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First combined quarter for the new Glaston: net sales grew to EUR 58.4 million and comparable EBITA was EUR 3.6 million

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Glaston Corporation              Half-year financial report        8 August 2019 at 13.00 EET

Glaston Corporation Half-Year Financial Report 1 January – 30 June 2019:
First combined quarter for the new Glaston: net sales grew to EUR 58.4 million and comparable EBITA was EUR 3.6 million


This release is a summary of Glaston Corporation's half year financial report January-June 2019. 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. 

APRIL–JUNE 2019 IN BRIEF

  •  Orders received totaled EUR 44.5 (25.4) million.
  •  Net sales totaled EUR 58.4 (25.6) million.
  •  Comparable EBITA was EUR 3.6 (1.4) million, 6.2 (5.4)% of net sales.
  •  The operating result (EBIT) was EUR 0.4 (0.9) million, 0.7 (3.6)% of net sales.
  •  The comparable operating result (EBIT) was EUR 2.5 (0.9) million, 4.3 (3.6)% of net sales.
  •  Items affecting comparability totaled EUR -2.1 (0.0) million.
  •  Cash flow from business operations was EUR -5.4 (1.9) million.

REVIEW PERIOD JANUARY–JUNE 2019 IN BRIEF

  •  Orders received totaled EUR 67.4 (52.0) million.
  •  The order book on 30 June 2019 was EUR 78.9 (37.3) million.
  •  Net sales totaled EUR 79.2 (50.3) million.
  •  Comparable EBITA was EUR 4.2 (3.0) million, i.e. 5.3 (5.9)% of net sales.
  •  The operating result (EBIT) was EUR -0.3 (1.8) million.
  •  The comparable operating result (EBIT) was EUR 2.6 (2.0) million, 3.3 (4.0)% of net sales.
  •  The comparable earnings per share were EUR -0.001 (0.019).
  •  Items affecting comparability totaled EUR -2.9 (-0.2) million.
  •  Cash flow from business operations was EUR –3.7 (-4.6) million.
  •  Net interest-bearing debt totaled EUR 43.8 (18.1) million.

PRO FORMA APRIL–JUNE 2019 IN BRIEF (comparables in brackets pro forma)  

  • Orders received declined by 16% and totaled EUR 44.5 (52.8) million.  
  • Net sales grew by 5.5% to EUR 58.4 (55.4) million.  
  • Comparable EBITA was EUR 3.6 (4.0) million, 6.2 (7.2)% of net sales.
  • The operating result (EBIT) was EUR 0.4 (2.8) million, 0.7 (5.1)% of net sales.
  • The comparable operating result was EUR 2.5 (2.8) million, 4.3 (5.1)% of net sales.  
  • Items affecting comparability totaled EUR -2.1 (0.0) million.

PRO FORMA JANUARY–JUNE 2019 IN BRIEF   

  •  Orders received declined by 18% and totaled EUR 89.8 (109.0) million.
  •  The order book on 30 June 2019 was EUR 78.9 (87.0) million.
  •  Net sales totaled EUR 102.8 (109.6) million.
  •  Comparable EBITA was EUR 6.4 (7.8) million, 6.3 (7.2)% of net sales.
  •  The operating result (EBIT) was EUR 1.2 (5.3) million.
  •  The comparable operating result (EBIT) was EUR 4.1 (5.5) million, 4.0 (5.0)% of net sales.
  •  Items affecting comparability totaled EUR -2.9 (-0.2) million.

GLASTON’S OUTLOOK FOR 2019

Glaston Corporation expects 2019 comparable pro forma EBITA to be at the 2018 level or slightly improve (2018 comparable pro forma EBITA EUR 11.5 million). As the integration process is at an early stage, more uncertainty than usual is associated with the outlook and the company’s estimate.

At the end of 2018, Bystronic glass had a significant number of orders that will be recognized as revenue in the second and third quarters of 2019, thereby improving Bystronic glass’s net sales and profitability at the beginning of the year. Bystronic glass’s fourth quarter net sales and profitability will be significantly lower than in the early part of the year. The Glaston segment’s lower than 2018 first half order intake and result will affect the segment’s 2019 result. The segment’s net sales and result will be skewed towards the second half of the year and particularly to the fourth quarter, when several orders received at the end of 2018 will be delivered. 


PRESIDENT & CEO ARTO METSÄNEN: A busy quarter - good start to the integration

“The second quarter was very busy for Glaston. The integration of Bystronic glass started actively and in addition to the rights issue related to the acquisition, we arranged the glass industry’s biggest conference, the Glass Performace days (GPD), at the end of June.

The start of the integration of Bystronic glass into Glaston has been very positive. It has been a pleasure to see how enthusiastic our customers are about our merger and how quickly our personnel have embraced the new situation. During the quarter, we have published a new strategy and financial targets, merged our sales and services organizations, and succeeded in our first cross-selling efforts. The integration is just beginning, but we have already achieved a great deal. I firmly believe that the acquisition will bring value added to our shareholders through synergies achieved by cross-selling of equipment and services, as well as through annual cost synergies of approximately 4 million euros achieved by 2021.

The rights issue we arranged in June was a success and it was oversubscribed. I want to thank all our shareholders and I am proud that so many want to participate in our growth story. With the proceeds received from the rights issue we repaid the bridgeloan related to the acquisition.

At the end of June, we arranged the glass industry’s biggest conference, the Glass Performance Days (GPD) in Tampere, Finland. The objective of the conference is to bring together glass industry specialists from around the world and the event is dedicated to developing the global glass industry. More than 1,000 specialists participated in the 2019 conference. Presentations included topics covering the energy efficiency of glass, environmental sustainability, digitalization and smart glass in addition to the traditional technical presentations. To increase innovation and increase business potential brought through digitalization Glaston also arranged, for the second time, the Step Change start up event in connection to the conference. Step change aims to boost the development of the industry as well as enable encounters between innovators, partners, customers and investors. Some 40 start ups participated in the event this year.

The activity in our Emerging Technologies product area has increased and we are negotiating about several interesting projects. Our new engineering projects for the automotive and aviation industries also developed well during the quarter.

There were no major changes in our markets in the second quarter, although the markets picked up slightly despite the uncertainty. Market uncertainty postponed decision-making on the heat treatment side in the EMEA area and China, which was reflected in the Glaston segment’s second-quarter order intake. Processing times for financing related to EMEA area projects have lengthened, which delays decision-making and payment of deposits. In Bystronic glass, demand for insulating glass and for services was strong, and the decline in orders received was mainly due to weak demand in the automotive glass market.

Our second-quarter net sales totaled EUR 58.4 million and comparable EBITA was EUR 3.6 million, i.e. 6.2% of net sales. Bystronic glass’s second-quarter comparable EBITA was very good, but as previously stated the Glaston segment’s result will be skewed this year towards the fourth quarter.  

We expect comparable pro forma EBITA for the year to be at the 2018 level or improve slightly. With integration at such an early stage, and due to the uncertain market situation, more uncertainty than usual is associated with the forecast.”

GLASTON GROUP’S PRO FORMA KEY FIGURES

EUR million Actual
4–6/
2019 		Pro forma 4–6/
2018 		Pro forma
1–6/
2019 		Pro forma
1–6/
2018 		Pro forma 2018
Orders received   44.5 52.8 89.8 109.0 216.7
of which service operations 17.9 15.8 35.3 31.7 64.2
of which service operations, % 40% 30% 39% 29% 30%
Order book at end of period 78.9 87.0 78.9 87.0 99.9
Net sales 58.4 55.4 102.8 109.6 201.8
of which service operations 14.9 14.3 32.1 29.9 63.8
of which service operations, % 26% 26% 31% 27% 32%
EBITDA 2.8 5.0 5.9 9.8 13.6
Items affecting comparability -2.1 0.0 -2.9 -0.2 -2.3
Comparable EBITDA 4.9 5.0 8.8 10.0 15.9
Comparable EBITDA, % 8.4% 9.1% 8.6% 9.1% 7.9%
Comparable EBITA 3.6 4.0 6.4 7.8 11.5
Comparable EBITA, % 6.2% 7.2% 6.3% 7.2% 5.7%
Operating result (EBIT) 0.4 2.8 1.2 5.3 4.4
Comparable operating result (EBIT) 2.5 2.8 4.1 5.5 6.7
Comparable operating result (EBIT), % 4.3% 5.1% 4.0% 5.0% 3.3%
Profit/loss before taxes  -1.1 2.1 -0.8 3.8 1.1
Profit/loss for the period   -1.8 2.1 -2.1 3.1 0.9

PRESS MEETING
An analyst and press conference is organized at Glaston's office on Lönnrotinkatu 11, Helsinki, on 8 August 2019 at 14.00 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
Joséphine Mickwitz, VP, IR, Communications and Marketing, tel. +358 10 500 5070

Glaston Corporation
Glaston is the glass processing industry’s innovative technology leader supplying equipment, services and solutions to the architectural, automotive, solar and appliance industries. The company also supports the development of emerging technologies integrating intelligence to glass. 

As of April 2019, Bystronic glass is part of Glaston Group. Together we are committed to providing our clients with both the best know-how and the latest technologies in glass processing, with the purpose of building a better tomorrow through safer, smarter, and more energy efficient glass solutions. We operate globally with manufacturing, services and sales offices in 12 countries. Glaston’s shares (GLA1V) are listed on NASDAQ Helsinki Ltd.   

Distribution: NASDAQ OMX Helsinki, key media, www.glaston.net

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