Interim Report January–September 2023: Continuous strong margin in a volatile market

Uponor Corporation, Stock Exchange Release, 25 October 2023 at 09:00 am EET

Interim Report January–September 2023: Continuous strong margin in a volatile market

July–September 2023 in brief

  • Net sales were €298.5 (364.0) million, a decrease of -18.0% or -16.0% in constant currency terms.
  • Operating profit was €32.8 (44.4) million or 11.0% (12.2) of net sales.
  • Comparable operating profit was €36.1 (44.9) million or 12.1% (12.3) of net sales.
  • Earnings per share were €0.29 (0.40).

January–September 2023 in brief

  • Net sales were €943.4 (1,109.7) million, a decrease of -15.0% or -12.9% in constant currency terms.
  • Operating profit was €117.8 (134.0) million or 12.5% (12.1) of net sales.
  • Comparable operating profit was €122.9 (142.6) million or 13.0% (12.9) of net sales.
  • Earnings per share were €1.01 (1.19).

Guidance statement for 2023 (unchanged)
Due to structural changes, Uponor expects its net sales, excluding the impacts of currencies, to be between €1,250 and €1,350 million in 2023, and its comparable operating profit margin to be at or above 11%.

Short-term market outlook
Uponor expects that construction markets will remain soft overall, especially in the new housing segment, in the fourth quarter of the year. While long-term demand drivers remain intact, elevated mortgage interest rates, a general environment of uncertainty and geopolitical conflicts are expected to continue to constrain the initiation of new construction projects and, to a lesser extent, investments in renovation projects in the near-term. Spending on civil engineering projects in the Nordics will be comparatively more stable overall, continuing at the same low level.

Michael Rauterkus, President and CEO, comments:
“In the third quarter of 2023, we continued to deliver on our ambition to build margin resilience under volatile market conditions. The third quarter saw us achieve a strong comparable operating profit margin of 12.1% (12.3%). Our net sales adjusted for structural changes decreased by 14.7%, affected by soft overall market demand. We continue to see the benefits of our ongoing transformation and new operating model. I would like to thank the Uponor team, whose dedication and hard work in driving our transformation and financial performance has delivered again strong profitability in demanding times.

Building Solutions – North America achieved yet again a great result, exceeding the previous year’s comparable operating margin level supported by robust operational performance and cost initiatives. Net sales were at the same level as the previous year in USD terms driven by strong demand generation activities and price discipline.

Uponor Infra continued to deliver on its strategy to focus on the profitable core. While net sales declined due to lower market activity, the comparable operating profit margin exceeded the previous year’s level supported by a favourable product and channel mix.

In Building Solutions – Europe, the comparable operating margin was negatively impacted by lower sales volumes due to continued slow underlying market activity in our key European markets. However, there were some signs of stabilisation visible in the order book development towards the end of the quarter. The ongoing transformation of the division has accelerated further, and I am pleased to welcome Jonas Brennwald to Uponor’s Executive Committee to lead the next phase of our transformation in Europe as our new President of the Building Solutions – Europe division.

Our commitment to sustainability was recognized during the quarter as Uponor was awarded a Gold level rating for the first time by EcoVadis. In line with our People First agenda, I was also pleased to see our safety performance continued to improve. Our lost time injury frequency rate, LTIF, for the first nine months of the year was 3.2 (9.2).

The execution of our Transformation programme remains on track. Several reorganizations have taken place to support our company’s transformation towards becoming a leaner and more resilient company. The transformation actions implemented so far within the programme are expected to generate annualised savings of €19.6 million of the total targeted €30 million cost savings by the end of 2024.

As part of our transformation, we are also bolstering our innovation and technological capabilities to better capture global growth opportunities and respond to customer needs. Through our newly introduced global Category Management Structure, based on our product categories Water, Energy, Installation and Infrastructure, we have great opportunity for driving innovation and long-term product strategies to implement in close collaboration with R&D. Redefining how this works within Uponor is an important part of our growth and innovation strategy, and I am very pleased to welcome Charlotta Persfell to Uponor as our new Chief Marketing Officer to ensure alignment of divisional Marketing teams and the global category structure, as well as to strengthen our brand.

The building blocks for accelerating the execution of our growth strategy through innovation are now in place. We are dedicated to responding to the growing long-term need for energy-efficient heating and cooling systems as well as systems for safe and clean water. We are turning our innovation focus towards adding more intelligence to our products enabling smart water delivery, heating and cooling, keeping people in their comfort zone, saving energy, and money, thereby enabling affordable sustainable housing.

For the remainder of 2023, we are prepared for continued high market volatility and a soft demand picture, especially in Europe, impacted by volatile interest rates and the effects of inflation.

Looking ahead, backed by our robust strategic plan, the improved resilience of our business model and healthy balance sheet, we are well equipped to achieve our strategic targets. We continue to focus firmly on our profitable core, executing our transformation and delivering value to our customers through leading the change in sustainable water solutions.”

Key figures

M€  7–9
Change 1–9
Change 1–12 /2022
Net sales 298.5 364.0 -18.0% 943.4 1,109.7 -15.0% 1,386.2
Operating expenses 253.8 306.2 -17.1% 802.4 936.4 -14.3% 1,197.7
Depreciation and impairments 12.7 13.7 -7.2% 38.6 39.7 -2.8% 54.5
Operating profit 32.8 44.4 -26.2% 117.8 134.0 -12.1% 135.5
Operating profit, % 11.0 12.2 -9.9% 12.5 12.1 +3.4% 9.8
Comparable operating profit 36.1 44.9 -19.7% 122.9 142.6 -13.8% 153.7
Comparable operating profit, % 12.1 12.3 -2.1% 13.0 12.9 +1.4% 11.1
Financial income and expenses -0.2 1.3 -114.0% -4.1 0.7 -691.0% -1.0
Profit before taxes 32.7 45.8 -28.7% 113.8 134.9 -15.6% 134.9
Profit for the period 22.9 33.1 -30.8% 80.5 95.9 -16.1% 97.5
Earnings per share 0.29 0.40 -26.8% 1.01 1.19 -15.1% 1.21


30 Sep 30 Sep   31 Dec
2023 2022 Change 2022
Net working capital, M€ 131.5 180.9 -27.3% 164.5
Net-interest bearing debt, M€ 56.8 55.2 +2.9% 48.5
Solvency, % 49.8 53.4 -6.7% 55.2
Gearing, % 11.9 9.9 +19.1% 9.1
Return on investment, % 25.0 29.1 -14.2% 22.2

Uponor Corporation’s financial calendar 2024
16 Feb 2024        Financial Statements 2023 Bulletin
13 Mar 2024        Annual General Meeting 2024
19 Apr 2024         Interim Report 1–3/2024
18 Jul 2024         Half-Year Financial Report 1–6/2024
23 Oct 2024        Interim Report 1–9/2024

For further information, please contact:
Markus Melkko, CFO, tel. +358 20 129 2038
Franciska Janzon, Senior Vice President, Communications and IR, tel. +358 20 129 2821

Nasdaq Helsinki

Uponor in brief
Uponor is a leading global provider of solutions that efficiently and effectively move water through cities, buildings, and homes. We help customers in residential and commercial construction, municipalities, and utilities, be more productive – and continuously find new ways to conserve, manage and provide water responsibly, unlocking its potential to provide comfort, health, and efficiency. Our safe drinking water, energy-efficient radiant heating and cooling systems, and reliable infrastructure solutions are sold in more than 80 countries. Uponor employs about 3,600 professionals in 26 countries in Europe and North America. In 2022, the company’s net sales totalled approximately €1.4 billion. Uponor Corporation is based in Finland and listed on Nasdaq Helsinki.