Uponor Corporation     Stock exchange release     11 February 2021     08:00 EET

Financial statements bulletin 1–12/2020: Strong performance in all segments continued in Q4


October–December 2020

  • Net sales were €280.5 (269.2) million, a growth of 4.2%. Organic growth was 6.0% in constant currency terms.
  • Comparable operating profit was €27.3 (21.8) million, a growth of 25.6%.
  • Operating profit was €23.8 (20.4) million, a growth of 16.7%.
  • Earnings per share were €0.27 (0.18).


January–December 2020

  • Net sales were €1,136.0 (1,103.1) million, a growth of 3.0%. Organic growth was 4.6% in constant currency terms.
  • Comparable operating profit was €142.7 (92.7) million, a growth of 53.9%.
  • Operating profit was €132.3 (91.3) million, a growth of 44.9%.
  • Earnings per share were €1.21 (0.72).
  • Cash flow from business operations was €207.5 (109.2) million.
  • Return on investment was 21.8% (14.4) and gearing 3.6% (37.6).
  • The Board’s dividend proposal: €0.57 (0.53) per share be paid, of which 0.28 cents will be paid in March 2021 and 0.29 cents is planned to be paid in September 2021.


Jyri Luomakoski, President and CEO, comments:

“During the exceptional year of 2020, our primary focus was to keep our employees safe and ensure uninterrupted deliveries to our customers. After a slowdown at the start of the pandemic, demand for our offering remained at a good level and a number of favourable drivers, including cost improvements partly triggered by COVID-19, supported our profitability development. This resulted in a record year for Uponor in terms of profitability, our best since the financial crisis in 2008, and we met our long-term financial target of an operating profit margin above 10%. During all our years as a listed company, we have only twice reported comparable operating profits and margins of this magnitude. But in those years, there were around 1.5 million more homes under construction yearly in our key markets than in 2020.  

The Building Solutions – Europe segment improved its profitability significantly in 2020, while net sales increased slightly. Our operational excellence programme’s initiatives are progressing as planned and started to yield the first results during 2020. In addition, favourable input costs and tight cost control increased profitability. We are pleased that improvements in operations, including at our Virsbo manufacturing facility in Sweden, continued during the whole year.

The Building Solutions – North America segment had a strong performance throughout the year. Profitability improvement was driven by well-managed pricing, increased volumes and favourable input costs, together with improvements in operations. Net sales increased in both the U.S. and Canadian markets. We were able to respond to the growth in demand, but by the end of 2020 this had lowered our inventory levels and increased our freight costs. Building a healthy level of inventory will be our focus area in 2021.

Uponor Infra had a solid year in terms of both net sales and operating profit. Even though COVID-19 had a negative impact on sales of large designed solutions projects, it was offset by the segment’s solid performance in other product groups. Profitability development was supported by improvements in operations and favourable input costs.

During 2020, we also advanced our sustainability agenda. Climate change is one of the biggest global threats we are facing, and we want to play our part in the fight against it. In December, we committed to the Science Based Targets initiative and we expect to gain approval for our new GHG emission reduction targets during the first half of 2021.

I want to thank all our employees for their hard work and commitment, as well as our customers and other stakeholders for their unwavering trust in us in 2020.

Our outlook for 2021 still involves uncertainties regarding the impacts of the COVID-19 pandemic. We do not expect to witness significant growth in demand overall for 2021, as construction is a late cyclical industry. We will continue to execute our operational excellence programme, as communicated earlier. On the other hand, there are already signs that some of our input costs are on the rise. While we will mitigate this development with price increases, we expect it to have some impact on our profitability in 2021.

We are happy to witness a strong start into the year 2021. Demand in January has been good much driven by high activity in the North American residential building segment.”


Guidance statement for 2021:

Excluding the impact of currencies, Uponor expects its net sales to stay at the level of the year 2020*. Uponor expects its comparable operating profit to decrease from 2020, but the comparable operating profit margin to remain above 10%.

*Stay at the level indicates a range of +/- 2.5% in comparison to the year 2020. 


The Board’s dividend proposal:

The Board proposes to the Annual General Meeting that a dividend of €0.57 (0.53) per share be paid, of which 0.28 cents will be paid in March 2021 and 0.29 cents is planned to be paid in September 2021.

When deciding on its dividend proposal, the Board considered the solvency, investment plans and other capital needs of the company. Further, the Board decided to deviate from the long-term target of dividend pay-out to be at least 50% of annual earnings, because the 2020 result was favourably impacted by pandemic triggered cost savings of around €10 million and non-recurring tax cost reductions of around €3 million, which had over 0.14 EUR impact on EPS.


Key figures

M€  10-12/ 
 2020		 10-12/
2019		 Change 1-12/
2020		 1-12/
2019		 Change
Net sales 280.5 269.2 4.2% 1,136 1,103.1 3.0%
Building Solutions – Europe 126.8 116.0 9.3% 499.5 489.3 2.1%
Building Solutions –
North America		 100.5 102.0 -1.5% 389.1 375.4 3.6%
Uponor Infra 54.1 52.0 4.0% 252.0 243.9 3.3%
Operating expenses 243.5 235.7 3.2% 952.0 961.3 -1.0%
Depreciation and impairments 13.5 13.1 2.5% 52.7 51.8 1.7%
Other operating income 0.3 0.1 9.1% 1.0 1.3 -37.0%
Operating profit 23.8 20.4 16.7% 132.3 91.3 44.9%
Building Solutions – Europe 8.5 5.3 62.0% 45.1 31.6 42.9%
Building Solutions –
North America		 15.6 19.0 -17.9% 74.5 57.1 30.5%
Uponor Infra 2.0 0.0   19.0 10.8 75.5%
Comparable operating profit 27.3 21.8 25.6% 142.7 92.7 53.9%
Building Solutions – Europe 11.9 5.9 100.7% 55.1 32.3 70.6%
Building Solutions –
North America		 15.6 19.0 -17.9% 74.6 57.1 30.6%
Uponor Infra 2.1  0.0   19.0 10.8 75.9%
Financial income and expenses -3.5 -3.1 10.6% -6.3 -11.6 -43.3%
Profit before taxes 19.4 16.3 19.0% 121.8 75.6 61.1%
Profit for the period 20.8 12.3 68.4% 96.1 55.3 73.8%
Earnings per share 0.27 0.18 53.4% 1.21 0.72 68.1%


M€  31 Dec 202031 Dec 2019 Change
Net working capital 65.9 115.1 -42.8%
Net interest-bearing debt 15.1 139.1 -89.2%
Solvency 48.7 44.6 9.1%
Gearing 3.6 37.6 -90.5%
Return on investment 21.8 14.4 50.8%

 

Uponor Corporation's long-term financial targets
(updated on 13 February 2019)

 Annual targets and actuals 2020 2019 2018 2017 2016
Organic net sales growth to exceed GDP growth (1 by 3 ppts (2020E: -1.2%) 3.0 -0.4 4.9 6.5 2.0
Comparable (2 EBIT margin >10% 12.6 8.4 8.3 8.3 8.2
Return on investment, ROI (3 (p.a.) >20% 21.8 14.4 17.2 16.3 14.1
Gearing (3 (annual average for the four latest quarters) 40–80% 28.6 57.5 53.0 58.4 56.7
Dividend payout > 50% of earnings 47.1 73.6 70.8 59.0 79.3

 1) GDP growth based on weighted average growth in the top 10 countries, measured by net sales.

2) The targets issued in February 2013 referred to reported EBIT margin.

3) 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.


Webcast of the results briefing and the presentation

A live webcast on the financial statements will be broadcasted on 11 February at 10:00 EET. It can be viewed via Uponor’s IR website at investors.uponor.com or via the Uponor IR mobile app. The recorded webcast can be viewed via the website or via 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 2021

11 Feb 2021   Financial statements bulletin 2020

Week 8           Annual report 2020

5 May 2021     Interim report 1–3/2021

27 July 2021   Interim report 1–6/2021

28 Oct 2021    Interim report 1–9/2021

 

For further information, please contact:
Jyri Luomakoski, President and CEO, tel. +358 20 129 2824
Minna Yrjönmäki, CFO, tel. +358 20 129 2036


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


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

 

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 3,700 professionals in 26 countries in Europe and North America. In 2020, Uponor's net sales totalled approximately €1.1 billion. Uponor Corporation is based in Finland and listed on Nasdaq Helsinki. www.uponor.com

 

Attachment

  • Uponor financial statements bulletin 2020

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