NORMA Group share plummets: NORMA Group plans sales growth – no recovery in profitability – dividend will be reduced

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MAINTAL (dpa-AFX) – The adjusted profit margin before interest and taxes (EBIT) should reach around eight percent in the current year and thus the level of the previous year, as the company listed in the SDax small-cap index announced on Tuesday in Maintal. So far, analysts had on average almost one percentage point more on the slip. However, the management announced measures to improve. In terms of sales, on the other hand, NORMA Group is targeting organic growth in the mid-single-digit percentage range.

The stock came under a lot of pressure in the morning. Analyst Peter Rothenaicher from Baader Bank said that while the management is quite confident about the sales prospects, it seems cautious about the margin outlook due to further restructuring burdens. However, a repeated reduction of the targets in the course of the year should be avoided at all costs.

The papers fell in the morning as a distant tail in the SDax small-cap index at times in double digits. Most recently, the minus was just under seven percent to 22.40 euros. The price gains of up to around a third since mid-February are largely gone. At that time, the idea of ​​a takeover arose after the Bloomberg news agency reported that the company had turned down a number of offers in recent months. For 2023, however, there is still a plus of 31 percent on the price list, after the shares had lost around half their value in 2022.

NORMA had already announced sales and operating results for 2022 in February. While the company achieved sales growth of almost 14 percent, the adjusted EBIT margin fell by 2.4 percentage points. The bottom line was 39.2 million euros last year, after 56.1 million in the previous year. The dividend is to be reduced by 20 cents to EUR 0.55. Here, too, experts had hoped for at least a little more.

NORMA had positively surprised with the development in the final quarter. After the key data in February, analysts such as Christian Glowa from Hauck Aufhäuser Investment Banking said that business development had bottomed out and that prospects were brightening.

In 2022, high inflation with high energy prices, the ongoing effects of the Ukraine war and the corona lockdowns in China had weighed heavily. Expenditure on logistics and materials, as well as other operational costs such as IT, increased. In the middle of the year, the management then had to lower the annual targets.

At the end of August, the company also announced that CEO Michael Schneider would be leaving the Executive Board early at the end of 2022. Miguel Àngel López Borrego is currently managing the company on an interim basis, while his seat on the Supervisory Board is suspended.

Now the company wants to work on improving efficiency and thus profit margins. After the measures to stabilize margins, corresponding projects are to be implemented from 2023, as stated in an investor presentation on Tuesday. Details are to follow on May 9th when the results for the first quarter are presented.

The NORMA Group share is presented in XETRA trading at times with a massive discount of 8.40 percent at EUR 22.04. In the meantime, the minus had been more than 15 percent.

MAINTAL (dpa-AFX)

Image sources: Norma Group