Glaston’s Financial Statement Bulletin: Good fourth quarter – orders received grew and comparable operating profit improved

2019-02-12, Glaston

This release is a summary of Glaston Corporation's financial statements bulletin for 2018.

FOURTH QUARTER 2018 IN BRIEF

Orders received grew by 18% and totaled EUR 33.9 (28.8) million.
Net sales totaled EUR 27.8 (29.7) million.
Comparable EBITDA was EUR 3.2 (2.2) million, 11.5 (7.3)% of net sales.
The operating profit was EUR 1.1 (1.2) million, 4.1 (4.1)% of net sales.
The comparable operating profit improved to EUR 2.5 (1.4) million, 8.8 (4.8)% of net sales.
Earnings per share were EUR 0.005 (0.003).
The comparable earnings per share were EUR 0.012 (0.005).
Cash flow from business operations was EUR 5.2 (7.3) million.

JANUARY–DECEMBER 2018 IN BRIEF

Orders received totaled EUR 107.6 (103.7) million.
The order book on 31 December 2018 was EUR 38.2 (34.1) million.
Net sales totaled EUR 101.1 (109.7, taking into account sold business operations 106.7*) million.
Comparable EBITDA was EUR 8.2 (8.0) million, 8.1 (7.3)% of net sales.
The operating profit was EUR 3.4 (4.6) million, 3.4 (4.2)% of net sales.
The comparable operating profit improved to EUR 5.2 (5.0) million, 5.2 (4.6)% of net sales.
Return on capital employed (ROCE) was 6.8 (9.2)%.
Comparable ROCE was 10.5 (10.0)%.
Earnings per share were EUR 0.011 (0.014).
The comparable earnings per share were EUR 0.021 (0.016).
Cash flow from business operations was EUR 0.0 (0.1) million.
Net interest-bearing debt totaled EUR 4.9 (0.9) million.
Research and development expenditure, excluding depreciation, totaled EUR 3.7 (4.0) million, i.e. 3.7 (3.6)% of net sales.
The Board of Directors proposes, subject to decision by the Extraordinary General Meeting, that a return of capital of EUR 0.006 per share be paid before the reverse share split to be approved by the Extraordinary General Meeting to be held on 26 February, which is equivalent to approximately EUR 0.03 per share after the reverse share split proposed by the Board of Directors.

Glaston has applied the new revenue recognition standard IFRS 15 fully retrospectively from 1 January 2018, and therefore the financial statements 1 January – 31 December 2018 are reported in accordance with the new standard for 2018 actual data and 2017 comparison data. Adjusted comparison figures presented in the tables of the review refer to IFRS 15 adjustments.

* In May 2017, Glaston sold its pre-processing business in the USA and Canada, and in December 2018 its Tools business in Italy and the USA.

GLASTON’S OUTLOOK FOR 2019
The company’s business is seasonal and, historically, the first quarter of the year is generally the weakest and the fourth quarter the strongest. Net sales and comparable operating profit are expected to be low for the first quarter of 2019, due to the low number of new orders received in the third quarter and the beginning of the fourth quarter of last year.

Deviating from Glaston’s disclosure policy and due to the timetable of the Bystronic glass acquisition, Glaston will disclose information on its outlook for the whole of 2019 at a later stage.

Factors and uncertainties affecting the company’s short-term development are outlined in more detail in the section ‘Uncertainties and factors affecting development in the near future’.

PRESIDENT & CEO ARTO METSÄNEN:
“Glaston’s development in the final quarter of 2018 was good. The Glasstec fair was strongly reflected in the development of the fourth quarter, and indeed of the whole autumn. The fair was a success for Glaston, and our fourth quarter order intake grew 18% from the comparison period. We received a number of large orders from different parts of the world, and the pick-up in the North American market was particularly positive. Net sales for the quarter fell slightly compared to the corresponding period last year.

I am particularly satisfied with our profitability development in the final quarter. Our comparable operating profit improved significantly, and the comparable operating profit margin was a record 8.8%.

Overall, 2018, despite a couple of weak quarters, was good. Our order intake grew 4% and our order book 12% from the previous year, which created a good basis for 2019 development and at the same time also for future changes. While our net sales declined slightly, our comparable operating profit improved to EUR 5.2 million from the previous year’s EUR 5.0 million.

At the end of November, we divested our Tools business in accordance with our strategy. The sale of the business had a slightly positive impact on the Group’s comparable operating profit. The divestment supports our goal of further improving our profitability.

In our strategy, updated in autumn 2018, we announced our goal to be at the forefront of market development while creating added value for our customers through new technologies and business models. An indication of this was our announcement on 25 January 2019 of the acquisition of the Swiss-German company Bystronic glass. Bystronic glass is a globally operating high-end machinery, systems, software and services provider, whose product offering and services is highly complementary to Glaston’s offering.

The acquisition, the largest in the sector for two decades, is our response to the market’s growing efficiency requirements, changes in glass demand and growing maintenance service needs. It supports our goal of further strengthening our position in the glass processing value chain and diversifying our offering to the architectural market as well as complementing offering to the automotive market. The combination of the companies creates for us a unique opportunity to develop for our customers’ benefit a comprehensive range of products and services that in the future will cover the entire value chain. I am looking forward to our cooperation and believe strongly in our success.”