NORMA Group (ETR:NOEJ) reported improved second-quarter profitability as cost discipline and transformation measures helped offset continued weak demand in automotive markets, while its industrial applications business posted growth.
Chief Executive Officer Birgit Seeger said the company’s “New Norma” reporting excludes the divested water management business unless otherwise stated. She said the company is focusing its current efforts on simplifying its organization, improving its operating footprint and accelerating sales activity.
“The environment still is challenging,” Seeger said, particularly in mobility and new energy, though industrial applications helped offset softer demand in those areas.
Industrial Growth Offsets Automotive Weakness
Acting Group CFO Okan Celiker said industrial applications revenue increased 7% year over year to EUR 70.6 million in the second quarter, or 8.4% on a comparable foreign-exchange basis. The segment’s reported sales included EUR 4.7 million of transition-services-agreement sales to Advanced Drainage Systems following the water management divestment.
Mobility and new energy sales declined 4% to EUR 141.3 million, reflecting weaker automotive demand. On a comparable foreign-exchange basis, the segment’s revenue fell 3.7%.
Regional profitability improved across all three of NORMA Group’s regions. Sales in the Americas rose 8% on a reported basis and 10% on a comparable currency basis, while the region’s adjusted EBIT margin improved to 5.8% from 3.4%. The Americas result included the transition-services sales, which contributed EUR 0.9 million to adjusted EBIT.
In Europe, the Middle East and Africa, sales fell 3.9% on a reported basis, but the adjusted EBIT margin improved to 2.2% from negative 1.5%. In Asia-Pacific, sales declined 6.1% on a reported basis, while the adjusted EBIT margin increased to 8.3% from 7.9%.
Transformation Measures Support Earnings
Celiker said the second-quarter improvement in adjusted EBIT was supported by EUR 1.3 million from volume and price effects, EUR 1.7 million from material costs and EUR 1.5 million from personnel costs. The company’s transformation program contributed EUR 2.3 million during the quarter.
For the first half, NORMA Group reported net sales of EUR 420.5 million, down 0.6% on a comparable currency basis. Adjusted EBIT was EUR 14 million, producing a 3.3% margin. The company generated positive net operating cash flow of EUR 6.6 million in the second quarter, while first-half net operating cash flow was negative EUR 13.1 million under the former reporting perimeter that included the water management divestment.
Seeger said the company’s program to reduce up to 400 positions was on track, and its voluntary leaver program in Germany had been completed as expected. Transformation benefits totaled EUR 6.1 million in the first half, and the company is targeting EUR 15 million for the full year.
The company expects about EUR 24 million of transformation-related EBITDA adjustments in 2026, including severance and project costs as initiatives are accelerated, Celiker said. Together with approximately EUR 5 million in purchase-price-allocation amortization adjustments, total EBIT-level adjustments are expected to reach about EUR 29 million for the year.
Major Orders and Capital Allocation
Seeger highlighted new orders in industrial applications tied to infrastructure markets including data centers, sustainable energy, battery energy storage systems and backup-power infrastructure. The company secured projects in Malaysia, Thailand and Australia, including follow-on work with some customers.
In mobility and new energy, NORMA Group won what Seeger described as the largest project in its history: a EUR 157 million lifetime-volume contract over 10 years with a European customer. The contract covers around 100 variants for a thermal-management system, with 80% representing extensions and 20% new business. Production is planned at the company’s Serbia facility.
Seeger said NORMA Group has assigned a project manager with relevant expertise and senior support to manage the variant-heavy project. She said the company negotiated contractual protections that it could obtain, without providing further details on pricing or volume clauses.
As of June 30, the company had reported net cash of roughly EUR 304 million and about EUR 57 million in short-term deposits expected to mature in the second half. That equates to pro forma net cash of EUR 361 million, Celiker said.
After a EUR 4 million dividend payment, EUR 208 million for a second share buyback program, approximately EUR 90 million in remaining tax payments related to the water management divestment and other expected cash movements, NORMA Group expects to retain net cash of EUR 70 million to EUR 90 million at year-end. Seeger said implementation of the capital measures was a priority following shareholder approval at the annual general meeting.
Outlook Maintained
NORMA Group confirmed its 2026 outlook for sales growth of 0% to 2%, an adjusted EBIT margin of 2% to 4%, and net operating cash flow of EUR 10 million to EUR 20 million.
Celiker said that, based on current market conditions, the company expects revenue to land around the midpoint of its guidance range or potentially below it. Provided other variables remain stable and transformation savings reach the planned EUR 15 million, he said the company expects to finish the year around the midpoint of its EBIT-margin guidance.
The company plans to provide a strategy update on Oct. 19 in Frankfurt, with an online option available. Seeger said the event will include medium-term ambitions and additional detail on the company’s strategic pillars, products and opportunities in markets such as data centers, white goods and aerospace.
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.
