Ongoing weak demand in Europe and volatile raw material prices have prompted Finnish pipe manufacturer Uponor (Vantaa; www.uponor.com) to revise its guidance for full-year 2015 operating profit.

Performance at its Building Solutions – Europe and Uponor Infra divisions has been impacted more severely than expected from prolonged weak demand in the building and underground engineering markets. As a result, Uponor estimates that this year’s operating profit will not improve from 2014.

Current estimates, based on organic growth, suggest that net sales in 2015 are expected to exceed those in 2014 but operating profit, excluding any non-recurring items, remains somewhat below last year’s level, said Uponor. Net sales in 2014 exceeded EUR 1 bn. In its February guidance, Uponor was expecting the group’s net sales and operating profit to increase year-on-year.

In addition to weak demand, performance in both the third and fourth quarters is impacted by a temporary erosion of gross margin because of sales from inventories made prior to the recent drop in resin prices.

The company launched a streamlining programme in July to align its European business with poor market conditions – see Plasteurope.com of 23.07.2015. Initiatives are underway in Sweden and the UK targeting a reduction of around 70 man years. Measures are also being prepared for a softening market in Germany. In total, Uponor expects to lose around 100 man years of work in its Building Solutions – Europe division.

However, the North American market remains strong and the building solutions business is developing as expected, Uponor said, adding that the expansion of its plant in Apple Valley, Minnesota, is progressing according to plan.