Glaston’s interim report January–September 2020: Positive development in Insulating Glass Technologies, Heat Treatment Technologies and Services slower than expected
GLASTON CORPORATION INTERIM REPORT 27.10.2020 AT 13.00
This release is a summary of Glaston Corporation's January-September 2020 interim 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.
This third-quarter interim report provides estimates on future prospects involving risk and uncertainty factors, and other factors as a result of which the performance, operation, or achievements of Glaston may substantially deviate from the estimates. Forward-looking statements relating to future prospects are subject to risks, uncertainties and assumptions, the implementation of which depends on the future business environment and other circumstances, such as the development of the COVID-19 pandemic.
JULY–SEPTEMBER 2020 IN BRIEF
- Orders received totaled EUR 33.3 (45.6) million
- Net sales totaled EUR 35.9 (54.5) million
- Comparable EBITA was EUR 1.3 (3.1) million, i.e. 3.6 (5.7)% of net sales
- The operating result (EBIT) was EUR -0.5 (-0.0) million
- The comparable operating result (EBIT) was EUR 0.2 (2.0) million, i.e. 0.5 (3.6)% of net sales
- Items affecting comparability totaled EUR -0.7 (-2.0) million
- Comparable earnings per share were EUR -0.013 (0.015)
- Cash flow from operating activities was EUR 0.6 (5.7) million
JANUARY–SEPTEMBER 2020 IN BRIEF
- Orders received totaled EUR 102.9 (113.0, pro forma 135.4) million
- Net sales totaled EUR 131.8 (133.7, pro forma 157.3) million
- Comparable EBITA was EUR 5.7 (7.3, pro forma 9.6) million, i.e. 4.3 (5.5, pro forma 6.1)% of net sales
- The operating result (EBIT) was EUR 0.2 (-0.3, pro forma 1.2) million
- The comparable operating result (EBIT) was EUR 2.3 (4.6, pro forma 6.1) million, i.e. 1.8 (3.4, pro forma 3.9)% of net sales
- Items affecting comparability totaled EUR -2.1 (-4.9, pro forma -4.9) million
- Comparable earnings per share were EUR -0.013 (0.014)
- Cash flow from operating activities was EUR -2.8 (2.1) million
GLASTON’S OUTLOOK FOR 2020 REMAINS UNCHANGED
Glaston Corporation estimates that comparable EBITA for 2020 will decline from the 2019 level. The company’s current assessment is that fourth-quarter orders will improve from the third quarter but remain below the previous year’s levels. The lower than 2019 order intake and lower than normal volume in services business impacts the development of net sales and earnings in 2020. The uncertainty surrounding the assessment remains, and the situation might change quickly depending on the development of the COVID-19 pandemic and the general economic climate.
ACTING PRESIDENT & CEO SASU KOIVUMÄKI:
Multifaceted quarter: The Insulating Glass segment performed well, Heat Treatment and Services slower than expected – profitability satisfactory under the circumstances
“Glaston’s third quarter development was multifaceted. The Insulating Glass (IG) business performed well with a faster than expected recovery in Europe, and several larger projects were picked up after the slow development in the previous quarter. Insulating Glass equipment and services order intake grew by 3% from the corresponding period last year, which gives the IG business a very good start to 2021. On the other hand, the market for Heat Treatment (HT) equipment and services remained very challenging. There is a significant difference in demand between the HT and the IG equipment markets. In the commercial building market, which is the main market for HT, forecasts are weak whereas the residential building market, important for IG, continues to grow. Consequently, we see a clear need to adapt our Heat Treatment business to current market demand. The Automotive business remains challenging due to overcapacity in the market. The short-time work implemented last year continues, and we are monitoring the situation very closely. During the quarter, we saw an increase in our Services business from the very low previous quarter, although recovery was slower than expected, mainly due to the remaining cross-border travel restrictions and restrictions on customer factory visits.
As a result of the low order intake in the previous quarters and the postponement of a number of orders, our net sales decreased in all segments. Third-quarter Group net sales totaled EUR 35.9 million. Our profitability was clearly impacted by low sales volumes in both HT and Automotive equipment and services but overall remained at a satisfactory level, supported by our rapid measures and synergy benefits. Demand for HT spare parts and service work was low, but demand for IG services was at a good level. Due to the current crisis, the Emerging Technologies (ET) market continued to be slow in the third quarter, but ET continued to develop its selected consulting projects together with its partners.
With the broadest and most versatile glass processing product and services portfolio, combined with innovation leadership, Glaston has a strong position in the market. In order to remain at the forefront of development we have continued to put significant efforts in 2020 into the continuous development of our core technology portfolio and R&D. The latest showcase of this work is Glaston’s cup wheel technology for glass edge arrissing of architectural glass which was presented at the virtual Glasstec fair in mid-October. Demand for arrissed glass is driven by stricter safety regulations and higher quality requirements.
Mitigating COVID-19 related near-term business disruptions continues to be high on our agenda and we are ready to reinstate measures to safeguard the health and safety of our employees and to safeguard the company’s financial stability quickly if necessary. We continue to constantly monitor the development of the situation, our orders and order book as well as the company’s cash flow and liquidity.”
GLASTON GROUP KEY FIGURES
|
EUR million |
7–9/ 2020 |
7–9/ 2019 |
1–9/ 2020 |
1–9/ 2019 |
1–12/ 2019 |
Pro forma 1–9/2019 | Pro forma 1–12/2019 |
| Orders received | 33.3 | 45.6 | 102.9 | 113.0 | 162.2 | 135.4 | 184.6 |
| of which service operations | 14.2 | 17.3 | 39.6 | 42.6 | 58.5 | 52.6 | 68.3 |
| of which service operations, % | 42.5% | 38.0% | 38.4% | 37.7 % | 36.1% | 38.8% | 37.0% |
| Order book at end of period | 47.8 | 79.1 | 79.5 | 79.1 | 79.5 | ||
| Net sales | 35.9 | 54.5 | 131.8 | 133.7 | 181.0 | 157.3 | 204.6 |
| of which service operations | 13.3 | 17.6 | 41.0 | 40.2 | 57.1 | 50.2 | 67.1 |
| of which service operations, % | 36.9% | 32.3% | 31.1% | 30.1% | 31.6% | 31.9% | 32.8% |
| EBITDA | 1.5 | 2.3 | 6.3 | 5.6 | 6.9 | 8.2 | 9.5 |
| Items affecting comparability | 0.7 | 2.0 | 2.1 | 4.9 | 7.2 | 4.9 | 7.2 |
| Comparable EBITDA | 2.2 | 4.4 | 8.4 | 10.6 | 14.1 | 13.1 | 16.7 |
| Comparable EBITDA, % | 6.0% | 8.0% | 6.4% | 7.9% | 7.8% | 8.4% | 8.2% |
| Comparable EBITA | 1.3 | 3.1 | 5.7 | 7.3 | 9.7 | 9.6 | 12.1 |
| Comparable EBITA, % | 3.6% | 5.7% | 4.3% | 5.5% | 5.4% | 6.1% | 5.9% |
| Operating result (EBIT) | -0.5 | 0.0 | 0.2 | -0.3 | -1.3 | 1.2 | 0.3 |
| Comparable operating result (EBIT) | 0.2 | 2.0 | 2.3 | 4.6 | 5.9 | 6.1 | 7.5 |
| Comparable operating result (EBIT), % | 0.5% | 3.6% | 1.8% | 3.4% | 3.3% | 3.9% | 3.7% |
| Profit/loss before taxes | -1.4 | -0.4 | -1.9 | -2.6 | -4.4 | 4.9 | 3.8 |
| Profit/loss for the period | -1.8 | -1.0 | -3.2 | -4.0 | -6.4 | 4.0 | 3.1 |
| Comparable earnings per share, adjusted with share issue, EUR | -0.013 | 0.015 | -0.013 | 0.014 | 0.011 | ||
| Number of registered shares at end of period adjusted with share issue (1 000) | 84290 | 84290 | 84290 | 84290 | 84290 | ||
| Cash flow from operating activities | 0.6 | 5.7 | -2.8 | 2.1 | 10.8 | ||
| Net interest-bearing debt at end of period | 37.2 | 41.0 | 33.0 | ||||
| Return on investment (ROI), %, (annualized) | 0.1% | -0.5% | -1.3% | ||||
| Comparable return on capital employed (ROCE), %, (annualized) | 3.4% | 6.1% | 8.7% | ||||
| Equity ratio, % | 41.4% | 40.0% | 41.6% | ||||
| Net gearing, % | 53.5% | 53.0% | 45.0% | ||||
| Number of employees at end of period | 740 | 792 | 790 |
Glaston Corporation’s acquisition of Bystronic glass was completed on 1 April 2019. The comparison data of this financial interim report for the period 1 January – 31 March 2019 do not include figures for Bystronic glass. Glaston Corporation has prepared unaudited pro forma financial information to illustrate the impact of the Bystronic glass acquisition, completed on 1 April 2019, on the Group’s operational result and financial position and to improve the comparability of financial information. The unaudited pro forma financial information for 1 January – 31 March 2019 and 1 January – 31 December 2019 presented in this interim report is presented as if the acquisition would have already been completed on 1 January 2019. Pro forma financial information has been titled Pro forma information in the places in the interim report where the information is presented.
As of 1 January 2020, the company has three reporting segments: Glaston Heat Treatment, Glaston Insulating Glass and Glaston Automotive & Emerging Technologies. 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 2020, the company published comparative information according to the new structure.
PRESS MEETING
Glaston’s Acting CEO Sasu Koivumäki and CFO Päivi Lindqvist will present the financial result to analysts, investors and media representatives on the publication day at 15.00 (Finnish time) in Finnish.
The live audiocast can be accessed through the link: https://glaston.videosync.fi/2020-10-27-q3. 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:
Acting President & CEO Sasu Koivumäki, tel. +358 10 500 500
Chief Financial Officer Päivi Lindqvist, tel. +358 10 500 500
GLASTON CORPORATION
Joséphine Mickwitz, VP, IR, Communications and Marketing, tel. +358 10 500 5070
Glaston Corporation
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 emerging technologies integrating intelligence to glass.
As of April 2019, Bystronic glass is part of Glaston Group. Together we are committed to providing our 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. We operate globally with manufacturing, services and sales offices in 11 countries. Glaston’s shares (GLA1V) are listed on NASDAQ Helsinki Ltd.
Distribution: NASDAQ OMX Helsinki, key media, www.glaston.net