Earnings, assets and financial position

 

General statement by the Management Board on the course of business and economic situation

The global economy showed a subdued and regionally very uneven development in the 2024 fiscal year. In Europe, and particularly in Germany, the economy and economic prospects became increasingly gloomy over the course of the 2024 fiscal year, and there was no significant economic recovery in China either, despite government measures. In the USA, on the other hand, the economy continued to grow in the current reporting year. Overall, the decline in global industrial production continued, with some significant setbacks in European mechanical engineering, the automotive sector and a persistently weak construction industry. The burdens caused by the war in Ukraine and the conflicts in the Middle East remained unchanged. Politically, 2024 was also an unstable year. By contrast, the lower energy price level and the central banks’ interest rate easing measures from the second half of the year had a positive impact in the 2024 fiscal year.

In this environment, NORMA Group’s consolidated sales amounted to EUR 1,155.1 million in fiscal year 2024, down 5.5% on the previous year (2023: EUR 1,222.8 million). Before currency effects (-0.3%) and acquisition effects (+0.2%), the decline amounted to 5.5%. This is due to a decrease in volume. The decline in sales was primarily triggered by the weakening of demand in NORMA Group’s key sales markets that has become apparent since the second quarter of 2024. This primarily affected the global automotive industry, which was characterized by highly volatile customer call-off behavior. The volume business in the Mobility & New Energy strategic business unit thus recorded significantly lower sales in all three regions compared to the previous year. This was particularly evident in the fourth quarter of 2024. In the Industry Applications area, sales in the past fiscal year were also down on the same period of the previous year, driven by a persistently difficult market environment in the three regions. In contrast, the continued stability of the Water Management business partially compensated for the decline in sales in Mobility & New Energy and Industry Applications.

At EUR 92.3 million, the adjusted operating result – adjusted EBIT – fell short of the previous year’s figure by 5.3% (2023: EUR 97.5 million). At 8.0%, the adjusted EBIT margin was in line with the previous year’s level (2023: 8.0%). Despite the decline in sales, NORMA Group achieved stable profitability in fiscal year 2024. While adjusted EBIT in fiscal year 2024 was negatively impacted by the higher expenses for employee benefits compared to the previous year due to inflation, the higher adjusted gross margin and measures to increase efficiency in the area of supply chain management had a positive effect on performance. This resulted in significantly lower freight costs, particularly for special freight.

Net operating cash flow was very strong in the fiscal year at EUR 105,4 million, significantly exceeding the previous year’s figure (2023: EUR 87,3 million). The positive development was due to optimized (trade) working capital, partly as a result of further improved inventory management as well as good receivables management and lower investment.

NORMA Group’s Management Board is looking ahead to 2025 with the necessary caution due to the challenges that partly continue to prevail in the business environment. Further information on the expected development in 2025 is set out in the FORECAST REPORT.

 

Adjustments

Management adjusts the result for the fiscal year for certain expenses and income in connection with realized M&A transactions in order to manage the Group’s operations. Adjustments are made in accordance with the management approach in segment reporting. Hence, the following adjusted results reflect the Management Board’s perspective.

In the 2024 fiscal year, adjustments for acquisition-related expenses of EUR 0.4 million (2023: EUR 0.2 million) were made within EBITDA (earnings before interest, taxes, depreciation of property, plant and equipment and amortization of intangible assets). These related to acquisition and integration costs in connection with the takeover of Teco Srl on February 29, 2024. In addition, depreciation of property, plant and equipment from purchase price allocations in the amount of EUR 0.8 million was recognized in EBITA in fiscal year 2024. (2023: EUR 1.0 million). In addition, amortization of intangible assets from purchase price allocations in the amount of EUR 33.8 million (2023: (EUR 20.3 million) was adjusted within EBIT. The increase compared to the previous year is due to an impairment loss recognized at an Indian subsidiary. NOTES

Notional income taxes resulting from the adjustments are calculated using the tax rates of the respective local companies concerned and taken into account in the adjusted earnings after taxes.

The following TABLE T021 shows the adjusted figures in fiscal year 2024. Further information on the unadjusted figures can be found in the disclosures in the NOTES

 

Earnings position

 

Development of sales

 

Group sales

NORMA Group’s consolidated sales amounted to EUR 1,155.1 million in fiscal year 2024, down 5.5% on the previous year (2023: EUR 1,222.8 million). This includes negative currency effects (-0.3%) - mainly in connection with the Brazilian real and the Chinese renminbi – as well as positive acquisition effects (+0.2%). The decline in sales compared to the previous year is almost entirely due to a decrease in volume. Positive price effects, particularly in the Americas and Asia-Pacific regions, only slightly offset the decline in revenue.

The development of volumes in the current reporting period was mainly impacted by overall volatile and weaker customer demand in key industries. This included the automotive customer business, in particular. The industrial customer business also suffered from the persistently difficult market conditions. Both were particularly true of the EMEA and Asia-Pacific regions, which resulted in a significant drop in sales in each region in the 2024 fiscal year. By contrast, sales in the Americas region were almost unchanged from the previous year, as continued stable volumes in the water business almost completely offset lower revenue in Mobility & New Energy and Industry Applications.

 

Industry Applications: Restrained sales development in 2024 driven by the environment

Sales in Industry Applications (a customer industry within the former SJT – Standardized Joining Technology distribution channel until the end of 2023) amounted to EUR 206.6 million in the 2024 fiscal year, down 6.4% overall on the previous year (2023: EUR 220.7 million). Before currency effects (-0.2%), the decline amounted to 6.2% in 2024. The decline in volume due to weak market-related demand was partially offset by pricing initiatives.

 

Water Management: stable sales growth in fiscal year 2024

In the 2024 fiscal year, sales revenue in the Water Management business (until the end of 2023 a customer industry within the former SJT – Standardized Joining Technology distribution channel) amounted to EUR 299.1 million. This corresponds to an overall increase of 3.5% compared to the previous year (2023: EUR 288.9 million), which was primarily due to good volume growth. In addition, sales from the Teco activities acquired on February 29, 2024 and included in the scope of consolidation since then (+0.9%) also had an increasing effect on revenue development. Negative currency effects, on the other hand, only slightly reduced the sales trend (-0.1%). Excluding the aforementioned currency and acquisition effects, growth in the 2024 fiscal year amounted to 2.8%. It should be noted that the sales potential of the water business in the USA was affected by the occurrence of an extreme weather event in the second half of the year, which was reflected in temporarily subdued customer demand.

 

Mobility & New Energy: Revenue in fiscal year 2024 below previous year’s level

The Mobility & New Energy division (until the end of 2023 the former distribution channel EJT – Engineered Joining Technology) recorded sales revenue of EUR 649.4 million in the 2024 fiscal year, a decrease of 8.9% compared to the same period of the previous year (2023: EUR 713.1 million¹⁵). This development is attributable to persistently weak demand due to lower production figures for light and heavy vehicles. This also resulted in unpredictable and, in key regions, highly volatile ordering behavior on the part of automotive industry customers. This effect was particularly evident in the EMEA and Asia-Pacific regions in the second half of the past fiscal year. Business performance in the Americas region was also impacted by the aforementioned fluctuations in 2024, although the decline in sales in the Americas region was less pronounced. Taken together, this led to significant changes in business volume in the first nine months of 2024. Negative currency effects (-0.4%) further reduced sales in Mobility & New Energy. Adjusted for the aforementioned effects, the decline amounted to -8.6%.

¹⁵     Since fiscal year 2024, NORMA Group has reported sales according to the Industry Applications (IA), Mobility & New Energy (MNE) and Water Management (WM) business segments. Until fiscal year 2023, sales were reported according to the Engineered Joining Technology (EJT) and Standardized Joining Technology (SJT) distribution channels. MNE essentially corresponds to the EJT distribution channel reported in the previous year. Against this backdrop, there are slight deviations from the figure of EUR 709.6 million published in the 2023 Annual Report, which corresponds to the sales value of the former EJT distribution channel.

 

Development of earnings

 

(Adjusted) EBIT, (adjusted) EBITA and adjusted ROCE

Operating earnings (earnings before interest and taxes, EBIT) amounted to EUR 57.3 million in the 2024 fiscal year and were therefore significantly below the previous year's figure (2023: EUR 76.1 million). The EBIT margin was 5.0% (2023: 6.2%).

EBIT, adjusted solely for amortization from purchase price allocations, fell slightly by 5.3% to EUR 92.3 million in the current reporting year, compared to EUR 97.5 million in the same period of the previous year. At 8.0%, the adjusted EBIT margin was in line with the previous year’s level (2023: 8.0%).

Adjusted EBIT in the 2024 fiscal year was primarily impacted by the higher expenses for employee benefits compared to the previous year due to inflation. On the other hand, the higher adjusted Gross margin compared to the previous year and the significant reduction in freight costs, particularly for special freight, had an increasing effect on adjusted EBIT.

Return on capital employed (ROCE) as a ratio of adjusted EBIT to average capital employed fell to 8.8% in the reporting period (2023: 9.3%). The year-on-year decline in ROCE was mainly due to the lower adjusted EBIT.

 

Key factors influencing the development of earnings

 

Cost of materials ratio and gross margin

In fiscal year 2024, NORMA Group’s global purchasing organization was able to achieve significant cost reductions for some important raw materials and supplies. In particular, costs for individual raw materials and energy were down again. PURCHASING AND SUPPLIER MANAGEMENT

Against this backdrop, the cost of materials fell by 9.0% to EUR 500.0 million in the current reporting year. (2023: EUR 549.6 million). The cost of materials ratio (cost of materials in relation to sales) amounted to 43.3% in the fiscal year 2024, a significant improvement on the previous year (2023: 45.0%). At 42.8%, the cost of materials ratio in relation to total operating performance (sales revenue plus changes in inventories and other own work capitalized) was also lower than in fiscal year 2023 (45.1%). The increase in inventories of finished goods and work in progress of EUR 6.2 million in the 2024 fiscal year (2023: inventory reduction of EUR 8.2 million) had a negative impact on the cost of materials ratio.

Gross profit in the 2024 fiscal year reached EUR 668.2 million, almost matching the previous year’s figure (2023: EUR 668.0 million). The gross margin amounted to 57.8%, an improvement of 3.2 percentage points compared to the previous year (2023: 54.6%). This development is primarily due to the disproportionately high reduction in the cost of materials compared to sales in the past fiscal year. The increase in inventories of finished goods and work in progress in the amount of EUR 6.2 million (2023: reduction of EUR 8.2 million) led to an increase in the gross margin.

 

Personnel cost ratio

Personnel expenses amounted to EUR 337.9 million in the 2024 fiscal year, representing an increase of 5.0% compared to the previous year (2023: EUR 321.8 million). The main reason for this development is a higher wage level compared to the previous year due to inflation-related adjustments. Temporary inefficiencies in the EMEA region had an additional negative impact due to higher expenses for employee benefits. The Personnel cost ratio thus increased significantly to 29.3% in the current reporting year after 26.3% in the 2023 fiscal year. 

 

Other operating income and expenses

The balance of other operating income and expenses amounted to EUR -176.7 million in fiscal year 2024 (2023: EUR -192.0 million). This corresponds to an improvement of 7.9% compared to the previous year. As a percentage of sales, the balance of other operating income and expenses was 15.3% (2023: 15.7%).

While within other operating expenses, the cost of freight (2024: EUR -29.3 million; 2023: EUR -39.3 million) – and, in particular, in the area of special freight – as well as expenses for temporary staff and other personnel-related expenses (2024: EUR -47.4 million; 2023: EUR -54.7 million) and currency losses from operating activities (2024: EUR -6.6 million; 2023: EUR -9.7 million) were able to be significantly reduced, expenses for IT and telecommunications (2024: EUR -28.7 million; 2023: EUR -25.2 million) registered a slight increase due to additional investments in the area of IT security and the further implementation of the roll-out of an ERP system, mainly at one location in Germany, among other things. Other operating expenses also include costs for marketing and consulting as a significant item (2024: EUR -19.1 million; 2023: EUR -21.2 million). NOTES

Other operating income in fiscal year 2024 mainly related to foreign exchange gains from operating activities resulting from currency fluctuations in the European region. Income from the reversal of liabilities and unused provisions were also included. NOTES

 

NORMA Value Added (NOVA)

NORMA Value Added (NOVA), which is also a relevant benchmark for the long-term remuneration of the Management Board, amounted to EUR -38.8 million in fiscal year 2024 and thus improved compared to the previous year (2023: EUR -43.6 million). In addition to the slightly lower adjusted tax rate compared to the previous year, lower capital costs due to a decrease in the weighted average cost of capital (WACC) had a positive effect.

 

Financial result

The financial result for the 2024 fiscal year was EUR -23.3 million, a slight deterioration compared to the previous year (2023: EUR -22.7 million). The financial result was mainly impacted by the significantly higher net interest expense compared to the previous year. This was due to a noticeable increase in interest expenses from liabilities to banks. Although the ECB’s interest rate cuts in 2024 have already had the first positive interest rate effects, NORMA Group refinanced in the third quarter of 2023 by issuing a promissory note loan with a sustainability component in the amount of EUR 120 million. This was implemented at higher interest conditions due to the general rise in market interest rates at the time, meaning that this effect increased the net interest expense in 2024 NOTES.

 

Income taxes

In the 2024 fiscal year, there was a tax expense of EUR 19.2 million at Group level (2023: tax expense EUR 25.5 million). Measured against a pre-tax result in the amount of EUR 34.0 million (2023: EUR 53.5 million), this results in a tax rate of 56.5% (2023: 47.8%). The increase in the tax rate in the 2024 financial year is mainly due to the non-recognition of deferred tax assets on current losses and non-tax-deductible expenses. NOTES

The adjusted tax rate in fiscal year 2024 was 40.8% (2023: 41.3%).

The reason for the persistently high (adjusted) tax rate is unrecognized deferred tax assets on losses as well as non-allowable withholding taxes and non-deductible expenses.

 

Profit for the period and appropriation of profit

The net profit for the 2024 fiscal year amounted to EUR 14.8 million, which was below the figure for the previous year (2023: EUR 27.9 million). Based on an unchanged number of shares compared to the previous year of 31,862,400, this results in earnings per share of EUR 0.46 after deduction of the result for the period for non-controlling interests (2023: EUR 0.87).

The adjusted profit for the period amounted to EUR 40.9 million in the 2024 fiscal year. (2023: EUR 43.9 million). After deducting the result for the period for non-controlling interests, this results in adjusted earnings per share of EUR 1.28 (2023: EUR 1.37).

The Management Board and Supervisory Board will propose to the Annual General Meeting on May 13, 2025, that a dividend totaling EUR 12.7 million be distributed from the commercial net profit of NORMA Group SE of EUR 44.4 million. This is equivalent to a dividend of EUR 0.40 per no-par value share entitled to a dividend. In fiscal year 2024, the proposed payout ratio amounts to 31.2% of the adjusted net profit and is thus in the corridor between 30% and 35% according to NORMA Group’s sustainable dividend strategy.

 

Development of sales and earnings in the segments

 

EMEA

External sales in the EMEA region decreased by 7.3% to EUR 477.3 million in the 2024 fiscal year (2023: EUR 514.7 million). The activities from the Teco business, which have been included in the scope of consolidation since February 29, 2024, contributed 0.5% to the sales performance in the 2024 fiscal year. Adjusted for this effect, the fall in sales amounted to 7.7%, mainly due to a decline in volume business.

The decline in sales in the EMEA region is due to highly volatile customer demand overall, which is primarily characterized by short-term and unpredictable shifts in ordering behavior, and thus an overall weak development in the automotive industry. Sales in the Mobility & New Energy fell by 9.2% to EUR 354.8 million in the 2024 fiscal year. (2023: EUR 390.6 million¹⁶). Sales in Industry Applications also fell short of the previous year’s volume due to the challenging market environment. At EUR 116.7 million, revenue was 4.1% below the previous year's level (2023: EUR 121.6 million): In contrast, the Water Management unit more than doubled its revenue to EUR 5.8 million in the 2024 fiscal year thanks to revenue contributions from Teco (2023: EUR 2.5 million).

Overall, the EMEA region’s share of total sales nevertheless decreased slightly to around 41% in the 2024 fiscal year (2023: 42%).

Adjusted EBIT in the EMEA region amounted to EUR 20.9 million in the 2024 fiscal year. (2023: EUR 24.3 million). The adjusted EBIT margin was 4.1% (2023: 4.4%). The decline in profitability is due to higher personnel costs in connection with rising inflation. At the same time, successful efficiency measures were implemented in the region and significant cost savings were achieved compared to the previous year, particularly in the area of logistics and freight.

 

Americas

In the Americas region, external sales amounted to EUR 530.4 million in the 2024 reporting year, falling short of the previous year’s figure (2023: EUR 534.5 million) only slightly by 0.8%. Declining volumes (-1.0%) and slightly negative exchange rate effects (-0.3%) were partially offset by positive price effects of 0.5%. Adjusted for the effects described here, the decline amounted to 0.5%.

With regard to developments in relevant customer industries, the picture was mixed: The Water Management business of the US subsidiary NDS grew compared to the previous year, despite subdued trends in some of the key sales markets. The sales volume increased by 3.3% to EUR 266.6 million. (2023: EUR 258.1 million). In contrast, the Industry Applications and Mobility & New Energy divisions reported a year-on-year decline in business performance in an environment characterized by a general reluctance to invest. Sales in Industry Applications fell by 4.7% to EUR 71.0 million. (2023: EUR 74.5 million). Revenue in the Mobility & New Energy business unit decreased to EUR 192.8 million. (2023: EUR 201.9 million). This corresponds to a decrease of 4.5%.

The Americas region accounted for around 46% of Group sales in fiscal year 2024 (2023: 44%).

At EUR 68.3 million, adjusted EBIT in the Americas region was up on the previous year’s figure (2023: EUR 63.1 million) despite a slight overall decline in revenue. The adjusted EBIT margin for the Americas region also improved accordingly. It reached a value of 12.7% (2023: 11.6%). Among other things, lower freight costs compared to the previous year had a positive effect here, while ramp-up costs for production at the Lithia Springs site reduced profitability.

¹⁶ Since fiscal year 2024, NORMA Group has reported sales according to the Industry Applications (IA), Mobility & New Energy (MNE) and Water Management (WM) business segments. Until fiscal year 2023, sales were reported according to the Engineered Joining Technology (EJT) and Standardized Joining Technology (SJT) sales channels. The MNE customer industry essentially corresponds to the EJT sales channel reported in the previous year. Against this backdrop, there are slight deviations from the figure of EUR 388.1 million published in the 2023 Annual Report, which corresponds to the sales value of the former EJT sales channel in the EMEA region.

 

Asia-Pacific

At EUR 147.4 million, external sales in the Asia-Pacific region in the 2024 fiscal year were down 15.1% on the previous year (2023: EUR 173.6 million). This includes slightly negative translation effects (-1.1%). Adjusted for this effect, the decline in sales amounted to 13.9%, mainly due to a significant drop in business volumes, while successful sales price adjustments marginally mitigated the decline.

The main reason for the decline in sales was the lack of economic momentum in the core market of China. This primarily affected the industrial business and thus the Industry Applications and Mobility & New Energy business units. In particular, the difficult environment and short-term changes in market expectations led to highly volatile ordering behavior on the part of customers in the automotive sector. Against this backdrop, revenue in the Mobility & New Energy business unit reached a level of EUR 101.9 million in the 2024 fiscal year, down 15.6% on the previous year (2023: EUR 120.6 million). In Industry Applications, the decline in sales was even more pronounced with a fall of 23.1%. Revenue amounted to EUR 19.0 million after EUR 24.6 million in fiscal year 2023. In the Water Management area, revenue also declined (2024: EUR 26.6 million), but the decline in sales compared to the previous year (-6.1%) was not quite as sharp (2023: EUR 28.3 million).

The Asia-Pacific region’s share of Group revenue in the 2024 fiscal year fell to 13%. (2023: 14%).

Adjusted EBIT for the Asia-Pacific region fell to EUR 14.1 million in fiscal year 2024. (2023: EUR 19.9 million). With the significantly lower level of sales, the adjusted EBIT margin fell to 8.7% in the reporting year (2023: 10.8%). While inflexibility in connection with the weak sales trend led to higher personnel costs, implemented cost-saving measures and realized efficiency gains supported the margin.

 

Asset position

 

Assets

 

Total Assets

Total assets amounted to EUR 1,436.6 million as of December 31, 2024, a decrease of 3.8% compared to the previous year (Dec 31, 2023: EUR 1,493.3 million).

 

Non-current assets

Non-current assets amounted to EUR 900.7 million at December 31, 2024. Compared to the previous year’s reporting date (Dec 31, 2023: EUR 890.9 million) this corresponds to an decrease of 1.1%. The goodwill included in this figure increased by 4.0% to EUR 410.4 million due to additions in connection with the Teco acquisition and positive currency effects from the USD.(Dec 31, 2023: EUR 394.8 million). In contrast, other intangible assets fell by 11.0% to EUR 150.5 million. (December 31, 2023: EUR 169.0 million). The primary reason for the change compared to the previous year was scheduled depreciation in the 2024 fiscal year and an additional impairment loss of EUR 13.6 million. In contrast, property, plant and equipment increased by 3.5% to EUR 319.0 million. (December 31, 2023: EUR 308.4 million). In the fiscal year 2024, a total of EUR 53.4 million (2023: EUR 61.3 million) was invested in fixed assets (property, plant and equipment and intangible assets, excluding leases). NORMA Group’s investing activities in fiscal year 2024 thus resulted in an investment ratio of 4.6% (2023: 5.0%). The investments mainly related to the locations in the USA, the Czech Republic, Serbia, China, the UK and Germany. PRODUCTION AND LOGISTICS

Non-current assets accounted for 62.7% of total assets as of the reporting date in 2024 (Dec 31, 2023: 59.7%). NOTES

 

Current assets

Current assets amounted to EUR 535.9 million as at December 31, 2023, and were thus 11.0% below the level on the previous year’s reporting date (Dec 31, 2023: EUR 602.4 million). The decline was primarily due to a reduction (-23.0%) in cash and cash equivalents. They amounted to EUR 127.1 million as at December 31, 2024. (December 31, 2023: EUR 165.2 million). This was due to the unscheduled repayment of bank credit lines in the amount of EUR 48.1 million in fiscal year 2024. In addition, there was a significant reduction in trade receivables compared to the previous year in line with the business development. A reduction in overdue receivables also had a reducing effect. Against this backdrop, trade receivables and other receivables amounted to EUR 159.4 million as at December 31, 2024. This corresponds to a decrease of 13.6% compared to the previous year’s figure (December 31, 2023: EUR 184.5 million).

At 37.3%, current assets as a percentage of total assets decreased slightly compared to the previous year’s reporting date (Dec 31, 2023: 40.3%).

 

(Trade) working capital

(Trade) working capital (inventories plus receivables less payables, in each case mainly trade payables) amounted to EUR 236.5 million as of December 31, 2024, an increase of 2.4% compared to the previous year’s reporting date (Dec 31, 2023: EUR 230.9 million). The working capital ratio (trade working capital in relation to sales) was 20.5% as of December 31, 2024 (Dec 31, 2023: 18.9%)

 

Liabilities

 

Equity ratio

NORMA Group’s consolidated equity amounted to EUR 721.4 million as of December 31, 2024, an increase of 4.0% compared to the previous year (Dec. 31, 2023: EUR 693.4 million). The consolidated equity ratio reached a level of 50.2% as of the reporting date of fiscal year 2024 (Dec 31, 2023: 46.4%). While the dividend payment made in 2024 totaling EUR 14.3 million (2023: EUR 17.5 million) reduced equity, currency effects from the translation of foreign business operations – particularly in connection with the US dollar – and the profit for the period of EUR 14.8 million increased equity.

 

Net debt

Net debt (financial liabilities including derivative hedging instruments in the amount of EUR 0.8 million less cash and cash equivalents) amounted to EUR 329.2 million at the end of December 2024, resulting in a change of 4.7% or EUR 16.3 million compared to the previous year (December 31, 2023: EUR 345.4 million). Current interest expenses in the fiscal year and additions to lease liabilities as part of newly concluded leases had an increasing effect on net debt. This was offset by net cash inflows from operating activities of EUR 137.0 million, net cash outflows from the procurement and sale of non-current assets of EUR -63.5 million and from the payment of dividends of EUR -14.3 million. Cash-neutral net currency effects from foreign currency loans, cash and cash equivalents, and lease liabilities and other financial liabilities had an increasing impact on net debt.

 

Financial liabilities

NORMA Group’s financial liabilities fell by 10.6% to EUR 456.3 million as of the reporting date in 2024 (Dec 31, 2023: EUR 510.6 million). The main reason for the change compared to the previous year was a decrease in loan liabilities due to repayments in the amount of EUR 66.8 million. (2023: EUR -5.2 million). Repayments in the current reporting year primarily relate to an unscheduled repayment of syndicated loans (EUR 48.1 million) and scheduled repayments of promissory note loans (EUR 18.0 million). On the other hand, the increase in liabilities from ABS and factoring in other financial liabilities and exchange rate effects – primarily on liabilities in US dollars – increased financial liabilities. NOTES

Gearing (net debt in relation to equity) was unchanged at 0.5 as of the reporting date in 2024 (2023: 0.5).

Leverage (net debt excluding hedging derivatives in relation to adjusted EBITDA for the past twelve months) improved to 2.1 as at December 31, 2024 (December 31, 2023: 2.2). The leverage relevant for the financing agreements was also lower as at the reporting date of December 31, 2024 at 2.1 (Dec 31, 2023: 2.2)

 

Assets not recognized in the balance sheet

NORMA Group’s trademark rights and patents to the brands it holds as well as customer relationships, if acquired externally, are recognized in the balance sheet under intangible assets. However, important influencing factors for a successful business are also the awareness and reputation of these brands among customers and their trust in NORMA Group products. The trustful customer relationships based on NORMA Group’s long-established distribution network are equally important. In addition, NORMA Group’s workforce makes an important contribution to the Company’s success with its extensive experience and specific expertise, so that the knowledge gained over many years in the areas of research and development and project management is also seen as a competitive advantage. The values listed are not recognized individually in the balance sheet, but are partly reflected in goodwill and other assets.

 

Financial position

 

Financing measures

NORMA Group constantly monitors risks from changes in exchange and interest rate changes and limits them, among other ways, by using derivative hedging instruments. Furthermore, NORMA Group generally strives to achieve a diversification of its financing instruments in order to reduce risks. This also includes the prolongation of repayment obligations and an even distribution of the maturity profile. Most of the supply and service relationships between individual currencies are hedged at matching maturities over the course of the year.

NORMA Group had successfully refinanced its bank credit lines most recently in fiscal year 2019, thus creating further financial security and even greater flexibility for the future. The credit agreement has a total volume of initially EUR 300 million, including a revolving facility of EUR 50 million and a flexible accordion facility. An additional EUR 50 million revolving facility was agreed under the existing credit agreement in October 2021. The refinancing was concluded with a banking syndicate consisting of ten international banks. In addition, a sustainability component links the financing conditions to NORMA Group’s commitment in the area of corporate responsibility. In 2024, as in the previous year, NORMA Group was able to achieve a positive sustainability scoring, which enabled further savings with regard to the credit margin to be realized. After exercising the two extension options from the syndicated loan agreement in fiscal years 2020 and 2021, all components of the loan agreement will be available to NORMA Group through at least the end of 2026. In addition, NORMA Group issued a promissory note loan – also with a sustainability component – in August 2023 for general corporate financing and to create further financial freedom. The promissory note with a total volume of EUR 120 million was issued in tranches with three, five and seven years as well as fixed and variable interest components. This ensures maximum financing flexibility.

The commercial paper program, which has been in place since 2019 and is used for short-term liquidity management, was not used as at the reporting date of 31 December 2024 (31 Dec. 2023: EUR 0 million). The revolving credit facilities were also not drawn down as at December 31, 2024 (December 31, 2023: EUR 0 million). Promissory note loan tranches from 2013 and 2014 in the amount of EUR 18 million were also repaid as scheduled and bank credit lines in the amount of EUR 48.1 million were repaid unscheduled. The promissory note loan from 2013 was thus repaid in full. NORMA Group’s gross debt (liabilities to banks) fell significantly from EUR 456 million on December 31, 2023, to EUR 397.7 million at the end of 2024.

NORMA Group uses interest rate hedges to hedge interest rate risks that could arise from the external financing components. As of December 31, 2024, the average interest rate of the gross debt (excluding derivatives) was 4.62%. The maturity profile of NORMA Group, based on the promissory note loans II (2014), III (2016) and IV (2023) as well as the syndicated bank loan (2019), as shown in figures G015 and G016, was as follows as of December 31, 2024: As of the 2024 balance sheet date, NORMA Group is not subject to any financial covenants contained in loan agreements: net debt in relation to adjusted Group EBITDA) more. However, due to a link to the level of financing costs, this key figure is still part of the financing agreements and is continuously monitored.

Concrete future financing steps depend on the current changes in the financing markets and potential acquisition opportunities.

57.9

Cash flow

 

Net operating cash flow

In fiscal year 2024, NORMA Group generated net operating cash flow (adjusted EBITDA less changes in working capital and investments from operations) of EUR 105.4 million (2023: EUR 87.3 million). The main driver was a positive development in the area of working capital management. Net operating cash flow in the current reporting period was also boosted by lower investments from the operating business compared to the same period of the previous year.

 

Cash flow from operating activities

Cash flow from operating activities increased significantly to EUR 137.0 million in fiscal year 2024 (2023: EUR 118.9 million). It mainly includes changes in inventories, trade receivables and other assets as well as trade payables and other liabilities that are not attributable to investing or financing activities. Overall, there was a positive development in working capital. The cash flow from operating activities also includes payments for share-based remuneration, non-cash expenses from the currency translation of external financing liabilities and non-cash interest expenses. Detailed information on the components mentioned here can be found in the NOTES.

 

Cash flow from investing activities

The net cash outflow from investing activities amounted to EUR 63.5 million in fiscal year 2024 (2023: EUR 59.8 million). It mainly includes net payments for the acquisition of Teco as well as outflows for the acquisition of intangible assets and property, plant and equipment, including for the expansion and modernization of production sites. Detailed information on the investments made in the three regional segments in the 2024 fiscal year can be found in the section PRODUCTION AND LOGISTICS.

 

Cash flow from financing activities

The cash outflow from financing activities increased by 97.0% to EUR 114.1 million in the 2024 fiscal year (2023: EUR 57.9 million). This was primarily due to higher net loan payments compared to the previous year as a result of scheduled repayments of promissory note loans totaling EUR 18.0 million as well as an unscheduled repayment of syndicated bank credit lines in the amount of EUR 48.1 million and increased interest payments. In contrast, fewer dividends were distributed to the shareholders of NORMA Group SE in fiscal year 2024 compared to the previous year (2023: EUR 14.3 million; 2023: EUR 17.5 million).