NORMA

COMMENTARY TO FINANCIAL RESULTS



COMMENTARY TO Q1 Y2000 CONSOLIDATED FINANCIAL RESULTS



Sales and revenue



The Q1 Y2000 consolidated net sales of AS Norma totaled 151,6

million EEK, incl. parent company with 126,4 million EEK.

Consolidated sales increased by 21,4% (+25,7 million EEK) from

Q1 in 1999. Revenues made by AS Norma accounted for 84%, AS

Metaprint 12%, AS Norma Maja 1% and AS Tööriistavabrik 2,4%  of

the group’s total income. The group’s main fields of activity

include production and sales of safety belts, car components,

tin sheet lithography and real estate administration. Sales 

structure by regions has remained unchanged from the previous

periods. Exports accounted for 89% of sales revenue, whereas

69% of production was exported to the Eastern markets and 20% 

to the West.

The average number of employees during the Q1 was 1121 (parent

company 765).



Profit



The company’s consolidated net profit was 48,4 million EEK;

which is 14,8 million EEK more than Q1 in 1999. 

To achieve high profit margin, AS Norma has decreased operating 

expenses and changed output structure. The reduction of 

administrative and general expenses of the group by 21,8% in the 

first quarter of 2000 compared Q1 in 1999 is another important 

factor for the growth of profitability.

The  groups net profit rate margin was 31,9%.  In Q1  1999  net

profit rate margin was 26,8%.



Use of capital



Accounts receivable at the end of the Q1 total 121,8  million

EEK, of which 73% is receivables from the Eastern markets.

Compared to the standings of 31.12.99, the volume of  accounts

receivable has increased by 11,3 million EEK. The share of

accounts in arrears of total receivables is 47%. Provision

reserve formed of total Eastern market accounts receivables

(16,2 million EEK) and provision reserve decrease 2,8  million

EEK. Due to a significant increase in sales compared to Q1

1999, inventories fell 7,4% compared year’s end, inventories

of raw materials fell by 17%.

As of  the  end Q1 2000, the consolidated balance sheet size

amounted to 539,1 million EEK (50,3 million EEK growth), increasing 

mainly due to the increase in current assets (53,9 million  EEK). 

The total bank loans for AS Norma was 53,3 million EEK (EBRD).

The group’s owners’ equity has increased by 48,4 million EEK,

amounting to 433,7 million EEK (80,4% of balance sheet volume).

Return on equity by net profit (ROE) was 11,2%



Cash flow



Net cash and cash equivalents generated 49,8 million EEK. Cash

generated by operations increased from 53,9 million EEK. Capital 

expenditure amounted to 4,1 million EEK.



Investments



To support the existing production capacities and to assure the

efficiency of production processes AS Norma invested totally 5,7 

million, of which 1,4 million EEK in machinery and equipment.



Net income and earnings per share



Net income increased by 44% to 48,4 million EEK in Q1 2000 from

33,6 million EEK in Q1 1999.

According to the new Income Tax Law that took effect on 1 January 

2000, there are no more income tax.

Earnings per share were 3,67 EEK in Q1 2000 compared to 2,55 EEK 

in Q1 1999.





Peep Siimon

Chairman of the Board

6500-442