2020-08-06 12:00:00 CEST

2020-08-06 12:00:16 CEST


REGULATED INFORMATION

English
Glaston Oyj Abp - Half Year financial report

Glaston’s half-year financial report January–June 2020: COVID-19 pandemic impacted orders and net sales, timely cost-savings supported healthy comparable EBITA


GLASTON CORPORATION                 HALF-YEAR FINANCIAL REPORT
          6.8.2020 AT 13.00

This release is a summary of Glaston Corporation's Half-Year January-June 2020
financial report. The complete report is attached to this release as a pdf-file.
The release is also available on the company's website at the address
www.glaston.net.

The half year financial report provides estimates on future prospects involving
risk and uncertainty factors, and other factors as a result of which the
performance, operation or achievements of Glaston may substantially deviate from
the estimates. Forward-looking statements relating to future prospects are
subject to risks, uncertainties and assumptions, the implementation of which
depends on the future business environment and other circumstances, such as the
development of the COVID-19 pandemic.

APRIL–JUNE 2020 IN BRIEF

  · Orders received totaled EUR 24.0 (44.5) million
  · Net sales totaled EUR 48.9 (58.4) million
  · Comparable EBITA was EUR 2.3 (3.6) million, i.e. 4.8 (6.2)% of net sales
  · The operating result (EBIT) was EUR 0.6 (0.4) million
  · The comparable operating result (EBIT) was EUR 1.2 (2.5) million, i.e. 2.5
(4.3)% of net sales
  · Items affecting comparability totaled EUR -0.7 (-2.1) million
  · Comparable earnings per share were EUR -0.007 (0.005)
  · Cash flow from operating activities was EUR -0.3 (-5.4) million

JANUARY–JUNE 2020 IN BRIEF

  · Orders received totaled EUR 69.6 (67.4, pro forma 89.8) million
  · Net sales totaled EUR 95.9 (79.2, pro forma 102.8) million
  · Comparable EBITA was EUR 4.4 (4.2, pro forma 6.4) million, i.e. 4.6 (5.3,
pro forma 6.2)% of net sales
  · The operating result (EBIT) was EUR 0.7 (-0.3, pro forma 1.2) million
  · The comparable operating result (EBIT) was EUR 2.1 (2.6, pro forma 4.1)
million, i.e. 2.2 (3.3, pro forma 4.0)% of net sales
  · Items affecting comparability totaled EUR -1.5 (-2.9, pro forma -2.9)
million
  · Comparable earnings per share were EUR 0.000 (-0.001)
  · Cash flow from operating activities was EUR -3.4 (-3.7) million


GLASTON’S OUTLOOK FOR 2020 UNCHANGED

Glaston Corporation estimates that comparable EBITA for 2020 will decline from
the 2019 level. The company’s current assessment is that the market will recover
gradually and that third- and fourth-quarter orders will improve from the second
quarter but stay below the previous year’s levels. The lower than 2019 order
intake and slower than normal volume in services business impacts the
development of net sales and earnings in 2020. The uncertainty surrounding the
assessment remains, and the situation might change quickly depending on the
development of the COVID-19 pandemic and the general economic climate.


ACTING PRESIDENT & CEO SASU KOIVUMÄKI:
The second quarter was clearly impacted by the pandemic – profitability
supported by timely cost savings and employee flexibility

“The spread of the COVID-19 pandemic accelerated in the Western countries at the
beginning of the second quarter, severely impacting all areas of society and
businesses. To Glaston this was evident in the significant decrease in orders
across all businesses, and several orders expected in the second quarter were
postponed due to market uncertainty. Although far from recovering, it seems we
have passed the steepest decline, and the majority of second-quarter orders were
in fact received in June. Although we have been impacted by the pandemic, and
will continue to be so throughout the year, our continuous customer dialogue
reassures me that several of the projects discussed earlier will ramp up once
the situation has settled to some extent. No orders in the order book have been
cancelled.

Throughout the pandemic, Glaston has been able to deliver all projects according
to schedule. However, at the beginning of the quarter, a number of customers,
mainly from the US, postponed project deliveries and installations due to the
economic uncertainty and restrictions caused by the pandemic. These
postponements have had a negative impact on our second-quarter net sales. Our
Services sales were strongly impacted by travel restrictions, the containment
measures of various countries and by the decreased or no production activity in
customer operations. The low demand  in the automotive industry also continued
to impact Services negatively. Although decreasing, our net sales remained at a
reasonable level at EUR 48.9 million, compared to the peaking second quarter of
2019. Profitability was impacted by lower sales volumes and sales mix, but still
held up rather well, thanks to clearly lower fixed costs from organizational
streamlining and temporary lay-offs as well as lower than usual marketing and
travelling costs. Also cost synergies from the Bystronic glass integration were
clearly higher than a year ago at the start of the integration. I want to thank
all our employees for their efforts, flexibility and efficiency in this
difficult situation.

Due to the current crisis, the Emerging Technologies (ET) market was slow in the
second quarter. ET provides consulting and engineering services to technology
companies and helps them commercialize technologies in the glass industry while
also creating new opportunities for Glaston’s equipment business. In the second
quarter, ET started a consulting project with a technology company designing
solutions integrating solar technology into buildings. During the first half of
2020, Heliotrope successfully raised additional funding from new investors,
despite of the challenging environment.

Mitigating COVID-19 related near-term business disruptions has been high on our
agenda throughout the spring and we have taken prompt action to safeguard the
health and safety of our employees and the company’s financial stability. We
have created tools that will enable us to adapt our operations quickly. In
Finland, temporary lay-offs for all personnel flexibly continue throughout the
year, and corresponding measures have also been implemented in Switzerland, the
USA and the UK. We are constantly monitoring the development of the situation,
our orders and order book, the company’s cash flow and liquidity, as well as
government and other aid available in different countries.

We are pleased to see that the EU’s recovery strategy for the pandemic, and
other support packages, involve investments in energy efficiency and digital
solutions. Glaston offers an extensive portfolio of products and solutions
answering to these needs.

Uncertainty in the market remains high. The lower than 2019 order intake and
slower than normal volume in the Services business impacts the development of
net sales and earnings in 2020. Currently, we estimate that new orders in the
third and fourth quarter will increase from the second quarter levels. The
postponement of the delivery of some orders will impact the development of net
sales and earnings in the near future.”



GLASTON GROUP KEY FIGURES


Glaston Corporation’s acquisition of Bystronic glass was completed on 1 April
2019. The comparison data of this financial interim report for the period
1 January – 31 March 2019 do not include figures for Bystronic glass. Glaston
Corporation has prepared unaudited pro forma financial information to illustrate
the impact of the Bystronic glass acquisition, completed on 1 April 2019, on the
Group’s operational result and financial position and to improve the
comparability of financial information. The unaudited pro forma financial
information for 1 January – 31 March 2019 and 1 January – 31 December 2019
presented in this interim report is presented as if the acquisition would have
already been completed on 1 January 2019. Pro forma financial information has
been titled Pro forma information in the places in the interim report where the
information is presented.

As of 1 January 2020, the company has three reporting segments: Glaston Heat
Treatment, Glaston Insulating Glass and Glaston Automotive & Emerging
Technologies. Services business is included in the reporting segments. Machine
and Services sales, order intake and order book are also reported separately as
additional, product area, information. On 18 March 2020, the company published
comparative information according to the new structure.

EUR million    4–6/20  4–6/20  1–6/20  1–6/20  1–12/2  Pro forma  Pro forma
                                           19  019      1–6/2019  1–12/2019
                   20      19      20
Orders           24.0    44.5    69.6    67.4   162.2       89.8      184.6
received
of which          9.9    17.9    25.4    25.3    58.5       35.3       68.3
service
operations
of which        41.3%   40.3%   36.5%   37.5%   36.1%       39.3      37.0%
service
operations, %
Order book at                    49.1    78.9    79.5       78.9       79.5
end
of period
Net sales        48.9    58.4    95.9    79.2   181.0      102.8      204.6
of which         11.2    14.9    27.7    22.6    57.1       31.8       67.1
service
operations
of which        22.8%   25.5%   28.9%   28.6%   31.6%      30.9%      32.8%
service
operations, %
EBITDA            2.6     2.8     4.8     3.3     6.9        5.9        9.5
Items            -0.7    -2.1    -1.5    -2.9    -7.2       -2.9       -7.2
affecting
comparability
Comparable        3.3     4.9     6.3     6.2    14.1        8.8       16.7
EBITDA
Comparable       6.7%    8.4%    6.5%    7.8%    7.8%       8.5%       8.2%
EBITDA,
%
Comparable        2.3     3.6     4.4     4.2     9.7        6.4       12.1
EBITA
Comparable       4.8%    6.2%    4.6%    5.3%    5.4%       6.2%       5.9%
EBITA, %
Operating         0.6     0.4     0.7    -0.3    -1.3        1.2        0.3
result
(EBIT)
Comparable        1.2     2.5     2.1     2.6     5.9        4.1        7.5
operating
result
(EBIT)
Comparable       2.5%    4.3%    2.2%    3.3%    3.3%       4.0%       3.7%
operating
result
(EBIT), %
Profit/loss      -0.3    -1.1    -0.4    -2.2    -4.4        1.1        3.8
before
taxes
Profit/loss      -1.2    -1.8    -1.5    -3.0    -6.4        0.9        3.1
for the
period
Comparable     -0.007   0.005   0.000  -0.001
earnings
per share,
adjusted
with share
issue,
EUR
Number of          84      84      84      84
registered        290     290     290     290
shares
at end of
period
adjusted
with share
issue
(1
000)
Cash flow        -0.3    -5.4    -3.4    -3.7
from
operating
activities
Net interest                     37.4    43.8
-bearing debt
at
end of
period
Return on                        1.0%   -0.6%
investment
(ROI),
%,
(annualized)
Comparable                       4,3%    2,6%
return
on capital
employed
(ROCE), %,
(annualized)
Equity ratio,                   40,8%   34,5%
%
Net gearing,                    51,8%   54,8%
%
Number of                         755     808
employees
at end of
period


BUSINESS RISKS AND NEAR FUTURE UNCERTAINTIES

Glaston’s long-term strategic and operational risks and uncertainties are
described in detail in the company's financial statements bulletin for 2019 and
in the Report of the Board of Directors. Near term risks are mainly related to
the impacts of the COVID-19 pandemic, and have been described in detail in the
Half-Year 2020 financial report.

PRESS MEETING
Glaston’s Acting CEO Sasu Koivumäki and CFO Päivi Lindqvist will present the
financial result to analysts, investors and media representatives on the
publication day at 15.00 (Finnish time) in Finnish at Glaston’s premises on
Lönnrotinkatu 11, Helsinki.

In addition, a live audiocast from the meeting can be accessed through the link:
https://glaston.videosync.fi/2020-08-06
-q2 (https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fglaston.vi
deosync.fi%2F2020-08-06
-q2&data=02%7C01%7C%7C45236b38265e4fed713408d832024099%7C45fc813ada604f18a6e3f5bb
ffa55156%7C0%7C0%7C637314332544192117&sdata=VqAVODfzFBQrS6U05HSXMeGjBUtlwnM2zOvf3
%2Fu44%2Fg%3D&reserved=0). An on-demand version of the presentation will be
available on the company's website later during the same day.



For further information, please contact:
Acting President & CEO Sasu Koivumäki, tel. +358 10 500 500
Chief Financial Officer Päivi Lindqvist, tel. +358 10 500 500

GLASTON CORPORATION
Joséphine Mickwitz, VP, IR, Communications and Marketing, tel. +358 10 500 5070


Glaston Corporation
Glaston is the glass processing industry’s innovative technology leader
supplying equipment, services and solutions to the architectural, automotive,
solar and appliance industries. The company also supports the development of
emerging technologies integrating intelligence to glass.

As of April 2019, Bystronic glass is part of Glaston Group. Together we are
committed to providing our clients with both the best know-how and the latest
technologies in glass processing, with the purpose of building a better tomorrow
through safer, smarter, and more energy efficient glass solutions. We operate
globally with manufacturing, services and sales offices in 11
countries. Glaston’s shares (GLA1V) are listed on NASDAQ Helsinki Ltd.
Distribution: NASDAQ OMX Helsinki, key media, www.glaston.net



08045906.pdf