Uponor financial statements bulletin January-December 2009
Uponor's profitability improved in declining markets
- Net sales and operating profit decreased, alongside the continuing slump in
the construction sector witnessed in all markets
- Q4 2009: fall in net sales smaller than at the beginning of the year
- Net sales 1-12: EUR 734.1m (2008: EUR 949.2m), down 22.7%
- Operating profit 1-12: EUR 41.2m (EUR 51.2m), down 19.4%
- Earnings per share EUR 0.16 (EUR 0.99)
- In 2010, net sales expected to remain stable and operating profit to improve
on the results reported in 2009
- Board of Directors' dividend proposal EUR 0.50 per share
(Figures for continuing operations unless otherwise stated.)
President and CEO Jyri Luomakoski comments on the reporting period:
- The year 2009 was a challenging time for all of us. Construction activity
slowed at an unprecedented rate across Uponor's key markets and, consequently,
demand for our products and services declined significantly.
- Our main focus in 2009 was to manage costs, maintain a steady cash flow and
improve our efficiency, which yielded some good results. Simultaneous with that
we implemented our new European organisation, aimed at further integrating the
company and creating structures that will support our growth in the years to
come.
- We do not expect the external business environment to show clearly more
favourable developments in 2010. But, to grow our business, we can depend on our
own innovations and take advantage of the favourable trends supporting demand
for our offerings.
Dividend proposal
Uponor's Board of Directors proposes to the Annual General Meeting that a
dividend of EUR 0.50 per share be paid, in total EUR 36.5 million, which is
316.3% of the profit. Resulting from this dividend proposal, Uponor's 2010
gearing, average across the quarters, is estimated to remain in the long-term
financial target of between 30 and 70.
Webcast and presentation material:
Following the release of this statement, the presentation material for the
financial information will be available at www.uponor.com > Investors.
A webcast on the financial information will be broadcast in English at 10:00 am
EET. The link to the webcast can be found at www.uponor.com. Questions for the
webcast can be sent to ir@uponor.com. A recording of the webcast can be viewed
later on the same day at www.uponor.com.
Last quarter of 2009
The stabilisation of market demand seen after the summer of 2009 continued in
the fourth quarter. The fall in demand slowed, and compared to the low levels
seen in the last quarter of 2008, slight growth could be detected in some
markets and product groups. This stemmed from growing interest among consumers
and businesses in investing and from improved financing opportunities, although
the credit squeeze continued to hold back the launch of new projects.
Net sales
Uponor's net sales for Q4 came to EUR 174.4 (198.9) million, down by 12.3
percent from 2008. The fall in net sales from 2008 remained significantly
smaller in Q4 than during the three preceding quarters.
This fall in net sales was mainly due to the contraction in the housing and
infrastructure technology markets, which has prevailed for more than two years
in most of Uponor's geographical operating regions. Measured in US dollars,
North American net sales took an upward turn in Q4. In Buidling solutions -
Europe, sales in the Nordic countries reached its highest level for the year in
the last quarter. The strengthening of currencies, such as the Swedish krona,
against the euro also had a positive effect. Among Uponor's main markets, Sweden
was alone in seeing net sales increase, including in the local currency.
The progress made by Uponor's indoor climate systems, its interesting new
products and successful marketing efforts, among other things, contributed to
the development of net sales.
Net sales by segment, October-December:
--------------------------------------------------------------------------------
| MEUR | 10-12 | 10-12 | Change |
| | /2009 | /2008 | |
--------------------------------------------------------------------------------
| Building solutions - Europe | 115.4 | 132.5 | -12.8% |
--------------------------------------------------------------------------------
| Building solutions - North America | 28.1 | 31.2 | -9.6% |
--------------------------------------------------------------------------------
| (Building solutions - North America, USD | 41.2 | 39.7 | 3.8%) |
--------------------------------------------------------------------------------
| Infrastructure solutions - Nordic | 32.0 | 37.0 | -13.7% |
--------------------------------------------------------------------------------
| Eliminations | -1.1 | -1.8 | |
--------------------------------------------------------------------------------
| Group (continuing operations) | 174.4 | 198.9 | -12.3% |
--------------------------------------------------------------------------------
Results and profitability
Uponor's operating profit for October-December stood at EUR 12.3 (-19.9)
million. A non-recurring cost provision of EUR 14.5 million related to product
replacement costs was recorded in North America in the fourth quarter of 2008.
Operating profit improved in all of Uponor's business segments. The improvement
over the comparison period is mainly due to the savings and efficiency measures
carried out in all of Uponor's businesses over the year. Enhancing and
streamlining the supply chain of building solutions in Europe and infrastructure
solutions in the Nordic countries rendered the best results. Intensive
improvements in the North American markets bore fruit when market demand began
to recover. The price development of components and raw materials continued to
have a favourable impact in the last quarter.
The result was eroded by non-recurring costs of EUR 7.4 million, relating to
various restructuring measures. Most of this, EUR 5.3 million, was related to
production while EUR 2.1 million went towards supply, marketing and
administration. Costs were generated by various savings and reorganisation
initiatives, including the reorganisation of production in Germany, the closing
down of infrastructure production in Hadsund, Denmark, and redundancy costs in
Germany, Italy, Spain and the USA, for example.
Operating profit by segment, October-December:
--------------------------------------------------------------------------------
| MEUR | 10-12 | 10-12 | Change |
| | /2009 | /2008 | |
--------------------------------------------------------------------------------
| Building solutions - Europe | 10.0 | -1.0 | 1082.6% |
--------------------------------------------------------------------------------
| Building solutions - North America | 3.2 | -18.4 | 117.5% |
--------------------------------------------------------------------------------
| (Building solutions - North America, USD | 4.5 | -27.0 | 116.6%) |
--------------------------------------------------------------------------------
| Infrastructure solutions - Nordic | 2.0 | -1.2 | 260.7% |
--------------------------------------------------------------------------------
| Other | -2.8 | -0.4 | |
--------------------------------------------------------------------------------
| Eliminations | -0.1 | 1.1 | |
--------------------------------------------------------------------------------
| Group (continuing operations) | 12.3 | -19.9 | 162.2% |
--------------------------------------------------------------------------------
Consolidated earnings per share (basic and diluted) for October-December were
EUR 0.03 (-0.22), and 0.05 (-0.22) for continuing operations. The period's cash
flow before financing was EUR 38.3 (25.7) million.
Review by the Board of Directors 1 January - 31 December 2009
Overview
The year 2009 turned out to be a difficult one, as expected, with the decline in
construction continuing from the previous year. Demand in the construction
markets throughout Uponor's main markets reached a historical low, except for
Germany, where the markets also weakened but remained at a reasonable level.
In 2009, all of Uponor's major end markets - residential new building, public
and commercial construction, and infrastructure solutions - were characterised
by low activity levels. An increase in renovation and modernisation projects was
seen in countries where recovery initiatives were targeted at consumers. This
stimulated demand for certain product groups.
Uponor carried out extensive savings, cost-efficiency and development projects
to secure control over its cost development. The Group's ongoing integration
process progressed successfully and the new organisational structure introduced
in the autumn of 2008 contributed to the significantly improved performance of
Uponor's supply chain, in particular.
Net sales
In 2009, Uponor's net sales from continuing operations fell to EUR 734.1 million
(in 2008: EUR 949.2 million), a fall of 22.7% year on year, and decidedly below
the long-term target growth of 6 per cent. Net sales decreased in all segments,
reflecting the overall weakening of demand. Fluctuations in foreign currencies,
mainly the US dollar, the Swedish krona and the UK pound, adversely affected net
sales by approximately EUR 8.3m.
Net sales by segment for 1 Jan. - 31 Dec. 2009:
--------------------------------------------------------------------------------
| MEUR | 2009 | 2008 | Reported |
| | 1-12 | 1-12 | change, % |
--------------------------------------------------------------------------------
| Building solutions - Europe | 486.9 | 635.3 | -23.4% |
--------------------------------------------------------------------------------
| Building solutions - North America | 109.0 | 130.8 | -16.6% |
--------------------------------------------------------------------------------
| (Building solutions - North America, USD | 151.8 | 191.5 | -20.7%) |
--------------------------------------------------------------------------------
| Infrastructure solutions - Nordic | 143.4 | 192.1 | -25.4% |
--------------------------------------------------------------------------------
| Eliminations | -5.2 | -9.0 | |
--------------------------------------------------------------------------------
| Group (continuing operations) | 734.1 | 949.2 | -22.7% |
--------------------------------------------------------------------------------
The biggest drops in net sales were recorded in Spain, the USA and Finland,
while in Germany and Netherlands the decrease was more moderate. This was partly
due to the successful progress of Uponor's indoor climate solutions in Central
Europe.
The largest geographical markets and their share of consolidated net sales in
2009 were as follows: Germany 17.5% (15.0), Finland 12.1% (11.8), USA 11.4%
(11.1), Sweden 9.7% (9.1), Spain 6.0% (8.3), Denmark 5.4% (6.1), Italy 5.3%
(5.5) and the Netherlands 5.2% (4.3).
Results
Uponor's consolidated gross profit from continuing operations came to EUR 271.1m
(341.8m), a fall of 20.7 per cent year on year. Despite the decreased net sales,
the gross profit margin improved from the previous year. Improved profitability
is due to greater production efficiency, among other things. Furthermore, the
gross profit for the comparison year was affected by the rapid increase in raw
material prices, which could not be passed onto sales prices.
Continuing operations generated an operating profit of EUR 41.2m (51.2m), down
19.4 (-62.3) per cent on the previous year. Profitability, or operating profit
margin, improved slightly, as the profit margin rose to 5.6 (5.4) per cent of
net sales.
The fall in operating profit in euro can be attributed to slackening markets. In
2009, this decline was significantly smaller than in the previous year. The fall
in operating profit can be primarily attributed to the sharp decline in the net
sales of Building solutions - Europe. Operating profit from Infrastructure
solutions and Building solutions - North America strengthened considerably.
As a result of savings, streamlining and cost reduction measures carried out
over the last year, costs were reduced in warehousing, marketing and
administration. These efficiency initiatives incurred a non-recurring expense of
EUR 12.5m, of which, purchasing and manufacturing costs accounted for EUR 8.9m,
and fixed expenses for EUR 3.6m.
Other income and expenses includes a property insurance claim compensation of
EUR 2.9m attributable to the fire which affected infrastructure solutions
production in Denmark.
Operating profit by segment for 1 Jan. - 31 Dec. 2009:
--------------------------------------------------------------------------------
| MEUR | 2009 | 2008 | Reported |
| | 1-12 | 1-12 | change, % |
--------------------------------------------------------------------------------
| Building solutions - Europe | 32.4 | 65.6 | -50.6% |
--------------------------------------------------------------------------------
| Building solutions - North America | 3.9 | -16.0 | 124.5% |
--------------------------------------------------------------------------------
| (Building solutions - North America, | 5.5 | -23.4 | 123.3%) |
| USD | | | |
--------------------------------------------------------------------------------
| Infrastructure solutions - Nordic | 14.4 | 10.0 | 45.0% |
--------------------------------------------------------------------------------
| Other | -9.3 | -9.5 | |
--------------------------------------------------------------------------------
| Eliminations | -0.2 | 1.1 | |
--------------------------------------------------------------------------------
| Group (continuing operations) | 41.2 | 51.2 | -19.4% |
--------------------------------------------------------------------------------
Expenses from discontinued operations include unanticipated costs due to
environmental clean-up measures associated with the factory property for sale in
Ireland, which were previously referenced in the January - June interim report.
According to the expert estimates obtained, the clean-up work is approaching
completion. The estimated costs of the remaining clean-up measures are provided
for in the 2009 results of discontinued operations, which totals EUR -5.7m.
Consolidated profit before taxes decreased by 30.7 per cent, to EUR 28.4m
(41.0m). Consolidated net financial expenses increased to EUR 12.7m (10.2m), of
which EUR 6.3m (1.7m) was due to currency translation.
At a tax rate of 39.6 (26.6) per cent, income tax totalled EUR 11.3m (10.9m).
The rise in tax rate is primarily attributable to the occurrence of taxable
income in 2009 in countries with relatively higher tax rates. Additionally, the
relative amount of non-deductible expenses decreased, year on year. Profit for
the financial year totalled EUR 11.5m (72.5m), of which continuing operations
accounted for EUR 17.2m (30.1m).
Return on equity stood at 4.1 (22.7) per cent and return on investment at 8.1
(22.2) per cent, while the long-term target is a minimum of 30 per cent.
Consolidated earnings per share were EUR 0.16 (0.99), and EUR 0.24 (0.41) for
continuing operations. Equity per share stood at EUR 3.53 (4.18). For other
share-specific information, please see the tables section.
To maintain a solid financial position, the company paid particular attention to
cash flow management over the last year. Due to lower net sales, cash flow from
operations did not, however, reach the 2008 level. Efficient net working capital
management measures were continued and cash flow before financing improved from
the previous year, excluding one-time items. In 2008, cash flow before financing
included the proceeds from the disposal of the UK/Irish infrastructure business,
which amounted to EUR 76.4m.
Consolidated cash flow from operations was EUR 78.8m (95.4m) while cash flow
before financing came to EUR 60.6m (133.6m).
Key figures are reported for a five year period in the financial accounts.
Investments, research and development, and financing
Uponor's long-term investment and development programme was fundamentally
revised due to the weak business environment. Most investments were targeted at
process development and measures to improve efficiency. Major single investments
included the acquisition of the UK company The Underfloor Heating Company Ltd
and investments related to infrastructure production transfers in the Nordic
countries. Subcontracted production of metal fittings in Kungsör, Sweden, was
divested in the spring and panel production by Hewing GmbH in Ochtrup, Germany,
at the year-end.
The European ERP system was implemented on six further business units.
Gross investments totalled EUR 27.4m (39.0m), down by EUR 11.6m year on year.
Net investments totalled EUR 22.7m (36.4m). The figures include replacement
investments covered by the insurance refund of EUR 2.9m due to the fire in
Denmark.
As part of the effort at system harmonisation, in Europe in particular,
investment activity was directed into larger development projects, resulting in
decreased investment requirements in euro, without compromising the value of
output. Research and development costs totalled EUR 15.5m (18.6m), or 2.0 (1.9)
per cent of net sales.
As market uncertainty continued, the safeguarding of liquidity was set as the
main goal of the financing activities. The commercial paper market, which Uponor
has heretofore actively utilised, remained weak during the spring, making this
an uncertain means of securing financing. Uponor replaced a syndicated credit
loan of EUR 120m, due in February 2010, with several committed bilateral loans
with its main banks. They total EUR 190m and will mature in 2012. Additionally,
the company has signed an agreement with a Finnish pension insurance company
borrowing back EUR 80m of its pension contributions falling mature in 2010-2013,
of which EUR 64m was outstanding at year-end.
On the balance sheet date, the Group did not utilise the above mentioned
bilateral credit limits. Moreover, a domestic commercial paper programme worth
EUR 150m continues to be available.
Consolidated net interest-bearing liabilities increased slightly to EUR 64.6m
(60.6m). The solvency ratio was 51.8 (51.4) per cent and gearing came to 25.0
(19.8) per cent. The average quarterly gearing was 45.2 (46.4), compared to the
range of 30-70 set in the company's financial targets.
Key events
In Europe, Uponor introduced its unique dynamic heating and cooling control
system at ISH, a major international fair within the HPAC industry, held in
Frankfurt in the spring. The new control system was well received by customers.
This system can significantly reduce the energy consumption of new and existing
underfloor cooling and heating systems without lowering the level of comfort.
In Germany, a significant partnership agreement was signed with a local heating
equipment manufacturer. The objective is to offer customers a comprehensive
solution for heat generation and distribution in residential and commercial
buildings that is both energy efficient and environmentally friendly.
In Europe, both the building solutions' and infrastructure solution's supply
chain was enhanced through centralised warehouses and improved service networks.
In Hadsund, Denmark, infrastructure production was closed down and production
equipment moved to factories in Sweden and Finland. The UK company Underfloor
Heating Company Ltd was acquired to strengthen Uponor's expertise in the
international project business.
To strengthen its market position in Eastern Europe and Asia, Uponor opened new
sales offices, for example, in Turkey, Slovakia, Croatia, and in Beijing, China.
In December, the Board made a decision to support Finland's new Aalto
University, which began operating on 1 January 2010, with a monetary endowment
of EUR 400,000. Half of the sum was paid and recorded as a tax-deductible cost
in the 2009 financial statements.
Personnel
At the end of the year, the Group had 3,316 (3,678) employees. In full-time
equivalents, this is 362 fewer than at the end of 2008. The annual average
number of employees was 3,426 (4,211).
The decline in staff numbers is attributable to the adjustment programme
implemented in all regional organisations. In terms of personnel groups, the
largest reductions were involved in production, warehousing, dispatching and in
marketing.
The geographical breakdown of the Group's personnel was as follows: Germany
1,113 (33.5%), Sweden 495 (14.9%), Finland 463 (14.0%), the USA 386 (11.6%),
Spain 195 (5.9%), the UK 128 (3.9%), Denmark 103 (3.1%), other countries 433
(13.1%).
A total of EUR 182.6m (EUR 203,3m) was paid in wages and other remunerations
during the financial period.
Riitta Palomäki, M.Sc. (Econ.) was appointed Chief Financial Officer and a
member of the Executive Committee from 1 June 2009. Ms. Paula Aarnio, Executive
Vice President, Human Resources, and a member of the Executive Committee,
resigned in April 2009.
Risks associated with business
Uponor's financial performance may be affected by several strategic,
operational, financial and hazard risks. A detailed analysis of these risks is
available in the Annual Report.
Market risks
Uponor's business is concentrated in Europe and North America, where exposure to
political risks is low. Since Uponor's net sales are divided among a large
number of customers, the majority of which are distributors (wholesalers), end
market demand for the company's products is distributed across a wide customer
base. The largest single customer generates approximately 10 per cent of
Uponor's net sales.
Demand for Uponor's end products depends on business cycles in the construction
sector. Traditionally, Uponor's main end market has comprised single-family
housing, but today, the company's products are increasingly being supplied also
to multi-family residential, commercial and public construction. Demand
fluctuations often differ between these segments. Fluctuations are also being
offset to a certain degree by demand for renovation projects, which is not
always as discretionary as new housing projects. A fifth of the company's net
sales are generated by infrastructure technology.
Operational risks
The prices of raw materials used in the manufacture of plastic pipe systems are
susceptible to other petrochemical and metal 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. Uponor manages the risk of
fluctuations in the price of metals and plastics raw material through supply
agreements with fixed prices. Uponor manages the risk of fluctuations in
electricity prices at Nordic level by using financial instruments.
Uponor manages its organisational and management risks, such as employee
turnover, distortion of age distribution and unnecessary recruitment, by
continuously analysing its human resources and ensuring that its organisational
structure supports efficient operations. Personnel development programmes focus
on enhancing management skills in particular.
Uponor observes an ISO 9000 quality system and an ISO 14000 environmental
management system, or comparable systems, in the production facilities, which
enhance production safety and productivity.
With respect to component and raw material suppliers, Uponor aims to use
supplies and raw materials available from several suppliers. Any sole supplier
used must have at least two production plants manufacturing goods used by
Uponor. Uponor implements systems for material and raw material quality control
and supplier accreditation.
Financial risks
The uncertainty of financial markets has considerably increased risks related to
the availability of financing. Uponor aims to ensure the availability and
flexibility of financing through sufficient credit limit reserves and a
well-balanced maturity distribution of loans, as well as by using several banks
and various forms of financing.
The Group manages its liquidity through efficient cash management solutions and
by investing solely in low-risk targets that can be liquidated rapidly and at a
clear market price.
Part of Uponor's net sales are created in currencies other than the euro.
Subsequently, expenses allocated to these net sales are also denominated in the
same local currencies. The international nature of its operations exposes the
Group to currency risks associated with different currencies. The Group Treasury
function is responsible for hedging Group-level net currency flows in external
currency markets, mainly by using currency forward contracts and currency
options as hedging instruments.
Moreover, Uponor is exposed to currency translation risk, which manifests itself
in the translation of non-euro area results into euro. According to the
company's hedging policy, non-euro area balance sheet items are not hedged.
Hazard risks
Uponor runs 10 production plants in 5 countries, and products manufactured in
these plants generate a major proportion of the company's net sales. Uponor
co-ordinates indemnity and business interruption insurance at Group-level on a
centralised basis, in order to achieve extensive insurance coverage neutralising
the 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.
Various measures are taken to manage risks of indemnity and business
interruptions, including safety training for personnel, adherence to maintenance
schedules and maintaining the availability of major spare parts.
Risk management in 2009
The global economic recession affected demand for Uponor's products. As market
risks grew in 2009, the focus of risk management was turned towards the
adjustment of operations in the changed market situation.
In the beginning of 2009, the Board of Directors approved the Group's new risk
management policy. As part of this comprehensive policy, Uponor issued
instructions on continuity management. In addition to this, several risk
management guidelines were implemented in 2009, supporting overall risk
management.
In the first half of the year, risks were comprehensively mapped and risk
management plans updated accordingly. During the autumn of 2009, the impact of
business interruptions was analysed in all production units.
In 2009, Uponor assessed the functionality of risk management in five production
units. The results showed that risk management was on a sound level in all
units.
Because of the economic crisis, the focus on financial risks was shifted to
maintaining liquidity by securing sufficient credit limit reserves and through
efficient cash flow management. Credit risks received special attention due to
the weak market situation, and an updated credit risk policy was implemented.
Product replacement repair in the U.S., related to clamps from a third party
supplier which were previously sold under a brand which has since been
withdrawn, was initiated at the end of 2008, and proceeded according to plan in
2009. This product replacement programme has almost been completed. Product
replacement costs were recorded in full in the 2008 financial statements. Uponor
has initiated measures to recover the costs of the replacement programme from
the clamp supplier and the company's insurance company of that time.
In the spring of 2009, there was a fire in the Danish production unit. Uponor's
property and business interruption insurance covers the resulting damage.
Uponor is involved in several judicial proceedings in various countries. The
year saw no other materialised risks, pending litigation or other legal
proceedings or measures by the authorities that might have been of material
significance to the Group.
Administration and audit
The Annual General Meeting (AGM) of 18 March re-elected the following Board
members for a term of one year: Anne-Christine Silfverstolpe Nordin, Jorma
Eloranta, Jari Paasikivi, Aimo Rajahalme and Rainer S. Simon. It elected Jari
Paasikivi Chairman of the Board and Aimo Rajahalme Deputy Chairman. The AGM
elected KPMG Oy Ab, Authorised Public Accountants, as the company's auditor,
with Lasse Holopainen, Authorised Public Accountant, acting as the principal
auditor.
Share capital and shares
In 2009, Uponor's share turnover on NASDAQ OMX Helsinki Stock Exchange was 45.8
(99.2) million, totalling EUR 455.8m (EUR 1,195.1m). The share quotation at the
end of 2009 was EUR 15.00 (7.70) and the market capitalisation of the
outstanding shares was EUR 1,098.1m (EUR 563.7m). At the end of the year, Uponor
reported a total of 20,214 (18,629) shareholders. Foreign shareholding accounted
for 23.7 per cent (22.6 per cent) of all shareholding at the end of the report
period.
At the beginning of 2009, Uponor Corporation's share capital totalled EUR
146,446,888 and the number of shares stood at 73,206,944. The share capital did
not change during the year.
No notifications on changes in holdings were made during the year. Further
information on shares and shareholdings is reported in the financial statements.
Board authorisations
The AGM of 18 March 2009 authorised the Board to decide on the buyback of the
company's own shares, using unrestricted equity. The number of shares to be
bought back will be no more than 3,500,000 shares, representing approximately
4.8 per cent of the company's shares. The authorisation is valid for one year
from the date of the AGM.
Treasury shares
By the end of the year, Uponor held 160,000 treasury shares, representing
approximately 0.2 per cent of the company's shares and voting rights.
Management shareholding
The members of the Board of Directors and the CEO, as well as corporations known
to the company, in which they exercise control, held a total of 674,357
(620,615) Uponor shares on 31.12.2009. These shares accounted for 0.9 per cent
of all company shares and total votes.
Share-based incentive programme
Over the years 2007 and 2008, Uponor Corporation's Board of Directors launched
long-term incentive schemes for members of the company's Executive Committee and
persons holding international executive positions. Shares based on both schemes
will be awarded in the spring of 2012. More information on these schemes is
available in the Corporate Governance section of the annual report and on the
company's website.
Events after the financial year
The report on corporate governance was on the agenda of the meeting of Uponor
Corporation's Board of Directors' Audit Committee on 5 February 2010. This
report is filed as a separate section in the annual report and can also be read
at www.uponor.com.
Outlook for 2010
The decline in the market which started in the autumn of 2007 has stabilised in
the last few months. This decline is no longer as steep as before and some areas
have seen growth. However, the future growth opportunities of national economies
remain weak, and demand in Uponor's market sectors is not expected to improve in
2010.
The public recovery programmes initiated in 2008 and 2009 continue to support
demand. However, no significant new recovery initiatives are anticipated. In
some countries, support programmes are affected by the poor public financial
situation. Although investment activity among consumers is growing, caution
exercised by the financial markets is holding back development.
The market shares of several of Uponor's product systems continued to develop
favourably in 2009. Increased energy costs and a general awareness of
environmental issues have benefited Uponor's indoor climate solutions, i.e.
heating and cooling systems, in particular. This trend is expected to continue.
New product and service solutions, recently introduced to customers, are
supporting Uponor's growth.
Uponor has taken considerable restructuring measures to adapt operations to the
current low level of demand, and day-to-day development will continue.
Significant benefits have been achieved through Uponor's new organisational
structure, especially in Europe, and it is anticipated that these benefits will
be of a permanent nature. This year, modest investment needs and a decrease in
the amount of capital invested in inventories will generate additional benefits,
despite the fact that there will be a targeted spend on growth after the lengthy
savings programme.
In the current business environment, Uponor's net sales in 2010 are expected to
remain level with 2009, and operating profit is expected to improve from last
year's reported operating profit. The Group's fixed-asset investments are not
expected to exceed depreciation, and efficient net working capital management
measures will help retain the Group's cash flow at a reasonable level.
Uponor Corporation
Board of Directors
For further information, please contact:
CEO Jyri Luomakoski, tel. +358 20 129 2824
CFO Riitta Palomäki, tel. +358 20 129 2822
Uponor Corporation
Tarmo Anttila
Vice President, Communications
Tel. +358 20 129 2852
DISTRIBUTION:
NASDAQ OMX - Helsinki
Media
www.uponor.com
ANNEX: Tables
This text may include estimates concerning the future which are based on the
current extent of the corporation's operations and Board of Directors'
assumptions and expectations. However, the actual results may ultimately differ
from them.
Information on the financial results bulletin
The figures in brackets in this financial results bulletin are the reference
figures for the equivalent period in 2008. The change percentages reported have
been calculated from exact figures, not from the rounded figures published.
FINANCIAL RESULTS BULLETIN JANUARY-DECEMBER 2009
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
--------------------------------------------------------------------------------
| MEUR | 1-12/ | 1-12/ | 10-12/ | 10-12/ |
| | 2009 | 2008 | 2009 | 2008 |
--------------------------------------------------------------------------------
| Continuing operations |
--------------------------------------------------------------------------------
| Net sales | 734.1 | 949.2 | 174.4 | 198.9 |
--------------------------------------------------------------------------------
| Cost of goods sold | 463.0 | 607.4 | 106.7 | 136.6 |
--------------------------------------------------------------------------------
| Gross profit | 271.1 | 341.8 | 67.7 | 62.3 |
--------------------------------------------------------------------------------
| Other operating income | 4.2 | 1.4 | 3.9 | 0.8 |
--------------------------------------------------------------------------------
| Dispatching and warehousing | 32.4 | 30.2 | 8.2 | 7.1 |
| expenses | | | | |
--------------------------------------------------------------------------------
| Sales and marketing expenses | 140.1 | 175.0 | 34.8 | 44.0 |
--------------------------------------------------------------------------------
| Administration expenses | 45.0 | 50.8 | 11.0 | 11.5 |
--------------------------------------------------------------------------------
| Other operating expenses | 16.6 | 36.0 | 5.3 | 20.4 |
--------------------------------------------------------------------------------
| Operating profit | 41.2 | 51.2 | 12.3 | -19.9 |
--------------------------------------------------------------------------------
| Financial expenses, net | 12.7 | 10.2 | 2.9 | 5.6 |
--------------------------------------------------------------------------------
| Profit before taxes | 28.5 | 41.0 | 9.4 | -25.5 |
--------------------------------------------------------------------------------
| Income taxes | 11.3 | 10.9 | 6.0 | -9.6 |
--------------------------------------------------------------------------------
| Profit for the period from | 17.2 | 30.1 | 3.4 | -15.9 |
| continuing operations | | | | |
--------------------------------------------------------------------------------
| |
--------------------------------------------------------------------------------
| Discontinued operations |
--------------------------------------------------------------------------------
| Profit for the period from | -5.7 | 42.4 | -1.5 | -0.1 |
| discontinued operations | | | | |
--------------------------------------------------------------------------------
| Profit for the period | 11.5 | 72.5 | 1.9 | -16.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other comprehensive income |
--------------------------------------------------------------------------------
| Translation differences | 2.4 | 5.2 | 3.0 | 5.2 |
--------------------------------------------------------------------------------
| Cash flow hedges | 0.5 | -1.4 | 0.6 | -1,4 |
--------------------------------------------------------------------------------
| Other comprehensive income for | 2.9 | 3.8 | 3.6 | 3.8 |
| the period | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive income for | 14.4 | 76.3 | 5.5 | -12.2 |
| the period | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, EUR | 0.16 | 0.99 | 0.03 | -0.22 |
--------------------------------------------------------------------------------
| - Continuing operations | 0.24 | 0.41 | 0.05 | -0.22 |
--------------------------------------------------------------------------------
| - Discontinued operations | -0.08 | 0.58 | -0.02 | 0.00 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Diluted earnings per share, EUR | 0.16 | 0.99 | 0.03 | -0.22 |
--------------------------------------------------------------------------------
| - Continuing operations | 0.24 | 0.41 | 0.05 | -0.22 |
--------------------------------------------------------------------------------
| - Discontinued operations | -0.08 | 0.58 | -0.02 | 0.00 |
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
--------------------------------------------------------------------------------
| MEUR | 31.12. | 31.12. |
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Assets |
--------------------------------------------------------------------------------
| Non-current assets |
--------------------------------------------------------------------------------
| Property, plant and equipment | 175.1 | 184.5 |
--------------------------------------------------------------------------------
| Intangible assets | 101.5 | 101.3 |
--------------------------------------------------------------------------------
| Securities and long-term investments | 7.5 | 6.3 |
--------------------------------------------------------------------------------
| Deferred tax assets | 12.0 | 17.0 |
--------------------------------------------------------------------------------
| Total non-current assets | 296.1 | 309.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets |
--------------------------------------------------------------------------------
| Inventories | 74.3 | 104.5 |
--------------------------------------------------------------------------------
| Accounts receivable | 88.2 | 91.4 |
--------------------------------------------------------------------------------
| Other receivables | 26.8 | 36.7 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 13.2 | 53.2 |
--------------------------------------------------------------------------------
| Total current assets | 202.5 | 285.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total assets | 498.6 | 594.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity and liabilities |
--------------------------------------------------------------------------------
| Shareholders' equity | 258.0 | 305.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 60.2 | 77.0 |
--------------------------------------------------------------------------------
| Deferred tax liability | 9.7 | 8.1 |
--------------------------------------------------------------------------------
| Provisions | 5.7 | 7.7 |
--------------------------------------------------------------------------------
| Employee benefits and other liabilities | 22.1 | 21.3 |
--------------------------------------------------------------------------------
| Total non-current liabilities | 97.7 | 114.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current liabilities |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 17.6 | 36.8 |
--------------------------------------------------------------------------------
| Provisions | 12.7 | 22.3 |
--------------------------------------------------------------------------------
| Accounts payable | 45.0 | 50.1 |
--------------------------------------------------------------------------------
| Other liabilities | 67.6 | 66.0 |
--------------------------------------------------------------------------------
| Total current liabilities | 142.9 | 175.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total shareholders' equity and liabilities | 498.6 | 594.9 |
--------------------------------------------------------------------------------
CONDENCED CONSOLIDATED STATEMENT OF CASH FLOW
--------------------------------------------------------------------------------
| MEUR | 1-12/ | 1-12/ |
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Cash flow from operations |
--------------------------------------------------------------------------------
| Net cash from operations | 65.7 | 85.0 |
--------------------------------------------------------------------------------
| Change in net working capital | 25.9 | 55.7 |
--------------------------------------------------------------------------------
| Income taxes paid | -8.5 | -39.8 |
--------------------------------------------------------------------------------
| Interest paid | -5.2 | -6.8 |
--------------------------------------------------------------------------------
| Interest received | 0.9 | 1.3 |
--------------------------------------------------------------------------------
| Cash flow from operations | 78.8 | 95.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from investments |
--------------------------------------------------------------------------------
| Acquisition of subsidiary shares | -1.9 | |
--------------------------------------------------------------------------------
| Proceeds from disposal of subsidiaries and | - | 76.4 |
| businesses | | |
--------------------------------------------------------------------------------
| Purchase of fixed assets | -24.0 | -39.0 |
--------------------------------------------------------------------------------
| Proceeds from sales of fixed assets | 7.3 | 0.4 |
--------------------------------------------------------------------------------
| Received dividends | 0.2 | 0.2 |
--------------------------------------------------------------------------------
| Loan repayments | 0.2 | 0.2 |
--------------------------------------------------------------------------------
| Cash flow from investments | -18.2 | 38.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from financing |
--------------------------------------------------------------------------------
| Borrowings and repayments of debt | -36.4 | 19.1 |
--------------------------------------------------------------------------------
| Dividends paid | -62.1 | -102.5 |
--------------------------------------------------------------------------------
| Purchase of own shares | - | -1.2 |
--------------------------------------------------------------------------------
| Payment of finance lease liabilities | -2.0 | -2.0 |
--------------------------------------------------------------------------------
| Cash flow from financing | -100.5 | -86.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Conversion differences for cash and cash equivalents | -0.1 | -0.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in cash and cash equivalents | -40.0 | 46.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash and cash equivalents at 1 January | 53.2 | 6.3 |
--------------------------------------------------------------------------------
| Cash and cash equivalents at end of period | 13.2 | 53.2 |
--------------------------------------------------------------------------------
| Changes according to balance sheet | -40.0 | 46.9 |
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
--------------------------------------------------------------------------------
| MEUR | Share | Share | Other | Treasury| Trans- | Retained| Total |
| | capital| premium| reserves| shares | lation | earnings| |
| | | | | shares | reserve | | |
--------------------------------------------------------------------------------
| Balance at | 146.4 | 50.2 | 0.8 | -1.2 | -16.4 | 125.8 | 305.6 |
| 31 Dec 2008| | | | | | | |
--------------------------------------------------------------------------------
| Total comprehensive income | 0.5 | | 2.4 | 11.5 | 14.4 |
| for the period | | | | | |
--------------------------------------------------------------------------------
| Dividend paid (EUR 0.85 per | | | | -62.1 | -62.1 |
| share) | | | | | |
--------------------------------------------------------------------------------
| Other adjustments | 0.0 | | | 0.0 | - |
--------------------------------------------------------------------------------
| Share based payments | | | | 0.1 | 0.1 |
--------------------------------------------------------------------------------
| Balance at | 146.4 | 50.2 | 1.3 | -1.2 | -14.0 | 75.3 | 258.0 |
| 31 Dec 2009| | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balance at | 146.4 | 50.2 | 2.2 | - | -24.1 | 158.3 | 333.0 |
| 31 Dec 2007| | | | | | | |
--------------------------------------------------------------------------------
| Total comprehensive income | -1.4 | | 5.2 | 72.5 | 76.3 |
| for the period | | | | | |
--------------------------------------------------------------------------------
| Purchase of own shares | | -1.2 | | | -1.2 |
--------------------------------------------------------------------------------
| Dividend paid (EUR 1.40 per | | | | -102.5 | -102. |
| share) | | | | | 5 |
--------------------------------------------------------------------------------
| Other adjustments | | | 2.5 | -2.5 | - |
--------------------------------------------------------------------------------
| Balance at | 146.4 | 50.2 | 0.8 | -1.2 | -16.4 | 125.8 | 305.6 |
| 30 Sep 2008| | | | | | | |
--------------------------------------------------------------------------------
NOTES TO THE FINANCIAL RESULTS BULLETIN
ACCOUNTING PRINCIPLES
The financial results bulletin has been prepared in compliance with
International Financial Reporting Standards (IFRS) as adopted by EU and IAS 34
Interim Financial Reporting. In financial results bulletin Uponor Group follows
the same principles as in the annual financial statement 2009.
--------------------------------------------------------------------------------
| PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS |
--------------------------------------------------------------------------------
| MEUR | 1-12/ | 1-12/ |
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Gross investment | 27.4 | 39.0 |
--------------------------------------------------------------------------------
| - % of net sales | 3.7 | 4.1 |
--------------------------------------------------------------------------------
| Depreciation | 32.0 | 31.8 |
--------------------------------------------------------------------------------
| Write downs | 0.5 | - |
--------------------------------------------------------------------------------
| Book value of disposed fixed assets | 4.6 | 5.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| PERSONNEL |
--------------------------------------------------------------------------------
| Converted to full time employees | 1-12/ | 1-12/ |
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Average | 3,426 | 4,211 |
--------------------------------------------------------------------------------
| At the end of the period | 3,316 | 3,678 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OWN SHARES | 31.12.| 31.12.|
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Own shares held by the company, pcs | 160,000 | 160,000 |
--------------------------------------------------------------------------------
| - of share capital, % | 0.2% | 0.2% |
--------------------------------------------------------------------------------
| - of voting rights, % | 0.2% | 0.2% |
--------------------------------------------------------------------------------
SEGMENT INFORMATION
--------------------------------------------------------------------------------
| | 1-12/2009 | 1-12/2008 |
--------------------------------------------------------------------------------
| MEUR | Exter|Internal| Total | External|Internal| Total |
| | nal| | | | | |
--------------------------------------------------------------------------------
| Segment revenue, continuing operations |
--------------------------------------------------------------------------------
| Building | 485.4| 1.5 | 486.9 | 632.7 | 2.6 | 635.3
|
| Solutions - | | | | | | |
| Europe | | | | | | |
--------------------------------------------------------------------------------
| Building | 109.0| - | 109.0 | 130.8 | - | 130.8 |
| Solutions - | | | | | | |
| North America | | | | | | |
--------------------------------------------------------------------------------
| Infrastructure | 139.7| 3.7 | 143.4 | 185.7 | 6.4 | 192.1 |
| Solutions - | | | | | | |
| Nordic | | | | | | |
--------------------------------------------------------------------------------
| Eliminations | - | -5.2 | -5.2 | - | -9.0 | -9.0 |
--------------------------------------------------------------------------------
| Total | 734.1| - | 734.1 | 949.2 | - | 949.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 10-12/2009 | 10-12/2008 | |
--------------------------------------------------------------------------------
| MEUR | Exte |Internal| Total | External |Internal| Total |
| | rnal | | | | | |
--------------------------------------------------------------------------------
| Segment revenue, continuing operations |
--------------------------------------------------------------------------------
| Building | 115.0| 0.4 | 115.4 | 131.6 | 0.9 | 132.5 |
| Solutions - | | | | | | |
| Europe | | | | | | |
--------------------------------------------------------------------------------
| Building | 28.1 | - | 28.1 | 31.2 | - | 31.2
|
| Solutions - | | | | | | |
| North America | | | | | | |
--------------------------------------------------------------------------------
| Infrastructure | 31.3 | 0.7 | 32.0 | 36.1 | 0.9 | 37.0 |
| Solutions - | | | | | | |
| Nordic | | | | | | |
--------------------------------------------------------------------------------
| Eliminations | - | -1.1 | -1.1 | - | -1.8 | -1.8 |
--------------------------------------------------------------------------------
| Total | 174.4| - | 174.4 | 198.9 | - | 198.9
|
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | 1-12/ | 1-12/ | 10-12/ | 10-12/ |
| | 2009 | 2008 | 2009 | 2008 |
--------------------------------------------------------------------------------
| Segment result, continuing operations |
--------------------------------------------------------------------------------
| Building Solutions - | 32.4 | 65.6 | 10.0 | -1.0 |
| Europe | | | | |
--------------------------------------------------------------------------------
| Building Solutions - North | 3.9 | -16.0 | 3.2 | -18.4 |
| America | | | | |
--------------------------------------------------------------------------------
| Infrastructure Solutions - | 14.4 | 10.0 | 2.0 | -1.2 |
| Nordic | | | | |
--------------------------------------------------------------------------------
| Others | -9.3 | -9.5 | -8.5 | -0.5 |
--------------------------------------------------------------------------------
| Eliminations | -0.2 | 1.1 | -0.1 | 1.2 |
--------------------------------------------------------------------------------
| Total | 41.2 | 51.2 | 12.3 | -19.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | 1-12/ | 1-12/ |
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Segment depreciation and impairments, continuing operations |
--------------------------------------------------------------------------------
| Building Solutions - Europe | 16.2 | 15.3 |
--------------------------------------------------------------------------------
| Building Solutions - North America | 6.1 | 5.6 |
--------------------------------------------------------------------------------
| Infrastructure Solutions - Nordic | 5.5 | 5.9 |
--------------------------------------------------------------------------------
| Others | 4.1 | 4.1 |
-------------------------------------------------------------------------------
| Eliminations | 0.6 | 0.5
|
--------------------------------------------------------------------------------
| Total | 32.5 | 31.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | 1-12/ | 1-12/ |
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Segment investments, continuing operations |
--------------------------------------------------------------------------------
| Building Solutions - Europe | 10.5 | 16.0 |
--------------------------------------------------------------------------------
| Building Solutions - North America | 5.1 | 14.4 |
--------------------------------------------------------------------------------
| Infrastructure Solutions - Nordic | 10.1 | 4.7 |
--------------------------------------------------------------------------------
| Others | 1.7 | 3.9 |
--------------------------------------------------------------------------------
| Total | 27.4 | 39.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| MEUR | 31.12. | 31.12. |
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Segment assets |
--------------------------------------------------------------------------------
| Building Solutions - Europe | 398.2 | 417.0 |
--------------------------------------------------------------------------------
| Building Solutions - North America | 118.1 | 121.8 |
--------------------------------------------------------------------------------
| Infrastructure Solutions - Nordic | 75.2 | 67.5 |
--------------------------------------------------------------------------------
| Others | 509.9 | 611.9 |
--------------------------------------------------------------------------------
| Eliminations | -602.8 | -623.3 |
--------------------------------------------------------------------------------
| Total | 498.6 | 594.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Segment liabilities |
--------------------------------------------------------------------------------
| Building Solutions - Europe | 281.6 | 290.3 |
--------------------------------------------------------------------------------
| Building Solutions - North America | 69.7 | 90.3 |
--------------------------------------------------------------------------------
| Infrastructure Solutions - Nordic | 59.7 | 59.1 |
--------------------------------------------------------------------------------
| Others | 451.2 | 490.9 |
--------------------------------------------------------------------------------
| Eliminations | -621.6 | -641.4 |
--------------------------------------------------------------------------------
| Total | 240.6 | 289.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 1-12/ | 1-12/ |
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Segment personnel, continuing operations, average |
--------------------------------------------------------------------------------
| Building Solutions - Europe | 2,433 | 2,803 |
--------------------------------------------------------------------------------
| Building Solutions - North America | 422 | 532 |
--------------------------------------------------------------------------------
| Infrastructure Solutions - Nordic | 510 | 605 |
--------------------------------------------------------------------------------
| Others | 61 | 66 |
--------------------------------------------------------------------------------
| Total | 3,426 | 4,006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Reconciliation |
--------------------------------------------------------------------------------
| MEUR | 1-12/ | 1-12/ |
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Segment result, continuing operations |
--------------------------------------------------------------------------------
| Segment results total | 41.2 | 51.2 |
--------------------------------------------------------------------------------
| Financial expenses, net | 12.7 | 10.2 |
--------------------------------------------------------------------------------
| Group's profit before taxes | 28.5 | 41.0 |
--------------------------------------------------------------------------------
CONTINGENT LIABILITIES
--------------------------------------------------------------------------------
| MEUR | 31.12. | 31.12. |
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Group: | | |
--------------------------------------------------------------------------------
| Pledges | 0.0 | 0.0 |
| - on own behalf | | |
--------------------------------------------------------------------------------
| Mortgages | 0.0 | 0.0 |
| - on own behalf | | |
--------------------------------------------------------------------------------
| Guarantees |
--------------------------------------------------------------------------------
| - on own behalf | 0.1 | 0.0 |
--------------------------------------------------------------------------------
| - on behalf of others | 7.4 | 7.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Parent company: |
--------------------------------------------------------------------------------
| Guarantees |
--------------------------------------------------------------------------------
| - on behalf of a subsidiary | 10.0 | 9.0 |
--------------------------------------------------------------------------------
| - on behalf of others | 6.9 | 7.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OPERATING LEASE COMMITMENTS | 30.1 | 31.9 |
--------------------------------------------------------------------------------
DERIVATIVE CONTRACTS
--------------------------------------------------------------------------------
| MEUR | Nominal | Fair | Nominal | Fair |
| | value | value | value | value |
| | 31.12. | 31.12. | 31.12. | 31.12. |
| | 2009 | 2009 | 2008 | 2008 |
--------------------------------------------------------------------------------
| Currency derivatives | 115.1 | 0.6 | 128.9 | 7.7 |
| - Forward agreements | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Commodity derivatives | 7.2 | -0.7 | 7.4 | -1.5 |
| - Forward agreements | | | | |
--------------------------------------------------------------------------------
SHARE BASED PAYMENTS
The Group has two management incentive schemes which are addressed to Executive
Committee and international business management. According to the agreement
conditions, the Group parent company will grant the shares without any cash
payments. Both of the management incentive schemes are conditional. The
conditions are based on the Group's cumulative operating profit and the share
amounts which the management scheme participants have personally acquired.
Management incentive scheme participants have acquired in total 34,952 shares.
Based on the actual 2009 and estimated 2010-2011 operating profits the share
based payment volume is 20,170 shares. The management incentive scheme valuation
impact on Group's operating profit is 0.2 (0.0) million euros, on equity 0.1
(0.0) million euros and the liability reserved for paying any related income
taxes for scheme participants 0.1 (0.0) million euros. The management incentive
scheme income statement and balance sheet impacts have been calculated on
accrual basis
DISCONTINUED OPERATIONS
The infrastructure business disposals during 2008 in the UK and Ireland have
been classified as discontinued operations according to the IFRS 5 - Non-current
Assets Held for Sale and Discontinued Operations. Uponor Ltd and its subsidiary
Radius Plastics Ltd in the UK, and the business assets of Uponor Ltd in Ireland,
were divested in June 2008. In addition, the Group sold its German subsidiary
Uponor Klärtechnik GmbH in 2008.
In 2009 the discontinued operations include 5.7 million euro costs in regard to
the sold Irish infrastructure business. These costs have occurred from soil
cleaning operations, which were started in 2008.
--------------------------------------------------------------------------------
| MEUR | 1-12/ | 1-12/ |
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Net sales | - | 8.9 |
--------------------------------------------------------------------------------
| Expenses | 5.7 | 10.0 |
--------------------------------------------------------------------------------
| Profit before taxes | -5.7 | -1.1 |
--------------------------------------------------------------------------------
| Income taxes | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Profit after taxes | -5.7 | -1.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net profit from divestment of discontinued | - | 43.5 |
| operations | | |
--------------------------------------------------------------------------------
| Income taxes | - | - |
--------------------------------------------------------------------------------
| Profit from divestment of discontinued operations | - | 43.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit for the period from discontinued operations | -5.7 | 42.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow from discontinued operations |
--------------------------------------------------------------------------------
| Cash flow from operations | -5.2 | -3.4 |
--------------------------------------------------------------------------------
| Cash flow from investments | - | 76.4 |
--------------------------------------------------------------------------------
Book value of assets disposed
--------------------------------------------------------------------------------
| MEUR | 1-12/ | 1-12/ |
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Property, plant and equipment | - | 33.7 |
--------------------------------------------------------------------------------
| Deferred tax asset | - | 1.9 |
--------------------------------------------------------------------------------
| Inventories | - | 17.8 |
--------------------------------------------------------------------------------
| Accounts receivable and other receivables | | 25.1 |
--------------------------------------------------------------------------------
| Cash and cash equivalent | - | 1.1 |
--------------------------------------------------------------------------------
| Total assets | - | 79.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Deferred tax liability | - | 3.1 |
--------------------------------------------------------------------------------
| Employee benefits and other liabilities | - | 4.3 |
--------------------------------------------------------------------------------
| Accounts payable and other current liabilities | - | 33.2 |
--------------------------------------------------------------------------------
| Total liabilities | - | 40.6 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net assets | - | 39.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash received from sales | - | 77.5 |
--------------------------------------------------------------------------------
| Cash and cash equivalent disposed of | - | 1.1 |
--------------------------------------------------------------------------------
| Cash flow effect | - | 76.4 |
--------------------------------------------------------------------------------
In addition to the payment in cash, the Group booked a vendor loan note worth
4.0 million pounds sterling, which converted at the date of sale into 5.0
million euros, as a non-current interest-bearing receivable. This is included in
the overall sales value amounting to 82.5 million euro.
ACQUIRED SUBSIDIARIES
On 30 November 2009, Uponor Group acquired the entire shareholding in the
radiant heating and cooling systems company The Underfloor Heating Company
Limited, based in Skelmanthorpe in Yorkshire in the UK. It is trading under the
name Velta UK. The original total purchase consideration was GBP 3.3 million, of
which 50 percent represents the initial purchase consideration at agreement date
and 50 percent an operating profit based potential earn-out consideration for
each year separately during 2009-2011. The acquisition cost at end of 2009 is
GBP 2.9 million, after the 2009 non-realised earn-out consideration of GBP 0.4
million reduced the maximum purchase consideration. The entire purchase
consideration has been booked as goodwill, since the purchased net assets were
negative at the acquisition data and the asset fair values did not excess their
carrying values for any identifiable item.
--------------------------------------------------------------------------------
| | Carrying value | Book value |
| | 30.11.2009 | 30.11.2009 |
--------------------------------------------------------------------------------
| | MEUR |
--------------------------------------------------------------------------------
| Fixed assets | 0.1 | 0.1 |
--------------------------------------------------------------------------------
| Inventories | 0.4 | 0.4 |
--------------------------------------------------------------------------------
| Accounts receivable and other | 2.5 | 2.5 |
| receivables | | |
--------------------------------------------------------------------------------
| Cash and cash equivalent | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Total Assets | 3.0 | 3.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Accounts payable | 3.1 | 3.1 |
--------------------------------------------------------------------------------
| Other current liabilities | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Total liabilities | 3.1 | 3.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net assets | -0.1 | -0.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Acquisition cost | 3.2 | |
--------------------------------------------------------------------------------
| Goodwill | 3.3 | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash outflow on acquisition | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Acquisition cost total | 3.2 | |
--------------------------------------------------------------------------------
| of which Earn-out consideration | -1.4 | |
--------------------------------------------------------------------------------
| Acquisition costs paid in cash | 1.8 | |
--------------------------------------------------------------------------------
| Cash and cash equivalent | 0.0 | |
--------------------------------------------------------------------------------
| Net cash flow arising on | 1.8 | |
| acquisition | | |
--------------------------------------------------------------------------------
RELATED-PARTY TRANSACTIONS
--------------------------------------------------------------------------------
| MEUR | 1-12/ | 1-12/ |
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Continuing operations |
--------------------------------------------------------------------------------
| Purchases from associated companies | 1.7 | 2.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Balances at the end of the period |
--------------------------------------------------------------------------------
| Accounts payables and other liabilities | 0.0 | 0.0 |
--------------------------------------------------------------------------------
KEY FIGURES
--------------------------------------------------------------------------------
| | 1-12/ | 1-12/ |
| | 2009 | 2008 |
--------------------------------------------------------------------------------
| Earnings per share, EUR | 0.16 | 0.99 |
--------------------------------------------------------------------------------
| - continuing operations | 0.24 | 0.41 |
--------------------------------------------------------------------------------
| - discontinued operations | -0.08 | 0.58 |
--------------------------------------------------------------------------------
| Operating profit (continuing operations), % | 5.6 | 5.4 |
--------------------------------------------------------------------------------
| Return on equity, %, (p.a.) | 4.1 | 22.7 |
--------------------------------------------------------------------------------
| Return on investment, %, (p.a.) | 8.1 | 22.2 |
--------------------------------------------------------------------------------
| Solvency ratio, % | 51.8 | 51.4 |
--------------------------------------------------------------------------------
| Gearing, % | 25.0 | 19.8 |
--------------------------------------------------------------------------------
| Net interest-bearing liabilities | 64.6 | 60.6 |
--------------------------------------------------------------------------------
| Equity per share, EUR | 3.53 | 4.18 |
--------------------------------------------------------------------------------
| - diluted | 3.53 | 4.18 |
--------------------------------------------------------------------------------
| Dividend per share, EUR | 0.50*) | 0.85 |
--------------------------------------------------------------------------------
| Dividend per earnings, % | 316.3 | 85.9 |
--------------------------------------------------------------------------------
| Effective share yield, % | 3.3 | 11.0 |
--------------------------------------------------------------------------------
| P/E ratio | 94.9 | 7.8 |
--------------------------------------------------------------------------------
| Market value of share capital, MEUR | 1,098.1 | 563.7 |
--------------------------------------------------------------------------------
| Trading price of shares |
--------------------------------------------------------------------------------
| - low, EUR | 6.80 | 6.10 |
--------------------------------------------------------------------------------
| - high, EUR | 15.10 | 18.91 |
--------------------------------------------------------------------------------
| - average, EUR | 9.95 | 12.04 |
--------------------------------------------------------------------------------
| Shares traded |
--------------------------------------------------------------------------------
| - 1,000 pcs | 45,815 | 99,227 |
--------------------------------------------------------------------------------
| - MEUR | 456 | 1,195 |
--------------------------------------------------------------------------------
| - of average number of shares, % | 62.7 | 135.6 |
--------------------------------------------------------------------------------
*) Board proposal
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
Dividend per share ratio
Dividend per share
= -------------------------------------------
Profit per share
Effective dividend yield
Dividend per share
= --------------------------------------- x 100
Share price at end of financial period
Price-Earnings ratio (P/E)
Share price at end of financial period
= -------------------------------------------
Earnings per share
Share trading progress
= Number of shares traded during the financial year in relation to average
value
of the said number of shares
Market value of shares
= Number of shares at end of financial period x last trading price
Average share price
Total value of shares traded (EUR)
= ---------------------------------------------
Total number of shares traded