Kyro Corporation STOCK EXCHANGE RELEASE 11 May 2005
Kyro Corporation STOCK EXCHANGE RELEASE 11 May 2005, 8.30 a.m.
ORDER BOOK AT RECORD LEVEL
- The Groups net sales according to IFRS were EUR 58.7 (60.3) million and profit
was EUR 5.1 (8.0) million
- Profit before taxes was EUR 5.2 (8.8) million, 8.9% (14.6) of net sales.
- In the current year, the Groups net sales and operating profit by quarter
will be weighted more towards the end of year than in 2004
- Earnings per share were EUR 0.04 (0.08)
- Equity ratio was 59.4% (53.8) and equity per share EUR 1.52 (1.50).
- Order book was at 31 March EUR 139.1 (116.2) million; at 30 April EUR 148,1
(121,4) million
- Order intake so far significantly higher than the previous year
- Glaston Technologies has decided to expand its factory in China
- In the current year, Kyro is aiming for better net sales and operating
profit than in 2004
KYRO GROUP STRUCTURE
Kyros business areas are Glaston Technologies and Energy. The main business
area, Glaston Technologies, consists of the Glass Machinery group and the
Glass Processing group.
The Glass Machinery group is the global market leader in glass processing
machines.The Glass Machinery groups products are glass pre-processing
machines as well as safety glass machines for the architectural and
automotive industries. The groupconsists of Tamglass, the technology and
market leader in safety glass machines,Uniglass, which manufactures
flat tempering machines, and the leading supplier of glass pre-processing
machines, Z. Bavelloni, which also produces stone processing machines.
Tamglass Glass Processing Group focuses on markets in Finland and neighbouring
countries and is the leading comprehensive supplier of glass processing products
in Finland. Its products are safety, insulating and balcony glasses and balcony
systems.
Kyros second business area is Energy, which consists of the electricity and
heat generating plants of Kyro Power Oy.
NET SALES AND PROFIT
The Kyro Groups net sales in the period under review totalled EUR 58.7 (60.3)
million. The Groups operating profit was EUR 5.1 (8.0) million. This represented
8.7% (13.3) of net sales. The direct effect of the strengthening of the euro was
to reduce net sales by EUR 0.6 million. Indirectly, a strong euro slows growth
in net sales much more through high prices. The location of Tamglass machine
manufacturing in different currency areas has compensated for the impact of
foreign exchange rates. In the current year, the Groups net sales and
operating profit by quarter will be weighted more towards the end of year
than in 2004.
Net financial items totalled EUR 0.1* (0.7) million. This includes interest,
dividend and other financial income of EUR 1.2* (1.1) million, and interest
and other financial expenses of EUR 1.1 (0.4) million. In the beginning of 2005
Kyro adopted IAS 39 principles concerning recognition and valuation of
financial instruments. Therefore, on 1 January 2005 unrealized
value increases, EUR 0.7 million, adjusted with taxes, have been
booked directly into the equity.
Profit before taxes was EUR 5.2* (8.8) million. This represented 8.9*%
(14.6) of net sales. Profit for the financial period was EUR 3.4* (6.1)
million. Return on invested capital stood at 15.2*% (23.4). Earnings
per share were EUR 0.04* (0.08).
The Groups order book at 31 March was EUR 139.1 (116.2) million.
* The figures are not directly comparable with the previous years
figures due to adoption of IAS39.
Figure 1. Net sales, operating profit and order book, EUR million.
Net sales Operating profit Order book
1-3/05 1-3/04 1-3/05 1-3/04 1-3/05 1-3/04
Glaston Technologies 50.7 52.8 4.5 7.1 114.5 93.5
Energy 8.0 7.5 2.0 1.7 24.6 22.7
Parent company, other operations
and eliminations 0.1 0.0 -1.4 -0.8
Group total 58.7 60.3 5.1 8.0 139.1 116.2
FINANCING
The Groups financial standing is good. Liquid funds and securities totalled EUR
11.5 (24.0) million. Interest-bearing liabilities amounted to EUR 23.7 (33.7)
million and interest-bearing net debt to EUR 12.2 (9.4) million. Gearing stood
at 10.1% (8.0). Equity per share was EUR 1.52 (1.50). Equity ratio was 59.4%
(53.8).
Cash flow from business operations was EUR 3.1 (7.3) million. A total of EUR 5.5
million was paid in dividends. In the comparison period of the previous year,
EUR 11.8 million was paid in dividends: basic dividends EUR 5.9 million and
supplementary dividends EUR 5.9 million.
INVESTMENTS
Investments totalled EUR 1.9 (1.0) million. This figure includes capitalised product
development costs of EUR 0.9 million, Glass Processings new production line as well
as repair and maintenance investments.
PERSONNEL
At the end of the period under review, the Kyro Group had 1,204 (1,126) employees.
The number of Group employees working abroad was 774 (701). The average
number of employees was 1,201 (1,128). The number of employees has grown
compared with the corresponding period last year due to the start-up of
Bavellonis Brazilian factory and the opening of the new joint Tamglass-Bavelloni
sales offices in Shanghai and Moscow. The number of employees at the end of
March was the same as at the end of 2004.
Figure 2. Number of employees 31 March
2005 2004
Glaston Technologies 1,170 1,092
Energy 23 24
Kyro Corporation 11 10
Kyro Group 1,204 1,126
SHARES AND SHARE PRICES
A total of 1,807,251 (5,278,504) Kyro Corporation shares were traded on the
Helsinki Exchanges in the period under review, representing 2.3% (6.7) of the
total number of shares. The lowest price paid for a Kyro Corporation share
on the Helsinki Exchanges was EUR 3.79 and the highest price EUR 4.60. The
average price was EUR 4.38.
ACQUISITION AND DISPOSAL OF OWN SHARES
The Annual General Meeting on 15 March 2005 authorised the Board of Directors to
acquire the companys own shares for the purpose of using them as consideration
in possible acquisitions, to finance investments or in other industrial
arrangements or to be disposed of in other ways or to be invalidated. According
to the authorisation the Board of Directors may acquire the companys own
shares using assets available for distribution of profits, provided that the
combined nominal value of the acquired shares together with any shares
already in the possession of the company corresponds to a maximum of 5 per
cent of the companys total share capital at the moment of acquisition. Shares
can be acquired or sold in public trading on the Helsinki Exchanges at the
market value of the shares at the time in question.
The authorisations to acquire and dispose of the companys own shares are valid
for a period of one year from the decision of the Annual General Meeting on 15
March 2005.
At 31 March 2005 Kyro Corporation held a total of 329,904 (329,904) of its own
shares, acquired on the basis of previous authorisations. During the period
under review, the company acquired none of its own shares.
BOARD OF DIRECTORS AND AUDITORS
At its meeting on 15 March 2005, the new Board of Directors elected Carl-Johan
Numelin as Chairman of the Board of Directors and Christer Sumelius as Deputy
Chairman. Lars Hammarén, Heikki Mairinoja and Carl-Johan Numelin (chairman)
were re-elected as members of the Audit Committee. Klaus Cawén, Christer Sumelius
and Carl-Johan Numelin (chairman) were re-elected as members of the Compensation
Committee.
The Annual General Meeting elected KPMG Oy Ab as the auditor of Kyro Corporation,
with Sixten Nyman, Authorised Public Accountant, as the responsible auditor.
ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)
Kyro Group has adopted the International Financial Reporting Standards (IFRS)
in its financial reporting from the beginning of 2005. The interim reports will
also be prepared in accordance with IFRS rules. This interim report uses IFRS
figures from 2004 as comparative data.
The most significant changes to the Groups result and balance sheet arise from
a change in revenue recognition policies, the capitalisation of product
development expenses, the accounting of subsidiaries share options and the
replacement of goodwill amortisation with annual impairment testing. The Kyro
Groups pre-processing line and safety glass machines deliveries are recognised
according to IFRS when delivery and installation have been performed and
accepted. The sales recognition policy under IFRS increases the order book of
the Groups Glaston Technologies business area. Compared with the previous
recognition policy under FAS, safety glass machines projects remain in the order
book for a few months longer, i.e. until the deliveries have been installed,
tested and accepted.
On 6 April 2005, Kyro published a separate stock exchange release on the effects
of the adoption of IFRS on the result and balance sheet.
The financial statements treatment of emissions trading, which started at the
beginning of 2005, follows the IFRS accounting practice, which permits the
recognition of emissions trading at acquisition cost. As of 1 January 2005,
the Kyro Group is applying classification and valuation rules for financial
assets as well as hedge accounting of foreign currency and electricity
derivatives in accordance with the IAS 32 and IAS 39 standards.
GLASTON TECHNOLOGIES
NET SALES, OPERATING PROFIT AND ORDER BOOK
Glaston Technologies net sales totalled EUR 50.7 (52.8) million in the
period under review. Operating profit was EUR 4.5 (7.1) million, representing
9.0% (13.5) of net sales. Glaston Technologies order book rose to a record
high due to the Glass Machinery groups good order intake and stood at
EUR 114.5 (93.5) million on 31 March. Order intake in April was EUR 21.5 million
and order book increased further to EUR 123.6 (98.7) million.
The net sales and profitability of the Glass Machinery group fell somewhat from
the corresponding period last year. The direct effect of the strengthening of
the euro was to reduce net sales by EUR 0.6 million. The strong euro had a
weakening effect on sales of pre-processing machines in particular. Net sales
and profitability in the first quarter of 2004 were exceptionally high. In
the current year, Glass Technologies net sales and operating profit by quarter
will be weighted more towards the end of year than in 2004.
The Glass Processing groups net sales and operating profit fell compared with
the corresponding period last year. Glass Processings order book, however,
has grown compared with the corresponding period in 2004.
GLASS MACHINERY GROUP
Markets and sales
Demand in the main market areas developed positively for both pre-processing and
safety glass machines compared with the previous year. Orders received focused
on machines with a more demanding level of technology. Clearly more orders for
architectural glass machines were received than in the corresponding period last
year. Automotive glass industry demand also continued the positive trend that
began at the end of 2004.
The situation in the Middle East market developed favourably. In North America,
demand remained at the level of the previous year. Sales in China are growing
and trending towards machines with a more demanding level of technology. In
Europe, economic conditions continue to restrict growth in demand for glass
processing machines.
Tamglass and Bavelloni participated in the international China Glass 2005 Fair,
which was held in China in April, and the event proved to be a commercial
success for both product lines. At the fair, Tamglass launched new machines
for the Chinese market.
Joint sales organisation
The Tamglass and Bavelloni sales groups as well as their strategic business
areas were merged at the beginning of 2005. This will support the development
of Tamglass and Bavellonis business operations and the One-Stop-Partner
concept, and will improve and enhance the efficiency of customer service.
Production and new products
Overall, the capacity utilisation rate at Glaston Technologies machine
factories was good. Production at Bavellonis Brazilian factory is still
at the start-up stage and will gradually grow this year in accordance with
plans. The manufacturing of all machinery companies is flexible in terms of
capacity and is based on own assembly and a strong subcontracting network.
Glaston Technologies has decided to build a new, larger factory in China. This
will enable Tamglass to increase its machinery production and expand its
product range. In addition, Bavelloni will start manufacturing its products in
China.
Bavelloni has developed the MAGNUMTM grinding machine and tool series for the
cost-effective, quality pre-processing of large glass sizes. Tamglass continued
its delivery of large tempering machines, the latest being the ProE MAGNUMTM,
the worlds largest flat tempering machine for low-E glasses.
Maintenance services
Demand for spare parts and machine options has picked up. The order book for used
machines is good and will be recognised as income mainly in the second half of the
year. Owing to active sales work, the number of maintenance contracts has
continued to grow. The first customer deliveries of the Tamglass Reactor
production-monitoring service were also scheduled for the first quarter.
The Tamglass-Bavelloni joint maintenance network, the industrys most
comprehensive, will be developed further with the objective of providing better
customer service.
GLASS PROCESSING GROUP
Tamglass Glass Processings order book was at a good level at the end of the
period under review compared with the corresponding period last year. Operating
profit was weakened by restructuring and efficiency improvement measures at
Tamglass Finton.
Tamglass Glass Processing has received and already partly implemented large
safety glass orders for a number of large construction projects, for example
Europes highest wood-structure office building in Espoo. Other notable
deliveries included the Kaari building in Helsinki, a Scandic Hotel in
Tampere and number of glazing systems at the Kamppi shopping centre in
Helsinki.
ENERGY
Net sales, operating profit and order book
The net sales of the Energy business area totalled EUR 8.0 (7.5) million.
Operating profit was EUR 2.0 (1.7) million, representing 25.1% (23.1) of net sales.
Profitability was improved by increased demand from forest industry customers
and higher than normal hydropower production made possible by higher rainfall.
Kyro Powers order book (12 months) stood at EUR 24.6 (22.7) million.
Development of the energy market
The greatest change in the energy market was the start of emissions trading at the
beginning of 2005. Kyro Power has sufficient emission rights relative to the volume
of its activities. Prices of emission rights were at a low level at the beginning
of the year, but started to rise in February. At the end of March, prices peaked
at 17 euros per tonne of carbon dioxide. Because Kyro Power burns low-emission
natural gas, its carbon dioxide emissions are low compared with other plants that
use fossil fuels. This gives Kyro Power a significant competitive advantage.
At the beginning of the year the water situation normalised, but then
weakened in March-April. This, coupled with the rise in emission rights,
led to a rise in the price of electricity.
Development of the energy business
Kyro Powers Partner project continues.
EVENTS AFTER THE REVIEW PERIOD
There have been no substantial changes after the review period.
FUTURE OUTLOOK
Kyro Groups position as it enters 2005 is fundamentally sound. Its order
and offer books are at a record level.
The industrys most extensive customer service network, widest product
range and the One-StopPartner concept create for Glaston Technologies
good opportunities to respond better to customers needs. Glaston
Technologies is striving to strengthen its position in the market,
enhance its operations and exploit synergies.
Kyro is aiming for better net sales and operating profit than last year.
The strength of the euro and the weakness of demand for glass processing
machines in Central Europe are the most significant risk factors that may
slow growth of the Kyro Groups net sales and profitability in the current
financial year.
Helsinki 11 May 2005
Kyro Corporation
Board of Directors
Additional information about Kyros financial statements can be obtained
from Kyros President and CEO Pentti Yliheljo and Chief Financial
Officer Vesa Hopia, tel. +358 3 382 3111.
Investor Kyro Corporation, Chief Financial Officer Vesa Hopia,
relations: tel. +358 3 382 3111, IR pages at the Internet address
www.kyro.fi
Distribution: Helsinki Exchanges
Key media
KYRO GROUP 1-3/2005, INCOME STATEMENT AND BALANCE SHEET
Consolidated Income Statement, EUR million
1-3/05 1-3/04 1-12/2004
et sales 58.7 60.3 231.4
Other operating income 0.5 0.4 1.1
Operating expenses 52.1 50.6 203.6
Depreciation 2.1 2.0 8.4
Operating profit 5.1 8.0 20.5
% of net sales 8.7 13.3 8.8
Net financial income and expenses 0.1 0.7 2.1
Profit before taxes and
minority interest 5.2 8.8 22.5
Income tax -1.8 -2.7 -7.9
Minority interest 0.0 0.0 -0.2
Profit for the financial year 3.4 6.1 14.5
Earnings per share. EUR 0.04 0.08 0.18
Consolidated Balance Sheet, EUR million
31.3.2005 31.3.2004 31.12.2004
Assets
Non-current assets 120.2 119.9 118.4
Inventories 65.1 65.8 63.3
Trade and other receivables 47.3 56.4 54.8
Assets recognised at fair value
through profit and loss 6.3
Financial securities 9.1 5.3
Cash and cash equivalents 5.2 14.9 6.2
Assets, total 244.1 266.2 248.0
Shareholders equity and liabilities
Shareholders equity 120.2 118.2 121.6
Minority interest 0.6 0.5 0.5
Shareholders equity, total 120.8 118.7 122.2
Provisions 7.7 6.8 6.8
Non-current interest-bearing
liabilities 0.6 1.9 0.7
Non-current non-interest-bearing
liabilities 7.9 9.7 8.3
Current interest-bearing
liabilities 23.1 31.7 19.6
Current non-interest-bearing
liabilities 84.0 97.3 90.4
Shareholders equity
and liabilities, total 244.1 266.2 248.0
Cash flow calculation, EUR million
1-3/05 1-3/04 1-12/04
Cash flow from business operations 3.1 7.3 13.4
Cash flow from investments -1.7 -1.0 -4.2
Cash flow from financing -2.5 -12.3 -23.7
Change in liquid assets -1.0 -5.9 -14.6
Key figures 1-3/05 1-3/04 1-12/04
Number of shares, 1,000 79 350 79 350 79 350
- of which outstanding, 1,000 79 020 79 020 79 020
Return on capital invested, % 15.2 23.4 11.7
Return on equity, % 11.3 20.2 11.9
Equity ratio, % 59.4 53.8 59.3
Gearing, % 10.1 8.0 7.1
Equity per share, EUR 1.52 1.50 1.54
Investments, EUR million 1.9 1.0 4.6
Personnel, average 1 201 1 128 1 175
Personnel at end of year 1 204 1 126 1 208
Order book, EUR million 139.1 116.2 135.5
Contingent liabilities, EUR million
31.3.2005 31.3.2004 31.12.2004
Company mortgages
Other own liabilities 0.4 0.5 0.4
Derivatives contracts 15.1 17.4 14.8
Value of underlying assets
Forward currency contracts 13.4 23.5 17.6
Electricity contracts 5.8 2.8 2.3
Fair value
Forward currency contracts
Positive fair value 0.0 0.4 0.6
Negative fair value -0.3 -0.4 0.0
Electricity contracts
Positive fair value 0.1 0.1 0.5
Negative fair value -0.4 -0.2 0.0
NET SALES, OPERATING PROFIT AND ORDER BOOK BY QUARTER
Net sales
2004 2005
1-3/04 4-6/04 7-9/04 10-12/04 1-3/05
EUR million
Glaston
Technologies 52.8 53.9 47.1 49.3 50.7
Energy 7.5 6.5 6.7 7.7 8.0
Parent company, other operations
and elim. 0.0 0.0 -0.1 0.0 0.1
Group total 60.3 60.4 53.7 57.0 58.7
Operating profit and operating profit %
2004 2005
1-3/04 4-6/04 7-9/04 10-12/04 1-3/05
EUR million
Glaston
Technologies 7.1 4.6 5.0 1.7 4.5
Operating profit % 13.5 8.5 10.5 3.4 9.0
Energy 1.7 1.2 1.0 1.7 2.0
Operating profit % 23.1 18.3 15.5 22.3 25.1
Parent company,
other operations
and elim. -0.8 -0.6 -0.8 -1.3 -1.4
Group total 8.0 5.1 5.2 2.1 5.1
Operating profit % 13.3 8.5 9.8 3.6 8.7
Order book
03/04 06/04 09/04 12/04 03/05
EUR million
Glaston
Technologies 93.5 97.6 100.8 111.0 114.5
Energy 22.7 22.7 22.7 24.5 24.6
Group total 116.2 120.3 123.5 135.5 139.1
Group shareholders equity change calculation, EUR million
Fair
Share Share Premium Translation value Retained Total
capital fund differences fund earnings assets
Shareholders
equity 1.1.2005 12.7 25.3 0.0 83.6 121.6
IAS39, Financial instruments,
recognition and valuation 0.5 0.5 1.0
Change in translation difference 0.5 0.5
Recognitions to fair
value fund -0.8 -0.8
Dividend distribution -5.5 -5.5
Profit for financial period 3.4 3.4
Shareholders
equity 31.3.2005 12.7 25.3 0.5 -0.3 82.1 120.2
Fair
Share Share Premium Translation value Retained Total
capital fund differences fund earnings assets
Shareholders
equity 1.1.2004 6.3 31.6 0.7 85.1 123.7
Change in translation difference 0.2 0.2
Dividend distribution -11.9 -11.9
Profit for financial period 6.1 6.1
Shareholders
equity 31.3.2004 6.3 31.6 0.8 79.3 118.2
Comparison figures
FAS IFRS
Consolidated income statement 03/04 Change 03/04
EUR million
Net sales 51.5 8.8 60.3
Other operating income 0.4 0.4
Operating expenses 45.4 5.3 50.6
Depreciation without amortisation
of consolidated goodwill 1.7 0.4 2.0
Operating profit before
amortisation of consolidated goodwill 4.9 3.1 8.0
% of net sales 9.5 13.3
Amortisation of consolidated goodwill 0.8 -0.8 0.0
Operating profit 4.1 4.0 8.0
% of net sales 7.9 13.3
Financial items 0.8 0.0 0.7
Profit before taxes 4.8 4.0 8.8
Income tax -1.8 -0.8 -2.7
Minority interest 0.0 0.0 0.0
Profit for financial period 3.0 3.1 6.1
Earnings per share 0.04 0.04 0.08
FAS IFRS
Consolidated balance sheet, EUR million 31.3.2004 Change 31.3.2004
Assets
Non-current assets 116.2 3.7 119.9
Inventories 38.4 27.4 65.8
Trade and other receivables 64.1 -7.7 56.4
Financial securities 9.1 9.1
Cash and cash equivalents 14.9 14.9
Balance sheet total 242.7 23.4 266.2
Shareholders equity and liabilities
Shareholders equity 127.1 -8.9 118.2
Minority interest 2.3 -1.8 0.5
Shareholders equity. total 129.4 -10.7 118.7
Provisions 6.1 0.8 6.8
Non-current interest-bearing
liabilities 1.4 0.5 1.9
Non-current non-interest-bearing
liabilities 8.6 1.1 9.7
Current interest-bearing
liabilities 31.6 0.1 31.7
Current non-interest-bearing
liabilities 65.6 31.6 97.3
Balance sheet total 242.7 23.4 266.2
Figures are unaudited.
