Notes to the Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position and Other Notes

5. Revenue and Cost of Materials

Revenue recognized for the reporting period is as follows:

At EUR 622,289 thousand, net sales revenue in the first six months of 2022 was 9.5 % higher than in the first six months of 2021 (EUR 568,067 thousand). In organic terms, sales revenue rose by 3.8% or EUR 21,475 thousand compared to the same period of the previous year. Organic growth and positive currency effects from the Americas region in particular contributed to the positive development of revenue. An increase in revenue was recorded in the water business in particular.

Other revenue mainly includes proceeds from the sale of production residues from metal production that are no longer used.

Revenue for the first six months of 2022 includes income from the reversal of refund liabilities recognized in the prior period in the amount of EUR 552 thousand (H1 2021: EUR 918 thousand). The reversals represent the difference between the expected volume discounts and annual bonuses for customers recognized as of December 31, 2021, and the actual payment in the fiscal year as well as the differences from recognized deferred revenue from price negotiations with NORMA Group customers that were not concluded in the previous year.

At 47.6% (H1 2021: 43.9%), the ratio of cost of materials to sales, excluding changes in inventories, was above the level of the prior-year period. As a percentage of total operating performance, the cost of materials was also up year on year at 47.3% (H1 2021: 43.4%), due to increased logistics costs on the input side and increasing price pressure on the raw material markets.

6. Other Operating Income and Other Operating Expenses

Overall, other operating income of EUR 13,469 thousand is EUR 3,640 thousand higher than in the first six months of fiscal year 2021 (EUR 9,829 thousand). Other operating income mainly includes foreign currency gains from operating activities (H1 2022: EUR 6,388 thousand; H1 2021: EUR 3,721 thousand) as well as income from the reversal of liabilities (H1 2022: EUR 3,207 thousand; H1 2021: EUR 2,774 thousand) and income from the disposal of non-current assets in the amount of EUR 2,021 thousand, which mainly resulted from the sale of a plot of land with buildings in the United States (H1 2021: EUR 196 thousand).

Income from the reversal of liabilities is mainly related to the reversal of personnel-related obligations.

At EUR 105,109 thousand, other operating expenses were 17.0% higher than in the first six months of 2021 (EUR 89,868 thousand).

Other operating expenses include, among other things, expenses for IT and telecommunications. The increase in this area compared with the prior-year period is mainly attributable to the Group-wide implementation of a new ERP system and the resulting greater need for consulting services and license fees.

Due to the decline in the COVID-19 pandemic, both travel and entertainment costs and the costs of company vehicles rose. Higher foreign currency losses from operating activities also had an increasing impact on the development of other operating expenses.

In relation to total operating performance, other operating expenses increased at a rate of 16.8% (H1 2021: 15.6%).

7. Employee Benefits Expenses

Employee benefits expenses amounted to EUR 157,531 thousand in the first six months of 2022 compared to EUR 146,396 thousand in the same period of the previous year, an increase of EUR 11,135 thousand. The increase is mainly related to currency effects, in particular the development of the US dollar against the euro, and to an increase in labor costs in the first half of 2022.

In relation to total operating performance, employee benefits expenses decreased from 25.4% in the first half of 2021 to 25.2% in the first half of 2022. This development was also influenced by inflation-related price increases and the related rise in sales.

The average headcount was 6,263 in the first six months of 2022 (H1 2021: 6,518).

8. Financial Result

The financial result amounted to EUR –4,532 thousand in the first six months of 2022, a increase of EUR 1,627 thousand compared to the first six months of 2021 (EUR –6,159 thousand). Net currency gains/losses (including income/expenses from the valuation of currency hedging derivatives) amounted to EUR 619 thousand in the first six months of 2022 (H1 2021: EUR -515 thousand).

Net interest expenses (including interest expenses from leases) decreased by EUR 403 thousand to EUR 4,428 thousand in the first half of 2022 compared to the first half of 2021 (EUR 4,831 thousand). The financial result improved in the first half of 2022 compared to the same period of the previous year due to the positive currency result from financing activities and lower interest expenses for loans.

In the first six months of 2022, interest expenses of EUR 528 thousand from leases (H1 2021: EUR 418 thousand) were recognized in the financial result.

9. Earnings per Share

Earnings per share are calculated by dividing the net profit for the period attributable to the shareholders of NORMA Group by the weighted average number of shares issued in the reporting period. NORMA Group has only issued ordinary shares. The weighted average number of shares in the first six months of 2022 was 31,862,400 (H1 2021: 31,862,400).

Earnings per share for the first six months of 2022 were as follows:

Earnings per share in the first six months of 2022 were negatively impacted by the heavily burdened operating profit. 10. Taxes/Deferred Income Taxes

In the first six months, income tax expenses of EUR 10,384 thousand (H1 2021: income tax expenses of EUR 15,036 thousand) were recognized on positive earnings before income taxes of EUR 37,083 thousand (H1 2021: positive earnings before income taxes of EUR 56,132 thousand). The tax rate for the first six months of 2022 was 28.0% (H1 2021: 26.8%).

11. Property, Plant and Equipment and Intangible Assets

Intangible assets can be broken down as follows:

The increase in goodwill from EUR 392,745 thousand as of December 31, 2021, to EUR 409,571 thousand as of June 30, 2022, resulted from positive exchange rate effects, from the US dollar region in particular.

Goodwill developed as follows:

Details on the historical development of accumulated depreciation and impairment losses can be found in the 2021 Annual Report.

Property, plant and equipment and rights of use can be broken down as follows:

EUR 19,756 thousand (H1 2021: EUR 21,879 thousand) was invested in non-current assets, including own work capitalized of EUR 1,205 thousand (H1 2021: EUR 1,326 thousand).

The main investments were made in the United States, China, the Czech Republic, Serbia, Poland and Germany.

In the Americas segment, the sale of a plot of land, including an office and production building, with a subsequent lease agreement for parts of the asset sold (sale and leaseback) was concluded in the first quarter of 2022. The carrying amount of the property sold, including the office and production building, amounted to EUR 6,043 thousand.

In addition, EUR 19,359 thousand (H1 2021: EUR 3,356 thousand) was recognized as additions to non-current assets for the capitalization of rights of use for leased land and buildings.

12. Current Assets

Current assets as of June 30, 2022, increased by 9.3% compared to December 31, 2021. One driving factors here was the sharp increase in trade receivables. Besides the seasonal increase, the reduction in receivables sold under the ABS and factoring programs compared to the end of the previous year (decrease of EUR 7,738 thousand) led to an increase in trade receivables.

Inventories also increased by EUR 22,540 thousand, or 10.8%, compared to December 31, 2021. In addition to the seasonal development, the increase in inventories also resulted from currency effects and price increases on the procurement market. In addition, a further increase in inventory reserves was initiated to counteract previously announced price increases.

On the other hand, cash and cash equivalents declined by EUR 30,618 thousand or 16.5% from EUR 185,719 thousand at the end of the year to EUR 155,101 thousand as of June 30, 2022, also due to the payment of the dividend in the amount of EUR 23,897 thousand to the shareholders of NORMA Group in May 2022. A detailed reconciliation of the change in cash and cash equivalents can be found in the Consolidated Statement of Cash Flows.

Compared to June 30, 2021, trade receivables increased significantly by 16.1%. Both the increase in sales compared to the same period of the corresponding previous year and currency effects had an impact here.

In the area of inventories (H1 2022: EUR 230,548 million; H1 2021: EUR 179,327 million), the increase compared to June 30, 2021, also resulted from effects at the end of fiscal year 2021. The high level of inventories at the end of fiscal year 2021 (EUR 208,008 million) resulted from the targeted build-up of strategic reserves in advance of the price increases for raw materials that were announced as part of coping with the challenges on the procurement side.

13. Financial Instruments

The following disclosures provide an overview of the financial instruments held by the Group.

The financial instruments by class and category were as follows:

13. (a) Trade Receivables Held for Transfer and Transferred

i. Transferred trade receivables

Subsidiaries of NORMA Group in the segments EMEA and Americas transfer trade receivables to non-Group buyers under factoring and ABS transactions. The details and effects of the respective programs are presented below.

a) Factoring transactions

Under the factoring agreement concluded in fiscal year 2017 with a maximum receivables volume of EUR 10 million, subsidiaries of NORMA Group in Germany, Poland and France sell trade receivables directly to the external buyers. Under this factoring program, receivables in the amount of EUR 7.3 million were sold as of June 30, 2022 (Dec 31, 2021: EUR 4.7 million), of which EUR 0.7 million (Dec 31, 2021: EUR 0 million) were not paid out as purchase price retentions held as security reserves and recognized as other financial assets.

The continuing involvement in the amount of EUR 67 thousand (Dec 31, 2021: EUR 43 thousand) was recognized as other financial liability and comprises the maximum loss for NORMA Group resulting from the late payment risk on the receivables sold as of the reporting date. The fair value of the guarantee or the interest payments to be assumed was recognized at EUR 6 thousand (Dec 31, 2021: EUR 4 thousand).

NORMA Group established yet another factoring program in 2018. In the factoring agreement concluded in December 2018 with a maximum receivables volume of USD 24 million, a subsidiary of NORMA Group in the United States sells trade receivables directly to the non-Group acquirers. Receivables in the amount of EUR 4.5 million were sold under this factoring program as of June 30, 2022 (Dec 31, 2021: EUR 19.0 million), EUR 0.9 million (Dec 31, 2021: EUR 0 million) of which were not paid out as purchase price retentions held as security reserves and recognized as other financial assets.

b) ABS program

NORMA Group entered into a revolving receivables purchase agreement with Weinberg Capital Ltd. (special purpose entity) in fiscal year 2014. The agreed structure provides for the sale of trade receivables of NORMA Group via an ABS transaction and was successfully initiated in December 2014. NORMA Group sells the receivables to the special purpose entity.

Under this asset-backed securities (ABS) program with a volume of up to EUR 20 million, domestic group companies of NORMA Group have sold receivables in the amount of EUR 11.6 million as of June 30, 2022 (Dec 31, 2021: EUR 11.4 million), EUR 0.5 million (Dec 31, 2021: EUR 0.5 million) of which were not paid out as purchase price retentions held as security reserves and recognized as other financial assets.

A continuing involvement in the amount of EUR 209 thousand (Dec 31, 2021: EUR 205 thousand) was recognized as other financial liability and comprises the maximum amount that NORMA Group might have to repay under the assumed default guarantee and the expected interest payments until receipt of payment in relation to the carrying amount of the transferred receivables. The fair value of the guarantee or the interest payments to be assumed was recognized and included in profit or loss as other liability in the amount of EUR 165 thousand (Dec 31, 2021: EUR 164 thousand).

NORMA Group entered into yet another revolving receivables purchase agreement with Weinberg Capital Ltd. (special purpose entity) in fiscal year 2018 on the sale of trade receivables. The agreed structure provides for the sale of trade receivables of NORMA Group via an ABS transaction and was successfully initiated in December 2018. The receivables are sold by NORMA Group to the special purpose entity.

Under this ABS program with a volume of up to USD 20 million, US Group companies of NORMA Group sold receivables in the amount of EUR 13.8 million as of June 30, 2022 (Dec 31, 2021: EUR 9.9 million), EUR 0.6 million of which were not paid out as purchase price retentions (Dec 31, 2021: EUR 0.5 million) held as security reserves and recognized as other financial assets.

A continuing involvement in the amount of EUR 277 thousand (Dec 31, 2021: EUR 199 thousand) was recognized as other financial liability and comprises the maximum amount that NORMA Group might have to repay under the assumed default guarantee and the expected interest payments until receipt of payment in relation to the carrying amount of the transferred receivables. The fair value of the guarantee or the interest payments to be assumed was recognized and included in profit or loss as other liability in the amount of EUR 201 thousand (Dec 31, 2021: EUR 144 thousand).

ii. Trade receivables earmarked for transfer

In the Group’s view, trade receivables included in these programs but not yet disposed of beyond the closing date cannot be allocated to either the “hold” or the “hold and sell” business model. Accordingly, they are recognized in the category “Fair Value through Profit and Loss” (FVTPL).

13. (b) Financial Liabilities and Net Debt

i. Loans

The maturities of the long-term syndicated loans as well as the promissory note loans and commercial paper as of June 30, 2022, are as follows:

The maturities of the syndicated loans and the promissory note loans as of December 31, 2021, are as follows:

Parts of the syndicated loans were hedged against interest rate changes by way of derivatives.

ii. Leases

The maturities of the nominal values and the carrying amounts of the lease liabilities as of June 30, 2022, are as follows:

iii. Other financial liabilities

Other financial liabilities are as follows:

a) Liabilities from ABS and factoring

The liabilities from ABS and factoring include liabilities from the remaining continuing involvement recognized within the ABS and factoring programs in the amount of EUR 553 thousand (Dec 31, 2021: EUR 447 thousand), liabilities from recognized fair values of default and interest rate guarantees in the amount of EUR 374 thousand (Dec 31, 2021: EUR 374 thousand) and liabilities from payments from customers for receivables already sold within the ABS and factoring programs. Liabilities from payments received from customers for receivables already sold within the ABS and factoring programs amount to EUR 3,985 thousand (Dec 31, 2021: EUR 6,976 thousand).

iv. Net debt

Net financial debt as of June 30, 2022, is as follows:

NORMA Group’s financial liabilities were 6.7% above the level as of December 31, 2021.

Loans amounting to EUR 10,000 thousand were repaid and loans amounting to EUR 15,075 thousand were taken out in the first six months of the fiscal year. Furthermore, cash-neutral currency effects on the foreign currency loans and accrued interest expenses increased loan liabilities.

The increase in liabilities from leases resulted from additions in the area of rights of use due to newly concluded leases, which more than offset the changes due to repayments (payment of lease installments).

The valuation-related increase in liabilities from derivatives also had an increasing effect on financial liabilities.

The decrease in other financial liabilities mainly resulted from the repayment of liabilities from ABS and factoring.

Net debt increased by EUR 64,311 thousand, or 20.2%, compared to December 31, 2021.

The main reason for this was a decrease in cash and cash equivalents due to net cash outflows from total cash inflows from operating activities of EUR 7,142 thousand, net cash outflows from the acquisition and sale of non-current assets of EUR 14,557 thousand, and from the payment of dividends in the amount of EUR 23,897 thousand.

Furthermore, current interest expenses in the first six months of 2022, the increase in liabilities from derivatives, the increase in lease liabilities, and non-cash currency effects in the first six months had an increasing effect on net debt. NOTE 18 “DISCLOSURES RELATING TO THE CONSOLIDATED STATEMENT OF CASH FLOWS”

13. (c) Derivative Financial Instruments

Derivative financial instruments held for hedging purposes are recognized at their respective fair values. They are classified entirely within Level 2 of the fair value hierarchy.

The derivative financial instruments are as follows:

Foreign currency derivatives

As of June 30, 2022, foreign currency derivatives with a positive fair value of EUR 0 thousand and foreign currency derivatives with a negative fair value of EUR 46 thousand were held to hedge cash flows. In addition, foreign currency derivatives with a positive market value of EUR 371 thousand and foreign currency derivatives with a negative market value of EUR 3,709 thousand were held to hedge changes in fair value.

Foreign currency derivatives used to hedge cash flows are used to hedge against fluctuations in the exchange rate arising from operating activities. Foreign currency derivatives used to hedge changes in fair value are used to hedge external financing liabilities and intercompany monetary items against fluctuations in the exchange rate.

Interest rate hedging instruments

Parts of NORMA Group’s external financing were hedged against interest rate fluctuations by using interest rate swaps. As of June 30, 2022, interest rate hedges with a positive fair value of EUR 4,631 thousand were held. The interest rate hedges had a notional amount of EUR 62,883 thousand (Dec 31, 2021: EUR 61,805 thousand). As of June 30, 2022, the fixed interest obligation resulting from the hedges was 1.41%, the variable interest rate was the 3-month LIBOR. The maximum default risk as of the reporting date is the fair value of the derivative assets recognized in the Consolidated Statement of Financial Position.

No expense was recognized from ineffective portions of cash flow hedges in the first six months of 2022 and 2021.

The effective portion from cash flow hedges recognized in other comprehensive income and the reserve for hedging costs developed as follows, excluding deferred taxes:

Gains and losses on interest rate swaps recognized in equity in the hedge reserve on the reporting date are recognized in profit or loss on an ongoing basis until the loan liabilities are repaid. The gains and losses on foreign currency derivatives recognized in the hedging reserve in equity are short-term and are recognized effectively in profit or loss within one year.

An overview of the gains and losses arising from fair value hedges recognized within the financial result is as follows:

13. (d) Fair Values of Financial Instruments

The following tables present the valuation hierarchy according to IFRS 13 of NORMA Group’s assets and liabilities measured at fair value as of June 30, 2022, and December 31, 2021, respectively:

As in the previous year, there were no transfers between the individual levels of the valuation hierarchies in the current period.

No terms of a financial asset that would otherwise be past due or impaired were renegotiated during the fiscal year.

Financial instruments held for hedging purposes are recognized at their respective fair values. They are classified in full in Level 2 of the fair value hierarchy.

The fair value of interest rate swaps is calculated as the present value of expected future cash flows. The fair value of forward exchange contracts is calculated using the forward exchange rate on the balance sheet date and the result is then presented at its discounted present value.

As of June 30, 2022 and December 31, 2021, no financial liabilities were assigned to Level 3 of the measurement hierarchy.

Financial instruments that are recognized in the Consolidated Statement of Financial Position at amortized cost but for which the fair value is disclosed in the notes are also classified in a three-level fair value hierarchy.

The fair values of the fixed-interest tranches of the promissory note loans, which are carried at amortized cost but for which the fair value is disclosed in the notes, are determined on the basis of the market yield curve using the zero coupon method, taking credit spreads (Level 2) into account. Interest accrued as of the reporting date is included in the amounts.

Trade and other receivables, as well as cash and cash equivalents, have short-term maturities. Their carrying amounts as of the reporting date equate to their respective fair values, as the effects of discounting are immaterial.

As trade payables and other financial liabilities have short maturities, their carrying amounts approximate their fair values.

14. Equity

In the first six months of 2022, equity changed due to the result for the period (EUR 26,699 thousand), currency translation differences (EUR 37,701 thousand) and cash flow hedges (EUR 3,427 thousand), the remeasurement of the net debt from benefit plans after taxes (EUR 2,084 thousand) and dividends (EUR –23,897 thousand).

Authorized and Conditional Capital

By resolution of the Annual General Meeting on June 30, 2021, the Management Board is authorized, with the approval of the Supervisory Board, to increase the company’s share capital on one or more occasions on or before June 29, 2025 (including that date) by up to a total of EUR 3,186,240 by issuing up to 3,186,240 new no-par value registered shares in return for cash contributions and/or contributions in kind, whereby shareholders’ subscription rights may be excluded (Authorized Capital 2021).

By resolution of the Annual General Meeting on June 30, 2021, the share capital of the company is conditionally increased by up to EUR 3,186,240 by issuing up to 3,186,240 new no-par value registered shares for the purpose of granting convertible bonds and/or bonds with warrants (Conditional Capital 2021).

15. Provisions

Provisions decreased slightly to EUR 25,825 thousand as of June 30, 2022, compared to December 31, 2021 (EUR 26,985 thousand).

The decrease is mainly attributable to current provisions. These decreased as a result of the payments made for deferred costs from the ongoing “Get on track” change program.

16. Pension Obligations

The decrease in provisions for pensions mainly resulted from the remeasurement of pensions in the current year as a consequence of the increased pension interest rate for Germany. As of June 30, 2022, the amount of the obligation was EUR 13,415 thousand (December 31, 2021: EUR 15,913 thousand).

17. Other Non-Financial Liabilities

Other non-financial liabilities are as follows:

18. Disclosures on the Consolidated Statement of Cash Flows

The cash flow statement distinguishes between cash flows from operating activities, investing activities and financing activities.

Cash flow from operating activities is derived indirectly from the profit or loss for the period. This is adjusted for non-cash depreciation and amortization, for expenses and payments allocated to cash flow from investing or financing activities, and for other non-cash expenses and income. The cash inflow from operating activities of EUR 7,142 thousand (H1 2021: EUR 41,848 thousand) shows the changes in current assets, provisions and liabilities (excluding liabilities related to financing activities).

The company participates in a reverse factoring program, a factoring program and an ABS program. The liabilities in the reverse factoring program are reported under trade and similar payables. As of June 30, 2022, liabilities of EUR 21,580 thousand (Dec 31, 2021: EUR 18,307 thousand) from reverse factoring programs are recognized. The cash flows from the reverse factoring, factoring and ABS programs are presented under cash flows from operating activities, as this equates to the economic substance of the transactions.

Cash inflow from operating activities in the first half of 2022 includes payments for share-based payments in the amount of EUR 578 thousand (H1 2021: EUR 365 thousand) resulting from the Short-Term-Incentive (STI) variable remuneration for members of the Management Board of NORMA Group (H1 2021: from the Matching Stock Program (MSP) for former members of the Management Board of NORMA Group).

The corrections for expenses from the measurement of derivatives of EUR 2,415 thousand (H1 2021: EUR 36 thousand) included in the cash inflow from operating activities relate to changes in the fair value of foreign currency derivatives and interest rate swaps recognized in profit or loss that are allocated to financing activities. The adjusted other non-cash income (–) / expenses (+) include expenses from the currency translation of external financing liabilities and intercompany monetary items amounting to EUR –2,734 thousand (H1 2021: EUR 215 thousand).

Furthermore, non-cash income (–) / expenses (+) in the first half of 2022 include non-cash interest expenses from the application of the effective interest method in the amount of EUR 102 thousand (H1 2021: EUR 137 thousand).

Cash flows from interest paid are reported under cash flows from financing activities.

Cash flows from investing activities include net cash outflows from the acquisition and disposal of non-current assets amounting to EUR 14,557 thousand (H1 2021: EUR 22,829 thousand). This includes the change in liabilities for the acquisition of intangible assets and property, plant and equipment of EUR –3,472 thousand (H1 2021: EUR –3,244 thousand).

In the current reporting period, cash flow from investing activities includes a cash inflow from a sale and leaseback transaction in the amount of EUR 6,136 thousand.

Cash flows from financing activities in the first half of 2022 include payments for dividends to the shareholders of NORMA Group SE in the amount of EUR 23,897 thousand (H1 2021: EUR 22,304 thousand), interest payments (H1 2022: EUR 3,394 thousand; H1 2021: EUR 3,447 thousand), payments for the repayment of loans (H1 2022: EUR 10,000 thousand; H1 2021: EUR 7,234 thousand), a repayment of liabilities from ABS and factoring in the amount of EUR 3,259 thousand (H1 2021: EUR 506 thousand) and proceeds from derivatives of EUR 269 thousand (H1 2021: proceeds of EUR 108 thousand).

The figures for the first half of 2022 also include proceeds from loans in the amount of EUR 18,402 thousand (H1 2021: EUR 0 thousand). The cash inflows in the current reporting period include a cash inflow from a sale and leaseback transaction in the amount of EUR 3,327 thousand.

In addition, lease payments of EUR 7,523 thousand (H1 2021: EUR 4,935 thousand) are reported under cash flow from financing activities.

The changes in balance sheet items presented in the Statement of Cash Flows cannot be derived directly from the Consolidated Statement of Financial Position, as effects from currency translation are non-cash and effects from changes in the scope of consolidation are presented directly in the cash outflow from investing activities.

As of June 30, 2022, cash and cash equivalents included cash and demand deposits of EUR 148,522 thousand (Dec 31, 2021: EUR 179,276 thousand) and cash equivalents of EUR 6,579 thousand (Dec 31, 2021: EUR 6,443 thousand).

19. Segment Reporting

NORMA Group presents the Group’s segments by region. NORMA Group’s reportable segments are the regions Europe, Middle East and Africa (EMEA), North, Central and South America (the Americas) and Asia-Pacific (APAC). NORMA Group’s strategy is focused on regional growth targets, among other targets. Regional and local priorities are set in the sales channels. 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 regional focus. The product portfolio does not vary significantly between the segments.

NORMA Group measures the performance of its segments primarily on the basis of the financial performance indicators “adjusted EBITDA,” “adjusted EBITA” and “adjusted EBIT.”

Adjusted EBITDA comprises revenue, changes in inventories of finished goods and work in progress, other own work capitalized, cost of raw materials and supplies, other operating income and expenses, and employee benefits expenses, and is adjusted for significant special effects for management purposes. It is determined in accordance with the accounting policies applied in the Consolidated Statement of Comprehensive Income.

Adjusted EBITA comprises adjusted EBITDA less depreciation and amortization of property, plant and equipment excluding depreciation and amortization from purchase price allocations.

Adjusted EBIT comprises adjusted EBITA less depreciation and amortization of intangible assets excluding depreciation and amortization from purchase price allocations.

The adjustments within EBITDA, EBITA and EBIT can be found in Note 4 “ADJUSTMENTS.”

Inter-segment revenue is generally recognized at prices that would also be agreed with third parties.

Segment assets comprise all assets less (current and deferred) income tax assets. Taxes are reported in the segment reporting within consolidation. The assets of the ‘Central Functions’ mainly include cash and cash equivalents and receivables from affiliated companies.

Segment liabilities include all liabilities less (current and deferred) income tax liabilities. Taxes are reported in the segment reporting within the consolidation. The liabilities of the corporate functions mainly comprise financial liabilities.

Capital expenditure (segment capital expenditure) corresponds to additions to non-current assets (property, plant and equipment and other intangible assets).

Segment assets and liabilities are measured using the method applied in the Consolidated Statement of Financial Position.

20. Contingent Liabilities and Commitments

NORMA Group has the following capital expenditures for which there are contractual obligations as of the reporting date of the Interim Financial Statements but which have not yet been incurred:

The Group has contingent liabilities in respect of legal claims arising in the ordinary course of business.

NORMA Group does not believe that these contingent liabilities will have a material adverse effect on its business operations or significant liabilities.

21. Related Party Transactions

There were no reportable related party relationships in the first six months of 2022.

22. Events after the Balance Sheet Date

As of August 10, 2022, there were no events or developments that would have resulted in a material change in the recognition or measurement of the individual assets and liabilities items as of June 30, 2022.