GLASTON’S FINANCIAL STATEMENT BULLETIN 1 January – 31 December 2015: Net sales grew 12%, comparable operating profit improved

GLASTON CORPORATION          FINANCIAL STATEMENT RELEASE 11.2.2016  AT 13.00

 

GLASTON’S FINANCIAL STATEMENT BULLETIN 1 January – 31 December 2015: Net sales grew 12%, comparable operating profit improved

This release is a summary of Glaston Corporation's financial statements bulletin 2015. 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.

 
OCTOBER-DECEMBER 2015

• Orders received totalled EUR 24.2 (52.0) million.
• Net sales totalled EUR 32.6 (36.6) million.
• The comparable operating profit, excluding non-recurring items, was EUR 0.6 (3.0) million.¹⁾
• The comparable operating profit was EUR -0.7 (3.0) million, i.e. -2.2 (8.1)% of net sales.¹⁾

JANUARY-DECEMBER 2015

• Orders received totalled EUR 107.4 (133.6) million.
• The order book on 31 December 2015 was EUR 38.5 (56.0) million.
• Net sales totalled EUR 123.4 (109.7) million.
• The comparable EBITDA, excluding non-recurring items, was EUR 9.5 (9.2) million, i.e. 7.7 (8.4)% of net sales.¹⁾
• The comparable operating profit, excluding non-recurring items, was EUR 6.1 (5.5) million.¹⁾
• The comparable operating profit was EUR 4.5 (4.9) million, i.e. 3.6 (4.5)% of net sales.¹⁾
• Continuing Operations’ return on capital employed (ROCE) was 10.0 (17.2)%.
• Continuing Operations’ earnings per share were EUR 0.00 (0.04).
• Interest-bearing net liabilities amounted to EUR 7.4 (-5.0) million.
• The Board of Directors proposes to the Annual General Meeting a return of capital of EUR 0.01 per share.

¹⁾ Due to the sale of the pre-processing machines business, internal purchases eliminated in the comparison figures up to 30 June 2015 changed from 1 July 2015 to external purchases. This impacts the comparability of Continuing Operations’ operating profit. In Continuing Operations’ comparable operating profit, those internal items that in future will be external items have been restated.

GLASTON’S OUTLOOK FOR 2016
We expect 2016 net sales to be slightly below the 2015 level and that operating profit, excluding non-recurring items, will be at the 2015 level. (In 2015 net sales were EUR 123.4 million and comparable operating profit, excluding non-recurring items, was EUR 6.1 million).

CHANGE IN REPORTING
In the second quarter of 2015, Glaston sold 100% of the shares of Glaston Italy S.p.A., which specialised in pre-processing operations. As a result, Glaston reassessed its reporting segments and, as of 1 July 2015, combined the operating segments into a single reporting segment.

As of the second quarter of 2015, pre-processing machines business has been classified in Discontinued Operations. Comments in the text refer only to Continuing Operations. Income statement comparison figures have been restated.
 

PRESIDENT & CEO ARTO METSÄNEN:
“We started 2015 with a record high order book and this had a positive impact throughout the year. Our net sales grew by 12% compared with the previous year and totalled EUR 123.4 million. The Machines and Services business areas both increased their net sales, with growth strongly weighted towards North America. The comparable operating profit, excluding non-recurring items, improved compared with the previous year and was EUR 6.1 million.

In the final quarter of the year, demand continued at a good level in North America. In the EMEA area, the market slowed and for the Machines business, the market situation became challenging. Our order book was weaker than the previous year and was EUR 38.5 million, whereas the figure for the previous year was record high (EUR 56.0 million.). 

The single most significant event for Glaston during 2015 was the disposal of pre-processing operations. The sales decision was influenced particularly by the fact that the profitability of the pre-processing operations did not correspond with our objectives and developing the operations in question to the target level would have demanded significant investment. 

As a result of the sale of the pre-processing machines business, our structure has been streamlined: we now focus on high technology heat treatment and services. In our view, the growth prospects in these product groups are good.”

 

OPERATING ENVIRONMENT
In 2015 there were substantial geographical differences in Glaston’s markets. In North America, the market grew significantly, driven by a recovery in construction. In the EMEA area, market development was stable, but demand weakened towards the end of the year. In Asia, the markets of the Pacific area developed positively. In China, the market developed more slowly than expected. During the year, the South American market was subdued and, particularly in Brazil, demand continued to be weak.
 

Machines
In 2015 Machines business markets mainly developed positively. In North America, the market situation continued to be good and glass processors invested in new machine lines in expectation of increased construction activity. In the EMEA area, demand growth levelled off in the final quarter. Customers’ willingness to invest was slowed by increased economic instability as well as political tensions.
 
In South America, particularly in Brazil, markets were subdued throughout the year. In Asia, the positive development of markets in the Pacific area continued.

The business area’s most significant product group was flat tempering machines. The FC500™ flat tempering line further strengthened its position in the market and rose to become Glaston’s most popular product. Significant deals were closed for the USA, Poland and Kuwait as well as China, where a customer ordered two CCS1000™ glass tempering furnaces. The first GlastonAir™ tempering line was delivered to Colombia at the end of the year. In addition, the first FC1000^TM flat tempering line was delivered to the USA.

Services
In 2015 the services market developed positively. All product groups, except for tools, increased their sales. Glaston’s market position continued to be strong. The profitability of the Services business was on a good level.

The Services business’ strongest market areas were North America and the EMEA area. The market slowdown in Asia and South America was reflected in the demand for maintenance services.

In upgrade products, 2015 was very good. Invoicing for modernisation and renovation products grew by 25% compared with the corresponding period the previous year. During the year, large upgrade deals were closed for Spain, the USA, Colombia, the Arab Emirates, Australia and Chile.

Spare parts sales grew by over 10% from the previous year and good results were achieved, particularly in North America and in the EMEA area. In Russia, China and Southeast Asia, target growth did not materialise.

In the tools product group, competition continued to be aggressive throughout the year and the market situation was challenging. The growth targets set for the service work product group were achieved.

OUTLOOK
In the final quarter of 2015, signs of caution appeared in Glaston markets. Looking at 2016, we expect the overall market to develop positively but cautiously.

We expect the North American market to continue to develop well also in 2016. We expect the EMEA area to develop positively. In Asia, we expect the Chinese market to remain stable at its current level, and we expect growth in the Pacific area.

The heat treatment machines market will continue to be reasonably subdued. We expect that demand for new heat treatment machines will be weaker than the previous year during the early part of the year. Despite a challenging market outlook, Glaston’s position in the market is good. Our wide product range corresponds excellently with customers’ needs. As the technology leader, we will continue our goal-oriented development work, in which digitalisation and new technologies will present new business opportunities.

The outlook for the services market is cautiously positive. Our growth objectives are supported by Glaston’s strong market position, comprehensive service network and up-to-date product range.

Due to the subdued market situation and reduced order book, we expect 2016 net sales to be slightly below the 2015 level. We expect the operating profit, excluding non-recurring items, to be at the 2015 level. (In 2015 net sales were EUR 123.4 million and operating profit, excluding non-recurring items, was EUR 6.1 million).

BOARD OF DIRECTORS’ PROPOSAL ON THE DISTRIBUTION OF PROFITS
The distributable funds of Glaston Corporation are EUR 23,833,715, of which EUR -22,649,728 represents the net loss for the financial year. The Board of Directors proposes to the Annual General Meeting to be held on 5 April 2016 that the loss for the financial year 2015 be placed in retained earnings and that no dividend be paid.

The Board of Directors proposes to the Annual General Meeting that, based on the balance sheet adopted for 2015, a return of capital of EUR 0.01 per share be paid. Capital will be repaid from the reserve for invested unrestricted equity. Capital will be repaid to a shareholder who is registered in the company’s register of shareholders, maintained by Euroclear Finland Ltd, on the record date for payment, 7 April 2016. The Board of Directors proposes to the Annual General Meeting that the return of capital be paid on 28 April 2016.

On the day that the proposal for the distribution of assets was made, the number of shares entitling to a return of capital was 192,919,754, which means that the total amount of the return of capital would be EUR 1,929,198.

PRESS MEETING
An analyst and press conference is organized at Glaston's office on Yliopistonkatu 7, Helsinki, on 11 February 2016 at 13.30 p.m.

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

GLASTON CORPORATION
Agneta Selroos
Communications Director

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