aNNual rEport 2012
TeChnology ConneCTs
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NORMA Group is an international market and technology leader in advanced engineered joining
technology. We offer about 30,000 high-quality products and solutions to approximately 10,000
customers. We manufacture a wide range of innovative engineered joining technology solutions
in three product categories: Clamp, Connect and Fluid. Headquartered in Maintal, we operate a
worldwide network with 19 manufacturing centres and numerous sales and distribution sites
across Europe, the Americas and Asia-Pacific.
overview of Key Figures 2012
order situation
Order book (31 Dec)
income statement
Revenue
Gross profit 1)
Adjusted EBITA 2)
Adjusted EBITA margin
EBITA
Adjusted profit for the period
Adjusted EPS
Profit for the period
EPS
Pro-forma adjusted EPS
Number of shares (weighted)
Cash flow
Operating cash flow
Operating net cash flow
Cash flow from investing activities
Cash flow from financing activities 3)
Balance sheet
Totals assets
Total equity
Equity ratio
Net debt
Employees
Core workforce
Share data
IPO
Stock exchange
Market segment
ISIN
Security identification number
Ticker symbol
Highest 4)
Lowest 4)
Year-end share price 31 Dec 2012 4)
2012
2011
Change
in %
EUR million
215.4
218.6
– 1.5
EUR million
EUR million
EUR million
%
EUR million
EUR million
EUR
EUR million
EUR
EUR
604.6
344.4
105.4
17.4
105.2
61.8
1.94
56.6
1.78
1.94
581.4
322.6
102.7
17.7
84.7
57.6
1.92
35.7
1.19
1.81
31,862,400
30,002,126
EUR million
EUR million
EUR million
EUR million
96.1
81.0
– 58.1
– 34.1
71.7
66.8
– 33.7
– 0.5
31 dec 12
31 Dec 11
EUR million
EUR million
%
EUR million
692.1
288.3
41.7
199.0
648.6
256.0
39.5
198.5
4.0
6.8
2.7
– 0.3 Pts.
24.1
7.3
1.0
58.4
49.6
7.3
34.0
21.3
72.6
n /a
Change
in %
6.7
12.6
2.2 Pts.
0.2
3,759
3,415
10.1
8 April 2011
Frankfurt Stock Exchange, Xetra
Regulated Market (Prime Standard), MDAX
DE000A1H8BV3
A1H8BV
NOEJ
EUR 23.10
EUR 15.85
EUR 21.00
1) Revenue including changes in inventories of finished goods and work in progress less raw materi-
3) Adjusted in 2011 mainly for financing activities
als and consumables used.
2) In 2011 adjusted by non-recurring / non period-related costs (mainly due to the IPO), restructuring
costs, as well as other group and normalised items as well as depreciation from PPA adjustments.
in connection with the IPO.
4) Xetra closing price.
Date of publication: 27 March 2013
Two Strong Distribution Channels –
Our Competitive Advantage
DISTRIBUTION OF SALES BY SALES CHANNELS
Engineered Joining Technology
Tailored, high-tech products
developed to meet specific
requirements of individual
OEM customers
2/3
1/3
Distribution Services
High-quality standardised
brand products for a variety
of applications
ENGINEERED JOINING TECHNOLOGY (EJT )
The EJT marketing strategy focuses on customised, engineered solutions which meet the specific application
requirements of original equipment manufacturers (OEM). Our EJT products are build on our extensive engi-
neering expertise and proven leadership in the field. We develop innovative, value-adding solutions for a wide
range of application areas and markets. No matter whether it’s a single component, a multi-component unit
or a complex system, all of our products are individually tailored to the exact requirements of our industrial
customers. In our experience, once a customer includes one of our engineered joining solutions in their end
product, it becomes an integral component of the system.
DISTRIBUTION SERVICES (DS)
In DS, we sell a wide range of high-quality, standardised joining technology products for a broad range of
applications through various distribution channels to customers such as distributors, OEM aftermarket cus-
tomers, technical wholesalers and hardware stores. The DS way-to-market benefits not only from our exten-
sive geographic presence and global manufacturing, distribution and sales capacities, but also from its
well-known brands, the customised packaging as well as our marketing expertise and the high availability of
the products at the point of sale. We distribute DS products through our own global distribution network and
representatives in more than 90 countries. We market our joining technology products under our well-known
brand names:
NORMA Group brands
NORMA Group has been defining the direction of
the market with its cleverly engineered innovations
for over 60 years. Our inventory of industrial property
rights in nearly 200 patent families, high standards
for quality and the personal commitment of our
approximately 4,500 employees make us the world’s
leader in the area of engineered joining technology.
We feel at home in many different industries.
WE SUPPORT OUR MORE THAN 10,000 CUSTOMERS IN 100 COUNTRIES AS
A STRATEGIC DEVELOPMENT PARTNER
AND MAINTAIN AN INTEGRATED
DISTRIBUTION SERVICES NETWORK FOR OUR PRODUCT SOLUTIONS.
WE MANUFACTURE AND MARKET OVER 30,000 TOP-QUALITY
JOINING PRODUCTS FOR USE IN VARIOUS FIELDS
IN THE THREE PRODUCT CATEGORIES CLAMPS,
CONNECTING ELEMENTS AND FLUID SYSTEMS.
Annual Review 2012
Q12012
Opening of a representative office in Vietnam
Development of the worm-drive clamp NORMACL AMP
TORRO Tamper Proof
Development of a sound conducting solution for the engine
sounds on behalf of a sports car manufacturer
Awarded the Silver Boeing Performance Excellence Award
for outstanding achievements
NORMACLAMP TORRO Tamper Proof
Q2 2012
Opening of the plant in Talegaon by our COO J. Stephenson
Opening of subsidiaries in the Philippines and Indonesia
Acquisition of Connectors Verbindungstechnik AG, Switzerland
Construction of a new plant in Talegaon, India, near Pune
Expansion of manufacturing in Newbury, England, and
Quingdao, China
Further development of the NORMAFLE X Low Emission Tubes
(LET fuel lines) completed
Further development NORMAQUICK T WIST III quick connec-
tors introduced to the market
Received major order for innovative fluid lines from China
NORMA Group AG Annual Report 2012 Annual Review 2012
Q3 2012
Acquisition of Nordic Metalblok S.r.l., Italy
Opening of a new distribution centre in Moscow and expansion
of sales activities in Russia
A new assembly system for the joining elements for exhaust
pipes put into operation at the plant in Gerbershausen, Germany
Patented NORMACONNECT V PP profile clamp introduced to
the market
Awarded “Best Supplier in Stable Business Relationship” hon-
ours by Würth Industrie Services, Bad Mergentheim
Increase in the free float to 83.3% as part of the sale of shares
by 3i and MABA Cyprus Limited
Q4 2012
Acquisition of 85 % of the shares in Chien Jin Plastic Sdn.
Bhd., Malaysia
Acquisition of a further 60% in Groen Bevestigingsmaterialen
B.V., Netherlands
Opening of the new manufacturing site in Talegaon, India
Assembly system for the joining elements for exhaust pipes in Gerbershausen
Q12013
Acquisition of DavyDick & Co. Pty. Ltd., Australia
Increase in the free float to 100% through the sale of shares by 3i
Inclusion in the MDA X
12
18
34
26
44
NORMA Group AG Annual Report 2012 Contents
13
Contents
Overview of key figures 2012
Two strong distribution channels
NORMA Group – Technology connects
Highlights 2012
15 Letter from the Management Board
22 To our Shareholders
22 NORMA Group on the Stock Market
30 Supervisory Board Report
38 Corporate Governance Report
with Declaration of Conformity
49 Consolidated Management Report
50 Business and operating environment
56 Overview of business development
62
Financial performance, financial
position and cash flows
68 Segment reporting
70 Research and development
73 Employees
76 Production and supply chain management
78 Purchasing and supplier management
79 Sales and marketing
80 Sustainability
82 Risk and opportunity report
91 Forecast
96 Other legally required disclosures
99 Supplementary report
101 Consolidated Financial Statements
102 Consolidated statement of financial position
Consolidated statement of comprehensive
104
income
105 Consolidated statement of cash flows
106 Consolidated statement of changes in equity
108 Segment reporting
110 Notes to the consolidated financial statements
161
Appendix to the notes to the consolidated
financial statements
163 Responsibility statement
164 Auditor’s report
165 Further Information
165 Glossary
169 Overview by quarter 2012
170 Multi-year overview
Financial calendar 2013
Contact
Imprint
14
NORMA Group AG Annual Report 2012
The Management Board of NORMA
Group pays a visit to manufacturing at
company headquarters in Maintal.
Bernd Kleinhens
Business Development
Dr. Othmar Belker
Chief Financial Officer
(CFO)
Werner Deggim
Chief Executive Officer
(CEO)
John Stephenson
Chief Operating Officer
(COO)
Management Board Letter
To Our Shareholders
Consolidated Management Report
Consolidated Financial Statements
Further Information
15
15
Letter from the
Management Board
Dear shareholders, customers and business partners,
Although 2012 was a rather challenging year for us as well, we managed to top our extremely suc-
cessful financial year 2011, the best year in the history of the company to date.
In light of the difficult conditions we faced, the operational figures turned out to be quite satisfactory.
We succeeded in increasing sales by 4.0 % to EUR 604.6 million. EBITDA rose by 3.3 % to EUR 120.8
million and thus exceeded last year’s high level. We increased our adjusted operational results (EBITA)
by 2.7 % to EUR 105.4 million and also managed to maintain our adjusted operational EBITA margin
at a very high level of 17.4 %.
Due to our solid net profit, we will be proposing to you, dear shareholders, at the Annual General Meet-
ing to be held on 22 May 2013 that we pay out a dividend of EUR 0.65 for the fiscal year 2012. This
equates to a dividend yield of 3.1 % based on the year-end share price. By doing so, we would like you
to participate in the economic success of the company, yet make sure we still have the financial re-
sources we will need to pursue further growth.
We will continue to see to it that we maintain a strong balance sheet and remain in a solid financial
position in the future as well. Our goal is to ensure sufficient equity capital and liquidity. During the last
financial year, we managed to lower our net financial debt to EUR 174.2 million despite having to pay
for four acquisitions and the dividend.
The year 2012 clearly showed that our multi-branch strategy is one of the strengths of NORMA Group.
Our broad diversification that spans various types of customers and regional markets enabled us to
compensate for negative trends in specific markets at least to some extent. Furthermore, we took
advantage of the opportunity to improve our market position by making acquisitions in Switzerland,
Italy and Malaysia, but also by increasing our shareholding in the Netherlands.
Last year, we managed to make significant progress in many of the areas we mentioned in our 2011
Annual Report.
For example, we have expanded our production capacities in Great Britain and China and are now
able to implement the same quality standards simultaneously at both sites due to their close coop-
eration. We also inaugurated a new plant in Talegaon, India, that is equipped with state-of-the-art
production technology. The large order for fluid lines we received from a Chinese truck manufacturer
16
16 NORMA Group AG Annual Report 2012
for which production in China started in 2013 represents an important reference for us in the Chinese
market. Our new representative offices in Vietnam, Indonesia and the Philippines allow us to expand
our sales and marketing capacities in existing markets.
Now that we managed to put our Russian assembly plant for fluid products in Togliatti into operation
in 2011, we are also planning to supply customers in Belarus and Kazakhstan from our new distribution
centre located near Moscow in the future.
And not to forget: we also strengthened our home base in Germany by putting a new assembly line
into operation in Gerbershausen.
All in all, our company thus continues to rest on a strong and sustainable foundation. And we plan to
keep it that way. So, let’s look ahead to the future.
Many of the problems caused by the financial and debt crisis have yet to be solved. Therefore, the
economic environment will remain challenging in 2013. We expect our operational business to pick up
slowly before a noticeable upswing takes place, but not before the second half of the year. This will be
supported by the introduction of the EURO 6 standard for trucks, among other things. Therefore, we
are optimistic that 2013 will be yet another good financial year with a slight increase in sales and a good
operational result.
Growth abroad will continue to come from various sources. On the one hand, we will continue to
benefit from the high dynamics of the economies in the Asia-Pacific region, in particular. For this reason,
we intend to continue expanding our sales activities. And, last but not least, we will continue to pursue
our goal of strengthening our presence in the domestic and foreign markets and further diversifying
our product portfolio by engaging in reasonable long-term acquisitions.
We already took the next step toward expanding our product range by acquiring DavyDick in Austra-
lia in January 2013.
Due to the high Asian demand, we will be expanding our production capacities by adding yet another
plant in China. This will also strengthen our cooperation with our local Chinese customers.
We intend to strengthen our presence in Brazil as well by setting up our own production capacities in
the foreseeable future. As a result, we will be present with our own sales, engineering and manufactur-
ing in all global regional segments.
We continue to face the challenges created by increased environmental consciousness, more stringent
emission regulations and rising energy costs, today perhaps more than ever before.
Management Board Letter
To Our Shareholders
Consolidated Management Report
Consolidated Financial Statements
Further Information
17
17
Our success will continue to be based on our customer-specific system solutions from a single source,
increasingly strong presence in the most important economic regions of the world and our leading
market and technology position in the field of engineered joining technology. We intend to continue the
growth of NORMA Group in the years to come based on this.
Here, we are counting on our employees’ expertise and strong commitment. We would like to express
our sincere thanks to all our employees for contributing to the fact that NORMA Group continues to
operate successfully on the market and has been able to continue its growth.
We would also like to thank our customers, suppliers and investors for their confidence in our com-
pany. And of course you, too, our dear shareholders, for your loyalty. We will continue pursuing our
strategy in a resolute manner to justify your confidence in us.
Sincerely,
Werner Deggim
CEO
Dr. Othmar Belker
CFO
Bernd Kleinhens
Business Development
John Stephenson
COO
With nearly 60 years of experience in product
development, we understand our customers’
needs and the technical demands of the avia-
tion industry.
Thomas Kraus, Vice President Business Development EMEA Engineered Joining Technology
Brian Ignaczak, Director Product Development Americas
AvIATION
Our goal is to achieve the highest possible customer
satisfaction. For this reason, we work together
very closely with our end customers and suppliers
in order to be able to develop products that offer
exceptional performance, durability and quality.
GLOBAL GROW Th IN The NuMBeR OF AIRCR AF T (2011 – 2031)
Sources: Aviation industry, NORMA Group
Passenger aircraft (more than 100 seats)
2011
approx. 16,000
2031
approx. 33,000 + 106 %
Freight aircraft (more than 10t)
2031
approx. 3,000 + 88 %
2011
approx. 1,600
NORMAFIX ® Red Grip
22
NORMA Group AG Annual Report 2012
NORMA Group on the Stock Market
Strong performance of the NORMA Group Share in 2012
Free float increased to 100 %
High attendance of first Annual General Meeting
ST OCK MARKeT ChAR ACTeRISeD By FLuCTuATIONS
The German stock market developed positively at the beginning
of 2012. Nevertheless, the financial markets showed a high de-
gree of volatility during the second and third quarters in response
to the political and economic situation in the euro zone, as well
as the USA and Asia. Not only the automotive sector, but also
increasingly disappointing company news from several indus-
trial shares caused a great deal of nervousness on the markets
starting in the third quarter. Nevertheless, the overall level of the
German stock market was considerably higher than in 2011.
Despite all of the negative news on the economy, the DA X rose
by roughly 25 % over the course of 2012. Among other things,
this could be attributed to the fact that corporate earnings had
developed more positively than anticipated based on the earn-
ings forecasts at the beginning of the year.
revise our sales and EBITA forecast slightly for the full year 2012
in early November. In response to the ad hoc announcement
made on 2 November 2012, the share price fell to EUR 17.70 by
9 November 2012 before it finally recovered again. On 31 De-
cember 2012, it stood at EUR 21.00, an increase of 31.3 % over
the previous year. Market capitalisation amounted to EUR 669.1
million, compared to EUR 509.8 million as at 31 December 2011.
The strong rise in price since the beginning of 2012 thus re-
flected the solid fundamental situation that the company is in.
This rise in the share price significantly exceeded that of the
SDA X index. As at 31 December 2012, the SDA X had reached
the 5,249 mark and was thus nearly 19 % higher than the level of
4,421 it hit on 31 December 2011.
The MDA X recorded an increase of 33.9 % over the same period
and reached the 11,914 mark (previous year: 8,897) as at 31 De-
cember 2012.
PO SITIv e PeRFORMANCe OF The NORMA GROuP
ShARe
INCReA Se IN TR ADING vOLuMe
NORMA Group’s share experienced a strong upswing in 2012,
even though the performance of our shares was quite volatile
over the year. The share price started the new year in January at
EUR 16.00 and rose to EUR 20.61 in April. A short-term down-
trend that did not reflect the company’s sound fundamentals
triggered a further drop in share prices to EUR 17.20 in June. In
August, the share gained momentum again. At EUR 21.32, it was
significantly higher on 31 October 2012 than the issue price of
EUR 21.00 in April 2011. The economic conditions forced us to
During the 12-month period January to December 2012, the av-
erage (Xetra) trading volume of the NORMA Group share was
54,432 shares per day (previous year: 46,393 shares). The total
trading volume of 72,905 per day was significantly higher than
that of the previous year, 60,557 shares, (excluding the first ten
days of trading). This means we ranked 9th in the SDA X in trad-
ing volume in December (projected over a 12-month period).
23
ShA Re PRICe PeRFORMANCe INDe XeD TO 100 IN COMPARISON TO The SDA X AND MDA X
in %
NORMA Group AG
SDAX
MDAX
40
30
20
10
0
-10
Jan
Feb
March
April
May
June
July
Aug
Sep
Oct
Nov
Dec
ChA NGeS IN ShARehOLDeR STRuCTuRe Due TO
hIGheR FRee FLOAT
In December, we came in 4th place in the SDA X category “free
float market capitalisation.”
The main shareholder 3i Group plc and funds managed by 3i still
held 11.3 million shares (35.5 %) as at 31 December 2011. Ac-
cording to the voting right notifications we received, the share-
holding dropped to 5.3 million shares (16.7 %) over the course of
2012. At the beginning of January 2013, 3i Group sold all of its
remaining shares in NORMA Group, thus share ownership has
dropped to 0 %.
MABA CYPRUS Limited, a major shareholder at the time of the
IPO, also reduced its share ownership in 2012 based on the vot-
ing right notifications made available to us. As at 31 December
2011, it still held 2.6 million shares (8.3 %). According to the voting
right notifications we received, 0.8 million shares (2.5 %) were
held as at 1 October 2012.
The free float increased to 100 % as a result.
According to further voting right notifications, NORMA Group
shares that can be attributed to free float were held by Thread-
needle (10.82 %), Allianz Global Investors Europe GmbH (5.75 %),
Mondrian Investment Partners Ltd. (5.34 %), DWS Investment
GmbH (4.44 %), ODDO & Cie. (3.39 %) and T. Rowe Price
(3.025 %).
The Management and Supervisory Boards of NORMA Group AG
hold roughly 3 % of the shares in total.
The regional distribution to institutional shareholders in free float
has changed due to the international placement of the shares by
3i at the end of 2012 and the beginning of 2013. 25 % (previ-
ously 15 %) of our shares were held in the USA, 27 % (previously
40 %) in the UK and 27 % (previously 23 %) in Germany.
SuS TAINeD INveSTOR ReL ATIONS ACTIvITIeS
We continued to pursue our goal of increasing awareness of the
NORMA Group all over the world and reinforcing and expanding
perception of the NORMA Group share as an attractive growth
stock. We engage in regular, transparent and reliable communi-
cation with analysts and institutional and private investors to sup-
port the strategic direction of NORMA Group that is based on
sustainable growth and high margins. In doing so, we seek to
improve investor confidence in the NORMA Group share and to
ensure that the share price is valued realistically and fairly.
We had numerous meetings with institutional investors, financial
analysts and private investors in 2012 and also attended capital
market conferences and roadshows in the main financial centres
of Europe and the USA. On many occasions, the members of
our Management Board attended in person to answer questions
from capital market participants.
NORMA Group on the Stock MarketManagement Board LetterConsolidated Management ReportConsolidated Financial StatementsFurther InformationTo Our Shareholders 24
ShARehOLD eR STRuCTuR e
in % as at 15 January 2013
FRee FLOAT SPLIT B y R eGION
in % as at 15 January 2013
United Kingdom 27
25 USA
100
Free float
Germany 27
21 Rest of the world
Among others, we presented at the following conferences:
ReSeARCh CO veR AGe AT h IGheR T hAN A veR AGe
Commerzbank German Investment Seminar, New York
Deutsche Bank Pan European Conference, London
Deutsche Bank German, Swiss & Austrian Conference,
Frankfurt/Main
Bank of America Merrill Lynch Pan European Small & Midcap
Conference, London
Commerzbank Sector Conference, Frankfurt/Main
UBS Best of Germany Conference, New York
Berenberg /Goldman Sachs Corporate Conference, Munich
Baader Investment Conference, Munich
Berenberg European Conference, London
Interested parties can register to be placed on our investor dis-
tribution list in the investor relations section of our website www.
normagroup.com in order to be informed promptly of the devel-
opments in the Group by e-mail, or to request our general pub-
lications. We also publish comprehensive information on the
NORMA Group share on our website. In addition to financial
reports and presentations that can be downloaded, you’ll find all
of the important financial market dates and contact details. The
conference calls on our quarterly and annual reports are avail-
able in audio format.
LeveLS
In the meantime, 16 banks and research companies now follow
our share. This number, which is above average for an SDA X
share, will continue to offer us easier access to new investors in
the future. As at 31 December 2012, there were nine “buy,” six
“hold,” and one “sell” recommendations. The average share price
target at that point was EUR 22.47 following EUR 18.35 as at
31 December 2011.
ReSe ARCh CO veR AGe OF NORMA GROuP S hAReS
Baader Bank
Bankhaus Metzler
Peter Rothenaicher
Jürgen Pieper
Bank of America Merrill Lynch
Claus Roller
Berenberg Bank
Benjamin Gläser
Close Brothers Seydler
Daniel Kukalj
Commerzbank
Deutsche Bank
DZ Bank
Exane BNP Paribas
Goldman Sachs
HSBC
LFG Kronos
Macquarie
MainFirst
Warburg Research
Westend Brokers
Ingo-Martin Schachel
Tim Rokossa
Jasko Terzic
Gerhard Orgonas
Will Wyman
Jörg-Andre Finke
Thomas Aney
Christian Breitsprecher
Tobias Fahrenholz
Christian Cohrs
Eerik Budarz
NORMA Group AG Annual Report 2012 25
ANALyST CO veR AGe
as at 31 December 2012
Sell 1
Hold 6
9 Buy / outperform
ANNuAL Ge NeR AL Mee TING 2012 WIT h
NORMA GROuP Sh ARe INCL uDeD IN MDA X
hIGh AT Te NDANCe
On 18 March 2013, the NORMA Group share was included in the
German share index MDA X (Midcap index) for medium-sized
companies.
NORMA Group AG held its first annual general shareholders’
meeting in Frankfurt/Main on 23 May 2012. 25.1 million of the
31.8 million voting shares or 78.68 % were represented. This
shows how interested our shareholders are in the affairs of the
Group. The shareholders in attendance voted to distribute a
dividend of 0.60 EUR per share. The pay-out ratio amounted to
33.2 % of the adjusted Group profit generated in 2011 (EUR 57.6
million). All other agenda items were approved by a majority of
over 99 %. The shareholders’ representatives from the German
Society for the Protection of Securities Holders and the German
Association for the Protection of Capital Investors who attended
unanimously praised the positive operating performance and the
development of the share price.
NORMA GROu P ANNuAL RePORT
The NORMA GROUP AG’s Annual Report immediately came in
16th place out of 50 in this year’s manager magazin ranking “The
Best Annual Report” in the SDA X segment. This means we
ranked in the top third overall. A print version can be ordered
from the Investor Relations department at any time.
NORMA Group on the Stock MarketManagement Board LetterConsolidated Management ReportConsolidated Financial StatementsFurther InformationTo Our Shareholders NORMA Group AG Annual Report 2012 We develop joining elements to realize higher
engine efficiency in close cooperation with
leading automotive and truck manufacturers.
Our products are indispensable in terms of
their performance, quality and reliability.
Stephan Mann, Director Product Development EMEA
Tan Hang, Research Engineer
AUTOMOTIVE
We leverage the automobile industry’s innovation
dynamics and transfer our profound know-how to
other industries. In doing so, we strengthen our
position as one of the world’s leading companies
in the area of engineered joining technology.
REDUCTION IN GLOBAL CO 2 EMISSIONS *
Sources: DieselNet, NORMA Group
EURO 3
EURO 4
EURO 5
EURO 6
EPA ’00
EPA ’04
EPA ’07
EPA ’10
EPA ’15
JPN ’98
JPN ’02
JPN ’05
JPN ’09
JPN ’14
J. ’19
EURO 1
EURO 2
EURO 3
EURO 5
EURO 6
EURO 1
EURO 2
EURO 3
EURO 4
EURO 5
EURO 1
EURO 2
EURO 3
EURO 4
EURO 5
EURO 2
EURO 3
EURO 4
EURO 5
EURO 6
Europe
NAFTA
Japan
Brazil
Russia
India
China
2000
2004
2006
2008
2010
2012
2012
2014
2016
2018 2019
* Planned emission regulations for passenger vehicles
NORMAQuICK ® Twist III
30
NORMA Group AG
Supervisory Board Report 2012
The Supervisory Board of NORMA Group AG has monitored and
advised on the activities of the Management Board in accor-
dance with the rules of the German Stock Corporation Act, the
German Corporate Governance Code and NORMA Group AG’s
Articles of Association.
Board discussed NORMA Group’s long-term strategic orienta-
tion and current M&A projects. In addition to the regularly recur-
ring topics, the Supervisory Board also dealt with the following
issues in financial year 2012:
The Management Board provides the Supervisory Board with
regular written reports on a monthly basis. These reports cover
the state of the economy, the business development of NORMA
Group AG and the Group as well as the forecast for the current
financial year, and give a detailed account of incoming orders,
the order book and the development of both sales and earnings
compared to the previous year and current targets.
TeL eCONFeR eNCe heLD ON 10 FeBRu ARy 2012
ReGARDING The ACQ uISITION OF CONN eCTORS
veRBINDuNGSTeChNIK AG
The Supervisory Board and Management Board discussed the
acquisition of Connectors Verbindungstechnik AG during a tele-
conference. The Supervisory Board approved the acquisition.
The Supervisory Board convened at four scheduled meetings in
financial year 2012. In addition, the board held a teleconference
and one other meeting on short notice.
SuPeR vISORy BOARD Mee TING heLD ON 27 MARCh
2012 IN M AINTAL
The Management Board provided extensive information about
the current course of business at the Supervisory Board’s regu-
lar meetings. In particular, all key figures for the Group and the
Company were discussed at these meetings and compared to
the previous year’s figures and current targets. At every meeting,
the Management Board provided the Supervisory Board with
information concerning the order situation as well as their as-
sessment of the economic outlook, market developments and
NORMA Group’s competitors. At each regular meeting of the
Supervisory Board, the Management Board also presents a risk
report in which the probability of occurrence and potential effects
of all relevant risks are assessed. This regular risk reporting pro-
vides the Supervisory Board with a clear picture of which pos-
sible risks could have a negative impact on the Company’s cash
flows and financial performance. The Supervisory Board worked
together with the Management Board to develop measures to
avoid the risk that was considered highly relevant and likely to
occur. In addition, the Supervisory Board and Management
The 2011 annual financial statements and management report of
NORMA Group AG as well as the corresponding consolidated
financial statements and group management report presented by
the Management Board were discussed in detail by the Supervi-
sory Board with the auditors in attendance from the engaged
auditing firm, PriceWaterhouse Coopers AG. This discussion fo-
cused, among other things, on the internal control system and
risk identification systems both in the legal units, including the
NORMA Group AG, as well as in the regions and the Group as a
whole. The members of the Audit Committee reported on their
in-depth discussion with the auditors on 26 March 2012 regarding
the annual financial statements.
The consolidated financial statements of NORMA Group AG were
prepared in accordance with section 315a of the German Com-
mercial Code (Handelsgesetzbuch, HGB) on the basis of Interna-
tional Financial Reporting Standards (IFRS). The auditor issued
an unqualified opinion for the 2011 annual financial statements
NORMA Group AG Annual Report 2012 Supervisory Board Report
31
Dr. Stefan Wolf
Chairman of the Supervisory Board
and management report of NORMA Group AG as well as for the
consolidated financial statements and group management report.
The documents pertaining to the financial statements, the Man-
agement Board’s proposal for the appropriation of net profit and
both auditor’s reports were submitted to the Supervisory Board.
The Supervisory Board accepted the auditor’s findings and had
no objections.
The Supervisory Board then approved and adopted the annual
financial statements of NORMA Group AG as well as the 2011
consolidated financial statements along with the associated man-
agement reports. The Supervisory Board also approved the Man-
agement Board’s recommendation on the utilisation of unappro-
priated net profits.
The Supervisory Board dealt with NORMA Group’s compliance
programme, for which current drafts of the code of conduct, the
anti-corruption policy and anti-corruption compliance procedures
and the conflict of interest review policy were presented, among
other things.
The Supervisory Board decided on a long-term lease for the
planned expansion of production in Newbury (UK) as well as a
simplification of the Management Board’s by-laws such that com-
panies in which NORMA Group AG holds more than 50% interest
are treated as full-fledged subsidiaries in the provisions of the
by-laws.
The Management Board presented a project for the establish-
ment of a long-term strategic orientation, which was approved by
the Supervisory Board.
The Supervisory Board’s examination of the efficiency of its ac-
tivities specified in the German Corporate Governance Code was
carried out in the Supervisory Board meeting held on 27 March
2012 after the Supervisory Board had worked together for one
year. In accordance with the German Corporate Governance
Code, the examination of efficiency will take place every year in
March when the Supervisory Board meets to adopt the financial
statements.
SuPeRvISORy BOARD M eeTING he LD ON 23 M Ay 2012
IN F R ANKFuRT AM M AIN
The Supervisory Board meeting began immediately following
the first annual shareholders’ meeting of NORMA Group AG with
a review of the successfully concluded annual shareholders’
meeting.
The detailed discussion of current business developments in-
cluded the supply shortage of specific plastics and the develop-
ment of personnel expenses in the Group as well as the status
of expansion in the APAC region.
The Management Board reported on the completion of the ac-
quisition of Connectors Verbindungstechnik AG and the status
of post-merger integration measures under the agenda item
‘strategic projects and acquisitions’. The Management Board
also presented the Supervisory Board with other possible M&A
projects. The discussion centred in particular on evaluation pa-
rameters for determining an appropriate purchase price as well
as on possible measures to minimise specific acquisition risks.
The Supervisory Board authorised the Management Board to
implement these projects on the basis of the upper limit set by
the Supervisory Board.
The responsible partner of a reputable international consulting
firm presented the Supervisory Board with a project outline to
draw up a long-term strategic orientation for NORMA Group that
included, in particular, the strategic definition and assessment of
NORMA Group’s medium-term growth markets. The Supervi-
sory Board approved the project after discussing it at greater
length.
Management Board LetterConsolidated Management ReportConsolidated Financial StatementsFurther InformationTo Our Shareholders 32
SuPeR vISORy BOARD Mee TING heLD ON 14 SePT eM-
BeR 2012 IN K RONBeRG IM T AuNuS.
The exercise of preemptive rights for the site in St. Clair, USA,
was approved by the Supervisory Board.
The Management Board explained the reasons for the planned
transformation of NORMA Group AG in an SE (Societas Euro-
paea). The Supervisory Board approved this project based on
the Group’s European and global orientation. In addition, the
Management Board presented a simplification of the Group’s
organisational structure with a legal subgroup ‘Americas’. The
Supervisory Board approved this recommendation.
The Management Board and the partner of a reputable interna-
tional consulting firm presented the results of the long-term stra-
tegic orientation project for NORMA Group to the Supervisory
Board. Potential acquisitions were discussed in addition to the
definition and assessment of medium-term growth markets. Fur-
ther strategic steps were reviewed with the Supervisory Board
following a lively discussion.
Furthermore, the Management Board reported on the positive
development of the APAC region. The Supervisory Board ap-
proved the construction of a second plant in South China to meet
production capacities required in subsequent years after a de-
tailed discussion. The Supervisory Board also approved the ac-
quisition of Chien Jin Plastic Sdn. Bhd., Malaysia, which will
strengthen the water supply business in Asia. The detailed plan
presented on the construction of a plant in Brazil was approved.
The Management Board presented a euro crisis scenario that
analyses the potential effects of a worsening of the euro crisis on
the Group. No risks to the company as a going concern would
be expected, even if the euro zone were to break up.
SuPeR vISORy BOARD Mee TING heLD ON 20 DeCe M-
BeR 2012 IN F R ANKFuRT AM M AIN
The Management Board presented the 2012 financial strategy
with which the terms of the existing syndicate agreement are to
be augmented. Additional debt or equity capital measures are to
be presented to the Supervisory Board if necessary.
The Supervisory Board convened without the members of the
Management Board and discussed the status of the search for
a new candidate to fill the vacant seat on the Supervisory Board.
The Supervisory Board also met with qualified female candidates
during this meeting.
The renewal of the leases at the sites in Michigan and Melbourne
was approved by the Supervisory Board.
Following the meeting, Dr. von Haacke resigned from his position
as a member of the Supervisory Board and thus also as Deputy
Chairman of the Supervisory Board and member of the General
and Nomination Committee.
SuPeR vISORy BOARD Mee TING heLD ON 22 NOveM-
BeR 2012 IN M AINTAL
The Management Board presented the 2013 plan to the Super-
visory Board along with the medium-term plan for 2014-2017.
The anticipated market developments, NORMA Group’s busi-
ness development and significant cost items were discussed in
detail. Due to the weak European economy, especially in the
fourth quarter of 2012, the growth targets were adjusted to the
expected market trend in the budget process.
The 2013 budget and the medium-term plan for 2014-2017 were
approved unanimously by the Supervisory Board.
The Management Board informed the Supervisory Board about
the current status of various M&A projects. The Supervisory Board
approved the increase of an equity investment in the Netherlands
as well as the acquisition of the operating activities of DavyDick &
Co. Pty. Limited – a trading firm in Australia – following an in-depth
discussion of the acquisition terms and conditions.
All members of the Supervisory Board attended the meetings
held on 27 March, 23 May and 14 September 2012 in person
with Dr. Stefan Wolf, Lars Berg, Dr. Ulf von Haacke, Dr. Günter
Hauptmann, Knut Michelberger and Dr. Christoph Schug. Dr.
Stefan Wolf, Lars Berg, Dr. Günter Hauptmann, Knut Michel-
berger and Dr. Christoph Schug attended the Supervisory Board
meeting held on 22 November 2012 in person. Dr. Stefan Wolf,
Lars Berg, Knut Michelberger and Dr. Christoph Schug attended
the Supervisory Board meeting held on 20 December 2012. Dr.
Günter Hauptmann was unable to attend.
The General and Nomination Committee convened once in 2012.
The Supervisory Board approved the preparation of contract
documents extending the term of service of a member of the
Management Board as the president of the APAC region on
23 May 2012.
There were no conflicts of interest between the members of the
Supervisory Board and the Company in the 2012 financial year.
In addition to the regular monthly reporting and the Supervisory
Board meetings, the Chairman of the Supervisory Board re-
mained in constant contact with the Chairman of the Manage-
ment Board by telephone and e-mail in the 2012 financial year.
This communication dealt with assessments of the Company’s
economic situation, important transactions and events and the
progress of ongoing projects. The Chairman of the Supervisory
NORMA Group AG Annual Report 2012 Supervisory Board Report
33
Board informed the other members of the Supervisory Board of
the important and relevant issues discussed by the Chairman of
the Supervisory Board and the Chairman of the Management
Board by e-mail and by phone.
The Management Board promptly alerted the Supervisory Board
of all transactions requiring its approval in the 2012 financial year.
The Supervisory Board made all of its decisions on the basis of
detailed and well-founded documents.
As the Chairman of the Audit Committee, Dr. Schug regularly
reported on the committee’s meetings in several Supervisory
Board meetings.
The Audit Committee of NORMA Group AG convened three
times in the financial year just ended. In addition, it held one
detailed telephone conference with the auditors concerning the
annual audit. Lars Berg, Knut Michelberger and Dr. Christoph
Schug as the Chairman participated in all meetings of the Audit
Committee. Knut Michelberger was unable to attend the tele-
phone conference. Dr. Othmar Belker from the Management
Board attended the meetings, as did officers of the second man-
agement level to advise on technical issues in their areas of re-
sponsibility. The auditors from PricewaterhouseCoopers AG, Dr.
Ulrich Störk and Stefan Hartwig, also attended two meetings.
The Audit Committee accompanied the audit of the annual finan-
cial statements in numerous meetings and discussed core con-
trols and areas of audit emphasis as well as the preliminary and
final results of the audit with the auditors. In addition to an in-
depth discussion of the process and results of the audit of the
consolidated financial statements as well as the Company’s
separate financial statements and individual accounting issues,
the Audit Committee dealt regularly with the risk reporting (in-
cluding specific individual risks in the area of procurement and
pension obligations), the compliance system and individual com-
pliance topics, the internal auditing department, the Treasury
department and financing, focusing on amending the existing
syndicate agreement and the integration of newly acquired com-
panies based on the example of Nordic Metalblok, Italy.
In addition to the Audit Committee meetings, the Chairman of
the Audit Committee was in regular personal and telephone
contact with the CFO as well as held a separate meeting with the
auditors and the CFO to discuss possible areas of emphasis for
the audit of the 2012 annual financial statements.
The 2012 annual financial statements for NORMA Group AG pre-
sented by the Management Board were audited by the auditing
firm PricewaterhouseCoopers AG along with the management
report and the corresponding consolidated financial statements
and group management report. The auditors were engaged on
1 October 2012.
The consolidated financial statements of NORMA Group AG
were prepared in accordance with section 315a of the German
Commercial Code (Handelsgesetzbuch, HGB) on the basis of
International Financial Reporting Standards (IFRS). The auditor
issued an unqualified opinion for the 2012 annual financial state-
ments and management report of NORMA Group AG as well as
for the consolidated financial statements and group manage-
ment report. The documents pertaining to the financial state-
ments, the Management Board’s proposal for the appropriation
of net profit and both auditor’s reports were submitted to the
Supervisory Board. The Audit Committee and the Supervisory
Board in its entirety thoroughly examined the reports and dis-
cussed and scrutinised them in detail together with the auditor.
The Supervisory Board accepted the auditor’s findings and had
no objections.
The Supervisory Board approved the annual financial statements
of NORMA Group AG and the 2012 consolidated financial state-
ments together with their respective management reports at its
meeting on 26 March 2013. NORMA Group AG’s annual financial
statements are thereby adopted in accordance with section 172
of the German Stock Corporation Act (Aktiengesetz, AktG). The
Supervisory Board approved the Management Board’s recom-
mendation on the utilisation of unappropriated net profits at the
same meeting.
The Supervisory Board dealt with the declaration of conformity
with the Corporate Governance Code and issued the version on
9 March 2012. In March 2013 the Supervisory Board issued the
current version on 4 March 2013. NORMA Group AG’s declara-
tion of conformity is available on the Company’s website at www.
normagroup.de.
The Supervisory Board would like to thank the Management
Board and all employees of NORMA Group AG as well as the
Group companies all around the world for their successful efforts
in the 2012 financial year. The solid performance would not have
been possible without the commitment of all employees. The
Supervisory Board sees this as motivation for all of the Group’s
employees to remain committed to the course in 2013 and con-
tribute to NORMA Group’s continued profitable growth.
Dettingen/Erms, 26 March 2013
Dr. Stefan Wolf
Chairman of the Supervisory Board
Management Board LetterConsolidated Management ReportConsolidated Financial StatementsFurther InformationTo Our Shareholders NORMA Group AG Annual Report 2012 By acquiring a company that specializes in
joining technology for medical technology
applications, NORMA Group has gained
access to customers in the pharmaceutical
and biotechnology industries.
Vito Di Leo, Technical Director, Connectors Verbindungstechnik AG
Fabio Stiz, Managing Director, Connectors Verbindungstechnik AG
BIOTeChNOLOGy
We will further expand our product portfolio and
global market positioning in the area of connection
technology through the expertise of Connectors.
GLOBAL e XPeNDITuRe FOR PhARMACeuTICAL PRODuCTS (2005 – 2015)
Sources: IMS Institute for Healthcare Informatics, NORMA Group
2015
1,080 billion USD +79 %
2010
856 billion USD
2005
605 billion USD
Connectors Connlock
38
Corporate Governance Report
with Declaration of Conformity
Corporate governance ensures the long-term development of
NORMA Group and the permanent growth of our Group. We are
aware of our economic and social responsibility to our share-
holders, employees, business partners and our social environ-
ment. Therefore, our corporate management is based on sus-
tainability and transparency.
The following is the Management Board’s declaration of confor-
mity in accordance with Section 289a of the German Commer-
cial Code (Handelsgesetzbuch, HGB) and section 3.10 of the
German Corporate Governance Code. The declaration is part of
the group management report.
1. DeCL AR ATION OF CONFORMIT y WIT h T he GeRMAN
CORPOR ATe GOveRNANCe C ODe
The Supervisory Board and Management Board thoroughly ex-
amined which of the German Corporate Governance Code’s
recommendations and suggestions NORMA Group AG should
follow and explains deviations from the recommendations and
the reasons for deviating from the Code. The current declaration
dated 4 March 2013 as well as the first declaration dated 4 Au-
gust 2011 and the second declaration dated 9 March 2012 are
published on NORMA Group’s website.
The declaration dated 4 March 2013 is presented below:
NORMA Group AG corresponds in financial year 2013 with the
recommendations of the Government Commission of the German
Corporate Governance Code (the “Code”) in the version dated 15
May 2012 published by the Federal Ministry of Justice in the of-
ficial section of the electronic Federal Gazette with the following
exceptions and will continue to correspond in the future:
1. The invitation to the Annual General Meeting is not sent by
electronic means (section 2.3.2 of the Code)
For organisational reasons, NORMA Group does not cur-
rently comply with the German Corporate Governance Code’s
recommendation to also make invitations to the Annual Gen-
eral Meeting available by electronic means. Because the com-
pany does not have e-mail addresses for the majority of its
shareholders, sending additional invitations by electronic
means would entail an unreasonable amount of time and effort
on the part of the Company without providing our sharehold-
ers with any real benefit. The invitation to the Annual General
Meeting was and is also available for download on the Com-
pany’s website.
2. Explicit goals for the composition of the Supervisory Board
are not established and accordingly not published in the
Corporate Governance Report. There is no age limit for Su-
pervisory Board members (section 5.4.1 of the Code)
All members of the Supervisory Board will continue to comply
with all pertinent legislation related to Supervisory Board nom-
inations for new Supervisory Board members and take the
professional and personal qualifications of candidates into ac-
count, regardless of their gender. Special attention will be paid
to the number of independent Supervisory Board members,
potential conflicts of interest, the Company’s international ac-
tivities and the diversity of the Supervisory Board. In light of
this, the Company does not see the need to establish spe-
cific goals or introduce an age limit.
2. ReL evANT INFORMATION ABOuT CORPOR AT e
GOveRNANCe PR ACTICe S
Our goal is to promote a culture of responsibility, honesty and
mutual respect among management and our employees. We ex-
pect our managers and employees to always meet high standards
of integrity.
NORMA Group AG Annual Report 2012
Corporate Governance Report
39
39
In addition to training and direct communications, our compliance
documents are our most important means of making our employ-
ees aware of their ethical and legal obligations. The central compli-
ance documents, the Code of Conduct and the two fundamental
guidelines “Conflicts of Interest” and “Anti-corruption” are binding
for all employees of NORMA Group. The guidelines can be found
on the NORMA Group website at
http://www.normagroup.com/kunden/norma/ttw.nsf/id/EN_
Code_of_Conduct?OpenDocument&ccm=010 and are also avail-
able on the intranet for management and employees. They are
periodically updated and adjusted to reflect changes in legal re-
quirements and current topics. We are aware that our compliance
documents and guidelines only provide general instructions and
cannot cover every individual case. In addition, we expect every
member of the management and our employees to demonstrate
proper ethical and legal behaviour in every situation.
The Supervisory Board monitors the Management Board’s adher-
ence to compliance rules. The Compliance Officer of NORMA
Group AG performs this function for NORMA Group AG’s employ-
ees. In the other Group companies, the Chief Compliance Officer
of NORMA Group Holding GmbH is responsible for the obser-
vance and administration of the above-mentioned Code for all
employees of NORMA Group Holding GmbH and its associated
companies. Furthermore, every operational Group company has
its own Compliance Officer who reports to one of the three re-
gional Compliance Officers for the regions EMEA, Americas and
APAC, who in turn reports to the Compliance Officer of NORMA
Group Holding GmbH. Among other things, the local Compliance
Officers organise on-site compliance training measures for the
employees. They are also responsible for ensuring that potential
violations of compliance rules are reported, investigated, sanc-
tioned, rectified and prevented in the future. We encourage our
employees to report violations of regulations and internal guide-
lines – skipping the chain of command if necessary – and to rec-
ommend measures for improvement.
3. MANAGeMeNT B OARD AND Su PeRvISORy
BOARD F uNCTIONS
Like every German stock corporation, NORMA Group AG has a
dual management system in which the management, i.e. the
Management Board, is monitored by a separate Supervisory
Board. The Management Board manages the Company under
its own responsibility and determines the strategy, while the Su-
pervisory Board appoints, advises and monitors the Manage-
ment Board.
The Management Board provides the Supervisory Board with
regular updates about business policies and the position of the
Company – in particular the development of sales and transactions
that could have a significant impact on profitability or liquidity.
The Chairman of the Supervisory Board and the Chairman of the
Management Board coordinate the collaboration of the two
boards. They also stay in regular contact between Supervisory
Board meetings and discuss current corporate governance is-
sues. All members of the Management Board participate in Su-
pervisory Board meetings unless they are closed to the Manage-
ment Board. The members of the Management Board report in
these meetings on the current business development and pro-
vide an outlook on the expected further development of NORMA
Group on the basis of written documents provided in advance
to the Supervisory Board members. In addition to monthly and
quarterly figures, risk analysis and measures to minimise identi-
fied risks are discussed at all Supervisory Board meetings and
each committee chairman reports on the preceding meetings.
In addition, the Management Board and Supervisory Board dis-
cussed ongoing M&A projects and NORMA Group’s long-term
acquisition strategy throughout 2012. The Management Board
submits monthly reports to the Supervisory Board on the most
important key figures of the Group and its current business de-
velopment, in particular with respect to the published statements
on the expected development of the Company.
Management Board LetterConsolidated Management ReportConsolidated Financial StatementsFurther InformationTo Our Shareholders 40
In accordance with the by-laws of the Management Board, the
Supervisory Board must approve certain important transactions.
This applies not only for measures at NORMA Group AG, but
also for measures at its subsidiaries. In order to ensure that the
Management Board is promptly informed of corresponding mat-
ters involving subsidiaries so that it can request the approval of
the Supervisory Board, a hierarchical system of approval require-
ments organised by functional areas, levels of responsibility and
countries applies worldwide at NORMA Group.
4. MANAGeMeNT BOARD
The Management Board of NORMA Group AG has four mem-
bers. Werner Deggim is Chairman of the Management Board
(Chief Executive Officer), Dr. Othmar Belker is Chief Financial
Officer, Bernd Kleinhens is Managing Director Business Develop-
ment and John Stephenson is Chief Operating Officer.
The allocation of responsibilities and internal order of the Man-
agement Board are based on relevant legislation, NORMA Group
AG’s Articles of Association and the Management Board by-laws
enacted by the Supervisory Board as well as the internal guide-
lines, including compliance documents. As a general rule, Man-
agement Board resolutions are passed by simple majority. The
Chairman has the deciding vote if the vote is tied. However, the
members of the Management Board are obliged to make an ef-
fort to reach unanimous decisions. If a member of the Manage-
ment Board cannot participate in a vote, his vote will be obtained
at a later date.
The entire Management Board is responsible in matters of par-
ticular importance. In accordance with the Management Board
by-laws, these include producing the Management Board re-
ports for the purpose of informing the Supervisory Board and the
quarterly and half-yearly reports, fundamental organisational
measures, including the acquisition or disposal of significant
parts of companies and strategic and business planning issues,
measures related to the implementation and supervision of a
monitoring system pursuant to section 91(2) of the German Stock
Corporation Act (Aktiengesetz, AktG), issuing the declaration of
conformity pursuant to section 161(1) AktG, preparing the con-
solidated and annual financial statements and similar reports,
convening the Annual General Meeting and inquiries and recom-
mendations by the Management Board that are to be handled
and resolved by the Annual General Meeting. In addition, every
Management Board member can request that a specific issue
be dealt with by the entire Management Board.
Local presidents in the three regions EMEA, Americas and APAC
are responsible for carrying out business on a daily basis. The
Chief Operating Officer of NORMA Group AG, John Stephenson,
performs this function for the APAC region. He currently works
on a regular basis in Singapore and is, in particular, locally in
charge of the expansion of NORMA Group in the growth region
APAC. The entire Management Board of NORMA Group AG
meets at least once a year with the presidents and their manag-
ers at both local headquarters – Singapore for the APAC region
and Auburn Hills (Michigan) for the Americas. In addition, indi-
vidual members of the Management Board meet regularly with
the local teams. This way, we ensure that our corporate gover-
nance rules are observed in all regions and subsidiaries.
5. SuPeR vISORy BOARD
The Supervisory Board has six members. In 2012, its members
comprised the Chairman of the Supervisory Board Dr. Stefan
Wolf, Dr. Ulf von Haacke, Dr. Christoph Schug, Günter Haupt-
mann, Knut J. Michelberger and Lars M. Berg. Dr. Ulf von Haacke
resigned from his position as a member of the Supervisory
Board, Deputy Chairman of the Supervisory Board and member
of the General and Nomination Committee at the end of the
Supervisory Board meeting held on 14 September 2012 effective
NORMA Group AG Annual Report 2012 Corporate Governance Bericht
41
immediately with the approval of the Chairman of the Supervi-
sory Board. On 8 February 2013, the Supervisory Board elected
Lars Berg as Deputy Chairman of the Supervisory Board. On 18
February 2013, Mrs Erika Schulte was appointed a member of
the Supervisory Board by court order at the recommendation of
the Management Board in liaison with the Supervisory Board
until the next Annual General Meeting on 22 May 2013. The
other five members are appointed until the 2016 Annual General
Meeting. The Supervisory Board can pass resolutions by simple
majority. The Chairman has the deciding vote if a vote is tied. In
addition to the Supervisory Board’s four scheduled meetings, a
teleconference and one other meeting took place in financial year
2012 in which candidates for the Supervisory Board position
vacated by Dr. von Haacke presented themselves.
The Chairman of the Supervisory Board represents the Super-
visory Board externally. He organises the work of the Supervi-
sory Board and chairs its meetings. The Supervisory Board
formed two committees: the Audit Committee and the General
and Nomination Committee. Both committees have three mem-
bers.
The Audit Committee deals in particular with monitoring the ac-
counting process and the effectiveness of the internal control
and risk management systems as well as the audit of the annual
financial statements, in particular the independence of the audi-
tor, the additional services rendered by the auditor, engaging the
auditor, determining areas of audit emphasis and agreeing to the
auditor’s fees. The Audit Committee accompanies the collabora-
tion between NORMA Group AG and the auditors and ensures
that opportunities for improvement identified during the audit are
promptly implemented. It is responsible for preparing the ac-
counting documents and adopting the Supervisory Board’s
resolution on the consolidated and separate financial statements.
Moreover, it is responsible for compliance and reviews the com-
pliance with statutory provisions and the internal guidelines.
The Chairman of the Audit Committee is Dr. Christoph Schug
and the other members are Lars M. Berg and Knut J. Michel-
berger. The Chairman of the Audit Committee has special knowl-
edge and experience in the application of accounting policies
and internal control processes due, in particular, to his many
years of work as Chief Financial Officer, managing director and
consultant. He is an independent financial expert within the
meaning of section 100(5) AktG.
As a rule, the Audit Committee convenes immediately prior to
Supervisory Board meetings as well as whenever necessary. It
convened four times in financial year 2012, dealing in particular
with the risk reporting and internal control system. Other topics
included the treasury system and financing contracts as well as
the integration of newly acquired companies. In addition, the
Audit Committee was presented with the current status of the
compliance system. The responsible employees presented the
current status of each item on the agenda and provided an out-
look on pending issues.
The General and Nomination Committee prepares personnel-
related decisions and monitors the Management Board’s compli-
ance with its by-laws. This committee has the following specific
responsibilities: preparing Supervisory Board resolutions regard-
ing the completion, change and termination of employment con-
tracts with members of the Management Board in accordance
with the remuneration system approved by the Supervisory
Board, preparing Supervisory Board resolutions regarding legal
applications to reduce the remuneration of a Management Board
member pursuant to section 87(2) AktG, preparing Supervisory
Board resolutions regarding the structure of the remuneration
system for the Management Board, acting as representatives of
the company to Management Board members who have left the
company pursuant to section 112 AktG, approving secondary
employment and external activities for Management Board
members pursuant to section 88 AktG, granting loans to the
persons specified in section 89 AktG (loans to members of the
NORMA Group on the Stock MarketManagement Board LetterConsolidated Management ReportConsolidated Financial StatementsFurther InformationTo Our Shareholders 42
Management Board) and section 115 AktG (loans to members
of the Supervisory Board), approving contracts with members of
the Supervisory Board pursuant to section 114 AktG and pro-
posing suitable candidates to the Annual General Meeting when
there is a vote on Supervisory Board members. This committee
convened once in 2012 in order to prepare the contracts to send
Mr. Stephenson to Singapore. In 2012, the Chairman of the Gen-
eral and Nomination Committee was Chairman of the Supervi-
sory Board Dr. Stefan Wolf and the other members were Dr.
Christoph Schug and Dr. Ulf von Haacke until he stepped down
from the Supervisory Board. On 8 February 2013, Lars Berg was
elected to succeed Dr. von Haacke as the other member of the
General and Nomination Committee.
7. ShARehOLDINGS OF T he MANAGeMeNT B OARD
AND SuPeR vISORy BOARD
On 31 December 2012, the Management Board and Supervi-
sory Board together held 2.8% of the shares of NORMA Group
AG, whereby 2.5% can be attributed to members of the Manage-
ment Board and 0.3% to members of the Supervisory Board.
The members of the Supervisory Board and Management Board
acquired most of these shares prior to the initial public offering,
because they held interest in the former NORMA Group GmbH,
which was transformed into NORMA Group AG prior to the initial
public offering in 2011. These acquisitions were not required to
be disclosed as directors’ dealings.
6. ANNuAL Ge NeR AL Mee TING
The shareholders of a stock corporation decide on the compa-
ny’s important and fundamental matters. Shareholders are en-
titled to vote if they are registered in the shareholders’ register of
NORMA Group AG and provide NORMA Group AG or another
location specified in the invitation with written notice, in German
or English, at least six days before the Annual General Meeting
that they will be attending. Each share entitles the bearer to one
vote. The shareholders exercise their voting rights at the Annual
General Meeting, which takes place at least once every year.
NORMA Group AG publishes the invitation and all documents
made available at the Annual General Meeting promptly on its
website. Information regarding the number of attendees and the
voting results are published there following the Annual General
Meeting.
8. DIReCTORS’ DeALINGS
According to section 15a of the German Securities Trading Act
(Wertpapierhandelsgesetz, WpHG), members of the Manage-
ment Board and the Supervisory Board and related parties are
obliged to disclose directors’ dealings in NORMA Group AG
shares if the value of these transactions reaches EUR 5,000
within a calendar year.
The following transaction was reported in connection with Direc-
tors’ Dealings in 2012:
NORMA Group AG Annual Report 2012 Corporate Governance Bericht
43
Buyer/seller
Lars M. Berg
Type of
transaction
Date of
transaction
Price per
share in EUR
Number
of shares
Total
value in EUR
Sale
26.11.2012
19.673
3,000
59,019.00
9. STOCK OPTION PL ANS AND e QuIT y-BASeD
INCeNTIve PROGR AMM eS
Please see the remuneration report for information about the
contracts of the members of the Management Board.
In financial year 2012, there were no employee participation pro-
grammes based on the Company’s share price.
10. SeATS ON T he MANAG eMeNT BOARDS AND S uPeR-
vISORy BOARD COMMIT T eeS OF OT heR LIST eD
COMPANIeS
In financial year 2012, the members of NORMA Group’s Super-
visory Board sat on the supervisory boards or comparable su-
pervisory committees of other companies:
Supervisory
Board member
Dr. Stefan Wolf
Dr. Ulf von Haacke
(until 14 September
2012)
Lars M. Berg
Günter Hauptmann
Knut J. Michelberger
Dr. Christoph Schug
Seats on other Supervisory Boards
Member of the Supervisory Board of Fielmann
AG,Hamburg, Germany
Member of the Board of Directors of Micronas
Semiconductor Holding AG, Zurich, Switzerland
No seats on other supervisory boards
Chairman of the Supervisory Board of
Net Insight AB, Stockholm, Sweden
Chairman of the Supervisory Board of KPN
OnePhone Holding B.V., Düsseldorf, Germany
Member of the Supervisory Board of Ratos AB,
Stockholm, Sweden
Member of the Supervisory Board of Tele2 AB,
Stockholm, Sweden
Member of the Supervisory Board of Geka
GmbH, Bechhofen, Germany
Chairman of the Advisory Board of Dematic
GmbH, Offenbach, Germany
Member of the Supervisory Board of Tom Tailor
Holding AG, Hamburg, Germany
Member of the Supervisory Board of Baden-
Baden Cosmetics AG, Baden-Baden, Germany
NORMA Group on the Stock MarketManagement Board LetterConsolidated Management ReportConsolidated Financial StatementsFurther InformationTo Our Shareholders
We supply a large number of customer industries
through our Distribution Services division. For
instance, we support our sales partners in the
area of infrastructure by offering a broad product
line including solutions in the area of water and
wastewater technology.
Jennifer Langlois, Product Development Manager Distribution Services
Ernest Muratet, Vice President EMEA Distribution Services
INFR ASTRUCTURE
Through the acquisitions we made in 2012, we
have expanded our product range and entered
into new international markets that are experi-
encing significant growth.
GLOBAL DEMAND FOR WATER 2000 –2050 IN KM³
Sources: OECD, NORMA Group
2049
2384
790
1195
44
1386
2000
568
236
27
348
2050
+ 53 %
Irrigation
Private households
Livestock breeding
Industry
Power generation
NORMACONNeCT® Vario-Pipe
48
NORMA Group AG Annual Report 2012
Successful expansion of international activities in the
Asia-Pacific region. 4 successful acquisitions. Sustainable
dividend policy with dividend proposal of EUR 0.65.
Management Board Letter
To Our Shareholders
Consolidated Management Report
Consolidated Financial Statements
Further Information
49
Consolidated Management Report
50 Business and operating environment
50 Group structure and operations
54 Corporate strategy and management
56 Strategic financing measures
56 Overview of business development
56 Economic environment
58 Industry-specific environment
59 Significant events for business development
60 Actual business development compared to the forecast
61 General statement by the Management Board on the
course of business and economic situation
82 Risk and opportunity report
82 Risk management system
84 Risks
88 Opportunities
90 Assessment of the overall risk profile
90 Internal control and risk management system and their
relation to the Group accounting process
91 Forecast
91 General economic conditions
93 NORMA Group’s focus
93 Future development of NORMA Group
95 General statement by the Management Board on
62 Financial performance, financial position and
anticipated development
cash flows
62 Sales and earnings performance
64 Financial position and cash flows
67 Financial management
68 Segment reporting
96 Other legally required disclosures
96 Additional information required under the German
Takeover Directive Implementation Act (Übernahmerich-
tlinie-Umsetzungsgesetz, ÜbernRLUG)
97 Remuneration report for the Management and Super-
visory Boards
70 Research & development
99 Report on transactions with related parties
73 Employees
99 Supplementary report
76 Production and supply chain management
78 Purchasing and supplier management
79 Sales and marketing
80 Sustainability
80 Corporate responsibility (CR)
81 Occupational health and safety
81 Group-wide Environmental Management System
50 NORMA Group AG Annual Report 2012
Consolidated Management Report
Sales growth of 4.0 % in face of difficult economic environment
Good cash flows result in stable net debt despite acquisitions and dividend payment
Successful acquisitions in Europe and Asia-Pacific
Sustained expansion of international business
Business and operating environment
Legal structure of the Group
GROu P S tRuC tuRE AN d OPER AtiONS
Leading global full-service provider to attractive
high-tech niche markets
We are an international market and technology leader in the at-
tractive niche markets for advanced engineered joining technol-
ogy. We manufacture and market more than 30,000 high-quali-
ty and often mission-critical joining products and solutions to
over 10,000 customers all over the world in the three product
categories clamps (CL AMP), joining elements (CONNECT) and
fluid systems/connectors (FLUID).
NORMA Group is respected in the marketplace for its many years
of expertise, customer-specific system solutions and global avail-
ability of products and reliable quality and delivery. This combina-
tion provides the basis for high customer satisfaction and forms
the foundation of our continued business success. Our products
and solutions account for only a small share of the costs and
prices of our customers’ end products, yet are often mission-
critical to how they function with respect to the quality, perfor-
mance and operational reliability of the final product. They there-
fore offer important added value for our customers. Global
megatrends such as the reduction of emissions, leakages,
weight and size and increased modularization of manufacturing
processes continue to present challenges to OEM companies
when it comes to developing new products. Here, we support
our customers proactively by offering our own broad range of
established brand products as well as innovative customized
joining products and solutions. Together we contribute to more
environmentally friendly, sustainable and efficient usage of our
natural resources.
NORMA Group was formed in 2006 as a result of the merger of
the German Rasmussen Group and the Swedish ABA Group. In
2011, NORMA Group took on the legal structure of a stock cor-
poration under German law based in Maintal. This entity holds
shares either directly or indirectly in the 42 companies that be-
long to NORMA Group. In 2012 we acquired Connectors
Verbindungstechnik AG, Nordic Metalblok S.r.l., a 85 % stake in
Chien Jin Plastic Sdn. Bhd., and 60 % of Groen Bevestigingsma-
terialen B.V. All of these companies are consolidated in the Group
financial statement. We do no longer consolidate SCI Seran and
Jiangyin NORMA Automotive Products Co.
Over the course of 2012, we modified the Group structure of our
international business by integrating all of the holding companies
in the Asia-Pacific region except for the Chinese company into
the APAC Holding in Singapore. We intend to do the same thing
with our holdings in America. The legal structure of the Group
would then mainly correspond to regional segment reporting. To
simplify the structure of the Group, we are also considering
merging NORMA Beteiligungs GmbH with NORMA Group Hold-
ing GmbH.
The Management Board plans to propose that NORMA Group
AG be transformed into the legal form of a European company
(Societas Europaea, “SE”) at the Annual General Meeting. The
transformation into an SE represents a consistent follow-up step
and embodies European values in a corporate sense and, at the
same time, underscores the international direction of NORMA
Group. The transformation of a stock corporation into an SE rep-
Management Board Letter
To Our Shareholders
Consolidated Management Report
Consolidated Financial Statements
Further Information
51
Business and operating environment
CORPOR ATE STRUCTURE
NORMA Group AG
Parent company
under company law
EMEA
Americas
Asia-Pacific
Segments
Engineered Joining Technology
(EJT)
Distribution Services
(DS)
Way to market
ALLOCATION OF RESPONSIBILITIES WITHIN THE MANAGEMENT
BOARD
resents a change in legal form that essentially has no effect on
the legal identity of the company and its admission to listing on
the stock exchange. The legal position of the shareholders in the
SE remains unchanged in all major respects. The SE regime
provides for slight differences in some aspects compared to a
German stock corporation. For example, the length of time re-
quired to hold the stock before requesting that an annual share-
holders’ meeting be convened or that additional items be placed
on the agenda does not apply in an SE. In order to prepare the
general meeting that is to decide on the transformation in an SE,
a detailed transformation report is being drafted in which, among
other things, the legal position of the shareholders in the stock
corporation and the SE is compared and discussed in detail.
Even though the transformation would allow for a different struc-
ture, we intend to retain the two-tier structure consisting of Man-
agement Board and Supervisory Board.
Werner Deggim
Dr. Othmar Belker
Bernd Kleinhens
Management and control
John Stephenson
NORMA Group AG has a dual management system consisting
of a Management Board and a Supervisory Board as required
by the German Stock Corporation Act (AktG). The Management
Board composed of four members served for the entire financial
year 2012. There was one personal change on the Supervisory
Board, however. Dr. Ulf von Haacke resigned from this office on
14 September 2012. His successor, Erika Schulte, took office on
18 February 2013.
Chairman
Compliance
Personnel
Legal & M&A
Group development
Public relations
Internal audit
Corporate responsibility / sustainability
CFO
Finance & controlling
Investor relations
Treasury
IT
Business development
Sales
Product development
Marketing
COO
Production
Purchasing
Supply chain management
Global Excellence Programme
Quality management
Active strategic management holding with a decentralised
structure in direct proximity to its local customers
NORMA Group AG, the parent company of NORMA Group,
serves as the formal legal holding of the Group. As the company
that manages the Group, NORMA Group AG is responsible for
defining the corporate strategy and overriding strategic control
52
as well as communications with the company’s important target
audiences, in particular the stock market and its shareholders.
The operational companies are managed by their own manage-
ment teams, which, at the same time, are part of the extended
Group management team and are evaluated on the basis of
agreed targets. Specific goals are defined at the Group, region-
al and operational level and reviewed on a regular basis. Func-
tional Group management departments like Group Accounting,
IT, Internal Audit or Treasury have been assigned to the subsid-
iary NORMA Group Holding GmbH.
Operational segmentation by region
To execute our successful growth strategy, our Group business
is displayed in the three regional segments EMEA (Europe, Mid-
dle East, Africa), Americas and Asia-Pacific. Our vision focuses,
among other things, on achieving regional growth targets. Re-
gional and local focuses are defined in the area of distribution
services. All three regions have networked regional and cross-
company organisations that carry out various functions. For this
reason, our management’s internal Group reporting and control
system is organised strictly by region.
Remuneration of the Management Board and Supervisory
Board
Remuneration of the Management Board includes both fixed and
variable components. The main features of the remuneration
system for the Management Board and Supervisory Board are
outlined in the Remuneration report on pages 97 to 99 of the
Management Report.
Statement on Corporate Governance
The statement on Corporate Governance that is to be issued in
accordance with § 289a of the German Commercial Code (HGB)
is found on pages 38 to 43 of the Corporate Governance report
and is also part of the Management Report. It contains infor-
mation on how the Management Board and Supervisory Board
operate, the declaration of conformity pursuant to § 161 AktG
and information on the main corporate policies.
important products, services, business processes and
sales markets
we produce added value with our experience, technological
expertise and power of innovation
Our clamp products and solutions are manufactured from unal-
loyed steels or stainless steel and are generally used to join or
seal elastomer hoses. The connection products include connec-
tors made of unalloyed steels or stainless steel that are partly
equipped with elastomer or metal seals and used as the joining
and sealing elements of metal and thermoplastic pipes. Our
fluid products are either single or multiple layer thermoplastic
plug-in connectors for liquid systems that reduce installation
times, ensure reliable flow of liquids or gases and occasionally
replace conventional products like elastomer hoses. Our prod-
ucts are often mission-critical because the quality of the end
product depends on our solutions’ abilities to perform properly.
The intellectual property portfolio of more than 800 patents and
utility patents in nearly 200 patent families underscores our high
power of innovation and protects our leading technological posi-
tion in the global marketplace.
As a strategic development partner for our industrial customers,
we provide customised solutions that match their application
requirements. In the process, we rely on our technological ex-
pertise and profound understanding of customer requirements.
Furthermore, we offer an integrated service network with joining
products and product solutions for many different areas of ap-
plication. This equipment is used in farming, engines, commer-
cial vehicles and passenger cars, the aviation industry and con-
struction machines as well as household appliances, irrigation
plants, the drinking water supply, pharmaceuticals and biotech-
nology. With our 19 production sites and additional sales and
distribution centres in Europe, North, Central and South America
and the Asia-Pacific region, we maintain a global presence in 100
countries.
two sales channels for meeting the diverse needs of our
customers as effectively as possible
When it comes to supplying our customers, we employ a variety
of different sales strategies quite successfully: Engineered Join-
ing Technology (EJT) and Distribution Services (DS). This ap-
proach that gives us a much better understanding of the various
needs of the market enables us to stand out from our manufac-
turing competitors.
In the area of EJT, we provide industrial OEM customers with
individually developed, customised products and solutions de-
signed to meet their specific application requirements. Once our
engineered joining solutions have been installed in a customer’s
product, they normally remain part of the final design of that
product. Our products and solutions can be used in many differ-
ent areas of application, including emission controls, cooling
systems, air intake and induction, assistive systems and infra-
structure. This area accounts for approximately two-thirds of
NORMA Group’s sales.
In the area of DS, we market a broad range of high-quality, stan-
dardised brand products for a broad spectrum of applications
via our own sales network as well as sales representatives, retail-
ers and importers. Our customers are distributors, specialised
wholesalers, OEM customers in the aftermarket segment and
do-it-yourself stores. Our DS marketing strategy benefits not only
from our broad geographical presence, but also our well-known
NORMA Group AG Annual Report 2012 53
SALES B y EN d MAR kEtS
diStRiButiON OF SALES B y SALES Ch ANNELS
in %
previous year figure in brackets
in %
previous year figure in brackets
Distributors
29 (29)
32 (33) Industrial
suppliers
Engineered
Joining
Technology
71
(71)
29
(29 )
Distribution
Services
Commercial
vehicles OEMs
10 (10)
29 (28) Passenger
vehicles OEMs
brands ABA, Breeze, Connectors, Gemi, NORMA, R.G.RAY, Ser-
flex, Serratub, TERRY and Torca. They exemplify our techno-
logical know-how, high-quality and reliability and account for
roughly one-third of our sales revenue.
Competitive situation
Due to our heterogeneous structure in the area of Engineered
Joining Technology, we face no competitors who are in a com-
parable position. We combine know-how from the area of metals
with our product categories clamps (CL AMP) and connection
elements (CONNECT) with our know-how in the area of thermo-
plastic materials through our product category fluid systems and
plug connectors (FLUID). The areas CL AMP and CONNECT in-
clude mainly small to medium-sized manufacturers who only
manufacture certain types of products and applications or oper-
ate mainly on a regional basis. The area of FLUID, on the other
hand, includes mainly globally active groups that focus on rubber
and elastomer products, which we do not offer.
Economic and legal factors of influence
We market our products and product solutions globally to cus-
tomers in various industries and are therefore subject to the eco-
nomic cycles in the various industries and regions. These can
vary quite significantly with respect to their time of occurrence
and extent, however. Our in-depth product line and broad cus-
tomer base across many different industries and regions enables
us to compensate for these cyclical developments to different
extents.
We consider developments that are most likely early on as part
of our business planning by relying on certain early indicators
that include raw material prices, our customers’ order behaviour
in the area of Distribution Services, our order book as well as the
expected development of the manufacturing and sales figures in
our customers’ industries.
Exchange rate fluctuations that result from trade relations be-
tween currency regions have only a limited operational effect on
our sales and earnings due to the fact that we mainly develop,
purchase, manufacture and market on a regional basis for re-
gional markets. Exchange rate fluctuations against the euro as
NORMA Group’s reporting currency influence the valuation of our
business in euros. We generate around one-third of our sales in
US dollars.
With respect to costs, the development of wages and salaries
has an effect on NORMA Group, as do changes in material costs.
Short-term fluctuations in material prices are generally of less
importance to us because we set the prices for important mate-
rials in long-term contracts when we place an order. This pertains
to both procurement as well as sales to consumers.
Furthermore, we increase our profitability by way of internal mea-
sures like process optimisation in all functional areas. We intro-
duced our Global Excellence Programme aimed at actively iden-
tifying potential for improvements back in 2009. As part of this
programme, we systematically track projects on increasing effi-
ciency that are monitored using a web-based programme. This
enables us to quantify the monetary savings that result from a
specific measure fairly accurately at the end of the 12-month
project cycles. Senior management reviews the current status of
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our ShareholdersBusiness and operating environment 54
all projects once a month and a steering committee does so
once a quarter. Our goal is to ensure that we offset or even
lower any inflationary increases in costs with the help of this
programme.
Because we are globally active, different legal and tax-related
policies often play a role and must be taken into consideration
with our business operations. Among others, these include prod-
uct safety and product liability laws, construction, environmental
and employment-related regulations as well as foreign trade and
patent laws. To the extent that these pose a risk to our business,
they are presented in the Risk report on pages 82 to 91.
The growing degrees of regulation in the area of environmental
law affect our product strategy quite significantly and generate
additional demand. For example, more stringent regulations on
emissions and the introduction of new emission standards mean
that the motor vehicle industry is in need of new solutions for
building engines that meet these requirements.
CORPOR AtE St R AtEGy AN d MANAGEMENt
Our strategic goal is to sustainably extend our business activities
in Germany and abroad to achieve growth in sales that is higher
than the market average. Furthermore, we also focus closely on
high profitability and stable cash flows. Compared to the previ-
ous year, there were no significant changes in our objectives and
strategies.
The core of our Group strategy is broad diversification with re-
spect to products, regions and end markets. On the one hand,
this strengthens the stability of our business operations and, on
the other, puts us in a position to be able to capitalise on attrac-
tive growth potentials out of the many relevant growth trends with
our customers and their end products.
Megatrends permanently support greater use of our
high-quality joining products and system solutions
Customer demands in the respective markets for engineered
joining technology are constantly changing. This is driven by
technological megatrends on the one hand, for instance higher
engine efficiency as a reaction to more stringent emission regu-
lations, weight reduction and modularisation of production pro-
cesses. On the other hand, global megatrends such as increased
environmental consciousness, rising fuel costs and growing cost
pressure for manufacturers also play a key role. For this reason,
we expect to see demand for engineered joining technologies in
the end products of our customers increase more quickly than
our customers’ end markets themselves. After all, both the num-
ber and the value of engineered joining elements in an end prod-
uct continue to increase. Supported by external market studies,
we expect the use of engineered joining technology in vehicles,
construction machines and engines, for instance, to increase by
3 % to 15 % annually from 2010 through 2015 depending on the
core industry and technical application. We intend to capitalise
on these growth opportunities by focusing on innovative solu-
tions for mission-critical connections that add value and thus
assist our customers in lowering emissions, leakages, weight,
space and installation time.
unique position and synergies thanks to unrivalled,
customer-oriented sales strategy
We distinguish ourselves from our manufacturing competitors
through our two separate ways to the market: Engineered Join-
ing Technology (EJT) and Distribution Services (DS). Both are
designed to meet the unique needs of the respective customers.
Thanks to this special combination of comprehensive expertise
and skills in developing customised solution approaches for in-
dustrial customers (EJT) and offering high-quality standard
brand products and solutions via global sales (DS), we benefit
from various synergies. These include significant economies of
scale in manufacturing, unique close proximity to international
EJT customers and the transfer of know-how from the area of
EJT to high-quality, standardised products in the DS area. This
approach allows us to consistently strengthen the diversification
and stability of our business.
Our parameters for success are global presence, size,
power of innovation and strong brands
Our goal is to extend our presence in existing markets and de-
velop new emerging markets that offer attractive growth poten-
tial. We intend to offer our existing customers solutions for these
types of applications that do not yet include our joining solutions,
for example by replacing alternative solutions due to higher prod-
uct performance capabilities or quality. By doing so, we will in-
crease the number of products used per customer end product
and encourage the implementation of our existing products. We
see growth opportunities in emerging countries that result from
the increase in industrial manufacturing and the rising demand
for mature joining technology. In the process, we leverage the
manufacturing and sales presence that we have established in
these markets in recent years. Our main focus in emerging coun-
tries is on Brazil, Russia, India and China, among others. Our
activities in recent years will enable us to further strengthen our
sites in Asia and South America in the short to medium term.
We address attractive markets with respect to margins, sophis-
ticated markets with respect to products and fragmented niche
markets with fast-growing sales with respect to competition.
Areas of application for EJT joining solutions include emission
controls, cooling systems, air intake and induction, assistive sys-
tems and infrastructure, for example. The relevant end markets
cover the spectrum of agricultural machines to the aviation in-
NORMA Group AG Annual Report 2012 55
dustry, commercial vehicles, construction machines and en-
gines, but also water management, passenger cars and rail ve-
hicles. By identifying additional end markets that offer high
growth potential and are related to the end markets of relevance
to us that we currently serve, we will generate further growth
possibilities. Our entry into the drainage end market is but one
example of successful knowledge transfer in which we adapted
existing joining products to meet the demands of new areas of
application and efficiently introduced high-performance prod-
ucts to the market. Through this type of expansion, we achieve
further diversification and thus strengthen our defensive earnings
profile with respect to end market presence. In the EJT area, we
have achieved a market share that is significantly higher than that
of our next largest competitor. This enables us to provide our
customers all over the world with customised, high-quality prod-
ucts and system solutions. Furthermore, we will continue to
strengthen our power of innovation and rely on research and
development (R &D). Each year, we intend to invest around 4 %
of EJT’s sales to R&D activities.
In the DS sales channel, we have a number of strong, well-known
brands. Here, we intend to strengthen and extend the respective
success parameters. DS customers are industrial companies
(OEM and Aftermarket), maintenance and repair companies, but
also sales companies, expert wholesalers and do-it-yourself
stores. Our goal is to achieve a global presence by systemati-
cally expanding our sales network, increasing the earnings share
with our existing customers and gaining new customers. We
intend to expand our DS network in those regions in which we
currently have a strong market position. Furthermore, we plan to
continue our expansion in regions in which we see strong poten-
tial for future growth, such as Brazil, Russia or Southeast Asia.
Moreover, we plan to extend our offerings to cover additional
groups of customers and end markets. These include, for in-
stance, the construction industry, the exhaust gas system after-
market segment, the area of infrastructure or the biotechnology
and pharmaceutical industries.
possibilities. We have a solid balance sheet with respect to the
acquisition and integration of companies that create added val-
ue. Future acquisitions will continue to strengthen the regional
presence of the Group, complement its product portfolio, im-
prove access to customers and allow for synergies to be realised.
We are well-positioned to benefit from the fragmentation of the
market and be a leader in its consolidation.
we constantly improve our production processes
and cost structures
We support and control our strategic goals of achieving high
profitability and strengthening our cash flow through various
measures. These include cost discipline, continuous improve-
ment of processes in all functions and regions and successful
supply chain management. We already completed comprehen-
sive optimisation of our manufacturing structure in 2010. As part
of our optimisation efforts, we bundle high-volume automated
and essentially standardised production processes on specific
high-tech manufacturing lines. This allows us to take advantage
of considerable economies of scale. We have set up production
processes that require a higher degree of manual assembly work
mainly in low-wage countries. Furthermore, we have continually
been able to generate significant cost savings with our “Global
Excellence Programme” that we introduced in 2009. The im-
provement initiatives we identified and introduced as part of this
programme will enable us to realise even greater cost advan-
tages by maximising flexibility in the future.
Continuous monitoring of specific financial and
non-financial control parameters
When it comes to managing NORMA Group, our Group manage-
ment bases its decisions mainly on financial control parameters.
These are essentially sales, EBITDA and EBITA parameters, op-
erating net cash flow and capital commitment to investments and
working capital (inventories and trade receivables less trade pay-
ables), liquidity, capital structure and risks that result from inter-
est, currencies and material costs.
Successful organic growth and selective acquisitions
that create added value
We pursue a strategy of organic growth and strategic acquisi-
tions. To strengthen our organic growth, we rely on constantly
expanding application solutions with existing EJT customers,
identifying and signing up new EJT customers, extending and
deepening our customer base in the area of Distribution Service
and entering into new end markets for engineered joining tech-
nology that create added value, such as the drainage market.
Achieving high profitability is one of the main target and measure-
ment parameters for our Group management. EBITDA and EBI-
TA serve as parameters here. We calculate a target EBITDA
margin and a target EBITA margin on the basis of our historical
performance and the planning of our divisions as the weighted
average of the divisions and adjust the amortisation effects from
the purchase price allocation of acquired companies. In 2012,
our target EBITA margin was at the level of previous years of
17.4 % or 17.7 %. We reached this goal by achieving 17.4 %.
Select acquisitions that complement our internal growth are also
a permanent component of our long-term growth strategy. We
observe the market for advanced joining technology very close-
ly. We set strict criteria in identifying and evaluating acquisition
Operating net cash flow is yet another target figure. By focusing
on this value, we ensure that the financial solidity of the Group is
also maintained in the future. Our operating net cash flow is
significantly affected by our EBITDA, changes in working capital
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our ShareholdersBusiness and operating environment 56
OPER AtiNG NE t CAS h FLO w
in EUR million
EBITDA*
Change in working capital
Investments from operational business
Operating net cash flow *
* in 2010 and 2011 mainly adjusted for IPO costs
2012
120.8
– 9.8
– 30.0
81.0
2011
117.0
– 19.5
– 30.7
66.8
2010
99.2
– 26.4
– 21.1
51.7
and investments at the operational level. We seek to achieve a
clearly positive value on average here. Each year, this mainly
depends on the financial performance and investments planned.
The goal for 2012 was to achieve a positive operating net cash
flow that was at least as high as the previous year’s level
(EUR 66.8 million). Thanks to our strong EBITDA, this value came
in at EUR 81.0 million and thus above plan in 2012.
All financial control values are planned and continuously moni-
tored at the Group, regional and Group company levels. We
measure deviations between forecast targets and what we actu-
ally achieve on a monthly basis inside all local companies. Key
figures are analysed on a monthly and quarterly basis. At the
same time, we evaluate our detailed business plans and make
projections on specific business developments that perhaps in-
clude various scenarios on the basis of existing monthly and
quarterly results.
Non-financial control parameters include market penetration,
power of innovation, the progress being made on productivity,
problem-solving behaviour and our sustainable overall develop-
ment. You will find more detailed information on non-financial
performance indicators on pages 70 to 82.
StR AtEGiC F iNANCiNG MEAS uRES
We have improved our ability to take action for the benefit of the
further continued strategic development of NORMA Group by
working closely with our banks. Our existing medium-term re-
volving credit facility is still EUR 125 million. As to the allocation
of resources the annual limit to acquisitions has been eliminated
and the total acquisition limit has been extended to EUR 200
million during the term of our loan. Furthermore, we have reached
an agreement on extending the available financing instruments.
This means we are now in a position to borrow funds through an
external foreign capital market in excess of our existing loan con-
tracts of up to EUR 125 million. In addition, the collateral guaran-
tees we had given for our existing loan have been fully released
due to the continued positive development of our company. The
Group’s financing contracts still include normal credit line condi-
tions (financial covenants). For further information, please refer
to the section entitled “Financial management” on pages 67 to
68.
Overview of business development
ECONOMiC EN viRONMENt
the global economy ground to a halt in 2012 as a result of
the sovereign debt crisis.
Also in 2012, the global economy was impacted by the Euro-
pean sovereign debt crisis and uncertainties in financial markets
as well as by high commodity prices. The International Monetary
Fund (IMF) calculated another weakening of global economic
growth to 3.2 % for 2012. In previous years, global economic
output still rose by 3.9 % (2011) and 5.1 % (2010).
The beginning of 2012 was still characterised by a strong eco-
nomic recovery. However, the economic climate and important
early indicators worsened over the course of the year. The mood
at companies and in many regions as well as the mood of con-
sumers deteriorated so that the economy lost momentum early
in the year. The real economy even came to a standstill starting
in late summer. According to the IMF, global trade growth for the
full year fell from 5.9 % in the previous year to 2.8 %. Major export
countries were hit particularly hard by this. Economic growth also
NORMA Group AG Annual Report 2012
Business and operating environment
Overview of business development
57
GdP GRO w th R AtES
in %
World
USA
China
Eurozone
Germany
Sources: OECD, IMF, Eurostat
2012
+ 3.2
+ 2.3
+ 7.8
– 0.5
+ 0.7
2011
+ 3.9
+ 1.8
+ 9.3
+ 1.4
+ 3.0
2010
+ 5.1
+ 2.4
+ 10.4
+ 2.0
+ 4.2
weakened noticeably in Germany at the end of 2012. Dynamic
developing and emerging economies recorded an increase in
real gross domestic product (GDP) of only 5.1 % after 6.3 % in
the previous year. In established economies, GDP growth de-
creased from 1.6 % in the previous year to 1.3 %.
China may have recorded the strongest growth (7.8 %) among
the major economic regions, but the pace of expansion fell con-
siderably short of its momentum in recent years. In prior years,
growth in China was as least 9 %, sometimes even in the double-
digits. The economy also stalled in India with GDP growth of
merely 4.5 % after 7.9 % in the previous year. Japan’s economy
may have recovered from the prior year’s tsunami and nuclear
catastrophes, growing at a rate of 2.0 % for the full year, but
economic output fell noticeably at the beginning of the second
half of the year. Growth in the USA accelerated slightly to a mod-
erate 2.3 % in 2012 (previous year: 1.8 %), supported by a robust
domestic economy and the improvement in the domestic hous-
ing market. The situation in particular in Western Europe deterio-
rated with the significant economic collapses in Southern Eu-
rope. The eurozone as a whole slid into recession in 2012,
whereby development in individual countries diverged even more
sharply.
weak economic growth in Europe – eurozone in recession
Eurostat, the statistical office of the European Union, put the
decrease in economic output in 2012 for the 27 countries of the
EU at real 0.3 % after an increase of 1.5 % in the previous year.
The United Kingdom was caught up in the weak development of
continental Europe and the global economy and its economy
stagnated (0.0 % after 0.9 %). The large economies of Italy (-2.3 %
after +0.4 %) and Spain (-1.4 % after +0.4 %) slid into recession.
The economy in the Netherlands (-0.3 % after +1.0 %) and Bel-
gium (-0.2 % after +1.8 %) also shrank. The economic weakness
in Portugal (-3.0 % after -1.6 %) and Greece (-6.0 % after -7.1 %)
continued. Growth in France was barely above stagnation at
0.2 % after 1.7 % in the previous year. In the eurozone, the neces-
sary measures to reduce sovereign debt and the deteriorating
economic climate resulted in reluctant investors and increasing
unemployment. As at the end of 2012, Germany also recorded
a noticeable weakening; GDP growth slowed from 3.0 % in the
previous year to only 0.7 %. Thus, the eurozone slid as a whole
into recession in 2012. According to estimates by Eurostat, eco-
nomic output in the eurozone fell by 0.5 % in 2012.
Europe’s poor economic state is also reflected in declining indus-
trial production. Industrial production (excluding the construction
industry) decreased in each month from December of the prior
year up to and including November 2012, both at the level of the
European Union (EU 27) as well as in the eurozone (EU 17) com-
pared to the previous year. Industrial production for the full year
decreased by more than 2 % (EU 27: -2.1 %; eurozone: -2.4 %).
The trend was clearly downward also for Germany starting in July
after fluctuating up and down in the first half of the year. German
industry recorded in part significant production setbacks in Oc-
tober (-3.2 %), November (-3.3 %) and December (-0.7 %). The
utilisation of capacities in the eurozone dropped accordingly to
77.2 % at the end of 2012 (previous year: 79.9 %) and in Ger-
many 81.0 % (previous year: 85.3 %).
Germany’s growth initially insusceptible, with a sharp
downturn at the end of the year
Considering its strong domestic economy supported by private
consumer spending and investments in residential construction,
and thanks initially to higher exports to countries outside the
European Union, the German economy was able to avoid the
maelstrom of the economic downturn for a comparatively long
time. Nevertheless, following a robust start to the year (Q1: GDP
+1.7 %), important early indicators worsened successively along
with companies’ incoming orders and their expectations; exports
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders
58
also gradually lost momentum. Investments in machinery and
equipment were scaled back. Thus, the effects of the slowdown
were already apparent in the second (+0.5 %) and third quarter
(+0.4 %). Economic output even fell in the final quarter of 2012 as
a result of the downturn in industrial production. Eurostat puts
the decrease in GDP at 0.6 % quarter-on-quarter. With expected
real growth of 0.7 %, the German economy grew noticeably
slower in 2012 than in the previous year. The labour market re-
mained strong in 2012, even though the positive development
came to a standstill at the end of the year. According to calcula-
tions by the German Bundesbank, 41.6 million individuals were
gainfully employed and the unemployment rate remained at a low
6.9 % at the end of 2012.
iNduStRy-SPECi FiC EN viRONMENt
2012 a successful year for German engineering
For the German engineering and plant construction industry,
2012 was successful and better than expected overall. The in-
dustry completely recovered from the setbacks of the last finan-
cial crisis, supported by high competitiveness and the excellent
order situation. The industry association VDMA estimates that
the previous record level of 2008 was reestablished in 2012 with
real growth of 2 % to a production value of EUR 196 billion. With
an expected EUR 209 billion, sales in 2012 reached a new his-
torical peak value. The German engineering and plant construc-
tion industry was also caught in the deterioration of the global
economy over the course of the year. After starting off the year
dynamically, the industry recorded a downward trend in growth
rates, even negative rates in some cases. The strongest impuls-
es for the industry’s growth in 2012 came once again from
abroad. Exports increased in particular to Latin America (by Oc-
tober 2012: 10.7 %), Southeast Asia (+21.4 %), USA (+20.1 %) and
also in the EU as a whole (+7.5 %) In contrast, exports to Italy
(-2.6 %), Spain (-2.8 %) and the largest importer China (-8.6 %) fell
short of the previous year’s values.
A portion of the previous significant decline in orders – in par-
ticular domestic orders – was recovered with a sharp rise in in-
coming orders in autumn and in December 2012 (real +4 %;
domestic +1 %; international +5 %). Incoming orders decreased
by 3 % overall for the full year 2012 (domestic -8 %; international
+0 %).
Global automotive industry on growth course –
downturn in Europe
The automotive industry remained on its growth course in 2012,
despite the severe market slump in Western Europe, thanks to
sustained strong demand in the USA and BRIC countries. The
market research institute Polk calculated an 8.8 % increase world-
wide in new registrations for light vehicles (automobiles, light
trucks) to 71.75 million vehicles. According to information pro-
vided by the German industry association VDA, the number of
new registrations in the USA (the largest single market with 14.4
million vehicles) rose by 13.4 %. The second-largest market, Chi-
na, expanded by 8.4 % to 13.2 million vehicles. Brazil (+6.1 %),
Russia (+10.6 %) and India (+10.3 %) also recorded significant in-
creases in new registrations. Japan recovered from the prior
year’s production standstills and reached 4.6 million vehicles
(+29.7 %). German manufacturers continued their successful
growth in foreign markets in 2012 and further increased their mar-
ket shares, in particular in the USA, China and Russia.
The West German automobile market shrank for the third year in
a row in 2012 – most recently with increasing momentum – under
the influence of the sovereign debt crisis and the pronounced
economic weakness in particular in Southern Europe. In particu-
lar the high-volume manufacturers with a strong orientation on
Southern Europe recorded double-digit decreases in sales. The
European association ACEA puts the decrease in new automobile
registrations in the EU for 2012 at 8.2 % (12.05 million vehicles).
The sharpest losses in high-volume markets were suffered by
Italy (-19.9 %), Spain (-13.4 %) and France (-13.9 %). In contrast,
sales were strong in the United Kingdom, with an increase of
5.3 %. In Germany, new automobile registrations fell to 3.08 mil-
lion vehicles (-2.9 %). German automobile manufacturers curbed
production by 4 % to 5.39 million vehicles.
The European market for commercial vehicles collapsed in 2012,
plunging 23.4 % in December alone. In total, new registrations of
lorries and buses fell by 12.4 % in the EU to 1.70 million vehicles.
In contrast to the United Kingdom (-5.7 %) and Germany (-7.0 %),
the commercial vehicle markets in France, Italy and Spain even
recorded double-digit declines. The market for lorries up to 3.5
tons was disproportionately weak (-13.3 %). The subsegment of
heavy trucks (over 16 tons), dominated by German manufactur-
ers, shrank by 9.4 %. Only new registrations of buses increased
in the EU (+1.4 %).
Construction industry in Europe weak, in Germany robust
In 2012, the construction industry shrank for the fifth year in a
row in Western Europe – in every single month year-on-year, ac-
cording to information provided by Eurostat. The decrease in
December was 4.8 % in the eurozone and 8.5 % in the European
Union (EU 27). The United Kingdom, Portugal and the Nether-
lands recorded double-digit losses, while Spain’s construction
industry recovered slightly from October to December. In 2012,
the construction industry decreased by 5.4 % in the eurozone
and by 5.8 % in the European Union. Building construction fell by
6.2 % (EU -8.3) and civil engineering by 2.9 % (EU 11.2 %) with
respect to the eurozone.
NORMA Group AG Annual Report 2012 Overview of business development
59
Although incoming orders for the German construction industry
in November 2012 were at their lowest level in two years with a
real decline of -8.3 % due to the reluctance to invest in the man-
ufacturing industry, 2012 was a satisfactory year for the industry.
Incoming orders grew by real 5.1 % (nominal +7.7 %) and sales
by 1.6 % for the first eleven months, according to information
provided by the Federal Statistical Office of Germany. The two
largest construction associations, ZDB and HDB, estimate that
construction revenues grew slightly by nominal 1 % to just under
EUR 93 billion in 2012. The growth driver was residential con-
struction with an increase of 5 % to EUR 32.5 billion. Commercial
construction also continued to grow in 2012, despite the de-
crease in production and investments on the part of the industry
in the second half of the year (revenues +1.5 % to EUR 34.2 bil-
lion). In contrast, public construction revenues fell by 4.5 % to
EUR 26.4 billion.
SiGNiFiCANt E vENtS FOR B uSi NESS dE vELOPMENt
Acquisition of the Swiss pharmaceutical supplier
Connectors verbindungstechnik AG
We acquired the Swiss company Connectors Verbindungstech-
nik AG on 19 April 2012. The company specialises in connection
systems for the pharmaceutical and biotechnology industries. It
has produced and sold connection elements for over 25 years
that correspond to the highest sterile technology standards in
the medical area. The product range includes, among other
things, clamps, valves, hoses and joining solutions for the trans-
port of liquids and gases for medical applications. In addition,
the company offers advisory and planning services for pharma-
ceutical process plants. The acquisition of Connectors Verbind-
ungstechnik AG provides us with access to customers in the
pharmaceutical and biotech industries. We will further expand
our product portfolio and global market positioning in joining
technology with the company’s expertise. In financial year 2011,
the company recorded sales of around EUR 14 million. Connec-
tors Verbindungstechnik AG was included in the consolidated
group of NORMA Group as at 19 April 2012 and accordingly
already contributed to sales and earnings starting the second
quarter of 2012.
Acquisition of the italian clamp manufacturer
Nordic Metalblok S.r.l.
On 12 July 2012, we acquired Nordic Metalblok S.r.l., based in
Italy. The company has been active in the market for over 40
years and produces clamps for various applications, in particular
for the heating, ventilation and air conditioning industry as well
as for the agricultural and construction industry. In addition, it
manufactures metal bands and the associated tools. Nordic Met-
alblok distributes its products to retailers and wholesalers as well
as to manufacturing companies all over the world. We are ex-
panding our global presence with this acquisition. The compa-
ny’s expertise, in particular in heating, ventilation and air condi-
tioning technology, is an ideal complement to our product
portfolio. In financial year 2011, the company recorded sales of
around EUR 6 million. It was included in the consolidated group
of NORMA Group as at 12 July 2012.
Acquisition of the majority of interest in
Chien Jin Plastic Sdn. Bhd.
On 30 November 2012, we acquired an 85 % interest in the
manufacturer of thermoplastic connectors Chien Jin Plastic Sdn.
Bhd. in Malaysia and included the company in the consolidation
group of NORMA Group. Furthermore, we have the right to ac-
quire the remaining 15 % interest by 2015. The company has
been active on the market for 20 years and produces joining
elements for plastic and cast iron pipe systems that are used in
various applications, in particular in drinking water and industrial
water supply as well as in sprinkler systems. The company also
manufactures components for sanitation products and distrib-
utes its products under the “Fish” brand to over 200 distributors
in approximately 30 countries worldwide. Chien Jin Plastic Sdn.
Bhd. recorded sales of around EUR 7 million in financial year
2011. With this acquisition, we are expanding our product range
in the area of infrastructure and also expanding our distribution
network in the Asia-Pacific region.
increase in shareholding in dutch distributor
Groen Bevestigingsmaterialen B.v.
On 31 December 2012, we acquired an additional 60 % interest
in Groen Bevestigingsmaterialen B.V. and consolidated it in NOR-
MA Group. ABA Group had already acquired 30 % of the Dutch
distributor in 1999. Thus, we now hold a total of 90 % of the
shares. Along with the increase in equity interest, we also ac-
quired the call option to purchase the remaining 10 % within the
next 5 years. Groen is family-operated and sells hose and pipe
clamps as well as couplers to industrial companies, the agricul-
tural and construction industry, sanitation manufacturers and
hardware retailers in Belgium, the Netherlands and Luxembourg.
In addition, it offers a comprehensive product portfolio of traffic
sign clamps. It also offers tools for assembly and disassembly.
Sales were around EUR 5 million in 2012, around 60 % of which
were generated with NORMA Group products. We further ex-
panded our distribution network in the Benelux countries by ac-
quiring additional shares of this company. In addition, we are
expanding our product portfolio to include traffic sign clamps.
This provides us with access to new customers in this area.
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders 60
COMPARiSON OF AC tuAL tO FORECAS t CO uRSE OF B uSiNESS
Sales in EUR million
Adjusted operating EBITA margin
Result
2011
581.4
17.7 %
Forecast 2011
Annual Report
(as of March
2012)
Forecast
Q1/2012 report
(as of May
2012)
Forecast
Q2/2012 report
(as of August
2012)
Forecast
2 November
2012
n/a
n/a
n/a
n/a
At least on par
with the two
previous years
(17.4 % and
17.7 %)
At least on par
with the two
previous years
(17.4 % and
17.7 %)
At least on par
with the two
previous years
(17.4 % and
17.7 %)
approx. 17.0 %
Result
2012
604.6
17.4
Sales growth
18.5 %
3 % – 6 %
3 % – 6 %
(+ approx. EUR
10 million from
acquisitions*)
3 % – 6 %
(+ approx. EUR
13 million from
acquisitions**)
approx. 1 %
(+ approx. EUR
13 million from
acquisitions**)
1.5% + EuR
14.3 million from
acquisitions***
* Connectors Verbindungstechnik AG
** Connectors Verbindungstechnik AG + Nordic Metalblok S.r.l.
*** Connectors Verbindungstechnik AG + Nordic Metalblok S.r.l. + Chien Jin Plastic Sdn. Bhd.
ACtuAL Bu SiNESS dEvELOPMENt COMPAREd t O thE
FORECASt
In our 2011 annual report published in March 2012, we fore-
casted that sales would grow by 3 % to 6 % in 2012 excluding
consolidation effects and that we aimed to achieve an operating
EBITA margin at the same level as in financial years 2010 and
2011 (17.4 % and 17.7 % respectively).
Our business developed very successfully up to the third quarter
of 2012. While the first half of the year is generally very strong for
NORMA Group, the second half is usually characterised by a
somewhat weaker business development. However, in 2012, the
rising trend began to stagnate already in the second quarter.
Therefore, we stated in the Q2 interim financial report that we
would only achieve the sales growth of between 3 % and 6 %
forecast for 2012 if the economic slowdown which had already
begun did not worsen – in particular in Europe. This economic
slowdown may have already been apparent in the third quarter,
but it didn’t have a significant impact on our nine month figures.
However, the picture changed at the beginning of the fourth
quarter and incoming orders in Europe decreased more than we
expected. Due to the increasingly opaque economic develop-
ment in Europe and considerably subdued perspectives, we had
to slightly lower our own targets for sales and EBITA for the 2012
financial year before the publication of our figures for the third
quarter in November. The decrease in orders in particular in the
EJT unit resulted in more significant sales declines in the fourth
quarter than we had expected.
Nevertheless, we finished financial year 2012 successfully. We
increased sales to EUR 604.6 million, including EUR 14.3 million
from acquisitions. thereby slightly exceeding the sales growth of
approximately 1 % and approximately EUR 13 million from acqui-
sitions forecasted in November. The operating EBITA margin was
17.4 % and thus even slightly above the predicted level of ap-
proximately 17.0 %.
In addition, in our forecast in the 2011 annual report, we ex-
plained that we intended to invest around 4 % of our EJT sales
in research & development. We further solidified our position as
a technology leader in 2012 with investments in new products.
Thus, with expenditures of EUR 22.1 million and a rate of 5.1 %,
we slightly exceeded the stated rate.
The cost of materials ratio should be held steady at around 45 %.
It is even a little better at 43.6 % as a result of systematic cost-
reduction measures under our Global Excellence programme
and the passing on of some costs.
We predicted that the increase in personnel costs would be dis-
proportionately low. However, as a result of acquisitions, the
opening and expansion of sites, and collectively agreed wage
increases, personnel costs increased overproportionately to
EUR 156.5 million. This effect was exacerbated in the fourth
quarter by poorer than expected operating results. Furthermore,
personnel costs were influenced by translation effects with the
US dollar.
NORMA Group AG Annual Report 2012
Overview of business development
61
Other operating expenses should stabilise. At EUR – 76.6 million,
they are at the adjusted level of the 2011 financial year.
We expected a significant increase in net financial income of
around EUR – 15 million excluding derivative measurement ad-
justments. At EUR – 13.3 million, the result was considerably bet-
ter than expected.
Adjusted earnings per share increased as planned. This was
EUR 1.94 in financial year 2012 and thus up 1.0 % year-on-year.
Pro-forma adjusted earnings per share increased by 7.3 % based
on the same number of ordinary shares (31,862,400).
At 30.3 % of net income before tax, the tax rate was on the
lower end of the target range of 30 % to 32 %.
We were aiming for an investment rate of 4.5 % of consolidated
sales. This should finance both maintenance investments as well
as investments for the purpose of expanding our business. Ad-
justed for acquisitions, our investment rate was 5.0 % and thus
slightly above the target value. Including acquisitions, the invest-
ment rate was 9.6 %.
At EUR 604.6 million, including acquisitions, sales at the end of
financial year 2012 were only slightly above our adjusted forecast
from November 2012. Despite the difficult economic situation,
we were able to increase EBITA and the EBITA margin of 17.4 %
was at the lower limit of our original forecast from the beginning
of 2012.
Development in the individual segments varied. While the EMEA
region struggled with the economic conditions, the situation was
considerably more positive in the Americas and the Asia-Pacific
region.
Our investments were within the expected range. The number of
employees increased significantly, among other things, as a re-
sult of the acquisitions and our strong expansion in particular in
the Asia-Pacific region. For this reason, personnel costs were
also higher than planned. Research and development expenses
were somewhat higher than we had forecasted.
Our net debt without derivative financial instruments as at 31
December 2012 decreased, despite the dividends paid for 2011
and the acquisitions.
Operating net cash flow should be at least stable and at or above
the adjusted level in 2011 of EUR 66.8 million. We significantly
exceeded this amount with EUR 81.0 million.
Total assets increased due to the slight growth and acquisitions.
We increased the equity ratio to 41.7 %, despite the dividends
paid and the increase in total assets as a result of the good net
profits.
We promised a sustainable dividend policy with a distribution
rate of approximately 30 % to a maximum of 35 % of consoli-
dated net profit for the financial year as long as the economic
situation permitted. In the Annual General Meeting for financial
year 2012, the Management Board and Supervisory Board will
propose a dividend of EUR 0.65 per share. This corresponds to
33.5 % of the adjusted consolidated net profit.
GENER AL S tAtEMENt B y thE M ANAGEMENt BOARd
ON th E CO uRSE OF B uSiNESS AN d ECONOM iC
SituAtiON
Considering the economic situation, in particular in the fourth
quarter of 2012, the Management Board is satisfied overall with
the development of the business in 2012. We were not able to
achieve all of the goals that we set for ourselves. However, we
expanded and strengthened our market position with the four
acquisitions and the further expansion of our capacities, in par-
ticular in the Asia-Pacific region. The development of new prod-
ucts helped to underpin our market leadership. The acquisition
of Australian DavyDick & Co. Pty. Ltd. in January 2013 also con-
tributes to further expanding our market position (also refer to
our Supplementary Report on page 99).
Financial year 2012 was essentially in line with the Management
Board’s expectations. Unfortunately, the positive trends at the
beginning of the year did not continue up to the end of the year.
Due to the economic slowdown in particular in Europe, we were
not able to meet the targets we set at the beginning of 2012 and
had to lower them slightly at the beginning of November. Weak
demand in the European economy continued to a certain degree
into 2013, albeit not to the same extent as at the end of 2012.
The Management Board views NORMA Group’s economic posi-
tion as stable and sustainable. This assessment is based on the
results of the 2012 consolidated financial statements and sepa-
rate financial statements and reflects the business development
up to when the 2012 group management report was prepared.
The business trend at the beginning of 2013 was in line with the
Management Board’s expectations when this annual report was
prepared.
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders 62
Financial performance, financial
position and cash flows
SALES AN d EARNi NGS PERFORMANCE
Slowing growth momentum hardly had an effect on
the order book
The deteriorating economic situation in the second half of the
year increased the reluctance of our customers to place orders.
Nevertheless, the order book of EUR 215.4 million as at 31 De-
cember 2012 was only slightly lower than at year-end 2011 of
EUR 218.6 million.
Solid sales growth despite economic weakness in Europe
Nevertheless, we finished financial year 2012 successfully with
consolidated sales of EUR 604.6 million and thus a 4.0 % in-
crease over the previous strong year’s consolidated sales of
EUR 581.4 million. This increase can be attributed to the suc-
cessfully integrated acquisitions (+2.5 %) and positive currency
effects (+3.4 %) despite an organic decrease in sales of 1.9 %.
The companies acquired in 2012 contributed EUR 14.3 million
overall to sales growth, although their individual contributions
varied depending on when they were acquired. Connectors
Verbindungstechnik was consolidated as at 19 April 2012, Nordic
Metalblok as at 12 July 2012 and Chien Jin Plastic as at 1 De-
cember 2012. The consolidation of Groen Bevestigingsmateri-
alen B.V. at the end of financial year 2012 did not increase con-
solidated sales.
OvERviEw OF th E AC quiREd CONtRiButiON tO SALES i N 2012
Company
Connectors Verbindungstechnik AG, Switzerland
Nordic Metalblok S.r.l., Italy
Chien Jin Plastic Sdn. Bhd., Malaysia*
Groen Bevestigingsmaterialen B.V., Netherlands**
total
* acquisition of 85% interest
** increase in interest from 30% to 90%
Contribution to
sales in EUR
million
11.5
2.3
0.5
0
14.3
We meet the demand in our business with our global network of
production plants with highly-developed joining technology. Our
manufacturing facilities are mostly located in the markets that
they serve. Accordingly, costs are incurred in the same currency
in which we realise our sales revenues. Currency effects, in par-
ticular the correlating development of both the US dollar and the
euro, had a positive impact on sales in 2012. Since we generate
a large portion of our sales in the USA and the eurozone, an ap-
preciation on the part of the US dollar is advantageous from a
balance sheet perspective, since we report in euros and the
profits generated in US dollars result in a higher computed euro
value (translation effect). As a rule, the currency relationship also
reflects the differences in regional economic momentum. The
average exchange rate of the euro to the US dollar was 1.28 in
2012 and thus significantly lower than the previous year’s aver-
age exchange rate of 1.39.
NORMA Group’s business development is subject to a certain
seasonal fluctuation and is typically characterised by a strong
first half of the year compared to the second half. The economic
situation reinforced this trend in 2012. At EUR 159.7 million, the
first quarter was the strongest, followed by a very good EUR 158.0
million in the second quarter. But we were not able to fully reach
this high level of sales in the third quarter. In addition to the effect
of holidays with fewer business days in the summer, the increas-
ing uncertainty regarding the further economic development
increased the reluctance of our customers to place orders. Sales
amounted to EUR 149.6 million. With EUR 137.3 million, the
fourth quarter was the weakest and, in addition to the seasonal
business development, also clearly reflected the economic
downturn.
different growth momentum in the two distribution
channels EJt and dS
We generated total sales of EUR 427.6 million in the EJT unit. This
represents an increase of 3.9 % over the previous year’s sales of
EUR 411.5 million. Whilst the 8.7 % growth in two first quarters of
2012 was still highly satisfactory, the economic downturn in the
second half of the year had a negative impact in various countries
that resulted in a weaker order situation and led to a decrease in
sales in the fourth quarter.
The DS unit developed satisfactorily as a result of the acquisitions.
Sales increased from EUR 170.3 million in 2011 to EUR 174.5
million in the current financial year and therefore grew by 2.5 %,
whereby Groen Bevestigingsmaterialen B.V. did not contribute
to sales due to the timing of its consolidation. Adjusted for the
acquisitions, DS sales were EUR 160.2 million and thus down
5.9 % year-on-year. The significantly deteriorated economic situ-
ation was apparent in important customer industries in Europe,
in particular in engineering and the construction industry.
NORMA Group AG Annual Report 2012
Management Board Letter
To Our Shareholders
Consolidated Management Report
Consolidated Financial Statements
Further Information
63
Financial performance, financial position and cash flows
SALES GROW TH
in EUR million
EFFECT ON CONSOLIDATED SALES
581.4
604.6
Sales 2011
Organic growth
Acquisitions
Currency effects
Sales 2012
in EUR million
Share in %
581.4
– 10.8
14.3
19.7
604.6
-1.9
2.5
3.4
4.0
600
400
200
0
2011
2012
Cost of materials ratio improved
Austenitic and ferritic steels as well as plastic granules are key
components of the raw materials we use. The cost of materials
increased disproportionately less than sales by only 0.5 % from
EUR 262.3 million in 2011 to EUR 263.5 million in 2012 as a result
of systematic cost-reduction measures under our Global Excel-
lence programme and the passing on of costs. Thus, we im-
proved the cost of materials ratio from 45.1 % to 43.6 %.
Gross profit margin up year-on-year
After deducting material costs in the amount of EUR 263.5 million
and changes in inventory in the amount of EUR 3.3 million, we
showed a gross profit of EUR 344.4 million in 2012, compared to
EUR 322.6 million in the previous year. This signifies an increase
in the gross profit margin of 1.5 percentage points to 57.0 % after
55.5 % in 2011.
Personnel costs impacted by extended production
capacities and acquisitions
Employee benefits expense increased to EUR 156.5 million in
2012 after EUR 138.4 million (adjusted) in 2011 (+13.0 %). The
number of employees, which increased to 4,485 in 2012 as a
result of acquisitions and the opening and expansion of sites
(previous year: 4,252) as well as collectively agreed wage in-
creases, had an effect on personnel expenses. Furthermore,
personnel costs were also influenced by translation effects re-
lated to the US dollar. Thus, the personnel cost rate was 25.9 %
in the financial year just ended after 23.8 % (adjusted) in 2011.
Adjusted non-recurring expenses in 2011 resulted in particular
from severances related to the integration of US companies ac-
quired in 2010 as well as provisions for a phantom share pro-
gramme for the Company’s previous shareholders and a one-
time bonus deferral related to the initial public offering.
Other operating income and expenses unchanged
Other operating income and expenses in 2011 were impacted by
the costs of the IPO and adjusted for these non-recurring ex-
penses. At EUR – 67.1 million with rising sales in 2012, they were
at the same level as in the previous year. Thus, the rate of 11.5 %
with respect to sales in 2011 decreased to a sound 11.1 %.
Operating profit increased at a high level
We increased earnings before interest, taxes, depreciation and
amortisation (EBITDA) by EUR 3.8 million or 3.3 % from EUR 117.0
million (adjusted) in 2011 to EUR 120.8 million in 2012.
EBITA is a more meaningful indicator of NORMA Group’s earn-
ings. In 2011, this value was adjusted for the depreciation of
material assets resulting from the purchase price allocation of
historical acquisitions as well as for non-recurring effects primar-
ily based on IPO costs and amounted to EUR 102.7 million. In
2012, the EBITA was only adjusted slightly for depreciation of
material assets from purchase price allocations and amounted
to EUR 105.4 million (+2.7 %). Thus, we generated an operating
margin of 17.4 %, which was only slightly below the previous
year’s value of 17.7 % (adjusted).
We had pointed out in the Q2 interim financial report that, due to
the historical business development, we would not be able to
carry over the high profitability of 18.2 % for the first half of the
year to the full 2012 financial year, since profitability in the second
half of the year is typically weaker than the first half, which turned
out to be the case in the second half of 2012.
64
NORMA Group AG Annual Report 2012
DEVELOPMENT OF THE DISTRIBUTION CHANNELS
ADJUSTED EBITA AND EBITA MARGIN
EJT
DS
in EUR million
Sales
in EUR million
Growth in %
Share of sales in %
2012
2011
2012
2011
427.6
411.5
3.9
71.0
70.7
174.5
2.5
29.0
170.3
29.3
150
100
50
0
17.7 %
102.7
17.4 %
105.4
2011
2012
Sharp increase in net financial income
We generated net financial income of EUR – 13.3 million in 2012.
This is an increase of EUR 16.3 million or 55.2 % compared to
EUR – 29.6 million in 2011. However, the value in the first half of
2011 was heavily influenced by preparations for the initial public
offering and the subsequent refinancing.
Net income after tax
We increased our adjusted net income after tax from EUR 57.6
million by 7.3 % to EUR 61.8 million in 2012.
FINANCIAL POSITION AND CASH FLOWS
Total assets reflect growth and acquisitions
Total assets increased to EUR 692.1 million and were thus 6.7 %
higher than on the last day of 2011 (EUR 648.6 million). This in-
crease can be attributed in particular to the acquisitions and
additions to non-current assets and to some extent also to cur-
rency effects, above all due to the higher transaction volume in
US dollars.
The adjusted income taxes in the financial year just ended
amounted to EUR – 26.8 million. The adjusted tax rate of 30.3 %
was at the adjusted level of 2011 of 30.0 % and therefore at the
lower end of our forecast.
The first-time inclusion of the four acquisitions in NORMA Group’s
consolidated group is reflected in the Group’s statement of finan-
cial position. The effects of these acquisitions on NORMA
Group’s assets and liabilities are presented under Note 39 on
pages 154 to 159.
Adjusted earnings per share increased significantly
to EUR 1.94
Earnings per share amounted to EUR 1.78 and were thus 49.6 %
higher than the previous year’s earnings per share of EUR 1.19.
Adjusted earnings per share were EUR 1.94 (previous year:
EUR 1.92). This is based on the weighted number of shares as
at 31 December 2012 of 31,862,400 (previous year: 30,002,126
shares). Pro-forma earnings per share for 2011 amounted to
EUR 1.81 based on the number of shares in circulation as at 31
December 2012 (31,862,400 shares). This represents an increase
of 7.3 % or EUR 0.13 in 2012.
Non-current assets mainly influenced by acquisitions
Non-current assets amounted to EUR 445.5 million or around
64 % of total assets at the end of the year. They increased by
8.6 % compared to EUR 410.2 million at the end of 2011. The
increase can be mainly explained by the increase in goodwill as
a result of the acquisitions as well as by the increase in other
intangible assets and property, plant and equipment.
Goodwill amounted to EUR 235.3 million as at 31 December
2012 and was thus EUR 10.5 million or 4.6 % higher than the
previous year’s amount of EUR 224.8 million. This includes
EUR 6.9 million from Connectors Verbindungstechnik AG,
EUR 1.0 million from Nordic Metalblok S.r.l., EUR 1.3 million from
Chien Jin Plastic Sdn. Bhd. and EUR 2.7 million from Groen
Bevestigingsmaterialen B.V.
Financial performance, financial position and cash flows
65
The increase in other intangible assets by EUR 13.6 million or
17.2 % to EUR 92.5 million (31 December 2011: EUR 78.9 million)
can also be attributed to these acquisitions.
Property, plant and equipment increased in particular due to the
acquisitions as well as capital expenditures in property, plant and
equipment by EUR 11.9 million or 12.2 % from EUR 97.2 million
as at 31 December 2011 to EUR 109.1 million as at 31 December
2012.
Capital commitment in (trade) working capital remains
low despite growth
(Trade) working capital (inventories plus receivables minus liabil-
ities, both primarily from trade payables and trade receivables)
was EUR 115.9 million as at 31 December 2012 (31 December
2011: EUR 106.2 million) and thus reflected the satisfactory busi-
ness development as well as effects from the acquisitions with
an unchanged low relative capital commitment in relation to
sales.
Current assets positively impacted by the increase in
cash and cash equivalents
Current assets amounting to EUR 246.7 million as at 31 Decem-
ber 2012 were only slightly above the level as at 31 December
2011 (EUR 238.4 million). Thus, they amounted to around 36 %
of total assets.
Non-current liabilities reduced
Non-current liabilities amounted to EUR 268.7 million as at 31
December 2012 and were thus around 39 % of total assets.
Since we were able to systematically reduce our loan liabilities,
non-current liabilities decreased by EUR 15.3 million or 5.4 %
compared to 2011 (EUR 284.0 million).
On the one hand, inventories increased to EUR 74.3 million com-
pared to EUR 66.8 million as at 31 December 2011; on the other,
cash and cash equivalents increased to EUR 72.4 million com-
pared to EUR 67.9 million in 2011. Trade receivables and other
receivables totalling EUR 79.3 million were slightly lower than the
previous year’s amount of EUR 80.8 million. As at 30 June 2012,
they amounted to EUR 101.8 million. The decrease in this line
item starting at the second half of the year primarily reflects the
business’ typical development over the course of the year.
The increase in inventories by EUR 7.6 million or 11.3 % was
mostly due to the acquisitions. The increase in cash and cash
equivalents can be mainly attributed to the cash flow, which was
positive despite the payments for the acquisitions and the divi-
dends paid out for financial year 2011.
Group equity base further increased to 41.7 %
Consolidated equity as at 31 December 2012 increased by
EUR 32.3 million or 12.6 % to EUR 288.3 million compared to
EUR 256.0 million at 31 December 2011. This increase resulted
mostly from the net profit for the period of EUR 56.6 million. In
contrast, the dividends paid in the second quarter in the amount
of EUR 19.1 million reduced the equity. Thus, equity expressed
as a percentage of assets was 41.7 % after 39.5 % as at 31 De-
cember 2011.
Net debt stable despite acquisitions and dividends
At EUR 199.0 million, net debt in 2012 was almost at the same
level as 2011 (EUR 198.5 million), despite our acquisitions and
the payment of dividends. Gearing (net debt in relation to equity)
of 0.7 was significantly below the level of 0.8 as at the end of
2011. Net financial debt included derivative (non-cash) liabilities
totalling EUR 24.8 million (31 December 2011: EUR 21.8 million).
Two opposing effects had an impact. On the one hand, non-
current loans payable decreased by 10.7 % or EUR 22.8 million
from EUR 213.5 million as at 31 December 2011 to EUR 190.7
million as at 31 December 2012. On the other, non-current de-
rivative financial liabilities increased by EUR 2.9 million or 13.1 %
from EUR 21.8 million as at 31 December 2011 to EUR 24.7 mil-
lion in 2012. The European Central Bank once again reduced
interest rates as a result of the effects of the European debt crisis.
Consequently, the negative fair value of NORMA Group’s deriva-
tive interest rate hedges further increased.
Current liabilities increased due to acquisitions
Current liabilities increased as at 31 December 2012 by EUR 26.6
million or 24.5 % to EUR 135.1 million (31 December 2011:
EUR 108.5 million) and thus amounted to around 20 % of total
assets.
This can be mainly attributed to the EUR 22.1 million increase in
current loans payable (+76.3 %) from EUR 28.9 million as at 31
December 2011 to EUR 51.0 million at the reporting date. Cred-
it lines available on short notice were utilised, among other
things, to finance acquisitions, the growth of working capital in
current assets, and the dividend payments. Please refer to Note
30 on page 150.
Accounting treatment of carrying amounts
As a rule, we recognise the carrying amounts of assets and lia-
bilities at amortised cost, whereby we adhere to the lower-of-
cost-or-market principle. Derivative financial instruments, avail-
able-for-sale financial assets and cash and cash equivalents are
measured at fair value. Note 5.3 on page 129 includes comments
on the determination of the carrying amount of financial instru-
ments.
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders 66
NORMA Group AG Annual Report 2012
ASSETS AND LIABILITIES STRUCTURE
in EUR million
Assets
2012
2011
446
174
72
288
269
135
692
2012
Liabilities
410
171
68
256
284
109
649
2011
692
649
Non-current
assets
Current assets
Cash & cash
equivalents
Equity
Non-current
liabilities
Current
liabilities
In one subsidiary, we sell a small amount of accounts receivable
under factoring agreements to hedge the inflow and outflow of
payments.
Off-balance sheet financial instruments
NORMA Group relies on rental agreements (so-called operating
leasing) for its financing, but only to a very limited extent. These
are not reflected in the consolidated financial statements. There
were no other major off-balance sheet financial instruments dur-
ing the reporting period January to December 2012.
Unrecognised intangible assets
NORMA Group’s rights to the brands that it owns and its patents
are recognised in the balance sheet as intangible assets. How-
ever, the reputation of these brands and how well known they
are among our customers also play an important role in our suc-
cess, as does consumer confidence in our products and solu-
tions. Well-established customer relationships are equally impor-
tant to us. These are also supported by our distribution network
built up over many years.
The know-how and experience of our employees also play an
important part in the success of the company. We also regard
our many years of research and development expertise and proj-
ect management know-how as competitive advantages for
NORMA Group.
These values are not recognised on the balance sheet.
Positive increase in operating net cash flow
NORMA Group’s management uses operating net cash flow
(EBITDA (previous year: adjusted EBITDA) plus/minus changes
in working capital minus investments from operating activities)
during the year and in the development of operations as an in-
ternal management parameter. At EUR 81.0 million, this cash flow
continued to be in line with our high expectations and was dis-
tinctly more positive in 2012 than in the previous year (EUR 66.8
million). In relation to total sales, it rose from 11.5 % in 2011 to
13.4 % in 2012.
Cash flow from operating activities driven by strong
net profit for the period
We generated a cash inflow of EUR 96.1 million from operating
activities compared to EUR 71.7 million in 2011 (+34.0 %). The
increase was mainly due to the sharp rise in net profit for the
period in the amount of EUR 56.6 million in 2012 after EUR 35.7
million in 2011 (+58.4 %).
Increased cash flow from investing activities
In 2012, we presented a cash outflow from investing activities in
the amount of EUR 58.1 million after EUR 33.7 million in the
previous year. This increase can be attributed primarily to the net
payments made for the acquisitions in the amount of EUR 29.0
million. Offsetting effects in 2012 included lower expenditures for
property, plant and equipment in the amount of EUR – 23.9 mil-
lion compared to EUR – 26.4 million in the previous year. Capital
expenditures in 2012 related in particular to projects to expand
our manufacturing capacities in Germany, the USA, Poland, India
and China as well as the new plant in Serbia.
Thus, the investment rate in 2012 amounted to 9.6 % of sales as
a result of acquisitions. Adjusted for the acquisitions and the
proceeds from the sale of property, plant and equipment, the
rate was 5.0 %. Based on the long-term growth trend, we also
aim to invest in expansion and maintenance in the medium term
at a rate of 4.5 % of sales on an annual basis.
Financial performance, financial position and cash flows
67
Cash flow from financing activities impacted by
dividends paid
In 2012, cash outflow from financing activities amounted to
EUR 34.1 million, whereas it was EUR 0.5 million in 2011. While
the cash flow in 2011 was still affected by the financing activities
in connection with the initial public offering, it was substantially
characterised by the payment of dividends for financial year 2011
in the amount of EUR 19.1 million in 2012.
FiNANCiAL MANAGEMEN t
Principles and objectives
Our basic goals with respect to the central financial and liquidity
management system remain the same:
I. Ensuring solvency at all times
Our main financial objective is maintaining the necessary liquid-
ity for the Group’s operating business at all times and maintaining
sufficient strategic liquidity reserves to ensure NORMA Group’s
long-term solvency.
II. Limiting financial risks
The Treasury division identifies interest rate and currency risks
as well as risks related to changes in the price of raw materials
and also selects suitable hedging instruments to reduce these
risks.
III. Optimising the Group’s internal liquidity
NORMA Group Holding is responsible for investing surplus li-
quidity as well as for intra-Group financing.
Liquidity management
We presented Group-wide cash holdings of EUR 72.4 million at
the end of the financial year. Our goal is to bundle surplus liquid-
ity of Group companies and allocate this money optimally in the
Group or invest it optimally outside the Group while ensuring
solvency at all times. This is done using a professional treasury
management system which provides us with an overview of the
cash holdings of our most important subsidiaries at all times. Due
to the heterogeneous global corporate structure, automated
global cash pooling is not sensible for technical reasons; as a
result, the Treasury division concentrates cash in periodic inter-
vals. Manually pooling funds allows us to invest these funds with
external institutions at better terms, whereby in particular the
local terms for international payments must be taken into ac-
count; accordingly, a complete concentration of funds is usually
not possible for legal and/or tax reasons.
Overview of finanical position
In the past year, we were able to further improve our financial
situation as a result of good earnings and a sustained, strong
cash flow. We increased our equity as a percentage of assets to
41.7 % as at 31 December 2012, despite further acquisitions and
a distribution of dividends of EUR 0.60 per share for financial year
2011. Our current financing offers a solid foundation for our me-
dium-term growth strategy. The total volume of financing
amounts to EUR 375 million. This includes a revolving credit line
in the amount of EUR 125 million that was drawn down in the
amount of EUR 18.5 million at the end of the year. Both the syn-
dicated loan as well as the revolving credit line have a remaining
term of more than 3 years and expire in the first quarter of 2016.
At the end of 2012, external financial liabilities from this syndi-
cated loan amounted to EUR 220 million with an interest margin
of less than 200 basis points over the 3-month EURIBOR. The
average synthetic interest rate resulting from the hedging instru-
ments was around 4.6 % in financial year 2012, comprising pri-
marily fixed interest rates exhibiting only a limited interest rate risk
until the loan agreement matures. Only the revolving credit line
– for working capital or acquisition financing – utilised on a short-
term basis exhibits a higher interest rate risk.
In addition, we also optimised our financing by adjusting loan
agreement clauses in the third quarter of 2012. The resulting
changes, which were fully approved by all of the syndicate banks,
relate in particular to qualitative positions within the loan agree-
ment. Overall, our flexibility with respect to loan volume and ap-
proved loan instruments was increased. The use of loan funds
was also adjusted so that we now have additional room for po-
tential company purchases.
As at the 2012 reporting date, we had met all of the financial
covenants negotiated in the credit agreement. The original col-
lateral provided for the extension of credit is released.
Limitation of financial risks
Our financial risks are reduced by a diverse syndicate comprising
15 international banks. The withdrawal of a bank participating in
the loan could be easily absorbed without negative consequenc-
es for our Group via an established banking connection and the
addition of a new bank.
The adjusted loan agreement permits new instruments to be
issued to procure borrowed funds from external sources. We
thereby achieve greater independence, since we can now use
debt instruments that are new for us.
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders 68
The entire syndicated loan was originally extended completely
on a variable euro basis. Thus, the interest expenses related to
the syndicated loan depend on the amount drawn down, par-
ticularly from the revolving line of credit, as well as the general
changes in money market rates, specifically the 3-month EURI-
BOR rate. In order to reduce this risk and meet the requirements
of our Group’s earnings and financial performance, the majority
of the loan amount was already paid out in 2011 in our three main
currencies, the US dollar, Swedish krona and British pound ster-
ling and hedged by means of derivative structures. This mini-
mised currency and interest rate risks. The changes in value of
the instruments selected for this purpose are recognised direct-
ly in equity as part of our hedge accounting.
In addition to these hedging instruments, we use forward trans-
actions and options primarily to limit the Group’s currency risk.
We are not currently using any other hedging instruments or
derivative structures. We regularly review whether there are suit-
able hedging instruments to sensibly reduce our risk, in particu-
lar in the area of commodities. We periodically analyse and
evaluate net open positions across the Group. We constantly
monitor the latest developments in hedging instruments and le-
gal hedging opportunities to see how they compare with risk
positions so that we can quickly react to changes in risk param-
eters.
We also expanded the possibilities for internal financing in the
past year through various projects in the Treasury division,
whereby we are pursuing the goal of placing our Group-wide
financing on an even broader and more balanced foundation in
order to further optimise the Group’s strong cash flow.
Key components of our policy to limit financial risks include clear-
ly defining process responsibilities, multi-level approval process-
es and risk reviews that we have fixed in a Treasury guideline.
investment analysis
We invest the funds from our operating cash flow in our growth.
In the past year, we further expanded the plant we established
in Serbia in 2011. In Asia, both internal as well as external growth
was augmented by the construction of new production plants
and strategic purchases. In the Netherlands, we considerably
increased the interest in our sales partners. With the acquisition
of Connectors Verbindungstechnik in Switzerland, we not only
entered a new geographical market, but also developed a new
customer segment from the pharmaceutical industry for the
NORMA Group. We also gained new products and sales part-
ners with the purchase of Chien Jin Plastic in Malaysia. We en-
hanced our market position in the joining technology market for
water and sewage in Asia. We strengthened our distribution
network in Southern Europe with the purchase of Nordic Metal-
blok in Italy.
In addition, we invested in existing plants worldwide in order to
automate and optimise production.
The economic efficiency of operating investments in the Group
is monitored in the controlling department of the respective op-
erationally legal unit.
Segment reporting
different development in the three operating segments
We further increased the share of sales realised internationally
from 61.7 % in 2011 to 67.4 % in the financial year just ended by
developing new markets and customers, thereby continuing our
strategy of internationalisation.
We measure the profitability of our segments based on EBITDA.
In 2011, this was adjusted primarily for non-recurring expenses
from the preparation and execution of the initial public offering
as well as other non-recurring expenses. Further information on
this can be found under Note 36 “Segment reporting” on page
153.
Business development in our three regional segments EME A
(Europe, Middle East, Africa), Americas and Asia-Pacific varied
significantly with respect to sales and EBITDA in 2012.
Only slight decline in sales trend in the EMEA region
despite flagging economy
Despite the general economic development in the EME A region,
sales only decreased slightly to EUR 367.5 million including ac-
quisitions compared to EUR 372.7 million in 2011 (-1.4 %). In ad-
dition to the sales growth from acquisitions, this can also be
attributed to the fact that the decrease in sales, which continued
to deteriorate in the first three quarters, did not continue in the
fourth quarter, but instead stabilised. We see here positive ef-
fects from the new Euro 6 emission standards, whose implemen-
tation has already been carried out in part by automobile manu-
facturers. The share of the EME A region fell in relation to total
sales due to the increased expansion in the Americas and Asia-
Pacific region from 64 % in 2011 to 61 % in 2012.
EBITDA fell from EUR 89.8 million (adjusted) in 2011 to EUR 79.3
million in 2012 and thus by 11.7 %. The EBITDA margin fell from
24.1 % only to 21.6 % as a result of cost-savings from the Global
Excellence programme.
NORMA Group AG Annual Report 2012 Financial performance, financial position and cash flows
Segment reporting
69
dEvELOPMENt OF thE SEGMEN tS
EMEA
Americas
Asia-Pacific
in EUR million
External sales
Contribution to consolidated sales
Adjusted EBITDA
2012
2011
Change
2012
2011
Change
367.5
61 %
79.3
372.7
– 1.4 %
64 %
89.8
– 11.7 %
193.3
32 %
43.0
173.0
+ 11.8 %
30 %
34.3
+ 25.4 %
2012
43.8
7 %
5.2
2011
Change
35.7
+ 22.6 %
6 %
3.1
+ 68.9 %
Assets increased from EUR 417.1 million in 2011 to EUR 457.4
million mainly due to the acquisitions of Connectors Verbindung-
stechnik and Nordic Metalblok as well as the acquisition of ad-
ditional shares of Groen Bevestigingsmaterialen.
We already described in detail other projects that were imple-
mented in 2012 in our interim financial reports in 2012.
For example, we opened a new distribution centre in Moscow.
We have distributed our joining products and solutions to local
distributors since July 2012, thereby continuing our course of
expansion and strengthening the local customer relationships.
Our customers benefit from the shorter delivery times and in-
creased product availability.
Furthermore, we placed a new assembly system for the manu-
facture of exhaust pipe connectors into operation in the German
plant in Gerbershausen in September. We manufacture the new
“Euro Coupler” joining element in this plant, which supports the
automotive industry’s need to build lighter automobiles, avoid
leakage and reduce CO2 emission values.
The construction of the new assembly plant at the site in New-
bury, United Kingdom, to manufacture NORMACONNECT V
profile clamps on which we reported in the half-yearly report is
nearly completed.
tion and the impending “fiscal cliff” at the end of the year had an
impact on the economy in the fourth quarter of 2012. Therefore,
we were unable to maintain the strong increase in sales of
+18.3 % in the first nine months until the end of the year. This
region’s share of sales in relation to total sales increased to 32 %
after 30 % in the previous year.
EBITDA increased from EUR 34.3 million (adjusted) in 2011 by
25.4 % to EUR 43.0 million. The EBITDA margin was 19.8 % in
the previous year and 22.2 % in 2012. We were also able to re-
duce the cost basis in the Americas segment as a result of mea-
sures from the Global Excellence programme.
Assets decreased from EUR 223.9 million in 2011 to EUR 209.9
million mainly due to higher exchange rates on the reporting date.
Strong sales growth in the Asia-Pacific region
The significance of the Asia-Pacific region for our growth poten-
tial remains high. The improved standard of living in the region’s
emerging markets has also led to increased demand for high-
quality products. Sales were EUR 35.7 million in 2011 and in-
creased by 22.6 % to EUR 43.8 million in 2012. Thus the share
of sales was 7 % after 6 % in the previous year. Observing the
share of sales with respect to the region of destination, i.e. includ-
ing the imported sales from other regions, it was around 10 %
and thus at the same level as in the previous year.
Sales trend in the Americas very positive
The Americas segment generated EUR 193.3 million in sales
compared to EUR 173.0 million in the previous year and thus rose
by 11.8 % also due to the positive currency development in 2012.
The political uncertainties leading up to the US presidential elec-
EBITDA rose from EUR 3.1 million in 2011 to EUR 5.2 million and
thus by 68.9 %. The EBITDA margin was 11.8 % after 8.6 % in
2011. The reason for the strong improvement is the ever increas-
ing utilisation of capacities, which had a positive effect on the
cost basis.
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders
70
BRE AkdO wN OF SALES B y SEGMEN t
in %
EMEA 61
32 Americas
7 Asia-Pacific
Assets increased from EUR 34.5 million by EUR 16.7 million to
EUR 51.2 million in 2012. This can be mainly attributed to the
acquisition of Chien Jin Plastic.
We already provided information in our interim financial reports
in 2012 on the diverse measures with which we take into account
the constantly rising significance of the Asia-Pacific region.
For example, we expanded our regional presence with branch
offices in new countries such as the Philippines or Vietnam and
Malaysia. We built a new production site in India in order to meet
the rising demand for our highly-developed joining products. We
are also increasing our activities in China and have produced
fluid lines for a leading manufacturer of lorries since 2013. We are
not only expanding production of NORMACONNECT V profile
clamps at our European site in Newbury, but also in our plant in
Qingdao, in order to provide our Asian customers with shorter
delivery times.
Research & development
innovation as the key to success
Our customers must continually cope with new challenges. On
the one hand, new legislation is constantly leading to lower emis-
sions thresholds, and on the other, safety requirements are al-
ways increasing also due to smaller and smaller installation
spaces. Intensive research activities and the development of new
products and solutions are thus indispensable and we have built
up a comprehensive research and development department in
recent years. Our technical solutions help our customers cope
with specific challenges in the reduction of emissions, leakage,
weight, space requirements and assembly time. They achieve a
process-optimised production through compatibility with modu-
larised production processes and by reducing assembly time.
On the one hand, we successfully develop high-performance
joining technologies together with our customers in order to de-
velop new applications for the use of existing products. On the
other hand, we meet new market challenges head on and imple-
ment them seamlessly in new products. This way we offer our
customers products for current applications, while simultane-
ously setting future trends in the area of joining technology.
These solutions offer our customers an innovative edge and thus
increased competitiveness. Our customers can trust the joining
integrity of our products after installation due to the safety con-
cept accompanying a product from development to the produc-
tion stage. We achieve both thanks to the committed and close
cooperation of all functional areas of NORMA Group, beginning
with our sales employees and engineers over the process devel-
opment to IT and other areas such as purchasing.
We implement the requirements of our customers flexibly in op-
timal solutions, whether it be a standardised joining element, a
multi-component section, or a complex piping system. We have
a highly qualified team of 190 staff across the globe to implement
customer specifications and market requirements.
NORMA Group AG Annual Report 2012 Segment reporting
Research & development
71
Our cutting-edge testing laboratory is set up to perform service
life tests for all relevant application areas. We use our laboratory
to test joining technology for cooling water and fuel lines, charge
air and other air and gas applications, among other things. These
outstanding test facilities help us to develop new products, set
their specifications and test them. We are also able to run tests
in accordance with relevant customer specifications. In the finan-
cial year just ended, a testing facility was placed into operation
to test the service life of SCR fluid lines.
customers. They work in close collaboration with our EJT cus-
tomers as well as NORMA Group’s product developers and
other functional areas that are required to successfully bring
customer projects to completion.
Our competence centres in the USA, China, India and Europe
focus on clearly defined innovation tasks designed to develop
solutions for various products and product groups in the different
customer groups and adjust them to regional characteristics.
two-pillar development structure
Our product development and application development in our
Engineered Joining Technology (EJT) unit is set up as a two-
pillar process. We create new basic products in product develop-
ment in close cooperation with our customers. The application
development process alters these basic products to meet the
customers’ specific needs.
Our product developers design new products or product groups
for the entire EJT unit. This process involves testing new prod-
ucts in collaboration with our production division and other func-
tional areas, but also developing new materials to suit the future
requirements of our customers. Our teams test the products and
develop internal product and test specifications which confirm
that our products are reliable. The innovations are reviewed on
a regular basis by the Management Board.
Our application developers modify our existing and newly devel-
oped products based on the specific requirements of our cus-
tomers or local conditions.
Global megatrends that, for example, trace back to climate
change are a challenge for many customers and their finished
products and offer excellent growth prospects. Our product de-
velopment concentrates on these innovation opportunities. This
also allows us to increase profitability as well as our technical and
entrepreneurial success. This improves the speed at which we
can bring product innovations to market, gives us a large number
of customer-specific customisations and makes us stand out
from our direct competitors, the majority of which have a local
focus. We have created a standardised innovation process
through our two-pillar structure. This allows us to utilise our re-
sources at a global level with a sharp focus on growth and prof-
itable markets.
Strategic collaboration with customers and research institutes
Many of our projects require a close and continuing on-site col-
laboration with our customers. Therefore, the application devel-
opment teams represent an active link to many of our largest
We also work with research and higher education institutions
such as material and other testing institutes. However, for com-
petitive reasons we do not publish the specific nature of these
research partnerships.
Awards
In March 2012, we received the Performance Excellence Award
in Silver from Boeing for our above-average performance in 2011.
The company purchases worm drive hose clamps from us,
which it uses in various types of commercial aircraft.
Significant developments in 2012
The Distribution Services unit is purely a commercial unit; the
market does not require the same type of technological research
as conducted in the Engineered Joining Technology unit. More-
over, these customers expect a strong brand image and the most
complete product range possible with the corresponding mar-
keting measures. Therefore, we continuously drive development
in this unit with sensible additions to the product range. In 2012,
we expanded our product range to include products from the
biotechnology and pharmaceutical areas and the heating, venti-
lation and air conditioning industry as well as products related to
drinking and industrial water supply and sprinkler systems
through three acquisitions in Switzerland, Italy and Malaysia. This
allowed us to make our product range even more attractive for
consumers in the retail sector.
In the EJT unit, we introduced further innovations to the market
that help our customers to meet challenges in the area of weight
and emission reduction, the minimisation of leaks and assembly
optimisation and safety.
The tamper-proof secure worm drive hose clamp NORMA-
CL AMP TORRO Tamper Proof comes with a special bolt head
that can only be mounted and removed with a matching tool.
This helps avoid errors in the assembly of components such as
pre-assembled tank, air induction or cooling systems. This re-
sults in simpler processes, increased installation safety and helps
to reduce costs.
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders 72
MOSt iMPORtANt PRO duCtS iNt ROduCEd iN 2012
Product
Application
Industry
NORMACLAMP TORRO Tamper Proof
Tank, air induction and cooling systems
Agriculture, automotive industry, shipbuilding,
construction industry
NORMAFLEX Low Emission Tubes
Fuel systems
Automotive industry
NORMAQUICK TWIST III
Charge air and cooling water systems
Agriculture, automotive industry, shipbuilding,
construction industry
NORMACONNECT V PP profile clamp
Flanged pipes, exhaust gas, cooling and filter
systems
Agriculture, automotive industry, shipbuilding,
construction industry
NORMAFIX Red Grip
Electrical, hydraulics, air ducts, drainages
Aviation industry
The latest development of NORMAFLE X Low Emission Tubes
(LET fuel lines) is a new generation of lines that meet the Low
Emission Vehicle (LEV) III Standards for evaporative emissions
for fuel with a high alcohol content in accordance with the Cali-
fornia Air Resource Board (CARB). This permits the development
of cost-optimised solutions for the fuel system that also make a
crucial contribution to meeting the new emission requirements
for future generations of vehicles.
NORMAQUICK T WIST III are connectors in the area of charge
air and cooling water systems and can be used, among other
things, in turbocharged gasoline engines. A new, self-locking
mechanism guarantees correct assembly, which in turn prevents
leaks. The connectors can be opened from any position and are
therefore suited for tight engine spaces and spin weld applica-
tions. Little force is required due to an optimised axial to radial
ratio – even when assembling larger elements. These advan-
tages simplify assembly significantly and permit our customers
to meet strict emission requirements. The connectors comprise
four completely recyclable components and are distinguished by
excellent chemical and thermal resistance.
clamp – ensures that the screw maintains the proper angle dur-
ing assembly. This decreases assembly time and lowers the risk
of improper assembly. Another advantage is the low weight of
the clamp, which has a positive impact on the total system
weight.
We developed the innovative, high-performance clamp NORMA-
FIX Red Grip for a major customer in the aviation industry over
the course of a pilot project in 2012. This corresponds to the
increased safety requirements of the aviation industry and also
resulted in more than a 30 % reduction in weight for the part. At
a technical level, the previously used metal parts of the clamp
were replaced with a new and improved thermoplastic material.
The resulting improvement also led to a significant economic
benefit for consumers due to the high number of parts installed
in an airplane (e.g. in electrical, hydraulic, air ducts, galleys, drain-
ages).
high significance of innovations in the Group
We use patents to protect our innovations. In 2012, we registered
intellectual property rights in more than 20 patent families.
The NORMACONNECT V PP (pressed profile) profile clamp is an
especially easy to assemble V-profile clamp that can be used in
tight spaces. It is a patented joining element for flanged pipes
that can be used in various applications such as exhaust gas,
cooling and filter systems, or in turbochargers and charged air
applications. This new profile clamp is distinguished by an inte-
grated bracket that enables the position of the clamp to be fixed
during assembly and – in contrast to a conventional V-profile
As at 31 December 2012, we had 190 employees worldwide in
our R&D division. Approximately 44 % were involved in applica-
tion development, 24 % in product development and around
32 % in process development. We offer our employees a broad
spectrum of advanced training possibilities, from project man-
agement to Six Sigma techniques. For brainstorming, we con-
duct “think tank” meetings in the area of product development
with the participation of all disciplines.
NORMA Group AG Annual Report 2012
Research & development
Employees
73
R & d E MPLOyEES B y dEPARtMENt
R & d kEy FiGuRES
in %
32
Process
development
employees
24 Product
development
employees
Number of R&D
employees
R&D expenses in the EJT
unit in EUR million
R&D ratio (with respect
to EJT sales)
External R&D expenses
(excluding personnel
costs) in EUR million
R&D subsidies received
in EUR ‘000
2012
2011
2010
190
22.1
174
16.8
n /a
16.6
5.1 %
4.1 %
5.1 %
3.2
55
3.0
58
2.2
55
44 Application
development
employees
Our research and development expenses in EJT totalled
EUR 22.1 million in 2012 (previous year: EUR 16.8 million). Exter-
nal expenses (excluding personnel expenses) in the Research
and Development division came to EUR 3.2 million in 2012 (pre-
vious year: EUR 3.0 million).
We received a total of EUR 55 thousand in research and develop-
ment subsidies (previous year: EUR 58 thousand).
Overview of future innovations
Also in 2013, we will continue to base our research and develop-
ment on customer requirements arising from global megatrends.
For instance, we will continue to strive to realise further weight
reductions by optimising construction and materials and to meet
the higher requirements for assembly safety.
During the course of 2012, there was a significant shortage of
polyamide 12 (PA 12), a technical thermoplastic that, among
other things, is used in the assembly of fluid lines. We were able
to partly offer our customers other future-proof solutions thanks
to the further development of alternative materials. These are
distinguished by a long service life and sustainable procurement
possibilities and offer at a minimum the same high performance
and safety in integrated systems as polyamide 12.
In order to meet the requirements of increasingly strict emission
regulations, we have been working for some time on a new gen-
eration of dynamic hose clamps for high temperature applica-
tions. These should meet the requirements of future emission
regulations and the resulting higher pressure, temperatures and
mechanical stresses, for example, vibrations.
Future assembly simplifications are in demand, above all to bal-
ance tolerances and reduce the susceptibility for mistakes during
the assembly process, in particular in the area of exhaust gas
aftertreatment. We are also looking at solutions which will save
our customers costs when manually installing particle filters or
complex waste gas systems.
The aspect of safety has always played an important role for our
customers. Therefore, we contemplate possibilities for develop-
ing additional secondary latches and assembly indicators for a
visual check of the connection in order to ensure the proper
assembly of connectors at all times.
Employees
The work of our employees who contribute their abilities and
passion for joining technologies on a daily basis forms the basis
of our business success.
As at 31 December 2012, we have 4,485 employees, including
temporary employees. Our workforce grew by 233 or 5.5 % com-
pared to the previous year (4,252 employees). More than 80 % of
our employees work outside Germany. The largest increase in
employees was due to the acquisition of Chien Jin Plastic Sdn.
Bhd. in Malaysia with 141 employees. Because around 30 % of
the workforce was employed in a flexible arrangement, we were
able to react quickly to the changes in the economic environment
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders
74
NORMA Group AG Annual Report 2012
NUMBER OF EMPLOYEES (INCL . TEMPOR ARY EMPLOYEES)
EMPLOYEES BY REGION 2012 (CORE WORKFORCE)
4,500
3,000
1,500
0
4,252
4,485
Asia-Pacific 496 /13 %
619 / 16 %
Americas
2011
2012
2,644 / 71 %
EMEA
that had a negative impact on our business at the beginning of
the fourth quarter; as a result, the percentage of employees with
flexible working arrangements decreased to around 16 % at the
end of the year.
71 % of NORMA Group’s core workforce was employed in the
EME A region. At 2,644 permanent employees, the number of
employees in this region increased 8.5 % compared to the previ-
ous year (2,437 employees), in particular as a result of the new
production sites in Serbia and Russia as well as the acquisition
of Connectors Verbindungstechnik AG and Nordic Metalblok
S.r.l.
619 permanent employees (16 % of the workforce) were working
without flexible arrangements in the Americas, a high-growth
region. This corresponds to a decrease in permanent employees
of 3.0 % compared to the 638 individuals employed as at 31
December 2011.
In the Asia-Pacific region, the number of employees was influ-
enced by the new opening of our plant in Thailand, the expansion
of the operations and supply chain organisation as well as the
opening of various sites and the acquisition of Chien Jin Plastic
Sdn. Bhd. We have 496 employees in this region compared to
340 employees as at 31 December 2011. This corresponds to
an increase of 45.9 %. The share of NORMA Group’s core work-
force was 13 %.
Decentralised organisation of personnel management
Our personnel management is organised locally in order to sat-
isfy the various needs of employees in the individual locations
and regions. Thus, the selection of personnel as well as the
qualification and remuneration is largely autonomous, taking into
account corporate headquarters’ personnel policy guidelines.
However, the strategic and operational corporate guidelines
must be observed in general, in particular the compliance guide-
lines.
Diversity
Among other things, our efforts are focused on utilising the exist-
ing diversity of the modern society. The diversity of the workforce,
with its different abilities and talents, opens up opportunities for
innovative and creative solutions. Such diversity includes gender,
nationality, ethnic origin, religion, or world view, disability, age,
sexual orientation and identity. Our long-term goal is to increase
the diversity of NORMA Group’s workforce, among other things,
by increasing the percentage of women in management positions.
In order to achieve this goal in the medium term, the Management
Board decided to give preference to women in the event of equal-
ly-qualified candidates when filling management positions. At the
end of the year, 27 % of our salaried senior managers were wom-
en.
Management Board Letter
To Our Shareholders
Consolidated Management Report
Consolidated Financial Statements
Further Information
75
Employees
STR ATEGIC CL ASSIFICATION OF THE ESS
Transparency
Manage-
ment in-
strument –
Employee
survey
Detailed information
on satisfaction and
solidarity
Definition of neces-
sary actions and
analysis of the un-
derlying reasons
Joint implementa-
tion of specified
measures
Continuous
systematic
improvement
Ensuring com-
petitiveness
through produc-
tivity improve-
ments /Employee
motivation
Commitment
Performance management
Our employees develop innovations, successfully implement
strategies and give the Company an unmistakable identity. Our
employees share a single vision and live out NORMA Group’s
corporate values, giving our workforce a feeling of unity and guid-
ance in our day-to-day work and responsibilities. We use variable
compensation systems to ensure that our employees are invest-
ed in the success of the Group and its performance. We review
remuneration through periodic benchmarks in order to ensure
that we offer our employees a salary that is in line with the market
as well as their performance and responsibilities. In 2012, we
simplified our worldwide bonus system so that starting in 2013
the central parameters applied as targets will be EBITA and op-
erating net cash flow.
Low fluctuation shows employee satisfaction
Our employees are highly motivated and have an above-average
level of commitment to the Company and its success. This is
evidenced by the small number of employees who voluntarily
leave the Company. Only 1 % of our employees in Germany de-
cided to do so in 2012. Excluding China and Mexico, the Group-
wide figure is approximately 3.3 %. The commitment of our em-
ployees to NORMA Group is also demonstrated by the low
absence rate of approximately 4 % Group-wide, as well as the
fact that 10 % of our employees have been with NORMA Group
for more than 30 years. The construction of new plants such as
in Serbia and Russia and the expansion of existing plants is re-
flected in the fact that approximately 30 % of the employees have
been with the Company for less than 2 years.
We introduced employee surveys to actively involve our work-
force in the process of changing the Company. These surveys
ask employees for their opinion on their day-to-day work in order
to spur important changes within NORMA Group. The third
Group-wide survey was conducted in 2012, after surveys in 2008
and 2010. The consistently excellent participation rate of just
under 90 % shows how interested our employees are in the fur-
ther development of NORMA Group. As in the previous surveys,
the results were reported to all of the employees and the areas
are working on improvement measures.
“Talent Drives Performance” – systematic development
of junior executives
In order to ensure the sustainability of our success, we have
further improved our internal junior executive development pro-
gramme under the motto “Talent Drives Performance – Create
your own career” by developing and introducing a Group-wide
high potential programme.
NORMA places a high priority on the development of managers
as well as the further development of our experts and all employ-
ees. Specially developed instruments and processes help us to
identify employees with potential for management and expert
responsibilities at all management levels of the Group. For ex-
ample, all employees and positions are discussed with the Man-
agement Board in our talent reviews and individual training mea-
sures are agreed.
76
NORMA Group AG Annual Report 2012
GROUP PARTICIPATION R ATE IN EMPLOYEE SURVEYS
in %
100
75
50
25
0
81.9
80.4
89.6
2008
2010
2012
The succession planning is also discussed and potential succes-
sors for critical positions are identified and systematically pre-
pared for the subsequent managing responsibilities.
All high potential individuals identified during the talent reviews
who have the potential to replace their supervisors and are pre-
pared to relocate around the world also participate in a manager
development programme that includes special training units,
mentoring by a senior manager and selected foreign assign-
ments (bubble assignments).
Currently, 17 employees from all regions are participating in this
programme.
We have set up local and regional programmes for employees
who have the potential for further development, but are not avail-
able for international assignments, and taken these employees
into account in the local succession planning.
Apprenticeship as elementary component of
personnel management
We see ourselves as a socially responsible employer. There were
43 apprentices employed in 8 trainee professions at our largest
production site in Germany in 2012. Thus, the trainee ratio in
Germany (number of trainees in proportion to the total workforce
in Germany) was 6 %. In addition to the business management
and technical trainee professions, there is the possibility of com-
pleting one of four dual study programmes. In 2012, 14 appren-
tices were accepted in permanent positions upon completion of
their training.
Systematic training to promote development potential
The qualification and commitment of our employees is crucial for
our success. In 2012, every employee was provided with an av-
erage of 30 hours of advanced training (excluding the newly ac-
quired companies). In order to assess and document the perfor-
mance, skills and development potential of each individual, all
supervisors conduct personal assessment and qualification
meetings with each of their employees at least once every year.
In these meetings, the responsibilities and personal goals for the
coming year are documented and training requirements are de-
termined. In 2012, these meetings were held for approximately
85 % of our employees without taking into account the compa-
nies acquired in 2012. This percentage is lower than in the previ-
ous year, because the integration of some sites had not yet been
completed.
Production and supply chain
management
PRODUCTION
We have organised our production essentially according to our
product categories CL AMP and CONNECT, which are metal-
based, as well as FLUID with plastic-based products. The two
product categories are based on different production processes,
technical expertise and sterility requirements. There are rela-
Employees
Production and supply chain management
77
PROJECtS iN 2012
Newbury, United Kingdom
Begin of expanding our capacities
Tagelswangen, Switzerland
Additional capacities due to the acquisition
Riese Pio X, Italy
Moscow, Russia
Juarez, Mexico
Wujin, China
Quingdao, China
Pune, India
Ipoh, Malaysia
Additional capacities due to the acquisition
Completion of our externally operated distribution centre
Outsourcing the production of certain clamps from the USA
Start with the construction of a new plant
Outsourcing the production of certain clamps from the USA
Completion and relocation to our new plant
Additional capacities due to the acquisition
tively few synergies between the production processes. There-
fore, we produce either metal-based or plastic-based products
at our production sites. In most instances we have strictly imple-
mented this approach in developed markets such as Europe or
the USA. In contrast, in emerging economies in which we main-
tain plants, production covers both product categories.
Due to our organic growth and our acquisition strategy, we are
confronted with the task of continually having to further develop
and optimise our production sites.
We measure the utilisation of capacity in all plants, in order to be
able to invest early enough in new equipment or new plants. We
continually optimise our production through direct deliveries and
our Global Excellence Programme. This leads to higher produc-
tion capacities in existing plants.
We comply with the OHSAS 18001 standard for occupational
health and safety management systems as well as the ISO 9001
and TS 16949 quality management and environmental stan-
dards. All of our older plants are certified according to these
standards, and certification is planned for newly constructed
and/or acquired plants that do not meet these standards.
SuPPLy ChAiN MANAGEMENt
Our goal is to produce in the region in which customers are lo-
cated. This way, we keep our working capital, production costs
and delivery risks as low as possible. This relates mainly to devel-
oped markets in which capital expenditures in production mate-
rial and plants are justified by a high volume of demand. In emerg-
ing economies, we import our products until demand reaches a
level that economically justifies extensive capital expenditures.
In 2010, we implemented an export control programme to ensure
that our supply chain fully corresponds to the legal requirements.
We conduct reviews at least once every year at all NORMA
Group sites in order to rule out that we supply legally sanctioned
third parties. These reviews have so far all confirmed our compli-
ance.
Since our plants in Europe export a considerable amount of mer-
chandise, we have optimised our customs processes and been
certified as an Authorised Economic Operator (AEO). We already
obtained an Authorised Economic Operator – Customs Simplifi-
cations certificate (AEO-C) for our German plants in 2010/2011.
In December 2012, we applied for a full Authorised Economic
Operator – Customs Simplifications/Security and Safety certifi-
cate (AEO-F) for our plant in the Czech Republic. In 2013, we will
apply for AEO-F certificates for our Polish, French, Swedish and
British plants. Furthermore, our plant in Michigan, USA, will sub-
mit a Customs and Trade Partnerships against Terrorism (C-
TPAT) application in 2013.
We are constantly working to reduce delivery times and optimise
our supply chain and freight and customs costs as well as to
minimise the effects on the environment. We strictly implement-
ed the principle of direct delivery in the last three years, focusing
on:
relocating production to plants near our customers
direct deliveries to customers, bypassing additional shipping
points.
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders
78
NORMA Group AG Annual Report 2012
MATERIAL COSTS WITH COST OF MATERIALS R ATIO
UTILISATION OF R AW MATERIALS BASED ON THE MOST
IMPORTANT PRODUCT GROUPS
in EUR million
in %
300
200
100
0
45.1 %
262.3
43.6 %
263.5
Other 31
2011
2012
Granules,
plastic & rubber
20
49 Steel &
stainless
steel
The volumes and destinations of our exports both to customers
as well as to NORMA Group sites are subject to ongoing chang-
es that we regularly analyse. These can be traced back to cus-
tomer activities as well as programmes such as direct delivery.
Therefore, we enter into annual agreements with freight and lo-
gistics service providers that process the deliveries in the best
possible manner for us and thereby help us to optimise our costs
and delivery times.
Purchasing and supplier management
Our granule and fluid group purchasing programme was also
confronted with major challenges as a result of an accident with
far-reaching consequences at one of our input material suppliers
of high-performance polyamides starting at the end of March
2012. As a result of a fire at a primary materials production facil-
ity for PA12 granule manufacturing, the availability of an input
material for PA12 granule production was severely limited world-
wide. We were able to bridge the PA12 suppliers’ force majeure
situation, which lasted for months, without impacting our ability
to supply our customers thanks to immediately implemented
countermeasures with release of alternative materials, long-term
supply contracts and the faithful and cooperative collaboration
with our most important granule suppliers.
Organisation of a global group purchasing structure
We have built up an efficient, worldwide group purchasing struc-
ture in the past year in order to supply the most important prod-
uct areas with steel, metal components, polyamides and rubber
materials as competitively as possible, taking advantage of the
Group’s corresponding economies of scale while taking the im-
portance of material costs for NORMA Group into account.
In total, material costs increased from EUR 262.3 million in 2011
to EUR 263.5 in 2012. This increase can also be explained by the
integration of the companies acquired in 2012 and by new cus-
tomer orders. In fact, the cost of materials ratio dropped from
45.1 % in 2011 to 43.6 % in 2012 as a result of the improved
worldwide purchasing organisation and falling raw materials
prices, in particular the alloy surcharges.
Various material price trends
Price development varied considerably for our most important
raw materials in 2012. The base prices of steel and metal were
stable or we were able to secure slight price reductions. The alloy
surcharges for stainless steel decreased successively after re-
maining steady in the first quarter of 2012, only to stabilise again
during the last quarter. In contrast, granulated material (polyam-
ides) for our injection-moulded and extruded products continued
to be characterised by rising cost prices. This can be attributed
in particular to the rising price of raw materials to manufacture
polyamide granules.
Expansion of global procurement and increased
localisation of materials purchases
In 2012, we continuously worked on a competitive expansion of
our supplier basis on the global procurement markets. For in-
stance, we identified new suppliers in important product seg-
ments, then developed and successively integrated them in our
series production. This ensures the long-term international com-
petitiveness of our material costs. We follow the BLC approach
(Best Landed Cost) when choosing new suppliers, which also
takes logistics and changes in inventory costs into account. Our
Production and supply chain management
Purchasing and supplier management
Sales and marketing
79
MARkEtiNG ACtivitiES
in %
50
general
marketing + brand
communication
50
product
communication
Asian subsidiaries, in particular, were successful in increasing
the localisation of materials procurement, since they were able
to reduce logistics costs and currency risks (natural hedging).
opment projects. Please refer to the Section on research and
development starting on page 70. However, we only generate
approximately 19 % of our sales with our Top 5 customers; as a
result, we are not dependent on any one customer.
By setting up an intensive and periodic reporting and communi-
cation system between Group and local purchasing teams, the
qualification of local, highly competitive sources of materials can
represent the first step in a supplier development process that
will subsequently also be used for other NORMA Group compa-
nies (Best Practice Approach).
While our EJT customers primarily work together with our sales
engineers and our application development department, we
serve our customers in the DS unit either through our own sales
employees in the respective subsidiaries and/or distribution cen-
tres or in some cases also through sales representatives.
Security through long-term contracts
In the area of energy, we have secured the majority of our en-
ergy requirements at competitive prices (gas, electricity) for our
German branch offices and most of our European companies by
entering into appropriate, long-term contracts.
We have had trusting and cooperative relationships with many
of our customers for many years. For example, we were award-
ed with the supplier prize of Würth Industrie Service GmbH & Co.
KG in the category of “Stable Business Relationship” in 2012.
At the beginning of the year, the area of packaging materials was
characterised by the rising commodity price trend, but we were
able to avoid this trend by optimising our supplier structure and
drawing up long-term supplier contracts.
We have introduced the new customer management system
eCRM as part of a project to increase the efficiency of our sales
department. With the help of this system, we intend to improve
our assessment of market information and internal processes
and utilise the resulting increased transparency to focus even
more closely on our customers and their requirements.
Sales and marketing
MARkE tiNG
SALES
In total, we supply more than 10,000 customers around the
world. In the EJT unit, we work together with approximately 900
customers with whom we generally also conduct mutual devel-
Our marketing activities serve to support our product sales and
further bolster our brand image worldwide. In 2012, our market-
ing expenses amounted to EUR 2.1 million and were thus flat
compared to 2011. Around 50 % can be attributed to general
marketing activities and brand communication and around 50 %
to product communication.
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders 80
In 2012, we were represented at 17 trade fairs with our own booth
and presented our products and joining solutions for the various
industries that we supply. Among other things, we participated
for the first time in the IL A Berlin Air Show, where we presented
our latest developments for the aviation industry.
Five CR fields of action
NORMA Group has systematised CR measures in five fields of
action. The relevant departments are responsible for their imple-
mentation. Two CR coordinators who report directly to the CEO
were appointed for cross-departmental functions.
One of our most important marketing campaigns centred on the
second generation of our SCR fluid lines (Selective Catalytic Re-
duction) to reduce emissions, which we introduced to the market
in 2011.
Sustainability
CORPOR AtE RESPONS iB iL it y (CR)
We regard bringing the effects of our operations in line with the
expectations and needs of the Company as a core responsibil-
ity. Therefore, we base our decisions on the principles of respon-
sible corporate governance and sustainable action.
The global megatrends resulting from climate change present us
with a special challenge as a manufacturer of innovative joining
technology and the business partner of companies from various
industries. We are meeting this challenge with solutions that pro-
vide ways to increase the efficiency of resources and energy.
Together with our business partners, we are making a contribu-
tion to increase the Company’s social and ecological sustain-
ability. This is both a challenge and an incentive for us.
New CR strategy
In 2012, we initiated a process to integrate corporate responsibil-
ity into the business strategy. We intend thereby to evaluate all
business decisions based on their effects on the environment,
the Company and future generations. A strategy for corporate
responsibility is also a tool for us to secure our excellent market
position and technological leadership for the long term.
For this purpose, a CR steering committee was established and
is headed by the CEO Werner Deggim. Its objective is to establish
the Company’s basic philosophy and set long-term corporate
responsibility goals. The CR steering committee developed an
initial approach to corporate responsibility in the autumn of 2012.
A CR roadmap will guide the implementation of CR measures
within NORMA Group. It is to be resolved in the first half of 2013.
Responsible business practices: Corporate responsibility
must be practiced by all of NORMA Group’s employees. This
requires clear instructions and guidelines. Our compliance is
an essential principal. Please refer to the Corporate Gover-
nance report, in particular our comments on compliance start-
ing on page 38.
Products and services: We offer our business partners prod-
uct solutions that make the use of liquid and gaseous sub-
stances cleaner, safer and more efficient. In this manner, we
help to reduce the consumption of energy and emissions that
are harmful to the climate. You can find more details on this in
the Section entitled “Group structure and operations” on pag-
es 50 to 56.
Employees: Our employees enable and drive our business
success. We consider health promotion and occupational
safety to be core areas of responsibility. We intend to strength-
en our position as a top employer through a supportive cor-
porate culture. Please refer to the Section entitled “Occupa-
tional health and safety” below as well as the Section entitled
“Employees” on page 73 for more information.
Environment: We take our dependency on the environment
into account. Therefore, we improve the efficient use of en-
ergy and other natural resources at our sites and in our logis-
tics activities. We help our business partners meet future en-
vironmental standards with our joining technology. We present
our Group-wide environmental policy and management sys-
tem on the pages below.
Company: NORMA Group benefits from a local environment
that is dynamic and worth inhabiting. In 2013, we will develop
a corporate citizenship programme to be implemented inter-
nationally. This programme is intended to systematically
strengthen the local neighbourhoods and contribute to re-
gional development.
dialogue and transparency
We understand that our responsibility includes a continuous dia-
logue with interest groups that influence our business activities
or are influenced by them. This includes in particular our employ-
ees and shareholders, customers and suppliers, our sites and
the society as a whole. We wish to transparently present informa-
tion regarding our CR activities. Suggestions to further develop
our CR strategy are to be gathered through a dialogue process.
NORMA Group AG Annual Report 2012 Sales and marketing
Sustainability
81
dEvELOPMENt OF th E i NCidENt R AtE
Year
Incident rate
2012
11
2011
10
2010
14
2009
22
OCCuPAtiONAL h EALth AN d SAFE t y
We invest in the area of occupational health and safety in order
to avoid jeopardising our employees. Therefore, we manage this
area comprehensively and systematically.
After establishing OHSAS 18001 as the Group-wide standard
for occupational health and safety management systems in 2010,
14 of 22 sites have already been certified according to this stan-
dard as of 2012. The plants that have not yet been certified are
planned for 2013, with the exception of the companies newly
acquired in 2012.
We have made significant improvements in occupational safety
in recent years. Our incident rate (incidents for every 1000 em-
ployees) was only 11 in 2012 compared to 22 in 2009.
Since the incidents in 2012 and the slight increase in the incident
rate compared to 2011 can be attributed to personal conduct,
we started an initiative in the past year that specifically address-
es this topic. The programme will be fully rolled out Group-wide
in 2013 in further pursuit of our goal of an incident-free working
environment.
NORMA Germany GmbH was already awarded a prize by the
German employer’s liability insurance association in 2012 for its
efforts in the area of occupational safety. Suggestions for im-
provement were drawn up by employees in an internal competi-
tion as part of a campaign to improve safety in the workplace.
As a result, the number of incidents was reduced by half.
Our reporting structure in the area of occupational safety ensures
transparency throughout the Group. Every incident is reported
to the Management Board with the corrective actions. The num-
ber of occupational incidents is accumulated Group-wide on a
monthly basis and the trend is monitored via two key perfor-
mance indicators (KPI), which are included in the monthly and
quarterly reports to the Management Board.
Starting in 2013, four more key indicators that enable an assess-
ment of potential accident risks will be added to the system.
The physical and mental health of all of our employees is very
important to us. We have various optional programmes in which
our employees can participate. Examples include flu vaccina-
tions, consultation for travel inoculations, skin screening, blood
cholesterol testing, nutritional counselling, the Campaign for
Healthier Backs (Aktion Gesunder Rücken) and lung function
tests.
GROuP-widE ENviRONMENtAL MANAGEMENt SyStEM
We have a comprehensive environmental management system
at all of our sites that are certified according to the ISO 14001
standard. In 2012, 5 more sites obtained certification. In total, 18
sites are certified. The sites that are still not certified are planned
for 2013, with the exception of the companies newly acquired in
2012.
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders
82
In order to protect the environment, we invest in the reduction of
harmful emissions and resource utilisation, among other things,
in product development, for building construction and work pro-
cesses.
Many of our products contribute to the reduction of emissions
from engines and vehicles. Examples include the second gen-
eration of our fluid systems to reduce nitrogen oxides in exhaust
in combustion engines, and the latest generation of V-band
clamps, which provide even greater sealing integrity for flanged
joints in exhaust systems ahead of the catalytic converter.
We are constantly working to further optimise our production
processes and reduce our local energy needs through waste
prevention and productivity initiatives. For example, in 2012, we
were able to significantly reduce power consumption at our 10
largest production facilities compared to 2011. Among other
things, the use of more energy efficient assembly machines and
lighting in the production plants was an important factor. Plans
have been initiated to use more efficient lighting at other sites.
By reprocessing detergent solutions that are used to clean pro-
duction components, we significantly reduced not only waste but
also the use of new detergents in our plant in Pennsylvania. The
same applies for cooling fluids and machine oils.
With respect to sustainability, we also focus on areas that are not
core to manufacturing. The existing company car guidelines in
Germany, which take fuel consumption into consideration, are
being updated. Products destined for maritime transport are car-
ried to harbour by train. We were able to offset 8.6 tons of CO2
in Germany within 8 months through the use of a carbon dioxide-
neutral parcel service.
Sustainability is an important element of our future company
strategy. This includes our suppliers, who are required to set up
an environmental management system or further develop their
existing system. Our goal is to minimise the effects on the envi-
ronment through efficient products and processes. A Group-
wide reporting tool to record and track our use of resources,
emissions and waste to be activated in 2013 will support us in
our efforts to promptly record and track results.
Risk and opportunity report
All entrepreneurial activity involves opportunities and risks. Be-
cause of this, we use an effective opportunity and risk manage-
ment system to increase long-term shareholder value.
NORMA Group’s corporate group is exposed to a wide variety
of risks and opportunities which can have a positive or negative
short-term or long-term impact on its financial position and per-
formance. We define risks as the possibility of disadvantageous
future developments, changes, or events that could have a neg-
ative impact on the Group’s ability to meet its targets and achieve
its business objectives.
Entrepreneurial opportunities are identified during annual opera-
tional planning and monitored throughout the year within the
framework of periodic reporting and regular forecasts. Moreover,
under the Global Excellence programme, opportunities and pos-
sibilities for improvement are identified early, consolidated and
managed globally. This enables us to realise consistent increas-
es in productivity and cost-savings, thereby systematically in-
creasing the value of the business. We define opportunities as
the possibility of advantageous future developments, changes,
or events that could have a positive impact on the Group’s abil-
ity to meet its targets and achieve its business objectives.
RiS k MANAGEMENt S ySt EM
The Management Board of NORMA Group AG is responsible for
maintaining an effective Group risk management system, which
has essentially not changed since the previous year. The Super-
visory Board is responsible for monitoring the effectiveness of the
Group risk management system. Checking compliance with the
Group’s internal risk management rules is also integrated in the
internal audit department’s periodic reviews.
NORMA Group’s risk management system is a Group-wide re-
sponsibility that starts with the expertise of each local business
unit. In addition, risks across the Group are identified and as-
sessed separately. The elements used to ensure that NORMA
Group has an effective risk management system include:
Risk identification and risk assessment
Risks are identified early by monitoring and analysing the eco-
nomic climate and the markets that are relevant for NORMA
Group, and through the early identification and assessment of
developments that could lead to risks.
NORMA Group AG Annual Report 2012
Sustainability
Risk and opportunity report
83
RiSk MANAGEMEN t S yStEM
track reporting
identification
Risk management
Risk identification
Risk reporting
Risk culture
Risk strategy
Methods
Technologies
Risk assessment
Risk analysis
Risk aggregation
Countermeasures
Supervisory
Board &
Management
Board
We use a systematic assessment procedure to evaluate the
risks that we identify, both in terms of their financial impact,
i.e. gross and net impact on planned financial indicators, and
their probability of occurrence. We put the financial impact of
risks into one of three categories when assessing risks: minor,
moderate and severe. We assess the probability of individual
risks and opportunities occurring on a scale of 0 % to 100 %
and assign it to one of three categories: unlikely, possible and
very likely.
Risk reporting and risk management
Risks are managed in accordance with the principles of the
risk management system as described in the Group risk man-
agement guidelines. The internal control system also safe-
guards the efficacy of our risk management system.
Risk reporting ensures that risk management officers report
newly identified risks and changes in existing risks to the Risk
Management unit every quarter.
In addition to considering general risk factors, our risk assess-
ment approach also has a quantitative element.
Group Risk Management provides the Management Board
and the Supervisory Board with information about the NORMA
Group risk portfolio every quarter.
Risk aggregation and risk analysis
In order to analyse NORMA Group’s overall risk situation and
initiate suitable countermeasures, we aggregate individual
risks of local business units and Group-wide risks in a risk
portfolio.
Our risk management officers are responsible for checking on
a regular basis whether all material risks have been identified,
adjusting the risk identification procedure when required,
analysing the risk portfolio and developing and implementing
suitable countermeasures to mitigate risk. These comprise
strategies to avoid, reduce or hedge against risk, i.e. measures
that minimise the financial impact of risks as well as their prob-
ability of occurrence.
Any situation that is important enough to warrant being com-
municated to the Management Board immediately is com-
municated in the form of an ad hoc report.
Because risks are subject to constant change, we continu-
ously monitor the development of risks as well as the counter-
measures that we implement in processes throughout the
year.
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders
84
RiSkS
Strategic and operating risks
Risks to the national and global economy
The corporate group’s business environment is affected by inse-
curity in the global political and economic environment. At the
beginning of 2013, the macroeconomic environment is still char-
acterised by uncertainty and volatility, which in turn can have a
negative effect on NORMA Group’s operations. Although the
positive signals for a stabilisation and moderate recovery of the
global economy are increasing, the unresolved sovereign debt
crisis in Europe as well as the budget discussions in the USA
continue to impact the economy. Therefore, we still expect eco-
nomic output to decrease, in particular in Europe. Nevertheless,
we expect the global economy to grow in 2013 – albeit barely –
compared to the previous year, although growth will vary from
region to region. As a result of the continuous expansion of our
global presence, in particular in emerging markets, which con-
tinue to grow robustly, and the increasingly regional production
(see Section entitled “Production and supply chain manage-
ment” on page 76) as well as a result of our continuous efforts
to optimise costs (Global Excellence), we can limit the risk of a
regional decrease in demand. Therefore, we consider it possible
for unfavourable macroeconomic developments and declines in
demand for economic reasons to have a negative impact on
NORMA Group’s business; the resulting financial effects would
be moderate.
Industry-specific and technological risks
Industry-specific risks can arise for NORMA Group in particular
due to technological and competitive changes. The increasing
importance of new technologies, such as environmentally friend-
ly drivetrain technologies, could also lead to increased compet-
itive pressure and greater price pressure. We counter these risks
with continuous initiatives to safeguard and expand our position
as a technological and innovative leader as well as by focusing
on customers and markets. This way we can effectively support
our customers in the reduction of emissions, leakage, weight,
space and installation time and help them achieve a process-
optimised production through compatibility with modularised
production processes as well as by reducing installation time
(see Section on research and development on pages 70 to 73).
Our strong diversification in terms of customers in different in-
dustries is another element of our risk minimisation strategy. We
attempt to minimise long-term industry-specific and technologi-
cal risks with a consistent policy of innovation and regular mon-
itoring of the market. As a result, we consider it unlikely that in-
dustry-specific or technological risks will occur. We consider the
potential financial effects to be minor.
Strategic risks
Misjudgement with respect to the corporate group’s strategic
orientation and its market potential or customer rejection of
newly developed products can have a negative effect on NORMA
Group’s competitive position and sales volume. In order to avoid
strategic risks, we work closely together with our customers
across all business processes. New products are created al-
ready in the product and application development phases in
constant coordination with our customers. Our two distribution
channels, Engineered Joining Technology and Distribution Ser-
vices, are also oriented on the special needs of our customers.
At the same time, we observe our market environment and our
competitors and conduct customer and supplier surveys for con-
tinual improvement. In individual cases, market studies are also
commissioned. Therefore, we consider strategic risks to be un-
likely to occur, whereas the potential financial effects are regard-
ed as severe.
Customer risks
Customer risks result from a company being dependent on im-
portant buyers for a significant proportion of its sales. They could
take advantage of their bargaining power, which can lead to in-
creased pressure on our margins. Decreases in demand from
these customers or the loss of these customers can have a
negative impact on NORMA Group’s earnings. For this reason,
we continuously monitor incoming orders and customer behav-
iour so as to identify customer risks early. We also have a diver-
sified customer portfolio, which reduces the financial repercus-
sions of customer risks. Accordingly, no single customer
generated more than 6 % of our sales in the 2012 financial year.
Therefore, it is possible that customer risks could have a negative
impact on our business, but the financial effects would be minor
due to our diversified customer structure.
Quality risks
Our products are often function-critical with respect to the qual-
ity, performance and reliability of the final product. Thus, product
quality is a key factor to ensuring NORMA Group’s long-term
success, so that our products provide crucial added value for
our customers. Maintaining the right balance between cost lead-
ership and quality assurance is a constant challenge. We use
far-reaching quality assurance measures and Group-wide qual-
ity standards to reduce this risk, and also focus on innovative and
value added joining solutions tailored to meet customer require-
ments. For this reason, we believe that it is possible for quality
risks to occur, while the potential financial repercussions would
be minor due to our existing insurance coverage.
NORMA Group AG Annual Report 2012 Risk and opportunity report
85
Risks from commodity price increases
The materials we use, in particular the raw materials steel and
plastics, are subject to the risk of price fluctuations. The price
trend is also influenced indirectly by the further development of
the debt crisis as well as by institutional investors. NORMA Group
limits the risk of rising commodity prices through systematic ma-
terial and supplier management. In this context, an efficient,
group purchasing structure was built up around the world in
order to utilise the Group’s economies of scale in the procure-
ment of the most important product areas of steel, metal com-
ponents, polyamides and rubber materials and to procure them
as competitively as possible. We also constantly strive to secure
permanently competitive procurement prices by continuously
optimising our selection of suppliers and applying the BLC ap-
proach (see Section on purchasing and supplier management
on page 78). We also try to reduce dependency on individual
materials through constant technological advances and tests of
alternative materials. We protect ourselves against commodity
price volatility by forming procurement contracts with a term of
up to 12 months, whereby material supply risks are minimised
and price fluctuations can be better calculated. We may con-
sider it possible for procurement prices to rise, but this would
only have a minor financial effect as a result of the countermea-
sures initiated in the financial year just ended.
Risks related to loss of supplier and dependence on key sup-
pliers
The loss of suppliers and increasing dependency on suppliers
can lead to material shortages and thus to negative impacts on
the Group’s activities. In order to minimise this risk, we only work
with reliable and innovative suppliers who meet our quality re-
quirements. We visit and evaluate our main suppliers on a regu-
lar basis for quality management purposes. If the loss of a sup-
plier appears imminent, we evaluate alternatives immediately. In
financial year 2012, we maintained our ability to deliver, despite
the shortage of an important input product for PA12 granule
manufacturing by immediately initiating countermeasures. As a
result, we consider it possible that we may lose suppliers and
continue to regard the potential financial impact as moderate.
Personnel risks
Our success is largely dependent on our employees’ enthusi-
asm, commitment to innovation, expertise and integrity. The
Group’s personnel management serves to retain and expand this
core expertise. The exit of employees with crucial skills as well
as a shortage of suitable workers can have a negative impact on
our operations. The competition for the most talented employees
as a result of demographic developments and the shortage of
skilled labour in Western industrial nations is becoming more and
more intense. We counter these risks with far-reaching basic and
advanced training as well as employee development pro-
grammes. We also encourage our employees to focus on the
Company’s success through variable remuneration systems. Our
employees can also be involved in the continuous improvement
of NORMA Group by participating in employee surveys. For this
reason, we believe that it is possible for personnel risks to occur,
while the potential financial repercussions would be minor as a
result of the implemented countermeasures.
IT risks
Maintaining and exchanging complete, timely and appropriate
information as well as being able to utilise functional and power-
ful IT systems are of central importance for an innovative and
global company such as NORMA Group. An extensive com-
puter system failure could disrupt our operations or expose sen-
sitive corporate information. Therefore, we have implemented
appropriate measures to avoid and reduce this type of risk.
These measures are collectively embedded in our IT risk man-
agement process and are adjusted in this context to changing
conditions. NORMA Group counters identifiable IT risks, for ex-
ample, by mirroring the database, maintaining decentralised data
and outsourcing data archiving to a certified external provider.
The Group’s data processing centre in Frankfurt / Main is also
used by other Group companies for their ERP systems. Another
data centre is located in the USA, with smaller backup systems
in Asia, which were transferred to a regional data centre in Sin-
gapore in 2012. The step-by-step transition from older ERP sys-
tems to new systems used throughout the Group can also con-
tribute to increasing the efficiency of NORMA Group’s processes.
In order to minimise implementation risk as well as due to the
complexity, we only rely on partners that are certified by the
manufacturer to introduce the new ERP systems. The access of
employees to sensitive information is ensured by means of au-
thorisation systems customised for the respective positions, tak-
ing into account the principle of separation of functions. IT sys-
tems used in the area of production are being doubled in order
to reduce risks. Potential risks are also taken into account
through early planning as well as by creating suitable transition
solutions. For this reason, we believe it is possible for IT risks to
occur and still consider the potential financial repercussions to
be minor.
Legal risks
Social and environmental risks
Violating social and environmental standards could damage the
reputation and the efficiency of NORMA Group. Therefore, we
have implemented corporate responsibility as an integral part of
our Group strategy. In this context, a systematic environmental
management system was introduced in NORMA Group so that
corporate decisions can always be evaluated also considering
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders 86
the goal of avoiding emissions and conserving resources. We
also invest in the area of occupational health and safety (see
Section on Sustainability on pages 80 to 82). Consequently, we
believe that negative developments remain unlikely to occur as
a result of social and environmental risks and that the potential
financial effects would be moderate.
Risks related to violations of intellectual property rights
NORMA Group’s position as a technology and innovation leader
means that violations of our intellectual property rights could lead
to lost sales and reputation. For this reason, we ensure that our
technologies and innovations are legally protected. We also mi-
nimise the potential impact by developing customer-specific so-
lutions and through the speed of our innovation. Therefore, we
consider it possible for our intellectual property to be violated.
Due to the countermeasures that we have implemented, we be-
lieve that the potential impact of an intellectual property violation
would be minor.
Risks related to violations of standards
Future changes to legislation and requirements in general com-
mercial law, liability law, environmental law, tax law, customs law
and labour law, as well as changes in related standards, could
have a negative impact on NORMA Group’s development. We
use our existing compliance and risk management systems to
ensure that we comply with constantly changing laws and regu-
lations. Please refer to the comments on compliance in the cor-
porate governance report on page 38 for more information. Con-
sequently, we consider risks related to violations of intellectual
property rights as unlikely to occur and the potential financial
impact to be moderate.
Any legal risks of which we are aware are taken into account
through provisions recognised in the consolidated financial state-
ments. We are not aware of any other significant risks.
Financial risks
Due to the nature of our business, we are exposed to an array of
financial risks, including default, liquidity and market risks. Due
to the unpredictability of the financial markets, the Group’s finan-
cial risk management strategy concentrates on the identification,
evaluation and mitigation of risks, focusing on minimising the
potential negative impact on the Company’s financial perfor-
mance. We use derivative financial instruments to hedge par-
ticular risk items. The financial risk management strategy is im-
plemented by Group Treasury. Group management defines the
areas of responsibility and necessary controls related to the risk
management strategy. Group Treasury is responsible for defin-
ing, evaluating and hedging financial risks in close consultation
with the Group’s operating units.
Capital risk management
NORMA Group’s objectives when it comes to managing its cap-
ital are the long-term servicing of its debts and remaining finan-
cially stable. We are obliged to maintain certain financial indica-
tors (financial covenants), such as interest cover ratio, total net
debt cover (debt divided by adjusted consolidated EBITDA) and
consolidated equity as a percentage of assets, which is continu-
ously monitored.
As part of our capital risk management, we monitor net debt in
all our accounts, which are managed in accordance with ac-
cepted accounting principles.
Default risks
Default risk is the risk of our contractual partners not meeting
their obligations arising from business and financial transactions.
Default risk results from deposits and other transactions con-
cluded with credit and financial institutions, and primarily from
the risk of customers defaulting on outstanding receivables or
confirmed transactions. We review the creditworthiness of new
customers to minimise the risk of default on trade receivables. In
addition, we generally only supply customers whose credit rat-
ings are below Group standards or who have defaulted on pay-
ment if they pay in advance. We have a diversified customer
portfolio, which reduces the financial repercussions of default
risks. For this reason, we believe that it is possible for default risks
to occur, while the potential financial repercussions would be
minor due to the implemented countermeasures.
Liquidity risks
Prudent liquidity risk management requires us to hold sufficient
cash funds and marketable securities, have sufficient financing
from committed lines of credit and be able to close out market
positions. Due to the dynamic nature of the underlying business,
Group Treasury aims to maintain flexibility in financing by keeping
committed credit lines available. Therefore, our primary objective
is to ensure the uninterrupted solvency of all Group companies.
Group Treasury is responsible for liquidity management and
therefore for minimising liquidity risks. As at 31 December 2012,
NORMA Group’s liquid assets amounted to EUR 72.4 million (31
December 2011: EUR 67.9 million). We also have a high level of
financial flexibility thanks to a total of EUR 125 million in commit-
ted revolving credit lines with national and international credit
institutions. These lines were drawn down in the amount of
EUR 18.5 million as at 31 December 2012.
In addition, the operational flexibility for NORMA Group’s strate-
gic further development was further optimised in collaboration
with our banks at the beginning of the fourth quarter of 2012. In
this context, a total acquisition limit of EUR 200 million was
agreed during the loan period. Furthermore, an expansion of the
NORMA Group AG Annual Report 2012 Risk and opportunity report
87
possible financing instruments was agreed. NORMA Group is
now in a position to raise funds also outside the existing loan
agreements of up to EUR 125 million via the external capital
market. The original collateral concept was cleared for this.
The Group’s financing agreements still contain typical terms for
credit lines (financial covenants). If we do not adhere to these
terms, the banks would be entitled to re-evaluate the agreements
and demand early repayment.
For this reason, we continuously monitor our compliance with
the financial covenants, so that we can implement suitable mea-
sures in advance to prevent the terms from being violated.
We were able to further minimise the likelihood of liquidity risks
negatively impacting NORMA Group’s operations by increasing
our financial flexibility compared to the previous year. In our view,
non-compliance with financial covenants remains unlikely due to
our high profitability and strong operating cash flow. Failure to
comply with these financial covenants would have severe poten-
tial financial repercussions.
Market risks
(i) Currency risks
As an international company, we are active in 100 different
countries, which exposes us to foreign currency risks. We
regard our main risky currency positions to be the US dollar,
British pound, Chinese renminbi, Polish zloty, Czech koruna
and Swedish krona.
The acquisition of Connectors Verbindungstechnik, Switzer-
land, as well as Chien Jin Plastic, Malaysia, which execute
their operations largely in their local currency, increases the
influence of changes in the exchange rate of the Swiss franc
and Malaysian ringgit to the euro on NORMA Group’s operat-
ing activities. However, due to the expected contribution to
NORMA Group’s total sales, we expect that the resulting for-
eign currency effects will be comparatively moderate.
Foreign currency risks that cannot be offset against each
other are hedged using futures and options whenever neces-
sary (including the US dollar, Swedish krona, Japanese yen
and British pound). The high volatility of many major currencies
and the particular influence of the US dollar on the Group’s
financial position and performance represent a significant risk
that can only be partially hedged for a short-term period. We
reduce the medium-term risk through continuous cost optimi-
sation initiatives (Global Excellence programme) and an in-
creasingly regional approach to production.
Because the Group’s subsidiaries operate in the most impor-
tant countries with currencies other than the euro, it has suf-
ficient cash-in and cash-out capabilities to absorb short-term
exchange rate fluctuations via targeted income and expendi-
ture management, i.e. our operating business gives us suffi-
cient capability to control foreign currency flows.
The net assets of the Group’s foreign companies are also ex-
posed to currency risks. Translation effects from items in the
statement of financial position and income statement of sub-
sidiaries in foreign currency areas on the consolidated state-
ment of financial position prepared in euros are unavoidable.
Currency risks are very likely to occur due to the ongoing ex-
change rate volatility as a result of the sovereign debt crisis. In
addition, the expected rising share of our business activities
in foreign currency areas, in particular in emerging markets,
signifies additional currency risk for NORMA Group. Conse-
quently, we believe the currency risk has increased. We regard
the potential financial effects of currency risks to be severe.
(ii) Interest change risk
Changes in global market interest rates affect future interest
payments for variable-interest liabilities and can therefore have
an adverse effect on the Group’s financial position, financial
performance and cash flows. NORMA Group’s interest change
risk arises in particular from long-term loans.
As a result of the considerable reduction in financial liabilities
in recent years, interest change risk has also decreased no-
ticeably. Variable interest rate commitments are hedged by
means of derivative interest rate instruments. Due to the per-
sistently low interest rate level, the portion of financial liabilities
hedged via an interest rate cap was completely fixed at more
favourable terms by means of interest rate swaps in the first
quarter of 2012. As a result, NORMA Group’s interest change
risk further decreased compared to the end of 2011.
In order to further reduce interest change risks, we intend to
use excess cash flow from operating activities in the medium
term to limit the debt/equity ratio or to reduce our net financial
liabilities. We will aim to hedge approximately 80 % of the inter-
est change risk arising from future medium-term utilisation of
the committed revolving credit facility.
Due to the currently low interest rate level, we consider the
likelihood that interest rates will rise in the medium-term to be
very high; however, the financial effects will be minor and de-
creasing year-on-year due to NORMA Group’s significantly
optimised financing structure.
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders
88
RiSk ASSESSMEN t AN d RiSk C ONSEquENCES
Risk
Probability of occurring
Financial effects
Unlikely
Possible
Very likely
Change
compared
to 2011
Minor
Moderate
Severe
Change
compared
to 2011
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Strategic and operating risks
Risks related to national and global
economy
Industry-specific and technological risks
Strategic risks
Customer risks
Quality risks
Risks from rising commodity prices
Risks related to loss of supplier
Personnel risks
IT risks
Legal risks
Social and environmental risks
Risks related to violations of intellectual
property rights
Risks related to violations of standards
Financial risks
Default risks
Liquidity risks
Currency risks
Interest change risk
unchanged
higher
lower
OPPOR tuNiti ES
Beneficial economic developments
The sales and profitability of the Group are influenced by the
economic and political climate. If the economic recovery is better
than expected or there are advantageous changes to legislation,
this can have a positive impact on NORMA Group’s sales and
profitability. Because we serve customers from a wide range of
industrial sectors, we have an opportunity as a result of this high
diversification to participate in the growth of various industries.
technological change and climate protection
Global megatrends, for example “green” technologies, present
a challenge to many of our customers and their finished products
and offer excellent growth prospects for NORMA Group. There-
fore, we concentrate our product development on these innova-
tion opportunities. The automotive industry is also putting more
and more emphasis on both low-emission engines and alterna-
tive power concepts, such as hybrid and electric engines. We
expect additional political regulatory measures and incentive
programmes to be drafted in some countries, which will lead to
higher demand for environmentally friendly technologies and
products. We have already secured additional order potential
and thus participate in the development of these markets as a
result of the challenging developments in these areas. In addi-
tion, the transfer of alternative or low-emission power concepts
to other regions and markets (e.g. shipbuilding, stationary gen-
erators, construction equipment) offers additional opportunities
for growth.
NORMA Group AG Annual Report 2012
Risk and opportunity report
89
Growth potential in emerging markets
Emerging markets are also expected to continue to grow con-
siderably faster than industrialised nations in coming years. In
order to be able to participate in these growth opportunities,
NORMA Group has already taken additional corresponding
steps in the financial year just ended. These include expanding
production capacities in China and India and opening a distribu-
tion centre in Russia. In the future, we also want to take corre-
sponding steps to continuously expand our sales, market share
and market presence in the BRIC countries (Brazil, Russia, India
and China) and other emerging markets.
Consistent optimisation of production processes and
cost structures
We take every opportunity to realise cost advantages to improve
our competitive position. We develop and implement initiatives
focused on cost discipline, the continuous improvement of pro-
cesses in all functions and regions and optimisation of supply
chain management and production processes. We expect these
initiatives to have a positive impact on our business.
Growth opportunities through increased commitment
to innovation
We invest around 4 % of EJT sales in research and development
every year. We are consolidating our competitive position as a
technology leader and increasing NORMA Group’s innovative
capacity as a result of this focus on developing new technolo-
gies, products and solutions, as well as on improving existing
ones, and can thereby realise cost advantages in the medium
term. At the same time, this also opens up new growth oppor-
tunities.
Growth opportunities through acquisitions, openings
and expansion
NORMA Group’s global presence is an essential factor contribut-
ing to its success, as it allows us to participate in global growth
opportunities. The goal is to expand our presence in existing
markets as well as to develop new emerging markets with attrac-
tive growth potential. In this context, we are pursuing a strategy
of organic growth and targeted acquisitions. As a result of our
global orientation, we can also locate production processes that
entail a more labour-intensive assembly to countries with lower
wage costs, thereby securing or further increasing our profit-
ability.
As a result of the acquisition of Connectors Verbindungstechnik
AG, Switzerland, on 19 April 2012, we expect to develop new
market potential in the traditional pharmaceutical and biotechnol-
ogy segment with its comparatively stable profit margins and
expand our product portfolio in this area.
With the acquisition of Nordic Metalblok S.r.l., based in Riese Pio X
in Northern Italy, on 12 July 2012, we can further expand our
commercial presence and optimally serve the needs of our cus-
tomers in Europe. The expertise of Nordic Metalblok S.r.l., in
particular with respect to heating, ventilation and air conditioning
technology, supplements NORMA Group’s product portfolio.
In November 2012, we acquired an 85 % interest in the manu-
facturer of thermoplastic joining systems Chien Jin Plastic Sdn.
Bhd. in Malaysia. The company has been active on the market
for 20 years and produces joining elements for plastic and cast
iron pipe systems that are used in various applications, in par-
ticular in drinking water and industrial water supply as well as in
sprinkler systems. The company also manufactures components
for sanitation products and distributes its products under the
“Fish” brand to over 200 distributors in approximately 30 coun-
tries worldwide. With this acquisition we are expanding our prod-
uct range in the area of infrastructure and also expanding our
distribution network in the Asia-Pacific region.
In December 2012, we acquired an additional 60 % interest in
Groen Bevestigingsmaterialen B.V., Purmerend, Netherlands.
With the 30 % of the Dutch distributor already acquired in 1999,
NORMA Group now holds a 90 % interest in Groen. Groen is
family-operated and sells hose and pipe clamps as well as cou-
plers to industrial companies, the agricultural and construction
industry, sanitation manufacturers, the automotive industry and
hardware retailers in Belgium, the Netherlands and Luxembourg.
In addition, Groen offers a comprehensive product portfolio of
traffic sign clamps as well as tools for assembly and disassembly.
We increased our interest in Groen in order to further expand our
distribution network in the Benelux countries. In addition, the
portfolio of traffic sign clamps expands our product range and
provides us with access to new customers in this segment.
On 10 January 2013, we acquired the distribution company
DavyDick & Co. Pty. Limited (“DavyDick”) in Goulburn, Australia.
DavyDick has distributed various elements for the transport of
water in irrigation and sprinkler systems for over 20 years. The
company supplies over 700 customers in Australia with joining
products for irrigation and sprinkler systems as well as valves
and pumps under the PUMPMASTER brand, in particular in the
agricultural industry as well as in the areas of sanitation and
household appliances. The acquisition of DavyDick represents
another step towards expanding our operations in the area of
water management and improves our infrastructure product
portfolio and distribution network, in particular in the areas of
agriculture and irrigation in the Asia-Pacific region. Please refer
to our Supplementary report on page 99.
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders 90
We also continue to constantly observe the markets for oppor-
tunities for strategic acquisitions or equity holdings to comple-
ment our organic growth. We use targeted acquisitions to con-
tinuously strengthen our position as a technology leader, exploit
market opportunities and improve the services we offer our cus-
tomers or expand our product range.
NORMA Group placed its production plants in India (Talegaon
near Pune) into operation in financial year 2012. We are expand-
ing our production capacities with the new 6,500 m² plant to
meet the demand for joining elements in India and Asia.
NORMA Group is continuing its course of expansion with a new
distribution centre in Moscow and strengthening its distribution
network in Russia and Eastern Europe. NORMA Group has dis-
tributed its joining products and solutions to local distributors
over the distribution centre in Moscow since July 2012. The
Company is strengthening its customer relationships in the Rus-
sian and Eastern European market with the new site, since the
customers benefit from shorter delivery times and greater prod-
uct availability.
New capacities to produce V profile clamps were built up at the
sites in Newbury in the United Kingdom and Qingdao in China in
financial year 2012. The close cooperation between Newbury
and Qingdao enables the transfer of know-how in this product
segment, thereby providing a global guarantee of the highest
quality standards. Our customers in Asia also benefit from short-
er delivery times as a result of the increasing regionalisation of
our production.
At the beginning of 2012, we opened a new representative office
in Ho Chi Minh City (formerly Saigon) in Vietnam. Vietnam quali-
fies as one of the next major growth markets in Asia. In the mid-
dle of the year, we also opened branch offices in Manila in the
Philippines and in Jakarta, Indonesia. With our new representa-
tive offices, we are developing new markets in the region in order
to introduce our brands there and build up nationwide distribu-
tion partnerships.
Our expansions will continue to focus on the Asia-Pacific region
and other emerging economies in which we want to significant-
ly boost our activities in the future.
Consistent working capital management
Our commitment to growth, the related acquisitions and the in-
crease in production volumes as a result of the rise in global
demand increase our need for working capital. In addition to
guaranteed financing from external banks, we also consistently
implement measures to optimise trade working capital in order
to improve our liquidity situation.
Beneficial changes on the financial markets
Beneficial exchange rate and interest rate changes can have a
positive impact on NORMA Group’s financial result. For this rea-
son, Group Treasury keeps a close eye on financial market de-
velopments. Group Treasury is strictly forbidden from engaging
in speculative transactions. Derivative financial instruments may
only be entered into if there is a corresponding underlying trans-
action.
ASSESSMENt OF th E O vER ALL R iSk PROF iLE
The Group’s overall risk situation results from the aggregation of
individual risks from all risk categories of the business units and
functions. After assessing the likelihood of risks occurring and
their potential financial impact as well as in light of the current
business outlook, NORMA Group’s management does not be-
lieve that there is any individual risk or group of risks with the
potential to jeopardise the company’s continued existence as a
going concern. In fact, we are well positioned to continue ex-
panding our market position and growing globally in the medium
to long term. This assessment is reinforced by the good oppor-
tunities to cover our financing requirements. Therefore, NORMA
Group has not made any effort to obtain a rating from a leading
rating agency.
Considerable general economic risks remain, which is why set-
backs on the way towards long-term realisation of our growth
and profitability targets cannot be ruled out. Compared to the
previous year, currency risks and the risk of losing suppliers have
increased due to events in the past financial year. In contrast,
liquidity risks and interest change risks have further decreased
slightly compared to the previous year’s assessment. All other
risks have not changed since the previous year.
However, the changes in individual risks do not have a significant
impact on NORMA Group’s overall risk profile. Therefore, in our
opinion, the Group’s overall risk profile has not changed since
the previous year.
iNt ERNAL CONt ROL AN d R iS k MANAGEMENt S ySt EM
ANd thEiR REL A tiON t O th E G ROuP ACCO uNtiNG
PROCESS
The relationship between our internal control and risk manage-
ment system and NORMA Group’s accounting and external fi-
nancial reporting can be described using the following main
characteristics. The purpose of this system is to identify, analyse,
evaluate and manage risks as well as monitor these activities.
NORMA Group AG Annual Report 2012 Risk and opportunity report
Forecast
91
The Management Board is responsible for ensuring that this sys-
tem meets the Company’s specific requirements. Based on the
allocation of responsibilities within the Company, the CFO is re-
sponsible for our Finance and Accounting divisions, which are,
in turn, responsible for accounting. These functional areas define
and review the Group-wide accounting standards within the
Group and compile the information used to produce the con-
solidated financial statements. The need to provide accurate and
complete information within predefined timeframes represents a
significant risk for the accounting process. Because of this, re-
quirements must be clearly communicated and the affected units
must be put in a position to meet these requirements.
The internal control system of the accounting process is de-
signed to provide reasonable assurance that the consolidated
financial statements are prepared according to regulations, de-
spite the risks identified in the financial reporting process. The
Internal Audit department reviews the accounting processes on
a regular basis to ensure that the internal control and risk man-
agement system is effective. Internal audit measures are also
assigned to specialised auditors in order to guarantee their qual-
ity. The auditor conducts audit procedures during the audit of
the annual financial statements based on the risk-driven audit
approach, whereby material errors and violations are to be un-
covered with reasonable assurance.
The IFRS accounting system is defined in an accounting manu-
al. All companies in the Group must base their accounting pro-
cesses on the standards described in the accounting manual.
The accounting manual contains binding definitions of important
measurement methods, such as those used in the measurement
of inventories, tools and receivables in accordance with IFRS.
The Group also has system-supported reporting mechanisms to
ensure that identical situations are handled in a standardised way
across the Group.
The consolidated financial statements and group management
report are prepared according to a uniform time schedule for all
companies. Each company in the Group prepares its separate
financial statements in accordance with the applicable local ac-
counting guidelines and IFRS. Intra-Group clearing accounts are
balanced by means of balance confirmations. The companies in
the Group use the COGNOS reporting system for reporting,
which in addition to financial data also contains information that
is particularly useful for the notes to the consolidated financial
statements. The data and information are subjected to audit pro-
cedures by an external auditor prior to submission and consoli-
dation, taking into account the associated risk.
Local financial accounting uses a variety of different IT systems.
We intend to standardise this in the future and have already be-
gun implementing the process.
All systems have tiered access authorisation systems. The type
and design of these access authorisations and authorisation
policies are decided by local management in coordination with
the Head of IT for the NORMA Group.
Posting transactions too early or too late or failing to comply with
accounting regulations are some situations that can result in risks
that could potentially impact the accounting process. In order to
avoid errors, the accounting process is based on the separation
of responsibilities and plausibility checks for reporting. Calcula-
tions are regularly monitored. Comprehensive and detailed
checklists must be completed before the respective financial
statement deadlines. The accounting process is fully integrated
into NORMA Group’s risk management system. This ensures that
accounting risks are identified early, allowing us to implement risk
provisioning and countermeasures without delay.
Forecast
GENER AL ECONOM iC CON ditiONS
Signs of a slight revival of the global economy –
eurozone remains in recession in 2013
The global economy is in an overall weak and continued pre-
carious state at the beginning of 2013. Despite the progress
made in the fight against the sovereign debt crisis in the euro-
zone, the economic impacts have not yet been surmounted. The
necessary budget consolidations limit the fiscal possibilities of
stimulating growth. In addition, the budget dispute in the USA
has not yet been resolved despite the last minute compromise.
In the meantime, there are more and more positive signals of a
stabilisation and moderate revival of the global economy, sup-
ported by central banks’ sustained expansionary monetary
policies. The International Monetary Fund (IMF) emphasizes in its
latest World Economic Outlook that the political measures in the
eurozone, the USA and some emerging economies have re-
duced the risks and that the financing terms for national budgets
have improved. The rise of various early indicators supports the
hope for a moderate economic turnaround.
The IMF expects the global economy to continue to grow in 2013,
albeit only moderately, with global GDP growth at 3.5 % in 2013.
That would be only a slight increase compared to the rate of
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders 92
FORECAStS FOR G dP GRO w th
in %
World
USA
China
Eurozone
Germany
Source: IWF, Eurostat
2012
+ 3.2
+ 2.3
+ 7.8
– 0.5
+ 0.9
2013e
2014e
+ 3.5
+ 2.0
+ 8.2
– 0.2
+ 0.6
+ 4.1
+ 3.0
+ 8.5
+ 1.0
+ 1.4
3.2 % in the previous year. The main reason is, above all, the lack
of momentum in Europe also in 2013. A recovery in the eurozone
will be delayed until 2014. The economic divide between the
member states will not be bridged for the time being. Global
trade volume will increase by 3.8 % in 2013 (previous year: 2.8 %).
This benefits in particular emerging markets for which the IMF
assumes an economic growth rate of 5.5 % (previous year:
5.1 %). China’s growth will once again top 8 % (IMF forecast:
8.2 %), while India’s growth looks to be 5.9 % after 4.5 % in the
previous year. At 1.4 %, economic activity in the developed econ-
omies is barely picking up speed (previous year: 1.3 %). The IMF
expects further moderate GDP growth of 2.0 % for the USA (pre-
vious year: 2.3 %). Despite the stimulus package, it only expects
weak growth of 1.2 % for Japan (previous year: 2.0 %). The eu-
rozone remains in recession also in 2013 with its economy
shrinking by 0.2 % (previous year -0.5 %). Once again, slightly
weakened growth is expected for Germany.
This overall economic backdrop is the foundation for NORMA
Group’s forecast and outlook.
For 2014, the IMF assumes that the eurozone will return to a
growth trajectory. Global growth will increase to 4.1 %, whereby
the established national economies should grow by 2.2 % and
thus more robustly than in the previous three years. The USA is
expected to grow by 3.0 %. The eurozone will overcome the reces-
sion in 2014 with a moderate 1.0 % increase in GDP. A plus of 1.4 %
is expected for the German economy and therefore somewhat
stronger growth than the average for the currency area. In addition
to the economic recovery in France (+0.9 %), Italy (+0.5 %) and
Spain (+0.8 %) will also see growth again. The IMF expects emerg-
ing economies to grow by 5.9 % in 2014, with a further increase in
growth in China to 8.5 %, in India to 6.4 % and in Brazil to 4.0 %.
Robust operating environment for important customer
industries of NORMA Group
The tentative revival of the global economy over the course of
2013 and the further improved prospects for 2014 form a solid
basis for important customer industries of NORMA Group.
The German engineering and plant construction industry is look-
ing optimistically ahead considering the high order book. The
industry association VDMA is heading for a new record level for
2013 with a real increase in production of 2 %. Sales revenues
should grow by just under 4 % to EUR 217 billion. The stimulus
is coming in particular from growth in the USA and the release
of pent-up demand in China. Both countries together count for
more than one-fifth of the industry’s exports.
The previous picture in the automotive industry will continue in
2013. Worldwide, the industry is on a growth course. The weak-
ness in Western Europe will persist. The research institute Polk
expects the global automobile market to grow by 2.5 % in 2013.
The NAF TA area and China will experience above-average ex-
pansion. In 2013, new registrations will decline in Western Europe
by more than 3 % to 11.4 million automobiles and in Germany by
more than 2 % to approximately 3 million automobiles according
to the German industry association VDA. German domestic pro-
duction and exports should remain stable in 2013. For 2014, Polk
forecasts an increase in global growth to 5.6 % in the automobile
segment.
In its current forecast for the European construction industry, the
European construction association Euroconstruct does not ex-
pect a recovery before 2015. Production will fall by 1.5 % in 2013.
In Germany, the industry situation remains better. Both trade
associations (HDB, ZDB) are expecting a 2 % increase in sales
NORMA Group AG Annual Report 2012
Forecast
93
in a forecast for 2013. In real terms, this corresponds to stagna-
tion. The development will continue to be carried by residential
construction (+3.5 %). The associations are cautiously optimistic
for commercial construction (+1 %). The expected recovery in
public construction is welcome, since the federal government is
planning to increase construction measures based on higher tax
revenue. Sales in this market segment will increase by 1.5 % in
2013.
NORMA GROu P’S FOCu S
We have continuously improved our sales and earnings figures in
the past and remain committed to our fundamental corporate
strategy. We intend to continue to grow faster than the market
through our two distribution channels EJT and DS, international
expansion and continuous innovation.
We will continue to foster our international approach by expanding
our distribution network and our production sites and continuing
to build on our local development expertise. In the medium term,
this will include, in particular, expanding our sites in China, India
and Brazil. This will allow us to exploit opportunities in these im-
portant growth markets.
FutuRE dEvELOPMENt OF NORMA GROu P
Moderate sales growth expected for 2013
For 2013, NORMA Group’s Management Board currently ex-
pects (Maintal, 13 March 2013) that the global economy will con-
tinue to grow at approximately the same rate as in 2012, albeit in
a volatile environment in European countries. We expect the main
growth drivers to be the BRIC countries and other emerging
economies.
Despite the global economy’s meagre rate of growth compared
to the 2012 financial year, business development with NORMA
Group’s key customers so far continues to be gratifying on the
whole. Our broad diversification in terms of products, regions and
end markets also gives us a relatively robust business model.
Thanks to solid growth in China, the expansion of our activities
in some Asian markets and improved market shares, we are
once again planning strong sales growth of more than 10 % for
the Asia-Pacific region. After the previous year’s solid growth, the
North American market has still not reached the historical peak
level; the market is expected to grow in local currency in 2013.
However, business growth will be neutral to slight in the Americas
measured in euros, due to a typically stronger US dollar. The
situation in the EME A region will vary. While production volume
in individual industries will decrease due to the persistent uncer-
tainty of the sovereign debt crisis, we expect a higher number of
joining elements of greater value in particular as a result of the
planned introduction of the Euro 6 emission standards in 2014
and the associated ramp-up of new motor generations in 2013.
Whereas we still expect a decline in Europe for the first half of
2013, the positive effect of more and higher quality interfaces
should more than offset the decreasing production figures by the
end of the year. Overall, growth in the EMEA region should be at
least neutral to weak for the full year compared to the previous
year.
We expect that the two ways to the market – EJT and DS – will
develop similarly; as a result, the breakdown of sales between
units will be similar to the previous year. EJT continues to repre-
sent approximately 70 % of sales and DS approximately 30 %.
The expected moderate sales growth will play a significant role
in the EJT unit, whereas the DS unit will be strengthened in par-
ticular by the acquisitions from 2012.
Overall, we expect consolidated sales to grow moderately in
2013 compared to 2012. This also assumes that the economy
will not experience a significant slowdown.
Moreover, there will be a year-on-year increase in sales of around
EUR 20 million due to consolidation from the acquisition of Con-
nectors Verbindungstechnik AG in Switzerland in April 2012,
Nordic Metalblok S.r.l. in Italy in July 2012, Chien Jin Plastic Sdn.
Bhd. in Malaysia in November 2012, the distribution business of
DavyDick & Co in Australia in January 2013 and the increase in
interest in the Dutch distributor Groen Bevestigingsmaterialen B.V.
in December 2012.
Research & development to remain at around 4 %
of EJt sales
We intend to continue investing around 4 % of EJT sales in re-
search and development. We can realise cost advantages in the
medium term by expanding our local development activities.The
focus of our research and development efforts remains on find-
ing innovative solutions to meet such customer requirements as
weight reduction, increased engine efficiency and the modulari-
sation of production processes. This ensures our competitive
edge, which is rewarded by our customers, particularly in our
EJT unit. Developments from this unit also frequently end up
being used by our customers in the Distribution Services unit.
We intend to register new patents again in 2013.
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders 94
Cost of materials ratio planned at a stable percentage
of sales
We negotiate fixed purchase contracts for steel and engineering
plastics during the year, making us largely immune to price fluc-
tuations on the commodities markets during the financial year.
Our contracts allow us to pass on the majority of demand-relat-
ed price fluctuations for additional materials during the financial
year to our customers. We thereby achieve a largely stable cost
of materials ratio in the Group in combination with the measures
from the worldwide Global Excellence cost-optimisation pro-
gramme, which should be around the same level as in the previ-
ous year (2012: 43.6 %).
Further optimisation of other cost items
Due to the continuous growth of the Group and the expansion
of our activities in the Asia-Pacific region, we expect personnel
expenses to grow by a disproportionately low rate in comparison
to sales. This will lead to a gradual and continuous improvement
in our personnel cost rate. Expenses related to our growth and
the expansion of our activities in emerging economies will lead
to a stabilisation in other operating expenses.
EBitA margin expected at the previous years’ level
Due to moderate year-on-year sales growth, the expansion of
operations in particular in the Asia-Pacific region and the acqui-
sitions carried out in 2012 and 2013, we are aiming for a sustain-
able EBITA margin for 2013. In 2013, the EBITA margin is ex-
pected to be at the same level as the past three years of more
than 17 %. This is based on the Company’s moderate sales
growth and the effects of the Group-wide Global Excellence cost
reduction programme.
Net financial income expected to be around EuR – 15 million
Assuming no further acquisitions, net financial income will show
lower interest expenses in the current financial year due to the
consistent reduction of debt. Moreover, net financial income can
be both positively as well as negatively impacted by possible fi-
nancing measures and changes in the hedging positions. Overall,
we expect net financial income of around EUR – 15 million.
Earnings per share to rise
Earnings per share will further increase moderately in financial
year 2013. Sales growth and a sustainable margin also contribute
as well as the earnings contributions from the acquisitions made
in 2012. The tax rate is anticipated to continue to be around 30 %
to 32 % of earnings before taxes.
target investment rate of around 4.5 %
We intend to invest around 4.5 % of consolidated sales over the
course of the 2013 financial year. This will be used for both main-
tenance investments and investments for the purpose of expand-
ing our business. Our expansions will focus on the Asia-Pacific
region and other emerging markets in which we want to signifi-
cantly boost our activities in the future. Investment can peak as
a result of the expansion of manufacturing capacities in China
and India as well as the market entry in Brazil.
Financial and liquidity situation: Stable operating
net cash flow
We expect operating cash flow to remain positive in 2013. We
intend to use this cash flow to finance short-term operating cap-
ital requirements as well as current investments and dividend
payments. We intend to use the majority of the excess cash flow
for investments in growth measures, particularly in emerging
markets, and to finance possible acquisitions.
Due to our high net operating income and planned investment
expenses, we are once again anticipating high positive free cash
flow (before acquisitions) in 2013. The operating net cash flow
should be near the previous year’s adjusted level (2012: EUR 81.0
million). This is based on the assumption that cash inflows will be
typical for our business, in particular in the fourth quarter of the
financial year.
Acquisitions remain a fundamental part of our growth
in future
Our current financing structure gives us the flexibility we need for
the external growth, whereby we will focus on acquiring compa-
nies that produce and distribute products that complement our
own product range as well as companies in regions in which we
do not yet have a share of the market. We will also focus on
consolidating the industry and markets as well as finding suitable
regional distributor organisations in the DS unit. Usually, these
are owner-managed private companies, which makes it difficult
to plan acquisitions and their timing.
we pursue a sustainable dividend policy
As long as the future economic situation permits, we aim to fol-
low a sustainable dividend policy that is based on a payout rate
of approximately 30 % to a maximum of 35 % of the adjusted
consolidated net income for the year, which will be proposed
accordingly to the shareholders for approval at the Annual Gen-
eral Meeting.
NORMA Group AG Annual Report 2012 Forecast
95
FORECASt 2013
Consolidated sales
moderate growth, plus approximately EUR 20 million from acquisitions
Sales growth Asia-Pacific
over 10 %
Sales growth Americas
Sales growth EMEA
Sales growth EJT
Sales growth DS
EBITA margin
Net financial income
Earnings per share
Investment in R&D
Cost of materials ratio
Personnel cost ratio
Tax rate
Investment rate
neutral to slight growth
neutral to weak growth
moderate
strengthened in particular by acquisitions from 2012
at the level of the three preceding years of over 17 %
approximately EUR – 15 million
rising moderately
around 4 % of EJT sales
Stable, approximately at the previous year’s level (43.6 %)
gradual and continuous improvement
around 30 % to 32 %
around 4.5 %
Operating net cash flow
stable (near the previous year’s adjusted level of EUR 81.0 million)
Dividends
approximately 30 % to a maximum of 35 % of adjusted consolidated net income
pect moderate sales growth for our EJT unit. Overall, the Man-
agement Board expects the Group as a whole to grow moder-
ately in 2012, assuming the economy doesn’t slow down
significantly.
We plan to hold the costs for research and development and
materials stable and see further possibilities for optimisation of
the other expense items as a result of our Global Excellence
programme. Therefore, we expect a sustainable margin for 2013
at the previous years’ level.
In the future, the Management Board will also regularly review
the possibility for acquisitions that can offer us additional earn-
ings potential, whereby we concentrate on companies that have
the potential to improve NORMA Group’s position in the regions
in which our activities do not yet cover the entire market, to bol-
ster our technology portfolio, or develop new customer groups.
Anticipated global economic recovery to benefit NORMA
Group’s course for success also in 2014
Consistent with the forecasts made by leading global economic
research institutions, we currently expect sales growth to ac-
celerate in 2014 compared to the 2013 financial year. We there-
fore also expect to be able to further increase consolidated sales
and consolidated profits in all three segments in 2014 compared
to 2013. We also expect NORMA Group’s financial situation to
improve on the basis of our anticipated cash flow.
GENER AL S tAtEMENt B y thE M ANAGEMENt BOARd
ON AN tiCiPAtEd d EvELOPMENt
As of the date on which the 2012 group management report was
prepared, the Management Board expects NORMA Group to
continue to grow in the next two years, despite the volatile eco-
nomic environment. However, our growth momentum will slow
in 2013 as a result of the difficult operating environment. Based
on current economic forecasts, the Management Board expects
growth to increase again in 2014. We see growth in particular in
the Asia-Pacific region and will further expand our operations
there. We also tend to see possibilities for growth in the Ameri-
cas, whereas we view the situation in the EMEA region as neutral
compared to 2012. While our DS unit is strengthened by the
acquisitions made in 2012 and at the beginning of 2013, we ex-
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders 96
Other legally required disclosures
AdditiONAL iNFORMAtiON RE quiREd uNdER thE
GERMAN tA kEOvER d iRECtivE iMPLEMEN tAtiON A Ct
(ÜBERNAhMERiChtLiNiE-uMSEtzuNGSGESEtz,
ÜBERNRL uG)
An overview of the information required under section 315(4) of
the German Commercial Code (Handelsgesetzbuch, HGB) is
presented below:
Section 315(4) no. 1 hGB
NORMA Group AG’s share capital totalled EUR 31,862,400.00
on 31 December 2012. This is divided into 31,862,400 registered
shares with no par value. Each share entitles the bearer to one
vote. There are no other classes of shares. NORMA Group AG
holds no treasury shares.
Section 315(4) no. 2 hGB
The Management Board of NORMA Group AG is not aware of
any restrictions affecting voting rights or the transfer of shares or
any agreements between shareholders which could result in
such restrictions.
Section 315(4) no. 3 hGB
There are no direct or indirect capital holdings exceeding one
tenth of the voting rights other than those voting rights listed in
the Notes to the consolidated financial statements.
Section 315(4) no. 4 hGB
There are no shares in NORMA Group AG that confer special
control rights to the holder.
Section 315(4) no. 5 hGB
There are no employee share schemes through which employ-
ees can acquire shares of NORMA Group AG. Employees with
shareholdings in NORMA Group AG exercise control rights in the
same way as other shareholders in accordance with applicable
legislation and the Articles of Association.
Section 315(4) no. 6 hGB
Management Board members are appointed and dismissed in
accordance with section 84 et seq. of the German Stock Cor-
poration Act (Aktiengesetz, AktG). The Articles of Association of
NORMA Group AG do not contain any provisions related to this
issue that contradict the applicable legislation. The Supervisory
Board is responsible for determining the actual number of mem-
bers on the Management Board. It can nominate a Chairman and
Deputy Chairman of the Management Board or a Management
Board spokesperson and a deputy spokesperson.
Changes to the Articles of Association are made by the Annual
General Meeting in accordance with section 179(1) AktG. In ac-
cordance with section 179(1) sentence 2 AktG, the Annual Gen-
eral Meeting can authorise the Supervisory Board to make
changes which affect only the wording of the Articles of Asso-
ciation. The Annual General Meeting of NORMA Group AG has
chosen to do so: According to Article 13(2) of the Articles of
Association, the Supervisory Board is authorised to make chang-
es to the Articles of Association which only affect their wording.
In accordance with Article 19(2) of the Articles of Association, a
simple majority of the capital represented at the meeting is suf-
ficient to make changes to the Articles of Association, wherever
permitted by law.
If the Management Board exercises its right to retire treasury
shares without a capital decrease and thereby increases the
proportion of the share capital represented by the remaining
shares, it is authorised to alter the number of shares in the Arti-
cles of Association. The Supervisory Board is authorised to alter
the wording of the Articles of Association after capital increases
from authorised capital 2011/II or following the expiry of the au-
thorisation period if this authorised capital is not used.
Section 315(4) no. 7 hGB
Authorised capital 2011/II
With the approval of the Supervisory Board, the Annual General
Meeting held on 6 April 2011 authorised the Management Board
to increase the company’s share capital to a total of
EUR 15,931,200.00 until 5 April 2016 through the issue of up to
15,931,200 new registered, no-par-value shares in exchange for
cash or non-cash contributions (authorised capital 2011/II).
The Management Board is authorised, subject to the Supervi-
sory Board’s approval, to disapply the pre-emptive rights of
shareholders for one or more capital increases in connection
with the authorised capital for fractional amounts resulting from
the shareholders’ subscription ratio, for capital increases in ex-
change for non-cash contributions, in particular to acquire com-
panies, for capital increases in exchange for cash contributions
limited to a maximum of 10 % of the share capital, provided the
issue price is not significantly lower than the stock market price
(simplified disapplication of pre-emptive rights in accordance
with section 186(3) sentence 4), to fulfil obligations resulting from
conversion and option rights or profit participation rights or par-
ticipating bonds.
Contingent capital
The share capital was contingently increased by up to
EUR 12,505,000.00 by issuing up to 12,505,000 new registered,
no-par-value shares with dividend rights from the beginning of
the financial year in which they were issued (contingent capital
NORMA Group AG Annual Report 2012 Other legally required disclosures
97
2011). With the approval of the Supervisory Board, the Manage-
ment Board is authorised to issue bonds with warrants or con-
vertible bonds and convertible profit participation rights one or
more times until the end of 5 April 2016 and to grant the bond-
holders or creditors of the bonds conversion or option rights on
up to 12,505,000 new shares of NORMA Group AG with a pro-
portionate interest in the share capital of up to EUR 12,505,000.00.
nies, for sale in exchange for cash contributions, provided the
price is not significantly lower than the stock market price (simpli-
fied disapplication of pre-emptive rights in accordance with sec-
tion 186(3) sentence 4 and section 71(1) no. 8 sentence 5 half-
sentence 2 AktG, limited to a maximum of 10 % of the share
capital), to fulfil obligations resulting from conversion and option
rights or conversion obligations.
The purpose of the contingent capital increase is to grant shares
to the holders or creditors of bonds with warrants or convertible
bonds and profit participation rights with warrants or conversion
rights which are issued by the Company or any company in
which the Company owns a majority interest or which depends
on the Company until the end of 5 April 2016 in accordance with
the resolution of the Annual General Meeting held on 6 April 2011.
The contingent capital increase is only carried out to the extent
that holders of the aforementioned bonds with warrants or con-
vertible bonds or profit participation rights with option or conver-
sion rights exercise these options or conversion rights, or conver-
sion obligations arising from such bonds are fulfilled and that the
Company’s treasury shares or new shares from the authorised
capital are used for this purpose.
Authorisation to acquire treasury shares
The Annual General Meeting held on 6 April 2011 authorised
NORMA Group AG to acquire treasury shares up to a total of
10 % of the share capital existing when the resolution was passed
over the stock market or by means of a purchase offer extended
to all of NORMA Group AG’s shareholders in accordance with
section 71(1) no. 8 AktG. This authorisation may be exercised as
a whole or in partial amounts on one or several occasions until
5 April 2016. The acquisition price (excluding transaction costs)
may not deviate by more than 10 % from the arithmetic average
of the closing price of the shares of NORMA Group AG in XETRA
trading or a successor system of the Frankfurt Stock Exchange
over the five trading days immediately preceding the acquisition
or the assumption of an obligation to acquire shares over the
stock market or the publication of a public offer.
The authorisation may be exercised for any purpose permitted
by law. The Management Board is authorised to retire all or part
of the acquired shares with the approval of the Supervisory
Board, whereby the Management Board may require the shares
to be retired without a capital decrease, but is under no obliga-
tion to do so. Other than selling them on the stock market or
offering them to all shareholders while partially or completely
disapplying pre-emptive rights, the Management Board is also
specifically authorised to use shares acquired on the basis of the
aforementioned authorisation for any of the following purposes
with the approval of the Supervisory Board: to disapply frac-
tional amounts resulting from the subscription ratio from share-
holders’ pre-emptive rights, for sale in exchange for non-cash
contributions, in particular as part of the acquisition of compa-
The Management Board of NORMA Group AG has yet to make
use of this authorisation.
Cancellation of authorised capital
The Annual General Meeting held on 6 April 2011 passed a res-
olution to cancel the authorised capital that was created in con-
nection with the transformation of NORMA Group GmbH’s legal
form to NORMA Group AG on 9 March 2011.
Section 315(4) no. 8 hGB
NORMA Group AG has no material agreements that take effect
in the event of a change of control following a takeover bid.
Section 315(4) no. 9 hGB
NORMA Group AG has no agreements in place that provide
compensation for members of the Management Board or em-
ployees in the event of a takeover bid. Please see the remunera-
tion report for further details.
REMuNER AtiON REPOR t FOR thE MANAGEMENt AN d
SuPERviSORy BOARdS
Remuneration of the Management Board
Outline of the remuneration system for members of the
Management Board
The purpose of NORMA Group AG’s remuneration system is to
provide the members of the Management Board with adequate
remuneration for their activities and area of responsibility as well
as their personal performance in accordance with applicable
legislation and provide them with a long-term incentive to commit
themselves to the success of the Company. In addition to the
criteria of the Company’s performance and future prospects, the
decision as to what level of remuneration is appropriate is also
based on the general levels of remuneration paid by comparable
companies and NORMA Group AG’s remuneration structure.
In accordance with the recommendations of the German Cor-
porate Governance Code in the version dated 15 May 2012, the
remuneration comprises a fixed element and variable elements.
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders 98
The basic remuneration is a fixed cash payment for the entire
year based on the respective Management Board member’s
area of responsibility. This basic remuneration is paid in the form
of a monthly salary.
To this end, the Supervisory Board specifies a number of
stock options to be allotted each financial year with the pro-
viso that the Management Board member makes a corre-
sponding personal investment in the company.
The variable element comprises multiple components.
1. The annual bonus is a variable cash payment calculated on
the basis of the quantifiable performance of the Company in
the previous financial year. The parameters taken into consid-
eration are whether or not the Company reaches its target for
an earnings component (EBITA) and a liquidity component
(operating free cash flow before external use).
Each of the two key indicators is calculated for a financial year
based on figures taken from the Company’s consolidated fi-
nancial statements and compared to the targets set in ad-
vance by the Supervisory Board. The annual salary of the
Management Board member is multiplied by a percentage
between 0 % and 200 %, depending on the extent to which
the targets for the components were met. The range limits the
annual bonus to 50 % of the member’s annual salary. It can
be reduced to EUR 0 if the company performs poorly.
2. The Company’s long term incentive (LTI) plan is a component
of a variable remuneration element designed to maximise the
Company’s long-term performance. The LTI plan also com-
prises an EBITA component and an operating free cash flow
before external use (FCF) component, each of which are ob-
served over a period of three years (performance period). A
new three year performance period begins every year.
Both components are calculated by multiplying the average
annual EBITA and FCF values actually achieved in the perfor-
mance period by the EBITA and FCF bonus percentages
specified in the employment contract. In the second step, the
actual value of a component is compared to the medium-term
plan approved by the Supervisory Board to evaluate the Com-
pany’s performance and adjustments are made to the LTI
plan. The LTI plan is limited to two and a half times the amount
that would be arrived at on the basis of the figures in the
Company’s medium-term plan. If the actual value is lower than
the planned value, the LTI plan is reduced on a straight-line
basis down to a minimum of EUR 0 if the three year targets
are missed by a significant amount.
3. The matching stock programme (MSP) provides a share price-
based long-term incentive to commit to the success of the
Company. The MSP is a stock option programme.
The MSP is split into five tranches. The first tranche was allot-
ted on the day of the initial public offering (8 April 2011). The
other tranches will be allotted on 31 March each following
year. The stock options relate to those shares allotted or ac-
quired and qualified under the MSP as specified in the Man-
agement Board contract. The number of stock options is
calculated by multiplying the qualified shares (for 2011 and
2012: 108,452 shares) held at the allotment date by the option
factor specified by the Supervisory Board. The option factor
is re-determined for each tranche and amounts to 1.5 for each
of the tranches in 2011 and 2012. Therefore, 162,679 share
options are to be taken into account in both financial year 2011
as well as financial year 2012.
The vesting period is four years and ends on 31 March in 2015
and 2016 respectively for the 2011 and 2012 tranches. The
exercise price for the 2011 tranche is the issue price at the time
of the Company’s IPO. The exercise price for the other tranch-
es will be the weighted average of the closing price of the
Company’s share on the 60 trading days immediately preced-
ing the allotment of the respective tranche. The value of the
stock option is calculated on the basis of generally accepted
valuation models.
Each tranche is recalculated, taking changes in influencing
factors into account, and recognised proportionally over the
vested period.
The options of a tranche can only be exercised within a period
of two years following the expiry of the vesting period. In order
for an option to be exercised, the exercise price must be at least
1.2 times the issue price (basis: weighted average of the last
ten trading days). When the option is exercised, the Company
can decide at its own discretion whether to settle the option in
shares or cash. The 2011 and 2012 tranches are expected to
be settled in equity instruments (no cash settlement).
The members of the Management Board are additionally com-
pensated with a company car which they can also use for per-
sonal purposes. In addition, Management Board members are
also reimbursed for any expenses and travel costs incurred when
performing their duties for the Company in accordance with the
Company’s respectively applicable guidelines. The members of
the Management Board arrange private insurance or are person-
ally responsible for the statutory deductible of 10 % of the loss
for the D&O insurance policy carried for the managing directors
of NORMA Group.
NORMA Group AG Annual Report 2012 Other legally required disclosures
Supplementary report
99
Remuneration of the Management Board in the
2012 financial year
The remuneration for the Management Board totalled EUR 2.4
million in the 2012 financial year (2011: EUR 3.2 million). This figure
comprises EUR 1.4 million in fixed elements and EUR 1.0 million
in variable elements.
The variable elements comprise the short-term performance-
based annual bonus and the two long-term performance-based
LTI and MSP schemes.
A provision was recognised for the variable compensation ele-
ments. The stock options associated with the MSP scheme were
reported as reserves in accordance with IFRS 2.
The Annual General Meeting held on 6 April 2011 resolved not to
disclose the remuneration for individual Management Board mem-
bers between 2011 and 2015 in accordance with sentences 5 to
9 of section 314(1) no. 6 letter a) HGB.
No remuneration was paid to Supervisory Board members in
financial year 2012 for services personally rendered (in particular
advisory and brokerage services).
The Supervisory Board members are reimbursed for any ex-
penses and travel costs incurred when performing their duties
for the Company in accordance with the Company’s respec-
tively applicable guidelines. The members of the Supervisory
Board arrange private insurance or are personally responsible
for the statutory deductible of 10 % of the loss for the D&O insur-
ance policy carried for the Management Board and the Super-
visory Board of NORMA Group.
REPORt ON t R ANSACtiONS with REL A tEd PAR tiES
There were no significant transactions with related parties in fi-
nancial year 2012. Please refer to Note 40 on page 159.
Remuneration of the Supervisory Board
Supplementary report
We acquired the distribution business of DavyDick & Co. in Aus-
tralia on 10 January 2013. The company has sold various ele-
ments for the transport of water in irrigation and sprinkler sys-
tems for over 20 years. It supplies over 700 customers in
Australia with joining products for irrigation and sprinkler systems
as well as valves and pumps under the PUMPMASTER brand, in
particular in the agricultural industry as well as in the areas of
sanitation and household appliances. With this acquisition, we
are expanding our operations in the area of water management
and also expanding our range of infrastructure products and the
distribution network, in particular in the areas of agriculture and
irrigation. DavyDick & Co. recorded sales of around EUR 4 million
in financial year 2012. It is included in the consolidated group of
NORMA Group as at January 2013 and has only limited influence
on its earnings, financials and net asset position.
The remuneration for the Chairman and the Deputy Chairman of
the Supervisory Board was calculated separately in accordance
with the recommendations of the German Corporate Gover-
nance Code in the version dated 15 May 2012. The Chairman is
paid double the remuneration of the other members of the Su-
pervisory Board, and Deputy Chairman is paid one and a half
times this amount. In addition, the Chairman and members of
the Supervisory Board’s committees are remunerated sepa-
rately.
The Supervisory Board members will be remunerated for their
activities on the day after the 2013 Annual General Meeting as
follows:
Supervisory Board
member
Committee membership/
chair
Dr. Stefan Wolf
Dr. Ulf von Haacke
(resigned on
14 September 2012)
Chairman of the Supervisory
Board
Chairman of the General and
Nomination Committee
Deputy Chairman of the Super-
visory Board
Member of the General and
Nomination Committee
Remu-
neration
in EUR
110,000.00
59,918.03
Lars M. Berg
Member of the Audit Committee
60,000.00
Günter Hauptmann
(not a member of any committee)
50,000.00
Knut J. Michelberger Member of the Audit Committee
60,000.00
Dr. Christoph Schug
Chairman of the Audit Committee
Member of the General and
Nomination Committee
95,000.00
Further InformationConsolidated Financial StatementsConsolidated Management ReportManagement Board LetterTo Our Shareholders
100
NORMA Group AG Annual Report 2012
Adjusted EBITA margin of 17.4 % at a sustained high level.
Operating net cash flow of EUR 81.0 million. Strong
adjusted profit for the period of EUR 61.8 million.
Management Board Letter
To Our Shareholders
Consolidated Management Report
Consolidated Financial Statements
Further Information
101
Consolidated Financial
Statements
102 Consolidated statement of financial position
104 Consolidated statement of comprehensive income
105 Consolidated statement of cash flows
106 Consolidated statement of changes in equity
108 Segment reporting
110 Notes to the consolidated financial statements
161
Appendix to the notes to the consolidated
financial statements
161 Notifications of voting rights
162 Corporate bodies
163 Responsibility statement
164 Auditor’s report
165 Further Information
165 Glossary
169 Overview by quarter 2012
170 Multi-year overview
102
Consolidated statement of financial position
ASS etS
in EUR ’000
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Other financial assets
Derivative financial assets
Income tax assets
Deferred income tax assets
Current assets
Inventories
Other non-financial assets
Derivative financial assets
Income tax assets
Trade and other receivables
Cash and cash equivalents
Notes
31 Dec 2012
31 Dec 2011
(19)
(19)
(20)
(22)
(23)
(17)
(18)
(25)
(26)
(23)
(17)
(24)
(35)
235,262
92,478
109,079
0
0
2,253
6,403
224,841
78,940
97,179
397
44
2,038
6,744
445,475
410,183
74,313
7,787
103
12,778
79,293
72,389
66,755
9,792
0
13,141
80,817
67,891
246,663
238,396
total assets
692,138
648,579
NORMA Group AG Annual Report 2012
103
Notes
31 Dec 2012
31 Dec 2011
(27)
(27)
(27)
(27)
(27)
(28)
(29)
(30)
(31)
(32)
(23)
(18)
(29)
(30)
(31)
(32)
(23)
(17)
(33)
31,862
213,559
– 8,550
50,450
287,321
1,021
288,342
10,319
5,739
190,727
1,589
2,666
24,675
32,940
31,862
212,252
– 2,668
14,112
255,558
444
256,002
8,407
4,615
213,457
1,310
676
21,809
33,775
268,655
284,049
6,743
50,969
19,600
2,225
114
17,827
37,663
135,141
403,796
6,359
28,917
21,877
1,527
18
8,457
41,373
108,528
392,577
692,138
648,579
equI t y AND lIAbI lItIeS
in EUR ’000
equity attributable to equity holders of the parent
Subscribed capital
Capital reserve
Other reserves
Retained earnings
equity attributable to shareholders
Non-controlling interests
total equity
liabilities
Non-current liabilities
Retirement benefit obligations
Provisions
Borrowings
Other non-financial liabilities
Other financial liabilities
Derivative financial liabilities
Deferred income tax liabilities
Current liabilities
Provisions
Borrowings
Other non-financial liabilities
Other financial liabilities
Derivative financial liabilities
Income tax liabilities
Trade payables
total liabilities
total equity and liabilities
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board LetterConsolidated statement of financial position
104
Consolidated statement of comprehensive income
in EUR ’000
Revenue
Changes in inventories of finished goods and work in
progress
Raw materials and consumables used
Gross profit
Other operating income
Other operating expenses
Employee benefits expense
Depreciation and amortisation
Operating profit
Financial income
Financial costs
Financial costs – net
Profit before income tax
Income taxes
Profit for the period
Other comprehensive income for the period, net of tax
Exchange differences on translation of foreign operations
Cash flow hedges, net of tax
Notes
(8)
(9)
(10)
(7, 11)
(7, 12)
(19, 20)
(7, 13)
(7, 13)
(16)
(27)
(27)
Actuarial gains/losses on defined benefit plans, net of tax
(27, 28)
Other comprehensive income for the period, net of tax
total comprehensive income for the period
Profit attributable to
Shareholders of the parent
Non-controlling interests
total comprehensive income attributable to
Shareholders of the parent
Non-controlling interests
undiluted earnings per share (in euR)
Diluted earnings per share (in euR)
(15)
(15)
q4 2012
137,354
35
– 58,510
78,879
3,547
– 18,752
– 37,281
– 8,493
17,900
– 1,010
– 4,250
– 5,260
12,640
– 3,252
9,388
– 1,168
– 243
– 1,039
– 2,450
6,938
9,392
– 4
9,388
6,875
63
6,938
0.30
0.30
Q4 2011
139,612
1,064
– 64,770
75,906
1,960
– 17,887
– 34,568
– 6,677
18,734
1,254
– 4,309
– 3,055
15,679
– 2,452
13,227
372
1,176
258
1,806
15,033
13,219
8
13,227
15,025
8
15,033
0.43
0.43
2012
604,613
3,259
– 263,489
344,383
9,536
– 76,626
– 156,468
– 26,414
94,411
800
– 14,069
– 13,269
81,142
– 24,569
56,573
– 2,570
– 3,085
– 1,039
– 6,694
49,879
56,573
0
56,573
49,652
227
49,879
1.78
1.78
2011
581,356
3,500
– 262,282
322,574
9,561
– 88,208
– 143,716
– 23,577
76,634
4,409
– 34,024
– 29,615
47,019
– 11,309
35,710
– 149
– 1,155
258
– 1,046
34,664
35,685
25
35,710
34,639
25
34,664
1.19
1.19
NORMA Group AG Annual Report 2012
Consolidated statement of comprehensive income
Consolidated statement of cash flows
105
Consolidated statement of cash flows
in EUR ’000
Notes
q4 2012
Q4 2011
2012
2011
Operating activities
Profit for the period
Depreciation and amortisation
Gain (–) / loss (+) on disposal of property, plant and equipment
Change in provisions
Change in deferred taxes
Change in inventories, trade receivables and other
receivables
Change in trade and other payables
Interest paid
Other non-cash expenses/income
Net cash provided by operating activities
thereof interest received
thereof income taxes
Investing activities
Purchase of former non-controlling interests
Net payments for acquisitions of subsidiaries
Investments in property, plant and equipment
Proceeds from sale of property, plant and equipment
Investments in intangible assets
Net cash used in investing activities
Financing activities
Proceeds from capital increase
Payments for the issuance of new shares
Reimbursement IPO costs from shareholder
Reimbursement OPICP from shareholder
Interest paid
Dividends paid to shareholders
Dividends paid to non-controlling interests
Refinancing costs
Proceeds from borrowings
Repayment of borrowings
Net cash used in financing activities
Net decrease (-)/increase (+) in cash and cash equivalents
Cash and cash equivalents at beginning of the year
Exchange gains/losses on cash
Cash and cash equivalents at end of the period
(19, 20)
(29)
(18)
(24, 25,
26)
(31, 33)
(27)
(39)
(19, 20)
(19, 20)
(27)
(27)
(27)
(27)
(27)
(13)
(30)
(30)
9,388
8,493
317
– 614
– 278
13,134
1,008
1,798
– 98
33,148
55
– 3,772
0
– 7,248
– 8,749
– 112
– 2,340
– 18,449
0
0
0
– 1
– 1,798
0
0
0
0
– 10,236
– 12,035
2,664
70,082
– 357
72,389
13,227
6,677
– 131
1,963
678
5,371
9,041
4,085
– 1,168
39,743
1,097
– 5,015
0
0
– 5,872
642
– 3,347
– 8,577
0
0
6,602
0
– 4,085
0
0
0
4,883
– 19,816
– 12,416
18,750
48,919
222
67,891
56,573
26,414
– 386
– 611
– 4,056
11,009
2,591
11,630
– 7,040
96,124
1,736
35,710
23,577
– 328
3,142
– 2,473
– 21,103
7,104
23,289
2,827
71,745
2,159
– 16,232
– 14,409
0
– 28,976
– 23,892
924
– 6,143
– 58,087
0
0
0
1,307
– 11,630
– 19,125
– 11
0
18,500
– 23,173
– 34,132
3,905
67,891
593
72,389
– 4,677
0
– 26,383
1,710
– 4,301
– 33,651
147,000
– 6,544
6,602
388
– 23,289
0
0
– 7,859
293,675
– 410,513
– 540
37,554
30,426
– 89
67,891
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
106
Consolidated statement of changes in equity
in EUR ’000
Notes
Subscribed capital
Capital reserve
Other reserves
Retained earnings
total
Non-controlling interests
total equity
Attributable to equity holders of the parent
Attributable to equity holders of the parent
balance at 31 December 2010
Changes in equity for the period
Result for the period
Exchange differences on translation of foreign operations
Cash flow hedges, net of tax
Actuarial gains/losses on defined benefit plans, net of tax
total comprehensive income for the period
Change in capital
Proceeds from capital increase
Stock options
Reimbursement OPICP by shareholders
IPO costs directly netted with equity, net of tax
Reimbursement IPO costs by shareholders, net of tax
Acquisition of non-controlling interests
total transactions with owners for the period
balance at 31 December 2011
Changes in equity for the period
Result for the period
Exchange differences on translation of foreign operations
Cash flow hedges, net of tax
Actuarial gains/ losses on defined benefit plans, net of tax
total comprehensive income for the period
Stock options
Reimbursement OPICP by shareholders
Dividends paid
Dividends paid to non-controlling interests
Acquisition of non-controlling interests
total transactions with owners for the period
balance at 31 December 2012
76
96,650
– 1,364
– 20,116
75,246
3,156
78,402
(23)
(27, 28)
(27)
(27)
(23)
(27, 28)
(27)
(27)
(27)
(39)
0
24,786
7,000
31,786
31,862
0
0
– 24,786
140,000
388
115,602
212,252
0
1,307
0
31,862
1,307
213,559
– 149
– 1,155
– 1,304
0
– 2,668
– 2,797
– 3,085
– 5,882
0
– 8,550
35,685
258
35,943
184
– 4,640
4,681
– 1,940
– 1,715
14,112
56,573
– 1,039
55,534
418
– 19,125
– 489
– 19,196
50,450
35,685
– 149
– 1,155
258
34,639
147,000
0
184
388
– 4,640
4,681
– 1,940
145,673
255,558
56,573
– 2,797
– 3,085
– 1,039
49,652
418
1,307
– 19,125
0
– 489
– 17,889
287,321
– 2,737
– 2,737
444
25
25
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
227
227
– 11
361
350
1,021
35,710
– 149
– 1,155
258
34,664
147,000
0
184
388
– 4,640
4,681
– 4,677
142,936
256,002
56,573
– 2,570
– 3,085
– 1,039
49,879
418
1,307
– 19,125
– 11
– 128
– 17,539
288,342
NORMA Group AG Annual Report 2012
Consolidated statement of changes in equity
107
in EUR ’000
Notes
Subscribed capital
Capital reserve
Other reserves
Retained earnings
total
Non-controlling interests
total equity
76
96,650
– 1,364
– 20,116
75,246
3,156
78,402
Attributable to equity holders of the parent
Attributable to equity holders of the parent
– 149
– 1,155
– 1,304
0
– 2,668
– 2,797
– 3,085
– 5,882
0
– 8,550
35,685
258
35,943
184
– 4,640
4,681
– 1,940
– 1,715
14,112
56,573
– 1,039
55,534
418
– 19,125
– 489
– 19,196
50,450
35,685
– 149
– 1,155
258
34,639
0
147,000
184
388
– 4,640
4,681
– 1,940
145,673
255,558
56,573
– 2,797
– 3,085
– 1,039
49,652
418
1,307
– 19,125
0
– 489
– 17,889
287,321
25
0
0
0
25
0
0
0
0
0
0
– 2,737
– 2,737
444
0
227
0
0
227
0
0
0
– 11
361
350
1,021
35,710
– 149
– 1,155
258
34,664
0
147,000
184
388
– 4,640
4,681
– 4,677
142,936
256,002
56,573
– 2,570
– 3,085
– 1,039
49,879
418
1,307
– 19,125
– 11
– 128
– 17,539
288,342
balance at 31 December 2010
Changes in equity for the period
Result for the period
Exchange differences on translation of foreign operations
Cash flow hedges, net of tax
Actuarial gains/losses on defined benefit plans, net of tax
total comprehensive income for the period
Change in capital
Proceeds from capital increase
Stock options
Reimbursement OPICP by shareholders
IPO costs directly netted with equity, net of tax
Reimbursement IPO costs by shareholders, net of tax
Acquisition of non-controlling interests
total transactions with owners for the period
balance at 31 December 2011
Changes in equity for the period
Result for the period
Exchange differences on translation of foreign operations
Cash flow hedges, net of tax
Actuarial gains/ losses on defined benefit plans, net of tax
total comprehensive income for the period
Stock options
Dividends paid
Reimbursement OPICP by shareholders
Dividends paid to non-controlling interests
Acquisition of non-controlling interests
total transactions with owners for the period
balance at 31 December 2012
(23)
(27, 28)
(27)
(27)
(23)
(27, 28)
(27)
(27)
(27)
(39)
0
24,786
7,000
31,786
31,862
0
0
– 24,786
140,000
388
115,602
212,252
0
1,307
0
31,862
1,307
213,559
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
108
Segment reporting
EMEA
Americas
Asia-Pacific
Total segments
Central functions
Consolidation
Consolidated group
in EUR ’000
Total revenue
thereof inter-segment revenue
2012
392,588
25,047
2011
395,821
23,122
2012
200,946
7,618
2011
180,118
7,130
2012
44,745
1,001
2011
36,791
1,122
Revenue from external customers
367,541
372,699
193,328
172,988
43,744
35,669
604,613
581,356
0
0
604,613
581,356
Contribution to consolidated group
sales
Adjusted EBITDA 1)
Depreciation without PPA
depreciation
Adjusted EBITA 1)
Assets 2)
Liabilities 3)
CAPEX
Number of employees 4)
61 %
79,350
– 10,013
69,337
457,426
185,155
15,153
2,468
64 %
89,821
– 9,620
80,201
417,079
202,474
20,833
2,336
32 %
42,981
– 4,087
38,894
209,894
138,118
6,683
644
30 %
34,272
– 3,736
30,536
223,939
164,310
3,389
616
7 %
5,175
– 1,028
4,147
51,240
36,536
5,752
367
6 %
3,064
– 930
2,134
34,540
14,853
3,142
335
1) For details regarding the adjustments refer to Note 35.
2) Including allocated goodwills, taxes are shown in reconciliation.
3) Taxes are shown in reconciliation.
4) Number of employees (average headcount).
2012
638,279
33,666
100 %
127,506
– 15,128
112,378
718,560
359,809
27,588
3,479
2011
612,730
31,374
100 %
127,157
– 14,286
112,871
675,558
381,637
27,364
3,287
2012
44,206
44,206
2011
25,389
25,389
2012
– 77,872
– 77,872
2011
– 56,763
– 56,763
2012
604,613
0
2011
581,356
0
– 5,078
– 9,102
– 1,603
– 1,036
120,825
117,019
– 264
– 5,342
131,680
171,693
4,118
98
– 50
– 9,152
131,869
149,020
3,320
43
– 1,603
– 158,102
– 127,706
– 1,036
– 158,848
– 138,080
– 15,392
105,433
692,138
403,796
31,706
3,577
– 14,336
102,683
648,579
392,577
30,684
3,330
0
0
0
0
0
0
0
0
NORMA Group AG Annual Report 2012
Segment reporting
109
EMEA
Americas
Asia-Pacific
Total segments
Central functions
Consolidation
Consolidated group
2012
638,279
33,666
2011
612,730
31,374
2012
44,206
44,206
2011
25,389
25,389
2012
– 77,872
– 77,872
2011
– 56,763
– 56,763
2012
604,613
0
2011
581,356
0
Revenue from external customers
367,541
372,699
193,328
172,988
43,744
35,669
604,613
581,356
0
0
0
0
604,613
581,356
100 %
127,506
– 15,128
112,378
718,560
359,809
27,588
3,479
100 %
127,157
– 14,286
112,871
675,558
381,637
27,364
3,287
– 5,078
– 9,102
– 1,603
– 1,036
120,825
117,019
– 264
– 5,342
131,680
171,693
4,118
98
– 50
– 9,152
131,869
149,020
3,320
43
0
– 1,603
– 158,102
– 127,706
0
0
0
– 1,036
– 158,848
– 138,080
0
0
– 15,392
105,433
692,138
403,796
31,706
3,577
– 14,336
102,683
648,579
392,577
30,684
3,330
in EUR ’000
Total revenue
thereof inter-segment revenue
2012
392,588
25,047
2011
395,821
23,122
2012
200,946
7,618
Contribution to consolidated group
sales
Adjusted EBITDA 1)
Depreciation without PPA
depreciation
Adjusted EBITA 1)
Assets 2)
Liabilities 3)
CAPEX
Number of employees 4)
61 %
79,350
– 10,013
69,337
457,426
185,155
15,153
2,468
64 %
89,821
– 9,620
80,201
417,079
202,474
20,833
2,336
32 %
42,981
– 4,087
38,894
209,894
138,118
6,683
644
1) For details regarding the adjustments refer to Note 35.
2) Including allocated goodwills, taxes are shown in reconciliation.
3) Taxes are shown in reconciliation.
4) Number of employees (average headcount).
2011
180,118
7,130
30 %
34,272
– 3,736
30,536
223,939
164,310
3,389
616
2012
44,745
1,001
7 %
5,175
– 1,028
4,147
51,240
36,536
5,752
367
2011
36,791
1,122
6 %
3,064
– 930
2,134
34,540
14,853
3,142
335
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
110
Notes to the consolidated
financial statements
1. GeNeR Al INFORMAtION
NORMA Group AG is the parent company of NORMA Group. Its
headquarter is located at 63477 Maintal, Edisonstr. 4 in the vicin-
ity of Frankfurt, Germany and is registered in the commercial
register of Hanau, under the number HRB 93582. NORMA Group
AG and its affiliated Group subsidiaries operate in the market as
‘ NORMA Group.’
NORMA Group has been listed in the Prime Standard of Frank-
furt Stock Exchange’s Regulated Market since 8 April 2011. The
majority shareholder at the time of the IPO, 3i Group plc and
funds managed by 3i, held 35.5 % or 11.31 million shares at
31 December 2011 and at 31 December 2012 16.7 % or 5.3 mil-
lion shares. MABA CYPRUS Limited held a further 8.3 % stake,
or 2.6 million shares at 31 December 2011, at 31 December 2012
the share was 2.5 % or 0.8 million shares. Furthermore, at 31 De-
cember 2012 Threadneedle (10.82 %), Mondrian Investment
Partners Ltd. (5.34 %), DWS GmbH (4.44 %), ODDO & Cie.
(3.39 %) and T. Rowe Price (3.025 %) held major shares.
NORMA Group AG, in the following referred to as “ NORMA
Group,” was established in 2006 as a result of the merger of
Rasmussen GmbH and the ABA Group. Rasmussen was found-
ed in 1949 as Rasmussen GmbH in Germany. It manufactured
connecting and retaining elements as well as fluid conveying
conduits such as monolayer and multilayer tubes and corru-
gated tubes. All products are marketed globally under the
NORMA brand. ABA Group was founded in 1896 in Sweden. The
Group has since developed into a leading multi-national com-
pany specialising in the design and production of hose and pipe
clamps, as well as connectors for many world-wide applications.
In 2007, NORMA Group acquired Breeze Industrial Products
Corporation (USA) to strengthen its foothold in the Americas.
Breeze had expanded its product offering to include a wide range
of worm-drive, T-bolt and V-clamps for the commercial and pas-
senger vehicle, heavy-duty vehicle, aircraft and industrial mar-
kets. In 2010, NORMA Group acquired two further companies in
America, R.G. R AY Corporation and Craig Assembly Inc., to
become one of the country’s leading suppliers of fastening and
fixing products. In 2012, NORMA Group acquired four further
companies. Connectors Verbindungstechnik AG in Switzerland
is specialised in connector systems for the pharmaceutical and
biotechnology industry. Nordic Metalblok S.r.l. in Italy produces
clamps for various applications particularly for the heating, ven-
tilation and air conditioning industry and the agricultural and
construction sectors. Chien Jin Plastic Sdn. Bhd. in Malaysia was
the first company NORMA Group acquired in Asia and is special-
ized in joining elements for plastic and iron pipe systems. NORMA
Group also acquired further 60 % of Groen Bevestigingsmateri-
alen B.V. in the Netherlands (before 30 %), a wholesale supplier
of hose and pipe clamps as well as couplings to the industrial,
construction, agriculture, plumbing, hardware, and automotive
sector throughout Belgium, the Netherlands and Luxembourg.
Moreover, Groen Bevestigingsmaterialen B.V. has an extensive
supply program of traffic sign brackets and offers the necessary
mounting tools.
In past decades, NORMA Group has, driven by its successful
acquisitions and continuous technological innovation of products
and operations, developed into a group of companies of global
importance. Today NORMA Group markets its products to its
customers via two different market channels: Distribution Ser-
vices (DS) and Engineered Joining Technologies (EJT).
For DS customers, NORMA Group offers a wide range of stan-
dard fastening and fixing products. Furthermore, NORMA Group
offers a broad technological and innovative product portfolio
which includes brands like NORMA ©, ABA ©, Breeze©, R.G. RAY©,
Serflex©, Serratub©, Terry©, and Torca©.
For EJT customers, NORMA Group offers tailor-made solutions
and special engineered joining systems. To effectively meet spe-
cial requirements, NORMA Group builds on extensive industry
and application knowledge, a successful track record of innova-
tion and long-standing relationships with all its key customers.
As a result, many joining systems and fluid conveying conduits
have been developed in close cooperation with global OEM s and
NORMA Group.
NORMA Group AG Annual Report 2012 Notes to the consolidated financial statements
111
Permanent technological and customer-oriented innovations
have brought NORMA Group products a superior position in
many markets. User-friendly connecting and retaining elements
have set a global standard in quality. Today, NORMA Group op-
erates in 100 countries, encompassing 19 manufacturing facili-
ties and various distribution centres. NORMA Group offers to its
customers in excess of 30,000 products.
IFRS 7 (amendments), Financial Instruments: Disclosures, was
published in October 2010. These amendments will allow the
readers of financial statements to improve their understanding
of transfer transactions of financial assets. Entities shall apply
the amendments for reporting periods beginning on or after 1
July 2011. In the first year of application, comparative informa-
tion is not required.
2. bASIS OF P RePAR AtION
The principal accounting policies applied in the preparation of
these consolidated financial statements are set out below. These
policies have been consistently applied to all the years present-
ed, unless otherwise stated.
The consolidated financial statements of NORMA Group have
been prepared in accordance with International Financial Report-
ing Standards (IFRS) as adopted by the EU as well as with the
regulations under commercial law as set forth in Section 315a of
the German Commercial Code (HGB) for the year ended 31 De-
cember 2012.
The consolidated statement of comprehensive income has been
prepared according to the total cost method.
The consolidated financial statements of NORMA Group are be-
ing filed with and published in the German Federal Gazette
(Bundesanzeiger).
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process
of applying the Group’s accounting policies. The areas involving
a higher degree of judgement or complexity or areas where as-
sumptions and estimates are significant to the consolidated fi-
nancial statements are disclosed in section 3.
New and amended standards adopted by the Group for the first
time in 2012
The following amendments to standards which are applied for
the first time for the financial year beginning 1 January 2012 did
not have a material impact on NORMA Group consolidated
financial statements.
IAS 12 (amendments), Income Tax, Deferred tax: Recognition
of Underlying Assets (effective for reporting periods beginning
on or after 1 January 2012), was published in December 2010.
This introduces an exception to the normal rule in IAS 12 that
measurement of deferred taxes in respect to an asset de-
pends on the asset’s expected manner of recovery (that is
through use or sale or a combination of both). The exception
applies to investment properties measured using the fair value
model in IAS 40 and introduces a rebuttable presumption that
such investment property is recovered entirely through sale.
This presumption is rebutted if the investment property is de-
preciable and is held within a business model whose objective
is to consume the investment property’s economic benefits
over time, rather than through sale. Therefore, the IAS 12 guid-
ance previously contained in SIC 21 will be accordingly with-
drawn.
Standards, amendments and interpretations of existing stan-
dards that are not yet effective and have not been adopted
early by the Group
The following standards and amendments to existing standards
have been published and application is mandatory for all Group
accounting periods beginning on or after 1 January 2013. The
company has decided against an early adoption.
1) Standards, amendments and interpretations to existing
standards that have already been endorsed by the EU (with
reference to each respective EU effective date)
IAS 19 (amendments), Employee Benefits, (effective for report-
ing periods beginning on or after 1 July 2013, earlier applica-
tion is permitted), was published in June 2011. The Company
early adopted the amendment as of December 31, 2012. The
amendment was applied retrospective in accordance with IAS
19.173 (2011) and IAS 8. Prior to the amendment, IAS 19 per-
mitted a choice on how to account for actuarial gains and
losses on pensions and similar items. The Exposure Draft
eliminates the use of the ‘corridor’ approach, which resulted
in the deferral of gains and losses. All actuarial gains and
losses thus have to be recognised in other comprehensive
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter 112
income. These changes will have no impact on the company
because NORMA Group does not apply the corridor approach
and already recognises changes in actuarial gains and losses
in other comprehensive income. In addition, the amended IAS
19 replaces the expected return on assets and interest costs
on the defined benefit obligation with a single net interest
component that is calculated by applying the discount rate to
the net defined benefit liability (asset). Past service costs will
be recognised fully in the period of the related plan amend-
ment. The amendments to IAS 19 also include enhanced pre-
sentation and disclosure requirements.
The amendment of IAS 19 contains further a change of the
requirements for termination benefits also. The definition of
termination benefits was clarified so that benefits that have
future-service obligations are not termination benefits and
have to be classified as “Other Long-Term Employee Benefits”
or as “Post-Employment Benefits.” This clarification has a di-
rect impact on the accounting of provisions for retirement
obligations and the corresponding expenses. Top-up pay-
ments which result from retirement agreements are no longer
classified as “Termination Benefits,” in accordance with the
amendments to IAS 19, they have to be classified as “Other
Long-Term Employee Benefits” in terms of IAS 19.08 seqq.
and IAS 19.153 seqq. The recognition of those top-up pay-
ments has to be made in accordance with IAS 19.155 (2011)
seqq. in conjunction with IAS 19.56 (2011) seqq., thus they
must be accumulated in return for services. The final determi-
nation of the impact arising from the amendment has not yet
been completed. However, NORMA Group expects no sig-
nificant impact on comprehensive income and total equity.
In May 2011, the IASB published its improvements to the
accounting and disclosure requirements for consolidation,
off-balance-sheet activities and joint agreements by issuing
IFRS 10, Consolidated Financial Statements, IFRS 11, Joint
Arrangements, IFRS 12, Disclosure of Interests in Other
Entities, consequential amendments to IAS 27, (Consoli-
dated and) Separate Financial Statements (amended 2011)
and IAS 28, Investments in Associates and Joint Ventures
(amended 2011). IFRS 10, 11, 12 and the consequential
amendments to IAS 27 and IAS 28 are effective for annual
periods beginning on or after 1 January 2014. An early
adoption is possible, but must be adopted as a package,
that is, all as of the same date, with the exception of IRFS 12.
The Group does not expect a material impact on its Con-
solidated Financial Statements from these standards.
The new standards and the consequential amendments are pre-
sented in detail below:
IFRS 10, CONSOlIDAteD FINANCIAl StAteMeNtS,
IAS 27, (CONSOlIDAteD AND ) SePARAte FINANCIAl
StAteMeNtS
IFRS 10 superseded the requirements relating to consolidated
financial statements in IAS 27, Consolidated and Separate Finan-
cial Statements (amended 2008) and SIC-12, Consolidation –
Special Purpose Entities. IFRS 10 builds on the existing princi-
ples by identifying the concept of control as the determining
factor in whether or not an entity should be included in the con-
solidated financial statements of the parent company. The stan-
dard provides additional guidance to assist in the determination
of control where this is difficult to assess. IAS 27 (amended 2011)
now only contains requirements relating to separate financial
statements as a result of the issuance of the new standard
IFRS10.
IFRS 11 JOINt ARR ANGeMeNtS
IFRS 11 provides guidance for the accounting of joint arrange-
ments. The core principle of IFRS 11 is to determine the account-
ing of joint ventures on the rights and obligations of the arrange-
ment, rather than its legal form. Basically the standard classifies
joint arrangements into two types, joint operations and joint
ventures, which differ in the way of accounting for joint arrange-
ments. A joint operation is a joint arrangement whereby the par-
ties that have joint control of the arrangement have rights to the
assets, and obligations for the liabilities, relating to the arrange-
ment. A joint venture is a joint arrangement whereby the parties
that have joint control of the arrangement have rights to the net
assets of the arrangement. IFRS requires a joint operator to rec-
ognise and measure the assets and liabilities in relation to its
interest in the arrangement applicable to the particular assets,
liabilities, revenues and expenses. A joint venture is required to
recognise an investment and to account for that investment us-
ing the equity method according to IAS 28.
IFRS 12 DISClOSuRe OF I NteReStS IN Othe R eN tItIeS
IFRS 12 unifies the disclosure requirements of IAS 27 and IFRS
10, IAS 31 and IFRS 11 and IAS 28 in one comprehensive stan-
dard. The standard provides guidance for disclosure require-
ments for any kind of interests in other entities, including joint
arrangements, associates, structured entities, special purpose
vehicles and off-balance-sheet activities. The objective of IFRS
12 is to require disclosures that enable users of financial state-
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
113
ments to evaluate the nature of, and risks associated with, its
interest in other entities and the effects on its financial position,
financial performance and cash flows.
IAS 28 INveStMeNtS IN A SSOCIAteS AND J OINt
veNtuR eS
According to the amendment of IAS 28, an entity shall account
for an investment, or for a portion of an investment, in an associ-
ate or joint venture held for sale if it meets the relevant criteria.
Any retained portion of an investment in an associate or joint
venture that has not been classified as held for sale shall be ac-
counted for using the equity method until the disposal of the
portion that is classified as held for sale takes place.
IFRS 13, Fair Value Measurement, (effective for reporting pe-
riods beginning on or after 1 January 2013, earlier application
is permitted), was published in May 2011. IFRS 13 aims to
improve consistency and reduce complexity. IFRS 13 provides
a precise definition of fair value and a single source of fair
value measurement and disclosure requirements for use
across IFRSs. The requirements do not extend to the use of
fair value accounting but rather provide guidance on how it
should be applied where its use is already required or permit-
ted by other standards within IFRSs. IFRS 13 requires an en-
tity to disclose information that helps readers of its financial
statements to assess the valuation techniques and inputs
used to develop those measurements and the effects of the
measurements on profit or loss or other comprehensive in-
come for the period. Regarding financial instruments, the ma-
jority of changes required by IFRS 13 have already been intro-
duced, mainly by amendments to IFRS 7, Financial Instruments:
Disclosures. The Group does not expect a material impact on
its Consolidated Financial Statements from these amend-
ments.
IAS 1 (amendments), Presentation of Financial Statements,
(effective for reporting periods beginning on or after 1 July
2012), was published in June 2011. The amendments to IAS 1
retain the ’one or two statement’ approach at the choosing of
the entity and only revise the way other comprehensive in-
come is presented. The presentation of other comprehensive
income requiring separate subtotals for those elements which
may be ‘recycled’ (e.g. cash-flow hedging, foreign currency
translation), and those elements that will not (e.g. fair value
through OCI items under IFRS 9). The Group does not expect
a material impact on its Consolidated Financial Statements
from these amendments.
The International Accounting Standard Board (IASB) has pub-
lished amendments to IAS 32, Financial Instruments: Presen-
tation, and to IFRS 7, Financial Instruments: Disclosure in
December 2011. The amendments introduce additional ap-
plication guidance under IFRS in applying the current offset-
ting principles. It clarifies that an entity currently has a legally
enforceable right to set-off if that right is enforceable both in
the normal course of business and in the event of default, in-
solvency of the entity and all counterparties. The amendments
to IFRS 7 require an entity to disclose information about rights
of set-off and related arrangements. The new disclosures are
required for all recognised financial instruments that are set
off in accordance with IAS 32. These disclosures also apply
to recognised financial instruments that are subject to an en-
forceable master netting arrangement or similar agreement,
irrespective of whether they are set-off in accordance with IAS
32. The amendments to IAS 32 are to be retrospectively ap-
plied for annual periods beginning on or after 1 January 2014,
the amendments to IFRS 7 are to be retrospectively applied
for annual periods beginning on or after 1 January 2013. The
Group does not expect a material impact on its Consolidated
Financial Statements from these amendments.
2) Standards, amendments and interpretations to existing
standards that have not yet been endorsed by the EU
IFRS 9, Financial Instruments, a project of the International
Accounting Standards Board (IASB) to replace and sim-
plify the current standard IAS 39 Financial Instruments:
Recognition and Measurement. The project was divided
into three phases:
Phase 1: Classification and measurement
Phase 2: Amortised cost and impairment of financial asset
Phase 3: Hedge accounting
Financial Instruments (effective from 1 January 2013, ear-
lier application is permitted), was published in November
2009 and covers the classification and measurement of fi-
nancial assets. The various classification and measurement
models in IAS 39 are replaced by a single model with only
two classification categories. Thus, upon initial recognition
financial assets are either classified as measured at amor-
tized cost or at fair value. Further changes introduced by
IFRS 9 concern the accounting of embedded derivatives
and the measurement of equity instruments not held for
trading. In October 2010, the IASB followed the publication
of IFRS 9 in November 2009 with an update to IFRS 9, Fi-
nancial Instruments, to include guidance on financial liabil-
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
114
ities and the derecognition of financial instruments. The
accounting and presentation of financial liabilities and for
derecognising financial instruments has been adopted from
IAS 39, ‘Financial Instruments: Recognition and Measure-
ment,’ without change, except for financial liabilities that are
measured at fair value through profit or loss. In November
2012, the IASB published an exposure draft proposing lim-
ited amendments to IFRS 9 ‘Financial Instruments (2010)’
(the ‘ED’). The significant changes from IFRS 9 in the ED
include the introduction of a third classification category for
debt instruments (fair value through other comprehensive
income), clarification of the business model for the existing
amortised cost category, clarification of the contractual
cash flow test, consequential changes as a result of the
limited amendments and revised transition guidance.
In December 2011, the IASB deferred the mandatory effec-
tive date from annual reporting periods beginning on or
after January 1, 2013 to annual reporting periods beginning
on or after January 1, 2015; early application is permitted.
The Company is currently assessing the impacts of adopt-
ing IFRS 9 on the Company’s Consolidated Financial State-
ments.
In November 2012, as part of its annual improvements proj-
ect, the International Accounting Standards Board (IASB)
issued for public comment exposure draft ED/2012/2 An-
nual Improvements to IFRSs: 2011-2013 Cycle (‘the ED’),
which proposes amendments to four International Financial
Reporting Standards (IFRSs). The proposed effective date
for the amendments is for annual periods beginning on or
after 1 January 2014. Early adoption is proposed to be per-
mitted for all of the amendments.
The new standards and consequential amendments are pre-
sented in detail below:
IFRS 1 FIRSt-tIM e ADOPtION OF INteRNAtIONA l
FINANCIAl RePORtING StANDARDS
The amendment clarifies that an entity, in its first IFRS financial
statements, has the choice between applying an existing and
currently effective IFRS or to apply early a new or revised IFRS
that is not yet mandatorily effective, provided that the new or
revised IFRS permits early application. An entity is required to
apply the same version of the IFRS throughout the periods cov-
ered by those first IFRS financial statements.
IFRS 3 b uSINe SS COMbINAtIONS
Amends IFRS 3 to exclude from its scope the accounting for the
formation of all types of joint arrangements as defined in IFRS 11
Joint Arrangements, including those involving the contribution of
a business to a joint arrangement, and clarifies that the scope
exclusion in paragraph 2(a) of IFRS 3 only addresses the ac-
counting in the financial statements of the joint venture or the joint
operation itself, and not the accounting by the parties to the joint
arrangement for their interests in the joint arrangement.
IFRS 13 FAIR vA lue MeASuReMeNt
The amendment clarifies that the portfolio exception in para-
graph 52 of IFRS 13 applies to all contracts accounted for with-
in the scope of IAS 39 Financial Instruments: Recognition and
Measurement or IFRS 9 Financial Instruments, even if they do
not meet the definition of financial assets or financial liabilities as
defined in IAS 32 Financial Instruments: Presentation, such as
certain contracts to buy or sell non-financial items that can be
settled net in cash or another financial instrument.
IAS 40 INveStMeNt PROPeRty
The amendment clarifies that IFRS 3 and IAS 40 are not mutu-
ally exclusive. Determining whether a specific transaction meets
the definition of a business combination as defined in IFRS 3
requires judgement based on the guidance in IFRS 3. Determin-
ing whether or not property is owner-occupied property or in-
vestment property requires application of paragraphs 7-15 of
IAS 40.
The amendments are intended to clarify the requirements and
not to change the accounting practice. The Group is currently
assessing the impact arising from the amendments on the con-
solidated financial statements.
ED/2012/3 Equity Method: Share of Other Net Asset Changes
– Proposed amendments to IAS 28
In December 2012, the International Accounting Standards
Board (IASB) published for public comment exposure draft
ED/2012/3 of the proposed amendments to IAS 28 Invest-
ments in Associates and Joint Ventures to specify that an in-
vestor should recognise, in the investor’s equity, its share of
the changes in the net assets of the investee that are not
recognised in profit or loss or other comprehensive income
(OCI) of the investee, and that are not distributions received
(‘other net asset changes’).
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
115
ED/2012/5 Clarification of Acceptable Methods of Deprecia-
tion and Amortisation (Proposed amendments to IAS 16 and
IAS 38)
The International Accounting Standards Board (IASB) pub-
lished for public comment exposure draft ED/2012/5 of the
proposed amendments to IAS 16 Property, Plant and Equip-
ment and IAS 38 Intangible Assets in December. This amend-
ment proposes to clarify that a revenue-based method should
not be used to calculate the charge for depreciation and/or
amortisation, because that method reflects a pattern of eco-
nomic benefits being generated from the asset, rather than
the expected pattern of consumption of the future economic
benefits embodied in the asset. The IASB also proposes to
clarify that expected future reductions in the unit selling price
of the product or service output of the asset could be an indi-
cator of the diminution of the future economic benefits of the
asset as a result of technical or commercial obsolescence,
and thereby relevant when applying the diminishing balance
method.
ED/2012/6 Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture
Exposure Draft ED/2012/6 Sale or Contribution of Assets be-
tween an Investor and its Associate or Joint Venture (Pro-
posed amendments to IFRS 10 and IAS 28) was published for
public comment by the International Accounting Standards
Board (IASB). The Exposure Draft proposes narrow-scope
amendments to IFRS 10 Consolidated Financial Statements
and IAS 28 Investments in Associates and Joint Ventures
(2011) to address an acknowledged inconsistency between
the requirements in IFRS 10 and those in IAS 28 (2011), in
dealing with the sale or contribution of a subsidiary to a joint
venture (as defined in IFRS 11 Joint Arrangements), or an as-
sociate. In accordance with IAS 28 (2011) (which incorporated
SIC-13 Jointly Controlled Entities – Non-monetary Contribu-
tions by Venturers), gain or loss resulting from the contribution
of a non-monetary asset to a jointly controlled entity in ex-
change for an equity interest in that jointly controlled entity is
restricted to the extent of the interests attributable to the un-
related equity holders in the jointly controlled entity. However,
IFRS 10/IAS 27 Consolidated and Separate Financial State-
ments (as revised in 2008) requires full recognition of a gain/
loss on loss of control of a subsidiary. The proposed amend-
ments require gain or loss arising from the loss of control of a
business (whether it is housed in a subsidiary or not), to be
recognised in full including cases in which the investor retains
joint control of, or significant influence over the investee. The
current requirement of partial gain or loss recognition for
transaction between an investor and its associate or joint ven-
ture only apply to sale or the contribution of assets that do not
constitute a business, as defined in IFRS 3 Business Combi-
nation.
ED/2012/7 Acquisition of an Interest in a Joint Operation
The IFRS do not provide guidance on the accounting by a joint
operator for the acquisition of an interest in a joint operation
in which the activity of the joint operation constitutes a busi-
ness. As a result of the lack of guidance, significant diversity
has arisen in practice in accounting for acquisition of interests
in jointly controlled operations or assets that are businesses.
For example, a premium that is paid in addition to the fair
value of the identifiable net assets is either recognised as a
separate asset, i.e. goodwill, or allocated to the identifiable
assets on the basis of their relative fair values, and the acqui-
sition-related costs are either capitalised or recognised as an
expense.
The Exposure Draft ED/2012/7 Acquisition of an Interest in a
Joint Operation (Proposed amendment to IFRS 11) was pub-
lished for public comment by the International Accounting
Standards Board (IASB). The objective of the proposed
amendment is to introduce guidance on the accounting, by a
joint operator, for the acquisition of an interest in a joint op-
eration, as defined in IFRS 11 Joint Arrangements, in which
the activity of the joint operation constitutes a business, as
defined in IFRS 3 Business Combinations. In the future, a joint
operator accounting for the acquisition of an interest in a joint
operation in which the activity of the joint operation constitutes
a business should apply the relevant principles on business
combinations accounting in IFRS 3 and other Standards, and
disclose the relevant information required by those Standards
for business combinations. The proposed amendments apply
to both acquisition of an interest in an existing joint operation
and acquisition of an interest in a joint operation on its forma-
tion, unless the formation of the joint operation coincides with
the formation of the business.
The IASB issued various other pronouncements. These recent-
ly adopted pronouncements as well as pronouncements not yet
adopted do not have a material impact on NORMA Group’s Con-
solidated Financial Statements.
3.
SuMMARy OF SIGNIFICAN t ACCO uNtING
PRINCIPle S
1. C ONSOlIDAtION
(a) Subsidiaries
Subsidiaries are all entities (including special purpose entities)
over which NORMA Group has the power to govern the financial
and operating policies. This generally accompanies a sharehold-
ing of more than half of the voting rights. The existence and effect
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
116
of potential voting rights that are currently exercisable or convert-
ible are considered when assessing whether the Group controls
another entity. Subsidiaries are fully consolidated from the date
on which control is transferred to the Group. They are de-con-
solidated from the date that control ceases.
The Group uses the acquisition method of accounting to account
for business combinations. The initial value for the acquisition of
a subsidiary is recognised at fair value of the assets transferred,
the liabilities incurred and the equity interests issued by the
Group. The initial value recognised includes the fair value of any
asset or liability resulting from a contingent consideration ar-
rangement. At the acquisition date, the fair value of contingent
consideration is recognised as part of the consideration trans-
ferred in exchange for the acquiree. Acquisition-related costs are
expensed as incurred. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business combination are
measured initially at their fair value at the acquisition date. Ac-
cording to IFRS 3 (revised), for each business combination, the
acquirer shall measure any non-controlling interest in the ac-
quiree either at fair value (full goodwill method) or at the non-
controlling interest’s proportionate share of the acquiree’s net
assets. The Group measures the non-controlling interest in the
acquiree at the non-controlling interest’s proportionate share of
the acquiree’s net assets.
The excess of the consideration transferred, the amount of any
non-controlling interest in the acquiree and the acquisition date
fair value of any previous equity interest in the acquiree over the
fair value of the Group’s share of the identifiable net assets ac-
quired, is recorded as goodwill. If this is less than the fair value
of the net assets of the subsidiary acquired in the case of a
bargain purchase, the difference is recognised directly in the
statement of comprehensive income.
In a business combination achieved in stages, the Group remea-
sures its previously held equity interest in the acquiree at its ac-
quisition date fair value and recognises the resulting gain or loss,
if any, in profit or loss.
Inter company transactions, balances and unrealised gains on
transactions between Group companies are eliminated. Unre-
alised losses are also eliminated. Accounting policies of subsid-
iaries have been changed where necessary to ensure consis-
tency with the policies adopted by the Group.
(b) Transactions and non-controlling interests
Non-controlling interests in the shareholders’ equity of subsidiar-
ies are calculated separately from the equity of the Group.
The Group treats transactions with non-controlling interests that
do not result in a loss of control as transactions with equity own-
ers of the Group. For purchases from non-controlling interests,
the difference between any consideration paid and the relevant
share acquired of the carrying value of net assets of the subsid-
iary is recorded in equity. Gains or losses on disposals of non-
controlling interests are also recorded in equity.
When the Group ceases to have control or significant influence,
any retained interest in the entity is remeasured at its fair value,
with the change in the carrying amount recognised in profit or
loss. The initial carrying amount is the fair value for the purposes
of subsequently accounting for the retained interest as an as-
sociate, joint venture or financial asset. In addition, any amounts
previously recognised in other comprehensive income in respect
of that entity are accounted for as if the Group had directly dis-
posed of the related assets or liabilities. This may mean that
amounts previously recognised in other comprehensive income
are reclassified to profit or loss.
NORMA Group AG Annual Report 2012 Notes to the consolidated financial statements
117
2. vA luAtION M ethODS
The following table shows the most important valuation
methods:
Position
Assets
Goodwill
Other intangible assets (except goodwill)
Property, plant and equipment
Other financial assets (categories IAS 39):
Financial assets held for trading (FAHfT)
Loans and receivables (LaR)
Available-for-sale financial assets (AfS)
Derivative financial assets:
Classified as cash flow hedge
Classified as fair value hedge
Without hedge accounting
Inventories
Other non-financial assets
Trade receivables
Cash and cash equivalents
liabilities
Pensions
Other provisions
Borrowings
Other non-financial liabilities
Other financial liabilities (categories IAS 39):
Financial liabilities held for trading (FLHfT)
Financial liabilities at cost (FLAC)
Loans and receivables (LaR)
Derivative financial liabilities:
Classified as cash flow hedge
Classified as fair value hedge
Without hedge accounting
Trade payables
Valuation method
Impairment-only approach
Amortised costs
Amortised costs
At fair value through profit or loss
Amortised costs
At fair value in other comprehensive income
At fair value in other comprehensive income
At fair value through profit or loss
At fair value through profit or loss
Lower of cost or net realisable value
Amortised costs
Amortised costs
Nominal amount
Projected unit credit method
Settlement amount
Amortised costs
Amortised costs
At fair value through profit or loss
Amortised costs
Amortised costs
At fair value in other comprehensive income
At fair value through profit or loss
At fair value through profit or loss
Amortised costs
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
118
3. FOReIGN C uRReNC y tR ANSl AtION
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s
entities are measured using the currency of the primary eco-
nomic environment in which the entity operates (‘the functional
currency’). The consolidated financial statements are presented
in ‘euros’ (EUR), which is the company’s functional and the
Group’s presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the actual exchange rates at the dates of the
transactions or valuation where items are remeasured. Foreign
exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates
of monetary assets and liabilities denominated in foreign curren-
cies are recognised in profit or loss.
Foreign exchange gains and losses that relate to borrowings and
cash and cash equivalents are presented in profit or loss within
‘financial income/costs.’ All other foreign exchange gains and
losses are presented in profit or loss within ‘other operating in-
come/ expenses.’
(c) Group companies
The results and financial position of all the Group entities (none
of which has the currency of a hyper-inflationary economy) that
have a functional currency that differs from the presentation cur-
rency are translated into the presentation currency as follows:
Assets and liabilities for each consolidated statement of finan-
cial position presented are translated at the closing rate at the
date of that consolidated statement of financial position;
income and expenses for each statement of comprehensive
income are translated at average exchange rates (unless this
average is not a reasonable approximation of the cumulative
effect of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the actual rate
on the dates of the transactions); and
all resulting exchange differences are recognised as a sepa-
rate component of equity.
Goodwill and fair value adjustments arising through the acquisi-
tion of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the closing rate.
The exchange rates of the main currencies affecting foreign cur-
rency translation are as follows:
Spot rate
Average rate
per EUR
Australian dollar
Chinese renminbi yuan
Swiss franc
31 Dec
2012
1.2683
8.2129
1.2084
31 Dec
2011
1.2716
8.1485
2012
2011
1.2408
8.1063
1.3483
8.9898
n/a
1.2051
n/a
Czech koruna
25.1300
25.8129
25.1404
24.5872
British pound sterling
0.8175
0.8372
0.8107
0.8678
Indian rupee
72.1682
68.9828
68.5293
65.1261
Japanese yen
113.4400
100.1168 102.3973
111.0312
Polish złoty
Russian ruble
Serbian dinar
4.0760
4.4553
4.1848
4.1254
40.1500
41.7428
39.9260
40.8875
113.5898
106.0746
113.0708
102.1315
Swedish krona
8.5863
8.9189
8.7042
9.0283
Singapore dollar
1.6119
1.6813
1.6052
1.7495
Turkish lira
US dollar
2.3625
2.4424
2.3139
2.3382
1.3176
1.2938
1.2846
1.3920
4. PROPeRt y, P l ANt AND equ IPMeNt
All property, plant and equipment are stated at historical cost
less depreciation and impairment loss, if applicable. Historical
cost includes expenditure that is directly attributable to the ac-
quisition of the items and, if any, estimated costs for dismantling
and removing the assets, restoring the site on which it is allo-
cated. Borrowing costs that are directly attributable to the acqui-
sition, construction or production of a qualifying asset are in-
cluded in the cost of that asset. A qualifying asset is an asset that
requires a substantial period of time to get ready for its intended
use or sale. In general, the Group’s property, plant and equip-
ment are not qualifying assets and therefore borrowing costs are
excluded from costs.
Subsequent costs are included in the asset’s carrying amount
or recognised as a separate asset, as appropriate, only when it
is foreseeable that future economic benefits associated with the
item will flow to the Group and the cost of the item can be mea-
sured reliably. The carrying amount of the replaced part is derec-
ognised. All other repairs and maintenance expenses are
charged to profit or loss during the financial period in which they
are incurred.
Land is not depreciated. Depreciation on other assets is calcu-
lated using the straight-line method to allocate their cost to their
residual values over their estimated useful lives.
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
119
The assets’ residual values and useful lives are reviewed, and
adjusted if appropriate, at each balance sheet date.
An asset’s carrying amount is written down immediately to its
recoverable amount if the asset’s carrying amount is greater than
its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the
proceeds with the carrying amount and are recognised within
‘other operating income/expenses’ in profit or loss.
The estimated useful lives for property, plant and equipment are
as follows:
Buildings: 8 to 33 years
Machinery and technical equipment: 3 to 18 years
Tools: 3 to 8 years
Other equipment: 2 to 20 years
Land is not depreciated
INtANGIble ASS etS
5.
(a) Goodwill
Goodwill represents the excess of the cost of an acquisition over
the fair value of the Group’s share of the net identifiable assets
of the acquired subsidiary at the date of acquisition. Goodwill on
acquisitions of subsidiaries is included in ‘intangible assets.’
Goodwill is tested annually for impairment and carried at cost
less accumulated impairment losses. Impairment losses on
goodwill are not reversed. Gains and losses on the disposal of
an entity include the carrying amount of goodwill relating to the
entity sold.
development costs can be measured reliably, the product or
process is
technically and
commercially feasible,
future economic benefits are probable
Furthermore, NORMA Group intends, and has sufficient resourc-
es, to complete development and use or sell the asset. The costs
capitalized include the cost of materials, direct labour and other
directly attributable expenditure that serves to prepare the asset
for use. Such capitalized costs are included in line item ‘patents
& technology.’ Capitalized development costs are stated at cost
less accumulated amortisation and impairment losses with an
amortisation period of generally three to five years. Development
costs which did not meet the requirements are expensed as
incurred.
(c) Other intangible assets
Separately acquired other intangible assets are shown at his-
torical cost. Intangible assets acquired in a business combination
are recognised at fair value at the acquisition date. All other in-
tangible assets have a finite useful life and are carried at cost less
accumulated amortisation and impairment loss, if applicable.
Amortisation is calculated using the straight-line method to al-
locate their cost.
Borrowing costs that are directly attributable to the acquisition
or production of a qualifying asset are included in the cost of that
asset. A qualifying asset is an asset that requires a substantial
period of time to get ready for its intended use or sale. In gen-
eral, the Group’s other intangibles are not qualifying assets and
borrowing costs are therefore excluded from costs.
Goodwill is allocated to cash-generating units for the purpose of
impairment testing. The allocation is made to those cash-gener-
ating units or groups of cash-generating units that are expected
to benefit from the business combination in which the goodwill
arose.
The useful lives of other intangible assets acquired in a business
combination are estimates based on the economics of each spe-
cific asset which were determined in the process of the purchase
price allocation.
(b) Development costs
Costs of research activities undertaken with the prospect of gain-
ing new scientific or technical knowledge and understanding are
expensed as incurred. Costs for development activities, whereby
research findings are applied to a plan or design for the produc-
tion of new or substantially improved products and processes,
are capitalized if
The estimated useful lives for other intangible assets are as fol-
lows:
Patents: 5 to 10 years
Certificates: 4 to 10 years
Technology: 10 to 20 years
Licences, rights: 3 to 5 years
Trademarks: 20 years
Software: 3 to 5 years
Development costs: 3 to 5 years
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter 120
IMPAIRMeN t OF NON -FINANCIAl ASSet S
6.
Assets that have an indefinite useful life, for example goodwill,
are not subject to amortisation and are tested annually for impair-
ment, as well as whenever there are indications that the carrying
amount of the cash generating unit (CGU) is impaired. If the im-
pairment loss recognised for the CGU exceeds the carrying
amount of the allocated goodwill, the additional amount of the
impairment loss is recognised through a pro-rata reduction of
the carrying amount of the assets allocated to the CGU. Assets
that are subject to amortisation are reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped
at the lowest levels for which there are separately identifiable
cash flows (cash-generating units). Non-financial assets other
than goodwill that suffered an impairment are reviewed for pos-
sible reversal of the impairment at each reporting date.
7. FINANCIAl ASSet S
Classification
The Group classifies its financial assets in the following catego-
ries: at fair value through profit or loss, loans and receivables,
and available-for-sale. The classification depends on the purpose
for which the financial assets were acquired. Management de-
termines the classification of its financial assets at initial recogni-
tion.
(a) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial
assets held for trading. A financial asset is classified in this cat-
egory if acquired principally for the purpose of selling in the short-
term. Derivatives are also categorised as held for trading unless
they are designated as hedges. Assets in this category are clas-
sified as current assets if expected to be settled within 12
months; otherwise they are classified as non-current.
(b) Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for maturities
greater than 12 months after the balance sheet date. These are
classified as non-current assets. The Group’s loans and receiv-
ables comprise ‘trade and other receivables’ and cash and cash
equivalents in the statement of financial position.
(c) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are
either designated in this category or not classified in any of the
other categories. They are included in non-current assets unless
management intends to dispose of the investment within 12
months of the balance sheet date.
Recognition and measurement
Regular purchases and sales of financial assets are recognised
on the trade-date – the date on which the Group commits to
purchase or sell the asset. Investments are initially recognised at
fair value plus transaction costs for all financial assets not carried
at fair value through profit or loss. Financial assets carried at fair
value through profit or loss are initially recognised at fair value
and transaction costs are expensed in the statement of compre-
hensive income. Financial assets are derecognised when the
rights to receive cash flows from the investments have expired
or have been transferred and the Group has transferred substan-
tially all risks and rewards of ownership. Financial assets at fair
value through profit or loss are subsequently carried at fair value.
Loans and receivables are carried at amortised cost using the
effective interest method. Available-for-sale financial assets are
subsequently carried at fair value unless the fair value cannot be
determined, in which case the available-for-sale financial asset
is carried at cost.
Dividends on available-for-sale equity instruments are recog-
nised in the statement of comprehensive income as part of finan-
cial income when the Group’s right to receive payments is es-
tablished.
Impairment of financial assets
(a) Assets carried at amortised cost
The Group assesses at the end of each reporting period wheth-
er there is objective evidence that a financial asset or group of
financial assets is impaired. A financial asset or a group of finan-
cial assets is impaired and impairment losses are incurred only
if there is objective evidence of impairment as a result of one or
more events that occurred after the initial recognition of the asset
(a ‘loss event’) and that loss event (or events) has (have) an im-
pact on the estimated future cash flows of the financial asset or
group of financial assets that can be reliably estimated.
The criteria that the Group uses to determine if there is objective
evidence of an impairment loss include:
Financial difficulty of the issuer or obligor;
A breach of contract, such as a default or delinquency in inter-
est or principal payments;
NORMA Group AG Annual Report 2012 Notes to the consolidated financial statements
121
The Group, for economic or legal reasons relating to the bor-
rower’s financial difficulty, granting to the borrower a conces-
sion that the lender would not otherwise consider;
covered. The Group assesses at the end of each reporting pe-
riod whether there is objective evidence that a financial asset or
group of financial assets is impaired. Such impairment losses are
not reversed.
It becomes probable that the borrower will enter bankruptcy
or other financial reorganisation;
Observable data indicating that there is a measurable de-
crease in the estimated future cash flows from a portfolio of
financial assets since the initial recognition of those assets,
although the decrease cannot yet be identified with the indi-
vidual financial assets in the portfolio, including:
(i) Adverse changes in the payment status of borrowers in the
8. OFFSet tING FINANCIA l INS tRuMeNtS
Financial assets and liabilities are offset and the net amount is
reported in the consolidated statement of financial position when
there is a legally enforceable right to offset the recognised
amounts and there is an intention to settle on a net basis, or
realise the asset and settle the liability simultaneously.
9.
DeRIvAtIve FINANCIA l INS tRuMeNtS AND heDGING
portfolio; and
ACtI vItIe S
(ii) National or local economic conditions that correlate with
defaults on the assets in the portfolio.
The Group first assesses whether objective evidence of impair-
ment exists.
The amount of the loss is measured as the difference between
the asset’s carrying amount and the present value of estimated
future cash flows (excluding future credit losses that have not
been incurred) discounted at the financial asset’s original effec-
tive interest rate. The asset’s carrying amount is reduced and the
amount of the loss is recognised in profit or loss. If a loan has a
variable interest rate, the discount rate for measuring any impair-
ment loss is the current effective interest rate determined under
the contract.
If, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised (such as
an improvement in the debtor’s credit rating), the reversal of the
previously recognised impairment loss is recognised in profit or
loss.
Impairment testing of trade receivables is described in section
3.11.
(b) Assets classified as available-for-sale
The Group carries its available-for-sale financial assets at cost.
To assess whether there is objective evidence that an available-
for-sale financial asset or a group of financial assets is impaired,
refer to the criteria and methods mentioned in (a) above. In ad-
dition to these criteria and methods, objective evidence of impair-
ment for an investment in an equity instrument includes informa-
tion about significant changes with an adverse effect that have
taken place in the technological, market, economic or legal en-
vironment in which the issuer operates, and indicates that the
cost of the investment in the equity instrument may not be re-
Derivatives are initially recognised at fair value on the date a de-
rivative contract is entered into and are subsequently re-mea-
sured at their fair value. The method of recognising the resulting
gain or loss depends on whether the derivative is designated as
a hedging instrument, and if so, the nature of the item being
hedged. Gains and losses from trading derivatives are recog-
nised in profit or loss.
Derivatives included in hedge accounting are generally desig-
nated as either:
Hedges of the fair value of recognised assets or liabilities or a
firm commitment (fair value hedge);
Hedges of a particular risk associated with a recognised asset
or liability or a highly probable forecast transaction (cash flow
hedge); or
Hedges of a net investment in a foreign operation (net invest-
ment hedge).
At NORMA Group, only cash flow hedges are used.
At the inception of the transaction, the relationship between the
hedging instrument and hedged item is documented, as well as
the risk management objectives and the strategy for undertaking
the hedging transaction. The Group also documents its assess-
ment, both at hedge inception and on an ongoing basis, of wheth-
er the derivatives that are used in hedging transactions are highly
effective in offsetting changes in the cash flows of hedged items.
The effective portion of changes in the fair value of derivatives
that are designated and qualify as cash flow hedges is recog-
nised in other comprehensive income. The gain or loss relating
to the ineffective portion is recognised immediately in the state-
ment of comprehensive income within ‘financial income/costs.’
Amounts accumulated in other comprehensive income are re-
classified to profit or loss in the periods when the hedged item
affects profit or loss.
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
122
The full fair value of a hedging derivative is classified as a non-
current asset or liability when the remaining maturity of the
hedged item is more than 12 months and as a current asset or
liability when the remaining maturity of the hedged item is less
than 12 months. Trading derivatives are classified as non-current
assets or liabilities in accordance with IAS 1.68 and 1.71 if they
are due after more than one year; otherwise they are classified
as current.
The fair values of derivative financial instruments used for hedg-
ing purposes and of those held for trading are disclosed in
Note 23. Movements on the hedging reserve in equity are shown
in Note 27.
10. I NveNtORIeS
Inventories are stated at the lower of cost and net realisable
value. Net realisable value is the estimated selling price in the
ordinary course of business, less applicable variable selling ex-
penses. Cost is determined using the weighted-average-meth-
od. The cost of finished goods and work in progress comprises
of design costs, raw materials, direct labour, other direct costs
and related production overheads (based on normal operating
capacity). Borrowing costs that are directly attributable to the
acquisition, construction or production of a qualifying asset are
included in the cost of that asset. A qualifying asset is an asset
that necessarily takes a substantial period of time to prepare it
for its intended use or sale. In general, the Group’s inventories
are not qualifying assets, and borrowing costs are therefore ex-
cluded from costs.
11. tRADe Re CeIvAble S
Trade receivables are amounts due from customers for merchan-
dise sold or services performed in the ordinary course of busi-
ness. If collection is expected within one year or less, they are
classified as current assets. If not, they are presented as non-
current assets.
Trade receivables are recognised initially at fair value and subse-
quently measured at amortised cost using the effective interest
method, less provision for impairment. An allowance of doubtful
accounts of trade receivables is established when there is objec-
tive evidence that the Group will not be able to collect all amounts
due according to the original terms of the receivables. Significant
financial difficulties of the debtor, the probability that the debtor
will enter bankruptcy or financial reorganisation, and default or
delinquency in payments are considered indicators that the trade
receivable is impaired. The amount of the allowance is the differ-
ence between the asset’s carrying amount and the present
value of estimated future cash flows, discounted at the original
effective interest rate.
12. CAS h AND CAS h equIvAleNtS
Cash and cash equivalents includes cash in hand, deposits held
at call with banks, and other short-term highly liquid investments
with original maturities of three months or less. Bank overdrafts
are shown within borrowings in current liabilities on the consoli-
dated statement of financial position.
13. tR ADe PAyAbleS
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from sup-
pliers. Accounts payable are classified as current liabilities if pay-
ment is due within one year or less. If not, they are presented as
non-current liabilities.
Trade payables are recognised initially at fair value and subse-
quently measured at amortised cost using the effective interest
method.
14. bORROwINGS
Borrowings are recognised initially at fair value, net of transaction
costs incurred. Borrowings are subsequently stated at amortised
cost; any difference between the proceeds (net of transaction
costs) and the redemption value is recognised in profit or loss
over the period of the borrowings using the effective interest
method.
Fees paid on the establishment of loan facilities are recognised
as transaction costs of the loan to the extent that it is probable
that some or all of the facility will be drawn down. In this case,
the fee is deferred until the draw-down occurs. To the extent that
there is no evidence that it is probable that some or all of the
facility will be drawn down, the fee is capitalised as a pre-pay-
ment for liquidity services and amortised over the period of the
facility to which it relates.
Borrowings are classified as current liabilities unless the Group
has an unconditional right to defer settlement of the liability for
at least 12 months after the balance sheet date.
15. CuRReNt AND D eF eRR eD INCOMe t A x
The tax expenses for the period are comprised of current and
deferred tax. Tax is recognised in profit or loss, except to the
extent that it relates to items recognised in other comprehensive
income or directly in equity. In this case, the tax is also recog-
nised in other comprehensive income or directly in equity, re-
spectively.
The current income tax charge is calculated on the basis of the
tax laws enacted or substantively enacted at the balance sheet
date in the countries where the company’s subsidiaries operate
and generate taxable income. Management periodically evalu-
ates positions taken in tax returns with respect to situations in
NORMA Group AG Annual Report 2012 Notes to the consolidated financial statements
123
which applicable tax regulation is subject to interpretation. It es-
tablishes provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities.
Deferred income tax is recognised using the liability method on
temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the consolidated fi-
nancial statements and on tax losses carried forward. However,
the deferred income tax is not accounted for if it arises from
initial recognition of an asset or liability in a transaction other than
a business combination that at the time of the transaction affects
neither accounting nor taxable profit or loss. Deferred income
tax is determined using tax rates (and laws) that have been en-
acted or substantially enacted by the balance sheet date and are
expected to apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that
it is probable that future taxable profit will be available against
which the temporary differences can be utilised.
Deferred income tax is provided on temporary differences arising
on investments in subsidiaries and associates, except where the
timing of the reversal of the temporary difference is controlled by
the Group and it is probable that the temporary difference will
not reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there
is a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income tax assets
and liabilities relate to income taxes levied by the same taxation
authority on either the taxable entity or different taxable entities
where there is an intention to settle the balances on a net basis.
16. eMPlOyee beNeFI tS
(a) Pension obligations
Group companies operate different pension schemes. NORMA
Group has both defined benefit and defined contribution plans.
A defined contribution plan is a pension plan under which the
Group pays fixed contributions to a separate entity. The Group
has no legal or constructive obligations to pay further contribu-
tions if the fund does not hold sufficient assets to pay all employ-
ees the benefits relating to employee service in the current and
prior periods. A defined benefit plan is a pension plan that is not
a defined contribution plan. The major defined benefit plan is the
German benefit plan which defines the amount of pension ben-
efit that an employee will receive upon retirement to depend on
years of service and compensation.
The liability recognised in the consolidated statement of financial
position with respect to defined benefit pension plans is the pres-
ent value of the defined benefit obligation at the balance sheet
date less the fair value of plan assets, if any, together with adjust-
ments for unrecognised past-service costs. The defined benefit
obligation is calculated annually by independent actuaries using
the projected unit credit method. The present value of the de-
fined benefit obligation is determined by discounting the esti-
mated future cash outflows using interest rates of high-quality
corporate bonds that are denominated in the currency in which
the benefits will be paid and that have terms to maturity ap-
proximating the terms of the related pension liability.
According to IAS 19, actuarial gains and losses arising from ex-
perience adjustments and changes in actuarial assumptions can
be either recognised using the corridor approach or the SORIE
method. To avoid volatility in profit or loss, NORMA Group uses
the SORIE method where actuarial gains and losses are charged
or credited to retained earnings in other comprehensive income
in the period in which they arise.
Past-service costs are recognised immediately in income, unless
the changes to the pension plan are conditional on the employ-
ees remaining in service for a specified period of time (the vesting
period). In this case, the past service costs are amortised on a
straight-line basis over the vesting period.
For defined contribution plans, the Group pays contributions to
publicly or privately administered pension insurance plans on a
mandatory, contractual or voluntary basis. The Group has no
further payment obligations once the contributions have been
paid. The contributions are recognised as employee benefits
expense when they are due. Prepaid contributions are recog-
nised as an asset to the extent that a cash refund or a reduction
in the future payments is available.
(b) Termination benefits
Termination benefits are payable when employment is termi-
nated by the Group before the normal retirement date, or when-
ever an employee accepts voluntary redundancy in exchange for
these benefits. The Group recognises termination benefits when
it is demonstrably committed to either terminating the employ-
ment of current employees according to a detailed formal plan
without a realistic possibility of withdrawal, or providing termina-
tion benefits as a result of an offer made to encourage voluntary
redundancy. Benefits falling due more than 12 months after the
balance sheet date are discounted to their present value.
17. ShARe-b ASeD PAyM eNt
Share-based payment plans issued in the NORMA Group are
accounted for in accordance with IFRS 2 “Share-based pay-
ment” (see also Note 27). All share-based payment transactions
fall within the scope of IFRS 2, unless the transaction is clearly
for a purpose other than payment for goods or services supplied
to the entity receiving them. The objective of IFRS 2 is that an
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter 124
entity should recognise all goods or services it obtains, regard-
less of the form of consideration. Where goods or services are
obtained for cash or other financial assets, the accounting is
generally straightforward. IFRS 2 starts from the premise that
goods or services obtained in a share-based payment transac-
tion should be recognised and measured in a similar way.
In accordance with IFRS 2, NORMA Group distinguishes be-
tween equity-settled and cash-settled plans. The financial inter-
est from equity-settled plans granted at grant date is generally
allocated over the expected vesting period against equity until
the exit event occurs. Expenses from cash-settled plans are gen-
erally also allocated over the expected vesting period until the
exit event occurs, but against accruals.
18. P ROvISIONS
Provisions are recognised when: the Group has a present legal
or constructive obligation to third parties as a result of past
events; it is probable that an outflow of resources will be required
to settle the obligation; and the amount has been reliably esti-
mated. Provisions are not recognised for future operating losses.
Where there are a number of similar obligations, the likelihood
that an outflow will be required in settlement is determined by
considering the class of obligations as a whole. A provision is
recognised even if the likelihood of an outflow with respect to any
one item included in the same class of obligations may be small.
Provisions are measured at the present value of the expenditures
expected to be required to settle the obligation taking into ac-
count all identifiable risks. Provisions are discounted using a pre-
tax rate that reflects current market assessments of the time
value of money and the risks specific to the obligation. The in-
crease in the provision due to passage of time is recognised as
interest expense.
19. ReveNue R eCOGNItION
Revenue comprises the fair value of the consideration received
or receivable for the sale of goods and services in the ordinary
course of the Group’s activities. Revenue is shown net of value-
added tax, returns, rebates and discounts and after eliminating
sales within the Group. It is recognised in the accounting period
in which they are earned in accordance with the realisation prin-
ciple.
The Group recognises revenue when the amount of revenue can
be reliably measured, it is probable that future economic benefits
will flow to the entity and when specific criteria have been met
for each of the Group’s activities as described below. The amount
of revenue is not considered to be reliably measurable until all
contingencies relating to the sale have been resolved. The Group
bases its estimates on historical results, taking into consideration
the type of customer, the type of transaction and the specifics of
each arrangement.
20. l eASeS
Leases in which a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases (net of any incen-
tives received from the lessor) are charged to profit or loss on a
straight-line basis over the period of the lease.
The Group leases certain property, plant and equipment. Leas-
es of property, plant and equipment where the Group has sub-
stantially all the risks and rewards of ownership are classified as
finance leases. Finance leases are capitalised at the lease’s com-
mencement at the lesser of the fair value of the leased property
and the present value of the minimum lease payments.
Each lease payment is allocated between the liability and finance
charges so as to achieve a constant rate on the finance balance
outstanding. The corresponding rental obligations, net of finance
charges, are included in other long-term payables. The interest
element of the finance cost is charged to profit or loss over the
lease period so as to produce a constant periodic rate of interest
on the remaining balance of the liability for each period. The
property, plant and equipment acquired under finance leases is
depreciated over the shorter of the useful life of the asset and the
lease term.
21. GOveRNMeNt GR ANtS
Government grants are not recognised until there is reasonable
assurance that the conditions attached to them are complied
with and that the grants will be received. Government grants for
the compensation of expenses incurred are recognised in profit
or loss on a systematic basis over the periods in which the re-
lated costs are expensed for which the grants are intended to
compensate. Grants related to non-depreciable assets are rec-
ognised in profit or loss over the periods that bear the cost of
meeting the obligations.
NORMA Group AG Annual Report 2012 Notes to the consolidated financial statements
125
4. SCOP e OF CONSO lIDAtION
5. FINANCIAl RISk MANAGe MeN t
With NORMA Group AG, the consolidated financial statements
contain all German and foreign companies which NORMA Group
AG controls directly or indirectly. Investments in associates for
which NORMA Group has no significant influence are accounted
for in accordance with IAS 39. At 31 December 2012, NORMA
Group did account no company in accordance with IAS 39
(31 December 2011: 30 % share in Groen Bevestigingsmaterialen
B.V.).
1. FINANCIAl RIS k FAC tORS
The Group’s activities expose it to a variety of financial risks,
comprising of market risk, credit risk and liquidity risk. The
Group’s financial risk management focuses on the unpredict-
ability of financial markets and seeks to minimise its potential
adverse effects on the Group’s financial performance. The Group
uses derivative financial instruments to hedge certain risk expo-
sures.
The consolidated financial statements of 2012 include eight Ger-
man (31 December 2011: eight) and 35 foreign (31 December
2011: 33) companies.
The composition of the Group changed as follows:
At 1 January
Additions
of which newly founded
of which acquired
Disposals
of which no longer consolidated
of which mergers
At 31 December
2012
41
4
0
4
2
2
0
43
2011
38
3
3
0
0
0
0
41
In 2012, NORMA Group acquired Connectors Verbindung-
stechnik AG (Switzerland), Nordic Metalblok S.rl. (Italy) and
Chien Jin Plastic Sdn. Bhd. (Malaysia). In addition, 60 % of the
shares of Groen Bevestigingsmaterialen B.V. (Netherlands)
were acquired, of which NORMA Group already held 30 %.
Groen Bevestigingsmaterialen B.V. was accounted for in ac-
cordance with IAS 39 in 2011 and is now fully consolidated.
For further details, refer to Note 39 business combinations.
Financial risk management is carried out by a central treasury
department (Group Treasury). The necessary responsibilities and
controls associated with risk management are determined by
Group management. Group Treasury identifies, evaluates and
hedges financial risks in close co-operation with the Group’s
operating units.
Market risk
(i) Foreign exchange risk
NORMA Group operates internationally in 100 different countries
and is exposed to foreign exchange risk arising from the expo-
sure to various currencies – primarily with respect to the US-
dollar, the British pound sterling, the Chinese renminbi yuan, the
Polish zloty and the Swedish krona.
Foreign exchange risk at 31 December 2012 arises from future
commercial transactions net long USD position of EUR 1.2 million
(31 December 2011: EUR 0.8 million), net long GBP position of
EUR 3.4 million (31 December 2011: EUR 1.3 million), net short
CNY position of EUR – 2.5 million (31 December 2011: EUR 0.03
million), net long PLN position of EUR of 9.1 million (31 December
2011: EUR 7.8 million) and net long SEK position of EUR 1.1 mil-
lion (31 December 2011: EUR 0.6 million).
The effects of changes in foreign exchange rates are analysed
below for financial assets and liabilities denominated in foreign
currencies.
In 2012, the inactive companies SCI Seran and Jiangyin Auto-
motive Products Co. Ltd. left the basis of consolidation. No
material effects occurred on the financial position, financial
performance and cash flows of NORMA Group.
If the US dollar had weakened/strengthened by 10 % against the
euro, NORMA Group would show a post-tax profit for the year
2012 of EUR 102 thousand lower/ EUR 125 thousand higher
(2011: EUR 76 thousand lower/ EUR 93 thousand higher).
For a detailed overview regarding the shareholdings of NORMA
Group, please refer to the chart on the next page. Due to busi-
ness relationships between the subsidiaries and the different
allocation of research and development activities, the results
of the single entities have only limited significance on the result
of the segments.
If the British pound Sterling had weakened/ strengthened by 10 %
against the euro, NORMA Group would show a post-tax profit for
the year 2012 of EUR 309 thousand lower/ EUR 378 thousand
higher (2011: EUR 115 thousand lower/ EUR 141 thousand higher).
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
126
lISt OF GRO uP COMPANI eS OF NORMA GROuP AS At 31 DeCeM beR 2012
No.
Company
Central Functions
01
02
03
04
NORMA Group AG
NORMA Group APAC Holding GmbH
NORMA Group Holding GmbH
NORMA Beteiligungs GmbH
Segment eMeA
Registered address
Maintal, Germany
Maintal, Germany
Maintal, Germany
Maintal, Germany
05
NORMA Distribution Center GmbH
Marsberg, Germany
06 DNL GmbH & Co KG
07
08
NORMA Germany GmbH
NORMA Türkei Verwaltungs GmbH
09 DNL France S.A.S
Maintal, Germany
Maintal, Germany
Munich, Germany
Briey, France
NORMA Distribution France S.A.S.
La Queue En Brie, France
10
11
NORMA France S.A.S.
12 DNL UK Ltd.
13
NORMA UK Ltd.
14 Nordic Metalblok S.r.l.
15
NORMA Italia SpA
Briey, France
Newbury, UK
Newbury, UK
Riese Pio X, Italy
Gavardo, Italy
16 Groen Bevestigingsmaterialen B.V.
Pumerend, Netherlands
17
18
19
NORMA Netherlands B.V.
NORMA Polska Sp. z o.o.
NORMA Group CIS LLC
20 DNL Sweden AB
21
NORMA Sweden AB
Ter Apel, Netherlands
Slawniów, Poland
Togliatti, Russia
Stockholm, Sweden
Anderstorp, Sweden
22 Connectors Verbindungstechnik AG
Tagelswangen, Switzerland
23
24
25
26
NORMA Group South East Europe d.o.o
Belgrade, Serbia
Fijaciones NORMA S.A.
NORMA Czech, s.r.o.
Barcelona, Spain
Hustopece, Czech Republic
NORMA Turkey Baglanti ve Birlestirme
Teknolojileri Sanayi ve Ticaret Limited Sirketi
Besiktas, Istanbul, Turkey
Segment Americas
27 Craig Assembly Inc.
St. Clair, USA
28
29
30
NORMA Michigan Inc. (former Torca Products Inc.) Auburn Hills, USA
NORMA US Holding LLC (former BIPC LLC)
Saltsburg, USA
NORMA Pennsylvania Inc. (former Breeze I.P.C.) Saltsburg, USA
31 R.G. RAY Corporation
Buffalo Grove, USA
32
33
NORMA do Brasil Sistemas De Conexão Ltda.
São Paulo, Brasil
NORMA Group México S. de R.L. de C.V.
Monterrey, Mexico
Segment Asia-Pacific
34
35
36
37
NORMA Pacific Pty. Ltd.
NORMA China Co., Ltd.
Melbourne, Australia
Qingdao, China
NORMA Group Products India Pvt. Ltd.
Pune, India
NORMA Japan Inc.
38 Chien Jin Plastic Sdn. Bhd.
Osaka, Japan
Ipoh, Malysia
39
40
41
42
43
NORMA Pacific (Malaysia) SDN. BHD.
Kuala Lumpur, Malaysia
NORMA Korea Inc.
Seoul, Republik Korea
NORMA Group Asia Pacific Holding Pte. Ltd
Singapore, Singapore
NORMA Pacific Asia Pte. Ltd.
NORMA Pacific (Thailand) Ltd.
Singapore, Singapore
Chonburi, Thailand
Share in %
Direct
parent
company
of
NORMA
Group
AG
held
by
Cur-
rency
Equity 1)
Result 1)
01
01
03
03
03
03
04
04
09
09
04
12
04
20
03
20
04
04
04
20
04
04
04
20
08
30
30
30
04
30
30
28
41
03
41
41
41
41
41
01
41
41
100.00
100.00
TEUR
46
100.00
100.00
TEUR
95,900
100.00
100.00
TEUR
9,291
– 3
17,902
9,507
94.80
100.00
TEUR
100.00
100.00
TEUR
2,174
6,543
94.90
100.00
TEUR
56,306
100.00
100.00
TEUR
17
5)
– 1
5)
– 3
100.00
100.00
TEUR
13,496
1,271
100.00
100.00
TEUR
100.00
100.00
TEUR
100.00
100.00
TGBP
3,023
5,958
4,119
100.00
100.00
TGBP
13,779
100.00
100.00
TEUR
100.00
100.00
TEUR
60.00
90.00
TEUR
100.00
100.00
TEUR
770
5,670
1,681
4,908
100.00
100.00
TPLN
115,840
533
743
– 393
4,110
– 133
906
4)
2,758
32,616
99.50
100.00
TRUR
– 14,703
– 18,606
100.00
100.00
TSEK
100.00
100.00
TSEK
100.00
100.00
TCHF
60,327
97,268
8,942
– 250
26,500
2,621
100.00
100.00
TRSD 1,487,808
– 100,731
100.00
100.00
TEUR
4,910
632
99.90
100.00
TCZK
242,997
28,460
99.00
100.00
TTRL
682
139
100.00
100.00
TUSD
100.00
100.00
TUSD
100.00
100.00
TUSD
100.00
100.00
TUSD
100.00
100.00
TUSD
99.90
100.00
TBRL
99.50
100.00
15,061
53,665
27,940
46,416
63,376
– 288
2)
2,127
11,322
– 1,150
4,612
8,694
– 402
2)
100.00
100.00
TAUD
100.00
100.00
TCNY
15,849
72,303
9,357
16,765
99.99
100.00
60.00
60.00
TINR
TJPY
119,356
260,942
– 73,288
85.00 100.00 TMYR
21,441
100.00
100.00
3)
100.00
100.00 TKRW
– 884
– 78,528
100.00
100.00
TSGD
16,641
100.00
100.00
TSGD
212
2,748
– 529
100.00
100.00
TTHB
53,056
37,658
119
334
3)
1)
2)
3)
4)
5)
Reported values according to IFRS as at 31 December 2012, except NORMA Group Holding GmbH, NORMA Beteiligungs GmbH, NORMA Germany GmbH,
NORMA Distribution Center GmbH and DNL GmbH & Co. KG.; these values are according to preliminary German GAAP results.
Included in NORMA Michigan Inc.
Included in NORMA Pacific Pty. Ltd.
The company was acquired as at 31 December 2012.
A profit-pooling-contract exists.
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
127
If the Chinese renminbi yuan had weakened/strengthened by
10 % against the euro, NORMA Group would show a post-tax
profit for the year 2012 of EUR 225 thousand higher/ EUR 275
thousand lower. There were no material effects in 2011.
If the Polish złoty had weakened / strengthened by 10 % against
the euro, NORMA Group would show a post-tax profit for the year
2012 of EUR 830 thousand lower/ EUR 1,014 thousand higher
(2011: EUR 707 thousand lower/ EUR 865 thousand higher).
If the Swedish krona had weakened / strengthened by 10 %
against the euro, NORMA Group would show a post-tax profit
for the year 2012 of EUR 101 thousand lower / EUR 123 thousand
higher (2011: EUR 56 thousand lower / EUR 68 thousand higher).
The Group treasury’s risk management policy is to hedge about
80 % or more of anticipated operational cash flows in US dollar,
British Pound sterling and Swedish krona.
NORMA Group has certain investments in foreign operations
whose net assets are exposed to foreign currency translation
risks. This translation risk is primarily managed through borrow-
ings in the relevant foreign currency.
(ii) Interest rate risk
NORMA Group’s interest rate risk arises from long-term borrow-
ings. Borrowings issued at variable interest rates expose the
Group to cash flow interest rate risk which is partially offset by
hedges (interest rate swaps). The Group’s policy is to maintain
approximately 80 % of its medium-term borrowings in fixed rate
instruments.
Below, the effects of changes in interest rates are analysed for
bank borrowings, which bear variable interest rates, and for inter-
est rate swaps included in hedge accounting. Borrowings that
bear fixed interest rates are excluded from this analysis.
At 31 December 2012, if interest rates on euro-denominated bor-
rowings had been 100 basis points higher/lower with all other
variables held constant, post-tax profit for the year would have
been EUR 185 thousand lower/EUR 185 thousand higher (2011:
EUR 2,259 thousand lower/EUR 2,262 higher) and other com-
prehensive income would have been EUR 2,317 thousand high-
er/EUR 862 thousand lower (2011: EUR 753 thousand higher/
EUR 825 thousand lower).
(iii) Other price risks
As NORMA Group is not exposed to any other material eco-
nomic price risks, like stock exchange prices or commodity
prices, an increase or decrease in the relevant market prices
within reasonable margins would not have an impact on the
Group’s profit or equity. Hence, the Group’s exposure to other
price risks is regarded as not material.
Credit risk
The credit risk incurred by the Group is the risk that counterpar-
ties fail to meet their obligations arising from operating activities
and from financial transactions. Credit risk arises from cash and
cash equivalents and deposits with banks and financial institu-
tions, as well as credit exposures to customers, including out-
standing receivables and committed transactions.
Credit risk is monitored on a Group basis. To minimise credit risk
from operating activities and financial transactions, each coun-
terparty is assigned a credit limit, the use of which is regularly
monitored. Default risks are continuously monitored in the oper-
ating business.
The aggregate carrying amounts of financial assets represent the
maximum default risk. For an overview of past-due receivables,
please refer to Note 24 ‘Trade and other receivables.’ Given the
Group’s heterogeneous customer structure, there is no risk con-
centration.
liquidity risk
Prudent liquidity risk management implies maintaining sufficient
cash and marketable securities, the availability of funding through
an adequate amount of committed credit facilities and the ability
to close out market positions. Due to the dynamic nature of the
underlying businesses, Group Treasury maintains flexibility in
funding by maintaining availability under committed credit lines.
With the IPO of NORMA Group in April 2011, all bank borrowings
were refinanced. The new syndicated bank facilities amounted
to EUR 250 million, of which EUR 30 million had been repaid
before 31 December 2012. In addition, a borrowing facility in the
amount of EUR 125 million is available for future operating ac-
tivities and to settle capital commitments of which EUR 18.5 mil-
lion was drawn at 31 December 2012 (31 December 2011: EUR 0
million).
Liquidity is monitored on an on-going basis with regard to the
Group’s business performance, planned investment and re-
demption of capital.
The amounts disclosed in the table are the contractual, undis-
counted cash flows. Financial liabilities denominated in foreign
currencies are translated at the closing rate at the balance sheet
date. Interest payments on financial instruments with variable
interest rates are calculated on the basis of the interest rates
applicable as of the reporting date.
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter 128
31 DeCeMbeR 2012
31 DeCeMbeR 2011
in EUR ’000
Borrowings
Trade payables
Less than
1 year
60,215
37,663
Finance lease liabilities
450
Between
1 and 2
years
Between
2 and 5
years
90,645
127,291
0
553
0
32
Other financial
liabilities
1,820
1,792
489
100,148
92,990
127,812
31 DeCeMbeR 2011
Over 5
years
in EUR ’000
Less than
1 year
Between
1 and 2
years
Between
2 and 5
years
Over 5
years
0
0
0
0
0
Derivative receivables –
net settlement
Cash inflows
Derivative liabilities –
gross settlement
Cash outflows
Cash inflows
Derivative liabilities –
net settlement
Cash outflows
44
– 309
291
– 21,809
– 18
44
– 21,809
0
in EUR ’000
Borrowings
Less than
1 year
Between
1 and 2
years
Between
2 and 5
years
30,686
32,541
208,182
Trade payables
41,373
Finance lease liabilities
431
0
343
0
391
Other financial
liabilities
1,145
0
0
73,635
32,884
208,573
Over 5
years
0
0
0
0
0
The maturity structure of the derivative financial instruments
based on cash flows is as follows:
31 DeCeMbeR 2012
in EUR ’000
Derivative receivables -
gross settlement
Cash outflows
Cash inflows
Derivative liabilities -
gross settlement
Cash outflows
Cash inflows
Derivative liabilities -
net settlement
Cash outflows
Less than
1 year
Between
1 and 2
years
Between
2 and 5
years
Over 5
years
– 2,658
2,761
– 2,561
2,447
– 24,675
– 11
0
– 24,675
0
2. CAPI tAl RIS k MANAG eMeNt
The Group’s objectives when managing capital are to ensure that
it will continue to be able to repay its debt and remain financially
sound.
The Group is subject to certain financial covenants, total interest
cover, total net debt cover, and equity ratio, which are monitored
on an on-going basis. These financial covenants are based on
the Group’s consolidated financial statements as well as on spe-
cial definitions of the bank facilities agreements.
According to the covenants agreement, total net debt cover,
which is defined as Total net debt / Adjusted consolidated EBITDA,
should not exceed the value of 3.0 (2011: 3.5). The ratio is not
included in the International Financial Reporting Standards and
is calculated according to bank definitions. There were no cov-
enant breaches in 2012 and 2011.
In the case of a covenant breach, the Facility Agreement includes
several ways to remedy a potential breach by rules of exemption
or shareholder actions. If a covenant breach occurs and is not
remedied, the syndicated loans may, but are not required to be,
withdrawn.
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
129
3. FAIR vAlue eStIMAtION
The amendment to IFRS 7 for financial instruments that are mea-
sured in the statement of financial position at fair value requires
disclosure of fair value measurements by level using the following
fair value measurement hierarchy:
Level 1: Quoted prices (unadjusted) in active markets for identical
assets or liabilities
Level 2: Inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly (that
is, as prices) or indirectly (that is, derived from prices)
Level 3: Inputs for the asset or liability that are not based on
observable market data (that is, unobservable inputs).
The level in the fair value hierarchy within which the fair value
measurement is categorised in total is determined on the basis
of the lowest level input that is significant to the fair value mea-
surement in total. The different hierarchy levels demand different
amounts of disclosure.
At 31 December 2012 and 2011, the Group’s financial instru-
ments carried in the statement of financial position at fair value
(i.e. trading derivatives and derivatives used for hedging) are cat-
egorised in total within level 2 of the fair value hierarchy.
The fair value of interest rate swaps and cross-currency-swaps
is calculated as the present value of the estimated future cash
flows. The fair value of forward foreign exchange contracts is
determined using a present value model based on forward ex-
change rates.
6.
CRItICAl ACCOuNtING eStIMAteS AND JuDGeMeNtS
Estimates and judgments are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances.
The Group makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition, sel-
dom equal the respective actual results. The estimates and as-
sumptions that have a significant risk of causing a material adjust-
ment to the carrying amounts of assets and liabilities within the
next financial year are addressed below.
estimated impairment of goodwill
NORMA Group tests annually whether goodwill has suffered any
impairment, in accordance with the accounting policy stated in
section 3.5. The recoverable amounts of cash-generating units
have been determined based on fair-value-less-costs-to-sell cal-
culations. These calculations are based on discounted cash flow
models, which require the use of estimates (Note 19).
In 2012 and 2011, no impairment of goodwill, which amounted
to EUR 235,262 thousand at 31 December 2012 (31 December
2011: EUR 224,841 thousand), was necessary. Even if the dis-
count rate would increase by + 2 % and the terminal value growth
rate would be 0 %, the change of the key assumptions would not
cause the carrying amount to exceed its recoverable amount in
any CGU.
Income taxes
The Group is subject to income taxes in numerous jurisdictions.
Significant judgements are required in determining the worldwide
provision for income taxes. There are many transactions and
calculations for which the ultimate tax determination is uncertain.
The Group recognises liabilities for anticipated tax audit issues
based on estimates of whether additional taxes will be due.
Where the final tax outcome of these matters is different from the
amounts that were initially recorded, such differences will impact
the current and deferred income tax assets and liabilities in the
period in which such determination is made. At 31 December
2012, income tax liabilities were EUR 17,827 thousand (31 De-
cember 2011: EUR 8,457 thousand) and deferred tax liabilities
were EUR 32,940 thousand (31 December 2011: EUR 33,775
thousand).
Pension benefits
The present value of the pension obligations depends on a num-
ber of factors that are determined on an actuarial basis using a
number of assumptions. The assumptions used in determining
the net cost (income) for pensions include the discount rate. Any
changes in these assumptions will impact the carrying amount
of pension obligations.
The Group determines the appropriate discount rate at the end
of each year. This is the interest rate that should be used to de-
termine the present value of estimated future cash outflows ex-
pected to be required to settle the pension obligations. In deter-
mining the appropriate discount rate, the Group considers the
interest rates of high-quality corporate bonds that are denomi-
nated in the currency in which the benefits will be paid, and that
have terms to maturity approximating the terms of the related
pension liability.
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter 130
Other key assumptions for pension obligations are based in part
on current market conditions. Additional information is disclosed
in section 3.16.
Notes to the consolidated statement
of comprehensive income
Pension liabilities amounted to EUR 10,319 thousand at 31 De-
cember 2012 (31 December 2011: EUR 8,407 thousand). If the
discount rate used were to differ by +0.25 %/ -0.25 % from man-
agement’s estimates, the defined benefit obligation for pension
benefits would be an estimated EUR 203 thousand lower or
EUR 213 thousand higher. If the future pension increase used
were to differ by +0.25 %/-0.25 % from management’s estimates,
the defined benefit obligation for pension benefits would be an
estimated EUR 186 thousand lower or EUR 194 thousand higher.
useful lives of property, plant and equipment and intangi-
bles assets
The Group’s management determines the estimated useful lives
and related depreciation/amortisation charges for its property,
plant and equipment and intangibles assets. This estimate is
based on projected lifecycles. These could change as a result of
technical innovations or competitor actions in response to severe
industry cycles. Management will increase the depreciation
charge where useful lives are less than previously estimated lives,
or it will write-off or write-down technically obsolete or non-stra-
tegic assets that have been abandoned or sold.
7. A DJuStM eNtS
Particularly due to costs in connection with the initial public of-
fering (IPO) of NORMA Group in April of 2011, the result for the
period was influenced by non-recurring expenses and restructur-
ing costs. In the financial year 2012, only depreciation and am-
ortisation from purchase price allocations were adjusted.
The following table shows profit and loss net of these expenses:
in EUR ’000
Revenue
Notes
2012
2011
(8)
604,613
581,356
Changes in inventories of finished
goods and work in progress
3,259
3,500
Raw materials and consumables used
(9)
– 263,489
– 262,282
Gross profit
Other operating income and
expenses (in 2011 adjusted)
Employee benefits expense
(in 2011 adjusted)
ebItDA (in 2011 adjusted)
344,383
322,574
(10, 11)
– 67,090
– 67,118
(12)
– 156,468
– 138,437
120,825
117,019
Depreciation without PPA depreciation
– 15,392
– 14,336
Adjusted ebItA
Amortisation without PPA amortisation
Adjusted operating profit (ebIt)
105,433
102,683
– 3,538
101,895
– 2,991
99,692
Financial costs - net (in 2011 adjusted)
(13)
– 13,269
– 17,392
Adjusted profit before income tax
88,626
82,300
Adjusted income taxes
Adjusted profit for the period
Non-controlling interests
Adjusted profit attributable to
shareholders of the parent
Adjusted earnings per shares
(in euR)
Adjusted earnings per share
(in euR) pro forma (unweighted
shares at 31 December 2012)
– 26,835
– 24,688
61,791
57,612
0
25
61,791
57,587
1.94
1.92
1.94
1.81
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
131
8. Reve Nue
10. OtheR OP eR AtING INCOMe
Revenue recognised during the period related to the following:
Other operating income comprised the following:
in EUR ’000
2012
2011
in EUR ’000
Engineered Joining Technologies
Distribution Services
Other revenue
Deductions
427,638
174,505
6,319
– 3,849
604,613
411,535
Currency gains operational
170,301
Reversal of provisions
4,002
– 4,482
581,356
Grants related to employee benefits
expense
Reimbursement of vehicle costs
Other income from disposal of fixed assets
Foreign exchange derivatives
Revenue for 2012 (EUR 604,613 thousand) was 4.0 % above rev-
enue for 2011 (EUR 581,356 thousand).
Government grants
Others
2012
3,105
367
381
468
467
68
437
4,243
9,536
2011
5,418
533
432
264
43
0
0
2,871
9,561
The sales figures for 2012 include sales of EUR 14,315 thousand
from the companies acquired in 2012. Connectors Verbindung-
stechnik AG (Switzerland), which was acquired in the second
quarter, contributed EUR 11,535 thousand, Nordic Metalblok
S.r.l. (Italy), which was acquired in the third quarter, contributed
EUR 2,308 thousand and Chien Jin Plastic Sdn. Bhd. (Malaysia),
which was acquired in the fourth quarter, contributed EUR 472
thousand.
For the analysis of sales by region, please refer to the segment
reporting.
The position ‘others’ includes a one-time effect from the full con-
solidation of Groen Bevestigingsmaterialen B.V. amounting to
EUR 1,296 thousand. For details, please refer to Note 39 ‘Busi-
ness combinations.’
Furthermore, the position ‘others’ includes mainly reversals from
accruals as well as price changes.
11. OtheR OP eR AtING exPeNSeS
9. R Aw MAteRIAlS AND CONS uMA bleS uSe D
Other operating expenses comprised the following:
Raw materials and consumables used comprised the following:
in EUR ’000
Consulting and marketing
in EUR ’000
2012
2011
Material costs third parties
– 237,986
– 231,639
Expenses for temporary workforce and
other personnel-related costs
Cost of purchased services
– 25,503
– 30,643
Freights
– 263,489
– 262,282
Other administrative expenses
Rentals and other building costs
Currency losses operational
The material costs decreased in relation to revenue from 45.1 %
in 2011 to 43.6 % in 2012.
Travel and entertainment
Research & development
The companies acquired in 2012 contributed EUR 7,067 thou-
sand to the material costs.
Vehicle costs
Maintenance (external)
Commission payable
Non-income-related tax
Insurances
IT and telecommunication
Others
2012
2011
– 12,467
– 19,805
– 12,045
– 13,228
– 7,854
– 4,304
– 6,063
– 4,359
– 5,359
– 3,247
– 2,445
– 1,884
– 2,584
– 1,529
– 1,614
– 7,372
– 3,500
– 7,714
– 7,923
– 6,290
– 4,394
– 4,943
– 2,987
– 1,948
– 3,010
– 1,835
– 1,497
– 1,702
– 5,452
– 5,480
– 76,626
– 88,208
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
132
Other operating expenses in 2011 include non-recurring costs
mainly due to the IPO amounting to EUR 11,529 thousand.
13. N et FINANCIAl COS t
Financial income and costs comprised the following:
The companies acquired in 2012 contributed EUR 1,704 thou-
sand to the other operating expenses.
in EUR ’000
2012
2011
12. eMPlOyee beN eFItS exP eNSe
Employee benefits expense comprised the following:
Financial costs
Interest expenses
– Bank borrowings
– Finance lease
in EUR ’000
Wages and salaries, including restructuring
costs and other termination benefits
Social security costs
Pension costs – defined contribution plans
Pension costs – defined benefit plans
2012
2011
– Expenses for interest accrued on pensions
– Expenses for interest accrued on provisions
– 127,655
– 118,797
– 21,877
– 18,618
– 6,681
– 255
– 6,156
– 145
Net foreign exchange (–) losses /(+) gains on
financing activities
Losses on evalution of derivatives
Expenses for option premiums
Expenses from disposal of liabilities
– 156,468
– 143,716
Other financial cost
Employee benefits expense was EUR 156,468 thousand in 2012
compared to EUR 143,716 thousand in 2011.
Financial income
Interest income on short-term bank deposits
In 2011, the employee benefits expense was influenced by ex-
penses relating to the IPO. Especially the Operational Perfor-
mance Incentive Cash Programme led to a one-time expense of
EUR 1,821 thousand. The employee benefits expense was fur-
ther impacted by restructuring costs resulting from the acquisi-
tions in North America and by bonus accruals for the IPO, lead-
ing to adjustments of EUR 5,279 thousand.
The companies acquired in 2012 contributed EUR 2,584 thou-
sand to the employee benefits expenses.
In 2012, the annual average number of employees was 3,577
(2011: 3,330).
– 12,284
– 18,050
– 34
– 368
– 356
775
– 367
0
0
– 1,435
– 16
– 115
– 362
– 1,805
– 2,947
– 1,099
– 8,881
– 749
– 14,069
– 34,024
263
136
0
401
800
2,158
0
2,083
168
4,409
Gains on evaluation of derivatives
Gains on disposal of liabilities
Other financial income
Net financial cost
– 13,269
– 29,615
The total interest expenses calculated using the effective interest
method for financial liabilities that are not measured at fair value
through profit or loss amount to EUR 12,284 thousand in 2012
(2011: EUR 18,050 thousand). The total interest income calcu-
lated using the effective interest method for financial assets not
measured at fair value through profit or loss amounts to EUR 263
thousand in 2012 (2011: EUR 2,158 thousand).
With the IPO of NORMA Group in April 2011, the syndicated bank
borrowings were repaid. Expenses relating to the refinancing of
the bank borrowings had a negative impact on the financial result
in 2011. Lower interest rates and reduced debt had a positive
impact, which leads to a substantially lower interest result in 2012.
Further changes to the net financial costs in 2011 resulted from
exchange rate and interest rate effects due to financing activities.
Costs amounting to EUR 7,859 thousand that are directly at-
tributable to the refinancing were netted with the bank borrow-
ings in accordance with IAS 39.43. They are amortised over the
financing period of five years using the effective interest method.
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
133
14. Net FOR eIGN ex ChANGe GAINS /lOSSeS
16. INCOMe tA xeS
The exchange differences recognised in profit or loss are as follows:
The breakdown of income taxes is as follows:
in EUR ’000
Currency gains operational
Currency losses operational
Net foreign exchange (–) losses /(+)
gains on financing activities
Notes
(10)
(11)
(13)
2012
3,105
2011
5,418
in EUR ’000
Current tax expenses
– 4,359
– 4,394
Deferred tax income
Total income taxes
775
– 479
– 1,805
– 781
2012
– 26,491
1,922
– 24,569
2011
– 11,954
645
– 11,309
15. eARNINGS P eR S hARe
On 14 March 2011, NORMA Group changed its legal form to a
public company. The resulting 24,862,400 shares (excluding
shares held by the company, that had been repurchased in April
2011) from the conversion have already been included in the
calculation for earnings per share from 1 January 2011 onwards.
There was no additional issuance of shares in the period as the
subscribed capital was increased via company capital.
There were no dilutions of the number of weighted shares.
With the IPO on 8 April 2011, an additional seven million shares
were issued.
Capital increase
through the issuance
of new shares
No. of shares
(unweighted)
Weight-
ing in
days
No. of
shares
(weighted)
24,862,400
365
24,862,400
7,000,000
268
5,139,726
31,862,400
365
30,002,126
31,862,400
365
31,862,400
31,862,400
365
31,862,400
Date
1 Jan
2011
8 April
2011
31 Dec
2011
1 Jan
2012
31 Dec
2012
The earnings per share were as follows:
in EUR ’000
2012
2011
Profit attributable to shareholders of
the parent (in EUR '000)
56,573
35,685
Number of weighted shares
31,862,400
30,002,126
Earnings per share (in EUR)
1.78
1.19
NORMA Group’s combined Group income tax rate for 2012 and
2011 amounted to 29.1 %, comprising corporate income tax at
a rate of 15 %, the solidarity surcharge of 5.5 % on corporate
income tax, and trade income tax at an average multiplier of
380 %.
The tax on the Group’s profit before tax differs from the theo-
retical amount that would arise using the Group tax rate appli-
cable to profits of the consolidated entities of 29.1 % as follows:
in EUR ’000
Profit before tax
Group tax rate
2012
81,142
29.1 %
2011
47,019
29.1 %
expected income taxes
– 23,612
– 13,683
Tax effects of:
Tax losses and tax credits from
actual year for which no deferred
income tax is recognised
Effects from deviation of Group tax
rate resulting mainly from different
foreign tax rates
Non-deductible expenses for tax
purposes
Utilisation of tax losses and tax credits
from prior year for which no deferred
income tax asset was recognised
Other tax-free income
Tax effect of changes in tax rates
Income taxes related to prior years
Tax losses and tax credits from prior
years for which income tax assets
are recognised in actual year
Impairment of tax assets
Others
Income taxes
– 388
– 710
– 169
465
– 3,255
– 1,218
60
1,285
1,459
428
0
– 13
– 364
457
307
522
2,395
246
0
– 90
– 24,569
– 11,309
The item ‘Tax effect of changes in tax rates’ consists mainly of
the reduced tax rate in the USA.
The item ‘Others’ consists in 2012 and 2011 mainly of other in-
come-based taxes (withholding tax).
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
134
The income tax charged/credited directly to other comprehen-
sive income during the year is as follows:
in EUR ’000
Cash flow hedges gains/losses
Actuarial gains/losses on defined
benefit plans
IPO costs directly netted with equity
Reimbursement IPO costs by
shareholders
Before tax
amount
– 4,378
2012
Tax charge /
credit
1,293
Net-of-tax
amount
– 3,085
Before tax
amount
– 1,839
– 1,465
426
– 1,039
0
0
0
0
0
0
2011
Tax charge /
credit
684
– 111
1,904
– 1,921
556
Net-of-tax
amount
– 1,155
258
– 4,640
4,681
– 856
369
– 6,544
6,602
– 1,412
Other comprehensive income
– 5,843
1,719
– 4,124
Notes to consolidated statement of
financial position
18. DeF eRR eD INCOMe t A x
The analysis of deferred tax assets and deferred tax liabilities due
to maturity is as follows:
17. INCOMe tA x ASS etS AND l IAbIlItIeS
Due to changes in German corporate tax laws (“SE-Steuerge-
setz” or “SEStEG,” which came into effect on 31 December
2006), an imputation credit asset (“Körperschaftsteuerguthaben
gem. § 37 KStG”) has been set up. As a result, an unconditional
claim for payment of the credit in ten annual instalments from
2008 through 2017 has been established. The resulting receiv-
able is included in income tax assets and amounted to EUR 2,133
thousand on 31 December 2012 (31 December 2011: EUR 2,514
thousand). In 2012, EUR 1,656 thousand are classified as non-
current (31 December 2011: EUR 2,038 thousand).
in EUR ’000
Deferred tax assets
Deferred tax assets to be recovered
after more than 12 months
Deferred tax assets to be recovered
within 12 months
Deferred tax assets
Deferred tax liabilities
Deferred tax liabilities to be recovered
after more than 12 months
Deferred tax liabilities to be recovered
within 12 months
Deferred tax liabilities
Deferred tax liabilities (net)
31 Dec 2012
31 Dec 2011
2,643
2,751
3,760
6,403
3,993
6,744
31,812
32,205
1,128
32,940
26,537
1,570
33,775
27,031
The movement in deferred income tax assets and liabilities dur-
ing the year is as follows:
in EUR ’000
2012
2011
Deferred tax liabilities (net) –
at 1 January
Deferred tax income
Tax charged to other comprehensive
income
Exchange differences
Acquisition of subsidiaries
Deferred tax liabilities (net) –
at 31 December
27,031
– 1,922
– 1,719
– 977
4,124
28,425
– 645
– 556
– 193
0
26,537
27,031
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
135
In 2011, a deferred tax liability of EUR 2,795 thousand resulting
from 2007 was adjusted resulting in an increase of the equity.
Without this adjustment, the Group tax rate in 2011 was 30 %.
The analysis of deferred income tax assets and deferred income
tax liabilities, without taking into consideration the offsetting of
balances within the same tax jurisdiction, is as follows:
DeFeRReD tA x ASS etS
in EUR ’000
Intangible assets
Property, plant and equipment
Other assets
Inventories
Trade receivables
Retirement benefit obligations/
pension liabilities
Provisions
Borrowings
Other liabilities, incl. derivatives
Trade payables
Tax losses and tax credits
Deferred tax assets
(before valuation allowances)
Valuation allowance
Deferred tax assets
(before offsetting)
Offsetting effects
Deferred tax assets
DeFeRReD tA x lIAbIl ItIe S
in EUR ’000
Intangible assets
Property, plant and equipment
Other assets
Inventories
Trade receivables
Borrowings
Provisions
Other liabilities, incl. derivatives
Trade payables
Untaxed reserves
Deferred tax liabilities
(before offsetting)
Offsetting effects
Deferred tax liabilities
Deferred tax liabilities (net)
31 Dec 2012
31 Dec 2011
2,152
2,146
249
202
901
470
1,081
1,013
796
9,222
68
772
16,926
– 13
16,913
– 10,510
6,403
133
434
780
481
664
1,085
159
9,264
86
1,411
16,643
0
16,643
– 9,899
6,744
31 Dec 2012
31 Dec 2011
27,843
9,100
1,201
156
96
4,219
14
137
9
675
43,450
– 10,510
32,940
26,537
26,528
9,917
1,436
5
85
4,657
593
118
0
335
43,674
– 9,899
33,775
27,031
Deferred income tax assets are recognised for all deductible
temporary differences to the extent that it is probable that future
taxable profits will be available against which the deductible tem-
porary difference can be utilised. The Group did not recognise
deferred income tax assets amounting to EUR 38 thousand in
respect of deductible temporary differences amounting to
EUR 116 thousand at 31 December 2012; in 2011, the Group did
not recognise deferred income tax assets amounting to EUR 68
thousand in respect of deductible temporary differences amount-
ing to EUR 201 thousand.
In 2012 and prior years, the Group had tax losses at several
subsidiaries in several countries. After offsetting the deferred tax
assets with deferred tax liabilities, the deferred tax assets not
subject to valuation allowances amounted to EUR 167 thousand
for those foreign subsidiaries (31 December 2011: EUR 1,475
thousand). NORMA Group believes it is more likely than not that
due to future taxable income, deferred tax assets which are not
subject to valuation allowances can be utilised.
Deferred income tax assets are recognised for tax losses carry-
forwards to the extent that the realisation of the related tax ben-
efit through future taxable profits is probable.
The Group did recognise the following tax losses:
in EUR ’000
Expiry within 1 year
Expiry in 2 – 5 years
Expiry later than 5 years
Unlimited carry forward
total
31 Dec 2012
31 Dec 2011
0
894
3,465
687
5,046
120
2,731
0
2,299
5,150
The Group did not recognise deferred income tax assets in re-
spect of losses amounting to EUR 7,328 thousand at 31 Decem-
ber 2012 (31 December 2011: EUR 4,227 thousand) that can be
carried forward against future taxable income. The deferred tax
assets on not recognised tax losses would theoretically be
EUR 1,814 thousand at 31 December 2012 (31 December 2011:
EUR 1,200 thousand).
The unrecognised losses expire as follows:
in EUR ’000
Expiry within 1 year
Expiry in 2 – 5 years
Expiry later than 5 years
Unlimited carry forward
total
31 Dec 2012
31 Dec 2011
285
1,643
806
4,594
7,328
74
1,116
2,681
356
4,227
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
136
Taxable temporary differences amounting to EUR 69,451 thou-
sand at 31 December 2012 (31 December 2011: EUR 34,482
thousand) associated with investments in subsidiaries are not
recognised as deferred tax liabilities, since the respective parent
is able to control the timing of the reversal of the temporary dif-
ference and it is probable that the temporary difference will not
reverse in the foreseeable future. These unremitted earnings of
non-German subsidiaries, the amount of which cannot be prac-
ticably computed, could become subject to additional tax if they
were remitted as dividends or if the Group were to sell its share-
holdings in the subsidiaries.
19. GOODwIll AND O theR IN tANGIble ASS etS
The acquisition costs as well as accumulated amortisation and
impairment of intangible assets consisted of the following:
in EUR ’000
At 1 Jan 2012
Additions
Deductions
Transfers
Changes in
consolidation
Currency
effects
At
31 Dec 2012
Acquisition costs
Goodwill
Certificates
Licenses, rights
Trademarks
Patents & technology
Intangible assets, other
total
Amortisation and Impairment
Goodwill
Certificates
Licenses, rights
Trademarks
Patents & technology
Intangible assets, other
total
256,287
44,049
849
20,189
29,444
19,442
370,260
31,446
8,472
655
3,360
12,678
9,868
66,479
0
120
334
0
1,303
6,057
7,814
0
3,162
128
1,015
2,457
3,987
10,749
0
0
– 5
0
0
– 6
– 11
0
0
– 5
0
0
– 5
– 10
0
0
121
0
– 1
– 120
0
0
0
0
0
0
0
0
11,905
13,966
882
1,086
354
1,146
– 1,896
266,296
– 733
– 3
– 372
– 499
192
57,402
2,178
20,903
30,601
26,711
29,339
– 3,311
404,091
0
0
0
0
0
0
0
– 412
– 133
– 1
– 85
– 267
31
– 867
31,034
11,501
777
4,290
14,868
13,881
76,351
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
137
in EUR ’000
At 1 Jan 2011
Additions
Deductions
Transfers
Changes in
consolidation
Currency
effects
At
31 Dec 2011
Acquisition costs
Goodwill
Certificates
Licenses, rights
Trademarks
Patents & technology
Intangible assets, other
total
Amortisation and Impairment
Goodwill
Certificates
Licenses, rights
Trademarks
Patents & technology
Intangible assets, other
total
in EUR ’000
Goodwill
Certificates
Licenses, rights
Trademarks
Patents & technology
Intangible assets, other
total
252,332
42,740
1,678
19,513
27,064
14,449
357,776
30,628
6,090
986
2,326
9,704
7,023
56,757
0
0
77
0
474
3,750
4,301
0
2,129
114
886
2,050
2,893
8,072
0
0
0
0
0
– 76
– 76
0
0
0
0
0
– 34
– 34
0
0
– 906
0
969
1,272
1,335
0
0
– 446
0
446
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3,955
1,309
0
676
937
47
256,287
44,049
849
20,189
29,444
19,442
6,924
370,260
818
253
1
148
478
– 14
1,684
31,446
8,472
655
3,360
12,678
9,868
66,479
Carrying amounts
In 2012 and 2011, no impairment for intangible assets was rec-
ognised.
31 Dec 2012
31 Dec 2011
235,262
45,901
1,401
16,613
15,733
12,830
224,841
35,577
194
16,829
16,766
9,574
327,740
303,781
At 31 December 2012 and 2011, the intangible assets are unse-
cured.
Impairment tests for goodwill
Goodwill is allocated to the Group’s cash-generating units
(CGUs) identified according to geographical areas. A summary
of the goodwill allocation is presented below.
in EUR ’000
CGU EMEA
CGU Americas
CGU Asia-Pacific
31 Dec 2012
31 Dec 2011
153,993
76,904
4,365
143,386
78,319
3,136
235,262
224,841
The item ‘Patents & technology’ at 31 December 2012 consists
of patents worth EUR 3,960 thousand (31 December 2011:
EUR 4,009 thousand) and technology worth EUR 11,773 thou-
sand (31 December 2011: EUR 12,757 thousand).
The item ‘Intangible assets, other’ consists mainly of software
and prepayments. Software is amortised over the useful life of
three to five years.
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
138
Goodwill for the cash-generating unit EMEA increased due to the
acquisitions in this region amounting to EUR 10,651 thousand as
well as currency effects. Goodwill for the CGU Americas changed
due to currency effects. Goodwill for the CGU Asia-Pacific was
increased by the acquisition of Chien Jin Plastic Sdn. Bhd.
amounting to EUR 1,254 thousand as well as by currency effects.
The recoverable amount of a CGU is determined based on fair-
value-less-costs-to-sell calculations. These calculations use
cash flow projections based on financial budgets approved by
the management covering a five-year period. Cash flows beyond
the five-year period are extrapolated using the estimated growth
rates stated below. The growth rate does not exceed our expec-
tations for the long-term average growth rate for the geographi-
cal area of the respective CGU.
The discount rates used are after-tax-rates and reflect the spe-
cific risk of each CGU. The respective before-tax-rates are
13.45 % for the CGU EMEA, 15.07 % for the CGU Americas and
13.54 % for the CGU Asia-Pacific.
The key assumptions used for fair-value-less-costs-to-sell calcu-
lations are as follows:
At 31 DeCeMbeR 2012
in %
Terminal value growth rate
Discount rate
Costs to sell
At 31 DeCeMbeR 2011
in %
Terminal value growth rate
Discount rate
Costs to sell
CGU
EMEA
1.50 %
10.20 %
1.00 %
CGU
Americas
CGU
Asia-Pacific
1.50 %
9.60 %
1.00 %
1.50 %
10.74 %
1.00 %
CGU
EMEA
CGU
Americas
CGU
Asia-Pacific
1.50 %
8.71 %
1.00 %
1.50 %
8.29 %
1.00 %
1.50 %
9.30 %
1.00 %
Even if the discount rate would increase by + 2 % and terminal
value growth rate would be 0 %, the change of the key assump-
tions would not cause the carrying amount to exceed its recover-
able amount in any CGU.
20. PROPeRt y, P l ANt AND equ IPMeNt
The acquisition and manufacturing costs as well as accumulated
depreciation of property, plant and equipment consisted of the
following:
At
1 Jan 2012
Additions
Deductions
Transfers
Changes in
consolidation
Currency
effects
At
31 Dec 2012
78,294
175,653
44,241
7,776
305,964
37,308
137,386
33,907
184
3,330
6,304
3,193
11,065
23,892
2,531
9,278
3,856
0
– 1,149
– 2,807
– 2,708
– 75
– 6,739
– 1,139
– 2,428
– 2,634
0
3,827
3,803
1,082
– 8,712
0
– 45
– 354
399
0
0
599
3,580
431
0
4,610
0
0
0
0
0
– 11
271
176
– 168
268
198
309
161
– 1
667
84,890
186,804
46,415
9,886
327,995
38,853
144,191
35,689
183
218,916
in EUR ’000
Acquisition costs
Land and buildings
Machinery & tools
Other equipment
Assets under construction
total
Depreciation and Impairment
Land and buildings
Machinery & tools
Other equipment
Assets under construction
total
208,785
15,665
– 6,201
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
139
At
1 Jan 2011
Additions
Deductions
Transfers
Changes in
consolidation
Currency
effects
At
31 Dec 2011
72,850
163,691
42,861
6,153
285,555
37,490
126,082
32,596
0
1,477
6,742
2,904
15,260
26,383
2,329
10,298
2,711
167
– 3,151
– 1,015
– 1,102
– 219
– 5,487
– 2,485
– 808
– 854
0
7,510
5,251
– 749
– 13,347
– 1,335
2
888
– 890
0
0
0
0
0
0
0
0
0
0
0
0
– 392
984
327
– 71
848
– 28
926
344
17
78,294
175,653
44,241
7,776
305,964
37,308
137,386
33,907
184
1,259
208,785
in EUR ’000
Acquisition costs
Land and buildings
Machinery & tools
Other equipment
Assets under construction
total
Depreciation and Impairment
Land and buildings
Machinery & tools
Other equipment
Assets under construction
total
196,168
15,505
– 4,147
in EUR ’000
Land and buildings
Machinery & tools
Other equipment
Assets under construction
total
Carrying amounts
31 Dec 2012
31 Dec 2011
46,037
42,613
10,726
9,703
109,079
40,986
38,267
10,334
7,592
97,179
Land and buildings did not include any amounts in 2012 and
2011 where the Group is a lessee under a finance lease.
Machinery includes the following amounts where the Group is a
lessee under a finance lease:
in EUR ’000
31 Dec 2012
31 Dec 2011
Cost – capitalised finance leases
Accumulated depreciation
Net carrying amount
472
– 388
84
643
– 615
28
At 31 December 2012, the item ‘Machinery & tools’ includes tools
of EUR 4,205 thousand (31 December 2011: EUR 4,960 thou-
sand).
Other equipment includes the following amounts where the
Group is a lessee under a finance lease:
No impairment was recognised on property, plant and equip-
ment in 2012 and 2011.
At 31 December 2012 and 2011 property, plant and equipment
are unsecured.
in EUR ’000
31 Dec 2012
31 Dec 2011
Cost – capitalised finance leases
Accumulated depreciation
Net carrying amount
367
– 170
197
900
– 599
301
The Group leases various property, machinery, technical and IT
equipment under non-cancellable finance lease agreements.
The lease terms are between three and ten years and ownership
of the assets lies within the Group.
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
140
21. FINANCIAl INS tRuM eN tS
Financial instruments according to classes and categories were
as follows:
Measurement basis IAS 39
Carrying
amount
31 Dec
2012
Category
IAS 39
Amortised
Cost
Cost
Fair value
through
profit or
loss
Measure-
ment basis
IAS 17
Fair value
31 Dec
2012
Fair value
in EUR ’000
Financial assets
Derivative financial instruments –
hedge accounting
Foreign exchange derivatives
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Borrowings
Derivative financial instruments –
held for trading
n /a
LaR
LaR
103
79,293
72,389
79,293
72,389
FLAC
241,696
241,696
Foreign exchange derivatives
FLHfT
114
114
Derivative financial instruments –
hedge accounting
Interest derivatives
Cross-currency-swaps
Trade payables
Other financial liabilities
Finance lease liabilities
totals per category
Loans and receivables (LaR)
n /a
n /a
FLAC
FLAC
n /a
18,868
5,807
37,663
3,951
940
37,663
3,951
151,682
151,682
Financial liabilities held for trading (FLHfT)
114
114
Financial liabilities at amortised cost (FLAC)
283,310
283,310
103
18,868
5,807
103
79,293
72,389
241,696
114
18,868
5,807
37,663
3,951
996
151,682
114
283,310
940
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
141
Measurement basis IAS 39
in EUR ’000
Financial assets
Carrying
amount
31 Dec
2011
Amortised
Cost
Category
IAS 39
Available-for-sale financial assets
AfS
397
Derivative financial instruments –
held for trading
Interest derivatives
Trade and other receivables
Cash and cash equivalents
Financial liabilities
Borrowings
Derivative financial instruments –
held for trading
FAHfT
LaR
LaR
44
80,817
67,891
80,817
67,891
FLAC
242,374
242,374
Foreign exchange derivatives
FLHfT
18
Derivative financial instruments –
hedge accounting
Interest derivatives
Cross-currency-swaps
Trade payables
Other financial liabilities
Finance lease liabilities
totals per category
Available-for-sale financial assets (AfS)
Financial assets held for trading (FAHfT)
41,373
1,145
n /a
n /a
FLAC
FLAC
n /a
18,478
3,331
41,373
1,145
1,058
397
44
Loans and receivables (LaR)
148,708
148,708
Financial liabilities held for trading (FLHfT)
18
Financial liabilities at amortised cost (FLAC)
284,892
284,892
Cost
397
397
Fair value
through
profit or
loss
Measure-
ment basis
IAS 17
Fair value
31 Dec
2011
Fair value
44
18
44
18
18,478
3,331
1,058
–
44
80,817
67,891
242,374
18
18,478
3,331
41,373
1,145
1,039
–
44
148,708
18
284,892
Trade and other receivables and cash and cash equivalents have
short-term maturities. Their carrying amounts at the reporting
date equal their fair values, as the impact of discounting is not
significant.
Available-for-sale financial assets that were held in 2011 were
recognised at cost. There is no active market for these instru-
ments. Since no future cash flows can be reliably measured, the
fair value cannot be determined using valuation techniques.
Trade payables and other financial liabilities have short times to
maturity; therefore the carrying amounts reported approximate
the fair values. At 31 December 2012, EUR 2,720 thousand in
liabilities resulting from the acquisitions of Chien Jin Plastic Sdn.
Bhd. and Groen Bevestigingsmaterialen B.V. are included in the
other financial liabilities. For details, please refer to Note 39 ‘Busi-
ness combinations.’
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
142
The fair values of finance lease liabilities are calculated as the
present values of the payments associated with the debts based
on the applicable yield curve and NORMA Group’s credit spread
curve (credit spread between 1.75 % and 2.25 %).
Derivative financial instruments held for trading and those used
for hedging are carried at their respective fair values. They have
been categorised entirely within level 2 in the fair value hierarchy
(section 5.3).
None of the financial assets that are fully performing have been
renegotiated in the last year.
In accordance with IFRS 7.20 (a) net gains and losses from
financial instruments by measurement category are as follows:
Net gains and losses of available-for-sale financial assets include
dividend income from associates not accounted for using the
equity method. At 31 December 2012, NORMA Group acquired
an additional 60 % of the shares of Groen Bevestigingsmaterialen
B.V. The previously held shares of 30 % were derecognised and
Groen Bevestigingsmaterialen B.V. is now fully consolidated. The
gain in 2012 resulted from the periods before the acquisition.
Net gains and losses of loans and receivables comprise cur-
rency effects, impairment of trade receivables, and interest in-
come on short-term bank deposits. Fair value gains and losses
on trading derivatives are net gains and losses of financial instru-
ments held for trading and net gains and losses of financial lia-
bilities at cost comprise interest expenses and currency effects
on loans, borrowings and bank deposits.
in EUR ’000
Available-for-sale financial assets (AfS)
Loans and receivables (LaR)
Financial instruments held for trading
(FAHfT and FLHfT)
Financial liabilities at cost (FLAC)
2012
50
255
– 152
– 12,742
– 12,589
2011
150
1,255
– 86
– 33,530
– 32,211
in EUR ’000
Cross-currency swaps – cash flow hedges
Interest rate swaps – cash flow hedges
Interest caps – held for trading
Foreign exchange derivatives – cash flow hedges
Foreign exchange derivatives – held for trading
total
Less non-current portion
Cross-currency swaps – cash flow hedges
Interest rate swaps – cash flow hedges
Interest caps – held for trading
Non-current portion
Current portion
22. OtheR FINANCIA l ASS etS
Other financial assets at 31 December 2011 consisted of shares
in the associated company Groen Bevestigingsmaterialen B.V.
amounting to EUR 397 thousand, which were classified as avail-
able-for-sale assets.
At 31 December 2012, NORMA Group acquired an additional
share of 60 % leading to Groen Bevestigingsmaterialen B.V. be-
ing fully consolidated. For details, please refer to Note 39 ‘Busi-
ness combinations.’
23. DeRIvAtIve FINANCIA l INSt RuMeNtS
The derivative financial instruments were as follows:
31 Dec 2012
31 Dec 2011
Assets
Liabilities
Assets
Liabilities
18,868
5,807
114
24,789
18,868
5,807
24,675
114
103
103
0
103
18,478
3,331
18
21,827
18,478
3,331
21,809
18
44
44
44
44
0
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
143
Foreign exchange derivatives
At 31 December 2012, foreign exchange derivatives with a pos-
itive market value of EUR 103 thousand were classified as cash
flow hedges (31 December 2011: EUR 0 thousand). The notion-
al principal amount was EUR 2,658 thousand.
Foreign exchange derivatives with a negative market value of
EUR 114 thousand are categorised as held for trading at 31 De-
cember 2012 (31 December 2011: EUR 18 thousand). The no-
tional principal amounts of the outstanding forward foreign ex-
change contracts at 31 December 2012 were EUR 2,446
thousand (31 December 2011: EUR 291 thousand).
Interest rate swaps and cross-currency-swaps
In order to avoid interest rate fluctuations, NORMA Group has
hedged parts of the loans against changes in the interest rates
as well as changes in the exchange rates. The remaining part
was hedged against interest rate changes.
Amounts recognised in the hedging reserve in equity at 31 De-
cember 2012 will be released in profit or loss until the repayment
of the loans.
The notional principal amounts of the outstanding cross-curren-
cy-swap contracts at 31 December 2012 were EUR 132 million
(31 December 2011: EUR 144 million). Interest rate derivatives
had a notional principal amount of EUR 160 million (31 December
2011: EUR 168 million).
At 31 December 2012 and 2011, the hedged fixed interest rate
was between 0.981 % and 4.04 %; the variable interest rate was
the 3-month EURIBOR.
The maximum exposure to credit risk at the reporting date is the
fair value of the derivative assets in the consolidated statement
of financial position.
The ineffective portion recognised in profit or loss amounts to a
profit of EUR 102 thousand in 2012 (2011: loss of EUR 256 thou-
sand).
24. tR AD e AND O theR R eCeIvAbleS
The trade receivables were as follows:
The effective part recognised in other comprehensive income in
equity reduced the equity in 2012 by EUR 2,757 thousand before
taxes (2011: reduction of EUR 18,783 thousand). The equity was
reduced by EUR 5,031 thousand (2011: increase of EUR 13,478
thousand) that were recycled from the hedging reserve.
in EUR ’000
Trade receivables
Less: allowances for doubtful accounts
31 Dec 2012
31 Dec 2011
81,110
– 2,350
78,760
82,232
– 2,247
79,985
All trade receivables are due within one year. The following table
shows the maturity analysis for trade receivables and other cur-
rent receivables:
At 31 DeCeMbeR 2012
in EUR ’000
Trade receivables
Other receivables
At 31 DeCeMbeR 2011
in EUR ’000
Trade receivables
Other receivables
Not past due
< 30 days
30 – 90 days
91 – 180 days
61,121
487
61,608
13,676
0
13,676
2,798
46
2,844
592
0
592
Not past due
< 30 days
30 – 90 days
91 – 180 days
61,947
832
62,779
12,952
0
12,952
2,934
0
2,934
1,123
0
1,123
181 days –
1 year
287
0
287
181 days –
1 year
666
0
666
> 1 year
170
0
170
total
78,644
533
79,177
> 1 year
363
0
363
Total
79,985
832
80,817
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
144
At 31 December 2012 and 2011, there was no indication that
trade receivables that were neither past due nor impaired could
not be collected.
The amount of receivables that were impaired and provided for
was as follows:
The creation and release of allowances for doubtful accounts
have been included in ‘other operating income/ expenses’ in the
consolidated statement of comprehensive income. Amounts
charged to the allowance account are generally written off, when
there is no expectation of recovering additional cash.
in EUR ’000
31 Dec 2012
31 Dec 2011
The other classes within trade and other receivables do not con-
tain impaired assets.
Trade receivables impaired and
provided for
Allowances for doubtful accounts
2,466
– 2,350
2,387
– 2,247
The maximum exposure to credit risk at the reporting date is the
carrying amount of each class of receivables mentioned above.
The Group does not hold any collateral as security.
At 31 December 2012 and 2011, the trade and other receivables
are unsecured.
Receivables of EUR 1,296 thousand were sold in a factoring
contract.
25. I NveNtORIeS
The inventories were as follows:
in EUR ’000
Raw materials
Work in progress
Finished goods and goods for resale
31 Dec 2012
31 Dec 2011
25,018
7,123
42,172
74,313
21,873
6,683
38,199
66,755
At 31 December 2012, inventories amounting to EUR 2,044 thou-
sand (31 December 2011: EUR 547 thousand) were reduced to
their net realisable value.
At 31 December 2012 and 2011, the inventories are unsecured.
The carrying amounts of the Group’s trade and other receivables
are denominated in the following currencies:
in EUR ’000
Euro
US dollar
Chinese renminbi yuan
British pound sterling
Australian dollar
Swedish krona
Swiss franc
Indien rupee
Malaysian ringgit
Thai baht
Russian ruble
Other currencies
31 Dec 2012
31 Dec 2011
40,211
24,717
3,237
2,155
1,434
1,228
1,136
982
1,137
700
1,014
1,342
79,293
41,737
27,916
3,466
1,874
1,682
1,286
n/a
884
68
181
212
1,511
80,817
All trade receivable were impaired by specific valuation allow-
ances. There have been no general allowances. Movements on
the Group’s provision for impairment of trade receivables are as
follows:
in EUR ’000
At 1 January
Additions
Amounts used
Reversals
Allowances acquired in a business
combination
Currency effects
At 31 December
2012
2,247
913
– 671
– 454
327
– 12
2,350
2011
1,676
859
– 295
– 42
0
49
2,247
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
145
26. OtheR NON -FINANCIAl ASSet S
Other non-financial assets were as follows:
31 Dec 2012
31 Dec 2011
1,208
3,543
0
352
1,094
1,590
7,787
1,847
3,174
2,430
597
328
1,416
9,792
in EUR ’000
Deferred costs
VAT assets
Security deposit
Receivables against factor
Prepayments
Other assets
27. equI t y
Subscribed capital
The subscribed capital of the company at 31 December 2012
and 2011 amounted to EUR 31,862 thousand and was fully paid
in. It is divided into 31,862,400 shares with no par value and a
notional value of EUR 1. The liability of the shareholders for the
obligations of the company to its creditors is limited to this capi-
tal. The amount of the subscribed capital is not permitted to be
distributed by the company to its shareholders.
With the change of the legal form of NORMA Group to a public
company on 14 March 2011, EUR 24,786 thousand, including
acquired treasury shares, were reclassified from the capital re-
serves to subscribed capital.
In the course of the IPO on 8 April 2011, a capital increase of
seven million shares was placed, leading to an increase in the
subscribed capital of EUR 7,000 thousand.
Authorised and conditional capital
The Management Board was authorised by the extraordinary
shareholders’ meeting on 6 April 2011 for the period ending on
5 April 2016 to increase the company’s registered share capital
in one or more transactions by up to EUR 15,931,200 in aggre-
gate by issuing up to 15,931,200 new no par value registered
shares against cash contributions or contributions in kind (au-
thorised capital).
With the resolution of the extraordinary shareholders’ meeting
on 6 April 2011, the company’s share capital has been condition-
ally increased by up to EUR 12,505,000 through the issuance of
up to 12,505,000 new no par value registered shares (condi-
tional capital). The conditional capital increase serves to issue
shares to the holders or creditors of convertible or warrant-linked
bonds as well as profit participation rights based on the authori-
sation approved by the extraordinary shareholders’ meeting of 6
April 2011.
Capital reserve
The capital reserve contains:
amounts (premiums) received for the issuance of shares,
premiums paid by shareholders in exchange for the granting
of a preference for their shares,
amounts resulted from other capital contributions of the owners.
NORMA Group AG began trading on the Prime Standard of the
Frankfurt Stock Exchange on 8 April 2011. The issue price for
NORMA Group’s shares was EUR 21.00. In the course of the IPO,
a capital increase of seven million shares with a value of
EUR 147,000 thousand was placed, leading to an increase in the
subscribed capital of EUR 7,000 thousand and an increase of
the capital reserve of EUR 140,000 thousand.
Costs for the Operational Performance Incentive Cash Pro-
gramme (OPICP) of EUR 2,808 thousand will be reimbursed by
the previous shareholders. In 2012, EUR 1,307 thousand (2011:
EUR 388 thousand) was paid and recognised in the capital re-
serve in accordance with the agreement.
treasury shares
At 20 December 2007, NORMA Group acquired its own shares
through purchase. The total amount paid to acquire the shares
was EUR 592 thousand and has been deducted from subscribed
capital by the amount of EUR 450 (par value) and retained earn-
ings by the amount of EUR 591,550 within shareholders’ equity.
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
146
Retained earnings
The retained earnings consisted of the following:
in EUR ’000
balance at 31 December 2010
Profit for the year
Stock options
Acquisition of non-controlling
interests
Effect before taxes
Tax effect
balance at 31 December 2011
Profit for the year
Dividends paid
Stock options
Acquisition of non-controlling
interests
Effect before taxes
Tax effect
Actuarial
gains/losses
on post em-
ployment ben-
efit obligations
– 93
Retained
earnings
– 20,023
35,685
15,662
56,573
– 19,125
Stock options
0
184
184
418
369
– 111
165
– 1,465
426
– 874
IPO costs
directly netted
with equity
Reimburse-
ment IPO-
costs by
shareholders
Acquisition of
non-controlling
interests
0
0
0
Total
– 20,116
35,685
184
– 1,940
– 1,940
– 6,544
1,904
– 4,640
6,602
– 1,921
4,681
– 1,940
– 489
427
– 128
14,112
56,573
– 19,125
418
– 489
– 1,465
426
50,450
balance at 31 December 2012
53,110
602
– 4,640
4,681
– 2,429
A dividend of EUR 19,125 thousand was paid to the shareholders
of NORMA Group after the Annual General Meeting in May 2012,
which reduced the retained earnings.
With the acquisition of 60% of Groen Bevestigingsmaterialen
B.V., a purchase option for the remaining 10 % was agreed upon.
Due to the definition in the contract, a financial liability amounting
to EUR 489 thousand was recognised, which reduces the re-
tained earnings. For details, please refer to Note 39 “Business
combinations”.
The matching stock programme (MSP) for the Management
Board provides a long-term incentive to commit to the success
of the company. The MSP is a share-based option.
To this end, the Supervisory Board specifies a number of share
options to be allotted each financial year with the proviso that the
Management Board member makes a corresponding personal
investment in the company.
The shares involved in the share options are those shares allo-
cated or acquired and qualified as part of the MSP defined in the
Management Board contract. The number of share options is
calculated by multiplying the qualified shares (2012: 108,452)
held at the time of allotment by the option factor specified by the
Supervisory Board. A new option factor is set for every tranche
(the option factor for 2012 is 1.5). The MSP is split into five tranch-
es. The first tranche was allocated on the day of the IPO. The
other tranches will be allocated on 31 March each following year.
There are therefore 162,679 share options in the 2012 financial
year.
The holding period is four years (on 31 March 2016 for the 2012
tranche and on 31 March 2015 for the 2011 tranche). The exer-
cise price for the 2011 tranche is the issue price at the time of
the company’s IPO. The exercise price for the other tranches will
be the weighted average of the closing price of the company’s
share on the 60 trading days directly preceding the allocation of
each tranche. The value of the share option is calculated using
the Black-Scholes method. The company used the volatility of
the NORMA Group share of the last six months and a surcharge
of 2 % to determine the volatility of 2012.
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
147
The company used the following parameters for its evaluation:
Expected duration until exercised in years
Risk-free interest rate in %
Average expected volatility in %
Expected dividend yield in %
Share price when granted in EUR
Share price on 30 December 2011 reporting date in EUR
4.00
1.24
35.00
0.00
18.55
21.00
Each tranche is recalculated, taking changes in influencing fac-
tors into account, and prorated over the vested period.
decide at its own discretion whether to settle the option in shares
or cash. The 2012 tranche will likely be settled in equity instru-
ments (no cash settlement).
The fair value when granted was determined using the Black-
Scholes method. Because the tranches will be settled in equity
instruments, the fair value of the option rights will not be adjusted
during the holding period (vesting period). The fair value of the
option rights for 2012 was EUR 5.67 per option right when the
option rights were granted (2011: EUR 6.01). The fair value of the
162,679 option rights granted with the 2012 tranche came to
EUR 921,870.
The options of a tranche can only be exercised within a period
of two years following the expiry of the holding period. In order
for an option to be exercised, the exercise price must be at least
1.2 times the issue price (basis: weighted average of the last ten
trading days). When the option is exercised, the company can
The resulting personnel expenses will be recorded over the
course of the vesting period. They came to EUR 417,476 for the
2012 financial year (2011: EUR 183,469), assuming no staff turn-
over. This amount was allocated to retained earnings.
The option rights granted under the matching stock programme
(MSP) changed as follows in the 2012 financial year:
balance at 31 December 2011
Granted
Exercised
Lapsed/expired
Number of
option rights
outstanding
162,679
162,679
–
–
Exercise price
per right (in EUR)
Waiting period
(service period)
in years
Aggregated
intrinsic value
(in EUR '000)
21.00
17.87
–
–
3
3
–
–
3
–
–
–
509,185*
balance at 31 December 2012
325,358
19.44
* based on the closing share price on 31 December 2012
Other reserves
The other reserves consisted of the following:
in EUR ’000
balance at 1 January 2011
Currency translation
Effect before taxes
Tax effect
balance at 31 December 2011
Currency translation
Effect before taxes
Tax effect
balance at 31 December 2012
Exchange
differences on
translating for-
eign operations
1,095
– 149
946
– 2,797
– 1,851
Cashflow
hedges
– 2,459
– 1,839
684
– 3,614
– 4,378
1,293
– 6,699
total
– 1,364
– 149
– 1,839
684
– 2,668
– 2,797
– 4,378
1,293
– 8,550
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
148
28. RetIR eMeNt beNeFIt O blIGAtIONS
Experience adjustments on plan liabilities are as follows:
Retirement benefit obligations result mainly from the German
pension plan as this pension plan is the most significant pension
plan in the Group.
The German defined benefit pension plan was closed for new
entrants in 1990 and provides benefits in case of retirement, dis-
ability, and death as life-long pension payments. The benefits
entitlements depend on years of service and salary. The portion
of salary that is above the income threshold for social security
contribution leads to higher benefit entitlements compared to the
portion of the salary up to that threshold. Employees hired after
1990 are eligible under a defined contribution scheme. The con-
tributions are paid into an insurance contract providing lump sum
payments in case of retirements and death.
The movement in cumulative actuarial gains/losses recognised
in other comprehensive income (before tax) is as follows:
in EUR ’000
At 1 January
Actuarial gains/losses recognised
in other comprehensive income in the
period (before tax)
At 31 December
2012
– 227
1,465
1,238
2011
142
– 369
– 227
The amounts recognised in the consolidated statement of finan-
cial position are determined as follows:
in EUR ’000
31 Dec 2012
31 Dec 2011
Present value of obligations
Unrecognised past service cost
liability in the balance sheet
10,319
0
10,319
8,407
0
8,407
If the discount rate used were to differ by +0.25 % /– 0.25 % from
management’s estimates, the defined benefit obligation for pen-
sion benefits would be an estimated EUR 203 thousand lower or
EUR 213 thousand higher. If the future pension increase used
were to differ by +0.25 % /– 0.25 % from management’s estimates,
the defined benefit obligation for pension benefits would be an
estimated EUR 186 thousand lower or EUR 194 thousand higher.
in EUR ’000
2012
2011
2010
2009
2008
Pension liability
10,319
8,407
9,063
8,058
7,939
Experience adjustments
on plan liabilities
– 1
– 202
222
– 169
– 730
The movement in the defined benefit obligation over the year is
as follows:
in EUR ’000
At 1 January
Current service cost
Interest cost
Actuarial gains/losses
Exchange differences
Benefits paid
Changes in consolidation
At 31 December
2012
8,407
255
356
1,465
3
– 656
489
10,319
The amounts recognised in profit or loss are as follows:
in EUR ’000
Current service cost
Interest cost
At 31 December
2012
255
356
611
The principal actuarial assumptions are as follows:
in %
Discount rate
Inflation rate
Future salary increases
Future pension increases
2012
2.91
2.00
2.52
2.00
2011
9,063
145
362
– 369
– 4
– 790
0
8,407
2011
145
362
507
2011
4.86
2.00
2.50
2.00
The biometric assumptions are based on the 2005 G Heubeck
life-expectancy tables.
Expected contributions to post-employment benefit plans are
EUR 575 thousand in 2013, EUR 572 thousand in 2014, EUR 567
thousand in 2015, EUR 562 thousand in 2016, and EUR 557 thou-
sand in 2017.
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
149
29. P ROvISIONS
The development of provisions is as follows:
in EUR ’000
Guarantees
Restructuring
Early retirement
Other personnel-related
obligations
Outstanding credit notes
Outstanding invoices
Others
total provisions
in EUR ’000
Guarantees
Restructuring
Early retirement
Operational Performance
Cash Programme
Other personnel-related
obligations
Outstanding credit notes
Outstanding invoices
Others
total provisions
in EUR ’000
Guarantees
Restructuring
Early retirement
Other personnel-related
obligations
Outstanding credit notes
Outstanding invoices
Others
total provisions
At 1 Jan
2012
1,507
782
3,902
1,790
2,541
99
353
Additions
222
455
Amounts
used
– 837
– 586
1,840
– 2,059
1,113
695
746
738
– 548
– 1,300
– 283
– 135
10,974
5,809
– 5,748
Unused
amounts
reversed
Interest
accrued
Changes in
consolidation
Foreign
currency
translation
At 31 Dec
2012
0
– 34
0
0
– 319
0
– 14
– 367
0
0
253
115
0
0
0
758
1
0
122
0
276
229
368
1,386
2
3
0
19
36
1
– 1
60
1,652
621
3,936
2,611
1,653
839
1,170
12,482
At 1 Jan
2011
532
361
4,041
Additions
950
586
Amounts
used
– 20
– 73
1,069
– 1,298
987
555
978
0
385
0
– 987
1,386
1,735
99
216
– 93
– 54
0
– 76
7,839
6,041
– 2,601
Unused
amounts
reversed
Interest
accrued
Changes in
consolidation
Foreign
currency
translation
At 31 Dec
2011
0
– 94
0
0
– 96
– 157
0
– 186
– 533
0
0
90
0
24
0
0
1
115
0
0
0
0
0
0
0
0
0
45
2
0
0
14
39
0
13
1,507
782
3,902
0
1,790
2,541
99
353
113
10,974
31 December 2012
31 December 2011
Total
1,652
621
3,936
2,611
1,653
839
1,170
12,482
thereof
current
1,354
621
0
1,155
1,653
839
1,121
6,743
thereof
non-current
298
0
3,936
1,456
0
0
49
Total
1,507
782
3,902
1,790
2,541
99
353
5,739
10,974
thereof
current
1,507
782
0
1,087
2,541
99
343
6,359
thereof
non-current
0
0
3,902
703
0
0
10
4,615
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
150
Employees at NORMA Group in Germany can engage in an
early retirement contract (“Altersteilzeit”). The employee reduces
their working hours in preparation of their retirement. In the first
phase the employee works 100 % (“Arbeitsphase”). In the second
phase he/she is exempt from work (“Freistellungsphase”). The
employees receive half of their payment for the total early retire-
ment-phase as well as additional payments (including social
security costs paid by the employer). The duration of the early
retirement has a maximum of six years.
The accounting for early retirement (“Altersteilzeit”) is based on
actuarial valuations taking into account assumptions such as a
discount rate of 1.8 % as well as the 2005 G Heubeck life-expec-
tancy tables. A liability for signed early retirement contracts as
well as potential early retirement contracts has been recognised.
The liability includes additional compensation (“Aufstockungs-
beträge”) as well as deferred salary payments (“Erfüllungs-
rückstände”).
Provisions for guarantees include provisions due to circumstanc-
es and provisions based on experience (customer claim quota,
amount of damage, etc.). Future price increases are considered
if material.
Other personnel-related obligations include jubilee provisions
and early retirement plans in foreign countries.
30. bORROwINGS
The borrowings were as follows:
in EUR ’000
Non-current
Bank borrowings
Current
Bank borrowings
Revolving credit facility
Other borrowings (e.g. factoring
and reverse-factoring)
total borrowings
31 Dec 2012
31 Dec 2011
190,727
190,727
213,457
213,457
25,681
18,500
6,788
50,969
241,696
20,269
0
8,648
28,917
242,374
bank borrowings
The syndicated bank facilities agreed upon in the second quarter
of 2011 of EUR 250 million have a maturity until 2016 and are
denominated in euro. By 31 December 2012, EUR 30 million were
repaid according to the payment plan. Additionally, a revolving
credit facility of EUR 125 million is available for financing the op-
erating business or future acquisitions within the line of the facil-
ity agreement. At 31 December 2012, EUR 18.5 million of this
credit line was used (31 December 2011: EUR 0 million).
The maturity of the syndicated bank facilities is as follows:
Later than
1 year
and no
later than
2 years
Later than
2 years
and no
later than
5 years
No later
than 1
year
Later than
5 years
in EUR ’000
Bank borrowings, net
25,000
70,000
125,000
0
Costs amounting to EUR 7,859 thousand that are directly at-
tributable to the refinancing were netted with the bank borrow-
ings in accordance with IAS 39.43. They are amortised over the
financing period of five years using the effective interest method.
The variable interest rates of the syndicated bank facilities are
hedged.
The bank borrowings are economically unsecured at 31 Decem-
ber 2012. With renegotiations of the credit facilities in the fourth
quarter of 2012, the established securities for the existing credit
lines were fully released.
Factoring
NORMA Group has sold a portion of their receivables (EUR 1,296
thousand) and payables (EUR 5,492 thousand) to a factor.
NORMA Group still bears the opportunities and risks resulting
from the receivables. The transactions are therefore shown as
financial liabilities.
31. OtheR NON -FINANCIAl lIAbIlItIeS
The other non-financial liabilities are as follows:
in EUR ’000
Non-current
Government grants
Other liabilities
Current
Non-income tax liabilities
Social liabilities
Personnel-related liabilities
(e.g. holiday, bonus, premiums)
Other liabilities
Deferred income
total other non-financial liabilities
31 Dec 2012
31 Dec 2011
1,394
195
1,589
1,606
3,285
13,278
1,341
90
19,600
21,189
1,210
100
1,310
4,206
2,419
14,060
1,044
148
21,877
23,187
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
151
33. tR ADe PAyAbleS
All trade payables are due to third parties within one year. For
information regarding trade payables, please refer to section
3.13.
34. FINANCIAl lIAbIlItIeS AND N et D ebt
The financial liabilities of NORMA Group have the following ma-
turity:
31 DeCeMbeR 2012
in EUR ’000
Borrowings
Trade payables
Less than
1 year
50,969
37,663
Finance lease liabilities
405
Between
1 and
2 years
Between
2 and
5 years
28,971
161,756
0
340
0
195
Other financial
liabilities
1,820
758
1,373
90,857
30,069
163,324
31 DeCeMbeR 2011
in EUR ’000
Borrowings
Trade payables
Less than
1 year
28,917
41,373
Finance lease liabilities
382
Other financial
liabilities
1,145
Between
1 and
2 years
Between
2 and
5 years
23,326
190,131
0
310
0
0
366
0
71,817
23,636
190,497
Over 5
years
0
0
0
0
0
Over 5
years
0
0
0
0
0
NORMA Group received government grants in 2012 and 2011
amounting to EUR 1,394 thousand. They consist of grants in
cash as well as land. The grants are bound to capital expenditure
and employees. NORMA Group recognises the government
grants as income over the period in which related expenses oc-
cur. In 2012, EUR 139 thousand were recognised as income.
32. OtheR FINANCIA l lIA bIlIt IeS
The other financial liabilities are as follows:
in EUR ’000
Non-current
Lease liabilities
Acquisition liabilities
Current
Lease liabilities
Outstanding credit notes
Acquisition liabilities
Other liabilities
total other financial liabilities
31 Dec 2012
31 Dec 2011
535
2,131
2,666
405
225
589
1,006
2,225
4,891
676
0
676
382
761
0
384
1,527
2,203
The future aggregate minimum lease payments under non-can-
cellable finance leases and their respective present values are as
follows:
in EUR ’000
31 Dec 2012
31 Dec 2011
Gross finance lease liabilities –
minimum lease payments
No later than 1 year
Later than 1 year and no later than
5 years
Later than 5 years
Future finance charges on finance
lease
Present value of finance lease
liabilities
No later than 1 year
Later than 1 year and no later than
5 years
Later than 5 years
450
585
0
431
734
0
1,035
1,165
95
107
405
535
0
940
382
676
0
1,058
Lease liabilities are effectively secured because the rights to the
leased assets will revert to the lessor in the event of default.
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
152
Net debt of the NORMA Group is as follows:
in EUR ’000
Bank borrowings, net
Derivative financial liabilities –
hedge accounting
Derivative financial liabilities –
held for trading
Other borrowings (e.g. factoring and
reverse factoring)
Lease liabilities
Other financial liabilities
Financial debt
Cash and cash equivalents
Net debt
31 Dec 2012
31 Dec 2011
234,908
233,726
24,675
21,809
114
18
6,788
940
3,951
271,376
72,389
198,987
8,648
1,058
1,145
266,404
67,891
198,513
Cash flows resulting from interest paid (2012: EUR – 11,630 thou-
sand; 2011: EUR – 23,289 thousand) are disclosed as cash flows
from financing activities.
Cash flows from investing activities include the cash effects of
the purchases of Connectors Verbindungstechnik AG (Switzer-
land), Nordic Metalblok S.r.l. (Italy), Chien Jin Plastic Sdn. Bhd.
(Malaysia) and Groen Bevestigingsmaterialen B.V. (Netherlands)
in 2012. In 2011, the cash effects of the purchase of non-control-
ling interest of EUR 4,677 thousand are recognised. Furthermore,
cash flows from investing activities include transactions relating
to the acquisition and disposal of non-current assets. Cash flows
from the acquisition of non-current assets of EUR 30,035 thou-
sand include cash flows for growth of EUR 18,548 thousand and
cash flows for maintenance of EUR 11,487 thousand.
The net payments for acquisitions of subsidiaries were as follows:
Other notes
in EUR ’000
Consideration
Fair value of previously held non-controlling interests
35. INFORMAtION ON the CONSO lIDAteD S tAteMeNt
Acquired cash and cash equivalents
OF CAS h F lOwS
Acquisition liability
Net payments for acquisitions of subsidiaries
37,564
– 1,773
– 4,584
– 2,231
28,976
In the statement of cash flows, a distinction is made between
cash flows from operating activities, investing activities and fi-
nancing activities.
Cash flows from operating activities represent the cash effects
of transactions and other events relating to the principal revenue-
producing activities. The Group participates in a reverse-factor-
ing-programme. The payments to the factor are included in cash
flows from operating activities, since this best represents the
economic substance of the transaction. Other non-cash expens-
es and revenues in financial year 2012 mainly include the non-
cash valuation of interest rate swaps amounting to EUR – 3,085
thousand (2011: EUR – 1,155 thousand), the non-cash evaluation
of bank borrowings, including net foreign exchange valuation on
financing activities as well as non-cash interest expenses
amounting to EUR 1,694 thousand (2011: EUR 6,539 thousand),
in equity recognised foreign exchange rate evaluation effects and
actuarial gains/losses amounting to EUR – 3,833 thousand (2011:
EUR 109 thousand) as well as own work capitalized amounting
to EUR – 1,671 thousand (2011: EUR 0 thousand). In 2012, a one-
time-income of EUR 1,296 thousand resulting from the fair-value-
evaluation of the 30 %-share in Groen Bevestigingsmaterialen
B.V. is also recognised in this item.
Cash flows from financing activities comprise proceeds from bor-
rowings (2012: EUR 18,500 thousand, 2011: EUR 293,675 thou-
sand), repayments of borrowings (2012: EUR – 23,173 thousand;
2011: EUR – 410,513 thousand), payment of the dividend (2012:
EUR – 19,125 thousand, 2011: EUR 0 thousand), reimbursement
of OPICP by shareholders (2012: EUR 1,307 thousand, 2011:
EUR 388 thousand) as well as cash flows resulting from interest
paid (2012: EUR – 11,630 thousand, 2011: EUR – 23,289 thou-
sand).
In 2011, cash flow from financing activities also included IPO
costs netted with equity (EUR – 6,544 thousand), reimbursement
of IPO costs by shareholders (EUR 6,602 thousand), refinancing
costs (EUR – 7,859 thousand) and proceeds from capital in-
crease (EUR 147,000 thousand).
Cash is comprised of cash on hand and demand deposits of
EUR 72,389 thousand at 31 December 2012 (31 December 2011:
EUR 67,891 thousand). As at 31 December 2012 and 2011, liquid
funds did not comprise any cash equivalents. Cash from China,
Serbia, Brazil and Malaysia (31 December 2012: EUR 4,963
thousand, 31 December 2011: EUR 982 thousand) cannot be
distributed due to capital transaction controls.
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
153
36. SeGMe Nt R ePOR tING
The reconciliation of the segments’ adjusted EBITDA and EBITA
is as follows:
NORMA Group segments the company at a regional level. The
reportable segments of NORMA Group are EMEA, the Americas,
and Asia-Pacific. NORMA Group’s vision includes regional
growth targets. Distribution services are focused regionally and
locally. All three regions have linked regional intercompany or-
ganisations of different functions. As a result, the Group’s man-
agement reporting and controlling system has a strong regional
focus. The product portfolio does not vary between these seg-
ments.
Revenues of each segment are generated from the three product
categories clamps (CL AMP), joining elements (CONNECT) and
fluid systems/connectors (FLUID).
NORMA Group measures the performance of its segments
through a profit or loss indicator which is referred to as “adjusted
EBITDA.” EBITDA comprises revenue, changes in inventories of
finished goods and work in progress, raw materials and consum-
ables used, other operating income and expenses, and employ-
ee benefits expense. EBITDA is measured in a manner consis-
tent with that used in the statement of comprehensive income.
The adjustments to EBITDA in 2011 relate mostly to costs result-
ing from preparations for the IPO of NORMA Group AG or other
non-recurring/non-period-related items, restructuring costs from
the first quarter of 2011 (closure of facilities, transfer of products,
severances with respect to the integration of the US-companies
acquired in 2010), and other Group items (mainly Group steward-
ship/sponsor-related costs).
In 2012, no adjustments were booked at Group EBITDA-level.
in EUR ’000
total segments' adjusted ebItDA
Depreciation without PPA
depreciation
total adjusted ebItA of the Group
Restructuring costs
Non-recurring / non-period-related
costs
Other Group and normalised items
Depreciation from PPA
ebItA of the Group
Amortisation
Financial costs - net
Profit before tax
2012
120,825
– 15,392
105,433
0
0
0
– 273
105,160
– 10,749
– 13,269
81,142
2011
117,019
– 14,336
102,683
– 1,778
– 14,847
– 183
– 1,166
84,709
– 8,075
– 29,615
47,019
Current and deferred tax assets and liabilities are shown in the
consolidation. At 31 December 2012, EUR 21,434 thousand
(31 December 2011: EUR 21,923 thousand) tax assets and
EUR 50,767 thousand (31 December 2011: EUR 42,232 thou-
sand) tax liabilities were shown in the consolidation.
Assets of the holdings include mainly cash and intercompany
receivables; the liabilities include mainly borrowings.
External sales per country, measured according to the place of
domicile of the company which manufactures the products, are
as follows:
Due to the importance of the adjusted EBITA for NORMA Group,
the adjusted EBITA is shown in the segment reporting as well.
The EBITA includes, in addition to the EBITDA, the depreciation
adjusted for depreciation from purchase price allocations.
in EUR ’000
Germany
USA
Other countries
Inter-segment revenue is recorded at values that approximate
third-party selling prices.
2012
197,281
193,328
214,004
2011
222,797
172,987
185,572
604,613
581,356
Segment assets comprise all assets less (current and deferred)
income tax assets. Taxes are shown in the reconciliation.
The non-current assets per country include non-current assets
less deferred tax assets, derivative financial instruments, and
shares in consolidated related parties.
Segment liabilities comprise of liabilities less (current and
deferred) income tax liabilities. Taxes are shown in the recon-
ciliation. Segment assets and liabilities are measured in a manner
consistent with that used in the statement of financial position.
Capex equals additions to non-current assets.
in EUR ’000
Germany
USA
Sweden
Other countries
Consolidation
31 Dec 2012
31 Dec 2011
121,028
158,165
54,746
123,648
– 18,515
117,895
163,537
52,156
84,147
– 14,340
439,072
403,395
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
154
37. C ONtINGeNCIeS
The Group has contingent liabilities in respect of legal claims
arising in the ordinary course of business.
Lease expenditure (including non-cancellable and cancellable
operating leases) amounting to EUR 7,774 thousand in 2012
(2011: EUR 7,073 thousand) is included in profit or loss in ‘other
operating expenses.’
NORMA Group does not believe that any of these contingent li-
abilities will have a material adverse effect on its business or any
material liabilities will arise from contingent liabilities.
The following table shows the future aggregate minimum lease
payments under non-cancellable operating leases:
38. COMMItM eNtS
Capital commitments
Capital expenditure contracted for at the balance sheet date but
not yet incurred is as follows:
in EUR ’000
No later than 1 year
Later than 1 year and no later
than 5 years
Later than 5 years
31 Dec 2012
31 Dec 2011
4,356
4,375
10,306
6,605
21,267
8,687
1,635
14,697
in EUR ’000
31 Dec 2012
31 Dec 2011
39. buSINeSS COM bINAtIONS
Property, plant and equipment
1,191
1,191
4,878
4,878
There are no material commitments concerning intangible as-
sets.
Operating lease commitments
The Group leases various vehicles, property and technical equip-
ment under non-cancellable operating lease agreements. The
lease terms are between 1 and 15 years. The Group also leases
various technical equipment under cancellable operating lease
agreements.
NORMA Group has significant operating lease arrangements
with annual lease payments of more than EUR 200 thousand,
concerning the leasing of land and buildings. Except for usual
renewable options, the lease contracts do not comprise other
options. The lease arrangements are held by the following com-
panies:
NORMA UK Ltd. (Great Britain): lease-term from 2006 to 2016,
prolonged to 2028, soonest termination in 2016 or 2028,
NORMA Pacific Pty. Ltd. (Australia): lease-term from 2013 to
2017, soonest termination in 2017,
R.G. RAY Corporation (USA): lease-term from 2010 to 2014,
soonest termination in 2014,
NORMA Michigan Inc. (USA): lease-term from 2008 to 2018,
soonest termination in 2018,
Connectors Verbindungstechnik AG (Switzerland): lease-term
from 2012 to 2016, soonest termination in 2016
Nordic Metalblok S.r.l. (Italy): lease-term from 2012 to 2018,
soonest termination in 2018.
business combinations in the financial year
NORMA Group acquired four companies in 2012: Connectors
Verbindungstechnik AG (Switzerland), Nordic Metalblok S.rl. (Italy),
Chien Jin Plastic Sdn. Bhd. (Malaysia) and Groen Bevestigings-
materialen B.V. (Netherlands). The acquisitions contributed 7.1 %
to total Group assets, which resulted mainly from goodwill
amounting to EUR 11,905 thousand and identified hidden reserves
in the immaterial assets amounting to EUR 17,434 thousand.
In the purchase price allocation, mainly immaterial assets were
identified. Customer lists were evaluated using the ‘Multi-Period
Excess Earnings Method’ amounting to EUR 13,966 thousand.
Trademarks of EUR 1,086 thousand were evaluated with the ‘Re-
lief from Royalty Method.’ Distribution rights were evaluated using
the ‘Multi-Period Excess Earnings Method’ amounting to
EUR 882 thousand. Customer orders of EUR 1,146 thousand
were evaluated with the ‘Multi-Period Excess Earnings Method.’
The acquired assets and liabilities are shown in detail in the fol-
lowing section.
Connectors verbindungstechnik AG
Effective 19 April 2012, NORMA Group acquired all shares of
Connectors Verbindungstechnik AG, based in Tagelswangen,
Switzerland. The company generated sales of around EUR 14
million in the financial year 2011.
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
155
Connectors Verbindungstechnik AG specializes in connector
systems for the pharmaceutical and biotechnology industry. With
the acquisition, NORMA Group will gain better access to custom-
ers in these sectors.
Of the total acquisition-related costs amounting to EUR 1,028 thou-
sand, EUR 305 thousand were recognised in 2011; the remaining
amount was recognised in 2012 in the other operating expenses
in the consolidated statement of comprehensive income.
The goodwill of EUR 6,948 thousand arising from the acquisition
is attributable to the access to the pharmaceutical and biotech-
nological market segments as well as the expansion of the
NORMA Group product portfolio by sterile connecting technol-
ogy, engineered valves and sterile silicon hoses.
The fair value of trade and other receivables is EUR 3,552 thou-
sand and includes trade receivables with a fair value of EUR 3,141
thousand. The gross contractual amount for trade receivables
due is EUR 3,340 thousand, of which EUR 199 thousand are
expected to be uncollectible.
The consideration of EUR 21,230 thousand was paid in cash.
None of the goodwill recognised is expected to be deductible for
income tax purposes.
The following table summarises the consideration paid for Con-
nectors Verbindungstechnik AG and the amounts of the assets
acquired and liabilities assumed recognised at the acquisition
date.
in EUR ’000
Consideration at 19 April 2012
q2 2012
21,230
Acquisition-related costs (included in other operating
expenses in the consolidated statement of comprehen-
sive income in H1 2012 and 2011)
Recognised amounts of identifiable assets
acquired and liabilities assumed
Cash and cash equivalents
Property, plant and equipment
Patents
Trademarks
Customer lists
Customer orders
Inventory
Trade and other receivables
Trade payables
Other liabilities
Provisions
Contingent liabilities
Income tax liabilities
Deferred tax assets
Deferred tax liabilities
total identifiable net assets
Goodwill
1,028
2,081
293
354
595
9,762
1,100
3,456
3,552
– 2,382
– 885
– 282
– 208
– 588
71
– 2,637
14,282
6,948
21,230
The fair value of the acquired identifiable intangible assets of
EUR 11,811 thousand (including patents, trademarks, customer
relationships and non-current customer orders) is provisional
pending receipt of the final valuations for those assets due to the
acquisition of Connectors Verbindungstechnik AG on 19 April
2012.
The provisions relate to warranty provisions in the ordinary
course of business.
A contingent liability of EUR 208 thousand has been recognised
for sales-related risks which should be settled within one year.
The revenue included in the consolidated statement of compre-
hensive income since 19 April 2012 contributed by Connectors
Verbindungstechnik AG was EUR 11,535 thousand. Connectors
also contributed profit of EUR 1,117 thousand over the same
period.
Had Connectors Verbindungstechnik AG been consolidated
from 1 January 2012, the consolidated statement of comprehen-
sive income would show revenue of EUR 16,801 thousand. The
profit for this period cannot be shown due to the previously dif-
ferent financial year.
Nordic Metalblok S.r.l.
Effective 12 July 2012, NORMA Group acquired all shares of
Nordic Metalblok S.r.l., based in Riese Pio X in Northern Italy. The
company generated sales of around EUR 6 million in the financial
year 2011.
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
156
Nordic Metalblok S.r.l. is producing clamps for various applica-
tions particularly for the heating, ventilation and air conditioning
industry and the agricultural and construction sectors. In addi-
tion, the company produces metal band and the related tools.
Nordic Metalblok S.r.l. distributes its products to retailers and
wholesalers as well as to manufacturing companies globally.
The fair value of trade and other receivables is EUR 1,835 thou-
sand and includes trade receivables with a fair value of EUR 1,649
thousand. The gross contractual amount for trade receivables
due was EUR 1,699 thousand of which EUR 50 thousand are
expected to be uncollectable.
Through the acquisition of Nordic Metalblok S.r.l., we are further
expanding our global footprint. The expertise of the company
particularly in the area of heating, ventilation and air conditioning
technology complements perfectly our product portfolio.
The fair value of the acquired identifiable intangible assets of
EUR 1,235 thousand (including trademarks and customer rela-
tionships) is provisional pending receipt of the final valuations for
those assets due to the acquisition of Nordic Metalblok S.r.l. on
12 July 2012.
The goodwill of EUR 1,049 thousand arising from the acquisition
is attributable to the stronger market position in Europe, the ex-
tended product range, especially in the segments heating, ven-
tilation and air conditioning as well as expected synergies.
The consideration of EUR 2,911 thousand was paid in cash.
None of the goodwill recognised is expected to be deductible for
income tax purposes.
The following table summarises the consideration paid for Nordic
Metalblok S.r.l. and the amounts of the assets acquired and lia-
bilities assumed recognised at the acquisition date.
in EUR ’000
Consideration at 12 July 2012
Acquisition-related costs (included in other operating
expenses in the consolidated statement of comprehen-
sive income in 2012)
Recognised amounts of identifiable assets
acquired and liabilities assumed
Cash and cash equivalents
Property, plant and equipment
Trademarks
Customer lists
Inventory
Trade and other receivables
Trade payables
Other liabilities
Provisions
Income tax liabilities
Deferred tax assets
Deferred tax liabilities
total identifiable net assets
Goodwill
q3 2012
2,911
155
332
1,827
342
893
897
1,835
– 1,110
– 1,949
– 701
– 65
73
– 512
1,862
1,049
2,911
The provisions relate to warranty provisions in the ordinary
course of business.
The revenue included in the consolidated statement of compre-
hensive income since 12 July 2012 contributed by Nordic Metal-
blok S.r.l. was EUR 2,308 thousand. Nordic Metalblok S.r.l. also
contributed a loss of EUR – 182 thousand over the same period.
Had Nordic Metalblok S.r.l. been consolidated from 1 January
2012, the consolidated statement of comprehensive income
would show revenue of EUR 5,601 thousand and a loss of EUR
– 64 thousand.
Chien Jin Plastic Sdn. bhd.
Effective 30 November 2012, NORMA Group acquired 85 % of
Chien Jin Plastic Sdn. Bhd., based in Malaysia. Due to the con-
tract, NORMA Group bears risks and rewards of the remaining
15 % of the share. Therefore, the result of the non-controlling
interests is reported in ‘other financial expenses’ and ‘financial
liability’ and not as non-controlling interest in equity. The fair
value of the non-controlling interests is shown as ‘financial liabil-
ity’ (31 December: EUR 884 thousand).
Chien Jin Plastic Sdn. Bhd. is based in Ipoh, approximately 200
km north of Kuala Lumpur, Malaysia. The company is specialized
in joining elements for plastic and iron pipe systems. Being in the
market for 20 years, Chien Jin Plastic manufactures pipe coup-
lings for different application areas, in particular for drinking and
domestic water distribution, and irrigation systems. In addition,
the company produces components for sanitary appliances and
globally distributes its products under its brand name Fish to
more than 200 distributors in about 30 countries. In 2011, the
company generated overall sales of more than EUR 7 million with
around 150 employees.
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
157
The acquisition of Chien Jin Plastic Sdn. Bhd. is a milestone for
NORMA Group in expanding its business activities into South-
east Asia. The company extends the product range in infrastruc-
ture and the distribution network in this dynamically growing
region.
The fair value of trade and other receivables is EUR 1,593 thou-
sand and includes trade receivables with a fair value of EUR 1,575
thousand. The gross contractual amount for trade receivables
due was EUR 1,650 thousand of which EUR 75 thousand are
expected to be uncollectable.
The goodwill of EUR 1,254 thousand arising from the acquisition
is attributable to the expansion of the business activities into
Southeast Asia, an extended product range in the segment in-
frastructure and the expansion of the distribution network in this
dynamically growing region.
The fair value of the acquired identifiable intangible assets of
EUR 1,725 thousand (including trademarks and customer rela-
tionships) is provisional pending receipt of the final valuations for
those assets due to the acquisition of Chien Jin Plastic Sdn. Bhd.
on 30 November 2012.
Of the consideration of EUR 7,535 thousand, EUR 6,419 thou-
sand were paid in cash and EUR 1,116 thousand consist of in-
curred liabilities.
None of the goodwill recognised is expected to be deductible for
income tax purposes.
The following table summarises the consideration paid for Chien
Jin Plastic Sdn. Bhd. and the amounts of the assets acquired
and liabilities assumed recognised at the acquisition date.
in EUR ’000
Consideration at 30 November 2012
q4 2012
7,535
Acquisition-related costs (included in other operating
expenses in the consolidated statement of comprehen-
sive income in 2012)
Recognised amounts of identifiable assets
acquired and liabilities assumed
Cash and cash equivalents
Property, plant and equipment
Trademarks
Customer lists
Customer orders
Inventory
Trade and other receivables
Income tax assets
Borrowings
Trade payables
Other liabilities
Provisions
Income tax liabilities
Deferred tax assets
Deferred tax liabilities
total identifiable net assets
Goodwill
234
2,110
2,322
149
1,545
31
1,220
1,593
59
– 479
– 287
– 495
– 649
– 357
117
– 598
6,281
1,254
7,535
The provisions relate mainly to legal issues.
The revenue included in the consolidated statement of compre-
hensive income since 30 November 2012 contributed by Chien
Jin Plastic Sdn. Bhd. was EUR 472 thousand. Chien Jin Plastic
Sdn. Bhd. also contributed profit of EUR 48 thousand over the
same period.
Had Chien Jin Plastic Sdn. Bhd. been consolidated from 1 Jan-
uary 2012, the consolidated statement of comprehensive income
would show revenue of EUR 7,679 thousand and profit of
EUR 1,050 thousand.
Groen bevestigingsmaterialen b.v.
Effective 31 December 2012, NORMA Group acquired an addi-
tional 60 % of Groen Bevestigingsmaterialen B.V., based in Pu-
merend, Netherlands. NORMA Group already held 30 % in Groen
Bevestigingsmaterialen B.V. which were accounted for at cost.
NORMA Group now holds 90 % of the shares and therefore fully
consolidates Groen Bevestigingsmaterialen B.V.
With the acquisition of a further 60 % of the shares, the previ-
ously held shares of 30 % amounting to EUR 477 thousand were
evaluated at fair value amounting to EUR 1,773 thousand. The
resulting income of EUR 1,296 thousand is recognised in ‘other
operating income’ in the consolidated statement of comprehen-
sive income. The fair value was evaluated using the discounted
cash flow method and verified with other evaluation methods.
Groen Bevestigingsmaterialen B.V. is based in Pumerend, about
20 kilometres North of Amsterdam in the Netherlands. The com-
pany is a wholesale supplier of hose and pipe clamps as well as
couplings to the industrial, construction, agriculture, plumbing,
hardware, and automotive sector throughout Belgium, the Neth-
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
158
erlands and Luxembourg. Moreover, Groen Bevestigingsmateri-
alen B.V. has an extensive supply programme of traffic sign brack-
ets. In addition, they offer the necessary mounting tools. The
company consisting of eight employees and two management
members generated sales of EUR 4.5 million in 2011, of which
about 60 % were achieved with products of NORMA Group.
We have increased our stake in Groen Bevestigingsmaterialen
B.V. in order to further strengthen our distribution business in the
Benelux countries. Moreover, the range of traffic sign brackets
and clamps the company offers will complement our product
portfolio and open up access to new customers in the traffic
clamp business.
The goodwill of EUR 2,654 thousand arising from the acquisition
is attributable to the expansion of the business activities in the
Benelux countries, an extended product range, especially in the
segment traffic signs as well as the expansion of the distribution
network.
The consideration based on 90 % of the shares amounts to
EUR 5,888 thousand. The consideration for the acquired 60 %
shares was paid in cash of EUR 3,000 thousand and consists of
incurred liabilities of EUR 1,115 thousand. The consideration in-
creased further by the fair value of the previously held 30 %
shares amounting to EUR 1,773 thousand. In addition, NORMA
Group has the right to acquire the remaining 10 % shares until
2018. Due to the contract, NORMA Group does not bear the risks
and rewards. The fair value of the purchase option of EUR 489
thousand is therefore shown in the ‘other financial liabilities.’
None of the goodwill recognised is expected to be deductible for
income tax purposes.
The following table summarises the consideration paid for Groen
Bevestigingsmaterialen B.V. and the amounts of the assets ac-
quired and liabilities assumed recognised at the acquisition date.
in EUR ’000
Consideration at 31 December 2012
q4 2012
5,888
Acquisition-related costs (included in other operating
expenses in the consolidated statement of comprehen-
sive income in 2012)
Recognised amounts of identifiable assets ac-
quired and liabilities assumed
Cash and cash equivalents
Property, plant and equipment
Licences, rights
Customer lists
Customer orders
Inventory
Trade and other receivables
Income tax assets
Trade payables
Other liabilities
Provisions
Income tax liabilities
Deferred tax assets
Deferred tax liabilities
Total identifiable net assets
Goodwill
Acquired non-controlling interests
51
61
168
882
1,766
15
1,089
413
58
– 110
– 55
– 35
– 19
28
– 666
3,595
2,654
361
5,888
The fair value of trade and other receivables is EUR 413 thousand
and includes trade receivables with a fair value of EUR 373 thou-
sand. The gross contractual amount for trade receivables due
was EUR 376 thousand of which EUR 3 thousand are expected
to be uncollectable.
The fair value of the acquired identifiable intangible assets of
EUR 2,663 thousand (including trademarks and customer rela-
tionships) is provisional pending receipt of the final valuations for
those assets due to the acquisition of Groen Bevestigingsmate-
rialen B.V. on 31 December 2012 only.
The provisions relate mainly to provisions for pending transac-
tions and warranty provisions in the ordinary course of business.
Due to the acquisition date, Groen Bevestigingsmaterialen B.V.
did not contribute to the revenue or profit of the Group.
NORMA Group AG Annual Report 2012
Notes to the consolidated financial statements
159
Had Groen Bevestigingsmaterialen B.V. been consolidated from
1 January 2012, the consolidated statement of comprehensive
income would show revenue of EUR 4,514 thousand and profit
of EUR 492 thousand. About 60 % of the revenue was achieved
with NORMA Group products.
40. Rel AteD-PARt y tR ANSAC tIONS
Sales and purchases of goods and services
In 2011, management services of about EUR 386 thousand were
received by related parties which consisted mainly of consulting
services due to the IPO. Management services are bought on
normal commercial terms and conditions. There were no mate-
rial balances at the year-end arising from these transactions. In
2012, no management services were bought from related par-
ties.
Except for the purchases of management services, there are no
material sales or purchases of goods and services from non-
consolidated companies, from the shareholders of NORMA
Group, from key management or from other related parties in
2012 and 2011.
Details regarding the remuneration of the Management Board
can be found on pages 97 to 99 and Notes 27.
Reimbursement claim to 3i funds
Costs for the Operational Performance Incentive Cash Pro-
gramme (OPICP) will be reimbursed by the previous sharehold-
ers. In 2012 and 2011, parts were paid and recognised in the
capital reserve in accordance with the agreement (see Note 27).
41. ADDItIONAl DISC lOSuReS P uRSuANt tO S eCtION
315A (1) OF the Ge RMAN C OMMeRCIAl CODe (hGb)
Fees for the auditor
Fees for the auditor, PricewaterhouseCoopers AG Wirtschafts-
prüfungsgesellschaft, were expensed as follows:
in EUR ’000
Audit fees
Audit-related fees
Tax consulting fees
Other fees
2012
393
7
0
0
2011
605
819
0
271
400
1,695
headcount
The average headcount breaks down as follows:
Number
Direct labour
Indirect labour
Salaried
2012
1,705
858
1,014
3,577
2011
1,658
765
907
3,330
The category ‘direct labour’ consists of employees that are di-
rectly engaged in the production process. The numbers fluctuate
according to the level of output. The category ‘indirect labour’
consists of personnel that do not directly produce products, but
rather support production. Salaried employees are employees in
administrative/sales/central functions.
Consolidation
Name, place of domicile and share in capital pursuant to section
313 (2) No. 1 HGB of the consolidated group of companies is
presented in section 4.
Compensation of board members
The remuneration of Management Board and Supervisory Board
of NORMA Group GmbH for the period 2012 was as follows:
Proposal for the distribution of earnings
The Management Board proposes that a dividend of EUR 0.65
be paid as a dividend per bearer of shares, leading to a total
dividend payment of EUR 20,710,560.
in EUR ’000
Total Management Board
Total Supervisory Board
2012
2,429
435
2,864
Corporate governance (Section 161 AktG)
Management Board and Supervisory Board have issued a cor-
porate governance declaration pursuant to section 161 of the
German Stock Corporation Act (Aktiengesetz) and made it avail-
able to shareholders on the website of NORMA Group.
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
160
42. e veNtS AF teR the b Al ANCe S heet DAte
NORMA Group signed an agreement on 10 January 2013 to
acquire the distribution business of DavyDick & Co. Pty. Limited
(“DavyDick”) in Australia.
DavyDick, based in Goulburn, approximately 150 km southwest
of Sydney, has been a distributor of various elements for the
transportation of water in irrigation systems for more than 20
years. The company is specialised in supplying a comprehensive
range of rural irrigation fittings, valves, and pumps under its
brand name PUMPMASTER to around 700 customers through-
out Australia in the agricultural, hardware and plumbing markets.
DavyDick maintains branches in Melbourne, Adelaide and Bris-
bane. In the past fiscal year, the company generated overall sales
of around EUR 4 million.
With the acquisition of the distribution business of DavyDick,
NORMA Group builds on its water platform and complements its
product range in the infrastructure business area. The company
expands its distribution network with a focus on agriculture and
irrigation. NORMA Group has already been present in Australia
since 1992.
NORMA Group AG Annual Report 2012 Appendix to the notes to the
consolidated financial statements
161
Appendix to the notes to the
consolidated financial statements
The following sheet gives an overview of all voting rights that have
been notified to the company as of 12 March 2013. It contains
the information of the last notification of each shareholder and the
percentage and shares may have changed in the meantime.
NotificatioNs of votiNg rights
According to section 160 (1) No. 8 AktG information regarding
voting rights that have been notified to the company pursuant to
section 21 (1) or (1a) of the German Securities Trading Act (Wert-
papierhandelsgesetz – WphG) have to be disclosed.
All notifications of voting rights by the company in the reporting
period and until 12 March 2013 are available on the website of
NORMA Group (http://investoren.normagroup.com).
Shareholder
Achievement of
voting rights
Notification limit
Pursuant to
section 22 WpHG
Share
Shares
3i Investments plc, London
14 January 2013
3 % shortfall
§ 22 para. 1 s. 1 no. 1
0.000 %
0
Allianz Global Investors Europe GmbH
14 January 2013
5 % exceedance
DWS Investment GmbH, Frankfurt*
03 February 2012
5 % shortfall
5.750 %
4.871 %
1,832,961
1,551,972
Columbia Wanger Asset Management LLC,
Chicago
07 September 2012
3 % exceedance
§ 22 para. 1 s. 1 no. 6
3.840 %
1,223,755
ODDO et Cie., Paris
05 September 2012
3 % exceedance
§ 22 para. 1 s. 1 no. 6
i.c.w. s. 2
3.390 %
1,081,190
ODDO Asset Management
05 September 2012
3 % exceedance
§ 22 para. 1 s. 1 no. 6
3.390 %
1,081,190
Mondrian Investment Partners Limited, London
15 June 2012
5 % exceedance
§ 22 para. 1 s. 1 no. 6
5.340 %
1,700,937
Columbia Management Investment Advisers
LLC, Boston
21 June 2012
3 % exceedance
Ameriprise Financial Inc., Minneapolis 1)
07 September 2012
10 % exceedance
26 January 2012
5 % exceedance
26 January 2012
5 % exceedance
§ 22 para. 1 s. 1 no. 6
i.c.w. s. 2
§ 22 para. 1 s. 1 no. 6
i.c.w. s. 2
§ 22 para. 1 s. 1 no. 6
i.c.w. s. 2
§ 22 para. 1 s. 1 no. 6
i.c.w. s. 2
3.250 %
1,036,183
10.820 %
3,445,924
5.570 %
1,775,477
5.530 %
1,760,835
26 January 2012
5 % exceedance
§ 22 para. 1 s. 1 no. 6
5.530 %
1,760,835
15 November 2012
5 % exceedance
§ 22 para. 1 s. 1 no. 6
5.050 %
1,610,051
08 August 2011
3 % exceedance
3.025 %
964,148
Threadneedle Asset Management Holdings
SARL, Luxembourg***
Threadneedle Asset Management Holdings
Limited, London***
Threadneedle Asset Management Limited,
London***
Threadneedle Investment Services Limited,
London 2)
T. Rowe Price International Discovery Fund,
Inc., Baltimore**
T. Rowe Price Group, Inc., Baltimore**
08 August 2011
3 % exceedance
§ 22 para. 1 s. 1 no. 6
i.c.w. s. 2
3.023 %
963,303
Nils Bergström, Sweden 3)
01 October 2012
3 % shortfall
§ 22 para. 1 s. 1 no. 1
2.510 %
800,595
* Notification by the company at 7 February 2012
** Notification by the company at 18 August 2011
*** Notification by the company at 01 February 2012
1)
The voting rights attributed to Ameriprise Financial Inc.are held by the following controlled undertaking company which share in the voting rights in NORMA Group AG ex-
ceeds 3 % or more: Threadneedle Investment Funds ICVC
The voting rights attributed to Threadneedle Investment Services Limited are held by the following controlled undertaking company which share in the voting rights in
NORMA Group AG exceeds 3% or more: Threadneedle Investment Funds ICVC
The voting rights attributed to Nils Bergström are held by the following controlling companies which shares in the voting rights in NORMA Group AG do not exceed 3 %
respectively: Connecting Capital Holding AB, MABA S.à r.l., GABA S.A., MABA Cyprus Limited
2)
3)
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter
162
MeMbeRS OF the MANAGeMe Nt bOARD:
MeMbeRS OF the SuPeR vISORy bOARD:
werner Deggim
Dipl.-Ingenieur, Chief Exceutive Officer (CEO)
Dr. Othmar belker
Dipl.-Volkswirt, Chief Financial Officer (CFO)
bernd kleinhens
Dipl.-Ingenieur, Managing Director Business Development
John Stephenson
Master of Science, Chief Operating Officer (COO)
The members of the Management Board are present in various
Supervisory Boards of NORMA Group companies.
Dr. Stefan wolf (Chairman)
Chief Exceutive Officer (CEO) of ElringKlinger AG
Member of the Supervisory Board of Fielmann AG,
Hamburg, Germany
Member of the Supervisory Board of Micronas Semiconductor
Holding AG, Zurich, Switzerland
Dr. ulf von haacke (Deputy Chariman,
until 14 September 2012)
Managing Director, Partner
lars Magnus berg (Deputy Chariman)
Consultant
Chairman of the Supervisory Board of Net Insight AB,
Stockholm, Sweden
Chairman of the Supervisory Board of
KPN OnePhone Holding B.V., Düsseldorf, Germany
Member of the Supervisory Board of Ratos AB,
Stockholm, Sweden
Member of the Supervisory Board of Tele2, AB,
Stockholm, Sweden
Günter hauptmann
Consultant
Member of the Supervisory Board of Geka GmbH, Bechhofen
knut J. Michelberger
Chief Financial Officer (CFO) of Dematic Group
and independent consultant
Chairman of the Advisory Board of Dematic GmbH
Dr. Christoph Schug
Entrepreneur
Member of the Supervisory Board of Tom Tailor Holding AG,
Hamburg, Germany
Member of the Supervisory Board of
Baden-Baden Cosmetics AG, Baden-Baden, Germany
erika Schulte (from 18 February 2013)
Managing Director of Hanau Wirtschaftsförderung GmbH,
of Brüder-Grimm-Berufsakademie Hanau GmbH and
of Technologie- und Gründerzentrum Hanau GmbH
NORMA Group AG Annual Report 2012 Appendix to the notes to the
consolidated financial statements
Responsibility statement
163
Responsibility statement
To the best of our knowledge, and in accordance with the applicable reporting principles, the con-
solidated financial statements give a true and fair view of the assets, liabilities, financial position and
profit or loss of the Group, and the Group Management Report includes a fair review of the develop-
ment and performance of the business and the position of the Group, together with a description of
the principal opportunities and risks associated with the expected development of the Group.
Maintal, 13 March 2013
NORMA Group AG
Management Board
Werner Deggim
CEO
Dr. Othmar Belker
CFO
Bernd Kleinhens
Business Development
John Stephenson
COO
Further InformationConsolidated Financial StatementsConsolidated Management ReportTo Our ShareholdersManagement Board Letter 164
Auditor’s report
We have audited the consolidated financial statements prepared by the NORMA Group AG, Maintal,
comprising the statement of financial position, the statement of comprehensive income, statement of
changes in equity, cash flow statement and the notes to the consolidated financial statements, to-
gether with the group management report for the business year from January 1, 2012 to December
31, 2012. The preparation of the consolidated financial statements and the group management report
in accordance with the IFRSs, as adopted by the EU, and the additional requirements of German com-
mercial law pursuant to § (Article) 315a Abs. (paragraph) 1 HGB ("Handelsgesetzbuch": German Com-
mercial Code) is the responsibility of the parent Company's Board of Managing Directors. Our respon-
sibility is to express an opinion on the consolidated financial statements and on the group management
report based on our audit.
We conducted our audit of the consolidated financial statements in accordance with § 317 HGB and
German generally accepted standards for the audit of financial statements promulgated by the Institut
der Wirtschaftsprüfer (Institute of Public Auditors in Germany) (IDW). Those standards require that we
plan and perform the audit such that misstatements materially affecting the presentation of the net
assets, financial position and results of operations in the consolidated financial statements in accor-
dance with the applicable financial reporting framework and in the group management report are
detected with reasonable assurance. Knowledge of the business activities and the economic and legal
environment of the Group and expectations as to possible misstatements are taken into account in
the determination of audit procedures. The effectiveness of the accounting-related internal control
system and the evidence supporting the disclosures in the consolidated financial statements and the
group management report are examined primarily on a test basis within the framework of the audit.
The audit includes assessing the annual financial statements of those entities included in consolidation,
the determination of the entities to be included in consolidation, the accounting and consolidation
principles used and significant estimates made by the Company’s Board of Managing Directors, as
well as evaluating the overall presentation of the consolidated financial statements and the group
management report. We believe that our audit provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion based on the findings of our audit, the consolidated financial statements comply with
the IFRSs as adopted by the EU and the additional requirements of German commercial law pursuant
to § 315a Abs. 1 HGB and give a true and fair view of the net assets, financial position and results of
operations of the Group in accordance with these requirements. The group management report is
consistent with the consolidated financial statements and as a whole provides a suitable view of the
Group's position and suitably presents the opportunities and risks of future development.
Frankfurt am Main, March 13, 2013
PricewaterhouseCoopers
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Dr. Ulrich Störk
Wirtschaftsprüfer
(German Public Auditor)
ppa. Benjamin Hessel
Wirtschaftsprüfer
(German Public Auditor)
NORMA Group AG Annual Report 2012 Management Board Letter
To Our Shareholders
Consolidated Management Report
Consolidated Financial Statements
Further Information
165
Auditor’s report
Glossary
Glossary
Technical terms
AF teRMARket S eGMeNt
The market concerned with the maintenance/repair of invest-
ment goods (e.g. machines) or long-life final goods (e.g. vehicles)
or the sale of replacement parts or complementary parts for the
goods. This involves the sale of services and/or parts that are
directly related to the previous sale of the goods.
AuSteNItIC S teelS
Austenitic steel is a stainless steel that normally contains an alloy
of 15 – 20 % chromium and 5 – 15 % nickel. Other alloy compo-
nents can have an impact on these figures. Austenitic steels
cannot be hardened by way of heat treatment and are usually
not magnetisable. They can be used in environments with high
chloride levels. Please note that “chloride” is not a precise term.
There are several types of chloride in technical chemistry, all of
which vary in terms of their impact on austenitic steels.
CO 2
Carbon dioxide, a chemical compound of carbon and oxygen.
DIStRIbutION SeRvICeS (DS)
One of NORMA Group’s two ways to market, which provides a
wide range of high-quality, standardised joining products for a
broad range of applications and customers.
el AStOMeRS
Elastomers are stable but elastic plastics which are used at a
temperature above their glass transition temperature. The plas-
tics can deform under tensile load or compressive load, but then
return to their original undeformed shape.
eNGINeeReD JOINING t eChNOlOGy (e Jt )
One of NORMA Group’s two ways to market. It provides custom-
ised, highly engineered joining technology products primarily, but
not exclusively, for industrial OEM customers.
FeRRI tIC S teelS
Ferritic chromium steel is a stainless steel that normally cannot
be hardened. It is magnetisable and is used in environments
containing little or no chloride.
FluID PROD uCtS /SySte MS
Single or multiple-layer thermoplastic fluid systems/connections.
hybRID vehIC leS
Generally a vehicle powered by a combination of different drive
systems or energy sources, usually an electric motor and a com-
bustion engine.
IND uCtION
The production of an electric current in a conductor using vary-
ing magnetic fields.
INSO uRCING
The reincorporation of processes and functions into a company.
ISO 14001
An international environmental management standard that spec-
ifies the internationally accepted requirements for an environ-
mental management system
It
Information technology, an umbrella term for information and
data processing.
leAk AGe
A leak is an unwanted hole in a product or technical system,
through which solids, liquids or gases can enter or exit. A leak
can lead to the failure of an entire technical system. The size of
a leak is measured by the leak rate.
OhSAS 18001
Abbreviation for Occupational Health and Safety Assessment
Series; used in many countries as a basis for certification of oc-
cupational health and safety management systems. The struc-
ture is closely linked to the ISO 9001 and ISO 14001 standards.
166
NItROG eN O xIDe
Nitrogen oxide is the generic term for oxygen and nitrogen com-
pounds (generic formula: NOx). The main examples are nitric
oxide and nitrogen dioxide. These are gaseous compounds with
low solubility in water. Nitrogen oxides are hazardous for people
and the environment and are a waste gas produced by combus-
tion engines.
ORIGINAl e quIPMeNt MANuFAC tuR eR (OeM)
A company that retails products under its own name.
SuPP ly Ch AIN MANAG eM eNt
Supply chain management is the planning and management of
all activities involved in supplier selection, procurement and con-
version, as well as all logistical activities. It refers particularly to
the coordination and collaboration of the partners involved (sup-
pliers, vendors, logistics service providers, customers).
theRMOP l AStICS
Also known as plastomers. These are plastics which become
elastic (thermoplastic) in a particular temperature range. This
process is reversible, i.e. it can be cooled and heated back to a
molten state as often as required unless thermal decomposition
sets in due to the material being overheated. This is how ther-
moplastics differ from thermosetting polymers and elastomers.
Another unique characteristic of thermoplastics is that they can
be welded.
Financial Terms
ACquISI tION
Acquisition of companies or parts of companies for strategic
purposes.
beSt l AND eD C OSt APPROAC h
Takes all logistics and storage costs for the procurement of a
purchased part into consideration and thus ensures that the
most competitive suppliers are selected.
beSt PR ACtICe APPROAC h
Also known as a success method; comes from Anglo-American
economics and refers to proven, good or exemplary methods,
practices or procedures within a company.
bRIC StAteS
An acronym that refers to the emerging markets of Brazil, Russia,
India and China.
COD e OF COND uCt
A set of policies which can / should be applied in a wide range of
contexts and environments depending on the situation. In con-
trast to a rule, the target audience is not obliged to always com-
ply with the code of conduct. For this reason, you will often hear
the term “voluntaryself-control.” A code of conduct is more of a
personal commitment to follow or abstain from certain patterns
of behaviour and ensure that nobody gains an unfair advantage
by circumventing these patterns.
COMPlIANCe
Conforming to rules: companies adhering to codes of conduct,
laws and guidelines.
CORPOR Ate GO veRNANCe
Generally speaking, corporate governance is the set of all inter-
national and national rules, regulations, values and principles
which apply to companies and determine how these companies
are managed and monitored.
COveR AGe
The regular assessment of the economic and financial situation
of a listed company by banks or financial research institutions.
eARNINGS be FORe IN teReSt, tA xeS AND AMOR tISA-
tION (eb ItA)
Earnings before interest, taxes and amortisation of intangible
assets. Practically speaking, however, EBITA means “earnings
before net financial result, extraordinary earnings, taxes and am-
ortisation of goodwill.” Extraordinary (one-off) expenses and
costs are ignored, as are interest, other financing costs or in-
come, taxes and amortisation of goodwill.
eARNINGS beFORe IN teReSt, tA xeS, D ePReCIAtION
AND AMOR tISAtION (ebItDA)
Earnings before interest, taxes, depreciation (of property, plant
and equipment)and amortisation (of intangible assets). It is a
measure of a company’s operating performance before invest-
ment expenses.
eCONOMIeS OF SCA le
Defined in business economics’ production theory and micro-
economics as the connection between the scale of a company’s
output and the number of factors of production that it uses.
eMe A
An Anglo-American abbreviation for the economic area of Europe
(made up of Western and Eastern Europe), the Middle East and
Africa .
NORMA Group AG Annual Report 2012 167
FRee CAS h F lOw
Indicates the amount of money that is available to pay dividends
to shareholders and/or repay loans.
GlOb Al e xCelle NCe PROGR AMMe
A cost optimisation programme that was started in 2009. It co-
ordinates and manages all of NORMA Group’s sites and busi-
ness units.
INteRNAtIONA l SeCuRItIe S ID eNtIFICAtION NuMbeR
(ISIN)
A 12-digital alphanumerical code used to identify a security
traded on the stock market.
IN veStOR Rel AtIONS
Maintaining contact with shareholders, investors, analysts and
the financial media.
JOINt ve Ntu Re
A joint subsidiary held by at least two legally and economically
independent companies.
lISt ING
Stock market listing. When a security is traded on the stock
market.
MDA x
(derived from Mid-Cap-DA X) was introduced by Deutsche Börse
on 19 January 1996. It includes the 50 Prime Standard shares
from sectors excluding technology that rank immediately below
the companies included in the DA X index. The company size is
based on terms of order book volume and market capitalization.
Thus it reflects the share price development of mid cap German
companies or companies that are predominantly active in Ger-
many. The companies that make up the index are reviewed twice
a year in March and September and if necessary inbetween , e.g.
mergers or larger IPOs. The 60 / 60 rule states that only listed
companies which are among the 60 largest below the DA X in the
categories market capitalisation and turnover can be included in
the MDA X index. Companies can be removed from the MDA X
index if they fail to meet these criteria by a large margin or a
sustained period of time.
Mezz ANINe CAPI tAl
A generic term for types of financing which are a mixture of equity
and debt in their legal and economic structure.
MeRG eR
The combining of two companies of roughly equal value, regard-
less of the legal nature of the combination, i.e. including mergers
resulting from a takeover that was originally designated as an
acquisition. For this reason, the English term “Mergers & Acqui-
sitions” and its abbreviation “M&A” in particular has established
itself in German-speaking countries.
NAtuR Al h eDGING
An Anglo-American term from the area of business administra-
tion that has found its way into the specialised German vocabu-
lary. The objective is to lower the difference between income and
expenses in a given currency and thus minimise transaction
risks. Hedging takes place by designing the real economic con-
ditions within a company.
Buying goods and components in the same currency in which
one’s own services to the customer are to be invoiced helps
minimise risks, for example.
PhAN tOM S hAR e PROGR AMM e
A phantom share programme is a modern variable method of
compensation, in which an employee is paid with imaginary
stock based on performance.
All phantom share schemes are based on the principle that the
shares received by the beneficiary are purely fictitious. These
shares represent an imaginary stake in the value of the company.
PRIMe StANDARD
A segment of the regulated stock market with higher inclusion
requirements than the General Standard. It is the private law
segment of the Frankfurt Stock Exchange with the highest trans-
parency standards. All companies listed in the DA X, MDA X,
TecDAX and SDA X have to be in the Prime Standard.
ROADS hOw
A series of corporate presentations made to investors by an is-
suer at various financial locations to attract investment in the
company.
SDA x
Small-Cap-DA X: A German share index that was introduced by
Deutsche Börse AG on 21 June 1999. It is a select index of 50
small-sized companies, also known as small caps, that rank be-
low the MDA X in terms of trading volume and market capitalisa-
tion. The 110/110 rule states that only listed companies which are
Management Board LetterTo Our ShareholdersConsolidated Management ReportConsolidated Financial StatementsFurther InformationGlossary 168
among the 110 largest below the DA X in these categories can
be included in the SDA X index. Companies can be removed from
the SDA X index if they fail to meet these criteria by a large margin
or a sustained period of time. The companies that make up the
index are reviewed on a quarterly basis at the beginning of
March, June, September and December.
SyNeRGIeS
Working together to produce mutual benefits.
weRtPAPIe RkeNNNuMMeR ( wkN) (SeCuRItIe S ID
NuMbeR )
A six-character combination of numbers and letters used in
Germany to identify securities.
wORkING CAPI tAl
Represents the net current assets of a company. Working capi-
tal is equal to current assets less current liabilities. This difference
and the ratio (current assets divided by current liabilities), known
as the working capital ratio, are used as indicators of the liquid-
ity situation of a company and are particularly important for
credit analyses.
xetR A
An electronic trading system operated by Deutsche Börse AG for
the spot market.
NORMA Group AG Annual Report 2012 169
Glossary
Overview by quarter 2012
Overview by quarter 2012
Income statement
Revenue
Gross profit
Adjusted EBITA
Adjusted EBITA margin
EBITA
Adjusted profit for the period
Adjusted EPS
Profit for the period
EPS
Pro-forma adjusted EPS
Cash flow
Cash flow from operating activities
Operating net cash flow
Cash flow from investing activities
Cash flow from financing activities
balance sheet
Total assets
Equity
Equity ratio
Net debt
Q1 2012
Q2 2012
Q3 2012
Q4 2012
159.7
158.0
149.6
137.3
90.8
29.2
18.3
29.1
17.3
0.54
16.3
0.51
0.55
19.7
16.1
– 6.0
– 3.7
669.8
271.9
40.6
186.5
89.4
28.6
18.1
28.6
17.3
0.55
16.1
0.51
0.54
18.4
10.5
– 23.9
– 13.8
687.9
268.5
39.0
224.6
85.3
25.7
17.2
25.6
16.1
0.50
14.8
0.46
0.50
24.9
22.3
– 9.8
– 4.6
691.9
281.4
40.7
212.0
78.9
21.9
15.9
21.9
11.1
0.35
9.4
0.30
0.35
33.1
32.1
– 18.4
– 12.0
692.1
288.3
41.7
199.0
EUR million
EUR million
EUR million
%
EUR million
EUR million
EUR
EUR million
EUR
EUR
EUR million
EUR million
EUR million
EUR million
EUR million
EUR million
%
EUR million
Management Board LetterTo Our ShareholdersConsolidated Management ReportConsolidated Financial StatementsFurther Information
170
Multi-year overview
Order situation
Order book (31.12.)
Income Statement
Revenue
thereof EMEA
thereof Americas
thereof Asia-Pacific
Revenue EJT
Revenue DS
Gross profit 1)
Adjusted EBITA 2)
Adjusted EBITA margin
EBITA
Adjusted profit for the period
Profit for the period
Adjusted EPS
Adjusted EPS (number of shares at year-end 2012)
EPS
Finanical income
Tax rate 3)
R&D investments
R&D ratio (related to EJT sales)
Cost of materials
Cost of materials ratio
Personnel expenses
Cash flow
Cash flow from operating activities
Operating net cash flow 4)
Cash flow from investing activities 5)
Cash flow from financing activities
balance sheet
Total assets
Equity
Equity ratio
Net debt
Working capital
Working capital in % of sales
employees
Core workforce
Total workforce incl. temporary workers
Share
Number of shares (weighted)
Number of shares (year-end)
2012
2011
2010
2009
2008
EUR million
215.4
218.6
188.0
n/a
n/a
EUR million
EUR million
EUR million
EUR million
EUR million
EUR million
EUR million
EUR million
%
EUR million
EUR million
EUR million
EUR
EUR
EUR
EUR million
%
EUR million
%
EUR million
%
EUR million
EUR million
EUR million
EUR million
EUR million
EUR million
EUR million
%
EUR million
EUR million
%
604.6
367.5
193.3
43.8
427.6
174.5
344.4
105.4
17.4
105.2
61.8
56.6
1.94
1.94
1.78
– 13.3
30.3
– 22.1
5.1
– 263.5
43.6
– 156.5
96.1
81.0
– 58.1
– 34.1
692.1
288.3
41.7
199.0
115.9
19.2
3,759
4,485
581.4
372.7
173.0
35.7
411.5
170.3
322.6
102.7
17.7
84.7
57.6
35.7
1.92
1.81
1.19
– 29.6
30.0
– 16.8
4.1
– 262.3
45.1
– 143.7
71.7
66.8
– 33.7
– 0.5
648.6
256.0
39.5
198.5
106.2
18.3
3,415
4,252
490.4
336.6
123.8
30.0
323.6
168.3
274.7
85.4
17.4
64.9
48.2
30.3
1.93
1.51
1.21
– 14.9
27.0
– 16.6
5.1
– 220.5
45.0
– 124.4
62.1
51.7
– 56.6
– 3.1
578.8
78.4
13.5
344.1
86.7
17.7
3,028
3,830
31,862,400
30,002,126
24,862,400
31,862,400
31,862,400
24,862,400
329.8
244.6
68.1
17.1
206.3
126.0
182.4
38.5
11.7
8.6
n/a
– 18.0
n/a
n/a
n/a
– 21.3
13.1
n/a
n/a
– 144.0
43.7
– 111.3
42.0
62.3
– 10.8
– 33.2
469.7
39.1
8.3
317.2
60.2
18.3
n/a
n/a
n/a
n/a
457.6
349.0
92.4
16.2
n/a
n/a
251.4
64.4
14.1
44.7
n/a
– 29.4
n/a
n/a
n/a
– 45.2
15.2
n/a
n/a
n/a
n/a
– 128.6
64.1
67.2
– 16.4
– 40.0
499.7
60.1
12.0
328.8
84.7
18.5
n/a
n/a
n/a
n/a
1)
2)
3)
4)
5)
Revenues including changes in inventories of finished goods and work in progress less raw materials and consumables used
Adjusted by non-recurring/non-period-related costs (mainly due to the IPO), restructuring costs as well as other group and normalised items as well as depreciation from
PPA adjustments
Tax rate adjusted 2011, adjustments see Note 18
2008 to 2011 adjusted for non-recurring, non-period-related costs
including acquisitions in 2012 and 2010
NORMA Group AG Annual Report 2012
NORMA Group worldwide
EmE a
Czech Republic (P)
France (P, D)
Germany (P, D)
Italy (P, D)
Netherlands (D)
Poland (P)
Russia (P, D)
Serbia (P)
Spain (D)
Sweden (P, D)
Switzerland (D)
Turkey (D)
United Kingdom (P, D)
amEr icas
Brazil (D)
Mexico (P)
USA (P, D)
as ia-Pacific
Australia (D)
China (P, D)
India (P, D)
Indonesia (D)
Japan (D)
Korea (D)
Malaysia (P, D)
Philippines (D)
Singapore (D)
Thailand (P)
Vietnam (D)
sa lEs amEricas
Employees: 619
Sales growth: + 11.8 %
P = Production
D = Distribution centre, Sales
centre, Competence centre
2011
2012
EUR
173.0
million
EUR
193.3
million
SalES E ME a
Employees: 2,644
Sales growth: – 1.4 %
2011
2012
eUR
372.7
million
eUR
367.5
million
SalES aS ia-paCi FiC
Employees: 496
Sales growth: + 22.6 %
2011
2012
eUR
35.7
million
eUR
43.8
million
Financial Calendar 2013
20.02.2013 Preliminary Financial Figures 2012
27.03.2013 Publication of Full Year Results 2012
07.05.2013 Publication of Q1 Interim Results 2013
22.05.2013 Annual General Meeting in Frankfurt am Main
07.08.2013 Publication of Q2 Interim Results 2013
06.11.2013 Publication of Q3 Interim Results 2013
We are constantly updating our financial calendar. Please visit the Investor Relations section on our homepage www.normagroup.com
for up-to-date information.
Contact and Imprint
If you have any questions regarding NORMA Group or would like to be included in our distribution list please
contact the Investor Relations Team:
Email: ir@normagroup.com
Andreas Trösch
Vice President Investor Relations
Tel.: + 49 6181 6102 741
Fax: + 49 6181 6102 7641
Email: andreas.troesch@normagroup.com
Editor
NORMA Group AG
Edisonstraße 4
D-63477 Maintal
Petra Müller
Senior Manager Investor Relations &
Head of Financial Publications
Tel.: + 49 6181 6102 742
Fax: + 49 6181 6102 7642
Email: petra.mueller@normagroup.com
Tel.: + 49 6181 6102 740
Email: info@normagroup.com
www.normagroup.com
CoNCEpt a Nd l ayout
3st kommunikation, Mainz
Note on the annual report
This annual report is also available in German. If there are differences between the two, the German version takes priority.
Note on rounding
Please note that slight differences may arise as a result of the use of rounded amounts and percentages.
Forward-looking statements
This annual report contains certain future-oriented statements. Future-oriented statements include all statements which do not relate to historical
facts and events and contain future-oriented expressions such as “believe“, “estimate“, “assume“, “expect“, “forecast“, “intend“, “could“ or “should“
or expressions of a similar kind. Such future-oriented statements are subject to risks and uncertainties since they relate to future events and are
based on the company‘s current assumptions, which may not in the future take place or be fulfilled as expected. The company points out that such
future-oriented statements provide no guarantee for the future and that the actual events including the financial position and profitability of the
NORMA Group AG and developments in the economic and regulatory fundamentals may vary substantially (particularly on the down side) from those
explicitly or implicitly assumed in these statements. Even if the actual assets for the NORMA Group AG, including its financial position and profit-
ability and the economic and regulatory fundamentals, are in accordance with such future-oriented statements in this annual report, no guarantee
can be given that this will continue to be the case in the future.
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NorMa Group aG
Edisonstrasse 4
D-63477 Maintal
Phone: +49 6181 6102 740
Email: info@normagroup.com
www.normagroup.com