Glaston Interim Report 1 January – 30 September 2017: Operating result improved compared to last year

 

GLASTON CORPORATION                   INTERIM REPORT    30.10.2017  AT 8.30

Glaston Interim Report 1 January – 30 September 2017: Operating result improved compared to last year


This release is a summary of Glaston Corporation's Interim Report for January-September 2017. The complete report is attached to this release as a pdf-file. The release is also available on the company's website at the address www.glaston.net.

JULY–SEPTEMBER 2017

  • Orders received totalled EUR 26.8 (25.6) million.
  • Net sales grew by 23% to EUR 25.3 (20.5) million.
  • Comparable EBITDA was EUR 2.0 (0.4) million.
  • The operating result was positive at EUR 1.3 (-0.3) million, i.e. 5.1 (-1.3)% of net sales.
  • The comparable operating result was EUR 1.3 (-0.3) million, i.e. 5.1 (-1.3)% of net sales.


JANUARY-SEPTEMBER 2017

  • Orders received totalled EUR 74.9 (79.3) million.
  • The order book on 30 September 2017 was EUR 41.8 (46.0) million.
  • Net sales totalled EUR 77.3 (72.0) million.
  • Comparable EBITDA was EUR 5.0 (2.0) million, i.e. 6.5 (2.8)% of net sales.
  • The operating result was positive at EUR 2.6 (-0.1) million, i.e. 3.4 (-0.2)% of net sales.
  • The comparable operating result was EUR 2.8 (0.0) million, i.e. 3.6 (0.0)% of net sales.
  • Return on capital employed (ROCE) was 7.0 (-0.2)%
  • Earnings per share were EUR 0.006 (-0.006)
  • Net interest-bearing debt amounted to EUR 8.2 (7.7) million.
  • Research and product development expenditure amounted to 3.8 (3.0)% of net sales.
  • Glaston revises its outlook and now expects the full-year 2017 comparable operating result to be EUR 4.0–5.5 million. (Previous outlook: We expect the full-year comparable operating result to improve from 2016. In 2016 the comparable operating result was EUR 2.8 million.)

OUTLOOK REVISION

Glaston’s January–September comparable operating result was EUR 2.8 million, i.e. at the same level as the whole of 2016. Previously, the full-year 2017 comparable operating result was expected to improve from 2016. 

Glaston revises its outlook and now expects the full-year 2017 comparable operating result to be EUR 4.0–5.5 million. (Previous outlook: We expect the full-year comparable operating result to improve from 2016. In 2016 the comparable operating result was EUR 2.8 million.)

PRESIDENT & CEO ARTO METSÄNEN:
“In the third quarter, Glaston’s good development continued. Net sales grew by 23% compared with the previous year, and the operating result was positive at EUR 1.3 million, whereas the operating result for the comparison period was a loss. Orders also exceeded the previous year’s level. In January-September, key indicators likewise developed positively, with the exception of order intake, as the order intake for the third quarter was not sufficient to offset the low level of the early part of the year.

Of the market areas, North America and particularly the USA market picked up. We strengthened our position in the growing lamination product segment and received a few large tempering machine orders. In the developed market of North America, the quality requirements for architectural glass are increasing further, and this is bringing us new opportunities for sales of both new machines and upgrade products. 

The most significant single deal during the review period was the sale of a Glaston Air™ tempering machine to China. The sale was an important opening for us in what is potentially the most significant market for this product. The deal strengthens our view that the use of thinner glass will increase in solar panels.”

KEY FIGURES 30.9.2017 30.9.2016 31.12.2016
       
Order book, EUR million 41.8 46.0 45.6
Orders received, EUR million 74.9 79.3 112.9
Net sales, EUR million 77.3 72.0 107.1
EBITDA, comparable, EUR million 5.0 2.0 5.4
EBITDA, comparable, as % of net sales 6.5 2.8 5.1
Operating result (EBIT), comparable, EUR million 2.8 0.0 2.8
Operating result (EBIT), comparable, as % of net sales 3.6 0.0 2.6
Profit / loss for the period, EUR million 1.2 -1.1 1.0
Earnings per share, EUR 0.006 -0.006 0.005
Net cash flow from operating activities -7.2 4.5 13.4
Return on capital employed, %, annualized 7.0 -0.2 4.6
Gross capital expenditure, EUR million 2.3 3.1 3.9
Equity ratio, % 45.4 43.6 43.2
Gearing, % 43.6 53.2 46.7

 

OPERATING ENVIRONMENT
In the third quarter, glass processing markets were busier than in the early part of the year. Development was strongest in North America. As a whole, the EMEA area was stable, but decisions on orders were further delayed. In the Asian market area, demand continued to be cautious. The South American market was weak.

MACHINES
In the third quarter, there was perceptible pick-up in the Machines business market. Development was positive particularly in North America. In these areas, ever-tightening building regulations are driving demand for laminated glass. In this important product group, our renewed laminating line solution has received a good reception, and during the review period Glaston closed the first two deals for the delivery of laminating lines to the USA. The South American market continued to be subdued.

In the EMEA area, there was no significant change compared to the previous quarter, and decision-making was still slow in many countries. There was a steady flow of orders and market development was stable. In the Middle East market, activity continued at a good level. In Eastern Europe, investment decisions continued to be impacted by the slow advance of decision-making on investments supported by the EU. After a quieter period, there were signs of a pick-up in the Russian market. In the Central European market, demand strengthened, and Glaston closed a deal for the delivery of two FC tempering lines to Belgium. In the UK, the market weakened due to uncertainty in economic development. In Portugal, a state-supported investment programme boosted demand.
 
In the Asian market area, demand for glass processing machines demand remained low. In the relatively subdued Chinese market, the activity of projects related to solar energy has steadily increased. In September, Glaston closed a deal for the sale of a Glaston Airtempering machine to China. The machine will be used in solar panel production and particularly in the heat treatment of thin glass. The machine will be delivered to the customer in mid-2018.

New technologies


In the third quarter, discussions in the Emerging Technologies unit on solar energy, the automotive industry and demanding architectural glass solutions proceeded according to plan.

In the review period, Glaston delivered to its Californian partner, Heliotrope Technologies, a special device enabling the processing of larger glass sizes, to be installed in a prototype line. The delivered device will play a key role in developing the new technology. The line will be taken into use during the latter part of the year. Planning work on a pilot line advanced to the decision stage.

SERVICES
In the third quarter, the cautiously positive development of the Services business market continued. Demand for maintenance services and tools was clearly above the corresponding period of the previous year. The biggest areas for tools continue to be the EMEA area and North America. In spare parts, sales continued to be good. In the EMEA area, development was fairly positive and in North America sales remained at a high level.

In upgrade products, orders doubled.
Development was strongest in the EMEA area and particularly in North America, where the market for modernisation products was excellent. The value of orders in the area grew by nearly 70% compared with the previous quarter. In January-September, too, the North American modernisation market recovered and the number of orders doubled compared with the corresponding period of the previous year. Sales of the laminating line upgrade product continued after a good start.

OUTLOOK REVISION
In the third quarter, the development of the glass processing market continued to be mainly positive. The prolonged uncertainty in the global economy and increasing political tensions in some regions are impacting customers’ willingness to invest, and decision-making times have lengthened. There are no visible signs of a permanent change in the market, however. We expect the positive market development to continue.

Glaston’s January–September comparable operating result was EUR 2.8 million, i.e. at the same level as the whole of 2016. Previously, the full-year 2017 comparable operating result was expected to improve from 2016. 

Glaston revises its outlook and now expects the full-year 2017 comparable operating result to be EUR 4.0–5.5 million. (Previous outlook: We expect the full-year comparable operating result to improve from 2016. In 2016 the comparable operating result was EUR 2.8 million.)



PRESS MEETING
An analyst and press conference is organized at Glaston's office on Lönnrotinkatu 11, Helsinki, on 30 October 2017 at 13.00 p.m.

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



GLASTON CORPORATION
Agneta Selroos
Communications Director

Glaston Corporation
Glaston is a frontrunner in glass processing technologies and services. We respond globally to the most demanding glass processing needs of the architectural, solar, appliance and automotive industries. Additionally, we utilise emerging technologies that integrate intelligence and sustainability to glass. We are committed to providing our clients with both the best know-how and the latest technologies in glass processing. 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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