Half-year financial report January – June 2020: Comparable operating profit improved in all segments despite lower net sales impacted by COVID-19 in Q2
Uponor Corporation Half year financial report 24 July 2020 08:00 EET
Half-year financial report January – June 2020: Comparable operating profit improved in all segments despite lower net sales impacted by COVID-19 in Q2
April–June 2020
- Net sales were €277.1 (292.6) million, a decline of 5.3%. Organic growth was -5.3% in constant currency terms.
- Comparable operating profit was €36.2 (25.3) million, a growth of 43.0%.
- Operating profit was €30.3 (25.3) million, a growth of 19.8%.
- Earnings per share were €0.21 (0.18).
January–June 2020
- Net sales were €554.5 (541.5) million, a growth of 2.4%. Organic growth was 2.4% in constant currency terms.
- Comparable operating profit was €65.6 (39.5) million, a growth of 65.8%.
- Operating profit was €58.8 (39.5) million, a growth of 48.8%.
- Earnings per share were €0.51 (0.29).
- Cash flow from business operations was €28.7 (-15.9) million.
- Return on investment was 19.0% (12.2), and gearing 40.2% (66.7).
Guidance statement for 2020
On 19 March 2020, Uponor withdrew its guidance for 2020 due to lack of visibility on the potential impacts of COVID-19 on comparable operating profit. Once visibility improves and the significant uncertainties have cleared, Uponor expects to update its outlook and issue a new guidance. Current state of the COVID-19 pandemic in Uponor’s key markets does not yet warrant a solid market outlook and hence Uponor is not issuing a guidance.
Jyri Luomakoski, President and CEO, comments:
“During Q2, our net sales decreased mainly due to the overall market slowness created by COVID-19 restrictions and related economic uncertainty. In many markets, activity started to pick up towards the end of the quarter. Despite the gap in net sales, all segments improved their profits and hence, profitability. Since the start of the pandemic, we have practised tight cost control and taken measures to right-size our personnel. Together with well running operations without similar yield and cost issues as witnessed last year, combined with favourable impact from input costs, these actions have supported our profitability development. By the end of the reporting period, there have been only minor reductions in our production volumes and our supply chain has been able to deliver according to our expectations and promises towards our customers.
Building Solutions – Europe had a strong quarter, despite the decreased net sales. It is good to keep in mind that its comparison period was weak due to the scaling up of the production of the new S-Press PLUS fitting and operational challenges in our production in Virsbo, Sweden. Operative improvements together with tight cost control improved the segment’s profitability.
Building Solutions – North America segment’s profitability improvement was driven by tight cost control and a well-managed pricing policy. Despite the pandemic, the U.S residential segment in particular has performed well. Going forward, general expectations are that the residential segment will be less impacted by COVID-19 than the commercial segment.
Delays in big designed solutions projects impacted Uponor Infra’s net sales, but profitability improved in our major Nordic markets, driven by lower operative costs.
The execution of our operational excellence programme has started and we can see the first signs that these actions have started to yield results already during the second quarter.
The impacts of COVID-19 on the second half of the year are still hard to predict. While there is no visibility beyond July, current progress in the month indicates demand essentially in line with July 2019. We will continue to maintain tight cost control and are ready to make more adjustments if needed.”
Key figures
| M€ | 4-6/ 2020 | 4-6/ 2019 | Change | 1-6/ 2020 | 1-6/ 2019 | Change | 1-12/2019 |
| Net sales | 277.1 | 292.6 | -5.3% | 554.5 | 541.5 | +2.4% | 1,103.1 |
| Building Solutions – Europe | 118.5 | 125.7 | -5.7% | 247.3 | 249.3 | -0.8% | 489.3 |
| Building Solutions – North America | 90.5 | 96.3 | -6.1% | 183.1 | 171.0 | +7.1% | 375.4 |
| Uponor Infra | 69.5 | 72.4 | -4.0% | 126.7 | 124.8 | +1.6% | 243.9 |
| Operating expenses | 234.1 | 254.7 | -8.1% | 469.6 | 477.4 | -1.6% | 961.3 |
| Depreciation and impairments | 13.1 | 13.3 | -1.4% | 26.6 | 25.8 | +3.2% | 51.8 |
| Other operating income | 0.5 | 0.6 | -24.2% | 0.5 | 1.2 | -54.0% | 1.3 |
| Operating profit | 30.3 | 25.3 | +19.8% | 58.8 | 39.5 | +48.8% | 91.3 |
| Building Solutions – Europe | 7.5 | 8.2 | -8.9% | 19.4 | 15.4 | +25.8% | 31.6 |
| Building Solutions – North America | 15.0 | 13.8 | +8.7% | 31.8 | 21.3 | +49.3% | 57.1 |
| Uponor Infra | 7.3 | 5.4 | +36.7% | 9.1 | 6.0 | +52.0% | 10.8 |
| Comparable operating profit | 36.2 | 25.3 | +43.0% | 65.6 | 39.5 | +65.8% | 92.7 |
| Building Solutions – Europe | 13.2 | 8.2 | +60.5% | 26.0 | 15.4 | +67.9% | 32.3 |
| Building Solutions – North America | 15.1 | 13.8 | +9.3% | 31.9 | 21.3 | +49.6% | 57.1 |
| Uponor Infra | 7.3 | 5.4 | +36.7% | 9.1 | 6.0 | +52.0% | 10.8 |
| Financial income and expenses | -4.9 | -3.2 | +53.6% | -1.8 | -6.6 | -72.6% | -11.6 |
| Profit before taxes | 24.2 | 21.1 | +14.9% | 54.6 | 31.0 | +76.5% | 75.6 |
| Profit for the period | 17.8 | 15.3 | +16.5% | 40.1 | 22.4 | +78.9% | 55.3 |
| Earnings per share | 0.21 | 0.18 | +12.5% | 0.51 | 0.29 | +76.9% | 0.72 |
| M€ | 30 June 2020 | 30 June 2019 | Change | 31 Dec 2019 |
| Net working capital | 132.6 | 163.1 | -18.7% | 115.1 |
| Net interest bearing debt | 147.0 | 224.9 | -34.6% | 139.1 |
| Solvency | 40.4 | 39.2 | +3.2% | 44.6 |
| Gearing | 40.2 | 66.7 | -39.8% | 37.6 |
| Return on investment | 19.0 | 12.2 | +55.9% | 14.4 |
Webcast of the results briefing and the presentation
A live webcast on the half year results will be broadcasted on 24 July at 10:00 EET. It can be viewed via Uponor’s IR website at investors.uponor.com or via the Uponor IR mobile app. The recorded webcast can be viewed via the website or via the app shortly after the live presentation. All presentation materials will be available at investors.uponor.com > News & downloads.
Uponor Corporation’s financial reporting in 2020
28 Oct 2020 Interim report 1–9/2020
For further information, please contact:
Jyri Luomakoski, President and CEO, tel. +358 20 129 2824
Minna Yrjönmäki, CFO, tel. +358 20 129 2036
Susanna Inkinen, Vice President, Communications and Corporate Responsibility, tel. +358 20 129 2081
DISTRIBUTION:
Nasdaq Helsinki
Media
www.investors.uponor.com
Uponor in brief
Uponor is rethinking water for future generations. Our offering, including safe drinking water delivery, energy-efficient radiant heating and cooling and reliable infrastructure, enables a more sustainable living environment. We help our customers in residential and commercial construction, municipalities and utilities, as well as different industries to work faster and smarter. Uponor employs about 3,800 professionals in 26 countries in Europe and North America. In 2019, Uponor's net sales totalled approximately €1.1 billion. Uponor Corporation is based in Finland and listed on Nasdaq Helsinki. www.uponor.com
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