Source: Uponor Oyj

Interim report January – March 2019: Restructuring supported development in Europe – demand was weaker in North America

Uponor Corporation     Interim report 1-3/2019    3 May 2019     08:00 EET

Interim report January – March 2019: Restructuring supported development in Europe – demand was weaker in North America

January–March 2019

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. Organic growth refers to Uponor’s operations without divested businesses.

  • Net sales in January–March totalled €248.9 (276.9) million, a decline of 10.1%. Organic growth was -2.2% in constant currency terms. Net sales for the comparison period without divested Uponor Infra’s North American business and Zent-Frenger would have been €250.3 million.
  • Operating profit was €14.3 (17.0) million, a decline of 16.0%; operating profit for the comparison period without divested Uponor Infra’s North American business and Zent-Frenger would have been €13.2 million. There were no significant items affecting comparability in the first quarter of 2019 or 2018.
  • Earnings per share were €0.10 (0.11)
  • Return on investment was 8.0% (9.9%), and gearing 72.8 (66.3)
  • Cash flow from business operations was €-31.6 (-25.0) million


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:

“The restructuring decisions concerning Australia, Switzerland and China, which were announced in the second half of 2018, began to improve profitability of the Building Solutions – Europe segment already in Q1. But as we expected in February, the purchasing patterns of our distributors impacted our net sales during Q1.

In March, we launched new products for European markets at ISH, the world’s leading trade fair in the field of sanitary and heating. Customer interest towards our new generation press fitting solution, S-Press PLUS, has been promising. The launch of S-Press PLUS had a negative impact on the net sales and profitability of Building Solutions – Europe, because two product lines and inventories were being maintained simultaneously and customers delayed their purchases until the new fitting was available.  

In North America, our customers piled up their stocks before year end, which impacted our financial performance in this quarter. Unfortunately, we continued to face challenges in terms of capacity shortages in the freight industry and this had also an impact on our profitability. General expectations for construction market’s growth have been reduced for 2019. This is likely to impact our outlook in the North American market.

Uponor Infra started a profitability improvement programme in Europe in 2018, and it continued to bring results, especially in Finland.”


Key figures

M€  1-3/ 
 2019
1-3
2018
Change 1-3
2018*)
1-12/2018
Net sales 248.9 276.9 -10.1% 250.3 1,196.3
Building Solutions – Europe 123.5 125.2 -1.4% 120.3 524.4
Building Solutions – North-America 74.7 77.6 -3.7% 77.6 340.5
Uponor Infra 52.4 75.3 -30.5% 53.6 337.3
Operating expenses 222.7 250.4 -11.1%   1,063.6
Depreciation and impairments 12.4 9.5 30.7%   42.4
Other operating income 0.5 0.1 782.4%   16.4
Operating profit 14.3 17.0 -16.0% 13.2 106.7
Building Solutions – Europe 7.2 6.0 +20.3% 6.4 31.1
Building Solutions – North-America 7.5 10.2 -26.2% 10.2 46.6
Uponor Infra 0.6 3.3 -82.0% -1.0 35.1
Comparable operating profit 14.3 17.0 -16.0% 13.2 99.3
Building Solutions – Europe 7.2 6.0 +20.3% 6.4 35.4
Building Solutions – North-America 7.5 10.2 -26.2% 10.2 46.6
Uponor Infra 0.6 3.3 -82.0% -1.0 23.4
Financial income and expenses -3.4 -1.7 101.3%   -8.5
Profit before taxes 9.8 13.2 -25.2%   93.5
Profit for the period 7.1 9.2 -22.7%   63.2
Earnings per share 0.10 0.11 -11.6%   0.72

*) Illustrative figures without divested Uponor Infra’s North American business and Zent-Frenger.


M€  31 March 
 2019
31 March 2018 Change 31 Dec 2018
Net working capital 150.5 152.4 -1.3% 119.3
Net-interest bearing debt 236.0 211.9 11.4% 139.2
Solvency 38.3 37.6 1.9% 45.1
Gearing 72.8 66.3 9.7% 39.4
Return on investment 8.0 9.9 -19.5% 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 the 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 of the impacts of IFRS 16 can found from page 15.


Webcast of the results briefing and the presentation
A webcast in English will be broadcast on 3 May at 10:00 EET. It can be viewed via our website investors.uponor.com 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’s financial reporting in 2019
13 Feb 2019   Financial statements bulletin 2018
Week 8           Annual report 2018
3 May 2019     Interim report 
26 July 2019   Interim report
25 Oct 2019    Interim report


For further information, please contact:
Jyri Luomakoski, President and CEO, tel. +358 20 129 2824

Susanna Inkinen, Vice President, Communications and Corporate Responsibility, tel. +358 20 129 2081

DISTRIBUTION:
Nasdaq Helsinki
Media
www.uponor.com 
www.investors.uponor.com   

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 - www.uponor.com

 

Attachment