Glaston half year financial report shows a clear turn for the better
Glaston’s outlook remains unchanged, and the company expects the full-year comparable operating result to improve from 2016. (In 2016 the comparable operating result was EUR 2.8 million.)
Orders received totalled EUR 48.1 (53.7) million; the order book on 30 June 2017 was EUR 41.2 (40.9) million; net sales totalled EUR 52.0 (51.5) million; comparable EBITDA was EUR 3.0 (1.6) million, i.e. 5.7 (3.1)% of net sales; the operating result was EUR 1.3 (0.1) million, i.e. 2.5 (0.2)% of net sales; the comparable operating result was EUR 1.5 (0.3) million, i.e. 2.8 (0.5)% of net sales; return on capital employed (ROCE) was 5.3 (0.7)%; earnings per share were EUR 0.002 (-0.003); net interest-bearing debt amounted to EUR 5.9 (11.4) million; research and product development expenditure amounted to 4.0 (2.8) % of net sales.
President & CEO Arto Metsänen: “Glaston’s second quarter was reasonably good, particularly compared with the weak quarter of the previous year. Due to an increased number of deliveries, second-quarter net sales grew by 32%. The comparable operating result improved significantly to EUR 1.4 million, whereas last year the second-quarter result was a loss. The market picked up perceptibly, and new orders grew by 23% compared with the first quarter.
Glaston’s core expertise is in flat tempering technology, and our technological leading position is based on customer-oriented product development. The first deliveries of the updated FC Series™ have begun and we are continuing to increase our lead over our competitors. In addition, our renewed lamination product has received good feedback from the market.
In the glass industry, the trend is clearly towards more intelligent and more functional glass. Emerging glass technologies and value-adding glass products are making a strong entry into the market. As a frontrunner in our sector, we are participating in this development. In June, a glass industry start-up event was held for the first time in connection with the Glaston-organised global Glass Performance Days conference. The aim of the event was to accelerate the development of the sector and introduce new innovations to investors. The conference was attended by more than 660 international experts. The start-up event attracted widespread interest, and a total of 35 start-up companies from all over the world participated in the programme. Glaston’s Emerging Technologies unit is contributing to taking new innovations forward by offering special expertise and technology in glass processing and bringing together the industry’s major companies and startups promoting ground-breaking ideas.”
In the second quarter, activity in the glass processing market developed positively. In the EMEA area, demand remained good. In the Asian market area, activity grew overall, but development varied from country to country. The North American market slowed and customers’ purchasing decisions were delayed. In the South American market, there was a slight recovery from a very low level.
After a quiet first quarter, the Machines business market become more active in the second quarter. In flat tempering, the trend towards significantly larger furnaces continued. The first deliveries of the updated FC Series™ began in the review period. In lamination products, the renewed line solution was well received in the market.
In the EMEA area, decision-making was slow in many countries, but overall market development was stable. The early-year high activity in the Middle East market continued in the second quarter. In the Central European market, demand picked up and Glaston agreed on the delivery of a tempering line to France after a gap of many years. In Eastern Europe, the slow progress of financing decisions postponed customers’ decision-making to future quarters. In Southern Europe, there were signs of emerging investment activity.
The North American market levelled off in the second quarter. In the USA, the market slowed and customers’ investment decisions were postponed. In Canada and Mexico, market development continued to be stable. The South American market picked up marginally, but the market situation in the region remains weak.
In the Asian market area, development was positive, but varied from region to region. The Australian and New Zealand markets remained active. In China, the first signs of a pick-up in construction were perceptible, but demand for glass processing machines remained weak. In Indonesia, Thailand and the Philippines, positive market development continued and was directed particularly at low-emissivity (low-E) glass.
In the Emerging Technologies unit, discussions on solar energy solutions, demanding architectural solutions and automotive industry innovations proceeded. In possible future projects, Glaston would act as the production line supplier.
In the second quarter, the product development of Glaston’s Californian partner, Heliotrope Technologies, advanced to the next stage.
In the second quarter, a cautiously positive development of the Services business market was evident. Orders received grew in the second quarter. The development of the EMEA was double-edged: on the one hand, Glaston received a high number of orders; on the other hand, in several EMEA countries, such as the UK, there was a significant slowdown. The North American market continued to be challenging. In South America, the market continued to be quiet. In the Asian market area, the second quarter was busier than the first, and Glaston closed a few large modernisation deals. Demand for maintenance services in Asia was also good.
The market for modernization products picked up. In April-June, the number of new projects nearly doubled compared with the first quarter. Particularly in Asia, activity was on the rise. In North America, extended decision-making periods and the postponement of provisionally agreed projects slowed sales of upgrades. Of Glaston’s products, the success of the lamination process product ProL-zone continued.
Sales of spare parts remained high in all areas. Service agreements were readily renewed and maintenance work remained buoyant. Development of the tools product group was stable, with the largest areas continuing to be the EMEA area and North America. In the EMEA area, market growth continued.
After a quiet first quarter, the glass processing market became more active to some extent in the second quarter. The prolonged uncertainty in the global economy and increasing political tensions in some regions are impacting customers’ willingness to invest, and decision-making times have lengthened. There are no visible signs of a permanent change in the market, however. We expect the positive market development to continue.
Good order book at start of the year, positive market development and the cost-saving measures undertaken create good conditions for the development of operations in 2017. We expect the full-year comparable operating result to improve from 2016. (In 2016 the comparable operating result was EUR 2.8 million.)