Date: 9 February 2007
The main business area, Glaston Technologies, consists of the Glass Machinery Group and Tamglass Glass Processing Ltd.
The Glass Machinery Group is the world market leader in glass processing machines. The Glass Machinery Group’s products are glass pre-processing machines as well as safety glass machines for the architectural and automotive industries. The group consists of Tamglass, the technology and market leader in safety glass machines; Uniglass, which manufactures flat tempering machines; the leading supplier of glass pre-processing machines Bavelloni, which also produces stone processing machines; and DiaPol, which manufactures tools for glass and stone pre-processing.
Tamglass Glass Processing focuses on markets in Finland and neighbouring countries and is the leading comprehensive supplier of glass processing products in Finland. Its safety and insulating glass products sold under the Tamglass brand as well as its balcony systems are supplied to the building, window and door industries, specialty vehicle manufacturers and construction
projects. Kyro’s second business area is Energy, which consists of the electricity and heat generating gas-fired combi power plant of Kyro Power Oy.
THE GROUP’S EFFICIENCY PROGRAMMES
In 2006 the Group initiated efficiency programmes which Kyro now estimates will have a positive impact on profits of EUR 4.5 million in the current year. To support future growth, it was decided to increase Bavelloni’s maintenance and service personnel at the end of the year, as a result of which the net personnel reductions of Bavelloni’s efficiency programme are smaller than anticipated. The estimated six million euros in savings, therefore, have been adjusted downward. The costs of the measures, EUR 5.3 million, were recognised in full during 2006. The related provisions were 1.6 EUR million.
In September, Bavelloni began a programme to boost the efficiency of its Italian operations, which led, among other things, to the closure of the Bergamo assembly plant. The programme also includes other productivity-raising operational and process changes, with arrangements affecting personnel. The outcome of negotiations relating to these measures was a reduction of 59 jobs, mainly in connection with the factory closure.
As part of the programme, the distribution logistics in Europe of Bavelloni’s tools and spare parts were enhanced. The area’s three tool and spare parts warehouses were centralised in Italy, from where they can be delivered to European customers more quickly than before. Measures taken in the Glass Processing Group included the restructuring of Tamglass Finton, the merger of three Glass Processing Group companies into one company, and the personnel reductions, a total of 36 employees, that followed from these.
NET SALES AND PROFIT
The Kyro Group’s net sales were EUR 268.9 (266.7) million in 2006. The Group’s comparable operating profit was EUR 22.0 (23.0) million, representing 8.2% (8.6%) of net sales.
Comparable operating profit does not include non-recurring items totalling EUR 5.6 million recognised in 2006 for the above-mentioned efficiency programmes. They consist of EUR 1.3 million for the Glass Processing Group restructuring and EUR 4.0 million for the Bavelloni efficiency programme. In addition, a non-recurring item of EUR 0.3 million was recognised for the Energy business area’s Partner project.
Comparable profit before taxes was EUR 22.3 (21.9) million, representing 8.3% (8.2%) of net sales.
Taking into account the recognised non-recurring items, profit before taxes was EUR 16.7 (34.3) million. Profit for the financial period was EUR 12.1 (22.4) million. This includes a EUR 1.8 million tax refund from previous years. Return on invested capital was 12.1% (26.1%). Earnings per share were EUR 0.15 (0.28) and equity per share was EUR 1.75 (1.76).
Net financial items totalled EUR 0.3 (—1.2) million. This includes interest, dividend and other financial income of EUR 2.2 (2,4) million, and interest and other financial expenses of EUR —1.9 (—3.7) million. The Group’s order book on 31 December 2006 was EUR 127.5 (140.7) million.
In 2006 Kyro, commenting on its future prospects, stated that both the previous year’s net sales and comparable operating profit were expected to grow. After the third quarter, the estimate was adjusted by mentioning that
certain significant delivery projects had been postponed to 2007 and that realising the target level would be substantially decided by other orders in the latter part of the year. Kyro increased its net sales, but comparable operating profit fell slightly from the previous year, as the profitability of the above-mentioned other orders at the end of the year proved to be weaker than expected.
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