Glaston Corporation January─March 2023: Solid performance in the Architectural business continued
GLASTON CORPORATION INTERIM REPORT 26.4.2023 AT 8.30
This release is a summary of Glaston Corporation's Interim Report for January-March 2023. The complete report is attached to this release as a pdf-file. The release is also available on the company's website at the address www.glaston.net.
January─March 2023 in brief
- Orders received totaled EUR 56.9 (59.0) million.
- Net sales totaled EUR 51.3 (52.3) million.
- Comparable EBITA was EUR 3.0 (3.5) million, i.e. 5.8 (6.6)% of net sales.
- The operating result (EBIT) was EUR 1.9 (2.2) million.
- The comparable earnings per share were EUR 0.019 (0.022)
PRESIDENT & CEO ANDERS DAHLBLOM:
“In the first quarter of 2023, market activity continued at a good level. Despite growing market uncertainty and a longer decision-making period for new investments due to economic uncertainty and rapidly increasing financing costs, our order intake totaled EUR 56.9 million, which was 4% below the level of the corresponding period in 2022 but 10% above our Q4 order intake. First-quarter net sales were down by 2% to EUR 51.3 million, primarily due to low machine volume in the Automotive business. Profitability was reasonable with comparable EBITA at EUR 3.0 million, corresponding to an EBITA margin of 5.8%. Profitability was impacted by the loss in the Automotive & Display business, which was a result of low volume and production ramp-up in China.
The Services business saw a slow start to the year. Order intake was 2% below the level of the corresponding period in the previous year, mainly due to the lower upgrade order intake than in 2022. The weak upgrade order intake in the latter part of 2022 affected Services’ first-quarter net sales. Daily Services and spare part business grew 9% and 6% respectively.
Ramping up the capabilities for the production of Automotive pre-processing equipment in Tianjin, China continued in line with our plans. The first delivery projects from Tianjin have low profitability as we are still building up the local supply chain. This impacted our first-quarter profitability and this will continue for the second quarter. In addition, we are manufacturing the first flat tempering CHF Solar lines in Tianjin, mainly during the first half of this year.
Growing our business in China is one of our strategic focus areas. Compared to the solar and automotive markets, the development of the architectural market in China has been characterized by uncertainty. Taking place in early May, the China Glass exhibition will be the first post-COVID meeting point for the industry, giving us valuable market insight and offering a great opportunity to meet face-to-face with our customers, with the goal of gaining new business.
Our good progress in sustainability continued. In 2022, we made major progress in reducing our own carbon footprint and we are now ready for the next step: we are committed to setting near-term company-wide emission reduction targets in line with climate science with the Science Based Targets initiative (SBTi). Our commitment to the SBTi challenges us to work together with our suppliers and customers to reduce emissions across the whole glass processing value chain.
In the review period, signs of increasing market uncertainty and more cautious customer behavior have been perceptible. However, the underlying growth drivers for our products and services remain solid and our high order backlog supports our performance in the coming quarters.”
GLASTON GROUP’S KEY FIGURES
| MEUR | 1‒3/2023 | 1‒3/2022 | Change% | 1−12/2022 |
| Orders received | 56.9 | 59.0 | -3.6% | 253.0 |
| of which service operations | 18.5 | 18.8 | -1.9% | 72.5 |
| of which service operations, % | 32.5% | 31.9% | 28.6% | |
| Order book at end of period | 139.0 | 98.1 | 41.7% | 138.3 |
| Net sales | 51.3 | 52.3 | -1.9% | 213.5 |
| of which service operations | 18.0 | 18.3 | -2.0% | 76.4 |
| of which service operations, % | 35.0% | 35.1% | 35.8% | |
| EBITDA | 3.7 | 4.3 | -13.9% | 15.3 |
| Items affecting comparability1) | 0.3 | 0.2 | 108.9% | 2.3 |
| Comparable EBITDA | 4.0 | 4.4 | -9.5% | 17.6 |
| Comparable EBITDA, % | 7.8% | 8.5% | 8.2% | |
| Comparable EBITA | 3.0 | 3.5 | -13.8% | 13.6 |
| Comparable EBITA, % | 5.8% | 6.6% | 6.4% | |
| Operating result (EBIT) | 1,9 | 2.2 | -14.2% | 7.6 |
| Profit/loss for the period | 1.1 | 1.2 | -8.3% | 3.1 |
| Comparable earnings per share, EUR2) | 0.019 | 0.022 | -13.6% | 0.074 |
| Cash flow from operating activities | -0.5 | -6.8 | 92.6% | 10.2 |
| Return on investment (ROI), %, (annualized) | 7.3% | 7.5% | 6.9% | |
| Comparable return on capital employed (ROCE), %, (annualized) | 8.9% | 9.8% | 10.5% | |
| Equity ratio, % | 45.6% | 43.0% | 44.0% | |
| Net gearing, % | 23.2% | 36.4% | 19.5% | |
| Number of employees at end of period | 800 | 761 | 5.1% | 783 |
- + cost, - income
- change in comparable EPS formula, net of tax added
GLASTON’S OUTLOOK FOR 2022 REMAINS UNCHANGED
In 2023, Glaston expects the markets to remain active despite some regional differences. The strong megatrends driving the demand for energy-efficient glass solutions continue to support Glaston’s markets. Europe could however be particularly affected by the slowdown in the architectural market. In the Americas, Glaston expects the demand to continue strong, whereas, in China, the prospects of the architectural market remain uncertain.
In 2023, Glaston continues to focus on the execution of its strategy, which will incur costs and capital expenditure ahead of the effect on revenue growth. Amid geopolitical tensions and increasing uncertainty in the global business environment, the higher-than-normal level of unpredictability is related to customers’ investment decisions.
Glaston entered 2023 with an order backlog 46 % higher than in the previous year, which supports the company’s net sales and profitability development. The Automotive production ramp-up in China continues to have a negative impact on profitability in the second quarter of 2023. Glaston Corporation estimates that its net sales and comparable EBITA will improve in 2023 from the levels reported for 2022. In 2022, Group full-year net sales totaled EUR 213.5 million and comparable EBITA was EUR 13.6 million.
PRESS MEETING
Glaston’s CEO Anders Dahlblom and CFO Päivi Lindqvist will present the financial result to analysts, investors and media representatives TODAY at 11:00 (Finnish time) in English.
The audiocast can be accessed through the link: https://glaston.videosync.fi/q1-2023-results/register. An on-demand version of the presentation will be available on the company's website later during the same day.
For further information, please contact:
President & CEO Anders Dahlblom, tel. +358 10 500 500
Chief Financial Officer Päivi Lindqvist, tel. +358 10 500 500
GLASTON CORPORATION
Pia Posio
VP, Communications, Marketing and IR
Tel. +358 10 500 5076
Glaston in brief
Glaston is the glass processing industry’s innovative technology leader supplying equipment, services and solutions to the architectural, automotive, solar and display industries. The company also supports the development of new technologies integrating intelligence to glass.
Glaston is committed to providing its clients with both the best know-how and the latest technologies in glass processing, with the purpose of building a better tomorrow through safer, smarter, and more energy efficient glass solutions. Glaston operates globally with manufacturing, services and sales offices in nine countries and its shares (GLA1V) are listed on NASDAQ Helsinki Ltd.
Distribution: Nasdaq Helsinki Ltd, key media, www.glaston.net.