2. Accounting Principles and Valuation Methods

The same accounting methods and consolidation principles have been applied in preparing these condensed Consolidated Financial Statements as in the Consolidated Financial Statements as of December 31, 2022. A detailed description of these methods is published in the Notes to the Consolidated Financial Statements in the 2022 Annual Report. NOTE 3 “SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES.”

No new or amended standards came into force in the current reporting period that had an impact on the Group’s accounting policies.


Valuation methods	T024
Balance sheet item	Valuation method
Assets
Goodwill	Acquisition cost less potential impairment losses
Other intangible assets (excluding goodwill) – finite useful lives	Amortized acquisition or production cost
Other intangible assets (excluding goodwill) – indefinite useful lives	Acquisition cost less potential impairment losses
Property, plant and equipment	Amortized cost
Derivative financial assets:
Classification as a hedge of a forecast transaction (cash flow hedge)	At fair value through other comprehensive income
Classification as a hedge of a change in fair value (fair value hedge)	At fair value through profit or loss
Without hedge accounting	At fair value through profit or loss
Inventories	Lower of acquisition or production cost and net realizable value
Other non-financial assets	Amortized cost
Other financial assets	Amortized cost
Trade and other receivables	Amortized cost
Trade receivables, available for sale	At fair value through profit or loss
Contract assets	Percentage-of-completion method less potential impairment
Cash and cash equivalents	Nominal value
Non-current assets held for sale	Lower of carrying amount and fair value less costs to sell
Liabilities
Pension obligations	Projected unit credit method
Other accrued liabilities	Present value of future settlement amount
Loans	Amortized cost
Other non-financial liabilities	Amortized cost
Lease liabilities	Valuation based on IFRS 16.36
Other financial liabilities:
Financial liabilities at cost (FLAC)	Amortized cost
Derivative financial liabilities:
Classification as a hedge of a forecast transaction (cash flow hedge)	At fair value through other comprehensive income
Classification as a hedge of a change in fair value (fair value hedge)	At fair value through profit or loss
Without hedge accounting	At fair value through profit or loss
Contingent consideration (contingent purchase price liabilities)	At fair value through profit or loss
Trade and other payables	Amortized cost

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The Consolidated Statement of Comprehensive Income is prepared using the nature of expense method.

The condensed Consolidated Interim Financial Statements are presented in euros (EUR).

Income tax expense is recognized in each interim period based on the best estimate of the weighted average annual income tax rate expected for the full fiscal year.

3. Scope of Consolidation

As of June 30, 2023, the Consolidated Interim Financial Statements comprise six domestic (Dec 31, 2022: six) and 42 (Dec 31, 2022: 43) foreign companies. The change in the scope of consolidation compared to the end of the year is due to the merger of DNL Sweden AB into NORMA Sweden AB in January 2023.

4. Adjustments

Management adjusts certain expenses for the operational management of NORMA Group. The adjusted results presented below therefore reflect the management perspective.

No net expenses were adjusted within EBITDA in the first six months of 2023. As in the previous year, depreciation of property, plant and equipment from purchase price allocations of EUR 427 thousand (H1 2022: EUR 603 thousand) was presented within EBITA (earnings before interest, taxes and amortization of intangible assets) in the first six months of the fiscal year and in addition amortization of intangible assets of EUR 10,204 thousand (H1 2022: EUR 10,440 thousand) within EBIT adjusted.

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

The following table shows earnings net of these effects:

Gross profit		343,430	0	0	343,430

Profit and loss net of adjustments					T025
in EUR thousand	Note	H1 2023 unadjusted	Step-up effects from purchase price allocations	Total adjustments	H1 2023 adjusted
Revenue	(5)	638,977		0	638,977
Changes in inventories of finished goods and work in progress		-16,980		0	-16,980
Other own work capitalized		1,296		0	1,296
Raw materials and consumables used		-279,863		0	-279,863
Other operating income and expenses	(6)	-101,229		0	-101,229
Employee benefits expense	(7)	-163,589		0	-163,589
EBITDA		78,612	0	0	78,612
Depreciation		-26,933	427	427	-26,506
EBITA		51,679	427	427	52,106
Amortization		-12,637	10,204	10,204	-2,433
Operating profit (EBIT)		39,042	10,631	10,631	49,673
Financial costs - net	(8)	-9,112		0	-9,112
Profit before income tax		29,930	10,631	10,631	40,561
Income taxes		-11,593	-2,674	-2,674	-14,267
Profit for the period		18,337	7,957	7,957	26,294
Non-controlling interests		72		0	72
Profit attributable to shareholders of the parent		18,265	7,957	7,957	26,222
Earnings per share (in EUR)		0.57			0.82

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Gross profit		330,240	0	0	330,240

(Continued) Profit and loss net of adjustments
in EUR thousand	Note	H1 2022 unadjusted	Step-up effects from purchase price allocations	Total adjustments	H1 2022 adjusted
Revenue	(5)	622,289		0	622,289
Changes in inventories of finished goods and work in progress		2,843		0	2,843
Other own work capitalized		1,205		0	1,205
Raw materials and consumables used		-296,097		0	-296,097
Other operating income and expenses	(6)	-91,640		0	-91,640
Employee benefits expense	(7)	-157,531		0	-157,531
EBITDA		81,069	0	0	81,069
Depreciation		-25,004	603	603	-24,401
EBITA		56,065	603	603	56,668
Amortization		-14,450	10,440	10,440	-4,010
Operating profit (EBIT)		41,615	11,043	11,043	52,658
Financial costs - net	(8)	-4,532		0	-4,532
Profit before income tax		37,083	11,043	11,043	48,126
Income taxes		-10,384	-2,771	-2,771	-13,155
Profit for the period		26,699	8,272	8,272	34,971
Non-controlling interests		54		0	54
Profit attributable to shareholders of the parent		26,645	8,272	8,272	34,917
Earnings per share (in EUR)		0.84			1.10

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