A warm welcome from my side to our Q3 analyst call 2021. Today with me is Andreas Trösch, our Vice President Investor Relations, Communications and Corporate Responsibility. Andreas will take the finance part today as Annette Stieve, our CFO, unfortunately, is ill today with a cold, so our best wishes to Annette to recover soon. Maybe a short overview on Q3 financials. It is page two of our presentation. In Q3, our sales were up by 8%, which means EUR 265.7 million, while we had in the previous year, Q3, EUR 246 million. Out of these EUR 265.7 million, we generated an adjusted EBITA of EUR 24.7 million, which is 9.3% EBITA margin in Q3.
Respectively, an EBIT of EUR 22.8 million, meaning 8.6% adjusted EBIT margin. Our net operating cash flow amounted to EUR 31 million or EUR 31.2 million, while we have an equity ratio of 44.1%, which increased slightly versus December last year from 41.7%. Our net debt as of September 30, was at EUR 332 million, while we had EUR 338 million December 31 last year. Our leverage amounted to 1.9 times end of September. End of December, it was at 3.4 times, so based on our good cash flow development, we had the chance to delever in the first nine months of 2021.
We had to update our guidance for 2021, which we did in September. We see an adjusted EBITA margin of more than 11%. Previously, we had our guidance at more than 13%, and accordingly, we also adjusted our EBIT margin being more than 10%, previously at more than 12%. Looking at the top line development, which is page three of our presentation. We see that we generated in the first nine months of 2021 nearly EUR 834 million in sales, which is an organic increase of 24% versus 2020. Of course, we had, especially in the first two quarters, mainly in the second quarter, this, let's say, COVID-19 impact, which was very much negatively impacting last year and so far, 24% year-to-date organic growth for the first nine months.
In Q3 itself, it was an increase of 7.6%, and we will have a closer look in a few minutes on these organic growth ratios. Our organic growth overall mainly due to strong growth in the Americas region and organic growth of 24% as mentioned year-to-date related also to the COVID-19 aspects. EJT sales showing an almost stable development on an organic basis. It's nearly on the level of Q3 2021 with, as mentioned, a very strong organic growth in the first nine months.
SJT, our Standard Products, showing strong organic growth of 18% in Q3, especially also related to the Water Management business, and nearly 20% year-to-date in the first nine months in Q1 to Q3 2021, driven mainly by EMEA and Americas region. We had some currency effects, positive translation effects of EUR 1 million. It's around 0.4% positive in Q3, and overall, for the first nine months, a negative impact of 3.3%, which is around EUR 22.7 million. You see on the right-hand side also the regional split, where we have a share of our sales in EMEA of 44%, while we have 41% in Americas and 15% of our sales in APAC. Looking into the segment reporting, which follows on page four.
We see in EMEA an increase of 4.3% of sales. EJT sales slightly organically declining by 2.5% in Q3. Due to the volatility in production related to the material shortages mainly related to steel, logistics capacities, containers, et cetera, and semiconductors. As mentioned in the first nine months year to date, Q1 to Q3, a high double-digit development of 25.9% organic growth. Standard joining technology in EMEA strong double digit organic growth of nearly 23% in Q3 and even year to date due to a good business development and even a restocking impact in EMEA in the first nine months of 2021. Americas development a strong organic growth development of 9.2% in Q3.
Ongoing high double-digit increase of 31.7% in the first nine months. Of course, comparing to a weak prior year, nine-month period, we had a very good development in Americas in the commercial vehicles area, mainly related to the heavy trucks, Class 7, Class 8. So that we had a quite strong development of the Americas business. The Americas business in Standardized Joining Technology also had a strong double-digit organic growth, 20% in Q3 and 20.8% in the first nine months, mainly driven by the Water Management. Water Management showing another double-digit organic growth of 15.4% in Q3 and 19.4% for the first nine months, 2021. Strong Water Management development in Americas. APAC.
We remember APAC. EJT business started to recover very early, so they already had in the second half of 2020 a good development. EJT business in APAC organically declined by 6.7% in Q3, but still is on a high double-digit organic growth level of 21.5% for the first nine months of 2021. The Standardized Joining Technology business in Asia Pacific showed a slight organic growth, 0.9% in the third quarter, which then leads to an organic growth of 9.7% in Q1 to Q3 2021 after a, of course, also COVID-19 related organic decline of 14.8% in 2020 in the first nine months. Coming from the top line to some margin developments, you see that in an overview on page five.
The adjusted EBITA and EBIT margin in Q3 2021 was negatively impacted by significantly lower production volumes in relevant industries, as well as higher material and freight costs in all regions. We all know the reasons for this crisis development, if it's container capacities, freight costs, truck availability, semiconductors, steel shortages, et cetera. This is heavily impacting the cost side and with that, the margin development, so that we have a 9.3% EBITA margin in Q3 2021. On a year to date basis, an EBIT margin of 8.6% in Q3 and year to date, 11.5%. To go into some details regarding financials and P&L, I hand over to Andreas.
Thank you very much and also warm welcome from my side to all participants. Let's have a look at some details of the P&L, starting with the material costs on page six. You see that the material costs went up in the third quarter as well as in the first nine months. That has something to do in the third quarter with the increase and build up of inventory of finished goods and semi-finished goods. And due to the method of our accounting, more detailed look in the gross profit. If you look at gross profit in Q3, it went down by 1.6% due to the factors that Michael already mentioned, material costs. Looking at the nine months, and that's the good news here, is that it's almost stable.
It improved even by 20 basis points in the first nine months when you look at the gross profit. Personnel costs improved there as well. Starting with the nine-month view there, it went down substantially. That's due to the fact that in the previous year, we had the provision built up for our Get on Track program. Also in Q3, it went better by from 27.2% - 26.4% due to the improvements that we made during the course of the year. On the other hand side, looking at OpEx.
OpEx went up in the quarter. Main reasons there is, on the one hand side, the volatile order behavior of the OEMs, on the automotive side, meaning that short-term cancellations and changing in order behavior leads to more than normal tool changes and extra costs on our side. Then temp workers are up in the quarter, as well, on the one hand side, due to still the ongoing corona situation and temp workers needed in order to replace our own personnel being in quarantine and also our improvements on the factory landscape lead to the fact that we have double personnel and more temp workers in order to cope with transfers of machinery. Freight costs is another factor which leads to higher than usual OpEx costs.
On the EBITA and EBIT side, the numbers have been mentioned in the beginning of the presentation already. We see year-on-year, first nine months, a nice development, leading to 12.3% on EBITA and 11.5% on adjusted EBIT for the first nine months, while the quarter, with all dimension factors went down from 11.7 to 9.3 on adjusted EBITA and 10.7 to 8.6 on adjusted EBIT. On the next page, some housekeeping for the operational adjustments. As you know, we do not adjust anything on EBITDA, so the costs for the Get on Track program are not adjusted, leading to the fact that reported EBITDA is equal to adjusted EBITDA.
The only adjustments that we are doing on a regular basis is PPA purchase price allocation from the past acquisitions. On the one hand side, EUR 1.1 million on depreciation PPA and then another EUR 15 million on amortization PPA. After tax, that leads to a difference between reported and adjusted EPS of EUR 0.38, EUR 1.60 at reported and EUR 1.98 at adjusted EPS for the first nine months. That brings me to the next page. Speaking about EPS, you see also there the nice development in the first nine months on adjusted EPS up to EUR 1.98 in the first nine months. Reported EPS EUR 1.60 per share in the first nine months. In the quarter, on the other hand side, slightly down from EUR 0.50 to EUR 0.44 on the adjusted EPS and EUR 0.36 to EUR 0.32 for reported EPS.
Switching from the P&L to the balance sheet on page nine. Starting with net debt, it decreased slightly by 1.7%, comparing December 31 to September 30 this year, which is a nice development due to the strict cash control measures and the cash collection that we did. Equity ratio improved very well to 44.1% from last year's 41.7%, and also the leverage improved, as already mentioned in the beginning, to 1.9 times compared to the pandemic number of 3.4 times at the end of last year. Gearing improved as well from 0.6 net debt to equity to 0.5 at the end of September net debt to equity. From the balance sheet onwards to the cash flow statement.
Looking into the quarter on page 10, our adjusted EBITDA went down, as mentioned, from EUR 40 million to EUR 36 million. Trade working capital inflow of another EUR 6 million, and the investments increased because of higher business activities to EUR 10.8 million, leading to the fact that we had a solid net operating cash flow of EUR 31.2 million. Cumulated for the first nine months from last year's EUR 49 million, we improved in net operating cash flow to EUR 70.5 million in the first nine months of cash flow development. From my side, last but not least, NORMA Value Added. Our NOVA is also negatively affected as the whole P&L in the quarter. We closed the quarter with EUR -2 million NOVA in Q3. Year-to-date September, it is +EUR 16 million from last year's -EUR 43 million. A strong improvement in the first nine months to EUR 16 million NORMA Value Added in the first nine months. With these details, I hand back to Michael.
Andreas, thanks a lot. Two more charts. Get on Track program, cost and savings timeline. Overall, we are on track with our Get on Track program. We are well on the way with the major savings in 2021. Looking at the net effect of that program of EUR 25 million in 2021, we will see these EUR 25 million out of the improvement program coming from additional measures and the one-time cost net effect EUR 25 million, especially also in the purchasing area. Our outlook for 2021, updated company guidance, as of 14th September. We expect organic sales growth in the low double-digit area, with an adjusted EBITA margin of more than 11% and an adjusted EBIT margin of 10%, generating a net operating cash flow of more than EUR 110 million and a NORMA Value Added between EUR 10 million and EUR 25 million in 2021. With that, we hand over to you and are happy to take your questions and discussions.
Thank you. We will now begin our question and answer session. If you have a question for our speakers, please dial zero and one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question is answered before it's your turn to speak, you can dial zero and two to cancel your question. If you're using speaker equipment today, please lift the handset before making your selection. One moment, please, for the first question. We have a first question. It's from Peter Rothenaicher, Baader Bank. The line is now open for you.
Yes. Hello, gentlemen. Firstly, one question regarding the material cost issue. This is hurting more or less every company in the automotive supplier area. As we hear from other suppliers, they are in strong negotiations with OEMs regarding compensation for these higher material costs. What do you expect now for the fourth quarter? Do you see here the possibility to get back some money and with the opportunity perhaps, and this would help the margin in the fourth quarter?
Yes. Peter, thanks a lot for that question. I think we all companies in that automotive supplier part are in a similar situation. We also are in strong negotiations with our customers. These negotiations are going on very well. So far, we also expect on the pricing side, positive impact to cover part of the material costs. This will be the case in Q4 and still more important for 2022.
Okay. Then the second question, typically your fourth quarter is somewhat weaker in terms of sales. This year we have a special situation in the automotive area. On the one hand, we still hear from significant semiconductor shortages. On the other hand, I think OEMs are eager to produce as many cars as possible. What is your view then on the potential sales development in the fourth quarter? Is there a chance that Q4 might get to a similar sales volume as the third quarter?
Well, if I take the LMC figures that came out this, or that were published first of November, we see for the fourth quarter an additional decline than in relation to what we saw in October. In October, for the light vehicle production, according to LMC figures, we expected a downturn worldwide of 14.6%. Now we have some LMC market analyst figures going from 14.6% negatively in Q4 to -18% in the fourth quarter. From our point of view, there is still significant pressure on the market, and apparently, according to LMC, a weaker situation than what we expected one month ago.
Perhaps can you comment a little bit on your business trends in October?
Well, we see in October the Q3 development. We are currently closing the month of October. It is in line with our new guidance, so that we are in line with that guidance for the fourth quarter. This is what we see for October. The LMC figures also indicate that fourth quarter will be overall weak as we have expected in our guidance.
Okay. The last point you mentioned the third quarter, some headwinds from COVID-19 with those quarantines of employees. Is this still an issue for you in the fourth quarter, or has this issue terminated?
No, it is still an issue. Unfortunately, COVID has not yet terminated. We see that development still that we have worldwide people in quarantine. On average per month, I would guess we have around 100, 110, maybe 120 people in quarantine because of COVID-19 development. Unfortunately this goes on.
Okay. Thank you.
Appreciate it.
Our next question is by Nicolai Kempf, Deutsche Bank. The line is now open for you.
Hi, it's Nicolai Kempf speaking from Deutsche Bank. Thanks for taking my question. My question will also be on the production environment. I mean, I understand that the volumes were rather below in the last quarter. Can you confirm that the environment is kind of stabilizing a bit so that you have less cancellations, which I believe are especially causing this inefficiency in the production ramp up? 'Cause what we've heard from the OEMs, from BMW and Daimler, is that it's getting better in the last quarter. What's your view on that?
Well, Nicolai, thanks. First of all, we do not have cancellations, but we have reductions of order books partly, and they are still a very inefficient situation where we have order book requirements from OEMs in total. And if these products are not or could not be sent the next week to our customers, it's extremely inefficient and generates additional production costs. Unfortunately, overall, this goes on in the EJT/OEM business. So far, there can be the one or other customer, as you mentioned, where we see some positive development. Overall, we have that volatile situation and still have to live with that, with these inefficiencies and with these costs.
Okay, understood. Maybe just one follow-up on the high input prices. When do you think you can pass them on to your end customers? I try to maybe reduce the length of the cycle that you can pass them on quicker.
Well, we are constantly working on the contract situation. Typically, we have a time frame of three to six months to hand over or lead these costs to the customers for the alloy surcharge prices. I think what we see in the contracts is a, let's say, constant adaptation to new needs. Currently, we have still the situation that we are talking about three, four, five months of timing differences to hand it over. Of course, it's a heavy negotiation. There's nobody sitting on the customer side waiting for us coming, so it's a tough negotiation, so that there are a few months that you need for finalizing these negotiations. And so far, that's currently the situation. Although we constantly try to improve our contracts.
Understood. Thank you.
Welcome.
The next question is by Harald Eggeling, Oddo BHF. The line is now open for you.
Yes, hello. Thank you for taking my question. One question regarding wage inflation. Basically, in the past, you launched your Get on Track program. Now I think, we have some wage inflation topic, going on, huh? Is your view basically that this is rather a structural issue which you will have to deal with, for the next couple of years, huh? In case you view this as a structural issue, how are you going to tackle this issue, please? Thank you.
Yes. Of course, we see overall inflation and even wage inflation that we expect for the next years. Let me remember to one part of our Get on Track program to improve our structures. We are currently in the process of closing one location in Germany. Our location in Gerbershausen is decided to be closed end of 2022, and it will be transferred to Czech Republic. We act on that structural topics to transfer headcount into lower cost or, let's say, best cost countries.
Okay. Regarding the U.S.? I mean, you have a very successful U.S. Water Management business. My view would basically probably be that the wage inflation might first be a topic in the U.S. A relocation from U.S. operations into other countries might not be an option. Should we expect that you raise prices in basically business areas where it might be possible, for instance, Water Management? How do you deal with this in your OEM business, please?
Yeah. Well, in the OEM business, we have to differentiate in the, let's say, DS and Water Management business, where we typically increase once, twice a year our prices. This year, for NDS, we already had the fourth round of increasing our prices to cover these inflation impacts and even the wage inflations. In the OEM, on the OEM side, we go in detailed discussions with our customers to hand over cost increases if these are structurally driven. That's one topic. Direct discussions, negotiations with our OEM customers. Of course, structurally, transferring production areas into best cost countries.
Okay. Currently, are there any kind of extra compensation you need to pay to your U.S. employees to keep them on board amid potential wage inflation?
Well, we have an increase in the minimum cost per employee per hour.
Okay.
This is one reason why we are in the fourth round of increasing our prices in the Water Management/DS area. We have to differentiate distribution services business, Standardized Joining Technology business, water and industry business. There we have one, two, and this year, the fourth round of price increases to cover these inflation trends. On the OEM side, we are in direct discussions and negotiations with our single customers on a one-to-one basis.
Okay. Thank you. Last point. The takeaway would simply then be that you in your OEM automotive business are currently facing higher costs, but potentially in some months or so when the negotiations were successful with the OEMs, you might be able to charge higher prices, right?
Exactly.
Okay. Thank you.
You're welcome.
As a reminder, if you want to ask a question, please press zero and one on your telephone.
Well, if
The next quest-
Okay.
We have the next question. It's by Harald Eggeling, Oddo BHF. The line is now open.
Sorry. One last question. Regarding kind of, I mean, we not know what will happen next year in 2023, but from today's perspective, now across the regions, how would your take basically be for regional growth patterns in 2022? Do you have a view you can share with us?
Well, Harald, I think we have a very intense and high volatility, and as the LMC figures, and this is what I can share. As the LMC figures for 2021 are constantly changing, and in fact going down, on a monthly basis. Also the 2022 figures are significantly changing over the month. Currently, if I take the LMC figures published beginning of November, we see for light vehicle production volumes an increase in 2022 of 11.6%. This is a current information on the trend in 2022. Let's see how reliable and stable these figures are over the next couple of months. At least LMC, and this is good, sees an increase currently of 11.6% in 2022 for light vehicle production worldwide.
Okay. Thanks. Also one follow-up, please. What basically then is your personal NORMA take for supply chain issues now? Do you expect this will basically resolve in H2 2022, or do you rather think it will be a topic for H1 2023, please?
Well, I would love to have a crystal ball. I would be very cautious at least for the first half of 2022, but I think it's far too early to give a solid assessment and expectation. And so far it's important to be on the cautious side, and to keep flexibility on a high level.
Okay. Thank you.
Welcome.
For the moment, there are no further questions, and so I hand back to Dr. Schneider.
Yeah. Thank you very much for your participation. Let me maybe summarize from NORMA Group's perspective. Of course, we are all seeing the headwinds in the economy that we have. We have to live with that. NORMA is, although we are not happy of course, as others as well, with our Q3 development. NORMA Group is very well prepared for the strategic mid and long-term development with our portfolio and with our measures. We are very confident and very optimistic on the long-term strategic development, and that we will handle the short-term crisis developments coming from the economy. And so far on long-term basis, we are very well prepared. Thank you very much for your participation. To all of you, please stay healthy.
Thank you very much. Bye-bye.