Glaston’s half-year financial report January─June 2022: Solid progress in the second quarter despite challenging environment
GLASTON CORPORATION HALF-YEAR FINANCIAL REPORT 4.8.2022 AT 8.30
This release is a summary of Glaston Corporation's Half-Year January-June 2022 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.
APRIL–JUNE 2022 IN BRIEF
- Orders received totaled EUR 56.2 (64.5) million
- Net sales totaled EUR 53.5 (43.3) million
- Comparable EBITA was EUR 3.5 (2.4) million, i.e. 6.6 (5.5)% of net sales
- The operating result (EBIT) was EUR 1.8 (1.6) million
- Comparable earnings per share were EUR 0.019 (0.009)
JANUARY─JUNE 2022 IN BRIEF
- Orders received totaled 115.2 (111.7) million
- Net sales totaled EUR 105.8 (83.7) million
- Comparable EBITA was EUR 7.0 (4.4) million, i.e. 6.6 (5.3)% of net sales
- The operating result (EBIT) was EUR 4.0 (1.7) million
- Comparable earnings per share were EUR 0.042 (0.018)
GLASTON SPECIFIES OUTLOOK FOR 2022
During the first half of 2022, the overall demand in most of Glaston’s markets remained strong, indicating good development for machines and services businesses. In 2022, Glaston’s net sales and profitability development are supported by the solid order backlog at the beginning of the year as well as healthy order intake during the first half of 2022. Costs and capital expenditure related to the execution of the refined Group strategy, announced in August 2021, will occur ahead of the effect on revenue growth.
Currently, higher than usual uncertainty is related to the development of global economic activity and customers’ investments. The uncertainty is driven by, in particular, the supply chain disturbances, which have become a longer-term challenge, and the Russian attack on Ukraine with its implications for energy and raw material prices. The impacts of the still ongoing COVID-19 pandemic add to the uncertainty, especially in China.
Despite the prevailing uncertainties, Glaston Corporation estimates that its net sales will increase in 2022 from the levels reported for 2021 and specifies its outlook for comparable EBITA, which is estimated to increase to EUR 12−15 million. In 2021, Group net sales totaled EUR 182.7 million and comparable EBITA was EUR 11.1 million.
(Previous outlook: Glaston Corporation estimates that its net sales and comparable EBITA will improve in 2022 from the levels reported for 2021.)
PRESIDENT & CEO ANDERS DAHLBLOM:
“Despite increasing overall global economic uncertainty, most of Glaston’s markets continued to perform well in the second quarter. The quarterly order intake was EUR 56.2 million, somewhat above our quarterly average. Net sales were up by 24% to EUR 53.5 million, primarily due to the good order intake in the previous quarters. Comparable EBITA improved and was EUR 3.5 million, corresponding to an EBITA margin of 6.6%, mainly due to good volume development and operational execution securing strong net sales growth.
For the Services business overall, a strong quarter with over 20% net sales growth was recorded as customers maintained operations or continued to ramp up their production. This was reflected in strong growth for daily services, with all market areas contributing to the outcome. With the Americas leading the way, the order intake for upgrades was record high, with a wide variety of upgrades sold from our broad offering. Labor availability constraints were a growing concern.
In the second quarter, the COVID-19 lockdowns in China continued thereby weakening market sentiment. New orders were on a modest level and some machine deliveries were postponed as a result of customers delaying payments as well as lock-down-related logistic challenges. Due to the governmental shutdowns, Glaston's factory in Tianjin was fully closed only for two days. In addition, operations were adversely impacted by different supply chain disruptions.
Even though the development of the Chinese market currently is surrounded by uncertainty, we will proceed with our strategic focus to grow our business in China with a plan to establish production for Automotive glass pre-processing equipment in Tianjin. The first products produced in China for the Chinese market are expected to be delivered during the first half of 2023. Introducing the Automotive offering’s local production in the Chinese market will contribute to our strategy of profitable growth by improved product offering for the Chinese market as well as productivity improvements.
Due to the Russian invasion of Ukraine in February 2022, Glaston made the decision to cease its operations in and business with Russia. In the review period, our operations in Russia were discontinued and all employment contracts, six in total, were terminated. Two upgrade projects totaling EUR 0.7 million were stopped and removed from the order backlog. New orders have not been taken from Russia since February. In 2021, Russia accounted for less than one percent of Glaston’s net sales.
We have made good progress with strategy implementation; our main strategic actions are ongoing and proceeding. As mentioned above, the strategic initiative to grow our business in China is advancing. Additionally, we have systematically improved our actions on safety and the first global safety week was held in May. We have taken action towards reaching our sustainability targets, specifically to reduce our own CO2 emissions. Of Glaston’s greenhouse gas emissions, over 80% occur in Finland, Germany and China. Our production units in Finland and Germany started using renewable electricity in the early part of the year, thereby substantially reducing their CO2 emissions. In addition, we made investment decisions to improve the energy efficiency at our production unit in Switzerland, where renewable energy is already used. Within the strategic initiative for developing the product offering, several initiatives are ongoing for automotive pre-processing, insulating glass and heat treatment with automotive pre-processing being in the final phase.
In the January−June period, the demand environment for Glaston’s products and services remained healthy in most of our markets. Amid the still ongoing Russian invasion of Ukraine, which is affecting the global and particularly the European economy, customers’ decision making for new projects is slowing down, mainly due to stricter financing rules for the projects and soaring materials and energy costs. The huge price increases for float glass, in particular, with the highest example being 40% in the United States, has impacted our customers’ short-term profitability. Supported by the clear improvement in the first half of the year and the second half starting with a high order backlog, we expect good progress in 2022 despite the challenges in the business conditions.”
GLASTON GROUP’S KEY FIGURES
|
|
|
|
|
|
|
|
|
|
MEUR |
4−6/ |
4−6/ |
Change% |
1−6/ |
1-6/ |
Change% |
1−12/ |
|
Orders received |
56.2 |
64.5 |
-12.7% |
115.2 |
111.7 |
3.1% |
216.2 |
|
of which service operations |
19.2 |
16.8 |
14.0% |
38.0 |
34.3 |
10.8% |
68.0 |
|
of which service operations, % |
34.2% |
26.1% |
|
33.0% |
30.7% |
|
31.4% |
|
Order book at end of period |
106.0 |
87.8 |
20.8% |
106.0 |
87.8 |
20.8% |
94.8 |
|
Net sales |
53.5 |
43.3 |
23.6% |
105.8 |
83.7 |
26.4% |
182.7 |
|
of which service operations |
17.7 |
14.7 |
20.5% |
36.1 |
31.3 |
15.1% |
66.8 |
|
of which service operations, % |
33.1% |
34.0% |
|
34.1% |
37.4% |
|
36.5% |
|
EBITDA |
3.7 |
2.0 |
82.3% |
8.0 |
5.5 |
44.2% |
13.0 |
|
Items affecting comparability1) |
0.8 |
-0.3 |
-387.7% |
1.0 |
0.5 |
88.8% |
1.5 |
|
Comparable EBITDA |
4.5 |
2.8 |
59.1% |
9.0 |
6.0 |
48.1% |
14.5 |
|
Comparable EBITDA, % |
8.4% |
6.5% |
|
8.5% |
7.2% |
|
7.9% |
|
Comparable EBITA |
3.5 |
2.4 |
48.4% |
7.0 |
4.4 |
57.6% |
11.1 |
|
Comparable EBITA, % |
6.6% |
5.5% |
|
6.6% |
5.3% |
|
6.1% |
|
Operating result (EBIT) |
1.8 |
1.6 |
14.8% |
4.0 |
1.7 |
138.6% |
5.1 |
|
Profit/loss for the period |
0.4 |
0.4 |
-6.6% |
1.6 |
-0.3 |
637.0% |
1.1 |
|
Comparable earnings per share, EUR |
0.019 |
0.009 |
111.1% |
0.042 |
0.018 |
133.6% |
0.060 |
|
Cash flow from operating activities |
4.4 |
7.7 |
-42.9% |
-2.3 |
14.3 |
-116.4% |
19.3 |
|
Return on investment (ROI), %, (annualized) |
|
|
|
7.1% |
2.7% |
|
2.8% |
|
Comparable return on capital employed (ROCE), %, (annualized) |
|
|
|
9.7% |
5.3% |
|
6.1% |
|
Equity ratio, % |
|
|
|
56.6% |
42.1% |
|
42.3% |
|
Net gearing, % |
|
|
|
34.6% |
32.1% |
|
26.9% |
|
Number of employees at end of period |
|
|
|
781 |
733 |
6,5% |
750 |
(1 + cost, - income
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 live webcast can be accessed through the link: https://glaston.videosync.fi/results-q2-2022/ . 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 10 countries and its shares (GLA1V) are listed on NASDAQ Helsinki Ltd.
Distribution: Nasdaq Helsinki Ltd, key media, www.glaston.net.