CEO review


22 February 2022

Dear reader,

Year 2021 was a record year for Uponor - our net sales and operating profit reached an all-time high level. All three divisions grew double digits in sales – also thanks to robust demand in both Europe and the US. Our teams in the markets successfully mitigated the various impacts of the COVID-19 pandemic and implemented programmes to compensate for the extraordinary price increases and material shortages. The situation remains volatile with inflation at levels we have not seen for decades.

Building Solutions – Europe continued their strong performance and made a significant improvement in their profitability. During the past 24 months, the division has more than doubled their comparable operating profit – and in 2021 grew their business’ net sales by 13%. The business benefited from improved processes, organic growth and innovations. In October, we completed the acquisition of Capricorn S.A., a Polish manufacturer of components for heating and sanitary installations. This acquisition complements our radiant heating and cooling product range and expands our European assembly network to meet the growing demand for prefabricated systems.

The Building Solutions - North America division reached an important milestone by achieving the $100 million mark in operating profit. The division’s net sales increased by 20.2%, despite the supply challenges. As demand continues to grow for our PEX-A pipes, we decided last summer to expand our capacity in Minnesota which should be completed in 2022.

The Uponor Infra business was driven by stable demand. However, the price programmes we put in place in the second half of 2021 could not fully mitigate the rapidly growing material prices. On a five-year perspective, Uponor Infra has improved their margin and our team is very committed to enhancing operational efficiency and product mix towards higher margin systems and solutions.

In August 2021, I joined Uponor - a great Finnish brand with more than 100 years of experience and a leading position in core markets as well as a lot of potential to address the future megatrends. Uponor puts people first: the engagement levels are high, and our health and safety programmes resulted in a 33% reduction of the lost time incident frequency. A strong global team with excellent divisional operations will unlock the full potential. Sustainable solutions for heating and cooling as well as state of the art systems for safe drinking water address the megatrends of the next decades: decarbonization and energy efficient solutions as well as the growing scarcity of drinking water. Infrastructure investments will increase overall in Europe - and we are the leading brand in the Nordic markets, moving from a component manufacturer to a provider of design solutions.

We are currently finalising our refined strategy to accelerate profitable, sustainable growth. We will strengthen our capabilities and capacity to develop future technologies, innovate more energy-efficient products - and become a sustainability enabler for our customers.

The global call for reducing CO2 emissions will transform the construction industry in the next decade. Uponor is in a great position not only because sustainability is in the “Finnish DNA” of our company but Uponor has also been pro-active for years to build the foundation for now playing a leading role in our industry.

Uponor launched in 2021 its first product utilising renewable raw materials, Ultra Rib 2 Blue sewer pipe, and more is to come in 2022. For local and district heating networks, the new Ecoflex VIP combines the best heat loss performance for flexible foam insulation pipes on the market with outstanding flexibility. In April, we got approval from the Science Based Targets initiative for our new greenhouse gas emission reduction targets as one of the first companies in the building material industry.

I would like to thank all Uponorians for their great achievements in 2021. Many thanks also to our customers, shareholders and partners for their continuing trust in Uponor. We are looking forward to the next chapter of success for Uponor!

Michael Rauterkus
President and CEO