Glaston Interim Report 1 January - 30 September 2016: Net sales down, outlook unchanged

GLASTON CORPORATION           INTERIM REPORT      31 OCTOBER 2016 AT 13.00


Glaston Interim Report 1 January – 30 September 2016: Net sales down, outlook unchanged

 

This release is a summary of Glaston Corporation's interim report for January-September 2016. The complete report is attached to this release as a pdf-file. The stock exchange release is also available on the company's website at the address www.glaston.net.

This interim report’s comparison year figures refer to Continuing Operations.

JULY-SEPTEMBER 2016

- Orders received totalled EUR 25.6 (28.2) million.

- Net sales totalled EUR 20.5 (34.3) million.

Comparable EBITDA was EUR 0.4 (3.4) million.

- The operating result was a loss of EUR 0.3 (2.4 profit) million, i.e. -1.3 (7.0)% of net sales.

- The comparable operating result was a loss of EUR 0.3 (2.5 profit) million, i.e. -1.3 (7.4)% of net sales.


JANUARY-SEPTEMBER 2016

- Orders received totalled EUR 79.3 (83.2) million.

- The order book on 30 September 2016 was EUR 46.0 (47.8) million.

- Net sales totalled EUR 72.0 (90.8) million.

Comparable EBITDA was EUR 2.0 (8.1) million, i.e. 2.8 (8.9)% of net sales.

- The operating result was a loss of EUR 0.1 (7.3 profit) million, i.e. -0.2 (8.1)% of net sales.

- The comparable operating result was EUR 0.0 (5.5) million, i.e. 0.0 (6.1)% of net sales.

- Cash flow from business operations was positive, at EUR 4.5 million.

Continuing Operations’ return on capital employed (ROCE) was -0.2 (18.6)%.

Continuing Operations’ earnings per share were EUR -0.01 (0.01).

- Interest-bearing net liabilities amounted to EUR 7.7 (5.2) million.

 


OUTLOOK
Glaston revised its outlook on 4 August 2016. Glaston expects 2016 net sales to be approximately EUR 105–110 million and the comparable operating profit to be approximately EUR 2–4 million. (In 2015 net sales were EUR 123.4 million and comparable operating profit was EUR 6.1 million).


PRESIDENT & CEO ARTO METSÄNEN:
“Due to low orders during the end of last year and the beginning of this year, Glaston’s third quarter net sales were very low and amounted to EUR 20.5 (34.3) million. Due to a lower cost level, however, the result was only slightly negative. The comparable operating result improved compared with the previous quarter and was a loss of EUR 0.3 (2.5 profit) million. Due to a reduction in working capital, cash flow clearly strengthened during the quarter.

Markets remained quiet at the beginning of the quarter, but picked up at the end of the review period. In the EMEA area and the Asian market area in particular, customer activity is increasing. Orders received in the third quarter declined by 9% compared with the corresponding period the previous year and totalled EUR 25.6 million. The orders intake of the Machines business grew 10% to EUR 16.6 million. We expect this positive development of the Machines business to continue in the final quarter of the year.

An efficiency plan for operations in South America, presented in June, was completed in the third quarter. In the future, the focus of South American operations will be on sales and service operations. From the beginning of October, Glaston has machine manufacturing in two efficient and modern production plants: In Tampere, Finland and in Tianjin, China.

Signs of a pick-up in the markets were clearly perceptible at our industry’s most significant fair, Glasstec, which was held in September. At the fair, we engaged in a number of negotiations, which we expect to lead to machine orders in the coming months. Offer activity has also been better in the Services business. We expect the order intake to grow significantly in the fourth quarter.

The final quarter is generally the strongest of the year for Glaston. This year, the difference compared with the other quarters will be higher than normal, because a large number of deliveries will take place in the latter part of the year.

 

KEY FIGURES 30.9.2016 30.9.2015 31.12.2015
       
Order book, EUR million 46.0 47.8 38.5
Orders, received, EUR million 79.3 83.2 107.4
Net sales, EUR million 72.0 90.8 123.4
EBITDA, comparable, EUR million 2.0 8.1 9.5
EBITDA, comparable, as % of net sales 2.8 8.9 7.7
Operating result (EBIT), comparable, EUR million 0.0 5.5 6.1
Operating result (EBIT), comparable , as % of net sales 0.0 6.1 4.9
Profit / loss for the period, EUR million -1.1 -12.4 -13.8
Earnings per share, EUR -0.01 -0.06 -0.07
Net cash flow from operating activities 4.5 -3.6 -3.0
Return on capital employed, %, annualized -0.2 -12.4 -13.8
Gross capital expenditure, continuing and discontinued operations, EUR million 3.1 3.7 7.2
Equity ratio, % 43.6 45.3 43.9
Gearing, % 53.2 38.2 36.7


OPERATING ENVIRONMENT
In the glass processing market, the third quarter began slowly, but at the end of the review period a pick-up was already perceptible.
In the Asian market area, good development continued. In the EMEA area, the market revived towards the end of the quarter. In North America, the market evened out. In South America, the market remained subdued.

MACHINES
In the Machines business, the third quarter began very quietly, but picked up towards the end of the quarter. The market situation as whole was challenging.

After a quiet second quarter, a recovery was evident in the EMEA market area in the third quarter. Customer demand was focused particularly on the FC product series. There was positive development, particularly in Eastern Europe and Italy, where customers’ investments were boosted by the entry into force of tax relief measures.

In the Asian market area, customer activity increased, particularly in the China, Australia and New Zealand markets.

In the North American market, customers’ decision-making times lengthened in the third quarter, and the market was sluggish. The South American market remained weak.

SERVICES
The third quarter brought no change in the modest development of the service market. In North America, steady development continued. In South America, the activity of automotive industry customers increased. In the Asian market area, with the exclusion of Australia, demand continued to be subdued. In the EMEA area, the operating environment was unchanged, and demand varied significantly from country to country.

The modernisation product market remained subdued. A positive note was evident in demand for flat laminating machine modernisations. A major player in the automotive industry bought a windscreen machine modernisation package for its production plant in South America, in order to improve the quality and capacity of its windscreen production. In addition to this, Glaston received, among others, a modernisation order from the Philippines for a continuously operating CHF furnace and a modernisation order from Russia for a Glassrobots flat tempering machine.

Sales of the spare parts product group levelled off in July-September, but were still better than in the comparison period. The stable development of the service market continued and sales of tools in the EMEA area continued to be good.

OUTLOOK
In the final quarter of the year, the glass processing market is expected to develop positively and new machine orders to grow markedly compared with the third quarter.

The good second-quarter order intake and the large number of deliveries scheduled for the fourth quarter will increase net sales considerably in the latter part of the year compared with previous quarters. The savings measures undertaken will also have a positive impact on the result.

Glaston revised its outlook on 4 August 2016. Glaston expects 2016 net sales to be approximately EUR 105–110 million and the comparable operating profit to be approximately EUR 2–4 million. (In 2015 net sales were EUR 123.4 million and comparable operating profit was EUR 6.1 million).


PRESS MEETING
An analyst and press conference is organized at Glaston's office on Yliopistonkatu 7, Helsinki, on 31 October 2016 at 14.00 p.m.



For further information, please contact:
President & CEO Arto Metsänen, tel. +358 10 500 6100
Chief Financial Officer Päivi Lindqvist, tel. +358 10 500 500

 

Sender:
Agneta Selroos
Communications Director
Glaston Corporation
Tel. 010 500 6105 


Glaston Corporation
Glaston is a leading company in glass processing technologies. We provide high-quality heat treatment machines and services for architectural, solar, appliance and automotive applications. We are committed to our customers’ success over the entire lifecycle of our offering. Moreover, we continuously innovate and develop technologies to enable the glass processing industry to reach ever higher standards in quality and safety. Glaston’s shares (GLA1V) are listed on Nasdaq Helsinki Ltd. Further information is available at www.glaston.net

Distribution: Nasdaq Helsinki Ltd, key media, www.glaston.net

 

 

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