NORMA Group SE Annual Report 2013

FY2013 Annual Report · NORMA Group SE

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ANNUAL REPORT 2013

GROWTH CONNECTS

NORMA Group SE is an international market and technology leader in advanced engineered
joining technology. We offer about 30,000 high-quality products and solutions to approxi-
mately 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 near Frankfurt, we operate a worldwide network with 21 manufacturing centres
and numerous sales and distribution sites across Europe, the Americas and Asia-Pacific.

Overview of Key Figures 2013

Order situation

Order book (31 December)

Income statement

Revenue

Gross profit 2)

Adjusted EBITA3)

Adjusted EBITA margin

EBITA

Adjusted profit for the period 3)

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

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 2013 4)

Lowest 2013 4)

Year-end share price 31 December 2013 4)

2013

2012 1)

EUR million

236.7

215.4

EUR million

EUR

EUR million

EUR

635.5

371.4

112.6

17.7

112.1

62.1

1.95

55.6

1.74

1.95

604.6

344.4

105.4

17.4

105.1

61.8

1.94

56.6

1.78

1.94

31,862,400

EUR million

115.4

103.9

– 43.4

51.7

96.1

81.0

– 58.1

– 34.1

31 Dec 13

31 Dec 12

EUR million

823.7

319.9

38.8

153.5

691.8

289.2

41.8

199.0

Change
in %

9.9

5.1

7.8

6.9

0.3 Pts.

6.7

0.4

0.5

–1.8

– 2.2

0.5

20.0

28.2

25.3

n / a

Change
in %

19.1

10.6

3 Pts.

– 22.9

4,134

3,759

10.0

8 April 2011

Frankfurt Stock Exchange, Xetra

Regulated Market (Prime Standard), MDAX

DE000A1H8BV3

A1H8BV

NOEJ

EUR 39.95

EUR 20.75

EUR 36.08

Market capitalisation as at 31 December 2013

EUR million 1,150.0

1) Restated due to effects from the application of IAS 19R.
2) Revenue including changes in inventories of finished goods and work in progress less raw materials and consumables used.
3) Adjusted by non-recurring / non period-related costs, restructuring costs, as well as other group and normalised items

Date of publication:
27 March 2014

as well as depreciation from PPA adjustments.

4) Xetra closing price.

Two Strong Distribution Channels –
Our Competitive Advantage

DISTRIBUTION OF SALES BY SALES CHANNELS

in %

Engineered Joining Technology
Tailored, high-tech products
developed to meet specific
requirements of individual
OEM customers

Distribution Services
High-quality standardised
brand products for a variety
of applications

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ENGINEERED JOINING TECHNOLOGY (EJT )

The EJT marketing strategy focusses on customised, engineered solutions which meet the specific application
requirements of original equipment manufacturers (OEM). Our EJT products are built 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 extensive
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

Innovative joining technology and the highest
quality standards secured our market position
for over 60 years now. We offer solutions for
many different industries with our advanced
products. In fact, we rank as the world’s market
and technology leader in the area of joining
technology thanks to the personal dedication
of roughly 5,000 employees and our intellectual
property rights portfolio that consists of more
than 850 patents.

Size

Thanks to the many different fields in which our products
and solutions are used, we will have access to high market po
tential in the long term and thus excellent growth opportunities.
Read more on p. 18.

Innovation

Our power of innovation and the ability to identify future
global trends are important prerequisites to achieve sustained
growth. For this reason, we invest around four percent of
our EJT sales in Research and Development. We are thus
able to continue to develop new products and solutions and
strengthen our position as technology leader in the area of
joining technology. Read more on p. 28.

Brands

We market many strong and well-known brands through
our Distribution Services. By systematically expanding our
sales network, we ensure that our products and services are
available all over the world. We will also continue to focus on
successively expanding in order to address new markets and
industries. Read more on p. 36.

Presence

Brazil is one of our key markets in expanding our business
in South America. The fifth largest country in the world offers
NORMA Group fertile ground for longterm, dynamic growth.
We intend to continue to significantly expand our activities in
this country in the years to come. Read more on p. 46.

Annual Review 2013

Q12013

Q2 2013

NORMA Group acquires Davydick & Co. Pty Ltd and
strengthens its distribution network in Australia

Acquisition of Variant S.A., Poland, and expansion of business
activities in Eastern Europe

Market launch of weight-optimized NORMAQUICK connector
for cooling water systems

Acquisition of Guyco Pty Ltd, an Australian distributor of join-
ing products for various industries

3i sells remaining NORMA Group shares, free float increases
to 100 %

Presentation of new high-performance clamp RedGrip at
Paris Airshow

NORMA Group was included in the MDAX

NORMA Group earns ‘Go Further Award for Business
Excellence’ from Ford Motor Co.

NORMA Group receives ‘Best Technology Innovation Award’
from Chinese B2B automobile market place Gasgoo
International

NORMA Group receives ‘Würth Award for Quality and
Reliability of Supply’

NORMA Group SE Annual Report 2013Annual Review 2013

Q3 2013

Q4 2013

NORMA Group completes conversion into Societas
Europaea (SE)

Market launch of improved ABA Mini clamp for use with thin-
walled hoses

NORMA Group start setting up production in Atibaia, Brazil

NORMA Group receives ‘Ford Q1 Award’ in Mexico for highest
customer satisfaction

NORMA Group secures business for innovative V profile
clamp for Japanese car and engine manufacturer

NORMA Group receives major order from leading German
vehicle and engine manufacturer for NORMAFLEX fluid
systems

NORMA Group expands its product portfolio in the
infrastructure division by the pipe connector
NORMACONNECT VARIO PIPE

NORMA Group was recognized for quality performance in
Thailand by Komatsu

NORMA Group earns ‘50 PPM-Award’ from
PACCAR Inc., USA

NORMA Group successfully places promissory note of
EUR 125 million

NORMA Group achieved 2nd place in the category ‘most in-
novative newcomer’ at the European Small and Mid-Cap
Awards 2013

NORMA Group receives major orders for fluid line systems
and hose clamps in China

NORMA Group obtains large order for its innovative NORMA-
FLEX fluid pipes from an Italian manufacturer of passenger
cars and commercial vehicles

Q12014

NORMA Group launches new range of compression fittings
for fluid transfer and compressed air transportation

NORMA Group receives ‘Best Partner Award’ from General
Motors Shanghai for high-quality product solutions and
excellent logistics

Partial repayment of the original IPO financing from cash
inflow of promissory note

NORMA Group receives ‘Best Medium Enterprise 2013 Award’
in Serbia

Contents

Letter from the
Management Board

To Our Shareholders

22 NORMA Group on the Capital Market
32 Supervisory Board Report
40

Corporate Governance Report
including Declaration of Conformity

Consolidated
Management Report

52 Principles of the Group
64 Economic Report including Segment Reporting
91 Supplementary Report
92 Forecast
97 Risk and Opportunity Report
107

Remuneration Report for the Management
and Supervisory Boards

109 Other Legally Required Disclosures

NORMA Group SE Annual Report 201313

112

Consolidated Financial
Statements

114 Consolidated Statement of Financial Position
116 Consolidated Statement of Comprehensive Income
117 Consolidated Statement of Cash Flows
118 Consolidated Statement of Changes in Equity
120 Segment Reporting
122 Notes to the Consolidated Financial Statements
Appendix to the Notes to the Consolidated
176
Financial Statements
179 Responsibility Statement
180 Auditor’s Report

194

Further Information

194 Glossary
199 Overview by Quarter 2013
200 Multi-Year Overview

Financial Calendar 2014
Contact
Imprint

E XPL ANATION OF SYMBOLS

* Glossary

@ Internet

Cross Reference

Bernd Kleinhens
Board Member
Business Development

Dr. Othmar Belker
Chief Financial Officer
(CFO)

Werner Deggim
Chief Executive Officer
(CEO)

John Stephenson
Chief Operating Officer
(COO)

Letter from the
Management Board

Dear shareholders, customers
and business partners,

Despite the difficult economic climate, 2013 proved to be yet another good financial year for NORMA
Group. We achieved most of our goals and resolutely continued writing our growth story. By making
strategic acquisitions and expanding our capacities, we once again managed to lay important mile-
stones for a sustainable positive development last year. And we set new records for both sales and
earnings in 2013. We succeeded in achieving significant organic growth, particularly thanks to the
dynamic market environment in the fourth quarter, and this makes us look forward to 2014 with optimism.

But let us begin by taking a look back at last year: We managed to increase our sales by 5.1 per cent
in 2013 to EUR 635.5 million. EBITDA rose by around 7 per cent to almost EUR 130 million and thus
once again exceeded last year’s high level. We succeeded in increasing our operational results (EBITA)
by nearly 7 per cent to just under EUR 113 million. And with an operational EBITA margin of 17.7 per
cent, we again achieved a record level well above the industry average. Despite the payments we made
for acquisitions and the dividend, our net debt continued to decline to EUR 138 million (without hedg-
ing instruments) last year.

Growth impulses came mainly from the new emission regulations from the EURO-6 Standard, which
became mandatory for all newly registered commercial vehicles in the EU in January 2014. The start-ups
of engines that this brought had a positive effect on our sales, particularly in the second half of the year.

Furthermore, the acquisitions we made last year also contributed to our growth. We managed to
continue driving our strategy of expanding into important growth markets and additional customer
industries through strategic acquisitions. We succeeded in strengthening NORMA Group’s presence
in the Asia-Pacific region by acquiring the two Australian companies Davydick & Co. and Guyco. We
also took yet another step into the promising irrigation market that we entered into by acquiring Chien
Jin Plastic in Malaysia in 2012.

Construction of our new plant in Brazil marked yet another milestone in expanding our manufacturing
in the fifth largest country in the world and strengthening our market position in South America.

By acquiring our sales partner Variant in Poland, we were able to optimise our supply processes and
strengthen our position in Eastern Europe.

Letter from the Management Board16

Last year, we received several large orders for our fluid products, among others from customers in
Germany, Italy and China, which only shows that our advanced solutions are in demand all over the
world. The many awards we received from our customers and suppliers last year clearly show how
satisfied our business partners are. At the same time, they encourage us to continue to meet our high
quality standards for our products and processes that we set for ourselves in the future.

Our multi-industry strategy paid off again in 2013. Expanding our global presence and diversifying
across many different customer industries will remain important goals in the future and become
important growth drivers in the long term.

To also express how international our business is through our legal form, the Annual General Meeting
approved of transforming NORMA Group AG into a European stock corporation (Societas Europaea)
in May 2013. The new Company structure that took effect in July 2013 will emphasize NORMA Group’s
open company culture and, at the same time, represents a commitment to our domestic European
market.

Since our former major investor, the 3i plc Group, left us in January 2013, the free float of the NORMA
Group share is now at 100 per cent. Thanks to the strong interest that international investors have
shown and the considerably higher trading volumes compared with the previous year, we managed
to advance from the SDA X to the MDA X in March 2013.

Dear shareholders, we are proud to see that NORMA Group now ranks among the 80 largest listed
companies in Germany and has established itself as a promising growth value on the international
capital markets after only three years of experience with the stock exchange.

Our strong operating performance and confidence in our business is also reflected in the remarkable
development of our share, which rose by 72 per cent last year and beat out all of the respective in dexes
by far. In July 2013, NORMA Group’s market capitalisation broke through the billion barrier for the first
time ever. In November, our share reached EUR 39.95, the highest level it had ever seen before. At the
end of December 2013, our Company was valued at EUR 1.2 billion on the stock exchange, and even
continued to increase in value during the first quarter of 2014.

Our good reputation on the capital market, strong balance sheet and solid financial situation represent
important success factors for our business that ensure that we receive favourable refinancing oppor-
tunities on the international money and capital markets. For example, the promissory note we issued
in mid-2013 also met with strong acceptance among international investors. Furthermore, we also
benefitted from advantageous framework conditions on the foreign capital markets, which enabled us
to secure attractive financing conditions for ourselves. By issuing the promissory note, we were able
to further diversify our financing instruments on the one hand and lay an additional foundation for future
acquisitions and sustainable growth on the other.

We will continue writing NORMA Group’s success story during the current year also. By focussing
closely on innovations, we plan to continue meeting our customers’ high demands for specific system
solutions and thus strengthen our leading market and technological position even further in the future.
Continued expansion of our global presence and entry into new industries remain our strategic fo cuses.
We expect to see increased demand for advanced joining technology particularly in the emerging
countries in the Asian-Pacific region and South America. We have therefore intensified our activities in
these regions.

NORMA Group SE Annual Report 201317

Stricter emission regulations that also result from climate change present us and our business partners
with special challenges. On the one hand, we benefit from these developments because our innovative
solutions make a significant contribution to reducing emissions, leakages and the weight of our cus-
tomers’ end products. On the other hand, we also bear a great deal of responsibility for our environment
and society. Sustainable and responsible business practices, Corporate Responsibility (CR), is there-
fore part of securing the future of NORMA Group and an integral component of our Group strategy.
We began formulating long-term objectives and central CR-activities back in 2012. In order to anchor
these in our Company guidelines more firmly, we published our sustainability strategy on our website
at the end of February 2014. We will also continue to work hard on achieving the goals formulated here
in the years to come.

Dear shareholders, we would also like to thank you for the trust you have shown in our Company. We
are pleased to have you participate again appropriately in our good net profit that we earned in finan-
cial year 2013. For this reason, we will be proposing a dividend of EUR 0.70 for the financial year 2013
at our Annual General Meeting to be held on 21 May 2014. This means we will have increased the
dividend again by another EUR 0.05 compared to last year.

Last, but not least, we would like to thank our close to 5,000 employees all over the world who con-
tribute to the success of NORMA Group each day through their hard work. Moreover, we would like
to thank our customers and business partners for our good and trusting relationships. We look forward
to the months to come and hope you will continue to support us.

Sincerely,

Werner Deggim
CEO

Dr. Othmar Belker
CFO

Bernd Kleinhens
Business Development

John Stephenson
COO

Letter from the Management BoardS IZE

Focus on growth – NORMA Group is only active in industries that are
experiencing growth. The demand for mature joining technology remains
on the rise, particularly in the emerging economies in the AsiaPacific
region. This will create promising growth opportunities for us.

LIGHT VEHICLE SALES (IN MILLIONS)

Source: LMC Automotive

2020e

23.6

28.4

54.6

19.1

25.6

42.0

2015e

2013e

17.7

24.0

35.9

EME A

Americas

APAC

NORMAQUICK® PS 3

“ We take advantage of the innovation
dynamics in the automotive industry and
apply our expertise to other areas in the
field of joining technology. We strengthen
our position as the world’s leading sup
plier of engineered joining technology by
focussing on growth markets, such as
the pharmaceutic and biotech industries,
but also aviation and the water industry.”

Sophie Zhang Finance Controller NORMA China, China

NORMA Group
on the Capital Market

NORMA Group share rises by 72 % in 2013 and beats all indices

Higher market capitalisation and trading volume pave the way into the MDA X

Number of private shareholders increased

MONETARY POLICY DECISIONS SHAPE THE TREND ON

NORMA GROUP SHARE

THE CAPITAL MARKETS

CONTINUES UPWARD TREND

International stock markets performed positively in 2013 over the
year as a whole. The important key indices of industrial nations
recorded high profits and even reached new record levels in some
cases. In contrast, interest on classic low-risk investments such
as federal government bonds persisted throughout the year at a
very low level. Even the risk premiums on interest for European
crisis countries fell over the course of the year, thereby signalling
a slow recovery from the debt crisis.

The common currency – the euro – appreciated significantly
against important currencies such as the USD, JPY and GBD. In
exchange, gold as a ‘crisis investment’ lost over 25 per cent in
value over the course of the year and thus fell to its lowest level
in two years.

The monetary policy decisions of industrial nations’ central banks
were the main driver of these developments. The low interest
policy that peaked in November 2013 with the surprising decrease
in the European key interest rate to a record low of 25 basis points
as well as unlimited bond purchases on the part of the US central
bank (FED) boosted international stock markets. A global eco-
nomic recovery and companies’ positive fundamental data also
supported this development. At most, the conflict in the Middle
East and the impending fiscal cliff in the USA only temporarily
curbed capital markets in 2013.

For instance, the indices S&P 500, Eurostoxx 50, Dow Jones and
NIKKEI closed in December 2013 with a strong double-digit per-
centage increase. The leading German index DA X ended the year
with a plus of around 26 per cent at 9,552 points. The MDA X
recorded a gain of around 40 per cent and closed at 16,574 points.

The share of NORMA Group SE also continued its upward trend
in 2013 and rose from EUR 21.00 on 31 December 2012 to EUR
36.085 on 31 December 2013. This corresponds to a year-over-
year price increase of around 72 per cent.

NORMA Group’s market capitalisation exceeded the billion mark
for the first time in July 2013. The NORMA Group share reached
its previous peak value of EUR 39.95 on 11 November 2013. On
31 December 2013, the market capitalisation amounted to EUR
1.15 billion (2012: EUR 669.1 million).

FREE FLOAT OF 100 PERCENT SINCE JANUARY 2013

At the end of 2012, the main shareholders 3i Group plc and funds
managed by 3i held around 5.3 million NORMA Group shares.
This corresponded to a shareholding of 16.7 per cent. At the
beginning of 2013, 3i sold its remaining shares in NORMA Group,
thereby decreasing its shareholding to 0 per cent. Since then,
100 per cent of the shares have been widely held.

SIGNIFICANTLY HIGHER TR ADING VOLUME

At 86,570 shares per day, the NORMA Group share’s average
Xetra trading volume was up significantly over the previous year
(2012: 54,432 shares) in the period from January to December
2013. The value of the average daily Xetra trading volume was
EUR 2.53 million (2012: EUR 1.04 million). Thus, around 98 per
cent of all official trading in Germany took place over the XETRA
in 2013 (2012: 90.3 per cent).

NORMA Group SE Annual Report 201323

NORMA Group SE

MDAX

DAX

SHARE PRICE PERFORMANCE INDE XED TO 100 IN COMPARISON TO THE MDA X AND DA X

in %

Jan

Feb

March

April

May

June

July

Aug

Sep

Oct

Nov

Dec

INSTITUTIONAL INVESTORS

According to the voting rights notifications received in 2013,
shares of NORMA Group designated as free floating are held by
the following institutional investors:

Ameriprise Financial Inc.

Allianz Global Investors Europe GmbH

Mondrian Investment Partners, Ltd.

T. Rowe Price International, Ltd.

Blackrock Group Ltd.

DWS Investment GmbH

BNP Paribas Investment Partners Belgium S.A.

Oddo Asset Management S. A.

9.96 per cent

5.75 per cent

5.34 per cent

3.02 per cent

2.98 per cent

2.84 per cent

As at 31 December 2013. More information regarding the voting rights can be found
on p. 176.

The Management Board and Supervisory Board of NORMA
Group SE hold around 2.5 per cent of the shares.

Trading over alternative platforms also increased considerably
year-on-year. An average of 30,656 million shares per day were
traded on alternative platforms in the past year (2012: 11,627
shares). This corresponds to around 14.6 per cent of all transac-
tions. An average of 90,870 shares per day (2012: 90,401 shares)
exchanged hands through block trades in 2013. This does not
include the roughly 10.5 million shares that were traded as part
of a private placement of the shares of 3i Group plc.

The total average number of daily traded shares was 209,887 in
2013 (2012: 164,329 shares).

NORMA ADMIT TED TO THE MDA X

As a result of the increased trading volume and greater market
capitalisation of the widely held stock, the NORMA Group share
rose from the SDA X to the MDA X in March 2013. The NORMA
Group share ranked 38th in the category of ‘free float market
capitalisation’ in the MDA X in December 2013; it ranked 46th
within the MDA X in trading volume.

In addition to the MDA X, the NORMA Group share is also includ-
ed in the following indices: CDA X, Classic All Share, Prime All
Share, DA Xsector All Industrial, DA X International 100, DA Xsec-
tor Industrial, DA Xsubsector, All Industrial Products & Services,
DA Xsubsector Industrial Products & Services, DA Xsubsector
Industrials, HDA X, MIDCAP MK T PR, MIDCAP MK T TR, Trade-
gate Indikator.

To Our ShareholdersNORMA Group on the Capital Market24

DISTRIBUTION OF TR ADING ACTIVIT Y

SHAREHOLDER STRUCTURE

Excluding the shares that were traded as part of the private placement of
the shares of 3i Group plc in January 2013.

43 %
Block trades

42 %
Official
trading

100 %
Free float

15 % Multilateral trading facilities

International investors increased in significance due to the place-
ment of shares on the part of 3i. In particular investors in the USA
increased their investment in our share. The identifiable share-
holdings of institutional investors can be broken down by region
as follows:

USA: 24 %
Germany: 21 %
United Kingdom: 26 %
Nordic: 10 %
France: 12 %
Rest of the world: 7 %

The number of private investors more than tripled from 623 to
2,149 in the past year. However, private investors only hold 1.53
per cent of all the shares.

SUSTAINABLE INVESTOR REL ATIONS ACTIVITIES

In 2013, we also consistently pursued our goal of increasing the
name recognition of NORMA Group SE around the world and
cementing and augmenting the perception of the NORMA Group
share as an attractive growth value. We supported the strategic
orientation of NORMA Group’s focus, which is directed on sus-
tainable growth and permanently high margins through continu-
ous, open and reliable communication with institutional investors,
private investors and analysts. We intend to further strengthen
trust in our share and achieve a realistic and fair valuation.

In 2013, we held numerous discussions with institutional inves-
tors, financial analysts and private shareholders. We were pres-
ent at 16 capital market conferences and conducted 34 road-
shows in Europe and North America’s important financial centres.
The Management Board personally attended many of these
events and addressed the questions of capital market partici-
pants.

NORMA Group SE Annual Report 201325

8 Buy/

Outperform

FREE FLOAT BY REGION

ANALYST RECOMMENDATIONS

in %

France 12

US 24

21 Germany

Sell 4

10 Nordic

7 Rest of world

26 UK

Hold 6

We presented at the following conferences in 2013:

RESEARCH COVER AGE AT A HIGH LEVEL

Commerzbank German Investment Seminar, New York
Cheuvreux German Corporate Conference, Frankfurt / Main
Deutsche Bank Small & Mid Cap Conference, London
Goldman Sachs European Small & Mid Cap Symposium,
London
Deutsche Bank German, Swiss & Austrian Conference,
Frankfurt / Main
Société Générale Mid Caps Conference, Nice
Exane BNP Paribas German Mid Caps Day, London
UBS Pan European Small & Mid Cap Conference, London
Commerzbank Sector Conference, Frankfurt / Main
HSBC Capital Goods Conference, London
UBS Best of Germany Conference, New York
Berenberg / Goldman Sachs German Corporate Conference,
Munich
Baader Investment Conference, Munich
Exane BNP Paribas, Mid Cap Forum, London
Analyst & Investor Conference, Frankfurt / Main
Berenberg European Conference, London

Those interested in receiving our circular letter for investors
can register in the investor relations area of our website
@ www.normagroup.com. They are informed promptly by e-mail
of de velop ments in the Group and automatically receive our regu-
lar publications. Furthermore, we publish comprehensive infor-
mation on the NORMA Group share on our website. In addition
to financial reports and presentations that can be downloaded,
all important financial market dates and details on how to reach
our contact partners can be found there. The teleconferences
on our quarterly and annual financial statements are recorded
and offered in audio format.

The number of banks and research companies that accompany
NORMA Group rose from 16 to 18 in the past year. We aim to
further increase the number of analysts.

As at 31 December 2013, there are 8 recommendations to ‘buy’,
6 to ‘hold’ and 4 to ‘sell’. The average price target was EUR 35.81
at the end of the year and thus around 60 per cent higher than
on 31 December 2012 (EUR 22.47).

RESEARCH COVERAGE OF NORMA GROUP SHARE

Baader Bank

Bankhaus Metzler

Peter Rothenaicher

Jürgen Pieper

Bank of America Merrill Lynch

Paul R. Hartley, Bernard Donges

Berenberg

Close Brothers Seydler

Commerzbank

Deutsche Bank

DZ Bank

Exane BNP Paribas

Goldman Sachs

Hauck & Aufhäuser

HSBC

Kepler Chevreux

LFG Kronos

Macquarie

MainFirst

NordLB

Warburg Research

Benjamin Gläser

Daniel Kukalj

Ingo-Martin Schachel

Tim Rokossa

Jasko Terzic

Gerhard Orgonas

Will Wyman

Philippe Lorrain

Jörg-Andre Finke

Hans-Joachim Heimbürger

Thomas Aney

Christian Breitsprecher

Tobias Fahrenholz

Frank Schwope

Christian Cohrs

To Our ShareholdersNORMA Group on the Capital Market26

DEVELOPMENT OF NORMA GROUP SHARE SINCE THE IPO IN APRIL 2011

in EUR

2011

2012

2013

2013 ANNUAL GENER AL MEETING

The second Ordinary Annual General Meeting of NORMA Group
AG was held in Frankfurt / Main on 22 May 2013. 11.8 million of
the 31.8 million shares with voting rights, i. e. 37.1 per cent, were
represented at the meeting. The participating shareholders re-
solved a dividend of EUR 0.65 per share. This corresponded to
a distribution rate of 33.5 per cent based on NORMA Group’s
adjusted net profit for the financial year of EUR 61.8 million. All
other items on the agenda were approved with majorities of more
than 98 per cent.

NORMA GROUP RECEIVED NUMEROUS AWARDS

Our 2012 annual report excelled in numerous national and inter-
national competitions and received the following awards

manager magazin
In manager magazin’s ‘Best Annual Report 2013’ ranking, we
placed 7th in overall scoring out of 50 in the MDA X segment.
Thus, we finished directly in the Top 10 of this competitive seg-
ment only a short time after the NORMA Group share was ad-
mitted to the MDA X with the second annual report since our IPO.
Our report took 19th place in the overall comparison of the 160
annual reports examined.

manager magazin’s competition is the most comprehensive
analysis of annual reports in Germany and Europe as well as one
of the largest worldwide. The goal of the competition is to motivate
companies to improve the quality of their annual reports in order
to better serve the interests of the users of the financial state-
ments.

NORMA Group SE Annual Report 201327

KEY FIGURES OF THE NORMA GROUP SHARE SINCE THE IPO

Closing price on 31 December (in EUR)

Highest price (in EUR)

Lowest price (in EUR)

Closing level MDAX as at 31 December 3)

Closing level SDAX as at 31 December 4)

2013

36.085

39.95

21.00

16,574

6,788

2012

21.00

23.10

15.85

11,914

5,249

2011

16.00

21.58

11.41

8,897

4,421

8 April 2011 1)

21.00 2)

n/a

10,539

5,230

Number of unweighted shares as at 31 December

31,862,400

Market capitalisation as at 31 December (in EUR millions)

1,150

669.1

509.8

669.1

Average daily Xetra volume

EUR million

Earnings per share (in EUR)

Adjusted earnings per share (in EUR)

Dividends per share (in EUR)

Dividend yield (in %)

Distribution rate (in %)

Price-earnings ratio

1) IPO and first trading day of the NORMA Group share
2) Issuing price
3) NORMA Group share in the MDAX since 18 March 2013
4) NORMA Group share in the SDAX from 8 June 2011 to 17 March 2013

LACP Vision Award Gold
In addition, we received the ‘L ACP Vision Award Gold’ with 98
out of 100 possible points in the category of ‘Other Industries’ of
the League of American Communication Professionals (L ACP).
More than 6,000 entries from over 24 countries were submitted
during this competition, whereby we prevailed against strong
international competitors and received the maximum number of
points in each of the categories of report cover, letter to share-
holders, report narrative and creativity as well as the trans parency
and accessibility of information.

Annual Report Competition
In the 2013 ‘Annual Report Competition’ (ARC), NORMA Group’s
annual report was awarded a ‘Bronze’ certificate in the category
of ‘Traditional Annual Report: Connection Method’ The ARC
Award is given annually and honours outstanding achievements
with respect to contents and original design. At the same time,
it sets the benchmark for the highest standards of quality for
annual reports.

86,570

54,432

46,393

2.53

1.74

1.95

0.70

1.9

35.9

20.7

1.04

1.78

1.94

0.65

3.1

33.5

11.8

1.45

1.19

1.92

0.60

3.8

33.2

13.4

n/a

GOOD DESIGN Award 2013
The 2012 annual report of NORMA Group SE prevailed against
multiple thousand entries from over 48 countries and is among
the 700 product and graphic designs from over 38 countries
chosen by the jury. The ‘GOOD DESIGN Award’ is presented
every year by the Chicago Athenaeum Museum of Architecture
and Design and European Centre for Architecture Art Design and
Urban Studies for outstanding design excellence.

European Small and Mid-Cap Awards 2013
We also took second place in the ‘European Small and Mid-Cap
Awards 2013’ in the category of ‘most innovative newcomer.’ The
award is a common initiative of the European Commission, the
Federation of European Securities Exchanges (FESE) and the
European Association of Issuers, European Issuers. The goal is
to increase the visibility of small and medium-sized enterprises
on the capital market.

To Our ShareholdersNORMA Group on the Capital Market

IN NOVATIO N

Technology in transition – Effective January 2014, the EURO6
standard now applies for all new heavy commercial vehicles. Start
ing in September 2014, the exhaust emission regulation will also be
mandatory for newly registered diesel and petrol cars. Increasing
government regulation places high demands on vehicle manufacturers
and the complexity of their engines – yet another growth driver for
NORMA Group and its engineered joining technology.

ADRESSABLE CONTENT – EMISSION STANDARDS

Source: NORMA Group

EURO-6

EURO-5

EURO-4

~ 15%

Content per vehicle for emission control
increases with each new emission standard

BREE ZE ® Constant Torque

“ We have been developing innovative, high
performance products for our customers
for over 60 years. Thanks to our long years
of experience and application knowhow,
we are the innovation leader in the area of
joining technology and continue to set
new standards for applications across all
industries.”

Michael Potts Vice President Sales & Application Engineering NORMA Americas, USA

NORMA Group SE
Supervisory Board Report

The Supervisory Board of NORMA Group SE has monitored and
advised on the activities of the Management Board in financial
year 2013 in accordance with the rules of the German Stock
Corporation Act, the German Corporate Governance Code and
NORMA Group SE’s (and previous to that NORMA Group AG’s)
Articles of Association. Until the entry of the transformation in the
commercial register on 4 July 2013, NORMA Group SE traded
as NORMA Group AG with a Supervisory Board comprised of
the same members.

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 SE 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.

In financial year 2013, NORMA Group AG’s Supervisory Board
convened for two regular meetings and NORMA Group SE’s
Board for another two ordinary meetings. Additional Superviso-
ry Board meetings were also conducted as needed via telecon-
ference on short notice.

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
SE were discussed at these meetings and compared to the pre-
vious year’s figures and current targets. At every meeting, the
Management Board provided the Supervisory Board with infor-
mation concerning the order situation as well as their assessment
of the economic outlook, market developments and NORMA
Group’s competitors. At each regular meeting of the Super visory
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 provides
the Supervisory Board with a clear picture of which possible 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
risks that were considered highly relevant and likely to occur. In
addition, the Supervisory Board and Management Board dis-

cussed NORMA Group’s long-term strategic orientation and
current M&A projects. In addition to the regularly recurring topics,
the Supervisory Board also dealt with the following issues in
finan cial year 2013:

TELEPHONIC SUPERVISORY BOARD MEETING OF

NORMA GROUP AG HELD ON 8 FEBRUARY 2013

The members of the Supervisory Board unanimously decided to
recommend Erika Schulte as a candidate for election to NORMA
Group AG’s Supervisory Board. Lars Berg was elected as Vice
Chairman of the Supervisory Board and as a member of the
General and Nomination Committees.

SUPERVISORY BOARD MEETING HELD ON

26 MARCH 2013 IN MAINTAL

The 2012 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 Super-
visory Board with the auditors in attendance from the engaged
auditing firm, PricewaterhouseCoopers AG. This discussion
focused, among other things, on the acquisitions made that year,
corporate restructuring in the APAC region and the internal con-
trol system. The members of the Audit Committee reported on
their in-depth discussion with the auditors on 25 March 2013
regarding various impairment tests and inventory management.
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 Inter-
national Financial Reporting Standards (IFRS). The auditor issued
an unqualified opinion for the 2012 annual financial statements
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
Manage ment Board’s proposal for the appropriation of net profit
and both auditors’ reports were submitted to the Supervisory
Board. The Supervisory Board accepted the auditor’s findings
and had no objections.

NORMA Group SE Annual Report 2013Supervisory Board Report

Dr. Stefan Wolf
Chairman of the Supervisory Board

The Supervisory Board then approved and adopted the annual
financial statements of NORMA Group AG as well as the 2012
consolidated financial statements along with the associated man-
agement reports. The Supervisory Board also approved the
Management Board’s recommendation on the utilisation of un-
appropriated 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. All members of the Supervisory Board approved
the current compliance programme subsequent to the meeting.

The presentation of the current risk management report on the
part of the Management Board involved in particular the dis-
cussion of a legal dispute in the USA. The Management Board
presented various acquisition targets as part of its long-term
strategic orientation project. The Supervisory Board discussed
various acquisition cases and approved the acquisition of the
distribution business of the Polish entity Variant S.A. as well as
the acquisition of capital goods in Brazil.

The Supervisory Board discussed the possibility and general
terms of a promissory note loan to improve NORMA Group’s
finan cing structure and unanimously approved the issue of a
promissory note loan with 5, 7 and 10 year tranches.

The Supervisory Board’s examination of the efficiency of its
activi ties specified in the German Corporate Governance Code
was carried out in the Supervisory Board meeting held on 26
March 2013.

SUPERVISORY BOARD MEETING HELD ON 22 MAY 2013

IN FR ANKFURT/MAIN

The detailed discussion of current business developments in-
cluded in particular the various developments in the various re-
gional segments. The Supervisory Board approved a capital
increase on the part of the subsidiary in Serbia, which currently
represents new production facilities under construction.

The Management Board presented the possible acquisition of
the Australian trading company Guyco under the agenda item
‘Strategic Projects and Acquisitions.’ The Supervisory Board
discussed the determination of the purchase price and potential
integration steps. Directly after the meeting, all members of the
Supervisory Board approved the acquisition.

The Management Board and Supervisory Board discussed the
schedule and general environment for the construction of a pro-
duction plant in Brazil.

Potential deviations in quality on the part of subcontractors,
among other things, were discussed under the topic of risk man-
agement.

SUPERVISORY BOARD MEETING OF NORMA GROUP SE

HELD ON 20 SEPTEMBER 2013 IN MAINTAL

In the first Supervisory Board meeting after the transformation of
NORMA Group AG into an SE (Societas Europaea), the Manage-
ment Board reported in detail on the Group’s business per-
formance in the first eight months of 2013. The subsequent dis-
cussion focused, among other things, on an initiative to improve
machine security introduced following a recent workplace acci-
dent, an initiative to further improve customer satisfaction, current
customer complaints and the ensuing customer claims. The
preliminary results of ongoing tax audits in overseas were pre-
sented and discussed. The influence of a successfully placed
promissory note was presented during the financial reporting.

The Supervisory Board meeting began immediately following
the second annual shareholders’ meeting of NORMA Group AG
with a review of the successfully concluded annual shareholders’
meeting.

The Supervisory Board was informed of the commencement of
an occasion-independent audit by the German Financial Report-
ing Enforcement Panel (Prüfstelle für Rechnungslegung, DPR) of
the annual and quarterly financial statements of NORMA Group
AG / SE.

To Our Shareholders34

The Management Board reported on the business trend in the
APAC region. The Management Board and Supervisory Board
discussed the selection criteria for potential acquisition targets
and various acquisition approaches in Taiwan and the USA. The
Supervisory Board approved the due diligence of various acqui-
sition targets following an in-depth discussion.

The 2014 budget and the medium-term plan for 2015–2018 were
approved unanimously by the Supervisory Board.

The Management Board and Supervisory Board discussed the
current risk reporting, focussing on issues related to ensuring the
capacity for innovation.

The Supervisory Board approved the formation of a lease for the
expansion of the Distribution Center North America (Michigan,
USA) as well as the exercise of a purchase option on the land
and building for the plant and administrative offices in Auburn
Hills (Michigan, USA).

The Management Board informed the Supervisory Board on the
current status of ongoing M&A projects.

The Supervisory Board approved the formation of a lease for the
Russian plant in Togliatti.

The Management Board presented the next steps for further
simplifying the Group’s corporate structure by reducing the
number of intermediate holding companies and introduction of
clear regional structures. The Supervisory Board agreed to this
reorganisation.

The Supervisory Board of NORMA Group SE unanimously con-
firmed the composition of the SE’s Supervisory Board as pre-
viously at NORMA Group AG:

Chairman of the Supervisory Board: Dr. Stefan Wolf
Vice Chairman of the Supervisory Board: Lars Berg
General and Nomination Committee: Dr. Stefan Wolf
(Chairman), Lars Berg, Dr. Christoph Schug
Audit Committee: Dr. Christoph Schug (Chairman),
Lars Berg, Knut Michelberger

The Supervisory Board unanimously approved the revision of the
by-laws of NORMA Group SE’s Supervisory Board as well as the
by-laws of its Management Board in their final versions. These
were necessary due to the transformation of the Company from
a stock corporation into an SE.

SUPERVISORY BOARD MEETING OF NORMA GROUP SE

HELD ON 27 NOVEMBER 2013 IN MAINTAL

The Management Board provided the Supervisory Board with
the 2014 budget as well as the 2015–2018 medium-term plan.
The expected market trend, NORMA Group’s business develop-
ment and key cost items were discussed in detail. This also in-
cluded the influence of the expansion of production as a result
of the construction of new plants currently underway in China
and Brazil as well as the expansion of the new plant in Serbia. In
addition to cost planning, the balance sheet planning and
develop ment of cash flows was discussed in detail. Due to the
changes in the external value of the euro, in particular against the
US dollar, the exchange rates used in the budget process were
adjusted to reflect the expected trend.

The Supervisory Board acknowledged the goal of partially re-
paying the existing financing from funds received from the newly
issued promissory note loan.

Erika Schulte, Dr. Stefan Wolf, Lars Berg, Dr. Günter Hauptmann,
Knut Michelberger and Dr. Christoph Schug participated in all
Supervisory Board meetings.

The General and Nomination Committee convened once in 2013.
The Supervisory Board approved the preparation of contract
documents to dispatch a member of the Management Board as
the President of the APAC region in 2014.

There were no conflicts of interest between the members of the
Supervisory Board and the Company in the 2013 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 2013 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
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 2013 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 convened four times in
the financial year just ended. In addition, it held three detailed
telephone conferences with the auditors concerning the annual

NORMA Group SE Annual Report 2013Supervisory Board Report

The Supervisory Board approved the annual financial statements
of NORMA Group SE and the 2013 consolidated financial state-
ments together with their respective management reports at its
meeting on 26 March 2014. 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 4 March 2013. The Supervisory Board had approved the
current version on 20 February 2014. NORMA Group SE’s dec-
laration 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 SE as well as the
Group companies all around the world for their successful efforts
in the 2013 financial year. These results would not have been
possible without the commitment of all employees. The Super-
visory Board considers the successful year 2013 a source of
motivation for all of the Group’s employees to remain committed
to the course in 2014 and contribute to NORMA Group’s con-
tinued profitable growth.

Dettingen / Erms, 26 March 2014

Dr. Stefan Wolf
Chairman of the Supervisory Board

audit and how it was to be prepared. Knut Michelberger and Dr.
Christoph Schug as the Chairman participated in all meetings of
the Audit Committee. Lars Berg was prevented from participating
in an ordinary meeting on the subject of Supervisory Board re-
porting. CFO Dr. Othmar Belker from the Management Board
at tended the meetings, as did officers of the second management
level to advise on technical issues in their areas of responsibility.
The auditors Dr. Ulrich Störk and Benjamin Hessel from Price-
waterhouseCoopers AG participated in the Supervisory Board
meeting to approve the balance sheet as well as in four Audit
Committee meetings and / or teleconferences. The Audit Com-
mittee accompanied the audit of the annual financial statements
and discussed core controls 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 on the execution and results
of the audit of the SE / stock corporation and consolidated finan-
cial statements as well as individual accounting issues, the Audit
Committee regularly dealt with the risk reporting (including special
individual risks from the area of taxes, litigation, the profitability
of subsidiaries and quality issues), the compliance system and
individual compliance topics, internal auditing, the audit conduct-
ed by DPR, the Treasury and financing with a focus on the issue
of a promissory note loan, the integration of newly acquired com-
panies and the efficiency of Supervisory Board reporting as well
as the detailed analysis of the planning process and budgeting.

In addition to the Audit Committee meetings, the Chairman of
the Audit Committee was in regular personal and telephone con-
tact with the CFO and held a separate meeting with the auditors
and the CFO to discuss possible areas of emphasis for the audit
of the 2013 annual financial statements.

The 2013 annual financial statements for NORMA Group SE 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
14 August 2013.

The consolidated financial statements of NORMA Group SE were
prepared in accordance with section 315a of the German Com-
mercial Code (Handelsgesetzbuch, HGB) on the basis of Inter-
national Financial Reporting Standards (IFRS). The auditor issued
an unqualified opinion for the 2013 annual financial statements
and management report of NORMA Group SE 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 auditors’ reports were submitted to the Supervisory Board.
The Audit Committee and the Supervisory Board in its entirety
thoroughly examined the reports and discussed and scrutinised
them in detail together with the auditor. The Supervisory Board
accepted the auditor’s findings and had no objections.

To Our ShareholdersB R A NDS

Everything is in flow – New industries will open up even more growth
opportunities for NORMA Group. The acquisition of the Davydick
distribution business last year marked an important step toward ex
panding our business activities in Australia and entering the promising
future water market.

GLOBAL DEMAND FOR WATER 2000 –2050 IN KM³

Sources: OECD, NORMA Group

2,049

2,384

790

1,195

1,386

2000

568

236
27

348

2050

+ 53 %

Irrigation

Private households

Livestock breeding

Industry

Power generation

NORMAFLE X ® CVS

“ We offer our customers stateof
theart technology for use in a wide
variety of industrial applications.
Whether it’s pharmaceuticals, the
biotech industry, the water industry,
aviation, or agriculture, our brands
stand for superior quality and the
high performance of our products.”

Jean-Luc Kirmann Director of Application Engineering NORMA EME A, France

Corporate Governance Report
including 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.

Corporate responsibility, p 88.

The following is the Management Board’s declaration of confor-
mity in accordance with Section 289a of the German Commercial
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 WITH THE

GERMAN CORPOR ATE GOVERNANCE CODE

OF THE MANAGEMENT AND SUPERVISORY BOARD

OF NORMA GROUP SE

The Supervisory Board and Management Board thoroughly
exam ined which of the German Corporate Governance Code’s
recommendations and suggestions NORMA Group SE should
follow and explains deviations from the recommendations and
the reasons for deviating from the Code. The current declaration
dated 20 February 2014 as well as the first declaration dated
4 August 2011 and the other declarations dated 9 March 2012
and March 4 2013 are published on NORMA Group’s website
@ www.normagroup.com.

The declaration dated 20 February 2014 is presented below:

With the following exceptions, NORMA Group SE complies with
the recommendations of the German Corporate Governance
Code in the financial year 2014 as amended on May 13, 2013,
published by the Federal Ministry of Justice in the official section
of the Federal Gazette (“Bundesanzeiger”) and will continue to
comply with the recommendations:

i. With respect to the compensation of the members of the
Management Board, the Supervisory Board does not take
into account the compensation of the upper management
or the workforce as a whole (Section 4.2.2 German Cor-
porate Governance Code).

When determining the compensation of the Management
Board, the Supervisory Board, advised by an external expert,
also took into account the compensation structure of the Com-
pany as well as the entire NORMA Group. Due to the NORMA
Group’s dynamic development, the Supervisory Board has so
far not explicitly defined the upper management or the relevant
workforce and, therefore, does not take these groups or their
development over time into account.

ii. The remuneration of the Management Board is not

capped, either in total or in terms of its variable com-
pensation elements (Section 4.2.3 German Corporate
Governance Code)
The maximum gross option profit from the matching stock
programme for the management board is limited in total to a
percentage of the average annual EBITA during the vesting
period; therefore a relative maximum limit that is dependent
on the Company’s success is applied rather than a maximum
monetary amount.

iii. Concrete objectives regarding the composition of the
Super visory Board are not set and, therefore, are not
published in the corporate governance report. There is
no age limit. (Section 5.4.1 German Corporate Gover-
nance Code)
All members of the Supervisory Board will continue to comply
with all pertinent legislation related to Supervisory Board nomi-
nations for new Supervisory Board and take the professional
and personal qualifications of candidates into account, regard-
less of their gender. Thereby they will take the number of inde-
pendent members of the Supervisory Board, potential conflicts
of interest, the international business of the Company and the
diversity of the Supervisory Board into consideration. Because
of this, the Company sees no need to set concrete objectives
in this area or to introduce an age limit.

iv. During the transformation of NORMA Group AG into an SE,
the members of the Supervisory Board were not chosen
in a separate election (Section 5.4.2 German Corporate
Governance Code)
All members of the first Supervisory Board of NORMA Group
SE were elected as part of the transformation pursuant to
Article 40 para. 2 sen 2 SE VO in accordance with the articles

NORMA Group SE Annual Report 2013

Corporate Governance Report

of association to ensure that the resolution on the election of
the members of the Supervisory Board could not be chal-
lenged separately. Otherwise, the risk could not be ruled out
that the Company would have no Supervisory Board or that
the Board would have an insufficient number of members af-
ter the transformation was entered in the commercial register.

The above declaration applies with regard to the recommendation
in Section 4.2.5 para. 3 of the German Corporate Governance
Code as amended on 13 May 2013 provided that this new re-
commen dation will be relevant for the first time for compensation
reports of financial years starting after 31 December 2013.

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 re-
ported, investigated, sanctioned, rectified and prevented in the
future.

We encourage our employees to report violations of regulations
and internal guidelines – skipping the chain of command if neces-
sary – and to recommend measures for improvement. Therefore,
we have set up a whistleblower hotline through which employees
can report compliance violations anonymously, if desired.

2. RELEVANT INFORMATION ABOUT

MANAGEMENT BOARD AND SUPERVISORY BOARD

3. RESPONSIBILITIES AND COOPER ATION OF

CORPOR ATE GOVERNANCE PR ACTICES

Responsibility, honesty and mutual respect among management
and our employees define our corporate culture. We expect our
managers and employees to not only comply with mandatory
laws and regulations, but also ethical rules. Our compliance docu-
ments are our most important resources for demonstrating to
our employees their ethical and legal obligations. The central
compliance documents, the Code of Conduct and the two funda-
mental guidelines “Conflicts of Interest” and “Anti-corruption” are
binding for all employees of NORMA Group. They are adjusted
to reflect changes in legal requirements and current topics as
necessary and regularly updated. We train our staff in in-person
meetings or online trainings on compliance-related issues. In
addition, we analyse our compliance risks as part of internal
compliance risk assessments.

The Supervisory Board monitors the Management Board’s ad-
herence to compliance rules. The Compliance Officer of NORMA
Group SE performs this function for NORMA Group SE’s em-
ployees. In the other Group companies, the Chief Compliance
Officer of NORMA Group Holding GmbH is responsible for the
observance and administration of the above-mentioned Code
for all employees of NORMA Group Holding GmbH and its asso-
ciated companies. Each Group company with business oper-
ations has its own Compliance Officer and the three regional
Compliance Officers for the regions EME A, Americas and Asia-
Pacific report to the Chief Compliance Officer. Among other

NORMA Group SE 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 Supervisory Board appoints, advises and
monitors the Management Board. This model corresponds to
the organisation of a traditional German stock corporation. In this
regard, no changes were made with the transformation of NORMA
Group AG into an SE, which means that responsibilities and func-
tioning of the Supervisory Board and Management Board are
continued unchanged after the transformation.

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 trans-
actions that could have a significant impact on profitability or li-
quidity. The Management Board reports on a monthly basis the
key figures of the Group and the current course of business to
the Supervisory Board, in particular with regard to the published
statements on the expected development of the Company.

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
issues. All members of the Management Board participate in
Supervisory Board meetings unless they are closed to the Man-

To Our Shareholders42

agement Board. The members of the Management Board report
in these meetings on the current business development and
provide 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 mini-
mise identified risks are discussed at all Supervisory Board meet-
ings and each committee chairman reports on the preceding
meetings. In addition, the Management Board and Supervisory
Board discussed 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
development, in particular with respect to the published state-
ments on the expected development of the Company.

In accordance with the by-laws of the Management Board and
NORMA Group SE’s Articles of Association, the Supervisory
Board must approve certain important transactions. This applies
not only for measures at NORMA Group SE, but also for mea-
sures at its subsidiaries. In order to ensure that the Management
Board is promptly informed of corresponding matters involving
subsidiaries so that it can request the approval of the Super visory
Board, a hierarchical system of approval requirements organised
by functional areas, levels of responsibility and countries applies
worldwide at NORMA Group.

ALLOCATION OF RESPONSIBILITIES WITHIN
THE MANAGEMENT BOARD

Werner Deggim

Dr. Othmar Belker

Bernd Kleinhens

John Stephenson

Chairman
Compliance
Personnel
Legal & M&A
Group development
Media relations
Internal audit
Corporate responsibility / sustainability

Chief Financial Officer
Finance
Controlling
Investor Relations
Treasury
IT
Risk management
Insurances

Business development
Sales
Product development
Marketing

COO
Production
Purchasing
Supply chain management
Global Excellence Programme
Quality management

4. MANAGEMENT BOARD AND REGIONAL MANAGEMENT

The Management Board of NORMA Group AG has four members.
When NORMA Group AG was transformed into an SE, all Board
members were reappointed and continued their previous func-
tions unchanged. Werner Deggim is Chairman of the Manage-
ment Board (Chief Executive Officer), Dr. Othmar Belker is Chief
Financial Officer, Bernd Kleinhens is Managing Director Business
Development and John Stephenson is Chief Operating Officer.

Principles of the Group, p 52.

The allocation of responsibilities and internal order of the Man-
agement Board are based on relevant legislation, NORMA Group
SE’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
effort to reach unanimous decisions. If a member of the Man-
agement Board cannot participate in a vote, his vote will be ob-
tained 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 reports
for the purpose of informing the Supervisory Board and the quar-
terly and half-yearly reports, fundamental organisational mea-
sures, including the acquisition or disposal of significant parts of
companies and strategic and business planning issues, measures

NORMA Group SE Annual Report 2013Corporate Governance Report

related to the implementation and supervision of a monitoring
system pursuant to section 91(2) of the German Stock Corpora-
tion Act (Aktiengesetz, AktG), issuing the declaration of con-
formity pursuant to section 161(1) AktG, preparing the consoli-
dated 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 may request that a specific issue
be dealt with by the entire Management Board. Board meetings
are held regularly on the first Monday of the month, with addi-
tional meetings convened as necessary.

Meeting has appointed all members of the Supervisory Board
until the Annual General Meeting which resolves on the formal
approval of the actions of the Supervisory Board members for
the fourth financial year after the commencement of their term of
office (financial year 2013 in which the term of office begins is not
counted in this respect), however no longer than six years. This
is presumably the Annual General Meeting in 2018.

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, one tele-
conference took place in financial year 2013.

Local presidents in the three regions EMEA, Americas and APAC
are responsible for carrying out business on a daily basis. The
entire Management Board of NORMA Group SE meets at least
once a year with the presidents and their managers at the local
headquarters – Singapore for the Asia-Pacific region, Auburn
Hills, Michigan, for the Americas, and Maintal for the EME A re-
gion. In addition, individual members of the Management Board
meet regularly with the local teams. NORMA Group has a matrix
structure in which the leading employees have both a disciplinary
as well as a technical supervisor. Thus, for example, the Vice
Presidents, who are responsible for sales in the three regions,
report to the regional Presidents and the Board Member business
development.

5. SUPERVISORY BOARD

The Supervisory Board of NORMA Group SE has six members:
Dr. Stefan Wolf (Chairman of the Supervisory Board), Lars M.
Berg (Vice Chairman of the Supervisory Board), Dr. Christoph
Schug, Günter Hauptmann, Knut J. Michelberger and Erika
Schulte. Acting on an application filed by the Management Board
in consultation with its Supervisory Board on 18 February 2013,
Mrs Schulte was legally appointed as a new member of the Com-
pany’s Supervisory Board until the time of the next Shareholders’
Meeting. She succeeds Dr. Ulf von Haacke, who resigned from
the Supervisory Board in September 2012 and stepped down
from the Board. Her appointment has been confirmed by the
2013 Annual General Meeting. In the course of the transformation
of NORMA Group AG in NORMA Group SE, the 2013 Annual

The Chairman of the Supervisory Board represents the Super-
visory Board externally. He organises the work of the Super visory
Board and chairs its meetings. The Supervisory Board formed
two committees: the Audit Committee and the General and Nomi-
nation Committee.

The Audit Committee deals in particular with monitoring the
accounting 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 collabo-
ration between NORMA Group SE and the auditors and ensures
that opportunities for improvement identified during the audit are
promptly implemented. It is responsible for preparing the account-
ing documents and adopting the Supervisory Board’s resolution
on the consolidated and separate financial statements. Moreover,
it is responsible for compliance and reviews the compliance 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. Michelberger.
The Chairman of the Audit Committee has special knowledge
and experience in the application of accounting policies and in-
ternal 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 sec-
tion 100(5) AktG.

To Our Shareholders44

As a rule, the Audit Committee convenes immediately prior to
Supervisory Board meetings as well as whenever necessary. It
convened seven times in financial year 2013. In addition to the
monitoring of risk reporting and internal control systems, the Audit
Committee dealt in particular with the examination by the German
Financial Reporting Enforcement Panel, current tax proceedings,
the efficiency of Supervisory Board reporting, the promissory note
and a detailed analysis of planning and budgeting processes.

The responsible employees presented the current status of each
item on the agenda and provided an outlook on pending issues.

The General and Nomination Committee prepares personnel-
related decisions and monitors the Management Board’s com-
pliance with its by-laws. This committee has the following specific
responsibilities: preparing Supervisory Board resolutions regard-
ing the formation, amendment and termination of employment
contracts with members of the Management Board in accor-
dance with the remuneration system approved by the Super visory
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 mem-
bers pursuant to section 88 AktG, granting loans to the persons
specified in section 89 AktG (loans to members of the Manage-
ment 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 proposing
suitable candidates to the Annual General Meeting when there
is a vote on Supervisory Board members. In 2013, the Chairman
of the General and Nomination Committee was Chairman of the
Supervisory Board Dr. Stefan Wolf and the other members Dr.
Christoph Schug and as of 8 February 2013 Lars Berg.

6. ANNUAL GENER AL MEETING

entitled to vote if they are registered in the shareholders’ register
of NORMA Group SE and provide NORMA Group SE 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 SE 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 re-
sults are published there following the Annual General Meeting.

7. SHAREHOLDINGS OF THE MANAGEMENT BOARD

AND SUPERVISORY BOARD

On 31 December 2013, the Management Board and the Super-
visory Board jointly held 796,431 (2.5 %) of the total 31,862,400
shares of NORMA Group SE. Members of the Supervisory Board
held 87,083 (0.3 %) and members of the Management Board
709,348 (2.2 %). No member of the Management Board held
more than 1 % of the shares in NORMA Group SE.

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. Therefore, these acquisitions were never
published as directors’ dealings.

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 SE
shares if the value of these transactions reaches EUR 5,000 with-
in a calendar year.

The shareholders of a Societas Europaea decide on the com-
pany’s important and fundamental matters. Shareholders are

The following transaction was reported in connection with Direc-
tors’ Dealings in 2013:

NORMA Group SE Annual Report 2013Corporate Governance Report

Buyer / seller

Dr. Othmar Belker

Katrin Belker

Dr. Othmar Belker

Katrin Belker

Dr. Othmar Belker

Katrin Belker

Type of
transaction

Date of
transaction

Price per share
in EUR

Number of
shares

Total value
in EUR

Sale

14 / 05 / 2013

13 / 05 / 2013

10 / 05 / 2013

27.9490

27.4564

28.2305

15,000

17,500

19,000

419,235.00

480,487.00

536,379.50

9. STOCK OPTION PL ANS AND EQUIT Y-BASED

INCENTIVE PROGR AMMES

In fiscal year 2013, a Long Term Incentive Programme (LTIP) was
launched for the second management level, which involved the
employees participating in NORMA Group’s success over the
medium term.

Remuneration report, p 107.

Supervisory Board
member

Dr. Stefan Wolf

Lars M. Berg

10. SEATS ON THE MANAGEMENT BOARDS AND

SUPERVISORY BOARD COMMIT TEES OF OTHER

LISTED COMPANIES

In financial year 2013, the members of NORMA Group’s Super-
visory Board sat on the supervisory boards or comparable super-
visory committees of other companies:

Günter Hauptmann

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

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
GIF GmbH, Alsdorf, Germany

Knut J. Michelberger

No seats on other supervisory boards

Dr. Christoph Schug

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
Member of the Board of Directors of
AMEOS Gruppe AG, Zürich, Switzerland

Erika Schulte

No seats on other supervisory boards

To Our Shareholders

PR ESE NCE

The key to success – We address attractive, highgrowth regions
all over the world and plan to continue erasing the last white spots on
the map in the future. Our expertise in the area of joining technology
and innovative solutions are in great demand in many other regions.
By expanding into new end markets we secure ourselves stable,
longterm growth.

WORLD POPUL ATION GROW TH

Sources: United Nations, NORMA Group

2050

9.0 billion

2035

8.6 billion

2011

7.0 billion

~ 30%

NORMA Compression Fittings

“ We are already present with our broad
product portfolio and global sales
network in more than 100 countries.
Through the acquisitions we made
in 2013, we are able to approach new
regional markets, expand our product
offerings and strengthen our market
position, particularly in the AsiaPacific
region.”

Malliga Muniandy Export Manager Chien Jin Plastic, Malaysia

Consolidated Management Report

52 Principles of the Group
52 Business Model
58 Corporate Goals and Strategies
59 Control System and Control Parameters
61 Research and Development

General Economic and Industry-Specific Conditions

64 Economic Report
64
66 Significant Events for Business Development
66
68

Actual Business Development compared to forecast
General Statement by the Management Board on the
Course of Business and Economic Situation

69 Earnings, Assets and Financial Position
76 Segment Reporting
78 Organisational and Process Advantages
80 Purchasing and Supplier Management
82 Marketing
84 Employees
88 Corporate Responsibility (CR)
89 Occupational Health and Safety
90 Environmental Protection and Ecological Management

NORMA Group SE Annual Report 201391 Supplementary Report

General Economic Conditions

92 Forecast Report
92
93 The Future Development of NORMA Group
97

General Statement by the Management Board
on Anticipated Development

T
R
O
P
E
R

T
N
E
M
E
G
A
N
A
M
D
E
T
A
D

L
O
S
N
O
C

97 Risk and Opportunity Report
97 Opportunity and Risk Management System
98

Internal Control and Risk Management System
and their Relation to the Group Accounting Process

100 Opportunity and Risk Portfolio of NORMA Group
105 Assessment of the Overall Profile of Opportunities and

Risks by the Management Board

107 Remuneration Report for the Management

and Supervisory Boards

109 Other Legally Required Disclosures
109 Additional Information Required under the German

Takeover Directive Implementation Act
111 Report on Transactions with Related Parties

Consolidated Management Report

Growth of 5.1% leads to record sales of EUR 635.5 million

Once again high and sustainable margin of 17.7 %

High operating net cash flow of EUR 104 million and decreasing net debt

Further expansion through acquisitions

Principles of the Group

BUSINESS MODEL

NORMA Group is an international market and technology leader
in attractive niche markets for advanced engineered joining tech-
nology. We manufacture and market more than 30,000 high-qual-
ity 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
connections/fluid systems (FLUID).

High customer satisfaction forms the foundation of our continued
business success. We offer our customers many years of exper-
tise, customer-specific system solutions and global availability of
products with reliable quality and delivery. Global megatrends
such as the reduction of emissions, leakages, weight and size,
but also increased modularisation of manufacturing processes,
continue to present challenges to OEM companies when it comes
to developing new products. Here, we proactively support our
customers by offering innovative customised joining products
and solutions as well as our own broad range of established
brand products. Our products account for only a small share of
the costs and prices of the end product, yet are often mission
critical to how they function with respect to quality, performance
and operational reliability.

Compared with financial year 2012, there have been no significant
changes in NORMA Group’s business activities and Group struc-
ture in 2013.

Important products, services, sales markets
and business processes
Our clamp products and solutions are manufactured from un-
alloyed steels or stainless steel and are generally used to join or
seal elastomer hoses.

The connection products include connectors made of unalloyed
steels or stainless steel that are partly equipped with elastomer
or metal seals and are used as the joining and sealing elements
of metal and thermoplastic pipes.

Our fluid products are either single or multiple layer thermo plastic
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 intellectual property portfolio of 867 patents and utility models
in 161 patent families underscores our high power of innovation
and secures us a leading technological position in the global
marketplace.

We offer joining products and product solutions for many different
areas of application. These include equipment and com ponents
for farming, motors, commercial vehicles, and passenger cars
for the aviation industry, construction machines, and household
appliances. Our products can also be found in irrigation systems,
drinking water supply systems and industrial water disposal
systems, but also in the pharmaceutical and bio tech nology
indus tries.

NORMA Group SE Annual Report 201353

SALES BY END MARKETS IN 2013

in %

2012 in brackets

30 (32)
Industrial
suppliers

30 (29)
Distributors

10 (10)
Commercial
vehicle OEMs

30 (29)
Passenger vehicle OEMs

With our 21 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 coun-
tries.
Worldmap. By consistently expanding our local engineer-
ing and production sites, among other places in Russia, Serbia,
Mexico, Brazil, China, India, and Thailand, we improve our cost
position and strengthen our working relationships with local cus-
tomers.

We supply our customers successfully via two different sales
channels:

Engineered Joining Technology (EJT) and
Distribution Services (DS).

In the area of DS, we market a broad range of high-quality, more
standardised brand products for a broad spectrum of applica-
tions via our own sales network as well as sales representatives,
retailers and importers. Our customers are distributors, special-
ised wholesalers, OEM customers in the aftermarket segment
and do-it-yourself stores and small application industries. Our
well-known brands ABA ®, BREE ZE ®, Connectors®, FISH ®,
GEMI ®, NORMA ®, R.G.RAY®, Serflex®, Serratub®, TERRY® and
Torca® exemplify technological know-how, high-quality and reli-
ability. Distinctions are made between many of these products
in trade on the basis of national technical standards. We manage
around 10,000 distributors in more than 100 countries and guar-
antee high-quality service. We generate roughly one-third of our
sales revenue in the area of DS.

This approach that gives us a much better understanding of the
various needs of the market enables us to stand out from our
manufacturing competitors.

Both distribution channels have intersections in the area of pro-
duction and development that enable cost advantages and quali-
ty assurance.

In the area of EJT, we provide industrial OEM customers with
indi vidually developed, customised products and solutions. Once
our engineered joining solutions have been installed in a cus-
tomer’s product, they normally remain part of the final design of
that product. Areas of application include emission controls,
cooling systems, air intake and induction, assistive systems and
infrastructure. The distribution channel EJT is characterised by
development partnerships with our customers that take several
years before manufacturing of the end product even begins. Our
customers are taken care of by both the Group’s development
departments and local developers (resident engineers). Many
new developments are validated on NORMA Group’s test stands.
The area of EJT accounts for approximately 70 percent of NORMA
Group’s sales.

Competitive situation
Due to our heterogeneous structure in the area of Engineered
Joining Technology, none of our competitors are in a comparable
position. We combine know-how from the area of metals with
our product categories clips/clamps (CL AMP) and joining ele-
ments (CONNECT) with our know-how in the area of thermo-
plastic materials through our product category connections/
fluid systems (FLUID). The areas CL AMP and CONNECT include
mainly small to medium-sized manufacturers who only manufac-
ture certain types of products and applications or oper ate main-
ly 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.
Research and De-
velopment, p. 61.

Consolidated Management ReportPrinciples of the Group54

PRODUCT CATEGORY AND END MARKETS

Segment

Main product categories

Distribution channels used

End markets

EMEA

CLAMP,
CONNECT,
FLUID

The Americas

Asia-Pacific

CLAMP,
CONNECT,
FLUID

EJT,
DS

Industrial suppliers,
passenger vehicle OEMs,
distributors,
commercial vehicle OEMs

Brands

ABA®,
Connectors®,
NORMA®,
Serflex®,
Serratub®,
TERRY®

BREEZE®,
R.G. RAY®,
TORCA®

FISH®,
GEMI®,
NORMA®

INTRODUCTION OF EMISSION STANDARDS

Sources: Integer Research, DieselNet, ACEA, 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

JPN ’19

EURO 1

EURO 2

EURO 3

EURO 4

EURO 5

EURO 6

Europe

NAFTA

Japan

Brazil

EURO 1

Russia

EURO 2

EURO 3

EURO 4

EURO 5

EURO 1

EURO 2

EURO 3

EURO 4

EURO 4+

India

China

EURO 1

EURO 2

EURO 3

EURO 4

EURO 5 (big cities)

EURO 6 (big cities)

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2019

NORMA Group SE Annual Report 2013

We consider ourselves to be a supplier of solutions to problems
that provide benefits to customers and therefore stand out from
many of our smaller competitors who focus on selling specific
types of products. We offer product solutions for a wide variety
of technical niches. We also strive to achieve high market pene-
tration within technical applications. We stand out in mass markets
thanks to our branding and high-quality service. For this reason,
we do not set market share goals, but rather seek to occupy
niches in which we are able to create benefits for our customers.

Economic and legal factors of influence
Economic factors
Our products and product solutions are used in different industries
and regions. These are subject to different economic fluctuations
that differ in terms of degree and time of occurrence, but also
have different effects on the demand for our solutions and our
order situation. Due to our comprehensive product portfolio and
our broad customer base, we are well prepared to compensate
for temporary declines in demand.

We track specific early indicators in order to be able to take
probable developments into consideration in our business plan-
ning early on. These include, among others, commodity price
development, our customers’ order behaviour in the area of Dis-
tribution Services, the order book, and the expected develop ment
of production and sales figures for our customer industries.

Due to the high share of long-term development partnerships,
we rely mainly on cost and process optimisation to react to short-
Global Excellence Programme,
term fluctuations in demand.
p. 55.

Exchange rate fluctuations
The effects that exchange rate fluctuations have on our business
must be looked at differently: due to the fact that we mainly
develop, purchase, manufacture and sell regionally to regional
markets, deviations between two non-euro currency regions have
only insignificant effects on our operating results.

Exchange rate fluctuations against the euro as NORMA Group’s
reporting currency influence the valuation of our business in eu-
ros. Due to the fact that we generate roughly a third of our sales
in US dollars, the weakening of the US dollar against the euro in
particular has a negative effect on our results. Another 30 percent
of our business is denominated in other currencies.
Risk and
Opportunity Report, p. 101, notes, p. 138.

Due to the fact that we are operationally active in 16 countries,
changes in personnel costs have different effects in the respec-
tive regions. We employ around 20 percent of all our employees
in Germany. Agreed salary adjustments in Germany therefore
only have an effect on part of our Group results. We achieve in-
creases in productivity, among other things, through our ongoing
cost reduction programme.

Short-term fluctuations in material prices generally have less ef-
fect on our earnings because we set the prices for important
materials in long-term contracts – generally one year – when we
place an order. This pertains to both procurement as well as sales
Purchasing and Supplier Management, p. 81.
to consumers.

We absorb negative developments on the cost side on the one
hand with the help of our Global Excellence Programme which
we launched back in 2009. As part of this program, we optimise
our internal processes in all functional areas, among other things,
and thus increase our profitability. Here, we systematically track
projects on increasing efficiency 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 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.

Legal and tax-related aspects
Due to the international focus of our business and against the
background of our acquisition strategy, various legal and tax-re-
lated regulations are of relevance to us. Among others, these
include product safety and product liability laws, construction,
environmental and employment-related regulations as well as
Risk and Opportunity Report,
foreign trade and patent laws.
p. 105.

The growing degrees of regulation in the area of environmental
law affect our product strategy quite significantly. For example,
we introduced more stringent emission regulations, such as the
EURO-6 Standard, which will be mandatory for all newly regis-
tered heavy goods vehicles starting in January 2014 and all
newly registered diesel and petrol passenger vehicles starting in
September 2014, and this will result in a higher demand for the
joining elements that we manufacture and increase the value of
these elements.

Changes in personnel and material costs
With respect to costs, particularly the development of wages
and salaries has an effect on NORMA Group, as do changes in
material costs.

Legal structure of the Group
NORMA Group was formed in 2006 as a result of the merger of
the German Rasmussen Group and the Swedish ABA Group.
From 2011 up until July 2013, NORMA Group took on the legal

Consolidated Management ReportPrinciples of the Group56

SIMPLIFIED GROUP STRUCTURE

NORMA Group SE

Parent company
under company law

EMEA

Americas

Asia-Pacific

Segments

Engineered Joining Technology (EJT)

Distribution Services (DS)

Way to market

structure of a stock corporation under German law based in
Maintal. The Company was transformed into a European com-
pany (Societas Europaea) in July 2013 based on the decision of
the annual general assembly on 22 May 2013. This transformation
became effective when it was entered into the commercial reg-
ister on 4 July 2013. The European legal structure SE stands for
modern, entrepreneurial Europe and as such reflects our inter-
national and open corporate culture. We will continue to have our
registered office in Maintal, Germany. The dual system consisting
of a Management and a Supervisory Board will also remain in
place. The Supervisory Board is still composed of six members
who are elected by the shareholders. The shareholders of
NORMA Group AG automatically became the shareholders of
NORMA Group SE when the transformation took effect. This has
no effect whatsoever on trading of NORMA Group shares on the
stock market.

NORMA Group holds shares in 44 companies that belong to
NORMA Group either directly or indirectly. In 2013, we acquired
the distribution business of Davydick & Co., Australia, and of
Variant S.A., Poland. The business acquired from Variant S.A. is
currently still being operated as our own subsidiary. In the medi-
um term, we plan to integrate this business into NORMA Polska
Sp. z o.o. Furthermore, we acquired Guyco Pty. Limited in Aus-
tralia in 2013. All of these companies have been fully consoli dated
in the consolidated financial statement.

In 2013, we continued to modify the Group structure to suit our
international business and separated the US business from the
EME A business under company law. This called for us to trans-
fer the shares of NORMA Pennsylvania Inc. that either directly or
indirectly holds all shares in the other American Group companies

from NORMA Group Holding GmbH to the NORMA Group SE
via spin-off in August 2013. The three regions EME A, Asia-Pacif-
ic and the Americas are thus held by their own holding companies
and the legal structure for the most part equates to reporting
Notes, p. 137 and p. 168.
segments in accordance with IFRS.

We plan to simplify the legal structure of the Company in the
Americas region in 2014. For this reason, we would like to lower
the number of US companies. This change will have no effect
on the operational business.

To simplify the holding structures, NORMA Beteiligungs-GmbH,
a German holding company, was also merged with NORMA
Group Holding GmbH in August 2013 with retrospective effect
to 1 January 2013. In the months to come, we are considering
concentrating our warehouses and possibly also our production
sites in Europe to an even greater extent and, as a result, re ducing
the number of companies. Furthermore, we are also considering
measures aimed at reducing the complexity of our holding struc-
ture under company law, particularly by eliminating intermediate
holdings.

In order to build up our plant in Atibaia, Brazil, we bought assets
of Click Automotiva Industrial Ltda. in September 2013, which
represent a portion of the production. The plant is now inte grated
into the organisational structure of the Americas region. In terms
of corporate law, it now belongs to our Brazilian subsidiary that
has been acting as a development and sales site.

By reducing the complexity of our structures, we avoid repeat
overhead costs while maintaining our focus on remaining close
to our customers in the marketplace.

NORMA Group SE Annual Report 201357

NORMA GROUP

A list of all Group companies and NORMA Group’s shareholdings as at 31 December 2013 can be found on page 137.

NORMA Group SE

NORMA Group Holding

NORMA Pennsylvania (USA)

NORMA Group APAC Holding

NORMA
Michigan (USA)

Craig Ass.
(USA)

R.G.Ray
(USA)

NORMA
Singapore

NORMA
Australia

Guyco
(Australia)

NORMA
Malaysia

NORMA
Thailand

NORMA EJT
(Changzhou)

NORMA Group
Mexico

Chien Jin Plastic
(Malaysia)

NORMA
Brazil

NORMA
Korea

NORMA
Japan

NORMA
India

NORMA
Germany

Groen BV
(Netherlands)

NORMA
Netherlands

NORMA
Italy

Nordic
Metalblok (Italy)

NORMA
France

NORMA
Sweden

NORMA
Serbia

NORMA
Poland

NORMA
Czech

NORMA
Turkey

NORMA
Spain

NORMA
UK

Connectors
Verbindungs-
technik AG (CH)

NORMA
Russia

NORMA
China 1)

1) NORMA China is categorised in the APAC segment.

In terms of company law, it belongs to NORMA Group Holding.

Consolidated Management ReportPrinciples of the Group58

NORMA Group SE, the parent company of NORMA Group,
serves as the formal legal holding of the Group. NORMA Group
SE is responsible for the strategic management of business activi-
ties. As the lead company in the Group, it is also responsible for
communication with the Company’s important target audiences,
particularly the capital market and shareholders. The operating
companies are managed by their own management that is mea-
sured based on agreed target requirements. The operational
coordination of duties is taken care of by regional management
that also ensures that we remain close to our regional customer
markets. Specific objectives are defined at the Group-wide, re-
gional and operational level and reviewed constantly. Group-wide
functional management responsibilities such as Group Account-
ing, IT, Internal Audit, and Treasury, are all based at the subsidi-
ary NORMA Group Holding GmbH. This is how we ensure that
subsidiaries are able to concentrate solely on everyday business.

Operative segmentation by regions
Our planning is based, among other things, on regional growth
targets. The Group business is managed by the three regional
segments EMEA (Europe, Middle East, Africa), the Americas and
Asia-Pacific (APAC) in order to be able to execute our successful
growth strategy. All three regions have networked regional and
cross-company organisations with different functions. The inter-
nal Group reporting and control system that our Management
uses is also therefore quite regional in nature.

Corporate Governance Statement
The statement of corporate governance pursuant to section 289a
HGB is included in the Corporate Governance Report and is also
part of the Management Report. This also includes a description
of the procedures of the Management Board and the Super visory
Board, the Declaration of Conformity pursuant to Section 161
AktG, and relevant information on corporate governance prac-
tices.

Corporate Governance Report, p. 40.

CORPOR ATE GOALS AND STR ATEGIES

Our strategic goal in both sales areas and all regions is to extend
our business activities in the long term. By offering innovative
products and high-quality service to the trade, we hope to achieve
growth in sales that exceeds the market average. Furthermore,
we also focus closely on high profitability and stable cash flows.
Compared to the previous year, there were no significant changes
in our objectives and strategies.

Forecast Report, p. 92.

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 constantly change. This is driven by techno-
logical megatrends on the one hand, for instance higher engine
efficiency as a reaction to more stringent emission regulations,
weight reduction and modularisation of production processes.
On the other hand, global megatrends such as increased en-
vironmental 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 pro-
duct 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
up to 15 per cent annually from 2010 through 2015 depending
on the core industry and technical application. We intend to capi-
talise on these growth opportunities by focussing on innovative
solutions for mission-critical connections that add value and thus
assist our customers in reducing emissions, leakages, weight,
Research and Development, p. 61.
space and installation time.

Unique position and synergies thanks to an unrivalled,
customer-oriented sales strategy
Our two separate ways to the market are designed to meet the
unique needs of the respective customers. We benefit from vari ous
synergies thanks to this special combination of comprehensive
expertise and skills in developing customised solution approach-
es for industrial customers (EJT) and offering high-quality standard
brand products and solutions via global distributors (DS). 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 prod-
ucts 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 potential.
We intend to offer our existing customers solutions for these types
of applications that do not yet include our joining solutions. We
rely here on product innovations that result in higher product
performances and quality. By doing so, we will increase the num-
ber of products used per customer end product and encourage
the implementation of our existing products. We see growth
oppor tunities 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 manu facturing

NORMA Group SE Annual Report 201359

and sales presence that we have established in these markets
in recent years. The main focus in the emerging countries is on
the BRIC nations (Brazil, Russia, India, and China). Based on our
past activities in India and China in recent years, among other
things establishing additional production capacities, we will con-
tinue to strengthen our sites in Asia and South America even
further.

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. By
engaging in strategic knowledge transfer to new fast-growing
industries, we open up new end markets for ourselves and make
effective use of growth potentials. These include, among other
areas, the construction industry, the flue gas system aftermarket
segment, and the area of infrastructure. We also succeeded in
entering the drainage end market. Our products are also used
here, in drainage systems at the Munich Airport since last year,
for example. The successful acquisition of Connectors Ver-
bindungs technik AG in 2012 and the related entry into the pharma-
ceuticals market is yet another example of our efforts to enter
into new markets.

By expanding in new markets, we achieve greater diversification
and thus strengthen our defensive earnings profile with respect
to end market presence. Furthermore, we continuously strength-
en our power of innovation, whereby Research and Development
(R&D) plays an important role here. Due to the fact that setting
up local engineering capacities will help to lower our personnel
costs for development work in the medium-term, we invest
Re-
around 4 per cent of EJT sales in R&D activities each year.
search and Development, p. 61. We focus here on strengthening
and extending the respective success parameters of our well-
known brands. By systematically expanding our sales network,
we strive to establish a global presence, increase the earnings
share with our existing customers and gain new customers.

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.

Selected 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
closely. We set strict criteria in identifying and evaluating acqui-
sition possibilities.

We have a solid track record with respect to the acquisition and
integration of companies that create added value. In 2012 and
2013, we acquired seven companies and successfully integrated
them into NORMA Group.
Economic Report, p. 64. Future
acquisitions will continue to strengthen the regional presence of
the Group, complement its product portfolio, improve access to
customers and allow for synergies to be realised. We are well-po-
sitioned 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 mea-
sures. These include cost discipline, continuous improvement of
processes in all functions and regions and successful supply
chain management.

After we significantly optimised our manufacturing structure in
Europe back in 2010, we finished expanding production capac-
ities for special clamps in England and China in 2013. Further-
more, we have continually been able to generate significant cost
savings with our “Global Excellence Programme” that we intro-
duced in 2009. The improvement initiatives we identified and
introduced as part of this programme will enable us to realise
even greater cost advantages by maximising flexibility in the
future.

CONTROL SYSTEM AND CONTROL PAR AMETERS

Group management relies on both financial and non-financial
control parameters to manage NORMA Group.

Important financial control parameters
The most important financial performance indicators include
sales, profitability (EBITA margin) and net operating cash flow.

In addition, we concentrate on committing our investment rate ,
the development of the working capital (inventories and trade
receivables less trade liabilities) as well as the liquidity and the
capital structure (
Financial Management, p. 60) taking into ac-
count risks from interest, foreign currencies and the costs of
materials.

Risk and Opportunity Report, p. 97.

We strive to achieve short and medium term growth in sales that
exceeds the market average. Due to the heterogeneous industries
that use joining technologies, we define the expected market
development based on quantitative and external market analyses.

Consolidated Management ReportPrinciples of the Group60

NET OPERATING CASH FLOW

In EUR millions

EBITDA1)

Change in working capital

Investments from the operational business

Net operating cash flow

1) 2010 and 2011 adjusted mainly to account for the costs of the IPO

2013

129.3

5.1

– 30.5

103.9

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

High profitability is one of the main target and measurement
para meters for our Group management. We calculate a target
EBITDA margin and a target EBITA margin based on the histor-
ic performance and planning of our business divisions. We de-
termine the target margin for the Group as the weighted average
of the divisions and adjust the amortisation effects from the
purchase price allocation of acquired companies.

Operating net cash flow is yet another target figure. By focusing
on this financial figure, we also ensure that the financial solidity
of the Group is maintained in the future. We calculate our oper-
ating net cash flow based on the EBITDA plus changes in work-
ing capital, minus investments from the operational business.

Economic Report, p. 64.

All financial control parameters are planned and continuously mon-
itored at the Group, regional and Group company levels. We mea-
sure deviations between forecasted targets and what we actually
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 include various
scenarios on the basis of existing monthly and quarterly results.

serves to manage our development strategy. The extent of our
market penetration is reflected in our organic growth in the me-
dium term. Our goal is to register new products and innovations
for patents each year.

Problem solving behaviour has an impact on the number of cus-
tomer complaints, which we measure with the help of key per-
formance indicators. These so-called KPIs include, among other
things, defective products measured in ‘parts per million’ (PPM),
or the number of customer inquiries for each product unit. We
track this information on a monthly basis.
Organisational and
Process Advantages, p. 78.

We consider it to be our main responsibility to bring the effects
of our business activity into balance with the expectations and
needs of society. For this reason, we base our operational deci-
sions on the principles of responsible company management and
sustainable actions. Our long-term development is influenced by
our Corporate Responsibility (CR) policies.
Corporate Respon-
sibility, p. 88.

More information on non-financial performance indicators can
be found from page 78 onwards.

Important non-financial control parameters
Among others, non-financial control parameters include market
penetration, power of innovation, problem-solving behaviour and
the sustainable overall development of NORMA Group.

Financial management
Our basic goals with respect to the central financial and liquidity
management system are the same as last year:

We quantitatively measure market penetration and innovative
capability by producing both application-oriented and seg-
ment-specific multiple year planning for the medium term that is
reviewed in great detail every six months. This planning mainly

I. Ensuring solvency at all times
Our main financial objectives are maintaining the necessary
liquidity for the Group’s operating business at all times, main-
taining sufficient strategic liquidity reserves and thus ensuring
NORMA Group’s long-term solvency.

NORMA Group SE Annual Report 2013

R&D EMPLOYEES BY DEPARTMENT

in %

2012 in brackets

30 (32)
Process
development

44 (44)
Application
development

Product development 26 (24)

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 GmbH is responsible for investing surplus
liquidity as well as for intra-Group financing.

Last year, we also extended the possibilities of internal financing
by engaging in various projects in the Treasury area. Here, we
pursue the objective of placing Group-wide financing on a broad
and well-balanced foundation and thus further optimising the
Group’s cash flow which is already quite strong.

The main components of our policy on limiting financial risks in-
clude a clear definition of process responsibility, multilevel approv-
al processes, and risk assessments, which we have adopted in
a Treasury policy. The new EMIR (European Market Infrastructure
Regulation) requirements have already been addressed as well.

Liquidity management
Our goal is to bundle surplus liquidity of Group companies and
allocate this money optimally in the Group or invest it optimally
outside the Group. 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 makes little sense 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 account.

RESEARCH AND DEVELOPMENT

Innovation as a growth driver
Our customers must continually cope with new challenges with
respect to their product development. On the one hand, new legis-
lation constantly leads to ever stricter regulations, especially in the
field of pollutant emissions, and on the other, mounting safety
requirements are always increasing due to increasingly smaller
installation spaces. Intensive research activities and the develop-
ment of new products and solutions are thus indispensable. For
this reason, we have built up a comprehensive fundamental Re-
search and Development department in recent years. Our prod-
uct development focusses on innovation opportunities that arise
from global megatrends and are of great benefit to our end cus-
tomers.
By offering our customers technical solutions that help them to
cope with the specific challenges of reducing emissions, leakage,
weight, space requirements and assembly time, we are increas-
ing our own profitability as well as our technological and eco-
nomic success. In return, we enable our customers to achieve
process-optimised and more efficient production.

There have been no major changes to our overall R&D strategy
or how the R&D department is organised compared to previous
financial years.

As at 31 December 2013, 205 employees (2012: 190) worldwide
worked for our R&D department. This represents approximately
5.0% of all permanent employees of the Group. Approximately
44% (2012: 44%) work in application development, 26% (2012:
24%) in product development and 30% (2012: 32%) in process
development. Our R&D personnel mainly consists of engineers,
technicians and technical draftsmen.

Consolidated Management ReportPrinciples of the Group62

Know-how protected by patents
Our know-how in the area of engineered joining technology rep-
resents a key success factor for our Group. We therefore use
patents to protect our innovations. As at 31 December 2013, we
held 867 patents and utility models in 161 patent families. In 2013,
we filed 68 new patent applications (2012: 77) in more than 16
patent families (2012: 20 patent families). Licensing revenue plays
a subordinate role since we use most of our licenses and rights
ourselves for competitive reasons.

The carrying amount of our patents and technologies as at 31
Notes,
December 2013 amounted to a total of EUR 14.3 million.
p. 149.

R&D expenses
Our research and development expenses in EJT totalled EUR
21.9 million in 2013 (2012: EUR 22.1 million). This represents
approximately 4.9 percent of sales in this area.

External expenses in the Research and Development department
came to EUR 2.5 million in 2013 (2012: EUR 3.2 million). This
includes primarily external audit costs. Audits that cannot be
performed internally in an economical manner must be secured
externally in order to meet the required audit extent in a flexible
and economical manner, besides general framework agreements
with experimental service providers.

The main investment focus in the area of Research and Devel-
opment was the second SCR (Selective Catalytic Reduction)
testing facility at our headquarters in Maintal. This unique testing
facility allows us to process initiated and planned projects with
SCR systems in the coming years in a timely manner. Further-
more, the testing sites in China and the United States were also
strengthened.

conditions. Our competence centres in the USA, China, India
and Europe focus on clearly defined innovation tasks aimed at
developing solutions for various products and product groups in
the different customer groups and adjusting them to account for
regional characteristics.

On the one hand, we successfully develop high-performance
joining technologies together with our customers in order to de-
velop new applications that allow for existing products to be used.
On the other hand, we meet new market challenges head on and
implement them seamlessly in new products. This process in-
cludes the validation of new products, but also the development
of new materials, product testing and the definition of internal
product and test specifications that confirm the reliability of our
products.

Due to our close proximity to our customers, we also increase
the speed with which we can market product innovations, achieve
a high level of customer-specific adaptation and differentiate our-
selves from direct competitors who mainly operate locally.
Further more, we offer our customers tailor-made products for
current applications, while simultaneously setting future trends
in the area of joining technology. These solutions offer our cus-
tomers an innovative edge and thus increased competitiveness.

At our cutting-edge testing laboratory, we are able 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 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. Our cus-
tomers can trust the joining integrity of our products after instal-
lation due to this safety concept that accompanies a product

We received no public funding support for Research and Develop-
ment in 2013 (2012: EUR 55,000).

R&D KEY FIGURES

Strategic collaboration with customers
and research institutes
Our product development and application development in the
area of Engineered Joining Technology (EJT) is set up as a
two-pillar process. Therefore, we have created a standardised
innovation process which allows us to utilise our resources at a
global level with a sharp focus on growth and profitable markets.

We create new basic products in the entire area of EJT in prod-
uct development in close cooperation with our customers. Our
application developers modify our existing and newly developed
products based on our customers’ specific requirements or local

Number of R&D employees

R&D employee ratio with
respect to permanent staff
in %

R&D expenses in the area of
EJT in EUR millions

R&D ratio (with respect to
EJT sales) in %

External R&D expenses
(excluding personnel costs)
in EUR millions

R&D subsidies received
in EUR thousands

2013

205

2012

190

2011

174

5.0

21.9

4.9

2.5

5.1

22.1

16.8

5.1

3.2

4.1

3.0

NORMA Group SE Annual Report 2013

IMPORTANT PRODUCTS INTRODUCED IN THE LAST YEARS

Product

Application

NORMACLAMP® TORRO Tamper Proof

Tank, air induction and cooling systems

NORMAFLEX® Low Emission Tubes

Fuel systems

NORMAQUICK® TWIST III

Charge air and cooling water systems

NORMACONNECT® V PP profile clamp

Flanged pipes, exhaust gas, cooling
and filter systems

Industry

Agriculture, automotive
industry, shipbuilding,
construction industry

Automotive industry

Agriculture, automotive
industry, shipbuilding,
construction industry

Red Grip

Electrical, hydraulics, air ducts, drainages

Aviation industry

Thermoplastic material for high temperature
applications in cooling systems

Cooling systems

SCR Urea Generation II lines

Dosing lines for SCR systems

Pre-positioning of hose clamps

Mainly for charge air connections
and other connections with large diameters

Automatic venting of closed fluid circuits

Cooling water systems in various vehicles,
electric vehicles in particular

Broadband coupling for exhaust aftertreatment

Exhaust gas systems

Agriculture,
automotive industry,
construction industry

Automotive industry

Year

2012

2011

from development to the production stage. We achieve both
thanks to the committed and close cooperation of all functional
areas of NORMA Group, starting with our sales employees and
engineers, but also process development, IT and other areas
such as purchasing.

Developments in 2013 and newly introduced products
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, minimisation of leaks and assembly opti-
misation and safety:

We also work closely with research and higher education insti-
tutions such as material and other testing institutes. However, for
competitive reasons, we do not publish the specific nature of
these research partnerships.

The Distribution Services division is purely a commercial unit; the
market does not require the same type of technological research
as is conducted in the EJT unit. Moreover, our customers in this
sales segment expect a strong brand image and the most com-
plete product range possible with the corresponding marketing
measures. Therefore, we continuously drive development in this
unit by making useful additions to the product range.

Redesign of the Push&Seal NORMAQUICK PS3 quick connec-
tor for cooling water systems in passenger cars. With the new
design, we have reduced the overall weight by up to 40 percent.
The connector is now even more compact, which means it can
be used more easily in narrow spaces.

We developed a diesel tank filling system for quicker and safe
refuelling of combines and large tractors in cooperation with
CL A AS KGaA mbH, a globally leading manufacturer of agri-
cultural machinery.

Optimisation of the ABA Mini W1 clamp for thin-walled hoses
with small diameters for use in fuel, pneumatic and water hoses.
Offers higher corrosion resistance and easier mounting.

Sale contribution of newly introduced product numbers in 2013
amounted to EUR 51.9 million of total sales. This corresponds to
an 8.1 % share of total sales.

Consolidated Management ReportPrinciples of the Group

Economic Report

GENER AL ECONOMIC AND

INDUSTRY-SPECIFIC CONDITIONS

The global economy remains weak –
industrial nations stronger
Following the massive slump at the end of 2012, the global econ-
omy developed weakly at the start of 2013 under these condi-
tions. No significant recovery took place until the fall, before
prospects brightened up tangibly at the end of the year. Never-
theless, economic momentum failed to meet initial expectations
due to the weak first half of the year. According to current calcu-
lations from the IMF (International Monetary Fund), global indus-
trial output grew at a rate of only 3% in 2013 and thus slower than
it had the two years before. Positive impulses mainly came from
the traditional industrial nations at the end of 2013.

According to IMF estimates, gross domestic product (GDP) in-
creased by only 1.9 % in the US and thus more slowly than had
been expected and more moderately than the year before (2012:
+ 2.8 %). Nevertheless, the US economy gained momentum at the
end of the year. Furthermore, the euro zone managed to overcome
the recession in the spring, but only with hesitant buoyant force.
Growth momentum picked up slightly in Japan and tangibly in the
United Kingdom in 2013. The IMF estimates that the established
economies altogether will grow only moderately by 1.3 % (2012:
1.4 %) again in 2013. Key emerging nations suffered from this lack
of momentum and their own structural and financing problems.
Furthermore, the Chinese economy appears to be growing at a
slower pace. Chinese GDP rose by another 7.7 %, but only due
to a strong last quarter. In the Southeast Asian countries
(ASEAN-5), growth slipped from 6.2 % the previous year to 5 %.
Faced with pressure from declining oil and gas revenues, Russia
achieved growth of only 1.5 % (2012: 3.4 %). Brazil and India on
the other hand grew faster than the previous year. According to
information from the IMF, growth of the GDP in the developing
and emerging nations dropped to 4.7 % in 2013 (2012: 4.9 %).

Euro zone leaves recession –
Trend reversal but without momentum
Following the slump at the beginning of 2013, the economy in
Europe gradually managed to relieve itself from the burden of the
public debt crisis. Although the reforms and efforts aimed at
consolidating the public budget in the peripheral countries damp-
ened the recovery, these measures started having a positive
structural effect. After six quarters in a row of declining eco nomic
output, the euro zone overcame the recession in the spring. The
driving forces remained weak, however. Compared to the previ-
ous year, the growth rate remained negative. According to infor-
mation from the IMF, the GDP in the euro zone declined by yet
another 0.4 % (2012: – 0.7 %). Considering the not yet sustainable
weak economy and declining inflation rate, the European Central
Bank lowered the prime rate in two steps to the historically low
level of 0.25 %. The economies in the various countries of Europe
developed quite heterogeneously on the other hand. Economic
output continued to decline in Portugal, Spain, Italy, Greece, and
the Netherlands. France’s economy essentially stagnated (+ 0.2 %).
Germany experienced minimal growth. Bolstered by the recovery
of the real estate market and increases in wages, the United
Kingdom experienced higher growth of 1.7 %.

The weak economic situation that Europe finds itself in without
a sustainable recovery over the course of the year was also re-
flected in the unemployment figures for the euro zone that have
remained at a record level since April 2013. According to the
Statistics Office of the European Union (Eurostat), 26.2 million
people, 19 million of whom live in the euro zone, were unemployed
in December. The weak domestic economy was also character-
ised by a reluctance to invest and negative industrial production
on into the late summer. On the other hand, the Eurostat statistics
have been reflecting a gradual positive development since Sep-
tember. Following only moderately improved data, industrial pro-
duction increased in November at an annual rate of 3.0 % in both
the EU and the euro zone. For the euro zone, capacity utilisation
improved in the 4th quarter to 79.3 % (end of 2012: 77.6 %). Ca-
pacity utilisation in Germany increased from 81 % at the end of
2012 to 83.7 % in the last quarter of 2013.

GDP GROWTH RATES

In %

World

USA

China

Euro zone

Germany 1)

Sources: IMF, 1) Deutsche Bundesbank

2011

+ 3.9

+ 1.8

+ 9.3

+ 1.5

+ 3.3

2012

+ 3.1

+ 2.8

+ 7.7

– 0.7

+ 0.7

2013

+ 3.0

+ 1.9

+ 7.7

– 0.4

+ 0.4

Germany’s economy recovers gradually,
optimism at the end of the year
At just 0.4 %, GDP growth in Germany in 2013 was weaker (Deut-
sche Bundesbank) than in the previous years that were affected
by the euro crisis. The reasons were lower exports, repeated
weaker investments in equipment, and cuts in spending in the
area of commercial and public construction. Due to the lower
interest rates, the high employment level and good income situ-
ation, the domestic economy was again supported by a rise in
residential construction and robust private consumption. 2013

NORMA Group SE Annual Report 2013

Economic Report

got off to a weak start due to the extremely cold and long winter.
GDP stagnated at the level of the weak previous quarter. Com-
pared to the previous year, economic output even declined by
1.6 %. The compensation effects in spring were followed by a
blow from disappointing foreign trade. The driving forces took
effect, but only slowly. Industrial capacity utilisation improved as
industrial production recovered starting at the middle of the year.
This triggered a recovery in investments in equipment. Both the
economic situation and expectations brightened up at the end
of 2013. Important early indicators like the Ifo Business Climate
Index and the ZEW Index improved noticeably and signalised a
robust recovery in the months to come at the end of 2013 / be-
ginning of 2014.

Global mechanical engineering lacks momentum,
decline in manufacturing in Germany
According to the estimates of the industrial association VDMA,
mechanical engineering grew slightly on a global basis. Sales
rose by 1 % in real terms. This can be attributed to the two large
countries of China (+ 5 %) and the USA (+ 1 %). Japanese and
Italian manufacturers recorded drops in sales of 2 % and 4 %
respectively. German mechanical engineering sales stagnated
at EUR 207 billion. Production declined by 1 % in real terms. Due
to the weak start of the year, expectations of weak growth in 2013
were not met. Reluctance to invest in Western Europe and Ger-
many in particular weakened the industrial economy. European
business stagnated, while exports to Asia, in particular, declined
(through October 2013: a nominal – 4.5 %) and Latin America
(– 3.2 %). 4.2 % fewer machines were exported to China during
this period, and 0.7 % fewer to the USA.

Orders for the German mechanical and industrial engineering
industry also reflected the weak global economy in 2013. The
recovery of incoming orders from abroad did not continue in 2013.
The trend was clearly negative here during the reporting year. At
the beginning of the year, domestic orders in particular slumped,
yet managed to recover over the course of the year. Impulses
came from industrial manufacturing, which gained momentum,
and the improved economic prospects. For the year 2013 as a
whole, incoming orders, domestic orders and orders from abroad
each came in 2 % behind last year’s level.

Car industry continues to grow –
Western Europe gained ground
The global automotive market also continued to grow in 2013.
According to information from the German industry association
VDA and the market research institute IHS Automotive (Polk),
new registrations (passenger cars, light trucks) increased by
about 5 % worldwide. The two major markets USA and China

accounted for almost all of this growth. The number of new regis-
trations in the USA rose by 7.5 %, while the Chinese market grew
by 23.1 % (VDA). The Japanese market stagnated. Due to the
weak economy, important emerging nations experienced a de-
cline in passenger car sales. According to VDA information, for
example, the market volumes in Brazil declined by 1.5 %, in India
by 7.5 %, and in Russia by 5.5 %.

The Western European passenger car market stabilised in the
second half of the year after several years of declines. A recovery
set in at the end of the year. According to information from the
European umbrella organisation ACE A, new registrations in the
euro zone declined by 1.8 % and in Western Europe by a total of
1.9 % to 11.55 million cars in 2013 overall. With respect to the
high-volume markets, France (– 5.7 %) and Italy (– 7.1 %) experi-
enced the highest declines. Spain (+ 3.3 %) and Portugal (+ 11.1 %)
on the other hand experienced growth once again. Due to the
strong domestic economy, the market in the United Kingdom
experienced strong growth of 10.8 %. New car registrations in
Germany dropped by 4.2 %. German manufacturers nevertheless
benefited from the international markets, especially from growth
in the USA and China. Therefore, according to estimates from
the VDA, exports and domestic production each rose by 1 %.
Manufacturing at foreign sites even rose by 6 %.

The European commercial vehicle market stabilised in 2013.
Accord ing to the ACE A’s figures, registrations of cars and buses
in Western Europe rose by 1.2 % and in the euro zone by 0.4 %
for the year as a whole. The Italian market continued its decline
(– 11.7 %). New registrations declined only slightly in France
(– 3.7 %) and Germany (– 2.0 %). The United Kingdom, Spain and
Portugal all showed strong growth. In 2013, registrations of heavy
vehicles (over 16 tons), a market dominated by German commer-
cial vehicle manufacturers, rose sharply by 6.8 % in the euro zone
and 8.6 % in the EU. The truck segment up to 3.5 tons dropped
slightly, while registration figures for buses rose moderately.

European construction declines,
strong residential construction in Germany
The construction industry in Europe shrunk again in 2013, how-
ever the trends differed in the various countries. The industry
network Euroconstruct and the Ifo Institute estimated the decline
in construction in Western Europe to be nearly 3 % in real terms.
Here, investment in new homes fell to the lowest level in 20 years.
Italy and Portugal had to absorb severe blows. Furthermore,
construction activity in the Netherlands also shrank. The con-
struction industry in France experienced moderate losses. The
markets in Spain and Ireland, on the other hand, recovered. The
construction industry in the United Kingdom experienced gains
over the course of the year.

Consolidated Management Report66

The construction industry in Germany suffered from a long, cold
winter. According to Eurostat, construction output started to re-
cover in July, yet still failed to compensate for the declines despite
a solid order situation. According to estimates from the IfW in
Kiel, construction spending dropped by 0.3 % in real terms in
2013. This was caused by losses in the area of commercial con-
struction (– 3.2 %) and public construction (– 1.1 %). Residential
construction, on the other hand, developed positively once again.
The number of building permits rose sharply. Despite the losses
caused by adverse weather conditions and high capacity utilisa-
tion, investment in residential construction increased by 1.3 % in
real terms (IfW, Deutsche Bundesbank). According to information
from the German Statistics Office, orders for the main construc-
tion trade rose by 1.2 % in real terms and total sales by 1.9 %
through November. The two major industry associations ZDB
and HDB estimate that the main German construction trade’s
sales rose by 2.5 % to EUR 95.3 billion in 2013.

SIGNIFICANT EVENTS FOR BUSINESS DEVELOPMENT

Acquisition of the distribution business of
Davydick & Co. Pty Ltd., Australia
In January 2013, we acquired the distribution business of Davydick
& Co. Pty Limited (“Davydick”) in Goulburn, Australia, and added
it to the group of consolidated companies of NORMA Group. Davy-
dick has been marketing various elements for use in transporting
water in irrigation systems for more than 20 years. The company
supplies more than 700 customers in Australia with joining prod-
ucts for irrigation systems and valves and pumps under the name
PUMPMASTER, particularly in the field of agriculture, sanitary prod-
ucts and home supplies. The company recorded sales of around
EUR 4 million in 2012. For us, this acquisition represents a major
step toward expanding our business activities in the area of water
management. We thus improve our infrastructure product range
and our sales network, particularly in the areas of agriculture and
irrigation in the Asia-Pacific region.

cial year 2012. With this acquisition, we are strengthening our
market position in the Eastern European region and expanding
our business activities in the area of cable connectors.

Acquisition of Guyco Pty Ltd., Australia
In June 2013, we signed a purchase agreement to acquire all of
the shares of Guyco Pty Ltd., which has its headquarters in
Adelaide, Australia. It was included in the consolidated group of
NORMA Group after the transaction had been completed in July
2013. This company specialises in the design, production and
sale of joining products and valves that are used in freshwater
supplies, irrigation and sanitary systems, but also in agriculture
and industry. Guyco supplies more than 700 customers in Aus-
tralia and New Zealand and generated sales of around EUR 7
million in financial year 2012. With this acquisition, we are ex-
panding our product portfolio and strengthening our presence
in the Asia-Pacific region.

Acquisition of a portion of production of Click Automotiva
Industrial and setting up of manufacturing in Brazil
In order to build up our plant in Atibaia, Brazil, we bought assets
of Click Automotiva Industrial Ltda. in September 2013, which
represent a portion of the production. The new plant in Atibaia
near São Paulo has capacities for manufacturing a broad range
of NORMA Group products including exhaust gas pipe clamps,
mounting clamps, connectors and fluid systems. We have been
present in Brazil with a sales site since 2011. By building this new
plant, we are further expanding our manufacturing in Brazil as
planned and strengthening our presence in South America.

These events are the direct results of our strategy described
earlier.

Corporate Goals and Strategies, p. 58.

COMPARISON OF ACTUAL TO FORECAST

COURSE OF BUSINESS

Acquisition of the distribution business on joining
technology from Variant S.A., Poland
In May 2013, we signed a purchase agreement to acquire the
distribution business of Variant S.A. based in Krakow, Poland,
and included this company in the group of consolidated compa-
nies of NORMA Group effective June 2013. Variant markets join-
ing products and cable connectors and has been a NORMA
Group sales partner for over 20 years. Its products are marketed
to more than 1,000 retailers and wholesalers in Poland. Among
its end customers are home-improvement markets, workshops,
and expert stores that sell automotive supplies. Variant had sales
of around EUR 5 million in its joining technology division in finan-

In our annual report 2012, we projected moderate growth in
sales and an acquisition-related sales contribution of EUR 20
million.
Annual Report 2012, p. 95. Due to additional acqui-
sitions, we adjusted acquisition-related growth in sales in our
Q2 report 2013 to EUR 25 million and to EUR 26 million in our
Q3 report.

With annual sales of EUR 635.5 million and sales growth of 5.1 %
compared to the previous year’s level, we were able to confirm
our forecast. The sales share from acquisitions amounted to
EUR 26.7 million, which is slightly higher than the level we had
projected.

NORMA Group SE Annual Report 2013Economic Report

COMPARISON OF ACTUAL BUSINESS DEVELOPMENT WITH FORECAST

Results in 2012

Forecast Annual Report 2012
(as at March 2013)

Forecast Q2 / 2013 report
(as at August 2013)

Forecast Q3 / 2013 report
(as at November 2013)

604.6

n /a

Group sales
in EUR millions

Adjusted EBITA margin

17.4 % on par with the three

no adjustment

previous years of over 17 %

Result 2013

635.5

17.7 %

Growth in Group sales

1.5 % + EUR
14.3 million from
acquisitions

moderate growth in addition
to around EUR 20 million
from acquisitions 1)

moderate growth in addition
to around EUR 25 million
from acquisitions 2)

moderate growth in addition
to around EUR 26 million
from acquisitions 3)

2.5% + EUR 26.7
million from
acquisitions

Sales growth in the
Asia-Pacific region

Sales growth in the
Americas

Sales growth in the
EMEA region

Sales growth EJT

Sales growth DS

Financial result
in EUR millions

22.6 % more than 10 % organic

no adjustment

more than 10 %
including acquisitions

11.8 % neutral to slight growth in

no adjustment

euros

– 1.4 % neutral to slight growth

no adjustment

3.9 % moderate

no adjustment

2.5 % strengthened mainly by ac-

no adjustment

quisitions made in 2012

28.1 %

– 0.9 %

5.6 %

3.8 %

11 %

– 13.3

approx. EUR 15 million

no adjustment

– 15.6 million

Earnings per share
in EUR

1.94 (adjusted)
1.78 (reported)

moderately higher

no adjustment

1.95 (adjusted)
1.74 (reported)

Investments in R&D
(in relation to EJT sales)

5.1 % about 4 % of EJT sales

no adjustment

Cost of materials ratio

43.6 % about the same level

no adjustment

as last year (43.6 %)

Personnel cost ratio

25.9 % gradual continued

no adjustment

Tax ratio (adjusted)

30.3 % about 30 to 32 %

improvement

Investment ratio (ad-
justed for acquisitions)

Net operating cash
flow in EUR millions

5.0

about 4.5 %

81.0

stable (near last year’s
adjusted level of
EUR 81.6 million)

Dividend in EUR
Dividend payment ratio

EUR 0.65
33.5 %

between around 30 % and
35 % of adjusted consolidat-
ed Group earnings

no adjustment

1) CONNECTORS Verbindungstechnik, Nordic Metalblok, Chien Jin Plastic, Groen Bevestigingsmaterialen, Davydick
2) in addition to Variant und Guyco
3) adjustment of expected sales for the acquired companies

4.9 %

42.4 %

26.7 %

32.6 %

4.8 %

103.9

EUR 0.70
35.9 %

Consolidated Management Report

As forecast, sales in the DS area were carried for the most part
by the acquisitions (15.3 %) we made in 2012 and 2013. Total
sales in the area of DS amounted to EUR 193.6 million.

We predicted an investment rate of 4.5% of consolidated sales.
With EUR 30.5 million in expenditures and a ratio of 4.8 %, we
were slightly above this originally planned ratio.

In the EJT area, sales grew organically by 5.6 %, but were nega-
tively affected by currency effects. By increasing sales by 3.8 %,
we remained within our forecast.

We expected to see the highest increase in sales of over 10 % in
the Asia-Pacific region in 2013. Here, we adjusted this forecast
in our Q3 report to more than 10 % growth, including acquisitions.
We were able to exceed this goal despite negative currency effects
by achieving growth in sales, including acquisitions, of 28.1 % to
EUR 56 million in 2013.

For the Americas and EME A regions, we had predicted neutral
to slight or neutral to weak growth respectively. In the EME A
region, we managed to significantly exceed our forecast due to
new ramp-ups as a result of the EURO-6 standard to achieve
5.6 % higher sales growth. In the Americas, the fact that the
economy remained weak prevented us from achieving our growth
goal there of 2.4 % organic growth by – 0.9 % in 2013 due to an
extremely strong euro during the second half of the year.

By employing systematic cost reduction measures as part of our
Global Excellence Programme and using intelligent sourcing
strategies, we managed to lower our cost of materials ratio to
42.4 %, which is even lower than the level we had projected.

On the other hand, we were unable to confirm our forecast of a
gradual and continued improvement in personnel costs. Per-
sonnel costs rose disproportionately to sales to 26.7 % in 2013
due to the acquisitions we made, the sites we opened or expand-
ed, and the resulting increase in the number of employees.

We had hoped that net other operating income and expenses
would stabilise due to investments in growth and the expansion
of our activities in the emerging nations. In relation to sales, at
11.4 %, they were only slightly above the 11.1 % level of the pre-
vious year, therefore we feel we met our forecast.

With a financial result of EUR – 15.6 million, we managed to meet
our forecast (EUR – 15 million).

Adjusted earnings per share, which is calculated on the basis of
the adjusted earnings for the period, amounted to EUR 1.95 in
2013 (2012: EUR 1.94). The reported earnings-per-share amount-
ed to EUR 1.74 (2012: EUR 1.78).

We had hoped that our net operating cash flow would remain
stable at the adjusted level of the previous year of EUR 81.0
million. Due to our positive operating result (EBITDA) and positive
effects from reverse factoring on trade liabilities, we were able to
significantly increase our forecast with net cash flow of EUR 103.9
million.

We pursue a sustainable dividend policy and strive to achieve a
pay-out ratio of approx. 30 % to 35 % of annual Group earnings.
With the proposed dividend of EUR 0.70 per share and a pay-out
ratio of 35.9 % of adjusted Group earnings, we are at the upper
end of this range.

GENERAL STATEMENT BY THE MANAGEMENT BOARD ON

THE COURSE OF BUSINESS AND ECONOMIC SITUATION

Financial year 2013 was essentially in line with the Management
Board’s expectations. We managed to compensate for the weak
start to the year because of the economy by the time the year
ended.

Due to the acquisitions we made, we were able to increase our
originally forecast consolidation-related sales for the first and
second quarters from EUR 20 million to EUR 25 million and 26
million respectively.

At the end of financial year 2013, total sales came in at EUR 635.5
million. By achieving 2.5 % organic growth in sales and expand-
ing our sales by 4.4 % with the help of acquisitions, we slightly
exceeded our November 2013 forecast. Despite the difficult eco-
nomic situation, we were able to increase our operating earnings
and achieve an operational margin of 17.7 % as forecast.

If we take a look at specific segments, we can see that the vari-
ous regions experienced different developments: Whereas the
APAC region recorded strong growth in all quarters mainly due
to acquisitions, the EME A region – driven by new ramp-ups as a
result of the EURO-6 standard – began experiencing significant
organic growth starting in the second quarter. The Americas
region also recorded solid organic growth starting in the third
quarter, nevertheless currency effects had a negative effect on
the total growth in sales in this region in 2013.

At 32.6 % of earnings before taxes, the tax ratio was slightly
higher than the target corridor that we had forecast of between
30 % and 32 %.

In light of the economic conditions, the Management Board is
satisfied with how business developed in 2013. We succeeded
in achieving most of our objectives. Through the acquisitions we
made and by expanding our capacities, particularly in the

NORMA Group SE Annual Report 2013Economic Report

OVERVIEW OF SALES CONTRIBUTIONS FROM THE COMPANIES ACQUIRED IN 2012 AND 2013

Company

Connectors Verbindungstechnik AG, Switzerland

Nordic Metalblok S.r.l., Italy

Chien Jin Plastic Sdn. Bhd., Malaysia 2)

Groen Bevestigingsmaterialen B.V., the Netherlands 3)

Davydick & Co. Pty Limited, Australia

Variant S.A., Poland

Guyco Pty Limited, Australia

Click Automotiva Industrial Ltda., Brazil

Total

1) Until 12 months have expired following the acquisition
2) as at 31 Dec. 2013: Share of 85 %
3) as at 31 Dec. 2013: Share of 90 %

When added to the
consolidated group

Share of sales contribution 2013 1)
in EUR millions

April 2012

July 2012

November 2012

December 2012

January 2013

June 2013

July 2013

September 2013

5.1

2.9

7.2

3.4

3.3

1.2

3.6

26.7

Asia-Pacific region, we managed to expand and strengthen our
market position.

The Management Board considers the economic situation of
NORMA Group to be stable and sustainable. This assessment
is based on the results of our balance sheet and NORMA Group
SE’s individual results in 2013 and takes business development
up until the drawing up of the Group management report 2013
into consideration. Business development through the start of
2014 has been in line with the Management Board’s expectations
up until this annual report was prepared.

EARNINGS, ASSETS AND FINANCIAL POSITION

The accounting rules changed in financial year 2013 due to the
first-time use of IAS 19R. In order to better compare the earnings,
assets and financial position, the figures in this annual report that
pertain to 2012 have been adjusted to suit the new accounting
rules and may therefore deviate from the figures published in
annual report 2012.

Notes, p. 141.

Sales and Earnings Performance
Order book remains at a high level
As at 31 December 2013, the order book was EUR 236.7 million
and thus significantly higher than last year’s previous high level
of EUR 215.4 million. Due to short-term orders in the area of DS,
the order volume pertains mainly to EJT.

Moderate growth in sales despite economic weakness in the
Americas and negative currency effects
We finished financial year 2013 successfully with Group sales of
EUR 635.5 million (2012: EUR 604.6 million). We were thus able

to achieve a 5.1 % increase over the previous year despite neg-
ative currency effects (– 1.8 %). Following a slow start to the first
quarter due to economic conditions, we managed to signi ficantly
increase our sales growth in the second, third and fourth quarters
compared to the previous year.

This growth resulted from the successfully integrated acquisitions
on the one hand (+ 4.4 %), on the other hand, we were able to
achieve 2.5 % organic growth in sales. The latter was driven
mainly by new ramp-ups due to the EURO-6 standard.

The companies acquired in 2012 and 2013 contributed EUR 26.7
million to sales growth, but to various extents depending on when
the acquisition took place.

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 negative impact on sales in 2013. Since we generate
a large portion of our sales in the USA and the euro zone, a
depreciation on the part of the US dollar is disadvantageous from
a balance sheet perspective, since we report in euros and the
profits generated in US dollars resulted in a lower computed euro
value (translation effect). The currency relationship usually also
reflects the differences in regional economic momentum. The
average exchange rate of the US dollar to the euro was 1.33 in
2013 and thus higher than the previous year’s average exchange
rate of 1.28 USD/EUR.

NORMA Group’s business development is subject to a certain
seasonal fluctuation and is typically characterised by a strong

Consolidated Management Report

Sales
in EUR
millions

H 1

H 2

Percentage share
of the entire
year 2012

52.5 %

47.5 %

2012

317.7

286.9

2013

322.8

312.7

Percentage share
of the entire
year 2013

50.8 %

49.2 %

SALES

in EUR millions

2012

2013

340

320

300

280

260

322.8

317.7

312.7

286.9

first half of the year compared to the second half. In 2013, how-
ever, we experienced the opposite trend due to the weak eco-
nomic environment.
General Economic and Industry-Specific
Environment, p. 64. In the first quarter, sales revenue amounted
to EUR 159.3 million and was thus 0.3 per cent lower than in the
first quarter of the previous year. In the second quarter, we not
only generated positive sales revenues from our acquisitions, but
also grew organically and generated sales of EUR 163.5 million,
3.5 per cent more than in the second quarter of 2012. In the third
quarter, at EUR 160 million, sales turned out to be somewhat
weaker than in the previous quarter due to the effect of holidays
with fewer business days in the summer and increasing uncer-
tainty regarding the further economic development. Compared
to the same period in the previous year, however, sales rose by
6.9 per cent. The fourth quarter was seasonally the weakest
compared to the rest of the year with sales of EUR 152.8 million,
but nevertheless exceeded the previous year’s period in 2012
with sales growth of 11.2 percent.

Organic growth in the area of EJT;
DS bolstered by acquisitions
We generated total sales of EUR 443.9 million in the EJT unit.
This represents an increase of 3.8 % over the previous year’s sales
of EUR 427.6 million. The EJT unit also clearly experienced the
weak economic environment at the beginning of the year and this
resulted in a slight decline in EJT sales by – 2.4 % during the first
quarter compared to the same period last year. Thanks to the
three strong quarters that followed, the unit was able to compen-
sate for this again by recording significant organic growth in sales.

The DS unit developed positively thanks to acquisitions. Sales
rose from EUR 174.5 million in 2012 to EUR 193.6 million in the
current financial year and thus by 11 %.

EFFECTS ON GROUP SALES

Sales 2012

Organic growth

Acquisitions

Currency effects

Sales 2013

in
EUR millions

Share
in %

604.6

15.1

26.7

– 10.9

635.5

2.5

4.4

– 1.8

5.1

DEVELOPMENT OF THE DISTRIBUTION CHANNELS

EJT

2013

2012

2013

2012

443.9

3.8

427.6

3.9

193.6

11.0

174.5

2.5

70.0

71.0

30.0

29.0

Sales
in EUR millions

Growth in %

Share of sales
in %

Operational results increase at a high level
We managed to increase our earnings before interest, taxes, de-
preciation and amortisation (adjusted EBITDA) by EUR 8.5 million
or 7.1 % from EUR 120.8 million in 2012 to EUR 129.3 million in
2013. EBITA amounted to EUR 112.6 million for the last financial
year and was thus 6.9 % higher than the adjusted EBITA in 2012
(EUR 105.4 million). This means we achieved a higher operating
margin of 17.7 % compared to the previous year (2012: 17.4 %).

NORMA Group SE Annual Report 2013

Economic Report

SALES DISTRIBUTION BY DISTRIBUTION CHANNELS

SALES GROW TH

in %

2012 in brackets

in EUR millions

DS 30 (29)

700

600

500

400

300

200

100

70 (71) EJT

604.6

635.5

2012

2013

Adjusted EBITDA generally comprises revenue, changes in in-
ventories of finished goods and work in progress, raw materials
and consumables used, other operating income and expenses,
and employee benefits expense, adjusted for material one-time
effects.

From the view of the Management Board, there were no import-
ant special effects in financial year 2013, therefore only the de-
preciation on fixed assets and intangible assets, in each case
from purchase price allocations, are presented in adjusted form.
Adjusted EBITA comprises adjusted EBITDA less depreciations,
without depreciations from purchase price allocations.
Notes,
p. 142.

The main influencing factors on the development of our opera-
tional results include material and personnel costs, but also other
operational earnings and expenditures.

The combination of stable prices and selective and specifically
coordinated purchasing activities helped us to limit the increase
in our material expenses to only 2.3 % from EUR 263.5 million to
EUR 269.4 million in 2013, a lower rate than sales. This means
we were able to significantly reduce our material cost ratio in 2013
to 42.4 % (2012: 43.6 %).
Notes, p. 143 and Multi-Year Overview,
p. 186.

Personnel costs impacted by extended production capaci-
ties and acquisitions
Employee benefits expense increased by 8.4 % from EUR 156.5
million to EUR 169.7 million compared to last year. The personnel
cost ratio rose from 25.9 % in 2012 to 26.7 %. This increase in
personnel costs can be attributed mainly to acquisitions and
expansion of sites and the resulting increase in the average num-
ber of employees (without temporary employees) to 3,945 (pre-
vious year: 3,577).

Production and Logistics, p. 78.

Cost of materials ratio improved again
Austenitic and ferritic steels as well as plastic granules are key
components of the raw materials we use. Despite relatively stable
market prices for steel-related goods last year, we managed to
lower our purchase prices for the respective material groups for
individual NORMA plants quite significantly by using intelligent
commodity strategies. We were able to negotiate better terms
by reducing the number of suppliers and leveraging volumes
across multiple NORMA Group plants. By identifying new sup-
pliers in best-cost countries and developing sustainable partner-
ships, we secure ourselves market compatible and globally
competitive price levels for our materials over the long term.

Other operating income and expenses relatively stable
Other operating income and expenses in 2013 amounted to EUR
– 72.4 million (previous year: EUR – 67.1 million). Thus, the rate of
11.1 % with respect to sales increased slightly to 11.4 %. This slight
increase in the ratio can be attributed among other things to one-
off expenses that were incurred by transforming NORMA Group
AG into a Societas Europaea (SE) in the second quarter of 2013.

Gross margin improved
After deducting material costs (EUR 269.4 million), changes in
inventories (EUR 1.9 million) and other own work capitalised (EUR
3.4 million) of sales, we reported gross profit of EUR 371.4 million
in 2013 (2012: EUR 344.4 million). This means our gross margin
improved by 1.4 percentage points to 58.4 % after 57.0 % in 2012.

Consolidated Management Report72

ADJUSTED EBITA AND EBITA MARGIN

COST OF MATERIALS AND COST OF MATERIALS R ATIO

in EUR millions

17.4 %

105.4

17.7 %

112.6

150

100

43.6 %

263.5

42.4 %

269.4

400

300

200

100

2012

2013

2012

2013

Net financial income impacted negatively by currency effects
We generated net financial income of EUR – 15.6 million in 2013.
This is an increase of EUR 2.4 million or 18.3 % compared to EUR
– 13.2 million last year. This can be attributed for the most part
to currency losses from financing activities in the amount of EUR
1.4 million (2012: earnings of EUR 0.8 million), but also the issuing
of the promissory note and the resulting interest expense in the
second half of the year.

Net income after tax increases again
The adjusted income taxes rose from EUR – 26.9 million in 2012
to EUR – 30.0 million last year. This equates to an adjusted tax
rate of 32.6 % (2012: 30.3 %). Effects from company restructuring
in Germany were adjusted.

We increased our adjusted net income after tax from EUR 61.8
million by 0.4 % to EUR 62.1 million in 2013.

Adjusted earnings per share
Adjusted earnings per share amounted to EUR 1.95 (2012: EUR
1.94) and were thus 0.3 % higher than the previous year’s earn-
ings.

Financial position and cash flows
Total assets reflect issuance of a promissory note
and acquisitions
Total assets increased to EUR 823.7 million in 2013 and were
thus 19.1 % higher than the balance sheet in 2012 (EUR 691.8
million). This increase can be attributed in particular to the prom-
issory note that was issued in the third quarter of 2013 and the
resulting increase in cash and cash equivalents and loan liabilities.

Non-current assets relatively stable
Non-current assets amounted to EUR 450.6 million or around
54.7 % of total assets at the end of the year. They increased by
EUR 5.4 million or 1.2 % compared to 2012 (EUR 445.1 million).

Whereas fixed assets increased by EUR 6.3 million or 5.8 % to EUR
115.4 million due to the acquisitions and investments in property,
plant and equipment, goodwill declined by EUR 2.0 million or 0.9 %
from EUR 235.3 million to EUR 233.2 million. The positive effects
of the acquisitions and offsetting negative currency effects had an
impact here. Furthermore, goodwill includes additions from the
acquisitions made in financial year 2013 in the amount of EUR 1.7
million.
Notes, p. 149. At EUR 92.9 million, other intangible assets
were close to last year’s level (2012: EUR 92.5 million).

Current assets positively impacted by the increase in cash
and cash equivalents
Current assets amounting to EUR 373.1 million as at 31 Decem-
ber were 51.3 % higher than last year’s level of EUR 246.7 million.
This significant increase resulted mainly from the EUR 121.8 mil-
lion increase in cash and cash equivalents to EUR 194.2 million.
This can be attributed to the promissory note that was issued in
the third quarter of 2013.

Furthermore, inventories increased by 7.3 % to EUR 79.8 million
(2012: EUR 74.3 million). This increase resulted from the ex pected
higher business activity in the first quarter of 2013.

Compared to 2012, trade receivables and other receivables in-
creased by about 13.7 % from EUR 79.3 million to EUR 90.1
million. As at 30 June 2013, this still amounted to EUR 102.2
million. The reduction in this item starting at the second half of
the year reflects mainly the usual seasonal course of business.

NORMA Group SE Annual Report 2013Economic Report

The higher final level can be attributed to the outstanding growth
in the fourth quarter and increased business activity compared
to the same quarter in the previous year.

As at 31 December 2013, current assets amounted to 45.3 % of
total assets (2012: 36 %).

Group equity base remains at a high level
Consolidated equity as at 31 December 2013 amounted to EUR
319.9 million and thus rose by 10.6 % or EUR 30.7 million compared
to the previous year (2012: EUR 289.2 million). This increase re-
sulted mainly from the net profit for the period of EUR 55.6 million.
In contrast, the dividends paid in the second quarter in the amount
of EUR 20.7 million reduced equity. Thus, the equity ratio was
38.8 % due to the higher total assets and thus declined by 41.8 %
compared to last year’s level.

The increase in non-current loan liabilities can be attributed on
the one hand to the issuance of a promissory note in the report-
ing year in the amount of EUR 125 million. The premature repay-
ment of EUR 101.4 million of the syndicated credit line in January
2014 that had already been taken into consideration in present-
ing the maturities as at 31 December 2013 had the opposite
effect. The decline in the derivative financial liabilities can be attri-
buted to the lower nominal value of the derivative securities due
to planned principle payments, reclassification of derivative lia-
bilities to the short-term category and the positive development
of market values of hedging instruments due to the change in the
market environment and higher interest rate expectations
amongst market participants. The respective derivatives stand
in security relationships with the loan liabilities that were repaid
prematurely in January 2014 and were therefore corre spondingly
reclassified to the current area.

Due to the premature repayment of EUR 101.4 million of the
syndicated financing in January 2014 with the help of the funds
raised by the promissory note, the equity ratio will increase again
this year.

Supplementary Report, p. 91.

Current liabilities
Current liabilities increased by EUR 107.2 million from EUR 135.2
million to EUR 242.4 million and thus amounted to around 29.4 %
(2012: 19.5 %) of total assets.

Net debt considerably lower
At EUR 153.5 million, net debt was considerably lower than in
2012 (EUR 199.0 million) despite the acquisitions and the payment
of a dividend. Gearing (net debt in relation to equity) of 0.5 was
significantly below the level of 0.7 as at the end of 2012. Net
financial debt included derivative (non-cash liabilities) totalling
EUR 15.3 million (2012: EUR 24.8 million).

Capital commitment in (trade) working capital
(Trade) working capital (inventories plus receivables minus liabil-
ities, both primarily from trade payables and trade receivables)
was EUR 110.9 million as at 31 December 2013, and thus 4.4 %
lower than last year’s figure of EUR 115.9 million. The reduction
in working capital can be attributed among other things to opti-
mised working capital management. Here, we managed to in-
crease the liquidity of NORMA Group through a better balance
of non-current liabilities and trade payables. By making greater
use of alternative financing forms, such as reverse factoring, we
achieved a significant extension in our average payment targets
(payables) from our largest suppliers.

Non-current liabilities
Non-current liabilities amounted to EUR 261.4 million as at 31
December 2013, and were thus around 31.7 % of total assets.
This means we were able to reduce them by EUR 6.1 million or
2.3 % compared to last year. Two opposing effects had an impact.
On the one hand, loans payable increased by 5.4 % from EUR
190.7 million to EUR 200.9 million, derivative financial liabilities
declined significantly by EUR 16.4 million from EUR 24.7 million
to EUR 8.3 million.

The increase in current liabilities can be attributed mainly to the
EUR 74.1 million increase in current loans payable from EUR 51.0
million to EUR 125.1 million. Analogous to the decline in non-cur-
rent loan liabilities, this increase resulted mainly from premature
principal payments on the syndicated credit line in the amount
of a partial payment of EUR 101.4 million, which was already
taken into consideration when the maturities were presented as
at 31 December 2013.

Furthermore, due to the introduction of reverse factoring and
optimisation of working capital management, trade liabilities in-
creased by 56.7 % compared to the previous year to EUR 59.0
million.

Costs of capital
No corporate debt rating has been assigned. The implicit invest-
ment grade contained in the conditions of the promissory note
loan is BBB. We currently expect no significant change in the
foreign capital cost rate.

Accounting treatment of carrying amounts
As a rule, we recognise the carrying amounts of assets and lia-
bilities at amortised cost. Derivative financial instruments and
available-for-sale financial assets are measured at fair value. Cash
and cash equivalents are reported at nominal value.
Notes,
p. 122.

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

Consolidated Management Report74

ASSETS AND LIABILITIES STRUCTURE

in EUR millions

Assets

451

2013

446

2012

Liabilities

179

194

320

262

242

824

2013

824

174

289

267

135

692

2012

692

Non-current

assets

Current
assets

Cash and cash

equivalents

Equity

Non-current

liabilities

Current
liabilities

are not reflected in the consolidated financial statements. There
were no other major off-balance sheet financial instruments
during the reporting period January to December 2013.

the short-term revolving credit line for working capital or to finance
acquisitions includes an interest rate change risk due to the fact
that this has not been hedged by using derivatives.

Unrecognised intangible assets
NORMA Group’s rights to the brands it owns are recognised in
the balance sheet as intangible assets together with its patents.
However, the reputation of these brands and how well known
they are among our customers also play an important role in our
success, as does consumer confidence in our products and
solutions. Well-established customer relationships are equally
important to us. These are also supported by our distribution
network built up over many years.

Worldmap.

The entire syndicated loan was initially issued solely on a variable
euro basis. To accommodate our Group’s local cash flows, most
of the credit amount was paid out in our three main currencies, the
US dollar, the Swedish krona and the British pound, back in 2011
and hedged by derivative structures. This enabled us to minimise
currency and interest rate change risks. The changes in value of
the instruments chosen are recorded directly in the equity position
as part of hedge accounting. Partial tranches will possibly be repaid
to some extent in 2014 or 2015 by using promissory note funds.

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.

Non-Financial Indicators, p. 78 onwards.

Most of the supply and service relationships between individual
currencies are simultaneously hedged over the course of the year.

To minimise risks, we strive to achieve broad diversification of our
financing instruments over the medium term. These also include
prolongation of repayment obligations and an even distribution
of the maturity profile.

Financial Management
Strategic financing measures
The original financing volume at the time of the IPO in 2011
amounted to EUR 375 million. This includes an amortising struc-
ture. As at 31 December 2013, the credit amount was EUR 200.5
million with an interest margin of under 1.75 basis points above
the 3-month-EURIBOR. This contains a revolving credit valued
at EUR 125 million that was drawn down by EUR 5.5 million by
the end of 2013. The credit line was intentionally converted over
to the fixed rate positions using derivative instruments to ensure
that no interest rate change risk exists before the term ends. Only

The issuance of a promissory note loan in the amount of EUR
125 million with a 5, 7, and 10-year term for the first time ever
represented an important step towards this. This new instrument
contributes about one-third to our financing mix. The strong in-
terest from the institutions that issued this loan resulted in high
oversubscription and therefore also an attractive credit margin.
Due to the strong condition of the foreign capital markets when
the promissory note loan was issued, we were able to achieve
an average interest rate (EURIBOR + margin) of less than 3.0
percent. With EUR 21 million, we managed to place a significant
share in the 10-year tranche. As with our syndicated loan, all

NORMA Group SE Annual Report 2013
Economic Report

tranches were either hedged to begin with or hedged using de-
rivative structures as fixed interest payment positions to limit the
risk of a change in interest rates. These funds are used to finance
general operations and will be partly used to repay existing loans
in 2014 or 2015 with a term until 30 March 2016. We therefore
managed to achieve a significant extension of the term and an
even repayment profile for half of the original credit tranche of
EUR 250 million from this financing. The operating credit line in
the amount of EUR 125 million which has hardly been used will
remain in effect until 2016. The average interest rate of the prom-
issory note loan of 3.0 percent corresponds to the market
assess ment of an ‘Investment Grade’ for NORMA Group.

As at 31 December 2013, we complied with all of the indicators
contained in the loan contracts (financial covenant: equity ratio,
interest ratio, financial debt ratio, change of control). The securi-
ties that had originally been provided in 2011 to receive the loan
have been released.

Notes, p. 100.

Further concrete financing steps will depend on the current
changes in the financing markets and acquisition potentials. We
also always take risks from changes in exchange rates that are
limited by using derivative structures into consideration.

Development of cash flow
Significant increase in operating net cash flow
We achieved operating net cash flow of EUR 103.9 million in 2013.
This was 28.2 % higher than last year’s level of EUR 81.0 million.
The increase in operating net cash flow reflects the good position
our business is in and is mainly attributable to the increase in
operating results (EBITDA). In relation to total sales, net cash flow
rose by 16.3 % in financial year 2013 (2012: 13.4 %).

Higher cash flow from operating activities
We generated a cash flow of EUR 115.4 million from operating
activities in 2013. This corresponds to an increase of around EUR
19.2 million or roughly 20.0 % compared to the previous year
(2012: EUR 96.1 million).

This increase was due for the most part to the repayment of trade
and other liabilities which are also impacted by the effect of re-
serve factoring discussed earlier.

Cash flow from investing activities
In 2013, cash outflow from investing activities amounted to EUR
43.4 million (2012: EUR 58.1 million).

The difference to the previous year is mainly due to a reduction
in the net payments for acquisitions of EUR 29.0 million by 54.4 %
to EUR 13.2 million. Expenditures for property, plant and equip-
ment (EUR 21.3 million) were slightly lower than last year (2012:
EUR 23.9 million), while intangible assets amounting to EUR 6.1
million rose slightly to EUR 9.3 million.

Capital expenditures in 2013 related in particular to projects
aimed at expanding our manufacturing capacities in the United
Kingdom, Serbia, Mexico, the USA, China and Brazil.
Organi-
sational and Process Advantages, p. 78.

Capital expenditure on property, plant and equipment and in-
tangible assets came in at 4.8 %. Based on the long-term growth
trend, we also aim to invest in expansion and maintenance in the
medium-term at a rate of about 4.5 % of sales on an annual
basis.

Cash flow from financing activities impacted by
the promissory note
In 2013, cash outflow from financing activities amounted to EUR
51.7 million, whereas it was EUR 34.1 million in 2012. This re sulted
mainly from the payments received in conjunction with the prom-
issory note issued in mid-2013. Cash flow pertained for the most
part to the payment of dividends to shareholders in the amount
of EUR 20.7 million (2012: 19.1 million), as well as principal pay-
ments on loans in the amount of EUR 47.1 million (2012: EUR 23.2
million).

Notes, p. 117.

Investment analysis
We invest the funds from operating cash flow in our growth. Last
year, we further expanded the plant we founded in Serbia in 2011.
In Asia, our internal and external growth was strengthened by
building new production sites and making strategic acquisitions.
By acquiring the distribution business of Variant S.A. in Poland,
we shorten the supply process to our customers by one level and
therefore have now moved closer to our end customers. By ac-
quiring the distribution business of Davydick and Guyco in Aus-
tralia, we have added new products and new sales partners and
further extended our presence on the continent. Furthermore,
we strengthened our position in the water and wastewater mar-
ket in the Asian region. By acquiring part of Click Automotiva
Industrial and setting up a production site in Brazil, we were able
to strengthen our market position in South America. Moreover,
we invested in automating and optimising our existing plants all
Organisational and Process Advantages, p. 78.
over the world.

Capital expenditures that have not yet been realised for which
contractual obligations exist as at 31 December 2013 amount to
EUR 1.4 million. These pertained mainly to investments in fixed
assets in Germany (kEUR 893), China (kEUR 531) and Poland
(kEUR 19).

Summary on financial position
Last year, we managed to improve our financial position even
further thanks to solid results, continued strong cash flow and
by successfully issuing a promissory note. Our equity ratio
reached 38.8 % in 2013 and remains at a high level. We succeed-
ed in achieving this despite issuing a promissory note in the

Consolidated Management Report76

DEVELOPMENT OF THE SEGMENTS

EMEA

Americas

Asia-Pacific

in EUR millions

External sales

Contribution to consolidated sales

Adjusted EBITDA 1)

2013

387.9

61 %

83.9

2012 2) Change

367.5

+ 5.6 %

61 %

79.3

+ 5.8 %

2013

191.6

30 %

45.2

2012 2) Change

193.3

– 0.9 %

32 %

43.0

+ 5.2 %

2013

56.0

9 %

6.5

2012 2) Change

43.7

+ 28.1 %

7 %

5.2

+ 25.0 %

1) The adjustments relate to adjustments within the individual segments. At Group level no adjustments were made in the EBITDA.
2) Restated due to effects of IAS 19R.

amount of EUR 125 million, acquiring additional companies and
paying out a dividend of EUR 0.65 per share for financial year
2012. Our current financing offers a sound foundation for our
medium term growth strategy.

SEGMENT REPORTING

By developing new markets and customers, we increased the
share of sales realised internationally even further from 67.4 % to
70.4 % in the financial year just ended, thereby continuing our
strategy of internationalisation.

EMEA
Solid development of sales in the EMEA region
Despite a decline in the volumes in some industries during the
first quarter of 2013, the EME A region developed positively for
the year overall. Whereas the first quarter was relatively slow due
to the economic conditions and only yielded growth due to the
acquisitions, the improved economic conditions resulted in a
moderate improvement in the second quarter and significant
organic growth in sales starting in the third quarter. This devel-
opment was complemented by the new ramp-ups due to the
EURO-6 emissions standard. With respect to the entire year, we
achieved solid growth in sales of 5.6 %. This equates to an in-
crease in external sales of around 20 million from EUR 367.5
million in 2012 to EUR 387.9 million. Besides the growth of 3.4 %
from acquisitions, we experienced solid organic growth of 2.9 %
on the challenging European market. The share of the EME A
region in relation to total sales remained at 61 %, the same level
as last year.

Positive EBITDA growth
Adjusted EBITDA increased by 5.8 % from EUR 79.3 million in
2012 to EUR 83.9 million in 2013. At 21.6 %, the EBITDA margin
remained at the same level as last year, and this despite a decline
in volume and the investments in new products for the new
EURO-6 engine generation.

Assets increased due to the acquisition of Variant, on the one
hand, and the increase in trade payables from EUR 457.4 million
as at 31 December 2012 to EUR 490.3 million as at 31 December
2013.

Investments amounted to EUR 13.1 million and were thus 13.8 %
lower than in 2012 (EUR 15.2 million). These funds were mainly
invested in production facilities to increase our capacities at the
German sites, but also in Serbia and the United Kingdom.

The Americas
Negative impact of currency development
The Americas segment generated EUR 191.6 million in sales in
2013, which were slightly lower than last year’s level of EUR 193.3
million. The positive currency development that drove sales
growth last year turned in the opposite direction in 2013 and had
a negative impact on sales denominated in the euro. For the year
2013 as a whole, we recorded a 0.9 % decline in sales. This
means that the organic growth of 2.4 % for the year was over-
shadowed by negative currency effects of – 3.3 %. This region’s
share of sales in relation to total sales declined to 30 % in 2013
(2012: 32 %).

NORMA Group SE Annual Report 2013

Economic Report

BRE AKDOWN OF SALES BY SEGMENT

in %

Asia-Pacific 9 (7)

2012 in brackets

30 (32)
Americas

61 (61)
EMEA

Over the course of the year, we were able to achieve a sequential
improvement in sales growth. While the first and second quarter
(Q1: – 7.0 %, Q2: – 5.8 %) remained relatively weak due to the
economy and currency effects, the situation improved consider-
ably in line with the gradual recovery of the US economy towards
the end of the year. In the fourth quarter, we achieved organic
growth compared to the previous year’s period of 16.8 % due to
the strong improvement in the economic situation.

Adjusted EBITDA amounted to EUR 45.2 million in 2013 and was
thus 5.2 % higher than the previous year’s level of EUR 43.0
million. The EBITDA margin improved from 22.2 % to 23.6 % com-
pared to last year. Among other things, this is due to the reduc-
tion of our cost base as a result of measures from our Global
Excellence Programme.

Assets (EUR 210 million) hardly changed at all compared to last
year (2012: EUR 209.9 million). Adjusted for currency effects,
however, they increased by EUR 9.6 million also due to the ac-
quisition of assets of Click Automotiva Industrial Ltda. that rep-
resent a portion of production.

Investments were EUR 7.3 million or 9.5 % higher than last year’s
level of EUR 6.7 million. The main focuses of investments included
the production facilities at our plants in Auburn Hills and St. Clair.

Asia-Pacific
Dynamic sales growth
The Asia-Pacific region continues to be of paramount importance
to the future growth of NORMA Group. Higher incomes and a
better standard of living in the emerging Asian economies results
in higher demand for high-quality products in all areas of life.

We generated sales of EUR 56.0 million in the Asia-Pacific region
in 2013 and thus exceeded last year’s level by 28.1 % (2012: EUR
43.8 million). This growth was driven mainly by acquisitions. Ad-
justed for acquisitions, sales amounted to EUR 41.9 million in
2013. The Asia-Pacific region accounted for a 9 % share of sales
in 2013, which was two percentage points higher than the share
in 2012.

Adjusted EBITDA rose by 25 % from EUR 5.2 million in 2012 to
EUR 6.5 million. The EBITDA margin was 11.6% and thus slightly
lower than the ratio of 11.8 % the previous year. This can be at-
tributed to expansion of sites and merger and acquisition activ-
ities, among other factors.

Assets rose from EUR 51.2 million to EUR 61.9 million and thus
by 20.8 % in 2013. This can be attributed partly to acquisitions,
but for the most part resulted from the operating business.

Investments in 2013 were made mainly to expand our second
site in China and in urea manufacturing at our existing Chinese
site in Qingdao. Investments amounted to EUR 6.7 million in 2013
and thus rose by 16.8 % compared to the previous year (2012:
EUR 5.8 million).

Consolidated Management Report78

Central management of financing
Due to the fact that financing as a whole is controlled centrally,
we forgo publishing a separate list of financing by segments. We
strive to achieve an investment ratio and cash generation in every
segment that is in line with the Group average in the medium-term.

ORGANISATIONAL AND PROCESS ADVANTAGES

Production and Logistics
NORMA Group manufactures approximately 30,000 different
products at 21 sites all over the world. Furthermore, we operate
distribution, sales and competence centres in 27 countries that
supply our customers in the respective regions. Our largest man-
ufacturing site is based in Maintal near Frankfurt/Main, Germany.

Worldmap.

Business Model, p. 52) involve differ-
Our product categories (
ent materials, production processes, technical expertise and
sterility requirements. Because of how few synergies there are
between these production processes, we try to keep the product
categories separate when it comes to producing them.

We have implemented this approach quite strictly in Europe and
the USA. In emerging economies in which we only have one plant,
however, both product categories are manufactured at a single
site.

Constantly improving manufacturing structures
and processes
As part of our Global Excellence Programme that we introduced
in 2009, we constantly analyse and identify potential for optimi-
sation in all areas and implement the appropriate measures aimed
at realising these. We already completed comprehensive optimi-
sation of our manufacturing structure in Europe in 2010. As part
of our optimisation efforts, we have bundled high-volume auto-
mated and essentially standardized production processes at
specific high-tech manufacturing lines. This has allowed us to
take advantage of considerable economies of scale. Production
processes that require a higher degree of manual assembly work
are based mainly in low-wage countries.

Manufacturing close to our customers and
high reliability of delivery
In order to optimise our production and logistics costs, we always
strive to manufacture in the regions our customers are based in.
This enables us to reduce our working capital and production
costs, but also to minimise delivery risks and thus be able to
respond quickly and flexibly to fluctuations in demand.

We constantly strive to shorten our delivery times, optimise our
supply chain and freight and customs costs, but also to minimise
negative effects on the environment. For this purpose, we put a
central warehouse into operation in Moscow, Russia, and Auburn
Hills, USA, over the last two years. This has enabled us to process
customer orders directly at the warehouse in less than a week
and significantly reduce the previous delivery times.

Furthermore, we sign annual agreements with those freight and
logistics service providers who promise to deliver us the best
possible results with respect to costs and environmentally rele-
vant aspects.

Flexible expansion of capacities
The capacity utilisation of our manufacturing and storage facilities
varies from site to site. In order to have sufficient capacity available
at all times, we plan our investments proactively: In emerging
countries, where we already have a manufacturing site, we see
to it that sufficient production space to be able to expand pro-
duction capacity successively when needed is available from the
very start. In industrial nations, on the other hand, we strive to
prevent having to invest in additional manufacturing space when-
ever possible. Instead, we try to make our manufacturing pro-
cesses as lean as possible in order to be able to use the existing
space to create additional capacity.

Capacity utilization also varies from site to site. Most of the prod-
ucts in the area of EJT are customer- and application-specific.
For this reason, the facilities and tools we use to manufacture
these products are also usually quite specific. Our investments
in new operating equipment are therefore made relatively pro-
portionate to prototype development, type testing and the be-
ginning of manufacturing at our customers’ sites.

In contrast to the area of EJT, we rely on standardised products
and production equipment in the area of DS. This means that we
can extend our capacities quickly and easily in case of increasing
customers’ demands.

Investments and acquisitions in 2013
As part of our company’s strategy, we rely not only on organic
Corporate
growth, but also on growth through key acquisitions.
Goals and Strategies, p. 58. We constantly optimise and further
de velop our production sites in order to be able to integrate new
acquisitions as effectively as possible and ensure the efficiency
of our production structures.

Apart from the acquisitions, the following investments toward
expanding our capacities were made in 2013:

NORMA Group SE Annual Report 2013Economic Report

Newbury,
United Kingdom

Serbia

Capacity extension of our plant in Newbury and ex-
pansion of production space by 1,850 m² as a reaction
to strong growth in demand for our VPP clamps from
our European customers

Expansion of extrusion capacities in order to prepare
for the market introduction of second-generation fluid
systems at our European OEMs

Riese Pio X,
Italy

Acquisition of Nordic Metalblok to create additional
capacity and contribute to further consolidation of the
European metal-based clamp market

Moscow,
Russia

Juarez,
Mexico

Monterrey,
Mexico

Establishment of distribution platform in Moscow in
order to improve customer service

Capacity increase for our roll-forming equipment

Expansion of existing production line in order to keep
up with growing demand for products in the area
of Selective Catalytic Reduction (SCR) in the North
American market.

Implementation of standard ERP-system in order to
improve efficiency of managing supply chains, financial
processes and customer service.

St. Clair,
Michigan, USA

Implementation of an automated assembly system and
expansion of plastic injection moulding capacities.

Changzhou,
China

Establishment of a second plant in China (10,800 m²)
for production of metal-based joining products for
Chinese, Japanese and Western OEMs.

Pune, India

Start of operation of a production facility in Pune.

Quality Management
Our products are often critical to the ability of our customers’ end
products to function properly. It is therefore extremely important
for us to ensure that we deliver outstanding quality. In order to
be able to offer our customers around the world the same high
quality, we observe the quality standards ISO 9001, TS 16949
and ISO 14001 throughout the entire Group. Even our plants that
have been in existence for quite some time have all been certified
based on these standards. Certification of plants that were built
more recently or acquired is also planned. Two sites that supply
to the aviation industry have also been certified in accordance
with EN 9100, and various product categories have been ap-
proved especially for the shipping and construction industry.
Furthermore, regional standards are also taken into consideration.
In addition, the same consistent production processes are used
at all NORMA Group sites. This know-how is shared and com-
municated inside the Group through close collaboration between
the various sites and gradual implementation of new quality man-
agement (CAQ) software.

Quality management at NORMA Group is based on an inte grated,
holistic approach that already starts with advanced planning of
quality and includes the entire process.

In 2013, we managed to reduce the number of returned parts
per million (PPM) to 24 (2012: 34). The number of quality-related
complaints per month could be reduced to an average of 9 (2012:
10.2).

Innovative methods of process optimisation
NORMA Group relies on many different proven methods to ana-
lyse processes, identify defects early and ultimately achieve
systematic process improvements. These include statistical pro-
cess regulation, kaizen, the 5S methodology on optimisation of
workplaces, the Six Sigma method for analysing and eliminating
defects in development and manufacturing, but also the daily
Gemba Walk through the production halls that was introduced
in June 2013. With the latter, individual processes are inspected
by an interdisciplinary team in the opposite order of the workflow.
Data on current and targeted performance, unplanned down-
time, accidents at work, the order situation, backlogs and qual-
ity defects is collected by the employees at each site and then
analysed. The goal is to identify potential for improvements at
every station and implement the appropriate measures quickly.
The Gemba Walk has already brought significant improvements
to the processes, a reduction in delivery backlogs, for example.

Customers reward NORMA quality
The many awards that we have received from our customers in
recent years clearly show that they are pleased with the quality
of our products:

April 2013: Awarded with ‘Best Technology Innovation’ price
by China’s automotive B2B marketplace Gasgoo International
August 2013: Receipt of the ‘50 PPM Award’ from American
car manufacturer Paccar Inc.
October 2013: Receipt of the ‘Ford Q1 Award’ for our plant in
Monterrey, Mexico
October 2013: Receipt of the ‘Ford Q1 Award’ for our plant in
Monterrey, Mexico
January 2014: Receipt of the ‘Best Partner Award’ by General
Motors Shanghai
February 2014: Receipt of the ‘Captain Misa Anastasijevic
Award’ in Serbia
March 2014: Certified ‘A-class supplier’ by FAW-Volkswagen
Automobile, China

Consolidated Management Report80

DEVELOPMENT OF NICKEL COMMODIT Y PRICES FROM 2012 TO 2013

in USD / Metric ton

Source: Dow Jones

21,000

20,000

19,000

18,000

17,000

16,000

15,000

14,000

13,000

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

DEVELOPMENT OF NICKEL COMMODIT Y PRICES AND THE ALLOY SURCHARGE 1.4301 FROM 2012 TO 2013

Alloy surcharge of flat products 1.4301 X5CrNi18-10 Europe (Outokumpu) cash in EUR (left scale)
Nickel on the LME 3 months in EUR (right scale)

Source: Dow Jones

1,600

1,500

1,400

1,300

1,200

1,100

1,000

18,000

16,000

14,000

12,000

10,000

8,000

Q1 2012

Q2 2012

Q3 2012

Q4 2012

Q1 2013

Q2 2013

Q3 2013

Q4 2013

MATERIAL PURCHASES IN 2013

STRUCTUR AL ANALYSIS OF SUPPLIERS IN 2013

in %

Alloy surcharges 9

Production mate- 4
rials (various)

19 Steel, wire

Indirect
materials 25
(MRO, DS,
various)

Electronic
components 1

20
Metal
components

Plastic parts 8

7 Rubber moulded parts

7 Granules

in %

100

Top 10

Top 50

Top 100

Share of suppliers in the purchasing volume

NORMA Group SE Annual Report 2013

Economic Report

Export controls
Due to the many cross-border deliveries, effective and reliable
customs processes are extremely important to us. We participate
in various customs and trade partnership programs in order to
ensure that our supply chains are stable and reliable. Our German
plants have held the permit to act as an Authorised Economic
Operator – Customs Simplifications (AEO-C) already since
2010 / 2011. In March 2013, our plant in the Czech Republic suc-
cessfully received a certificate. Since September 2013, following
a scheduled evaluation by a US customs authority, our plant in
Michigan, USA, has been a member of the “Customs and Trade
Partnership against Terrorism” (C-TPAT).

In 2010, we implemented an export control programme in order
to ensure that our supply chain fully meets the legal requirements.
We conduct reviews of all business partners at least once a year
in order to rule out that we supply legally sanctioned third parties.

Relatively stable commodity prices
The market prices for steel-related materials remained relatively
stable on average in 2013. Alloy surcharges for stainless steel,
on the other hand, declined compared to 2012 and remained at
a relatively low level compared to previous years. This was due
mainly to declining nickel prices.

In the area of granules, the supplier situation normalised consid-
erably again in 2013 following the accident with serious conse-
quences that took place at one of our preliminary material sup-
pliers’ sites in 2012 and the resulting global shortage of supply
of polyamide 12. Due to the fact that the situation returned to
normal in the area of high-performance polyamides and com-
modity prices (butadiene, for example) declined to some extent,
we managed to negotiate better purchasing agreements for the
Group in 2013.

PURCHASING AND SUPPLIER MANAGEMENT

Material costs represent the highest cost position for a manufac-
turing company like NORMA Group next to personnel costs.
Because they significantly affect NORMA Group’s profits, pur-
chasing and supplier management both play a decisive role in
the success of the Group.

Proactive management of direct and indirect material costs and
services is the most important task for the purchasing depart-
ment. These pertain mainly to the direct material areas of steels
(strip steels of various grades), stainless steels, wires, technical
thermoplastics, polyamides, granules, plastics, rubber and met-
al components, but also electronic components. Due to the fact
that these commodities are subject to price changes, it is up to
purchasing to lower these price risks by employing systematic
material and supplier risk management. For this reason, we have
developed a high-performance global Group purchasing struc-
ture in order to leverage economies of scale within the Group in
purchasing the most important product areas and acquiring these
as competitively as possible.

Furthermore, we always strive to ensure permanently competitive
purchasing prices by constantly optimising our selection of sup-
pliers and by employing the BLC (Best-landed-cost) approach.
We also protect ourselves from the volatility of raw material prices
by signing purchasing contracts with terms of up to 12 months
and longer.

Global structure and regional expertise
Purchasing of commodities and materials at NORMA Group is
managed by a global commodity structure for all domestic and
foreign Group companies. Here, regional teams contribute their
unique expertise with respect to local market conditions and cost
drivers that are typical for a region. This structure that was es-
tablished for the EMEA region back in 2012 has made a significant
contribution to continuously improving the cost of materials ratio
and ensuring that our purchasing management remains com-
petitive.

In 2013 regional purchasing structure in consultation of material
group volumes within one regional commodity-responsibility and
global commodity direction could be established successfully in
the Americas.

Supplier structure
Our total production materials turnover amounts to roughly EUR
180 million. Our top 10 suppliers account for roughly 32 percent,
while our top 50 suppliers account for nearly 65 percent of the
total volume.

Support for organic growth through
purchasing programmes
Commodity strategies and a supplier panel that is clearly defined
based on product categories represent an important foundation
for the newly established Programme Purchasing in our EJT Flu-
id business. Thanks to decentralised programme purchasing in
the area of Fluid directed at lean central coordination, we are able
to support our organic growth plans in a much more focussed

Consolidated Management Report82

OUR BR ANDS

manner and more efficiently through purchasing. Furthermore, a
project purchasing database not only enables better purchasing
management, but also allocation of new material orders con-
formed to the commodity strategy.

We also established new structures in purchasing last year in the
area of non-production materials & services. Our goal is to achieve
a higher degree of professionalism and gradually conclude more
long-term, competitive contracts by coming up with a good com-
bination of global and regional purchasing management.

MARKETING

NORMA Group has continued to grow in recent years. In order
to further increase awareness of our products all over the world,
increase product sales and intensify our customer relationships,
we employ many different marketing instruments that suit our
individual target audiences.

We coordinate our marketing activities either centrally, region ally,
or locally, depending on the type of activity and objectives. By
having Group marketing teams work closely with regional and
local organisational units, we ensure that local marketing con-
ditions and consumer preferences are taken into account in the
various regions and markets. The Group marketing team’s re-
sponsibilities include planning and defining strategic goals,
develop ing our brand strategy and corporate identity, but also
defining the framework conditions for all marketing activities. The
regional marketing units are responsible for executing the various
activities and synchronising them with the operative objectives
of NORMA Group. All trade marketing activities are managed at
the regional level and executed locally.

Our marketing expenditures amounted to EUR 2.87 million in
2013 (2012: EUR 2.15 million). Around 20 % of this spending
was put toward general marketing activities, 63 % was invested
in brand-related communication, and approximately 17 % on
product-related communication. Roughly 45 % of our marketing
expenditures can be attributed to the EME A region, 30 % to the
Americas, and 25 % to the APAC region.

We plan to continue intensifying our marketing activities in 2014,
particularly in the APAC region and the Americas. As a result,
total expenditures on marketing will be higher in these segments
this year. Nevertheless, we expect to be able to lower our overall
marketing expenses in the EME A region due to new organisa-
tional structures in the area of marketing and the increased
effective ness and higher capacities associated with these. Gen-
erally speaking, we intend to optimise our cost structure by es-
tablishing new structures and introducing new instruments and
processes in 2014. For this reason, 2014 spending should remain
at roughly the same level as in 2013 despite the higher level of
marketing activity.

Annual customer survey aimed at further improving
customer satisfaction
Being able to understand what our customers expect of us and
our products is of immense importance to our Company. For this
reason, our global marketing team conducts an annual study on
customer satisfaction every year, the Customer Satisfaction Sur-
vey (CSS). This is actually a detailed survey with which we seek
to gain new insights on our customers’ expectations and how
they feel about our performance. Furthermore, we also analyse
the various levels of expectation of different groups of customers

NORMA Group SE Annual Report 2013Economic Report

MARKETING E XPENDITURES BY ACTIVIT Y

MARKETING E XPENDITURES BY SEGMENT

in %

Product communication 17

in %

20 All marketing
activities

Asia-Pacific 25

45 EMEA

63 Brand communication

Americas 30

and measure customer satisfaction over an extended period of
time, also compared with our fellow market participants. We then
leverage the potential for improvement that we discover to pro-
duce an activity plan that helps us to systematically execute and
monitor the respective optimisation processes. This plan contains
specific goals which the respective employees are expected to
achieve within a certain period of time. Management oversees
this process on an ongoing basis.

More than 600 customers took part in this survey last year and
assessed the following categories: sales, products, product train-
ing, packaging and labelling, logistics, technology and engineer-
ing, quality, customer service and the NORMA Group website.

We proceeded to develop a catalogue of activities based on the
potential for improvement that the survey exposed. Of the 81
measures formulated in total, 26 had already been completed by
the end of 2013. We will gradually begin executing the remaining
measures starting in 2014. In the EME A region, for example, we
are planning to intensify and expand our contact to customers
by holding Innovation Day events on-site. In the Asia-Pacific re-
gion, the main focus of marketing activities and measures that
contribute to sales will be on product training courses. Here, our
goal is to be able to prepare offers for our customers more quick-
ly in the future. In the Americas region, we will also be looking to
react more quickly when it comes to producing technical draw-
ings and prototypes, for example.

Newly established marketing activities
In 2013, we organised our first ‘Tech Day’, a marketing event
aimed at introducing new product developments directly at our
customers’ sites and thus strengthening our customer relation-
ships. The first Tech Day took place at the corporate headquarters
of one of our Swedish customers. Other events of this kind were
also held and all were considered to be extremely successful.

We are currently working on developing a global brand strategy
for the DS area that will address the changing market more di-
rectly.

Attendance of 43 exhibitions all over the world
Maintaining a presence at trade fairs and industrial exhibitions
also represents an important component of our marketing strat-
egy. It is here that we unveil the new products in our product
portfolio and have the opportunity to speak directly with both
existing and potential customers.

In 2013, we attended 43 exhibitions all over the world (previous
year: 17) with our own trade fair booth and introduced our prod-
ucts and joining solutions for the many different industries we
serve. Our presence in the Asia-Pacific growth region deserves
special mention in this respect. We participated in 13 exhibitions,
which among others included the ACMA Automechanika in India
and the Water Expo in China.

We measure the results of our efforts with the help of the cus-
tomer satisfaction index and the so-called Net Promoter Score
(NPS) – a further indicator that directly measures customer satis-
faction and indirectly their willingness to recommend us to other
companies.

Social Media
In order to increase public awareness of NORMA Group and to
provide a further platform for interaction to our customers, part-
ners and employees, we expanded our online activities in the

Consolidated Management Report84

TR ADE FAIRS AND E XHIBITIONS 2013

EMPLOYEE DEVELOPMENT AT NORMA GROUP

Employees (incl. temporary workers)

4,947

4,485

4,252

5,000

4,800

4,600

4,400

4,200

4,000

3,800

Asia-Pacific

Americas

EMEA

2011

2012

2013

area of social media and have been present on the international
networks Twitter, LinkedIn, Facebook and the German network
Xing with our own company profile since April 2013.

EMPLOYEES

The work of our employees who contribute their skills and passion
for joining technologies on a daily basis forms the foundation of
our business success.

Employee development
As at 31 December 2013, we had 4,947 employees, including
temporary workers. This means our workforce grew by 462,
around 10% compared to the previous year (4,485 employees).
Roughly 80% of our employees work outside Germany. Around
16.4% of the workforce, temporary workers, for instance, was
employed in a flexible arrangement.

2,820 employees, 68 % of NORMA Group’s core workforce, were
employed in the EME A region at the end of the year (previous
year: 2,644). This roughly 6.6 % increase in the number of em-
ployees in this region can be attributed for the most part to higher
incoming orders in the UK and the continued expansion of our
plant in Serbia.

As at 31 December 2013, we have 4,947 employees, including
temporary workers. This means our workforce grew by 462,
around 10% compared to the previous year (4,485 employees).
Roughly 80% of our employees work outside Germany. Around
16.4% of the workforce, temporary workers, for instance, was
employed in a flexible arrangement.

At the end of the year, 711 permanent employees or 17 % of the
company’s core workforce were employed in the Americas re-
gion. This corresponds to an increase in permanent employees
of around 14.8 % compared to 2012. New hires pertained mainly
to our US subsidiaries in St. Clair and Auburn Hills last year.

In the Asia-Pacific region, the number of employees was influ-
enced by acquisitions in Australia and the high level of capacity
utilisation at our plant in Malaysia. As at 31 December 2013, we
employed 603 people there (2012: 496 employees). This corre-
sponds to a 21.6 % increase and a roughly 15 % share of NORMA
Group’s core workforce.

We rely on a local personnel management organisation in order
to be able to meet the various needs in different regions. In other
words, the individual sites are largely responsible for selecting,
training and deciding on the remuneration of their own em-
ployees. On the other hand, they must still observe the strategic
and operational corporate guidelines on personnel policies and
compliance.

Corporate Governance Report, p. 40.

Charter of Diversity
Our employees come from 40 different nations and have various
ethnic and cultural backgrounds. We view the diversity of our
employees to be a competitive advantage. We are convinced that
we will only be economically successful if we recognise and lever-
age this diversity. We reaffirmed this position by signing the ‘Char-
ter of Diversity’ in March 2013.

Three regional diversity officers are employed on a Group-wide
basis to see to it that all of our employees benefit from receiving
the same respect and equality of opportunity. On 11 June 2013,

NORMA Group SE Annual Report 2013Economic Report

EMPLOYEES BY REGIONS 2013 (CORE WORKFORCE)

NEW HIRES OF FEMALE EMPLOYEES IN 2013

in %

Asia-Pacific 15

17
Americas

in %

Asia-Pacific 35

32 EMEA

68
EMEA

31 Americas

AGE STRUCTURE 1)

< 30 years

30 – 50 years

> 50 years

Average

17.64 %

61.40 %

20.96 %

35.75 years

1) 3,650 employees counted (88 % of permanent staff) in total. For legal reasons,

reporting on employees’ ages is not possible for all Group companies.

we participated in the 1st German Diversity Day that the club
Charta of Diversity e. V. issued a nationwide invitation to. The
second Diversity Day will be held on 3 June 2014.

More female expertise
As a consequence of our diversity strategy, we intend to increase
the share of female employees in management positions. Roughly
35 % of our employees are currently females. In 2013, a Super visory
Board mandate was issued to a woman for the first time ever.

Inclusion of the handicapped
At NORMA Group, we want people who have handicaps to also
take part in normal work life. In fact, we currently employ 46
severely handicapped men and women in Germany.

Integration through cooperation
For us, fostering diversity also means seeing to it that all parties
are able to get along well in their immediate environment. People
from 25 different countries work at our headquarters in Maintal
alone. We cooperate with the non-profit FAB gGmbH in order to
also support effective integration outside the workplace, for ex-
ample. This organisation gives the foreign employees of our site
in Maintal the opportunity to participate in the German courses
that are held by educational institutions at no charge.

Managing performance – Rewarding performance
Our goal is to attract and retain qualified and committed em-
ployees. For this reason, we place particular importance on fair
remuneration and profit-sharing, but also on how we handle tem-
porary employment. By offering variable remuneration systems,
we strive to encourage our employees to take an interest in our
success and the further development of the company. By hold-
ing regular benchmarks, we ensure that our employees are paid
market-oriented salaries and wages based on their performance
and responsibilities, regardless of their gender. Furthermore, we
ensure that all of the remuneration and social contributions paid
satisfy at least the local statutory standards.

Rewarding and motivating
Participation in our success is an important element of our re-
muneration system. Our results are largely dependent on the
contributions and motivation of our employees. For this reason,
we consider allowing them to participate in our Company’s profit
to be a logical consequence. This participation can be considered
recognition and appreciation of our employees’ achievements
and, at the same time, as an incentive to achieve even better
results in the future.

Responsibility for temporary employees
Temporary employment of workers allows us to compensate for
temporary peaks in production and economic cycles in a flexible
manner. Furthermore, it enables us to work on special projects
or to fill-in for employees. Temporary employment thus contrib-
utes to our operational results. For this reason, it is important to
us not to achieve this success at the expense of temporary em-
ployees. Therefore, NORMA Group reached an agreement with
the German Group Works Council in October 2012 that requires
that temporary employees be offered permanent employment

Consolidated Management Report

as soon as they have worked for the Company for more than 15
months. Temporary employees already receive the same base
salary as our core workforce after six months. In contrast to this,
the collective bargaining provisions of the IG Metall in Germany
require permanent employment after two years and salaries are
adjusted in four steps after nine months at the earliest.

Low fluctuation reflects employee satisfaction
Our employees are extremely motivated and work hard for the
Company and to ensure its success. The low number of em-
ployees who voluntarily leave the Company clearly confirms that
this is the case. The share in Germany was only 1 % and 6 % on
a Group-wide basis (excluding China and Mexico). This high com-
mitment to NORMA Group can also be seen in the low absence
rate of only 4 % Group-wide. 27 % of our workforce also looks
back on having worked for the Company for over ten years – a
rather high number considering the new plants that have been
built and the acquisitions made in recent years. The average
total length of service is currently around 8 years.

Knowledge as a resource – Talent drives performance
By investing to further improve the qualifications and edu cational
backgrounds of our skilled employees, NORMA Group is also
investing in the future of the Company and society. We are an
international market and technology leader in the area of engi-
neered joining technology. In order to reinforce and expand our
position, we need qualified and well-trained employees. For this
reason, we consider further education and training of our staff to
be not only part of our social responsibility, but also an important
contribution to the future development of our business. Our goal
is to recruit as many of our expert employees from our own youth
as possible. For this reason, training our young people represents
an elementary component of our personnel policy. Besides this,
we also lower our dependence on the external job market and
are able to ensure a high level of educational quality.

Focus on technical careers
At NORMA Germany, the main focus of training at the site in
Maintal is on technical careers. These include electronic techni-
cians who work on operational equipment, industrial mechanics,
machine and plant operators (metal technology), mechatronics
technicians, process mechanics on plastics and rubber technol-
ogies, but also toolmakers.

Furthermore, industrial managers and skilled employees for the
area of logistics are trained at our two sites in Maintal and Ger-
bershausen. In keeping with the global focus of NORMA Group,
our training and further education programmes also have an
international focus. We offer employees who are just starting their
careers study trips, English courses and traineeships at other

national companies in order to prepare them for working in inter-
national teams at an early point in time.

Dual studies offer advantages
Our company has been giving young men and women the chance
to obtain a combination of practical training and university studies
since 2006. Theoretical and practical contents are closely co-
ordinated with a dual studies program. This makes it easier for
them to enter the job world later on because students are already
familiar with our Company and the internal operating procedures.
They are then able to acquire their Bachelor of Engineering de-
grees at the Career Academy in Frankfurt / Offenbach and at the
Technical University of Darmstadt in the fields of industrial engi-
neering, mechanical engineering and mechatronics or their Bach-
elor of Arts degrees in business administration.

In 2013, NORMA Germany employed 39 trainees, three of whom
pursued dual studies. 13 career entrants successfully completed
their training or studies in 2013. We gave all of these individuals
permanent employment.

Nevertheless, education does not come to an end for our em-
ployees when they are hired. To ensure that we are able to con-
tinue improving our position as a technology and innovation
leader in the industry, our workforce must be given the chance
to improve its qualifications in all relevant areas. For this reason,
each and every person who works for NORMA Group was able
to benefit from an average of 28 hours of additional occu pational
training in 2013. 97 % of our employees participated in at least
one training activity last year.

Targeted search for talent
The development of our workforce and technical and manage-
rial personnel in particular is of high priority to NORMA Group.
So-called talent reviews help us to identify employees with po-
tential at all levels of management. We introduced a global talent
programme in 2013. 15 extremely promising future managers or
so-called high potentials who have already demonstrated their
ability to perform well in the past, but also have immense poten-
tial to advance in their professional careers, are prepared here
for higher management responsibilities. The participants acquire
management and conflict solving skills in four modules over a
period of three years. At the same time, they train their strategic
and entrepreneurial thinking. We also developed special promo-
tion programs for employees with development potential who
have strong ties to the region.

Furthermore, we offer experienced managers who are nomi nated
by the Management Board a modular training programme aimed
at further developing their professional and personal development
in cooperation with the Frankfurt School of Finance & Manage-

NORMA Group SE Annual Report 2013Economic Report

PARTICIPATION R ATE IN THE EMPLOYEE SURVE Y

in %

100

81.9

80.4

89.6

2008

2010

2012

ment. These managers are then able to acquire new skills in the
areas of strategy, organisation, corporate culture, but also per-
sonnel, resource and supply chain management, for example.

All supervisors are required to hold an assessment and qualifi-
cation conversation with each individual employee at least once
a year in order to be able to evaluate their staff’s performances,
specialized knowledge and development potential. During these
meetings, the employees’ responsibilities and personal goals for
the next year are documented and the need for further training
is determined.

Exchanges of personnel: More communication,
better understanding
NORMA Group will continue to grow internationally in the future,
both organically and through acquisitions. In order to be able to
integrate new parts of the Group and for the individual sites to
work together efficiently, we need functioning communication at
all levels. To achieve this, we offer a variety of exchange pro-
grammes for our employees, one to three-month so-called ‘bub-
ble assignments,’ three to twelve month ‘short term assignments’
and ‘long-term assignments’ with a term of at least one year.
Expert personnel and managers who participate in this initiative
bring special skills and experience to the new sites and, at the
same time, benefit from the know-how that their new colleagues
have. Through these projects, we promote the internal transfer
of know-ledge, intercultural awareness, the establishment of net-
works and the individual development of the participants. This
exchange is not limited to technical and management personnel.
Job entrants are also given the chance to take part in traineeships
at other national companies while they are being trained and are
thus able to extend their specialised and intercultural skills.

Our employees express their opinions
By strengthening our company culture, we lay the foundation for
higher employee satisfaction and more motivated and productive
employees. In 2008, we introduced an employee survey as an
instrument for actively co-designing internal processes. This sur-
vey enables us to systematically analyse our company’s strengths
and weaknesses from the perspective of our employees. It helps
us to identify and meet challenges more effectively, but also to
initiate important change processes.

We conducted our third Group-wide survey since 2008 and 2010
in 2012. The overall results of the survey and the high participation
rate of nearly 90 per cent clearly suggest that our employees
support the further development of NORMA Group and are
pleased with their situation at work.

Families welcome
NORMA Group helps its employees to reconcile work and fam-
ily life. For this reason, we established measures to offer the
highest degree of flexibility to employees with family and children.
For example, we supported the introduction of a lifetime working
time account together with the German Group Works Council.
NORMA Group employees at the sites in Maintal, Gerbers-
hausen, and Marsberg are allowed to set up wage credit ac-
counts on a voluntary basis by saving parts of their monthly
salaries, bonuses or remaining vacation days. The resulting
credits can be used by our employees to take time off to attend
to their children or take care of family members. Furthermore,
since November 2013, our employees have been able to perform
some or even all of their work-related tasks outside the Com pany
at their home offices.

Consolidated Management Report88

Healthy Team – Healthy Company
A productive company like NORMA Group depends on having
healthy and satisfied employees. For this reason, we contribute
to our employees’ health by conducting various activities, such
as skin screening, intraocular pressure and blood fat measure-
ments, tests on lung function, cardiovascular disease prevention
and flu vaccinations. Our company doctors also accompany the
rehabilitation and reintegration of these employees into work life.
By conducting tours of our facilities on a regular basis, we subject
each and every workplace to analysis with respect to all possible
work-related healthcare risks. Our goal is to establish medical
facilities and healthcare programmes at all NORMA Group sites.
On the way to achieving this, doctors began working at our sites
in Ciudad Juarez and Monterrey (both NORMA Mexico) and Briey
(NORMA France) in 2013. Furthermore, we took out voluntary
health insurance policies for all of our employees in Russia,
France, Poland, the UK and Turkey.

We know from our most recent employee survey in 2012 that
job-related and personal stress can exert immense pressure on
many of our employees. For this reason, NORMA Group Holding
and NORMA Group SE began working with an external healthcare
and social service provider in October 2013. The doctors, psy-
chologists, social advisors and legal advisors who work for
EAP-Assist GmbH are now available to assist our employees and
their immediate family members around the clock and throughout
the year to help them with any health-related, mental, social or
family problems they might be having. Our employees at the site
in Pune (NORMA India) have been benefitting from a similar pro-
gramme since 2013.

CORPOR ATE RESPONSIBILT Y (CR)

We consider bringing the effects of our operations in line with the
needs and expectations of society to be a core responsibility. For
this reason, we base our decisions on the principles of respon-
sible corporate governance and sustainable action.

The global megatrends that result from climate change present
us, as a manufacturer of innovative joining technology and a busi-
ness partner for companies in many different industries, with a
special challenge. We stand up to this challenge by offering solu-
tions that provide ways to increase the efficiency of re sources and
energy. Together with our business partners, we thus contribute
toward making society more socially and ecologically sustainable.
We consider this to be both a challenge and an incentive.

Organisation
In August 2012, a CR steering committee was established under
the direction of our CEO Werner Deggim. Its objective is to define
the long-term corporate responsibility goals for NORMA Group
and to develop and decide on cross-functional measures.

Now that we initiated the process of integrating Corporate Re-
sponsibility into our business strategy and developed our first
CR-model in 2012, we focussed on defining the specifics of our
CR-strategy in 2013. The CR-steering committee approved an
appropriate roadmap in the spring of 2013. Overriding goals were
identified and medium and long-term measures were adopted.
The CR-steering committee monitors execution at regular inter-
vals, adjusts the objectives if conditions have changed, and modi-
fies the activity plan, if necessary.

Five CR key areas
NORMA Group has systematised CR-measures in five key ar-
eas of action. The respective departments are responsible for
their implementation and for achieving the objectives. The CR
coordinators are responsible for cross-departmental functions.

Responsible management: Corporate leadership that takes
the interests of the various stakeholders into consideration
represents an important element of our understanding of re-
sponsibility. This requires that our employees live a culture of
responsibility, honesty and mutual respect. Our policies on
compliance are our most important tools for reminding our
Corporate
employees of their ethical and legal obligations.
Governance Report, p. 40.

Business solutions: We offer our business partners and cus-
tomers product solutions that make using fluid and gaseous
substances cleaner, safer and more efficient. By doing so, we
help to lower energy consumption and emissions that are
harmful to the climate. Conducting research on and develop-
ing new, ‘green’ products plays an important role in meeting
the changing social and legal requirements.
Research and
Development, p. 61.

Employees: Thanks to our global presence, promoting diver-
sity among our workforce represents an important part of our
Company culture at NORMA Group. By signing the Charter of
Diversity in March 2013, we committed ourselves to creating a
working atmosphere that is free from prejudices and discrim-
ination and characterised by mutual respect and appreciation.

Employees, p. 84.

Environment: We are mindful of the fact that we depend on
the environment with all actions we take. This is why we are
improving the efficiency of our use of energy and other natural
resources at our sites and in the area of logistics. In 2013,
NORMA Group continued to expand certification of its sites in
accordance with ISO 14001. We also introduced a Group-wide
reporting system that enables us to record and track the con-
sumption of resources, emissions and waste. This helps us to
further improve the efficiency of our manufacturing in environ-
mental terms.

Environmental Protection, p. 90.

NORMA Group SE Annual Report 2013Economic Report

DEVELOPMENT OF INCIDENT R ATE

Incidents per 1,000 employees

2009

2010

2011

2012

2013

Community: NORMA Group benefits from operating in lively
and liveable communities. To sharpen our profile of being a
responsible partner at our sites, the Management Board ratified
a Corporate Citizenship Guideline (CCG) in October 2013. The
CCG serves as the framework for our local and regional com-
mitment and defines the main areas, target audiences and ways
in which NORMA Group’s sites serve the community. Further-
more, NORMA Group is planning to establish an international
project in 2014 that is aimed at using water more efficiently for
those who live in developing countries.

Certified standards
We have been certifying the safety management systems at our
sites in accordance with OHSAS 18001 (Occupational Health and
Safety Assessment Series) since 2010, and thus guarantee a high
standard of safety within the Group. In 2012, 14 of our 21 global
sites were already rated accordingly. 16 sites have been certified
in accordance with OHSAS 18001 since the end of 2013. Certifi-
cation of the remaining sites is planned for 2014. These certification
audits are conducted by external auditors and repeated annually.

Website on Corporate Responsibility
In order to present NORMA Group as a responsible company to
its stakeholders more actively in the future, the new website
@ www.normagroup.com/cr will inform all interested parties at a
glance of how Corporate Responsibility is being put to strategic
use, our objectives and our model activities in the five key areas.

OCCUPATIONAL HEALTH AND SAFET Y

Our employees represent an essential factor in the successful
and sustainable development of NORMA Group. The safety and
health of our employees is therefore of the highest priority for us.
We invest heavily and systematically in the area of occupational
health and safety in order to prevent potential hazards.

We also recognize our responsibility and duty to take good care
of our employees. Therefore, we work very hard to comply with
all applicable laws and regulations that pertain to environmental
health and occupational safety. In addition, we also see to it that
all workplaces ensure maximum safety and avoid accidents where
possible through complementary policies and programmes.

Safety is a job for top management
Every accident at work is not only reported at the highest level,
including corrective and preventive measures, the Management
Board also keeps track of how figures on accidents, risks and
medical treatments develop. The number of occupational acci-
dents is collected on a Group-wide basis each month and the
trend is monitored using various key performance indicators (KPI).

In 2013, two key indicators were added to the indicator system.
In order to better estimate the risk of accidents, we now record
the incident rate (incidents for every 1,000 employees), the total
number of reportable incidents, the number of medical treatments
and its rate (medical treatment rate). These four performance
indicators are then used to monitor accidents at work each month
on a global basis. The quarterly reporting system ensures Group-
wide transparency and helps us to respond quickly to threats
and changes in trends.

Number of medical treatments

Medical treatment rate

2013

229

4.48

2012

340

6.58

Consolidated Management Report

SPECIFIC ENVIRONMENTAL INDICATORS

CO2 emissions from the consumption of electricity and gas (kg / EUR thousands of production activity)

Electricity consumption (kWh / EUR thousands of production activity)

Gas consumption (kWh / EUR thousands of production activity)

Water consumption (t / EUR thousands of production activity)

Metal waste (t / EUR of production activity)

Non-metal waste (t / EUR of production activity)

Paper waste (t / EUR per production activity)

Remaining waste (t / EUR per production activity)

2012

82.54

2013

80.32

120.83

118.25

39.50

0.19

13.04

1.29

1.21

1.66

36.84

0.17

12.17

1.68

1.11

1.46

Change

– 2.7 %

– 2.1 %

– 6.7 %

– 10.5 %

– 6.7 %

+ 30.2 %

– 8.3 %

– 12.0 %

We have made significant progress in the area of occupational
safety in recent years. We managed to reduce our incident rate
to 10 in 2013. Our goal is to achieve an incident rate close to zero
over time.

In 2012, we established the Value Based Safety Programme at
our US production sites which will be rolled out to include all sites
by the end of 2014. The Value Based Safety Programme analyses
the activities of employees at work and determines potentially
dangerous behaviours as part of weekly security checks. The
deficits found are permanently corrected using standardised and
team-oriented problem solving methods, for example, the so-
called 8D-method that includes detailed feedback. We thus
involve our employees more actively in occupational safety, sen-
sitize them and, at the same time, increase safety for all those
involved.

Group-wide environmental management system
In 2013, we established a comprehensive, Group-wide environ-
mental management system that currently includes 18 sites in
total that are certified according to the ISO 14001 standard. Our
goal is to increase the efficiency of our production processes,
sustainably reduce our energy consumption and produce less
waste. The long-term savings that this will bring will also con-
tribute positively to the profitability of NORMA Group.

Our aim is to integrate all NORMA Group production sites into
the system by mid-2014 with the exception of Chien Jin Plastic,
Malay sia, and Nordic Metalblok, Italy. New acquisitions from 2013
have not yet been taken into account here. A Group-wide report-
ing tool for recording and tracking our use of resources, emissions
and waste that was activated in 2013 will help us to record and
track results more swiftly.

ENVIRONMENTAL PROTECTION

AND ECOLOGICAL MANAGEMENT

As a manufacturing company, we are well aware of our environ-
mental, economic and social responsibilities. Environmentally-
friendly and sustainable management is therefore an integral part
of the strategy of NORMA Group.
Corporate Responsibility,
p. 88. The systematic integration of environmental aspects into
business decisions and the continuous optimisation of our pro-
cesses play an important role here.

Reducing consumption of energy and water
As part of the implementation of our sustainability strategy, we
succeeded in reducing our energy and water consumption com-
pared to 2012. Measures that have made a significant contribu-
tion to this include the use of more efficient lighting systems, the
consequent shutdown of consumption during breaks, and the
use of efficient compressors at the site in Juarez. Together, these
measures have helped us to reduce CO 2 emissions from elec-
tricity and gas consumption compared with 2012 by 2.7% to
80.32 kg/kEUR of production activity. Power consumption also
dropped by 2.1 % to 118.25 kWh / kEUR of production activity.

To make our contribution to the sustainable use of resources and
environmental protection, we invest in measures that serve to
optimise the efficiency of our processes and lower our consump-
tion of resources.

Water consumption was cut by more than half compared with
the previous year at our sites in Auburn Hills through optimisation
measures for watering the building grounds.

NORMA Group SE Annual Report 2013

Supplementary Report

In Pennsylvania, USA, we significantly reduced both the amount
of waste and new consumption by reprocessing detergent solu-
tions that are used to clean parts of production. At the same time,
we also succeeded in lowering consumption of coolants and
machine oils.

Through these and other measures, we managed to improve our
waste balance in 2013 with the exception of non-metallic waste.
For example, we reduced paper and residual waste by 8.3 % and
12.0 % respectively compared to 2012. The 30.2 % increase in
non-metallic waste can be attributed to the launch of new prod-
ucts and changes in the product mixes at a few plants.

Responsible transportation of people and goods
We continue to update the company car directive that applies in
Germany and takes fuel consumption into consideration. And
with shipments by sea, the respective products are transported
to the port by train.

Furthermore, we have been shipping parcels carbon dioxide-neu-
trally in Germany since 2011. This means the emissions produced
during processing of a parcel that are harmful to the environment
are compensated for by financing climate protection projects.
Even this Annual Report was printed carbon neutrally using
FSC-certified paper. From April 2012 to March 2013, we thus
compensated for 14.3 tons of CO 2 in total.

Sustainability will also continue to play an important role in our
Group strategy in the future. Here, we also involve our suppliers
by requesting that they establish a sustainable environmental
management system or continue to develop their existing systems.

A green product portfolio
NORMA Group is an expert in the area of engineered joining
technology. We manufacture a wide range of components that
are installed in critical areas of vehicles, ships and aircraft and
are crucial to their ability to perform properly. Roughly 50 % of
our product portfolio is used to control emissions. Examples
include our SCR-fluid pipe systems that are used to reduce the
level of nitrogen oxide in the exhaust fumes of combustion en-
gines. Our latest generation V-Band clamps and Euro Couplers
are not only used to reduce weight, but also to achieve more
reliable sealing of interfaces in the exhaust track and on the turbo-
charger.

Furthermore, roughly one million vehicles are currently equipped
with our newly developed coolant duct systems. Our products
are up to 30 % lighter than conventional systems and thus con-

tribute significantly to reducing the weight and emissions of ve-
hicles. Our product Euro Coupler helps our customers to build
lighter cars, prevent leakages and thus lower CO 2 emissions. The
further development of our NORMAFLE X® Low Emission Tubes,
a new generation of tubing, meets the Low Emission III Standards
for fuels with a high percentage of aggressive alcohol com-
pounds.

Due to how extremely important the components we manufacture
are for our customers’ end products, we bear a great deal of
responsibility to them. Therefore, our goal is to ensure the high-
est possible product reliability. We achieve this by relying on a
high degree of auto mation in our manufacturing and by using
modern quality and testing technique.Among other things, this
enables us to significantly reduce the risk of negative consequenc-
Organisational and Process
es for the environment and society.
Advantages, p. 78.

Supplementary Report

OPTIMISATION OF OUR FINANCING STRUCTURE

In mid-January 2014, NORMA Group used the funds raised from
the promissory note that was issued in the middle of 2013 to
prematurely repay a share of the syndicated financing that the
Company has had available since April 2011. The repayment
amounted to EUR 101.4 million in total. As a result of this repay-
ment, NORMA Group will benefit from lower interest expenses
in the future. In fact, this will already have a positive effect on
results for the first quarter of 2014.

The hedging transactions associated with the amount that was
repaid (interest / cross currency swaps) were closed when these
funds were paid back. These releases will have a one-off negative
effect on the first quarter in the amount of EUR 6.8 million. The
savings that will result from lower interest expenses starting in
January 2014 will already compensate for roughly half of the
one-off expenditures during the current year. By the end of the
financing term, NORMA Group will have saved more than EUR
3.6 million by repaying this loan and cancelling the derivative.

Including the premature decomposition of confined financing
costs, we expect total financing costs of around EUR 18 million
in 2014 which will be reduced to EUR 10 million in the follow-
ing year.

Consolidated Management Report92

ACQUISITION OF THE REMAINING SHARES

IN CHIEN JIN PL ASTIC SDN. BHD.

In February 2014, we exercised our right to acquire the remaining
15 % shares in Chien Jin Plastic Sdn. Bhd. in Malaysia. We there-
fore now hold 100 % of the shares in this company.

Due to the fact that we have already been fully consolidating
Chien Jin Plastic since the acquisition in November 2012, the
acquisition of the remaining 15 % of the shares will have no effect
on the operative figures for the Group.

Chien Jin Plastic is a manufacturer of thermoplastic joining tech-
nology based in Ipoh, Malaysia. The company has been on the
market for over 20 years and manufactures connecting elements
for plastic and iron pipe systems that are used in a wide variety
of different applications, most notably to supply drinking and in-
dustrial water, but also in irrigation systems. For further informa-
tion, please refer to our 2012 Annual Report.
Annual Report
2012, p. 59. The complete acquisition of Chien Jin Plastic is in line
with our strategic goal of further expanding our presence in Asia.

According to IMF forecasts for 2014, developing nations and
emerging markets could expand more robustly at + 5.1 % fol-
lowing + 4.7 % in the previous year. However, the risks are high.
At the beginning of 2014, some emerging markets had already
countered further currency devaluation and rapidly rising rates
of inflation with massive interest rate hikes. Barring any disrup-
tions, the emerging markets should also achieve higher growth
rates than the established regions in the future. However, eco-
nomic researchers are assuming that the very high rates of
expansion seen in the past, in particular in China, are general-
ly no longer achievable. The Chinese government is accelerat-
ing the process of structural and permanent reinforcement of
its private domestic economy with reforms, which are intended
to reduce its dependency on infrastructure investments and
exports. The IMF estimates that the Chinese economy will grow
by only 7.5 % in 2014. In 2014, the ASE AN-5 countries will grow
by 5.1 % and Brazil by 2.3 %, similar to the previous year. For
Russia (2.0 %) and India (5.4 %), economic recoveries are on the
horizon for 2014.

This overall economic backdrop is the foundation for NORMA
Group’s forecast and outlook.

Forecast Report

GENER AL ECONOMIC CONDITIONS

Industrial nations drive global economy –
euro zone grows moderately
The prospects for the global economy noticeably improved at
the turn of 2013 / 2014. Important early indicators signal an eco-
nomic recovery in the coming months. In its outlook for the current
year updated in January 2014, the International Monetary Fund
(IMF) expects economic output to grow 3.7 % (2013: + 3.0 %) and
also expects growth to further accelerate in 2015.

The drivers in 2014 are in particular the advanced economic
regions. The IMF forecasts a 2.2 % increase in GDP (2013: +1.3 %)
for the major industrial nations. US economic growth should
accel erate to 2.8 %, provided the US central bank’s change of
course is carried out cautiously and without turbulence in the
capital markets. The euro zone returns to a moderate growth
course of 1.0 % in 2014, supported by higher exports and grad-
ually rising investments; however, the recovery remains fragile.
For Germany, the IMF forecasts an acceleration of growth to
1.6 %, while the German Bundesbank expects 1.7 %. In addition
to robust private consumption and higher construction investments,
the driving factors also result from investments in machinery and
equipment, which are once again growing tangibly. In the United
Kingdom, GDP growth of 2.4 % is gaining further momentum.

FORECASTS FOR GDP GROWTH

In %

World

USA

China

Euro zone

Germany 1)

Sources: IMF, 1) German Bundesbank

2013

+3.0

+1.9

+7.7

– 0.4

+0.4

2014e

2015e

+3.7

+2.8

+7.5

+1.0

+1.7

+3.9

+3.0

+7.3

+1.4

+2.0

In 2015, the driving factors will continue to increase worldwide.
All important economic regions will contribute to this result. The
IMF estimates global growth of 3.9 % in 2015, whereby both
advanced economies (2.3 %) as well as developing nations and
emerging markets (5.4 %) will gain slight momentum. However,
in the view of the IMF, the important economic regions are not
expected to contribute equally to global economic growth in 2015.
On the one hand, growth in the USA, estimated at 3.0 %, as well
as in the euro zone, expected to be 1.4 %, will continue to accel-
erate. France (1.5 %), Italy (1.1 %) and Spain (0.8 %) in particular
will contribute to this. The IMF also expects a stronger recovery
in India, the ASE AN-5 region as well as in Russia and Brazil for
2015. On the other hand, growth is expected to weaken to 1.0 %
in Japan and 7.3 % in China. The IMF also expects growth to
flatten to 1.4 % in Germany for 2015. In contrast, the German
Bundesbank and IfW (Kiel) expect a clear recovery in Germany
to 2.0 % and 2.5 % respectively.

NORMA Group SE Annual Report 2013

Forecast Report

Improved operating environment for
important customer industries of NORMA Group
The looming recovery of the international economy for 2014 and
2015 improves the environment and prospects for important
customer industries of NORMA Group.

The German industry association VDMA is confident about the
development of the engineering and plant construction industry
in 2014. This is bolstered by global economic growth and the
positive performance of early indicators. The association expects
worldwide machine sales to grow by 5 % in 2014, whereby growth
in China (+ 7 %) and the USA (+ 2 %) is expected to accelerate
compared to the previous year. The Italian engineering industry
(+ 3 %) and the sales revenues of Japanese manufacturers (+ 7 %)
are also expected to grow dynamically once again. The VDMA
expects the German engineering industry’s sales revenues to
grow by just under 4 % to the record level of EUR 215 billion in
2014, whereby production is expected to increase by 3 % in real
terms. The drivers will be both a tangible recovery of the domes-
tic economy, which benefited from a recent increase in orders
and once again rising investments in machinery and equipment,
as well as once again growing exports.

The prospects for the global automotive industry are brightening
again in 2014. On the one hand, because the two largest markets
(USA, China) will continue to grow. On the other, because the
Western European market for automobiles and commercial ve-
hicles will recover moderately after years of contraction. In addi-
tion, demand is rising again in important emerging markets. The
industry association VDA expects new registrations to rise by 3 %
worldwide to 74.7 million automobiles for 2014. The research
institute IHS Automotive (Polk) forecasts an increase of 3.5 % to
78.4 million units in the global market for automobiles and light
trucks. The VDA expects that, with the exception of Japan (– 4 %),
all relevant markets will grow in 2014. According to its expecta-
tions, China should grow by 7 % and the USA by 3 %. Growth of
2 % is predicted for Western Europe. The VDA is also confident
about India (+ 7 %), Brazil (+ 2 %) and Russia (+ 3 %). The German
market is only expected to recover slightly with a solid 3 million
new automobile registrations. In the opinion of the VDA, produc-
tion by German manufacturers will increase by 3.5 % to just under
14.7 million automobiles in 2014. This expansion will be attributable
almost entirely to higher production levels at foreign plants (+ 6 %).

The industry network Euroconstruct and the Ifo Institute forecast
a trend reversal for the European construction industry in 2014.
Production should expand moderately by + 0.9 %. The driver will
be residential construction, which will return to growth for the first
time in nearly all countries. Growth is expected to further accel-
erate in 2015, as commercial construction and pent up infrastruc-
ture investments are also expected to gain momentum. The
prospects for the German construction industry remain positive.

In light of the high number of building permits, the German
Bundesbank expects residential construction investments to in-
crease by 5.5 % for 2014 (2015: + 3.8 %). The IfW forecasts growth
rates of 4.3 % (2014) and 4.7 % (2015). Investments in commercial
construction (2014: +1.5 %; 2015: + 3.9 %) will also rise with the
recovery of investments in machinery and equipment. Public-sec-
tor construction should receive a significant boost estimated at
5 % in 2014 (2015: – 0.2 %). Arguments in favour of this include
higher infrastructure investments for energy and roads as well as
the repair of the prior year’s flood and storm damage. The fore-
casts of the trade associations ZDB and HGB are based on the
assumption that sales revenues will grow by 3.5 % in the main
construction trades to EUR 98.6 billion. The driver remains resi-
dential construction at + 5.0 %. Sales growth is also expected for
the commercial construction (+ 2.5 %) and public-sector con-
struction industries (+ 3.5 %).

THE FUTURE DEVELOPMENT OF NORMA GROUP

Apart from the structural simplifications in the Americas men-
tioned on p. 58, we currently have no plans to make significant
changes to the Company’s goals or legal structure.

We have succeeded in continuously increasing both our sales
and our earnings in the past and hold fast to our basic company
strategy. We intend to continue to grow faster than the market in
the future with the help of our two sales channels EJT and DS,
international expansion and constant innovations.

We will also continue to drive our international focus forward in
the future, by expanding our distribution network and our pro-
duction sites, but also by further expanding our local engineering
know-how. In the medium and short term, this will include ex-
panding and building new sites in China and Brazil. By doing so,
we hope to be able to leverage the opportunities in these import-
ant growth markets and to transfer the value creation chain to
the respective region or country.

Growth in sales expected in 2014
For the year 2014, the NORMA Group Management Board cur-
rently (Maintal, 12 March 2014) expects the global economy to
grow at a higher rate than in 2013. The advanced economic re-
gions will be the main drivers here. The euro region will return to
its moderate growth course in 2014 thanks to exports and a
gradual increase in investments. We also expect to see growth
impulses from the developing and emerging nations, nevertheless
the risks here are quite high.

Due to broad diversification with respect to products, regions
and markets, we have a relatively robust business model. Sup-

Consolidated Management Report94

ported by the positive development in growth of the global
economy compared to financial year 2013, business with im-
portant customers of NORMA Group has developed quite pos-
itively so far.

Stimulated by solid growth in many Asian markets, such as China
for example, and the further expansion of our activities, but also
higher market shares, we are planning to achieve strong growth
in sales of over 10 % in the Asia-Pacific region.

Following the moderate growth we saw the previous year, the
North American market has still not reached its historic high and
this suggests that solid market growth in local currency can be
expected in 2014. This could be supported by a possible pre-buy
effect in the second half of 2014 due to plans to implement the
emissions regulation EPA15 for heavy goods vehicles starting on
1 January, 2015. Due to the relative strength of the euro, this
growth will probably be compensated for to at least some extent.
For this reason, slight growth measured in euros seems likely.

We also expect to see the EME A region develop positively.
Whereas production volumes in the various industries have prob-
ably bottomed out for the first time in several years, e. g. growth
can be expected for the current year, we also expect to see an
increase in the number of joining elements and a higher value of
these elements due to the legal introduction of the emissions
standards EURO-6 and the related ramp-up for the new energy
generation. All in all, the EME A region should achieve more solid
growth in 2014 than in the previous year.

We expect the two ways to market EJT and DS to develop sim-
ilarly and this will lead to a more analogous division compared to
the previous year. EJT still accounts for approx. 70 % of total
sales, and DS for approx. 30 %. The organic growth in sales that
is expected in the area of EJT will be important here, while the
area of DS will be supported not only by an organic recovery, but
also by the acquisitions made in 2013.

In total, we expect Group sales to increase organically by around
a solid 4 to 7 per cent in 2014 compared to 2013. Here, it is as-
sumed that no economic cool down occurs in the regional seg-
ments. For the most part, this growth will be achieved through
higher volumes, while the price adjustment clauses so typical of
our business will continue to lead to slight declines in prices.

Furthermore, the acquisitions of the Polish company Variant S.A.
in June 2013 and the Australian company Guyco Pty. Ltd. in July
2013 will generate around EUR 5 million in additional sales com-
pared to the previous year, due to consolidation.

Approximately 4 % of EJT sales to be put toward
Research & Revelopment in the future also
We plan to invest roughly 4 % of our EJT sales in Research and
Development in the future. We will be able to realise cost advan-
tages in the medium term by expanding our local development
activities. We will continue to put the main focus of our Research
and Development work on developing innovative solutions that
meet our customers’ demands, particularly with respect to weight
reduction, higher engine efficiency and modularisation of pro-
duction processes.
Research & Development, p. 61. By doing
so, we hope to secure ourselves a competitive advantage that
will be honoured by our customers in the area of EJT in particu-
lar. Furthermore, developments from this area continue to find
their way into areas of application for our customers in the area
of Distribution Services. We also plan to register new patents
again in 2014.

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, such as vibrations, for example.

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 that will save our
customers costs when manually installing particle filters or com-
plex waste gas systems. In addition, we are working on further
developing the profile clamps that are used to ensure operation-
al reliability even under the most difficult conditions in terms of
temperature and vibrations.

The aspect of safety has always played an important role for our
customers. Therefore, we have developed additional secondary
latches and assembly indicators for a visual check of the con-
nection in order to ensure the proper assembly of connectors at
all times.

Cost of materials ratio planned at the level of the
previous two years
By concluding fixed purchasing contracts in the areas of steel
and technical polymers during the year, we are protecting our-
selves against price changes in the commodity markets to a large
extent during the current financial year. We are able to pass on
a large portion of the fluctuations in prices for aggregates that
occur over the course of the financial year due to the contracts

NORMA Group SE Annual Report 2013Forecast Report

we have with our customers. In combination with the measures
from our Global Excellence Programme, we achieve a relatively
stable cost of materials ratio within the Group that should remain
at roughly the same level in 2014 as the previous two years (2012:
43.6 %; 2013: 42.4 %).

Higher earnings per share (adjusted)
Adjusted earnings per share will rise solidly in financial year 2014.
Growth in sales and a sustainable margin, but also the result
contributions from acquisitions made in 2013, will contribute to
this. The one-off effect from partial repayment of the syndicated
credit line is not included here.

Further optimisation of the remaining cost positions
Thanks to the Group’s ongoing growth and the fact that we have
intensified our activities in the Asia-Pacific region, we expect per-
sonnel costs to rise more slowly than sales. This will result in a
gradual, continuous improvement in our personnel cost ratio. The
other operational expenses will remain at a stable level due to
expenditures for growth and expansion of our activities in the
emerging nations, particularly the costs of ramping up new plants.

Adjusted EBITA margin expected at the same level
as in previous years
Organic growth compared to the previous year once again en-
ables us to expand our activities, especially in the Asia-Pacific
region and Brazil. Together with the acquisitions we made in 2013,
we strive to achieve yet another sustainable adjusted EBITA mar-
gin in 2014. The adjusted EBITA margin in 2014 should remain at
the same level as in prior years of more than 17 %. This can also
be attributed to the effects of our Global Excellence Programme.

Financial result of around EUR – 18 million expected
Partial repayment of the syndicated credit line in the amount of
EUR 101.4 million with bank balances in January 2014 resulted
in partial termination of related hedges. The savings from lower
interest expenses starting in January 2014 already compensate
for roughly half of the one-off expenditures of around EUR 6.8
million in the current financial year. Furthermore, assuming that
no further acquisitions are made, the financial result will show
lower interest expenses in the current financial year due to re-
payment of this debt. In addition, the financial result can be in-
fluenced either positively or negatively by possible, but currently
unplanned financing measures or changes in the hedging position.
In total, we expect a financial result of around EUR – 18 million.

Tax rate of around 32 per cent
Due to the positive earnings development of the Americas seg-
ment, we expect a Group tax rate of around 32 %. In case of
further sales and earnings growth, especially in the APAC region,
we assume a reduction of the Group tax rate in the mid-term.

Investment rate of around 4.5 % the goal
For financial year 2014, we plan to invest around 4.5 % of Group
sales or roughly at the same level as in previous years. By doing
so, we will be financing both maintenance investments and in-
vestments on expanding our business. With this expansion, we
will be concentrating mainly on the Asia-Pacific region and other
emerging nations in which we intend to significantly expand our
activities in the future. Investment peaks could result from ex-
panding manufacturing capacities at a second plant in China or
further roll-out activities in the Brazilian market.

Financial and liquidity situation: Operating net cash flow
between the levels of the two previous years
In 2014, we expect a continued positive cash flow from operating
activities. This cash flow will help us to finance the demand for
short-term operating capital, but also current investments and
dividend payments. We plan to use excess funds mainly to invest
in growth activities, particularly in emerging countries, and to
finance possible acquisitions.

Due to the high operational results and planned investment ex-
penditures, we once again expect to see high positive free cash
flow (before acquisitions) in 2014. Operating net cash flow for
2014 should be between the levels of the previous two years
(2013: EUR 103.9 million / 2012: EUR 81.0 million). This is assum-
ing the inflows that are typical for our business, particularly in the
4th quarter of the financial year. Besides the cash flow that we
expect, sufficient funds from the revolving credit line valued at
EUR 125 million are available.

Acquisitions to remain a cornerstone of our growth
in the future
The current financing structure gives us sufficient latitude to
achieve external growth. Here, the focus is on companies that
manufacture and sell products that complement our current
product portfolio, but also companies in regions in which we have
not yet addressed the market. Furthermore, we focus on consol-
idation of the industry and the markets and include the search

Consolidated Management Report96

2014 FORECAST

Consolidated sales

solid organic growth of around 4 % and 7 %, in addition, approximately EUR 5 million from acquisitions

Sales growth Asia-Pacific

over 10 %, driven by expansion of our activities and gains in market share, among other factors

Sales growth Americas

solid organic growth driven by pre-buy effects due to the introduction of EPA15, among other factors

Sales growth EMEA

solid organic growth, among other things, driven by the new introduction of EURO-6

Sales growth EJT

Sales growth DS

solid growth driven by the introduction of new emission standards, among other things

solid growth due to the recovery of the market and the effects of acquisitions, among other things

Adjusted EBITA margin

sustainable at the same level as in previous years of more than 17 %

Net financial income

approx. EUR – 18 million including the one-off effect of partial repayment of the syndicated credit line

Tax rate

around 32 %

Adjusted Earnings per share

solid increase

Investments in R&D

around 4 % of EJT sales

Cost of materials ratio

around the same as in the previous two years

Personnel cost ratio

gradual and continuous improvement

Investment rate

operationally at around the same level as the previous years of around 4.5 %

Operating net cash flow

between the levels of the previous two years (2012: EUR 81 million, 2013: EUR 103.9 million)

Dividend

approximately 30 % to 35 % of adjusted annual group earnings

for appropriate regional dealer organisations in the area of DS.
These activities in addition to our main industries could also
include entry into attractive new industries. This will generally
involve owner-managed private companies. For this reason, basic
decisions and the exact timing are quite difficult to plan.

We pursue a long-term dividend policy
To the extent that the future economic situation allows, we plan
to pursue a long-term dividend policy that is orientated towards
a pay-out ratio of approx. 30 % to 35 % of the adjusted Group
annual results and intend to propose this for our shareholders to
vote on at the Annual General Meeting.

Market penetration and innovative capability
The extent of our market penetration is reflected in our organic
growth in the medium term. Our goal is to register new products
and innovations for patents each year.

Problem-solving behaviour
We employ key performance indicators, such as parts per million
(PPM) and number of customer complaints, to measure and
control our problem-solving behaviour. We strive to achieve a
value of under 40 for the indicator PPM. Our goal for 2014 is to
lower the number of customer complaints by at least 3 %.

Sustainable Company development
(Corporate Responsibility)
We started 2012 by beginning to develop and gradually imple-
ment our CR strategy. Our objective is to continue to expand
these efforts in the years to come and to anchor them in all areas
of the Company. The goal for 2014 is to introduce other quanti-
tative measurement gauges for a sustainable Company policy
and to influence these positively. The publication of our CR-strat-
egy on its own website in February 2014 represents an initial step
toward achieving this.

Corporate Responsibility, p. 88.

Expected recovery of the global economy to contribute to
the success of NORMA Group also in 2015
In accordance with the forecasts of the world’s leading eco nomic
research institutes, from today’s perspective, we too expect sales
to increase in 2015 compared to the current financial year 2014
in both sales channels. We also assume that we will be able to
increase Group sales and Group profit in 2015 in all three seg-
ments compared with 2014. Due to the good cash flow that we
expect, we also expect to see the financial situation of NORMA
Group improve. No significant change in cost positions can be
foreseen at the moment.

NORMA Group SE Annual Report 2013Risk and Opportunity Report

GENER AL STATEMENT BY THE MANAGEMENT BOARD

ON THE PROBABLE DEVELOPMENT

At the time that the management report 2013 was prepared, the
Management Board expect NORMA Group to achieve solid
growth in 2014. This growth will be achieved due to a consider-
ably more relaxed economic environment on the one hand. On
the other hand, we expect to see positive effects on our business
from the introduction of new emission standards. On the basis
of current economic forecasts, the Board of Management expects
this growth to continue to gain momentum in 2015. We see
growth especially in the Asia-Pacific region and will therefore
continue to expand our activities in this region. In the Americas,
we also see solid growth opportunities at least in local currency.
The EME A region has probably hit bottom for the first time in
several years and this gives cause to expect growth on the volume
side. Both the areas of EJT and DS should show solid organic
growth. Furthermore, the area of DS is growing due to the ac-
quisitions made in 2013. In total, the Management Board expects
solid growth for the Group compared to 2013, assuming that the
economy does not cool down significantly.

We plan to keep the costs of Research and Development, thr
cost of materials ratio and other operational expenditures stable
and see other slight optimisation possibilities with respect to the
other cost positions due to our solid growth and the consistent
implementation of our Global Excellence Programme. We will
continue to invest in expanding our plans in the current financial
year. For this reason, we expect to achieve a sustainable margin
at the same level as in previous years, more than 17 %,

The Management Board will continue to consider the possibility
of acquisitions that offer us additional potential for success on a
regular basis in the future. Here, we will concentrate on compa-
nies that have the potential of improving NORMA Group’s position
in the regions in which we do not cover the market, strengthen
our technology portfolio, or address new target audiences.

Risk and Opportunity Report

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. For this reason, opportunity and risk management
represents an integral component of corporate management for
NORMA Group SE, at both the Group management level and at
the level of the individual companies and individual functional
areas. Due to the fact that all corporate activities are associated

with risks and opportunities, we consider identifying, assessing,
and managing opportunities and risks to be a fundamental com-
ponent of executing our strategy, securing the short and long-
term success of the Company and sustainably increasing share-
holder value. In order to achieve this over the long-term, we
encourage our employees in all areas of the Company to remain
conscious of risks and opportunities.

OPPORTUNIT Y AND RISK MANAGEMENT SYSTEM

We define risks as the possibility of disadvantageous future de-
velopments, changes, or events that could have a positive / neg-
ative impact on the Group’s ability to meet its targets and achieve
its business objectives. Analogous to our medium-term planning,
our focus with respect to possible deviations in specific risks and
opportunities covers a period of five years. Opportunities and
risks that affect the Company’s success beyond this period of
time are recorded and controlled at the Group management
level and taken into consideration in the Company’s strategy.

The Management Board of NORMA Group AG is responsible for
maintaining an effective Group risk and opportunity management
system. The Supervisory Board is responsible for monitoring the
effectiveness of the Group risk management system. Checking
compliance with the Group’s internal risk and opportunity man-
agement rules is also integrated into the internal audit depart-
ment’s periodic reviews.

Risks are recorded on a Group-wide basis every quarter and
categorised according to functional areas and individual compa-
nies and then reported to the individuals responsible for these
functions and segment management, the Management Board
and the Supervisory Board. Furthermore, risks that are identified
during a quarter whose expected value will have a significant
effect on the results of Group divisions are reported to the Board
of Management on an ad hoc basis and, if necessary, even to
the Supervisory Board. Operational opportunities are identified
during monthly meetings held at the local and regional level, but
also by the Management Board, and then documented and ana-
lysed. Measures aimed at capitalising on strategic and opera-
tional opportunities through local and regional projects are ap-
proved during these meetings. Regular forecasts are developed
as part of periodic reporting to record how successfully potential
opportunities are taken advantage of. Strategic opportunities are
recorded and evaluated as part of annual planning. We use a
systematic assessment procedure to evaluate the opportunities
and 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.

Consolidated Management Report98

RISK MANAGEMENT SYSTEM

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

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.
Here, the scope of consolidation in the area of risk management
equates to the group of companies covered by the consolidated
financial statements. In addition, we categorise risks according
to type and the functional area they affect. This makes it possible
to aggregate individual risk titles into risk groups in a structured
manner. This aggregation enables us to identify and control not
only individual risks, but also trends and NORMA-specific types
of risks and thus sustainably influence and reduce the risk factors
with certain types of risks.

Our risk management officers are responsible for checking on a
regular basis whether all material risks have been identified, ad-
justing 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 probability of occur-
rence. Risks are managed in accordance with the principles of
the risk management system as described in the Group risk
management guidelines. The internal control system also safe-
guards the efficacy of our risk management system. The work of
those individuals who are responsible for risks, the risk portfolio
and the evaluation of risks and activities is reviewed by holding
quarterly risk steering sessions.

INTERNAL CONTROL AND RISK MANAGEMENT SYSTEM

AND THEIR REL ATION TO THE GROUP ACCOUNTING

PROCESS

The relationship between our internal control and risk manage-
ment system and NORMA Group’s accounting and external finan-
cial reporting can be described using the following main charac-
teristics. The purpose of this system is to identify, analyse,
evaluate and manage risks as well as monitor these activities.
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 consol-
idated 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.

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. The preparation of the financial
statements of those entities to be included in the consolidated
financial statements as well as the consolidation measures based
on this consolidated group are characterised by consistent ob-
servance of the “principal of dual control.” Comprehensive and
detailed checklists must be completed before the respective

NORMA Group SE Annual Report 2013Risk and Opportunity Report

ELEMENTS OF OPPORTUNITY AND RISK MANAGEMENT AT NORMA GROUP

Tasks

Identification

Assessment

Aggregation

Analysis

Reporting

Steering

Ongoing monitoring
of the Company,
the business envi-
ronment and the
general environment

Comprehention of all
aspects of a risk

Identification of
affected elements of
the business or / and
Company

The risk’s impact
on EBITA and its
probability of
occurrence are
measured

Assessment is
based on Group-
wide standards

Aggregation of
related risks to risk
categories

Risks and categories
are analyzed to en-
able implementation
of counter-measures

Quarterly
report cycle

Regional and Group
steering committees

Identification of
further counter-
measures on all
levels; local, regional
and Group-wide

Quarterly Risk
Report of Group
status for Mgmt. and
Supervisory Board

Ad-hoc report

Implementation of
counter-measures

Consolidation of
local risks to regional
portfolios

Consolidation of
regional portfolios
and Group risks to
Group portfolio

Top-down
actors

Group Functions
Group Mgmt.

Regional Mgmt.
Group Mgmt.

Bottom-up
actors

Functional,
Local entity,
Regional Mgmt.

–

Functional,
Local entity,
Regional Mgmt.

Regional Mgmt.
Group Functions
Group Mgmt.

Functional,
Local entity,
Regional Mgmt.

Regional and Group
Steering Committee

Local risk owner

finan cial 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.

The internal control system of the accounting process is designed
to provide reasonable assurance that the consolidated financial
statements are prepared according to regulations, despite the
risks identified in the financial reporting process. The Internal
Audit department reviews the accounting processes on a regu-
lar basis to ensure that the internal control and risk management
system is effective. Internal audit measures are also assigned to
specialised auditors in order to guarantee their quality. The auditor
also 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 uncovered with
reasonable assurance.

The IFRS accounting system in the way it must be applied in the
EU is defined in an accounting manual. All companies in the
Group must base their accounting processes 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 sys-
tem-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
account ing guidelines and IFRS. Intra-Group deliveries and ser-
vices are recorded in separately designated accounts by the
Group companies. The net balances of Intra-Group offsetting
accounts are reconciled on the basis of defined guidelines and
schedules 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 particu larly useful for the notes to the consolidated financial
statements. In accordance with the NORMA Group’s regional
segmentation, technical responsibility for the financial area is
shared by both the financial officers in the Group companies as
well as by the regional CFO for the respective segment. They are
included in the quality assurance of the financial statements of
the Group companies included in the consolidated financial state-
ments. The comprehensive quality assurance of the financial
statements of the Group companies included in the consolidated
financial statements is carried out by Group Finance & Reporting
at corporate headquarters, which is responsible for preparing
the consoli dated financial statements. In addition, the data and
disclosures of the Group companies as well as the consolidation
measures necessary for the preparation of the consolidated finan-
cial statements are verified through audit procedures conducted
by external audi tors under consideration of the associated risks.

Consolidated Management Report100

Local financial accounting uses a variety of different IT systems.
We are aiming to standardise the local IT systems across the
Group in the medium term and have already begun with imple-
mentation. All systems have tiered access authorisation systems.
The type and design of these access authorisations and authori-
sation policies are decided by local management in coordination
with the Head of IT for NORMA Group.

OPPORTUNIT Y AND RISK PORTFOLIO

OF NORMA GROUP

As part of the preparation and monitoring of our risk and oppor-
tunities profile, we assess the financial impact of risks and op-
portunities based on three categories derived in relation to our
EBITA:

Minor: up to 5 % of current EBITA
Moderate: up to 25 % of current EBITA
Severe: more than 25 % of current EBITA

The interval of the risk’s impact relates to the EBITA of the Group
or segment provided that an individual assessment relates to a
specific segment. The presented effects always reflect the effects
of (counter)-measures implemented, thereby representing a net
assessment of risks and opportunities.

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: up to 5 % probability of occurrence
Possible: up to 25 % probability of occurrence
Very likely: more than 25 % probability of occurrence

The measurement of individual risk and opportunity categories
reflects a period of five years based on our medium-term plan
unless another period is indicated in the individual categories.

Financial opportunities and risks
Due to the nature of our business, we are exposed to an array of
financial risks, including default, liquidity and market risks. The
Group’s financial risk management strategy concentrates on the
identification, evaluation and mitigation of risks, focusing on mini-
mising the potential negative impact on the Company’s financial
performance. We use derivative financial instruments to hedge
particular risk items. The financial risk management strategy is
implemented by Group Treasury. Group management defines
the areas of responsibility and necessary controls related to the
risk management strategy. Group Treasury is responsible for
defining, evaluating and hedging financial risks in close consul-
tation with the Group’s operating units.

Capital risk management
NORMA Group’s objective when it comes to managing its capi-
tal is primary the long-term servicing of its debts and remaining
financially stable. In connection with our financing agreements,
we are obliged to maintain certain financial indicators (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. These key figures and their
maintenance are continually monitored. As part of our capital risk
management, we monitor net debt in all our accounts, which are
managed in accordance with accepted 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 ratings
are below Group standards or who have defaulted on payment
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 opportunities and 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.
Financial Management, p. 60. Group Treasury is responsible
for liquidity management and therefore for minimising liquidity
risks. As at 31 December 2013, NORMA Group’s liquid assets
(Cash and Cash equivalents) amounted to EUR 194.2 million (31
December 2012: EUR 72.4 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
5.5 million as at 31 December 2013.

We see financial opportunities, among other things, in NORMA
Group’s high creditworthiness as well as its solid financial posi-
tion, financial performance and cash flows, which enable us to
gradually reduce our capital costs. For instance, we succeeded
in further optimising NORMA Group’s operational flexibility by
issuing a promissory note loan in the amount of EUR 125 million
in the summer of 2013. On the one hand, the promissory note

NORMA Group SE Annual Report 2013Risk and Opportunity Report

101

loan enabled us to access a new investor group; on the other,
we were able to extend the maturity profile of our liabilities to five,
seven and ten years. The financing terms of the promissory note
loan were fully twisted into an attractive fixed interest rate so that
future interest rate risk can be ruled out. We estimate the financial
opportunities based on our good reputation on the capital mar-
ket to be possible with a moderate impact on net profit or loss.

The Group’s financing agreements 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. Failure to comply with these loan cov-
enants would have severe potential financial repercussions. For
this reason, we continuously monitor our compliance with the
financial covenants in order to implement suitable measures in
advance and 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-com-
pliance with financial covenants remains unlikely due to our high
profitability and strong operating cash flow.

Foreign currency trends
As an international company, we are active in more than 100
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, Swedish
krona, Thai baht, and Turkish Lira.

Since our distribution sites in Turkey and Thailand settle their
transactions largely in local currency, the influence of the foreign
exchange rate trends of the Thai baht and Turkish lira against the
euro is increased due to the current political situation. However,
in light of these countries’ limited contribution to NORMA Group’s
total sales, we expect that the resulting foreign currency effects
will be comparatively moderate.

Foreign currency risks that cannot be offset against each other
are hedged using futures and options whenever necessary (in-
cluding the US dollar, Swedish krona, Japanese yen and British
pound). The high volatility of many major currencies and the par-
ticular 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 an increasingly regional approach to production.

Because the Group’s subsidiaries operate in the most important
countries with currencies other than the euro, it has sufficient
cash-in and cash-out capabilities to absorb short-term exchange
rate fluctuations via targeted income and expenditure manage-
ment. In addition, currency risk is monitored in the Group and

transferred to the euro over time on a rolling basis by means of
derivative hedging instruments if the risk becomes too excessive,
whereby translation risk, i.e. the risk of fluctuations in the value
of the net assets of our Group companies as a consequence of
changes in exchange rates, is intentionally not hedged using
hedging instruments due to NORMA Group’s long-term engage-
ment. Translation effects from items in the statement of financial
position and income statement of subsidiaries in foreign currency
areas on the consolidated statement of financial position prepared
in euros are unavoidable. Currency risks are very likely to occur
due to the ongoing exchange rate volatility. In addition, the ex-
pected rising share of our business activities in foreign currency
areas, in particular in emerging markets, signifies additional
currency risk for NORMA Group. Nevertheless, we regard the
poten tial financial effects of currency risks to be moderate under
consideration of our countermeasures. In contrast, our assess-
ment of the opportunities for an advantageous development of
foreign exchange rates is more cautious; we thus regard the
probability of a positive impact on our business success to be
possible and the financial scope to be moderate. In addition, we
are pur posely expanding our opportunities in the area of foreign
currencies by further localising our production and the payment
and currency flow of equivalent internal financing and can thus
further reduce our currency exposure.

Changes in interest rates
Changes in global market interest rates affect future interest pay-
ments for variable-interest liabilities and can therefore have an
adverse effect on the Group’s financial position, financial perfor-
mance and cash flows. NORMA Group’s interest change risk
arises in particular from long-term loans.

However, it is limited to the utilisation of the revolving credit line
(EUR 5.5 million as at 31 December 2013), because neither the
existing bank financing nor the individual tranches (five, seven,
and ten years) of the issued promissory note loan are subject to
interest rate risk. 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 interest change risk arising from future medium-term utilisa-
tion of the committed revolving credit facility.

As a result of the currently low interest rate level and the first signs
of a more restrictive monetary policy, we regard the risk of inter-
est rate hikes in the medium term to be very likely; however, they
will only have a minor impact due to NORMA Group’s financing
structure. Accordingly, we also consider the potential for oppor-
tunities that can arise from a falling interest rate level to be un-
likely and the financial effects of such a development to be minor.

Consolidated Management Report102

Economic and cyclical opportunities and risks
The success of NORMA Group depends heavily on macro
economic trends on its sales markets and its customers’ sales
markets. Therefore, we take into account the indicators for eco
nomic development worldwide both in the planning as well as in
our risk and opportunities management. In order to gauge the
macro economic trend, we mainly use the forecasts of widely
regarded institutions such as the IMF, the Bundesbank and rep
utable economic research institutes. Accordingly, global growth
of 3.7 % can be expected in 2014. We regard positive develop
ment over and above this level to be an opportunity. As a result
of our flexible production structures, we can expand our capac
ities on short notice and thereby react to a general increase in
demand. We consider it possible for the economic situation
worldwide to improve considerably within a framework that can
moderately impact our earnings. In addition, we consider the
possibility of a positive deviation from the assumptions on which
our planning for the AsiaPacific region is based to be very likely.

Nevertheless, we see risks that can offset these forecasts, which
is reflected in our Groupwide risk management. We regard a weak
ening of the global economy under consideration of the strained
budget situation of numerous countries in the EME A region and
the USA as well as the politically uncertain situation in some coun
tries in the AsiaPacific region to be unlikely. If these factors should
nevertheless impact global demand, the financial effects for
NORMA Group compared to our plan would be moderate.

Industry-specific and technological opportunities and risks
Industryspecific opportunities and risks can arise for NORMA
Group in particular due to technological and competitive changes.
The increasing importance of new technologies, such as envi
ronmentally friendly drivetrain technologies, could also lead to
increased competitive 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
Research &
well as by focusing on customers and markets.
Development, p. 61.

The global megatrend toward “green” technologies presents
challenges to many of our customers and their finished products
and offers excellent growth prospects for NORMA Group. Since
we concentrate our product developments on innovations in this
area, we regard this change as an opportunity. It can be assumed
that regulatory measures such as the Euro6 Standard on emis
sions and incentive programmes will be established in other
countries, which will lead to increased demand for environmen
tally friendly technologies and products. We have already secured
additional order volume and thus participate in the development
of these markets thanks to early and innovative developments in
these areas. Therefore we regard the likelihood of future positive

developments in this area that go beyond the scale of our plan
ning as possible based on the current discussion on tightening
environmental standards. This would have a moderate impact
on our performance. For the AsiaPacific region, we estimate the
likelihood of future positive stimulus to be high – also with mod
erate effects on regional earnings – as a result of our transfer of
existing technologies from other regions and the rising techno
logical demands of customers in the region.

Our strong diversification in terms of customers in different indus
tries is another element of our risk and opportunity management.
We counter longterm, industryspecific risks and opportunities
through consistent innovation policy and regular market analyses.
As a result, we consider it unlikely that industryspecific or tech
nological risks will occur. We consider the potential for financial
effects to be minor.

Risks and opportunities associated with corporate strategy
The Group’s strategic orientation was advanced in 2013 through
investments in growth markets, the expansion of the second
production site in China (Changzhou) and the expansion of ex
isting markets in Australia, Poland and Brazil.

The goal of these acquisitions is to expand our presence in ex
isting markets and to develop new emerging markets with attrac
tive growth potential. As a result of our global orientation, we can
also set up production processes that entail a more labourin
tensive assembly in countries with lower wage costs, thereby
securing and further increasing our profitability. We also continue
to constantly observe the markets and identify opportunities for
strategic acquisitions or equity holdings to complement our or
ganic growth. We use targeted acquisitions to continuously
strengthen our position as a technology leader, exploit market
opportunities and improve the services we offer our customers
and expand our product range.

In addition, we work together closely with our customers across
all business processes. New products are created already in the
product and application development phases in constant co
ordination with our customers. Our two distribution channels,
Engineered Joining Technology and Distribution Services, are
oriented toward the special needs of our customers. We will
continue to develop our markets in collaboration with our cus
tomers in the future.

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 technologies,
products and solutions, as well as on improving existing ones,
and can thereby realise cost advantages in the medium term.

NORMA Group SE Annual Report 2013Risk and Opportunity Report

103

We consider this strategic orientation to be the basis for creating
longterm potential for opportunities. Therefore, we estimate the
intermediate impact of our strategy to be moderate and expect
a potential positive deviation from our plan.

us. Therefore, we estimate the opportunities arising from falling
commodity prices to be minor, whereby a declining global com
modity price trend is possible in China due to poorer economic
expectations.

Nevertheless, misjudgement with respect to the Group’s strate
gic orientation and its market potential or cus tomer rejection of
newly developed products cannot be ruled out and can have a
negative effect on NORMA Group’s competitive position and
sales volume. In order to avoid strategic risks, we observe our
market environment and our competitors and conduct custom
Purchasing
er and supplier surveys for continual improvement.
and Supplier Management, p. 81. Therefore, we consider strate
gic risks to be unlikely to occur, whereas the potential finan cial
effects for financial year 2014 are regarded as moderate.

We adjust our corporate strategy in the individual segments to the
individual market conditions; nevertheless, the general appraisal
of strategic risks and opportunities in the regions is identical.

Performance-related opportunities and risks
Commodity prices
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 world economic situation as well as by institutional investors.
NORMA Group limits the risk of rising purchase prices through
systematic material 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
procurement of the most important product areas of steel, metal
components, polyamides and rubber materials and to procure
them as competitively as possible. This Grouppurchasing struc
ture also enables us to balance out the risks of individual segments
with each other. We also constantly strive to secure permanently
competitive procurement prices by continuously optimising our
selection of suppliers and applying the BLC approach. 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 minimized and price fluctuations can be
Purchasing and Supplier Management, p. 81.
better calculated.

Although we consider it possible for prices to rise based on the
positive growth forecasts for the global economy, this would only
have a minor financial effect as a result of the countermeasures
initiated in the financial year just ended. Since we can transfer a
portion of changes in our material prices to our customers
through the structure of our contractual documents, falling com
modity prices are also not a significant performance factor for

Suppliers and dependencies on key suppliers
The loss of suppliers and dependency on individual 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 require
ments. The ten most important suppliers are responsible for
Purchasing and
approximately 32 % of our purchasing volume.
Supplier Management, p. 81. This and other key suppliers are
regularly observed and assessed as part of our quality manage
ment. If the loss of a supplier appears imminent, we evaluate
alternatives immediately. For instance, we were able to offset the
loss of an important supplier for the plastic granule PA12 in 2012.
As a result, we consider it possible that we may lose suppliers
and continue to regard the potential financial impact as minor.
However, we also see opportunities in this area as a result of our
proactive approach both in our existing supplier relationships as
well as in the identification of new suppliers and raw materials.
But since we also anticipate an optimisation in the area of pur
chasing in the medium term, we estimate the potential of our
implemented measures for a positive deviation from our planning
to be possible with a minor impact. (reference to Section on
Purchasing)

Quality and processes
Our products are often functioncritical with respect to the qual
ity, performance and reliability of the final product. Therefore, the
reliable guarantee of product quality is a key factor to ensuring
NORMA Group’s longterm success, so that our products provide
Organisational and Pro
crucial added value for our customers.
cess Advantages, p. 78. Maintaining the right balance between
cost leadership and quality assurance is a constant challenge.
We use farreaching quality assurance measures and Groupwide
quality standards to reduce this risk, and also focus on innovative
and value added joining solutions tailored to meet customer re
quirements. 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.

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
Organisa
initiatives to have a positive impact on our business.
tional and Process Advantages, p. 78. Since we pursue a con
tinuous process of improvement, there are opportunities over
and above our planning for positive deviations in the area of these

Consolidated Management Report104

processes. This applies for all regions in which NORMA Group
is active. We estimate the likelihood of costsavings to be possi
ble. However, since our planning allows for an optimisation of
production processes and our processes are already extremely
efficient, the shortterm financial impact of a deviation from the
plan as a result of improved production processes is minor.

Customers
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 neg
ative impact on NORMA Group’s earnings. For this reason, we
continuously monitor incoming orders and customer behaviour
so as to identify customer risks early. We also have a diversified
customer portfolio, which reduces the financial repercussions of
customer risks. Accordingly, no single customer generated more
than 6 % of our sales in the 2013 financial year. Average annual
sales per customer are only kEUR 60. 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.

However, based on our strategy and the goal of further ex panding
our markets, we managed to expand our customer portfolio com
pared to the previous year. We can excite new customers for our
products in all regions as a result of our innovative solutions and
therefore estimate the opportunities for positive deviations from
our planning as possible with a minor impact on our earnings
based on a growing number of customers. For the APAC region,
our planning is based on the assumption of likely positive effects
with a moderate impact on regional earnings due to the dy namic
market environment and our continuous growth strategy.

Group in connection with employee surveys and improvement
initiatives. Comprehensive representation rules and a division of
responsibilities that promote mutual exchange secure us from
risks that can arise due to the departure of employees. When
identifying potential new employees that can make a crucial con
tribution to performance, we seek the advice of external human
relations advisors.

Since NORMA Group’s personnel policy is practiced worldwide,
the risks and opportunities are consistent across the regions. We
regard the probability of personnel risks occurring as possible,
whereas the potential financial impact is minor due to our sus
tainable personnel policy.

In addition, there are opportunities from the consistent further
development of our employees. We foster our employees and
offer them incentives to further develop their personal expertise
through numerous educational and training opportunities as well
as the targeted search for talent within the Group. In addition, we
offer our employees a broad range of additional services (free
health checkups, flexible and familyfriendly working time mod
els, etc.) which contribute on the whole to a high degree of em
ployee satisfaction – measured by means of a semiannual em
ployee survey – and a low fluctuation rate of only six percent
Groupwide (excluding China and Mexico).

Employees, p. 84.

We actively promote the retention and expansion of knowhow
in the Company through the aforementioned measures, wherein
we see an opportunity for the future development of NORMA
Group whose impact on our further success we regard as very
likely. However, since the financial performance beyond our plan
ning is oriented on the very long term, we estimate the financial
impact of these opportunities to be minor.

Opportunities and risks of personnel management
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 em
ployees as a result of demographic developments and the short
age of skilled labour in Western industrial nations is becoming
more and more intense.

We counter these risks with farreaching basic and advanced
training as well as employee development programmes. We also
encourage our employees to focus on the Company’s success
through variable remuneration systems. In return, our employees
contribute to the continuous further development of NORMA

IT-related opportunities and 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 sensitive
corporate information. Therefore, we have implemented appro
priate measures to avoid and reduce this type of risk. These
measures are collectively embedded in our IT risk management
process and are adjusted in this context to changing conditions.
NORMA Group controls identifiable IT risks, for example, by
mirror ing the database, maintaining decentralised data and out
sourcing 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 ERPsystems. Another data
centre is located in the USA, with smaller backup systems in Asia,
which were transferred to a regional data centre in Singapore in

NORMA Group SE Annual Report 2013Risk and Opportunity Report

105

2012. The access of employees to sensitive information is ensured
by means of authorisation systems customised for the respective
positions, taking into account the principle of separation of func
tions. IT systems 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.

Based on global standards, we estimate the probability of ITre
lated risks occurring in all regions to be possible and the potential
financial impact to be minor. Opportunities in the area of IT arise
in particular from the potential of process standardisation and
optimisation across all companies of NORMA Group. For in
stance, the gradual replacement of older ERPsystems with new,
Groupwide uniform systems was once again advanced in 2013.
We regard the opportunities arising from this standardisation to
be very likely and expect the financial impact to be very minor.

Legal opportunities and risks
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 regulations.
Corporate Governance Report, p. 40. Consequently, we con
sider 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.

Social and environmental standards
Violating social and environmental standards could damage the
reputation of NORMA Group. Therefore, we have implemented
corporate responsibility as an integral part of our Group strategy.
Corporate Responsibility, p. 88. In this context, a systematic
environmental management system was introduced at NORMA
Group so that corporate decisions can always be evaluated also
considering the goal of avoiding emissions and conserving resourc
Environmental Protection, p. 90. We also invest in the area
es.
Occupational Health and
of occupational health and safety.
Safety, p. 89. 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.

However, our investments in the area of Corporate Re sponsibility
serve not only to ward off risks. We also see the measures and

initiatives as having the potential to positively impact both our
business environment as well as NORMA Group and its stake
holders. Therefore, we estimate the opportunities in this area to
be possible. We assume that the measures and initiatives will
have a minor impact on our planning overall.

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 mini
mise the potential impact by developing customerspecific solu
tions and through the speed of our innovation. At the same time,
it is also possible for NORMA Group to violate the intellectual
property of third parties. For this reason, we review our develop
ments for potential patent violations at an early stage. Therefore,
we consider it possible for our intellectual property to be violated.
Due to the countermeasures that we have implemented, we
believe that the potential impact of an intellectual property viola
tion would be minor. In addition, we also see potential opportu
nities that can lead to a minor deviation from our medium term
plan as a result of the consistent defence of our intellectual prop
erty and the expansion of legal unique selling points.

ASSESSMENT OF THE OVER ALL PROFILE

OF OPPORTUNITIES AND RISKS

BY THE MANAGEMENT BOARD

The Group’s overall situation results from the aggregation of in
dividual risks and opportunities from all categories of the business
units and functions. After assessing the likelihood of risks occur
ring and their potential financial impact as well as in light of the
current business outlook, NORMA Group’s Management Board
does not believe that there is any individual risk or group of risks
with the potential to jeopardise the continued existence of the
Group or individual Group companies as a going concern. Taking
the aggregated opportunities into account, we are in an excellent
position with respect to both the medium and long terms to
further expand our market position and to grow globally. This
assessment is reinforced by the good opportunities to cover our
financing requirements. Therefore, NORMA Group has not made
any effort to obtain a rating from a leading rating agency.

General economic risks remain for NORMA Group in all areas,
which is why setbacks on the way towards longterm realisation
of our growth and profitability targets cannot be ruled out. In
contrast, there are clear opportunities that we are taking ad
vantage of through our strategy and consistent opportunity
management, so that it is possible for us to exceed our profit
ability targets.

Consolidated Management Report106

OPPORTUNITY AND RISK PORTFOLIO OF NORMA GROUP 1)

Probability

Impact

unlikely

possible

likely

Change in
2013

minor

moderate

major

Change in
2013

Financial risks and opportunities

Default

Liquidity – Risks

– Opportunities

Currency – Risks

– Opportunities

Interest – Risks

– Opportunities

Economic risks and opportunities

Risks

Opportunities 2)

•

Industry-specific and technological risks and opportunities

Risks

Opportunities 2)

•

Risks and opportunities associated with corporate strategy

Risks

Opportunities

Operative risks and opportunities

Commodity pricing

– Risks

– Opportunities

Supplier

– Risks

– Opportunities

Quality and production – Risks

– Opportunities

Customer

– Risks

– Opportunities 3)

Risks and opportunities of personnel management

Risks

Opportunities

IT-related risks and opportunities

Risks

Opportunities

Legal risks and opportunities

Disregard to standards

Social and environment – Risks

Property rights

– Risks

– Opportunities

•

1) Provided that not indicated differently, the risk assessment applies for all regional segments.
2) For the APAC region, we assume a positive deviation as likely whereas the financial impact is rated moderate.
3) For the APAC region, we assume a positive deviation as possible whereas the financial impact is rated moderate.

unchanged
higher
lower
new

NORMA Group SE Annual Report 2013

Remuneration Report for the Management and Supervisory Boards

107

Risks Opportunities

OPPORTUNITY AND RISK PORTFOLIO OF NORMA GROUP SE

Financial risks and opportunities

Default

Liquidity

Currency

Interest

Economic risks and opportunities

Industry-specific and technological risks and opportunities

Risks and opportunities associated with corporate strategy

Operative risks and opportunities

Commodity pricing

Supplier

Quality and production

Customer

Risks and opportunities of personnel management

IT-related risks and opportunities

Legal risks and opportunities

Disregard to standards

Social and environment

Property rights

Compared to the prior year, we have reduced the risks from
currency, the economic environment and our strategy. All other
risks have not changed since the previous year. However, the
changes in individual risks and opportunities do not have a sig
nificant impact on NORMA Group’s overall risk profile. Therefore,
in our opinion, the Group’s overall profile has essentially not
changed since the previous year.

Remuneration Report for the
Management and Supervisory Boards

REMUNER ATION OF THE MANAGEMENT BOARD

Outline of the remuneration system for members of the
Management Board
The purpose of NORMA Group SE’s remuneration system is to
provide the members of the Management Board with adequate
remuneration for their activities and areas of responsibility as well
as their personal performance in accordance with applicable
legislation and to provide them with a longterm incentive to com
mit 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 SE’s remuneration structure.

In accordance with the recommendations of the German Cor
porate Governance Code in the version dated 13 May 2013
(
Corporate Governance Report, p. 40), the remuneration com
prises a fixed element and variable elements.

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.

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 (adjusted EBITA) and a liquidity com
ponent (operating free cash flow before external use).

Each of the two indicators is calculated for a financial year
based on figures taken from the Company’s consolidated
finan cial statements and compared to the target set in advance
by the Supervisory Board. The annual salary of the Manage
ment 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 re
duced to EUR 0 if the company performs poorly.

Consolidated Management Report

108

2. The Company’s longterm incentive (LTI) plan is a component
of a variable remuneration element designed to maximise the
Company’s longterm performance. The LTI plan also com
prises an EBITA component (adjusted) and an operating free
cash flow before external use (FCF) component, each of which
are observed over a period of three years (performance period).
A new threeyear performance period begins every year.

MATCHING STOCK PROGRAMME (MSP)

Tranches

2011

2012

2013

Option
factor

Number of
options

Exercise
price

1.5

162,679

21.00 EUR

162,679

17.87 EUR

162,679

23.71 EUR

End of the
vesting
period

2015

2016

2017

Both components are calculated by multiplying the average
annual EBITA (adjusted) and FCFvalues actually achieved in
the performance period by the EBITA (adjusted) and FCF
bonus percentages specified in the employment contract. In
a second step, the actual value of a component is compared
to the mediumterm plan approved by the Supervisory Board
to evaluate the Company’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 mediumterm plan. If the actual value
is lower than the planned value, the LTI plan is reduced on a
straightline 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 longterm incentive to commit to the success of the
Company. The MSP is a stock option programme. To this end,
the Supervisory Board specifies a number of stock options to
be allotted each financial year with the proviso that the Man
agement Board member makes a corresponding personal
investment in the company.

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 acquired
and qualified under the MSP as specified in the Management
Board contract. The number of stock options is calculated by
multiplying the qualified shares (for 2011, 2012 and 2013:
108,452 shares per year) held at the allotment date by the
option factor specified by the Supervisory Board. The option
factor is redetermined for each tranche and amounts to 1.5
for each of the tranches in 2011, 2012 and 2013. Therefore,
162,679 share options are to be taken into account in financial
years 2011, 2012 and 2013. Every tranche will be recalculated
taking changes in the influencing factors into consideration
and accrued pro rata temporis over the vesting period.

The vesting period is four years and ends on 31 March in 2015,
2016 and 2017 respectively for the 2011, 2012 and 2013
tranches. The options in a tranche can only be exercised within
a period of two years after the vesting period expires. As a
precondition for exercising the options, the share price must
exceed the exercise threshold when the options are exercised

(basis: weighted average of the last ten exchange trading days
before exercising the option). The exercise threshold is set by
the Supervisory Board when the respective tranche is allo cated
and equals at least 120 % of the strike price. The exercise
threshold was set at 120 % of the strike price for the 2011, 2012
and 2013 tranches. The strike price for the 2011 tranche corre
sponds to the initial offering price at the time of the IPO; i. e. the
issuing price set at the end of the book building phase for the
shares offered publicly during the IPO. The weighted average
closing price of the Company’s share for the last 60 exchange
trading days directly preceding the allocation of the respective
tranche applies when determining the strike price of the other
tranches. Dividend payments from the Company during the
vesting period are to be deducted from the exercise price of
the respective tranche. The value of the stock options is calcu
lated based on generally accepted business valuation models.

When the options are exercised, the Company is free to decide
whether to settle them in shares or in cash. The 2011, 2012
and 2013 tranches are expected to be settled in equity instru
ments (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. Furthermore, Management Board members are
reimbursed for any expenses and travel costs incurred while
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&Oinsurance policy carried for the Managing Directors
of NORMA Group.

Remuneration of the Management Board in the
2013 financial year
The remuneration for the Management Board totalled EUR 3.93
million (2012: EUR 2.4 million.). This figure comprises EUR 1.38
million in fixed elements and EUR 2.55 million in variable elements.

The variable elements comprise the shortterm performancebased
annual bonus and the two longterm performancebased LTI and
MSP schemes.

NORMA Group SE Annual Report 2013

Other Legally Required Disclosures

109

A provision was recognized 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
members between 2011 and 2015 in accordance with sen tences
5 to 9 of section 314(1) no. 6 letter a) HGB.

Furthermore, the Supervisory Board members are reimbursed
for any expenses and travel costs incurred while performing their
duties for the Company in accordance with the Company’s re
spectively applicable guidelines. The members of the Super visory
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.

REMUNER ATION OF THE SUPERVISORY BOARD

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 Governance
Code in the version dated 13 May 2013. The Chairman is paid
double the remuneration of the other members of the Super visory
Board, and the Deputy Chairman is paid one and a half times
this amount. In addition, the Chairman and members of the
Super visory Board’s committees are remunerated separately.

The Supervisory Board members will be remunerated for their
activities on the day after the 2014 Annual General Meeting as
follows:

Supervisory Board
member

Membership /
Chairmanship of a committee

Dr. Stefan Wolf

– Chairman of the

Remuneration
in EUR

110,000.00

Supervisory Board

– Chairman of the General and

Nomination Committees

Lars M. Berg

– Deputy Chairman of the

91,356.16

Supervisory Board
(since 8 February 2013)

– Member of the Audit Committee
– Member of the General and
Nomination Committees
(since 8 February 2013)

– Not a member of a committee

50,000.00

– Member of the Audit Committee

60,000.00

– Chairman of the Audit Committee
– Member of the General and

Nomination Committees

95,000.00

– Not a member of a committee

43,424.66

449,780.82

Günter
Hauptmann

Knut J.
Michelberger

Dr. Christoph
Schug

Erika Schulte
(appointed effective
18 February, 2013)

Total

No remuneration was paid to Supervisory Board members in
financial year 2013 for services personally rendered (in particular
advisory and brokerage services).

Other Legally Required Disclosures

ADDITIONAL INFORMATION REQUIRED UNDER THE

GERMAN TAKEOVER DIRECTIVE IMPLEMENTATION ACT

(ÜBERNAHMERICHTLINIEN-UMSETZUNGSGESETZ)

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 SE’s share capital totalled EUR 31,862,400.00
on 31 December 2013. 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 SE
holds no treasury shares.

Section 315(4) no. 2 HGB
The Management Board of NORMA Group SE 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 SE that confer special
control rights to the holder.

Section 315(4) no. 5 HGB
There are no employee share schemes through which employees
can acquire shares of NORMA Group SE. Employees with share
holdings in NORMA Group SE exercise control rights in the same
way as other shareholders in accordance with applicable legis
lation and the Articles of Association.

Consolidated Management Report
110

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 SE 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
General Meeting can authorise the Supervisory Board to make
changes which affect only the wording of the Articles of Associ
ation. The Annual General Meeting of NORMA Group SE has
chosen to do so: According to Article 14(2) of the Articles of
Association, the Supervisory Board is authorised to make
changes to the Articles of Association which only affect their
wording. In accordance with article 20 sentence 3 of the Articles
of Association, a simple majority of votes submitted is sufficient
for a resolution on changing the Articles of Association if at least
half of the share capital is represented when the resolution is
adopted and a different majority is not required under the 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 Articles
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 authori
zation 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, noparvalue shares in exchange for
cash or noncash contributions (authorised capital 2011/II). With
the approval of the Supervisory Board, the Annual General Meet
ing 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, noparvalue shares in exchange for
cash or noncash contributions (authorised capital 2011/II). Arti
cle 5 of NORMA Group SE’s Articles of Association adopts the
provisions on the Company’s Authorised Capital 2011/II from
article 5 of NORMA Group AG’s Articles of Association prior to

the transformation. The only change compared to the Articles of
Association of NORMA Group AG is the additional clarification
that the Authorised Capital 2011/II only exists in NORMA Group
SE to the extent remaining when the transformation went into
effect, i. e. not yet used up.

The Management Board is authorised, subject to the Super visory
Board’s approval, to disapply the preemptive rights of share
holders for one or more capital increases in connection with the
authorised capital for fractional amounts resulting from the share
holders’ subscription ratio, for capital increases in exchange for
noncash contributions, in particular to acquire companies, 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 preemptive rights in accordance with section
186(3) sentence 4), to fulfil obligations resulting from conversion
and option rights or profit participation rights or participating bonds.

Contingent capital
Article 6 of NORMA Group SE’s Articles of Association adopts
the Contingent Capital 2011 from article 6 of NORMA Group AG’s
Articles of Association prior to the transformation and also clar
ifies that the Contingent Capital 2011 only exists to the extent
remaining when the transformation went into effect, i. e. capital
increases under article 6 of NORMA Group AG’s Articles of Asso
ciation have not yet been carried out. The share capital was
contingently increased by up to EUR 12,505,000.00 by issuing
up to 12,505,000 new registered, noparvalue shares with divi
dend rights from the beginning of the financial year in which they
were issued (contingent capital 2011). With the approval of the
Supervisory Board, the Management Board is authorised to issue
bonds with warrants or convertible bonds and convertible profit
participation rights one or more times until the end of 5 April 2016
and to grant the bondholders or creditors of the bonds conversion
or option rights on up to 12,505,000 new shares of NORMA
Group SE with a proportionate interest in the share capital of up
to EUR 12,505,000.00.

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
convertible bonds or profit participation rights with option or con
version rights exercise these options or conversion rights, or
conversion obligations arising from such bonds are fulfilled and

NORMA Group SE Annual Report 2013Other Legally Required Disclosures

111

Section 315(4) no. 9 HGB
NORMA Group SE has no agreements in place that provide com
pensation for members of the Management Board or employees
in the event of a takeover bid. Please see the remuneration report
for further details.

REPORT ON TR ANSACTIONS WITH REL ATED PARTIES

Apart from the reported, there were no significant transactions
with related parties in financial year 2013.

Notes, p. 174.

Maintal, 12. March 2014

NORMA Group SE

The Management Board

Werner Deggim

Dr. Othmar Belker

Bernd Kleinhens

John Stephenson

that the Company’s treasury shares or new shares from the
autho rized capital are used for this purpose.

Authorisation to acquire treasury shares
The Annual General Meeting held on 6 April 2011 authorised
NORMA Group SE 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 SE’s shareholders in accordance with sec
tion 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 SE 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 obligation to
do so. Other than selling them on the stock market or offering
them to all shareholders while partially or completely disapplying
preemptive rights, the Management Board is also specifically
authorised to use shares acquired on the basis of the aforemen
tioned authorisation for any of the following purposes with the
approval of the Supervisory Board: to disapply fractional amounts
resulting from the subscription ratio from shareholders’ preemp
tive rights, for sale in exchange for noncash contributions, in
particular as part of the acquisition of companies, for sale in
exchange for cash contributions, provided the price is not sig
nificantly lower than the stock market price (simplified disappli
cation of preemptive rights in accordance with section 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 con
version obligations.

The Management Board of NORMA Group SE has yet to make
use of this authorisation.

Section 315(4) no. 8 HGB
The promissory note loan that NORMA Group SE received in
2013 also includes the typical Change of Control Clause just as
NORMA Group’s other financing agreements. In the event of a
takeover by a third party, the possibility that NORMA Group would
not be able to finance itself at similarly favourable terms and
conditions cannot be ruled out.

Consolidated Management Report

112

Consolidated Financial
Statements

114 Consolidated Statement of Financial Position

116 Consolidated Statement of Comprehensive Income

117 Consolidated Statement of Cash Flows

118 Consolidated Statement of Changes in Equity

120 Segment Reporting

NORMA Group SE Annual Report 2013113

S
T
N
E
M
E
T
A
T
S

L
A

C
N
A
N

D
E
T
A
D

L
O
S
N
O
C

122 Notes to the Consolidated Financial Statements

176 Appendix to the Notes to the Consolidated

Financial Statements
176 Notifications of Voting Rights
178 Corporate Bodies

179 Responsibility Statement

180 Auditor’s Report

181 Further Information
181 Glossary
185 Overview by Quarter 2013
186 Multi-year Overview

Consolidated Financial Statements

114

Consolidated Statement of Financial Position

ASSETS

in EUR thousands

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

Note

31 Dec 2013

31 Dec 20121)

1 Jan 20121)

(20)

(21)

(18)

(19)

(25)

(26)

(23)

(18)

(24)

(36)

233,239

92,910

115,367

1,533

7,515

235,262

92,478

109,079

2,253

6,061

224,841

78,940

97,179

397

2,038

6,420

450,564

445,133

409,859

79,770

8,114

827

90,138

194,188

373,129

74,313

7,787

103

12,778

79,293

72,389

66,755

9,792

13,141

80,817

67,891

246,663

238,396

Total assets

823,693

691,796

648,255

1) Restated due to effects from the application of IAS 19R.

See: Section 2 Basis of preparation and Section 7 Change in accounting principles.

NORMA Group SE Annual Report 2013

Consolidated Statement of Financial Position

115

EQUIT Y AND LIABILITIES

in EUR thousands

Note

31 Dec 2013

31 Dec 20121)

1 Jan 20121)

Equity attributable to equity holders of the parent

Subscribed capital

Capital reserves

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

1) Restated due to effects from the application of IAS 19R.

See: Section 2 Basis of preparation and Section 7 Change in accounting principles.

(27)

(29)

(30)

(31)

(32)

(33)

(23)

(19)

(30)

(31)

(32)

(33)

(23)

(18)

(34)

31,862

215,927

– 13,857

84,966

318,898

1,004

319,902

10,869

5,284

200,981

1,398

1,619

8,293

32,970

261,414

8,334

125,127

22,407

4,676

6,977

15,831

59,025

242,377

503,791

31,862

213,559

– 8,550

51,289

288,160

1,021

289,181

10,319

4,558

190,727

1,589

2,666

24,675

32,940

31,862

212,252

– 2,668

14,908

256,354

444

256,798

8,407

3,495

213,457

1,310

676

21,809

33,775

267,474

282,929

6,743

50,969

19,600

2,225

114

17,827

37,663

135,141

402,615

6,359

28,917

21,877

1,527

8,457

41,373

108,528

391,457

823,693

691,796

648,255

Consolidated Financial Statements

116

Consolidated Statement of Comprehensive Income

in EUR thousands

Revenue

Changes in inventories of finished goods
and work in progress

Other own work capitalised

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

Other comprehensive income that
can be reclassified into profit or loss, net of tax

Exchange differences on translation of foreign operations

Cash flow hedges, net of tax

Other comprehensive income that
cannot be reclassified into profit or loss, net of tax

Note

(9)

(10)

(11)

(12)

(13)

(20, 21)

(14)

(17)

(27)

Remeasurements of post employment benefit obligations,
net of tax

(27, 29)

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)

(16)

1) Restated due to effects from the application of IAS 19R.

See: Section 2 Basis of preparation and Section 7 Change in accounting principles.

Q4 2013

152,804

– 318

2,275

– 61,996

92,765

2,690

– 20,424

– 43,252

– 7,780

23,999

232

– 4,596

– 4,364

19,635

– 7,008

12,627

– 2,110

– 1,992

– 118

Q4 20121)

137,354

– 1,051

1,086

– 58,510

78,879

3,547

– 18,752

– 37,317

– 8,493

17,864

– 1,010

– 4,153

– 5,163

12,701

– 3,270

9,431

2013

635,545

1,894

3,377

– 269,421

371,395

6,983

– 79,370

– 169,689

– 29,799

99,520

555

– 16,140

– 15,585

83,935

– 28,319

55,616

20121)

604,613

1,588

1,671

– 263,489

344,383

9,536

– 76,626

– 156,504

– 26,414

94,375

800

– 13,972

– 13,172

81,203

– 24,587

56,616

– 1,411

– 1,168

– 243

– 5,383

– 7,712

2,329

– 5,655

– 2,570

– 3,085

– 567

– 1,039

– 567

– 1,039

– 567

– 2,677

9,950

12,617

12,627

10,047

– 97

9,950

0.40

0.39

– 1,039

– 2,450

6,981

9,435

– 4

9,431

6,918

6,981

0.30

– 567

– 5,950

49,666

55,557

55,616

49,683

– 17

49,666

1.74

– 1,039

– 6,694

49,922

56,616

49,695

227

49,922

1.78

NORMA Group SE Annual Report 2013

Consolidated Statement of Comprehensive Income | Statement of Cash Flows

117

Consolidated Statement of Cash Flows

in EUR thousands

Note

Q4 2013

Q4 20121)

2013

20121)

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 account reveivables
and other receivables

Change in trade and other payables

Interest expenses of the period

Other non-cash expenses / income

Net cash provided by operating activities

thereof interest received

thereof income taxes

Investing activities

Payments for acquisitions of subsidiaries, net

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

Reimbursement OPICP from shareholder

Interest paid

Dividends paid to shareholders

Dividends paid to non-controlling interests

Proceeds from borrowings

Repayment of borrowings

Net cash provided by (+) / used in (–) financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of the year

Effect of foreign exchange rates on cash and cash equivalents

Cash and cash equivalents at end of the period

(20, 21)

(30)

(19)

(24, 25, 26)

(32, 34, 35)

(36)

(40)

(21)

(20)

(27)

(31)

(36)

1) Restated due to effects from the application of IAS 19R.

See: Section 2 Basis of preparation and Section 7 Change in accounting principles.

12,627

7,780

861

329

12,440

1,228

2,682

4,712

42,702

229

– 4,674

– 1,167

– 8,559

139

– 5,990

– 15,577

– 1,750

– 16,782

– 18,532

8,593

186,209

– 614

194,188

9,431

8,493

317

– 676

– 259

13,134

1,008

1,798

– 98

33,148

– 3,772

– 7,248

– 8,749

– 112

– 2,340

– 18,449

– 1

– 1,798

– 10,236

– 12,035

2,664

70,082

– 357

72,389

55,616

29,799

– 66

542

– 633

– 4,732

12,424

11,408

10,993

115,351

485

– 16,484

– 13,210

– 21,267

376

– 9,261

– 43,362

1,067

– 9,773

– 20,711

128,118

– 47,051

51,650

123,639

72,389

– 1,840

194,188

56,616

26,414

– 386

– 673

– 4,037

11,009

2,591

11,630

– 7,040

96,124

1,736

– 16,232

– 28,976

– 23,892

924

– 6,143

– 58,087

1,307

– 11,630

– 19,125

– 11

18,500

– 23,173

– 34,132

3,905

67,891

593

72,389

Consolidated Financial Statements

118

Consolidated Statement of Changes in Equity

in EUR thousands

Balance at 31 December 2011 (as reported)

Effects from the application of IAS 19R

Balance at 31 December 2011 1)

Changes in equity for the period

Result for the period 1)

Exchange differences on translation of foreign operations

Cash flow hedges, net of tax

Remeasurements of post employment benefit obligations, net of tax

Total comprehensive income for the period

Stock options

Reimbursement OPICP by shareholders

Dividends paid

Dividends paid to non-controlling interests

Non-controlling interest acquired in a business combination

Total transactions with owners for the period

Balance at 31 December 2012 1)

Balance at 31 December 2012 (as reported)

Effects from the application of IAS 19R

Balance at 31 December 2012 1)

Changes in equity for the period

Result for the period

Exchange differences on translation of foreign operations

Cash flow hedges, net of tax

Remeasurements of post employment benefit obligations, net of tax

Total comprehensive income for the period

Stock options 2)

Reimbursement OPICP by shareholders

Dividends paid

Total transactions with owners for the period

Balance at 31 December 2013

Note

(7)

(23)

(27, 29)

(28)

(27)

(7)

(23)

(27, 29)

(28)

(27)

Attributable to
equity holders of the parent

Subscribed
capital

31,862

Capital
reserve

212,252

31,862

212,252

31,862

1,307

213,559

31,862

213,559

31,862

1,301

1,067

2,368

215,927

1) Restated due to effects from the application of IAS 19R. See: Section 2 Basis of preparation and Section 7 Change in accounting principles.
2) In 2013 the expenses from the stock option programme recognised in equity were reclassified from the retained earnings into the capital reserve in order to achieve the same

disclosure in the Statutory Financial Statements of NORMA Group SE and the Consolidated Financial Statements of NORMA Group.

Attributable to

equity holders of the parent

Non-controlling

interests

Total equity

Other

reserves

– 2,668

– 2,797

– 3,085

– 5,882

– 8,550

– 7,636

2,329

– 5,307

– 13,857

Retained

earnings

14,112

796

14,908

56,616

– 1,039

55,577

418

– 19,125

– 489

– 19,196

51,289

50,450

839

51,289

55,557

– 567

54,990

– 602

– 20,711

– 21,313

84,966

Total

255,558

796

256,354

56,616

– 2,797

– 3,085

– 1,039

49,695

418

1,307

– 19,125

– 489

– 17,889

288,160

287,321

839

288,160

55,557

– 7,636

2,329

– 567

49,683

699

1,067

– 20,711

– 18,945

318,898

444

227

– 11

361

350

1,021

– 76

– 17

1,004

256,002

796

256,798

56,616

– 2,570

– 3,085

– 1,039

49,922

418

1,307

– 19,125

– 11

– 128

– 17,539

289,181

288,342

839

289,181

55,616

– 7,712

2,329

– 567

49,666

699

1,067

– 20,711

– 18,945

319,902

NORMA Group SE Annual Report 2013

Consolidated Statement of Changes in Equity

119

in EUR thousands

Balance at 31 December 2011 (as reported)

Effects from the application of IAS 19R

Balance at 31 December 2011 1)

Changes in equity for the period

Result for the period 1)

Exchange differences on translation of foreign operations

Cash flow hedges, net of tax

Remeasurements of post employment benefit obligations, net of tax

Total comprehensive income for the period

Stock options

Dividends paid

Reimbursement OPICP by shareholders

Dividends paid to non-controlling interests

Non-controlling interest acquired in a business combination

Total transactions with owners for the period

Balance at 31 December 2012 1)

Balance at 31 December 2012 (as reported)

Effects from the application of IAS 19R

Balance at 31 December 2012 1)

Changes in equity for the period

Result for the period

Exchange differences on translation of foreign operations

Cash flow hedges, net of tax

Remeasurements of post employment benefit obligations, net of tax

Total comprehensive income for the period

Stock options 2)

Dividends paid

Reimbursement OPICP by shareholders

Total transactions with owners for the period

Balance at 31 December 2013

Note

(7)

(23)

(27, 29)

(28)

(27)

(7)

(23)

(27, 29)

(28)

(27)

Attributable to

equity holders of the parent

Subscribed

capital

31,862

Capital

reserve

212,252

31,862

212,252

31,862

213,559

31,862

1,307

213,559

1,301

1,067

2,368

215,927

Attributable to
equity holders of the parent

Other
reserves

– 2,668

– 2,797

– 3,085

– 5,882

– 8,550

– 7,636

2,329

– 5,307

– 13,857

Retained
earnings

14,112

796

14,908

56,616

– 1,039

55,577

418

– 19,125

– 489

– 19,196

51,289

50,450

839

51,289

55,557

– 567

54,990

– 602

– 20,711

– 21,313

84,966

Total

255,558

796

256,354

56,616

– 2,797

– 3,085

– 1,039

49,695

418

1,307

– 19,125

– 489

– 17,889

288,160

287,321

839

288,160

55,557

– 7,636

2,329

– 567

49,683

699

1,067

– 20,711

– 18,945

318,898

Non-controlling
interests

Total equity

444

227

– 11

361

350

1,021

– 76

– 17

1,004

256,002

796

256,798

56,616

– 2,570

– 3,085

– 1,039

49,922

418

1,307

– 19,125

– 11

– 128

– 17,539

289,181

288,342

839

289,181

55,616

– 7,712

2,329

– 567

49,666

699

1,067

– 20,711

– 18,945

319,902

Consolidated Financial Statements

120

Segment Reporting

EMEA

Americas

Asia-Pacific

Total segments

Central functions

Consolidation

Consolidated group

in EUR thousands

Total revenue

thereof inter-segment revenue

2013

412,691

24,730

2012 7)

392,588

25,047

2013

198,321

6,752

2012

200,946

7,618

2013

57,218

1,203

2012

44,745

1,001

2013

668,230

32,685

2012 7)

638,279

33,666

2013

42,457

2012

44,206

2013

– 75,142

2012

– 77,872

2013

635,545

2012 7)

604,613

Revenue from external customers

387,961

367,541

191,569

193,328

56,015

43,744

635,545

604,613

635,545

604,613

Contribution to
consolidated group sales

Adjusted EBITDA 1)

Depreciation without
PPA depreciation 2)

Adjusted EBITA 3)

Assets 4)

Liabilities 5)

CAPEX

Number of employees 6)

61 %

83,920

– 9,803

74,117

490,322

196,079

13,055

2,546

61 %

79,314

– 10,013

69,301

457,426

185,155

15,153

2,468

30 %

45,216

– 4,133

41,083

210,047

121,336

7,317

664

32 %

42,981

– 4,087

38,894

209,894

138,118

6,683

644

9 %

6,471

– 1,991

4,480

61,895

20,385

6,716

567

7 %

5,175

– 1,028

4,147

51,240

36,536

5,752

367

1) The adjustments relate to adjustments within the individual segments. At Group level, no adjustments were made in the EBITDA.
2) Depreciation from purchase price allocations.
3) For details regarding the adjustments, refer to Note 8.
4) Including allocated goodwills, taxes are shown within the reconciliation.
5) Taxes are shown within the reconciliation.
6) Number of employees (average headcount).
7) Restated due to effects from the application of IAS 19R. See: Section 2 Basis of preparation and Section 7 Change in accounting principles.

100 %

135,607

– 15,927

119,680

762,264

337,800

27,088

3,777

100 %

127,470

– 15,128

112,342

718,560

359,809

27,588

3,479

– 5,915

– 5,078

– 373

– 1,603

129,319

120,789

– 772

– 6,687

212,440

277,946

3,440

168

– 264

– 5,342

131,680

171,693

4,118

– 373

– 151,011

– 111,955

– 1,603

– 158,102

– 127,706

– 16,699

112,620

823,693

503,791

30,528

3,945

– 15,392

105,397

692,138

403,796

31,706

3,577

NORMA Group SE Annual Report 2013

Segment Reporting

121

EMEA

Americas

Asia-Pacific

Total segments

Central functions

Consolidation

Consolidated group

2013

668,230

32,685

2012 7)

638,279

33,666

2013

42,457

2012

44,206

2013

– 75,142

2012

– 77,872

2013

635,545

2012 7)

604,613

Revenue from external customers

387,961

367,541

191,569

193,328

56,015

43,744

635,545

604,613

635,545

604,613

100 %

135,607

– 15,927

119,680

762,264

337,800

27,088

3,777

100 %

127,470

– 15,128

112,342

718,560

359,809

27,588

3,479

– 5,915

– 5,078

– 772

– 6,687

212,440

277,946

3,440

168

– 264

– 5,342

131,680

171,693

4,118

– 373

– 151,011

– 111,955

– 1,603

129,319

120,789

– 1,603

– 158,102

– 127,706

– 16,699

112,620

823,693

503,791

30,528

3,945

– 15,392

105,397

692,138

403,796

31,706

3,577

in EUR thousands

Total revenue

thereof inter-segment revenue

2013

412,691

24,730

2012 7)

392,588

25,047

2013

198,321

6,752

Contribution to

consolidated group sales

Adjusted EBITDA 1)

Depreciation without

PPA depreciation 2)

Adjusted EBITA 3)

Assets 4)

Liabilities 5)

CAPEX

Number of employees 6)

61 %

83,920

– 9,803

74,117

490,322

196,079

13,055

2,546

61 %

79,314

– 10,013

69,301

457,426

185,155

15,153

2,468

30 %

45,216

– 4,133

41,083

210,047

121,336

7,317

664

2012

200,946

7,618

32 %

42,981

– 4,087

38,894

209,894

138,118

6,683

644

2013

57,218

1,203

9 %

6,471

– 1,991

4,480

61,895

20,385

6,716

567

2012

44,745

1,001

7 %

5,175

– 1,028

4,147

51,240

36,536

5,752

367

Consolidated Financial Statements

122

Notes to the Consolidated
Financial Statements

1. GENER AL INFORMATION

NORMA Group SE is the parent Company of NORMA Group. Its
headquarters are located at 63477 Maintal, Edisonstrasse 4 in
the vicinity of Frankfurt, Germany, and is registered in the com
mercial register of Hanau under the number HRB 94473. NORMA
Group SE and its affiliated Group subsidiaries operate in the
market as ‘NORMA Group.’

NORMA Group has been listed in the Prime Standard of Frankfurt
Stock Exchange’s Regulated Market since 8 April 2011. For a
detailed overview of NORMA Group SE’s shareholdings, please
refer to the appendix to the notes: voting rights.

NORMA Group SE was established in 2006 as a result of the
merger of Rasmussen GmbH and the ABA Group. Rasmussen
was founded in 1949 as Rasmussen GmbH in Germany. It manu
factured connecting and retaining elements as well as fluid con
veying conduits such as monolayer and multilayer tubes and
corrugated tubes. All products were marketed globally under the
NORMA brand. ABA Group was founded in 1896 in Sweden. The
Group has since developed into a leading multinational Com pany
specialising in the design and production of hose and pipe
clamps, as well as connectors for many worldwide applications.

fixing products. In 2012, NORMA Group acquired Connectors
Verbindungstechnik AG in Switzerland, which is specialised in
connector systems for the pharmaceutical and biotechnology
industry.

In the financial years 2012 and 2013, more acquisitions were made
in accordance with our acquisition strategy. In 2012, acqui sitions
were made in the regions of EMEA and AsiaPacific. In 2013, we
focussed on the regions EMEA, Americas and AsiaPacific.

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 Distribution Services (DS) customers, NORMA Group offers a
wide range of standard fastening and fixing products. Furthermore,
NORMA Group offers a broad technological and innovative prod
uct portfolio which includes brands like NORMA ®, ABA ®, BREEZE®,
R.G. RAY®, Serflex®, Serratub®, TERRY®, Torca® and FISH ®.

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 wormdrive, Tbolt and Vclamps for the commercial and pas
senger vehicle, heavyduty vehicle, aircraft and further industrial
markets. In 2010, NORMA Group acquired two further companies
in America, R.G. RAY Corporation and Craig Assembly Inc., to
become one of the country’s leading suppliers of fastening and

For Engineered Joining Technology (EJT) customers, NORMA
Group offers tailormade solutions and special engineered joining
systems. To effectively fulfil special requirements, NORMA Group
builds on extensive industry and application knowledge, a suc
cessful track record of innovation and longstanding relationships
with all its key customers. As a result, many joining systems and
fluid conveying conduits have been developed in close cooper
ation with global OEMs and NORMA Group.

NORMA Group SE Annual Report 2013123

2. BASIS OF PREPAR 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 presented,
unless otherwise stated.

The consolidated financial statements of NORMA Group have
been prepared in accordance with International Financial Report
ing Standards as adopted by the EU (IFRS) 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
Decem ber 2013.

The consolidated statement of comprehensive income has been
prepared in accordance with the total cost method.

The consolidated financial statements of NORMA Group SE were
prepared by the Management Board on 12 March 2014 and re
leased for publication after the approval by the Supervisory Board
on 26 March 2014.

The consolidated financial statements of NORMA Group are being
filed with and published in the German Federal Gazette (Bundes
anzeiger).

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
assump tions and estimates are significant to the consolidated
financial statements are disclosed in Note 6.

New and amended standards adopted by the Group
for the first time in 2013
The following new standards or amendments to standards which
are applied for the first time for the financial year beginning 1 Jan
uary 2013 had some significant enhancements to the disclosures
in the notes, but they did not have a material impact on NORMA
Group’s financial positions, cash flows and financial performance.

IAS 1 (amendments), Presentation of Financial Statements,
was published in June 2011. The presentation of other com
prehensive income has been adapted as a result of the amend
ed IAS 1, so that items that will be reclassified, at a later date,
in the profit or loss (socalled, recycling); (e. g. cash flow
hedges, foreign currency translation) are to be separated from
those items that cannot be recycled (e. g. Actuarial gains and
losses on defined benefit pension plans).

IAS 19 (amendments), Employee Benefits, was published in
June 2011. The amendment was applied retrospective in
accor dance with IAS 19.173 (2011) and IAS 8. The most im
portant change of the amended IAS 19 (IAS 19R ) is that the
existing election law for the recognition of losses and gains
from the remeasurement of defined benefit pension plans was
abolished and now only the immediate recognition in other
comprehensive income is allowed. This change had no impact
on the consolidated financial statements of the group as the
NORMA Group recognises actuarial gains and losses, in
accor dance with the previous election law, in other com
prehensive income. In addition to this change, the profit or loss
to be recorded from plan assets under IAS 19R no longer has
to be measured on the basis of expectations, but by applying
the discount rate of the defined benefit liability. This change
has no material effect on the NORMA Group, as there are only
limited plan assets to secure pension obligations.

The amendment of IAS 19 contains further a change of the
requirements for termination benefits. The definition of termi
nation benefits was clarified, so that benefits that have
futureservice obligations are not termination benefits and have
to be classified as “ShortTerm Employee Benefits”, as “Other
LongTerm Employee Benefits” or as “PostEmployment Bene
fits”. This clarification has a direct impact on the accounting of
provisions for retirement obligations and the corresponding
expenses. Topup payments 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 LongTerm Employee Benefits” in terms
of IAS 19.08 seqq. and IAS 19.153 seqq. The recognition of
those topup payments 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.
Note 7 presents the impacts of the changes in accounting
policy with respect to the provisions for retirement obligations.

The International Accounting Standards Board (IASB) has
published amendments to IFRS 7, Financial Instruments: Dis
closure in December 2011. The amendments to IFRS 7 require
an entity to disclose information about rights of setoff and
related arrangements. The new disclosures are required for all
recognised financial instruments that are setoff in accordance
with IAS 32. These disclosures also apply to recognised finan
cial instruments that are subject to an enforceable master
netting arrangement or similar agreement, irrespective of
whether they are setoff in accordance with IAS 32. The new
disclosure requirements have no impact on the NORMA Group.

Consolidated Financial StatementsNotes to the Consolidated Financial Statements
124

IFRS 13, Fair Value Measurement, 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
permitted by other standards within IFRSs. IFRS 13 requires
an entity to disclose information that helps readers of its finan
cial 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
major ity of changes required by IFRS 13 have already been
introduced, mainly by amendments to IFRS 7, Financial Instru
ments: Disclosures.

The IASB, as a consequential amendment to IFRS 13, Fair
Value Measurement, modified some of the disclosure require
ments in IAS 36, Impairment of Assets, regarding measure
ment of the recoverable amount of impaired nonfinancial
assets. This amendment removed certain disclosures of the
recoverable amount of CGUs which had been included in IAS
36 by the issue of IFRS 13. In addition to removing the require
ment to disclose recoverable amounts when there has been
impairment or reversal of impairment, the amendments require
the following disclosures when an impairment is recognised
or reversed and recoverable amount is based on fair value less
cost of disposal:

The level of the IFRS 13 ‘fair value hierarchy’ within which

the fair value measurement has been determined;

Standards (IFRSs). The amendments are effective for annual
periods beginning on or after 1 January 2013. The amend
ments are as follows:

Pronouncement

Amendments

IFRS 1
Firsttime Adoption of
International Financial
Reporting Standards

Permit the repeated application
of IFRS 1

Borrowing costs relating to qualifying
assets for which the commence
ment date for capitalisation is before
the date of transition to IFRSs

IAS 1 Presentation of
Financial Statements

Clarification of the requirements
for comparative information

IAS 16
Property, Plant and Equipment

Classification of
servicing equipment

IAS 32
Financial Instruments:
Presentation

IAS 34
Interim Financial Reporting

Clarify that tax effect of a distribution
to holders of equity instruments
should be accounted for in accor
dance with IAS 12 Income Taxes

Clarify interim reporting of segment
information for total assets in order
to enhance consistency with the
requirements in IFRS 8 Operating
Segments

Standards, amendments and interpretations of existing
standards 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 account
ing periods beginning on or after 1 January 2014. The Group has
decided against an early adoption.

A description of the valuation techniques used and any
changes in that valuation technique for Level 2 and Level 3
of the fair value hierarchy;

1) Standards, amendments and interpretations to existing
standards that have already been endorsed by the EU
(with reference to each respective EU effective date)

For fair value measurements at Level 2 or Level 3 of the fair
value hierarchy: Key assumptions used in the measurement
of the fair value, including the discount rate used in the
current measurement and previous measure if the fair value
less costs of disposal is measured using a present value
technique.

The amendments apply retrospectively to annual reporting
periods beginning on or after 1 January 2014, an early adop
tion is permitted with simultaneous application of IFRS 13. The
Group has early applied the amendments as of 31 December
2013.

In Mai 2012, as part of its annual improvements project, the
International Accounting Standards Board (IASB) issued An
nual Improvements to IFRSs: 2009–2011 Cycle, which pro
poses amendments to five International Financial Reporting

In May 2011, the IASB published its improvements to the
account ing and disclosure requirements for consolidation, off
balancesheet activities and joint agreements by issuing IFRS
10, Consolidated Financial Statements, IFRS 11, Joint Arrange
ments, IFRS 12, Disclosure of Interests in Other Entities, con
sequential amendments to IAS 27, (Consolidated 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 Consolidated Financial Statements from these standards.

The new standards and the consequential amendments are
presented in detail below:

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125

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
Financial Statements (amended 2008) and SIC12, Consoli
dation – Special Purpose Entities. IFRS 10 builds on the exist
ing principles by identifying the concept of control as the de
termining factor in whether or not an entity should be included
in the consolidated financial statements of the parent Com
pany. The standard provides additional guidance to assist in
the determination of control where this is difficult to assess.
IAS 27 (amended 2011) now only contains requirements relat
ing to separate financial statements as a result of the issuance
of the new standard IFRS10.

IFRS 11 Joint Arrangements
IFRS 11 provides guidance for the accounting of joint arrange
ments. The core principle of IFRS 11 is to determine the ac
counting of joint ventures on the rights and obligations of the
arrangement, 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 arrangements. A joint operation is a joint arrangement
whereby the parties that have joint control of the arrangement
have rights to the assets, and obligations for the liabilities,
relating to the arrangement. A joint venture is a joint arrange
ment whereby the parties that have joint control of the arrange
ment have rights to the net assets of the arrangement. IFRS
requires a joint operator to recognise and measure the assets
and liabilities in relation to its interest in the arrangement appli
cable to the particular assets, liabilities, revenues and ex
penses. A joint venture is required to recognise an investment
and to account for that investment using the equity method
according to IAS 28.

IFRS 12 Disclosure of Interests in Other Entities
IFRS 12 unifies the disclosure requirements of IAS 27 and IFRS
10, IAS 31 and IFRS 11 and IAS 28 in one comprehensive
standard. The standard provides guidance for disclosure re
quirements for any kind of interests in other entities, including
joint arrangements, associates, structured entities, special
purpose vehicles and offbalancesheet activities. The objec
tive of IFRS 12 is to require disclosures that enables users of
financial statements to evaluate the nature of, and risks asso
ciate with, its interest in other entities and the effects on its
financial position, financial performance and cash flows.

IAS 28 Investments in Associates and Joint Ventures
According to the amendment of IAS 28 an entity shall account
for an investment, or for a portion of an investment, in an as
sociate 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 accounted for using the equity method until the dis
posal of the portion that is classified as held for sale takes
place.

The International Accounting Standards Board (IASB) has
published amendments to IAS 32, Financial Instruments: Pre
sentation, in December 2011. The amendments introduce
additional application guidance under IFRS in applying the
current offsetting principles. It clarifies that an entity currently
has a legally enforceable right to setoff if that right is enforce
able both in the normal course of business and in the event of
default, insolvency of the entity and all counterparties. The
amendments to IAS 32 are to be retrospectively applied for
annual periods beginning on or after 1 January 2014. 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 simplify
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 assets
Phase 3: Hedge accounting

IFRS 9, Financial Instruments (effective from 1 January 2013,
earlier application is permitted), was published in November
2009 and covers the classification and measurement of finan
cial 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 amortised 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, Financial Instruments, to include
guidance on financial liabilities and the derecognition of finan
cial instruments. The accounting and presentation of financial
liabilities and for derecognising financial instruments has been
adopted from IAS 39, ‘Financial Instruments: Recognition and
Measurement’, without change, except for financial liabilities
that are measured at fair value through profit or loss. In No
vember 2012, the IASB published an exposure draft proposing
limited amendments to IFRS 9 ‘Financial Instruments (2010)’
(the ‘ED’). The significant changes from IFRS 9 in the ED in
clude the introduction of a third classification category for debt
instruments (fair value through other comprehensive income),

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

126

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.

final effective date will be determined when the classification
and measurement and impairment chapters of IFRS 9 are final
ised. The Group is currently assessing the impacts of adopting
IFRS 9 on the Group’s Consolidated Financial Statements.

In December 2011, the IASB deferred the mandatory effective
date from annual reporting periods beginning on or after 1 Jan
uary 2013 to annual reporting periods beginning on or after
1 January 2015; early application is permitted.

The International Accounting Standards Board (IASB) has
published an amendment to IFRS 9 ‘Financial Instruments’
incorporating its new general hedge accounting model. This
represents a significant milestone as it completes another
phase of the IASB’s project to replace IAS 39 ‘Financial Instru
ments: Recognition and Measurement’. The new general
hedge accounting model will allow reporters to reflect risk
management activities in the financial statements more closely
as it provides more opportunities to apply hedge accounting.
The new general hedge accounting model will allow more op
portunities to apply hedge accounting. The new model allows
financial instruments at fair value through profit or loss to be
designated as hedging instruments. It also introduces a new
way to account for the change in time value of an option when
the intrinsic value is designated, resulting in less volatility in
profit or loss. A fundamental difference to the IAS 39 hedge
accounting model is the lack of the 80–125 per cent bright line
threshold for effective hedges and the requirement to perform
retrospective hedge effectiveness testing. Under the IFRS 9
model, it is necessary for there to be an economic relationship
between the hedged item and hedging instrument, with no
quantitative threshold. The trade off to increased hedge ac
counting possibilities is increased disclosures about an entity’s
risk management strategy, cash flows from hedging activities
and the impact of hedge accounting on the financial statements.

The amendment removes the previous 1 January 2015 man
datory effective date of IFRS 9. At the IASB’s November 2013
meeting, the Board decided that the mandatory effective date
of IFRS 9 would not be before 1 January 2017, but that the

On 20 May 2013, the International Accounting Standards
Board (IASB) issued IFRIC Interpretation 21, Levies, to IAS 37,
Provisions, contingent liabilities and contingent assets, which
deals with the accounting treatment of levies imposed by
govern ments. IFRIC 21 is dealing with the issue of accounting
for levies imposed by governments, other than income taxes.
An issue was the point at which an “obligating event” under
IAS 37 arose, requiring the recognition of a liability for the levy.
The interpretation now makes it clear that this obligating event
arises when the activity described in the relevant legislation
that triggers the payment of the levy is undertaken. IFRIC 21
is effective for annual periods beginning on or after 1 January
2014. The Group does not expect a material impact on its
Consolidated Financial Statements from these amendments.

On 19 November 2013 the International Accounting Standards
Board (IASB) issued amendments to IAS 19 Defined Benefit
Plans: Employee Contributions. The amendments clarify the
requirements that relate to how contributions from employees
or third parties that are linked to service should be attributed
to periods of service. In addition, it permits a practical expe
dient if the amount of the contributions is independent of the
number of years of service, in that contributions, can, but are
not required to be recognised as a reduction in the service
cost in the period in which the related service is rendered. The
amendment is effective for annual periods beginning on or after
1 July 2014. The Group does not expect a material impact on
its Consolidated Financial Statements from these amendments.

On 20 November 2012, as part of its annual improvements proj
ect, the International Accounting Standards Board (IASB) issued
Annual Improvements to IFRSs: 2011–2013 Cycle and 2010–
2012 Cycle, which propose amendments to five International
Financial Reporting Standards (IFRSs). The amendments are
effective for annual periods beginning on or after 1 July 2014.

NORMA Group SE Annual Report 2013

127

CYCLE 2010–2012

Standard

IFRS 2
Sharebased Payment

IFRS 3
Business Combinations
(with consequential amendments
to other standards)

IFRS 8
Operating Segments

IFRS 13
Fair Value Measurement
(amendments to the basis of conclusions
only, with consequential amendments to
the bases of conclusions of other standards)

IAS 16
Property, Plant and Equipment

IAS 24
Related Party Disclosures

IAS 38
Intangible Assets

CYCLE 2011–2013

Amendments

Definition of ‘vesting condition’
Amends the definitions of ‘vesting condition’ and ‘market condition’ and adds definitions for ‘performance
condition’ and ‘service condition’ (which were previously part of the definition of ‘vesting condition’).

Accounting for contingent consideration in a business combination
Clarifies that a contingent consideration that is classified as an asset or a liability shall be measured at
fair value at each reporting date.

Aggregation of operating segments
Requires an entity to disclose the judgements made by management in applying the aggregation criteria to
operating segments.

Reconciliation of the total of the reportable segments’ assets to the entity’s assets
Clarifies that an entity shall only provide reconciliations of the total of the reportable segments’ assets to the
entity’s assets if the segment assets are reported regularly.

Short-term receivables and payables
Clarifies that issuing IFRS 13 and amending IFRS 9 and IAS 39 did not remove the ability to measure short
term receivables and payables with no stated interest rate at their invoice amounts without discounting if the
effect of not discounting is immaterial.

Revaluation method – proportionate restatement of accumulated depreciation
Clarifies that when an item of property, plant and equipment is revalued the gross carrying amount is adjusted
in a manner that is consistent with the revaluation of the carrying amount.

Key management personnel
Clarifies that an entity providing key management personnel services to the reporting entity or to the parent of
the reporting entity is a related party of the reporting entity.

Revaluation method – proportionate restatement of accumulated amortisation
Clarifies that when an intangible asset is revalued the gross carrying amount is adjusted in a manner that is
consistent with the revaluation of the carrying amount.

Standard

Amendments

IFRS 1
Firsttime Adoption of International
Financial Reporting Standards
(changes to the Basis for Conclusions only)

Meaning of effective IFRSs
Clarifies that an entity, in its first IFRS financial statements, has the choice between applying an existing and
currently effective IFRS or applying 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 covered by those first IFRS financial statements.

IFRS 3
Business Combinations

IFRS 13
Fair Value Measurement

IAS 40
Investment Property

Scope of exception for joint ventures
Clarifies that IFRS 3 excludes from its scope the accounting for the formation of a joint arrangement in the
financial statements of the joint arrangement itself.

Scope of paragraph 52 (portfolio exception)
Clarifies that the scope of the portfolio exception defined in paragraph 52 of IFRS 13 includes all contracts
accounted for within the scope of IAS 39 Financial Instruments: Recognition and Measurement or IFRS 9
Financial Instruments, regardless of whether they meet the definition of financial assets or financial liabilities as
defined in IAS 32 Financial Instruments: Presentation.

Clarifying the interrelationship of IFRS 3 and IAS 40 when classifying property as investment property
or owner-occupied property
Clarifies that determining whether a specific transaction meets the definition of both a business combination
as defined in IFRS 3 Business Combinations and investment property as defined in IAS 40 Investment Property
requires the separate application of both standards independently of each other.

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

128

The amendments are intended to clarify the requirements and
not to change the accounting practice. The Group does not
expect a material impact on its Consolidated Financial State
ments from these amendments.

The IASB issued various other pronouncements. These re
cently adopted pronouncements as well as pronouncements
not yet adopted will not have a material impact on NORMA
Group’s Consolidated Financial Statements.

3. SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

1. Consolidation
(a) Subsidiaries
Subsidiaries are all entities over which NORMA Group has the
power to govern the financial and operating policies. This gen
erally accompanies a shareholding of more than half of the voting
rights. The existence and effect of potential voting rights that are
currently exercisable or convertible are considered when assess
ing whether the Group controls another entity. Subsidiaries are
fully consolidated from the date on which control is transferred
to the Group. They are deconsolidated 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 arrange
ment. At the acquisition date the fair value of contingent consider
ation is recognised as part of the consideration transferred in
exchange for the acquiree. Acquisitionrelated costs are ex
pensed 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. Accord
ing to IFRS 3 (revised), for each business combination the acquirer
shall measure any noncontrolling interest in the acquiree either
at fair value (full goodwill method) or at the noncontrolling inter
est’s proportionate share of the acquiree’s net assets. The Group
measures the noncontrolling interest in the acquiree at the
noncontrolling interest’s proportionate share of the acquiree’s
net assets.

The excess of the consideration transferred, the amount of any
noncontrolling 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 immediately in
the statement of comprehensive income.

In a business combination achieved in stages, the Group re
measures its previously held equity interest in the acquiree at its
acquisition date fair value and recognises the resulting gain or
loss, if any, in profit or loss.

Intercompany transactions, balances and unrealised gains or
losses on transactions between Group companies are elimi nated.
Accounting policies of subsidiaries have been changed where
necessary to ensure consistency with the policies adopted by
the Group.

(b) Non-controlling interests
Noncontrolling interests have a share in the earnings of the re
porting period. Their interests in the shareholders equity of sub
sidiaries are reported separately from the equity of the Group.

The Group treats transactions with noncontrolling interests that
do not result in a loss of control as transactions with equity own
ers of the Group. For purchases from noncontrolling interests,
the difference between any consideration paid and the relevant
share acquired of the carrying value of net assets of the sub sidiary
is recorded in equity. Gains or losses on disposals of noncon
trolling interests are also recorded in equity.

(c) Disposal of subsidiaries
When the Group ceases to have control, any retained interest in
the subsidiary is remeasured at its fair value, with the change in
the carrying amount recognised in profit or loss. The initial carry
ing amount is the fair value for the purposes of subsequently ac
counting for the retained interest as an associate, joint venture or
financial asset. In addition, any amounts previously recognised in
other comprehensive income in respect of that entity are account
ed for as if the Group had directly disposed of the related assets
or liabilities. This may mean that amounts previously recog nised
in other comprehensive income are reclassified to profit or loss.

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129

2. Valuation methods
The following table shows the most important valuation methods:

Position

Assets

Goodwill

Other intangible assets (except goodwill)

Property, plant and equipment

Derivative financial assets:

Classified as cash flow hedge

Inventories

Other nonfinancial assets

Trade receivables

Cash and cash equivalents

Liabilities

Pensions

Other provisions

Borrowings

Other nonfinancial liabilities

Other financial liabilities (categories IAS 39):

Financial liabilities at cost (FLAC)

Derivative financial liabilities:

Classified as cash flow hedge

Contingent consideration

Trade payables

Valuation method

Impairmentonly approach

Amortised costs

At fair value in other comprehensive income

Lower of cost or net realisable value

Amortised costs

Nominal amount

Projected unit credit method

Settlement amount

Amortised costs

At fair value in other comprehensive income

At fair value through profit or loss

Amortised costs

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 in accor
dance with IFRS 13 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,

At 31 December 2013 and 2012, the Group’s derivative financial
instruments carried in the statement of financial position at fair
value (i. e. trading derivatives and derivatives used for hedging)
are categorised in total within level 2 of the fair value hierarchy.
Contingent considerations, recognised in the balance sheet as
at 31 December 2013, measured at fair value, are within level 3
of the fair value hierarchy (Note 22).

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) and

The fair value of interest rate swaps and crosscurrencyswaps 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 exchange rates.

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.

4. Foreign currency translation
(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 cur
rency’). The consolidated financial statements are prepared in
‘euros’ (EUR), which is the NORMA Group SE’s functional and
the Group’s presentation currency.

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

130

(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 yearend 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 hyperinflationary economy) that
have a functional currency different 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 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 separate

component of equity.

Goodwill and fair value adjustments arising through the acqui
sition 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 currencies affecting foreign currency
translation are as follows:

Spot rate

Average rate

31 Dec
2013

1.5396

3.1929

31 Dec
2012

1.2683

2.6900

8.3342

1.2269

8.2129

1.2084

2013

1.3748

2.9411

8.1614

1.2310

2012

1.2408

2.5601

8.1063

1.2051

27.3990

25.1300

25.9518

25.1404

per EUR

Australian dollar

Brazilian real

Chinese
renminbi yuan

Swiss franc

Czech koruna

British pound sterling

0.8328

0.8175

0.8495

0.8107

Indian rupee

85.1004

72.1682

77.5964

68.5293

Japanese yen

144.5000

113.4400

129.4232

102.3973

Malaysian ringgit

4.5133

4.0354

4.1786

3.9664

Mexican peso

Polish złoty

Russian ruble

Serbian dinar

Swedish krona

Singapore dollar

18.0270

17.1240

16.9383

16.9001

4.1502

4.0760

4.1973

4.1848

45.2515

40.1500

42.2848

39.9260

114.1970

113.5898

112.5200

113.0708

8.8263

1.7391

8.5863

1.6119

8.6391

1.6605

8.7042

1.6052

South Korean won

1,453.3639 1,403.0000 1,451.3184 1,446.2045

Thai baht

Turkish lira

US dollar

45.0853

40.3409

40.7419

39.9223

2.9453

1.3768

2.3625

1.3176

2.5269

1.3272

2.3139

1.2846

5. Intangible assets
(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 good
will are not reversed. Gains and losses on the disposal of an
entity include the carrying amount of goodwill relating to the en
tity sold.

Goodwill is allocated to cashgenerating units for the purpose of
impairment testing. The allocation is made to those cashgener
ating units or groups of cashgenerating units that are expected
to benefit from the business combination in which the goodwill
arose.

(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 capitalised if

NORMA Group SE Annual Report 2013

131

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 re
sources, to complete development and use or sell the asset. The
costs capitalised include the cost of materials, direct labour and
other directly attributable expenditure that serves to prepare the
asset for use. Such capitalised costs are included in profit or loss
in line ‘own work capitalised’. Capitalised 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 histori
cal cost less accumulated amortisation. Intangible assets ac
quired in a business combination are recognised at fair value at
the acquisition date. All other intangible assets have a finite use
ful life. Amortisation is calculated using the straightline method
to allocate their cost.

In general, the Group’s other intangibles are not qualifying assets
in accordance with IAS 23 and borrowing costs eligible for
capital isation therefore do not exist.

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.

The estimated useful lives for other intangible assets are as follows:

Patents: 5 to 10 years
Certificates (Customer lists): 4 to 20 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

6. Property, plant and equipment
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 eligible for capitalisation in the sense of IAS 23
were not available.

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 measured
reliably. The carrying amount of the replaced part is derecognised.
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 straightline method to allocate their cost to their
residual values over their estimated useful lives.

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 to its recoverable
amount if the asset’s carrying amount is greater than its esti mated
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’.

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

7. Impairment of non-financial assets
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
impair ment loss recognised for the CGU exceeds the carrying
amount of the allocated goodwill, the additional amount of the
impairment loss is recognised through a prorata 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 (cashgenerating units). Nonfinancial assets other than
goodwill that suffered impairment are reviewed for possible re
versal of the impairment at each reporting date.

Consolidated Financial StatementsNotes to the Consolidated Financial Statements132

8. Inventories
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 the estimated costs of comple
tion and the estimated variable selling costs. Cost is determined
using the weightedaveragemethod. 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). Inventories of the Group
are not qualifying assets in accordance with IAS 23, so that the
acquisition or production costs do not include being capitalised
borrowing costs.

9. Financial instruments
Financial assets
Classification
The Group classifies its financial assets in the following cate
gories: at fair value through profit or loss, loans and receivables,
available-for-sale and held to maturity. The classification depends
on the purpose for which the financial assets were acquired.
Management determines the classification of its financial assets
at initial recognition.

In the current and in the previous financial year, all financial assets,
except for derivative financial instruments, are classified in the
category loans and receivables.

Loans and receivables are nonderivative 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 noncurrent assets. The Group’s loans and receiv
paragraph 11)
ables comprise ‘trade and other receivables’ (
see paragraph 12) in the state
and cash and cash equivalents (
ment of financial position.

Recognition and measurement
Regular purchases and sales of financial assets are recognised
on the tradedate – the date on which the Group commits to
purchase or sell the asset. Financial assets are initially recognised
at fair value plus transaction costs for all financial assets not
carried at fair value through profit or loss. Financial assets are
derecognised when the rights to receive cash flows have expired
or have been transferred and the Group has transferred substan
tially all risks and rewards of ownership. Loans and receivables
are carried at amortised cost using the effective interest method.

Impairment of financial assets carried at amortised cost
The Group assesses at the end of each reporting period whether
there is objective evidence that a financial asset or group of finan
cial assets is impaired. A financial asset or a group of financial
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 impact
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 in

terest or principal payments;

The Group, for economic or legal reasons relating to the bor
rower’s financial difficulty, granting to the borrower a con
cession that the lender would not otherwise consider;

It becomes probable that the borrower will enter bankruptcy

or other financial reorganisation;

Observable data indicating that there is a measurable decrease
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 individual finan
cial assets in the portfolio, including:
(i) Adverse changes in the payment status of borrowers in the

portfolio; and

(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 effective
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 im
provement in the debtor’s credit rating), the reversal of the previ
ously recognised impairment loss is recognised in profit or loss.

Impairment testing of trade receivables is described in para
graph 11.

NORMA Group SE Annual Report 2013

133

Financial liabilities
Financial liabilities primarily include trade payables, liabilities to
paragraph 11), and other
banks, derivative financial liabilities (
liabilities.

a) Financial liabilities that are measured at amortised cost

After initial recognition, financial liabilities are carried at amor
tised cost using the effective interest method. In this category,
in particular, trade payables, liabilities to banks and other finan
cial liabilities are classified.

b) Financial liabilities at fair value through profit and loss

Financial liabilities at fair value through profit and loss include
derivative financial instruments unless they are designated as
hedges and contingent purchase price liabilities. Gains or
losses on financial liabilities that are measured at fair value
through profit and loss are included in profit or loss.

10. Offsetting financial instruments
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. In 2013
and 2012, no financial instruments were offset and there were no
financial assets or liabilities with netting agreements, enforceable
master netting agreements or similar agreements.

11. Derivative financial instruments and hedging activities
Derivatives are initially recognised at fair value on the date a de
riva tive contract is entered into and are subsequently remeasured
at their fair value. The method of recognising the resulting gain or
loss depends on whether the derivative is designated as a hedg
ing instrument, and if so, the nature of the item being hedged.

(a) Derivative financial instruments not designated as hedges
Gains and losses from derivatives that are not designated as
hedges (trading derivatives) are recognised in profit or loss. Trad
ing derivatives are classified as noncurrent 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.

(b) Derivative financial instruments designated as hedges
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, at present, only cash flow hedges occur.

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 strategy for undertaking the
hedging transaction. The Group also documents its assessment,
both at hedge inception and on an ongoing basis, of whether the
derivatives that are used in hedging transactions are highly effec
tive 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 recognised
in other comprehensive income. The gain or loss relating to the
ineffective portion is recognised immediately in the statement of
comprehensive income within ‘financial income / costs.’ Amounts
accumulated in other comprehensive income are reclassified to
profit or loss in the periods when the hedged item affects profit
or loss.

The full fair value of a hedging derivative is classified as a noncur
rent 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.

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.

12. Trade receivables
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 noncur
rent assets.

Trade receivables are classified as loans and receivables in accor
dance with IAS 39 and recognised initially at fair value and sub
sequently 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 ob
jective 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 difference between the asset’s carrying amount and the pres
ent value of estimated future cash flows, discounted at the orig

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

134

inal effective interest rate. In addition to the required individual
bad debt allowances, the Group will determine a portfolio based
bad debt allowance considering the aging structure for trade
receivables to cover general credit risk if this is applicable.

13. Cash and cash equivalents
Cash and cash equivalents are measured at their nominal value
and includes cash in hand, deposits held at call with banks, and
other shortterm highly liquid investments with original maturities
of three months or less and which are subject only to insignificant
risk of change in value. Bank overdrafts are shown within bor
rowings in current liabilities on the consolidated statement of fi
nancial position.

14. Trade 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
noncurrent liabilities.

Trade payables are recognised initially at fair value and sub
sequently measured at amortised cost using the effective interest
method.

15. 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 drawdown occurs. To the extent 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 prepayment 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.

16. Current and deferred income tax
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 Group’s subsidiaries operate and
generate taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes
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 finan
cial 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.

17. Employee benefits
(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 contri
butions if the fund does not hold sufficient assets to pay all em
ployees 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
benefit that an employee will receive on retirement to depend on
years of service and compensation.

NORMA Group SE Annual Report 2013135

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. The defined benefit obli
gation is calculated annually by independent actuaries using the
projected unit credit method. The present value of the defined
benefit obligation is determined by discounting the estimated
future cash outflows using interest rates of highquality corporate
bonds that are denominated in the currency in which the benefits
will be paid and that have terms to maturity approximating the
terms of the related pension liability.

Remeasurement gains and losses arising from experience ad
justments and changes in actuarial assumptions are recognised
within retained earnings in the other comprehensive income (OCI).

Past service costs are recognised fully in the period of the re lated
plan amendment.

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 recognised
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 whenever an
employee accepts voluntary redundancy in exchange for these
benefits. The Group recognises termination benefits as a liability
and expense at the earlier date of: (a) when the entity can no
longer withdraw the offer of those benefits; or (b) when the en tity
recognise costs for a restructuring that is within the scope of IAS
37 and involves the payment of termination benefits. Benefits
falling due more than 12 months after the balance sheet date are
discounted to their present value.

(c) Short-term employee benefits
Employee benefits with shortterm payment dates include wages
and salaries, social security contributions, vacation pay and sick
ness benefits and are recognised as liabilities at the repayment
amount as soon as the associated job has been performed.

visions is determined on the basis of actuarial opinions in line with
IAS 19. Gains and losses from the remeasurement are recognised
in profit or loss in the period in which they are incurred.

18. Share-based payment
Sharebased payment plans issued in the NORMA Group are
accounted for in accordance with IFRS 2 “Sharebased payment”
All sharebased 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 entity should recognise
all goods or services it obtains, regardless of the form of consider
ation. IFRS 2 starts from the premise that goods or services
obtained in a sharebased payment transaction should be recog
nised and measured in a similar way.

In accordance with IFRS 2, NORMA Group in principle distin
guishes between equitysettled and cashsettled plans. The
finan cial interest from equitysettled plans granted at grant date
is generally allocated over the expected vesting period against
equity until the exit event occurs. Expenses from cashsettled
plans are generally also allocated over the expected vesting
period until the exit event occurs, but against accruals. A de
scription of the plans existing within the NORMA Group can be
found in Note 28.

19. Provisions
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 estimated.
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 account
all identifiable risks. Provisions are discounted using a pretax
rate that reflects current market assessments of the time value
of money and the risks specific to the obligation. The increase in
the provision due to passage of time is recognised as interest
expense.

(d) Provisions for other long-term employee benefits
Provisions for obligations similar to pensions (such as anni versary
allowances and death benefits) are comprised of the present
value of future payment obligations to the employee less any
associated assets measured at fair value. The amount of pro

In addition to the expected amount of cash outflows, uncertain
ties also exist regarding time of outflows. If it is expected that the
outflows take place within one year, the relevant amounts are
reported in the shortterm provisions.

Consolidated Financial StatementsNotes to the Consolidated Financial Statements136

When the Group expects a refund for a provision, this refund is
recognised in accordance with IAS 37.53 as a separate asset. If
the refund is in a close economic relationship with the recognised
provision, the expenses from the provision are netted with the
income from the corresponding refund in profit and loss.

20. Revenue recognition
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
valueadded tax, returns, rebates and discounts and after elimi
nating sales within the Group.

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 the significant risks and rewards,
associated with ownership of the goods sold, have been trans
ferred to the buyer. The above criteria are regularly fulfilled if the
beneficial ownership has been transferred to the customer in
accordance with the agreed Incoterms. 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 customers, the type of transaction and the specifics of each
arrangement.

21. Leases
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
straightline basis over the period of the lease.

Leases where the Group has substantially all the risks and re
wards of ownership are classified as finance leases. Finance
leases are capitalised at the lease’s commencement at the lesser
of the fair value of the leased property and the present value of
the minimum lease payments.

outstanding. The corresponding rental obligations, net of finance
charges, are included in other financial liabilities. The interest ele
ment 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 depreciat
ed over the shorter of the useful life of the asset and the lease term.

The Group’s leases include both, operating leases and finance
leases, which relate mainly to property and equipment.

22. Government grants
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 related costs are expensed for which the
grants are intended to compensate.

Grants related to nondepreciable assets are recognised in profit
or loss over the periods that bear the cost of meeting the obli
gations.

Grants related to depreciable assets are recognised in profit or
loss over the period that bear the expense related to the de
preciation of the underlying assets.

4. SCOPE OF CONSOLIDATION

With NORMA Group SE, the consolidated financial statements
contain all domestic and foreign companies which NORMA Group
SE controls directly or indirectly.

The consolidated financial statements of 2013 include seven do
mestic (31 December 2012: eight) and 38 foreign (31 December
2012: 35) companies.

Each lease payment is allocated between the liability and finance
charges so as to achieve a constant rate on the finance balance

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

2013

2012

Total Domestic

Foreign

Total Domestic

Foreign

NORMA Group SE Annual Report 2013

LIST OF GROUP COMPANIES OF NORMA GROUP AS OF 31 DECEMBER 2013

No. Company

Central Functions

NORMA Group SE

NORMA Group APAC Holding GmbH

NORMA Group Holding GmbH

Segment EMEA

Registered address

Maintal, Germany

NORMA Distribution Center GmbH

Marsberg, Germany

DNL GmbH & Co KG

NORMA Germany GmbH

NORMA Türkei Verwaltungs GmbH

DNL France S.A.S

Maintal, Germany

Briey, France

NORMA Distribution France S.A.S.

La Queue En Brie, France

NORMA France S.A.S.

DNL UK Ltd.

NORMA UK Ltd.

Nordic Metalblok S.r.l.

NORMA Italia SpA

Groen Bevestigingsmaterialen B.V.

NORMA Netherlands B.V.

NORMA Polska Sp. z o.o.

NORMA Group CIS LLC

DNL Sweden AB

NORMA Sweden AB

Briey, France

Newbury, Great Britain

Riese Pio X, Italy

Gavardo, Italy

Ter Apel, Netherlands

Slawniów, Poland

Togliatti, Russian Federation

Stockholm, Sweden

Anderstorp, Sweden

Connectors Verbindungstechnik AG

Tagelswangen, Switzerland

NORMA Group South East Europe d.o.o

Fijaciones NORMA S.A.

NORMA Czech, s.r.o.

NORMA Turkey Baglanti ve Birlestirme
Teknolojileri Sanayi ve Ticaret Limited Sirketi

Belgrade, Serbia

Barcelona, Spain

Hustopece, Czech Republic

Besiktas, Istanbul, Turkey

NORMA Group Distribution Polska Sp. z o.o.

Krakow, Poland

Segment Americas

Craig Assembly Inc.

NORMA Michigan Inc.

NORMA US Holding LLC

NORMA Pennsylvania Inc.

R.G. RAY Corporation

St. Clair, USA

Auburn Hills, USA

Saltsburg, USA

Buffalo Grove, USA

NORMA do Brasil Sistemas De Conexão Ltda.

São Paulo, Brazil

NORMA Group México S. de R.L. de C.V.

Monterrey, Mexico

Segment Asia-Pacific

NORMA Pacific Pty. Ltd.

NORMA China Co., Ltd.

NORMA Group Products India Pvt. Ltd.

NORMA Japan Inc.

Chien Jin Plastic Sdn. Bhd.

Melbourne, Australia

Qingdao, China

Pune, India

Osaka, Japan

Ipoh, Malysia

NORMA Pacific (Malaysia) SDN. BHD.

Kuala Lumpur, Malaysia

NORMA Korea Inc.

Seoul, Republic of Korea

NORMA Group Asia Pacific Holding Pte. Ltd

Singapore, Singapore

NORMA Pacific Asia Pte. Ltd.

NORMA Pacific (Thailand) Ltd.

Guyco Pty Ltd

Singapore, Singapore

Chonburi, Thailand

Adelaide, Australia

NORMA EJT (Changzhou) Co., Ltd.

Jiangsu Province, China

137

Share in %

Direct
parent
company

of
NORMA
Group
SE

Cur
rency

held
by

Equity 1)

Result 1)

100.00

100.00 kEUR

– 3

100.00

100.00 kEUR

115,959

29,825

94.80

100.00 kEUR

100.00

100.00 kEUR

2,175

6,537

94.90

100.00 kEUR

56,306

100.00

100.00 kEUR

100.00

100.00 kEUR

12,529

100.00

100.00 kEUR

100.00

100.00 kEUR

100.00

100.00 kGBP

3,728

6,120

3,931

100.00

100.00 kGBP

20,199

100.00

100.00 kEUR

100.00

100.00 kEUR

60.00

90.00 kEUR

100.00

100.00 kEUR

670

6,256

1,639

6,268

0 3)

– 6

0 3)

– 5

– 967

705

132

– 359

6,419

– 100

1,286

782

1,360

100.00

100.00 kPLN

154,029

38,190

99.96

100.00 kRUR

100.00

100.00 kSEK

21,869

78,100

100.00

100.00 kSEK

115,095

100.00

100.00 kCHF

9,387

– 31,482

10,865

17,827

2,446

100.00

100.00 kRSD 1,538,155

– 591,830

100.00

100.00 kEUR

4,190

99.90

100.00 kCZK

255,633

100.00

100.00 kTRL

1,514

1,012

25,135

828

100.00

100.00 kPLN

4,567

– 433

100.00

100.00 kUSD

100.00

100.00 kUSD

100.00

100.00 kUSD

100.00

100.00 kUSD

100.00

100.00 kUSD

99.90

99.50

100.00 kBRL

100.00 kUSD

19,948

61,606

26,421

51,178

71,711

23,970

2,058

4,886

8,604

– 1,519

3,511

8,334

– 2,978

1,495

100.00

100.00 kAUD

100.00

100.00 kCNY

13,820

79,689

489

7,386

100.00 kINR

315,844

– 95,555

99.99

60.00

85.00

60.00 kJPY

122,595

100.00 kMYR

19,154

100.00

100.00 kMYR

100.00

100.00 kKRW 105,283

106,167

100.00

100.00 kSGD

59,488

– 4,765

100.00

100.00 kSGD

100.00

100.00 kTHB

100.00

100.00 kAUD

100.00

100.00 kCNY

176

68,603

4,390

41,133

– 36

15,547

– 119

– 9

3,239

4,213

1) Reported values according to IFRS as at 31 December 2013; except for NORMA Group Holding GmbH, NORMA Germany GmbH, NORMA Distribution Center GmbH and

DNL GmbH & Co. KG; these values are prepared according to German GAAP as at 31 December 2013 but not yet finally audited. The values are translated with the exchange
rates according to Note 3.4.

2) Included in NORMA Pacific Pty. Ltd. (No. 34).
3) A profitpoolingcontract exists.

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

138

In 2013, NORMA Group Distribution Polska Sp. z o.o., based in
Poland and NORMA EJT (Changzhou) Co., Ltd., based in China,
were founded. Furthermore, Guyco Pty Limited, based in Aus
tralia, was acquired and NORMA Beteiligungs GmbH was merged
into NORMA Group Holding GmbH.

If the euro had strengthened / weakened by 10 % against the Chi
nese renminbi, NORMA Group would show a profit before tax for
the year 2013 of EUR 8 thousand higher / EUR 9 thousand lower
(2012: EUR 225 thousand lower / EUR 275 thousand higher).

For further details, please refer to Note 40 business combinations.

For a detailed overview regarding the shareholdings of NORMA
Group, please refer to the chart on the previous page.

5. FINANCIAL RISK MANAGEMENT

1. Financial risk factors
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 exposures.

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 cooperation with the Group’s
operating units.

Market risk
(i) Foreign exchange risk
NORMA Group operates internationally in around 100 different
countries and is exposed to foreign exchange risk arising from
the exposure to various currencies – primarily with respect to the
US dollar, the British pound sterling, the Chinese renminbi yuan,
the Polish zloty, the Swedish krona, the Swiss franc, the Serbian
dinar and the Singapore dollar.

The effects of changes in foreign exchange rates are analysed
below for financial assets and liabilities denominated in foreign
currencies.

If the euro had strengthened / weakened by 10 % against the US
dollar, NORMA Group would show a profit before tax for the year
2013 of EUR 172 thousand lower / EUR 211 thousand higher
(2012: EUR 102 thousand lower / EUR 125 thousand higher).

If the euro had strengthened / weakened by 10 % against the Pol
ish zloty, NORMA Group would show a profit before tax for the
year 2013 of EUR 755 thousand higher / EUR 922 thousand low
er (2012: EUR 830 thousand higher / EUR 1,014 thousand lower).

If the euro had strengthened / weakened by 10 % against the
Swedish krona, NORMA Group would show a profit before tax
for the year 2013 of EUR 97 thousand higher / EUR 118 thousand
lower (2012: EUR 101 thousand higher / EUR 123 thousand lower).

If the euro had strengthened / weakened by 10 % against the
Swiss franc, NORMA Group would show a profit before tax for
the year 2013 of EUR 201 thousand higher / EUR 246 thousand
lower (2012: EUR 214 thousand higher / EUR 262 thousand lower).

If the euro had strengthened / weakened by 10 % against the Ser
bian dinar, NORMA Group would show a profit before tax for the
year 2013 of EUR 386 thousand higher / EUR 472 thousand low
er (2012: EUR 112 thousand higher / EUR 136 thousand lower).

If the euro had strengthened / weakened by 10 % against the Singa
pore dollar, NORMA Group would show a profit before tax for the
year 2013 of EUR 197 thousand lower / EUR 241 thousand high
er (2012: EUR 188 thousand lower / EUR 230 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 longterm 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 mediumterm borrowings in fixed rate
instruments.

If the euro had strengthened / weakened by 10 % against the
British pound sterling, NORMA Group would show a profit before
tax for the year 2013 of EUR 344 thousand higher / EUR 420
thousand lower (2012: EUR 309 thousand higher / EUR 378 thou
sand lower).

Below, the effects of changes in interest rates are analysed for
bank borrowings, which bear variable interest rates, and for in
terest rate swaps included in hedge accounting. Borrowings that
bear fixed interest rates are excluded from this analysis.

NORMA Group SE Annual Report 2013139

At 31 December 2013, if interest rates on eurodenominated
borrowings had been 100 basis points higher / lower with all other
variables held constant, profit before tax for the year would have
been EUR 55 thousand lower / EUR 55 thousand higher (2012:
EUR 185 thousand lower / EUR 185 thousand higher) and other
comprehensive income would have been EUR 2,525 thousand
higher /
EUR 2,584 thousand lower (2012: EUR 2,317 thousand higher /
EUR 862 thousand lower).

in the amount of EUR 125 million is available for future operating
activities and to settle capital commitments of which EUR 5.5
million was drawn at 31 December 2013 (31 December 2012: EUR
18.5 million). In July 2013, NORMA Group has issued a promis
sory note valued at EUR 125 million with 5, 7 and 10 year terms.

Liquidity is monitored on an ongoing basis with regard to the
Group’s business performance, planned investment and redemp
tion of capital.

The amounts disclosed in the table are the contractual, undis
counted cash flows. The early repayment in an amount of EUR
101.4 million is already considered within the maturity analysis.
Financial liabilities denominated in foreign currencies are trans
lated at the closing rate at the balance sheet date. Interest pay
ments on financial instruments with variable interest rates are
calculated on the basis of the interest rates applicable as of the
reporting date.

31 DECEMBER 2013

in EUR thousands

Borrowings

Trade payables

Finance lease liabilities

Other financial liabilities

31 DECEMBER 2012

in EUR thousands

Borrowings

Trade payables

Finance lease liabilities

Other financial liabilities

up to
1 year

> 1 year
up to
2 years

> 2 years
up to
5 years

> 5 years

133,495

26,728

119,043

79,692

59,025

342

4,367

236

508

158

736

197,229

27,472

119,937

79,692

up to
1 year

60,215

37,663

450

1,820

> 1 year
up to
2 years

> 2 years
up to
5 years

90,645

127,291

553

1,792

489

100,148

92,990

127,812

> 5 years

(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 reason
able margins would not have an impact on the Group’s profit or
equity. Hence, the Group’s exposure to other price risks is re
garded as not material.

Credit risk
The credit risk incurred by the Group is the risk that counter parties
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 institutions, as
well as credit exposures to customers, including outstanding
receivables and committed transactions.

Credit risk is monitored on a Group basis. To minimise credit risk
from operating activities and financial transactions, each counter
party is assigned a credit limit, the use of which is regularly moni
tored. Default risks are continuously monitored in the operating
business.

The aggregate carrying amounts of financial assets represent the
maximum default risk. For an overview of pastdue 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 55 million had been repaid before
31 December 2013. In January 2014 there was an additionally
repayment of EUR 101.4 million. In addition, a borrowing facility

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

140

The maturity structure of the derivative financial instruments
based on cash flows is as follows:

should not exceed the value of 3.0 (2012: 3.0). The ratio is calcu-
lated according to bank definitions. There were no covenant
breaches in 2013 and 2012.

up to
1 year

> 1 year
up to
2 years

> 2 years
up to
5 years

> 5 years

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.

31 DECEMBER 2013

in EUR thousands

Derivative receivables
– gross settlement

Cash outflows

Cash inflows

Derivative liabilities
– gross settlement

Cash outflows

Cash inflows

Derivative liabilities
– net settlement

Cash outflows

31 DECEMBER 2012

in EUR thousands

Derivative receivables
– gross settlement

Cash outflows

Cash inflows

Derivative liabilities
– gross settlement

Cash outflows

Cash inflows

Derivative liabilities
– net settlement

Cash outflows

– 3,100

3,192

– 1,176

1,126

– 6,927

– 6,885

– 8,293

up to
1 year

> 1 year
up to
2 years

> 2 years
up to
5 years

> 5 years

– 2,658

2,761

– 2,561

2,447

– 24,675

– 11

– 24,675

2. Capital risk management
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
special 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,

6. CRITICAL ACCOUNTING ESTIMATES

AND JUDGEMENTS

Estimates and judgments are continually evaluated and are based
on historical experience, and expectations regarding 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
assump tions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities with-
in 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
Note 3.5. The recoverable amounts of cash-generating units have
been determined based on fair-value-less-costs-to-sell calcula-
tions. These calculations are based on discounted cash flow
models, which require the use of estimates (Note 20).

In 2013 and 2012, no impairment of goodwill, which amounted
to EUR 233,239 thousand at 31 December 2013 (31 December
2012: EUR 235,262 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 these key assumptions would
not cause in any CGU the carrying amount to exceed its re-
coverable amount.

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

NORMA Group SE Annual Report 2013

141

2013, income tax liabilities were EUR 15,831 thousand (31 De-
cember 2012: EUR 17,827 thousand) and deferred tax liabilities
were EUR 32,970 thousand (31 December 2012: EUR 32,940
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 bal-
ance sheet date. This is the interest rate that should be used to
determine the present value of estimated future cash outflows
expected 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.

Other key assumptions for pension obligations are based in part
on current market conditions. Additional information is disclosed
in Note 3.17.

Pension liabilities amounted to EUR 10,869 thousand at 31 De-
cember 2013 (31 December 2012: EUR 10,319 thousand).

Useful lives of property, plant and equipment and
intangibles 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. CHANGE IN ACCOUNTING PRINCIPLES

The first time adoption of IAS 19 (2011) had an impact on the
measurement of provisions for partial retirement obligations and
the amount of the corresponding personnel and interest expense
at NORMA Group. Top-up payments, which result from partial
retirement agreements, are not, as previously classified as “Termi-
nation Benefits” and already accrued in full at the signing date of
the retirement agreement. In accordance with the amendments
to IAS 19, they have to be classified as “Other Long-Term Em-
ployee Benefits” in terms of IAS 19.08 seqq. and IAS 19.153 seqq.
The recognition of those top-up payments 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 differences resulting from the change effects are shown in
the following tables:

BALANCE SHEET

in EUR thousands

Total assets

thereof deferred income tax assets

Total liabilities

thereof non-current provisions

Total equity

thereof retained earnings

thereof income for the period

31 December 2012

adjustments
due to
IAS 19R

as reported

692,138

6,403

403,796

5,739

288,342

50,450

56,573

– 342

– 1,181

839

796

after
adjustments

as reported

691,796

648,579

6,061

6,744

402,615

392,577

4,558

289,181

51,246

56,616

4,615

256,002

14,112

1 January 2012

adjustments
due to
IAS 19R

after
adjustments

– 324

– 1,120

796

648,255

6,420

391,457

3,495

256,798

14,908

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

142

INCOME STATEMENT

The following table shows profit and loss net of these expenses:

in EUR thousands

as reported

2012

adjustments
due to
IAS 19R

after
adjustments

Profit before income tax

81,142

81,203

in EUR thousands

Revenue

Note

2013

20121)

(9)

635,545

604,613

Changes in inventories of finished
goods and work in progress

Other own work capitalised

1,894

3,377

1,588

1,671

thereof personnel
expenses

thereof financial costs

Income taxes

Profit of the period

– 156,468

– 14,069

– 24,569

56,573

– 36

– 18

– 156,504

– 13,972

– 24,587

Raw materials and consumables used

(10)

– 269,421

– 263,489

Gross profit

371,395

344,383

Other operating income and expenses (11, 12)

– 72,387

– 67,090

56,616

Employee benefits expense

(13)

– 169,689

– 156,504

If the Group would have applied the previously existing version
of IAS 19 in all periods presented in the consolidated financial
statement 2013, the provisions were approximately EUR 1,100
thousand higher, the deferred income tax assets EUR 330 thou-
sand lower and retained earnings EUR 770 thousand lower than
reported as per December 2013. There would be no material
impact on personnel, interest and tax expenses compared to the
values reported in 2013.

Notes to the consolidated statement
of comprehensive income

8. ADJUSTMENTS

In the financial year 2013, EUR 910 thousand tax expenses from
corporate restructuring measures were adjusted within the
position income taxes. Aside from this, in 2013, as already in
2012, no material one-time items occurred. Therefore, only de-
preciation in the amount of EUR 496 thousand (2012: EUR 273
thousand) and amortisation in the amount of EUR 7,661 thousand
(2012: EUR 7,211 thousand), both from purchase price allocations,
were further adjusted.

EBITDA

129,319

120,789

Depreciation without PPA depreciation

– 16,699

– 15,392

Adjusted EBITA

112,620

105,397

Amortisation without PPA amortisation

– 4,943

– 3,538

Adjusted operating profit (EBIT)

107,677

101,859

Financial costs – net

(14)

– 15,585

– 13,172

Adjusted profit before income tax

Adjusted income taxes

Adjusted profit for the period

Non-controlling interests

Adjusted profit attributable to
shareholders of the parent

92,092

88,687

– 30,027

– 26,853

62,065

61,834

62,006

61,834

Adjusted earnings per share (in EUR)

1.95

1.94

1) Restated due to effects from the application of IAS 19R.

See: Section 2 Basis of preparation and Section 7 Change in accounting principles.

9. REVENUE

Revenue recognised during the period related to the following:

in EUR thousands

Engineered Joining Technologies

Distribution Services

Other revenue

Deductions

2013

443,874

193,617

2,190

– 4,136

635,545

2012

427,638

174,505

6,319

– 3,849

604,613

Revenue for 2013 (EUR 635,545 thousand) was 5.1 % above
revenue for 2012 (EUR 604,613 thousand).

The sales figures for 2013 include sales of EUR 8,061 thousand
from the companies acquired in 2013. The distribution business
of Davydick & Co. Pty Limited (Australia), which was acquired in
the first quarter, contributed EUR 3,246 thousand, the distribution
business of Variant S.A. (Poland), which was acquired in the

NORMA Group SE Annual Report 2013

143

second quarter, contributed EUR 1,183 thousand and Guyco Pty
Limited (Australia), which was acquired in the third quarter, con-
tributed EUR 3,632 thousand.

12. OTHER OPER ATING EXPENSES

Other operating expenses comprised the following:

For the analysis of sales by region please refer to Note 37 “Seg-
ment reporting”.

10. R AW MATERIALS AND CONSUMABLES USED

Raw materials and consumables used comprised the following:

in EUR thousands

Cost of raw materials,
consumables and supplies

Cost of purchased services

2013

2012

– 242,717

– 237,986

– 26,704

– 25,503

– 269,421

– 263,489

The material costs decreased in relation to revenue from 43.6 %
in 2012 to 42.4 % in 2013.

The companies and distribution businesses acquired in 2013
contributed EUR 4,102 thousand to the material costs.

in EUR thousands

Consulting and marketing

Expenses for temporary workforce
and other personnel related costs

Freights

Other administrative expenses

Rentals and other building costs

Currency losses operational

Travel and entertaining

Research & development

Vehicle costs

Maintenance (external)

Commission payable

Non-income-related taxes

Insurances

IT and telecommunication

Others

2013

2012

– 11,003

– 12,467

– 12,326

– 12,045

– 8,308

– 5,274

– 6,965

– 3,156

– 6,073

– 2,505

– 2,691

– 2,223

– 3,028

– 1,734

– 1,993

– 9,059

– 3,032

– 7,854

– 5,964

– 6,063

– 4,359

– 5,359

– 3,247

– 2,445

– 1,884

– 2,584

– 1,529

– 1,614

– 7,372

– 1,840

– 79,370

– 76,626

11. OTHER OPER ATING INCOME

Other operating income comprised the following:

The companies and distribution businesses acquired in 2013
contributed EUR 1,620 thousand to the other operating ex-
penses.

in EUR thousands

Currency gains operational

Reversal of provisions

Grants related to employee
benefits expense

Reimbursement of vehicle costs

Other income from disposal
of fixed assets

Foreign exchange derivatives

Government Grants

Others

2013

2,838

352

351

566

152

310

2,414

6,983

2012

3,105

367

381

468

467

437

4,243

9,536

13. EMPLOYEE BENEFITS EXPENSE

Employee benefits expense comprised the following:

in EUR thousands

Wages and salaries and
other termination benefits

Social security costs

Pension costs
– defined contribution plans

Pension costs
– defined benefit plans

2013

2012 1)

– 140,099

– 127,691

– 21,839

– 21,877

– 7,513

– 6,681

– 238

– 255

– 169,689

– 156,504

The position “others” includes mainly reversal from accruals for
variable components of remuneration for employees.

1) Restated due to effects from the application of IAS 19R.

See: Section 2 Basis of preparation and Section 7 Change in accounting principles.

In 2012, the position “others” includes a one-time effect from the
full consolidation of Groen Bevestigingsmaterialen B.V. amount-
ing to EUR 1,296 thousand.

The companies and distribution businesses acquired in 2013
contributed EUR 1,776 thousand to the employee benefits ex-
penses.

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

144

14. FINANCIAL INCOME AND COSTS

Financial income and costs comprised the following:

in EUR thousands

2013

2012 1)

Financial costs

Interest expenses

Bank borrowings

Finance lease

Expenses for interest accrued
on provisions

Expenses for interest accrued
on pensions

Foreign exchange result
on financing activities

Losses on evalution of derivatives

Other financial cost

Financial income

Interest income on
short-term bank deposits

Gains on evaluation of derivatives

Other financial income

Costs amounting to EUR 7,859 thousand that are directly attri-
butable to the refinancing of the IPO in April 2011 were netted
with the bank borrowings in accordance with IAS 39.43. They
are amortised over the financing period of five years using the
effective interest method.

– 13,118

– 12,284

– 28

– 55

– 34

– 271

15. NET FOREIGN EXCHANGE GAINS/LOSSES

The exchange differences recognised in profit or loss are as follows:

– 248

– 356

in EUR thousands

– 1,355

– 140

– 1,196

– 16,140

775

– 367

– 1,435

– 13,972

Currency gains operational

Currency losses operational

Foreign exchange result
on financing activities

Note

(11)

(12)

(14)

2013

2,838

2012

3,105

– 3,156

– 4,359

– 1,355

– 1,673

775

– 479

485

555

263

136

401

800

Net financial cost

– 15,585

– 13,172

1) Restated due to effects from the application of IAS 19R.

See: Section 2 Basis of preparation and Section 7 Change in accounting principles.

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 13,118 thousand in 2013
(2012: EUR 12,284 thousand). The total interest income calcu lated
using the effective interest method for financial assets not mea-
sured at fair value through profit or loss amounts to EUR 485
thousand in 2013 (2012: EUR 263 thousand).

Profit attributable to shareholders of the parent (in EUR thousands)

Number of weighted shares

Effect of dilutive share-based payment

Number of weighted shares (diluted)

Earnings per share (in EUR)

Earnings per share diluted (in EUR)

16. EARNINGS PER SHARE

Earnings per share are calculated by dividing net income for the
period attributable to NORMA Group’s shareholders by the
weighted average number of shares issued during the period
under review. NORMA Group has only issued common shares.
In 2013, as in the previous year, the average weighted number of
shares was 31,862,400.

Options issued out of the Matching-Stock-Programme (“MSP”)
for the Board of NORMA Group had dilutive effects on earnings
per share in the financial year 2013. A detailed description of the
MSP can be found in Note 28 “Share based payments”. The
dilutive effect on earnings per share is calculated using the trea-
sury stock method.

Earnings per share in 2013 and 2012 were as follows:

Q4 2013

12,617

Q4 20121)

9,435

2013

55,557

20121)

56,616

31,862,400

145,020

138,204

32,007,420

31,862,400

32,000,604

31,862,400

0.40

0.39

0.30

1.74

1.78

1) Restated due to effects from the application of IAS 19R. See: Section 2 Basis of preparation and Section 7 Change in accounting principle.

NORMA Group SE Annual Report 2013

17. INCOME TA XES

The breakdown of income taxes is as follows:

in EUR thousands

Current tax expenses

Deferred tax income

Total income taxes

2013

– 30,077

1,758

– 28,319

2012 1)

– 26,491

1,904

– 24,587

1) Restated due to effects from the application of IAS 19R.

See: Section 2 Basis of preparation and Section 7 Change in accounting principles.

NORMA Group’s combined Group income tax rate for 2013
amounted to 30.2 %, 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 410 %.

The tax on the Group’s profit before tax differs from the theo retical
amount that would arise using the Group tax rate applicable to
profits of the consolidated entities of 30.2 % as follows:

145

in EUR thousands

Profit before tax

Group tax rate

2013

83,935

30.2 %

2012 1)

81,203

29.1 %

Expected income taxes

– 25,348

– 23,630

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

Impairment of tax assets

Other

Income taxes

– 809

– 388

– 1,515

– 169

– 1,619

– 3,255

219

– 270

1,315

– 296

1,285

1,459

428

– 13

– 364

– 28,319

– 24,587

1) Restated due to effects from the application of IAS 19R.

See: Section 2 Basis of preparation and Section 7 Change in accounting principles.

The item ‘Tax effect of changes in tax rates’ consists in 2012
mainly of the reduced tax rate in the USA.

The item ‘Income taxes related to prior years’ consists in particu-
lar of the release of not-utilised tax provisions.

The item ‘Other’ consists in 2013 and 2012 mainly of other in-
come-based taxes (withholding tax).

The income tax charged/credited directly to other comprehensive
income during the year is as follows:

2013

2012

in EUR thousands

Cash flow hedges gains / losses

Actuarial gains / losses on defined benefit plans

Other comprehensive income

Before
tax amount

Tax charge /
credit

Net-of-tax
amount

Before
tax amount

Tax charge /
credit

Net-of-tax
amount

3,314

– 726

2,588

– 985

159

– 826

2,329

– 567

1,762

– 4,378

– 1,465

– 5,843

1,293

426

1,719

– 3,085

– 1,039

– 4,124

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

146

Notes to the Consolidated Statement
of Financial Position

The movement in deferred income tax assets and liabilities during
the year is as follows:

18. INCOME TA X ASSETS AND LIABILITIES

Due to changes in German corporate tax laws (“SE-Steuergesetz”
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 receivable is included
in income tax assets and amounted to EUR 1,737 thousand on
31 December 2013 (31 December 2012: EUR 2,133 thousand).
In 2013, EUR 1,260 thousand are classified as non-current (31
December 2012: EUR 1,656 thousand).

19. DEFERRED INCOME TA X

The analysis of deferred tax assets and deferred tax liabilities due
to maturity is as follows:

in EUR thousands

31 Dec 2013

31 Dec 2012 1)

in EUR thousands

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

2013

2012 1)

26,879

– 1,758

826

– 926

434

27,355

– 1,904

– 1,719

– 977

4,124

25,455

26,879

1) Restated due to effects from the application of IAS 19R.

See: Section 2 Basis of preparation and Section 7 Change in accounting principles.

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 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)

1) Restated due to effects from the application of IAS 19R.

See: Section 2 Basis of preparation and Section 7 Change in accounting principles.

DEFERRED TAX ASSETS

in EUR thousands

Intangible assets

Property, plant and equipment

1,035

6,480

7,515

Other assets

2,301

Inventories

Trade receivables

3,760

6,061

Retirement benefit obligations /
pension liabilities

Provisions

Borrowings

32,565

31,812

Trade payables

Other liabilities, incl. derivatives

405

32,970

25,455

1,128

32,940

26,879

Tax losses and tax credits

Deferred tax assets
(before valuation allowances)

Valuation allowance

Deferred tax assets
(before offsetting)

Offsetting effects

Deferred tax assets

31 Dec 2013

31 Dec 2012 1)

1,596

184

1,173

280

1,387

1,088

3,227

4,442

392

441

14,289

– 19

14,270

– 6,755

7,515

2,152

249

202

901

470

1,081

671

796

9,222

772

16,584

– 13

16,571

– 10,510

6,061

1) Restated due to effects from the application of IAS 19R.

See: Section 2 Basis of preparation and Section 7 Change in accounting principles.

NORMA Group SE Annual Report 2013

147

31 Dec 2013

31 Dec 2012

in EUR thousands

31 Dec 2013

31 Dec 2012

27,843

Expiry within 1 year

Expiry in 2–5 years

Expiry later than 5 years

Unlimited carry forward

Total

2,628

475

3,134

894

3,465

687

5,046

DEFERRED TAX LIABILITIES

in EUR thousands

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)

26,591

8,759

399

384

459

2,084

169

874

39,725

– 6,755

32,970

25,455

9,100

1,201

156

4,219

137

675

43,450

– 10,510

32,940

26,879

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. As at 31 December 2013,
deferred tax assets for all deductable temporary differences could
be recognised.

In 2013 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 34 thousand
for those foreign subsidiaries (31 December 2012: EUR 167 thou-
sand). NORMA Group believes it is more likely than not that due
to future taxable income, deferred tax assets which are not sub-
ject 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 benefit
through future taxable profits is probable.

The Group did recognise the following tax losses:

The Group did not recognise deferred income tax assets in
respect of losses amounting to EUR 5,579 thousand at 31 De-
cember 2013 (31 December 2012: EUR 7,328 thousand) that can
be carried forward against future taxable income. Theoretically,
the deferred tax assets on not recognised tax losses would be
EUR 1,058 thousand at 31 December 2013 (31 December 2012:
EUR 1,814 thousand).

The unrecognised losses expire as follows:

in EUR thousands

Expiry within 1 year

Expiry in 2–5 years

Expiry later than 5 years

Unlimited carry forward

Total

31 Dec 2013

31 Dec 2012

2,256

3,294

5,579

285

1,643

806

4,594

7,328

Taxable temporary differences amounting to EUR 113,059 thou-
sand at 31 December 2013 (31 December 2012: EUR 69,451
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 differ-
ence 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 practi-
cably 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.

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

148

20. GOODWILL AND OTHER INTANGIBLE ASSETS

The acquisition costs as well as accumulated amortisation and
impairment of intangible assets consist of the following:

in EUR thousands

Acquisition costs

Goodwill

Certificates (Customer lists)

Licenses, rights

Trademarks

Patents & technology

Internally generated intangible assets

Intangible assets, other

Total

Amortisation and Impairment

Goodwill

Certificates (Customer lists)

Licenses, rights

Trademarks

Patents & technology

Internally generated intangible assets

Intangible assets, other

Total

in EUR thousands

Acquisition costs

Goodwill

Certificates (Customer lists)

Licenses, rights

Trademarks

Patents & technology

Internally generated intangible assets

Intangible assets, other

Total

Amortisation and Impairment

Goodwill

Certificates (Customer lists)

Licenses, rights

Trademarks

Patents & technology

Internally generated intangible assets

Intangible assets, other

Total

At
1 Jan 2013

Additions

Deductions

Transfers

Changes in
consolidation

Currency
effects

At
31 Dec 2013

266,296

57,402

2,178

20,903

29,952

2,014

25,346

404,091

31,034

11,501

777

4,290

14,780

293

13,676

76,351

111

996

3,060

5,092

9,261

4,192

378

1,080

2,374

683

3,897

12,604

– 2

– 27

– 146

– 175

– 2

– 146

– 148

114

– 118

1,683

5,881

211

– 4,670

– 2,367

– 4

– 840

1,120

– 1,277

– 34

– 505

263,309

60,918

2,498

20,138

30,791

5,127

29,669

8,970

– 9,697

412,450

– 964

– 451

– 2

– 220

– 667

– 11

– 191

– 2,506

30,070

15,242

1,151

5,150

16,487

965

17,236

86,301

At
1 Jan 2012

Additions

Deductions

Transfers

Changes in
consolidation

Currency
effects

At
31 Dec 2012

256,287

44,049

849

20,189

29,444

208

19,234

370,260

31,446

8,472

655

3,360

12,678

172

9,696

120

334

654

1,817

4,889

7,814

3,162

128

1,015

2,369

124

3,951

66,479

10,749

– 5

– 6

– 11

– 5

– 10

121

– 1

– 120

11,905

13,966

882

1,086

354

1,146

29,339

– 1,896

266,296

– 733

– 3

– 372

– 499

– 11

203

57,402

2,178

20,903

29,952

2,014

25,346

– 3,311

404,091

– 412

– 133

– 1

– 85

– 267

– 3

– 867

31,034

11,501

777

4,290

14,780

293

13,676

76,351

NORMA Group SE Annual Report 2013

149

in EUR thousands

Goodwill

Certificates (Customer lists)

Licenses, rights

Trademarks

Patents & technology

Internally generated intangible assets

Intangible assets, other

Total

Carrying amounts

31 Dec 2013

31 Dec 2012

233,239

235,262

45,676

1,347

14,988

14,304

4,162

12,433

326,149

45,901

1,401

16,613

15,172

1,721

11,670

327,740

The item ‘Patents & technology’ at 31 December 2013 consists
of patents worth EUR 4,180 thousand (31 December 2012: EUR
3,794 thousand) and technology worth EUR 10,124 thousand (31
December 2012: EUR 11,378 thousand).

The item ‘Intangible assets, other’ consists mainly of software
and prepayments. Software is amortised over the useful life of
three to five years.

Internally generate intangible assets mainly include technologies.

The change in goodwill from EUR 235,262 thousand to EUR
233,239 thousand results from negative exchange differences
and from the acquisition of the distribution business of Variant
S.A., in the amount of EUR 252 thousand, the acquisition of the
distribution business of Davydick & Co. Pty. Limited in the first
half year of 2013, which increased the goodwill by EUR 451 thou-
sand as well as the acquisition of Guyco Pty Limited in the amount
of EUR 980 thousand in the third quarter of 2013.

The change in goodwill is summarised as follows:

in EUR thousands

Balance at 31 December 2012

Changes in consolidation

Variant S.A.

Davydick & Co. Pty. Limited

Guyco Pty Limited

Currency effect

Balance at 31 December 2013

235,262

1,683

252

451

980

– 3,706

233,239

In 2013 and 2012, no material impairment for intangible assets
or write ups were recognised. Besides the goodwill, there are no
intangible assets with an indeterminable useful life.

At 31 December 2013 and 2012, the intangible assets are un-
secured.

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 thousands

CGU EMEA

CGU Americas

CGU Asia-Pacific

31 Dec 2013

31 Dec 2012

154,141

73,598

5,500

153,993

76,904

4,365

233,239

235,262

Goodwill for the cash-generating unit EME A increased in 2013
due to the acquisition of the distribution business of Variant S.A.
amounting to EUR 252 thousand, partly offset by currency effects.
Goodwill for the CGU Americas changed in 2013 solely due to
currency effects. Goodwill for the CGU Asia-Pacific was increased
by the acquisition of Guyco Pty Limited and the acquisition of the
distribution business of Davydick & Co. Pty. Limited amounting
to EUR 1,431 thousand. Other changes were driven by currency
effects.

The recoverable amount of a CGU is determined based on fair-
value-less-costs-to-sell, which is calculated by discounting pro-
jected cash flows. Based on the inputs used for this valuation
technique, fair values are classified as level 3 fair values (Note 3.3
“Fair value estimation”). These calculations use cash flow projec-
tions 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 expectations for the
long-term average growth rate for the geographical area of the
respective CGU.

The discount rates used are after-tax-rates and reflect the specific
risk of each CGU. The respective before-tax-rates are 13.36 % (2012:
13.45 %) for the CGU EMEA, 14.74 % (2012: 15.07 %) for the CGU
Americas and 13.16 % (2012: 13.54 %) for the CGU Asia-Pacific.

The key assumptions used for fair-value-less-costs-to-sell calcu-
lations are as follows:

31 December 2013

Terminal value growth rate

Discount rate

Costs to sell

31 December 2012

Terminal value growth rate

Discount rate

Costs to sell

CGU
EMEA

CGU
Americas

CGU
Asia-Pacific

1.50 %

10.31 %

1.00 %

1.50 %

9.62 %

1.00 %

1.50 %

10.50 %

1.00 %

CGU
EMEA

CGU
Americas

CGU
Asia-Pacific

1.50 %

10.20 %

1.00 %

1.50 %

9.60 %

1.00 %

1.50 %

10.74 %

1.00 %

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

150

Even if the discount rate would increase by + 2 % and terminal
value growth rate would be 0 %, the change of these key assump-
tions would not cause in any CGU the carrying amount to exceed
its recoverable amount.

21. PROPERT Y, PL ANT AND EQUIPMENT

The acquisition and manufacturing costs as well as accumulated
depreciation of property, plant and equipment consisted of the
following:

in EUR thousands

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

in EUR thousands

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

At
1 Jan 2013

Additions

Deductions

Transfers

Changes in
consolidation

Currency
effects

At
31 Dec 2013

84,890

186,804

46,415

9,886

1,227

7,157

3,649

9,234

327,995

21,267

38,853

144,191

35,689

183

2,388

11,017

3,790

– 186

– 3,176

– 2,520

– 187

– 6,069

– 125

– 3,185

– 2,449

218,916

17,195

– 5,759

2,240

3,282

1,374

– 6,896

– 427

427

239

4,930

790

– 1,402

– 3,532

– 689

– 758

87,008

195,465

49,019

11,367

6,047

– 6,381

342,859

– 557

– 1,892

– 408

– 3

40,559

149,704

37,049

180

– 2,860

227,492

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

– 1,149

– 2,807

– 2,708

– 75

– 6,739

– 1,139

– 2,428

– 2,634

208,785

15,665

– 6,201

3,827

3,803

1,082

– 8,712

– 45

– 354

399

599

3,580

431

4,610

– 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

NORMA Group SE Annual Report 2013

151

in EUR thousands

Land and buildings

Machinery and tools

Other equipment

Assets under construction

Total

Carrying amounts

31 Dec 2013

31 Dec 2012

46,449

45,761

11,970

11,187

46,037

42,613

10,726

9,703

In financial year 2013, a contract for the use of land in China was
signed for a period of 50 years by NORMA Group. Since the
present value of the minimum lease payments is equal to fair
value of the leased item, it was classified as a finance lease.

Machinery includes the following amounts where the Group is a
lessee under a finance lease:

115,367

109,079

in EUR thousands

31 Dec 2013

31 Dec 2012

At 31 December 2013, the item ‘Machinery and tools’ includes
tools of EUR 7,952 thousand (31 December 2012: EUR 4,205
thousand).

No material impairment and no material write ups were recog-
nised on property, plant and equipment in 2013 and 2012.

At 31 December 2013 and 2012, property, plant and equipment
are unsecured.

Land and buildings includes the following amounts where the
Group is a lessee under a finance lease:

in EUR thousands

31 Dec 2013

31 Dec 2012

Cost – capitalised finance leases

Accumulated depreciation

Net carrying amount

523

Cost – capitalised finance leases

Accumulated depreciation

Net carrying amount

661

– 431

230

472

– 388

Other equipment includes the following amounts where the Group
is a lessee under a finance lease:

in EUR thousands

31 Dec 2013

31 Dec 2012

Cost – capitalised finance leases

Accumulated depreciation

Net carrying amount

367

– 248

119

367

– 170

197

The Group leases various property, machinery, technical and IT
equipment under non-cancellable finance lease agreements. The
lease terms for machinery and other equipment are between
three and ten years, the lease terms for land and building are up
to 50 years.

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

152

22. FINANCIAL INSTRUMENTS

Financial instruments according to classes and categories were
as follows:

in EUR thousands

Financial assets

Derivative financial instruments
– hedge accounting

Foreign exchange derivatives

Trade and other receivables

Cash and cash equivalents

Financial liabilities

Borrowings

Derivative financial instruments
– hedge accounting

Interest derivatives

Cross-currency swaps

Foreign exchange derivatives

Trade payables

Other financial liabilities

Contingent considerations

Other liabilities

Finance lease liabilities

Totals per category

Loans and receivables (LaR)

Financial liabilities at amortised cost (FLAC)

Measurement basis IAS 39

Category
IAS 39

Carrying
amount
31 Dec 2013

Amortised
Cost

Fair value
through
profit or loss

Derivatives
used for
hedging

Measurement
basis IAS 17

Fair value
31 Dec 2013

n /a

LaR

90,138

194,188

90,138

194,188

FLAC

326,108

n /a

5,375

9,845

FLAC

59,025

5,375

9,845

n /a

FLAC

n /a

1,371

4,241

683

1,371

4,241

683

284,326

389,374

284,326

389,374

90,138

194,188

329,273

5,375

9,845

59,025

1,371

4,241

705

284,326

392,539

NORMA Group SE Annual Report 2013

153

Measurement basis IAS 39

Category
IAS 39

Carrying
amount
31 Dec 2012

Amortised
Cost

Fair value
through
profit or loss

Derivatives
used for
hedging

Measurement
basis IAS 17

Fair value
31 Dec 2012

in EUR thousands

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

103

79,293

72,389

79,293

72,389

FLAC

241,696

Foreign exchange derivatives

FLHfT

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

FLAC

n /a

5,807

18,868

37,663

3,951

940

37,663

3,951

151,682

Financial liabilities held for trading (FLHfT)

114

Financial liabilities at amortised cost (FLAC)

283,310

103

5,807

18,868

103

79,293

72,389

241,696

114

5,807

18,868

37,663

3,951

996

151,682

114

283,310

940

Financial instruments, that are recognised in the balance sheet
at amortised cost and for which the fair value is stated in the
notes, are also allocated within a three step fair value hierarchy.

The fair value calculation of the fixed-interest promissory note
that is recognised at amortised cost and for which the fair value
is stated in the notes, was based on the market yield curve
accord ing to the zero coupon method considering credit spreads
(level 2). Interests accrued on the reporting date are included.

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.

Trade payables and other financial liabilities have short times to
maturity; therefore the carrying amounts reported approximate
the fair values. At 31 December 2013, liabilities in the amount of
EUR 3,500 thousand resulting from the acquisitions in 2013 and
2012, are included in the position other financial liabilities. Further-
more, this position includes a contingent consideration measured
at fair value amounting to EUR 1,371 thousand from the acqui-
sition of Guyco Pty Limited (EUR 1,274 thousand) and Davydick
& Co. Pty Limited (EUR 97 thousand). For details, please refer to
Note 40 ‘Business combinations’.

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.

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

154

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.

None of the financial assets that are fully performing have been
renegotiated in the last year.

The tables below provide an overview of the classification of
finan cial assets and liabilities measured at fair value in the fair
value hierarchy under IFRS 13 as at 31 December 2013 as well
as at 31 December 2012:

in EUR thousands

Recurring fair value measurements

Assets

Foreign exchange derivatives – hedge accounting

Total

Liabilities

Cross-currency swaps – hedge accounting

Interest swap – hedge accounting

Foreign exchange derivatives – hedge accounting

Other financial liabilities

Total

Level 11)

Level 2 2)

Level 3 3)

Total at
31 Dec 2013

9,845

5,375

15,270

1,371

9,845

5,375

1,371

16,641

1) Fair value measurement based on quoted prices (unadjusted) in active markets for these or identical assets or liabilities.
2) Fair value measurement for the asset or liability based on inputs that are observable on active markets either directly (i. e. as priced) or indirectly (i. e. derived from prices).
3) Fair value measurement for the asset or liability based on inputs that are not observable market data.

in EUR thousands

Recurring fair value measurements

Assets

Foreign exchange derivatives – hedge accounting

Total

Liabilities

Cross-currency swaps – hedge accounting

Interest swap – hedge accounting

Foreign exchange derivatives – held for trading

Total

Level 11)

Level 2 2)

Level 3 3)

Total at
31 Dec 2012

103

18,868

5,807

114

24,789

103

18,868

5,807

114

24,789

NORMA Group SE Annual Report 2013

155

In 2013, no transfers between the different levels occurred.

The fair value of interest swaps and cross-currency swaps is
calculated as the present value of estimated future cash flows.
The fair value of forward foreign exchange contracts is determined
using a present value model based on forward exchange rates.

Level 3 includes fair values of financial liabilities from contingent
consideration resulting from the acquisition of Guyco Pty Limited
and the acquisition of Davydick & Co. Pty Limited. The agreement
on the contingent consideration related to the acquisition of
Guyco Pty Limited is committed NORMA Group to pay an amount
depending on the gross profits made by the Guyco Pty Limited
in the period from 1 July 2013 to 30 June 2014. The fair value of
the contingent consideration was determined at the acquisition
date with taking into account the budget of the Company and
set to the maximum value of EUR 1,274 thousand. The key para-
meters, for which no observable market data are available are
shown below:

Assumed, gross profit: > TAUD 5,500
Discount rate: 4 %

A decrease in the estimated gross profit to a value below AUD
5,500 thousand but above AUD 4,500 thousand would lead in a
lower value of the contingent consideration. A decrease in the
estimated gross profit to a value below AUD 4,500 thousand
would lead in a value of EUR 0 thousand. Furthermore, a signifi-
cant increase (decrease) in the discount rate would lead in a
lower (higher) value of the contingent consideration.

The agreement on the contingent consideration related to the
acquisition of Davydick & Co. Pty Limited committed NORMA
Group to pay an amount depending on the revenues made by
the Davydick & Co. Pty Limited in the period from 1 January 2013
to 31 December 2013. The fair value of the contingent consider-
ation was determined at the acquisition date with taking into ac-
count the budget of the Company and set to the maximum value
of EUR 285 thousand. On 31 December 2013, an adjustment of
the fair value was made to reflect the achieved revenues, the
difference of EUR 188 thousand in the fair values was recog nised
as income in profit or loss in the period. The key parameters, for
which no observable market data are available, are shown below:

Used revenue of Davydick & Co. Pty Limited as at 31 December
2013: AUD 4,909 thousand

The development of the financial assets that are recognised at
fair value and assigned in level 3 of the fair value hierarchy is
stated below:

in EUR thousands

At 1 January

Acquisition of Guyco Pty Limited

Acquisition of Davydick & Co. Pty Limited

Gains and losses recognised in profit or loss

At 31 December

Total gains or losses for the period included
in profit or loss for financial liabilities held
at the end of the reporting period, under
‘Financial result’

Contingent
consideration in
business
combinations

Total

1,249

285

163

285

163

1,371

163

In accordance with IFRS 7.20 (a) net gains and losses from finan-
cial instruments by measurement category are as follows:

in EUR thousands

Available-for-sale financial assets (AfS)

Loans and receivables (LaR)

Financial instruments held for trading
(FAHfT and FLHfT)

Financial liabilities at cost (FLAC)

2013

– 33

– 14,563

– 14,596

2012

255

– 152

– 12,742

– 12,589

In 2012, net gains and losses of available-for-sale financial assets
included 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 Bevestigings-
materialen B.V. The previously held shares of 30 % were de-
recognised 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 income on
short-term bank deposits. Fair value gains and losses on trading
derivatives are net gains and losses of financial instruments held
for trading and net gains and losses of financial liabilities at cost
comprise interest expenses and currency effects on loans, bor-
rowings and bank deposits.

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

156

23. DERIVATIVE FINANCIAL INSTRUMENTS

The derivative financial instruments were as follows:

in EUR thousands

Cross-currency swaps – cash flow hedges

Interest rate swaps – cash flow hedges

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

Non-current portion

Current portion

31 December 2013

31 December 2012

Assets

Liabilities

Assets

Liabilities

9,845

5,375

15,270

8,293

6,977

18,868

5,807

114

24,789

18,868

5,807

24,675

114

103

Foreign exchange derivatives
At 31 December 2013, foreign exchange derivatives with a posi-
tive market value of EUR 92 thousand and with a negative market
value of EUR 50 thousand were classified as cash flow hedges.
The notional principal amount was EUR 3,100 thousand and EUR
1,126 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 of
NORMA Group’s financing was hedged against interest rate
changes.

Amounts recognised in the hedging reserve in equity at 31 De-
cember 2013 will be released in profit or loss until the repayment
of the loans.

The notional principal amounts of the outstanding cross-cur-
rency-swap contracts at 31 December 2013 were EUR 117 million
(31 December 2012: EUR 132 million). Interest rate derivatives
had a notional principal amount of EUR 199 million (31 December
2012: EUR 160 million).

At 31 December 2013 and 2012, the hedged fixed interest rate
was between 0.981 % and 4.04 %; the variable interest rate was
the 3-months-EURIBOR.

The ineffective portion recognised in profit or loss amounts to a
loss of EUR 140 thousand in 2013 (2012: profit of EUR 102 thou-
sand).

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 effective part recognised in other comprehensive income
reduced the equity in 2013 by EUR 1,527 thousand before taxes
(2012: reduction of EUR 9,409 thousand). Of this amount, EUR
4,404 thousand are due to the measurement of the derivatives
held as cash flow hedges and EUR – 5,931 thousand are due to
the change in value of the underlying. In the period, an addition-
al EUR 4,841 thousand before tax were reclassified from the
hedging reserve to the profit and loss and thus increased other
comprehensive income (2012: increase of EUR 5,031 thousand).

24. TR ADE AND OTHER RECEIVABLES

The trade receivables were as follows:

in EUR thousands

Trade receivables

Less: allowances for doubtful accounts

31 Dec 2013

31 Dec 2012

91,092

– 1,638

89,454

81,110

– 2,350

78,760

All trade receivables are due within one year. The following table
shows the maturity analysis for trade receivables and other cur-
rent receivables that are not impaired:

NORMA Group SE Annual Report 2013

157

AT 31 DECEMBER 2013

in EUR thousands

Trade receivables

Other receivables

AT 31 DECEMBER 2012

in EUR thousands

Trade receivables

Other receivables

Not past due

< 30 days

30 to
90 days

91 to
180 days

181 days
to 1 year

64,563

681

65,244

17,439

17,441

5,528

1,133

483

Not past due

< 30 days

30 to
90 days

91 to
180 days

181 days
to 1 year

61,121

487

61,608

13,676

2,798

2,844

592

287

> 1 year

201

> 1 year

170

Total

89,347

683

90,030

Total

78,644

533

79,177

At 31 December 2013 and 2012, there was no indication that
trade receivables that were neither past due nor impaired could
be irrecoverable.

All trade receivables were impaired by specific valuation allow-
ances. There have been no general allowances. Movements on
the Group provision for impairment of trade receivables are as
follows:

The amount of receivables that were impaired and provided for
was as follows:

in EUR thousands

At 1 January

in EUR thousands

Trade receivables impaired
and provided for

Allowances for doubtful accounts

31 Dec 2013

31 Dec 2012

Additions

1,746

– 1,638

2,466

– 2,350

Amounts used

Reversals

Allowances acquired in a
business combination

The carrying amounts of the Group’s trade and other receivables
are denominated in the following currencies:

Currency effects

At 31 December

2013

2,350

273

– 716

– 221

– 48

1,638

2012

2,247

913

– 671

– 454

327

– 12

2,350

in EUR thousands

31 Dec 2013

31 Dec 2012

Euro

US dollar

Chinese renminbi

British pound

Australian dollar

Swedish krona

Swiss franc

Indien rupee

Malaysian ringgit

Thai baht

Russian ruble

Other currencies

44,547

28,782

4,428

2,515

2,704

1,232

1,220

685

900

457

731

1,937

90,138

40,211

24,717

3,237

2,155

1,434

1,228

1,136

982

1,137

700

1,014

1,342

79,293

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.

The other classes within trade and other receivables do not con-
tain impaired assets.

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 2013 and 2012, the trade and other receivables
are unsecured.

Receivables of EUR 1,339 thousand (2012: EUR 1,296 thousand)
were sold in a factoring contract.

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

158

25. INVENTORIES

The inventories were as follows:

in EUR thousands

Raw materials

Work in progress

Finished goods and goods for resale

31 Dec 2013

31 Dec 2012

25,134

7,271

47,365

79,770

25,018

7,123

42,172

74,313

At 31 December 2013, impairments on inventories amounting to
EUR 2,919 thousand (31 December 2012: EUR 2,044 thousand)
were made.

At 31 December 2013 and 2012, the inventories are unsecured.

26. OTHER NON-FINANCIAL ASSETS

Other non-financial assets were as follows:

in EUR thousands

Deferred costs

VAT assets

Receivables against factor

Prepayments

Reimbursement insurance contracts

Other assets

31 Dec 2013

31 Dec 2012

1,019

2,751

767

1,061

1,141

1,375

8,114

1,208

3,543

352

1,094

1,590

7,787

27. EQUIT Y

Subscribed capital
The subscribed capital of the Company at 31 December 2013
and 2012 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 aggregate
by issuing up to 15,931,200 new no par value registered shares
against cash contributions or contributions in kind (authorised
capital).

With the resolution of the extraordinary shareholders’ meeting on
6 April 2011, the Company’s share capital has been conditionally
increased by up to EUR 12,505,000 through the issuance of up to
12,505,000 new no par value registered shares (conditional capi-
tal). 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 authorisation 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 SE 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 sub-
scribed 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 2,762 thousand were reimbursed in
accordance with the agreement by the previous shareholders.
In 2013, EUR 1,067 thousand (2012: EUR 1,307 thousand) was
paid and recognised in the capital reserve.

Retained earnings
The retained earnings consisted of the following:

NORMA Group SE Annual Report 2013

Retained
earnings

15,662

56,573

– 19,125

in EUR thousands

Balance at 31 December 2011

Profit for the year

Dividends paid

Stock options

Acquisition of non-controlling
interests

Effect before taxes

Tax effect

Balance at 31 December 2012 1)

53,110

Balance at 31 December 2012
(as reported)

Profit for the year

Dividends paid

Stock options

Effect before taxes

Tax effect

53,110

55,557

– 20,711

Remeasure-
ments of
post employ-
ment benefit
obligations

IPO costs
directly
netted with
equity

Reimburse-
ment IPO-
costs by
shareholder

Acquisition
of non-
controlling
interest

Effects
from the
application
of IAS 19R

Stock
options

165

184

– 4,640

4,681

– 1,940

418

– 489

602

– 4,640

4,681

– 2,429

– 1,465

426

– 874

1,120

– 324

839

– 874

602

– 4,640

4,681

– 2,429

– 602

– 726

159

1,181

– 342

839

Balance at 31 December 2013

87,956

– 1,441

– 4,640

4,681

– 2,429

1) Restated due to effects from the application of IAS 19R. See: Section 2 Basis of preparation and Section 7 Change in accounting principles.

A dividend of EUR 20,711 thousand (EUR 0,65 per share) was
paid to the shareholders of NORMA Group after the Annual Gen-
eral Meeting in May 2013, which reduced the retained earnings.

Other reserves
The other reserves consisted of the following:

in EUR thousands

Balance at 1 January 2012

Currency translation

Effect before taxes

Tax effect

Balance at 31 December 2012

Currency translation

Effect before taxes

Tax effect

Balance at 31 December 2013

Cashflow hedges

Exchange differences
on translating foreign
operations

946

– 2,797

– 1,851

– 7,636

– 3,614

– 4,378

1,293

– 6,699

3,314

– 985

– 4,370

– 9,487

– 13,857

159

Total

14,112

56,616

– 19,125

418

– 489

– 345

102

51,289

50,450

55,557

– 20,711

– 602

455

– 183

84,966

Total

– 2,668

– 2,797

– 4,378

1,293

– 8,550

– 7,636

3,314

– 985

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

160

28. SHARE BASED PAYMENTS

The Group used the following parameters for its evaluation:

Management incentive schemes
The matching stock programme (MSP) for the Management
Board provides a long-term incentive to commit to the success
of the Group. The MSP is a share-based option.

To this end, the Supervisory Board specifies a number of share
options to be granted each financial year with the proviso that
the Management Board member makes a corresponding per-
sonal investment in the Group.

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 (2013: 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 2013 is 1.5). The MSP is split into five tran-
ches. 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 2013 finan cial
year.

The holding period is four years (on 31 March 2017 for the 2013
tranche, on 31 March 2016 for the 2012 tranche and on 31 March
2015 for the 2011 tranche). The exercise price for the 2011 tranche
is the issue price at the time of the Group’s IPO. The exercise
price for the other tranches will be the weighted average of the
closing price of the Group’s share on the 60 trading days directly
preceding the allocation of each tranche. Dividend payments by
the Group during the vesting period are deducted from the ex-
ercise price of each tranche. The value of the share option is
calculated using a generally accepted valuation methodologies.
The Group used the volatility of the NORMA Group SE share of
the last six months to determine the volatility of 2013.

Expected duration until exercised in years

Risk-free interest rate in %

Expected volatility in %

Expected dividend payment in in %

Share price when granted in EUR

Share price on 31 December 2013 reporting date

4.00

0.75

35.00

0.00

24.59

36.09

Each tranche is recalculated, taking changes in influencing factors
into account, and prorated over the vested period.

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 Group can decide
at its own discretion whether to settle the option in shares or
cash. The 2011, 2012 and 2013 tranche will likely be settled in
equity instruments (no cash settlement).

The fair value was determined when the options were granted.
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 2013
was EUR 7.33 per option right when the option rights were grant-
ed (2012: EUR 5.67). The fair value of the 162,679 option rights
granted with the 2013 tranche came to EUR 1,191,674.

The resulting personnel expenses will be recorded over the
course of the vesting period. They came to EUR 698,531 for the
2013 financial year (2012: EUR 417,476), assuming no staff turn-
over. This amount was allocated to capital reserve.

The option rights granted under the matching stock programme
(MSP) changed as follows in the 2013 financial year:

Balance at 31 December 2012

Granted

Exercised

Lapsed /expired

Balance at 31 December 2013

Number of option
rights outstanding

Exercise price
per right (in EUR)

Waiting period
(service period) in years

325,358

162,679

488,037

19.44

23.71

20.86

1.75

3.25

2.25

The aggregated intrinsic value, based on the closing share price
on 31 December 2013, was EUR 7,429 thousand.

The exercise prices of the option rights granted under the MSP
are between EUR 17.87 and EUR 23.71 per right.

NORMA Group SE Annual Report 2013

161

In the financial year 2013, NORMA Group has installed a share-
based, long-term, variable compensation component for execu-
tives and certain other groups of employees (Long-Term Incentive
Plan). The Long-Term Incentive Plan (LTI) is a share-based pay-
ment, cash settled plan that takes into account both the per-
formance of the Company and the share price development.

The participants receive a preliminary number of share units
(virtual shares) at the start of the performance period based on
a percentage of the respective base salary multiplied with a con-
version rate. The conversion rate is determined based on the
average share price of the previous 60 trading days of the calen-
dar year prior to the grant date. Once four years have elapsed,
the number of share units granted at the start of the performance
period is adjusted based on the Company’s performance
achieved, incorporating both the targets defined during the per-
formance period and the Company / regional factor.

The goal achievement factor, measured by adjusted EBITA, as
well as the Company / regional factor are applied as performance
targets. The goal achievement factor is based on the adjusted
EBITA of the NORMA Group. The absolute adjusted EBITA target
is determined for every year of the performance period based on
the budgeted value. After conclusion of the four-year-period, the
yearly recorded adjusted EBITA values are defined as percentage
in relation to the target values and averaged out over the four
years. Allocation occurs above a goal achievement ratio of 90 %.
Between 90 % and 100 % goal achievement every percentage
point amounts to 10 percentage points of goal achievement fac-
tor. Between 100 % and 200 % goal achievement the goal
achievement factor grows by 1.5 percentage points per percent-
age point of goal achievement.

The company factor is determined by the Group Senior Manage-
ment based on the development of the Company, as well as the
development in relation to comparable companies. In addition to
this, the development of free cash flows are taken into account
when determining the factor. At the discretion of the Group Senior
Management, unanticipated developments can also be taken
into account and the company factor corrected either downward
or upward accordingly. The factor can assume values between
0.5 and 1.5.

The regional factor is defined by the Group Senior Management
prior to pay-out and can assume a value between 0.5 and 1.5.
The factor takes into account the results of the region, as well as
any region-specific aspects.

The value of the share units is then determined at the end of the
fourth calendar year based on the average share price of the last
60 days of trading in this fourth year. In case that the calculated
Long-term Incentive pay-out exceeds 250 % of initial grant value,

the maximum pay-out is capped at 250 %. The value determined
is paid out to the participants in cash in May of the fifth year.

The LTI is a group-wide and global compensation instrument
with a long-term orientation. Due to the coupling to the develop-
ment not only of the stock price, but also the Company’s perfor-
mance, the LTI provides an additional incentive to create value
through value-based action, aligned with the goals of NORMA
Group.

The determination of fair value, which is the basis for determining
the pro rata provision at the balance sheet date, was performed
using a Monte Carlo simulation. Due to the cash settlement of
the virtual share units the fair value is measured at each balance
sheet date and the resulting changes in the fair value are recog-
nised in income or loss. The allocation of the expenses is made
on a pro rate basis over the performance period.

The share units granted under the LTI changed as follows in the
2013 financial year:

Expected duration until exercised in years

Fair value per “Share Unit” in EUR

Share price when granted in EUR

Balance at 31 December 2012

Tentatively granted “Share Units”

Exercised

Lapsed

Balance at 31 December 2013

1. Tranche
LTI 2013

3.00

30.73

20.68

43,394

6,272

37,122

In the financial year 2013, expenses resulting from the LTI in an
amount of EUR 285 thousand were recorded under personnel
expense and within a corresponding liability.

29. RETIREMENT BENEFIT OBLIGATIONS

Retirement benefit obligations result mainly from the German
pension plan and a Swiss post-employment benefit plan.

The German defined benefit pension plan was closed for new
entrants in 1990 and provides benefits in case of retirement,
disability, 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. Even the plan was
closed in 1990, NORMA Group is still exposed to certain actu-

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

162

arial risks associated with defined benefit plans, such as lon gevity
and compensation increases. Due to the amount of the obligation
and the composition of the plan participants, approximately 95 %
are pensioners, significant change in the actuarial assumptions
would have no significant effects on the NORMA Group. Em-
ployees hired after 1990 are eligible under a defined contribution
scheme. The contributions are paid into an insurance contract
providing lump sum payments in case of retirements and death.

in EUR thousands

At 1 January

Current service cost

Past service cost

Settlement (gains) losses

Interest expenses

Remeasurements:

2013

10,319

238

248

2012

8,407

255

356

– 51

1,465

– 101

181

– 656

2,730

– 1

12,907

– 656

489

10,319

Actuarial (gains) losses from changes
in demographic assumptions

Actuarial (gains) losses from changes
in financial assumptions

Experience (gains) losses

Plan participants contribution

Benefits paid

Settlement payments

Business combinations,
disposals and other

Foreign currency translation effects

At 31 December

The changes in the scope of consolidation and other are due to
the initial consolidation of the Swiss plan.

The total defined benefit obligation at the end of financial 2013
includes EUR 4,711 thousand for active employees, EUR 77 thou-
sand for former employees with vested benefits and EUR 8,119
thousand for retirees and surviving dependents.

A detailed reconciliation of the changes in the fair value of plan
assets is provided in the following table:

in EUR thousands

At 1 January

Interest income

Besides the German plan there is a further benefit plan in Switzer-
land resulting from the Swiss “Berufliches Vorsorgegesetz” law
(BVG). According to the BVG each employer has to grant post-em-
ployment benefits for qualifying employees. The plan is a capital
based plan under which the Company has to make contributions
equivalent to at least the limits specified in the plan conditions
employee contributions. These plans are administered by foun-
dations that are legally separated from the entity and are subject
to the BVG. The Group has outsourced the investment process
to the Foundation, which sets the strategic asset allocation in
their group life portfolio. All regulatory granted obligations out of
the plan are reinsured by an insurance company. This covers
risks of disability, death and longevity. Furthermore, there is, for
the retirement assets invested, a 100 % capital and interest guar-
antee. In the case of a shortfall, the employer and plan partici-
pants’ contribution might be increased according to decisions of
the relevant foundation board. Strategies of the foundation boards
to make up for potential shortfalls are subject to approval by the
regulator.

Reconciliation for defined benefit obligations (DBO)
and plan assets
The amounts included in the Group’s Consolidated Financial
Statements arising from its post-employment defined benefit
plans are as follows:

in EUR thousands

31 Dec 2013

31 Dec 2012

Present value of obligations

Fair Value of plan assets

Effects in connection with assets ceiling

12,907

2,038

10,319

Remeasurement:

Return on plan assets excluding amounts
included in net interest expenses

Liability in the balance sheet

10,869

10,319

Employer contributions

Plan participants contributions

A detailed reconciliation for the changes in the DBO is provided
in the following table:

Benefits paid

Settlement payments

Business combinations, disposal and other

Liability administration costs

Foreign currency translation effects

Fair value of plan assets at end of year

The other changes are due to the initial consolidation of the Swiss
plan.

2013

2,038

NORMA Group SE Annual Report 2013

163

jected unit credit method) has been applied as when calculating
the post-employment benefit obligation recognised in the Con-
solidated Statement of Financial Position. Increases and decreas-
es in the discount rate or rate of pension progression which are
used in determining the DBO do not have a symmetrical effect
on the DBO due to the compound interest effect created when
determining the net present value of the future benefit. If more
than one of the assumptions are changed simultaneously, the
combined impact due to the changes would not necessarily be
the same as the sum of the individual effects due to the changes.
If the assumptions change at a different level, the effect on the
DBO is not necessarily in a linear relation.

Future cash flows
Employer contributions expected to be paid to the post-employ-
ment defined benefit plans in financial year 2014 are EUR 165
thousand.

Expected payments from post-employment benefit plans are as
follows:

in EUR

Expected benefit payments

2014

2015

2016

2017

2018

2019 – 2023

31 Dec 2013

761,788

751,766

740,945

730,478

719,915

3,443,497

The weighted average duration of the defined benefit obligation
is 9.9 years.

Disaggregation of plan assets
The allocation of the plan assets of the benefit plans is as follows:

in EUR thousands

Asset class

Insurance contracts

Cash deposit

Equity securities

Total

2013

1,956

2,038

Cash deposits and equity securities have quoted prices in active
markets. The values for insurance contracts represent the re-
demption value, for these no quoted prices in an active market
are available.

Actuarial assumptions
The principal actuarial assumptions are as follows:

in %

Discount rate

Inflation rate

Future salary increases

Future pension increases

2013

2.85

1.77

2.40

2.00

2012

2.91

2.00

2.52

2.00

The biometric assumptions are based on the 2005 G Heubeck
life-expectancy tables for the German plan and on the life-ex-
pectancy tables of the BVG 2010 G for the Swiss plan.

Sensitivity analysis
If the discount rate were to differ by + 0.25 % / – 0.25 % from the
interest rate used at the balance sheet date, the defined benefit
obligation for pension benefits would be an estimated EUR 369
thousand lower or EUR 399 thousand higher. If the future pension
increase used were to differ by + 0.25 % / – 0.25 % from manage-
ment’s estimates, the defined benefit obligation for pension bene-
fits would be an estimated EUR 207 thousand higher or EUR 200
thousand lower. The reduction / increase of the mortality rates by
10 % results in an increase / deduction of life expectancy depend-
ing on the individual age of each beneficiary. That means for
example, that the life expectancy of a male NORMA employee
age 55 years as at 31 December 2013 increases / decreases by
approximately one year. In order to determine the longevity sen-
sitivity the mortality rates were reduced / increased by 10 % for
all beneficiaries. The effect on DBO as at 31 December 2013 due
to a 10 % reduction / increase in mortality rates would result in an
increase of EUR 642 thousand or decrease of EUR 670 thousand.

When calculating the sensitivity of the defined benefit obligation
to significant actuarial assumptions the same method (present
value of the defined benefit obligation calculated with the pro-

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

164

30. PROVISIONS

The development of provisions is as follows:

1,652

621

2,755

2,611

1,653

839

1,170

1,507

782

2,782

1,790

2,541

353

Effects
from the
application
of IAS 19R

At
1 Jan 2012

Effects
from the
application
of IAS 19R

At
1 Jan 2013

Unused
amounts
reversed

Interest
accrued

Changes
in consoli-
dation

Foreign
currency
translation

At
31 Dec
2013

in EUR thousands

Guarantees

Restructuring

At
1 Jan 2013

1,652

621

Early retirement 1)

3,936

– 1,181

Other personnel-related
obligations

Outstanding credit notes

Outstanding invoices

Others

2,611

1,653

839

1,170

Additions

578

437

Amounts
used

– 131

– 507

2,136

– 2,060

1,565

532

269

837

– 217

– 659

– 182

– 532

– 4

– 115

– 113

– 99

– 21

– 46

– 2

217

– 101

510

822

– 22

– 25

– 78

2,144

549

2,883

3,963

1,391

802

1,886

Total provisions

12,482

– 1,181

11,301

6,354

– 4,288

– 352

– 274

13,618

in EUR thousands

Guarantees

Restructuring

At
1 Jan 2012

1,507

782

Early retirement 1)

3,902

– 1,120

Other personnel-related
obligations

Outstanding credit notes

Outstanding invoices

Others

1,790

2,541

353

Additions

222

455

Amounts
used

– 837

– 586

1,876

– 2,059

1,113

695

746

738

– 548

– 1,300

– 283

– 135

Unused
amounts
reversed

Interest
accrued

Changes
in consoli-
dation

Foreign
currency
translation

At
31 Dec
2012

– 34

– 319

– 14

– 367

156

115

758

122

276

229

271

1,386

– 1

1,652

621

2,755

2,611

1,653

839

1,170

11,301

Total provisions

10,974

– 1,120

9,854

5,845

– 5,748

in EUR thousands

Guarantees

Restructuring

Early retirement 1)

Other personnel-related
obligations

Outstanding credit notes

Outstanding invoices

Others

Total provisions

31 December 2013

31 December 2012

Total

2,144

549

2,883

3,963

1,391

802

1,886

13,618

thereof
current

1,835

549

2,289

1,391

802

1,468

8,334

thereof
non-current

309

2,883

1,674

418

5,284

Total

1,652

621

2,755

2,611

1,653

839

1,170

11,301

thereof
current

1,354

621

1,155

1,653

839

1,121

6,743

thereof
non-current

298

2,755

1,456

4,558

1) Restated due to effects from the application of IAS 19R. See: Section 2 Basis of preparation and Section 7 Change in accounting principles.

NORMA Group SE Annual Report 2013

165

Employees at NORMA Group in Germany can engage in an early
retirement contract (“Altersteilzeit”). The employee reduces his /
her working hours in preparation of his / her 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 top-up payments (including social secu-
rity costs paid by the employer). The duration of the early retire-
ment 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 1.75 % (2012: 1.80 %) as well as the 2005 G Heu-
beck life-expectancy tables. For signed early retirement contracts
a liability has been recognised. The liability includes top-up pay-
ments (“Aufstockungsbeträge”) as well as deferred salary pay-
ments (“Erfüllungsrückstände”).

Provisions for guarantees include provisions due to circum stances
where a final agreement has not yet been achieved and provisions
based on experience (customer claim quota, amount of damage,
etc.). Future price increases are considered if material.

Other personnel-related obligations include long-term incentives
in an amount of EUR 2,113 thousand (2012: EUR 635 thousand),
which are mainly due to a variable element of the board compen-
sation (LTI) of the Management Board. The Company’s long-term
incentive (LTI) plan is a component of a variable remuneration
element designed to maximise the Company’s long-term perfor-
mance. The LTI plan also comprises an EBITA component and
an operating free cash flow before external use (FCF) component,
each of which are observed over a period of three years (perfor-
mance period). A new three year performance period begins
every year. Both components are calculated by multiplying the
average annual adjusted EBITA and FCF values actually achieved
in the performance period by the adjusted EBITA and FCF bonus
percentages specified in the employment contract. In the second
step, the actual value of a component is compared to the medi-
um-term plan approved by the Supervisory Board to evaluate the
Company’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 Com-
pany’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. Due to the calculation of the variable
remuneration based on future results of the Group, uncertainties
exist regarding the amount of the future outflows. Parts of the
long-term compensation component will be paid out in the first
half of the following financial year and are therefore reported
under the current provisions.

Furthermore other personnel-related provisions include jubilee
provisions in an amount of EUR 585 thousand (2012: EUR 622
thousand) and provisions for payable income tax and social
security contributions in foreign countries and other personnel-
related provisions.

Jubilee provisions are based on actuarial valuations taking into
account assumptions such as a discount rate of 2.8 % as well as
the 2005 G Heubeck life-expectancy tables.

Provisions for outstanding credit notes in an amount of EUR 1,391
thousand (2012: 1,653 thousand) include obligations for sub-
sequent price adjustments for past periods due to ongoing ne-
gotiations with customers. There are uncertainties regarding the
amount and timing of the outflows. However, it is expected that
this results within a year in payments.

The position “Other” includes provisions for dismantling obligations
in an amount of EUR 1,117 thousand (2012: EUR 545 thousand).

31. BORROWINGS

The borrowings were as follows:

in EUR thousands

31 Dec 2013

31 Dec 2012

Non-current

Bank borrowings

Current

Bank borrowings

Revolving credit facility

Other borrowings
(e. g. factoring and reverse-factoring)

Total borrowings

200,981

190,727

117,856

5,500

1,771

125,127

326,108

25,681

18,500

6,788

50,969

241,696

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 2013, EUR 55 million were
repaid according to the payment plan. Additionally, a revolving
credit facility of EUR 125 million is available for financing the oper-
ating business or future acquisitions within the line of the facility
agreement. At 31 December 2013, EUR 5.5 million of this credit
line was used (31 December 2012: EUR 18.5 million). Furthermore,
NORMA Group issued a promissory note valued at EUR 125
million with 5, 7 and 10 year terms in July 2013.

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

166

The maturity of the syndicated bank borrowings and the prom-
issory note at 31 December 2013 is as follows:

32. OTHER NON-FINANCIAL LIABILITIES

The other non-financial liabilities are as follows:

in EUR thousands

up to
1 year

> 1 year
up to
2 years

> 2 years
up to
5 years

Bank borrowings, net

115,800

19,200

Promissory Note, net

60,000

52,000

Total

115,800

19,200

112,000

> 5 years

73,000

Non-current

Government grants

Other liabilities

in EUR thousands

31 Dec 2013

31 Dec 2012

The maturity of the syndicated bank borrowings at 31 December
2012 is as follows:

in EUR thousands

Bank borrowings, net

Total

up to
1 year

25,000

> 1 year
up to
2 years

> 2 years
up to
5 years

70,000

125,000

70,000

125,000

> 5 years

The early repayment made in January 2014 in an amount of EUR
101.4 million is already considered within the maturity analysis
(

Note 43).

Costs amounting to EUR 7,859 thousand that are directly attri-
butable to the refinancing were netted with the bank borrowings
in accordance with IAS 39.43. They are amortised over the finan-
cing period of five years using the effective interest method.

The syndicated bank facilities are hedged against foreign ex-
change rate and interest rate changes. Furthermore, tranches of
the promissory note with variable interest rates are hedged
against interest rate changes. The derivative liability was de-
creased from EUR 24,675 thousand at 31 December 2012 to
EUR 15,220 thousand at 31 December 2013.

Current

Non-income tax liabilities

Social liabilities

Personnel-related liabilities
(e. g. holiday, bonus, premiums)

Other liabilities

Deferred income

Total other non-financial liabilities

1,163

235

1,398

2,859

3,021

14,827

1,547

153

22,407

23,805

1,394

195

1,589

1,606

3,285

13,278

1,341

19,600

21,189

NORMA Group received government grants amounting to EUR
1,163 thousand. They consist of grants in cash as well as land.
The grants are bound to capital expenditures and employees.
NORMA Group recognises the government grants as income
over the period in which related expenses occur. In 2013, EUR
301 thousand were recognised as income (2012: EUR 139 thou-
sand).

33. OTHER FINANCIAL LIABILITIES

The other financial liabilities were as follows:

in EUR thousands

31 Dec 2013

31 Dec 2012

The bank borrowings are unsecured at 31 December 2013. With
renegotiations of the credit facilities in the fourth quarter of 2012
the established securities for the existing credit lines were fully
released.

Non-current

Lease liabilities

Acquisition liability

Other liabilities

Factoring
NORMA Group has sold a portion of their receivables (EUR 1,339
thousand) and payables (EUR 432 thousand) to a factor. NORMA
Group still bears the opportunities and risks resulting from the
receivables. The transactions are therefore shown as financial
liabilities.

Current

Lease liabilities

Outstanding credit notes

Acquisition liability

Other liabilities

Total other financial liabilities

375

544

700

1,619

308

225

2,956

1,187

4,676

6,295

535

2,131

2,666

405

225

589

1,006

2,225

4,891

NORMA Group SE Annual Report 2013

167

The future aggregate minimum lease payments under non-can-
cellable finance leases and their respective present values are as
follows:

31 DECEMBER 2013

in EUR thousands

up to
1 year

> 1 year
up to
2 years

> 2 years
up to
5 years

> 5 years

in EUR thousands

31 Dec 2013

31 Dec 2012

Borrowings

125,127

19,326

108,619

73,036

Gross finance lease liabilities
– minimum lease payments

Up to 1 year

Later than 1 year and up to 5 years

Later than 5 years

Future finance charges
on finance lease

Present value of
finance lease liabilities

Up to 1 year

Later than 1 year and up to 5 years

Later than 5 years

343

395

738

308

375

683

450

585

1,035

405

535

940

Trade payables

Finance lease liabilities

Other financial liabilities

59,025

309

4,367

221

508

153

737

188,828

20,055

109,509

73,036

31 DECEMBER 2012

in EUR thousands

Borrowings

Trade payables

Finance lease liabilities

Other financial liabilities

up to
1 year

50,969

37,663

405

1,820

> 1 year
up to
2 years

> 2 years
up to
5 years

28,971

161,756

340

758

195

1,373

90,857

30,069

163,324

> 5 years

Lease liabilities are effectively secured because the rights to the
leased assets will revert to the lessor in the event of default.

Net debt of the NORMA Group is as follows:

34. TR ADE PAYABLES

All trade payables are due to third parties within one year. For
information regarding trade payables, please refer to Note 3.14.

35. FINANCIAL LIABILITIES AND NET DEBT

The financial liabilities of NORMA Group have the following
maturity:

in EUR thousands

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 2013

31 Dec 2012

324,338

234,908

15,270

24,675

114

1,770

683

5,612

6,788

940

3,951

347,673

271,376

194,188

153,485

72,389

198,987

The financial debt of NORMA Group increased by 28.1 % from
EUR 271,376 thousand as at 31 December 2012 to EUR 347,673
thousand as at 31 December 2013. The increase is mainly due
to the issue of a promissory note valued at EUR 125 million.
Conversely bank borrowings were repaid in an amount of EUR
47 million and the derivative financial liabilities decreased as a
result of the valuation as at 31 December 2013.

The net debt of EUR 153,485 thousand decreased significantly
in comparison to 31 December 2012 (EUR 198,987 thousand).

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

168

Other Notes

36. INFORMATION ON THE CONSOLIDATED

STATEMENT OF CASH FLOWS

In the statement of cash flows a distinction is made between cash
flows from operating activities, investing activities and financing
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 represents the econom-
ic substance of the transaction. Other non-cash ex penses and
revenues in financial year 2013 mainly include the non-cash val-
uation of interest rate swaps amounting to EUR 2,329 thousand
(2012: EUR – 3,085 thousand), the non-cash evaluation of bank
borrowings amounting to EUR 6,430 thousand (2012: EUR
– 2,885 thousand).

Furthermore, non-cash expenses from the stock option pro-
gramme amounting to EUR 699 thousand (2012: EUR 418 thou-
sand) and non-cash interest expenses amounting to EUR 1,710
thousand (2012: EUR 1,694 thousand) are included in non-cash
expenses and revenues.

In 2012, a one-time-income of EUR 1,296 thousand resulting from
the fair-value-evaluation of the 30 %-share in Groen Bevestigings-
materialen B.V. is also recognised in this item.

Cash flows resulting from interest paid (2013: EUR – 9,773 thou-
sand; 2012: EUR – 11,630 thousand) are disclosed as cash flows
from financing activities.

Cash flows from investing activities in 2013 in an amount of EUR
13,210 thousand include the cash effects from the purchases of
the distribution business of Davydick & Co. Pty Limited and
Variant S.A., the purchase of a portion of the production of Click
Automotiva Industrial Ltda., as well as the purchase of Guyco Pty
Limited. In 2012, cash effects from acquisitions in the amount of
EUR 28.976 were recognised.

Furthermore, cash flows from investing activities include transac-
tions relating to the acquisition and disposal of non-current assets.
Cash flows from the acquisition of non-current assets of EUR
30,528 thousand include cash flows for growth of EUR 23,191
thousand and cash flows for maintenance of EUR 7,337 thousand.

The net payments for acquisitions of subsidiaries in 2013 were
as follows:

in EUR thousands

Consideration

Acquired cash and cash equivalents

Acquisition liability

Net payments for acquisitions of subsidiaries

16,819

– 109

– 3,500

13,210

Cash flows from financing activities comprise proceeds from
borrowings (2013: EUR 128,118 thousand, 2012: EUR 18,500
thousand), repayments of borrowings (2013: EUR – 47,051 thou-
sand; 2012: EUR – 23,173 thousand), payment of the dividend
(2013: EUR – 20,711 thousand, 2012: EUR – 19,125 thousand),
reimbursement of OPICP by shareholders (2013: EUR 1,067 thou-
sand, 2012: EUR 1,307 thousand) as well as cash flows resulting
from interest paid (2013: EUR – 9,773 thousand, 2012: EUR
– 11,630 thousand).

Cash is comprised of cash on hand and demand deposits of EUR
194,188 thousand at 31 December 2013 (31 December 2012:
EUR 72,389 thousand). Cash from China, Serbia, Brazil and
Malay sia (31 December 2013: EUR 9,272 thousand, 31 Decem-
ber 2012: EUR 4,963 thousand) cannot currently be distributed
due to restrictions on capital movements.

37. SEGMENT REPORTING

NORMA Group segments the Group at a regional level. The
report able 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.
EME A, the Americas and Asia-Pacific have linked regional inter-
company organisations of different functions. As a result, the
Group’s management reporting and controlling system has a
regional focus. The product portfolio does not vary significantly
between these segments.

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 profit or loss indicators which are referred to as “adjust-
ed EBITDA” and “adjusted EBITA”.

The “adjusted EBITDA” comprises revenue, changes in invento-
ries of finished goods and work in progress, other own work
capitalised, raw materials and consumables used, other operat-
ing income and expenses, and employee benefits expense, ad-
justed for material one-time effects. EBITDA is measured in a
manner consistent with that used in the statement of compre-
hensive income.

NORMA Group SE Annual Report 2013
169

The “adjusted EBITA” includes, in addition to the EBITDA, the
depreciation adjusted for depreciation from purchase price allo-
cations.

In 2013 and 2012, no material one-time items occurred, therefore
the EBITA is only adjusted by depreciation from purchase price
allocations.

in EUR thousands

Germany

USA, Mexico

Other countries

2013

188,414

191,569

255,562

635,545

2012

197,281

193,328

214,004

604,613

Inter-segment revenue is recorded at values that approximate
third-party selling prices.

The non-current assets per country include non-current assets
less deferred tax assets, derivative financial instruments, and
shares in consolidated related parties.

Segment assets comprise all assets less (current and deferred)
income tax assets. Taxes are shown in the reconciliation. Seg-
ment assets and liabilities are measured in a manner consistent
with that used in the statement of financial position.

Assets of the “Central Functions” include mainly cash and inter-
company receivables.

Segment liabilities comprise of all liabilities less (current and de-
ferred) income tax liabilities. Taxes are shown in the reconciliation.
Segment assets and liabilities are measured in a manner consis-
tent with that used in the statement of financial position. Liabilities
of the “Central Functions” include mainly borrowings.

in EUR thousands

31 Dec 2013

31 Dec 2012

Germany

USA, Mexico

Sweden

Other countries

Consolidation

38. CONTINGENCIES

118,879

152,854

53,239

129,463

– 11,386

121,028

158,165

54,746

123,648

– 18,515

443,049

439,072

Capex equals additions to non-current assets.

The Group has contingent liabilities in respect of legal claims
arising in the ordinary course of business.

The reconciliation of the segments’ adjusted EBITDA and EBITA
is as follows:

NORMA Group does not believe that any of these contingent
liabilities will have a material adverse effect on its business or any
material liabilities will arise from contingent liabilities.

in EUR thousands

Total segments’ adjusted EBITDA

Depreciation without PPA depreciation

Total adjusted EBITA of the Group

Depreciation from PPA

EBITA of the Group

Amortisation

Financial costs – net

Profit before tax

2013

129,319

– 16,699

112,620

– 496

112,124

– 12,604

– 15,585

83,935

2012 1)

120,789

– 15,392

105,397

– 273

105,124

– 10,749

– 13,172

81,203

1) Restated due to effects from the application of IAS 19R.

See: Section 2 Basis of preparation and Section 7 Change in accounting principles.

Current and deferred tax assets and liabilities are shown in the
consolidation. At 31 December 2013, EUR 13,105 thousand (31
December 2012: EUR 21,434 thousand) tax assets and EUR
43,217 thousand (31 December 2012: EUR 50,767 thousand) tax
liabilities were shown in the consolidation.

External sales per country, measured according to the place of
domicile of the company which manufactures the products, are
as follows:

39. COMMITMENTS

Capital commitments
Capital expenditure (nominal value) contracted for at the balance
sheet date but not yet incurred is as follows:

in EUR thousands

31 Dec 2013

31 Dec 2012

Property, plant and equipment

1,443

1,191

There are no material commitments concerning intangible assets.

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.

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

170

NORMA Group has significant operating lease arrangements with
annual lease payments of more than EUR 200 thousand, con-
cerning the leasing of land and buildings. Except for usual renew-
able options, the lease contracts do not comprise other options.
The lease arrangements are held by the following companies:

NORMA UK Ltd. (Great Britain): lease-term from 2006 to 2016,

prolonged to 2028, soonest termination in 2023,

NORMA Pacific Pty Ltd. (Australia): lease-term from 2013 to

2017, soonest termination in 2017,

NORMA Michigan Inc. (USA): lease-term from 2008 to 2018,

soonest termination in 2018,

NORMA Pennsylvania Inc. (USA): lease-term from 2011 to

2016, soonest termination in 2016,

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.

Lease expenditure (including non-cancellable and cancellable
operating leases) amounting to EUR 8,345 thousand in 2013
(2012: EUR 7,774 thousand) is included in profit or loss in ‘other
operating expenses.’

The following table shows the future aggregate minimum lease
payments (nominal value) under non-cancellable operating leases:

in EUR thousands

No later than 1 year

Later than 1 year and
no later than 5 years

Later than 5 years

31 Dec 2013

31 Dec 2012

5,191

9,780

6,053

21,024

4,356

10,306

6,605

21,267

40. BUSINESS COMBINATIONS

Business combinations in the financial year
NORMA Group acquired the distribution business of Davydick &
Co. Pty Limited (Australia), the distribution business for joining
technology from Variant S.A. (Poland), 100 % of the shares in the
Guyco Pty Limited (Australia) as well as a portion of the produc-
tion of Click Automotiva Industrial Ltda. (Brazil) in 2013.

In the purchase price allocation, mainly immaterial assets were
identified. Customer lists were evaluated using the ‘Multi Period
Excess Earnings Method’ amounting to EUR 5,375 thousand.
Patents & technology of EUR 1,120 thousand were evaluated with
the ‘Relief from Royalty Method.’ Distribution rights were evalu-
ated using the ‘Multi Period Excess Earnings Method’ amounting
to EUR 717 thousand.

The acquired assets and liabilities are shown in detail in the fol-
lowing section.

Davydick & Co. Pty. Limited
NORMA Group signed an agreement on 10 January 2013 to
acquire the distribution business of Davydick & Co. Pty. Limited
in Australia.

Davydick & Co. Pty. Limited, based in Goulburn, approximately
150 kilometres southwest of Sydney, has been a distributor of
various elements for the transportation of water in irrigation sys-
tems for more than 20 years. The Company is specialised in
supplying a comprehensive range of rural irrigation fittings, valves,
and pumps under the appellation “PUMPMASTER” to around
700 customers throughout Australia in the agricultural, hardware
and plumbing markets. Davydick & Co. Pty. Limited maintains
branches in Melbourne, Adelaide and Brisbane. In the financial
year 2012, the Company generated overall sales of around EUR
5 million. With the acquisition of the distribution business of
Davydick NORMA Group builds on its water platform and com-
plements its product range in the infrastructure business area.
The Company expands its distribution network with a focus on
agriculture and irrigation.

Change of the primarily purchase price allocation of the
distribution business of Davydick & Co. Pty. Limited
acquired in the first quarter of 2013
The purchase price allocation was adjusted in the third quarter
of 2013 based on new information regarding facts and circum-
stances that existed as of the acquisition date. Had this infor-
mation been available at the time, it would have had an effect on
the allocation of the purchase price.

NORMA Group SE Annual Report 2013

171

The provisions relate to warranty provisions in the ordinary course
of business.

The revenue included in the consolidated statement of compre-
hensive income contributed by Davydick & Co. Pty. Limited was
EUR 3,246 thousand since 10 January 2013. Had Davydick &
Co. Pty. Limited been consolidated from 1 January 2013, the
consolidated statement of comprehensive income would show
revenue of EUR 3,417 thousand. NORMA Group acquired the
distribution business of Davydick & Co. Pty., therefore no profit
can be shown for this period.

Variant S.A.
Effective 3 June 2013, NORMA Group acquired the distribution
business for joining technology of Variant S.A. in Poland. Variant
S.A. has been a reliable distribution partner of NORMA Group
for more than 20 years. Variant is headquartered in Krakow, Po-
land, approximately 60 kilometres away from our production site
in Pilica. The Company is one of the leading distributors of joining
products and cable ties in Poland selling to over 1,000 retailers
and wholesalers across the country. End clients include home
improvement stores, garages and specialist retailers for auto-
motive supplies. By acquiring Variant, we will not only obtain a
valuable client base, but also expand our cable tie business. The
skilled team will support us in strengthening NORMA Group’s
market position in the Eastern European region and in catering
for our local clients’ needs even better.

Change of the primarily purchase price allocation of the
distribution business of Variant S.A. acquired in the second
quarter of 2013
The purchase price allocation was adjusted in the third quarter
of 2013 based on new information regarding facts and circum-
stances that existed as of the acquisition date. Had this infor-
mation been available at the time, it would have had an effect on
the allocation of the purchase price.

The following table summarises the consideration paid for Variant
and the amounts of the assets acquired and liabilities assumed
recognised at 30 September 2013 based on information at the
end of the measurement period:

The following table summarises the consideration paid for
Davydick & Co. Pty Limited and the amounts of the assets ac-
quired and liabilities assumed recognised as at 30 September
2013 based on information at the end of the measurement period:

Initial
purchase
price
allocation

Corrections
within the
evaluation
period

Adjusted
purchase
price
allocation

2,686

in EUR thousands

Consideration
at 10 January 2013

Acquisition-related costs
(included in other operating
expenses in the consolidated
statement of comprehensive
income)

Recognised amounts of
identifiable assets acquired
and liabilities assumed

Property, plant and
equipment

Customer lists

Inventory

Trade and other receivables

Trade payables

Provisions

Deferred tax assest

Deferred tax liabilities

499

564

1,273

602

– 213

– 44

– 202

– 107

– 86

119

– 169

– 446

446

499

564

1,071

602

– 320

– 130

119

– 169

2,235

451

2,686

Total identifiable net assets

2,681

Goodwill

2,686

Goodwill of EUR 451 thousand derives from the acquisition which
relates to the strengthening of our market position in the agri-
culture, hardware and plumbing markets.

None of the goodwill recognised is expected to be deductible for
tax purposes.

Of the consideration of EUR 2,686 thousand, EUR 2,401 thou-
sand were paid in cash and EUR 285 thousand consist of incurred
liabilities.

The fair value of trade and other receivables is EUR 602 thousand
and includes trade receivables with a fair value of EUR 558 thou-
sand. There were no write-downs of acquired trade receivables.

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

172

in EUR thousands

Consideration
at 3 June 2013

Acquisition-related costs
(included in other operating
expenses in the consolidated
statement of comprehensive
income)

Recognised amounts of
identifiable assets acquired
and liabilities assumed

Property, plant and
equipment

Customer lists

Licences, rights

Inventory

Provisions

Deferred tax assets

Deferred tax liabilities

Total identifiable net assets

Goodwill

Initial
purchase
price
allocation

Corrections
within the
evaluation
period

Adjusted
purchase
price
allocation

3,971

2,863

211

629

– 11

– 584

3,152

819

3,971

– 16

584

567

– 567

2,863

211

629

– 11

3,719

252

3,971

Goodwill of EUR 252 thousand derives from the acquisition which
relates to the strengthening of our market position in the Eastern
European region, the extended product range especially in the
cable tie business as well as the expansion of the client base.

The goodwill recognised is expected to be deductible for tax
purposes.

revenue of EUR 2,149 thousand. NORMA Group acquired the
distribution business of Variant S.A., therefore profit cannot be
shown for this period.

Guyco Pty Limited
NORMA Group signed an agreement on 20 June 2013 to acquire
100 % of the shares in the Australian business Guyco Pty Limited.
Guyco Pty Limited, headquartered in Adelaide, commenced
business in 1994 as a distributor to the agricultural market. Today,
the Company specialises in the design, manufacture and distri-
bution of fittings and valves for freshwater distribution, irrigation,
agricultural, plumbing and industrial market sectors. Guyco Pty
Limited supplies over 700 customers in Australia and New Zea-
land through its warehouses in South Australia, Western Aus tralia
and Queensland. It employs 32 employees and generated sales
of around EUR 7 million in 2012.

Goodwill of EUR 980 thousand derives from the acquisition which
mainly relates to the extended product range of the fittings and
valves for freshwater distribution, irrigation, agricultural, plumbing
and industrial market sectors and the strengthening of NORMA
Group’s presence in the Asia-Pacific region.

None of the goodwill recognised is expected to be deductible for
tax purposes.

Of the consideration of EUR 5,274 thousand, EUR 3,900 thou-
sand were paid in cash and EUR 1,374 thousand consist of
incurred liabilities.

The incurred liabilities consist entirely of a contingent consider-
ation agreement according to IFRS 3.39. Under the contingent
consideration agreement, NORMA Group is obligated to pay a
specific amount depending on Guyco Pty Limited’s gross profit
between 1 July 2013 and 30 June 2014.

Of the consideration of EUR 3,971 thousand, EUR 3,971 thousand
were paid in cash.

The potential not discounted future amount resulting out of the
contingent consideration is between EUR 0 thousand and EUR
1,299 thousand.

The provisions related to warranty provisions in the ordinary
course of business.

The revenue included in the consolidated statement of compre-
hensive income contributed by Variant S.A. was EUR 1,183 thou-
sand since 3 June 2013. Variant S.A. also contributed a loss of
EUR – 103 thousand over the same period.

Based on the financial forecast of the Company, the Group ex-
pects that the contingent consideration will be at the upper end
of the bandwidth. This leads to a fair value in the amount of EUR
1,249 thousand at the acquisition date, considering a discount
rate of 4 %.

Had Variant S.A. been consolidated from 1 January 2013, the
consolidated statement of comprehensive income would show

The following table summarises the consideration paid for Guyco
Pty Limited and the amounts of the assets acquired and liabilities
assumed recognised at the acquisition date:

NORMA Group SE Annual Report 2013

173

in EUR thousands

Consideration at 2 July 2013

Acquisition-related costs
(included in other operating expenses in the
consolidated statement of comprehensive income)

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

Other financial assets

Trade payables

Provisions

Deferred tax assets

Deferred tax liabilities

Total identifiable net assets

Goodwill

would have contributed a loss of EUR 259 thousand. This result
has only limited relevance, as it includes interest expenses from
financial liabilities that were not acquired.

Production expanding in Brazil
Effective 18 September 2013, NORMA Group signed the pur-
chase agreement for the acquisition of machinery, tools and
equipment and intangible assets, which represents a portion of
the production of Click Automotiva Industrial Ltda. The acquisition
is accounted for as a business combination applying IFRS 3.4.
NORMA Group contributed to establishing its own products and
customer relationships in Brazil by way of this contract. The acqui-
sition of machinery and tools is complemented by a contractual
prohibition of competition for a limited period.

Of the consideration of EUR 4,887 thousand, EUR 3,707 thou-
sand were paid in cash and EUR 1,180 thousand consist of
incurred liabilities.

The consideration was fully allocated on the total identifiable net
assets. The following table summarises the consideration paid
for a portion of the production of Click Automotiva Industrial Ltda.
and the amounts of the assets acquired and liabilities assumed
recognised at the acquisition date:

5,274

309

109

2,076

1,948

716

846

145

– 737

– 400

124

– 606

4,294

980

5,274

The fair value of trade and other receivables is EUR 846 thousand
and includes trade receivables with a fair value of EUR 835 thou-
sand, of which EUR 10 thousand are expected to be uncollectible.

Due to the acquisition of the distribution business of Guyco Pty
Limited on 2 July 2013, the determination of the fair values of the
acquired assets at the balance sheet date could not be com-
pleted. The consolidation is therefore based on a preliminary
purchase price allocation. This concerns in particular the fair
value of the acquired identifiable intangible assets in the amount
of EUR 2,023 thousand; this position mainly includes customer
relationships.

The provisions mainly consist of personnel-related provisions.

The revenue included in the consolidated statement of compre-
hensive income contributed by Guyco Pty Limited was EUR 3,632
thousand since 2 July 2013 (acquisition date). Guyco Pty Limited
also contributed a loss of EUR 8 thousand over the same period.

Had Guyco Pty Limited been consolidated from 1 January 2013,
the consolidated statement of comprehensive income would
show revenue of EUR 6,729 thousand and Guyco Pty Limited

in EUR thousands

Consideration at 18 September 2013

Acquisition-related costs
(included in other operating expenses in the
consolidated statement of comprehensive income)

Recognised amounts of identifiable assets
acquired and liabilities assumed

Property, plant and equipment

Non-compete agreement

Patents and technology

Provisions

Deferred tax assets

Total identifiable net assets

4,887

427

3,446

506

1,120

– 281

4,887

Due to the acquisition of a portion of the production of Click
Automotiva Industrial Ltda. on 18 September 2013, the determi-
nation of the fair values of the acquired assets at the balance
sheet date could not be completed. The consolidation is therefore
based on a preliminary purchase price allocation. This concerns
in particular the fair value of the acquired identifiable intangible
assets in the amount of EUR 1,626 thousand; this item includes

Consolidated Financial StatementsNotes to the Consolidated Financial Statements

174

mainly a non-compete agreement as well as patented and un-
patented technologies.

The provisions relate to unfavorable contractual relationships.

Fees for the auditor
Fees for the auditor, PricewaterhouseCoopers AG Wirtschafts-
prüfungsgesellschaft, Frankfurt am Main were expensed as fol-
lows:

NORMA Group acquired a portion of the production of Click
Automotiva Industrial Ltda., which led to individual assets and
processes being transferred to NORMA Group; therefore no profit
can be shown for this period.

in EUR thousands

Audit fees

Audit-related fees

Other fees

2013

356

111

485

41. REL ATED -PART Y TR ANSACTIONS

Sales and purchases of goods and services
In 2013 and 2012, no management services were bought from
related parties.

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 par-
ties in 2013 and 2012.

Details regarding the compensation of the Management Board
can be found on pages 107 to 109 and Notes 28 and 42.

Reimbursement claim to 3i funds
Costs for the Operational Performance Incentive Cash Pro-
gramme (OPICP) were reimbursed by the previous shareholders;
in 2013 the last part of the costs for the OPICP in the amount of
EUR 1,067 thousand was paid by the previous shareholders and
recognised in the capital reserve in accordance with the agree-
ment (

Note 27).

42. ADDITIONAL DISCLOSURES PURSUANT TO

SECTION 315A (1) OF THE GERMAN COMMERCIAL

CODE (HGB)

Compensation of board members
The remuneration of Management Board and Supervisory Board
of NORMA Group GmbH for the period 2013 was as follows:

in EUR thousands

Total Management Board

Total Supervisory Board

2013

3,923

450

4,373

Headcount
The average headcount breaks down as follows:

Number

Direct labour

Indirect labour

Salaried

2013

1,833

931

1,181

3,945

The category ‘direct labour’ consists of employees that are
directly engaged in the production process. The numbers fluc-
tuate according to the level of output. The category ‘indirect
labour’ consists of personnel that do not directly produce prod-
ucts, 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 Note 4.

Proposal for the distribution of earnings The Management Board
proposes that a dividend of EUR 0.70 be paid as a dividend per
bearer of shares, leading to a total dividend payment of EUR
22,303,680.

Corporate governance (Section 161 AktG)
The Management Board and Supervisory Board have issued a
corporate 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.

2012

393

400

2012

1,705

858

1,014

3,577

NORMA Group SE Annual Report 2013

175

43. EVENTS AFTER THE BAL ANCE SHEET DATE

Unscheduled repayment of syndicated bank facilities
In January 2014, NORMA Group has repaid parts of the existing
syndicated financing with the proceeds of the promissory notes.
The repayment amounted to EUR 101.4 million. Due to the re-
payment NORMA Group will in future benefit from lower interest
expense that will already have a positive effect on the result in
the first quarter of 2014. The associated hedging instruments
(cross-currency and interest rate swaps) were dissolved at the
time of repayment. These releases will have a one-off negative
effect on the first quarter in the amount of EUR 6.8 million. The
savings that will result from lower interest expenses starting in
January 2014 will already compensate for roughly half of the
one-off expenditures during the current year. By the end of the
financing term, NORMA Group will have saved more than EUR
3.6 million by repaying this loan and cancelling the derivative.
Including the early termination of deferred financing costs, we
expect for 2014 overall financing costs of approximately EUR 18
million, which are reduced in the following year on a comparable
basis to approximately EUR 10 million.

Acquisition of the outstanding shares of
Chien Jin Plastic Sdn. Bhd.
In February 2013, NORMA Group has acquired the remaining
15 % of the shares in Chien Jin Plastic Sdn. Bhd. located in Malay-
sia, by redemption of the outstanding purchase price liability in
an amount of EUR 0.9 million. This transaction brings NORMA
Group’s share in the Company to 100 %. Since we have already
fully consolidated Chien Jin Plastic from the acquisition in No-
vember 2012 on, there are no effects on the Group’s financial
figures. Chien Jin Plastic Sdn. Bhd. is based in Ipohis specialised
in joining elements for plastic and iron pipe systems. Chien Jin
Plastic manufactures joining solutions for plastic and cast iron
pipe systems used in diverse applications with a focus on drink-
ing and domestic water supply as well as irrigation systems.
Being in the market for 20 years, Chien Jin Plastic manufactures
pipe couplings 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. For more infor-
mation, please refer to our Annual Report 2012. The acquisition
of outstanding shares of Chien Jin Plastic goes in line with stra-
tegic aim to expand our presence in Asia.

Consolidated Financial StatementsNotes to the Consolidated Financial Statements176

Appendix to the Notes to the
Consolidated Financial Statements

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.

The following sheet gives an overview of all voting rights that have
been notified to the company as of 12 March 2014. It contains
the information of the last notification of each shareholder and
the percentage and shares can have changed in the meantime.

Notifying party

The Capital Group, Inc.,
Los Angeles, USA

Capital Research and Management Company,
Los Angeles, USA

Threadneedle Asset Management Holdings SARL,
Luxembourg 1)

BlackRock Financial Management, Inc.,
New York, USA

BlackRock Holdco 2, Inc.,
Wilmington, USA

BlackRock, Inc.,
New York, USA

Allianz Global Investors Europe GmbH,
Frankfurt/Main, Germany

ODDO et Cie.,
Paris, France

ODDO Asset Management,
Paris, France

Threadneedle Asset Management Holdings Limited,
London, United Kingdom 1)

Threadneedle Asset Management Limited,
London, United Kingdom 1)

Achievement
of voting rights

Notification limit

Share
in %

Pursuant to section 22 WpHG

7 March 2014

3 % exceedance

3.05

973,100

§ 22 (1) sent. 1 no. 6 in connection
with sent. 2 and sent. 3 WpHG

7 March 2014

3 % exceedance

3.05

973,100

§ 22 (1) sent. 1 no. 6 WpHG

12 February 2014

5 % shortfall

4.98 1,585,678

21 January 2014

5 % exceedance

5.10 1,626,217

21 January 2014

5 % exceedance

5.10 1,626,217

21 January 2014

5 % exceedance

5.10 1,626,217

21 January 2014

5 % exceedance

5.02 1,601,001

6 December 2013

3 % shortfall

2.84

903,541

§ 22 (1) sent. 1 no. 6
in connection with sent. 2 WpHG

thereof 0.50 % (157,764) accord-
ing to § 22 (1) sent. 1 no. 6 WpHG

§ 22 (1) sent. 1 no. 6
in connection with sent. 2 WpHG

6 December 2013

3 % shortfall

2.84

903,541

§ 22 (1) sent. 1 no. 6 WpHG

19 November 2013

5 % shortfall

4.95 1,576,817

§ 22 (1) sent. 1 no. 6
in connection with sent. 2 WpHG

19 November 2013

5 % shortfall

4.95 1,576,817

§ 22 (1) sent. 1 no. 6 WpHG

BNP Paribas Investment Partners S.A.,
Paris, France

Threadneedle Investment Funds ICVC,
London, United Kingdom

Threadneedle Investment Services Limited,
London, United Kingdom 1)

5 November 2013

3 % shortfall

2.86

912,398

17 October 2013

5 % shortfall

4.94 1,575,121

thereof 2.12 % (676,754) accord-
ing to § 22 (1) sent. 1 no. 1 WpHG
and likewise 0.74 % (235,644) ac-
cording to § 22 (1) sent. 1 no. 6 in
connection with sent. 2 WpHG

17 October 2013

5 % shortfall

4.94 1,575,121

§ 22 (1) sent. 1 no. 6 WpHG

1) The voting rights attributed to the notifying party are held by the following shareholder which share in the voting rights in NORMA Group SE exceeds 3 % or more:

Threadneedle Investment Funds ICVC

NORMA Group SE Annual Report 2013

Appendix to the Notes to the Consolidated Financial Statements

177

Notifying party

BlackRock Group Limited,
London, United Kingdom

BR Jersey International Holdings, L.P.,
St. Helier, Jersey, Channel Islands

BlackRock International Holdings, Inc.,
New York, USA

BlackRock Advisors Holdings, Inc.,
New York, USA

DWS Investment GmbH,
Frankfurt am Main, Germany

Ameriprise Financial Inc.,
Minneapolis, USA 1)

Columbia Wanger Asset Management LLC,
Chicago, USA

3i EF4 GP Limited,
London, United Kingdom

3i Group Investments LP,
London, United Kingdom

Achievement
of voting rights

Notification limit

Share
in %

Pursuant to section 22 WpHG

2 August 2013

3 % exceedance

3.02

961,863

2 August 2013

3 % exceedance

3.02

962,003

2 August 2013

3 % exceedance

3.02

962,003

2 August 2013

3 % exceedance

3.02

962,003

§ 22 (1) sent. 1 no. 6
in connection with sent. 2 WpHG

24 July 2013

3 % shortfall

2.98

949,650

9 May 2013

10 % shortfall

9.96 3,172,259

§ 22 (1) sent. 1 no. 6
in connection with sent. 2 WpHG

20 March 2013

3 % shortfall

2.82

897,250

§ 22 (1) sent. 1 no. 6 WpHG

14 January 2013

5 % and 3 % shortfall

0.00

14 January 2013

3 % shortfall

0.00

3i Pan European Buyouts 2004–06 LP;
London, United Kingdom

14 January 2013

3 % shortfall

0.00

3i Investments GP Limited,
London, United Kingdom

3i Investments plc,
London, United Kingdom

3i plc,
London, United Kingdom

3i Holdings plc,
London, United Kingdom

3i Group plc,
London, United Kingdom

14 January 2013

5 % and 3 % shortfall

0.00

14 January 2013

15 %, 10 %, 5 % and
3 % shortfall

0.00

1) The voting rights attributed to the notifying party are held by the following shareholder which share in the voting rights in NORMA Group SE exceeds 3 % or more:

Threadneedle Investment Funds ICVC

All notifications of voting rights by the company in the reporting
period and until 12 March 2014 are available on the website of
NORMA Group (@ http://investoren.normagroup.com).

Consolidated Financial Statements

178

MEMBERS OF THE MANAGEMENT BOARD

MEMBERS OF THE SUPERVISORY BOARD

Werner Deggim
Diplom-Ingenieur, Chief Executive Officer (CEO)

Dr. Stefan Wolf (Chairman)

Chief Executive Officer (CEO) of ElringKlinger AG,

Dr. Othmar Belker
Diplom-Volkswirt, Chief Financial Officer (CFO)

Bernd Kleinhens
Diplom-Ingenieur, Managing Director Business Development

Dettingen, Germany

Member of the Supervisory Board of Fielmann AG,

Hamburg, Germany

Member of the Board of Directors of Micronas
Semiconductor Holding AG, Zurich, Switzerland

Lars M. Berg (Deputy Chairman)

John Stephenson
Master of Science, Chief Operating Officer (COO)

Consultant
Chairman of the Supervisory Board of Net Insight AB,

The members of the Management Board are
appointed members of various Supervisory Boards
of NORMA Group companies.

Stockholm, Sweden

Chairman of the Supervisory Board of KPN OnePhone

Holding B.V., Duesseldorf, 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, Germany

Chairman of the Advisory Board of GIF GmbH,

Alsdorf, Germany

Knut J. Michelberger

Consultant (no seats on other Supervisory Boards)

Dr. Christoph Schug

Consultant
Member of the Supervisory Board of Tom Tailor Holding AG,

Hamburg, Germany

Member of the Supervisory Board of

BCG Baden-Baden-Cosmetics AG, Baden-Baden, Germany

Member of the Board of Directors of AMEOS Gruppe AG,

Zurich, Switzerland

Erika Schulte (since 18 February 2013)

Managing Director of Hanau Wirtschaftsförderung GmbH,

Managing Director of Brüder-Grimm-Berufsakademie Hanau
GmbH and Liquidator of Technologie- und Gründerzentrum
Hanau GmbH (no seats on other Supervisory Boards)

NORMA Group SE Annual Report 2013Responsibility Statement

179

Responsibility Statement

To the best of our knowledge, and in accordance with the applicable reporting principles, the consoli-
dated 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 development
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, 12 March 2013

NORMA Group SE
Management Board

Werner Deggim

Dr. Othmar Belker

Bernd Kleinhens

John Stephenson

Consolidated Financial Statements180

Auditor’s Report

We have audited the consolidated financial statements prepared by NORMA Group SE, Maintal, com-
prising the statement of financial position, the statement of comprehensive income, the statement of
changes in equity, the 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 2013 to December
31 2013. 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
commercial law pursuant to § (Article) 315a Abs. (paragraph) 1 HGB (“Handelsgesetzbuch”: German
Commercial Code) is the responsibility of the parent Company’s Board of Managing Directors. Our
responsibility 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 12 2014

PricewaterhouseCoopers
Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft

Dr. Ulrich Störk
Wirtschaftsprüfer
(German Public Auditor)

ppa. Benjamin Hessel
Wirtschaftsprüfer Glossar
(German Public Auditor)

NORMA Group SE Annual Report 2013181

Glossary

Technical Terms

AFTERMARKET SEGMENT
The market concerned with the maintenance /repair of investment
goods (e. g. machines), long-life final goods (e. g. vehicles), 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.

EUROPEAN MARKET INFR ASTRUCTURE REGUL ATION

(EMIR)
EU regulation that regulates the over-the-counter market with
derivative products. The main stipulation of this regulation obli-
gates market participants to clear their over-the-counter standard
derivative transactions through a central counterpart and report
these transactions to a transaction registry.

AIAG (AUTOMOTIVE INDUSTRY ACTION GROUP)
Not-for-profit association that develops and publishes uniform
standards for the automotive industry.

AUSTENITIC STEELS
Austenitic steel is a stainless steel that normally contains an alloy
of 15–20 % chromium and 5–15 % nickel. Other alloy components
can have an impact on these figures. Austenitic steels cannot
be hardened by way of heat treatment and are usually not mag-
netisable.

CAQ-SOFT WARE
Software for quality assurance.

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 plastics
can deform under tensile load or compressive load, but then
return to their original undeformed shape.

ENGINEERED JOINING TECHNOLOGY (EJT )
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.

FERRITIC STEELS
Ferritic chromium steel is a stainless steel that normally cannot
be hardened. It is magnetisable and is used in environments that
contain little or no chloride.

FLUID PRODUCTS / SYSTEMS
Single or multiple-layer thermoplastic fluid systems /connections.

FSC-CERTIFICATE
International label for wood and wood products that originate
exclusively from sustainably managed forests.

HYBRID VEHICLE
A vehicle that contains at least two types of energy transformers
and two energy storage systems that allow it to drive forward.
The energy transformers can be electric, petrol or diesel engines.
The energy storage systems are usually accumulators, fuel or
petrol tanks.

INDUCTION
Generation of an electric current in a conductor using varying
magnetic fields.

INSOURCING
The reincorporation of processes and functions into a company.

ISO 9001
Describes the minimum requirements for quality management
systems.

Further InformationGlossary
182

ISO 14001
An international environmental management standard that speci-
fies the internationally accepted requirements for an en vironmental
management system.

SIX SIGMA
A management system for process improvement using analytic
and statistical methods.

ISO / TS 16949
A standard that combines the existing general demands on qual-
ity management systems of the (mostly North American and
European) automotive industry.

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 leakage rate.

SUPPLY CHAIN MANAGEMENT
Supply chain management is the planning and management of
all activities involved in supplier selection, procurement and con-
version, as well as manufacturing, logistics and even sales.

THERMOPL ASTICS (ALSO KNOWN AS PL ASTOMERS)
These are plastics which become elastic (thermoplastic) in a par-
ticular temperature range, whereby this process is reversible.

Other Terms

ACQUISITION
Acquisition of companies or parts of companies for strategic
purposes.

NITROGEN OXIDE
Nitrogen oxide is the generic term for oxygen and nitrogen com-
pounds. These are gaseous compounds with low solubility in
water. Nitrogen oxides are hazardous for people and the envi-
ronment and are a waste gas produced by combustion engines.

BEST L ANDED COST APPROACH
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.

OHSAS 18001
Occupational Health and Safety Assessment Series; certification
of occupational health and safety management systems.

BEST PR ACTICE APPROACH
This term comes from Anglo-American economics and refers to
proven, good or exemplary methods, practices or procedures
within a company.

ORIGINAL EQUIPMENT MANUFACTURER (OEM)
A company that retails products under its own name.

PA12 RESINS
Polyamide 12 resin (laurinlactam or -aminododecanoic acid)

BRIC STATES
An acronym that refers to the emerging markets of Brazil, Russia,
India and China.

SELECTIVE CATALY TIC REDUCTION (SCR)
Selective catalytic reduction of nitrogen oxides to reduce particle
and nitrogen oxide emissions.

CASH-POOLING
Pooling of liquidity within the group with the help of central finan-
cial management with the purpose of balancing surplus liquidity
or a shortage of liquidity.

NORMA Group SE Annual Report 2013183

CODE OF CONDUCT
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 always obliged to com-
ply with the code of conduct. For this reason, you will often hear
the term “voluntary self-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.

COMMODIT Y
A term used in procurement concerning every kind of merchan-
dise for the tangible assets transcribed by tradesmen.

COMPLIANCE
Conforming to rules: companies adhering to codes of conduct,
laws and guidelines.

CORPOR ATE GOVERNANCE
Corporate governance is the set of all international and national
rules, regulations, values and principles which apply to com-
panies and determine how these companies are managed and
monitored.

COST OF MATERIALS R ATIO
Share of the costs of materials in sales revenues.

COVER AGE
The regular assessment of the economic and financial situation
of a listed company by banks or financial research institutions.

DODD FR ANK ACT
An American federal law with the objective of promoting the sta-
bility of the financial market in the United States of America.

EARNINGS BEFORE INTEREST, TA XES

AND AMORTISATION (EBITA)
Earnings before interest, taxes and amortisation of intangible
assets.

EARNINGS BEFORE INTEREST, TA XES, DEPRECIATION

AND AMORTISATION (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 SCALE
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.

EMEA
An Anglo-American abbreviation for the economic area of Europe
(made up of Western and Eastern Europe), the Middle East and
Africa.

ESS (EMPLOYEE SATISFACTION SURVEY )
Survey on employee satisfaction.

EURIBOR
Reference rate for time deposits in the interbank business (cur-
rency: EUR).

ISSUE PRICE
The first off-market purchase price of new securities determined
by the issuer.

FREE CASH FLOW
Indicates the amount of money that is available to pay dividends
to shareholders and / or repay loans.

GLOBAL EXCELLENCE PROGR AMME
A cost optimisation programme that was started in 2009. It co-
ordinates and manages all of NORMA Group’s sites and business
units.

INITIAL PUBLIC OFFERING (IPO)
First offering of shares of a company on the organised capital
market.

Further InformationGlossary184

INTERNATIONAL SECURITIES IDENTIFICATION NUMBER

(ISIN)
A 12-digit alphanumerical code used to identify a security traded
on the stock market.

and the issue price each multiplied by the number of shares
placed in the example of an issuance of shares.

PROLONGATION
Lifetime extensions of loans or financial investments.

INVESTMENT R ATIO
Share of the investments made in total assets.

LTI (LONG-TERM INCENTIVE PROGR AMME)
A form of profit-sharing to create long term performance incen-
tives, usually offered to those who hold management positions.

MDA X
(Derived from Mid-Cap DA X) The MDA X was introduced on 19
January 1996. It is made up of 50 securities – primarily from
traditional sectors – that track the values of the DA X in the rank-
ing list based on market capitalisation and level of trading on the
stock exchange. The MDA X reflects the price performance of
shares in medium-sized German companies or companies pri-
marily operating in Germany (Mid Caps).

MSP
Matching Stock Programme: a stock-based option right that is
part of the remuneration for Management Board members.

OECD

(ORGANISATION FOR ECONOMIC

CO-OPER ATION AND DEVELOPMENT )
Organisation for economic co-operation and development seeks
to contribute to successful economic development, high employ-
ment, and rising living standards in its member states.

REVERSE FACTORING
Reverse factoring or purchase factoring is where the factoring
company commits to its supplier to prefinance the customer’s
obligations.

ROADSHOW
A series of corporate presentations made to investors by an issuer
at various financial locations to attract investment in the company.

SECURITIES ID NUMBER ( WKN)
A six-character combination of numbers and letters used to iden-
tify securities in Germany.

SOCIETAS EUROPAEA (SE)
A legal form for stock companies in the European Union and the
European Economic Area. With the SE, the EU started allowing
for companies to be founded in accordance with a largely uniform
legal framework at the end of 2004.

SYNERGIES
This term refers to organisms, materials or forces working
together to gain mutual benefits.

TA X R ATIO
Share of taxes payable in annual earnings.

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,
TecDA X and SDA X must be included in the Prime Standard.

WORKING CAPITAL
Represents the net current assets of a company. Working capital
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 liquidity situation
of a company and are particularly important for credit analyses.

PROCEEDS OF THE ISSUE
The total capital the issuer benefits from in case of an issuance
of securities. The proceeds of issue consist of the nominal value

XETR A
An electronic trading system operated by Deutsche Börse AG for
the spot market.

NORMA Group SE Annual Report 2013Overview by Quarter 2013

185

Overview by Quarter 2013

Income statement

Revenue

Gross profit

Adjusted EBITA

Adjusted EBITA margin

EBITA

Adjusted profit for the period

Adjusted EPS

Profit for the period

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 2013

Q2 2013

Q3 2013

Q4 2013

159.3

163.5

159.9

152.8

91.0

28.3

17.8

28.3

17.3

0.54

15.8

0.50

9.8

7.6

– 6.4

1.6

720.3

305.6

42.4

200.3

94.6

27.9

17.1

27.8

16.1

0.51

14.7

0.46

35.1

38.3

– 9.5

– 39.5

701.8

298.1

42.5

193.6

93.0

28.8

18.0

28.7

13.8

0.43

12.5

0.39

27.8

26.9

– 11.9

108.2

826.2

308.9

37.4

181.0

92.8

27.6

18.0

27.3

14.9

0.47

12.6

0.40

42.7

31.1

– 15. 6

– 18.5

823.7

319.9

38.8

153.5

EUR million

EUR

EUR million

EUR

EUR million

Further Information

186

Multi-Year Overview

Order situation

Order book (31 Dec)

Income Statement

Revenue

thereof EMEA

thereof Americas

thereof Asia-Pacific

Revenue EJT

Revenue DS

Gross profit 2)

Adjusted EBITA 3)

Adjusted EBITA margin

EBITA

Adjusted profit for the period

Profit for the period

Adjusted EPS

Adjusted EPS (number of shares at year-end 2013)

EPS

Finanical result

Tax rate 4)

R&D investments

R&D ratio (related to EJT sales)

Cost of materials

Cost of materials ratio

Personnel expenses 5)

Cash flow

Cash flow from operating activities

Operating net cash flow5)

Cash flow from investing activities 6)

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

Number of shares (weighted)

Number of shares (year-end)

2013

2012 1)

2011

2010

2009

2008

EUR million

236.7

215.4

218.6

188.0

n /a

EUR million

EUR

EUR million

635.5

388.0

191.5

56.0

443.9

193.6

371.4

112.6

17.7

112.1

62.1

55.6

1.95

1.74

– 15.6

32.6

– 21.9

4.9

– 269.4

42.4

– 169.7

115.4

103.9

– 43.4

51.7

823.7

319.9

38.8

153.5

110.8

17.4

4,134

4,947

604.6

367.5

193.3

43.8

427.6

174.5

344.4

105.4

17.4

105.1

61.8

56.6

1.94

1.78

– 13.2

30.3

– 22.1

5.1

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

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

96.1

81.0

– 58.1

– 34.1

691.8

289.2

41.8

199.0

115.9

19.2

3,759

4,485

71.7

66.8

– 33.7

– 0.5

648.6

256.0

39.5

198.5

106.2

18.3

3,415

4,252

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 31,862,400 30,002,126 24,862,400

31,862,400 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

457.6

349.0

92.4

16.2

n /a

251.4

64.4

14.1

44.7

n /a

– 18.0

– 29.4

n /a

– 21.3

13.1

n /a

– 45.2

15.2

n /a

42.0

62.3

– 10.8

– 33.2

469.7

39.1

8.3

317.2

60.2

18.3

n /a

64.1

67.2

– 16.4

– 40.0

499.7

60.1

12.0

328.8

84.7

18.5

n /a

– 263.5

– 262.3

– 220.5

– 144.0

43.6

45.1

45.0

43.7

– 156.5

– 143.7

– 124.4

– 111.3

– 128.6

1) 2012: The accounting rules changed this year 2013 due to the first-time use of

3) Adjusted by non-recurring / non-period-related costs (mainly due to the IPO), restruc-

IAS 19R. In order to better compare the earnings, assets and financial positions,
the figures in this annual report that pertain to 2012 have been adjusted to suit
the new accounting rules and may therefore deviate from the figures published in
the annual report 2012.

2) Revenues including changes in inventories of finished goods and work in progress

less raw materials and consumables used

turing costs as well as other group and normalised items as well as depreciation from
PPA adjustment

4) Tax rate adjusted in 2011 by deferred tax liabilties of EUR 2,795 thousand resulting

from 2007

5) From 2008 to 2011 adjusted for non-recurring, non-period-related costs
6) Including acquisitions in 2010, 2012 and 2013

NORMA Group SE Annual Report 2013

NORMA Group worldwide

EME A

Czech Republic (P)
France (P, D)
Germany (P, D)
Italy (P, D)
Netherlands (D)
Poland (P, D)
Russia (P, D)
Serbia (P)
Spain (D)
Sweden (P, D)
Switzerland (D)
Turkey (D)
United Kingdom (P, D)

AMERICAS

Brazil (P, D)
Mexico (P)
USA (P, D)

ASIA-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)

e
d
w
d

l
r
o
w
p
u
o
r

G
A
M
R
O
N

SALES AMERICAS

Employees: 711
Sales growth: – 0.9 %

P = Production
D = Distribution centre, Sales

centre, Competence centre

2012

2013

EUR
193.3
million

EUR
191.6
million

SALES EMEA

Employees: 2,820
Sales growth: + 5.6 %

2012

2013

EUR
367.5
million

EUR
387.9
million

SALES ASIA-PACIFIC

Employees: 603
Sales growth: + 28.1 %

2012

2013

EUR
43.8
million

EUR
56.0
million

Financial Calendar 2014

19 / 02 / 2014 Preliminary Financial Figures 2013

27 / 03 / 2014 Publication of Full Year Results 2013

07 / 05 / 2014 Publication of Q1 Interim Results 2014

21 / 05 / 2014 Annual General Meeting in Frankfurt / Main

06 / 08 / 2014 Publication of Q2 Interim Results 2014

05 / 11 / 2014 Publication of Q3 Interim Results 2014

We constantly update our financial calendar. Please visit the Investor Relations section
on our website @ 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:

E-Mail: ir@normagroup.com

Andreas Trösch
Vice President Investor Relations
Phone: + 49 6181 6102 741
Fax:
E-Mail: andreas.troesch@normagroup.com

+ 49 6181 6102 7641

EDITOR
NORMA Group SE
Edisonstrasse 4
63477 Maintal

Vanessa Mieschke
Senior Manager Investor Relations
Phone: + 49 6181 6102 742
Fax:
E-Mail: vanessa.mieschke@normagroup.com

+ 49 6181 6102 7642

Phone: + 49 6181 6102 740
E-Mail: info@normagroup.com
www.normagroup.com

CONCEPT AND 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 NORMA
Group SE 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 NORMA Group SE, including its financial position and profitability 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.

NORMA Group SE
Edisonstrasse 4
63477 Maintal

Phone: +49 6181 6102 740
E-Mail: info@normagroup.com
www.normagroup.com