Glaston’s interim report January─March 2021: GOOD ORDER INTAKE CONTRIBUTED TO STRONG CASH FLOW. EBITA MARGIN IMPROVED.
GLASTON CORPORATION INTERIM REPORT 29.4.2021 AT 13.00
This release is a summary of Glaston Corporation's Interim Report for January-March 2021. 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. The figures in brackets refer to the comparison period, i.e.the same period in the previous year, unless otherwise stated.
JANUARY─MARCH 2021 IN BRIEF
- Orders received totaled EUR 47.2 (45.6) million.
- Net sales totaled EUR 40.4 (46.9) million.
- Comparable EBITA was EUR 2.1 (2.0) million, i.e. 5.1 (4.3)% of net sales.
- The operating result (EBIT) was EUR 0.1 (0.1) million.
- The comparable operating result (EBIT) was EUR 0.9 (0.9) million, i.e. 2.3 (2.0)% of net sales.
- Items affecting comparability totaled EUR 0.8 (0.8) million.
- The comparable earnings per share were EUR 0.010 (0.015).
- Cash flow from operating activities was EUR 6.6 (-3.1) million.
GLASTON’S OUTLOOK FOR 2021 UNCHANGED
The strong recovery in orders received in the fourth quarter of 2020 and its continuation in the first quarter of 2021 indicate positive development for both the machines and services business throughout 2021. Glaston started 2021 with a 20% lower order backlog than the previous year, impacting net sales and comparable operating profit for the first half of 2021. The second half of 2021 will benefit from the order intake recovery. Glaston expects the heat treatment and insulating glass technology markets to perform well, but visibility continues to be shorter than normal due to the COVID-19 pandemic and its implications on economic activity, investments and travel restrictions. The demand for automotive glass processing technology is volatile and uncertain due to COVID-19, structural changes in the market and automotive supply chain disruptions.
Based on the expected continued positive market development, Glaston Corporation estimates, that its net sales and comparable EBITA will improve in 2021 from the levels reported for 2020. In 2020, Group net sales totaled EUR 170.1 million and comparable EBITA was EUR 7.7 million.
PRESIDENT & CEO ANDERS DAHLBLOM:
“In the first quarter of 2021, Glaston’s markets continued to develop positively and orders received were up 3.5% compared to the corresponding period in 2020, totaling EUR 47.2 million. In particular, the demand for heat treatment equipment increased. As anticipated in the Financial statements bulletin 2020, first-quarter net sales (EUR 40.4 million) were low. This was primarily due to the low number of new orders in the second and third quarters of last year. However, comparable EBITA was slightly above the previous year’s level (EUR 2.1 million) despite lower net sales. Lower fixed costs and integration related synergy benefits contributed to the outcome.
The strength of our current broader product offering, especially for the architectural segment, was clearly demonstrated in the early part of the year as we signed several customer contracts including both heat treatment and insulating glass equipment. The cross-selling is strategically and commercially important and will eventually strengthen our market position further. It also adds value to our customers who can benefit from consolidating their technology solutions and from enhanced service know-how and availability. Showcasing the strategic importance, Glaston disclosed earlier this week a new order with the leading European manufacturer of flat glass for one tempering line, several insulating glass lines, a grinding line, as well as other equipment. The order, booked in received orders for Q2/2021, will reinforce Glaston’s position as the key player in insulating glass technologies.
Our number one priority for this year is the renewal of Glaston’s strategy and the work is well underway. Currently, different growth options are being evaluated and a number of interesting market opportunities have already been identified. The intense analysis will build solid ground for making sound decisions and action plans. Succeeding with customers, engaged employees and shareholder value creation are our key goals. Realizing the full potential of the Bystronic glass integration is another key priority on our agenda. Closely linked to the strategy process, the second phase of integration is underway. The second phase covers the commercial potential for both equipment and services with, for example, the integrated growth strategy for our service businesses We will communicate the key outcomes of the strategy process in August 2021.
Last year, the importance of safe and healthy living and working environments became increasingly significant. Safety is at the core of Glaston’s operations. Glass tempering and lamination technologies, resulting in stronger and non-hazardous glass, are among our key competencies, and stricter construction laws and regulations lead to increased demand for the technologies in question. Safety is also a strong focus for us internally. We want our employees to work in a safe and healthy work environment and our target is zero accidents at work. A positive sign is that in 2020, accidents were down to 14 compared to 22 in the previous year, and we will continue the improvement work. Improvement work such as occupational safety is one of our key priorities for 2021.
In the review period, Glaston’s markets continued to develop well. In light of increasing customer activity and resumed customer projects, we expect the positive development to continue in 2021, which indicates continued positive order intake for both machines and services businesses, as well as good net sales development.”
GLASTON GROUP’S KEY FIGURES
|of which service operations||17.5||15.5||57.1|
|of which service operations, %||37.0%||34.0%||37.2%|
|Order book at end of period||68.0||76.4||63.9|
|of which service operations||16.6||16.5||58.1|
|of which service operations, %||41.1%||35.2%||34.1%|
|Items affecting comparability||0.8||0.8||3.8|
|Comparable EBITDA, %||7.0%||6.4%||6.7%|
|Comparable EBITA, %||5.1%||4.3%||4.6%|
|Operating result (EBIT)||0.1||0.1||-0.5|
|Comparable operating result (EBIT)||0.9||0.9||3.2|
|Comparable operating result (EBIT), %||2.3%||2.0%||1.9%|
|Profit/loss before taxes||-0.3||-0.1||-3.3|
|Profit/loss for the period||-0.7||-0.2||-5.5|
|Comparable earnings per share, adjusted with share issue, EUR||0.010||0.015||0.013|
|Number of registered shares at end of period adjusted with share issue (1 000)||84,290||84,290||84,290|
|Cash flow from operating activities||6.6||-3.1||0.7|
|Net interest-bearing debt at end of period||28.4||37.2||33.6|
|Return on investment (ROI), %, (annualized)||0.2%||0.3%||-0.4%|
|Comparable return on capital employed (ROCE), %, (annualized)||3.1%||3.1%||4.7%|
|Equity ratio, %||40.0%||40.7%||41.2%|
|Net gearing, %||41.8%||50.7%||48.8%|
|Number of employees at end of period||721||752||723|
UNCERTAINTIES AND FACTORS AFFECTING NEAR FUTURE DEVELOPMENT
In the first quarter of 2021, market activity increased in Glaston’s markets despite the still ongoing COVID-19 pandemic. The vaccine rollout with hundreds of millions of people being vaccinated has raised expectations of a turnaround in the pandemic later this year. Nevertheless, near-term risks continue to be mainly related to the impact of the COVID-19 pandemic such as new variants of the virus, a slow rollout of vaccinations and a shortfall of doses. This could lead to new lock-downs and more stringent travel restrictions, particularly affecting service work and spare parts business, as well as machine installations. Under the prevailing circumstances, a higher-than-normal uncertainty is related to customers’ investment behavior.
In addition, the company is actively mitigating the risks related to raw material and component prices and availability as well as logistics cost increases.
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/2021-04-29-interimreport-q1 . 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
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.