Uponor Corporation's Financial Statements Bulletin for 1–12/2022: 2022 was a good year for Uponor

Uponor Corporation, Stock exchange release, 15 February 2023 at 09:00 am EET

Uponor Corporations Financial Statements Bulletin for 112/2022: 2022 was a good year for Uponor
October–December 2022 in brief

  • Net sales were €276.5 (329.3) million, a decline of -16.0%, or -18.4% in constant currency terms. The organic growth was -16.5%.
  • Operating profit was €1.4 (22.8) million or 0.5% (6.9) of net sales.
  • Comparable operating profit was €11.0 (26.7) million or 4.0% (8.1) of net sales.
  • Earnings per share were €0.02 (0.23). 

January–December 2022 in brief

  • Net sales were €1,386.2 (1,313.2) million, a growth of 5.6%, or 2.2% in constant currency terms. The organic growth was 3.6%.
  • Operating profit was €135.5 (154.1) million or 9.8% (11.7) of net sales.
  • Comparable operating profit was €153.7 (160.5) million or 11.1% (12.2) of net sales.
  • Earnings per share were €1.21 (1.33). 

Guidance statement for 2023
Excluding the impacts of currencies, Uponor expects its net sales to be between €1,300 and €1,400 million in 2023, and its comparable operating margin to be above 10%.

The Board’s dividend proposal
The Board proposes to the Annual General Meeting that a dividend of €0.69 (0.67) per share be paid, of which €0.34 will be paid in March 2023 and €0.35 is planned to be paid in September 2023.

When deciding on its dividend proposal, the Board considered the solvency, investment plans and other capital needs of the company.

Annual General Meeting 2023
Uponor Corporation’s Annual General Meeting will be held at the Paavo Hall of the Helsinki Music Centre, which is located at Mannerheimintie 13 A, 00100 Helsinki, on 17 March 2023 at 13:00 EET.

The company’s shareholders and their proxy representatives may attend the general meeting and exercise their shareholder rights either by attending the meeting or by voting in advance. Shareholders also have the opportunity to follow the Annual General Meeting as a webcast if the registration and advance voting has been completed. The webcast is mainly held in Finnish and translated into English.

Shareholders holding a Finnish book-entry account may register and vote in advance between 16 February–10 March 2023 at 10:00 EET in the following ways:

  • via Uponor Corporation’s website at uponorgroup.com/en-en/investors/governance/agm-2023, which requires strong identification, or
  • by email to agm@innovatics.fi, when also necessary documentation shall be attached to the email, such as signed voting form and possible proxy document and/or extract from trade register, or
  • by mail addressed to Innovatics Oy, Yhtiökokous / Uponor Oyj, Ratamestarinkatu 13 A, 00520 Helsinki, Finland, when also necessary documentation shall be attached to the email, such as signed voting form and possible proxy document and/or extract from trade register.

Holders of nominee registered shares may register and vote in advance between 16 February–14 March 2023 at 10:00 EET as set out in the meeting notice published on the company’s website.

Further information: uponorgroup.com/en-en/investors/governance/agm-2023

Short-term market outlook
Uponor expects high market volatility to continue impacted by geopolitical uncertainties. Construction activity will continue to soften overall, particularly in the new housing segment, from the elevated levels witnessed in recent years. Increased interest rates will likely constrain demand, adding to the prevailing challenges of a lack of skilled labour and high inflation.

Michael Rauterkus, President and CEO, comments:
“2022 was a good year for Uponor. Despite a volatile market environment impacted by the war in Ukraine, rising interest rates, high inflation and the cyberattack we faced in the month of November, we did well. Our full year 2022 net sales were record-high at €1.4 billion, growing by 5.6% year-on-year. Our comparable operating profit reached its second highest level ever and the margin remained solid at 11.1% (12.2), reflecting our strong operational performance as well as ability to successfully implement price increases and manage adverse conditions.

Market development was relatively positive in the first half of the year. However, as interest rates started to rise, construction activity began to moderate from multi-year highs, especially in the US single-family home segment, and builder confidence fell throughout our markets in the second half of the year.

In the fourth quarter, our net sales decreased by 16% mainly due to the impact of the cyberattack against Uponor on 5 November. After the attack, the company took immediate actions to investigate and remediate the situation. One of these actions was to shut down all systems and production as a precautionary measure. After one week of production interruption, operating levels started to recover, and they were back at normal levels from the beginning of December. Net sales declined in all divisions, but our Infra business was the least affected by the cyberattack and delivered a strong operating result due to successfully run designed solutions projects. Our Building Solutions Europe and North America divisions also recovered fast and posted a record result for the month of December. However, this was not enough to compensate for the impact of production interruption and related volume loss in November before the financial year ended.

We have executed well on our ‘Maximizing the Core and Sustainable Innovations’ strategy during its initial year. In Building Solutions – Europe, we focused on countries with high potential to drive organic growth with a systematic 4C approach (Categories, Countries, Channels, Customers). We also started the journey moving from component selling to selling more integrated solutions, which can significantly increase the sales opportunities per dwelling. In Building Solutions – North America, we continued to make inroads into the commercial market and to leverage on our global offerings and brought new, innovative products to the local market. In Uponor Infra, we continued successfully to transform the sales mix by moving towards industry projects with higher margin categories.

To accelerate sustainable innovation, we formed a new Technology organisation that will also drive manufacturing efficiency and supply chain resilience. We moved forward innovation initiatives to enable profitable growth in technologies where Uponor has a competitive advantage. We also renewed our ESG framework in line with our ambition to lead the construction industry towards net zero. We made progress towards our ESG targets, in particular, with regards to our aim of having a sustainable alternative for 50% of the product portfolio by 2027. We launched four new sustainable ‘Blue’ products based on renewable raw materials. The positive initial feedback that we have received from our customers is encouraging. Together with our value chain partners, we completed the technical development of a closed loop chemical recycling process for PEX-a waste, allowing Uponor, as the first one in the world, to recycle its PEX-a waste back to new PEX pipes. We harmonized the calculation of our lost time injury frequency rate, LTIF, across all divisions and have taken steps to transform the safety culture at Uponor to reach our ‘zero accidents’ target by 2025. In 2022, our LTIF was 8.3 (8.8).

Our People First efforts focused on building a new engaged performance-based culture, while creating an inclusive and diverse workplace that attracts and retains the best talent. I am also very pleased to have been able to welcome new members to our Executive Committee and Group Leadership Team. I feel confident we have a strong team to deliver the strategy.

Uponor’s updated vision and purpose statements are grounded in our strategy. Our vision is to be the leader in sustainable water solutions. The company purpose of unlocking water’s potential to protect the place we call home challenges Uponorians to continuously find new ways to conserve, manage and move water responsibly. Water is the catalyst that allows us to innovate energy-efficient systems and this is also captured in our new company tagline “Moving Water”.

Turning to 2023, we stay on course with our long-term growth strategy while improving our resilience. Our demand outlook is negatively impacted by the rising interest rates, a continued volatile environment and cost inflation pressures. To offset these headwinds and continue building a robust, lean and resilient company, we have initiated a transformation programme over the years 2023–2024. With the successful implementation of this transformation, Uponor aims to create a new Uponor-wide operating model strengthening Uponor’s long-term competitiveness, capability to adjust to changing market conditions and ability to better serve customer needs. The programme aims at efficiency gains and annual cost savings of €30 million with an estimated net reduction of up to 400 jobs globally.

Pursuing growth with a systematic 4 C approach, optimizing capacity and protecting our margins will be our key priorities in 2023 and 2024.

Looking on the long term, maximizing the core and sustainable innovation will support Uponor's profitable growth ambitions, also under tough market conditions. We believe the current energy crisis will further accelerate the transformation toward and growing demand for more energy-efficient systems. Uponor is well positioned to benefit from this trend.
Finally, I would like to thank everyone in our organization for their dedication, focus on delivery and outstanding work during a very exceptional year.

I am very proud of the leadership and how Uponorians, united as one team, managed the cyber incident in a short time frame. This shows that, while systems are essential, the knowledge and experience of our people are what makes this company stand out. We are also thankful for the support and recognition that we have received from our customers, suppliers and other stakeholders.

I am confident that the strong engagement and performance focus of our people, as well as the strength of our balance sheet and our diversified portfolio, positions us well to capture growth opportunities even if volatility in our markets remains high in the coming quarters.”

Key figures

M€  10–12/
Change 1–12/
Net sales 276.5 329.3 -16.0% 1,386.2 1,313.2 +5.6%
Operating expenses 261.3 293.9 -11.1% 1,197.7 1,110.8 +7.8%
Depreciation and impairments 14.8 12.6 +17.2% 54.5 49.1 +10.9%
Other operating income 1.0 0.1 +1,936.0% 1.5 0.9 +66.1%
Operating profit 1.4 22.8 -93.7% 135.5 154.1 -12.1%
Operating profit, % 0.5 6.9 -92.4% 9.8 11.7 -16.7%
Comparable operating profit 11.0 26.7 -58.6% 153.7 160.5 -4.3%
Comparable operating profit, % 4.0 8.1 -50.7% 11.1 12.2 -9.3%
Financial income and expenses -1.7 -1.0 +69.0% -1.0 -7.9 -87.7%
Profit before taxes 0.0 21.9 -100.1% 134.9 139.8 -3.5%
Profit for the period 1.5 18.4 -91.8% 97.5 103.4 -5.8%
Earnings per share 0.02 0.23 -89.6% 1.21 1.33 -9.0%

  31 Dec 2022 31 Dec 2021  
Net working capital, M€ 164.5 93.3 +76.4%
Net-interest bearing debt, M€ 48.5 20.9 +131.7%
Solvency, % 55.2 50.2 +10.0%
Gearing, % 9.1 4.3 +109.5%
Return on investment, % 22.2 24.7 -9.8%

Results briefing and live webcast
A live webcast for analysts, institutional investors and the media will be broadcast on Wednesday, 15 February 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
26 Apr 2023       Interim report 1–3/2023
20 Jul 2023        Half-year financial report 2023
25 Oct 2023       Interim report 1–9/2023

Uponor Corporations’ Annual Review 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 Investor Relations, 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 4,000 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. www.uponorgroup.com