Financial statements bulletin 1–12/2019: Positive profitability development continued

Uponor Corporation     Stock exchange release     12 February 2020     08:00 EETFinancial statements bulletin 1–12/2019: Positive profitability development continuedUponor 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.
October–December 2019Net sales were €269.2 (282.6) million, a decline of 4.8%. In organic terms and in constant currency terms, the decline was 5.0%.The comparable operating profit was €21.8 (20.5) million, an increase of 6.4%. Operating profit was €20.4 (17.1) million, an increase of 19.3%.Earnings per share were €0.18 (0.08).
January–December 2019Net sales were €1,103.1 (1,196.3) million, a decline of 7.8%. In organic terms and in constant currency terms, the decline was 1.2%. Net sales for the comparison period without divested Uponor Infra’s North American business and Zent-Frenger would have been €1,107.7 million.The comparable operating profit was €92.7 (99.3) million. Comparable operating profit had an increase of 11.0% from the comparison period without the divested Uponor Infra’s North American business and Zent-Frenger (2018: €83.5 million). Operating profit was €91.3 (106.7) million, a decline of 14.5%.Earnings per share were €0.72 (0.72).Cash flow from operations was €109.2 (79.9) million.Return on investment was 14.4% (17.2). Gearing was 37.6% (39.4) on 31 Dec. Without the adoption of IFRS 16, return on investment would have been 14.8% and gearing would have been 26.5%.Organic growth refers to Uponor’s operations without the divested businesses.
Jyri Luomakoski, President and CEO, comments:“Our guidance for 2019 was based on comparison figures (net sales €1,107.7 million and comparable operating profit €83.5 million) which excluded the impacts of entities divested in 2018. From that baseline, we saw a positive development in our comparable operating profit margin from 7.5% to 8.4%. Our profitability has continuously improved year-on-year since 2013.Building Solutions – Europe suffered from operational challenges, as launching and scaling up the production of the new fitting, S-Press PLUS, affected performance during the year. The decline in net sales also had an impact on profitability. On the positive side, the continuous corrective measures taken at our manufacturing facility in Virsbo, Sweden, have started to have a favourable impact on productivity. The development in the Eastern European market was also positive throughout the year. The segment will focus on implementing operational excellence initiatives in 2020.Building Solutions – North America had a good year, after a slow start in the first quarter. We are pleased that our second manufacturing facility in Hutchinson, Minnesota, which was opened in 2018, is up and running according to plans. Both the U.S. and Canadian markets developed positively.Uponor Infra continued the successful execution of its profitability improvement strategy, which had a negative impact on the segment’s net sales. In 2020, Uponor Infra continues to seek growth opportunities with designed solutions sales.In comparison to the previous years, the growth in many of our key markets has further slowed down, although there are regional differences in these trends. Overall the construction market is still on a good level. In 2020, we expect the markets to remain on similar level as in 2019. We will continue to advance our strategic agenda and execute our operational excellence programme. The first signs of the benefits of this programme should be visible during the second half of 2020.”
Guidance statement for 2020:Uponor expects comparable operating profit to improve from 2019.  
The Board’s dividend proposal:The Board proposes to the Annual General Meeting that a dividend of €0.53 (0.51) per share be paid, of which 26 cents will be paid in March 2020 and 27 cents is planned to be paid in September 2020.
Key figures*) Illustrative figures without divested Uponor Infra’s North American business and Zent-Frenger.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 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 on the impacts of IFRS 16 can found on page 24.
Uponor Corporation’s long-term financial targets(updated on 13 February 2019)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.
News conference, webcast and the presentation
A news conference for analysts, fund managers, investors and representatives of the media will be arranged at Savoy, Eteläesplanadi 14 (Meeting rooms 2&3, 7th floor), Helsinki, Finland on 12 February at 10:00 EET.A webcast of the news conference in English will be broadcast on 12 February at 10:00 EET. It can be viewed via our IR website at 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.
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
Uponor CorporationDISTRIBUTION:
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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 AttachmentUponor_full_year_results_2019