Notes to the Development of Revenue and Earnings

The following discussion of revenue and earnings performance takes into account the classification of the Water Management business as a discontinued operation³. For more information, see the section DISCONTINUED OPERATION.

³ Any exceptions are identified accordingly.

Trends in Group Revenue

For the first nine months of 2026, Group revenue totaled EUR 628.3 million (Q1–Q3 2025: EUR 631.8 million), which was 0.6% below the prior-year level. This included negative currency effects of 1.4%. Adjusted for these effects, revenue increased by 0.9%  in the first nine months of 2026.

In the third quarter of 2026, Group revenue rose by 5.2% to EUR 207.8 million (Q3 2025: EUR 197.5 million). Revenue growth was influenced by positive currency effects totaling 1.0%. Adjusted for these effects, revenue growth amounted to 4.2%.

Revenue Trends for the Strategic Business Units

Industry Applications: Revenue Growth Over the First Nine Months of 2026

Revenue in the Industry Applications business unit totaled EUR 207.1 million in the first nine months of 2026, representing a 6.1% increase over the prior-year level (Q1–Q3 2025: EUR 195.1 million). Adjusted for currency effects of -2.0%, revenue grew by 8.1%. This positive trend was driven in particular by robust demand in the Americas and Asia-Pacific regions, as well as by new business in attractive industrial application areas.

Mobility & New Energy: Revenue Below Last Year’s Level Due to Persistently Weak Demand

From January through September 2026, the Mobility & New Energy business unit generated revenue of EUR 421.2 million, which was 3.5% below the prior-year level (Q1–Q3 2025: EUR 436.7 million). This was due in particular to continued subdued demand from the global automotive industry, which resulted in lower sales volumes. In addition, negative currency effects totaling 1.2% weighed on revenue growth. Adjusted for these effects, revenue declined by 2.4%.

(Adjusted) cost of materials ratio

Cost of materials for the first nine months of 2026 totaled EUR 279.4 million, which was 3.0% below the prior-year figure (Q1–Q3 2025: EUR 288.1 million). The ratio of material costs to revenue improved accordingly to 44.5% (Q1–Q3 2025: 45.6%). This was due in particular to measures aimed at optimizing the cost of materials and energy as well as the pricing initiatives implemented as part of the NewNORMA transformation. The cost of materials as a percentage of total operating performance (revenue plus changes in inventories and other own work capitalized) also improved to 44.3% (Q1–Q3 2025: 45.2%). The buildup of inventories of finished goods and work in progress was lower than in the corresponding prior-year period, at EUR 1.3 million (Q1–Q3 2025: EUR 2.7 million).

In the first nine months of 2026, adjustments were made for expenses totaling EUR 0.2 million within cost of materials. The adjusted cost of materials therefore amounted to EUR 279.2 million (Q1–Q3 2025: EUR 288.0 million). The adjusted cost of materials ratio was the same as the reported ratio when rounded.

In the third quarter of 2026, the cost of materials amounted to EUR 95.8 million (Q3 2025: EUR 88.3 million). The cost of materials ratio rose to 46.1% (Q3 2025: 44.7%). As a percentage of total operating performance, it stood at 45.5% (Q3 2025: 44.2%). Since no significant adjustments were made in the third quarter, the adjusted key figures corresponded to the reported figures.

(Adjusted) gross profit and (adjusted) gross margin

In the first nine months of 2026, NORMA Group generated gross profit (revenue less cost of materials plus changes in inventory and other own work capitalized) of EUR 352.0 million (Q1–Q3 2025: EUR 349.5 million). The gross margin improved to 56.0% (Q1–Q3 2025: 55.3%). A key factor in this was the disproportionately large decline in cost of materials relative to revenue.

Within gross profit, material expenses totaling EUR 0.2 million were adjusted for the first nine months of 2026. The adjusted gross profit therefore amounted to EUR 352.3 million (Q1–Q3 2025: EUR 349.5 million). The adjusted gross margin was 56.1% (Q1–Q3 2025: 55.3%).

In the third quarter of 2026, gross profit rose by 3.0% to EUR 114.9 million (Q3 2025: EUR 111.6 million). The gross margin decreased to 55.3% (Q3 2025: 56.5%). Since no significant adjustments were made to cost of materials in the third quarter of 2026, the adjusted gross profit and adjusted gross margin were the same as the reported figures.

Number of Employees by Region

As of September 30, 2026, NORMA Group had 6,063 employees worldwide, including temporary workers (September 30, 2025: 6,094). Of these, 4,624 are employees in the core workforce (September 30, 2025: 4,800).

(Adjusted) personnel cost ratio

Expenses for employee benefits totaled EUR 213.6 million in the first nine months of 2026, representing an increase of 1.8% compared with the prior-year figure (Q1–Q3 2025: EUR 209.9 million). The personnel cost ratio increased to 34.0% (Q1–Q3 2025: 33.2%). The increase was primarily due to higher expenses related to the implementation of the NewNORMA transformation.

In the first nine months of 2026, adjustments were made for expenses totaling EUR 10.8 million related to the NewNORMA transformation within personnel expenses. Adjusted personnel expenses decreased by 2.1% to EUR 202.9 million (Q1–Q3 2025: EUR 207.2 million). The adjusted personnel cost ratio improved to 32.3% (Q1–Q3 2025: 32.8%). This reflects the positive effects of the measures already implemented to reduce the personnel cost base.

In the third quarter of 2026, personnel expenses rose to EUR 71.6 million (Q3 2025: EUR 65.5 million). The personnel cost ratio increased to 34.4% (Q3 2025: 33.2%). Adjusted for transformation expenses, personnel expenses totaled EUR 64.4 million (Q3 2025: EUR 63.2 million). The adjusted personnel cost ratio improved to 31.0% (Q3 2025: 32.0%).

(Adjusted) other operating income and expenses

The balance of other operating income and expenses for the first nine months of 2026 totaled EUR -99.4 million (Q1–Q3 2025: EUR -105.1 million). As a percentage of revenue, this amounted to 15.8% (Q1–Q3 2025: 16.6%).

Other operating income in the reporting period amounted to EUR 13.6 million (Q1–Q3 2025: EUR 10.9 million). The main components were foreign exchange gains from operating activities amounting to EUR 3.3 million (Q1–Q3 2025: EUR 2.6 million) and income from the reversal of liabilities and provisions (Q1–Q3 2026: EUR 4.6 million; Q1–Q3 2025: EUR 2.3 million), especially in connection with personnel and supplier-related liabilities.

Other operating expenses for the first nine months of 2026 totaled EUR 113.0 million (Q1–Q3 2025: EUR 116.0 million). The decrease was primarily due to lower IT and telecommunications expenses (Q1–Q3 2026: EUR 16.5 million; Q1–Q3 2025: EUR 18.9 million). Consulting and marketing expenses (Q1–Q3 2026: EUR 14.7 million; Q1–Q3 2025: EUR 14.8 million) and freight costs (Q1–Q3 2026: EUR 15.6 million; Q1–Q3 2025: EUR 15.8 million) remained largely at the prior-year level. This was countered by higher expenses for temporary workers and other personnel-related expenses (Q1–Q3 2026: EUR 28.6 million; Q1–Q3 2025: EUR 27.3 million) as well as increased write-offs and impairment allowances for trade receivables (Q1–Q3 2026: EUR 2.3 million; Q1–Q3 2025: EUR 0.9 million).

In the first nine months of 2026, other operating income and expenses were adjusted for costs totaling EUR 5.7 million related to the NewNORMA transformation. The adjusted net balance thus amounted to EUR -93.6 million, which was 8.3% below the prior-year figure (Q1–Q3 2025: EUR -102.1 million). As a percentage of revenue, this amounted to 14.9% (Q1–Q3 2025: 16.2%).

In the third quarter of 2026, the balance of other operating income and expenses totaled EUR -36.8 million (Q3 2025: EUR -34.3 million). As a percentage of revenue, this amounted to 17.7% (Q3 2025: 17.3%). In the third quarter of 2026, other operating income and expenses were adjusted for costs totaling EUR 5.3 million related to the NewNORMA transformation. The balance of adjusted other operating income and expenses thus amounted to EUR -31.5 million (Q3 2025: EUR -33.1 million). As a percentage of revenue, this amounted to 15.1% (Q3 2025: 16.7%).

(Adjusted) operating profit

EBIT in the first nine months of 2026 amounted to EUR 1.2 million (Q1–Q3 2025: EUR -54.1 million). The prior-year figure was impacted by a non-cash impairment charge of EUR 50 million on goodwill in the EMEA region. Earnings performance for the period from January through September 2026 was supported by lower cost of materials and an improved net balance of other operating income and expenses. In particular, higher personnel expenses – largely attributable to costs associated with the implementation of the NewNORMA transformation – had an offsetting effect. The EBIT margin was 0.2% (Q1–Q3 2025: -8.6%).

Adjustments within EBIT in the first nine months of 2026 totaled EUR 20.5 million and included expenses related to the NewNORMA transformation (EUR 16.7 million) and depreciation and amortization of tangible and intangible assets arising from purchase price allocations (EUR 3.8 million). Adjusted EBIT improved significantly to EUR 21.7 million (Q1–Q3 2025: EUR 5.9 million). The adjusted EBIT margin rose to 3.5% (Q1–Q3 2025: 0.9%).

In Q3 2026, EBIT amounted to EUR -6.0 million (Q3 2025: EUR -51.0 million). The EBIT margin was -2.9% (Q3 2025: -25.8%). EBIT was adjusted for expenses related to the NewNORMA transformation and depreciation and amortization of tangible and intangible assets arising from purchase price allocations totaling EUR 13.8 million. Adjusted EBIT thus amounted to EUR 7.8 million (Q3 2025: EUR 3.8 million). The adjusted EBIT margin improved to 3.7% (Q3 2025: 1.9%).

Financial result

The financial result in the first nine months of 2026 amounted to EUR 1.5 million and thus improved in comparison to the prior year (Q1–Q3 2025: EUR -13.3 million). The main driver was higher financial income of EUR 10.4 million (Q1–Q3 2025: EUR 2.4 million), in particular due to increased interest income on short-term deposits with banks due to higher liquidity positions following the sale of the Water Management business. In addition, financing expenses fell to EUR 8.9 million (Q1–Q3 2025: EUR 15.7 million), particularly due to lower liabilities to banks following the debt repayment in Q1 2026. Net interest expense was significantly lower during the reporting period (Q1–Q3 2026: EUR 1.3 million; Q1–Q3 2025: EUR 11.7 million).

In the third quarter of 2026, the financial result improved to EUR 1.4 million (Q3 2025: EUR -4.3 million).

(Adjusted) income taxes and tax rate

Based on earnings before taxes (EBT) of EUR 2.7 million in the first nine months of 2026 (Q1–Q3 2025: EUR -67.4 million), income taxes amounted to EUR 16.1 million (Q1–Q3 2025: EUR 8.4 million). The tax rate was 591.3% (Q1–Q3 2025: -12.5%). The higher-than-average tax rate is primarily attributable to the decision not to recognize deferred tax assets related to tax losses, particularly within the German tax consolidation group.

In the first nine months of 2026, income taxes were adjusted for the tax effects of adjustments related to the NewNORMA transformation and depreciation and amortization of tangible and intangible assets arising from purchase price allocations totaling EUR 5.5 million. Adjusted income tax expense thus amounted to EUR 21.5 million (Q1–Q3 2025: EUR 11.0 million). Based on adjusted earnings before taxes of EUR 23.3 million (Q1–Q3 2025: EUR -7.4 million), the adjusted tax rate was 92.6% (Q1–Q3 2025: -148.5%).

In Q3 2026, earnings before taxes amounted to EUR -4.6 million (Q3 2025: EUR -55.4 million). Income taxes amounted to EUR 8.4 million (Q3 2025: EUR 2.3 million). This resulted in a tax rate of -182.6% (Q3 2025: -4.2%).

In the third quarter of 2026, income taxes included the tax effects of adjustments related to the NewNORMA transformation and depreciation and amortization arising from purchase price allocations totaling EUR 4.0 million. Adjusted income tax expense thus amounted to EUR 12.4 million (Q3 2025: EUR 3.6 million). Based on adjusted earnings before taxes of EUR 9.2 million (Q3 2025: EUR -0.6 million), the adjusted tax rate was 135.4% (Q3 2025: -642.6%).

(Adjusted) net profit for the period and (adjusted) earnings per share

The significant improvement in earnings before taxes, despite the continued high tax burden, led to an improved profit for the period in the first nine months of 2026 amounting to EUR -13.3 million (Q1–Q3 2025: EUR -75.8 million). Adjustments at the level of profit for the period totaled EUR 15.1 million and corresponded to the related after-tax effects of the adjustments at EBIT level. Adjusted profit for the period thus amounted to EUR 1.7 million (Q1–Q3 2025: EUR -18.5 million).

The average number of shares used to calculate adjusted earnings per share decreased as a result of the share repurchases carried out during the reporting period. Based on an average number of 29,379,858 shares, adjusted earnings per share from continuing operations amounted to EUR 0.05 (Q1–Q3 2025: EUR -0.58).

Net income for the third quarter of 2026 amounted to EUR -13.0 million (Q3 2025: EUR -57.7 million). Profit for the period was adjusted for expenses and depreciation and amortization, net of taxes, totaling EUR 9.8 million. Adjusted profit for the period thus amounted to EUR -3.3 million (Q3 2025: EUR -4.1 million). Adjusted earnings per share, based on an average number of shares of 27,347,484, amounted to EUR -0.12 (Q3 2025: EUR -0.13).