Interim report January–September 2020: Strong performance for all segments

Uponor Corporation Stock exchange release 28 October 2020 08:00 EET

Interim report January-September 2020: Strong performance for all segments

July-September 2020
• Net sales were €301.0 (292.4) million, a growth of 2.9%. Organic growth was 4.0% in constant currency terms.
• Comparable operating profit was €49.7 (31.3) million, a growth of 58.7%.
• Operating profit was €49.6 (31.3) million, a growth of 58.4%.
• Earnings per share were €0.43 (0.26).

January-September 2020
• Net sales were €855.5 (833.9) million, a growth of 2.6%. Organic growth was 3.6% in constant currency terms.
• Comparable operating profit was €115.3 (70.9) million, a growth of 62.7%.
• Operating profit was €108.5 (70.9) million, a growth of 53.1%.
• Earnings per share were €0.94 (0.54).
• Cash flow from business operations was €129.2 (47.4) million.
• Return on investment was 23.2% (15.1) and gearing 18.6% (52.9).

Guidance statement for 2020
On 16 September 2020, Uponor reinstated its guidance for 2020: Uponor expects comparable operating profit to improve from 2019.

Jyri Luomakoski, President and CEO, comments:
'In the third quarter, we witnessed the markets starting to recover from the COVID-19 shock in the spring. However, after a calmer summer in Europe, the infection rates began to rise again towards the end of the quarter, keeping the market outlook uncertain. Since the second quarter, raw material prices have risen, but when compared year-over-year, our input costs have stayed at a favourable level. This and other positive drivers helped us deliver another strong quarterly result.

Building Solutions - Europe made good progress in the third quarter. Net sales increased slightly; positive development was visible in parts of Northern and Central Europe. Tight cost control, favourable input costs and the operational excellence programme have driven the segment's positive profitability development. Improvements in operations, especially positive yield development, also contributed to the profit increase year-over-year.

The Building Solutions - North America segment had a very strong quarter. In the U.S, Uponor's traditionally strong foothold, the residential market has remained strong despite COVID-19. Increased net sales in both the U.S. and Canada combined with well-managed pricing, cost containment and favourable input costs resulted in an exceptionally strong operating profit.

Uponor Infra also performed well in the third quarter. Profitability improved in Norway, Denmark and Sweden, in particular. After the reporting period, we acquired a small Finnish engineering company that specialises in underwater construction and services. This acquisition will support our growth strategy in designed solutions projects, where many of our projects have already been related to different water systems below the surface.

When we reinstated our guidance in September, we communicated that visibility of demand is still weak, and this has continued. The reinstatement of the guidance was based on our actual year-to-date performance instead of improved visibility on market development. As we approach the end of the year, it is good to keep in mind that our fourth quarter was especially strong last year. Due to seasonality of our business, the fourth quarter is slower for us in comparison to Q2 and Q3. We estimate that some favourable drivers witnessed earlier this year will benefit us less towards the end of the year. Regarding the demand, our current levels of demand are at the same level as in October 2019.'

Key figures

M€	7-9/ 2020	7-9/ 2019	Change	1-9/ 2020	1-9/ 2019	Change	1-12/2019
Net sales	301.0	292.4	2.9%	855.5	833.9	2.6%	1,103.1
Building Solutions - Europe	125.3	124.0	1.1%	372.7	373.3	-0.2%	489.3
Building Solutions - North America	105.5	102.4	3.0%	288.6	273.4	5.6%	375.4
Uponor Infra	71.1	67.1	6.0%	197.8	191.9	3.1%	243.9
Operating expenses	238.9	248.2	-3.7%	708.5	725.6	-2.3%	961.3
Depreciation and impairments	12.7	12.9	-2.0%	39.3	38.7	1.4%	51.8
Other operating income	0.2	0.0	489.3%	0.7	1.2	-40.6%	1.3
Operating profit	49.6	31.3	58.4%	108.5	70.9	53.1%	91.3
Building Solutions - Europe	17.2	10.9	57.9%	36.6	26.3	39.1%	31.6
Building Solutions - North America	27.1	16.8	61.4%	58.9	38.1	54.6%	57.1
Uponor Infra	7.9	4.9	62.6%	17.0	10.8	56.7%	10.8
Comparable operating profit	49.7	31.3	58.7%	115.3	70.9	62.7%	92.7
Building Solutions - Europe	17.2	10.9	58.1%	43.2	26.3	63.9%	32.3
Building Solutions - North America	27.1	16.8	61.5%	59.0	38.1	54.9%	57.1
Uponor Infra	7.9	4.9	62.6%	17.0	10.8	56.7%	10.8
Financial income and expenses	-1.0	-1.9	-48.4%	-2.8	-8.5	-67.2%	-11.6
Profit before taxes	47.7	28.3	68.6%	102.4	59.3	72.7%	75.6
Profit for the period	35.2	20.5	71.4%	75.3	43.0	75.3%	55.3
Earnings per share	0.43	0.26	68.2%	0.94	0.54	72.8%	0.72

M€	30 Sep 2020	30 Sep 2019	Change	31 Dec 2019
Net working capital	103.8	150.7	-31.1%	115.1
Net interest-bearing debt	73.9	190.5	-61.2%	139.1
Solvency	42.7	42.1	1.4%	44.6
Gearing	18.6	52.9	-64.9%	37.6
Return on investment	23.2	15.1	53.5%	14.4

Webcast of the results briefing and the presentation
A live webcast on the third quarter results will be broadcasted on 28 October 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.

For further information, please contact:
Jyri Luomakoski, President and CEO, tel. [phone]
Minna Yrjönmäki, CFO, tel. [phone]
Susanna Inkinen, Vice President, Communications and Corporate Responsibility, tel. [phone]

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 3,800 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. www.uponor.com