Glaston’s net sales and profitability up during last quarter

In the second quarter, Glaston sold 100% of the shares of Glaston Italy S.p.A., which specialised in pre-processing operations. As a result, Glaston reassessed its reporting segments and, as of 1 July 2015, combined the operating segments into a single reporting segment.

This interim report has been prepared in accordance with the new segment structure. As of the second quarter of 2015, pre-processing machines business has been classified in Discontinued Operations. Comments in the text refer only to Continuing Operations. Income statement comparison figures have been restated.
According to President and CEO Arto Metsansen, “The third quarter was good in terms of net sales growth. Compared with the corresponding period of the previous year, net sales grew by 57% to EUR 34.3 million. Both the Machines business and the Services business increased their net sales. Growth was mainly in North America, where net sales increased by 60% compared with July-September 2014, and in the EMEA, where net sales grew by 25%. The Asian market, too, showed signs of recovery. Our profitability improved, and the comparable operating profit, excluding non-recurring items, was EUR 2.5 million. Profitability was improved by increased net sales, although fixed costs relating to pre-processing business will adversely affect the year-end result. In respect of these, corrective measures are under way.
 The positive mood that prevailed in the EMEA area deteriorated during the summer. This was reflected in third-quarter orders received, which totalled EUR 28.2 (32.1) million. The order book on 30 September, however, was better than the previous year, EUR 47.8 (41.7) million. We expect order flow to increase slightly during the latter part of the year.
In the third quarter, we initiated measures in South America and Asia to restructure our operations in accordance with the company’s structure and the prevailing market situation. With these measures, we are seeking significant annual savings of fixed costs.”
Glaston expects that Continuing Operations’ 2015 net sales and comparable operating profit, excluding non-recurring items, will exceed the level of 2014 (in 2014 net sales were EUR 109.7 million and comparable operating profit, excluding non-recurring items, was EUR 5.5 million).
In the third quarter of 2015, Glaston’s markets continued to develop positively. In the North American and EMEA area markets, growth continued. In Asia, the machines market showed signs of recovery. In South America, the market remained subdued.
In the third quarter, the market situation remained favourable in North America and the EMEA area. The positive development of the North American market was intensified by construction, as glass processors prepared for additional investments. In the EMEA area, market development was stable.
The market in Asia showed signs of picking up, although the recovery has been at a slower pace than expected. In the third quarter, Glaston received a significant order, when a customer in China ordered two Glaston CCS1000™ glass tempering furnaces. In total, the deal is worth approximately EUR 2.4 million. In the Pacific area, the market developed in a more positive direction, and in the summer Glaston received machine orders from both Australia and New Zealand.
In South America, the market remained weak. Of the area’s largest markets, the unstable economic situation in Brazil in particular slowed customers’ decision-making.
In the heat treatment machines segment, Glaston maintained its strong market position.
 The services market developed favourably during the third quarter. All product groups, excluding tools, developed positively, and Glaston’s market position remained strong.
In modernisation and refurbishment products, the third quarter was very good. Glaston received a significant modernisation order worth approximately EUR 1 million from an automotive glass manufacturer in Spain. Large modernisation and refurbishment deals were also closed for New Zealand, the United Arab Emirates, Israel, Germany, Portugal, the USA and Colombia.
In the third quarter, sales of heat treatment machine spare parts continued to be good. The number of service work orders also grew. With regard to tools, competition continued to be aggressive, and market situation was challenging.
 It is expected that Glaston’s markets will grow moderately in 2015. In sales of new machines, we expect good development to continue in the EMEA area and in North America. Economic uncertainty in the EMEA area as well as its local political tensions might, however, reduce customers’ willingness to invest.
 The very subdued Asian market showed signs of recovery in July-September and we expect the favourable development to continue in the latter part of the year. We expect demand in the South American market to remain subdued in the fourth quarter. In the services market, we expect growth to continue in all product groups and particularly in upgrades.
 Glaston expects that Continuing Operations’ 2015 net sales and comparable operating profit, excluding non-recurring items, will exceed the level of 2014 (in 2014 net sales were EUR 109.7 million and comparable operating profit, excluding non-recurring items, was EUR 5.5 million).