Uponor Corporation Stock exchange release 30 September 2015 8:00 EET
Weak European demand and raw material price volatility drive operating profit guidance change for 2015
Prolonged weak demand in the European building and civil engineering markets has impacted on performance in Building Solutions – Europe and Uponor Infra more severely than expected, as a result of which Uponor estimates that its full year 2015 operating profit will not improve from 2014. In February, Uponor issued guidance suggesting that the Group’s net sales and operating profit (excluding any non-recurring items) were expected to improve from 2014.
According to current estimates, based on organic growth, net sales for 2015 are expected to exceed those of the prior year while operating profit, excluding any non-recurring items, remains somewhat below that of 2014.
In addition to weak demand in Europe, performance in the third and fourth quarter is impacted by a temporary gross margin erosion coming from sales of inventories made prior to the recent decline in resin prices.
In July, Uponor launched a streamlining programme in its Building Solutions – Europe segment in order to adjust operations to the slack demand environment in Europe. This programme is set to bring annual savings of around €3 million. It is estimated that these initiatives will incur a total of €4–€5 million in non-recurring costs, most of which will be booked during 2015.
Uponor has already launched initiatives in Sweden and the UK targeting a reduction of circa 70 man years. Measures are also being prepared for the softening German market. In total, the measures are expected to account for around 100 man years of work in Building Solutions - Europe. Further details will be communicated when the plans are ready.
The North American market has remained strong and Uponor’s building solutions business is developing as expected. In addition, the manufacturing expansion in Apple Valley, Minnesota, which began in the early spring, is progressing according to plan.
For further information, please contact:
Jyri Luomakoski, President and CEO, tel. +358 20 129 2824
Riitta Palomäki, CFO, tel. +358 20 129 2822
Tarmo Anttila
Vice President, Communications
Tel. +358 20 129 2852
DISTRIBUTION:
NASDAQ Helsinki
Media
www.uponor.com
Uponor is a leading international provider of plumbing and indoor climate solutions for residential and commercial building markets across Europe and North America. In Northern Europe, Uponor is also a prominent supplier of infrastructure pipe systems. The Group employs approx. 3,800 persons, in 30 countries. In 2014, Uponor's net sales exceeded €1 billion. Uponor Corporation is listed on NASDAQ Helsinki in Finland. www.uponor.com