NORMA Group ETR: NOEJ management highlighted improved profitability, progress on its transformation program, and a strengthened balance sheet during the company’s first-quarter 2026 results call, while noting that sales declined year-over-year due to currency headwinds and softer automotive demand.
Profitability improved as sales slipped
Chief Executive Officer Birgit Seeger, delivering her first full quarterly report as NORMA’s new CEO alongside new CFO Okan Celiker, said the company achieved “a very good improvement in our profitability,” with the adjusted EBIT margin rising 3.1 percentage points year-over-year. Seeger attributed the improvement to “cost discipline in all cost areas” and benefits from “pricing efforts.”
For the quarter, net sales were EUR 208.6 million, down slightly from the prior year. Seeger said the company continues to see “some slight issues” on sales, which management is working to address.
Celiker provided additional detail, saying the year-over-year sales decline was -5.7%, driven primarily by EUR 9.7 million in foreign exchange headwinds. He said EUR 6.8 million of the currency impact was tied to the U.S. dollar and EUR 1.9 million to the renminbi. Organically, sales were down -1.3% (EUR 2.8 million), with volume declines partially offset by positive pricing.
Adjusted EBIT totaled EUR 6.3 million, translating to a 3% adjusted EBIT margin. Celiker said this marked a “significant improvement” from an adjusted EBIT margin that was “almost 0%” in the prior-year period.
Industry Applications grew organically; Mobility & Energy pressured by automotive demand
In NORMA’s Industry Applications business, first-quarter sales were EUR 66.3 million, down -0.6% year-over-year. Celiker said the segment faced a -5.4% currency impact but posted 4.9% organic growth, driven by stronger demand in APAC and the ramp-up of a major project in the region.
In Mobility & Energy, sales were EUR 142.3 million, down -7.9% year-over-year. Celiker attributed the decline to “a softer automotive demand,” which contributed a -3.9% negative volume and pricing impact, alongside a -3.9% currency impact.
Regional performance: margin gains across the board
Celiker also broke out performance by region:
- Americas: Sales of EUR 65.0 million, down -10.9%, driven by FX and softer automotive demand. EBIT margin improved by 1 percentage point to 4.6% on pricing and tight cost management.
- EMEA: Sales of EUR 114.1 million, down -2.9%. EBIT margin improved 4.6 percentage points year-over-year due to operational improvements and cost discipline.
- APAC: Sales of EUR 29.5 million, down -3.8%. EBIT margin remained above 10%, which Celiker said reflects sustainable operational improvements and disciplined spending.
Transformation program and cost actions supported earnings
Celiker outlined the drivers behind the quarter’s adjusted EBIT improvement. While weakening demand created a negative EUR 7 million impact from volume and pricing, management said it offset the pressure through cost actions and mix improvements.
Key year-over-year drivers cited included:
- Material costs: EUR 8.7 million improvement due to favorable mix and a better material cost ratio versus Q1 2025.
- Personnel costs: EUR 2.9 million improvement due to lower headcount and personnel cost reductions.
- Other operating expenses: EUR 2.5 million improvement tied to “disciplined cost management.”
- Transformation program: EUR 3.8 million contribution to results compared with Q1 2025.
Seeger said the company has begun simplifying and streamlining the organization, with cost measures “well underway according to plan.” She pointed to early steps including implementation of a business-oriented structure, expansion of a shared service center in Novi Sad, Serbia (around 80 employees across functions), SG&A improvements in the U.S. and Europe, and headcount reductions via voluntary leaver programs.
The CEO said NORMA intends to change reporting beginning in 2027 to business unit segment reporting, aligning disclosure with how the company is being managed.
Cash flow impacted by divestment-related effects; balance sheet reset underway
Management emphasized that first-quarter cash flow was heavily influenced by the sale of the water management business, which the company referred to as part of “former NORMA.” Celiker said adjusted EBITDA of EUR 20.7 million in Q1 included the water management business “in line with the provisions of IFRS 5.”
Net operating cash flow was negative, with Celiker citing a trade working capital impact of minus EUR 33.6 million, which he said was significantly related to the water management sale. He referenced reductions in supply chain financing in the context of the transaction, as well as seasonal inventory effects tied to the divested unit. External free cash flow was minus EUR 29.2 million.
However, Celiker said that “without the one-off impact out of the water management sale, our net operating cash flow would have been positive,” adding that this supports the company’s view that “new NORMA has a positive cash generation also in the quarter one 2026.”
On the balance sheet, Seeger said debt repayment was “very positive” following the divestment proceeds, and said NORMA is “net debt-free currently.” Celiker said net proceeds from the water management divestment are expected to be approximately EUR 650 million post-tax in 2026. The company earmarked up to EUR 300 million for debt repayment, with EUR 290 million repaid in Q1. Remaining debt consists largely of promissory notes, and Celiker added that the debt figure includes about EUR 20 million of leases.
Celiker also reiterated NORMA’s plan to return EUR 260 million to shareholders, noting that EUR 53 million was already returned in early Q2 2026 via a public share buyback offer. He said the company remains on track for a EUR 70 million to EUR 90 million net cash position by the end of 2026.
Looking ahead, management confirmed full-year 2026 guidance of 0% to 2% net sales growth, an adjusted EBIT margin of approximately 2% to 4%, and net operating cash flow of approximately EUR 10 million to EUR 20 million. In the Q&A, Seeger said NORMA expects the next quarters to be “somewhat stronger,” while Celiker said he does not currently see specific improvements in the environment but also no significant negative shifts beyond what the company has planned for. Management said it plans to provide a strategy update in the second half of the year, including a target vision for 2028.
About NORMA Group ETR: NOEJ
NORMA Group SE, together with its subsidiaries, manufactures and sells engineered joining technology solutions in Europe, the Middle East, Africa, the Americas, and the Asia-Pacific. The company provides quick connectors, hose clamps, retaining clamps, and pipe couplings. It also offers various products for stormwater management, landscape irrigation, and joining components for water infrastructure solutions. The company sells its products to distributors, original equipment manufacturer aftermarket customers, technical wholesalers, and hardware stores under the ABA, Breeze, Clamp-All, CONNECTORS, FISH, Gemi, Kimplas, NDS, NORMA, Raindrip, R.G.RAY, Serflex, TORCA, and TRUSTLENE brand names.
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