Norma Group (NOEJ) Q1 2026 earnings summary

Executive summary

• Profitability improved in Q1 2026, with adjusted EBIT margin up 3.1 percentage points year-over-year, driven by cost discipline, gross profit margin expansion, and positive pricing effects, despite lower sales from FX headwinds and softer automotive demand.

• The company became net debt-free following the Water Management business divestment, strengthening financial flexibility and providing a strong foundation for future growth.

• Transformation initiatives advanced as planned, focusing on cost base reduction, organizational simplification, operational improvements, and new pricing strategies.

• Major new business wins and orders were secured in both Mobility & (New) Energy and Industry Applications segments, supporting future growth and improved customer relationships.

• Full-year 2026 outlook confirmed, targeting modest sales growth and margin expansion.

Financial highlights

• Q1 2026 net sales were EUR 208.6 million, down 5.7% year-over-year, mainly due to FX headwinds and subdued demand.

• Adjusted EBIT improved to EUR 6.3 million (Q1 2025: -0.2 million), with a margin of 3.0% (Q1 2025: -0.1%).

• Gross profit margin expanded to 56.5% from 54.4% year-over-year, driven by improved material cost ratio.

• Net operating cash flow was negative at EUR -19.7 million, mainly due to one-off effects from the Water Management divestment.

• Adjusted net profit for the period was EUR 1.0 million (Q1 2025: -8.4 million); adjusted EPS at EUR 0.03.

Outlook and guidance

• Full-year 2026 guidance confirmed: net sales growth of 0%-2%, adjusted EBIT margin of 2%-4%, and net operating cash flow between EUR 10 million and EUR 20 million.

• Management expects stronger performance in H2 2026, supported by ongoing transformation and order intake.

• Transformation costs of approximately EUR 24 million expected, with EUR 15–20 million cash out.

• Dividend policy targets payout ratio of 30–35% of adjusted annual earnings, subject to net profit.

• Cautious outlook maintained due to ongoing geopolitical and macroeconomic uncertainties.