Glaston Half Year Financial Report 1 January – 30 June 2016: Order intake picked up from the early part of the year

GLASTON CORPORATION           HALF YEAR FINANCIAL REPORT   9 AUGUST 2016 AT 13.00

Glaston Half Year Financial Report 1 January – 30 June 2016:  Order intake picked up from the early part of the year

This release is a summary of Glaston Corporation's half year financial report January-June 2016. The complete report is attached to this release as a pdf-file. The stock exchange release is also available on the company's website at the address www.glaston.net.

ESMA (European Securities and Markets Authority) has published new guidelines on alternative performance measures. As a result, Glaston is renaming the alternative non-IFRS performance measures that it uses. Comparable operating result excluding non-recurring items has been replaced with comparable operating result, and comparable EBITDA excluding non-recurring items has been replaced with comparable EBITDA. The definitions of the alternative performance measures used are presented in the item ‘performance measure calculation formulas’ of the table section of the interim report. A reconciliation with IFRS performance measure is presented in the item ‘comparable operating result’.


This half year report’s comparison year figures refer to Continuing Operations.
 

APRIL–JUNE 2016

- Orders received totalled EUR 28.6 (32.5) million.

- Net sales totalled EUR 22.1 (30.1) million.

- Comparable EBITDA was EUR 0.2 (2.6) million.

- The operating result was a loss of EUR 0.6 (2.5 profit) million, i.e. -2.7 (8.2)% of net sales.

- The comparable operating result was a loss of EUR 0.4 (1.7 profit) million, i.e. -1.9 (5.8)% of net sales.

JANUARY–JUNE 2016

- Orders received totalled EUR 53.7 (55.0) million.

- The order book on 30 June 2016 was EUR 40.9 (56.0) million.

- Net sales totalled EUR 51.5 (56.5) million.

- Comparable EBITDA was EUR 1.6 (4.7) million, i.e. 3.1 (8.3)% of net sales.

- The operating profit was EUR 0.1 (4.9) million, i.e. 0.2 (8.7)% of net sales.

- The comparable operating profit was EUR 0.3 (3.0) million, i.e. 0.5 (5.3)% of net sales.

- Continuing Operations’ return on capital employed (ROCE) was 0.7 (20.2)%.

- Continuing Operations’ earnings per share were EUR -0.00 (0.01).

- Interest-bearing net liabilities amounted to EUR 11.4 (6.1) million.

OUTLOOK
Glaston expects 2016 net sales to be approximately EUR 105 – 110 million and the comparable operating profit to be approximately EUR 2 – 4 million. (In 2015 net sales were EUR 123.4 million and comparable operating profit was EUR 6.1 million).

PRESIDENT & CEO ARTO METSÄNEN:
“Glaston’s markets remained quiet in the second quarter of the year and the operating environment continued to be challenging. Our April–June net sales declined from the previous year and totalled EUR 22.1 (30.1) million. The decline in net sales was due primarily to weaker machine sales in the EMEA area. In the Americas area, net sales were at a good level. In the Asian market, the positive development of net sales that began in the first quarter continued.

Orders received in the second quarter totalled EUR 28.6 million and grew by 14.4% compared with the first quarter. Despite this, the order intake for the first half of the year, a total of EUR 53.7 (55.0) million, was not at the targeted level.

Glaston’s comparable operating result for April–June was a loss of EUR -0.4 (1.7 profit) million. The result was affected in particular by lower than expected net sales. Enhanced cost-saving measures will take effect and balances the impact of the lower net sales.

The glass processing market will continue to be challenging during the latter part of the year. We will purposefully continue our measures to adjust costs to the market situation. In Finland, we will initiate consultations with personnel on the possible need for lay-offs and job reductions. The consultations will cover all Glaston personnel in Finland.” 

 

OPERATING ENVIRONMENT
In April–June, there were significant regional differences in the development of the glass processing market. Growth in the North American market continued, although more moderately. The South American market remained quiet. The Asian market area grew slightly. In the EMEA area, the market levelled off.

MACHINES
In the second quarter, the glass processing machines market continued to be challenging. In a difficult market situation, Glaston succeeded in maintaining its market position relative to competitors.

In North America, the market situation continued to be favourable, and Glaston received a follow-up order exceeding EUR 2 million from the US company Cardinal Glass Industries for a Glaston FC1000™ tempering line. The second quarter brought no change in the situation of the South American market. The market remained quiet, and the weak Brazilian currency and instability in the financial markets negatively impacted operations.

In the Asian market area, positive development was perceptible in the Indian, Australian and New Zealand markets. In China, the market situation continued to be subdued, but cautious signs of a pick-up were evident at the end of the period.

In the EMEA area, the operating environment remained fairly low in the second quarter. The economic uncertainty prevailing in the area and tightening operating conditions slowed customers’ investment decisions. In May, Glaston closed a deal exceeding EUR 2 million for the delivery of high technology safety glass machines to HORN Glass Industries AG.

SERVICES
Services’ strongest market remained North America. The EMEA area overall was quiet, but demand varied significantly from country to country. In South America and Asia, demand for services remained subdued.

In the spare parts product group, good development continued in the second quarter in all of the main market areas. The service market also developed positively. Tool sales in the EMEA area advanced well, but continued to decline in the other market areas. Pre-processing machine business and related services remained at the level of the previous quarter.

The second quarter did not bring an improvement in the market for modernisation products. The number of orders received in the second quarter was low. In the EMEA area, Glaston received from the UK a large modernisation order for a Uniglass flat tempering machine, and one of the industry’s largest operators bought an iLook™ quality measurement system for its production plant in Germany. Glaston launched two new products: the ProL-zone modernisation product for flat-laminated glass, and the iControL™ upgrade product for Uniglass machines.

OUTLOOK
In the second half of the year, the glass processing market is expected to remain challenging as economic uncertainty continues.

In Europe, a deterioration of the economic outlook and increased stability in the operating environment will be reflected in customers’ investment decisions. Despite this, Central and Eastern Europe offer growth opportunities. We expect stable development in the North American market. In South America, the market will remain quiet, particularly in Brazil. In the Asian market, we expect cautious growth.

Glaston expects 2016 net sales to be approximately EUR 105 – 110 million and the comparable operating profit to be approximately EUR 2 – 4 million. (In 2015 net sales were EUR 123.4 million and comparable operating profit was EUR 6.1 million).

PRESS MEETING
An analyst and press conference is organized at Glaston's office on Yliopistonkatu 7, Helsinki, on 9 August 2016 at 14.00 p.m.



For further information, please contact:
President & CEO Arto Metsänen, tel. +358 10 500 6100
Chief Financial Officer Sasu Koivumäki, tel. +358 10 500 500

Sender:
Agneta Selroos
Communications Director
Glaston Corporation
Tel. 010 500 6105 


Glaston Corporation
Glaston is a leading company in glass processing technologies. We provide high-quality heat treatment machines and services for architectural, solar, appliance and automotive applications. We are committed to our customers’ success over the entire lifecycle of our offering. Moreover, we continuously innovate and develop technologies to enable the glass processing industry to reach ever higher standards in quality and safety. Glaston’s shares (GLA1V) are listed on NASDAQ Helsinki Ltd. Further information is available at www.glaston.net

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