Interim report January–September 2022: Strong performance in a toughening market
Uponor Corporation, Stock exchange release, 4 November 2022 at 8:00 am EET
Interim report January–September 2022: Strong performance in a toughening market
July–September 2022 in brief
- Net sales were €364.0 (321.4) million, a growth of 13.3% or 9.1% in constant currency terms. The organic growth was 11.0% or 6.7% in constant currency terms.
- Operating profit was €44.4 (37.3) million or 12.2% (11.6) of net sales.
- Comparable operating profit was €44.9 (38.1) million or 12.3% (11.8) of net sales.
- Earnings per share were €0.40 (0.35).
January–September 2022 in brief
- Net sales were €1,109.7 (983.9) million, a growth of 12.8% or 8.8% in constant currency terms. The organic growth was 10.2% or 6.2% in constant currency terms.
- Operating profit was €134.0 (131.3) million or 12.1% (13.3) of net sales.
- Comparable operating profit was €142.6 (133.8) million or 12.9% (13.6) of net sales.
- Earnings per share were €1.19 (1.10).
Guidance statement for 2022 (unchanged)
Excluding the impacts of currencies, Uponor expects its net sales and comparable operating profit to increase from 2021.
(Increase indicates a growth of 2.5% or more.)
Short-term market outlook
Uponor expects market conditions to become tougher in the fourth quarter of the year. While construction markets have performed relatively well to-date, it is anticipated that the combination of substantial increases in borrowing costs and energy prices, a lack of skilled labour in the construction industry, and construction material price inflation will begin to take a heavier toll on the demand, especially in the new build sector, going forward. In addition, the exceptionally high level of uncertainty surrounding monetary policies and geopolitical developments adds extra risks to the outlook.
Michael Rauterkus, President and CEO, comments:
“We delivered a strong performance in the third quarter of 2022, despite volatile market conditions. Net sales increased by 13% in the third quarter. The organic growth reached 11%, driven by strong price realization and supported by changes in currencies. Our comparable operating profit increased by 18% mainly due to pricing actions and favourable sales mix. The comparable operating margin reached the level of 12.3% (11.8). Our safety performance took a step back with a lost time injury frequency, LTIF, rate of 6.6 (5.8). We strengthened our efforts to improve our safety performance.
I was pleased to see a strong quarter in Uponor Infra, net sales and operating profit growth was driven by favourable sales mix, pricing, and improved operational efficiencies. In Building Solutions – Europe, net sales were stable at previous year’s level impacted by wholesalers reducing their inventories, as our service levels have normalized, and the comparable operating profit decreased due to an unfavourable sales mix. Building Solutions – North America delivered a good quarter, net sales and operating profit improvement was supported by strong price realization, sales mix and operational performance.
Our strategy of accelerating innovation and maximizing the core is progressing well. I was pleased to welcome Thomas Fuhr, to a new position on our Executive Committee, as our new Chief Technology Officer (CTO). He will lead our newly formed Technology organization designed to accelerate innovation, and drive manufacturing efficiency and supply chain resilience. Our lead in sustainable product innovations continues to be well received by our customers helping them advance towards their ESG targets. In line with maximizing the core, we focused on countries with high potential to drive organic growth with a systematic 4 C approach on categories, countries, channels and customers moving from component selling to integrated solutions.
Looking ahead, we stay on course with our long-term growth strategy while improving our agility and resilience. We have been able to manage well through the pandemic, supply shortages, raw material, and other input cost inflation and now we are getting ready for the impact of rising interest rates on the demand picture. We are preparing for different scenarios and have started to take action to optimize capacity, manage costs, protect our margins and safeguard our competitiveness.
Overall, we are pleased by our strong and consistent performance during the first nine months of the year. I want to thank our entire team for their great work in challenging times. Our ability to handle volatile conditions emphasizes the flexibility of our team and the strength of our business model. Backed by our robust strategic plan and healthy balance sheet, we are well equipped to deliver performance and improve productivity despite short-term market volatility.”
Key figures
| M€ | 7–9/ 2022 | 7–9/ 2021 | Change | 1–9/ 2022 | 1–9/ 2021 | Change | 1–12/ 2021 |
| Net sales | 364.0 | 321.4 | +13.3% | 1,109.7 | 983.9 | +12.8% | 1,313.2 |
| Operating expenses | 306.2 | 272.2 | +12.5% | 936.4 | 816.9 | +14.6% | 1,110.8 |
| Depreciation and impairments | 13.7 | 12.1 | +13.6% | 39.7 | 36.5 | +8.7% | 49.1 |
| Other operating income | 0.3 | 0.3 | +1.6% | 0.5 | 0.8 | -45.2% | 0.9 |
| Operating profit | 44.4 | 37.3 | +18.8% | 134.0 | 131.3 | +2.0% | 154.1 |
| Operating profit, % | 12.2 | 11.6 | +4.9% | 12.1 | 13.3% | -9.5 | 11.7 |
| Comparable operating profit | 44.9 | 38.1 | +17.9% | 142.6 | 133.8 | +6.6% | 160.5 |
| Comparable operating profit, % | 12.3 | 11.8 | +4.1% | 12.9 | 13.6 | -5.5% | 12.2 |
| Financial income and expenses | 1.3 | -1.1 | -214.7% | 0.7 | -7.0 | -110.0% | -7.9 |
| Profit before taxes | 45.8 | 37.2 | +23.2% | 134.9 | 117.9 | +14.4% | 139.8 |
| Profit for the period | 33.1 | 27.4 | +20.8% | 95.9 | 85.0 | +12.9% | 103.4 |
| Earnings per share | 0.40 | 0.35 | +15.1% | 1.19 | 1.10 | +8.1% | 1.33 |
| | 30 Sep | 30 Sep | Change | 31 Dec |
| 2022 | 2021 | 2021 | ||
| Net working capital, M€ | 180.9 | 82.2 | +120.1% | 93.3 |
| Net-interest bearing debt, M€ | 55.2 | -26.6 | -307.5% | 20.9 |
| Solvency, % | 53.4 | 50.2 | +6.4% | 50.2 |
| Gearing, % | 9.9 | -5.6 | -276.4% | 4.3 |
| Return on investment, % (p.a.) | 29.1 | 28.5 | +2.3% | 24.7 |
Results briefing and live webcast
A live webcast for analysts, institutional investors and the media will be broadcast on Friday, 4 November at 14:30 EET. The briefing is in English. The webcast and its recording can be viewed via our website at uponorgroup.com > Investors > Reports and presentations or via the Uponor IR mobile app along with all presentation materials.
Uponor Corporation’s financial calendar for 2023
15 Feb 2023 Financial statements bulletin 2022
26 Apr 2023 Interim report 1–3/2023
26 Jul 2023 Half-year financial report 2023
25 Oct 2023 Interim report 1–9/2023
Uponor Corporations’ Annual Report for 2022 will be published the week starting 20 February 2023 and the Annual General Meeting 2023 will be held on Friday, 17 March 2023.
For further information, please contact:
Markus Melkko, CFO, tel. +358 20 129 2038
Franciska Janzon, SVP, Corporate Communications and IR, tel. +358 20 129 2821
DISTRIBUTION:
Nasdaq Helsinki
Media
Uponor in brief
Uponor is one of the leading international providers of solutions that move water for buildings and infrastructure. The company is rethinking water for future generations with its safe drinking water delivery systems, energy-efficient radiant heating and cooling systems, and reliable infrastructure solutions. With a commitment to sustainability and a passion for innovation, Uponor is developing new technologies and systems that enrich people’s lives. 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 3,900 professionals in 26 countries in Europe and North America and Uponor’s products are sold in more than 80 countries. In 2021, Uponor's net sales totalled approximately €1.3 billion. Uponor Corporation is based in Finland and listed on Nasdaq Helsinki. www.uponorgroup.com
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