NORMA Group reported sales for the period January to September 2019 increased 2.6% to €838.6 million. However, organic sales declined -1.6% in the period.
The Kimplas and Statek acquisitions contributed 1.6% and positive currency effects a further 2.6% to sales growth. The adjusted EBITA margin was 14.2% for the period (Q1 – Q3 2018: 16%). NORMA attributed the decline in margin to significantly lower production volumes in the automotive industry, increased personnel costs and costs introducing a new ERP in Latin America.
EMEA region sales for the nine months fell 0.9% to €372.3 million (Q1–Q3: €375.7 million). Orgnaic sales declined 1.6%, with “ongoing restrained business in the automotive sector” the main issue.
American sales rose 5.4% to €352.2 million in the first nine months of 2019 (Q1–Q3 2018: €334.3 million). Growth was mainly due to strong water business and positive currency effects, which contributed 6.1% to sales growth. Organic sales declined 0.8% mainly due to the weak business in the Engineered Joining Technology division.
Asia-Pacific sales increased 6.6% to €114.2 million (Q1 – Q3 2018: €107.2 million). An organic sales decline of -4.1% was offset by positive currency effects of +1% and acquisition-related sales contributions of +9.6%.
“The tense situation on the global automobile market still poses a challenge for us,” said Dr Michael Schneider, member of the management board of NORMA Group.
“The positive development of our water management division, however, underscores the fact that NORMA Group is in a stable and sustainable position thanks to its broad range of products and services and its strategic focus on the future markets of water management and electromobility.”
In mid-October NORMA revised its full year organic sales forecast to decline between -2% and -4% (previously -1 to +1%), mainly due to the sharp slump in American EJT business due in part to strikes at car and truck makers. EMEA and Asia-Pacific regions also lagged slightly behind expectations. NORMA expects to achieve an adjusted EBITA margin of more than 13%.
On 5th November NORMA announced its “Get on track” programme, comprising measures to enhance the Group’s flexibility and profitability. Actions include optimisation of locations worldwide and the streamlining and close management of the product portfolio. The programme is expected to deliver sustained cost savings starting next year, achieving annual savings of €40 million – €45 million in 2023. Total programme cost through to 2023 is projected at €45 million – €50 million.
Source: Fastener + Fixing