UPONOR'S INTERIM REPORT FOR JANUARY-JUNE 2007
Growth continued in the second quarter
- Improvement in net sales and results continued in the second quarter
- Net sales for January-June came to 635.0 (551.4) million euros, a change of
+15.2%
- January-June operating profit was 81.5 (61.7) million euros, a change of
+32.1%
- Earnings per share were 0.74 (0.57) euros
- Return on investment over the period was 40.1% (29.2%), with 51.0% (7.6%)
gearing
- Guidance remains unchanged: full-year organic growth in net sales is expected
to be around 10 per cent, and the operating profit and operating profit margin
are expected to improve from the levels recorded in 2006
CEO Jan Lång comments on the financial performance for the period:
- Growth continued, but the growth rate slowed down as anticipated from the high
level witnessed in the first quarter.
- In North America, we implemented various reorganisation measures that clearly
improved our profitability, despite the downturn of the residential construction
markets.
- We are progressing in the implementation of our strategy as planned. In the
high-rise market segment, in particular, we have established new partnerships
and pilot projects across Europe.
Presentation material is available, and a teleconference will be held:
Following the release of this report, the presentation material for the interim
report will be available at www.uponor.com/investors, under 'IR material'.
Uponor will hold a teleconference in English for equity analysts today, at
5:00pm Finnish time (London: 3:00pm, New York: 10:00am). Those who would like to
participate should call +44 20 7019 0812, using a DTMF telephone and the
participant code ‘Uponor'. Instructions are available at
www.uponor.com/investors.
Markets
Demand for both housing solutions and infrastructure applications was active in
the second quarter of 2007.
There was healthy demand in Central Europe. In Germany, which is the largest
market in the Central Europe region, the residential building market declined
significantly while stable growth was seen in the area of commercial and public
buildings, according to available market information. Hence, demand for plumbing
applications grew somewhat in the second quarter, whereas underfloor heating did
not reach the growth level recorded in the first quarter. Other Central European
markets showed steady growth.
Demand remained strong in the Nordic region throughout the second quarter,
though hindered somewhat by a shortage of installation capacity that slowed down
activities. In contrast to development in the other Nordic countries, market
activity flattened out in Denmark.
Market conditions and construction activity in the Uponor Europe - West, East,
South region, e.g. in the UK, Ireland, France and Italy, remained mainly brisk.
In Spain, there were signs of slowing down in the building market but demand in
Uponor's product groups stayed healthy. Construction levels remained positive in
the Baltic countries and Russia. In the UK and Ireland infrastructure market,
demand in the utilities sector increased markedly from that in the equivalent
period in 2006.
The US market for new houses continued to operate at a historically low level.
The sales rate of new homes remained weak, and the large inventory of unsold new
and existing homes continued to be an issue, contributing to the relatively low
rate of establishment of new housing.
Net sales
Uponor's consolidated net sales for April-June grew by 11.1 per cent on the
comparison period and totalled 334.2 (300.9) million euros.
The net sales of Uponor Central Europe grew by 9.7 million euros on the
comparison period, a growth of 11.4%. Sales developed well, especially in
plumbing.
In the Nordic region, net sales were on a clearly higher level than that of the
second quarter of 2006, due to high building activity, market growth, and
increased price levels, especially in the infrastructure sector.
In the diverse Uponor Europe - West, East, South region, Spain and France
continued to show positive development, and there was good progress also in
Eastern Europe. Net sales in the infrastructure sector in the UK and Ireland
developed well.
Despite the continued downturn in the US housing market, the net sales of Uponor
North America were up by 7.6% on the comparison period. The distribution channel
returned to normal buying patterns after having reduced stocks at the end of
2006 and in the first quarter of 2007.
Net sales by segment, April-June:
--------------------------------------------------------------------------------
| MEUR | 4-6/2007 | 4-6/2006 | Change |
--------------------------------------------------------------------------------
| Central Europe | 95.6 | 85.9 | 11.4% |
--------------------------------------------------------------------------------
| Nordic | 116.0 | 104.1 | 11.3% |
--------------------------------------------------------------------------------
| Europe - West, East, South | 115.8 | 99.5 | 16.3% |
--------------------------------------------------------------------------------
| North America | 49.9 | 46.4 | 7.6% |
--------------------------------------------------------------------------------
| (North America, MUSD | 67.2 | 58.9 | 14.3%) |
--------------------------------------------------------------------------------
| Eliminations | -43.1 | -35.0 | |
--------------------------------------------------------------------------------
| Total | 334.2 | 300.9 | 11.1% |
--------------------------------------------------------------------------------
January-June net sales totalled 635.0 (551.4) million euros, representing growth
of 15.2%. The growth rate slowed down as compared to that for the first quarter
of the year.
Net sales by segment, January-June:
--------------------------------------------------------------------------------
| MEUR | 1-6/2007 | 1-6/2006 | Change |
--------------------------------------------------------------------------------
| Central Europe | 189.7 | 159.5 | 18.9% |
--------------------------------------------------------------------------------
| Nordic | 210.5 | 178.6 | 17.8% |
--------------------------------------------------------------------------------
| Europe - West, East, South | 232.2 | 187.2 | 24.0% |
--------------------------------------------------------------------------------
| North America | 85.7 | 91.1 | -5.9% |
--------------------------------------------------------------------------------
| (North America, MUSD | 114.3 | 112.6 | 1.6%) |
--------------------------------------------------------------------------------
| Eliminations | -83.1 | -65.0 | |
--------------------------------------------------------------------------------
| Total | 635.0 | 551.4 | 15.2% |
--------------------------------------------------------------------------------
Results and profitability
Uponor's operating profit for the second quarter was improved from the
comparison period. Consolidated operating profit for April-June totalled 50.2
(39.9) million euros, representing a growth of 25.8%. Profitability also
improved, as the profit margin rose to 15.0 (13.3) per cent.
- In Uponor Central Europe, operating profit decreased when compared to that of
the exceptionally strong second quarter of 2006. The main reasons for the weaker
development were a temporary increase in supply chain costs and costs related to
marketing campaigns, along with a higher proportion of internal sales.
- Uponor Nordic recorded a modest improvement in operating profit; however, the
result was affected by increased internal sales and intensified efforts in the
development of new businesses.
- Operating profit increased in Uponor Europe - West, East, South. Positive
development continued throughout the region. In the UK and Irish infrastructure
business, increased volumes supported positive development of profitability.
- In North America, profitability improved due to reorganisation measures
resulting in better cost management as well as improvements in manufacturing and
supply chain processes.
Operating profit by segment, April-June:
--------------------------------------------------------------------------------
| MEUR | 4-6/2007 | 4-6/2006 | Change |
--------------------------------------------------------------------------------
| Central Europe | 12.5 | 13.7 | -8.3% |
--------------------------------------------------------------------------------
| Nordic | 19.0 | 18.3 | 4.3% |
--------------------------------------------------------------------------------
| Europe - West, East, South | 16.9 | 7.8 | 118.4% |
--------------------------------------------------------------------------------
| North America | 7.4 | 2.4 | 212.4% |
--------------------------------------------------------------------------------
| (North America, MUSD | 9.9 | 3.0 | 231.4%) |
--------------------------------------------------------------------------------
| Other | -4.1 | -3.1 | |
--------------------------------------------------------------------------------
| Eliminations | -1.5 | 0.8 | |
--------------------------------------------------------------------------------
| Total | 50.2 | 39.9 | 25.8% |
--------------------------------------------------------------------------------
Due to the strong first quarter, the operating profit for the first half of the
year came to 81.5 (61.7) million euros, up 32.1% on the previous year's figure.
Operating profit by segment, January-June:
--------------------------------------------------------------------------------
| MEUR | 1-6/2007 | 1-6/2006 | Change |
--------------------------------------------------------------------------------
| Central Europe | 23.4 | 23.5 | -0.2% |
--------------------------------------------------------------------------------
| Nordic | 29.0 | 24.5 | 18.4% |
--------------------------------------------------------------------------------
| Europe - West, East, South | 30.1 | 14.8 | 103.5% |
--------------------------------------------------------------------------------
| North America | 8.2 | 4.1 | 101.2% |
--------------------------------------------------------------------------------
| (North America, MUSD | 10.9 | 5.0 | 117.2%) |
--------------------------------------------------------------------------------
| Other | -6.3 | -4.1 | |
--------------------------------------------------------------------------------
| Eliminations | -2.9 | -1.1 | |
--------------------------------------------------------------------------------
| Total | 81.5 | 61.7 | 32.1% |
--------------------------------------------------------------------------------
Consolidated profit before taxes for January-June came to 79.4 (60.6) million
euros, up 30.9% from the previous year. Taxes amounted to 25.0 (18.7) million
euros, with a tax rate of 31.5 (31.0) per cent.
The result for the financial period was 54.4 (41.9) million euros.
Earnings per share (basic and diluted) were 0.74 (0.57) euros. Equity per share
was 4.02 (5.32) euros, basic and diluted.
Investment and financing
The amount of investment remained roughly at the same level as before. The
largest share of investment funds was allocated to the enterprise resource
planning (ERP) system implementation in Europe. Investments in production
capacity expansions and automation were made in Uponor Nordic and Uponor - West,
East, South.
Gross investments for January-June totalled 17.0 (19.0) million euros, or 2.7
(3.4) per cent of net sales.
Gearing rose to 51.0 (7.6) per cent. The reasons for the increase were increased
stock levels, in anticipation of the peak season, and the long-term target
related to the company's capital structure, set by the Uponor Board of
Directors. To reach that target, dividends were paid out in autumn 2006 and
spring 2007. The solvency ratio declined to 38.7 (57.5) per cent. Net
interest-bearing liabilities increased to 150.1 (29.7) million euros.
Return on investment (ROI) grew to 40.1 (29.2) per cent and return on equity
(ROE) to 34.1 (20.7) per cent.
Key events during the period
Uponor's strategy is built on three main pillars: growth, operational
excellence, and strengthening of the Uponor brand. In the period under review,
efforts in all three areas of focus continued according to plan.
In line with the company's growth strategy and strengthening of market presence,
new partnerships in the high-rise segment were established in several European
countries. Market coverage was expanded in the Russian and Baltic markets,
including the first major entry to the Russian high-rise market. New offices and
training facilities were opened in several countries, including Italy, Latvia,
Romania, Ukraine, Ireland, and Russia.
In accordance with its strategy, Uponor has invested resources in the
development of its cooling business. In Spain, which is one of the key potential
markets for cooling in Europe, a television advertising campaign was launched to
increase brand recognition and consumer awareness of underfloor heating and
cooling solutions. In addition, to stimulate innovative solutions for solar
radiant heating and cooling in the Spanish market, Uponor made a marketing
agreement with ClimateWell, a company specialising in solar and air-conditioning
equipment.
A significant renovation contract was won in the UK, where an agreement was
signed to refurbish 8,000 dwellings with Uponor's composite pipe plumbing over
the course of four years.
Along with the strategic initiative to harmonise processes and achieve
operational excellence, the preparations for subsequent rollouts of a common
European ERP system have continued in the Nordic countries and the Iberian
Peninsula. The system was implemented first in Germany, in 2006.
Uponor has extended its contract to supply a telecommunications pipe system to
TDC in Denmark, worth an estimated 10 million euros over a term running to the
end of 2009.
Uponor was one of the official congress partners of Clima 2007, a scientific
congress held in June in Helsinki, Finland, that covered all aspects of HVAC
technology. The event allowed Uponor to further intensify partnerships with the
leading international experts and scientists in the field.
Human resources and organisation
The reported number of Group employees averaged 4,417 (4,216) during the period
under review, an increase of 201 persons from the second quarter of 2006. At the
end of the period, the Group had 4,562 employees, 308 more than in June 2006.
The increase in the number of employees resulted mainly from added staff in
production operations. In the US, the sales and marketing functions were
strengthened, to equip them better to support realisation of the company's
strategic objectives.
In April, Sebastian Bondestam joined the company as member of the Uponor
Corporation Executive Committee, assuming responsibility for the company's
supply chain function.
Share capital and shares
The number of Uponor shares exchanged on the Helsinki Stock Exchange increased
in the second quarter to 16.6 (10.3) million shares, and the monetary value of
the shares exchanged totalled 486.8 (233.9) million euros. The market value of
the share capital at the end of the period was 2.1 (1.5) billion euros, and the
number of shareholders was 8,239 (6,731).
Pursuant to the decision of the Uponor Corporation Board of Directors, a total
of 16,500 shares held by the company were cancelled during the period under
review. The cancellation had no effect on the share capital of the company. At
the end of the period, Uponor Corporation's share capital amounted to
146,446,888 euros, and its number of shares totalled 73,206,944.
Sampo Life Insurance Company Ltd announced, on 24 May 2007, that their holdings
represent under 5% of the voting rights and share capital of Uponor Corporation.
Events after the report period
At the beginning of July, Uponor expanded its pan-European ERP system to its
first Nordic site, in Kungsör, Sweden. The system went live according to plans
and without any material disruptions to the business.
Short-term outlook
Recent economic and construction activity forecasts predict no significant
deviations from the previous guidance in Uponor's business environment or the
economic environment this year.
Uponor's financial results are exposed to a number of strategic, operational,
financial, and hazard risks. For further details on these, see Uponor's
Financial Report 2006.
Demand is expected to remain at a good level for the second half of 2007 in most
European markets. In Germany, where construction activity grew from the second
half of last year through early 2007, market demand is expected to decrease
driven by slower residential construction activity.
In the US, new housing construction is expected to decline year on year by some
20 per cent.
Uponor's performance in the second quarter was in line with the company's
expectations that formed the basis for the revision of guidance after the first
quarter. Hence, that guidance remains valid: In 2007, organic growth in net
sales is expected to be around 10 per cent, fully meeting the long-term
financial target of a minimum 6% organic net sales growth rate over the cycle.
Operating profit and the operating profit margin are expected to improve from
the levels recorded in 2006.
Uponor Corporation
Board of Directors
For further information, please contact:
President and CEO Jan Lång, at tel. +358 20 129 2822
CFO and Deputy CEO Jyri Luomakoski, at tel. +358 40 515 4498
Tarmo Anttila
Vice President, Communications
Tel. +358 20 129 2852
DISTRIBUTION:
Helsinki Stock Exchange
Media
www.uponor.com
Information on the interim report
The figures in brackets in this interim report are the reference figures for the
equivalent period in 2006. The change percentages reported in the interim report
have been calculated from exact figures, not from rounded figures published in
the interim report.
INTERIM REPORT 1-6/2007, IFRS
The figures in this interim report are unaudited.
CONSOLIDATED INCOME STATEMENT
--------------------------------------------------------------------------------
| MEUR | 1-6/ | 1-6/ | 4-6/ | 4-6/ | 1-12/ |
| | 2007 | 2006 | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
| Net sales | 635.0 | 551.4 | 334.2 | 300.9 | 1,157.0 |
--------------------------------------------------------------------------------
| Cost of goods sold | 403.9 | 355.2 | 208.1 | 192.1 | 743.8 |
--------------------------------------------------------------------------------
| Gross profit | 231.1 | 196.2 | 126.1 | 108.8 | 413.2 |
--------------------------------------------------------------------------------
| Other operating income | 1.0 | 1.2 | 0.5 | 0.9 | 3.7 |
--------------------------------------------------------------------------------
| Dispatching and | 14.6 | 12.3 | 7.6 | 6.2 | 25.7 |
| warehousing expenses | | | | | |
--------------------------------------------------------------------------------
| Sales and marketing | 96.1 | 88.1 | 48.2 | 45.4 | 176.6 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Administration expenses | 31.3 | 25.1 | 15.7 | 12.4 | 51.0 |
--------------------------------------------------------------------------------
| Other operating | 8.6 | 10.2 | 4.9 | 5.8 | 19.9 |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 81.5 | 61.7 | 50.2 | 39.9 | 143.7 |
--------------------------------------------------------------------------------
| Financial expenses, net | 2.1 | 1.1 | 2.1 | 1.9 | 2.2 |
--------------------------------------------------------------------------------
| Profit before taxes | 79.4 | 60.6 | 48.1 | 38.0 | 141.5 |
--------------------------------------------------------------------------------
| Income taxes | 25.0 | 18.7 | 15.2 | 11.7 | 45.0 |
--------------------------------------------------------------------------------
| Profit for the period | 54.4 | 41.9 | 32.9 | 26.3 | 96.5 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, EUR | 0.74 | 0.57 | 0.45 | 0.36 | 1.32 |
--------------------------------------------------------------------------------
| Diluted earnings per | 0.74 | 0.57 | 0.45 | 0.36 | 1.32 |
| share, EUR | | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
--------------------------------------------------------------------------------
| MEUR | 30.6. | 30.6. | 31.12. |
| | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
| Assets | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Property, plant and equipment | 209.4 | 205.9 | 211.8 |
--------------------------------------------------------------------------------
| Intangible assets | 96.9 | 88.5 | 97.6 |
--------------------------------------------------------------------------------
| Securities and long-term investments | 3.6 | 10.5 | 3.6 |
--------------------------------------------------------------------------------
| Deferred tax assets | 22.4 | 18.5 | 20.9 |
--------------------------------------------------------------------------------
| Total non-current assets | 332.3 | 323.4 | 333.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Inventories | 158.5 | 128.6 | 128.1 |
--------------------------------------------------------------------------------
| Accounts receivable | 247.0 | 206.8 | 150.6 |
--------------------------------------------------------------------------------
| Other receivables | 13.7 | 14.5 | 18.9 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 10.1 | 4.7 | 12.4 |
--------------------------------------------------------------------------------
| Total current assets | 429.3 | 354.6 | 310.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | 761.6 | 678.0 | 643.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity and liabilities | | | |
--------------------------------------------------------------------------------
| Shareholders' equity | 294.4 | 389.4 | 344.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 20.8 | 21.8 | 17.2 |
--------------------------------------------------------------------------------
| Deferred tax liability | 16.7 | 17.2 | 16.9 |
--------------------------------------------------------------------------------
| Provisions | 10.4 | 9.4 | 10.8 |
--------------------------------------------------------------------------------
| Employee benefits and other liabilities | 25.4 | 26.8 | 29.2 |
--------------------------------------------------------------------------------
| Total non-current liabilities | 73.3 | 75.2 | 74.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 139.4 | 12.6 | 16.9 |
--------------------------------------------------------------------------------
| Provisions | 6.5 | 6.7 | 4.7 |
--------------------------------------------------------------------------------
| Accounts payable | 97.0 | 80.9 | 90.0 |
--------------------------------------------------------------------------------
| Other liabilities | 151.0 | 113.2 | 113.8 |
--------------------------------------------------------------------------------
| Total current liabilities | 393.9 | 213.4 | 225.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total shareholders' equity and liabilities | 761.6 | 678.0 | 643.9 |
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT
--------------------------------------------------------------------------------
| MEUR | 1-6/ | 1-6/ | 1-12/ |
| | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
| Net cash from operations | 100.6 | 80.0 | 180.7 |
--------------------------------------------------------------------------------
| Change in net working capital | -79.3 | -41.9 | 5.2 |
--------------------------------------------------------------------------------
| Paid income taxes | -23.9 | -19.8 | -37.9 |
--------------------------------------------------------------------------------
| Paid interest | -3.1 | -1.4 | -3.9 |
--------------------------------------------------------------------------------
| Received interest | 1.1 | 1.3 | 3.2 |
--------------------------------------------------------------------------------
| Cash flow from operations | -4.6 | 18.2 | 147.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investments | | | |
--------------------------------------------------------------------------------
| Proceeds from disposal of subsidiaries | - | 0.5 | 0.3 |
--------------------------------------------------------------------------------
| Purchase of fixed assets | -17.0 | -19.0 | -54.2 |
--------------------------------------------------------------------------------
| Proceeds from sales of fixed assets | 0.4 | 4.4 | 6.5 |
--------------------------------------------------------------------------------
| Loan repayments | 0.1 | 10.7 | 18.6 |
--------------------------------------------------------------------------------
| Cash flow from investments | -16.5 | -3.4 | -28.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing | | | |
--------------------------------------------------------------------------------
| Borrowings of debt | 122.6 | 8.6 | 14.7 |
--------------------------------------------------------------------------------
| Repayments of debt | -0.3 | - | -1.7 |
--------------------------------------------------------------------------------
| Dividends paid | -102.5 | -65.8 | -166.0 |
--------------------------------------------------------------------------------
| Payment of finance lease liabilities | 1.0 | -1.1 | -2.0 |
--------------------------------------------------------------------------------
| Other financial items | - | -0.8 | 0.0 |
--------------------------------------------------------------------------------
| Cash flow from financing | 18.8 | -59.1 | -155.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Conversion differences for cash and cash | 0.0 | 0.1 | 0.0 |
| equivalents | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in cash and cash equivalents | -2.3 | -44.2 | -36.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents at 1 January | 12.4 | 48.9 | 48.9 |
--------------------------------------------------------------------------------
| Cash and cash equivalents at end of period | 10.1 | 4.7 | 12.4 |
--------------------------------------------------------------------------------
| Changes according to balance sheet | -2.3 | -44.2 | -36.5 |
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
--------------------------------------------------------------------------------
| MEUR | Share | Share | Other | Treasury| Trans | Retai | Total |
| | capi | pre | reserv | shares | lation | ned | |
| | tal | mium | es | | reserve | ear | |
| | | | | | | nings | |
--------------------------------------------------------------------------------
| Balance | 146.4 | 42.5 | 6.7 | -1.6 | -10.2 | 160.6 | 344.4 |
| at 31 Dec | | | | | | | |
| 2006 | | | | | | | |
--------------------------------------------------------------------------------
| Translation | | | -2.0 | | -2.0 |
| differences | | | | | |
--------------------------------------------------------------------------------
| Net profit for | | | | 54.4 | 54.4 |
| the period | | | | | |
--------------------------------------------------------------------------------
| Total recognised | | | | -2.0 | 54.4 | 52.4 |
| income and expense | | | | | | |
| for the period | | | | | | |
--------------------------------------------------------------------------------
| Cancelling of | | | 0.3 | | -0.3 | - |
| shares | | | | | | |
--------------------------------------------------------------------------------
| Dividend paid (EUR | | | | | -102.5 | -102.5 |
| 1.40 | | | | | | |
| per share) | | | | | | |
--------------------------------------------------------------------------------
| Share based | | | 1.3 | | -1.3 | - |
| incentive plan | | | | | | |
--------------------------------------------------------------------------------
| Other adjustments | | 0.1 | | | | 0.1 |
--------------------------------------------------------------------------------
| Balance | 146.4 | 42.5 | 6.8 | - | -12.2 | 110.9 | 294.4 |
| at 30 Jun | | | | | | | |
| 2007 | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance | 148.8 | 40.1 | 3.3 | -21.2 | -5.4 | 252.8 | 418.4 |
| at 31 Dec | | | | | | | |
| 2005 | | | | | | | |
--------------------------------------------------------------------------------
| Translation | | | | -5.2 | | -5.2 |
| differences | | | | | | |
--------------------------------------------------------------------------------
| Net profit for the | | | | | 41.9 | 41.9 |
| period | | | | | | |
--------------------------------------------------------------------------------
| Total recognised | | | | -5.2 | 41.9 | 36.7 |
| income and expense | | | | | | |
| for the period | | | | | | |
--------------------------------------------------------------------------------
| Cancel | -2.3 | 2.3 | | 19.6 | | -19.6 | - |
| li | | | | | | | |
| ng of | | | | | | | |
| shares | | | | | | | |
--------------------------------------------------------------------------------
| Dividend paid (EUR | | | | | -65.8 | -65.8 |
| 0.90 per share) | | | | | | |
--------------------------------------------------------------------------------
| Share based | | | | | 0.2 | 0.2 |
| incentive plan | | | | | | |
--------------------------------------------------------------------------------
| Other | -0.1 | 0.1 | 1.1 | | | -1.2 | -0.1 |
| adjust | | | | | | | |
| me | | | | | | | |
| nts | | | | | | | |
--------------------------------------------------------------------------------
| Balance | 146.4 | 42.5 | 4.4 | -1.6 | -10.6 | 208.3 | 389.4 |
| at 30 Jun | | | | | | | |
| 2006 | | | | | | | |
--------------------------------------------------------------------------------
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
ACCOUNTING PRINCIPLES
The interim report has been prepared in compliance with International Financial
Reporting Standards (IFRS) as adopted by EU and IAS 34 Interim Financial
Reporting. In interim reports Uponor Group follows the same principles as in the
annual financial statement 2006.
The Group has adopted the following new and amended standards from 1 January
2007:
- IFRS 7 Financial instruments: Disclosures
- Amendment to IAS 1 Presentation of Financial Statements - Capital Disclosures
The adoption of standard and amendment has impact on information presented in
the notes to consolidated financial statements.
--------------------------------------------------------------------------------
| PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS |
--------------------------------------------------------------------------------
| MEUR | 1-6/ | 1-6/ | 1-12/ |
| | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
| Gross investment | 17.0 | 19.0 | 54.2 |
--------------------------------------------------------------------------------
| - % of net sales | 2.7 | 3.4 | 4.7 |
--------------------------------------------------------------------------------
| Depreciation | 18.6 | 17.3 | 35.6 |
--------------------------------------------------------------------------------
| Book value of disposed fixed assets | 0.4 | 4.9 | 6.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PERSONNEL | | | |
--------------------------------------------------------------------------------
| Converted to full time employees | 1-6/ | 1-6/ | 1-12/ |
| | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average | 4,417 | 4,216 | 4,260 |
--------------------------------------------------------------------------------
| At the end of the period | 4,562 | 4,254 | 4,325 |
--------------------------------------------------------------------------------
| OWN SHARES | | | |
--------------------------------------------------------------------------------
| | 30.6. | 30.6. | 31.12. |
| | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Own shares held by the company, pcs | - | 88,000 | 88,000 |
--------------------------------------------------------------------------------
| - of share capital, % | - | 0.1 % | 0.1 % |
--------------------------------------------------------------------------------
| - of voting rights, % | - | 0.1 % | 0.1 % |
--------------------------------------------------------------------------------
SEGMENT INFORMATION
--------------------------------------------------------------------------------
| | Geographical segments |
--------------------------------------------------------------------------------
| | | 1-6/2007 | 1-6/2006 |
--------------------------------------------------------------------------------
| | MEUR | Exter | Inter | Total | Exter | Inter | Total |
| | | nal | nal | | nal | nal | |
--------------------------------------------------------------------------------
| | Segment revenue | | | | | |
--------------------------------------------------------------------------------
| | Central | 151.0 | 38.7 | 189.7 | 131.1 | 28.4 | 159.5 |
| | Europe | | | | | | |
--------------------------------------------------------------------------------
| | Nordic | 168.3 | 42.2 | 210.5 | 143.7 | 34.9 | 178.6 |
--------------------------------------------------------------------------------
| | Europe | 231.1 | 1.1 | 232.2 | 185.5 | 1.7 | 187.2 |
| | - West, | | | | | | |
| | East, | | | | | | |
| | South | | | | | | |
--------------------------------------------------------------------------------
| | North | 84.6 | 1.1 | 85.7 | 91.1 | - | 91.1 |
| | America | | | | | | |
--------------------------------------------------------------------------------
| | Elimina | - | -83.1 | -83.1 | - | -65.0 | -65.0 |
| | tions | | | | | | |
--------------------------------------------------------------------------------
| | Total | 635.0 | - | 635.0 | 551.4 | - | 551.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | 4-6/2007 | 4-6/2006 |
--------------------------------------------------------------------------------
| | | Exter | Inter | Total | Exter | Inter | Total |
| | | nal | nal | | nal | nal | |
--------------------------------------------------------------------------------
| | Segment revenue | | | | | |
--------------------------------------------------------------------------------
| | Central | 75.5 | 20.1 | 95.6 | 71.2 | 14.7 | 85.9 |
| | Europe | | | | | | |
--------------------------------------------------------------------------------
| | Nordic | 94.5 | 21.5 | 116.0 | 84.5 | 19.6 | 104.1 |
--------------------------------------------------------------------------------
| | Europe | 115.3 | 0.5 | 115.8 | 98.8 | 0.7 | 99.5 |
| | - West, | | | | | | |
| | East, | | | | | | |
| | South | | | | | | |
--------------------------------------------------------------------------------
| | North | 48.9 | 1.0 | 49.9 | 46.4 | - | 46.4 |
| | America | | | | | | |
--------------------------------------------------------------------------------
| | Elimina | - | -43.1 | -43.1 | - | -35.0 | -35.0 |
| | tions | | | | | | |
--------------------------------------------------------------------------------
| | Total | 334.2 | - | 334.2 | 300.9 | - | 300.9 |
--------------------------------------------------------------------------------
| | | | 1-12/2006 |
--------------------------------------------------------------------------------
| | | | | | Exter | Inter | Total |
| | | | | | nal | nal | |
--------------------------------------------------------------------------------
| | Segment revenue | | | | | |
--------------------------------------------------------------------------------
| | Central Europe | | | 283.5 | 61.6 | 345.1 |
--------------------------------------------------------------------------------
| | Nordic | | | | 305.2 | 72.6 | 377.8 |
--------------------------------------------------------------------------------
| | Europe | | 385.3 | 2.6 | 387.9 |
| | - West, East, South | | | | |
--------------------------------------------------------------------------------
| | North America | | | 183.0 | - | 183.0 |
--------------------------------------------------------------------------------
| | Elimination | | | | - | -136.8 | -136.8 |
| | s | | | | | | |
--------------------------------------------------------------------------------
| | Total | | | | 1157.0 | - | 1157.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | | 1-6/ | 1-6/ | 4-6/ | 4-6/ | 1-12/ |
| | | | 2007 | 2006 | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
| | Segment result | | | | | |
--------------------------------------------------------------------------------
| | Central Europe | 23.4 | 23.5 | 12.5 | 13.7 | 49.3 |
--------------------------------------------------------------------------------
| | Nordic | | 29.0 | 24.5 | 19.0 | 18.3 | 56.6 |
--------------------------------------------------------------------------------
| | Europe | 30.1 | 14.8 | 16.9 | 7.8 | 38.2 |
| | - West, East, South | | | | | |
--------------------------------------------------------------------------------
| | North America | 8.2 | 4.1 | 7.4 | 2.4 | 14.5 |
--------------------------------------------------------------------------------
| | Others | | -6.3 | -4.1 | -4.1 | -3.1 | -12.0 |
--------------------------------------------------------------------------------
| | Elimination | | -2.9 | -1.1 | -1.5 | 0.8 | -2.9 |
| | s | | | | | | |
--------------------------------------------------------------------------------
| | Total | | 81.5 | 61.7 | 50.2 | 39.9 | 143.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | MEUR | | | | 1-6/ | 1-6/ | 1-12/ |
| | | | | | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
| | Segment depreciation and | | | | |
| | impairments | | | | |
--------------------------------------------------------------------------------
| | Central Europe | | | 3.7 | 3.6 | 7.8 |
--------------------------------------------------------------------------------
| | Nordic | | | | 5.2 | 5.3 | 10.7 |
--------------------------------------------------------------------------------
| | Europe | | 5.3 | 4.9 | 9.4 |
| | - West, East, South | | | | |
--------------------------------------------------------------------------------
| | North America | | | 2.6 | 2.9 | 5.7 |
--------------------------------------------------------------------------------
| | Others | | | | 1.6 | 0.3 | 1.6 |
--------------------------------------------------------------------------------
| | Eliminations| | | | 0.2 | 0.3 | 0.4 |
--------------------------------------------------------------------------------
| | Total | | | | 18.6 | 17.3 | 35.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Segment investments | | | | | |
--------------------------------------------------------------------------------
| | Central Europe | | | 4.1 | 2.4 | 7.5 |
--------------------------------------------------------------------------------
| | Nordic | | | | 5.8 | 4.6 | 14.7 |
--------------------------------------------------------------------------------
| | Europe | | 3.1 | 3.1 | 8.6 |
| | - West, East, South | | | | |
--------------------------------------------------------------------------------
| | North America | | | 3.3 | 5.0 | 8.8 |
--------------------------------------------------------------------------------
| | Others | | | | 0.7 | 3.9 | 14.6 |
--------------------------------------------------------------------------------
| | Total | | | | 17.0 | 19.0 | 54.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | MEUR | | | | 1-6/ | 1-6/ | 1-12/ |
| | | | | | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
| | Segment assets | | | | | |
--------------------------------------------------------------------------------
| | Central Europe | | | 200.5 | 203.6 | 197.6 |
--------------------------------------------------------------------------------
| | Nordic | | | | 232.0 | 260.3 | 203.5 |
--------------------------------------------------------------------------------
| | Europe | | 253.2 | 212.2 | 223.3 |
| | - West, East, South | | | | |
--------------------------------------------------------------------------------
| | North America | | | 121.7 | 107.3 | 109.5 |
--------------------------------------------------------------------------------
| | Others | | | | 628.0 | 651.0 | 612.5 |
--------------------------------------------------------------------------------
| | Eliminations| | | | -673.8 | -756.4 | -702.5 |
--------------------------------------------------------------------------------
| | Total | | | | 761.6 | 678.0 | 643.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Segment liabilities | | | | | |
--------------------------------------------------------------------------------
| | Central Europe | | | 113.6 | 119.0 | 132.2 |
--------------------------------------------------------------------------------
| | Nordic | | | | 279.1 | 340.1 | 270.3 |
--------------------------------------------------------------------------------
| | Europe | | 137.8 | 118.9 | 115.8 |
| | - West, East, South | | | | |
--------------------------------------------------------------------------------
| | North America | | | 54.7 | 48.9 | 46.8 |
--------------------------------------------------------------------------------
| | Others | | | | 573.1 | 439.9 | 454.8 |
--------------------------------------------------------------------------------
| | Eliminations| | | | -691.1 | -778.2 | -720.4 |
--------------------------------------------------------------------------------
| | Total | | | | 467.2 | 288.6 | 299.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | Segment personnel, average | | | | |
--------------------------------------------------------------------------------
| | Central Europe | | | 1,246 | 1,144 | 1,167 |
--------------------------------------------------------------------------------
| | Nordic | | | | 1,367 | 1,280 | 1,309 |
--------------------------------------------------------------------------------
| | Europe | | 1,189 | 1,128 | 1,132 |
| | - West, East, South | | | | |
--------------------------------------------------------------------------------
| | North America | | | 558 | 616 | 603 |
--------------------------------------------------------------------------------
| | Others | | | | 57 | 48 | 49 |
--------------------------------------------------------------------------------
| | Total | | | | 4,417 | 4,216 | 4,260 |
--------------------------------------------------------------------------------
| Business segments | 1-6/2007 |
--------------------------------------------------------------------------------
| | Segment external | | Housing | Infra | Total |
| | revenue | | solu | struc | |
| | | | tions | ture solu | |
| | | | | tions | |
--------------------------------------------------------------------------------
| | Central Europe | | 151.0 | - | 151.0 |
--------------------------------------------------------------------------------
| | Nordic | | 71.1 | 97.2 | 168.3 |
--------------------------------------------------------------------------------
| | Europe - West, East, South | 136.0 | 95.1 | 231.1 |
--------------------------------------------------------------------------------
| | North America | | 84.6 | - | 84.6 |
--------------------------------------------------------------------------------
| | Total | | 442.7 | 192.3 | 635.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | 1-6/2006 |
--------------------------------------------------------------------------------
| | Segment external | | Housing | Infra | Total |
| | revenue | | solu | struc | |
| | | | tions | ture solu | |
| | | | | tions | |
--------------------------------------------------------------------------------
| | Central Europe | | 131.1 | - | 131.1 |
--------------------------------------------------------------------------------
| | Nordic | | 58.8 | 84.9 | 143.7 |
--------------------------------------------------------------------------------
| | Europe | 100.2 | 85.3 | 185.5 |
| | - West, East, South | | | |
--------------------------------------------------------------------------------
| | North America | | 91.1 | - | 91.1 |
--------------------------------------------------------------------------------
| | Total | | 381.2 | 170.2 | 551.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | 1-12/2006 |
--------------------------------------------------------------------------------
| | Segment external | | Housing | Infra | Total |
| | revenue | | solu | Struc | |
| | | | tions | ture solu | |
| | | | | tions | |
--------------------------------------------------------------------------------
| | Central Europe | | 283.5 | - | 283.5 |
--------------------------------------------------------------------------------
| | Nordic | | 127.7 | 177.5 | 305.2 |
--------------------------------------------------------------------------------
| | Europe | 210.2 | 175.1 | 385.3 |
| | - West, East, South | | | |
--------------------------------------------------------------------------------
| | North America | | 183.0 | - | 183.0 |
--------------------------------------------------------------------------------
| | Total | | 804.4 | 352.6 | 1,157.0 |
--------------------------------------------------------------------------------
CONTINGENT LIABILITIES
--------------------------------------------------------------------------------
| MEUR | 30.6. | 30.6. | 31.12. |
| | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
| Group: | | | |
--------------------------------------------------------------------------------
| Mortgages | - | 2.1 | - |
| - on own behalf | | | |
--------------------------------------------------------------------------------
| Guarantees | | | |
--------------------------------------------------------------------------------
| - on behalf of others | 12.7 | 12.6 | 12.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Parent company: | | | |
--------------------------------------------------------------------------------
| Guarantees | | | |
--------------------------------------------------------------------------------
| - on behalf of a subsidiary | 11.0 | 11.8 | 11.4 |
--------------------------------------------------------------------------------
| - on behalf of others | 9.5 | 10.0 | 9.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OPERATING LEASE LIABILITIES | 24.2 | 21.3 | 24.4 |
--------------------------------------------------------------------------------
DERIVATIVE CONTRACTS
--------------------------------------------------------------------------------
| MEUR | Nomi | Fair | Nomi | Fair | Nomi | Fair |
| | nal | value | nal | value | nal | value |
| | value | 30.6. | value | 30.6. | value | 31.12. |
| | 30.6. | 2007 | 30.6. | 2006 | 31.12. | 2006 |
| | 2007 | | 2006 | | 2006 | |
--------------------------------------------------------------------------------
| Foreign | 2.4 | 0.0 | 12.5 | 0.2 | 6.4 | 0.1 |
| currency | | | | | | |
| derivatives | | | | | | |
| - Forward | | | | | | |
| agreements | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Commodity | 4.9 | 0.1 | 4.8 | 1.1 | 5.6 | -0.4 |
| derivatives | | | | | | |
| - Forward | | | | | | |
| agreements | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Currency | 46.9 | -0.2 | 4.5 | 0.0 | 6.6 | 0.1 |
| swaps | | | | | | |
--------------------------------------------------------------------------------
COMMERCIAL PAPER PROGRAMME
In February Uponor Corporation increased its EUR 100 million domestic Commercial
Paper Programme to EUR 150 million. The proceeds of the programme will be used
to fund short-term working capital needs.
SHARE BASED PAYMENTS
In February the members of Executive Committee received 71,500 shares in
compliance with share based incentive scheme published May 6, 2004. Share based
payments were expensed 2004-2006 according to IFRS 2 standard.
RELATED PARTY TRANSACTIONS
Associated companies
--------------------------------------------------------------------------------
| MEUR | 1-6/ | 1-6/ | 1-12/ |
| | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
| Net sales to associated companies | 2.3 | 1.9 | 3.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balances at the end of the period | | | |
--------------------------------------------------------------------------------
| Loan receivable from associated companies | 1.1 | - | 1.1 |
--------------------------------------------------------------------------------
| Accounts and other receivables | 1.7 | 1.4 | 0.4 |
--------------------------------------------------------------------------------
| Accounts payables and other liabilities | 0.5 | 0.2 | 0.1 |
--------------------------------------------------------------------------------
KEY FIGURES
--------------------------------------------------------------------------------
| | 1-6/ | 1-6/ | 1-12/ |
| | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
| Earnings per share, EUR | 0.74 | 0.57 | 1.32 |
--------------------------------------------------------------------------------
| - diluted | 0.74 | 0.57 | 1.32 |
--------------------------------------------------------------------------------
| Operating profit, % | 12.8 | 11.2 | 12.4 |
--------------------------------------------------------------------------------
| Return on equity, %, cumulative | 34.1 | 20.7 | 25.3 |
--------------------------------------------------------------------------------
| Return on investment, %, cumulative | 40.1 | 29.2 | 35.8 |
--------------------------------------------------------------------------------
| Solvency ratio, % | 38.7 | 57.5 | 53.6 |
--------------------------------------------------------------------------------
| Gearing, % | 51.0 | 7.6 | 6.3 |
--------------------------------------------------------------------------------
| Net interest-bearing liabilities | 150.1 | 29.7 | 21.7 |
--------------------------------------------------------------------------------
| Equity per share, EUR | 4.02 | 5.32 | 4.71 |
--------------------------------------------------------------------------------
| - diluted | 4.02 | 5.32 | 4.70 |
--------------------------------------------------------------------------------
| Trading price of shares | | | |
--------------------------------------------------------------------------------
| - low, EUR | 25.56 | 18.00 | 18.00 |
--------------------------------------------------------------------------------
| - high, EUR | 31.45 | 26.40 | 29.35 |
--------------------------------------------------------------------------------
| - average, EUR | 28.20 | 21.81 | 22.73 |
--------------------------------------------------------------------------------
| Shares traded | | | |
--------------------------------------------------------------------------------
| - 1,000 pcs | 39,438 | 18,557 | 42,417 |
--------------------------------------------------------------------------------
| - MEUR | 1,112 | 405 | 964 |
--------------------------------------------------------------------------------
DEFINITIONS OF KEY RATIOS
Return on Equity (ROE), %
Profit before taxes - taxes
= ------------------------------------------------ x 100
Shareholders' equity + minority interest,average
Return on Investment (ROI), %
Profit before taxes
+ interest and other financing costs
= ------------------------------------------- x 100
Balance sheet total
- non-interest-bearing liabilities, average
Solvency, %
Shareholders' equity +/- minority interest
= ------------------------------------------ x 100
Balance sheet total
- advance payments received
Gearing, %
Net interest-bearing liabilities
= ------------------------------------------ x 100
Shareholders' equity + minority interest
Net interest-bearing liabilities
= Interest-bearing liabilities
- cash, bank receivables and financial assets
Earnings per share (EPS)
Profit for the period
= -------------------------------------------------
Number of shares adjusted for share issue in
financial period excluding treasury shares
Equity per share ratio
Shareholders' equity
= -------------------------------------------------------
Average number of shares adjusted for share issue
at end of year
Average share price
Total value of shares traded (EUR)
= --------------------------------
Total number of shares traded