Glaston’s Financial Statement 1 January – 31 December 2014: Favourable growth continued; order book grew by 48%

Glaston Corporation                        FINANCIAL STATEMENTS            5 February 2015 at 13.00 (EET)

Glaston’s Financial Statement 1 January – 31 December 2014: Favourable growth continued; order book grew by 48%

This release is a summary of Glaston Corporation’s financial statements bulletin 2014. 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.

KEY POINTS  JANUARY –  DECEMBER 2014

• Orders received in January-December totalled EUR 145.1 (123.3) million. Orders received in the fourth quarter totalled EUR 55.5 (33.3) million.
• The order book on 31 December 2014 was EUR 57.9 (39.1) million.
• Consolidated net sales totalled EUR 124.5 (122.2) million. Final quarter net sales totalled EUR 40.8 (35.9) million.
• EBITDA, excluding non-recurring items, was EUR 9.2 (6.7) million, i.e. 7.4 (5.5)% of net sales.
• EBITDA was EUR 8.6 (10.5) million, i.e. 6.9 (8.6)% of net sales.
• The operating profit, excluding non-recurring items, grew 130.7% and was EUR 4.9 (2.1) million, i.e. 3.9 (1.7)% of net sales. The final quarter operating profit, excluding non-recurring items, was EUR 2.5 (1.9) million.
• Continuing Operations’ operating profit was EUR 4.3 (5.9) million, i.e. 3.4 (4.8)% of net sales. The final quarter operating profit was EUR 2.5 (1.9) million.
• Continuing Operations’ return on capital employed (ROCE) was 7.9 (9.8)%.
• Continuing Operations’ earnings per share were EUR 0.01 (0.01) and for the fourth quarter EUR 0.00 (-0.01). Continuing and Discontinued Operations’ earnings per share were EUR 0.01 (0.01) and in the fourth quarter EUR 0.00 (-0.01).
• Glaston’s interest-bearing net debt totalled EUR -5.0 (8.6) million.
• The Board of Directors proposes to the Annual General Meeting a return of capital of EUR 0.02 per share.
• We expect that 2015 net sales and operating profit, excluding non-recurring items, will exceed the level of 2014 (net sales EUR 124.5 million and operating profit, excluding non-recurring items EUR 4.9 million in 2014)

PRESIDENT & CEO ARTO METSÄNEN:
“For Glaston, the final quarter of the year was good and we start 2015 with a strong order book. Our new products and particularly the FC series have gained a strong reputation among customers and this was reflected in new orders. Based on feedback received from customers, our new convection systems are clearly ahead of what our competitors have to offer.

For the full year, we achieved growth in both net sales and operating profit. I am particularly satisfied with the stronger than expected development of operating profit. In terms of net sales, our growth expectations were higher than the level of net sales achieved. The situation in Russia and a lower than expected order intake in Asia slowed development of net sales. We will continue our strong focus on Asia. Our new products have already gained a strong position in the European and North American markets, and we also believe in their competitiveness in Asia.

Among the other significant events during the review period was strong cash flow, as a result of which our net debt was negative. In addition, we concluded our first deal for a GlastonAir™ machine, equipped with our new air floatation technology. The deal was a significant milestone in the technological development of the industry.”

GLASTON’S OUTLOOK FOR 2015
We expect that 2015 net sales and operating profit, excluding non-recurring items, will exceed the level of 2014 (net sales EUR 124.5 million and operating profit, excluding non-recurring items EUR 4.9 million in 2014).
 

OPERATING ENVIRONMENT
Glaston’s markets developed favourably in 2014. After a quiet first quarter, positive development began in the second quarter and strengthened as the year progressed. In the EMEA area, a pick-up in the market was evident in a number of countries. The glass processing machine market advanced in the UK, eastern Central Europe, Germany, the Baltic countries and Spain. In the North American market, a strong pick-up was also perceptible. In South America, steady development continued with large regional differences. In Brazil, demand fell short of expectations, but in other South American countries good results were achieved. In Asia, market development was weaker than expected.

In the Machines segment, the operating environment developed positively as a rule during 2014. Except for Asia, all sales regions developed positively. In North America and the EMEA area, demand strengthened during 2014. In South America, the market remained at rather low level. In Asia, demand in the machines business was more subdued than expected.

In the final quarter, demand was strong in both North America and the EMEA area. In the North American market, the strengthening of the dollar against the euro increased customers’ activity, and the activation of large glass companies was evident towards the end of the year. The EMEA area developed strongly, with the UK, Poland and Germany acting as engines of growth. In late 2014, the weakening of the Russian rouble was reflected in the willingness of Russian customers to invest. In Asia, demand was weak throughout the quarter, and in China investment declined due to a tight lending policy and rising interest rates.

In 2014 the positive development of the service market continued in the EMEA area and in North America, with demand being directed at machine upgrade products. In Spain, the UK and Poland, in particular, significant deals were concluded. In the Middle East, growth of demand was evident in the latter part of the year. The sought-after growth in the Asia market was not fulfilled. A fall-off in the growth rate in China particularly contributed to this trend. Despite an extensive installed machine stock, demand in South America did not correspond with expectations.

Glaston’s market position remained strong, particularly in heat treatment machine maintenance contracts. Competition continued to be aggressive in pre-processing machine spare parts and tools. Despite this, the company was able to increase its market share in certain areas, such as Italy, Mexico and the United States.

The final quarter was good for the Services segment. Excellent sales of upgrade products in the EMEA area and Japan raised the segment’s net sales above the previous year’s level. In other product groups, too, sales grew in the final quarter.

OUTLOOK
The company’s diverse and competitive product portfolio, strengthened order book and solid financial position, combined with the cautious recovery of the glass processing industry, create good conditions for business growth.

Glaston operates in growing markets.We expect our markets to grow moderately in 2015. Growth is expected particularly in heat treatment machines, but Glaston's extensive installed machine base also creates great potential in service business.

In market development, differences between market areas are expected. In the EMEA area and in North America strong development is expected to continue. In South America, the stable development of the market will continue. Gross prospects in Asia’s glass processing market remain good, despite a temporary setback. We expect the Asian market to pick up in the second half of the year.

We expect that 2015 net sales and operating profit, excluding non-recurring items, will exceed the level of 2014 (net sales EUR 124.5 million and operating profit, excluding non-recurring items EUR 4.9 million in 2014)

BOARD OF DIRECTORS’ PROPOSAL ON THE DISTRIBUTION OF PROFITS
The distributable funds of Glaston Corporation are EUR 50,340,334 of which EUR 682,293 represents the net profit for the financial year. The Board of Directors proposes to the Annual General Meeting to be held on 26 March 2015 that the profit for the financial year 2014 be placed in retained earnings and no dividend be paid.
 

The Board of Directors proposes to the Annual General Meeting that, based on the balance sheet to be adopted for 2014, a return of capital of EUR 0.02 per share be paid. Capital is repaid from the reserve for invested unrestricted equity. The capital is repaid to a shareholder who is registered in the Company’s shareholders’ register maintained by Euroclear Finland Ltd on the record date for payment, 30 March 2015. The Board of Directors proposes to the Annual General Meeting that the return of capital be paid on 30 April 2015.
 

On the day the proposal for the distribution of assets was made, the number of shares entitling to dividend was 192,919,754, which means the total amount of the return of capital would be EUR 3,858,395.

PRESS MEETING
An analyst and press conference is organized at Glaston’s office on Yliopistonkatu 7, Helsinki, on 5 February 2015 at 13.30 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

GLASTON CORPORATION
Agneta Selroos
Director, Communications and Marketing
 

Glaston Corporation
Glaston is a global company developing glass processing technology for architectural, solar, appliance and automotive applications. Our product portfolio ranges from pre-processing and safety glass machines to services. We are dedicated to our customers' continued success and provide services for all glass processing needs with a lifecycle-long commitment in mind. Further information is available at www.glaston.net. Glaston’s share (GLA1V) is listed on the NASDAQ OMX Helsinki Small Cap List.

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