2013-04-29 07:00:00 CEST
2013-04-29 07:00:07 CEST
REGULATED INFORMATION
Uponor - Interim report (Q1 and Q3)
Interim report Q1/2013: Uponor reports softer first quarter due to anticipated slowness in Europe
Uponor Corporation Interim report January-March 2013
29 April 2013 8.00 EET
Interim report Q1/2013: Uponor reports softer first quarter due to anticipated
slowness in Europe
-- The long winter burdened demand in the first quarter, compared to the
exceptionally strong first quarter in 2012
-- Net sales in January-March totalled €177.7 (192.5) million; a decrease of
7.7%; organic growth was negative at -3.5%
-- Operating profit for January-March totalled €6.1 (9.3) million; down by
-34.0%
-- Earnings per share were €0.05 (0.06)
-- Return on investment was 7.0% (11.2%), and gearing 77.6% (79.8%)
-- Cash flow from business operations came to €-15.5 (-21.4) million
-- Full-year guidance remains unchanged
(This interim report has been compiled in accordance with the IAS 34 reporting
standards and is unaudited. Figures in the report are for continuing
operations, unless otherwise stated.)
President and CEO Jyri Luomakoski comments on developments during the reporting
period:
-- Our good progress continued in North America, with double-digit percentage
growth for the seventh consecutive quarter. While this growth has strained
our manufacturing capacity, it has made a solid profit contribution to the
Group.
-- We continue to focus on cost management, and have succeeded in keeping our
expenses in Q1 below the previous year's figures in comparable terms. The
new organisational structure we launched in early April will reduce
complexity and further support efficiency in execution.
-- Concerns for the stability of the recovery of the European economies remain
high on the daily agenda, hindering the steady recovery of the building and
construction markets. Despite high volatility and the anticipated slower
first quarter, we achieved our second highest operating profit in five
years, second only to the exceptionally strong first quarter last year.
Information on the January - March 2013 interim report bulletin
This document is a condensed version of Uponor's January-March 2013 interim
report bulletin, which is attached to this release. It is also available on the
company website. The figures in brackets are the reference figures for the
equivalent period in the previous year. Figures refer to continuing operations,
unless otherwise stated. Any change percentages were calculated from the exact
figures and not from the rounded figures published here.
Webcast and the presentation
A webcast, in English, of the results briefing will be broadcast on 29 April at
10:00 am 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.
Next interim results
Uponor Corporation will publish its Q2 interim results on 26 July 2013. During
the silent period from 1 to 26 July, Uponor will not comment on market
prospects or factors affecting business and performance.
Markets
Overall, the national economies in Uponor's key markets continued to develop
according to much the same pattern as evidenced in the last quarter of 2012 and
earlier in the year. However, in comparison to the previous year, whose first
quarter was exceptionally lively, 2013 began on a clearly more subdued note.
First quarter demand was primarily affected by three factors. Firstly, despite
promising signs in the second half of 2012, the economic situation in Europe
remained difficult, causing investor and consumer sentiment to remain weak, and
even to deteriorate from there in the last quarter of 2012. Secondly, and again
mainly affecting the European markets, the winter was long and harsh, in some
regions - such as Austria and Switzerland - historically so, impacting on
activities related to residential building demand. A third reason, also with a
notable impact, was the lower number of business days compared to the previous
year.
In Europe, building solutions demand held up reasonably well in Germany, while
steeper drops were noticed in some other Central European markets. In southwest
Europe, the earlier declining trends continued more or less as before. Also the
UK and French markets, where demand for Uponor products has until now remained
reasonably strong, began to deteriorate. In northern Europe, Swedish and Danish
demand stabilised on a lower level, while Finland maintained a reasonable level
of activity and Norway continued to rise. In Eastern Europe, the Baltic and
Russian markets continued to show strength, while the other markets were more
or less flat.
In North America, positive sentiments continued in the building market,
particularly in its residential sectors, and demand in the US developed well.
The trend in Canada softened somewhat after a lengthy period of high activity
and also as a result of the authorities' efforts to cool down the market.
As far as the infrastructure markets are concerned, demand in Northern Europe,
where Uponor is active in this business segment, continued to be slow due to
lack of public investment, intense competition and the harsh winter.
Net sales
Uponor's net sales declined considerably compared to the exceptionally strong
first quarter of 2012, but slightly exceeded those of the first quarter of
2011, which was also reasonably strong. The Group's consolidated net sales in
the first quarter of 2013 were €177.7 (192.5) million, down by 7.7%. Adjusted
for the divestment of the OEM manufacturer Hewing GmbH in the end of the first
quarter last year, this represents a change of -3.5% in consolidated net sales
and -8.6% in net sales for Building Solutions - Europe.
The translation impact of currencies on consolidated figures increased net
sales by €1.0m, or 0.6%, in comparison to the previous year.
The above-mentioned factors impacting on market demand, i.e. a lack of economic
confidence in Europe, the long winter and fewer business days, all affected
building market activity levels, and thus had a negative effect on the net
sales of Building Solutions - Europe. In 2012, the sales price increases that
affected organic growth in the first quarter, mainly driven by raw material
price increases, did not have a similar growth effect in the first quarter of
2013.
Building Solutions - North America reported strong growth in net sales for the
seventh quarter in a row. This was a result of continued lively building and
construction activity in several key US regions, and successful sales and
marketing programmes.
In terms of the Building Solutions business group, sales development of
plumbing solutions and indoor climate solutions diverged from one region to
another. Plumbing developed better in markets where renovation activity was
lively, while sales of indoor climate solutions followed the development of
residential building and the related project business. Growth in North America
favoured plumbing systems, in particular.
Infrastructure Solutions' net sales were hit by the strong winter, in
comparison to the milder first quarter last year. Negative development was also
partly due to exchange rate developments in the Swedish krona, which attracted
more foreign competition than normal.
Breakdown of net sales by segment (January-March):
M€ 1-3/ 1-3/ Change 2013 2012
--------------------------------------------------------------
--------------------------------------------------------------
Building Solutions - Europe 113.9 133.0 -14.4%
Building Solutions - North America 37.2 31.0 20.0%
(Building Solutions - North America (M$) 49.0 41.4 18.5%)
Infrastructure Solutions 27.6 29.7 -7.2%
Eliminations -1.0 -1.2
--------------------------------------------------------------
--------------------------------------------------------------
Total 177.7 192.5 -7.7%
Among the largest geographic markets, measured by net sales in local currency,
business grew most in the USA, up 25.1%. Sales development in Finland was also
modestly positive, at 1.2%, while other markets failed to reach previous years'
levels. Looking beyond last year's exceptionally strong first quarter, and
comparing to the first quarter of 2011, Uponor's sales to customers in five of
the biggest national markets clearly grew in euro terms.
Results and profitability
Uponor's consolidated operating profit for continuing operations in the first
quarter of 2013 came to €6.1 (9.3) million, representing a decrease of -34.0%
year-on-year. Profitability, as measured by operating profit margin, declined
to 3.4% from the 4.8% reported a year ago.
The main reason for the decline in operating profit in Building Solutions -
Europe was lower net sales. An improved cost structure as a result of
efficiency measures implemented last year, as well as the positive impact of
fewer promotions, helped to partly offset the decline in results.
In Building Solutions - North America, operating profit clearly improved over
last year, driven by higher sales, operational leverage of production and
effective control of overhead spending.
Weak development of net sales also influenced Infrastructure Solutions' profit.
In addition, margins were under pressure due to higher input costs and
unfavourable developments in the product mix.
Expenses, totalling €63.2 million, fell by €2.4 million as a result of the
Hewing divestment and the cost savings measures implemented in 2012.
Profit before taxes for January-March totalled €5.0 (7.1) million. The effect
of taxes on profits was €1.7 million, compared to €2.6 million in the first
quarter of 2012. Profit for the first quarter of 2013 amounted to €3.3 (4.5)
million.
Breakdown of operating profit by segment (January-March):
M€ 1-3/ 1-3/ Change
2013 2012
------------------------------------------------------------
------------------------------------------------------------
Building Solutions - Europe 6.7 11.7 -42.4%
Building Solutions - North America 4.6 2.7 74.6%
(Building Solutions - North America (M$) 6.1 3.5 72.5%)
Infrastructure Solutions -3.7 -1.9 -92.4%
Others -1.2 -2.4
Eliminations -0.3 -0.8
------------------------------------------------------------
------------------------------------------------------------
Total 6.1 9.3 -34.0%
Investment and financing
Apart from ongoing manufacturing capacity expansions in the Apple Valley
factory in Minnesota, USA, Uponor's capital investments during the reporting
period were mainly targeted at maintenance and development.
Gross investments in the first quarter came to €4.6 (3.8) million, clearly
below depreciation, which amounted to €7.1 (7.3) million. Cash flow from
business operations improved to €-15.5 (-21.4) million, mainly due to the fact
that in 2012 cash flow included the payment of €15.0 million in taxes, surtaxes
and interest, related to the decision by the Finnish tax authorities in
December 2011. Cash flow from financing and thus cash flow for the period was
also affected by the dividend payment on 28 March, which amounted to €27.8
(25.6) million.
Uponor continues to have a special focus on maintaining a high level of
liquidity, as well as following up accounts receivable, among other issues, in
order to reduce credit risk.
The main existing funding programmes on 31 March 2013 included an €80 million
bond maturing in 2018 and a €20 million bond maturing in 2016. Committed
bilateral revolving credit facilities, maturing in 2015, totalled €190 million;
none of these back-up facilities were in use during the period under review. At
the period end, €40.0 million of commercial papers were issued under the €150
million domestic commercial paper programme.
The Group's solvency, at 34.4% (33.6%), has remained at a good level. Net
interest-bearing liabilities were €142.1 (145.3) million. The period-end cash
balance totalled €8.1 (12.0) million. Gearing came to 77.6 (79.8)%.
Short-term outlook
Despite the progress achieved in stabilising the political and financial
climate in Europe and the euro zone, in particular, prospects in Europe remain
challenging. This is especially true in the southwest part of the continent and
some central European markets. The outlook in northern and eastern Europe is
more stable, i.e. no big moves upwards or downwards are anticipated. Thus, the
markets in Europe remain fragile and vulnerable to major international economic
developments.
In North America, the recovery is expected to continue throughout the year,
albeit not as strongly and steadily, perhaps, as during the last one and a half
years, and with Canada, in particular, continuing on a softer path than last
year.
For the reasons stated above, visibility in Uponor's key application areas
remains rather weak. Uponor is planning for a lengthy period of low activity
levels in the European market, while making efforts to meet increasing demand
in North America and some other smaller geographical pockets of growth.
The management continues to keep a sharp eye on cost efficiency and cash flow,
while aiming to secure growth where possible.
Uponor repeats its guidance for the year 2013, announced on 12 February 2013:
Uponor expects its net sales and operating profit to show modest organic growth
from 2012. This guidance is based on the current business portfolio and
organisational setup and on the company's anticipation that the external
environment faces no major, unexpected changes.
Uponor's financial performance may be affected by a range of strategic,
operational, financial, and hazard risks. A more detailed risk analysis is
provided in the section ‘Key risks associated with business' in the Financial
Statements 2012.
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
Tarmo Anttila
Vice President, Communications
Tel. +358 20 129 2852
DISTRIBUTION:
NASDAQ OMX - Helsinki
Media
www.uponor.com
Uponor is a leading international provider of plumbing and indoor climate
solutions for residential and commercial building markets across Europe and
North America. In Northern Europe, Uponor is also a prominent supplier of
infrastructure pipe systems. The Group employs approx. 3,000 persons, in 30
countries. In 2012, Uponor's net sales exceeded €810 million. Uponor
Corporation is listed on NASDAQ OMX Helsinki in Finland. http://www.uponor.com.
© 2024 Nasdaq, Inc. All Rights Reserved |