UPONOR
Over 200 jobs to be shed as part of cost-cutting drive / Sharp drop in sales and earnings in first six months of 2008 / Company expects full-year income and profits to fall short of 2007 levels
Uponor (Vantaa / Finland; www.uponor.com) has announced a cost-cutting drive affecting more than 200 jobs, confirming indications a couple of months ago when the company cut its 2008 full year profits guidance – see Plasteurope.com of 19.06.2008. The plastic pipe producer expects the cut-backs to bring annual savings of around EUR 30m from 2009. The aim is to align costs with the poor order situation, which seems unlikely to improve in 2009 in light of building industry performance. The cost-reduction programme is expected to cost EUR 10m, which will be split between 2008 and 2009.
In a separate, apparently unrelated, development, Uponor’s president and CEO Jan Lång has resigned to take up the role of chief executive of fibre materials group Ahlstrom (Helsinki / Finland; www.ahlstrom.com) on 1 January 2009. He will continue in his current role until late autumn, the company said.
Uponor performed badly in the first half of 2008. Sales fell more than 8% year-on-year to EUR 501m and its operating profit declined by 33% to EUR 48m. Business with the construction industry, especially house-building, is proving particularly tough according to the company. At the same time, the downswing is starting to impact other areas of the company and countries not previously affected. The only exceptions are the Eastern European region, which reported strong growth, and Germany, where the market was stable.
The satisfactory trend in the non-residential and public building markets continued but the company reported signs that growth could decline or stagnate in these segments as well in the coming quarters.
The infrastructure segment (mainly drainage, rainwater and gas pipes) showed the first signs of slowdown in the first quarter of this year, especially in Denmark and Finland, and this has now spread to Sweden and Norway. Uponor has sold its UK and Irish infrastructure business to the venture capital company 3i (London / UK; www.3i.com) – see Plasteurope.com of 20.05.2008 – to enable it to concentrate on the Scandinavian market.
As might have been expected, the clearest downturn was in North America, where sales dropped by 28% to EUR 61m. The main downside factors were the US construction crisis and currency effects. In US dollars, sales slipped 17% to USD 95m. The operating profit plunged 91% to EUR 800,000.
In the Europe region, which comprises western, eastern and southern Europe, sales were 10% lower at EUR 129m and the operating profit dropped 39% to EUR 12.8m. In the “Nordic” region sales decreased 4% to EUR 201m and the operating profit was EUR 20m, a fall of 31%. Sales weakened in Sweden and Norway, compounding the trend already set by Denmark and Finland. The downturn in Central Europe was more moderate with sales dropping 5% to EUR 181m while the operating profit slipped 11% to EUR 21m.
Uponor is not anticipating a significant improvement over the year as a whole. Full-year sales are expected to fall short of the 2007 level and earnings will also be lower according to the company’s fairly unspecific guidance.
In a separate, apparently unrelated, development, Uponor’s president and CEO Jan Lång has resigned to take up the role of chief executive of fibre materials group Ahlstrom (Helsinki / Finland; www.ahlstrom.com) on 1 January 2009. He will continue in his current role until late autumn, the company said.
Uponor performed badly in the first half of 2008. Sales fell more than 8% year-on-year to EUR 501m and its operating profit declined by 33% to EUR 48m. Business with the construction industry, especially house-building, is proving particularly tough according to the company. At the same time, the downswing is starting to impact other areas of the company and countries not previously affected. The only exceptions are the Eastern European region, which reported strong growth, and Germany, where the market was stable.
The satisfactory trend in the non-residential and public building markets continued but the company reported signs that growth could decline or stagnate in these segments as well in the coming quarters.
The infrastructure segment (mainly drainage, rainwater and gas pipes) showed the first signs of slowdown in the first quarter of this year, especially in Denmark and Finland, and this has now spread to Sweden and Norway. Uponor has sold its UK and Irish infrastructure business to the venture capital company 3i (London / UK; www.3i.com) – see Plasteurope.com of 20.05.2008 – to enable it to concentrate on the Scandinavian market.
As might have been expected, the clearest downturn was in North America, where sales dropped by 28% to EUR 61m. The main downside factors were the US construction crisis and currency effects. In US dollars, sales slipped 17% to USD 95m. The operating profit plunged 91% to EUR 800,000.
In the Europe region, which comprises western, eastern and southern Europe, sales were 10% lower at EUR 129m and the operating profit dropped 39% to EUR 12.8m. In the “Nordic” region sales decreased 4% to EUR 201m and the operating profit was EUR 20m, a fall of 31%. Sales weakened in Sweden and Norway, compounding the trend already set by Denmark and Finland. The downturn in Central Europe was more moderate with sales dropping 5% to EUR 181m while the operating profit slipped 11% to EUR 21m.
Uponor is not anticipating a significant improvement over the year as a whole. Full-year sales are expected to fall short of the 2007 level and earnings will also be lower according to the company’s fairly unspecific guidance.
14.08.2008 Plasteurope.com [211571]
Published on 14.08.2008
German version of this article...