Glaston’s interim report January–September 2021: Strong EBITA margin in third quarter, net sales up 29%
GLASTON CORPORATION INTERIM REPORT 28.10.2021 AT 13.00
This release is a summary of Glaston Corporation's January-September 2021 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.
JULY–SEPTEMBER 2021 IN BRIEF
- Orders received totaled EUR 45.4 (33.3) million
- Net sales totaled EUR 46.4 (35.9) million
- Comparable EBITA was EUR 3.2 (1.3) million, i.e. 6.9 (3.6)% of net sales
- The operating result (EBIT) was EUR 2.3 (-0.5) million
- The comparable operating result (EBIT) was EUR 2.1 (0.2) million, i.e. 4.4 (0.5)% of net sales
- Items affecting comparability totaled EUR 0.2 (-0.7) million
- Comparable earnings per share were EUR 0.019 (-0.005)
- Cash flow from operating activities was EUR -0.5 (0.6) million
JANUARY–SEPTEMBER 2021 IN BRIEF
- Orders received totaled 158.5 (102.9) million
- Net sales totaled EUR 130.1 (131.8) million
- Comparable EBITA was EUR 7.6 (5.7) million, i.e. 5.9 (4.3)% of net sales
- The operating result (EBIT) was EUR 3.9 (0.2) million
- The comparable operating result (EBIT) was EUR 4.3 (2.3) million, i.e. 3.3 (1.8)% of net sales
- Items affecting comparability totaled EUR -0.3 (-2.1) million
- Comparable earnings per share were EUR 0.038 (0.012)
- Cash flow from operating activities was EUR 13.8 (-2.8) million
GLASTON’S OUTLOOK FOR 2021 REMAINS UNCHANGED
From January−September, orders received saw a healthy recovery, indicating positive development for both the machines and services business throughout 2021. As anticipated, after the record high second-quarter order intake, order intake returned to pre-COVID-19 levels in the third quarter.
Glaston expects the heat treatment and insulating glass technology markets to continue to perform well during the rest of the year. In the short term, demand for automotive glass processing technology has shown some recovery but remains volatile due to structural changes and supply chain driven challenges in the market. Generally, there is higher than normal level of uncertainty associated with the outlook due to increased component prices and delivery times.
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 comparable EBITA will 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.
PRESIDENT & CEO ANDERS DAHLBLOM:
“In the third quarter, our orders received grew by 36% to EUR 45.4 million. A major part of this recovery was in our Heat Treatment business, which was very low in the comparison period and was strongly impacted by the pandemic. For the January−September period, orders received totaled EUR 158.5 million, already exceeding the full-year 2020 order intake level. The strong order intake development in the previous quarters favorably impacted net sales and profitability. Third-quarter net sales totaled EUR 46.4 million, up 29% compared to the corresponding period in the previous year. Comparable EBITA improved significantly compared to the previous year (+145%) as higher net sales and synergies as well as re-structuring in Heat Treatment partially contributed to the outcome. Comparable EBITA totaled EUR 3.2 million with an EBITA-margin of 6.9%, which is the highest quarterly margin level we have achieved for the new Glaston combined with Bystronic glass.
Our strategy for the period 2021−2025 was finalized in August, and is targeting clearly improved organic growth and profitability. Currently several strategic initiatives are executed, one of them focusing on common leadership principles, which play a key role in implementing our strategy and embedding it into our everyday working life. Safety is high on our agenda and we have set a group-wide safety target measured as zero lost time accidents (LTA). In order to meet this target, safety has to be integrated into our ways of working, and for the development and management of safety related topics we have established a cross-functional safety team. Another strategic cornerstone project, Innovate with customers to win, focuses on strengthening Glaston’s technological leadership by seamless integration of understanding customer needs, as well as joint and more rapid innovation and development work. Sustainability is our strategic focus area. We will systematically advance our sustainability agenda and have established a management structure and clear responsibilities for implementing Glaston’s sustainability related practices, as well as developing sustainability further to capture business opportunities and to meet continuously increasing stakeholder expectations and regulatory requirements.
Supply chain disruptions continued during the quarter with longer delivery times for certain components and increasing raw material prices, freight costs and logistics availability concerns. Managing the situation requires additional work on a daily basis from our teams and has had some impact on the timing of revenue, particularly for spare parts. As we do not anticipate that the challenges will disappear in the short term, mitigating the impact of supply chain related disruptions is high on our agenda. We want to deliver on our promises to our customers and Glaston’s teams are working persistently to give rapid responses and keep to delivery times.
After a break of almost two years, we finally had the opportunity to meet our customers face to face at two trade shows: Glassbuild America in Atlanta in mid-September and the VITRUM exhibition in Milan in October. For me personally, it was a great experience to attend the events. I eventually had the opportunity to meet several Glastonians in person, as well as a number of customers. The events were highly appreciated by us as a company and by our customers, with great activities and good customer discussions at our stands, even though visitor numbers were lower compared to pre-COVID-19 times.
The positive development in cross-selling heat treatment and insulating glass technologies has continued and an example of this was the close to EUR 5 million deal we closed with a customer in the Americas.The product combination reflects the need for advanced glass processing technology resulting from more stringent safety and quality regulations in commercial building construction – a growing trend that is evident in many of our markets areas.
The review period saw a continued recovery in investment confidence with improved customer activity. We expect the good level of activity to continue during the last quarter of 2021.”
GLASTON GROUP’S KEY FIGURES
| MEUR | 7−9/2021 | 7−9/2020 | 1−9/2021 | 1−9/2020 | 1−12/2020 |
| Orders received | 45.4 | 33.3 | 158.5 | 102.9 | 153.5 |
| of which service operations | 16.2 | 14.2 | 50.5 | 39.6 | 57.1 |
| of which service operations, % | 35.7% | 42.5% | 31.9% | 38.4% | 37.2% |
| Order book at end of period | 86.1 | 47.8 | 86.1 | 47.8 | 63.9 |
| Net sales | 46.4 | 35.9 | 130.1 | 131.8 | 170.1 |
| of which service operations | 17.9 | 13.3 | 49.2 | 41.0 | 58.1 |
| of which service operations, % | 38.6% | 36.9% | 37.8% | 31.1% | 34.1% |
| EBITDA | 4.3 | 1.5 | 9.8 | 6.3 | 7.6 |
| Items affecting comparability(1 | -0.2 | 0.7 | 0.3 | 2.1 | 3.8 |
| Comparable EBITDA | 4.1 | 2.2 | 10.1 | 8.4 | 11.3 |
| Comparable EBITDA, % | 8.8% | 6.0% | 7.8% | 6.4% | 6.7% |
| Comparable EBITA | 3.2 | 1.3 | 7.6 | 5.7 | 7.7 |
| Comparable EBITA, % | 6.9% | 3.6% | 5.9% | 4.3% | 4.6% |
| Operating result (EBIT) | 2.3 | -0.5 | 3.9 | 0.2 | -0.5 |
| Comparable operating result (EBIT) | 2.1 | 0.2 | 4.3 | 2.3 | 3.2 |
| Comparable operating result (EBIT), % | 4.4% | 0.5% | 3.3% | 1.8% | 1.9% |
| Profit/loss before taxes | 1.9 | -1.4 | 2.2 | -1.9 | -3.3 |
| Profit/loss for the period | 1.3 | -1.8 | 1.0 | -3.2 | -5.5 |
| Comparable earnings per share, adjusted with share issue, EUR | 0.019 | -0.005 | 0.038 | 0.012 | 0.013 |
| Number of registered shares at end of period adjusted with share issue (1 000) | 84290 | 84290 | 84290 | 84290 | 84290 |
| Cash flow from operating activities | -0.5 | 0.6 | 13.8 | -2.8 | 0.7 |
| Net interest-bearing debt at end of period | 23.0 | 37.2 | 33.6 | ||
| Return on investment (ROI), %, (annualized) | 4.5% | 0.1% | -0.4% | ||
| Comparable return on capital employed (ROCE), %, (annualized) | 6.9% | 4.0% | 4.7% | ||
| Equity ratio, % | 42.4% | 41.4% | 41.2% | ||
| Net gearing, % | 33.6% | 53.5% | 48.8% | ||
| Number of employees at end of period | 743 | 740 | 723 |
(1 + cost, - income
UNCERTAINTES AND FACTORS AFFECTING SHORT-TERM DEVELOPMENT
In the third quarter of 2021, the global economic outlook continued to improve and stable market activity was noted in Glaston’s markets. Currently, supply chain disruptions constitute the main short-term risk for business operations. These disruptions are expected to continue in the foreseeable future and Glaston is actively mitigating the higher than normal risks related to raw material and component prices and availability, as well as logistics cost increases and freight availability. Major supply chain disruptions may impact the company’s performance.
Even though the impact of the COVID-19 pandemic has decreased, there is still significant uncertainty over the duration of the pandemic and the rollout of vaccination programmes on a global scale. 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, there is also a higher-than-normal uncertainty related to customers’ investment behavior.
PRESS MEETING
Glaston’s CEO Anders Dahlblom and CFO Päivi Lindqvist will present the financial result to analysts, investors and media representatives today at 15:00 (Finnish time) in English.
The live audiocast can be accessed through the link: https://glaston.videosync.fi/2021-10-28-glastonirq3
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.