Uponor's interim results Jan-Mar 2007: Year begins with a strong improvement
- Net sales and results improved in the first quarter
- January - March net sales MEUR 300.8 (250.5), a change of 20.1%
- January - March operating profit MEUR 31.3 (21.8), a change of 43.6%
- Earnings per share EUR 0.29 (0.21)
- Return on investment at 32.5% (21.8%), gearing at 62 % (12.6%)
- Full-year net sales growth expected to be around 10 per cent
- Full-year operating profit and operating profit margin expected to improve
from
the previous year.
CEO JAN LÅNG COMMENTS ON THE FINANCIAL PERFORMANCE FOR THE PERIOD:
- A very strong performance supported by market demand and a strengthened
market
position.
- We are making progress on our strategic agenda items, with our organisational
improvements essentially completed and a healthy flow of projects obtained in
our new target segments.
- In a difficult market environment, our North American operative performance
has
been sound, supported by improved market activities and an adjusted cost base
while the results are still behind those of the previous year.
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 5:00
pm 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.
Interim report for January-March 2007:
Markets
Demand for both housing solutions and infrastructure applications was active
during the first quarter of 2007. The penetration of plastic pipe systems
continued, and was further supported by the sustained high price levels of
copper. The economic environment in most European markets has been positive, and
the mild weather conditions have enabled construction activities.
In Germany, which is the largest market in the Central Europe region,
residential building permits declined in the fourth quarter of 2006 while an
increase in non-residential building permits was reported for the same period.
Market conditions in the versatile Uponor Europe - West, East, South region vary
between different countries. Increased interest rates may have an effect on the
number of building permits, especially in Spain, where construction activity has
remained at a high level.
In the infrastructure business in the UK and Ireland, regulatory targets in the
UK gas and water sectors set the levels of replacement work to be achieved, and
UK gas and water utilities have had to increase their spending, increasing
demand for Uponor products. Overall, the economy remains in growth and house
pricing and demand are strong in the UK.
The favourable market situation in Uponor Nordic continued during the first
quarter of 2007. Building activities remained on a high level in all Nordic
countries. The winter has been mild, which has contributed to lively demand,
including that for infrastructure systems. The building industry is suffering
from a labour shortage.
In Uponor North America, US housing starts declined by around 6 per cent from
the previous quarter. Compared to the same period last year, housing starts are
down by about 25 per cent, which has contributed to sluggish demand for our
products. Overall competitiveness in the market has increased.
Net sales
Uponor's consolidated net sales for the first quarter totalled MEUR 300.8
(250.5), or 20.1 per cent more than for Q1/2006. The most significant factor
contributing to growth in net sales was continued, steady demand. Our efforts to
enter the high-rise segment are also beginning to show results. During the first
quarter, Uponor implemented price increases across its operating regions, but
the effect of these were not fully visible in the first quarter net sales
figures.
Growth in net sales is fully meeting the long-term annual growth target of above
6 per cent (average over the cycle).
Net sales by segment (January-March):
--------------------------------------------------------------------------------
| MEUR | Q1/2007 | Q1/2006 | Change |
--------------------------------------------------------------------------------
| Central Europe | 94.1 | 73.6 | 27.7% |
--------------------------------------------------------------------------------
| Nordic | 94.5 | 74.5 | 27.0% |
--------------------------------------------------------------------------------
| Europe - West, East, South | 116.4 | 87.7 | 32.8% |
--------------------------------------------------------------------------------
| North America | 35.8 | 44.7 | -19.9% |
--------------------------------------------------------------------------------
| (North America, MUSD | 47.1 | 53.7 | -12.4%) |
--------------------------------------------------------------------------------
| Other | - | - | |
--------------------------------------------------------------------------------
| Eliminations | -40.0 | -30.0 | |
--------------------------------------------------------------------------------
| Total | 300.8 | 250.5 | 20.1% |
--------------------------------------------------------------------------------
In Uponor Central Europe, growth in net sales was driven by healthy demand and
focused marketing efforts. The weather conditions during the first quarter were
also favourable to construction.
Growth in Uponor Nordic stemmed from both housing solutions and the
infrastructure business. Competition is intense, and there are many new
competitors on the market. Price increases took effect in all Nordic markets
during the first quarter but their impacts have not yet fully materialised. The
piloting phase in Uponor's new focus area, the high-rise segment, has been
encouraging.
Uponor Europe - West, East, South reported a net sales increase of 32.8 per
cent. Growth has been strong in all housing solutions business groups.
Geographically, the Iberian Peninsula and France have shown the strongest growth
figures. Efforts to increase sales continue, and ongoing customer loyalty
programmes will be expanded to strengthen customer loyalty further.
Demand in the Eastern European markets has been developing well and in line with
our expectations.
In Uponor North America, the first quarter net sales in US dollars were 12.4 per
cent below last year, which is less than the market decline. In addition to more
focussed marketing programmes, continued plastic penetration has helped to
offset the overall negative market development in the US housing market.
Results and profitability
Group operating profit was MEUR 31.3 (21.8), up 43.6 per cent from the preceding
year.
The growth in the operating profit is mainly based on the leverage effect
resulting from increased net sales, continuing steady demand and sales price
increases to offset higher material costs.
- In Uponor Central Europe, sales price increases were realised with a delay,
which lowered the profit margin.
- Operating profit increased significantly, by 87.2 per cent, in Uponor Europe -
West, East, South. There has been positive development across the region.
- In Uponor Nordic, operating profit increased from last year due to the
leverage effect resulting from high organic growth.
- In North America, the operating profit decreased by MUSD 1.0 mainly due to
volume losses partly offset by lower overall spending.
Operating profit by segment (January-March):
--------------------------------------------------------------------------------
| MEUR | Q1/2007 | Q1/2006 | Change |
--------------------------------------------------------------------------------
| Central Europe | 10.9 | 9.8 | 11.1% |
--------------------------------------------------------------------------------
| Nordic | 10.0 | 6.2 | 59.8% |
--------------------------------------------------------------------------------
| Europe - West, East, South | 13.2 | 7.0 | 87.2% |
--------------------------------------------------------------------------------
| North America | 0.8 | 1.7 | -54.4% |
--------------------------------------------------------------------------------
| (North America, MUSD | 1.0 | 2.0 | -50.0%) |
--------------------------------------------------------------------------------
| Other | -2.2 | -1.0 | |
--------------------------------------------------------------------------------
| Eliminations | -1.4 | -1.9 | |
--------------------------------------------------------------------------------
| Total | 31.3 | 21.8 | 43.6% |
--------------------------------------------------------------------------------
Consolidated profit before taxes for January - March came to MEUR 31.3 (22.6),
up 38.8 per cent on the previous year. Taxes amounted to MEUR 9.8 (7.0), with a
tax rate of 31.5 per cent (31.0). The result for the financial period was MEUR
21.5 (15.6). Earnings per share (diluted and undiluted) were EUR 0.29 (0.21).
Equity per share was 3.56 (5.0), or 3.56 (4.99) diluted.
Investment and financing
Increased demand, especially in Uponor's European regions, has set capacity
challenges, and created a need for capacity expansions, which accounted for the
majority of gross investments during the first quarter.
Gross investments during the first quarter amounted to MEUR 7.1 (8.6).
Depreciations were MEUR 9.3 (8.8) and net interest-bearing liabilities MEUR
161.4 (46.0). Gearing rose to 62 per cent (12.6).
Key events
In Central Europe, Uponor launched a new self-adhesive underfloor heating system
improving the ease and speed of installation.
Preparation for the implementation of the common European ERP system in the
Nordic region is ongoing.
The Uponor Control System for underfloor heating, first introduced in the
Central European market during the fourth quarter of 2006, has been launched
throughout the Nordic region, and has been well received.
In Sweden, the Swedish National Road Administration decided on a trial involving
the installation of surface heating in an uphill slope on a main road.
In the UK, Uponor retained the majority of the Wales and West Utilities contract
for another three years.
Uponor was active in several high-rise projects throughout its key geographical
areas.
Human resources and organisation
The reported number of Group employees averaged 4,354 (4,175) during the period
under review, an increase of 179 persons from 2006. At the end of the period,
the Group had 4,383 (4,190) employees, 193 more than in March 2006.
The addition in the number of employees resulted from staff increases, mainly in
production, warehousing and dispatching as a result of increased demand.
Annual General Meeting
The Uponor Annual General Meeting was held in Helsinki on 15 March 2007. The AGM
adopted the financial statements of Uponor Corporation and the Uponor Group and
discharged members of the Board of Directors and the managing director from
liability. It also decided to distribute a per-share dividend of EUR 1.40 for
2006. The dividend payment date was 27 March 2007.
The number of members of the Board of Directors was increased to six. All of the
previous members were re-elected: Jorma Eloranta, Pekka Paasikivi, Aimo
Rajahalme, Anne-Christine Silfverstolpe Nordin, and Rainer S. Simon. Jari
Paasikivi, President and CEO of Oras Ltd, was elected as a new member. The
members are elected for one year at a time. The Board elected Pekka Paasikivi as
Chairman and Aimo Rajahalme as Deputy Chairman.
The AGM re-elected KPMG Oy Ab, Authorised Public Accountants, to continue as the
corporation's auditor.
The AGM also authorised the Board to decide to buy back own shares, and approved
an amendment to the Articles of Association based on the new Finnish Companies
Act.
Share capital and shares
The number of Uponor shares exchanged on the Helsinki Stock Exchange increased
in the first quarter to 22.8 (8.3) million shares, and the value in euros of the
shares exchanged totalled EUR 625.4 (170.8) million. The market value of the
share capital at the end of the period was EUR 1.9 (1.6) billion, and the number
of shareholders was 9,489 (7,022).
At the beginning of 2007, Uponor Corporation's share capital amounted to EUR
146,446,888 and its number of shares totalled 73,223,444.
The AGM authorised the Board to decide, within one year, on the buyback of the
company's 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 4.8 per cent, or
3,500,000 shares, of the corporation's share capital and voting rights held at
the time of the buyback. The Board of Directors did not use this authorisation
during the period under review.
The Board of Directors has no other authorisations.
At the beginning of 2007, Uponor Corporation held 88,000 treasury shares.
Following the disposal of Uponor Corporation's own shares to the members of
Uponor's Executive Committee in accordance with the share-based incentive scheme
published on 6 May 2004, this number decreased to 16,500. At the end of the
period, they accounted for 0.02 per cent of the share capital and total voting
rights accompanying all shares.
Short-term outlook
Based on recent economic and construction activity forecasts, no significant
deviations from the previous guidance are expected in Uponor's business
environment or in 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 continue at a good level in most European markets. In
Germany, where construction activity has increased since the second half of last
year, growth is expected to flatten out in the latter part of 2007. In the USA,
housing starts are expected to decline year-on-year by some 15-20 per cent.
In the first quarter, Uponor posted strong development with respect to the
previous year and some segments exceeded internal expectations. Due to this, our
guidance for the full year has been revised.
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 per cent 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
Jan Lång, President and CEO, at tel. +358 20 129 2822
Jyri Luomakoski, CFO and Deputy CEO, at tel. +358 40 515 4498
DISTRIBUTION:
Helsinki Stock Exchange
Media
www.uponor.com
Information on the interim report:
--------------------------------------------------------------------------------
| INTERIM 1-3/2007, IFRS | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The figures in this interim report | | | | | |
| are unaudited. | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED INCOME STATEMENT | | | | | | |
--------------------------------------------------------------------------------
| MEUR | | | | 1-3/ | 1-3/ | 1-12/ |
| | | | | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | | | | 300.8 | 250.5 | 1,157.0 |
--------------------------------------------------------------------------------
| Cost of goods sold | | | | 195.8 | 163.1 | 743.8
--------------------------------------------------------------------------------
| Gross profit | | | | 105.0 | 87.4 | 413.2 |
--------------------------------------------------------------------------------
| Other operating income | | | | 0.5 | 0.3 | 3.7 |
--------------------------------------------------------------------------------
| Dispatching and warehousing | | | | 7.0 | 6.1 | 25.7 |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| Sales and marketing expenses | | | | 47.9 | 42.7 | 176.6 |
--------------------------------------------------------------------------------
| Administration expenses | | | | 15.6 | 12.7 | 51.0 |
--------------------------------------------------------------------------------
| Other operating expenses | | | | 3.7 | 4.4 | 19.9
|
--------------------------------------------------------------------------------
| Operating profit | | | | 31.3 | 21.8 | 143.7 |
--------------------------------------------------------------------------------
| Financial expenses, net | | | | 0.0 | -0.8 | 2.2
|
--------------------------------------------------------------------------------
| Profit before taxes | | | | 31.3 | 22.6 | 141.5 |
--------------------------------------------------------------------------------
| Income taxes | | | | 9.8 | 7.0 | 45.0
|
--------------------------------------------------------------------------------
| Profit for the period | | | | 21.5 | 15.6 | 96.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, EUR | | | | 0.29 | 0.21 | 1.32 |
--------------------------------------------------------------------------------
| Diluted earnings per share, EUR | | | | 0.29 | 0.21 | 1.32 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED BALANCE SHEET | | | | | | |
--------------------------------------------------------------------------------
| MEUR | | | | 31.3. | 31.3. | 31.12. |
| | | | | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
| Assets | | | | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | | | | |
--------------------------------------------------------------------------------
| Property, plant and equipment | | | | 208.2 | 212.0 | 211.8 |
--------------------------------------------------------------------------------
| Intangible assets | | | | 96.9 | 85.8 | 97.6 |
--------------------------------------------------------------------------------
| Securities and long-term | | | | 3.5 | 17.3 | 3.6 |
| investments | | | | | | |
--------------------------------------------------------------------------------
| Deferred tax assets | | | | 21.5 | 18.8 | 20.9
--------------------------------------------------------------------------------
| Total non-current assets | | | | 330.1 | 333.9 | 333.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | | | | |
--------------------------------------------------------------------------------
| Inventories | | | | 143.1 | 127.1 | 128.1 |
--------------------------------------------------------------------------------
| Accounts receivable | | | | 217.7 | 181.7 | 150.6 |
--------------------------------------------------------------------------------
| Other receivables | | | | 12.4 | 14.8 | 18.9 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | | | | 8.4 | 10.6 | 12.4
--------------------------------------------------------------------------------
| Total current assets | | | | 381.6 | 334.2 | 310.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | | | | 711.7 | 668.1 | 643.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity | | | | 260.3 | 365.4 | 344.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | | | | 20.4 | 22.3 | 17.2 |
--------------------------------------------------------------------------------
| Deferred tax liability | | | | 16.5 | 17.4 | 16.9 |
--------------------------------------------------------------------------------
| Provisions | | | | 10.7 | 8.9 | 10.8 |
--------------------------------------------------------------------------------
| Employee benefits and other | | | | 25.8 | 27.6 | 29.2
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Total non-current liabilities | | | | 73.4 | 76.2 | 74.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities | | | | | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | | | | 149.4 | 34.3 | 16.9 |
--------------------------------------------------------------------------------
| Provisions | | | | 5.4 | 7.5 | 4.7 |
--------------------------------------------------------------------------------
| Accounts payable | | | | 86.2 | 78.9 | 90.0 |
--------------------------------------------------------------------------------
| Other liabilities | | | | 137.0 | 105.8 | 113.8
--------------------------------------------------------------------------------
| Total current liabilities | | | | 378.0 | 226.5 | 225.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total shareholders' equity and | | | | 711.7 | 668.1 | 643.9 |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED CASH FLOW | | | | | | | |
| STATEMENT | | | | | | | |
--------------------------------------------------------------------------------
| MEUR | | | | | 1-3/ | 1-3/ | 1-12/ |
| | | | | | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net cash from operations | | | | | 41.3 | 30.1 | 180.7 |
--------------------------------------------------------------------------------
| Change in net working | | | | | -57.8 | -21.5 | 5.2 |
| capital | | | | | | | |
--------------------------------------------------------------------------------
| Paid income taxes | | | | | -9.4 | -8.7 | -37.9 |
--------------------------------------------------------------------------------
| Paid interest | | | | | -1.1 | -0.6 | -3.9 |
--------------------------------------------------------------------------------
| Received interest | | | | | 0.4 | 1.9 | 3.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from operations | | | | | -26.6 | 1.2 | 147.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investments | | | | | | | |
--------------------------------------------------------------------------------
| Proceeds from disposal of | | | | | - | - | 0.3 |
| subsidiaries | | | | | | | |
--------------------------------------------------------------------------------
| Purchase of fixed assets | | | | | -7.1 | -8.6 | -54.2 |
--------------------------------------------------------------------------------
| Proceeds from sales of fixed | | | | | 0.2 | 0.5 | 6.5 |
| assets | | | | | | | |
--------------------------------------------------------------------------------
| Loan repayments | | | | | 0.0 | 3.1 | 18.6 |
--------------------------------------------------------------------------------
| Cash flow from investments | | | | | -6.9 | -5.0 | -28.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing | | | | | | | |
--------------------------------------------------------------------------------
| Borrowings of debt | | | | | 132.5 | 31.8 | 14.7 |
--------------------------------------------------------------------------------
| Repayments of debt | | | | | 0.0 | - | -1.7 |
--------------------------------------------------------------------------------
| Dividends paid | | | | | -102.5| -65.8 | -166.0 |
--------------------------------------------------------------------------------
| Payment of finance lease | | | | | -0.5 | -0.6 | -2.0 |
| liabilities | | | | | | | |
--------------------------------------------------------------------------------
| Cash flow from financing | | | | | 29.5 | -34.6 | -155.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Conversion differences for cash | | | | 0.0 | 0.1 | 0.0 |
| and cash equivalents | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in cash and cash | | | | | -4.0 | -38.3 | -36.5 |
| equivalents | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents at | | | | | 12.4 | 48.9 | 48.9 |
| 1 January | | | | | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at | | | | | 8.4 | 10.6 | 12.4 |
| end of period | | | | | | | |
--------------------------------------------------------------------------------
| Changes according to balance | | | | | -4.0 | -38.3 | -36.5 |
| sheet | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| STATEMENT OF CHANGES IN SHAREHOLDERS' | | | | |
| EQUITY | | | | |
--------------------------------------------------------------------------------
| MEUR | Share | Share| Other| Trea- | Accumu- | Retai- | Total |
| | capi- | pre-| re- | sury | lated | ned | |
| | tal | mium | ser- | shares| conver- |earnings| |
| | | | ves | | sion | | |
| | | | | | diffe- | | |
| | | | | | rences | | |
--------------------------------------------------------------------------------
| Balance at 31 | 146.4 | 42.5 | 6.7 | -1.6 | -10.2 | 160.6 | 344.4 |
| December 2006 | | | | | | | |
--------------------------------------------------------------------------------
| Translation | | | | | -3.1 | | -3.1 |
| differences | | | | | | | |
--------------------------------------------------------------------------------
| Net profit for the | | | | | | 21.5 | 21.5 |
| period | | | | | | | |
--------------------------------------------------------------------------------
| Total recognised income and | | | | -3.1 | 21.5 | 18.4 |
| expense for the period | | | | | | |
--------------------------------------------------------------------------------
| Dividend paid (EUR | | | | | | -102.5 | -102. |
| 1.40 per share) | | | | | | | 5 |
--------------------------------------------------------------------------------
| Share based | | | | 1.3 | | -1.3 | 0.0 |
| incentive plan | | | | | | | |
--------------------------------------------------------------------------------
| Other adjustments | | | 0.1 | | | -0.1 | 0.0 |
--------------------------------------------------------------------------------
| Balance at 31 March | 146.4 | 42.5 | 6.8 | -0.3 | -13.3 | 78.2 | 260.3 |
| 2007 | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance at 31 | 148.8 | 40.1 | 3.3 | -21.2 | -5.4 | 252.8 | 418.4 |
| December 2005 | | | | | | | |
--------------------------------------------------------------------------------
| Translation | | | | | -2.9 | | -2.9 |
| differences | | | | | | | |
--------------------------------------------------------------------------------
| Net profit for the | | | | | | 15.6 | 15.6 |
| period | | | | | | | |
--------------------------------------------------------------------------------
| Total recognised | | | | | -2.9 | 15.6 | 12.7 |
| income and expense | | | | | | | |
| for the period | | | | | | | |
--------------------------------------------------------------------------------
| Cancelling of | -2.3 | 2.3 | | 19.6 | | -19.6 | 0.0 |
| shares | | | | | | | |
--------------------------------------------------------------------------------
| Dividend paid (EUR | | | | | | -65.8 | -65.8 |
| 0.90 per share) | | | | | | | |
--------------------------------------------------------------------------------
| Share based | | | | | | 0.1 | 0.1 |
| incentive plan | | | | | | | |
--------------------------------------------------------------------------------
| Other adjustments | -0.1 | 0.1 | 1.1 | | | -1.1 | 0.0 |
--------------------------------------------------------------------------------
| Balance at 31 March | 146.4 | 42.5 | 4.4 | -1.6 | -8.3 | 182.0 | 365.4 |
| 2006 | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | | | 1-3/ | 1-3/ | 1-12/ | |
| | | | | 2007 | 2006 | 2006 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, EUR | | | | 0.29 | 0.21 | 1.32 | |
--------------------------------------------------------------------------------
| - diluted | | | | 0.29 | 0.21 | 1.32 | |
--------------------------------------------------------------------------------
| Operating profit, % | | | | 10.4 | 8.7 | 12.4 | |
--------------------------------------------------------------------------------
| Return on equity, %, | | | | 28.4 | 15.9 | 25.3 | |
| cumulative | | | | | | | |
--------------------------------------------------------------------------------
| Return on investment, | | | | 32.5 | 21.8 | 35.8 | |
| %, cumulative | | | | | | | |
--------------------------------------------------------------------------------
| Solvency ratio, % | | | | 36.6 | 54.7 | 53.6 | |
--------------------------------------------------------------------------------
| Gearing, % | | | | 62.0 | 12.6 | 6.3 | |
--------------------------------------------------------------------------------
| Net interest-bearing | | | | 161.4 | 46.0 | 21.7 | |
| liabilities | | | | | | | |
--------------------------------------------------------------------------------
| Equity per share, EUR | | | | 3.56 | 5.00 | 4.71 | |
--------------------------------------------------------------------------------
| - diluted | | | | 3.56 | 4.99 | 4.70 | |
--------------------------------------------------------------------------------
| Trading price of shares | | | | | | | |
--------------------------------------------------------------------------------
| - low, EUR | | | | 25.56 | 18.00 | 18.00 | |
--------------------------------------------------------------------------------
| - high, EUR | | | | 30.40 | 23.10 | 29.35 | |
--------------------------------------------------------------------------------
| - average, EUR | | | | 27.39 | 20.69 | 22.73 | |
--------------------------------------------------------------------------------
| Shares traded | | | | | | | |
--------------------------------------------------------------------------------
| - 1000 pcs | | | | 22,832 | 8,252 | 42,417 | |
--------------------------------------------------------------------------------
| - MEUR | | | | 625 | 171 | 964 | |
--------------------------------------------------------------------------------
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 the consolidated financial statements.
--------------------------------------------------------------------------------
| PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS | | |
--------------------------------------------------------------------------------
| MEUR | | | | 1-3/ | 1-3/ | 1-12/ |
| | | | | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross investment | | | | 7.1 | 8.6 | 54.2 |
--------------------------------------------------------------------------------
| - % of net sales | | | | 2.4 | 3.4 | 4.7 |
--------------------------------------------------------------------------------
| Depreciation | | | | 9.3 | 8.8 | 35.6 |
--------------------------------------------------------------------------------
| Book value of disposed fixed | | | | 0.2 | 0.2 | 6.7 |
| assets | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PERSONNEL | | | | | | |
--------------------------------------------------------------------------------
| Converted to full time | | | | 1-3/ | 1-3/ | 1-12/ |
| employees | | | | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average | | | | 4,354 | 4,175 | 4,260 |
--------------------------------------------------------------------------------
| At the end of the period | | | | 4,383 | 4,190 | 4,325 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OWN SHARES | | | | | | |
--------------------------------------------------------------------------------
| | | | | 31.3. | 31.3. | 31.12. |
| | | | | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Own shares held by the | | | | 16,500 | 88,000 | 88,000 |
| company | | | | | | |
--------------------------------------------------------------------------------
| - of share capital, % | | | | 0.02 % | 0.1 % | 0.1 % |
--------------------------------------------------------------------------------
| - of voting rights, % | | | | 0.02 % | 0.1 % | 0.1 % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
|SEGMENT INFORMATION | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | 1-3/2007 | 1-3/2006 |
--------------------------------------------------------------------------------
| | Externa | Interna | Total | Externa | Interna | Total |
| | l | l | | l | l | |
--------------------------------------------------------------------------------
| Segment revenue | | | | | | |
--------------------------------------------------------------------------------
| Central Europe | 75.5 | 18.6 | 94.1 | 59.9 | 13.7 | 73.6 |
--------------------------------------------------------------------------------
| Nordic | 73.8 | 20.7 | 94.5 | 59.2 | 15.3 | 74.5 |
--------------------------------------------------------------------------------
| Europe - West, | 115.8 | 0.6 | 116.4 | 86.7 | 1.0 | 87.7 |
| East, South | | | | | | |
--------------------------------------------------------------------------------
| North America | 35.7 | 0.1 | 35.8 | 44.7 | - | 44.7 |
--------------------------------------------------------------------------------
| Others | - | - | - | - | - | 0.0 |
--------------------------------------------------------------------------------
| Eliminations | - | -40.0 | -40.0 | - | -30.0 | -30.0 |
--------------------------------------------------------------------------------
| Total | 300.8 | - | 300.8 | 250.5 | - | 250.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | | | 1-12/ 2006 | |
--------------------------------------------------------------------------------
| | | | | Extern | Intern | Total | |
| | | | | al | al | | |
--------------------------------------------------------------------------------
| Segment revenue | | | | | | | |
--------------------------------------------------------------------------------
| Central Europe | | | | 283.5 | 61.6 | 345.1 | |
--------------------------------------------------------------------------------
| Nordic | | | | 305.2 | 72.6 | 377.8 | |
--------------------------------------------------------------------------------
| Europe - West, East, | | | | 385.3 | 2.6 | 387.9 | |
| South | | | | | | | |
--------------------------------------------------------------------------------
| North America | | | | 183.0 | - | 183.0 | |
--------------------------------------------------------------------------------
| Others | | | | - | - | - | |
--------------------------------------------------------------------------------
| Eliminations | | | | - | -136.8 | -136.8 | |
--------------------------------------------------------------------------------
| Total | | | | 1,157.0| - | 1,157.0| |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | | | 1-3/ | 1-3/ | 1-12/ | |
| | | | | 2007 | 2006 | 2006 | |
--------------------------------------------------------------------------------
| Segment result | | | | | | | |
--------------------------------------------------------------------------------
| Central Europe | | | | 10.9 | 9.8 | 49.3 | |
--------------------------------------------------------------------------------
| Nordic | | | | 10.0 | 6.2 | 56.6 | |
--------------------------------------------------------------------------------
| Europe - West, East, | | | | 13.2 | 7.0 | 38.2 | |
| South | | | | | | | |
--------------------------------------------------------------------------------
| North America | | | | 0.8 | 1.7 | 14.5 | |
--------------------------------------------------------------------------------
| Others | | | | -2.2 | -1.0 | -12.0 | |
--------------------------------------------------------------------------------
| Eliminations | | | | -1.4 | -1.9 | -2.9 | |
--------------------------------------------------------------------------------
| Total | | | | 31.3 | 21.8 | 143.7 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Central Europe | | | | 1.9 | 1.8 | 7.8 | |
--------------------------------------------------------------------------------
| Nordic | | | | 2.7 | 2.7 | 10.7 | |
--------------------------------------------------------------------------------
| Europe - West, East, | | | | 2.6 | 2.5 | 9.4 | |
| South | | | | | | | |
--------------------------------------------------------------------------------
| North America | | | | 1.3 | 1.5 | 5.7 | |
--------------------------------------------------------------------------------
| Others | | | | 0.8 | 0.2 | 1.6 | |
--------------------------------------------------------------------------------
| Eliminations | | | | 0.0 | 0.1 | 0.4 | |
--------------------------------------------------------------------------------
| Total | | | | 9.3 | 8.8 | 35.6 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment investments | | | | | | | |
--------------------------------------------------------------------------------
| Central Europe | | | | 1.4 | 0.8 | 7.5 | |
--------------------------------------------------------------------------------
| Nordic | | | | 2.6 | 2.7 | 14.7 | |
--------------------------------------------------------------------------------
| Europe - West, East, | | | | 1.4 | 1.5 | 8.6 | |
| South | | | | | | | |
--------------------------------------------------------------------------------
| North America | | | | 1.6 | 2.5 | 8.8 | |
--------------------------------------------------------------------------------
| Others | | | | 0.1 | 1.1 | 14.6 | |
--------------------------------------------------------------------------------
| Total | | | | 7.1 | 8.6 | 54.2 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment assets | | | | | | | |
--------------------------------------------------------------------------------
| Central Europe | | | | 194.0 | 186.4 | 197.6 | |
--------------------------------------------------------------------------------
| Nordic | | | | 215.7 | 238.6 | 203.5 | |
--------------------------------------------------------------------------------
| Europe - West, East, | | | | 241.3 | 211.4 | 223.3 | |
| South | | | | | | | |
--------------------------------------------------------------------------------
| North America | | | | 106.8 | 111.4 | 109.5 | |
--------------------------------------------------------------------------------
| Others | | | | 586.9 | 657.9 | 612.5 | |
--------------------------------------------------------------------------------
| Eliminations | | | | -633.0 | -737.6 | -702.5 | |
--------------------------------------------------------------------------------
| Total | | | | 711.7 | 668.1 | 643.9 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment liabilities | | | | | | | |
--------------------------------------------------------------------------------
| Central Europe | | | | 118.3 | 114.6 | 132.2 | |
--------------------------------------------------------------------------------
| Nordic | | | | 274.4 | 327.9 | 270.3 | |
--------------------------------------------------------------------------------
| Europe - West, East, | | | | 132.1 | 121.9 | 115.8 | |
| South | | | | | | | |
--------------------------------------------------------------------------------
| North America | | | | 44.3 | 50.9 | 46.8 | |
--------------------------------------------------------------------------------
| Others | | | | 532.8 | 445.0 | 454.8 | |
--------------------------------------------------------------------------------
| Eliminations | | | | -650.5 | -757.6 | -720.4 | |
--------------------------------------------------------------------------------
| Total | | | | 451.4 | 302.7 | 299.5 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment personnel, | | | | | | | |
| average | | | | | | | |
--------------------------------------------------------------------------------
| Central Europe | | | | 1,237 | 1,131 | 1,167 | |
--------------------------------------------------------------------------------
| Nordic | | | | 1,339 | 1,253 | 1,309 | |
--------------------------------------------------------------------------------
| Europe - West, East, | | | | 1,173 | 1,126 | 1,132 | |
| South | | | | | | | |
--------------------------------------------------------------------------------
| North America | | | | 549 | 618 | 603 | |
--------------------------------------------------------------------------------
| Others | | | | 56 | 47 | 49 | |
--------------------------------------------------------------------------------
| Total | | | | 4,354 | 4,175 | 4,260 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Business segments | | | | | | | |
--------------------------------------------------------------------------------
| | | | 1-3/2007 | |
--------------------------------------------------------------------------------
| Segment external | | | Housin | Infra- | Others | Total | |
| revenue | | | g | struc- | | | |
| | | | solut | ture | | | |
| | | | ions | solut | | | |
| | | | | ions | | | |
--------------------------------------------------------------------------------
| Central Europe | | | 75.5 | - | - | 75.5 | |
--------------------------------------------------------------------------------
| Nordic | | | 33.5 | 40.3 | - | 73.8 | |
--------------------------------------------------------------------------------
| Europe - West, East, | | | 71.5 | 44.3 | - | 115.8 | |
| South | | | | | | | |
--------------------------------------------------------------------------------
| North America | | | 35.7 | - | - | 35.7 | |
--------------------------------------------------------------------------------
| Others | | | - | - | - | - | |
--------------------------------------------------------------------------------
| Total | | | 216.2 | 84.6 | - | 300.8 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | | 1-3/2006 | |
--------------------------------------------------------------------------------
| Segment external | | | Housin | Infra- | Others | Total | |
| revenue | | | g | struc- | | | |
| | | | solut | ture | | | |
| | | | ions | solut | | | |
| | | | | ions | | | |
--------------------------------------------------------------------------------
| Central Europe | | | 59.9 | - | - | 59.9 | |
--------------------------------------------------------------------------------
| Nordic | | | 26.2 | 33.0 | - | 59.2 | |
--------------------------------------------------------------------------------
| Europe - West, East, | | | 47.3 | 39.4 | - | 86.7 | |
| South | | | | | | | |
--------------------------------------------------------------------------------
| North America | | | 44.7 | - | - | 44.7 | |
--------------------------------------------------------------------------------
| Others | | | - | - | - | - | |
--------------------------------------------------------------------------------
| Total | | | 178.1 | 72.4 | - | 250.5 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | | 1-12/2006 | |
--------------------------------------------------------------------------------
| Segment external | | | Housin | Infra- | Others | Total | |
| revenue | | | g | struc- | | | |
| | | | solut | ture | | | |
| | | | ions | solut | | | |
| | | | | ions | | | |
--------------------------------------------------------------------------------
| Central Europe | | | 283.5 | - | - | 283.5 | |
--------------------------------------------------------------------------------
| Nordic | | | 127.7 | 177.5 | - | 305.2 | |
--------------------------------------------------------------------------------
| Europe - West, East, | | | 210.2 | 175.1 | - | 385.3 | |
| South | | | | | | | |
--------------------------------------------------------------------------------
| North America | | | 183.0 | - | - | 183.0 | |
--------------------------------------------------------------------------------
| Others | | | - | - | - | - | |
--------------------------------------------------------------------------------
| Total | | | 804.4 | 352.6 | - | 1157.0 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONTINGENT LIABILITIES | | | | | | |
--------------------------------------------------------------------------------
| MEUR | | | | 31.3. | 31.3. | 31.12. |
| | | | | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
| Group: | | | | | | |
--------------------------------------------------------------------------------
| Pledges | | | | | | |
--------------------------------------------------------------------------------
| - on own behalf | | | | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Mortgages | | | | | | |
--------------------------------------------------------------------------------
| - on own behalf | | | | - | 2.2 | 0.0 |
--------------------------------------------------------------------------------
| Guarantees | | | | | | |
--------------------------------------------------------------------------------
| - on behalf of others | | | | 12.7 | 12.3 | 12.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Parent company: | | | | | | |
--------------------------------------------------------------------------------
| Guarantees | | | | | | |
--------------------------------------------------------------------------------
| - on behalf of a | | | | 11.1 | 10.2 | 11.4 |
| subsidiary | | | | | | |
--------------------------------------------------------------------------------
| - on behalf of others | | | | 9.8 | 10.1 | 9.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OPERATING LEASE | | | | 23.6 | 21.2 | 24.4 |
| LIABILITIES | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| DERIVATIVE CONTRACTS | | | | | | |
--------------------------------------------------------------------------------
| MEUR | Nominal | Fair | Nomina | Fair | Nomina | Fair |
| | value | value | l | value | l | value |
| | | | value | | value | |
--------------------------------------------------------------------------------
| | 31.3. | 31.3. | 31.3. | 31.3. | 31.12. | 31.12. |
| | 2007 | 2007 | 2006 | 2006 | 2006 | 2006 |
--------------------------------------------------------------------------------
| Foreign currency | | | | | | |
| derivatives | | | | | | |
--------------------------------------------------------------------------------
| - Forward agreements | 9.9 | 0.1 | 25.3 | -0.1 | 6.4 | 0.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Commodity derivatives | | | | | | |
--------------------------------------------------------------------------------
| - Forward agreements | 5.2 | -0.6 | 3.0 | 1.2 | 5.6 | -0.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Currency swaps | 6.8 | 0.0 | 7.8 | 0.1 | 6.6 | 0.1 |
--------------------------------------------------------------------------------
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 the 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 5, 2004. Share based
payments were expensed 2004-2006 according to IFRS 2 standard.
RELATED PARTY TRANSACTIONS
--------------------------------------------------------------------------------
| Associated companies | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | | | | 1-3/ | 1-3/ | 1-12/ |
| | | | | 2007 | 2006 | 2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales to associated | | | | 4.1 | 1.2 | 3.1 |
| companies | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balances at the end of | | | | | | |
| period | | | | | | |
--------------------------------------------------------------------------------
| Loan receivable from | | | | 1.1 | - | 1.1 |
| associated companies | | | | | | |
--------------------------------------------------------------------------------
| Accounts and other | | | | 0.9 | 0.6 | 0.4 |
| receivables | | | | | | |
--------------------------------------------------------------------------------
| Accounts payables and other | | | | 0.4 | 0.1 | 0.1 |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
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
Earning 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