Glaston’s half year financial report January–June 2021: Record high quarterly order intake in Q2
GLASTON CORPORATION HALF-YEAR FINANCIAL REPORT 5.8.2021 AT 13.00
This release is a summary of Glaston Corporation's Half-Year January-June 2021 financial report. 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.
As of 1 January 2021, the company has three reporting segments: Glaston Heat Treatment, Glaston Insulating Glass and Glaston Automotive & Display. Services business is included in the reporting segments. Machine and Services sales, order intake and order book are also reported separately as additional product area information. On 18 March 2021, the company published comparative information according to the new structure.
APRIL–JUNE 2021 IN BRIEF
- Orders received totaled EUR 65.9 (24.0) million
- Net sales totaled EUR 43.3 (48.9) million
- Comparable EBITA was EUR 2.4 (2.3) million, i.e. 5.5 (4.8)% of net sales
- The operating result (EBIT) was EUR 1.6 (0.6) million
- The comparable operating result (EBIT) was EUR 1.3 (1.2) million, i.e. 2.9 (2.5)% of net sales
- Items affecting comparability totaled EUR 0.3 (-0.7) million
- Comparable earnings per share were EUR 0.009 (0.002)
- Cash flow from operating activities was EUR 7.7 (-0.3) million
JANUARY–JUNE 2021 IN BRIEF
- Orders received totaled 113.2 (69.6) million
- Net sales totaled EUR 83.7 (95.9) million
- Comparable EBITA was EUR 4.4 (4.4) million, i.e. 5.3 (4.6)% of net sales
- The operating result (EBIT) was EUR 1.7 (0.7) million
- The comparable operating result (EBIT) was EUR 2.2 (2.1) million, i.e. 2.6 (2.2)% of net sales
- Items affecting comparability totaled EUR -0.5 (-1.5) million
- Comparable earnings per share were EUR 0.018 (0.016)
- Cash flow from operating activities was EUR 14.3 (-3.4) million
GLASTON SPECIFIES OUTLOOK FOR 2021
The strong recovery in orders received in the first half of 2021 indicates positive development for both the machines and services business throughout 2021. The low order backlog at the start of 2021 (20% lower compared to the previous year) impacted Glaston’s January–June 2021 net sales and comparable operating profit. Moreover, the second half of 2021 will benefit from the strong order intake development seen in the first half of the year.
Glaston expects the heat treatment and insulating glass technology markets to continue to perform well. However, order intake for the rest of the year is expected to return to pre-COVID-19 levels after the record high second quarter. In the short-term demand for automotive glass processing technology shows recovery but remains uncertain due to structural changes and supply chain driven challenges in the market. There is higher than normal uncertainty connected to the outlook due to increasing component pricing and delivery times, as well as potential ongoing travel restrictions.
Based on the high order intake since the fourth quarter of 2020, Glaston Corporation estimates that its net sales in 2021 will improve from the level reported for 2020 and specifies its outlook for comparable EBITA, which is estimated to increase to EUR 10.5−12.5 million. In 2020, Group net sales totaled EUR 170.1 million and comparable EBITA was EUR 7.7 million.
(Previous outlook: Glaston Corporation estimates that its net sales and comparable EBITA will improve in 2021 from the levels reported for 2020.)
PRESIDENT & CEO ANDERS DAHLBLOM:
“In the second quarter of 2021, the strong recovery of Glaston’s markets continued and orders received increased to a record high EUR 65.9 million. This increase is, of course, significant compared to the COVID-19 impacted second quarter of 2020 but, more importantly, new orders were as much as 48% higher than in the second quarter of 2019. The strong demand for heat treatment equipment, already noted in the previous two quarters, continued throughout the second quarter, and orders received increased to EUR 24.4 million. Orders received in the Insulating Glass segment saw excellent development and increased to EUR 30.9 million. Also, order intake in the Automotive & Display segment noted good recovery to EUR 10.3 million. Due to the strong development in order intake, cash flow was excellent and the order backlog increased to EUR 87.8 million.
Second-quarter net sales were EUR 43.3 million, down 12% compared to the corresponding period in the previous year. Comparable EBITA was slightly above the previous year’s level (EUR 2.4 million), despite lower net sales.
During the quarter, supply chain disruptions were a growing concern. Raw material prices are increasing and the delivery times for certain components are becoming longer. Currently, material shortages are primarily putting pressure on spare parts and we can see our own delivery times becoming longer for certain products, which is impacting the timing of our services revenue. We proactively take actions to secure the availability of the critical components to avoid delivery delays. Due to increasing material and freight costs, we are focusing on managing our product pricing accordingly.
Differentiating us from the competition, Glaston’s wide product portfolio and comprehensive services add value to our customers, who can benefit from unifying their technology solutions. During the first half of the year, we have noted good development in cross-selling heat treatment and insulating glass technologies. Disclosed in April, the strategic and commercial importance of cross-selling was clearly demonstrated when PRESS GLASS UAB, part of PRESS GLASS Group, the leading European producer of processed flat glass for the construction industry, placed an order for several insulating glass lines, one tempering line, a grinding line, as well as other equipment.
Glaston’s revised strategy for 2021−2025 was approved on 5 August. The key objectives of the strategy are clearly improved organic growth and profitability. Growth is driven by our strategic initiatives and the expected over 5% annual addressable equipment market growth. Strategic must-win development initiatives securing net sales growth and improved profitability have been identified in all Glaston business areas, as well as in the services business. As the industry frontrunner, Glaston plans to increase investments in innovation and development initiatives. Profitability improvement is supported by net sales growth, an optimal product offering, as well as productivity improvements.
For Glaston, sustainability is a strategic focus area. Our ambition is to maintain leadership in developing the industry towards a more sustainable future. As societies take actions towards carbon neutrality, there is increased focus on the energy performance of buildings. Glaston’s technologies are at the core of promoting sustainability as the majority of our business is targeted at the architectural segment in which our products provide key technologies for improved energy efficiency and building safety. The increased focus on reducing the energy consumption of buildings is expected to boost demand for insulating glass technologies, in particular. In addressing our focus on sustainability, in addition to financial targets, we have also set new non-financial targets, for example for CO2 emissions and health and safety.
The review period saw a recovery in investment confidence. In most regions and markets, our customers’ business activity improved. Considering the increasing customer activity and resumed customer projects, we expect the positive market development to continue during the second half of 2021, indicating a healthy, pre-COVID-19 order intake level.
GLASTON GROUP’S KEY FIGURES
| MEUR | 4–6/2021 | 4–6/2020 | 1–6/2021 | 1–6/2020 | 1–12/2020 |
| Orders received | 65.9 | 24.0 | 113.2 | 69.6 | 153.5 |
| of which service operations | 16.8 | 9.9 | 34.3 | 25.4 | 57.1 |
| of which service operations, % | 25.5% | 41.3% | 30.3% | 36.5% | 37.2% |
| Order book at end of period | 87.8 | 49.1 | 87.8 | 49.1 | 63.9 |
| Net sales | 43.3 | 48.9 | 83.7 | 95.9 | 170.1 |
| of which service operations | 14.7 | 11.2 | 31.3 | 27.7 | 58.1 |
| of which service operations, % | 34.0% | 22.8% | 37.4% | 28.9% | 34.1% |
| EBITDA | 3.5 | 2.6 | 5.5 | 4.8 | 7.6 |
| Items affecting comparability(1 | -0.3 | 0.7 | 0.5 | 1.5 | 3.8 |
| Comparable EBITDA | 3.2 | 3.3 | 6.0 | 6.3 | 11.3 |
| Comparable EBITDA, % | 7.4% | 6.7% | 7.2% | 6.5% | 6.7% |
| Comparable EBITA | 2.4 | 2.3 | 4.4 | 4.4 | 7.7 |
| Comparable EBITA, % | 5.5% | 4.8% | 5.3% | 4.6% | 4.6% |
| Operating result (EBIT) | 1.6 | 0.6 | 1.7 | 0.7 | -0.5 |
| Comparable operating result (EBIT) | 1.3 | 1.2 | 2.2 | 2.1 | 3.2 |
| Comparable operating result (EBIT), % | 2.9% | 2.5% | 2.6% | 2.2% | 1.9% |
| Profit/loss before taxes | 0.6 | -0.3 | 0.3 | -0.4 | -3.3 |
| Profit/loss for the period | 0.4 | -1.2 | -0.3 | -1.5 | -5.5 |
| Comparable earnings per share, adjusted with share issue, EUR | 0.009 | 0.002 | 0.018 | 0.016 | 0.013 |
| Number of registered shares at end of period adjusted with share issue (1,000) | 84,290 | 84,290 | 84,290 | 84,290 | 84,290 |
| Cash flow from operating activities | 7.7 | -0.3 | 14.3 | -3.4 | 0.7 |
| Net interest-bearing debt at end of period | 21.4 | 37.4 | 33.6 | ||
| Return on investment (ROI), %, (annualized) | 2.7% | 1.0% | -0.4% | ||
| Comparable return on capital employed (ROCE), %, (annualized) | 5.3% | 4.3% | 4.7% | ||
| Equity ratio, % | 42.1% | 40.8% | 41.2% | ||
| Net gearing, % | 32.1% | 51.8% | 48.8% | ||
| Number of employees at end of period | 733 | 755 | 723 |
(1 + cost, - income
UNCERTAINTES AND FACTORS AFFECTING SHORT-TERM DEVELOPMENT
In the second quarter of 2021, the global economic outlook improved further and despite the ongoing COVID-19 pandemic, market activity increased in Glaston’s markets. Even though the impact of the pandemic has decreased, there are still concerns about the impact of the pandemic, such as more transmissible variants of the virus and a slow global rollout of vaccinations. This could, lead to new lockdowns and more stringent travel restrictions, particularly affecting service work and the spare parts business, as well as machine installations. Under the prevailing circumstances, a higher-than-normal uncertainty is related to customers’ investment behavior.
Glaston is also actively mitigating the risks related to raw material and component prices and availability, as well as logistics cost increases. Major supply chain disruptions may impact on the company’s performance.
PRESS MEETING
Glaston’s CEO Anders Dahlblom and CFO Päivi Lindqvist will present the financial result to analysts, investors and media representatives TODAY at 14:30 (Finnish time) in English.
The live webcast can be accessed through the link: https://glaston.videosync.fi/2021-08-05-glastonirq2/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 appliance 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 10 countries and its shares (GLA1V) are listed on NASDAQ Helsinki Ltd.
Distribution: Nasdaq Helsinki Ltd, key media, www.glaston.net.