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Uponor Oyj — Interim / Quarterly Report 2016
Apr 29, 2016
3245_10-q_2016-04-29_cc13d573-a4ed-466a-8a71-ecaab8735cb0.pdf
Interim / Quarterly Report
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Interim report 1-3/2016
29 April 2016
INTERIM REPORT JANUARY – MARCH 2016
Uponor reports steady progress in Europe, strong growth in North America continues
- Net sales in January March totalled €246.9 (237.1) million, up by 4.1%, or 2.6% in organic terms
- Operating profit came to €11.9 (11.3) million, a change of 5.0%, or 31.4% excluding non-recurring costs of €3.0 (0.0) million from the European transformation programmes
- Earnings per share were €0.09 (0.06)
- Return on investment was 8.9% (7.2%), and gearing 62.4% (46.7%)
- Cash flow from business operations came to €-14.5 (-22.4) million
- Uponor repeats its full-year guidance announced on 12 Feb 2016: the Group's net sales and operating profit (excluding any non-recurring items) are expected to improve from 2015, assuming that economic development in Uponor's key geographies otherwise continues undisturbed.
(This interim report has been compiled in accordance with the IAS 34 reporting standards and is unaudited. Figures given in the report are for continuing operations, unless otherwise stated.)
President and CEO Jyri Luomakoski comments on developments during the reporting period:
- Building Solutions Europe reports modest top-line growth and positive profitability development in the challenging European business landscape, while it is simultaneously focussing on the extensive transformation programme. The programme is progressing according to plan in most geographies, with key parts of the programme expected to be completed during the year.
- Another successful quarter is behind us in Building Solutions North America. In the last few quarters, we have successfully continued our penetration of the commercial space, added to our manufacturing capacity and strengthened customer loyalty, all of which have helped us to strengthen our position as a preferred partner in all regions.
- In Uponor Infra, we have made positive progress with the consolidation programme, especially in cost savings, but the results are not yet visible in reported performance. We continue to face challenges on the volume side due to persistently flat and highly competitive markets, although in Finland, where the market has been in recession for 4 years, we are finally gaining some traction in key applications.
Information on the January – March 2016 interim report bulletin
The figures in brackets are the reference figures for the equivalent period in the previous year. Figures refer to continuing operations unless otherwise stated. Any change percentages were calculated from the exact figures and not the rounded figures published here.
Webcast of the results briefing and the presentation
A webcast in English will be broadcast on 29 April at 10:00 a.m. EET. Connection details are available at http://investors.uponor.com. Questions can be sent to [email protected]. The recorded webcast can be viewed at http://investors.uponor.com shortly after publication. The presentation document will be available at http://investors.uponor.com > News & downloads.
Next interim results
Uponor Corporation will publish its Q2 interim results on 26 July 2016. During the silent period from 1 to 26 July, Uponor will not comment on market prospects or factors affecting business and performance.
Markets
Although general trends in the building and construction markets in Uponor's key geographies, Europe and North America, remained much as they had been in several previous quarters, there was some optimism in the air. The economy in the U.S., Uponor's single largest national market, continued to perform well in the first quarter and some positive signs and stabilisation were also reported in Europe, although they were not necessarily yet visible in the post-cyclical construction industry.
In Europe's largest building market, Germany, domestic demand and increased public expenditure continued to support the economy in the face of sustained political and economic uncertainty. This was reflected in construction activity, where order books in the residential segment, in particular, were solid. Germany's neighbouring countries were stable to a satisfactory degree. Positive building market trends were also visible in Sweden and Spain. Construction output in Finland has also yielded minor growth recently, but no broadbased recovery is yet in sight. The weakening trend in Russia is having an impact on other eastern European markets, especially in the Baltic countries, while the south-eastern markets continue to be livelier.
In North America, growth in the U.S. economy showed some signs of slowing from the previous quarter, although consumer spending and housing components maintained their momentum in the first quarter. Within the construction industry, spending in nearly every construction segment was above last year's levels; despite the fact that builder confidence has softened, the sector is still in expansionary territory. Compared to the first quarter of 2015, the number of housing permits and starts was clearly higher in the U.S. and remained at the previous year's level in Canada.
The infrastructure solutions markets developed very much in line with general trends in the construction market. Demand in the early part of the quarter, however, was somewhat weaker in Europe, due to weatherdriven issues, i.e. the mild last quarter of 2015 and harsh weather in January 2016. In North America, the competitive pressures caused by the troubled oil and gas exploration market persisted in Uponor's key market sectors.
Net sales
Uponor's consolidated net sales reached €246.9 (237.1) million, up 4.1% in the reported figures. In organic terms, there was a growth of 2.6%. This includes adjustments for Uponor Infra's divested Thai and Extron business units in the first quarter 2015, as well as the acquisitions of the KaMo/Delta businesses as part of Building Solutions – Europe in early 2016.
In constant currency terms, i.e. using Q1/2015 exchange rates, net sales would have been €249.6 million or €2.7 million higher than reported net sales. The main impact came from CAD, NOK, RUB, and GBP, while the greatest aggregate impact was on Building Solutions – Europe.
Net sales grew most strongly in Building Solutions – North America in what was a healthy business environment in all regions. Reported growth in euro terms was 24.2%. Growth in USD was almost as robust, at 23.8%. Although smaller in volume, growth was particularly strong in Canada in relative terms, driven partly by major new product introductions. Both plumbing and indoor climate offerings fared well in both countries.
Building Solutions – Europe reported growth of 9.2% in net sales, or 2.1% in terms of organic growth. In Germany, net sales growth was largely attributable to the KaMo/Delta acquisition completed in early January. The acquisition brought important new high-end value-adding technology to Uponor. The integration of the acquired technology has been managed efficiently, also resulting in the rapid adoption of the new pre-assembled units in the local offerings of some other European countries. The project business in Germany also experienced a good quarter. Among Uponor's other large national markets, good progress was reported in Denmark, Spain and Sweden.
Uponor Infra's net sales declined by 20.7%, or 15.5% adjusting for the divestments in Q1/2015. With the exception of Sweden and Norway, measured in local currency, net sales declined in all other key markets.
Net sales in the segment's largest national market, Finland, developed favourably in key applications but declined in terms of total net sales. Net sales in Canada declined due to prolonged weak and competitive market, while in Poland, orders dropped owing to the lack of larger projects.
Breakdown of net sales by segment (January – March):
| 1–3/ | 1–3/ | Change | |
|---|---|---|---|
| M€ | 2016 | 2015 | |
| Building Solutions – Europe | 123.0 | 112.6 | 9.2% |
| Building Solutions – North America | 70.7 | 56.9 | 24.2% |
| (Building Solutions – North America (M\$) | 78.2 | 63.2 | 23.8%) |
| Uponor Infra | 54.1 | 68.3 | -20.7% |
| Eliminations | -0.9 | -0.7 | |
| Total | 246.9 | 237.1 | 4.1% |
Results and profitability
Uponor's consolidated gross profit margin at 35.5% (35.9%) has remained almost unchanged. The downward notch was a result of a combination of factors, including the non-recurring items related to the European transformation programmes, as well as a weaker product mix in sales and continued competitive pressures on prices in Building Solutions - Europe. A key component, the price development of plastic raw materials, year-over-year, was rather stable in the first quarter.
Uponor's consolidated operating profit for continuing operations in the first quarter of 2016 came to €11.9 (11.3) million, representing a change of 5.0% year-over-year. Profitability, as measured by the reported operating profit margin, remained at 4.8%, the same as a year ago. Excluding any non-recurring items, operating profit was €14.9 (11.3) million, up 31.4%. The first quarter of 2016 included non-recurring costs of €3.0 million as part of the transformation programmes in Building Solutions – Europe, €2.6 million, and Uponor Infra, €0.4 million.
Building Solutions – Europe's reported operating profit came to €4.9 (6.1) million, or €7.5 million excluding non-recurring items related to the extensive transformation programme. Good progress was made in costs, partly due to improved productivity at the new Central European distribution centre in Hassfurt, Germany, taken into use in March 2015.
Building Solutions – North America reported an operating profit of €11.1 (8.1) million, up by 36.6%, as a result of the strong growth of the business and overall cost timing. Furthermore, a favourable product mix and resin cost development both had a positive impact on profits. The previously announced shortage in engineered polymer resin had a less adverse impact than originally anticipated.
Uponor Infra's transformation programme is progressing as planned and initiatives such as the manufacturing footprint optimisation are well underway. For this reason, the targeted savings are not yet visible in operating profit, which came to €-3.6 million, a decline of €2.3 million from the previous year, mainly driven by lower net sales.
In terms of discontinued operations, there was a gain of €0.6 million from the sale of manufacturing property previously occupied by Uponor's infrastructure solutions business in Ireland.
Despite favourable progress in creating savings, mainly via Building Solutions – Europe's transformation programme, expenses increased slightly and came to €76.5 (74.6) million. Key contributors to this increase were non-recurring costs related to the transformation programmes, of which €2.3 million were included in expenses. In addition, expenses grew in Building Solutions – North America, due to sales and marketing
related activities and partly for timing reasons, and in Building Solutions – Europe as a result of the German acquisitions.
Profit before taxes for January – March totalled €8.6 (6.3) million. The effect of taxes on profits was €3.2 million, compared to €2.3 million in the first quarter of 2015. The estimated tax rate for the full year is 37.0%, compared to 40.9% at the year-end 2015, which included higher income tax in Estonia due to dividends paid to the parent company.
Profit for the first quarter of 2016 amounted to €5.4 (4.0) million.
Breakdown of operating profit by segment (January – March):
| 1–3/ | 1–3/ | Change | |
|---|---|---|---|
| M€ | 2016 | 2015 | |
| Building Solutions – Europe | 4.9 | 6.1 | -19.0% |
| Building Solutions – North America | 11.1 | 8.1 | 36.6% |
| (Building Solutions – North America (M\$) | 12.3 | 8.9 | 36.2%) |
| Uponor Infra | -3.6 | -1.3 | -168.9% |
| Others | -0.7 | -1.3 | |
| Eliminations | 0.2 | -0.3 | |
| Total | 11.9 | 11.3 | 5.0% |
Investment and financing
Uponor's gross investments in the first quarter came to €5.3 (8.1) million, remaining clearly below depreciation. Depreciation, which was influenced by the German acquisition, grew modestly to €9.8 (9.3) million. Cash flow from business operations came to €-14.5 (-22.4) million. Cash flow from financing and thus cash flow for the period were influenced by the dividend payment of €32.2 (30.7) million of 22 March 2016.
Uponor maintains its cautious policy with regard to credit risk and makes every effort to maintain a high level of liquidity, thus actively following up on accounts receivable, among other issues. Recent volatility in the commodity markets has increased the risk of disruption in the continuous availability of Uponor's critical raw materials. Uponor has therefore increased its focus on group-wide business continuity management and enhancing risk management within the supply chain, in particular.
The main existing funding programmes on 31 March 2016 included a €20 million bond maturing in 2016 and an €80 million bond maturing in 2018. Committed bilateral revolving credit facilities totalled €200 million, with €100 million maturing in 2019 and €100 million in 2020; none of these back-up facilities were in use during the period under review. In addition to the outstanding bonds and the available committed back-up facilities, Uponor signed a €50 million bilateral loan in January, which was partly used for the financing of the German acquisitions. This loan was fully drawn down by the end of March. At the period end, €25.0 (10.0) million of commercial papers were issued under the €150 million domestic commercial paper programme.
The Group's solvency, at 38.0% (40.7%), has remained at a good level. Net interest-bearing liabilities were €176.5 (130.9) million, the increase being mainly driven by the German acquisitions closed in early January 2016. The period-end cash balance totalled €20.9 (16.1) million. Gearing came to 62.4% (46.7%).
Key events
In early January, Uponor announced the following additions to its Building Solutions – Europe portfolio. On 4 January, Uponor Holding GmbH completed the acquisition of all of the shares in two German companies, Delta Systemtechnik GmbH and the KaMo Group, as announced on 30 November 2015. The acquisition broadened Uponor's portfolio and competence in the increasingly important hygienic drinking-water delivery sector. In 2014, Delta and KaMo combined generated a total turnover of €32.8 million and employed 119 employees. On 7 January, Uponor Corporation announced the acquisition of the entire shareholding in a Finnish start-up company specialising in online water quality monitoring. The company has developed a unique and revolutionary technology for the online measurement of water quality. Uponor is targeting the commercialisation of the technology in the near future. The above acquisitions strengthen Uponor's competencies in assuring water quality and hygiene, both of which are of growing importance in modern-day water services, whether such services involve municipal, industrial or residential water supply applications.
On 19 January, Uponor announced that its Finnish subsidiaries Uponor Infra Oy and Uponor Suomi Oy had concluded co-determination negotiations in Finland. As a result, a total of 126 employment contracts will be terminated by September 2016. The planned savings can thus be implemented with a smaller impact on personnel than originally estimated. The negotiations were related to the European transformation programmes announced in the autumn of 2015. Another outcome was that Uponor Infra will relocate all pressure pipe and standard chamber manufacturing operations from Vaasa to Nastola, Finland, by the end of 2016.
During the first quarter, Uponor promoted actively its key offering and especially novelties in several exhibitions. These include the new Smatrix Aqua that helps improve drinking water safety and hygiene, and which has received favourable feedback from stakeholders. Uponor has also actively continued the roll-out of its unique seamless aluminium composite pipe, Uni Pipe Plus. In North America, Uponor has worked with its partners to introduce new tools and solutions for the commercial market, where demand of Uponor systems is rapidly growing. Uponor co-developed with Milwaukee a unique new-generation tool, Milwaukee Force Logic, which makes fitting large-diameter PEX pipes easier and much more competitive than by traditional tools.
March 2016 saw Uponor host two of its most premier customer and stakeholder events. In mid-March, the company's 38th Uponor Kongress was held in Austria with the theme "Build a Sustainable Future". Close to 200 experts from the sector participated, together with a wider representation of experts from the European building and housing industry. The congress focused on the hygiene of drinking water, examples of practical solutions and, above all, the technical evolution of the building industry. At the end of March, Uponor hosted its biennial Uponor Convention in the U.S. city of Las Vegas. This two-day event, titled Connections 2016, attracted close to 1,000 industry professionals, and offered participants practical consultancy and guidance by Uponor employees as well as external presentations. Historically speaking, this was the biggest such event so far, with 13,000 square feet (1,200 m2) of space featuring current and upcoming Uponor products for the plumbing, indoor climate and fire protection markets.
Annual General Meeting
Uponor's Annual General Meeting, held in Helsinki, Finland, on 10 March 2016, adopted Uponor's parentcompany and consolidated financial statements for 2015 and released the Board members and the managing director from liability. The AGM approved the proposed dividend of €0.44 per share for 2015.
Existing Board members Jorma Eloranta, Timo Ihamuotila, Markus Lengauer, Eva Nygren, Annika Paasikivi and Jari Rosendal were re-elected.
Deloitte & Touche Oy, authorised public accountants, was re-elected as the auditor of the corporation for the 7th consecutive year. In this connection, Jukka Vattulainen, Authorised Public Accountant, assumed the role of principal auditor from outside the previous team.
The Board of Directors was authorised to buy back a maximum of 3.5 million of the company's own shares, which equals 4.8 per cent of the total number of shares of the company. These shares will be bought back
using distributable earnings from unrestricted equity. The authorisation is valid until the end of the next Annual General Meeting, and for no longer than 18 months.
The Board was also authorised to resolve on issuing a maximum of 7.2 million new shares or transferring the company's own shares, amounting to approximately 9.8 per cent of the total number of shares of the company. The Board of Directors is authorised to decide on all conditions relating to the issuance of shares. This authorisation is valid until the end of the next Annual General Meeting. The Board's annual remuneration remained unchanged.
Further details regarding the Annual General Meeting are available at http://investors.uponor.com/governance/general-meeting/agm-2016.
Human resources and administration
The number of Group full-time-equivalent employees in continuing operations averaged 3,823 (3,909) in January – March 2016, a decrease of 86 persons from the first quarter 2015. At the end of the period, the Group had 3,810 (3,785) employees. There was an increase of 116 staff in Germany, due to the KaMo/Delta companies acquired in Q1/2016. Also, North American employment increased as a result of the growth in the building solutions business. The personnel were reduced by close to 220 persons due to Uponor Infra's divestments in Q1/2015, while the European transformation programmes reduced the number of jobs in Building Solutions – Europe and Uponor Infra.
In its meeting subsequent to the AGM, the Board of Directors re-elected Jorma Eloranta as Chair and Annika Paasikivi as Deputy Chair of the Board. The Board also decided to re-establish the Audit Committee and the Personnel and Remuneration Committee. The members of the Audit Committee are Timo Ihamuotila (Chair), Markus Lengauer, Annika Paasikivi and Jari Rosendal. The members of the Personnel and Remuneration Committee are Jorma Eloranta (Chair) and Annika Paasikivi.
While Uponor complies with the Finnish Corporate Governance Code 2015 issued by the Securities Market Association, the company deviates from the code with respect to recommendation 15. Uponor's Personnel and Remuneration Committee, re-established subsequent to the AGM held in March 2016, has two members instead of the three stated in the recommendation. Uponor considers sufficient expertise for the Personnel and Remuneration Committee to have been secured with two members, and the Committee can also seek the views of non-Committee members. The Committee acts as a preparatory body assisting the Board of Directors, and all essential matters relating to remuneration are handled by the Board of Directors.
Uponor Corporation's corporate governance statement for 2015 and remuneration statement for 2015 were published on 12 February 2016 and are available through the website at http://investors.uponor.com.
On 10 March 2016, for the first time the Board approved a set of diversity principles for the board of directors. These are available for review at http://investors.uponor.com/governance/corporategovernance/board-directors. It is the Board's wish that the Nomination Board take these principles into account when considering the proposal on the composition of the Board members to be put to the General Meeting. In the future, diversity principles and their fulfilment will be reported as part of the Corporate Governance Statement.
Share capital and shares
Uponor Corporation's share capital amounts to €146,446,888 and the number of shares totals 73,206,944. There were no changes in the share capital and the number of shares during the reporting period.
The number of Uponor shares traded on Nasdaq Helsinki in the reporting period was 4.9 (7.4) million shares, totalling €61.8 (110.9) million. The market value of share capital at the end of the period was €0.9 (1.2) billion and the number of shareholders 14,545 (14,918).
On 12 February 2016, based on the authorisation granted by the Annual General Meeting on 17 March 2015, Uponor's Board of Directors decided on a directed share issue to the company's management, as part of the long-term share-based incentive plan for 2013-2015. Based on the Board's decision, Uponor transferred, without payment, 28,601 of the company's own shares to 9 key employees, as specified in the rules of the plan. Further details are available in the stock exchange release announced on 12 February 2016.
No new shares were issued in connection with the plan and the plan therefore had no diluting effect. Prior to this directed issue, Uponor held a total of 97,560 of its own shares, of which 68,959 remain.
Events after the period under review
There were no events to report on.
Short-term outlook
The near-term economic outlook in Uponor's core geographical markets remains much as it was on 12 February 2016, when Uponor announced the full-year 2015 financial results.
Continuing the trends witnessed in the last couple of years, the North American economy is expected to remain strong and offer a solid basis for the further creation of market growth.
In Europe, however, the economies within the eurozone, in particular, are expected to remain weak although some stabilisation is likely to take place after the prolonged slowdown. Of Uponor's key markets, building activity is expected to continue to be brisk in Sweden in the near future and the German residential market is showing signs of picking up. Likewise, the positive sentiment visible in Spain, Denmark and even in Finland in the first quarter of 2016 may mark a turning point after the lengthy slow period. Viewed over a longer time horizon, the weak economic cycle in Europe that began after the financial crisis in the autumn of 2007 will soon have lasted almost a decade. For this reason, there is a great deal of pent up demand in Europe which, once the tide turns, is likely to drive a recovery in the building and construction market.
No major changes are expected outside Uponor's core markets, i.e. Europe and North America, in the near term.
In the autumn of 2015, Uponor announced extensive transformation programmes in its European businesses, involving both Building Solutions – Europe and Uponor Infra, with the purpose of improving market presence and contributing to both net sales development and performance improvement, including cost savings. The implementation of these programmes is well underway and will continue in 2016. In North America, manufacturing capacity enhancements will support continued profitable growth. At the same time, Uponor is boosting investment in research, technology and corporate development in order to maintain its lead in the building industry's transition towards a more sustainable economy. In recent years alone, Uponor has introduced new, unique system offerings and has invested in acquisitions to meet growing demand for pre-assembled building components and more stringent health and hygiene requirements. All of these initiatives were designed to ensure that Uponor is well placed to meet growth in demand when the markets eventually turn.
In connection with the results briefing on 12 February 2016, Uponor stated that the Group's capital expenditure will increase from that experienced in the last few years. Uponor estimated that capital expenditure, excluding any investment in shares, will amount to circa €58 million in 2016, against €50 million in 2015. Some key reasons for the increase were the continued high emphasis on new offering development, extensive European transformation initiatives including manufacturing footprint optimisation, as well as a plan to establish a greenfield factory in China.
After a strong fourth quarter in 2015, the first quarter of 2016 started off weakly but strengthened in February and March. This was mainly driven by favourable weather conditions in key geographies. Assuming that economic development in Uponor's key geographies otherwise continues undisturbed, Uponor repeats its full-year guidance, announced on 12 Feb 2016: the Group's net sales and operating profit (excluding any non-recurring items) are expected to improve from 2015.
Uponor's financial performance may be affected by a range of strategic, operational, financial, legal, political and hazard risks. A more detailed risk analysis is provided in the section 'Key risks associated with business' in the Financial Statements 2015.
Uponor Corporation Board of Directors
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 systems and solutions provider for safe drinking water delivery, energyefficient radiant heating and cooling, and reliable infrastructure. The company serves a variety of building markets including residential, commercial, industrial, and civil engineering. Uponor employs about 3,700 employees in 30 countries, mainly in Europe and North America. In 2015, Uponor's net sales totalled €1,050 million. Uponor is based in Finland and listed on Nasdaq Helsinki. www.uponor.com
Table part
This interim report has been compiled in accordance with the IAS 34 reporting standard and it is unaudited. The figures in brackets are the reference figures for the equivalent period in 2015. The change percentages reported have been calculated from the exact figures and not from the rounded figures published in the interim report.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| M€ | 1-3/ | 1-3/ | 1-12/ |
|---|---|---|---|
| Continuing operations | 2016 | 2015 | 2015 |
| Net sales | 246.9 | 237.1 | 1,050.8 |
| Cost of goods sold | 159.1 | 151.9 | 680.6 |
| Gross profit | 87.8 | 85.2 | 370.2 |
| Other operating income | 0.6 | 0.7 | 2.4 |
| Dispatching and warehousing expenses | 8.8 | 8.9 | 35.3 |
| Sales and marketing expenses | 48.7 | 47.6 | 187.4 |
| Administration expenses | 14.1 | 13.7 | 56.8 |
| Other operating expenses | 4.9 | 4.4 | 21.7 |
| Operating profit | 11.9 | 11.3 | 71.4 |
| Financial expenses, net | 3.4 | 5.1 | 8.9 |
| Share of results in associated companies | 0.1 | 0.1 | 0.3 |
| Profit before taxes | 8.6 | 6.3 | 62.8 |
| Income taxes | 3.2 | 2.3 | 25.7 |
| Profit for period from continuing operations | 5.4 | 4.0 | 37.1 |
| Discontinued operations | |||
| Profit for the period from discontinued operations | 0.5 | 0.0 | -0.2 |
| Profit for the period | 5.9 | 4.0 | 36.9 |
| Other comprehensive income | |||
| Items that will not be reclassified subsequently to profit or loss | |||
| Re-measurements on defined benefit pensions, net of taxes |
- | - | 1.4 |
| Items that may be reclassified subsequently to profit or loss | |||
| Translation differences | -3.2 | 14.5 | 11.3 |
| Cash flow hedges, net of taxes | -0.2 | -0.2 | 0.0 |
| Net investment hedges | 0.7 | -1.9 | -2.0 |
| Other comprehensive income for the period, net of | |||
| taxes | -2.7 | 12.4 | 10.7 |
| Total comprehensive income for the period | 3.2 | 16.4 | 47.6 |
| Profit/loss for the period attributable to | |||
| - Equity holders of parent company | 7.2 | 4.7 | 37.5 |
| - Non-controlling interest | -1.3 | -0.7 | -0.6 |
| Comprehensive income for the period attributable to | |||
| - Equity holders of parent company | 4.5 | 16.0 | 47.3 |
| - Non-controlling interest | -1.3 | 0.4 | 0.3 |
| Earnings per share, € | 0.10 | 0.06 | 0.51 |
| - Continuing operations | 0.09 | 0.06 | 0.51 |
| - Discontinued operations | 0.01 | 0.00 | 0.00 |
| Diluted earnings per share, € | 0.10 | 0.06 | 0.51 |
| - Continuing operations | 0.09 | 0.06 | 0.51 |
| - Discontinued operations | 0.01 | 0.00 | 0.00 |
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
| M€ | 31.3.2016 | 31.3.2015 | 31.12.2015 |
|---|---|---|---|
| Assets | |||
| Non-current assets | |||
| Property, plant and equipment | 219.0 | 209.3 | 221.4 |
| Intangible assets | 123.3 | 97.5 | 94.7 |
| Securities and non-current receivables | 20.7 | 10.6 | 21.0 |
| Deferred tax assets | 20.5 | 21.2 | 21.0 |
| Total non-current assets | 383.5 | 338.6 | 358.1 |
| Current assets | |||
| Inventories | 130.8 | 135.2 | 112.4 |
| Accounts receivable | 184.1 | 176.9 | 154.5 |
| Other receivables | 29.4 | 25.7 | 33.6 |
| Cash and cash equivalents *) | 20.9 | 16.1 | 49.2 |
| Total current assets | 365.2 | 353.9 | 349.7 |
| Total assets | 748.7 | 692.5 | 707.8 |
| Equity and liabilities | |||
| Equity | |||
| Equity attributable to the owners of the parent company | 220.5 | 216.5 | 248.0 |
| Non-controlling interest | 62.4 | 63.9 | 63.7 |
| Total equity | 282.9 | 280.4 | 311.7 |
| Non-current liabilities | |||
| Interest-bearing liabilities | 144.6 | 126.2 | 91.2 |
| Deferred tax liability | 25.1 | 20.5 | 20.2 |
| Provisions | 11.0 | 4.6 | 10.6 |
| Employee benefits and other liabilities | 27.1 | 30.9 | 28.1 |
| Total non-current liabilities | 207.8 | 182.2 | 150.1 |
| Current liabilities | |||
| Interest-bearing liabilities | 52.8 | 20.8 | 48.3 |
| Provisions | 13.5 | 11.9 | 14.4 |
| Accounts payable | 72.9 | 77.5 | 63.9 |
| Other liabilities | 118.8 | 119.7 | 119.4 |
| Total current liabilities | 258.0 | 229.9 | 246.0 |
| Total equity and liabilities | 748.7 | 692.5 | 707.8 |
*) In 2016 and on 31 December 2015, cash and cash equivalents include €1.0 million in restricted cash.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
| M€ | 1-3/2016 | 1-3/2015 | 1-12/2015 |
|---|---|---|---|
| Cash flow from operations | |||
| Net cash from operations | 21.5 | 16.0 | 105.6 |
| Change in net working capital | -26.2 | -32.4 | -15.0 |
| Income taxes paid | -9.4 | -5.7 | -29.5 |
| Interest paid | -0.4 | -0.4 | -3.2 |
| Interest received | 0.0 | 0.1 | 0.3 |
| Cash flow from operations | -14.5 | -22.4 | 58.2 |
| Cash flow from investments | |||
| Acquisition of subsidiaries and businesses* | -31.4 | - | -0.1 |
| Proceeds from disposal of subsidiaries and businesses | 0.0 | 5.9 | 7.6 |
| Purchase of fixed assets | -5.3 | -8.1 | -50.1 |
| Proceeds from sale of fixed assets | 2.2 | 0.1 | 0.7 |
| Dividends received | - | - | 0.2 |
| Loan repayments | 0.0 | 0.0 | 0.0 |
| Cash flow from investments | -34.5 | -2.1 | -41.7 |
| Cash flow from financing | |||
| Borrowings of debt | 65.2 | 8.4 | 17.4 |
| Repayment of debt | -0.4 | -1.3 | -33.3 |
| Change in other short-term loan | -10.5 | 3.5 | 19.1 |
| Dividends paid | -32.2 | -30.7 | -30.7 |
| Payment of finance lease liabilities | -0.3 | -0.3 | -0.9 |
| Cash flow from financing | 21.8 | -20.4 | -28.4 |
| Conversion differences for cash and cash equivalents | -0.1 | 0.8 | -0.1 |
| Change in cash and cash equivalents | -27.3 | -44.1 | -12.0 |
| Cash and cash equivalents at 1 January | 48.2 | 60.2 | 60.2 |
| Cash and cash equivalents at end of period | 20.9 | 16.1 | 48.2 |
| Changes according to balance sheet | -27.3 | -44.1 | -12.0 |
*) Acquisition of subsidiaries and businesses consists of €32.5 million paid for the acquisition of the KaMo/Delta business and €1.1 million received in cash and cash equivalents from the acquisition.
STATEMENT OF CHANGES IN EQUITY
| M€ | A | B | C | D* | E | F | G | H | I |
|---|---|---|---|---|---|---|---|---|---|
| Balance at | |||||||||
| 1 Jan 2016 | 146.4 | 50.2 | -1.0 | -1.8 | -0.7 | 54.9 | 248.0 | 63.7 | 311.7 |
| Total | |||||||||
| comprehensive | |||||||||
| income for the | |||||||||
| period | -0.2 | -2.5 | 7.2 | 4.5 | -1.3 | 3.2 | |||
| Dividend paid (€0.44 | |||||||||
| per share) | -32.2 | -32.2 | -32.2 | ||||||
| Share-based | |||||||||
| incentive plan | 0.2 | 0.0 | 0.2 | 0.2 | |||||
| Balance at | |||||||||
| 31 March 2016 | 146.4 | 50.2 | -1.2 | -4.3 | -0.5 | 29.9 | 220.5 | 62.4 | 282.9 |
| Balance at | |||||||||
| 1 Jan 2015 | 146.4 | 50.2 | -1.0 | -10.3 | -1.0 | 46.8 | 231.1 | 66.8 | 297.9 |
| Total | |||||||||
| comprehensive | |||||||||
| income for the | |||||||||
| period | -0.2 | 11.5 | 4.7 | 16.0 | 0.4 | 16.4 | |||
| Dividend paid (€0.42 | |||||||||
| per share) | -30.7 | -30.7 | -30.7 | ||||||
| Share-based | |||||||||
| incentive plan | 0.3 | -0.2 | 0.1 | 0.1 | |||||
| Disposal of | |||||||||
| subsidiaries | -3.3 | -3.3 | |||||||
| Other adjustments | 0.0 | 0.0 | 0.0 | ||||||
| Balance at | |||||||||
| 31 March 2015 | 146.4 | 50.2 | -1.2 | 1.2 | -0.7 | 20.6 | 216.5 | 63.9 | 280.4 |
*) Includes a €-14.8 (-15.4) million effective part of net investment hedging at the end of period.
A – Share capital
B – Share premium
C – Other reserves
D* – Translation reserve
E – Treasury shares
F – Retained earnings
G – Equity attributable to owners of the parent company
H – Non-controlling interest
I – Total equity
NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS
ACCOUNTING PRINCIPLES
The interim report has been prepared in compliance with International Financial Reporting Standards (IFRS) as adopted by the EU and IAS 34 Interim Financial Reporting. In its interim reports, Uponor Group follows the same principles as in the annual financial statements for 2015.
PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS
| M€ | 31.3.2016 | 31.3.2015 | 31.12.2015 |
|---|---|---|---|
| Gross investment | 5.3 | 8.1 | 50.1 |
| - % of net sales | 2.1 | 3.4 | 4.8 |
| Depreciation and impairments | 9.8 | 9.3 | 39.1 |
| Book value of disposed fixed assets | 1.1 | 0.1 | 0.9 |
| PERSONNEL | |||
| Converted to full time employees | 1-3/2016 | 1-3/2015 | 1-12/2015 |
| Average | 3,823 | 3,909 | 3,842 |
| At the end of the period | 3,810 | 3,785 | 3,735 |
| OWN SHARES | 31.3.2016 | 31.3.2015 | 31.12.2015 |
| Own shares held by the company, pcs | 68,959 | 97,560 | 97,560 |
| - of share capital, % | 0.1 | 0.1 | 0.1 |
| - of voting rights, % | 0.1 | 0.1 | 0.1 |
| Accounted par value of own shares held by the company, M€ | 0.1 | 0.2 | 0.2 |
| SEGMENT INFORMATION |
| 1-3/2016 | 1-3/2015 | ||||||
|---|---|---|---|---|---|---|---|
| M€ | External | Internal | Total | External | Internal | Total | |
| Net sales by segment, continuing operations | |||||||
| Building Solutions – Europe | 122.8 | 0.1 | 123.0 | 112.4 | 0.2 | 112.6 | |
| Building Solutions - North America | 70.7 | 0.0 | 70.7 | 56.9 | 0.0 | 56.9 | |
| Uponor Infra | 53.4 | 0.8 | 54.1 | 67.8 | 0.5 | 68.3 | |
| Eliminations | 0.0 | -0.9 | -0.9 | -0.0 | -0.7 | -0.7 | |
| Total | 246.9 | - | 246.9 | 237.1 | - | 237.1 |
| 1-12/2015 | |||
|---|---|---|---|
| M€ | External | Internal | Total |
| Net sales by segment, continuing operations | |||
| Building Solutions – Europe | 466.4 | 0.7 | 467.1 |
| Building Solutions - North America | 275.8 | - | 275.8 |
| Uponor Infra | 308.6 | 3.4 | 312.0 |
| Eliminations | 0.0 | -4.1 | -4.1 |
| Total | 1,050.8 | - | 1,050.8 |
| M€ | 1-3/2016 | 1-3/2015 | 1-12/2015 |
|---|---|---|---|
| Operating result by segment, continuing operations | |||
| Building Solutions - Europe | 4.9 | 6.1 | 24.0 |
| Building Solutions - North America | 11.1 | 8.1 | 51.0 |
| Uponor Infra | -3.6 | -1.3 | 0.2 |
| Others | -0.7 | -1.3 | -3.8 |
| Eliminations | 0.2 | -0.3 | 0.0 |
| Total | 11.9 | 11.3 | 71.4 |
| M€ | 1-3/2016 | 1-3/2015 | 1-12/2015 |
| Segment depreciation and impairments, continuing operations | |||
| Building Solutions - Europe | 3.4 | 2.6 | 10.2 |
| Building Solutions - North America | 2.6 | 2.5 | 9.8 |
| Uponor Infra | 2.7 | 3.0 | 14.5 |
| Others | 1.1 | 1.1 | 4.5 |
| Eliminations | 0.0 | 0.1 | 0.1 |
| Total | 9.8 | 9.3 | 39.1 |
| Segment investments, continuing operations | |||
| Building Solutions – Europe | 1.9 | 4.0 | 15.4 |
| Building Solutions - North America | 1.9 | 2.8 | 22.6 |
| Uponor Infra | 1.3 | 1.4 | 11.3 |
| Others | 0.2 | 0.0 | 0.8 |
| Total | 5.3 | 8.1 | 50.1 |
| M€ | 31.3.2016 | 31.3.2015 | 31.12.2015 |
| Segment assets | |||
| Building Solutions - Europe | 396.8 | 348.7 | 325.5 |
| Building Solutions - North America | 203.1 | 179.7 | 216.0 |
| Uponor Infra | 219.6 | 242.2 | 212.9 |
| Others | 236.7 | 154.8 | 227.7 |
| Eliminations | -307.5 | -232.9 | -274.3 |
| Total | 748.7 | 692.5 | 707.8 |
| Segment liabilities | |||
| Building Solutions - Europe | 276.7 | 238.2 | 211.3 |
| Building Solutions - North America | 142.5 | 90.2 | 160.2 |
| Uponor Infra | 89.9 | 108.4 | 80.0 |
| Others | 292.7 | 235.3 | 245.7 |
| Eliminations | -336.0 | -260.0 | -301.0 |
| Total | 465.8 | 412.1 | 396.2 |
| 1-3/2016 | 1-3/2015 | 1-12/2015 | |
| Segment personnel, continuing operations, average | |||
| Building Solutions – Europe | 2,056 | 2,020 | 2,014 |
| Building Solutions - North America | 644 | 557 | 592 |
| Uponor Infra | 1,061 | 1,272 | 1,173 |
| Others | 63 | 60 | 63 |
| Total | 3,823 | 3,909 | 3,842 |
| Reconciliation | |||
| M€ | 1-3/2016 | 1-3/2015 | 1-12/2015 |
| Operating result by segment, continuing operations | |||
| Total result for reportable segments | 12.4 | 12.8 | 75.2 |
| Others | -0.7 | -1.2 | -3.8 |
| Eliminations | 0.2 | -0.3 | 0.0 |
| Operating profit | 11.9 | 11.3 | 71.4 |
| Financial expenses, net | 3.4 | 5.1 | 8.9 |
|---|---|---|---|
| Share of results in associated companies | 0.1 | 0.1 | 0.3 |
| Profit before taxes | 8.6 | 6.3 | 62.8 |
CONTINGENT LIABILITIES AND ASSETS
| M€ | 31.3.2016 | 31.3.2015 | 31.12.2015 |
|---|---|---|---|
| Commitments of purchase PPE (Property, plant, equipment) | 7.4 | 7.3 | 5.7 |
| Other commitments | 1.2 | 1.3 | 1.5 |
| - on own behalf | |||
| Pledges at book value | 0.1 | 0.1 | 0.1 |
| Mortgages issued | 3.8 | - | - |
| Guarantees issued | 4.8 | 4.6 | 4.8 |
| - on behalf of a subsidiary | |||
| Pledges at book value | - | 0.0 | - |
| Guarantees issued | 39.0 | 21.1 | 19.6 |
| Letter of Comfort commitments undertaken on behalf of subsidiaries | |||
| are not included in the above figures | |||
| Pledges at book value | 0.1 | 0.1 | 0.1 |
| Mortgages issued | 3.8 | - | - |
| Guarantees issued | 43.8 | 25.8 | 24.4 |
| Total | 47.7 | 25.9 | 24.5 |
Uponor Corporation's subsidiary in Spain, Uponor Hispania, S.A.U, had a tax audit in December 2011 – May 2012, covering financial years 2006 and 2007. As a result of the audit, the tax authority claims €3.9 million in taxes, delay interest and penalties from Uponor Hispania. The claim mainly relates to the tax deductibility of certain costs such as services rendered by Uponor Group and advertising. Uponor Hispania disagrees with the assessment of the tax authority and has appealed the case. In May 2015, the Spanish tax authority accepted Uponor Hispania's appeal for the most part, however rejecting the tax deductibility of costs related to Group services. As a result of this, Uponor Hispania has started a process to avoid double taxation. While the case is still in progress, Uponor Hispania has provided a bank guarantee of €2.7 million covering the tax amount and delay interests due to the Spanish tax authority. The bank guarantee given is included in Guarantees issued on behalf of a subsidiary above.
In the beginning of 2012, Uponor Corporation and its subsidiary Uponor Business Solutions Oy paid €15.0 million in taxes, surtaxes and penalties based on the taxation adjustment decisions made by the Finnish tax authority for the years 2005-2009. Uponor appealed against the decisions and filed a request for rectification to the Board of Adjustment. The Board of Adjustment rejected Uponor Business Solutions Oy's appeal in April 2013 and, for the most part, also Uponor Corporation's appeal in June 2013. On July 2013, Uponor placed the issue before the administrative court and applied for rectification of the Board of Adjustment's ruling. Uponor has also started a process to avoid possible double taxation. In November 2015, the administrative court rejected the appeals. This decision by the administrative court will not lead to any new payments or payment returns at this stage, and will therefore not affect Uponor's consolidated cash flow. Uponor does not agree with the dismissal of the case by the administrative court and has sought leave to appeal to the supreme administrative court. The surtaxes (€1.9 million) and the interest on delayed payments (€3.3 million) were recorded as expenses in 2011. The paid taxes (€9.8 million) relating to an increase in taxable income were booked as receivables from the tax authority in 2012. Tax authority returned €0.3 million to Uponor Corporation in June 2013; thus the tax receivable decreased to €9.6 million. The tax receivable is reported in non-current receivables, as the process can last years. If Uponor, against expectations, should fail to get the appeal approved, the surtaxes and interests would remain as the company's loss. If the appeal would be approved, the surtaxes and interests would be returned to the company.
| M€ | 31.3.2016 | 31.3.2015 | 31.12.2015 |
|---|---|---|---|
| OPERATING LEASE COMMITMENTS | 42.7 | 45.9 | 45.9 |
DERIVATIVE CONTRACTS
| M€ | Nominal | Fair | Nominal | Fair | Nominal | Fair |
|---|---|---|---|---|---|---|
| value | value | value | value | value | value | |
| 31.3.2016 | 31.3.2016 | 31.3.2015 | 31.3.2015 | 31.12.2015 | 31.12.2015 | |
| Currency derivatives | ||||||
| - Forward agreements | 207.3 | 0.0 | 219.6 | -1.4 | 230.0 | 0.7 |
| Interest derivatives | ||||||
| - Interest rate swaps | 61.0 | -2.6 | 170.0 | -3.4 | 61.0 | -2.4 |
| - Interest rate options | 20.0 | 0.1 | ||||
| Commodity derivatives | ||||||
| - Forward agreements | 4.4 | -1.8 | 6.4 | -1.2 | 5.0 | -1.8 |
FINANCIAL ASSETS AND LIABILITIES BY MEASUREMENT CATEGORY
| 31.3.2016 M€ |
Derivative | Financial | Financial liabilities |
Carrying amount |
|||
|---|---|---|---|---|---|---|---|
| contracts, | assets/liabilities | Available | measured | by | IFRS 7 | ||
| under | at fair value | for sales | at | balance | Fair value | ||
| hedge | through profit and | Loans and | financial | amortised | sheet | hierarchy | |
| accounting | loss | receivables | assets | cost | item | level | |
| Non-current financial | |||||||
| assets | |||||||
| Other shares and | |||||||
| holdings | 0.3 | 0.3 | |||||
| Non-current | |||||||
| receivables | 20.2 | 20.2 | |||||
| Current financial | |||||||
| assets | |||||||
| Accounts receivable | |||||||
| and other receivables | 199.4 | 199.4 | |||||
| Other derivative | |||||||
| contracts | 0.5 | 0.9 | 1.4 | 2 | |||
| Cash and cash | |||||||
| equivalents | 20.9 | 20.9 | |||||
| Carrying amount | 0.5 | 0.9 | 240.5 | 0.3 | 242.2 | ||
| Non-current financial | |||||||
| liabilities | |||||||
| Interest bearing | |||||||
| liabilities | 144.6 | 144.6 | |||||
| Electricity derivatives | 0.9 | 0.9 | 1 | ||||
| Current financial | |||||||
| liabilities | |||||||
| Interest bearing | |||||||
| liabilities | 52.8 | 52.8 | |||||
| Electricity derivatives | 0.9 | 0.9 | 1 | ||||
| Other derivative | |||||||
| contracts | 2.6 | 1.3 | 3.9 | 2 | |||
| Accounts payable and | |||||||
| other liabilities | 120.8 | 120.8 | |||||
| Carrying amount | 4.4 | 1.3 | 318.2 | 323.9 | |||
| 17 I 29 April 2016 | I Interim report 1-3/2016 |
FINANCIAL ASSETS AND LIABILITIES BY MEASUREMENT CATEGORY
| 31.3.2015 Financial Carrying |
|
|---|---|
| M€ Derivative Financial liabilities amount |
|
| contracts, assets/liabilities Available measured |
by IFRS 7 |
| under at fair value for sales at balance |
Fair value |
| hedge through profit and Loans and financial amortised sheet |
hierarchy |
| accounting loss receivables assets cost item |
level |
| Non-current financial | |
| assets | |
| Other shares and | |
| holdings 0.4 0.4 |
|
| Non-current | |
| receivables 10.3 10.3 |
|
| Current financial | |
| assets | |
| Accounts receivable | |
| and other receivables 188.9 188.9 |
|
| Other derivative | |
| contracts 1.0 1.7 2.7 |
1, 2 |
| Cash and cash | |
| equivalents 16.1 16.1 |
|
| Carrying amount 1.0 1.7 215.3 0.4 218.4 |
|
| Non-current financial | |
| liabilities | |
| Interest bearing | |
| liabilities 126.2 126.2 |
|
| Electricity derivatives 0.7 0.7 |
1 |
| Current financial | |
| liabilities | |
| Interest bearing | |
| liabilities 20.8 20.8 |
|
| Electricity derivatives 0.6 0.6 |
1 |
| Other derivative | |
| contracts 3.6 3.8 7.4 |
2 |
| Accounts payable and | |
| other liabilities 125.8 125.8 |
|
| Carrying amount 4.9 3.8 272.8 281.5 |
FINANCIAL ASSETS AND LIABILITIES BY MEASUREMENT CATEGORY
| M€ Derivative Financial Available liabilities Carrying IFRS 7 contracts, assets/liabilities at for sales measured at amount by Fair value under hedge fair value through Loans and financial amortised balance hierarchy accounting profit and loss receivables assets cost sheet item level Non-current financial assets Other shares and holdings 0.2 0.2 Non-current receivables 20.6 20.6 Current financial assets Accounts receivable and other receivables 178.1 178.1 Other derivative contracts 0.0 1.4 1.4 2 Cash and cash equivalents 49.2 49.2 Carrying amount 0.0 1.4 247.9 0.2 249.5 Non-current financial liabilities Interest bearing liabilities 91.2 91.2 Electricity derivatives 0.9 0.9 1 Current financial liabilities Interest bearing liabilities 48.3 48.3 Electricity derivatives 0.9 0.9 1 Other derivative |
31.12.2015 | Financial | |||||
|---|---|---|---|---|---|---|---|
| contracts | 2.7 | 0.5 | 3.2 | 2 | |||
| Accounts payable and | |||||||
| other liabilities 92.7 92.7 |
|||||||
| Carrying amount 4.5 0.5 232.2 237.2 |
The carrying value of financial assets and liabilities is considered to correspond to their fair value. The Group's financial instruments are classified according to IFRS 7 fair value hierarchies. Uponor applies the hierarchy as follows:
-
The fair value of electricity derivatives is measured based on stock exchange prices. (Hierarchy 1)
-
The fair value of currency forward agreements is measured based on price information from common markets and commonly used valuation methods. (Hierarchy 2)
BUSINESS COMBINATIONS
On 4 January 2016, Uponor Holding GmbH completed the acquisition of all of the shares in two German companies, Delta Systemtechnik GmbH and the KaMo Group, as announced on 30 November 2015. KaMo Group consists of three companies: KaMo Frischwarmwassersysteme GmbH, KaMo Verteilersysteme GmbH and Morlok Betriebsgesellschaft mbH. Delta Systemtechnik GmbH produces fresh water units for central domestic hot water systems as well as heating transfer stations and components for hot water and heating systems. KaMo develops and distributes systems for local and central heating and domestic hot water preparation. This acquisition aims at broadening Uponor's portfolio and competencies in the increasingly important hygienic drinking water delivery sector. The new companies are included in the Building Solutions - Europe segment.
| M€ | 2016 |
|---|---|
| Recognised amounts of identifiable assets acquired and liabilities assumed | |
| Property, plant and equipment | 4.3 |
| Intangible assets | 19.8 |
| Inventories | 5.5 |
| Accounts receivable and other receivables | 5.1 |
| Cash and cash equivalents | 1.1 |
| Total assets | 35.8 |
| Non-current interest-bearing liabilities | 3.3 |
| Deferred tax liability | 5.7 |
| Provisions | 0.7 |
| Current interest-bearing liabilities | 0.4 |
| Accounts payable and other current liabilities | 4.3 |
| Total liabilities | 14.4 |
| Net assets | 21.4 |
| M€ | |
| Consideration | 32.5 |
| Acquired net assets | -21.4 |
| Goodwill | 11.1 |
The consideration of €32.5 million represents the entire determined fair value of Delta Systemtechnik GmbH and the KaMo Group. The estimate was done by applying an income approach and a market approach. The fair value measurement is based on significant inputs that are not observable in the market, which IFRS 13 Fair Value Measurement refers to as Level 3 inputs.
The goodwill of €11.1 million arising from the acquisition consists largely of attainable synergies, such as those involving international growth, project business, product portfolio, and cross selling. The acquisition calculation is preliminary; the fair value of acquired net assets is provisional pending on the receipt of final valuations for identifiable intangible assets and property, plant and equipment.
Acquisition related costs amounted to €0.9 million. They were included in administration expenses in the consolidated statement of comprehensive income as follows: €0.6 million for the year ended 31 December 2015 and €0.3 million for the reporting period ended 31 March 2016.
Delta Systemtechnik GmbH and the KaMo Group, included in the consolidated statement of comprehensive income as of 4 January 2016, contributed a total of €7.9 million in net sales and €0.1 million in profit for the period.
In December 2015, Uponor Corporation acquired the entire shareholding in a Finnish start-up company NWater Oy (UWater Oy from 12 January 2016) specialising in online water quality monitoring. The consideration paid in connection with the transaction as well as the net assets acquired and liabilities assumed were immaterial.
DISPOSAL OF SUBSIDIARIES AND BUSINESSES
There are no disposal of subsidiaries and businesses in 2016.
On 25 February 2015, Uponor Corporation announced that its majority-held subsidiary Uponor Infra Oy had divested its majority shareholding of 65.99% of the shares in Wiik & Hoeglund PLC, a company listed on the stock exchange of Thailand. Uponor Infra Oy made a decision to withdraw from the business in accordance with its strategy to focus on markets where it can command a strong market position and achieve operational synergies.
Further, on 30 March 2015, it was announced that Uponor Infra Oy divested, for the same reasons, its fully owned Finnish subsidiary, Extron Engineering Oy, a specialist in the business of designing and manufacturing machinery for the plastic products industry.
In December 2015, following the strategic adjustment of its product portfolio, Uponor Infra Oy sold the Omega-Liner® pipeline renovation business.
The sales price received from the above listed three transactions totalled to €9.8 million, with a net impact on the result at €1.9 million.
| M€ | 2015 |
|---|---|
| Book value of disposed assets | |
| Property, plant and equipment | 8.0 |
| Other non-current assets | 1.5 |
| Inventory | 5.1 |
| Accounts receivable and other receivables | 5.9 |
| Cash and cash equivalents | 2.2 |
| Total assets | 22.7 |
| Interest-bearing non-current liabilities | 0.4 |
| Other non-current liabilities | 0.4 |
| Interest-bearing current liabilities | 6.0 |
| Accounts payable and other current liabilities | 4.7 |
| Total liabilities | 11.5 |
| Net assets | 11.2 |
| - attributable to parent company | 7.9 |
| Cash received from sales | 9.8 |
| Cash and cash equivalents disposed of | 2.2 |
| Cash flow effect | 7.6 |
DISCONTINUED OPERATIONS
In 2016 and 2015, discontinued operations include costs related to the administration and maintenance of the real estate vacated by the Irish infrastructure solutions business sold in 2008. In 2016, there was a gain of €0.6 million from the sale of the property.
| M€ | 1-3/2016 | 1-3/2015 | 1-12/2015 |
|---|---|---|---|
| Expenses | -0.5 | 0.0 | 0.2 |
| Profit before taxes | 0.5 | 0.0 | -0.2 |
| Income taxes | - | - | - |
| Profit after taxes | 0.5 | 0.0 | -0.2 |
| Profit for the period from discontinued operations | 0.5 | 0.0 | -0.2 |
| Cash flow from discontinued operations | |||
| Cash flow from operations | -0.2 | -0.1 | -0.6 |
RELATED-PARTY TRANSACTIONS
| M€ | 1-3/2016 | 1-3/2015 | 1-12/2015 |
|---|---|---|---|
| Continuing operations | |||
| Purchases from associated companies | 0.4 | 0.5 | 1.9 |
| Balances at the end of the period | |||
| Loan receivable from associated companies | 0.3 | 0.3 | 0.3 |
| Accounts receivable and other receivables | - | 0.0 | - |
| Accounts payables and other liabilities | 0.1 | 0.1 | 0.1 |
KEY FIGURES
| 1-3/2016 | 1-3/2015 | 1-12/2015 |
|---|---|---|
| 0.10 | 0.06 | 0.51 |
| 0.09 | 0.06 | 0.51 |
| 0.01 | 0.00 | 0.00 |
| 4.8 | 4.8 | 6.8 |
| 7.9 | 5.5 | 12.1 |
| 8.9 | 7.2 | 15.5 |
| 38.0 | 40.7 | 44.3 |
| 62.4 | 46.7 | 29.3 |
| 176.5 | 130.9 | 91.3 |
| 3.01 | 2.96 | 3.39 |
| 3.01 | 2.96 | 3.39 |
| 11.13 | 11.25 | 10.42 |
| 14.37 | 16.58 | 17.30 |
| 12.72 | 14.89 | 13.92 |
| 4,862 | 7,438 | 27,590 |
| 62 | 111 | 384 |
QUARTERLY DATA
| 1-3/ | 10-12/ | 7-9/ | 4-6/ | 1-3/ | |
|---|---|---|---|---|---|
| 2016 | 2015 | 2015 | 2015 | 2015 | |
| Continuing operations | |||||
| Net sales, M€ | 246.9 | 262.0 | 274.1 | 277.6 | 237.1 |
| - Building Solutions – Europe | 123.0 | 114.3 | 121.2 | 119.0 | 112.6 |
| - Building Solutions – North America | 70.7 | 74.0 | 75.1 | 69.8 | 56.9 |
| - Building Solutions – North America, \$ | 78.2 | 80.2 | 83.6 | 77.6 | 63.2 |
| - Uponor Infra | 54.1 | 75.0 | 79.0 | 89.7 | 68.3 |
| Gross profit, M€ | 87.8 | 91.4 | 95.0 | 98.6 | 85.2 |
| - Gross profit, % | 35.5 | 34.9 | 34.7 | 35.5 | 35.9 |
| Operating profit, M€ | 11.9 | 14.0 | 23.6 | 22.5 | 11.3 |
| - Building Solutions – Europe | 4.9 | 3.3 | 8.4 | 6.2 | 6.1 |
| - Building Solutions – North America | 11.1 | 12.2 | 15.7 | 15.0 | 8.1 |
| - Building Solutions – North America, \$ | 12.3 | 13.1 | 17.5 | 16.8 | 8.9 |
| - Uponor Infra | -3.6 | -1.2 | -0.3 | 3.0 | -1.3 |
| - Others | -0.7 | -0.9 | -0.2 | -1.4 | -1.3 |
| Operating profit, % of net sales | 4.8 | 5.3 | 8.6 | 8.1 | 4.8 |
| - Building Solutions – Europe | 4.0 | 2.9 | 6.9 | 5.2 | 5.4 |
| - Building Solutions – North America | 15.7 | 16.4 | 20.9 | 21.5 | 14.1 |
| - Uponor Infra | -6.7 | -1.5 | -0.4 | 3.0 | -0.2 |
| Profit for the period, M€ | 5.9 | 4.4 | 15.4 | 13.3 | 4.0 |
| Balance sheet total, M€ | 748.7 | 707.8 | 740.0 | 716.8 | 692.5 |
| Earnings per share, € | 0.09 | 0.07 | 0.21 | 0.17 | 0.06 |
| Equity per share, € | 3.01 | 3.39 | 3.26 | 3.08 | 2.96 |
| Market value of share capital, M€ | 934.1 | 995.6 | 851.4 | 989.0 | 1,153.0 |
| Return on investment, % (p.a.) | 8.9 | 15.5 | 17.3 | 14.0 | 7.2 |
| Net interest-bearing liabilities | |||||
| at the end of the period, M€ | 176.5 | 91.3 | 114.8 | 138.8 | 130.9 |
| Gearing, % | 62.4 | 29.3 | 37.9 | 47.8 | 46.7 |
| Gearing, % rolling 4 quarters | 44.3 | 40.4 | 40.0 | 41.0 | 43.2 |
| Gross investment, M€ | 5.3 | 19.7 | 11.9 | 10.4 | 8.1 |
| - % of net sales | 2.1 | 7.5 | 4.3 | 3.7 | 3.4 |
DEFINITIONS OF KEY RATIOS
| Return on Equity (ROE), % |
|---|
| Profit before taxes – taxes –––––––––––––––––––––––––––––––––––––––– x 100 |
| Total equity, average |
| Return on Investment (ROI), % |
| Profit before taxes + interest and other financing costs |
| ––––––––––––––––––––––––––––––––––––-----------–––– x 100 Balance sheet total – non-interest-bearing liabilities, average |
| Solvency, % |
| Total equity |
| ––––––––––––––––––––––––––––––––––––----- x 100 Balance sheet total – advance payments received |
| Gearing, % |
| Net interest-bearing liabilities |
| –––––––––––––––––––––––––––––––––--------- x 100 Total equity |
| Net interest-bearing liabilities |
| Interest-bearing liabilities – cash and cash equivalents excluding restricted cash |
| Earnings per share (EPS) |
| Profit for the period attributable to equity holders of the parent company |
| –––––––––––––––––––––––––––––––––––––––––––––––––-------------- Average number of shares adjusted for share issue in financial period excluding treasury shares |
| Equity per share ratio |
| Equity attributable to the owners of the parent company |
| ––––––––––––––––––––––––––––––––––––––––––––----------– |
Average share price
Total value of shares traded (€)
= ––––––––––––––––––––––––––– Total number of shares traded