Interim report January–March 2020: Strong first quarter for all segments
Uponor Corporation Stock exchange release 29 April 2020 12:30 EET
Interim report January–March 2020: Strong first quarter for all segments
January–March 2020
- Net sales in January–March totalled €277.4 (248.9) million, a growth of 11.5%. Organic growth was 11.2% in constant currency terms.
- Comparable operating profit was €29.5 (14.3) million, a growth of 106.2%.
- Operating profit was €28.6 (14.3) million, a growth of 99.9%.
- Earnings per share were €0.30 (0.10).
- Return on investment was 21.4% (8.0), and gearing 52.2% (72.8).
- Cash flow from business operations was €-11.3 (-31.6) million.
Guidance statement for 2020:
On 19 March 2020, Uponor withdrew its guidance for 2020 due to lack of visibility on the potential impacts of COVID-19 on comparable operating profit. Once visibility improves and the significant uncertainties have cleared, Uponor expects to update its outlook and issue a new guidance.
Jyri Luomakoski, President and CEO, comments:
“All our segments had a very strong performance during the first months of the year, even though the first COVID-19 restrictions started to be visible in the construction markets in the last weeks of March.
The Building Solutions – Europe’s net sales and operating profit improved from a somewhat soft comparison period. We had a good quarter in central Europe, in particular. In addition, continuous improvements at our Swedish manufacturing facility in Virsbo are yielding results and improving our operational performance together with the other manufacturing excellence initiatives we started last year.
Net sales and operating profit improved significantly in the Building Solutions – North America segment. The segment’s result was very strong both in sales volumes and profits, even in light of the weak comparison period. Profitability improvements were supported by operational leverage through volume growth, price increases and cost improvements e.g. in form of lower freight costs.
Uponor Infra also had a good start to the year with improved net sales and operating profit. Profitability improved mainly in Sweden and Poland. Volume growth driving this operational leverage was gained through growth in market share in standard project sales.
We have continued the planning of our operational excellence programme, which is estimated to reduce in total approximately 200 FTEs by the end of 2021. First initiatives related to reduce complexity, harmonise processes in order to create efficiencies and related collective bargaining consultations were started in April.
When the COVID-19 pandemic hit our key markets, our first priority was to protect the health and safety of our employees and other stakeholders. I am pleased to see how our teams have served our customers and kept our operations running uninterrupted while practising social distancing and all other local safety recommendations. During the first quarter, all months were strong for us from a demand perspective, even though March could have included some stock building of our products to secure availability. From the beginning of April, we have seen reduced daily order intake volumes in comparison to last year in most of our key markets, especially in the building solutions segments. Effects of countries and US states with a nearly complete lockdown has also been visible in order patterns.
Our strong performance in the first quarter combined with strong cash flow in 2019, creates us a solid financial position for the next phases of pandemic and its implications. Measures taken during the first quarter to increase our cash position with emission of commercial paper combined with our unutilised committed credit lines also give confidence on our resilience to a weaker market environment, which is likely given the macro economic impacts of the measures to slow down the spread of COVID-19. We have also started necessary adjustments to our operations to balance costs with weaker anticipated demand also beyond April.”
Key figures
| M€ | 1-3/ 2020 | 1-3/ 2019 | Change | 1-12/2019 |
| Net sales | 277.4 | 248.9 | +11.5% | 1,103.1 |
| Building Solutions – Europe | 128.8 | 123.5 | +4.3% | 489.3 |
| Building Solutions – North-America | 92.7 | 74.7 | +24.0% | 375.4 |
| Uponor Infra | 57.2 | 52.4 | +9.3% | 243.9 |
| Operating expenses | 235.5 | 222.7 | +5.7% | 961.3 |
| Depreciation and impairments | 13.4 | 12.4 | +8.0% | 51.8 |
| Other operating income | 0.1 | 0.5 | -88.9% | 1.3 |
| Operating profit | 28.6 | 14.3 | +99.9% | 91.3 |
| Building Solutions – Europe | 11.9 | 7.2 | +65.2% | 31.6 |
| Building Solutions – North-America | 16.8 | 7.5 | +123.8% | 57.1 |
| Uponor Infra | 1.7 | 0.6 | +190.6% | 10.8 |
| Comparable operating profit | 29.5 | 14.3 | +106.2% | 92.7 |
| Building Solutions – Europe | 12.8 | 7.2 | +76.5% | 32.3 |
| Building Solutions – North-America | 16.8 | 7.5 | +123.8% | 57.1 |
| Uponor Infra | 1.7 | 0.6 | +190.6% | 10.8 |
| Financial income and expenses | 3.1 | -3.4 | -189.9% | -11.6 |
| Profit before taxes | 30.4 | 9.8 | +208.4% | 75.6 |
| Profit for the period | 22.3 | 7.1 | +212.7% | 55.3 |
| Earnings per share | 0.30 | 0.10 | +194.1% | 0.72 |
| M€ | 31 March 2020 | 31 March 2019 | Change | 31 Dec 2019 |
| Net working capital | 138.4 | 150.5 | -8.0% | 115.1 |
| Net-interest bearing debt | 180.5 | 236.0 | -23.5% | 139.1 |
| Solvency | 39.7 | 38.3 | +3.7% | 44.6 |
| Gearing | 52.2 | 72.8 | -28.3% | 37.6 |
| Return on investment | 21.4 | 8.0 | +168.6% | 14.4 |
Webcast of the results briefing and the presentation
A webcast of the news conference in English will be broadcast on 29 April at 14:00 EET. It can be viewed via our IR website at or via the Uponor IR mobile app. The recorded webcast can be viewed via the website or the app shortly after the live presentation. All presentation materials will be available at investors.uponor.com > News & downloads.
Uponor Corporation
For further information, please contact:
Jyri Luomakoski, President and CEO, tel. 4
Minna Yrjönmäki, CFO, tel. 6
Susanna Inkinen, Vice President, Communications and Corporate Responsibility, tel. 1
DISTRIBUTION:
Nasdaq Helsinki
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Uponor in brief
Uponor is rethinking water for future generations. Our offering, including safe drinking water delivery, energy-efficient radiant heating and cooling and reliable infrastructure, enables a more sustainable living environment. We help our customers in residential and commercial construction, municipalities and utilities, as well as different industries to work faster and smarter. Uponor employs about 3,800 professionals in 26 countries in Europe and North America. In 2019, Uponor's net sales totalled approximately €1.1 billion. Uponor Corporation is based in Finland and listed on Nasdaq Helsinki.
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