Uponor Corporation Stock exchange release 8 February 2007 13:00
RESULTS RELEASE: Uponor achieves its targets for 2006
- Net sales: EUR 1,157.0m (2005: 1,031.4m), a change of +12.2%
- Operating profit: EUR 143.7m (123.0m), growth of +16.8%
- Profit before taxes: EUR 141.5m (120.5m)
- Cash flow before financing: EUR 118.5m (139,8m) and gearing of 6.3 (-6.4)
- Boards dividend proposal: a total of EUR 1.40 (0.90) per share
- Expectations for 2007: organic growth exceeding 6% and an increase
in profit margin from 2006 levels
Uponor adopted the International Financial Reporting Standards (IFRS)
as of 1 January 2005. Consequently, the accounts for 2006, with the
relevant comparable figures, have been compiled in accordance with
IFRS.
Comparable figures have been adjusted to take account of the impact of
exchange rate fluctuations and divestments.
Last quarter of 2006
For the last quarter of 2006, net sales totalled EUR 285.9 (261.5)
million, up 9.3% year on year. Operating profit came to EUR 29.9
(32.3) million.
The net sales of Uponors European regional organisations continued to
develop favourably in the last quarter of 2006, showing a growth of
close to, or over, 20% on a year earlier. In addition to strong
demand, the growth in net sales was supported by sales prices that
were higher than in the previous year. In North America, net sales
decreased by almost 30% due to a substantial decline in building
activities toward the end of the year and the distribution channel
reducing its inventory levels.
The last quarters profit margin fell short of the 2005 figure.
A significant factor affecting this comparison is the disposal gain
of EUR 2.3 million reported in the Others segment in the last quarter
of 2005 arising from the sale of the last investment property.
Further, the negative development was attributable to the mathematical
marginal erosion caused by price increases as well as the additional
costs arising from the demand exceeding our capacity, requiring us to
implement exceptional arrangements in the form of overtime work and
subcontracting to external parties. Measures aimed at compensating for
the fall in profitability caused by the substantially reduced demand in
North America did not generate savings for the last quarter of 2006.
CEO Jan Lång commented on the 2006 financial statements as follows:
We achieved our long-term financial targets, published in 2003,
during the 2006 financial year and made good progress in implementing
our strategic agenda. We were particularly delighted by the fact that
we were able to take advantage of our strong market position as
construction sector demand continued to be at a high level in our main
markets. In the Europe West, East, South region, we were able to
generate strong organic growth, in addition to which the recovery of
the German building market in the latter part of the year after
several years slump was a positive sign for the future.
The successful implementations of our new enterprise resource planning
system in Germany provided concrete proof of our progress toward a
unified Uponor that operates as an integrated whole across national
and organisational boundaries.
For 2007, we expect overall construction activity to slow down
slightly in our main markets from the 2006 levels. In order to meet
our organic growth targets, we need to make successful use of our new
market segments, in particular by achieving a strong position in our
present regional markets high-rise segment while strengthening our
position in those markets in both Western and Eastern Europe, where
our presence is not yet that prominent.
Dividend proposal
The Board proposes to the AGM that a dividend of EUR 1.40 (EUR 0.90)
per share be paid for the 2006 financial year. The Board bases its
proposal on the companys dividend distribution policy published in
November, on the basis of which an ordinary dividend of EUR 1.15 per
share is proposed. In order to achieve a capital structure meeting the
companys long-term financial goals published in the same connection,
the Board proposes an extra dividend of EUR 0.25.
Presentation material and teleconference
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 6:00pm Finnish time (London 4:00pm and New York 11:00am)
and those who would like to participate should call (using a DTMF
telephone) +44 20 7019 0812, participant code: Uponor. Presentation
will be shown on the Internet. Instructions to join the web-meeting
are available at www.uponor.com/investors.
Uponor Corporation
Board of Directors
Contact for further information:
Jan Lång, President and CEO; tel. +358 20 129 2822
Jyri Luomakoski, CFO and Deputy CEO; tel. +358 40 515 4498
ANNEX:
Review by the Board of Directors
Tables
DISTRIBUTION
Helsinki Stock Exchange
Media
www.uponor.com
Financial statements for 1 Jan. 31 Dec. 2006
Review by the Board of Directors
Overview
For Uponor, 2006 was one of the most successful years in the companys
history. Uponor carried out restructuring measures according to plan,
allowing the company to concentrate on its strategic priorities:
growth, brand development and enhancing operational efficiency. Work
on these priorities progressed as planned.
Overall, there was a positive sentiment in Uponors principal markets.
The companys largest market, the United States, showed a markedly
weaker demand towards the end of the financial year. The German market
was flat in the first half until it picked up clearly during the
second half. Spain showed favourable sales development while market
demand elsewhere in Europe varied from satisfactory to brisk.
Net sales
In 2006, Uponor posted consolidated net sales of EUR 1,157.0 million
(2005: EUR 1,031.4), up 12.2 per cent year on year.
Uponor Central Europe (18.6 per cent) and Uponor Europe WES (19.0
per cent) reported the strongest growth in net sales, while Uponor
Nordics 13.6 per cent growth markedly exceeded the Groups growth
targets. Uponor North Americas net sales growth (1.8 per cent)
remained modest due to a considerably weakening demand in housing
construction during the second half, as a result of a contraction of
12.9 per cent in housing starts.
Net sales by segment for 1 Jan. 31 Dec. 2006:
2006 2005 Reported
1-12 1-12 change, %
Central Europe 345.1 291.1 +18.6
Nordic 377.8 332.6 +13.6
Europe West, East, South 387.9 325.9 +19.0
North America, EUR 183.0 179.8 +1.8
(North America, USD 230.9 222.2 +3.9)
Others, EUR - 3.9
Eliminations -136.8 -101.9
_____________________________________________________________________
Total 1,157.0 1,031.4 12.2
Demand in the largest Central European market, Germany, recovered
during 2006 after several sluggish years, Uponors housing solutions
in Germany recording a net sales increase of 17.0 per cent. Demand for
housing solutions in other Central European markets also showed
favourable development. Moreover, growth in the plastic systems
market share contributed to Uponors growth, since price increases of
competing raw materials, mainly copper, boosted the competitiveness of
plastic pipe systems.
Demand for housing solutions in Uponor Nordic remained strong,
reflected in net sales growth of 23.5 per cent, which was also partly
supported by brisk demand in other Uponor regions. In Uponor Nordic,
infrastructure solutions posted 4.9 per cent growth in net sales, a
significant proportion of this growth being due to product price
increases offsetting higher material costs.
The Uponor Europe WES housing solutions business expanded rapidly,
with annual organic growth at slightly over 32 per cent. In certain,
large markets, such as Spain, Uponors strong market position paved
the way for growth, involving targeted measures to enhance customer
loyalty. In geographical terms, Uponor expanded and strengthened its presence
in a few markets, such as the U.K., France, Russia and the Baltic
countries. In the U.K. in particular, the infrastructure business
showed favourable development amidst difficult market conditions
characterised by occasional challenges presented by higher raw
material costs and the availability of raw materials. Extensive supply
contracts concluded in late 2005 and during 2006 guaranteed high
capacity utilisation rates and net sales growth of 25 per cent.
Secondary segment net sales for housing solutions rose to EUR 804.4
million (697.5), with organic growth at 15.3 per cent. Infrastructure
solutions posted net sales of EUR 352.6 million (332.7), representing
organic growth of 12.3 per cent, excluding divestments. This net sales
growth by housing solutions stemmed from a combination of higher
volumes and prices, while the growth in infrastructure solutions net
sales came mostly from higher sales prices resulting from higher raw
material costs.
The largest geographical markets and their share of consolidated net
sales in 2006 were as follows: USA 14.0% (15.4), Germany 13.9% (14.7),
U.K. 11.2% (9.8), Finland 9.1% (9.7), Spain 8.1% (6.4), Sweden 7.4%
(7.2) and Denmark 6.3% (6.2).
Results
Consolidated operating profit came to EUR 143.7 million (123.0),
accounting for 12.4 per cent (11.9) of net sales. Like-for-like
operating profit improved by 16.8 per cent on a year earlier. This
improvement was mainly due to the leverage effect of increased sales,
higher sales prices compensating for higher raw material costs and the
improved production cost structure resulting from the restructuring
programme. Operating profit was affected by major expenditure on the
further development of the companys operations, such as the
development of a common enterprise resource planning (ERP) system and
the brand strategy.
Operating profit by segment for 1 Jan. 31 Dec. 2006:
2006 2005 Reported
1-12 1-12 change, %
Central Europe 49.3 34.5 43.0
Nordic 56.6 45.4 24.5
Europe West, East, South 38.2 30.0 27.3
North America, EUR 14.5 22.7 -36.2
(North America, USD 18.3 28.1 -34.8)
Others, EUR -12.0 -8.3
Eliminations -2.9 -1.3
_____________________________________________________________________
Total 143.7 123.0 16.8
All of the European regional organisations posted improved results and
profitability. Uponor Central Europe showed the greatest improvement
in profitability, with EUR 4.5 million of restructuring expenses
recorded in 2005 affecting year-on-year comparability. The leverage
effect resulting from growth and streamlining measures also
contributed to improved profitability in Uponor Central Europe and
Uponor Nordic.
Although Uponor Europe WES recorded the fastest net sales growth, it
did not enjoy the same kind of leverage effect on profitability as
Uponor Central Europe and Uponor Nordic, due to its business
structure. A significant share of the regions growth came from sales
units, which purchase their products from other regional
organisations. Operating profit reported by Uponor Europe WES was
also affected by EUR 3.0 million in capital losses on the divestment
of the German and Czech infrastructure operations in the spring of
2006.
Uponor North Americas results and profitability fell significantly
due to declining construction, resulting in the distribution channel
lowering inventories. At the same time, price competition toughened in
the housing solutions market. North Americas results at the beginning
of the year were also eroded by disproportionate increases in distribution
costs.
Consolidated operating profit reported for 2006 was in line with the
forecasts announced at the beginning of the financial year and updated
in subsequent interim reports, according to which operating profit for
2006 would exceed that recorded for 2005 and profit margin would meet
the long-term target of a minimum of 12 per cent of net sales.
Consolidated profit before taxes from continuing operations rose by
17.4 per cent, to EUR 141.5 (120.5) million. At a tax rate of 31.8
(31.4) per cent, income taxes totalled EUR 45.0 (37.8) million. Profit
for the financial year totalled EUR 96.5 million (82.7).
Thanks to the stronger balance sheet, net financial expenses decreased
to EUR 2.2 million (2.5), despite higher interest rates.
Return on equity stood at 25.3 (20.3) per cent and return on
investment rose to 35.8 (28.1) per cent.
Earnings per share (diluted and undiluted) were EUR 1.32 (1.12).
Equity per share (undiluted) was EUR 4.71 (5.72) and (diluted)
EUR 4.70 (5.72).
Cash flow from operations was EUR 147.3 million, which is EUR 11.3
million below the 2005 level due mainly to taxes paid in 2006 that
were EUR 21.1 million higher than the year before.
Investments, research and development, and financing
Investments in 2006 were mainly allocated to the development of an
enterprise resource planning (ERP) system and common processes, as
well as the enhancement of the production network. The largest single
investment, EUR 13.8 million, was the pan-European ERP system. Gross
investments totalled EUR 54.2 million (49.0), up EUR 5.2 million,
while net investments came to EUR 47.4 million (20.7).
R&D expenditure showed a slight decrease, totalling EUR 16.5 million
(17.4), accounting for 1.4 per cent (1.7) of net sales.
Uponor Group already achieved a very strong financial position in 2005
due to finalised divestments of non-core assets and strong cash flow
from business operations. In 2006, cash flow from operations remained
strong. Dividends paid out during the financial year, a total of EUR
166.0 million (ordinary dividends of EUR 65.8 million and extra
dividends of EUR 100.2 million), returned the balance sheet to a net
debt position. Net interest-bearing liabilities increased to EUR 21.7
(-26.9). The solvency ratio stood at 53.6 per cent (63.2) and gearing
was 6.3 per cent (-6.4).
Key events
Uponor underwent a major change in its history in early 2006 when all
of its various system brands assumed the Uponor brand and the company
adopted a new visual identity. These measures also enabled the
combination of four German sales organisations to form one of the
markets strongest, unified Uponor organisation.
In February, Uponor announced that it would place a stronger focus on
the high-rise segment, which, in addition to the single-family home
segment, provides a firmer basis for organic growth in Uponors
housing solutions products. The financial year saw the launch of
targeted measures for the new market segment.
Uponors pan-European enterprise resource planning (ERP) system
project is progressing as planned. In July, a sales office in Germany
was the first to adopt the related limited functionality. In early
December, the rest of the German system sales and production
operations adopted the new ERP system successfully.
In the U.K., Uponor won several multi-year contracts for the supply of
municipal pipe systems with local utilities. At a total value of
around EUR 25 million per year, the largest single contract has a
duration of seven years with a one-year extension option.
The summer saw the completion in North America of the extension of the
office and production facilities, initiated in the preceding year,
making it again possible to combine the functions previously housed in
several buildings in the area under the same roof.
In early September, Uponor confirmed a new organisation aimed at
further unifying Uponor by rotating and redistributing top management
duties. At the same time, Europe WES underwent changes in its
management system, supporting the further development of this most
vigorously growing regional organisation.
In early November, Uponors Board of Directors set new long-term Group
targets for 200709. For example, the profit margin target increased
from the previous minimum of 12 per cent to the current minimum of 15
per cent. On the Capital Markets Day held at the same time, Uponor
presented its cooling application, which is expected to become a
product line of long-term significance similar to the radiant floor
heating business.
Personnel
The Group had a staff of 4,325 (4,126) at the end of the year, while
the reported number of employees in 2006 averaged 4,260 (2005: 4,169
and 2004: 4,684). The increase in staff numbers largely reflects
organic growth in business. Wages and salaries for the financial year
totalled EUR 181.3 million (2005: 164.4 and 2004: 182.5).
The geographical breakdown of personnel was as follows: Germany 1,207
(27.9%), Sweden 681 (15.7%), U.K. 502 (11.6%), Finland 478 (11.1%),
USA 392 (9.1%), Spain 281 (6.5%) and other countries 784 (18.1%).
Risks associated with business
Strategic risks
Uponors business is concentrated in Europe and North America, where
exposure to political risks is perceived as low. Since Uponors net
sales are divided among a large number of customers, the majority of
which are distributors (wholesalers), demand for the companys
products are evenly spread among end users. The largest single
customer generates less than 10 per cent of Uponors net sales.
With respect to suppliers, Uponor aims to use supplies and raw
materials provided by a large number of suppliers. In the event of a
sole supplier, it must have at least two production plants
manufacturing goods used by Uponor.
Operational risks
The prices of raw materials used in the manufacture of plastic pipe
systems are susceptible to other petrochemical product price
fluctuations. In recent years, Uponor has been capable of passing the
effects of such fluctuations onto its selling prices with a reasonable
delay in such a way that this has not resulted in any major income
losses. Demand for Uponors end products depends on business cycles in
the construction sector. These business cycles are somewhat offset by
demand for renovation projects, which is not always based on
discretion to the same extent as new housing projects.
Financial risks
Since Uponor has strengthened its balance sheet in the last few years,
financial risks plays a considerably smaller role in the companys
risk management. A substantial share of Uponors net sales are created
in currencies other than the euro, but for the most part expenses
allocated to these net sales are also denominated in the local
currencies in question. Consequently, the translation risk is the most
significant currency risk, reflected in translating non-euro area
results into the euro.
Hazard risks
Uponor runs 17 production plants in 11 countries and products
manufactured in these plants generate a major proportion of the
companys net sales. Uponor co-ordinates indemnity and business
interruption insurance at Group-level on a centralised basis, in order
to achieve an extensive insurance coverage neutralising financial
damage caused by any risks associated with machine breakdowns, fire
etc. Another major hazard risk is associated with product liability
related to products manufactured and sold by Uponor. Product liability
is also insured at Group level.
The year 2006 saw no materialised risks, pending litigations or other
legal proceedings or measures by the authorities that could have had a
material significance to the Group.
Administration and audit
The Annual General Meeting (AGM) of 16 March 2006 re-elected the
following Board members for a term of one year: Anne-Christine
Silfverstolpe Nordin, Jorma Eloranta, Pekka Paasikivi, Aimo Rajahalme
and Rainer S. Simon. The Board re-elected Pekka Paasikivi Chairman of
the Board and Aimo Rajahalme Deputy Chairman. The AGM elected KPMG Oy
Ab, Authorised Public Accountants, the companys auditor, with Sixten
Nyman, Authorised Public Accountant, acting as the principal auditor.
Share capital and shares
At the beginning of 2006, Uponor Corporations share capital totalled
EUR 148,766,888 and the number of shares 74,383,444, while the year-
end share capital was worth EUR 146,446,888 with the number of shares
totalling 73,233,444. This decrease resulted from the invalidation of
1,160,000 shares as decided by the Annual General Meeting of 16 March.
At a nominal value of EUR 2, each share entitles its holder to one
vote at the shareholders meeting.
Board authorisations
The AGM of 16 March 2006 authorised the Board of Directors to decide,
by 16 March 2007, on the buyback of the companys own shares using
distributable earnings from unrestricted equity. The combined par
value of the shares to be bought back, together with the par value of
own shares already held by the corporation, may not exceed five per
cent of the company share capital and voting rights held at the time
of the buyback.
The Extraordinary General Meeting of 27 October 2006 authorised the
Board of Directors to decide on transferring, without payment, a
maximum of 88,000 of treasury shares at a per-share par value of two
(2) euros to the companys Executive Committee members, under the
terms of the 2004 share-based incentive scheme, and on other issues
related to the transfer.
Treasury shares
During the financial year, Uponor Oyjs Board of Directors did not
exercise the AGMs authorisation to buy back own shares.
Management shareholding
The members of the Board of Directors, CEO and his deputy, as well as
corporations known to the company, in which they exercise control,
held a total of 458,515 Uponor shares on 31 December 2006. These
shares accounted for 0.6 per cent of all company shares and total
votes.
Share-based incentive programme
In April 2004, Uponor Corporations Board of Directors decided to
launch a new incentive programme aimed at Executive Committee members,
who would have the opportunity to receive a share-based reward in
2007, based on the attainment of a pre-determined cumulative EBITA
target set for the period of three years from 2004 to 2006,
corresponding to a maximum net value of 80,000 Uponor shares. The CEO
and CFO are not entitled to dispose of the shares earned under this
programme during their term of employment, without the consent of the
Board of Directors. For other Executive Committee members, half of the
shares earned are subject to the same restriction. The Board of
Directors has the possibility to raise or reduce the number of shares
by ten per cent, depending on whether the companys other long-term
objectives are achieved.
Events after the financial year
At its meeting on 8 February 2007, the Board of Directors decided on
granting bonuses based on the 20042006 incentive programme.
Cumulative EBITA for the financial year achieved the maximum target
under the programme and the Board of Directors decided to transfer
71,500 shares to seven Executive Committee members. In addition, the
company will pay a cash bonus equalling taxes and similar charges
resulting from the share transfer.
Outlook for 2007
Construction in Europe is expected to remain active although the
growth rate is anticipated to slow down from the previous years
level. In Germany, construction is expected to continue to recover. In
Eastern Europe, construction is projected to grow, but this market
does not yet account for a substantial share of Uponors net sales.
In North America, especially the U.S.A, general market expectations
look unfavourable. However, there are wide variations between these
expectations, which is why anticipating demand proves challenging. On
average, housing starts are expected to decline by around 15 per cent.
The expected increase in the market share of plastic plumbing systems
and investments in the high-rise segment will support Uponors growth.
In addition, growth will be supported by those European market areas
where Uponor has not yet achieved a satisfactory position. For these
reasons, organic growth in net sales is expected to reach the long-
term target of minimum 6 per cent.
Supported by organic growth and as a result of recent years
development efforts, the profit margin is expected to improve from the
2006 level. Operating profit in euro is also projected to exceed the
level recorded in 2006.
TABLES
FINAL QUARTER 2006
CONSOLIDATED INCOME STATEMENT
10-12 10-12
2006 2005
Net sales 285.9 261.5
Cost of goods sold 186.3 168.6
Gross profit 99.6 92.9
Other operating income 1.6 2.2
Dispatching and 7.0 6.1
warehousing expenses
Sales and marketing 46.4 40.3
expenses
Administration expenses 13.4 12.9
Other operating expenses 4.5 3.5
Operating profit 29.9 32.3
Financial expenses, net 0.9 1.3
Profit before taxes 29.0 31.0
Income taxes 9.6 9.2
Profit for the period 19.4 21.8
Earnings per share 0.27 0.30
Diluted earnings per 0.27 0.30
share
SEGMENT INFORMATION
10-12 10-12
2006 2005
Primary segments
Segment revenue
Central Europe 88.7 70.2
Nordic 98.0 80.3
Europe - West, East, 93.9 80.6
South
North America 38.8 54.9
Others - 0.1
Eliminations -33.5 -24.6
Uponor Group 285.9 261.5
Segment result
Central Europe 10.6 7.2
Nordic 12.9 10.5
Europe - West, East, 9.8 10.2
South
North America 3.4 6.3
Others -4.9 -2.2
Eliminations -1.9 0.3
Uponor Group 29.9 32.3
ANNUAL ACCOUNTS
CONSOLIDATED INCOME STATEMENT
2006 2005
Net sales 1,157.0 1,031.4
Cost of goods sold 743.8 667.6
Gross profit 413.2 363.8
Other operating income 3.7 6.2
Dispatching and 25.7 23.6
warehousing expenses
Sales and marketing 176.6 158.2
expenses
Administration expenses 51.0 47.7
Other operating expenses 19.9 17.5
Operating profit 143.7 123.0
Financial expenses, net 2.2 2.5
Profit before taxes 141.5 120.5
Income taxes 45.0 37.8
Profit for the period 96.5 82.7
Earnings per share 1.32 1.12
Diluted earnings per 1.32 1.12
share
CONSOLIDATED BALANCE SHEET
31 Dec 31 Dec
2006 2005
Assets
Intangible assets 97.6 85.1
Tangible assets 211.8 214.9
Securities and long-term 3.6 19.4
investments
Deferred tax assets 20.9 18.3
Total fixed assets 333.9 337.7
Inventories 128.1 111.4
Current receivables 169.5 165.3
Cash and cash equivalent 12.4 48.9
Total current assets 310.0 325.6
Total Assets 643.9 663.3
Shareholders' equity and liabilities
Shareholders' equity 344.4 418.4
Non-current interest 17.2 19.4
bearing liabilities
Provisions 15.5 14.8
Current interest-bearing 16.9 2.6
liabilities
Non-interest-bearing 249.9 208.1
liabilities
Total liabilities 299.5 244.9
Total shareholders' 643.9 663.3
equity and liabilities
CONSOLIDATED CASH FLOW
1 Jan 1 Jan
31 Dec 2006 31 Dec 2005
Net cash from operations
Profit for the period 96.5 82.7
Adjustment for non-cash 84.2 70.8
items
Net cash from operations 180.7 153.5
Change in net working 5.2 22.8
capital
Paid income taxes -37.9 -16.8
Paid interest -3.9 -4.2
Received interest 3.2 3.3
Cash flow from operations 147.3 158.6
Cash flow from investments
Proceeds from share - 0.5
divestments
Proceeds from disposal of 0.3 19.4
subsidiaries
Purchase of fixed assets -54.2 -49.0
Proceeds from sale of 6.5 8.4
fixed assets
Granted loans - -
Loan repayments 18.6 1.9
Cash flow from -28.8 -18.8
investments
Cash flow before 118.5 139.8
financing
Cash flow from financing
Borrowings of debt 14.7 -
Repayments of debt -1.7 -46.1
Share issue - -
Dividends paid -166.0 -52.0
Purchase of own shares - -20.0
Payment of finance lease -2.0 -2.2
liabilities
Cash flow from financing -155.0 -120.3
Conversion differences for - -0.1
cash and cash equivalents
Change in cash and cash -36.5 19.4
equivalents
Cash and cash equivalents 48.9 29.5
at 1 January
Cash and cash equivalents 12.4 48.9
at 31 December
Changes according to -36.5 19.4
balance sheet
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Share Share Other Treasury
capital premium reserves shares
Balance at 1 January 2005 149.6 33.0 7.7 -6.7
Translation adjustments - - - -
Net profit for the period - - - -
Total recognised income - - - -
and expense for the
period
Cancelling of shares -0.8 0.8 - 5.5
Purchase of own shares - - - -20.0
Dividend paid - - - -
Other adjustments - 6.3 -4.4 -
Share based incentive plan - - - -
Balance at 31 December 2005 148.8 40.1 3.3 -21.2
Balance at 1 January 2006 148.8 40.1 3.3 -21.2
Translation adjustments - - - -
Net profit for the period - - - -
Total recognised income - - - -
and expense for the period
Cancelling of shares -2.3 2.3 - 19.6
Dividend paid - - - -
Other adjustments -0.1 0.1 3.4 -
Share based incentive plan - - - -
Balance at 31 December 2006 146.4 42.5 6.7 -1.6
Accumu Retained Total
lated earnings
conversion
differences
Balance at 1 January 2005 -15.5 228.9 397.0
Translation adjustments 10.1 - 10.1
Net profit for the period - 82.7 82.7
Total recognised income 10.1 82.7 92.8
and expense for the period
Cancelling of shares - -5.5 -
Purchase of own shares - - -20.0
Dividend paid - -52.0 -52.0
Other adjustments - -1.8 0.1
Share based incentive plan - 0.5 0.5
Balance at 31 December 2005 -5.4 252.8 418.4
Balance at 1 January 2006 -5.4 252.8 418.4
Translation adjustments -4.8 - -4.8
Net profit for the period - 96.5 96.5
Total recognised income -4.8 96.5 91.7
and expense for the period
Cancelling of shares - -19.6 -
Dividend paid - -166.0 -166.0
Other adjustments - -3.4 -
Share based incentive plan - 0.3 0.3
Balance at 31 December 2006 -10.2 160.6 344.4
2006 2005
KEY FIGURES
Earnings per share, EUR 1.32 1.12
- fully diluted 1.32 1.12
Return on Equity (ROE),% 25.3 20.3
Return on Investment (ROI),% 35.8 28.1
Solvency, % 53.6 63.2
Gearing, % 6.3 -6.4
Equity per share, EUR 4.71 5.72
- fully diluted 4.70 5.72
Issue-adjusted share prices,
EUR
- highest 29.35 19.78
- lowest 18.00 13.72
- average 22.73 16.39
Share trading, MEUR 964.0 477.7
Share trading, 42,417 29,090
in thousands
INVESTMENTS, MEUR
Gross investments 54.2 49.0
- % of net sales 4.7 4.8
Depreciation 35.6 31.8
PERSONNEL
Average 4,260 4,169
At the end of period 4,325 4,126
OWN SHARES
Own shares held by the 88,000 1,248,000
company
- combined nominal 176,000 2,496,000
value, EUR
- of share capital, % 0.1 1.7
SEGMENT INFORMATION
Primary segments
Segment revenue
Central Europe 345.1 291.1
Nordic 377.8 332.6
Europe - West, East,South 387.9 325.9
North America 183.0 179.8
Others - 3.9
Eliminations -136.8 -101.9
Uponor Group 1,157.0 1,031.4
Segment result
Central Europe 49.3 34.5
Nordic 56.6 45.4
Europe - West, East,South 38.2 30.0
North America 14.5 22.7
Others -12.0 -8.3
Eliminations -2.9 -1.3
Uponor Group 143.7 123.0
Secondary segments
2006
Segment external revenue Housing Infra Others Total
solutions structure
solutions
Central Europe 283.5 - - 283.5
Nordic 127.7 177.5 - 305.2
Europe - West, East,South 210.2 175.1 - 385.3
North America 183.0 - - 183.0
Others - - - -
Total 804.4 352.6 - 1157.0
2005
Segment external revenue Housing Infra Others Total
solutions structure
solutions
Central Europe 248.0 - - 248
Nordic 110.7 166.7 - 277.4
Europe - West, East,South 159.0 163.3 - 322.3
North America 179.8 - - 179.8
Others - 2.7 1.2 3.9
Total 697.5 332.7 1.2 1031.4
CONTINGENT LIABILITIES 2006 2005
Group:
- on own behalf
Mortgages issued 0.0 2.6
- on behalf of others
Guarantees issued 12.6 13.0
Operating lease 24.4 22.2
commitments
Parent company:
Guarantees issued
- on behalf of a 11.4 10.1
subsidiary
- on behalf of others 9.7 10.2
DERIVATIVE CONTRACTS
Foreign currency derivatives
Forward agreements 6.4 26.9
Currency swaps 6.6 -
Commodity derivatives
Forward agreements 5.6 3.2