Norma Group (NOEJ) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales declined 5.5% year-over-year to €306.3 million, with H1 sales down 3.8% to €614.8 million, mainly due to weaker demand in automotive and industrial markets, partially offset by growth in Water Management and positive acquisition effects.

• Adjusted EBIT for Q2 was €26.1 million, with margin rising to 8.5% due to efficiency measures and operational improvements; H1 adjusted EBIT increased 4.4% to €51.8 million, margin at 8.4%.

• Net operating cash flow increased by over €11 million to €43.6 million in Q2, up 36.7% year-over-year, and turned positive at €41.2 million for H1, reflecting stringent working capital management.

• Equity ratio improved to 47% as of June 30, 2024, up from 46.4% at year-end 2023.

• CO2 emissions reduced by 10.7% in H1 2024 compared to H1 2023, reaching 2,297 t CO2e as of June 30, 2024.

Financial highlights

• Adjusted EBIT margin improved to 8.5% in Q2 and 8.4% for H1, up from 8.4% and 7.8% in the prior year, respectively.

• Adjusted EBITDA for Q2 was €41.0 million, margin stable at 13.4%.

• Adjusted EPS for H1 2024 was €0.72, with reported EPS and profit down due to higher tax rate and lower financial result.

• Net financial debt increased 6.4% since year-end 2023 to €368 million, leverage at 2.3x Adjusted EBITDA.

• Net operating cash flow up by more than €54 million compared to H1 2023.

Outlook and guidance

• Full-year 2024 guidance confirmed: group sales expected at €1.2–1.3 billion, adjusted EBIT margin 8–8.5%, net operating cash flow €80–110 million, and CO2 emissions below 9,600 tons.

• Management expects results at the lower end of sales guidance due to market headwinds.

• Step Up efficiency and growth program on track, aiming for a midterm sales mix shift toward 60% Water Management & Industry Applications.

• Adjusted tax rate for full year projected at around 40%.

• Americas expected to continue strong, APAC to see slight improvement but remain challenging, EMEA to be stable and dependent on economic conditions.