Norma: Mispriced Auto Supplier with Major Capital Return Kicker

Nils Herzing of Shareholder Value Beteiligungen AG presented his investment thesis on Norma Group SE (Germany: NOEJ) at European Investing Summit 2025.

Thesis summary:

Norma Group is a German producer of mission-critical C-components, such as clamps and fasteners, for automotive and industrial applications. The company is widely perceived as an automotive supplier, a sector facing cyclical and structural headwinds. The core of the investment thesis is a valuation dislocation driven by the pending sale of its highly profitable NDS water management division. This divestiture, which was pushed by activist shareholder Teleios (21% owner) and is expected to close by early 2026, provides a large cash infusion and a clear catalyst for the re-rating of the remaining business.

The “new” Norma, post-divestiture, will consist of the Mobility and Industry Applications segments. The market is concerned about the Mobility segment’s exposure to the ICE-to-BEV transition, but Nils’s research indicates that BEV content per vehicle (CPV) is 50-90% that of an ICE vehicle, mitigating this risk. Current profitability is depressed, with the Mobility segment recently operating at a 2% EBITA margin. Nils argues this is temporary, resulting from one-off costs related to plant rationalization (extra freight, temporary labor) and legacy OEM contracts. The company is now implementing a “margin-before-volume” policy on new contracts, targeting >10% EBIT margins, while the Industry Applications segment already achieves >10% margins.

The NDS sale is expected to generate proceeds of 840 million EUR ($1 billion USD). This cash influx is the thesis’s primary driver. Management plans to first repay all outstanding debt. Following this, a massive capital return is planned, starting with a 10% share buyback. A subsequent special tender, which requires an AGM vote, will aim to repurchase at least an additional 30% of shares outstanding. Nils highlights this will reduce the total share count by a minimum of 40%, driving significant EPS accretion, alongside an expected dividend. A smaller portion of the proceeds is earmarked for M&A in the industrial fastener space.

The stock recently traded around 15.00 EUR. Nils views this as highly compelling, noting the market cap of ~450 million EUR is backed by >300 million EUR in cash that the company will hold post-debt-repayment but pre-buybacks, illustrating a protected downside. Nils presented a SOTP valuation that arrives at a fair value of 23.80 EUR per share. This SOTP values the remaining Mobility business at 6.0x EV/EBIT and the Industry business at 8.0x EV/EBIT, combined with the net proceeds from the NDS sale. Based on a conservative margin recovery path (to 8% EBITA by 2030) and the large-scale repurchases, Nils projects a 22% TSR.

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About the instructor:

Nils Herzing is an Executive at Shareholder Value Beteiligungen AG (SVB), a long-term oriented, publicly traded value investment vehicle. Prior to joining SVB, Nils was Partner and first employee at Active Ownership Capital (AOC). Before that, he was the manager of a Family Office located in Regensburg, Germany. In 2013, he graduated with a B.A. in Management, Philosophy & Art. In the same year he founded the Herzing Value Investment GmbH. Afterwards, he earned an MSc in Finance from the EBS Business School and EDHEC Business School during which he passed the first two levels of the CFA Program. Since 2016, he has been a CFA Charterholder. In 2017, Nils co-founded ForkOn GmbH, the first vendor neutral SaaS forklift fleet management solution. From 2018 until 2022, he has severed as a board member of the supervisory board of PBKM (Polski Bank Komórek Macierzystych) S.A. and Vita 34 AG.