Interim report January – September 2019: Favourable profitability development in all segments
Uponor Corporation Interim report 25 October 2019 08:00 EET
Interim report January – September 2019: Favourable profitability development in all segments
Uponor divested Uponor Infra’s North American business in August 2018 and Zent-Frenger (reported in Building Solutions – Europe segment) in October 2018. The financial information from the comparison period includes their figures.
July–September 2019
- Net sales were €292.4 (311.9) million, a decline of 6.2%. Organic growth was 1.6% in constant currency terms. Net sales for the comparison period without divested Uponor Infra’s North American business and Zent-Frenger would have been €285.6 million.
- The comparable operating profit was €31.3 (33.8) million, a decline of 7.5%. Comparable operating profit improved 12.3% from the comparison period without the divested Uponor Infra’s North American business and Zent-Frenger (2018: €27.9 million). Operating profit was €31.3 (44.6) million, a decline of 29.9%.
- Earnings per share were €0.26 (0.34).
January–September 2019
- Net sales were €833.9 (913.7) million, a decline of 8.7%. Organic growth was -0.2% in constant currency terms. Net sales for the comparison period without divested Uponor Infra’s North American business and Zent-Frenger would have been €827.6 million.
- The comparable operating profit was €70.9 (78.8) million. Comparable operating profit improved 11.5% from the comparison period without the divested Uponor Infra’s North American business and Zent-Frenger (2018: €63.6 million). Operating profit was €70.9 (89.6) million, a decline of 20.9%.
- Earnings per share were €0.54 (0.64).
- Cash flow from business operations was €47.4 (35.5) million.
- Return on investment was 15.1% (19.1%), and gearing 52.9 (42.2). Without the adoption of IFRS 16, return on investment would have been 15.6% and gearing would have been 41.5.
Organic growth refers to Uponor’s operations without the divested businesses.
Guidance statement for 2019:
Uponor repeats its full-year guidance announced on 13 February 2019: Excluding the impact of currencies, Uponor expects its net sales to reach the level of the year 2018 net sales excluding the divested Uponor Infra’s North American business and Zent-Frenger (€1,107.7 million), and comparable operating profit to improve from the year 2018 comparable operating profit excluding the divested Uponor Infra’s North American business and Zent-Frenger (€83.5 million).
Jyri Luomakoski, President and CEO, comments:
“We are satisfied that all our segments improved their profitability when measured by the current business portfolio, excluding the impacts of last year’s restructuring activities and divestments.
In Building Solutions – Europe, the production of the S-Press PLUS fitting, which was launched in the first quarter, is now at full speed and we do not expect to incur any abnormal costs related to production in the last quarter. Corrective measures to address operational challenges at the Virsbo manufacturing facility in Sweden are ongoing, but as anticipated in our half year report, more time is still needed to normalise the production. Of our key markets in Europe, net sales increased in Germany and Sweden, but declined slightly in Finland.
In Building Solutions – North America, both net sales and profitability developed positively. It seems that the construction market has stabilised after an uncertain first quarter, even though the construction volumes are lagging a bit behind those of 2018.
Uponor Infra’s net sales declined slightly as a result of the strategic decision to decrease the share of standard project sales and to invest in designed solutions sales. During the third quarter, profitability improvement was driven by Sweden.”
Key figures
| M€ | 7-9/ 2019 | 7-9/ 2018 | Change | 1-9/ 2019 | 1-9/ 2018 | Change | 1-9/ 2018*) | 1-12/2018 |
| Net sales | 292.4 | 311.9 | -6.2% | 833.9 | 913.7 | -8.7% | 827.6 | 1,196.3 |
| Building Solutions – Europe | 124.0 | 131.8 | -5.9% | 373.3 | 395.7 | -5.7% | 376.5 | 524.4 |
| Building Solutions – North America | 102.4 | 88.8 | +15.3% | 273.4 | 250.0 | +9.4% | 250.0 | 340.4 |
| Uponor Infra | 67.1 | 92.6 | -27.6% | 191.9 | 272.0 | -29.5% | 205.2 | 337.3 |
| Operating expenses | 248.2 | 269.1 | -7.8% | 725.6 | 807.1 | -10.1% | 1,063.6 | |
| Depreciation and impairments | 12.9 | 10.4 | 24.7% | 38.7 | 29.6 | 30.8% | 42.4 | |
| Other operating income | 0.0 | 12.3 | -99.8% | 1.2 | 12.6 | -90.5% | 16.4 | |
| Operating profit | 31.3 | 44.7 | -29.9% | 70.9 | 89.6 | -20.9% | 106.7 | |
| Building Solutions – Europe | 10.9 | 9.0 | +20.1% | 26.3 | 26.0 | +1.0% | 31.1 | |
| Building Solutions – North America | 16.8 | 13.9 | +20.5% | 38.1 | 32.9 | +15.8% | 46.6 | |
| Uponor Infra | 4.9 | 21.9 | -77.7% | 10.8 | 35.3 | -69.4% | 35.1 | |
| Comparable operating profit | 31.3 | 33.8 | -7.5% | 70.9 | 78.8 | -10.1% | 63.6 | 99.3 |
| Building Solutions – Europe | 10.9 | 10.4 | +4.4% | 26.3 | 27.4 | -3.9% | 26.7 | 35.4 |
| Building Solutions – North America | 16.8 | 13.9 | +20.5% | 38.1 | 32.9 | +15.8% | 32.9 | 46.6 |
| Uponor Infra | 4.9 | 9.7 | -49.7% | 10.8 | 23.1 | -53.2% | 8.5 | 23.4 |
| Financial income and expenses | -1.9 | -2.7 | -30.0% | -8.5 | -7.0 | 21.9% | -8.5 | |
| Profit before taxes | 28.3 | 41.4 | -31.5% | 59.3 | 79.0 | -24.9% | 93.5 | |
| Profit for the period | 20.5 | 30.0 | -31.4% | 43.0 | 56.5 | -23.9% | 63.2 | |
| Earnings per share | 0.26 | 0.34 | -23.7% | 0.54 | 0.64 | -14.8% | 0.72 |
*) Illustrative figures without divested Uponor Infra’s North American business and Zent-Frenger.
| M€ | 30 Sept 2019 | 30 Sept 2018 | Change | 31 Dec 2018 |
| Net working capital | 150.7 | 154.9 | -2.7% | 119.3 |
| Net-interest bearing debt | 190.5 | 156.7 | 21.6% | 139.2 |
| Solvency | 42.1 | 44.3 | -4.9% | 45.1 |
| Gearing | 52.9 | 42.2 | 25.6% | 39.4 |
| Return on investment | 15.1 | 19.1 | -20.6% | 17.2 |
Uponor divested Uponor Infra’s North American business in August 2018 and Zent-Frenger (reported in Building Solutions – Europe segment) in October 2018. The financial information from the comparison period includes their figures.
The impact of IFRS 16 adoption on Uponor's liabilities as of 1 January 2019 was €44.3 million, increasing the amount of lease liabilities, more detailed information on the impacts of IFRS 16 can found on page 15.
Webcast of the results briefing and the presentation
A webcast in English will be broadcast on 25 October at 10:00 EET. It can be viewed via the Uponor IR mobile app or /goodmood/uponor/interim-results-briefing-1-9-2019. The recorded webcast can be viewed via the same link or via the app shortly after the live presentation. All presentation materials will be available at investors.uponor.com > News & downloads.
For further information, please contact:
Jyri Luomakoski, President and CEO, tel. 4
Minna Yrjönmäki, CFO, tel. +358 20 129 2036
Susanna Inkinen, Vice President, Communications and Corporate Responsibility, tel. 1
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Uponor in brief
Uponor is a leading international systems and solutions provider for safe drinking water delivery, energy-efficient radiant heating and cooling and reliable infrastructure. The company serves a variety of building markets including residential, commercial, industrial and civil engineering. Uponor employs about 4,100 employees in 30 countries, mainly in Europe and North America. In 2018, Uponor's net sales totalled nearly €1.2 billion. Uponor is based in Finland and listed on Nasdaq Helsinki. Uponor builds on you -
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