Glaston January-September 2013 interim report: Orders received grew. Glaston adjusts its outlook.

Orders received in the third quarter totalled EUR 34.2 (28.4) million.

-The order book on 30 September 2013 was EUR 42.0 (35.3) million.

-Consolidated net sales in January-September totalled EUR 86.4 (83.4) million. Third-quarter net sales were EUR 26.3 (24.6) million.

-EBITDA was EUR 7.5 (0.2) million, i.e. 8.6 (0.2)% of net sales.

-The operating result, excluding non-recurring items, was a profit of EUR 0.3 (3.9 loss) million, i.e. 0.3 (-4.7)% of net sales. The third-quarter operating result, excluding non-recurring items, was a loss of EUR 0.4 (0.4 loss) million.

-The operating result was a profit of EUR 4.0 (6.9 loss) million, i.e. 4.7 (-8.2)% of net sales. The third-quarter operating result was a loss of EUR 0.4 (0.4 loss) million.

-Continuing Operations’ return on capital employed (ROCE) was 10.3 (-7.6)%.

-Continuing Operations’ January-September earnings per share were EUR 0.02 (-0.10). Continuing and -Discontinued Operations’ earnings per share totalled EUR 0,02 (-0.15) euros.

-Glaston’s interest-bearing net debt totalled EUR 11.4 (56.8) million.

- Glaston adjusts its outlook and expects 2013 net sales to exceed 2012 net sales and both EBIT and EBIT excluding non-recurring items to be positive.

 

President & CEO Arto Metsänen:

“Glaston's operations in the third quarter developed in line with expectations. July-September net sales were slightly higher than the previous year and totalled EUR 26.3 million. Our January-September net sales totalled EUR 86.4 million, also slightly higher than the previous year.

 

 

The level of new orders in the third quarter was good, around 20% higher than the previous year. The positive development of the heat treatment machine market in particular continued, and we closed major deals in the USA and Spain, for example.

In September, we published our updated strategic guidelines and financial targets for 2013–2016. Our main goal is to deliver profitable growth through innovation and technology leadership in selected product groups. Our company has long traditions in the fields of product development and innovation. In the new strategy, we have also highlighted the customer experience as a key area, and our aim is to offer our customers the best customer experience in the industry.

Seasonal variations are typical in our industry, and traditionally the last quarter of the year has been the strongest. I look towards the end of the year with confidence.”

Glaston adjusts its outlook for 2013

Glaston adjusts its outlook. Glaston expects 2013 net sales to exceed 2012 net sales and both EBIT and EBIT excluding non-recurring items to be positive.

(Earlier forecast: Glaston expects 2013 net sales to be on the 2012 level and both EBIT excluding non-recurring items and EBIT to be positive.)

Markets

In the third quarter of the 2013, Glaston’s markets developed in line with expectations. The recovery of the North American market continued. In Asia and South America, market development was stable. In the EMEA area, the market situation remained challenging, but among other things, there was positive development in Spain, the UK and Germany.

Machines

In January-September, the heat treatment machine market developed in line with Glaston’s expectations, and in the third quarter was even above expectations. In pre-processing machines, the market situation continued to be challenging also in the third quarter. The demand for tools remained stable.

In the third quarter, Glaston closed a deal to a value of approximately EUR 3.0 million for a heat treatment line with the Spanish company Tvitec – Técnicas de Vidro Transformado S.L. The line represents Glaston’s latest technology and is a large-scale flat glass tempering line. In addition, a deal worth approximately EUR 5.5 million for glass processing machinery was closed with the US company Cardinal Glass Industries. The first flat tempering line will be delivered by the end of 2013 and the subsequent lines will be delivered in 2014. The orders were divided between the second and third quarter order books. A new product, the ProL500 flat laminating line, was launched onto the Brazilian market. The machine is manufactured at Glaston’s factory in Brazil and the first machine delivery took place in the third quarter.

In the third quarter, product lines prepared for the Vitrum Fair, which was held in October. Among the products presented were the new UC series of automatic cutting lines, the innovative Omnia double edging machine, which is suitable for solar glass applications and the appliance industry, the GlastonAir™ concept, intended for tempering thin glass, and the IriControL™ technology, with which glass processors can measure and minimise anisotropic phenomena in tempered glass.

In January-September, the Machines segment's net sales totalled EUR 64.5 (62.0) million. The operating result, excluding non-recurring items, was a profit of EUR 0.6 (3.1 loss) million. Third-quarter net sales totalled EUR 19.1 (18.4) million and the operating result, excluding non-recurring items, was EUR 0.0 (0.5 loss) million.

Services

In the services market, Glaston position’s remained strong in the third quarter, despite the challenges posed by sales of heat treatment machine spare parts and upgrade products. In spare parts sales for pre-processing machines, the very aggressive price competition continued. Despite this, Glaston succeeded in increasing spare parts sales in Asia and the EMEA area. Maintenance work sales developed in line with expectations.

The third quarter’s most significant deals were a sale worth EUR 0.5 million to the USA, in which the customer will upgrade its flat tempering line with heating and cooling chambers, and a sale valued at EUR 0.3 million to Poland, in which a machine will be modernised to meet today’s low-e requirements.

In January-September, the Services segment’s net sales totalled EUR 22.2 (22.4) million and the operating profit, excluding non-recurring items, was EUR 3.6 (4.0) million. Third-quarter net sales totalled EUR 7.5 (6.8) million and the operating profit, excluding non-recurring items, was EUR 1.2 (1.2) million.

Significant sales of assets during the review period

Glaston completed the sale of its Software Solutions business area in the first quarter. The sales price was approximately EUR 18 million, of which a portion is contingent. The result of Glaston’s Discontinued Operations in 2013 includes the result of the Software Solutions business area for the period 1 January–31 January 2013 as well as the result on the sale of the business area.

During the first quarter, Glaston also completed the sale and leaseback of the Tampere factory property complex in Finland. The sale resulted in a non-recurring capital gain of EUR 3.7 million.

Continuing Operations’ orders received and order book

Glaston's order intake in the review period totalled EUR 90.0 (84.8) million. Of orders received, the Machines segment accounted for 76% and the Services segment 24%. Orders received during the third quarter of the year totalled EUR 34.2 (28.4) million.

Glaston's order book on 30 September 2013 was EUR 42.0 (35.3) million. Of the order book, the Machines segment accounted for EUR 40.0 million and the Services segment for EUR 2.0 million.

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