2016-07-26 07:00:01 CEST
2016-07-26 07:00:01 CEST
REGLAMENTUOJAMA INFORMACIJA
Uponor - Half Year financial report
Half year financial report Jan–June 2016: Pick up in European demand and savings from transformation programmes strengthened Uponor
Uponor Corporation Stock exchange release 26 July 2016 08:00 EET
Half year financial report January – June 2016:
Pick up in European demand and savings from transformation programmes
strengthened Uponor
-- The U.S. building solutions market remained healthy and in Europe, while
heterogeneous, an upturn in demand was reported in several markets; the
infrastructure solutions markets remained challenging, although with signs
of levelling out in Europe
-- Net sales for April – June totalled €299.5 (277.6) million, up 7.9% or 9.6%
in constant currency
-- Operating profit for April – June came to €26.5 (22.5) million, up 18.0%,
driven by Building Solutions – Europe and Uponor Infra; comparable
operating profit, i.e. excluding items affecting comparability, came to
€30.7 (23.3) million, a growth of 31.8%
-- Net sales in January – June totalled €546.4 (514.7) million, up 6.2% or
7.6% in constant currency
-- Operating profit for January – June came to €38.4 (33.8) million, a change
of 13.6%; comparable operating profit came to €45.6 (34.6) million, a
growth of 31.7%
-- January – June earnings per share amounted to €0.28 (0.23)
-- January – June return on investment was 15.3% (14.0%), and gearing was
58.5% (47.8%)
-- January – June cash flow from business operations totalled -€3.4 (-19.8)
million
-- Uponor repeats its guidance for the year 2016, announced on 12 February
2016:
Assuming that economic development in Uponor's key geographies otherwise
continues undisturbed, Uponor issues the following guidance for 2016: the
Group’s net sales and comparable operating profit are expected to improve
from 2015.
President and CEO Jyri Luomakoski comments on developments
during the reporting period:
-- Building Solutions – Europe’s transformation is progressing well and the
initial results, with modest top line growth and some cost reductions
already implemented, give us confidence that our transformation programme
will deliver the desired results. Simultaneously, we are making major
strides in leveraging acquired technology across national borders and
building up our competencies in smart, hygienic water installations,
generating short-term and long-term sales opportunities.
-- Building Solutions - North America maintained strong sales growth in a
healthy market. Operating profit remained close to the previous year’s
level, its lack of growth mainly caused by costs related to the recent
temporary EP fittings replacement by metal fittings, the Canadian currency
impact and costs related to the joint venture transaction with Belkin.
-- Uponor Infra’s demand environment has somewhat stabilised but challenges
remain, especially in Canada and Poland. Thanks to our determined cost
drive, less headwind in the markets, and a stable input cost environment,
we made promising headway in terms of profitability.
-- Uponor took an important step towards the emerging Internet of Things (IoT)
market by establishing a joint venture with Belkin, a global front runner
in IoT. Strategically, this is a major new step in digitalisation for
Uponor and supports our technology emphasis on water hygiene and
conservation in our global markets.
Key financial figures
Consolidated income statement 1-6 1-6 2015 2014 2013 2012
(continuing operations), M€ 2016 2015
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Net sales 546.4 514.7 1,050.8 1,023.9 906.0 811.5
Operating expenses 490.5 463.3 942.7 926.4 823.6 726.5
Depreciation and impairments 19.5 18.3 39.1 36.5 33.0 28.2
Other operating income 2.0 0.7 2.4 2.4 0.8 0.9
Operating profit 38.4 33.8 71.4 63.4 50.2 57.7
Comparable operating profit 45.6 34.6 75.8 67.7 55.2 57.7
Financial income and expenses -5.5 -6.4 -8.9 -7.4 -7.1 -8.6
Profit before taxes 33.0 27.5 62.8 56.3 43.2 49.4
Result from continuing operations 20.8 17.3 37.1 36.3 27.1 32.9
Profit for the period 21.2 17.0 36.9 36.0 26.8 32.8
Earnings per share 0.28 0.23 0.51 0.50 0.38 0.45
Information on the January–June 2016 half year financial report
This half year financial report has been compiled in accordance with the IAS 34
reporting standard and is unaudited. Figures given in the report are for
continuing operations, unless otherwise stated. Any change percentages have
been calculated from the exact figures and not from the rounded figures
published here.
From this report onwards, Uponor will follow the new recommendation from the
European Securities and Markets Authority (ESMA) concerning Alternative
Performance Measures. Thus, the term “non-recurring items” (NRI) will be
changed to “items affecting comparability” (IAC). See the table section for
more details.
This document is a condensed version of Uponor’s January–June 2016 half year
financial report, which is attached to this release. It is also available on
the company website.
Webcast and presentation
A webcast, in English, of the results briefing will be broadcast on 26 July at
10:00 a.m. EET. Connection details are available at www.uponor.com > Investors.
Questions can be sent in advance to ir@uponor.com. The recorded webcast can be
viewed at www.uponor.com > Investors shortly after publication. The
presentation document will be available at www.uponor.com > Investors > News &
downloads.
The next results report
Uponor Corporation will publish its Q3 interim report on Friday 28 October
2016. During the silent period from 28 September to 28 October, Uponor will not
comment on market prospects or factors affecting business and performance, nor
will the company engage in any discussion of events or trends related to the
reporting period or the current fiscal period.
Markets
The building and construction markets in North America continued to be healthy
and positive developments in demand were reported across several European
markets, as well. This aligns well with publicly available key indicators which
show, for instance, that permit activity, based on data covering the period up
to February 2016, has continued to trend slowly upwards in both the residential
and non-residential segments, while builder confidence in Europe has
strengthened in most markets compared to last year.
In Central Europe, Uponor’s largest European market, Germany, continued to see
improvements in its construction market in the second quarter of 2016. The
economy has so far managed to brush off external uncertainties, with households
driving economic growth, and builder confidence has also improved lately,
reaching another post-reunification high. Order book development in the German
building industry has also remained generally positive in both the residential
and non-residential segments, although building activity continues to be
limited by a lack of professional installers. In contrast, activity has
moderated considerably in the Netherlands, but even there it remains
expansionary.
In Southern Europe, recovery continued in Spain, demand in Italy remained
stagnant and major uncertainty surrounded the UK, even prior to the ‘Brexit’
referendum.
Within the Nordic countries, demand in Sweden continued to be robust, clearly
continuing to outpace its neighbours, especially in the new residential
segment. Within the Swedish construction industry, the residential new-build
segment continues to grow significantly, reaching a 25-year high. However,
builder confidence has moderated in recent months and non-residential and civil
engineering activity remains more constrained. The other Nordic markets were
generally stable, with some individual signs of a fragile recovery witnessed in
Finland, from a low base. However, as in Sweden, the positive trend seen in
builder confidence in Finland may have ground to a halt during recent months.
In North America, construction activity growth has slowed since the second
quarter 2015, mainly due to Canada, where a depressed energy market continues
to take a toll on construction. In the U.S., demand in the construction market
remained resilient or improved across various building segments, but overall
growth has slowed from the previous year. Although construction spending in the
U.S. has risen across nearly all residential and non-residential building
segments compared to the same period in 2015, residential builder confidence
softened somewhat during the quarter under review.
In terms of infrastructure solutions, in the Nordic markets - especially
Finland - market demand stabilised during the first half of 2016 after a
decline of several years. The other Nordic markets also showed stable or
slightly positive development from the previous year. In Poland, the delayed
implementation of EU-funded projects resulted in the postponement of many
projects and the market has contracted significantly. Furthermore, the poor
volume trend in the North American polyethylene pipe market has continued since
the summer of 2015.
Net sales
Uponor’s continuing operations reported net sales of €299.5 (277.6) million for
the second quarter, representing growth of 7.9% or 9.6% in constant currency.
Much of this net sales growth is based on improved demand in the markets.
Acquisitions made in Germany in January 2016 contributed by €8.6 million. In
constant currency terms, i.e. using Q2/2015 exchange rates, net sales would
have been €4.8 million higher than reported net sales, mainly due to CAD, RUB,
NOK and GBP.
Building Solutions – Europe reported 13.3% growth, partly driven by
acquisitions and partly by the market recovery in parts of Europe, which paired
with successful marketing initiatives and benefits from combining Uponor’s
native offering with those of recent acquisitions. Of the largest markets,
Germany, Sweden, Spain, the UK and Russia reported good progress in the local
currency. While ongoing changes in the value chain pose challenges to standard
business, advances were made in areas such as the pre-fab business, where
Uponor is a pioneer, thus confirming the lack of installers as a bottle neck in
business growth. In addition, the market for commercial solutions has slowly
begun to pick up, following the longer-term trend of increased urban living and
the need for high-rise residential and office buildings.
Building Solutions – North America, reported continued solid growth of net
sales against the prior year, including in local currency. Such growth was
driven by strong sales throughout U.S. geographic regions, in contrast to
Canada where sales clearly contracted from the second quarter of 2015. Most of
U.S. growth continues to come from the plumbing business, in particular within
the commercial segment that was trending up in a favourable manner in the
second quarter. In Canada, net sales development was strongest in indoor
climate, supported in part by significant new product introductions made
recently.
Uponor Infra reported a drop in net sales despite the emerging stability in the
European infrastructure markets. The main reasons for this were continued
softness in Canada, driven by the challenges in oil exploration as reported
earlier, as well as a significant drop in Polish demand due to delayed
implementation of EU-funded projects. In addition, net sales development in the
district energy business in Finland and the Czech Republic was behind last
year. Supported by stabilising demand across much of Europe, Uponor Infra was
able to grow sales through its wholesale distribution chain.
Breakdown of net sales by segment (April–June):
M€ 4-6/2016 4-6/2015 Change
--------------------------------------------------------------------
Building Solutions – Europe 134.8 119.0 13.3%
--------------------------------------------------------------------
Building Solutions – North America 80.2 69.8 15.0%
--------------------------------------------------------------------
(Building Solutions – North America (M$) 90.0 77.6 15.9%)
--------------------------------------------------------------------
Uponor Infra 85.8 89.7 -4.4%
--------------------------------------------------------------------
Eliminations -1.3 -0.9
--------------------------------------------------------------------
Total 299.5 277.6 7.9%
--------------------------------------------------------------------
Uponor’s January–June net sales reached €546.4 (514.7) million, recording
growth of 6.2%, or 7.6% in constant currency. This was driven by brisk growth
in the building solutions business in both North America and Europe, as well as
acquisitions in Germany. In constant currency terms, net sales would have been
€7.5 million higher than reported net sales. The main influence, mainly
impacting on European segments, was caused by fluctuations in CAD, RUB, NOK and
GBP.
Breakdown of net sales by segment (January–June):
M€ 1-6/2016 1-6/2015 Change
--------------------------------------------------------------------
Building Solutions – Europe 257.8 231.6 11.3%
--------------------------------------------------------------------
Building Solutions – North America 150.9 126.7 19.1%
--------------------------------------------------------------------
(Building Solutions – North America (M$) 168.2 140.8 19.5%)
--------------------------------------------------------------------
Uponor Infra 139.9 158.0 -11.5%
--------------------------------------------------------------------
Eliminations -2.2 -1.6
--------------------------------------------------------------------
Total 546.4 514.7 6.2%
--------------------------------------------------------------------
Results and profitability
Gross profit for continuing operations in the second quarter amounted to €105.5
million (35.2%) from 98.6 million (35.5%) in 2015. Comparable gross profit
margin came to 35.5% (35.6%).
Operating profit for continuing operations in the second quarter came to €26.5
(22.5) million, representing a year-on-year increase of 18.0%. Profitability
measured in terms of operating profit margin reached 8.8% (8.1%). Comparable
operating profit, i.e. excluding any items affecting comparability, came to
€30.7 (23.3) million in the quarter under review, with a comparable operating
profit margin of 10.2% (8.4%). Items affecting comparability totalled €4.2
(0.8) million, of which €3.3 (0.8) million related to Building Solutions –
Europe’s transformation programme and €0.6 (0.0) million to that of Uponor
Infra. The main contributors to the favourable performance improvement were
Uponor Infra and Building Solutions – Europe.
Building Solutions – Europe’s operating profit improved as a result of the
savings already achieved from the transformation and streamlining measures
implemented, supported by operational leverage from higher sales volumes in
several markets.
Building Solutions – North America’s performance developed rather steadily,
although the operating profit declined by 2.0% in local currency and 2.7% in
euro terms. Despite being down versus the comparison period - mainly as a
result of managing the temporary transition of a range of plastic fittings to
metal fittings and back, and the costs related to the Phyn joint venture
transaction with Belkin - overall profitability remained resilient, thanks to
continued net sales growth and careful expenditure management.
Regardless of lower net sales, Uponor Infra’s operating profit exceeded that of
the comparison period. The main reason for this was a change in the mix of
products sold and the channels employed. A key role was also played by reduced
operational cost levels in Finland, following the restructuring and
transformation initiatives executed in 2013 - 2015 and those that are still
ongoing.
Breakdown of operating profit by segment (April-June):
M€ 4-6/2016 4-6/2015 Change
--------------------------------------------------------------------
Building Solutions – Europe 8.3 6.2 33.2%
--------------------------------------------------------------------
Building Solutions – North America 14.6 15.0 -2.7%
--------------------------------------------------------------------
(Building Solutions – North America (M$) 16.3 16.8 -2.0%)
--------------------------------------------------------------------
Uponor Infra 5.1 3.0 69.3%
--------------------------------------------------------------------
Others -1.0 -1.4
--------------------------------------------------------------------
Eliminations -0.5 -0.3
--------------------------------------------------------------------
Total 26.5 22.5 18.0%
--------------------------------------------------------------------
Profit before taxes for April – June totalled €24.4 (21.2) million. Taxes had a
€9.0 million effect on profits, while the amount of taxes in the comparison
period was €7.9 million. Profit for the second quarter came to €15.4 (13.3)
million.
The January – June gross profit came to €193.3 million (35.4%) against 183.8
million (35.7%) in 2015. Comparable gross profit margin at 35.6% (35.8%) was
mainly burdened by competitive price pressure especially in the European
building solutions business.
The January – June operating profit came to €38.4 (33.8) million, or €45.6
(34.6) million without items affecting comparability, up 13.6 or 31.7 per cent
respectively from the comparison period. Key contributors to this development
were Building Solutions – North America with its solid performance in both the
first and the second quarter, as well as Building Solutions – Europe and Uponor
Infra with their strong second quarter performance in particular.
Items affecting comparability in January–June 2016 totalled €7.2 (0.8) million,
of which €5.9 (0.8) million came from the transformation programme in Building
Solutions – Europe and €1.0 (0.0) million from Uponor Infra’s programme.
Profitability, or the operating profit margin, for the first half-year was
7.0%, against 6.6% in the first half of 2015. The comparable operating profit
margin came to 8.3% (6.7%).
Breakdown of operating profit by segment (January–June):
M€ 1-6/2016 1-6/2015 Change
--------------------------------------------------------------------
Building Solutions – Europe 13.2 12.3 7.2%
--------------------------------------------------------------------
Building Solutions – North America 25.7 23.1 11.1%
--------------------------------------------------------------------
(Building Solutions – North America (M$) 28.6 25.7 11.4%)
--------------------------------------------------------------------
Uponor Infra 1.5 1.7 -10.5%
--------------------------------------------------------------------
Others -1.7 -2.7
--------------------------------------------------------------------
Eliminations -0.3 -0.6
--------------------------------------------------------------------
Total 38.4 33.8 13.6%
--------------------------------------------------------------------
Earnings per share, both basic and diluted, for January – June totalled €0.28
(0.23). Equity per share, both basic and diluted, was €3.22 (3.08).
Events during the period
On 25 May 2016, Uponor Corporation and the U.S. company Belkin International,
Inc. announced their intention to form a partnership to pioneer the development
of water sensing and conservation technology for buildings. The purpose of the
new joint venture – named Phyn - is to develop products for the emerging
intelligent water market, both for consumers and professional customers.
As part of the plan, two joint venture companies were established: one in the
U.S. and another in Europe. Uponor initially invested $15 million in exchange
for a 37.5% shareholding in the companies. The investment will impact on
Uponor’s cash flow in the third quarter 2016, but will have no impact on
Uponor’s profit guidance for 2016. As a minority-owned business, the joint
venture company will be consolidated with Uponor’s financial accounts using the
equity method. The parties have also agreed on a time frame within which Uponor
has an option to invest an additional $10 million and increase its shareholding
in Phyn to 50%. Uponor regards the partnership as an important step in its
growth strategy, particularly in the emerging Internet of Things (IoT) market
and a major development in digitalisation, which is perfectly aligned with the
company’s commitment to creating safe and sustainable buildings and
infrastructures.
In April, Building Solutions – Europe launched 75mm Q&E fittings and a new
Milwaukee expansion tool extending the offering range from 63 mm/6 bar pipes
all the way up to 75 mm and 10 bar pipes. These products are used in tap water
riser installations and local heat distribution (LHD) installations. At the end
of April, Uponor Infra launched Decibel, a modern silent soil & waste pipe
system that combines an aesthetic visual appearance with the product’s inner
mineral layer, which helps to eliminate noise.
On 16 May, Uponor, Inc.’s factory expansion in Apple Valley, Minnesota was
inaugurated in the presence of state and local dignitaries.
In early June, Uponor arranged a Capital Markets Day in Hassfurt, Germany,
where the management presented the company’s near-term strategic focus areas to
investors.
On 20 June, Uponor, Inc. began reintroducing the remaining engineered polymer
(EP) fittings, which were suspended in 2015 owing to a temporary resin
shortfall. This will enable Uponor to gradually build up towards offering its
North American customers a full range of EP fittings to.
In its first quarter report, Uponor further referred to the following events:
On 4 January, Uponor Holding GmbH completed the acquisition of all shares in
two German companies, Delta Systemtechnik GmbH and the KaMo Group, as announced
on 30 November 2015. This acquisition broadened Uponor’s portfolio and
competencies in the increasingly important hygienic drinking-water delivery
sector. On 7 January, Uponor Corporation announced the acquisition of the
entire shareholding in a Finnish start-up company specialising in online water
quality monitoring. These are all included in the Building Solutions – Europe
segment.
On 19 January, Uponor announced that its Finnish subsidiaries Uponor Infra Oy
and Uponor Suomi Oy had concluded co-determination negotiations in Finland. As
a result, a total of 126 employment contracts will be terminated by September
2016. As a consequence of this, Uponor Infra will relocate all of its pressure
pipe and standard chamber manufacturing operations from Vaasa to Nastola,
Finland, by the end of 2016. The transfer is proceeding according to plan.
Events after the reporting period
On 13 July 2016, Uponor announced the closing of the partnership agreement with
Belkin International, Inc. with regulatory approvals and other customary
closing conditions completed. The companies have established two joint venture
businesses: Phyn LLC, based in Los Angeles, California, and Phyn Oy, which is
domiciled in Helsinki, Finland, and aims to be a pioneer in the development of
water sensing and conservation technology for buildings. Uponor has a 37.5%
ownership in both of these companies.
Short-term outlook
Notwithstanding the UK’s EU referendum, no other sudden, noteworthy changes
have occurred which might influence the near-term economic outlook in Uponor’s
core geographical markets as portrayed in the outlook issued on 12 February
2016, in connection with the full-year 2015 financial results announcement.
Naturally, the UK vote can have shorter and longer-term impact on the
development of GDP in the UK and the EU. In general, lower GDP growth would
have an adverse impact on the industry. A direct impact of ‘Brexit’ on Uponor’s
business would likely be limited due to Uponor’s low exposure to the UK market.
Apart from this, the economic and political environment in Europe has continued
its slow progress towards stabilisation. This was evidenced in the second
quarter, when building activity in a number of countries across Europe picked
up. In addition, demand for infrastructure solutions was on a firmer footing
than in the previous few quarters. The political situation in Ukraine and the
refugee situation have both entered a calmer period, causing less concern for
investors.
In North America, the U.S. economy is expected to continue to enjoy a strong
tailwind, perhaps with a moderate slowdown. The building and construction
markets are, nevertheless, expected to remain buoyant, driven by pent-up demand
from over the last several years or so, as well as increasing interest in
building sustainable homes and commercial premises. In Canada, the economy has
already slowed down, somewhat affecting building market demand.
In the autumn of 2015, Uponor announced extensive transformation programmes in
its European businesses, involving both Building Solutions – Europe and Uponor
Infra, with the purpose of improving market presence, boosting net sales and
improving performance through structural changes and cost savings. The
implementation of these programmes has mainly progressed well and, despite the
fact that many initiatives are still in the pipeline, tangible benefits have
already been secured. Manufacturing capacity enhancements were successfully
executed in North America, supporting continued profitable growth.
Uponor continues to focus on investing in research and development in order to
maintain its lead in the building industry’s transition towards a more
sustainable economy. One such example is the formation of Phyn, a joint venture
with Belkin International, Inc. which will support Uponor in developing and
offering smarter control and monitoring solutions for the plumbing profession.
In connection with the results briefing on 12 February 2016, Uponor stated that
the Group's capital expenditure will increase from that experienced in the last
few years. Uponor estimated that capital expenditure, excluding any investment
in shares, will amount to circa €58 million in 2016, against €50 million in
2015. Reasons for the increase included the continued high emphasis on new
offering development, extensive European transformation initiatives including
manufacturing footprint optimisation, as well as a plan to establish a
greenfield factory in China.
Assuming that economic development in Uponor's key geographies continues
undisturbed, Uponor reiterates its full-year guidance, announced on 12 Feb
2016: the Group’s net sales and comparable operating profit are expected to
improve from 2015.
Uponor’s financial performance may be affected by a range of strategic,
operational, financial, legal, political and hazard risks. A more detailed risk
analysis is provided in the section ‘Key risks associated with business’ in the
Financial Statements 2015.
Uponor Corporation
Board of Directors
For further information, please contact:
Jyri Luomakoski, President and CEO, tel. +358 20 129 2824
Riitta Palomäki, CFO, tel. +358 20 129 2822
Uponor Corporation
Tarmo Anttila
Vice President, Communications
Tel. +358 20 129 2852
DISTRIBUTION:
Nasdaq Helsinki
Media
www.uponor.com
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 3,700 employees in 30 countries, mainly in Europe and North
America. In 2015, Uponor's net sales totalled €1,050 million. Uponor is based
in Finland and listed on Nasdaq Helsinki. www.uponor.com
© 2024 Nasdaq, Inc. All Rights Reserved |
| Slapukai |