07/28/2014

Glaston Interim Report 1 January – 30 June 2014

Glaston Interim Report 1 January – 30 June 2014: Signs of a market picking up in the second quarter; Glaston revises its operating profit guidance

Glaston Corporation is adopting a new disclosure procedure in accordance with Regulations and Guidelines 7/2013 (disclosure obligation on issuers) of the Financial Supervisory Authority and is publishing the interim report for January-March 2014 as an attachment to this stock exchange release. Glaston Corporation’s interim report for January-March 2014 is a PDF file attachment to this stock exchange release and is available on the company’s website at the address www.glaston.net.

KEY POINTS JANUARY – JUNE 2014
• Orders received in January-June totalled EUR 55.5 (55.8) million. Orders received in the second quarter were EUR 29.1 (26.9) million.
• The order book on 30 June 2014 was EUR 34.7 (33.8) million.
• Consolidated net sales in January-June totalled EUR 58.2 (60.1) million. Second-quarter net sales were EUR 35.2 (33.7) million.
• EBITDA was EUR 3.0 (6.8) million, i.e. 5.1 (11.2)% of net sales; the comparison year figure includes non-recurring items totalling EUR 3.8 million.
• The operating result, excluding non-recurring items, in January-June was a profit of EUR 1.3 (0.7) million, i.e. 2.2 (1.2)% of net sales. The second-quarter operating result, excluding non-recurring items, was a profit of EUR 2.0 (1.1) million.
• The operating result in January-June was a profit of EUR 0.7 (4.5) million, i.e. 1.1 (7.4)% of net sales. The second-quarter operating result was a profit of EUR 1.4 (1.1) million.
• Continuing Operations’ return on capital employed (ROCE) was 2.3 (16.8)%.
• Continuing Operations’ January-June earnings per share were EUR 0.00 (0.03).
• Glaston’s interest-bearing net debt totalled EUR 10.7 (12.3) million.
• Glaston adjusts its outlook and expects that 2014 net sales and operating profit, excluding non-recurring items, will grow.

ADJUSTMENT TO OUTLOOK FOR 2014
Glaston adjusts its outlook for 2014. Glaston adjusts its outlook and expects that 2014 net sales and operating profit, excluding non-recurring items, will grow (previous outlook: Glaston expects that 2014 net sales and operating profit will grow).

PRESIDENT & CEO ARTO METSÄNEN:
“For Glaston, the second quarter was significantly better than the first. Our net sales grew compared with the corresponding period of the previous year and our operating result, excluding non-recurring items, was positive at EUR 2.0 million. The January-June operating profit, excluding non-recurring items, improved compared with the corresponding period last year by EUR 0.6 million, despite the fact that net sales were slightly below the previous year’s level. This shows that our profitability is developing in the right direction.

In the second quarter, new orders received were on a higher level than the previous year and reduced the difference caused by the low level of the first quarter. We ended up, in practice, at the previous year’s level for the whole first half of the year. We continue to believe that full-year net sales will exceed the previous year´s level.

Although the net sales of each reporting segment for the first six months fell short of the previous year’s figures, business profitability has improved. In the Machines segment, demand has been strong, particularly for furnaces of the FC product series. Demand for pre-processing machines has improved but profitability is still unsatisfactory. In the Services segment, there was a slight pick-up in demand, especially towards the end of the second quarter.

We will continue our systematic work with both growth and profitability measures during the second half of the year. In line with our strategy, we are focusing more strongly on developing the customer experience, and during the early part of the year we have received encouraging feedback on our work from our customers. Our goal is to achieve the highest customer satisfaction in our field of business.”

KEY FIGURES
30.6.2014 30.6.2013 31.12.2013
Order book, EUR million 34.7 33.8 39.1
Orders, received, EUR million 55.5 55.8 123.3
Net sales, EUR million 58.2 60.1 122.2
EBITDA, EUR million 3.0 6.8 10.5
EBITDA, as % of net sales 5.1 11.2 8.6
Operating result (EBIT), EUR million 0.7 4.5 5.9
Operating result (EBIT), as % of net sales 1.1 7.4 4.8
Profit / loss for the period, EUR million 0.6 4.3 1.3
Earnings per share, EUR 0.00 0.03 0.01
Net cash flow from operating activities -1.3 1.7 7.1
Return on capital employed, %, annualized 2.3 17.0 9.9
Gross capital expenditure, EUR million 1.0 1.7 2.8
Equity ratio, % 45.0 46.5 45.4
Gearing, % 46.7 49.2 49.3

OPERATING ENVIRONMENT
In January-June 2014, Glaston’s markets developed largely according to expectations. Market growth of new machines was good in the EMEA area. Stable development continued in North America and in Asia. In South America, the machine market remained subdued. The service market continued to be challenging.

In the Machines segment, the market picked up in the second quarter after a relatively quiet first quarter. In the EMEA area, particularly the UK and Central Europe, the market for heat treatment machines developed positively. In North America, market development was stable due to recovering office and residential construction. In South America, the market remained quiet. In Asia, market development was uneven. In China, stable development continued. In the Pacific area, growth slowed significantly compared with the corresponding period of the previous year. The difficult market situation for pre-processing machines continued in the second quarter. In North America, however, demand for pre-processing machines was satisfactory. In other areas, demand was weaker.

The Services segment’s year continued to be challenging for all product lines. Despite the difficult market situation, the company maintained its strong market position.

OUTLOOK
Glaston still expects the market overall to grow moderately in 2014. In North America, market growth is expected to continue. The European economy has shown signs of strengthening, and the positive development of the EMEA area is expected to continue. In Asia, and particularly in China, stable development is expected, despite the short-term uncertainty overshadowing the market. The largest challenges are directed at South America, where market development has slowed.

Glaston operates in growing markets, and the safety glass market is expected to grow by nearly 7% per year up to 2017. Drivers of growth include increasing use of safety glass, greater use of glass in construction, and more widespread utilisation of energy-saving glass in both renovations and new construction. In accordance with its strategy, the company will increasingly focus on enhancing customer benefit and customer experience as well as on traditional areas of expertise, namely glass processing machines and related services, with the goal of delivering the industry’s best customer satisfaction.

Glaston adjusts its outlook and expects that 2014 net sales and operating profit, excluding non-recurring items, will grow (previous outlook: Glaston expects that 2014 net sales and operating profit will grow).

PRESS MEETING
An analyst and press conference is organized at Glaston’s office on Yliopistonkatu 7, Helsinki, on 24 July 2014 at 13.00 p.m.

DISCLOSURE PROCEDURE
Glaston Corporation is adopting a new disclosure procedure in accordance with Regulations and Guidelines 7/2013 (disclosure obligation on issuers) of the Financial Supervisory Authority and is publishing the interim report for January-March 2014 as an attachment to this stock exchange release. Glaston Corporation’s interim report for January-March 2014 is a PDF file attachment to this stock exchange release and is available on the company’s website at the address www.glaston.net.

Source: Glaston/glaston.net