Glaston Interim Report 1 January – 31 March 2016: Net sales and orders received grew
GLASTON CORPORATION INTERIM REPORT 28.4.2016 AT 13.00
GLASTON’S INTERIM REPORT 1 JANUARY – 31 MARCH 2016: Net sales and orders received grew
This release is a summary of Glaston Corporation's Interim Report for January-March 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.
- Orders received totalled EUR 25.0 (22.5) million.
- The order book on 31 March 2016 was EUR 34.5 (52.8) million.
- Net sales totalled EUR 29.4 (26.3) million.
- EBITDA was EUR 1.4 (2.1) million, i.e. 4.7 (8.0)% of net sales. 1)
- The operating profit was EUR 0.7 (1.2) million, i.e. 2.4 (4.7)% of net sales.1)
- Continuing Operations’ return on capital employed (ROCE) was 6.0 (25.8)%.
- Continuing Operations’ earnings per share were EUR 0.00 (0.01).
- Interest-bearing net liabilities amounted to EUR 10.9 (-1.2) million.
1) Due to the sale of the pre-processing machines business, figures for 2015 have been restated. Internal purchases eliminated in the comparison figures up to 30 June 2015 changed from 1 July 2015 to external purchases. This impacts the comparability of Continuing Operations’ operating profit. In Continuing Operations’ comparable operating profit, those internal items that from 1 July 2015 changed to external items have been restated
GLASTON’S OUTLOOK UNCHANGED
We expect 2016 net sales to be slightly below the 2015 level and that operating profit, excluding non-recurring items, will be at the 2015 level. (In 2015 net sales were EUR 123.4 million and comparable operating profit, excluding non-recurring items, was EUR 6.1 million).
PRESIDENT & CEO ARTO METSÄNEN:
“At the end of last year, uncertainty in the glass processing market increased, and the situation remained unchanged as we entered the new year. In the first quarter, the markets were relatively quiet, except for North America. In an unstable market situation, reliability and quality become even stronger competitive factors and we succeeded in increasing our market share.
Despite the market instability, our net sales grew by 12% compared with the corresponding period the previous year and totalled EUR 29.4 million. Our comparable operating profit was EUR 0.7 million. Order intake was EUR 25.0 million, representing 11% growth compared with the previous year.
We cannot be satisfied with our operating profit and therefore we have initiated measures to improve our profitability. We will further intensify our cost saving programmes, which still primarily concern Brazil and China. In Finland, we have already launched an action programme to reduce fixed costs.
In March, we announced our updated strategy as well as our financial targets for the period 2016–2018. Glaston is moving to a new strategic phase, the cornerstones of which are growth, technology leadership and the industry’s best customer experience. We will focus on high-technology heat treatment and services. Our core expertise is flat tempering technology. In this segment, we estimate that our global market share is slightly under 40%. We are pursuing growth through product development and a first-class product range. Based on our core business, we see growth opportunities not only in flat tempering technology but also in other safety glass categories, such as bending, tempering-bending and laminating.”
|Order book, EUR million||34.5||52.8||38.5|
|Orders received, EUR million||25.0||22.5||107.4|
|Net sales, EUR million||29.4||26.3||123.4|
|EBITDA, comparable, EUR million||1.4||2.1||7.9|
|EBITDA, comparable, as % of net sales||4.7||8.0||6.4|
|Operating result (EBIT), comparable, EUR million||0.7||1.2||4.5|
|Operating result (EBIT), comparable, as % of net sales||2.4||4.7||3.6|
|Profit / loss for the period, EUR million||0.2||0.1||-13.8|
|Earnings per share, continuing and discontinued operations, EUR||0.00||0.00||-0.07|
|Net cash flow from operating activities||-1.8||-3.3||-3.0|
|Return on capital employed, %, annualized||6.0||15.2||-13.8|
|Gross capital expenditure, continuing and discontinued operations, EUR million||1.5||1.6||7.2|
|Equity ratio, %||45.3||45.3||43.9|
In the first quarter of 2016, uncertainty was still perceptible in the glass processing market. After a quiet January, the market picked up during February and March. In North America, the growth of the market continued. In the EMEA area, markets were still challenging. In South America, particularly in Brazil, the markets remained subdued. In Asia, particularly in China, market instability continued.
In the first quarter, the Machines business markets developed reasonably positively and Glaston maintained its strong market position in the flat tempering machines segment.
In North America, demand continued at a good level. In the EMEA area, the market slowed down in the latter part of 2015, but however in the first quarter the market situation was reasonable. In Asia and South America, market uncertainty continued. In China, demand was affected by slower economic growth as well as the large investments in production capacity expansions of previous years. In Brazil, the uncertain political situation and a shortage of reasonably priced financing put the brake on customers’ investment willingness.
During the review period, Glaston sold a number of RC200™, RC350™ and FC500™ machines. The company also closed a major deal of approximately EUR 4 million with a leading US glass manufacturer for flat tempering and laminating lines. In automotive products, Glaston received a large Matrix™ machine order from Egypt.
After a quiet January, the Services business markets picked up during February and March. Services’ strongest market area was in North America, where, for example, a large modernisation deal was closed for a Glassrobots flat tempering machine. In Asia, market activity was at the previous year’s level. In the EMEA area and South America, the market situation was challenging, and demand for services remained weak.
In modernisation products, the first quarter was quiet. With the exception of North America, the market situation was difficult and new orders were at a low level. The spare parts product group developed positively and invoicing grew by 26% compared with the corresponding period of the previous year. The number of new service agreements fell short of expectations.
Glaston still expects the overall market to develop on a cautiously positive note. The North American market and the EMEA area are expected to develop positively. We expect the Asian markets to remain stable at their current level. In China, market activity continues to be low. In South America, market continues to be subdued, particularly in Brazil.
In the heat treatment machines market, no significant changes are anticipated, and we expect demand for heat treatment machines to remain at the previous year’s level. The outlook for the services market continues to be cautiously positive.
Glaston’s outlook remains unchanged. Due to the subdued market situation and the reduced order book, we expect 2016 net sales to be slightly below the 2015 level. We expect the operating profit, excluding non-recurring items, to be at the 2015 level. (In 2015 net sales were EUR 123.4 million and comparable operating profit, excluding non-recurring items, was EUR 6.1 million).
An analyst and press conference is organized at Glaston's office on Yliopistonkatu 7, Helsinki, on 28 April 2016 at 14.00 p.m.
For further information, please contact:
President & CEO Arto Metsänen, tel. +358 10 500 500
Chief Financial Officer Sasu Koivumäki, tel. +358 10 500 500
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