Connection technology specialist: Norma earns less | Automobile week

At the connection technology specialist Rule global materials shortages depressed earnings in the third quarter. The group has felt the global shortage of raw materials such as engineering plastics and stainless steel in the form of higher material costs, said CEO Michael Schneider when presenting the figures on Wednesday in the Hessian Maintal near Frankfurt. The increasing supply bottlenecks for electronic components have also depressed production figures in relevant industries, the manager said. This applies above all to the automotive sector.

The news was received negatively on the stock exchange. The Norma share lost 1.64 percent in the morning to 35.90 euros, making it one of the weakest stocks in the SDax small cap index.

In mid-September, Norma had already cut its profitability targets for the current year due to a persistent shortage of materials. The management stuck to its sales forecast.

Sales increase by eight percent

In the third quarter, adjusted earnings before interest and taxes (adjusted EBIT) fell by around 13 percent year-on-year to 22.8 million euros. The Norma management explained the decline on the one hand with the global scarcity of raw materials with high demand at the same time, on the other hand with the sharp rise in prices for technical plastics, stainless steel and alloy surcharges. In addition, higher costs for logistics and temporary workers had a negative impact on the result. The corresponding margin fell from 10.7 to 8.6 percent.

In contrast, sales rose by eight percent to EUR 265.7 million, excluding currency effects by 7.6 percent. It was said that Norma recorded significant growth, especially in the US business with water management applications for draining rainwater and for irrigation. In contrast, the production backlog in the automotive industry, which is shaken by material shortages, has also reduced the demand for connection products for vehicles. The bottom line was that Norma posted a profit of 10.1 million euros, around eleven percent less than in the previous year.

For the year as a whole, the Norma management expects that more than 10 percent of sales will remain in the form of adjusted earnings before interest and taxes (EBIT). Previously, the board had promised more than 12 percent. Meanwhile, the company intends to continue to increase its own revenues by a low double-digit percentage in the current year.

Focus even more on e-mobility

Norma had clearly felt the consequences of the pandemic in the first half of last year and slipped into the red. In the second quarter in particular, there was a slump in demand and production stoppages in numerous Norma plants before the demand for connection technology gradually picked up again. As early as the third quarter of 2020, things started to pick up again for the Hessians.

In the future, Schneider wants to focus even more on water management, industrial applications and electromobility. He continues to regard 2021 as a “year of transition” in order to position the group for the future and to make it more profitable. In addition, the ongoing renovation and savings program should continue to be implemented, he had already emphasized in March.

Broadly positioned

In contrast to pure automotive suppliers, Norma is more broadly positioned with its customers. The Norma Group manufactures, among other things, hoses, fittings, pipes and fastenings. The connection technology specialist’s products are used, for example, in the automotive industry, but also in aviation and marine, in cooling systems or in water management. According to its own information, the company employs around 8,800 people and customers in 100 countries. (dpa / mer)

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Lenny Li

I started to play with tech since middle school. Smart phones, laptops and gadgets are all about my life. Besides, I am also a big fan of Star War. May the force be with you!

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