Glaston Corporation Financial Statements 1 January - 31 December 2008
GLASTON CORPORATION Stock Exchange Release 10 February 2009 14.00
Glaston Corporation Financial Statements 1 January - 31 December 2008
- Orders received in January-December totalled EUR 184.7 (212.7) million. Orders
received in the fourth quarter totalled EUR 31.8 (42.1) million.
- Glaston's order book on 31 December 2008 was EUR 60.7 (87.0) million.
- Net sales totalled EUR 270.4 (269.8) million. Final quarter net sales totalled
EUR 68.9 (88.8) million.
- Operating profit excluding non-recurring items was EUR 6.2 (16.8) million,
i.e. 2.3 (6.2)% of net sales. The final quarter operating result was a loss of
EUR 0.3 (7.3 profit) million, i.e.
-0.4 (8.2)% of net sales. Non-recurring items of EUR -12.3 million were
recognised in the final quarter
- Return on capital employed (ROCE) was -2.3 (11.3)%
- Earnings per share were EUR -0.12 (0.14), of which the final quarter
contribution was EUR -0.16 (0.10).
- The Board of Directors proposes to the Annual General Meeting that a dividend
of EUR 0.05 (0.10) per share, a total of EUR 4.0 million, be distributed.
- Due to a weak order book at the end of 2008, Glaston expects 2009 net sales to
fall short of the 2008 level. Based on the weak visibility an outlook for
opreating profit is not given.
President & CEO Mika Seitovirta:
“The global financial crisis considerably weakened the glass processing machine
market in the second half of 2008. The development is particularly evident in
orders of new machines. During the final quarter of the year, orders fell
sharply compared with the corresponding period of the previous year and the
order book clearly weakened.
Efficiency improvement measures have been initiated in all of Glaston's units to
cut costs and boost cash flow. Strong measures are particularly needed in the
Pre-Processing business area and in Tamglass Glass Processing.
Despite the currently weak economic outlook, we are purposefully continuing to
implement our strategy. The architectural glass segment and the solar energy
market still represent a foundation for the Group's future growth. Further
development of service business will also play an increasingly key role in the
weak economic climate.
2009 will be a difficult year. Due to a weak order book at the end of 2008 and
exceptionally low demand, Glaston expects 2009 net sales to fall short of the
2008 level. Based on the weak visibility an outlook for opreating profit is not
given.
Markets
Due to the global financial crisis and the deteriorating economic climate,
Glaston's market situation weakened substantially during the autumn, and in the
final quarter the market was particularly quiet. More extensive One-Stop-Partner
projects stopped in the latter part of the year. Service and maintenance
business as well as demand for glass industry software continued to be
satisfactory. In all markets, excluding South-America, demand fell sharply
during the final quarter of the year.
Pre-processing
In the second quarter of 2008, the Pre-processing business area's market began
to slow rapidly. In addition to North America, demand also weakened in the EMEA
area and Asia. To strengthen its market position, Glaston both restructured and
strengthened the Pre‑processing business area's sales organisation, with the
emphasis being on the EMEA area.
In 2008 the market developed positively, however, in South‑America, where
growing demand for glass applications, particularly in the architectural glass
segment supported demand for pre-processing machines and tools. Glaston
succeeded in increasing its market share and net sales in the area in 2008.
Assembly of Bavelloni cutting tables and lines began at the Tianjin factory in
China during the year, and the first products were delivered to the local market
in the third quarter. These actions represented the first steps towards a new
localised production range through which the Group will be better able to meet
local market needs in China and grow its operations in low cost countries.
Glaston's first ever global upgrade agreement for pre-processing machines was
signed at the beginning of the year. Sales of service contracts developed
positively in all geographical areas.
Orders received in January-December totalled EUR 56.9 (68.7) million.
January-December net sales totalled EUR 89.7 (94.1) million.
Heat Treatment
In 2008 the market situation of the Heat Treatment business area was good,
excluding the latter part of the year. Activity in the solar energy glass market
continued to be favourable throughout nearly the entire year. Market uncertainty
and financial market instability postponed customers' decisions and delivery
times in several market areas.
In the EMEA area and in South America demand continued to be strong. The strong
downturn in the North American market continued. In Asia, the market slow-down
intensified the competitive situation. To strengthen market position in Northern
Asia, production of two safety glass machine product families production began
at Glaston's factory in Tianjin.
Sales of ceramic rollers as spare parts began via the Tampere delivery centre in
the latter part of the year. In North and South America, also sales of upgrade
packages developed positively towards the end of the year.
The Heat Treatment business area's January-December net sales totalled EUR 152.9
(162.3) million. Orders received during the financial year totalled EUR 113.9
(141.0) million.
The restructuring of Tamglass Glass Processing, which operates in Finland,
continued during 2008. As part of the reorientation of operations, the glass
processing unit discontinued production of working machines and special
automotive glass in order to focus in future on architectural and interior glass
as well as glass needed for solar energy producing solutions. In late summer,
the unit started production at a factory in Akaa, Finland.
Software Solutions
During the financial year, the integration of Albat+Wirsam
into Glaston's organisation and operations was completed. The acquisition of
Albat+Wirsam increased Glaston's glass processing expertise and strengthened the
company's comprehensive offering. During 2008 the Software Solutions business
area focused strongly on integrating Albat+Wirsam software with Glaston's
machines and ensuring their compatibility.
The Software Solutions business area developed favourably in 2008 and the market
was strong throughout nearly the entire year. A higher degree of automation and
flexibility, long sought after in the industry, clearly influenced demand. The
EMEA area in particular boosted the business area's growth. In addition, an
extensive project in Japan furthered the adaptation of Glaston's software
products to the requirements of the Asian market. The North American market did
not shown signs of recovery during the financial year.
In October 2008, Glaston acquired the operations of the Chinese company Shanghai
Yunzhe Software Co., Ltd. The acquired business is connected with the expansion
of Software Solutions business area into China.
January-December net sales totalled EUR 28.2 (7-12/2007: 14.7) million. Licence
orders received totalled EUR 13.9 (3.0) million.
One-Stop-Partner
To improve Glaston's delivery process and accelerate
One-Stop-Partner product integration, in January 2008 the One-Stop-Partner unit
was divided into two, namely One-Stop-Partner Offering and One-Stop-Partner
Deliveries. During the year, the product offering was defined and delineated
more clearly than before, focusing on the glass processing needs of the
architectural and solar energy segments.
In 2008 demand for integrated glass processing solutions, except for the latter
part of the year, was good in Eastern and Southern Europe, the Middle East,
Northern Asia and the APAC area. Demand was weak in Central and Northern Europe.
During the first months of 2008, demand for solar energy solutions was strong in
the Americas, and flat panels and Glaston's bending technology were of
particular interest to customers. Due to the global financial crisis, customers'
decision-making processes lengthened significantly in many areas and projects
came to a halt in the final quarter.
In 2008 Glaston delivered OSP solutions in both the architectural and the solar
energy sectors. Total sales for One-Stop-Partner joint deliveries were EUR 25.9
(47.7) million in January-December. The unit's earnings are included in
Glaston's reported segments.
Orders received
Glaston's orders received during the financial year totalled EUR 184.7 (212.7)
million. Of orders received, Heat Treatment accounted for 61.7 percent,
Pre-processing 30.8 percent and Software Solutions 7.5 percent.
Orders received during the final quarter totalled EUR 31.8 (42.1) million.
Geographical distribution of orders received, EUR million
--------------------------------------------------------------------------------
| | 2008 | 2007 | Change, % |
--------------------------------------------------------------------------------
| EMEA | 126.2 | 134.4 | -6.1 |
--------------------------------------------------------------------------------
| America | 35.5 | 44.0 | -19.3 |
--------------------------------------------------------------------------------
| Asia | 23.0 | 34.3 | -33.0 |
--------------------------------------------------------------------------------
| Total | 184.7 | 212.7 | -13.2 |
--------------------------------------------------------------------------------
Order book
Glaston's order book on 31 December 2008 was EUR 60.7 (87.0) million. The Heat
Treatment business area accounted for EUR 44.2 (59.9) million of the order book,
Pre-processing for EUR 13.0 (20.9) million and Software Solutions for EUR 3.5
(6.2) million.
--------------------------------------------------------------------------------
| Order book, EUR | 31.12.2008 | 31.12.2007 | Change, % |
| million | | | |
--------------------------------------------------------------------------------
| Pre-processing | 13.0 | 20.9 | -37.8 |
--------------------------------------------------------------------------------
| Heat Treatment | 44.2 | 59.9 | -26.2 |
--------------------------------------------------------------------------------
| Software | 3.5 | 6.2 | -43.5 |
| Solutions | | | |
--------------------------------------------------------------------------------
| Total | 60.7 | 87.0 | -30.2 |
--------------------------------------------------------------------------------
Net sales and operating profit
Glaston's January-December net sales totalled EUR 270.4 (269.8) million.
Pre-processing's net sales in the financial period were EUR 89.7 (94.1) million,
Heat Treatment's net sales EUR 152.9 (162.3) million and Software Solutions' net
sales EUR 28.2 (14.7) million.
Final quarter net sales totalled EUR 68.9 (88.8) million. Pre-processing's net
sales in the fourth quarter were EUR 23.7 (28.5) million, Heat Treatment's net
sales EUR 38.8 (52.8) million and Software Solutions' net sales EUR 6.6 (7.9)
million.
--------------------------------------------------------------------------------
| Net sales, EUR million | 2008 | 2007 |
--------------------------------------------------------------------------------
| Pre-processing | 89.7 | 94.1 |
--------------------------------------------------------------------------------
| Heat Treatment | 152.9 | 162.3 |
--------------------------------------------------------------------------------
| Software Solutions | 28.2 | 14.7 |
--------------------------------------------------------------------------------
| Parent company, elim. | -0.3 | -1.3 |
--------------------------------------------------------------------------------
| Total | 270.4 | 269.8 |
--------------------------------------------------------------------------------
*) Software Solutions 7-12/2007
Operating profit excluding non-recurring items was EUR 6.2 (16.8) million, i.e.
2.3 (6.2) percent of net sales. The operating result for the final quarter,
excluding non-recurring items, was a loss of EUR 0.3 (7.3 profit) million.
The operating result was a loss of EUR 6.1 (12.2 profit) million. Non-recurring
items totalling EUR 12.3 million were recognised in the final quarter, due to
the efficiency programme as well as one-off costs recognised for agreements made
in previous years and for uncertain receivables.
Pre-processing's operating result in January-December was a loss of EUR 8.4 (0.1
profit) million and in the final quarter of loss of EUR 6.6 (0.5 profit)
million. The operating result, excluding non-recurring items, for
January-December was a loss of EUR 3.0 (1.6 profit) million and in the final
quarter a loss of EUR 1.1 (0.4 profit) million. The weak profit development is
explained by intensifying price competition resulting from the market situation
and a narrow product range.
The Heat Treatment business area's operating result for January-December was
EUR 6.7 (13.7) million and in the final quarter a loss of EUR 0.3 (0.9 profit)
million. The business area's operating result, excluding non-recurring items,
for January-December was EUR 13.0 (19.6) million and in the final quarter
EUR 2.5 (7.7) million.
Tamglass Glass Processing's operating loss of EUR 6.3 (-2.0) million
significantly weakened the result of Heat Treatment business area and of Glaston
as a whole. The restructuring of Tamglass Glass Processing's operations was
forcefully continued in 2008.
Software Solutions' operating result in January-December was EUR 3.2 (2.6)
million and in the final quarter a loss of EUR 0.4 (1.0 profit) million.
Operating profit, excluding non- recurring items, in the reporting period was
EUR 3.7 (2.6) million and in the final quarter EUR 0.1 (1.0) million.
--------------------------------------------------------------------------------
| Operating result, excluding | 1-12/2008 | 1-12/2007 |
| non-recurring items EUR million | | |
--------------------------------------------------------------------------------
| Pre-processing | -3.0 | 1.6 |
--------------------------------------------------------------------------------
| Heat Treatment | 13.0 | 19.6 |
--------------------------------------------------------------------------------
| Software Solutions | 3.7 | 2.6 |
--------------------------------------------------------------------------------
| Parent company, elim. | -7.5 | -7.0 |
--------------------------------------------------------------------------------
| Total | 6.2 | 16.8 |
--------------------------------------------------------------------------------
| Non-recurring items | -12.3 | -4.6 |
--------------------------------------------------------------------------------
| Operating result after non-recurring | -6.1 | 12.2 |
| items | | |
--------------------------------------------------------------------------------
The result for the financial year was a loss of EUR 9.2 (10.8 profit) million.
Return on capital employed (ROCE) was -2.3 (11.3) percent. Earnings per share
were EUR -0.12 (0.14) Fourth-quarter earnings per share were EUR -0.16 (0.10).
Financing and cash flow
The Group's financial position remained reasonably good, despite strongly
increased indebtedness. The need for working capital was increased above all by
a reduction in customers' advance payments (EUR -8.4 million) and growth in
inventories (EUR +9.8 million). Reducing working capital is a key element of the
initiated efficiency programme. The equity ratio on 31 December 2008 was 45.8
(55.5) percent. Glaston Continuing Operations' cash flow from operating
activities was EUR -23.3 (8.7) million and cash flow from investing activities
was EUR -13.4 (-27.3) million.
Cash flow from financing in January-December was EUR 37.8 (1.5) million,
including dividends paid in the financial period of EUR 7.8 (7.1) million.
The Group's liquid funds at the end of the period totalled EUR 11.5 (11.4)
million. Interest-bearing net debt totalled EUR 57.9 (9.9) million and net
gearing was 46.8 (7.1) percent. The financing structure was changed by the
raising of a TyEL pension loan amounting to EUR 16.4 million. To ensure
liquidity, the Group has a EUR 65 million committed revolving credit facility.
At the end of 2008, EUR 29 million of the facility was in use.
Efficiency programme
To improve profitability Glaston initiated efficiency
measures in all units. The objective of the programme is to improve the
profitability of the whole Group and of the Pre-processing business area in
particular, as well as to adjust the Group's operations to the market situation.
Negotiations held with personnel representatives in Finland were completed in
December. The outcome was that Glaston Finland personnel, a total around 200
people, will be laid off for an average of 4-8 weeks in winter and spring 2009.
In the Pre-processing business area 25 percent of personnel, i.e. 100 people,
have been regularly laid off since December. In addition, personnel reductions
have taken place in a number of the Group's other units, resulting in the
redundancy of around 100 employees. The number of external hired workers has
also been reduced.
The programme is estimated to generate around EUR 5 million in cost savings on
an annual basis. These will be realised in full from the beginning of 2010.
As part of operational reorientation and business restructuring, Glaston's
Tamglass Glass Processing Ltd., which processes glass in Finland, initiated
negotiations in July on the discontinuing of working machines and special
automotive glass operations in order to focus in future on architectural glass
business. Operations at the Pihtipudas unit ceased at end of the year and the
fixed-term employment of 17 people ended. In terms of the working machine and
special automotive glass operations to be discontinued, the primary adjustment
measure is a three-month lay-off period for ten employees during winter
2008/2009.
Research and development
Research and development expenditure totalled EUR 14.5 (6.3) million,
representing 5.4 (2.3) per cent of net sales.
Pre‑processing market area product development focused on product integration
and mainly on new products directed at the solar energy market. During the year,
Glaston launched eight new glass and stone processing products for the
architectural, furniture and solar energy segments. Pre-processing machines
equipped with Albat+Wirsam software were brought to the market for the first
time in the autumn.
A new product strategy was prepared for the Heat Treatment business area, and
product management was reorganised. The product development priorities were the
development of solar energy products and the development of production-line
automation systems. The Tamglass CHF ProTM model, launched into the Tamglass CHF
flat tempering product range, is particularly suitable for the tempering of flat
architectural applications and solar energy glass, particularly photovoltaic
(PV) glass. In bending machines, the Tamglass ESU EcoPowerTM was launched, which
is able to bend high quality CSP (Concentrated Solar Power) technology solar
panels. The ProE MagnumTM product family was expanded to larger glass sizes: a
newly launched machine can temper glass sizes up to 3.3 m x 9.6 m.
Product development in the Software Solutions business area focused on
integration of glass processing machines and software. In addition to developing
pre-processing machine systems, a new product group, the Panorama line control
systems, was introduced.
Capital expenditure and depreciation
Glaston's gross capital expenditure totalled EUR 18.4 (34.1) million. The most
significant capital expenditure during the year was related to the global ERP
project, product development and production machines.
During 2008 depreciation and amortization of property, plant and equipment and
intangible assets totalled EUR 8.7 (7.1) million. In addition, impairment losses
totalling EUR 2.6 million were recognised, of which most were directed at
capitalised development expenses which no longer are expected to generate future
economic benefits.
Organisation and personnel
To streamline Finnish operations, Glaston Service
Oy's business operations were transferred on 1 January 2008 to Glaston Finland
Oy. The transfer had no impact on the number of personnel. Albat+Wirsam France
S.A. was merged with Glaston Finland France S.A.S.U. at end of June.
In October 2008, as part of an efficiency programme, it was decided to combine
the operations of Uniglass Engineering Oy with Glaston Finland Oy. The
combination of the operations will take place during 2009.
On 31 December 2008, Glaston Corporation had a total of 1,541 (1,435) employees,
of whom 29 percent were in Finland and 47 percent elsewhere in Europe, mainly in
Germany and Italy. The proportion of Group employees working in Asia was 10
percent and in the Americas 14 percent. The average number of employees was
1,519 (1,288).
Environment
Alternative energy sources and energy efficiency are key
environmental trends for Glaston. In addition, increasing environmental
awareness means that energy-saving targets are growing, which impacts on demand
for energy glass: using the right kind of glass, energy consumption can be
significantly reduced. Solar energy production will grow strongly during the
coming years and the emphasis of Glaston's product development is on solutions
aimed at the manufacture of solar energy glass. Concepts launched during the
year for the needs of solar energy customers were well received.
In its own operations, Glaston's aim is to adopt as environmentally friendly
operating practices as possible, and processes are continually developed taking
the principles of sustainable development into account. The life cycle of a
glass processing machine is long, on average around 20 years. The design of
Glaston's machines takes into account a machine's entire life cycle, and they
are manufactured to withstand continuous use at high production capacities.
Special attention is also paid to the machines' energy use. During the year,
Glaston launched a flat tempering machine in which, due to new technology, the
energy consumption of glass processing can be reduced by 6-7 percent.
Changes in company management
In January 2008, Henrik Reims was appointed SVP, OSP Deliveries and in May Timo
Nieminen was appointed SVP, Service Solutions. Both are members of Glaston's
Executive Management Group. Timo Rautarinta was appointed Managing Director of
Glaston's glass processing unit Tamglass Glass Processing Ltd. in March 2008.
Risks and risk management
Glaston operates globally and changes in the
development of the world economy directly affect the Group's operations and
risks. The Board of Directors is responsible for the Group's risk management
policy and it supervises the implementation of the policy. The President and CEO
and the Executive Management Group, reporting to the Board of Directors, are
responsible for risk management operating practices, implementation and
monitoring.
A strategic risk for Glaston is above all the possible arrival on the market of
a competing machine technology, which would require Glaston to make large
product development investments. Moreover, losing the Group's market share,
particularly in the most strongly developing markets (Asia, the Middle East) is
a strategic risk. Implementing the Group's strategy may require acquisitions,
the possible failure of which would affect financial performance and Glaston's
risk profile.
Glaston's most significant operational risks include management of large
customer projects, availability and price development of raw materials and
components, management of the subcontractor network, and the availability and
permanence of expert personnel. Glaston is developing its information systems
and a new enterprise resource planning system will be taken into use in Finland
according to plan in 2009. Despite careful planning, temporary disruptions to
operations might be associated with the introduction of the system.
Financial risks connected with operations, such as foreign exchange, interest
rate, financing and counterparty risks and, particularly in the last few months,
credit and liquidity risks have grown. The nature of international business
means that the Group has risks arising from fluctuations in foreign exchange
rates. Changes in interest rates represent an interest rate risk. Credit and
counterparty risk arises from risk associated with the payment period granted to
customers. The liquidity risk comes from the fact that the Group's negotiated
credit facilities are insufficient to cover financial needs of the business.
Financial risks and their management are explained in more detail in the
consolidated financial statements.
In 2008 Glaston strongly developed its global risk management, and a new risk
management policy, process and reporting were approved by the Board of Directors
and introduced to th organization. The development of comprehensive risk
management is a Group-level responsibility. The business areas and units are
responsible for recognising, managing and reporting risks associated with their
own operations. The Group Treasury handles centrally the management of the
Group's financial risks in accordance with a treasury policy approved by the
Board of Directors and within the restrictions issued by the Board of Directors.
In protecting against possible accident risk, worldwide insurance programmes
covering all companies are used, in addition to preventative risk handling
measures. The coverage of these programmes is regularly reviewed as part of
overall risk management.
Shares and share prices
Glaston Corporation's share (GLA1V) is quoted on the
NASDAQ OMX Helsinki Mid Cap List. The company's paid and registered share
capital on 31 December 2008 was EUR 12.7 million and the number of issued shares
totalled 79,350,000. The company has one series of share.
At the end of December, the company held 809,793 of the company's own shares
(treasury shares), corresponding to 1 percent of the total number of issued
shares and votes.
The counter book value of the own shares held by the company is EUR 129,567.
Every share that the company does not hold itself entitles to one vote at the
Annual General Meeting. The share has no nominal value. Each share has a counter
book value of EUR 0.16.
During January-December, a total of 3,965,341 of the company's shares were
traded, representing 5.1 percent of the average number of shares. The lowest
price paid for a share was EUR 0.87 and the highest price EUR 3.33. The average
price, weighted to trading volumes, during the period was EUR 2.07 and the
closing price on 31 December 2008 was EUR 0.91. On 31 December 2008, the market
capitalization of Glaston's shares, treasury shares excluded, was EUR 71.5
(217.3) million.
The equity per share attributable to the owners of the parent was EUR 1.58
(1.78).
Share-based incentive scheme
On 9 May 2007, Glaston's Board of Directors decided
on a new share-based incentive scheme for the Glaston Group's key personnel. The
scheme has three one-year performance periods, namely the calendar years 2007,
2008 and 2009. The scheme will be settled in 2008, 2009 and 2010 in shares and
cash. The proportion to be settled in cash is intended to cover taxes and
tax-related social costs arising to key personnel from the bonus. Shares cannot
be disposed of within two years of the bonus being awarded.
The potential bonus from the scheme for the 2008 performance period is based on
growth of the Group's profit and net sales. If the targets set for the
performance criteria of the incentive scheme for the years 2007-2009 are
achieved in full, a maximum of 652,500 shares, namely 217,000 shares per year,
will be given as bonus from the scheme, and cash paid will be at most the amount
needed for the taxes and tax-related social costs arising to key personnel from
the bonus at the time the bonus is paid.
Glaston's Board of Directors confirmed the incentive scheme return for 2008 as
xxx per cent. The impact of incentive schemes on the 2008 result was EUR 0.3
million.
Decisions of the Annual General Meeting
The company's Annual General Meeting was
held on 11 March 2008. The meeting approved the financial statements for 2007
and released the Board of Directors and the President and CEO from liability for
the financial year.
The meeting also approved the Board of Directors' proposal to pay a dividend of
EUR 0.10 per share, a total of EUR 7.8 million.
Annual General Meeting confirmed that the following persons continue on the
Board of Directors for a year-long term of office: Claus von Bonsdorff, Klaus
Cawén, Carl-Johan Rosenbröijer, Christer Sumelius and Andreas Tallberg. Ahlstrom
Oyj's CEO Jan Lång and Cargotec Oyj's CEO Mikael Mäkinen were elected new
members of the Board of Directors. The Annual General Meeting re-elected as
auditor the authorised public accounting firm KPMG Oy Ab, with the responsible
auditor being Sixten Nyman, APA.
Acquisition and disposal of own shares and authorizations of the Board of
Directors
The 2007 Annual General Meeting authorised the Board of Directors to
acquire the company's own shares up to a maximum of 7,605,096 shares. During
January-September, the company did not acquire its own shares. The authorisation
to acquire shares was valid for 18 months from the decision of the 2007 Annual
General Meeting, so it was no longer valid at the end of 2008.
The 2007 Annual General Meeting also decided to authorise the Board of Directors
to decide on the disposal of own shares in the company's possession (treasury
shares). The authorisation is valid until the end of the 2009 Annual General
Meeting. On 23 April 2008, the company transferred 103,707 treasury shares to
personnel included in the Group's share-based incentive scheme. The counter book
value of the transferred shares was EUR 16,593.
The Board of Directors has no other authorisations.
Board of Director's Proposal for the distribution of profits
The distributable funds of Glaston Corporation, the parent of Glaston Group, are
EUR 56,122,554, of which EUR 153,094 represents the net profit for the financial
year.
The Board of Directors proposes to the Annual General meeting that EUR 0.05 per
shares be distributed as dividend from the net profit for the year and from
retained earnings. The total dividend would amount to a maximum of EUR
3,967,500. EUR 52,155,054 would be left in distributable funds. Treasury shares
held by the company are not entitled to dividends.
The financial position of the company has not materially changed after the end
of the financial year, and it is the Board of Directors' opinion, that the
proposed distribution of funds does not compromise the company's liquidity.
Events after the review period
On January 2009, Tamglass Glass Processing Ltd.
initiated statutory employer-employee negotiations under the Act on
Co-Determination within Undertakings (YT negotiations) in respect of the
adjustment of architectural glass operations to the present market situation.
The architectural glass operations employ around 110 people.
Uncertainties in the near future
Due to the global financial crisis and the economic recession, Glaston's market
rapidly changed during the second half of the year. The situation has adversely
affected the investment possibilities of Glaston's customers to a significant
extent, and the instability has had a particularly strong impact on large
One-Stop-Partner orders.
Owing to the recession, demand for glass processing machines will be weak in the
coming months. Customers' financing difficulties mean that orders may be
postponed and those already confirmed may be cancelled.
Risks relating to raw materials have decreased. Raw material prices have
levelled off and subcontracting capacity problems have nearly disappeared.
Outlook
The current situation in the operating environment will have a strong
impact on Glaston's business in 2009. Adjustment of operations to the prevailing
market situation will be forcefully continued.
The cornerstones of Glaston's business remain the architectural glass segment
and the solar energy market. In the economic downturn, the significance of
service and maintenance business will increase.
The market outlook for the early part of the year is very poor. Prospects for
service and maintenance business are reasonable. The emphasis of new machine
sales will be on sales of single machines. No significant demand for
One-Stop-Partner projects is perceptible for the first half of the current year.
Demand for glass processing machines in the latter part of the year is very
difficult to forecast in the uncertain economic climate.
Due to a weak order book at the end of 2008 and exceptionally low demand,
Glaston expects 2009 net sales to fall short of the 2008 level. Based on the
weak visibility an outlook for operating profit is not given.
Helsinki, 10 February 2009
Glaston Corporation
Board of Directors
Sender:
Glaston Corporation
Agneta Selroos
IR and Communications Manager
Tel. +358 10 500 6105
Glaston Corporation
Glaston Corporation is a growing, international glass technology company.
Glaston is the global market leader in glass processing machines, and a
comprehensive One-Stop-Partner supplier to its customers. Its product range and
service network are the widest in the industry. Glaston's well-known brands are
Bavelloni in pre-processing machines and tools, Tamglass and Uniglass in safety
glass machines, and Albat+Wirsam in glass industry software.
Glaston's own glass processing unit, Tamglass Glass Processing, is a local
Finnish manufacturer of high quality safety glass products.
Glaston's share (GLA1V) is quoted on the NASDAQ OMX Helsinki Mid Cap List.
www.glaston.net
GLASTON CORPORATION
CONDENSED FINANCIAL STATEMENTS AND NOTES 1 JANUARY - 31 DECEMBER 2008
These condensed financial statements are audited. Auditor's report has been
given on 10 February, 2009. Quarterly information and interim reports are not
audited.
As a result of rounding differences, the figures presented in the tables may not
add up to the total.
CONDENSED STATEMENT OF FINANCIAL POSITION
--------------------------------------------------------------------------------
| | restated | restated |
--------------------------------------------------------------------------------
| EUR million | 31.12.2008 | 31.12.2007 | 31.12.2006 |
--------------------------------------------------------------------------------
| Assets | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Property, plant and equipment | 35.0 | 32.5 | 43.3 |
--------------------------------------------------------------------------------
| Goodwill | 66.2 | 67.6 | 53.2 |
--------------------------------------------------------------------------------
| Other intangible assets | 22.5 | 19.6 | 15.8 |
--------------------------------------------------------------------------------
| Joint ventures and associates | 0.9 | 0.8 | - |
--------------------------------------------------------------------------------
| Available-for-sale assets | 0.3 | 0.1 | 0.6 |
--------------------------------------------------------------------------------
| Deferred tax assets | 7.9 | 4.4 | 8.6 |
--------------------------------------------------------------------------------
| Total non-current assets | 132.9 | 125.0 | 121.5 |
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Inventories | 53.9 | 46.2 | 49.5 |
--------------------------------------------------------------------------------
| Receivables | | | |
--------------------------------------------------------------------------------
| Trade and other receivables | 83.3 | 91.3 | 67.8 |
--------------------------------------------------------------------------------
| Assets for current tax | 4.4 | 1.7 | 0.9 |
--------------------------------------------------------------------------------
| Total receivables | 87.6 | 92.9 | 68.7 |
--------------------------------------------------------------------------------
| Cash equivalents | 11.5 | 11.4 | 10.5 |
--------------------------------------------------------------------------------
| Assets held for sale | - | 0.3 | - |
--------------------------------------------------------------------------------
| Total current assets | 153.1 | 150.9 | 128.7 |
--------------------------------------------------------------------------------
| Total assets | 285.9 | 275.9 | 250.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | restated | restated |
--------------------------------------------------------------------------------
| EUR million | 31.12.2008 | 31.12.2007 | 31.12.2006 |
--------------------------------------------------------------------------------
| Equity and liabilities | | | |
--------------------------------------------------------------------------------
| Equity | | | |
--------------------------------------------------------------------------------
| Share capital | 12.7 | 12.7 | 12.7 |
--------------------------------------------------------------------------------
| Share premium account | 25.3 | 25.3 | 25.3 |
--------------------------------------------------------------------------------
| Reserve for invested | 0.2 | 0.3 | - |
| unrestricted equity | | | |
--------------------------------------------------------------------------------
| Treasury shares | -3.5 | -3.9 | -1.0 |
--------------------------------------------------------------------------------
| Fair value reserve | 0.0 | - | - |
--------------------------------------------------------------------------------
| Hedging reserve | - | 0.0 | -0.2 |
--------------------------------------------------------------------------------
| Retained earnings and | 98.2 | 94.8 | 94.8 |
| translation differences | | | |
--------------------------------------------------------------------------------
| Net result attributable to | -9.1 | 10.8 | 8.7 |
| owners of the parent | | | |
--------------------------------------------------------------------------------
| Equity attributable to owners | 123.7 | 139.9 | 140.3 |
| of the parent | | | |
--------------------------------------------------------------------------------
| Non-controlling interest | 0.1 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Total equity | 123.8 | 139.9 | 140.3 |
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Non-current interest-bearing | 16.4 | 1.9 | 0.9 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Non-current interest-free | 8.0 | 9.4 | 7.5 |
| liabilities and provisions | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 8.4 | 9.4 | 7.4 |
--------------------------------------------------------------------------------
| Total non-current liabilities | 32.9 | 20.7 | 15.8 |
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Current interest-bearing | 53.0 | 19.4 | 7.2 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Current provisions | 10.6 | 2.6 | 6.1 |
--------------------------------------------------------------------------------
| Trade and other payables | 63.8 | 89.8 | 78.2 |
--------------------------------------------------------------------------------
| Liabilities for current tax | 1.9 | 3.5 | 2.6 |
--------------------------------------------------------------------------------
| Total current liabilities | 129.3 | 115.3 | 94.1 |
--------------------------------------------------------------------------------
| Total liabilities | 162.2 | 136.0 | 109.9 |
--------------------------------------------------------------------------------
| Total equity and liabilities | 285.9 | 275.9 | 250.2 |
--------------------------------------------------------------------------------
CONDENSED INCOME STATEMENT
--------------------------------------------------------------------------------
| | | restated | | restated |
--------------------------------------------------------------------------------
| EUR million | 10-12/ | 10-12/ | 1-12/ | 1-12/ |
| | 2008 | 2007 | 2008 | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 68.9 | 88.8 | 270.4 | 269.8 |
--------------------------------------------------------------------------------
| Other operating income | 0.0 | 0.3 | 0.4 | 0.6 |
--------------------------------------------------------------------------------
| Expenses | -64.6 | -79.1 | -253.5 | -246.5 |
--------------------------------------------------------------------------------
| Share of result of joint | 0.0 | - | 0.0 | - |
| ventures and associates | | | | |
--------------------------------------------------------------------------------
| Depreciation, amortization | -4.7 | -2.6 | -11.2 | -7.1 |
| and impairment | | | | |
--------------------------------------------------------------------------------
| Non-recurring items | -12.3 | 2.8 | -12.3 | -4.6 |
--------------------------------------------------------------------------------
| Operating profit / loss | -12.6 | 10.1 | -6.1 | 12.2 |
--------------------------------------------------------------------------------
| Gains from sale of assets | 0.0 | - | 0.1 | - |
| held for sale | | | | |
--------------------------------------------------------------------------------
| Other net financial items | -2.2 | -0.3 | -2.1 | 0.0 |
--------------------------------------------------------------------------------
| Result before income taxes | -14.8 | 9.8 | -8.1 | 12.2 |
--------------------------------------------------------------------------------
| Income taxes | 2.5 | -1.8 | -1.1 | -5.2 |
--------------------------------------------------------------------------------
| Net result, continuing | -12.3 | 8.1 | -9.2 | 7.0 |
| operations | | | | |
--------------------------------------------------------------------------------
| Net result, discontinued | - | 0.0 | - | 3.8 |
| operations | | | | |
--------------------------------------------------------------------------------
| Profit / loss for the | -12.3 | 8.1 | -9.2 | 10.8 |
| period | | | | |
--------------------------------------------------------------------------------
| Attributable to: | | | | |
--------------------------------------------------------------------------------
| Non-controlling interests | 0.0 | 0.0 | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Owners of the parent | -12.3 | 8.1 | -9.1 | 10.8 |
--------------------------------------------------------------------------------
| Total | -12.3 | 8.1 | -9.2 | 10.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, EUR, | -0.16 | 0.10 | -0.12 | 0.09 |
| continuing operations | | | | |
--------------------------------------------------------------------------------
| Earnings per share, EUR, | - | 0.00 | - | 0.05 |
| discontinued operations | | | | |
--------------------------------------------------------------------------------
| Earnings per share, EUR, | -0.16 | 0.10 | -0.12 | 0.14 |
| total, basic and diluted | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit / loss, as | -18.3 | 11.4 | -2.3 | 4.5 |
| % of net sales | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit / loss for the | -17.8 | 9.1 | -3.4 | 4.0 |
| period, as % of net sales | | | | |
--------------------------------------------------------------------------------
Operating profit / loss, non-recurring items excluded
--------------------------------------------------------------------------------
| 10-12/ | 10-12/ | 1-12/ | 1-12/ |
| 2008 | 2007 | 2008 | 2007 |
--------------------------------------------------------------------------------
| Operating profit / loss, | -0.3 | 7.3 | 6.2 | 16.8 |
| excluding non-recurring | | | | |
| items | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit / loss, | -0.4 | 8.2 | 2.3 | 6.2 | |
| non-recurring items | | | | | |
| excluded, as % of net | | | | | |
| sales | | | | | |
--------------------------------------------------------------------------------
STATEMENT OF COMPEREHENSIVE INCOME
EUR million
--------------------------------------------------------------------------------
| | | 1-12/ | 1-12/ |
| | | 2008 | 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit / loss for the period | | -9.2 | 10.8 |
--------------------------------------------------------------------------------
| Other comprehensive income | | | |
--------------------------------------------------------------------------------
| Total exchange differences on translating | | 0.7 | -1.8 |
| foreign operations | | | |
--------------------------------------------------------------------------------
| Hedging of net investment in foreign | | - | 0.2 |
| operations | | | |
--------------------------------------------------------------------------------
| Effective portion of fair value changes | | - | 0.0 |
| of cash flow hedges recognized in other | | | |
| comprehensive income | | | |
--------------------------------------------------------------------------------
| Fair value changes of cash flow hedges | | 0.0 | 0.2 |
| reclassified in profit or loss | | | |
--------------------------------------------------------------------------------
| Fair value changes of available-for-sale | | 0.0 | - |
| shares | | | |
--------------------------------------------------------------------------------
| Other reclassifications | | 0.0 | - |
--------------------------------------------------------------------------------
| Income tax on other comprehensive income | | 0.0 | -0.1 |
--------------------------------------------------------------------------------
| Other comprehensive income for the year, | | 0.7 | -1.5 |
| net of tax | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total comprehensive income for the year | | -8.5 | 9.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Attributable to | | | |
--------------------------------------------------------------------------------
| Owners of the parent | | -8.5 | 9.3 |
--------------------------------------------------------------------------------
| Non-controlling interest | | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Total comprehensive income for the year | | -8.5 | 9.3 |
--------------------------------------------------------------------------------
CONDENSED STATEMENT OF CASH FLOWS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | 1-12/ | 1-12/ |
| | 2008 | 2007 |
--------------------------------------------------------------------------------
| Cash flows from operating activities, continuing | | |
| operations | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Cash flow before change in net working capital | 7.2 | 10.3 |
--------------------------------------------------------------------------------
| Change in net working capital | -30.4 | -1.6 |
--------------------------------------------------------------------------------
| Net cash flow from operating activities | -23.3 | 8.7 |
--------------------------------------------------------------------------------
| Cash flow from investing activities, continuing | | |
| operations | | |
--------------------------------------------------------------------------------
| Business combinations | 0.7 | -17.7 |
--------------------------------------------------------------------------------
| Other purchases of non-current assets | -14.5 | -11.3 |
--------------------------------------------------------------------------------
| Proceeds from sale of non-current assets | 0.4 | 1.7 |
--------------------------------------------------------------------------------
| Net cash used in investing activities | -13.4 | -27.3 |
--------------------------------------------------------------------------------
| Cash flow before financing, continuing operations | -36.7 | -18.5 |
--------------------------------------------------------------------------------
| Cash flow from financing activities, continuing | | |
| operations | | |
--------------------------------------------------------------------------------
| Changes in non-current liabilities (increase + / | 17.5 | 0.0 |
| decrease -) | | |
--------------------------------------------------------------------------------
| Changes in non-current loan receivables (increase | 0.3 | - |
| - / decrease +) | | |
--------------------------------------------------------------------------------
| Short-term financing, net (increase + / decrease | 27.9 | 11.3 |
| -) | | |
--------------------------------------------------------------------------------
| Dividends paid | -7.8 | -7.1 |
--------------------------------------------------------------------------------
| Acquisition of treasury shares | - | -3.9 |
--------------------------------------------------------------------------------
| Disposal of treasury shares | - | 1.3 |
--------------------------------------------------------------------------------
| Other financing | 0.0 | - |
--------------------------------------------------------------------------------
| Net cash used in financing activities, continuing | 37.8 | 1.5 |
| operations | | |
--------------------------------------------------------------------------------
| Discontinued operations | | |
--------------------------------------------------------------------------------
| Cash flow from operations | - | 7.6 |
--------------------------------------------------------------------------------
| Cash flow from investments | - | 10.7 |
--------------------------------------------------------------------------------
| Cash flow from discontinued operations | - | 18.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Effect of exchange rate fluctuations | -1.0 | -0.3 |
--------------------------------------------------------------------------------
| Net change in cash and cash equivalents | 0.1 | 0.9 |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the beginning of | 11.4 | 10.5 |
| period | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at the end of period | 11.5 | 11.4 |
--------------------------------------------------------------------------------
| Net change in cash and cash equivalents | 0.1 | 0.9 |
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN EQUITY
--------------------------------------------------------------------------------
| EUR million | Share | Share | Reserve | Treasury | Fair | Hedging |
| | capital | premium | for | shares | value | reserve |
| | | account | invested | | reserve | |
| | | | unrest. | | | |
| | | | equity | | | |
--------------------------------------------------------------------------------
| Equity at 1 | 12.7 | 25.3 | - | -1.0 | - | -0.2 |
| January | | | | | | |
| 2007, as | | | | | | |
| published | | | | | | |
--------------------------------------------------------------------------------
| Effect of | - | - | - | - | - | - |
| restatement | | | | | | |
--------------------------------------------------------------------------------
| Equity at 1 | 12.7 | 25.3 | - | -1.0 | - | -0.2 |
| January 2007 | | | | | | |
--------------------------------------------------------------------------------
| Total | - | - | - | - | - | 0.2 |
| comprehensiv | | | | | | |
| e income for | | | | | | |
| the year | | | | | | |
--------------------------------------------------------------------------------
| Acquisition | - | - | - | -3.9 | - | - |
| of treasury | | | | | | |
| shares | | | | | | |
--------------------------------------------------------------------------------
| Disposal of | - | - | 0.4 | 1.0 | - | - |
| treasury | | | | | | |
| shares | | | | | | |
--------------------------------------------------------------------------------
| Tax effect | - | - | -0.1 | - | - | - |
| of net | | | | | | |
| income | | | | | | |
| recognized | | | | | | |
| directly in | | | | | | |
| equity | | | | | | |
--------------------------------------------------------------------------------
| Equity at 31 | 12.7 | 25.3 | 0.3 | -3.9 | - | 0.0 |
| December | | | | | | |
| 2007 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | Share | Share | Reserve | Treasury | Fair | Hedging |
| | capital | premium | for | shares | value | reserve |
| | | account | invested | | reserve | |
| | | | unrestr. | | | |
| | | | equity | | | |
--------------------------------------------------------------------------------
| Equity at 1 | 12.7 | 25.3 | 0.3 | -3.9 | - | 0.0 |
| January 2008 | | | | | | |
--------------------------------------------------------------------------------
| Total | - | - | - | - | 0.0 | 0.0 |
| comprehensiv | | | | | | |
| e income for | | | | | | |
| the year | | | | | | |
--------------------------------------------------------------------------------
| Acquisition | - | - | - | - | - | - |
| of treasury | | | | | | |
| shares | | | | | | |
--------------------------------------------------------------------------------
| Disposal of | - | - | -0.1 | 0.4 | - | - |
| treasury | | | | | | |
| shares | | | | | | |
--------------------------------------------------------------------------------
| Tax effect | - | - | 0.0 | - | - | - |
| of net | | | | | | |
| income | | | | | | |
| recognized | | | | | | |
| directly in | | | | | | |
| equity | | | | | | |
--------------------------------------------------------------------------------
| Equity at 31 | 12.7 | 25.3 | 0.2 | -3.5 | 0.0 | 0.0 |
| December | | | | | | |
| 2008 | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR million | Retained | Transl. | Equity | Non-contro | Total |
| | earnings | differences | attribu-ta | ll. | equity |
| | | | ble to | interest | |
| | | | owners of | | |
| | | | the parent | | |
--------------------------------------------------------------------------------
| Equity at 1 | 102.8 | 0.4 | 140.1 | 0.0 | 140.1 |
| January 2007, | | | | | |
| as published | | | | | |
--------------------------------------------------------------------------------
| Effect of | 0.2 | - | 0.2 | - | 0.2 |
| restatement | | | | | |
--------------------------------------------------------------------------------
| Equity at 1 | 103.0 | 0.4 | 140.3 | 0.0 | 140.3 |
| January 2007 | | | | | |
--------------------------------------------------------------------------------
| Total | 10.8 | -1.7 | 9.3 | 0.0 | 9.3 |
| comprehensive | | | | | |
| income for the | | | | | |
| year | | | | | |
--------------------------------------------------------------------------------
| Acquisition of | - | - | -3.9 | - | -3.9 |
| treasury shares | | | | | |
--------------------------------------------------------------------------------
| Disposal of | - | - | 1.3 | - | 1.3 |
| treasury shares | | | | | |
--------------------------------------------------------------------------------
| Tax effect of | - | - | -0.1 | - | -0.1 |
| net income | | | | | |
| recognized | | | | | |
| directly in | | | | | |
| equity | | | | | |
--------------------------------------------------------------------------------
| Share-based | 0.1 | - | 0.1 | - | 0.1 |
| incentive plan | | | | | |
--------------------------------------------------------------------------------
| Share-based | - | - | - | - | - |
| incentive plan, | | | | | |
| tax effect | | | | | |
--------------------------------------------------------------------------------
| Dividends paid | -7.1 | - | -7.1 | - | -7.1 |
--------------------------------------------------------------------------------
| Equity at 31 | 106.8 | -1.2 | 139.9 | 0.0 | 139.9 |
| December 2007 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR | Retained | Transl. | Equity | Non-controll | Total |
| million | earnings | difference | attribu-ta | . interest | equity |
| | | s | ble to | | |
| | | | owners of | | |
| | | | the parent | | |
--------------------------------------------------------------------------------
| Equity at | 106.8 | -1.2 | 139.9 | 0.0 | 139.9 | |
| 1 January | | | | | | |
| 2008 | | | | | | |
--------------------------------------------------------------------------------
| Total | -9.2 | 0.7 | -8.5 | 0.0 | -8.5 | |
| comprehens | | | | | | |
| ive income | | | | | | |
| for the | | | | | | |
| year | | | | | | |
--------------------------------------------------------------------------------
| Other | - | - | - | 0.0 | 0.0 | |
| changes in | | | | | | |
| non-contro | | | | | | |
| lling | | | | | | |
| interest | | | | | | |
--------------------------------------------------------------------------------
| Acquisitio | - | - | - | - | - | |
| n of | | | | | | |
| treasury | | | | | | |
| shares | | | | | | |
--------------------------------------------------------------------------------
| Disposal | - | - | 0.3 | - | 0.3 | |
| of | | | | | | |
| treasury | | | | | | |
| shares | | | | | | |
--------------------------------------------------------------------------------
| Tax effect | - | - | 0.0 | - | 0.0 | |
| of net | | | | | | |
| income | | | | | | |
| recognized | | | | | | |
| directly | | | | | | |
| in equity | | | | | | |
--------------------------------------------------------------------------------
| Share-base | -0.2 | - | -0.2 | - | -0.2 | |
| d | | | | | | |
| incentive | | | | | | |
| plan | | | | | | |
--------------------------------------------------------------------------------
| Share-base | 0.0 | - | 0.0 | - | 0.0 | |
| d | | | | | | |
| incentive | | | | | | |
| plan, tax | | | | | | |
| effect | | | | | | |
--------------------------------------------------------------------------------
| Reversal | 0.0 | - | 0.0 | - | 0.0 | |
| of unpaid | | | | | | |
| dividends | | | | | | |
--------------------------------------------------------------------------------
| Dividends | -7.8 | - | -7.8 | - | -7.8 | |
| paid | | | | | | |
--------------------------------------------------------------------------------
| Equity at | 89.6 | -0.5 | 123.7 | 0.0 | 123.8 | |
| 31 | | | | | | |
| December | | | | | | |
| 2008 | | | | | | |
--------------------------------------------------------------------------------
KEY RATIOS
--------------------------------------------------------------------------------
| | 31.12.2008 | 31.12.2007 |
--------------------------------------------------------------------------------
| EBITDA, as % of net sales (1 | 1.9 | 7.2 |
--------------------------------------------------------------------------------
| Operating profit / loss (EBIT), as % of net | -2.3 | 4.5 |
| sales | | |
--------------------------------------------------------------------------------
| Net result, as % of net sales | -3.4 | 4.0 |
--------------------------------------------------------------------------------
| Gross capital expenditure, EUR million | 18.4 | 34.1 |
--------------------------------------------------------------------------------
| Gross capital expenditure, as % of net sales | 6.8 | 12.6 |
| (net sales including discontinued operations) | | |
--------------------------------------------------------------------------------
| Equity ratio, % | 45.8 | 55.5 |
--------------------------------------------------------------------------------
| Gearing, % | 56.1 | 15.2 |
--------------------------------------------------------------------------------
| Net gearing, % | 46.8 | 7.1 |
--------------------------------------------------------------------------------
| Net interest-bearing debt, EUR million | 57.9 | 9.9 |
--------------------------------------------------------------------------------
| Capital employed, end of period, EUR million | 193.2 | 161.2 |
--------------------------------------------------------------------------------
| Return on equity, %, annualized | -7.0 | 7.7 |
--------------------------------------------------------------------------------
| Return on capital employed, continuing | -2.3 | 8.0 |
| operations, %, annualized | | |
--------------------------------------------------------------------------------
| Return on capital employed, %, annualized | -2.3 | 11.3 |
--------------------------------------------------------------------------------
| Number of personnel, average, continuing | 1,519 | 1,288 |
| operations | | |
--------------------------------------------------------------------------------
| Number of personnel, average | 1,519 | 1,302 |
--------------------------------------------------------------------------------
| Number of personnel, end of period, continuing | 1,541 | 1,435 |
| operations | | |
--------------------------------------------------------------------------------
| Number of personnel, end of period | 1,541 | 1,435 |
--------------------------------------------------------------------------------
(1 EBITDA = Operating profit / loss + depreciation, amortization and impairment.
--------------------------------------------------------------------------------
| PER SHARE DATA | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | 31.12.2008 | 31.12.2007 |
--------------------------------------------------------------------------------
| Number of shares, end of period, treasury | 78,540 | 78,437 |
| shares excluded (1,000) | | |
--------------------------------------------------------------------------------
| Number of shares, average, treasury shares | 78,507 | 78,682 |
| excluded (1,000) | | |
--------------------------------------------------------------------------------
| EPS, continuing operations, EUR (* | -0.12 | 0.09 |
--------------------------------------------------------------------------------
| EPS, discontinued operations, EUR (* | - | 0.05 |
--------------------------------------------------------------------------------
| EPS, total, EUR (* | -0.12 | 0.14 |
--------------------------------------------------------------------------------
| Equity attributable to owners of the parent | 1.58 | 1.78 |
| per share, EUR | | |
--------------------------------------------------------------------------------
| Dividend per share, EUR (** | 0.05 | 0.10 |
--------------------------------------------------------------------------------
| Dividend payout ratio, % (** | -43.0 | 73.2 |
--------------------------------------------------------------------------------
| Dividend yield (** | 5.5 | 3.6 |
--------------------------------------------------------------------------------
| Price per earnings per share (P/E) ratio | -7.8 | 20.3 |
--------------------------------------------------------------------------------
| Price per equity attributable to owners of the | 0.58 | 1.55 |
| parent per share | | |
--------------------------------------------------------------------------------
| Market capitalization, EUR million | 71.5 | 217.3 |
--------------------------------------------------------------------------------
| Share turnover, % (number of shares traded, % | 5.1 | 10.2 |
| of the average number of shares) | | |
--------------------------------------------------------------------------------
| Number of shares traded, (1,000) | 3,965 | 7,993 |
--------------------------------------------------------------------------------
| Closing price of the share, EUR | 0.91 | 2.77 |
--------------------------------------------------------------------------------
| Highest quoted price, EUR | 3.33 | 4.53 |
--------------------------------------------------------------------------------
| Lowest quoted price, EUR | 0.87 | 2.70 |
--------------------------------------------------------------------------------
| Volume-weighted average quoted price, EUR | 2.07 | 3.84 |
--------------------------------------------------------------------------------
(* Glaston Corporation has not issued options or warrants or similar instruments
which would dilute the earnings per share.
(** Dividend for 2008 is the Board of Directors' proposal
DEFINITIONS OF KEY RATIOS
Financial ratios
EBITDA = Profit / loss before depreciation, amortization and impairment, share
of joint ventures' and associates' results included
Operating profit (EBIT) = Profit / loss after depreciation, amortization and
impairment, share of joint ventures' and associates' results included
Liquid funds = Cash and bank + current investments
Net interest-bearing debt = Interest-bearing liabilities - liquid funds
Financial expenses = Interest expenses of financial liabilities + fees of
financing arrangements + foreign currency differences of financial liabilities
Equity ratio, % = Equity (Equity attributable to owners of the parent +
non-controlling interest) x 100 / Total assets - advance payments received
Gearing, % = Interest-bearing liabilities x 100 / Equity (Equity attributable to
owners of the parent + non-controlling interest)
Net gearing, % = Net interest-bearing debt x 100 / Equity (Equity attributable
to owners of the parent + non-controlling interest)
Return on investments, % (ROCE) = Profit / loss before taxes + financial
expenses x 100 / Equity + interest-bearing liabilities (average of 1 January
and end of the reporting period)
Return on equity, % (ROE)= Profit / loss for the reporting period x 100 /
Equity (Equity attributable to owners of the parent + non-controlling interest)
(average of 1 January and end of the reporting period)
Per share data
Earnings per share (EPS) = Net result attributable to owners of the parent /
Adjusted average number of shares
Dividend per share = Dividends paid / Adjusted number of issued shares at end of
the period
Dividend payout ratio = Dividend per share x 100 / Earnings per share
Dividend yield = Dividend per share x 100 / Share price at end of the period
Equity attributable to owners of the parent per share = Equity attributable to
owners of the parent at end of the period / Adjusted number of shares at end of
the period
Average trading price = Shares traded (EUR) / Shares traded (volume)
Price per earnings per share (P/E) = Share price at end of the period /
Earnings per share (EPS)
Price per equity per share = Share price at period end / Equity attributable to
owners of the parent per share
Share turnover = The proportion of number of shares traded during the period to
weighted average number of shares
Market capitalization = Number of shares at end of the period x share price at
end of the period
Number of shares at period end = Number of issued shares - treasury shares
RESTATEMENT OF PREVIOUS YEARS
Due to an error discovered in the actuarial calculations of defined benefit
plans the figures of the 2007 financial statements have been restated
accordingly. Also the statement of financial position of 2006 has been restated
accordingly. The impact of the restatement is presented in the tables below.
--------------------------------------------------------------------------------
| Income statement | | 1 January - 31 December |
--------------------------------------------------------------------------------
| EUR million | | 2007 | | 2007 |
--------------------------------------------------------------------------------
| | | before | effect of | restated |
| | | restatement | restatement | |
--------------------------------------------------------------------------------
| Net sales | | 269.8 | - | 269.8 |
--------------------------------------------------------------------------------
| Other operating income | | 0.6 | - | 0.6 |
--------------------------------------------------------------------------------
| Expenses | | -251.3 | 0.2 | -251.1 |
--------------------------------------------------------------------------------
| Depreciation, amortization | | -7.1 | - | -7.1 |
| and impairment charges | | | | |
--------------------------------------------------------------------------------
| Operating profit | | 12.0 | 0.2 | 12.2 |
--------------------------------------------------------------------------------
| Net financial items | | 0.0 | - | 0.0 |
--------------------------------------------------------------------------------
| Profit / loss before income | | 12.0 | 0.2 | 12.2 |
| taxes | | | | |
--------------------------------------------------------------------------------
| Income tax expense | | -5.2 | 0.0 | -5.2 |
--------------------------------------------------------------------------------
| Profit / loss from continuing | | 6.9 | 0.1 | 7.0 |
| operations | | | | |
--------------------------------------------------------------------------------
| Profit from discontinued | | 3.8 | - | 3.8 |
| operations | | | | |
--------------------------------------------------------------------------------
| Profit / loss for the | | 10.6 | 0.1 | 10.8 |
| reporting period | | | | |
--------------------------------------------------------------------------------
| Attributable to | | 0.0 | - | 0.0 |
| non-controlling interest | | | | |
--------------------------------------------------------------------------------
| Attributable to owners of the | | 10.6 | 0.1 | 10.8 |
| parent | | | | |
--------------------------------------------------------------------------------
| Total | | 10.6 | 0.1 | 10.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, EUR, | | 0.09 | - | 0.09 |
| continuing operations | | | | |
--------------------------------------------------------------------------------
| Earnings per share, EUR, | | 0.05 | - | 0.05 |
| discontinued operations | | | | |
--------------------------------------------------------------------------------
| Earnings per share, EUR, | | 0.14 | - | 0.14 |
| total, basic and diluted | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Statement of financial position | | |
--------------------------------------------------------------------------------
| EUR million | | 2007 | | 2007 |
--------------------------------------------------------------------------------
| | | before | effect of | restated |
| | | restatement | restatement | |
--------------------------------------------------------------------------------
| Assets | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current assets | | | | |
--------------------------------------------------------------------------------
| Goodwill | | 67.6 | - | 67.6 |
--------------------------------------------------------------------------------
| Intangible assets | | 19.6 | - | 19.6 |
--------------------------------------------------------------------------------
| Property, plant and | | 32.5 | - | 32.5 |
| equipment | | | | |
--------------------------------------------------------------------------------
| Holdings in associates and | | 0.8 | - | 0.8 |
| joint ventures | | | | |
--------------------------------------------------------------------------------
| Available-for-sale assets | | 0.1 | - | 0.1 |
--------------------------------------------------------------------------------
| Deferred tax assets | | 4.4 | - | 4.4 |
--------------------------------------------------------------------------------
| Total non-current assets | | 125.0 | - | 125.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| Inventories | | 46.2 | - | 46.2 |
--------------------------------------------------------------------------------
| Assets for current tax | | 1.7 | - | 1.7 |
--------------------------------------------------------------------------------
| Trade and other receivables | | 91.3 | - | 91.3 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | | | | |
--------------------------------------------------------------------------------
| Current investments | | 0.1 | - | 0.1 |
--------------------------------------------------------------------------------
| Cash and bank | | 11.3 | - | 11.3 |
--------------------------------------------------------------------------------
| Assets held for sale | | 0.3 | - | 0.3 |
--------------------------------------------------------------------------------
| Total current assets | | 150.9 | - | 150.9 |
--------------------------------------------------------------------------------
| Total assets | | 275.9 | - | 275.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity and liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share capital | | 12.7 | - | 12.7 |
--------------------------------------------------------------------------------
| Share premium account | | 25.3 | - | 25.3 |
--------------------------------------------------------------------------------
| Reserve for invested | | 0.3 | - | 0.3 |
| unrestricted equity | | | | |
--------------------------------------------------------------------------------
| Treasury shares | | -3.9 | - | -3.9 |
--------------------------------------------------------------------------------
| Fair value reserve | | - | - | - |
--------------------------------------------------------------------------------
| Hedging reserve | | 0.0 | - | 0.0 |
--------------------------------------------------------------------------------
| Retained earnings and | | 94.6 | 0.2 | 94.8 |
| translation differences | | | | |
--------------------------------------------------------------------------------
| Net result attributable to | | 10.6 | 0.1 | 10.8 |
| owners of the parent | | | | |
--------------------------------------------------------------------------------
| Attributable to owners of | | 139.5 | 0.4 | 139.9 |
| the parent | | | | |
--------------------------------------------------------------------------------
| Non-controlling interest | | 0.0 | - | 0.0 |
--------------------------------------------------------------------------------
| Total equity | | 139.6 | 0.4 | 139.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | | |
--------------------------------------------------------------------------------
| Non-current interest-bearing | | 1.9 | - | 1.9 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Non-current interest-free | | 0.3 | - | 0.6 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Provisions | | 4.9 | - | 4.9 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | | 9.2 | 0.2 | 9.4 |
--------------------------------------------------------------------------------
| Defined benefit pension and | | 4.8 | -0.5 | 4.3 |
| other long-term employee | | | | |
| benefit liabilities | | | | |
--------------------------------------------------------------------------------
| Total non-current | | 21.0 | -0.3 | 20.7 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Current liabilities | | | | |
--------------------------------------------------------------------------------
| Current interest-bearing | | 19.4 | - | 19.4 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Provisions | | 2.6 | - | 2.6 |
--------------------------------------------------------------------------------
| Accounts payable and other | | 89.8 | - | 89.8 |
| current interest-free | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Liabilities for current tax | | 3.5 | - | 3.5 |
--------------------------------------------------------------------------------
| Total current liabilities | | 115.3 | - | 115.3 |
--------------------------------------------------------------------------------
| Total liabilities | | 136.3 | -0.3 | 136.0 |
--------------------------------------------------------------------------------
| Total equity and liabilities | | 275.9 | 0.0 | 275.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Statement of financial position | | |
--------------------------------------------------------------------------------
| EUR million | | 2006 | | | 2006 | |
--------------------------------------------------------------------------------
| | | before | effect of | restated |
| | | restatemen | restatement | |
| | | t | | |
--------------------------------------------------------------------------------
| Assets | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current assets | | | | |
--------------------------------------------------------------------------------
| Goodwill | | 53.2 | - | 53.2 |
--------------------------------------------------------------------------------
| Intangible assets | | 15.8 | - | 15.8 |
--------------------------------------------------------------------------------
| Property, plant and | | 43.3 | - | 43.3 |
| equipment | | | | |
--------------------------------------------------------------------------------
| Holdings in associates | | - | - | - |
| and joint ventures | | | | |
--------------------------------------------------------------------------------
| Available-for-sale | | 0.6 | - | 0.6 |
| assets | | | | |
--------------------------------------------------------------------------------
| Deferred tax assets | | 8.6 | - | 8.6 |
--------------------------------------------------------------------------------
| Total non-current assets | | 121.5 | - | 121.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| Inventories | | 49.5 | - | 49.5 |
--------------------------------------------------------------------------------
| Assets for current tax | | 0.9 | - | 0.9 |
--------------------------------------------------------------------------------
| Trade and other | | 67.8 | - | 67.8 |
| receivables | | | | |
--------------------------------------------------------------------------------
| Cash and bank | | 10.5 | - | 10.5 |
--------------------------------------------------------------------------------
| Total current assets | | 128.7 | - | 128.7 |
--------------------------------------------------------------------------------
| Total assets | | 250.2 | - | 250.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity and liabilities | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Share capital | | 12.7 | - | 12.7 |
--------------------------------------------------------------------------------
| Share premium account | | 25.3 | - | 25.3 |
--------------------------------------------------------------------------------
| Reserve for invested | | - | - | - |
| unrestricted equity | | | | |
--------------------------------------------------------------------------------
| Treasury shares | | -1.0 | - | -1.0 |
--------------------------------------------------------------------------------
| Fair value reserve | | - | - | - |
--------------------------------------------------------------------------------
| Hedging reserve | | -0.2 | - | -0.2 |
--------------------------------------------------------------------------------
| Retained earnings and | | 94.3 | 0.5 | 94.8 |
| translation differences | | | | |
--------------------------------------------------------------------------------
| Net result attributable | | 8.9 | -0.2 | 8.7 |
| to owners of the parent | | | | |
--------------------------------------------------------------------------------
| Attributable to owners | | 140.1 | 0.2 | 140.3 |
| of the parent | | | | |
--------------------------------------------------------------------------------
| Non-controlling interest | | 0.0 | - | 0.0 |
--------------------------------------------------------------------------------
| Total equity | | 140.1 | 0.2 | 140.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | | |
--------------------------------------------------------------------------------
| Non-current | | 0.9 | - | 0.9 |
| interest-bearing | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Non-current | | 0.1 | - | 0.1 |
| interest-free | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Provisions | | 1.4 | - | 1.4 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | | 7.3 | 0.1 | 7.4 |
--------------------------------------------------------------------------------
| Defined benefit pension | | 6.4 | -0.3 | 6.1 |
| and other long-term | | | | |
| employee benefit | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Total non-current | | 16.0 | -0.2 | 15.8 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Current liabilities | | | | |
--------------------------------------------------------------------------------
| Current interest-bearing | | 7.2 | - | 7.2 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Provisions | | 6.1 | - | 6.1 |
--------------------------------------------------------------------------------
| Accounts payable and | | 78.2 | - | 78.2 |
| other current | | | | |
| interest-free | | | | |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Liabilities for current | | 2.6 | - | 2.6 |
| tax | | | | |
--------------------------------------------------------------------------------
| Total current | | 94.1 | - | 94.1 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Total liabilities | | 110.1 | -0.2 | 109.9 |
--------------------------------------------------------------------------------
| Total equity and | | 250.2 | 0.0 | 250.2 |
| liabilities | | | | |
--------------------------------------------------------------------------------
ACCOUNTING POLICIES
The consolidated financial statements of Glaston Group are prepared in
accordance with International Financial Reporting Standards (IFRS), including
International Accounting Standards (IAS) and Interpretations issued by the
International Financial Reporting Interpretations Committee (SIC and IFRIC).
International Financial Reporting Standards are standards and their
interpretations adopted in accordance with the procedure laid down in regulation
(EC) No 1606/2002 of the European Parliament and of the Council. The Notes to
the Financial Statements are also in accordance with the Finnish Accounting Act
and Ordinance and the Finnish Companies' Act.
These condensed consolidated financial statements have been prepared in
accordance with International Financial Reporting Standard IAS 34 Interim
Reporting as approved by the European Union. They do not include all the
information required for full annual financial statements.
The accounting principles applied in these condensed consolidated financial
statements are the same as those applied by Glaston in its consolidated
financial statements as at and for the year ended 31 December 2007, with the
exception of the following new or revised or amended standards and
interpretations which have been applied from 1 January 2008:
IFRIC 11 IFRS 2 Group and Treasury Share Transactions
IFRIC 12 Service Concession Arrangements
IFRIC 14 IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction
Changes to IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7
Financial Instruments: Disclosures - Reclassification of Financial Assets
(applied from 1 July 2008)
IFRIC 16 Hedges of a Net Investment in a Foreign Operation (applied from 1
October 2008)
These new or amended standards or interpretations are not material for Glaston
Group.
In addition, Glaston has applied IAS 1 (revised) Presentation of Financial
Statements standard in its financial statements for the reporting period of
2008. In accordance with the revised standard, income and expense items are not
presented in the statement of changes in equity for the period, so these changes
in equity which are not related to owners are separated from the changes in
equity which are related to owners. Changes in equity not related to the owners
are presented in two separate statements, in income statement and in other
comprehensive income in the statement of comprehensive income. The statement of
comprehensive income includes, in addition to profit or loss for the period,
also those income and expense items which are not recognized in the income
statement and which are not related to owners.
Revised IAS 1 also changes the names of the statements of the financial
statements. “Balance sheet” is replaced with “statement of financial position”
and “cash flow statement” with “statement of cash flows”.
Glaston will apply the following new or revised or amended standards and
interpretations from 1 January 2009:
- IAS 23 (revised) Borrowing Costs
- IFRS 8 Operating Segments
- IFRIC 3 Customer Loyalty Programs
- Amendments to IFRS 2 Share-based Payments: Vesting Conditions and
Cancellations
- Amendments to IAS 32 Financial Instruments: Presentation and IAS 1
Presentation of Financial Statements - Puttable Financial Instruments and
Obligations Arising on Liquidation
- IFRIC 15 Agreements for the Construction of Real Estate
- Amendment to IAS 39 Financial Instruments: Recognition and Measurement -
Eligible Hedged Items
- Changes to IFRS 1 First-time Adoption of International Financial Reporting
Standards and IAS 27 Consolidated and Separate Financial Statements - Cost of
an Investment in a Subsidiary, Jointly Controlled Entity or Associate.
In addition, Glaston applies the annual Improvements to IFRSs issued in May
2008.
Glaston estimates that applying IFRS 8 will not have any material effect on the
financial information of Glaston.
Applying revised IAS Borrowing Costs will change Glaston's accounting principles
from 1 January 2009. From that date on the borrowing costs that are directly
attributable to the acquisition, construction or production of an asset will be
capitalized to the acquisition cost of the asset. The capitalization will apply
mainly to property, plant and equipment and intangible assets.
Other new or amended standards or interpretations are not material for Glaston
Group.
Glaston will apply the following new or revised or amended standards and
interpretations from 1 January 2010:
IFRS 3 (revised) Business Combinations
IAS 27 (amended) Consolidated and Separate Financial Statements.
IFRIC 17 Distribution of Non-cash Assets to Owners
In accordance with the revised IFRS 3 standard all acquisition-related costs
arising from the business combinations made after 1 January 2010 will be
recognized in profit or loss and not capitalized as a part of the purchase
consideration, as currently is done. In addition, all consideration transferred
in the business combination will be measured at the acquisition-date fair value,
and liabilities classified as contingent consideration will subsequently be
measured at fair value with any resulting gain or loss recognized in profit or
loss. Also, remuneration to be paid to former owners for future services will be
recognized as employee benefit expenses in profit or loss, and it will not be
capitalized as a part of the purchase consideration, as currently is done. For
each business combination it will be possible to choose, whether the
non-controlling interest will be measured at fair value or as the
non-controlling interest's proportionate share of the acquiree's net
identifiable assets. This choice will have an effect on the goodwill arising
from the business combination.
In accordance with the revised IAS 27 standard the effects of the transactions
made with non-controlling interests will be recognized in equity, if there is no
change in control. These transactions will not result in goodwill or gains or
losses. If the control is lost, the possible remaining ownership share will be
measured at fair value and the resulting gain or loss will be recognized in
profit or loss. Also, in accordance with the revised standard, total
comprehensive income will be attributed also to non-controlling interest even if
this will result in the non-controlling interest having a deficit balance.
Other new or amended standards or interpretations are not material for Glaston
Group.
BUSINESS COMBINATIONS
Glaston acquired in October 2008 the business of the Chinese company Yunzhe
Software Co. Ltd. The acquired business is related to software business, i.e.
Software Solutions segment, which is with the acquisition expanding its
geographical market area to China. The acquistion was an asset deal. The
purchase consideration was EUR 0.2 million, and it was recognized as a liability
at the end of 2008. A part of the purchase consideration is contingent and it
depends on the future net sales arising from the acquired business.
Glaston acquired in the business combination identifiable intangible assets
consisting of patents and customer list. The fair value of the acquired
intangible assets was EUR 0.2 million. A minor goodwill arose from the
acquisition. The basis of the goodwill is the expert personnel which was
transferred to Glaston in the acquisition.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | | Carrying | | Fair values |
| | | amounts | | of net |
| | | before | | assets |
| | | combination | | acquired |
--------------------------------------------------------------------------------
| Intangible assets | - | | 0.2 |
--------------------------------------------------------------------------------
| Acquired net assets | - | | 0.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Purchase consideration | | | 0.2 |
--------------------------------------------------------------------------------
| Expenses related to acquisition | | | 0.0 |
--------------------------------------------------------------------------------
| Total purchase price | | | 0.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Goodwill | | | 0.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Purchase consideration paid in cash | | | - |
--------------------------------------------------------------------------------
| Expenses related to acquisition | | | 0.0 |
--------------------------------------------------------------------------------
| Effect on cash flow | | | 0.0 |
--------------------------------------------------------------------------------
Glaston Corporation acquired on 2 July 2007 all the shares in a German company
Albat+Wirsam Software AG. The recognized acquisition cost was EUR 21.7 million
and the goodwill EUR 14.2 million at the end of 2007, and they were recognized
provisionally. Based on the terms of the share purchase agreement the purchase
consideration was decreased during the third quarter of 2008 by EUR 1.2 million.
As a result of the lower acquisition cost and changes in the provisionally
recognized fair values of the acquired business, the goodwill arising from the
acquisition decreased by EUR 1.5 million.
SEGMENT INFORMATION
Glaston Group's primary segment is business segment. The Pre-processing segment
includes glass pre-processing machines sold under the Bavelloni brand,
maintenance and service operations, as well as tool manufacturing. The Heat
Treatment segment includes tempering, bending and laminating machines sold under
the Tamglass and Uniglass brands, maintenance and service operations, as well as
the glass processing operations of Tamglass Glass Processing. The Software
Solutions segment's product offering, sold under the Albat+Wirsam brand, covers
enterprise resource planning systems for the glass industry, software for
windows and door glass manufacturers, and software for glass processor's
integrated line solutions. Software Solutions has been consolidated to Glaston
Group from 1 July 2007.
The Energy business area was divested from Glaston Group in July 2007, and is
thus classified as discontinued operations in 2007 figures.
EUR million
--------------------------------------------------------------------------------
| Net sales | 1-12/ 2008 | 1-12/ 2007 |
--------------------------------------------------------------------------------
| Pre-processing | 89.7 | 94.1 |
--------------------------------------------------------------------------------
| Heat Treatment | 152.9 | 162.3 |
--------------------------------------------------------------------------------
| Software Solutions | 28.2 | 14.7 |
--------------------------------------------------------------------------------
| Parent and eliminations | -0.3 | -1.3 |
--------------------------------------------------------------------------------
| Total | 270.4 | 269.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit / loss, excluding non-recurring | 1-12/ | 1-12/ |
| items | 2008 | 2007 |
--------------------------------------------------------------------------------
| Pre-processing | -3.0 | 1.6 |
--------------------------------------------------------------------------------
| Heat Treatment | 13.0 | 19.6 |
--------------------------------------------------------------------------------
| Software Solutions | 3.7 | 2.6 |
--------------------------------------------------------------------------------
| Parent and eliminations | -7.5 | -7.0 |
--------------------------------------------------------------------------------
| Total | 6.2 | 16.8 |
--------------------------------------------------------------------------------
| Non-recurring items | -12.3 | -4.6 |
--------------------------------------------------------------------------------
| Operating profit / loss | -6.1 | 12.2 |
--------------------------------------------------------------------------------
| Net financial items | -2.0 | 0.0 |
--------------------------------------------------------------------------------
| Income taxes | -1.1 | -5.2 |
--------------------------------------------------------------------------------
| Discontinued operations | - | 3.8 |
--------------------------------------------------------------------------------
| Net result for the period | -9.2 | 10.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit / loss, excluding non-recurring | 1-12/ | 1-12/ |
| items, as % of net sales | 2008 | 2007 |
--------------------------------------------------------------------------------
| Pre-processing | -3.3% | 1.7% |
--------------------------------------------------------------------------------
| Heat Treatment | 8.5% | 12.1% |
--------------------------------------------------------------------------------
| Software Solutions | 13.3% | 17.8% |
--------------------------------------------------------------------------------
| Total | 2.3% | 6.2% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Depreciation, amortization and impairment | 1-12/ | 1-12/ |
| | 2008 | 2007 |
--------------------------------------------------------------------------------
| Pre-processing | -2.1 | -1.8 |
--------------------------------------------------------------------------------
| Heat Treatment | -6.5 | -4.0 |
--------------------------------------------------------------------------------
| Software Solutions | -1.7 | -1.1 |
--------------------------------------------------------------------------------
| Parent and eliminations | -0.9 | -0.2 |
--------------------------------------------------------------------------------
| Total | -11.2 | -7.1 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Capital expenditure in property, plant, equipment and intangible | |
| assets | |
--------------------------------------------------------------------------------
| | 2008 | 2007 |
--------------------------------------------------------------------------------
| Pre-processing | 2.9 | 6.6 |
--------------------------------------------------------------------------------
| Heat Treatment | 9.0 | 15.7 |
--------------------------------------------------------------------------------
| Software Solutions | 2.1 | 10.5 |
--------------------------------------------------------------------------------
| Parent and eliminations | 4.5 | 0.6 |
--------------------------------------------------------------------------------
| Total | 18.4 | 33.3 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets | 31.12.2008 | 31.12.2007 |
--------------------------------------------------------------------------------
| Pre-processing | 81.2 | 80.4 |
--------------------------------------------------------------------------------
| Heat Treatment | 148.6 | 143.4 |
--------------------------------------------------------------------------------
| Software Solutions | 26.8 | 26.3 |
--------------------------------------------------------------------------------
| Unallocated and eliminations | 29.4 | 25.7 |
--------------------------------------------------------------------------------
| Total assets | 285.9 | 275.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities | 31.12.2008 | 31.12.2007 |
--------------------------------------------------------------------------------
| Pre-processing | 32.3 | 37.1 |
--------------------------------------------------------------------------------
| Heat Treatment | 46.5 | 73.2 |
--------------------------------------------------------------------------------
| Software Solutions | 4.5 | 5.8 |
--------------------------------------------------------------------------------
| Unallocated and eliminations | 78.9 | 19.9 |
--------------------------------------------------------------------------------
| Total liabilities | 162.2 | 136.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Orders received | 1-12/ | 1-12/ |
| | 2008 | 2007 |
--------------------------------------------------------------------------------
| Pre-processing | 56.9 | 68.7 |
--------------------------------------------------------------------------------
| Heat Treatment | 113.9 | 141.0 |
--------------------------------------------------------------------------------
| Software Solutions | 13.9 | 3.0 |
--------------------------------------------------------------------------------
| Total | 184.7 | 212.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order book | 31.12.2008 | 31.12.2007 |
--------------------------------------------------------------------------------
| Pre-processing | 13.0 | 20.9 |
--------------------------------------------------------------------------------
| Heat Treatment | 44.2 | 59.9 |
--------------------------------------------------------------------------------
| Software Solutions | 3.5 | 6.2 |
--------------------------------------------------------------------------------
| Total | 60.7 | 87.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Personnel at the end of the period, | 31.12.2008 | 31.12.2007 |
| continuing operations | | |
--------------------------------------------------------------------------------
| Pre-processing | 614 | 556 |
--------------------------------------------------------------------------------
| Heat Treatment | 640 | 612 |
--------------------------------------------------------------------------------
| Software Solutions | 262 | 247 |
--------------------------------------------------------------------------------
| Parent | 26 | 20 |
--------------------------------------------------------------------------------
| Total | 1,541 | 1,435 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Personnel, average, continuing operations | 1-12/ | 1-12/ |
| | 2008 | 2007 |
--------------------------------------------------------------------------------
| Pre-processing | 591 | 572 |
--------------------------------------------------------------------------------
| Heat Treatment | 647 | 606 |
--------------------------------------------------------------------------------
| Software Solutions | 255 | 97 |
--------------------------------------------------------------------------------
| Parent | 26 | 13 |
--------------------------------------------------------------------------------
| Total | 1,519 | 1,288 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales by market area | 1-12/ | 1-12/ |
| | 2008 | 2007 |
--------------------------------------------------------------------------------
| EMEA | 175.6 | 150.5 |
--------------------------------------------------------------------------------
| America | 56.0 | 75.6 |
--------------------------------------------------------------------------------
| Asia | 38.8 | 43.7 |
--------------------------------------------------------------------------------
| Total | 270.4 | 269.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales by market area, % | 1-12/ | 1-12/ |
| | 2008 | 2007 |
--------------------------------------------------------------------------------
| EMEA | 65.0% | 55.8% |
--------------------------------------------------------------------------------
| America | 20.7% | 28.0% |
--------------------------------------------------------------------------------
| Asia | 14.4% | 16.2% |
--------------------------------------------------------------------------------
| Total | 100.0% | 100.0% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 12/ | 12/ | change, % |
| 2008 | 2007 | |
--------------------------------------------------------------------------------
| Geographical distribution | |
| of orders received | |
--------------------------------------------------------------------------------
| EMEA | 126.2 | 134.4 | -6.1% | |
--------------------------------------------------------------------------------
| America | 35.5 | 44.0 | -19.3% | |
--------------------------------------------------------------------------------
| Asia | 23.0 | 34.3 | -33.0% | |
--------------------------------------------------------------------------------
| Total | 184.7 | 212.7 | -13.2% | |
--------------------------------------------------------------------------------
NET SALES, OPERATING PROFIT / LOSS AND ORDER BOOK OF CONTINUING OPERATIONS BY
QUARTER
EUR million
--------------------------------------------------------------------------------
| Net sales | 1-3/ | 4-6/ | 7-9/ | 10-12/ |
| | 2008 | 2008 | 2008 | 2008 |
--------------------------------------------------------------------------------
| Pre-processing | 22.9 | 23.2 | 20.0 | 23.7 |
--------------------------------------------------------------------------------
| Heat Treatment | 32.9 | 44.0 | 37.2 | 38.8 |
--------------------------------------------------------------------------------
| Software Solutions | 7.3 | 6.4 | 7.8 | 6.6 |
--------------------------------------------------------------------------------
| Parent and eliminations | 0.0 | -1.0 | 0.8 | -0.2 |
--------------------------------------------------------------------------------
| Total | 63.1 | 72.6 | 65.8 | 68.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 1-3/ | 4-6/ | 7-9/ | 10-12/ |
| | 2007 | 2007 | 2007 | 2007 |
--------------------------------------------------------------------------------
| Pre-processing | 21.7 | 23.4 | 20.6 | 28.5 |
--------------------------------------------------------------------------------
| Heat Treatment | 36.6 | 42.7 | 30.2 | 52.8 |
--------------------------------------------------------------------------------
| Software Solutions | - | - | 6.8 | 7.9 |
--------------------------------------------------------------------------------
| Parent and eliminations | -0.1 | -0.5 | -0.3 | -0.5 |
--------------------------------------------------------------------------------
| Total | 58.2 | 65.6 | 57.3 | 88.8 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit / loss excluding | 1-3/ | 4-6/ | 7-9/ | 10-12/ |
| non-recurring items | 2008 | 2008 | 2008 | 2008 |
--------------------------------------------------------------------------------
| Pre-processing | 0.6 | -0.7 | -1.6 | -1.1 |
--------------------------------------------------------------------------------
| Operating profit / loss, % | 2.5% | -3.1% | -8.4% | -4.8% |
--------------------------------------------------------------------------------
| Heat Treatment | 1.9 | 5.3 | 3.3 | 2.5 |
--------------------------------------------------------------------------------
| Operating profit / loss, % | 5.7% | 12.0% | 8.9% | 6.4% |
--------------------------------------------------------------------------------
| Software Solutions | 1.0 | 1.2 | 1.4 | 0.1 |
--------------------------------------------------------------------------------
| Operating profit / loss, % | 13.2% | 19.3% | 18.1% | 1.8% |
--------------------------------------------------------------------------------
| Parent and eliminations | -1.8 | -2.0 | -2.0 | -1.8 |
--------------------------------------------------------------------------------
| Total | 1.6 | 3.8 | 1.1 | -0.3 |
--------------------------------------------------------------------------------
| Operating profit / loss, % | 2.6% | 5.2% | 1.6% | -0.4% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit / loss excluding | 1-3/ | 4-6/ | 7-9/ | 10-12/ |
| non-recurring items | 2007 | 2007 | 2007 | 2007 |
--------------------------------------------------------------------------------
| Pre-processing | 1.2 | -0.2 | 0.3 | 0.4 |
--------------------------------------------------------------------------------
| Operating profit / loss, % | 5.3% | -0.9% | 1.3% | 1.3% |
--------------------------------------------------------------------------------
| Heat Treatment | 3.0 | 5.7 | 3.2 | 7.7 |
--------------------------------------------------------------------------------
| Operating profit / loss, % | 8.1% | 13.4% | 10.5% | 14.6% |
--------------------------------------------------------------------------------
| Software Solutions | - | - | 1.6 | 1.0 |
--------------------------------------------------------------------------------
| Operating profit / loss, % | - | - | 23.1% | 13.2% |
--------------------------------------------------------------------------------
| Parent and eliminations | -2.4 | -1.7 | -1.1 | -1.8 |
--------------------------------------------------------------------------------
| Total | 1.7 | 3.8 | 4.0 | 7.3 |
--------------------------------------------------------------------------------
| Operating profit / loss, % | 2.9% | 5.8% | 6.9% | 8.2% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit / loss | 1-3/ | 4-6/ | 7-9/ | 10-12/ |
| | 2008 | 2008 | 2008 | 2008 |
--------------------------------------------------------------------------------
| Pre-processing | 0.6 | -0.7 | -1.6 | -6.6 |
--------------------------------------------------------------------------------
| Operating profit / loss, % | 2.5% | -3.1% | -8.4% | -27.7% |
--------------------------------------------------------------------------------
| Heat Treatment | 1.9 | 5.3 | 3.3 | -3.8 |
--------------------------------------------------------------------------------
| Operating profit / loss, % | 5.7% | 12.0% | 8.9% | -9.8% |
--------------------------------------------------------------------------------
| Software Solutions | 1.0 | 1.2 | 1.4 | -0.4 |
--------------------------------------------------------------------------------
| Operating profit / loss, % | 13.2% | 19.3% | 18.1% | -6.5% |
--------------------------------------------------------------------------------
| Parent and eliminations | -1.8 | -2.0 | -2.0 | -1.8 |
--------------------------------------------------------------------------------
| Total | 1.6 | 3.8 | 1.0 | -12.6 |
--------------------------------------------------------------------------------
| Operating profit / loss, % | 2.6% | 5.2% | 1.6% | -18.3% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating profit / loss | 1-3/ | 4-6/ | 7-9/ | 10-12/ |
| | 2007 | 2007 | 2007 | 2007 |
--------------------------------------------------------------------------------
| Pre-processing | 1.2 | -1.6 | 0.3 | 0.5 |
--------------------------------------------------------------------------------
| Operating profit / loss, % | 5.3% | -7.0% | 1.3% | 1.6% |
--------------------------------------------------------------------------------
| Heat Treatment | 3.0 | -0.2 | 3.2 | 7.7 |
--------------------------------------------------------------------------------
| Operating profit / loss, % | 8.1% | -0.4% | 10.6% | 14.6% |
--------------------------------------------------------------------------------
| Software Solutions | - | - | 1.6 | 1.0 |
--------------------------------------------------------------------------------
| Operating profit / loss, % | - | - | 23.1% | 13.2% |
--------------------------------------------------------------------------------
| Parent and eliminations | -2.4 | -1.7 | -1.1 | 0.9 |
--------------------------------------------------------------------------------
| Total | 1.7 | -3.5 | 4.0 | 10.1 |
--------------------------------------------------------------------------------
| Operating profit / loss, % | 2.9% | -5.4% | 6.9% | 11.2% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order book | 1-3/ | 4-6/ | 7-9/ | 10-12/ |
| | 2008 | 2008 | 2008 | 2008 |
--------------------------------------------------------------------------------
| Pre-processing | 21.0 | 21.9 | 19.1 | 13.0 |
--------------------------------------------------------------------------------
| Heat Treatment | 65.0 | 71.0 | 59.0 | 44.2 |
--------------------------------------------------------------------------------
| Software Solutions | 9.5 | 6.0 | 4.5 | 3.5 |
--------------------------------------------------------------------------------
| Total | 95.5 | 98.9 | 82.6 | 60.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order book | 1-3/ | 4-6/ | 7-9/ | 10-12/ |
| | 2007 | 2007 | 2007 | 2007 |
--------------------------------------------------------------------------------
| Pre-processing | 20.2 | 25.9 | 24.4 | 20.9 |
--------------------------------------------------------------------------------
| Heat Treatment | 72.3 | 90.3 | 92.6 | 59.9 |
--------------------------------------------------------------------------------
| Software Solutions | - | - | 8.6 | 6.2 |
--------------------------------------------------------------------------------
| Total | 92.5 | 116.2 | 125.7 | 87.0 |
--------------------------------------------------------------------------------
DISCONTINUED OPERATIONS AND ASSETS HELD FOR SALE
The Energy business area was divested from Glaston Group in July 2007, and is
thus classified as discontinued operations in 2007 figures.
EUR million
--------------------------------------------------------------------------------
| Result of the Energy Business Area | 1-12/ | 1-12/ |
| | 2008 | 2007 |
--------------------------------------------------------------------------------
| Income | - | 16.0 |
--------------------------------------------------------------------------------
| Expenses | - | -11.9 |
--------------------------------------------------------------------------------
| Profit before taxes | - | 4.1 |
--------------------------------------------------------------------------------
| Income taxes | - | -1.1 |
--------------------------------------------------------------------------------
| Profit after taxes | - | 3.0 |
--------------------------------------------------------------------------------
| Gains from disposal of discontinued | - | 0.8 |
| operations net of tax | | |
--------------------------------------------------------------------------------
| Profit for the period. discontinued | - | 3.8 |
| operations | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| The impact of the disposal of the Energy Business Area on Glaston Group's |
| financial position in 2007 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Carrying amounts of disposed assets and liabilities | |
--------------------------------------------------------------------------------
| Property. plant and equipment | 13.8 |
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| Intangible assets | 0.1 |
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| Inventories | 0.2 |
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| Trade payables and other liabilities | -0.1 |
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| Total assets and liabilities | 14.0 |
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| Consideration received in cash | 10.6 |
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| Expenses attributed to disposal | -0.3 |
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| Cash flow from disposal | 10.4 |
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| Recognized as a receivable | 4.7 |
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| Total consideration | 15.1 |
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From the sale of the Energy Business Area a receivable of EUR 4.7 million was
recognized related to the sale of future CO2 emission rights. The receivable is
estimated to be realized in 2009 - 2013.
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| Assets held for sale | 31.12.2008 | 31.12.2007 |
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| Intangible assets | - | - |
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| Property. plant and equipment | - | - |
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| Shares | - | 0.3 |
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| Inventories | - | - |
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| Total assets | - | 0.3 |
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Assets held for sale were related to shares owned by Glaston Corporation.
CONTINGENT LIABILITIES
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| EUR million | 31.12.2008 | 31.12.2007 |
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| Mortgages | | |
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| On own behalf | 0.2 | 0.2 |
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| Guarantees | | |
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| On own behalf | 0.8 | 1.4 |
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| On behalf of others | 0.1 | 0.3 |
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| Lease obligations | 19.3 | 18.6 |
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| Repurchase obligations | 0.8 | 3.0 |
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A customer of the US subsidiary Glaston USA, Inc. has made a claim of
approximately USD 22 million due to a sale of a machine in 2004. It is Glaston's
opinion that the claim is unfounded. The matter has been referred to arbitration
court in the USA and the court's decision is expected to be received during the
second quarter of 2009.
The Group recognized a tax refund of approximately EUR 2 million in 2006 after
having received an affirmative decision according to which the expenses arising
from the management incentive scheme of the Group are deductible in taxation.
The tax authorities of the Tax Office for Major Corporations appealed against
the decision to the Administrative Court of Helsinki. Administrative Court of
Helsinki decided the case on Glaston's favour in January 2009.The decision is
subject to appeal until late March 2009.
Glaston Group has international operations and can be a defendant or plaintiff
in a number of legal proceedings incidental to those operations. The Group does
not expect the outcome of any unmentioned legal proceedings currently pending,
either individually or in the aggregate, to have material adverse effect upon
the Group's consolidated financial position or results of operations.
DERIVATIVE INSTRUMENTS
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| EUR million | 31.12.2008 | | 31.12.2007 | |
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| | Nominal | Fair | Nominal | Fair |
| | value | value | value | value |
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| Currency derivatives | | | | |
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| Currency forwards | 6.2 | -0.1 | 12.8 | 0.1 |
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Derivative instruments are used only for hedging purposes. Nominal
values of derivative instruments do not necessarily correspond with
the actual cash flows between the counterparties and do not therefore give a
fair view of the risk position of the Group. The fair values are based on market
valuation on the date of reporting.
PROPERTY, PLANT AND EQUIPMENT
--------------------------------------------------------------------------------
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| EUR million | | |
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| Changes in property, plant and equipment | 1-12/ | 1-12/ |
| | 2008 | 2007 |
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| Carrying amount at beginning of the period | 32.5 | 43.3 |
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| Additions | 11.4 | 8.6 |
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| Disposals | -0.2 | -15.2 |
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| Depreciations, continuing operations | -4.8 | -4.1 |
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| Impairment losses and reversals of impairment | -0.8 | - |
| losses | | |
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| Reclassification and other changes | -3.3 | 0.0 |
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| Exchange differences | 0.3 | -0.2 |
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| Carrying amount at end of the period | 35.0 | 32.5 |
--------------------------------------------------------------------------------
At the end of 2008, Glaston had EUR 0.1 million of contractual commitments for
the acquisition of property, plant and equipment.
RELATED PARTY TRANSACTIONS
Glaston Group's related parties include the parent, subsidiaries, associates and
joint ventures. Related parties also include the members of the Board of
Directors and the Group's Executive Management Group, the CEO and their family
members.
Glaston follows the same commercial terms in transactions with associates and
joint ventures and other related parties as with third parties.
During the review period Glaston's related party transactions included sales to
joint ventures. In addition, the Group has leased premises from companies owned
by individuals belonging to the management. The lease payments were in January -
December EUR 0.6 million.
During the review period there were no related party transactions whose terms
would differ from the terms in transactions with third parties.
Directors' and Management Remuneration
In 2008 the remuneration of the Board of Directors of Glaston Corporation was
EUR 198 (207) thousand. The remuneration of the CEO, fringe benefits included
was EUR 668 (382) thousand, of which 136 (0) thousand based on the share-based
incentive plan. The rest of the Executive Management Group was paid EUR 1,785
thousand, of which EUR 240 thousand was based on the share-based incentive plan.
In 2007 the rest of the Executive Management Group was paid EUR 6,126 thousand,
of which EUR 4,235 thousand was based on the option scheme.
Share-based incentive plan
Based on the 2007 share-based incentive plan, Glaston Corporation
transferred in April own shares to persons who are considered to be
related parties. The shares were transferred to the CEO (19,740
shares) and other members of the Management Team (in total 32,900 shares).
The expenses arising from the 2007 and 2008 plans were EUR 0.3 million in
January - December.
Transactions with joint ventures and associates
In 2008 Glaston had no material transactions with the joint venture. As the
joint venture was acquired in 2007, there were no transactions with the joint
venture in 2007.
Glaston did not have transactions with the associate.
