NORMA Group has unveiled the operational details of its NewNORMA strategy, setting financial ambitions through 2031 that include average annual currency-adjusted sales growth of 1 to 3%, an adjusted EBIT margin above 10%, and cash conversion exceeding 70%. The announcement, made at a Strategy Update in Frankfurt, signals a shift from portfolio restructuring to execution, as the company seeks to leverage its industrial base to improve competitiveness, profitability, and cash generation.
Central to the strategy is the realignment of two strategic business units: Mobility & New Energy and Industry Applications. Mobility & New Energy will focus on strengthening competitiveness, improving asset utilization, and ensuring resilient cash generation as the group's core business. Industry Applications will drive profitable growth by expanding into structurally attractive markets such as data centers, battery energy storage systems, heat pumps, and household appliances. Starting in 2027, NORMA Group will adopt an SBU-led operating model, giving each unit end-to-end responsibility for customers, pricing, growth, capacity utilization, and financial performance.
The strategy rests on three interconnected initiatives: Sales Push, Footprint, and Transformation. The Sales Push intensifies commercial execution and customer relationships, with Sales and Engineering collaborating more closely to win profitable business. Target costing is being used to define cost structures before contracts are awarded. Initial results are visible: in the first nine months of 2026, cumulative lifetime sales won in Mobility & New Energy increased by approximately 45% year-over-year. Footprint measures include consolidating manufacturing sites in China, concentrating production in Mexico, closing a distribution center in Australia, and planning the closure of the regional office in Singapore, while strengthening the Shared Service Center in Novi Sad, Serbia. In EMEA, where nine production sites operate below capacity, NORMA Group intends to consolidate production and make more targeted use of best-cost locations. These measures are expected to generate an additional annualized EBIT contribution of approximately EUR 20 to 30 million by 2031.
The Transformation program aims to reduce structural costs by simplifying the organization, standardizing and automating core processes, and strengthening performance management through clear financial KPIs. Combined with the footprint optimization, NORMA Group expects total additional annualized EBIT savings of approximately EUR 70 to 90 million by 2031 compared to fiscal year 2026. CFO Okan Celiker stated that the financial ambition is underpinned by clear operational measures already being implemented, combining volume growth, improved mix, higher capacity utilization, lower structural costs, and strict working capital discipline.
Capital allocation will prioritize a strong balance sheet, with a medium-term target of net debt to adjusted EBITDA of up to 1.5x. The company will focus on organic growth and productivity, allocating capital only where strategic fit and risk-adjusted returns meet value-creation criteria. A new dividend policy, starting in fiscal year 2027, targets a payout ratio of at least 10% of adjusted Group Net Income, subject to approval by the Annual General Meeting. This policy maintains a reliable base dividend while providing flexibility for growth investments and potential share buybacks. The full strategy presentation is available through the release on www.newmediawire.com.
The implications are significant for stakeholders. For investors, the explicit margin and cash conversion targets, coupled with the new dividend policy, provide a clearer roadmap for returns and capital discipline. For employees and operations, the footprint consolidation and transformation program imply structural changes, including site closures and organizational simplification, which may affect local workforces but are intended to secure long-term competitiveness. For customers, the SBU-led model promises faster decision-making and more focused support, while the expansion into new applications like data centers and energy storage positions NORMA Group to capitalize on megatrends. Overall, the strategy underscores NORMA Group's commitment to transforming its industrial foundation into a higher-performing, cash-generative business, with execution risk remaining the key variable to watch.
