Good afternoon, ladies and gentlemen. Thank you for your patience. Welcome to the NORMA Group Full Year 2025 Results Webcast and Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To ensure that the session runs as smoothly as possible and is easy for all participants to follow, we kindly ask that you raise your questions one at a time. In other words, if you have more than one question, please wait for the answer to the current question before moving on to your next one. Please be advised that today's conference is recorded.
I would now like to hand the conference over to your first speaker, Birgit Seeger, Chief Executive Officer of NORMA Group. Please go ahead.
Very warm welcome to all of you. Good afternoon, good morning to this year's earnings call 2025 for NORMA Group. With me today, I have Okan Celiker, our acting Group CFO. Very warm welcome to you, Okan. It's Okan's second day.
Thank you.
I'm convinced Okan will present the financials in a very good manner and will answer your questions. Please be patient with Okan. Today we will include basically three points. We will review our results 2025, we will provide the outlook for 2026, and we will, number three, give a sneak preview for our strategy for the NewNORMA Group. On the next page you see our usual disclaimer. One important thing to note is that we have continuing and discontinued operations due to our divestment of the water business, and we have marked this clearly as former NORMA or NewNORMA in the presentation going ahead. We will see here a summary of our achievements in 2025.
Basically, we see the closing of the Water Management, the divestment on the top right corner, which really marks a milestone for us at NORMA Group, where we achieved EUR 650 million of net proceeds, and this is a great enabler to build New NORMA. We will propose a dividend of EUR 0.14 per share at the next AGM this year. Also, we delivered on our guidance. However, it was a very tough and challenging year for New NORMA, what we will review shortly. We have conducted this public share buyback, you are aware, and this was successfully concluded. Tonight we will publish the results on our internet and you can review them. We enter 2026 with a net debt-free situation after the Water Management sale, and we give significant return to our shareholders.
This is a sharp focus what we have now, this strategic realignment, and it opens the doors and gives the foundation to become really an industrial powerhouse for Connecting Solutions. The preview of the strategy will come later in this presentation. Let's now start with a brief recap of our financials. You have received the preliminary results in February this year already. Okan will later on give you some more details on the financials. NewNORMA reflects the perimeter without Water Management going forward. The 2024 revenues, we have restated accordingly for NewNORMA. Let's look at the summary. Net sales total EUR 821.7 million, lower than last year. The adjusted EBIT at EUR 6.3 million, again, significantly lower than last year. The adjusted EBIT margin at 0.8%, also lower than last year.
Of course, this is not what we want. This was a very tough year. From this we have to reset in this year to build New NORMA and to really go forward and grow in all our parameters here. Net operating cash flow, again, this is the former NORMA view. We achieved EUR 95.8 million in 2025. Also we have delivered in guidance. Again, this is challenging for us. It was very challenging. However, now with the divestment, with the new situation, with the new strategy, we will have a good basis for New NORMA and therefore we are going to reset and start with this new setup. For the next financial topics, I will hand over to Okan, please.
Thank you very much, Birgit, and hello also from my side. Very well. Warm welcome. I'm very excited to take over this role, and I'm also very much looking forward to engage with all of you going forward. Let's look at the details of our financial development on the next slides. Starting with our net sales, our jump-off base in 2024 for NewNORMA was at EUR 882 million. Throughout the year, we saw a volume impact of EUR 37 million as well as a price impact of EUR 4 million, mainly coming, especially the volume impact from a weakening market demand.
On top of that, we had a negative impact from the currency and the exchange rates here primarily impacted by the euro-U.S. dollar exchange rate totaling to EUR 18 million or roughly EUR 19 million, which overall got us to EUR 821 million-EUR 822 million for the full-year NewNORMA, which is in line with our guidance given in October last year. Let's look at the next page, please. Again, we are looking at the net sales, this time focused on the strategic business units. Also again, of course, NewNORMA. I'm starting with the left side. The Industry Applications business unit. Our net sales in the Industry Applications business increased year-over-year by 8%.
However, this includes a reallocation of the Mobility and New Energy business of EUR 34 million, roughly. On a like-for-like basis, this means our sales declined by 6% to EUR 252 million. Also inside this development is a volume and price impact of EUR 8.7 million and a currency impact of EUR 6 million. Now I'm moving on to the right side, to the Mobility and New Energy business. Our net sales year-over-year were declined by -12%. Of course, again, also here including reallocation, this time from the other way around, basically from Mobility to Industry Applications. That means like-for-like, the sales reduction was at 7% in the Mobility and New Energy business.
The corresponding volume and price impact was at EUR 33 million, currency impact EUR 13 million. This gets us to the EUR 570 million 2025 net sales Mobility and New Energy business. All right. Next page. On the next page, we are looking at the breakdown by regions. Again, we are looking at obviously NewNORMA. I'm starting with the left side, Americas region. The net sales declined in the Americas region by 8% year-over-year. We've been able to counteract and balance that a little bit due to initiated cost improvement initiatives in order to cover the inflation. Overall, that got us then to an adjusted EBIT margin of 3.8% for the Americas region.
Now moving on to the EMEA region in the middle of this chart. In the EMEA region, our sales declined by 7% year-over-year, and the adjusted EBIT margin declined by roughly 5%, mainly impacted by extraordinary impacts in the EMEA region in the year 2025. The APAC region, the net sales development was at -6% year-over-year, which are stable, basically very positive, adjusted EBIT development from 9.5% to 10.8%, mainly driven by positive product mix impacts in the APAC region. Also important to mention here, in the future, we will focus more on the strategic business units and also the reporting of the strategic business units.
This is just as an FYI here in our presentation, and with that, we can also move to the next slide. On our next slide, we are looking at our adjusted EBIT development. Our jump off base adjusted EBIT NewNORMA 2024 is EUR 33 million. Throughout the year, we saw already mentioned a strong volume and price impact is reflected in the EBIT margin with -18%. However, we've been able to balance that a little bit with positive developments in the material cost area due to positive sourcing effects, basically, that supported a positive development of the material costs.
On the other hand side, we also had our first transformation program savings kicked in in the personnel cost area, but this was negatively overcompensated, especially in the direct area of our personnel costs. Other OPEX and depreciation and amortization have been largely stable. With an FX rate impact of -EUR 6 million, we achieved a total adjusted EBIT of EUR 6.3 million in 2025. Let's move on to the next slide. On the next slide, we see the EBIT margin development. The EUR 33 million that we saw on the previous page is 3.7%.
With all the impacts that I've just described on the previous slide, we consequently achieved an EBIT margin of 0.8%, which is also in line with our guidance given in last year, which was between 0%-1% EBIT margin. All right. Let's look at our operational adjustments in 2025 and 2026. I'm gonna start with the EBITDA. The adjustments on EBITDA level, full year 2025, are mainly related to our transformation program and in that area related primarily to severance payments and amounts to EUR 32 million. For 2026, we expect another adjustment on EBITDA level, again, out of our transformation program, of another EUR 24 million, which basically represents an acceleration of our transformation program.
We are basically pulling forward initiatives defined in our transformation program that we initially planned to conduct in the outer years into 2026. On the EBIT level, we see an adjustment of, in total, roughly EUR 90 million on top of the EUR 30 million that I've just mentioned in 2025. We have here another EUR 55 million of PPA amortization, of which EUR 50 million is related that we undertook in the EMEA region and communicated also in November last year. In 2026, we are expecting another EUR 29 million approximately in addition to the EUR 24 million that I've mentioned earlier. This includes EUR 5 million of additional PPA amortization out of historical M&A transactions that we undertook.
We expect this EUR 5 million to stay with us for the next couple of years, but on a slightly declining level. Net profit. Overall, on a net profit level, the adjustment is a total of EUR 80 million, roughly, which includes a EUR 10 million tax impact compared to the adjustment on the EBIT level. For the earnings per share, consequently, we achieve 2.45 euro cents in the full year 2025. Due to the fact that we are currently planning a capital increase, which is subject to the approval during the annual general meeting, we decided to pause the earnings per share guidance for 2026. Next page is, and we can see our dividend development.
For dividend purposes, we are looking at our adjusted net income of former NORMA. That includes the continuing and discontinued business, as well as the adjusted EPS, again, for former NORMA. The adjusted net income in 2025 for former NORMA was at EUR 14.3 million, and the adjusted earnings per share was at 0.45 euro cent. With the dividend of 0.40 euro cent that we proposed, that was mentioned initially by Birgit, this results in a payout ratio of 31% for our dividend 2025, which is again in line with our dividend policy of 30%-35%. On the next slide, we see the cash flow development for full NORMA or former NORMA. Again, important to mention here.
We are starting with our adjusted EBITDA of EUR 125 million for the continuing and discontinued business 2025, which already represents a reduction compared to 2024 of roughly EUR 19 million. From there, our net operating cash flow for the full year 2025 is at EUR 96 million, which basically is just a decline of 9%. How did we manage to reduce the decline compared to the EBITDA decline? Primarily due to a positive trade working capital impact, which is resulting from a positive impact out of the inventory management and also a lower supply chain financing program, roughly EUR 5 million, which also contributed here in that area.
Related to our CapEx, we've been quite disciplined, and this also helped us to reach that net operating cash flow of EUR 96 million. Together with the payments for interest and for tax, we achieved for the former NORMA in 2025 an external free cash flow of EUR 52 million. With that, let's look at the next page where we will walk you through our full year net debt development. Important to mention here, in the beginning on the left-hand side, we are looking at former NORMA. On the right-hand side, we are looking at NewNORMA. Starting with the left side, our net debt in the beginning of 2025/end of 2024 was at EUR 330 million.
Roughly, we've managed to reduce our net debt, despite let's say the challenging environment we've been in by roughly EUR 13 million. This was supported, again by the external free cash flow that I've just walked you through of EUR 52 million. On top of that, we had dividend payouts and also other developments, let's say within our net debt. That got us ultimately then to the EUR 316 million. So if we now move to our expected net debt for 2026, we adjusted in the first step our baseline for 2026. Why is that? Because, we had a net debt portion, that we deducted which is attributable to the water business, amounting to roughly EUR 10 million. With that, our new baseline is at EUR 306 million.
Based on our guidance, which Birgit will share in a few with you, we also expect external free cash flow in a range of EUR +10 million to EUR -10 million in 2026. Another dividend payout that we've just described of EUR 4 million. Of course, we have the big impact out of the net proceeds from the Water Management sale of EUR 650 million, as well as the shareholder return of EUR 260 million, which then overall gets us to a positive net cash position expected for 2026 in a range of EUR 70 million-EUR 90 million. With that, I hand over again to you, Birgit.
Thank you, Okan, for sharing this with us.
Sure. You're welcome.
With this, we leave the year 2025 behind us. It was a really challenging year for NORMA, and we move ahead looking into 2026. What have we organized for 2026? What have we planned for 2026? It was a very good start with the divestment and the closing of the Water Management. We could reset our balance sheet, and the whole year 2026 is a year of reset. What will this look like? Let's look at the outlook. We see here the net sales. We foresee a growth in the area of 0%-2%, so very slight growth. We look at the adjusted EBIT margin, and we see the range of 2%-4%. We are confident to run this. This is based on our forecast, our internal forecast.
We have the full two months in this year already completed, and March is actually up to date and also completed. This was leading us to this adjusted EBIT margin outlook. Looking at the net operating cash flow, we see the range of around EUR 10 million-EUR 20 million. If you compare with 2025, please reconsider, as explained before, that this is not comparable with the New NORMA, but it's based on the former NORMA, basically. We think this is also a reasonable and good range for us. In terms of dividend policy, I want to make you aware that in the first sentence we confirmed the dividend policy.
We have added one important point for us that this dividend is subject that the NORMA Group SE reports a net profit in its annual financial statements, and this together brings us the updated dividend policy. In terms of target vision for the outer years, we will provide a strategy update in the second half of 2026. This will include the content of our strategy and also our target and vision for the outer years. We move on now to the assumptions we have taken to come to our guidance. Starting with the top line. We looked at the markets, and we are all aware of the situation in passenger cars and commercial vehicles. Passenger cars slightly negative, commercial vehicles slightly positive. Mechanical, a flat market, and in construction, some moderate growth depending on the regions.
We have also included net sales from our business between Industry Applications and ADS. This is the buyer of our Water Management business in 2026, which is really planned to end by the end of the year 2026. A further important assumption is that stable geopolitical impacts like tariffs and so on. Of course, it's the question what is coming this year, but we concluded that this is the best assumption we can take for the moment. Of course, we are watching and monitoring very careful and very diligently what's going to happen, and we will manage in our best possible opportunity any changes which are coming. Looking at the bottom line, we see the EUR 16 million one-off cost from 2025, which we have reported. We see also the EUR 15 million from the transformation program, as you are aware, and we have reported.
The personnel cost inflation, we kept on a stable level compared to the last year, and we also assume stable energy and raw material prices. Again, here we see maybe some impact, but this was the best assumption we could use for our outlook for this year. We have some cash flow drivers, so the net operating cash flow is lower than in 2025 because of the closing of the Water Management sale. Also important, we have now lower effects from supply chain financing again, due to the Water Management sale compared to last year. Of course, we have cash-related expenses from the transformation. FX assumptions are stable, so same FX rate in our planning for the U.S. dollar and the CNY, basically. With this, we move on to some housekeeping topics. I'm not going into all the details here.
Maybe one point is important, the interest income. We have an income of EUR 5 million. However, net it's EUR 1.5 million, as a result of the net debt free position and depending on the interest rate. The others, I think you will read yourself and basically we have explained the mechanism already for this one. Now we are moving on, and this is really the NewNORMA update. NewNORMA being, the strategy for the outer years, and here we are very excited to see on the next page, what we have done for the foundation. Basically we focused our business. We focused our business towards this industrial powerhouse, which is Industry Applications and M&E, Mobility and New Energy. What does this mean? We can deliver our Connecting solutions to a very wide range of industries, and we have huge potential.
The focus makes absolute sense. We have an improved capital structure as we've just explained, and this gives us very good flexibility to build NewNORMA. We are simplifying our organization. Are we there yet? No. We are on a good way. We are making very nice progress. This means that we reduce our SG&A to a competitive level, which is very important, and we also bring our organization in a situation that we can make fast decisions, and we have a very business-oriented steering for NewNORMA. Our footprint optimization, which has delivered very good results. We closed two factories in China already, and this is a great outcome here. We see very good operations. We are in the process and focusing our operations in Mexico further, and we will go on and continue our footprint optimization.
We see on the next page, what are our enablers. This is the strategic focus. We prioritize attractive markets. Now you may say, "What are these markets?" We are in the evaluation. Just to give you some insights, we are talking about white goods, we are talking about aerospace, we are talking about life sciences, data centers, all of these markets, very attractive markets. I can say we have the right products. Maybe to give you some insights about my first months is in NORMA, I've met many of our customers in the meantime, and they confirm that we have the right products, which is very good for us. However, for many of these industries, we have currently very low market share. Why is this the case? Because our focus was before not on these industries.
Now with NewNORMA, we focus on the right markets, and I'm absolutely confident we will have great results and great progress there. Execution discipline, cost management. The cost management for all our cost elements is what we are improving, what we are driving daily. Of course, working capital focus and operationally to have accountability, to have a performance culture in our operations will really contribute to NewNORMA. Implementation speed, again, with the reshaped organization, we will accelerate our decision-making, and we will focus on the SBUs. This means we will take business-driven decisions. We will take market and customer-oriented decisions, where we also focus our decision-making, our responsibilities on the business, on the business units. What does this mean now coming really to the core of our strategy?
You see four pillars, and these four pillars are the core, basically, and to give you some early insights. To the left, you will see restructuring. You are aware of our transformation program, as we have communicated, and we are fully implementing. We will go on with SG&A improvements. We currently know that our SG&A are not so much competitive, so we will bring them with the restructuring program on a really competitive level, and we'll bring performance orientation inside NewNORMA. The second pillar is the footprint. With the footprint, we talk about plants, and we talk about sites. As just mentioned, we are on a good track here. However, we will go ahead.
End of the day, we will have, for NORMA, plants and sites which fits to our business, to the size of our business and also to the nature of our business, following our customers and our products. We will have a target operating model again, which really fits the NewNORMA with our connecting solutions. The third pillar is a sales push. We will and we want to have new business wins. This means to grow our order book. With this, we have been working already, and we will further work on our commercial situation, our pricing strategy, and with this to increase the plant utilization across NewNORMA.
Focus really on the customers, on the end markets, and we have started already to bring a Target costing live in NORMA, meaning that we are competitive, we understand the markets very nice, and we have target costs, and we run the measures to meet these targets. The fourth pillar is about growth. Currently we are evaluating markets and market segments where we foresee a very good growth, organic growth and inorganic growth. This is currently, again, in evaluation. An update will come in the second quarter for our strategy update. With this, we go ahead and talk about a timeline because I'm sure you are curious when this will be all executed. This year, 2026, is the year of the reset. We strengthen this foundation, and we build it.
As Okan also said, we are working also on reporting, on steering the business, really focusing on the customers, on the markets, on our business, will be detailed in the strategy update second half of 2026. The year 2027 will be the year of optimizing, so we will see performance improvement already there. The year 2028 and further out will be the years of growth, where we have really positioned our structural opportunities. We go ahead, and I say a big thank you for listening to us, and we are looking forward to receive and answer your questions.
Thank you. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To ensure that the session runs as smoothly as possible and is easy for all participants to follow, we kindly ask that you raise your questions one at a time. In other words, if you have more than one question, please wait for the answer to the current question before moving on to your next question. Once again, it is star one and one to ask a question. Thank you. We will now go to our first question. One moment, please. Our first question is from the line of Nikita Papaccio from Deutsche Bank. Please go ahead.
Yeah. Hi. Thanks for taking my questions. I would have three, and we'll go through them one by one. The first one, thanks for clarifying on your restructuring program and the higher cost this year because of you pushing forward the measures, as I understood. Could you maybe elaborate bit more, which measures these are and how the timeline is then for 2027 and beyond, especially also on the savings side?
Okay, I will start with the restructuring program. There's basically the transformation program as we have announced already. This is in full execution, sort of, and we will really, in the strategy, look at the whole restructuring requirements and answer this then in the second half. For the known transformation program, we can give already the numbers and maybe, Okan, you give us some insights.
Yeah, exactly. As already mentioned, we achieved savings according to our plan that we've communicated last year with regard to the transformation program. In terms of savings in 2025, EUR 4.5 million, and in 2026, EUR 15 million. That's what we are planning or what we are expecting. Yeah, to add to Birgit's answer, for 2027, yes, due to the pull forward of specific initiatives, of course, we do also expect a slightly earlier kick in for certain initiatives. As also mentioned by Birgit, we will bake that in into our planning, which yeah, will be the new basis for us going forward and will be presented in H2 this year.
Thank you. The second question is on your midterm outlook. I mean, I understood fully that you are giving us a strategy update in H2, but I was thinking about you, especially on your mobility business. For now, you are seeing no growth in this business. I understood that you are trying to gain more market share, especially in the APAC region. Any indication how to achieve 10% margin or more in this segment? I mean, with the increase in volume, potentially you would see a decline in prices, right?
I just repeat your question because it was a little bit broken. I understand that you are asking especially for our midterm outlook, especially focus on the APAC region where we see a 10% margin. I mean, yes, as you rightly saw, we have currently a good margin in the APAC region. In 2025, we had really some improvement, and we are very happy about this. For the midterm outlook, we are still working on this. Regions are all different. The markets are different. They are going in different direction. We will give the midterm outlook then as part of our strategy update to ensure we have a good evaluation of data we are giving, and then we can present this with a high confidence level to you.
Thanks. As the question was regarding the mobility segment and its target of 10% margin overall. You know? It's not on APAC in specific, but globally.
Okay. Thanks. Thanks for clarifying this. For the mobility segment, I mean, it's the same. It's also one of our industry segments and there we are also assessing this. There is also an impact what we will achieve with the restructuring, what we will achieve with the footprint. This all has an impact of course. Also our commercial update has an impact on the offerings, on our competitiveness. This will also have a significant impact, of course, on the margin level also in the mobility segment. Here we are also in a very detailed and deep evaluation and will give an update also here in the second half of 2026.
Okay. Understood. Final question from me. I mean, you mentioned that you're assuming stable supply chains and tariffs and so on. What is the current situation with regards to Middle East? Any impacts you are seeing, indirect or direct?
Thanks for this question. The impact in the Middle East. Basically we have no own operations in NORMA in Middle East. We have a business which is roughly EUR 1 million of revenue. We see for sure in the freights and so on some impact, some delays, which is getting more complex, some increased cost of course also in the energy. Further on for the moment, we do not see any severe impact on our operations. However, we are monitoring very closely and we are also preparing the different scenarios, what we can do and how we can manage the situation.
Okay. Thank you very much.
Thank you.
Thank you.
Thank you. As a reminder, if you would like to ask a question, please press star one and one on your telephone keypad. That is star one and one to ask a question. You will then hear an automated message advising your hand is raised. We have a question via text message. I'm just going to read that for you. It is from Harald Eggeling from ODDO BHF. What are the underlying assumptions for the upper and lower end of the guidance ranges?
Yeah. Let me take that. I think we've of course consciously decided to give our guidance with ranges this year of course due to the, let's say, situation we see on a geopolitical side and also on an economic side. I think in general our expectations and assumptions Birgit just shared in the housekeeping part of the presentation. There is not really something that we have to add to these assumptions that we took and baked into our guidance. It includes stable material prices. It includes stable FX rates.
We've been, however, a little bit cautious as said due to the developments that we see especially geopolitically these days. Other than that, we feel very confident with our guidance and all the three elements of our guidance.
Thank you. We have just received another question. One moment, please. Your next question comes from the line of Andres Gujan from Carnot Capital. Please go ahead.
Yes. Hello. Thanks for taking the question. Can you please describe what the situation is in the discussions with the unions in your factories and what the main discussion points are, and how confident you are to achieve an agreement?
Yes. Thank you for this question. It's about what is the discussion with the unions. First of all, we have, of course, different situations in different sites. In different plants, there's different unions. I start about Maintal, about our plant in Germany, where we have achieved just before Christmas in 2025 a very good agreement with the union, with our works council on this voluntary leave program. I can share also the process of it. It was a very constructive, a very positive process where we all shared basically the same targets and also the timeline until we could conclude was very positive. It was concluded obviously before Christmas, so we could get all our employees, our colleagues, the opportunity to take the time over Christmas, and it's going extremely well. This is basically fully booked, so this is a very positive result.
in some other plants in some other sites, we are also in good discussions on the way ahead with the unions. However, it's very individual and in very different stages.
Okay. Thank you very much.
Thank you.
Thank you. As a final reminder, if you would like to ask a question, please press star one and one on your telephone keypad. That is star one and one. We have a follow-up question. One moment, please. The follow-up question comes from Nikita Papaccio from Deutsche Bank. Please go ahead. Nikita, is your line on mute?
Oh, yeah. Can you hear me now?
Yes.
Yes.
Okay. Perfect. Another question is on your share buyback program. It just concluded, you said, any indications for the cash return going forward in 2026?
Well, as you said, yes, it was just concluded, and we met the target here. We will, and we plan currently to propose to the AGM a capital reduction so that it totals together with the share buyback in the range of up to EUR 260 million. This is what we are currently planning.
Thank you.
Thank you.
Thank you. I will now hand the call back to Birgit Seeger for closing remarks.
Thank you. Thanks for attending our this year's call. Thanks for your interest and your great question, and looking forward to have the discussion in other forums or on our next Q1 call, which I'm looking forward to. Have a great day, and thanks for your interest and for contribution to NewNORMA. Thank you.
Thank you very much.