordingly, all business activities are strategically aligned with this goal. The Group's profitability is to be sustainably increased through appropriate operational efficiency measures, for example, as part of the GROWTH AND EFFICIENCY PROGRAM “STEP UP": program. This includes, for example, continuous optimization of operational business processes aimed at aligning the Group for sustainable profitable growth and further improving and maintaining NORMA Group's competitiveness in the long term. The measures from the "Step Up" program are to be continued in fiscal year 2025, and are expected to have a positive impact on earnings development. At the same time, it can be assumed that the declining sales trend since the fourth quarter of 2024 and influenced by external factors will also be reflected in the EBIT margin, especially in the first half of 2025. In addition, the development of the adjusted EBIT margin in fiscal year 2025 is influenced by expenses related to the early departure of former CEO Guido Grandi, announced on February 17, 2025.
Against this backdrop, the Management Board expects an adjusted EBIT margin of approximately 6% to approximately 8% for the 2025 fiscal year. The forecast for the adjusted EBIT margin is subject to the assumption that no massively adverse market conditions arise that could potentially lead to significant additional costs or restrictions in the implementation of operational efficiency measures.
With regard to the adjustment of earnings, the Management Board expects, as in previous years, that depreciation and amortization of tangible and intangible assets in connection with purchase price allocations in the context of past business combinations will be taken into account. These will total up to approximately EUR 15 million in the 2025 fiscal year, depending on exchange rate developments.
In addition, transaction costs totaling approximately EUR 20 million are expected in connection with the sale of the global Water Management business. Secondly, extraordinary expenses are expected for the organizational transformation in connection with the sale of the Water Management business unit, the exact amount of which cannot yet be estimated. The company intends to adjust all extraordinary expenses in the operating result (EBIT).
Net Operating Cash Flow
Assuming continued positive effects in working capital management, net operating cash flow is expected to reach a value in the range of approximately EUR 75 million to approximately EUR 95 million in fiscal year 2025.
NORMA Value Added (NOVA)
For fiscal year 2025, the Management Board expects a NOVA in the range of approximately EUR -40 million to approximately EUR -20 million.
Carbon Dioxide Emissions
The sustainable reduction of greenhouse gas emissions (GHG emissions) at its global sites is a key objective for NORMA Group. The target for fiscal year 2025 is to avoid 1,000 tons of greenhouse gas emissions through the implementation of measures. This target includes not only NORMA Group's production sites but also its distribution centers. Furthermore, the figure of 1,000 tons of GHG emissions refers to both Scope 1 and Scope 2 emissions combined.
Furture development of NORMA Group |
T061 |
||
---|---|---|---|
Key performance indicator |
Value 2024 |
Forecast for fiscal year 20251 |
|
Sales |
EUR million |
1,155.1 |
In the range of around EUR 1.1 billion and around EUR 1.2 billion |
Adjusted EBIT margin |
% |
8.0 |
In the range of around 6% to around 8% |
Net operating cash flow |
EUR million |
105.4 |
In the range of around EUR 75 million to around EUR 95 million |
NORMA Value Added (NOVA) |
EUR million |
-38.8 |
In the range of around EUR -40 million to around EUR -20 million |
CO2 emissions2, 3 |
t CO2eq |
4,171 |
Avoidance of 1,000 tons of CO2 equivalents of emissions emitted at NORMA Group sites |
1_This forecast is based on the Group structure valid as at December 31, 2024. 2_The CO2 emissions for the target value were reported in the management system up to the end of the 2024 financial year based on the GHG Protocol (market-based, Scope 1 and Scope 2). Scope 1 only includes emissions from natural gas and liquid gas and Scope 2 emissions from purchased electricity and district heating. When recording emissions, only emissions relating to the production sites were taken into account. Since January 2022, NORMA Group has purchased electricity from renewable energy sources at all production sites. NORMA Group purchases “Energy Attribute Certificates” for this purpose. These are also included in the target value. 3_The methodology described in footnote 2 was used in the management system until the end of 2024 based on the forecast for CO2 emissions of “below 9,600 tons of CO2 equivalents” issued in fiscal year 2024. The change in the calculation basis in connection with the first-time application of the European Sustainability Reporting Standards (ESRS) will be included in the 2025 Annual Report. This means that in future annual reports, the emissions from the greenhouse gas balance in accordance with the Greenhouse Gas (GHG) Protocol initiative will be reported in the Scope 1 to Scope 3 categories for all locations worldwide in the management system. |
Legend
These contents are part of the Non-financial Group Report and were subject to a separate limited assurance examination.