Welcome to our conference call. I am Guido Grandi, and together with my colleague, Annette Stieve, we will guide you through the following slides. We will answer your questions after the presentation. Let us start with some key figures. Despite multiple challenges in 2023, NORMA Group was able to achieve net sales of EUR 1.2 billion. The related organic sales growth was 0.7%, mainly due to a good development in the EMEA and APEC regions. Our adjusted EBIT for the full year 2023 leveled at EUR 97.5 million, or an adjusted EBIT margin of 8%, which was strong given the circumstances. Both the adjusted and the reported earnings per share declined compared to last year, mainly due to a lower financial result and higher taxes. This leads us to a dividend of EUR 0.45, which we will propose to the annual general meeting on May 16.
Coming to the balance sheet, our equity ratio further improved in 2023 and reached 46.4% at the end of December. The net debt decreased to EUR 345.4 million, and the leverage ended stable at 2.2x EBITDA at the end of 2023. Looking at the cash flow, our net operating cash flow showed a strong increase to EUR 87.3 million. When looking into more details of the top-line development, we see that NORMA Group's net sales came in at -1.6% due to positive organic growth being outweighed by negative currency effects of minus EUR 29.3 million, or -2.4%, mainly related to translation effects and the U.S. dollar. Our organic growth of 0.7%, mainly due to good development in EMEA and APEC, resulted from positive pricing effects of 3.6%, which were partly offset by -2.8% volume effects.
In our EJT area, engineered joining technology products, sales were showing organic growth of 3.8%, leading to sales of EUR 709.6 million, which was mainly due to growth in the EMEA region. In our SJT area, the standardized joining technologies, sales were showing slight decreases of 2.8%, leading to sales of EUR 506.7 million. This was mainly due to weaker industrial demand in the Americas and the APEC region. Looking at the sales split by region, we see again the positive development of the EMEA region. While the Americas region showed a decline in net sales of 6.9% and the APEC region showed a decline of 3.3%, the EMEA region grew by 5.2% in net sales. These results are not yet where we want them to be. However, they prove that our measures for the EMEA region are taking effect.
Looking into the sales development by region and distribution channel on the next slide. In the Americas region, the industrial application business showed weaker demand, and the water management business suffered from a slowdown in the first half of the year, leading to an organic decline of 4% in the SJT business. On the positive side, sales in water management picked up in the second half of the year as we posted revenue increases in quarter three and also quarter four. The M&E business in the Americas registered extraordinary effects due to a strike at the year-end, leading to an organic decline of 4.3% in the EJT business.
In the EMEA region, the improvements in the product availability in the IA business led to organic growth of 1.5% in the SJT business, and higher demand in the EMEA M&E business resulted in an organic growth of 7.1% for the EJT business. In the APEC region, the industrial applications and the water management businesses showed weaker demand, leading to an organic decline of 4.1% for the SJT business. While the mobility and new energy business, especially in China, showed strong development, leading to an organic growth of 8% in the EJT business. Overall, the sales mix shows a slight shift towards M&E, representing 58% of our 2023 sales. This is based on a higher demand in the EMEA and APEC regions in 2023.
On the flip side, somewhat lower demand in IA and in Water Management, at least in the first half of 2023, led to an SJT revenue share of 42%. Let's move over to the next slide where we show the development of our P&L. Let me now hand over to Annette Stieve, who will give us more details on our financials.
Hello everyone, and a warm welcome also from my side. Let us start with an overview on the development of our P&L. Material cost prices have eased in the course of 2023. Accordingly, the material cost ratio declined by 300 basis points to 45%. The personnel expense ratio was up by 140 basis points due to inflation-related wage increases, but also inefficiencies, especially in the EMEA region. Other expenses ratio decreased by 20 basis points, especially due to lower freight and IT costs. This is underlining our success in lifting up the efficiency in the EMEA region. Adjusted EBITDA and adjusted EBIT margin came in the same level as in 2022, but with a significant positive dynamic in our third and fourth quarter. Looking at the adjusted EBIT by region, I would like to highlight that the Americas and the APEC region are already posting a solid double-digit margin.
The adjusted EBIT margin in the EMEA region has partially recovered in 2023, but there's still a way to go. As we have carried out multiple times over the past months, we are progressing in the EMEA region with a stepwise recovery, especially in our two focus plants, Czech Republic and Germany. We will continue to implement our measures in the EMEA region and thus stepwise return to a double-digit margin also here, which will bring the entire company back to the desired margin level. At the next slide, we show our operational adjustment in the P&L. 2023, as well as in the coming years, we do have predominantly PPA effects for our acquisitions. Concluding our P&L, let's have a quick look to our EPS and the dividend proposal.
Based on the increased interest and also a higher tax ratio, both the adjusted as well as the reported EPS are down year-over-year. Looking to the dividend proposal, I would like to remind you on our dividend policy. We are targeting a payout ratio of about 30%-35% of our adjusted group earnings. For 2023, we will propose a dividend of EUR 0.45 per share to our AGM. This would be a payout ratio of 32.7%, so well in line with this dividend policy. Let's move over to the balance sheet figures. Starting with our trade working capital, we show the trade working capital including our factoring programs on the left. The overall level is stable compared to 2022, while the ratio has slightly increased due to the somewhat lower top line.
The trade working capital ratio without factoring programs, as we show at the right side, is down by 60 basis points. This is owed to a significant reduction of our factoring programs by the year-end to EUR 58 million, compared to EUR 77 million at year-end 2022. Our net financial debt is down by 1.2%. Our leverage at the end of December stood at 2.2 times Adjusted EBITDA and thus significantly below the leverage of 2.6 at the end of Q3. Our equity ratio has further improved in 2023 and reached 46% at the end of December. After the successful refinancing in last summer, our maturity profile is very solid. The next bigger refinancing is due in 2026. Overall, there is currently no general covenant risk in our long-term financing. As additional information, we have added information on our fixed and floating ratio at the lower left of this chart.
As we are expecting interest rates in Europe and the U.S. to be at a certain plateau for the moment, but with the opportunity of lowered interest rates in the course of the year, we currently have 58% of our liability with variable unhedged rates. So if the interest rate will be lowered, we can, with a certain timeshift, benefit out of that. As a financial highlight of the year 2023, let us have a look to our cash flow. Overall, our net operating cash flow has increased by more than 33% compared to 2022. This is owed to an improved working capital management. As a reminder, we have lowered our factoring programs by the end of the year by more than EUR 90 million compared to the end of 2022.
On a like-for-like comparison, our cash flow figure is even better and amounts roughly to EUR 106 million, which brings NORMA back to a certain strength. Before handing over again to Guido Grandi for the outlook of 2024, please let me give you some insights into our non-financials for 2023. Overall, we have achieved our targets as set out in our sustainability report. I would like to highlight the significantly improved PPM figures at the top left. This is clearly underlining our success in our Step-Up efficiency measures in 2023. At the right, we show some selected sustainability ratings of our company. Overall, NORMA is one of the highest rated companies in the industrial sector. With this good news, I send over again to Guido Grandi.
Thank you very much, Annette. Ladies and gentlemen, at this point, we would like to present our guidance for the financial year 2024. As you can see, we have adjusted the structure of our guidance according to the feedback that we received from numerous investors and analysts over the last months. As for the group sales, we expect it to be in a range of around EUR 1.2 billion-around EUR 1.3 billion. As we do still see various uncertainties and challenges in the global economy, we are taking a rather wide range into account. Breaking these numbers down to our regions, you will find the corresponding guidance for the segments below. Our Adjusted EBIT margin is expected to be in the range of around 8%-8.5%.
Despite the challenges in the overall markets, we are confident that we can stepwise improve our margins in the current year and going forward. Moreover, we do also expect our net operating cash flow to further improve and to end in the range of around EUR 80 million-around EUR 110 million next year. Overall, we chose to give a somewhat conservative but also realistic guidance given the economic circumstances. This way, we want to make sure to deliver on our promises. Concluding, ladies and gentlemen, we are confident that we can gradually improve our performance even under challenging market conditions. We have already proven this in the second half of 2023, and we will follow this recovery path in the coming years as well. Before answering your questions, please let me quickly run you through our progress in our Step Up program.
As a reminder, Step Up is not just another short-term improvement program. With Step Up, we're targeting a cultural change, a change of our mindset as a continuous improvement process or our internal Kaizen at NORMA Group. We're addressing both growth and efficiency measures. We will further develop our organization towards our three strategic business units: Water Management, Industrial Applications, as well as Mobility and New Energy. In the current year 2024, we will start to report our quarterly sales relative to these three SBUs. We're targeting to fully implement a full segment reporting by 2026 in order to give you more transparency on all key metrics. Just as a reminder, with Step Up, we're addressing growth as well as efficiency. For growth, the development of new products or opening new sales channels like moving beyond traditional distribution to e-commerce platforms, as well as entering into new markets and countries.
In 2023, we achieved the biggest success with our efficiency measures like material cost savings initiatives, improved supply chains, and a reduced backlog and better product availability. We're furthermore improving our capital allocation process to support our transition into more business in Water Management and Industrial Applications. Overall, we're targeting a shift in our sales mix from currently about 60% in Mobility and New Energy to about 60% in the future in Water Management and Industrial Applications. To give you some more quantitative figures on the current status of Step Up, please let me give you an update on the current number of initiatives. By the end of 2023, we have identified more than 1,100 initiatives. Several hundred initiatives are related to our purchasing department and have been tracked in a software tool until Q3 last year.
We have now consolidated all growth and efficiency measures for NORMA Group in one fully transparent software tool where we evaluate and track each initiative. By the end of last year, about 53% of the initiatives were in the validation and implementation phase. About 47% have already been implemented, and we start to record the first positive impacts in our numbers. I would like to highlight again that our Q4 Adjusted EBIT margin has increased year-over-year from 6.4% in 2022 to 8% in 2023. This is a first and very promising indication for the effectiveness of our program. We're now focusing on constantly improving our performance and implementing our Step Up measures sequentially. In the midterm, we're targeting a solid double-digit margin at group level. Finally, please let me give you two examples as key highlights for our Step Up program success in 2023.
First, the transfer of know-how in water management towards industry applications. Secondly, the application of an M&E product now in heat pumps in the industrial sector. Both examples are showcasing the opportunities for the NORMA Group to enter into new promising markets on the basis of existing know-how and without any major investments. There are more synergies we can gain. Ladies and gentlemen, the 2023 financial year has been a year full of challenges. We have managed to satisfy, navigate the NORMA Group through this environment, and to incrementally improve the efficiency of the EMEA region. Finishing on a strong quarter four, the first successes of our Step Up program became visible. 2024 will most probably be another year with various economic and political challenges all over the world.
We, as the management team, are absolutely convinced that we will, even under these circumstances, continue to gradually improve the overall performance of our company. We're thus looking carefully optimistic into the current year. Thank you very much for joining our call today. Now, looking forward to answering your questions.
Our first question today is from Yasmin Steilen from Berenberg. Please go ahead with your question.
Thank you very much for taking my questions. I have three, if I may. The first one on U.S. water. So you mentioned that you've showed a positive growth rate in the second half after the decline we have seen in the first half. So could you provide more color what was attributable to the ramp-up of the FAB in Georgia? If I remember correctly, it was in May. And what was related to underlying organic volume recovery? Then the second question, again, on U.S. water. So with, again, some mixed news from the weather conditions in California year to date, can you share some indications of the business development of U.S. water so far? And the last one on EMEA. You will execute on the EMEA water management strategy now and might launch, among others, also manufacturing in EMEA, for example, in Serbia.
What is the current status quo of the plans, and how would a capacity shift in Serbia for EMEA water at the expense of new mobility? How would this impact the overall profitability of the EMEA business? Thank you.
Okay. Thank you very much for your questions. Starting with the first aspect, water management business in North America, especially in the second half. Let me be specific. The recovery that we saw in North America with our water management business was mainly market-driven. There was a lesser, smaller influence of our additional production capacity, which will have a more significant impact in the midterm and long run. But looking back at 2023, the main changes between the first half and second half were really market-driven. And that was due to the following effects. Number one, in the first half, as we also discussed in some of the earlier calls and as you mentioned also in your question, weather aspects led to a situation where new construction and also some of the home improvement projects were delayed to the second half of the year.
We saw that effect coming in the second half of the year, which was basically a shift of demand from the first half to the second half. So as I said, market-driven. But let me take the opportunity to also talk about the new production facility in Lithi Springs, Georgia. The plant is now fully operational. It took over some of the running products as well as new products, and it enables us to better reach the East Coast of North America, which, as you all know, is a, not new, but underdeveloped market for us. So we still see growth potential in North America with this additional plant, and we're going to see that going forward. That leads me to your question about 2024 and the current weather pattern that we're seeing.
While weather all over the world is playing a more and more important role, I can attest to the fact that what we've seen in January and February and also now in March is not going to harm our business. As a matter of fact, we feel very positive about our water management business in North America in 2024. Now, last but not least, your question about the EMEA region and our manufacturing strategy in EMEA. We're currently still evaluating the best footprint for the EMEA region relative to our water management business. There are different aspects that we have to take into account. On the one hand, of course, variable cost and the best cost footprint that we can choose.
At the same time, of course, logistics issues because the water management business also plays a very significant role in the southeastern and the southwestern part of Europe, and therefore, logistics plays an important role. Overall, we're evaluating the manufacturing footprint for water management in EMEA, and we will make a decision here in the course of the year. Thank you very much. I hope that answers those questions, and we're ready for some additional questions.
Yep. Sorry. Maybe as a quick catch-up, if you might decide on the plant in Serbia, how could this impact the profitability in EMEA? I mean, looking at the regional development, it's for sure that EMEA is the one which is underperforming, and a significant shift of the EMEA margin would also immediately lift the profitability of the entire group.
Yes. I mean, you're correct. The EMEA region has been our issue over the last couple of years. And as we've seen in the fourth quarter last year, we have been improving in the EMEA region step by step. Yes, absolutely. The intent of industrializing and bringing the Water Management business to Europe will also help to improve those margins in Europe going forward. But please don't forget, this is a growing business, and it will take a couple of years in Europe to really make a significant difference. Relative to the still strong industrial and M&E business that we have in Europe, it will take some time for the Water Management business to really shift that margin in Europe.
So in the short run, our homework is to self-help and further improve our operations in Europe, which we're currently doing and which we're addressing with Step Up, and that will help those EBIT margins in Europe in the short run. In the midterm and long term, you're exactly right. The product mix will change, and that is our strategic goal for the mid and long term.
Okay. Perfect. Thanks so much.
On top, Yasmin, we should not forget that starting a business in Europe, that is, first of all, not a huge number. So this number will not significantly impact the result of EMEA negatively. So we will grow this business, but for sure, it's first of all, I would say, a smaller amount in terms of sales and also in terms of cost.
Perfect. Thanks very much. I'll step back into the line.
The next question comes from Marc-René Tonn from Warburg Research. Please go ahead with your question.
First one would be on the top line development and even.
Sorry. We cannot hear anything in the moment.
Sorry, but it's not sorry. I had the mic at the wrong place. Sorry for that. Thanks again for taking my question. It should be better now. My first question would be on the top line development and the split between price and volume, which you are expecting for the current year. And particularly when talking about price, I think you mentioned when you talked about, let's say, the very positive development of the material cost ratio last year that you were obviously able to recover material prices pretty well on the top line. Whether there's any pressure now from a customer or any customers or any demand to claw back some of the price increases, which you had seen in the past years, that would be the first question.
Second question would be, when we look at your margin guidance for the current year, at least stable on last year, could you give us some flavor how you look at the profitability by region? Is it mainly, let's say, any improvement must come from EMEA, and the other regions are more stable, or is it even, let's say, more growth in EMEA and the others being a bit weaker, or also some potential for higher profitability in the other regions? And the third question would be on the tax rate, which I think was pretty high in the fourth quarter. If you can give us some indication what you would expect for this year for the tax rate as a whole? I think last year it was 39.5%. What would be, let's say, an appropriate figure to think about for 2024? Thank you.
Marc-René, thank you for your questions. I will take a shot at the first two parts of your question, then I'll hand over to Annette for the third portion. On the top line, you were questioning not questioning, but you were commenting on the price effects that we saw in 2023 and how those will develop in 2024, given the fact, of course, that we're now entering into a season where the inflation is tapering off a little bit, and of course, customers are asking for price decreases. And yes, as a matter of fact, let's be honest and open, we do see that, of course. I mean, that was also the intent of the overall policy to stop inflation and then or at least get to a more normal situation with our inflationary figures. And then, of course, our customers are reacting to that as well.
What are we doing to address that? There are two things that are helping us in this situation. Number one, of course, we are negotiating and arguing and also showing facts and figures that not all inflationary figures have come down. As a matter of fact, we do see material pricing coming down, but at the same time, labor costs and merit increases across the world are going the other direction. So that plays into our discussions with our customers, and we feel and we get some positive response from our customers that they adhere to that. At the same time, we do have the benefit, of course, of material prices coming down. So as those price effects will probably not go forward relative to further increases, our goal is to keep prices stable as much as we can.
But at the same time, relative to the bottom line, we're going to see some very positive influence relative to raw material pricing coming down. So that's an ongoing process. In summary, we don't expect prices to go up any further. We're going to try to keep them stable, and we're going to see some tailwind relative to our bottom line with material prices coming down. Now, you asked a question about the margins in 2024 and the development of the different regions. And yes, I can attest to that, the fact that we expect the EMEA region to further recover from its lows of the last couple of years. The reason why maybe you expect to see more of that in our guidance for our EBIT margin is that I can only attest to the fact that we feel very strongly about our capabilities at NORMA Group.
If the overall environment would be a little bit more positive, maybe our guidance would be a little bit different. But we want to be conservative, and that's based on the fact that a lot of feedback that we receive from investors and analysts of the last couple of years is that we want to promise that we want to deliver on what we've promised. And therefore, we attest to the fact that the European region is going to improve, but at the same time, we want to be conservative about what to expect in 2024 as the world around us is still a little bit challenging. So relative to your question about the tax rate, I'll hand over to Annette Stieve.
Yes, Marc-René, you're fully right. Our tax rate amounting more than 40% is for sure pretty high. I think we commented that already during the course of last year. So at the end, as you all know, that we had our problems in the focus area EMEA, we are cautious in capitalizing the first taxes on our tax fiscal unity level. At the end, we don't capitalize as much the first taxes as calculation-wise would come out. As soon as the region here recovers, and in particular, our holding recovers with this fiscal unity, we will start again an appropriate capitalization of the first taxes. And with this, we would come back then pretty soon then on a level below 30%, something like this.
If you ask me when I expect that, I would say cautiously, I would say in the course of the year, so the later year, something around Q3, Q4.
Perfect. Thank you very much.
The next question comes from Nicolai Kempf from Deutsche Bank. Please go ahead.
Yes. Good afternoon. Nicolai Kempf, Deutsche Bank speaking. I've got three questions. I will take them one by one. First one is on the momentum we see in electrification. We saw a massive slowdown of pure battery electric vehicles and a bit of recovery of plug-in hybrids. If I do remember correctly, you had a higher content per vehicle in plug-in hybrids. So is this current development helping you, or would you say it's because volumes are not that great, it's not really as support right now?
Should I answer that, or do you want to pose all three questions first?
You can answer it first. I'll take the other one.
Okay. Fair enough. Makes it a bit easier on me and my capabilities to memorize your questions. Anyway, yes, we do see a little bit of a shift here in the short term. We don't expect a significant change in the long term as, I guess, governments all over the world are pushing e-mobility now. We definitely see that shift in the future, but in the short term, we see a little bit of a different demand from our customers. Maybe just to clarify one aspect of your question, our business opportunity per vehicle is pretty similar between an electric car or a vehicle with an internal combustion engine. It's approximately EUR 80-100. So in the end of the day, we are very flexible, and we're independent of what our customers ask from us.
Now, at the same time, for hybrid vehicles, we have a little bit of an additional content because the vehicle has two hearts, so to say. So we have two systems that we can support. So hybrid vehicles are very positive for us. What does that mean in the short run? In the short run, it means that we just have to be flexible relative to our manufacturing capabilities as we can supply both kinds of vehicles, actually all three kinds of vehicles, very well. It helps a little bit also for the metallic components that we're delivering and for the plastic components, which are more strongly used in the electric vehicles. We have both capacities available. And again, it's more of a short-term management of our manufacturing process rather than our business opportunities.
And again, in the long run, we do expect the e-mobility to take hold, and we're preparing ourselves for that.
Understood. Thank you. My second one, probably more housekeeping-related, you did mention the factoring is going down. Should we assume this will also be the case this year?
Well, for sure. So at the end, we feel well in a certain percentage. So normally, our highest level was by the end of 2022. I think we dropped down now significantly. And normally, within a range of EUR 50 million-55 million, we feel pretty well. So it's the question of mix finally. But at the end, I think as we are gaining cash and as we get more and more cash generating, that is the target, yes.
Okay. Understood. Last one, and something maybe a bit more long-term or medium-term, depends on your view. I mean, it seems like the business is stabilizing, and your guidance for this year is surely undermining that. Would you say that or when could we expect that the company will reach the double digits again, which you're targeting, because some aspects seem just a bit more long-term to fix?
Yes. I mean, we definitely, as we always said, have the ambition to return to double-digit margins. As you can see in our guidance, we're not ready to announce that for this year, but it's clearly our goal, and we clearly see the potential to do so in the midterm. And I intentionally say midterm and not long-term.
Okay. Thank you.
I would say if I can also comment that. So look to our Step Up program and what we published there. If you put that at the back of an envelope, all these measures finally turn out to a margin between low 13% and high 17%. So in between, every kind of margin, step by step, is welcome.
Okay. Thank you.
Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star and one. Our next question comes from Peter Rothenaicher, sorry about that, from Baader Bank. Please go ahead.
Yes. Hello together. One question on the environment in the automotive industry. So 2023 was a more stable year than 2022 when there were big fluctuations in call-off. How do you consider the situation for 2024? Do you feel relatively confident regarding visibility so that you are not surprised about the call-off ratios from the OEMs?
Yeah. I mean, it's an easy question, and it's a tough question at the same time because we all don't really know. But let's get a little bit closer to the question, the environment of the automotive industry in 2024. When you look at the numbers that are published by the German VDA and also all the other sources of information, I guess at best we can say it's going to be stable, which is not bad news, but it's stable maybe with a light opportunity, especially in Asia-Pacific, of course, but also the other regions for a little bit of an uptick. But comparing 2023 and 2024, I would say, and that's also the basis for our planning, we expect it to be somewhat stable.
Now, if you look in our product portfolio, for those of you that have been following us a little bit longer, you know that we have a mix of automotive products. Some are addressing the light vehicles, and some are addressing the heavy vehicles. We do see a little bit of a different scheme here. For the heavy vehicles, there was an expected, so to say, downturn, especially in North America for this year because based on regulation and emissions regulations, we're going to see a higher demand in North America in 2025 because there's going to be a pre-buy in 2025 relative to some stronger regulations in 2026. And that automatically, or at least historically, led to situations where the year prior to the pre-buy sorry for the complexity, but basically looking at 2024, it's going to be a little bit lower. And we address that in our numbers.
We'll see if all that happens as planned, but we are conservative here. The latest numbers looking at the first two months in 2024 look fairly good, but overall, we're planning for a stable development, maybe with a little bit of an opportunity for an uptick in the second half.
I would say without we need to mention that all the time. I think we are still underway in bumpy times. If you look to all geopolitical risks and with all these different conflicts, in particular in EMEA, we had to absorb also in the recent times that here and there, the supply chains and so on are, at the end, a little bit fragmented or not too stable. Therefore, there are certain risks which are higher than in normal times.
Okay. Then second question regarding the water business in Europe. So you did, though, a small acquisition. Can you give us some indications? What can we expect in terms of sales volume for the upcoming years? Are we, let's say, in 2024, at a sales volume of EUR 10 million or EUR 20 million? And what can we expect then for 2025, 2026 here?
Well, I guess we have to be realistic about what is possible with water management in Europe. I mean, we're very happy, and I can say also to a certain degree proud that we took a first step to finally implement our water management strategy in Europe. This is definitely very positive for NORMA Group, and we're going to build on that going forward. At the same time, we shouldn't forget where we're coming from. We're coming from small, single-digit million EUR of revenue in the European region. So we were a minor player in Europe, and to be honest with you, we still are. But now with the acquisition of Teco and investing more resources to this business, we want to grow this to a double to EUR 10 million of business in the midterm and then to even larger numbers in the long term.
But again, we have to be realistic here. It's a business that is very fragmented, meaning it is very decentralized in all the different markets of Europe. Therefore, the distribution channels are somewhat complex, and it takes step by step and a lot of groundwork, acquisition work, to grow this business. With Teco, we now have a second door open in the European market, which we, of course, want to leverage, but we have to be realistic about our goals.
Okay. Then in terms of restructuring, is there something specific to expect in 2024? So you had some plant closures in the recent years, which resulted in some major inefficiencies. Is there another closure planned in the current year? So is there the risk of something unfavorably happening about this?
Now, at first, let me answer this question by acknowledging that it's our responsibility as the management of this company to always look at our manufacturing footprint and to look at how we can improve our cost structure, especially in manufacturing. Therefore, of course, we're looking at all the different options and all the different locations and plants that we have to perform and have to get to a certain performance level to make them sustainable for the future. That's a continuous process. At the same time, no, there is no restructuring decided here in the moment. I mean, as you very well know, in our environment, other competitors in the market are going through restructuring programs right now. NORMA Group has gone through a restructuring program with Get On Track and the Apollo program over the last two years.
Some homework was already done, which was hard to do, but at the same time, it helps us now because some of the benefits we're reaping in now. And there is no concrete restructuring decision concerning a certain location planned here in the moment. But again, we are continuously looking at our footprint, and we continuously have to improve our competitiveness.
Okay. Thank you. And then as a help for our calculation models, financial result, we've talked about the strong increase in charges in 2023. Is it fair to assume now a largely stable financial result for the current year? And looking forward, how fast do you think you can improve the financial result again?
Well, I would say we are not bad underway in this. Finally, well, we did our last promissory note last summer. I think there we came out without any covenants and whatever. We have roughly something of EUR 23 million per quarter mostly. It might turn out now a little bit higher because this promissory note was last year only half year in the interest, and now it's then for the full-time in. But all in all, in the average, we are financed by something around 4.7%, which I find pretty cheap under the current market conditions, to be honest. So we optimize all the time. We put our portfolios down. We try to optimize our mix of factoring and whatever. This we are all looking and doing. But at the end, I think we are not bad underway.
Does this mean the financial result in 2024 largely stable?
More or less, yes, because there's not a lot to change. So we can optimize here and there. And minimal, we'll have the inflow of this last promissory note, the impact of that this is now then one year in, but that is not a big portion. So therefore, yes, it will be roughly about EUR 23 million-EUR 25 million.
Okay. And as a clarification for the tax rate, you mentioned in the second half of the year, you might have the chance to come down then with capitalization of different taxes. Also for calculation, what would you assume to take as a tax rate for 2024? Is 35% a fair assumption, or will it likely be higher?
Exactly. Something about that. And we will do I expect that to be so financial guys are always prudent, more in Q4, something like that. But yes, something 35%, between 30% and 35%, I would say everything is possible.
Okay. Thank you very much.
Our next question comes from Christian Glowa from Ha-ib. Please go ahead with your question.
Yeah. Hi. Good afternoon. Sorry, I have arrived actually late to the conference call. I apologize if that question has already been asked. I simply wanted to touch point once again on your water management business. Can you please confirm that you basically returned to growth in water management since Q3, 2023, and that you also have shown growth in Q4 because of your customers turning from destocking to restocking? And if that is true, can you explain why you basically only guide for stable development in water management overall? Is it simply you being conservative?
Yes, Christian. As a matter of fact, we did talk about that for a little bit, so I'm going to keep it short. But of course, I want to answer your question.
Thank you.
Yes. Last year was somewhat of a very special year because for those of you that have been following the group for a while and have been following the water management business, you know that normally, you'll have a strong season in the beginning of the year when people are starting to recreate their gardens and do some outside work, and you have a somewhat slower second half of the year. Last year, especially in North America, we saw a little bit of the reverse, which was one issue of that was the weather pattern, which caused well, a lot of rainfall caused on the West Coast caused these construction projects to linger on till the second half of the year.
As the different supply chains for these products are normally filled up in the first half of the year, it took much longer last year for these supply chains to basically accomplish and therefore to reorder. We do see that normalizing for 2024. And I mean, first of all, to finish up your question for 2023, we were very happy to see, and it was part of our prognosis, that the effect kind of came back in the second half in Q3 and Q4, basically making up for some of the causes that we saw in the first half. Not all of them, but recovery. And therefore, when you compare the quarter specifically to the same quarter of the year prior, yes, we did see a growth there, and it confirms that our business model with water management in North America is healthy and is working well.
We expect that also to continue into 2024. As you know, 2024 is an election year in North America, and that also gives a little bit of uncertainty how this year is going to develop. So yes, the second part of your question, we want to be conservative about our estimations.
That's very clear. Thank you.
That was our last question for today. I hand back to Mr. Grandi for closing comments.
Well, thank you very much, everybody, for joining our call today. As you know and as we've discussed here today, 2023 was a challenging year. Nevertheless, we feel very confident and happy about the numbers that we have achieved. While revenue was under some pressure, we showed that with the establishment of the Step Up program and our efficiency measures that we implemented, we were able to cope with these somewhat softer revenues and still provide a good result in our eyes. Of course, we want to take that momentum into the future. 2024 is a difficult year to judge from an overall economic situation. Nevertheless, we're confident that with the homework that we've done and the homework that we continue to do, we will further improve.
And also, we will continue to work on our growth opportunities going forward to return to the numbers that you all expect from us and that we expect from ourselves and the company going forward. So again, thank you very much for your time, and we're all looking forward to talking to you soon.