Uponor warns that full-year results will fall short of earlier guidance
Uponor Corporation Stock exchange release 27 Sept. 2011 18:00 EET
In connection with its financial reporting for the second quarter 2011, Uponor forecast that its full-year operating profit would improve from that reported for the previous year. This forecast was based on a combination of price increases already implemented and the expectation of continued volume growth based on commonly available construction industry forecasts. However, more recent economic developments have reduced the validity of these construction industry forecasts.
Uponor estimates that, against earlier guidance, its net sales growth will tail off to such an extent that the gap in operating profit, generated in the first half of 2011, cannot be met during the latter half of the year. The January–June 2011 operating profit lagged behind the same period in the previous year, by €1.6 million. Forecasting the results of the net working capital improvement programme is exceptionally challenging; hence, Uponor will not issue a guidance on full-year cash flow for 2011.
The management has initiated actions to improve focus, reduce cost and improve cash flow. Among others, the company will exit from markets with poor performance, and it plans to reduce personnel costs through headcount reductions, where applicable, and through voluntary programmes of unpaid leave. Production will be curtailed to run down inventories to meet the expected demand and to support this year’s cash flow. The Board continues to review the management’s plans and actions to mitigate the unsatisfactory financial performance.
Based on the above, Uponor is altering its full-year guidance:
Uponor's net sales is expected to improve on the 2010 level, but operating profit should fall somewhat short of the previous year's reported result. The Group's fixed-asset investments are not expected to exceed depreciation.
For further information, please contact:
Jyri Luomakoski, President and CEO, tel. + 358 20 129 2824
Riitta Palomäki, CFO, tel. + 358 20 129 2822
Vice President, Communications
Tel. +358 20 129 2852
NASDAQ OMX – Helsinki
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. Uponor offers its customers solutions that are technically advanced, ecologically sustainable, and safe and reliable to own and operate. The Group employs approx. 3,200 persons, in 30 countries. In 2010, Uponor's net sales totalled €750 million. Uponor Corporation is listed on NASDAQ OMX Helsinki in Finland. http://www.uponor.com.