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2009-10-29 12:00:00 CET 2009-10-29 12:00:03 CET REGULATED INFORMATION Glaston Oyj Abp - Interim report (Q1 and Q3)Glaston Interim Report 1 January - 30 September 2009Glaston Corporation Interim Report 29.10.2009 at 13.00 Glaston Interim Report 1 January - 30 September 2009 -Orders received in January-September totalled EUR 100.3 (185.9) million. Orders received in the third quarter totalled EUR 33.0 (49.1) million. -Glaston's order book on 30 September 2009 was EUR 40.9 (84.4) million. - Consolidated net sales in January-September were EUR 115.9 (201.5) million. - The operating result in January-September was a loss of EUR 26.9 (6.5 profit) million, representing -23.2 (+3.2)% of net sales. - The operating result, excluding non-recurring items, was a loss of EUR 22.6 (6.5 profit) million. - Return on capital employed (ROCE) was -18.8 (+6.2)%. - Earnings per share in January-September were EUR -0.34 (+0.04). -Due to aweak order book in 2009, exceptionally low demand and necessary adjustment measures, Glaston still expects 2009 net sales to fall short of the 2008 level and the operating result for the full year to be clearly loss-making. President & CEO Arto Metsänen: “The weakening of Glaston's markets appears to have stopped. No immediate improvement of the markets is evident, however, and no significant rise in the demand for glass processing machines is expected in the near future. During the third quarter, signs of recovery have been perceptible in a number of markets, but positive development is not yet evident as orders received. Glaston's third quarter, as expected, was loss-making. The weak financial performance was due to the sharp fall in sales. Operational adjustment and cost-cutting measures will be robustly continued during the final quarter of the year.” New segment information On 22 April 2009, Glaston announced that it was changing its organisation, and the reporting segments are now Machines, Services and Software Solutions. The Pre-processing and Heat Treatment segments have been combined to form the Machines segment. At the same time, maintenance and service business was separated from machine operations into its own Services segment. The Machines segment comprises tempering, bending and laminating machines sold under the Tamglass and Uniglass brands, glass pre-processing machines sold under the Bavelloni brand, and tool manufacturing. The Services segment consists of glass processing machine maintenance and service activity, sales of spare parts and tools, and the operation of the glass processing factory in Akaa, Finland, on behalf of a partner. The Software Solutions segment includes enterprise resource planning systems for the glass industry, sold under the Albat+Wirsam brand. The geographical segments reported quarterly are, from the second quarter, Europe, MEAI (Middle East, Africa, India, Pakistan and Bangladesh), Asia and America. Markets The weak market situation continued during the third quarter with demand remaining at an exceptionally low level. Given the continued market uncertainty, the emphasis of machine sales was on individual machines and there was no demand for extensive One-Stop-Partner projects. At the end of the second quarter, the first signs of market recovery appeared in Asia, particularly in China. The cautiously positive development continued in the area during the third quarter. Machines Demand for glass processing machines remained weak, and particularly in Europe the activity level was very modest due to the holiday period. Demand in South America, however, again continued to be very good. At the end of second quarter, cautious signs of a market recovery were perceptible. In the Chinese market, demand has been growing slightly due to local economic stimulus programmes. This modest growth in demand was not evident, however, in new orders during the third quarter. Transfer of technology to China continued in the review period. Due to the closure of a factory located in the USA, the transfer to Finland and China of tempering machine production that previously took place in the USA proceeded according to plan. The Machines business area's January-September net sales totalled EUR 63.1 (124.6) million. Services The market situation for Services was again weak, with overall demand remaining clearly below the previous year's level. A cautious market recovery was perceptible in China, however, towards the end of the second quarter, and during June demand also picked up slightly in Australia, New Zealand, Brazil, the UK and Central Europe. Demand for spare parts showed slight indications of recovery during the third quarter but remained clearly below the 2008 level. Demand for upgrades again continued at a good level, and demand is also expected to remain good during the final quarter of the year. In the third quarter, a number of large upgrade orders were received from Central Europe as well as from South and North America. These upgrades were automation and convection technology upgrades. Compared with the previous year, the volume of invoiced maintenance work grew. The number of service contracts is rising despite the difficult market situation, and also new comprehensive Glaston Care Plus service contracts were signed in the review period. Weak demand for tools continued during the third quarter. As part of the Group's segment reform and to promote sales of tools, sales and distribution of tools were transferred during the third quarter from the Machines business area to the Services business area. Since the second quarter, operations at the Akaa glass processing factory have been reported as part of the Services segment. In September, Tamglass Glass Processing announced that it was temporarily laying off the whole of its personnel working in Akaa, a total of 16 people. The lay-offs will begin in late October/early November and are valid until further notice. The Services' business area's January-September net sales totalled EUR 37.1 (56.8) million. Software Solutions The Software Solutions' market has stabilised during the second and third quarters, although demand remains clearly below the level in the corresponding period of 2008. The market situation in Central Europe has continued to be stable, and slight signs of recovery are perceptible in the Chinese market. Demand in the United States has continued to be weak. A higher degree of automation as well as systems integration have been the product development priorities of the Software Solutions segment for a couple of years now. The product innovations of the early part of the year, the Panorama and AWFactory line control systems, were in pilot use during the third quarter with a number of Central European customers, and the actual launch of the products will take place during the final quarter of the year. The Software Solutions business area's January-September net sales totalled EUR 17.6 (21.5) million. One-Stop-Partner Demand for extensive One-Stop-Partner projects fell away during the final quarter of 2008 and demand has continued to be weak during 2009. The market for comprehensive solutions relating to solar energy still exists, but as the global recession continues customers have postponed their investment decisions. Glaston's position in this customer segment is strong, and solutions based on the company's Photovoltaic (PV) and Concentrated Solar Power (CSP) technologies have been of particular interest to customers. The order intake for One-Stop-Partner deliveries was EUR 2.0 (20.5) million in January-September. The unit's earnings are included in Glaston's reported segments. Orders received Glaston's orders received in January-September totalled EUR 100.3 (185.9) million. Of orders received, the Machines segment accounted for 61%, Services 32% and Software Solutions 8%. Orders received in the third quarter totalled EUR 33.0 (49.1) million. Order book Glaston's order book on 30 September 2009 was EUR 40.9 (84.4) million. Of the order book, the Machines business area accounted for EUR 36.7 million, Services for EUR 1.6 million and Software Solutions for EUR 3.5 million. -------------------------------------------------------------------------------- | Order book, EUR million | 30.9.2009 | 30.9.2008 | -------------------------------------------------------------------------------- | Machines | 35.8 | 64.8 | -------------------------------------------------------------------------------- | Services | 1.6 | 15.0 | -------------------------------------------------------------------------------- | Software Solutions | 3.5 | 4.5 | -------------------------------------------------------------------------------- | Total | 40.9 | 84.4 | -------------------------------------------------------------------------------- Net sales and result Continued low demand affected the development of net sales. January-September net sales totalled EUR 115.9 (201.5) million. The Machines business area's net sales in January-September were EUR 63.1 (124.6) million, Services' net sales EUR 37.1 (56.8) million and Software Solutions' net sales EUR 17.6 (21.5) million. Third-quarter net sales were EUR 31.5 (65.8) million and distributed across the business areas as follows: Machines EUR 14.7 (38.2) million, Services EUR 11.6 (20.2) million and Software Solutions EUR 5.8 (7.8) million. -------------------------------------------------------------------------------- | Net sales, EUR | 1-9/2009 | 1-9/2008 | 1-12/2008 | | million | | | | -------------------------------------------------------------------------------- | Machines | 63.1 | 124.6 | 168.5 | -------------------------------------------------------------------------------- | Services | 37.1 | 56.8 | 76.0 | -------------------------------------------------------------------------------- | Software | 17.6 | 21.5 | 28.2 | | Solutions | | | | -------------------------------------------------------------------------------- | Other and | -1.9 | -1.4 | -2.2 | | internal sales | | | | -------------------------------------------------------------------------------- | Total | 115.9 | 201.5 | 270.4 | -------------------------------------------------------------------------------- The operating result in January-September was a loss of EUR 22.6 (6.5 profit) million, representing -19.5 (+3.2)% of net sales. The result includes EUR 4.3 million of non-recurring costs relating to operational efficiency measures, which were recognised in the second quarter. Of the January-September operating loss, excluding non-recurring items, the Machines business area accounted for EUR -14.6 (+4.7) million, the Services business area for EUR -2.1 (+3.9) million and Software Solutions for EUR +0.6 (+3.6) million. The strong decline in sales weakened the profitability of the Machines business area, because the substantial cost-cutting and adjustment measures were insufficient to balance sharply falling turnover. Operational adjustment will be robustly continued during the final quarter of the year. The third quarter operating loss, excluding non-recurring items, was EUR -7.4 (+1.1) million, of which the Machines business area accounted for EUR -4.9 (-0.4) million, the Services business area for EUR -0.1 (+2.0) million and Software Solutions for EUR 0.5 (1.4) million. The Services business area's result is burdened by the strongly negative operating result of Tamglass Glass Processing, EUR -3.3 million. -------------------------------------------------------------------------------- | Operating result, EUR | 1-9/2009 | 1-9/2008 | 1-12/2008 | | million | | | | -------------------------------------------------------------------------------- | Machines | -14.6 | 4.7 | 5.1 | -------------------------------------------------------------------------------- | Services | -2.1 | 3.9 | 4.9 | -------------------------------------------------------------------------------- | Software Solutions | 0.6 | 3.6 | 3.7 | -------------------------------------------------------------------------------- | Other and eliminations | -6.5 | -5.8 | -7.6 | -------------------------------------------------------------------------------- | Operating result, | -22.6 | 6.5 | 6.2 | | excluding non-recurring | | | | | items | | | | -------------------------------------------------------------------------------- | Non-recurring items | -4.3 | - | -12.3 | -------------------------------------------------------------------------------- | Operating result | -26.9 | 6.5 | -6.1 | -------------------------------------------------------------------------------- The result for the financial period was EUR -26.8 (3.1) million. Return on capital employed was -18.8 (+6.2)% and earnings per share were EUR -0.34 (+0.04). Earnings per share in July-September were EUR -0.11 (-0.01). Efficiency programme To improve profitability and adjust operations to the market situation, efficiency measures were initiated throughout the Group in September 2008, and these measures were continued during the third quarter. The restructuring of Machines business proceeded during the third quarter, with the focus being on completing the integration process and further improving profitability. Developing the global production structure, enhancing purchasing activity and streamlining the product portfolio have been the operational priorities. In the third quarter, Glaston initiated a programme to develop spare parts and tool operations as well as logistics. Inventories in Mexico and Greensboro were transferred to Cinnaminson in the USA. In the Services business, cost-cutting and operational adjustment measures continued. The unit manufacturing upgrade products in Orivesi, Finland, was closed in July. The Group's substantial temporary lay-offs in Finland and Italy continued during the third quarter, as did cuts in working hours in Germany and the USA. As a result of the efficiency and adjustment measures, the number of Glaston employees at the end of the period under review had fallen by around 300 compared with the end of 2008. In addition, temporary subcontracted workers were reduced by nearly 60. The cost savings planned in the efficiency measures total nearly EUR 20 million and related non-recurring costs are EUR 4.3 million for 2009. The savings will be implemented mainly during 2009. Cost savings in the period under review (excluding material expenses) totalled EUR 18.5 million compared with the corresponding period the previous year (in the third quarter 7.9 million). Financing The Group's financial position remained reasonable, even though net debt grew in the third quarter compared with the end of the second quarter. In addition to dividends paid during the review period, the Group's financial position was affected mainly by changes in working capital and cash flow from operating activities as well as by a convertible bond issue (EUR 23.8 million). Thanks to special measures, working capital has been reduced (EUR +20.5 million), but cash flow from operating activities, excluding the change in working capital, was negative (EUR -25.1 million) in the review period. Cash flow from investing activities was EUR -6.7 (-10.3) million. Cash flow from financing activities in January-September was EUR +18.9 (+27.9) million, including dividends paid in the review period of EUR 3.9 (7.8) million. The equity ratio on 30 September 2009 was 40.4 (48.5)%. The Group's liquid funds on 30 September 2009 totalled EUR 19.2 (15.7) million. Interest-bearing net debt totalled EUR 67.6 (43.9) million and net gearing was 70.3 (32.3)%. To ensure liquidity, the Group has a EUR 65 million committed revolving credit facility. At the end of September, EUR 27.7 million of the facility was in use. Capital expenditure, depreciation and amortisation Glaston's gross capital expenditure totalled EUR 7.4 (13.6) million. The most significant capital expenditure was related to a joint venture founded in connection with the sale of the glass processing operations as well as to the global ERP project. During the review period, depreciation and amortisation of property, plant and equipment and intangible assets totalled EUR 6.3 (6.3) million. Of impairment of assets recognised during the review period, EUR 1.2 (0.3) million, most was directed at tangible assets. Group structural changes As part of an efficiency programme initiated last year, operations of Uniglass Engineering Oy were transferred to Glaston's factory in Tampere, Finland. Operations at the Uniglass factory in Ylöjärvi, Finland, ended on 31 March 2009. Glaston's subsidiary Tamglass Glass Processing Ltd. sold its insulation and architectural glass processing operations to INTERPANE Glass Oy in March. INTERPANE Glass Oy is a Glaston joint venture company. As of 1 April 2009, glass processing operations consist only of solar reflector production at Akaa, Finland. Glaston's two companies in Mexico were merged in the second quarter, Glaston UK Ltd and Albat+Wirsam Software Ltd in the UK at the beginning of the third quarter, and Albat+ Wirsam Software AG and Cantor Software GmbH in Germany at the beginning of September. The Pre-processing and Heat Treatment business areas were merged in April to form the Machines business area. To boost sales of tools and ensure synergy benefits in spare parts sales and deliveries, tool sales were transferred during the third quarter from the Machines business area to the Services segment, with tool manufacturing and development remaining in the Machines business area. Personnel Henrik Reims was appointed Senior Vice President Sales and Marketing as of 1 April 2009, Topi Saarenhovi Senior Vice President of the Machines business area as of 22 April 2009 and Manne Tiensuu as Glaston's Senior Vice President, Human Resources as of 15 May 2009. Arto Metsänen, M.Sc.(Eng.), was appointed on 5 August 2009 as the company's new President & CEO, and he started work in his post on 1 September 2009. On 30 September 2009, Glaston Corporation had a total of 1,244 (1,534) employees. Of the Group's employees, 21% worked in Finland and 50% elsewhere in Europe, 1% in the MEAI area, 14% in Asia and 14% in the Americas. The average number of employees was 1,392 (1,507). Shares and share price Glaston Corporation's paid and registered share capital on 30 September 2009 was EUR 12.7 million and the number of issued shares totalled 79,350,000. The company has one series of share. At the end of period under review, the company held 838,582 of the company's own shares (treasury shares), corresponding to 1% of the total number of issued shares and votes. The counter book value of treasury shares is EUR 134,173. Every share that the company does not hold itself entitles its owner to one vote at the Annual General Meeting. The share has no nominal value. The counter book value of each share is EUR 0.16. On 30 September 2009, the market capitalisation of the company's shares, treasury shares excluded, was EUR 97.4 (158.7) million. During the first nine months of the year, a total of around 5.5 million of the company's shares were traded, representing 7.0% of the average number of shares. The lowest price paid for a share was EUR 0.92 and the highest price EUR 1.44. The volume-weighted average price of shares traded during the review period was EUR 1.20. The closing price on 30 September 2009 was EUR 1.24. The equity per share attributable to owners of the parent was EUR 1.22 (1.73). Decisions of the Annual General Meeting The Annual General Meeting of Glaston Corporation was held in Helsinki on 17 March 2009. The Annual General Meeting approved the financial statements and consolidated financial statements for 2008 and released the President & CEO and the Board of Directors from liability for the financial period 1 January-31 December 2008. The Annual General Meeting approved a dividend of EUR 0.50 per share, representing a maximum total sum of around EUR 4.0 million. The Annual General Meeting confirmed that the following will continue on the Board of Directors for a year-long term of office: Claus von Bonsdorff, Klaus Cawén, Jan Lång, Carl-Johan Rosenbröijer, Christer Sumelius and Andreas Tallberg. The Annual General Meeting decided to maintain the Chairman of the Board's annual remuneration at EUR 40,000 and the Deputy Chairman's annual remuneration at EUR 30,000. It was also decided to maintain the remuneration of the other Members of the Board at EUR 20,000 per year. The Board of Directors elected Andreas Tallberg to continue as the Chairman of the Board and Christer Sumelius to continue as the Deputy Chairman of the Board. The Annual General Meeting re-elected as auditor the authorised public accounting firm KPMG Oy Ab, with the responsible auditor being Sixten Nyman, APA. The Annual General Meeting approved amendments to the Articles 2, 11 and 12 of the Articles of Association. Authorisations given by the Annual General Meeting The 2009 Annual General Meeting of Glaston Corporation authorised the Board of Directors to decide on the acquisition of the company's own shares up to a maximum of 7,000,000 shares. The authorisation is valid for 18 months from the decision of the Annual General Meeting. The Annual General Meeting also authorised the Board of Directors to decide on the issue of new shares and/or the conveyance of the own shares held by the company such that, in exception to the pre-emptive subscription right of shareholders, a maximum of 7,800,000 new shares can be issued and a maximum of 7,800,000 own shares held by the company can be conveyed, but such that the total number of shares to be issued and/or conveyed does not exceed 7,800,000. The latter authorisation is not, however, valid on the date of this report. Decisions of the Extraordinary Meeting of Shareholders The Extraordinary Meeting of Shareholders of Glaston Corporation, held on 8 June 2009, authorised the Board of Directors to decide of the issuing of shares and the issuing of special rights granting entitlement to shares, referred to in Chapter 10 Section 1 of the Companies Act. The number of shares to be issued under the authorisation may not exceed a total of 25,000,000 shares. If all shares that may be issued under the authorisation were issued, the number of shares issued would correspond to approximately 24% of all the shares in the company. The Board of Directors shall decide on the conditions of the issuing of shares and of special rights granting entitlement to shares. The authorisation concerns both the issuing of new shares as well as the conveyance of treasury shares. The issuing of shares and of special rights granting entitlement to shares may be carried out in exception to shareholders' pre-emptive rights. The authorisation is effective until the next Annual General Meeting, however no longer than 30 June 2010, and it cancels the authorisation to decide on the issuing of shares given by the Annual General Meeting on 17 March 2009. Convertible bond On 16 June 2009, the Board of Directors decided, based on the authorisation granted by the Extraordinary Meeting of Shareholders, to issue a convertible bond up to a maximum principal of EUR 30,000,000, divided into negotiable promissory notes of nominal value EUR 50,000.The bond was issued in exception to the shareholders' pre-emptive subscription rights to investors selected by the Board of Directors. The bond was subscribed to a total of EUR 23,750,000 and the Board of Directors approved the subscriptions on 17 June 2009. The bond strengthens the company's financial position, optimises the capital structure and facilitates investments. The terms and conditions of the convertible bond were presented in a stock exchange release dated 16 June 2009. On 28 September 2009 a total of 475 subscribed promissory notes were accepted for public trading on the NASDAQ OMX Helsinki Ltd. Uncertainties and risks in the near future Glaston's uncertainties and risks in the near future are to a large extent linked to the development of the world economy. A significant proportion of the uncertainties are beyond the control of the company management. Due to the global financial crisis, Glaston's markets have changed and demand for glass processing machines remains weak. The economic downturn has adversely affected customers' investment opportunities, in which case orders may be postponed and those already confirmed may be cancelled. The impact has been particularly strong in One-Stop-Partner orders. Customers' financial situation also impacts on the collection of receivables and on credit losses. Risks relating to raw materials have decreased. Raw material prices have levelled off and subcontracting capacity problems have nearly disappeared. If the international financial crisis is extended and the recovery of the sector delayed, it is possible that Glaston's recoverable amounts will, despite the savings arising from efficiency measures, be insufficient to cover the carrying amounts of assets, particularly goodwill. If this happens, it will be necessary to recognise an impairment of assets, which when implemented will weaken the result and shareholders' equity. A more detailed review of Glaston's risks has been presented in the 2008 financial statements. Outlook The quiet market will continue to impact strongly on Glaston's business, and adjustment of operations to the market situation will continue. The cornerstones of Glaston's business remain the architectural glass segment and the solar energy market. The first signs of market recovery were perceptible at the end of the first half of the year and cautious positive development in certain market areas continued in the third quarter. Nevertheless, no clear improvement of the markets is evident and demand for glass processing machines in the latter part of the year will remain on a low level. Due to a weak order book in 2009, exceptionally low demand and necessary adjustment measures, Glaston still expects 2009 net sales to fall short of the 2008 level and the operating result for the full year to be clearly loss-making. Helsinki, 29 October 2009 Glaston Corporation Board of Directors For further information, please contact: Arto Metsänen, President & CEO, tel. +358 10 500 500 or Kimmo Lautanen, CFO, +358 10 500 500. Submitted by: Glaston Corporation Agneta Selroos IR and Corporate Communications Manager Tel. +358 10 500 6105 Glaston Corporation Glaston Corporation is a growing, international glass technology company. Glaston is the global market leader in glass processing machines, and a comprehensive One-Stop-Partner supplier to its customers. Its product range and service network are the widest in the industry. Glaston's well-known brands are Bavelloni in pre-processing machines and tools, Tamglass and Uniglass in safety glass machines, and Albat+Wirsam in glass industry software. Glaston's share (GLA1V) is listed on the NASDAQ OMX Helsinki Mid Cap List www.glaston.net Distribution: OMX, Main media, www.glaston.net GLASTON CORPORATION CONDENSED INTERIM FINANCIAL STATEMENTS AND NOTES 1 JANUARY - 30 SEPTEMBER 2009 These condensed interim financial statements are not audited. As a result of rounding differences, the figures presented in the tables may not add up to the total. CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION -------------------------------------------------------------------------------- | EUR million | 30.9.2009 | 30.9.2008 | 31.12.2008 | -------------------------------------------------------------------------------- | Assets | | | | -------------------------------------------------------------------------------- | Non-current assets | | | | -------------------------------------------------------------------------------- | Property, plant and equipment | 27.1 | 37.4 | 35.0 | -------------------------------------------------------------------------------- | Goodwill | 66.2 | 66.3 | 66.2 | -------------------------------------------------------------------------------- | Other intangible assets | 23.7 | 20.3 | 22.5 | -------------------------------------------------------------------------------- | Joint ventures and associates | 0.8 | 0.8 | 0.9 | | and loan receivables from joint | | | | | ventures | | | | -------------------------------------------------------------------------------- | Available-for-sale assets | 0.3 | 0.2 | 0.3 | -------------------------------------------------------------------------------- | Deferred tax assets | 9.9 | 3.9 | 7.9 | -------------------------------------------------------------------------------- | Total non-current assets | 128.1 | 129.0 | 132.9 | -------------------------------------------------------------------------------- | Current assets | | | | -------------------------------------------------------------------------------- | Inventories | 38.0 | 59.6 | 53.9 | -------------------------------------------------------------------------------- | Receivables | | | | -------------------------------------------------------------------------------- | Trade and other receivables | 62.1 | 92.5 | 83.3 | -------------------------------------------------------------------------------- | Assets for current tax | 4.1 | 3.7 | 4.4 | -------------------------------------------------------------------------------- | Total receivables | 66.2 | 96.2 | 87.6 | -------------------------------------------------------------------------------- | Cash equivalents | 19.2 | 15.7 | 11.5 | -------------------------------------------------------------------------------- | Assets held for sale | - | 0.2 | - | -------------------------------------------------------------------------------- | Total current assets | 123.4 | 171.7 | 153.1 | -------------------------------------------------------------------------------- | Total assets | 251.5 | 300.7 | 285.9 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | 30.9.2009 | 30.9.2008 | 31.12.2008 | -------------------------------------------------------------------------------- | Equity and liabilities | | | | -------------------------------------------------------------------------------- | Equity | | | | -------------------------------------------------------------------------------- | Share capital | 12.7 | 12.7 | 12.7 | -------------------------------------------------------------------------------- | Share premium account | 25.3 | 25.3 | 25.3 | -------------------------------------------------------------------------------- | Other reserves | 0.0 | - | - | -------------------------------------------------------------------------------- | Reserve for invested | 0.2 | 0.2 | 0.2 | | unrestricted equity | | | | -------------------------------------------------------------------------------- | Treasury shares | -3.5 | -3.5 | -3.5 | -------------------------------------------------------------------------------- | Fair value reserve | 0.0 | 0.0 | 0.0 | -------------------------------------------------------------------------------- | Hedging reserve | - | - | - | -------------------------------------------------------------------------------- | Retained earnings and exchange | 87.9 | 98.1 | 98.2 | | differences | | | | -------------------------------------------------------------------------------- | Net result attributable to | -26.8 | 3.1 | -9.1 | | owners of the parent | | | | -------------------------------------------------------------------------------- | Equity attributable to owners of | 95.8 | 135.9 | 123.7 | | the parent | | | | -------------------------------------------------------------------------------- | Non-controlling interest | 0.4 | 0.1 | 0.0 | -------------------------------------------------------------------------------- | Total equity | 96.2 | 136.0 | 123.8 | -------------------------------------------------------------------------------- | Non-current liabilities | | | | -------------------------------------------------------------------------------- | Non-current interest-bearing | 36.9 | 8.2 | 16.4 | | liabilities | | | | -------------------------------------------------------------------------------- | Non-current interest-free | 6.5 | 10.0 | 8.0 | | liabilities and provisions | | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 8.5 | 8.9 | 8.4 | -------------------------------------------------------------------------------- | Total non-current liabilities | 51.9 | 27.1 | 32.9 | -------------------------------------------------------------------------------- | Current liabilities | | | | -------------------------------------------------------------------------------- | Current interest-bearing | 49.9 | 51.4 | 53.0 | | liabilities | | | | -------------------------------------------------------------------------------- | Current provisions | 4.0 | 2.4 | 10.6 | -------------------------------------------------------------------------------- | Trade and other payables | 48.1 | 79.4 | 63.8 | -------------------------------------------------------------------------------- | Liabilities for current tax | 1.5 | 4.5 | 1.9 | -------------------------------------------------------------------------------- | Total current liabilities | 103.4 | 137.6 | 129.3 | -------------------------------------------------------------------------------- | Total liabilities | 155.3 | 164.7 | 162.2 | -------------------------------------------------------------------------------- | Total equity and liabilities | 251.5 | 300.7 | 285.9 | -------------------------------------------------------------------------------- CONDENSED CONSOLIDATED INCOME STATEMENT -------------------------------------------------------------------------------- | EUR million | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ | | | 2009 | 2008 | 2009 | 2008 | 2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | 31.5 | 65.8 | 115.9 | 201.5 | 270.4 | -------------------------------------------------------------------------------- | Other operating income | 0.4 | 0.0 | 0.9 | 0.4 | 0.4 | -------------------------------------------------------------------------------- | Expenses | -36.4 | -62.3 | -135.2 | -188.9 | -265.8 | -------------------------------------------------------------------------------- | Share of associates | -0.7 | 0.0 | -1.1 | 0.0 | 0.0 | | and joint ventures' | | | | | | | result | | | | | | -------------------------------------------------------------------------------- | Depreciation, | -2.3 | -2.5 | -7.5 | -6.5 | -11.2 | | amortization and | | | | | | | impairment | | | | | | -------------------------------------------------------------------------------- | Operating profit / | -7.4 | 1.1 | -26.9 | 6.5 | -6.1 | | loss | | | | | | -------------------------------------------------------------------------------- | Gains from assets held | - | 0.0 | - | 0.1 | 0.1 | | for sale | | | | | | -------------------------------------------------------------------------------- | Other financial items, | -0.9 | -1.1 | -1.7 | 0.1 | -2.1 | | net | | | | | | -------------------------------------------------------------------------------- | Result before income | -8.4 | 0.0 | -28.6 | 6.7 | -8.1 | | taxes | | | | | | -------------------------------------------------------------------------------- | Income taxes | -0.3 | -0.6 | 1.8 | -3.6 | -1.1 | -------------------------------------------------------------------------------- | Profit / loss for the | -8.7 | -0.6 | -26.8 | 3.1 | -9.2 | | period | | | | | | -------------------------------------------------------------------------------- | Attributable to: | | | | | | -------------------------------------------------------------------------------- | Non-controlling | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | | interests | | | | | | -------------------------------------------------------------------------------- | Owners of the parent | -8.7 | -0.6 | -26.8 | 3.1 | -9.1 | -------------------------------------------------------------------------------- | Total | -8.7 | -0.6 | -26.8 | 3.1 | -9.2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share, | -0.11 | -0.01 | -0.34 | 0.04 | -0.12 | | EUR, basic | | | | | | -------------------------------------------------------------------------------- | Earnings per share, | -0.11 | -0.01 | -0.34 | 0.04 | -0.12 | | EUR, diluted | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit / | -23.6 | 1.6 | -23.2 | 3.2 | -2.3 | | loss, as % of net | | | | | | | sales | | | | | | -------------------------------------------------------------------------------- | Profit / loss for the | -27.6 | -0.9 | -23.1 | 1.5 | -3.4 | | period, as % of net | | | | | | | sales | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-recurring items | - | - | -4.3 | - | -12.3 | | included in operating | | | | | | | profit / loss | | | | | | -------------------------------------------------------------------------------- | Operating profit / | -7.4 | 1.1 | -22.6 | 6.5 | 6.2 | | loss, non-recurring | | | | | | | items excluded | | | | | | -------------------------------------------------------------------------------- | Operating profit / | -23.6 | 1.6 | -19.5 | 3.2 | 2.3 | | loss, non-recurring | | | | | | | items excluded, as % | | | | | | | of net sales | | | | | | -------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF COMPEREHENSIVE INCOME -------------------------------------------------------------------------------- | EUR million | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ | | | 2009 | 2008 | 2009 | 2008 | 2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Profit / loss for the | -8.7 | -0.6 | -26.8 | 3.1 | -9.2 | | period | | | | | | -------------------------------------------------------------------------------- | Other comprehensive income | | | | | | -------------------------------------------------------------------------------- | Total exchange differences | -0.6 | 1.2 | -0.7 | 0.6 | 0.7 | | on translating foreign | | | | | | | operations | | | | | | -------------------------------------------------------------------------------- | Effective portion of fair | - | 0.2 | - | 0.0 | - | | value changes of cash flow | | | | | | | hedges | | | | | | -------------------------------------------------------------------------------- | Fair value changes of cash | - | 0.0 | - | 0.0 | 0.0 | | flow hedges reclassified | | | | | | | in profit or loss | | | | | | -------------------------------------------------------------------------------- | Fair value changes of | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | | available-for-sale assets | | | | | | -------------------------------------------------------------------------------- | Other reclassifications | - | 0.0 | - | 0.0 | 0.0 | -------------------------------------------------------------------------------- | Income tax on other | 0.0 | -0.1 | 0.0 | 0.0 | 0.0 | | comprehensive income | | | | | | -------------------------------------------------------------------------------- | Other comprehensive income | -0.6 | 1.3 | -0.7 | 0.6 | 0.7 | | for the reporting period, | | | | | | | net of tax | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total comprehensive income | -9.3 | 0.8 | -27.5 | 3.7 | -8.5 | | for the reporting period | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to | | | | | | -------------------------------------------------------------------------------- | Non-controlling interest | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -------------------------------------------------------------------------------- | Owners of the parent | -9.3 | 0.8 | -27.5 | 3.7 | -8.5 | -------------------------------------------------------------------------------- | Total comprehensive income | -9.3 | 0.8 | -27.5 | 3.7 | -8.5 | | for the reporting period | | | | | | -------------------------------------------------------------------------------- CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR million | 1-9/2009 | 1-9/2008 | 1-12/2008 | -------------------------------------------------------------------------------- | Cash flows from operating activities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flow before change in net | -25.1 | 8.5 | 7.2 | | working capital | | | | -------------------------------------------------------------------------------- | Change in net working capital | 20.5 | -22.1 | -30.4 | -------------------------------------------------------------------------------- | Net cash flow from operating | -4.6 | -13.7 | -23.3 | | activities | | | | -------------------------------------------------------------------------------- | Cash flow from investing activities | | | | -------------------------------------------------------------------------------- | Business combinations | -0.5 | -0.6 | 0.7 | -------------------------------------------------------------------------------- | Other purchases of non-current | -5.4 | -10.2 | -14.5 | | assets | | | | -------------------------------------------------------------------------------- | Investment in joint ventures | -2.0 | - | - | -------------------------------------------------------------------------------- | Other | 0.1 | - | - | -------------------------------------------------------------------------------- | Proceeds from sale of non-current | 1.2 | 0.4 | 0.4 | | assets | | | | -------------------------------------------------------------------------------- | Net cash used in investing | -6.7 | -10.3 | -13.4 | | activities | | | | -------------------------------------------------------------------------------- | Cash flow before financing | -11.2 | -24.0 | -36.7 | -------------------------------------------------------------------------------- | Cash flow from financing activities | | | | -------------------------------------------------------------------------------- | Changes in non-current liabilities | 20.6 | 3.3 | 17.5 | | (increase + / decrease -) | | | | -------------------------------------------------------------------------------- | Changes in non-current loan | 0.0 | 0.3 | 0.3 | | receivables (increase - / decrease | | | | | +) | | | | -------------------------------------------------------------------------------- | Short-term financing, net (increase | 0.9 | 32.3 | 27.9 | | + / decrease -) | | | | -------------------------------------------------------------------------------- | Dividends paid | -3.9 | -7.8 | -7.8 | -------------------------------------------------------------------------------- | Other financing | 1.2 | -0.1 | 0.0 | -------------------------------------------------------------------------------- | Net cash used in financing | 18.9 | 27.9 | 37.8 | | activities | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Effect of exchange rate changes | 0.0 | 0.3 | -1.0 | -------------------------------------------------------------------------------- | Net change in cash and cash | 7.6 | 4.3 | 0.1 | | equivalents | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents at the | 11.5 | 11.4 | 11.4 | | beginning of period | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents at the end | 19.2 | 15.7 | 11.5 | | of period | | | | -------------------------------------------------------------------------------- | Net change in cash and cash | 7.6 | 4.3 | 0.1 | | equivalents | | | | -------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF CHANGES IN EQUITY -------------------------------------------------------------------------------- | EUR million | Share | Share | Other | Reserve | Treasury | Fair | | | capital | premium | reserves | for | shares | value | | | | account | | invested | | reserve | | | | | | unrestr. | | | | | | | | equity | | | -------------------------------------------------------------------------------- | Equity at 1 | 12.7 | 25.3 | - | 0.3 | -3.9 | - | | January, | | | | | | | | 2008 | | | | | | | -------------------------------------------------------------------------------- | Total | - | - | - | - | - | 0.0 | | comprehensiv | | | | | | | | e income for | | | | | | | | the period | | | | | | | -------------------------------------------------------------------------------- | Disposal of | - | - | - | -0.1 | 0.4 | - | | treasury | | | | | | | | shares | | | | | | | -------------------------------------------------------------------------------- | Tax effect | - | - | - | 0.0 | - | - | | of net | | | | | | | | income | | | | | | | | recognized | | | | | | | | directly in | | | | | | | | equity | | | | | | | -------------------------------------------------------------------------------- | Equity at 30 | 12.7 | 25.3 | - | 0.2 | -3.5 | 0.0 | | September, | | | | | | | | 2008 | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Share | Share | Other | Reserve | Treasury | Fair | | | capital | premium | reserves | for | shares | value | | | | account | | invested | | reserve | | | | | | unrestr. | | | | | | | | equity | | | -------------------------------------------------------------------------------- | Equity at 1 | 12.7 | 25.3 | - | 0.2 | -3.5 | 0.0 | | January, 2009 | | | | | | | -------------------------------------------------------------------------------- | Total | - | - | - | - | - | 0.0 | | comprehensive | | | | | | | | income for | | | | | | | | the period | | | | | | | -------------------------------------------------------------------------------- | Other changes | - | - | - | 0.0 | 0.0 | - | | in treasury | | | | | | | | shares | | | | | | | -------------------------------------------------------------------------------- | Other changes | - | - | 0.0 | - | - | - | -------------------------------------------------------------------------------- | Tax effect of | - | - | - | - | - | - | | net income | | | | | | | | recognized | | | | | | | | directly in | | | | | | | | equity | | | | | | | -------------------------------------------------------------------------------- | Equity at 30 | 12.7 | 25.3 | 0.0 | 0.2 | -3.5 | 0.0 | | September, | | | | | | | | 2009 | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | Hedgin | Retained | Exch. | Equity | Non-control | Total | | | g | earnings | diff. | attrib. | ling | equity | | | reserv | | | to | interest | | | | e | | | owners | | | | | | | | of the | | | | | | | | parent | | | -------------------------------------------------------------------------------- | Equity at 1 | 0.0 | 106.8 | -1.2 | 139.9 | 0.0 | 139.9 | | January, 2008 | | | | | | | -------------------------------------------------------------------------------- | Total | 0.0 | 3.1 | 0.6 | 3.7 | 0.0 | 3.7 | | comprehensive | | | | | | | | income for | | | | | | | | the period | | | | | | | -------------------------------------------------------------------------------- | Disposal of | - | - | - | 0.3 | - | 0.3 | | treasury | | | | | | | | shares | | | | | | | -------------------------------------------------------------------------------- | Tax effect of | - | - | - | 0.0 | - | 0.0 | | net income | | | | | | | | recognized | | | | | | | | directly in | | | | | | | | equity | | | | | | | -------------------------------------------------------------------------------- | Share-based | - | -0.2 | - | -0.2 | - | -0.2 | | incentive | | | | | | | | plan | | | | | | | -------------------------------------------------------------------------------- | Share-based | - | 0.0 | - | 0.0 | - | 0.0 | | incentive | | | | | | | | plan, tax | | | | | | | | effect | | | | | | | -------------------------------------------------------------------------------- | Dividends | - | -7.8 | - | -7.8 | - | -7.8 | | paid | | | | | | | -------------------------------------------------------------------------------- | Equity at 30 | 0.0 | 101.8 | -0.6 | 135.9 | 0.1 | 136.0 | | September, | | | | | | | | 2008 | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EUR million | Hedging | Retaine | Exch. | Equity | Non-contro | Total | | | reserve | d | diff. | attrib. | lling | equity | | | | earning | | to | interest | | | | | s | | owners | | | | | | | | of the | | | | | | | | parent | | | -------------------------------------------------------------------------------- | Equity at 1 | - | 89.6 | -0.5 | 123.7 | 0.0 | 123.8 | | January, 2009 | | | | | | | -------------------------------------------------------------------------------- | Total | - | -26.8 | -0.7 | -27.5 | 0.0 | -27.5 | | comprehensive | | | | | | | | income for the | | | | | | | | period | | | | | | | -------------------------------------------------------------------------------- | Other changes | - | 0.0 | - | 0.0 | 0.3 | 0.4 | | in | | | | | | | | non-controllin | | | | | | | | g interest | | | | | | | -------------------------------------------------------------------------------- | Other changes | - | - | - | - | - | - | | in treasury | | | | | | | | shares | | | | | | | -------------------------------------------------------------------------------- | Other changes | - | 0.0 | - | - | - | - | -------------------------------------------------------------------------------- | Tax effect of | - | - | - | - | - | - | | net income | | | | | | | | recognized | | | | | | | | directly in | | | | | | | | equity | | | | | | | -------------------------------------------------------------------------------- | Share-based | - | 0.0 | - | 0.0 | - | 0.0 | | incentive plan | | | | | | | -------------------------------------------------------------------------------- | Share-based | - | 0.0 | - | 0.0 | - | 0.0 | | incentive | | | | | | | | plan, tax | | | | | | | | effect | | | | | | | -------------------------------------------------------------------------------- | Equity part of | - | 3.4 | - | 3.4 | - | 3.4 | | convertible | | | | | | | | bond | | | | | | | -------------------------------------------------------------------------------- | Dividends paid | - | -3.9 | - | -3.9 | - | -3.9 | -------------------------------------------------------------------------------- | Equity at 30 | - | 62.4 | -1.2 | 95.8 | 0.4 | 96.2 | | September, | | | | | | | | 2009 | | | | | | | -------------------------------------------------------------------------------- KEY RATIOS -------------------------------------------------------------------------------- | | 30.9.2009 | 30.9.2008 | 31.12.2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EBITDA, as % of net sales (1 | -16.7 | 6.5 | 1.9 | -------------------------------------------------------------------------------- | Operating profit / loss (EBIT), as % | -23.2 | 3.2 | -2.3 | | of net sales | | | | -------------------------------------------------------------------------------- | Net result, as % of net sales | -23.1 | 1.5 | -3.4 | -------------------------------------------------------------------------------- | Gross capital expenditure, EUR | 7.4 | 13.6 | 18.4 | | million | | | | -------------------------------------------------------------------------------- | Gross capital expenditure, as % of | 6.4 | 6.7 | 6.8 | | net sales | | | | -------------------------------------------------------------------------------- | Equity ratio, % | 40.4 | 48.5 | 45.8 | -------------------------------------------------------------------------------- | Gearing, % | 90.3 | 43.9 | 56.1 | -------------------------------------------------------------------------------- | Net gearing, % | 70.3 | 32.3 | 46.8 | -------------------------------------------------------------------------------- | Net interest-bearing debt, EUR | 67.6 | 43.9 | 57.9 | | million | | | | -------------------------------------------------------------------------------- | Capital employed, end of period, EUR | 183.0 | 195.6 | 193.2 | | million | | | | -------------------------------------------------------------------------------- | Return on equity, %, annualized | -32.5 | 3.0 | -7.0 | -------------------------------------------------------------------------------- | Return on capital employed, %, | -18.8 | 6.2 | -2.3 | | annualized | | | | -------------------------------------------------------------------------------- | Number of personnel, average | 1,392 | 1,507 | 1,519 | -------------------------------------------------------------------------------- | Number of personnel, end of period | 1,244 | 1,534 | 1,541 | -------------------------------------------------------------------------------- (1 EBITDA = Operating profit / loss + depreciation, amortization and impairment. -------------------------------------------------------------------------------- | PER SHARE DATA | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | 30.9.2009 | 30.9.2008 | 31.12.2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Number of shares, end of period, | 78,511 | 78,540 | 78,540 | | treasury shares excluded (1,000) | | | | -------------------------------------------------------------------------------- | Number of shares, average, treasury | 78,526 | 78,496 | 78,507 | | shares excluded (1,000) | | | | -------------------------------------------------------------------------------- | Number of shares, diluted, average, | 86,569 | 78,496 | 78,507 | | (1,000) | | | | -------------------------------------------------------------------------------- | EPS, basic, EUR | -0.34 | 0.04 | -0.12 | -------------------------------------------------------------------------------- | EPS, diluted, EUR | -0.34 | 0.04 | -0.12 | -------------------------------------------------------------------------------- | Equity attributable to owners of the | 1.22 | 1.73 | 1.58 | | parent per share, EUR | | | | -------------------------------------------------------------------------------- | Price per earnings per share (P/E) | -3.6 | 50.9 | -7.8 | | ratio | | | | -------------------------------------------------------------------------------- | Price per equity attributable to | 1.02 | 1.17 | 0.58 | | owners of the parent per share | | | | -------------------------------------------------------------------------------- | Market capitalization, EUR million | 97.4 | 158.7 | 71.5 | -------------------------------------------------------------------------------- | Share turnover, % (number of shares | 7.0 | 2.5 | 5.1 | | traded, % of the average number of | | | | | shares) | | | | -------------------------------------------------------------------------------- | Number of shares traded, (1,000) | 5,465 | 1,940 | 3,965 | -------------------------------------------------------------------------------- | Closing price of the share, EUR | 1.24 | 2.02 | 0.91 | -------------------------------------------------------------------------------- | Highest quoted price, EUR | 1.44 | 3.33 | 3.33 | -------------------------------------------------------------------------------- | Lowest quoted price, EUR | 0.92 | 2.02 | 0.87 | -------------------------------------------------------------------------------- | Volume-weighted average quoted | 1.20 | 2.96 | 2.07 | | price, EUR | | | | -------------------------------------------------------------------------------- DEFINITIONS OF KEY RATIOS Financial ratios EBITDA = Profit / loss before depreciation, amortization and impairment, share of joint ventures' and associates' results included Operating profit (EBIT) = Profit / loss after depreciation, amortization and impairment, share of joint ventures' and associates' results included Cash and cash equivalents = Cash + other financial assets Net interest-bearing debt = Interest-bearing liabilities - cash and cash equivalents Financial expenses = Interest expenses of financial liabilities + fees of financing arrangements + foreign currency differences of financial liabilities Equity ratio, % = Equity (Equity attributable to owners of the parent + non-controlling interest) x 100 / Total assets - advance payments received Gearing, % = Interest-bearing liabilities x 100 / Equity (Equity attributable to owners of the parent + non-controlling interest) Net gearing, % = Net interest-bearing debt x 100 / Equity (Equity attributable to owners of the parent + non-controlling interest) Return on investments, % (ROCE) = Profit / loss before taxes + financial expenses x 100 / Equity + interest-bearing liabilities (average of 1 January and end of the reporting period) Return on equity, % (ROE)= Profit / loss for the reporting period x 100 / Equity (Equity attributable to owners of the parent + non-controlling interest) (average of 1 January and end of the reporting period) Per share data Earnings per share (EPS) = Net result attributable to owners of the parent / Adjusted average number of shares Diluted earnings per share = Net result attributable to owners of the parent adjusted with the result effect of convertible bond / Adjusted average number of shares, dilution effect of the convertible bond taken into account Equity attributable to owners of the parent per share = Equity attributable to owners of the parent at end of the period / Adjusted number of shares at end of the period Average trading price = Shares traded (EUR) / Shares traded (volume) Price per earnings per share (P/E) = Share price at end of the period / Earnings per share (EPS) Price per equity per share = Share price at period end / Equity attributable to owners of the parent per share Share turnover = The proportion of number of shares traded during the period to average number of shares Market capitalization = Number of shares at end of the period x share price at end of the period Number of shares at period end = Number of issued shares - treasury shares ACCOUNTING POLICIES These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting as approved by the European Union. They do not include all of the information required for full annual financial statements. The accounting principles applied in these condensed interim consolidated financial statements are the same as in the previous financial statements, with the exception of the following new or revised or amended standards and interpretations, which have been applied from 1 January, 2009: - IAS 23 (revised) Borrowing Costs - IFRS 8 Operating Segments - IFRIC 13 Customer Loyalty Programs - Amendments to IFRS 2 Share-based Payments: Vesting Conditions and Cancellations - Amendments to IAS 32 Financial Instruments: Presentation and IAS 1 Presentation of Financial Statements - Puttable Financial Instruments and Obligations Arising on Liquidation - IFRIC 15 Agreements for the Construction of Real Estate - Amendment to IAS 39 Financial Instruments: Recognition and Measurement - Eligible Hedged Items - Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards and IAS 27 Consolidated and Separate Financial Statements - Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate. - Amendments to IFRS 7 Financial Instruments: Disclosures - Improving Disclosures about Financial Instruments - Amendments to IFRIC 9 and IAS 39: Embedded Derivatives In addition, Glaston applies the annual Improvements to IFRSs issued in May 2008. Applying revised IAS 23 Borrowing Costs changed Glaston's accounting principles from 1 January 2009. From that date on the borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized to the acquisition cost of the asset. The capitalization will apply mainly to property, plant and equipment and intangible assets. Applying IFRS 8 Operating Segments did not have any material effect on the financial information of Glaston. Other new or amended standards or interpretations are not material for Glaston Group. DIVESTMENTS Glaston's subsidiary Tamglass Glass Processing Ltd. sold in March its insulated and architectural glass processing operations to INTERPANE Glass Oy. INTERPANE Glass Oy began its operations on 1 April, 2009. The divested operations had net sales of approximately EUR 14 million in 2008 and 93 employees at the end of March. The personnel were transferred to INTERPANE Glass Oy. The transaction was an asset deal, consisting of, among others, tangible assets and inventory. The deal was financed mainly through vendor financing given by Glaston. Glaston has also invested EUR 2.0 million in the equity of INTERPANE Glass Oy. In addition, Glaston is committed to invest additional EUR 0.5 million in INTERPANE's equity. Also the other party of the transaction is committed to make additional investments in INTERPANE's equity. INTERPANE Glass Oy is a company owned jointly by Georg F. Hesselbach through his company A A A Glass & Design Finland Oy, and a subsidiary of Glaston Corporation. The shareholders of INTERPANE Glass Oy have entered into a shareholders' agreement which incorporates put and call options enabling the shareholders to rearrange their ownership shares in the company in the future. The transaction has no material effect on Glaston's result. INTERPANE Glass Oy is a joint venture of Glaston, and it is consolidated in Glaston's consolidated financial statements using the equity method. Glaston continues its production of solar reflectors in Akaa, Finland. CHANGES IN JOINT VENTURES The Chinese company Sanhe AAA Tools Co. was consolidated in 2008 as a joint venture using the equity method and not as a subsidiary despite of the 70 per cent ownership of Glaston, because Glaston was not considered to have control of the company. From 1 January, 2009, Sanhe AAA Tools Co. has been consolidated as a subsidiary as Glaston has gained control of the company. INTERPANE Glass Oy became a joint venture of Glaston on 31 March, 2009. SEGMENT INFORMATION Machines segment includes glass tempering, bending and laminating machines sold under Tamglass and Uniglass brands and glass pre-processing machines sold under the Bavelloni brand as well as tools manufacturing. Services segment includes maintenance and service of glass processing machines, sale of spare parts and tools as well as operating of glass processing factory in Akaa, Finland, on behalf of a customer. In the segment information in this interim report the net sales and part of the operating result of the Tools business have been reclassified to Services segment. In January - June interim report the net sales and operating result of the Tools business were still included in Machines segment in their entirety. Orders received of the Tools business have been restated to Services segment. Software Solutions segment's product offering, sold under the Albat+Wirsam brand, covers enterprise resource planning systems for the glass industry, software for window and door glass manufacturers, and software for glass processor's integrated line solutions. EUR million -------------------------------------------------------------------------------- | Machines | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ | | | 2009 | 2008 | 2009 | 2008 | 2008 | -------------------------------------------------------------------------------- | External sales | 14.7 | 38.0 | 62.6 | 123.9 | 167.6 | -------------------------------------------------------------------------------- | Intersegment sales | 0.0 | 0.2 | 0.5 | 0.6 | 0.9 | -------------------------------------------------------------------------------- | Net sales | 14.7 | 38.2 | 63.1 | 124.6 | 168.5 | -------------------------------------------------------------------------------- | Share of associates' and | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | | joint ventures' results | | | | | | -------------------------------------------------------------------------------- | EBITDA excluding | -3.9 | 0.6 | -11.9 | 7.5 | 10.0 | | non-recurring items | | | | | | -------------------------------------------------------------------------------- | EBIT excluding non-recurring | -4.9 | -0.4 | -14.6 | 4.7 | 5.1 | | items | | | | | | -------------------------------------------------------------------------------- | EBIT-%, excl. non-recurring | -33.1 | -1.0 | -23.2 | 3.8 | 3.0 | | items | | | | | | -------------------------------------------------------------------------------- | Non-recurring items | - | - | -3.8 | - | -9.5 | -------------------------------------------------------------------------------- | EBIT | -4.9 | -0.4 | -18.4 | 4.7 | -4.4 | -------------------------------------------------------------------------------- | EBIT-% | -33.1 | -1.0 | -29.2 | 3.8 | -2.6 | -------------------------------------------------------------------------------- | Net working capital | | | 37.4 | 62.0 | 64.0 | -------------------------------------------------------------------------------- | Number of personnel, average | | | 782 | 795 | 804 | -------------------------------------------------------------------------------- | Number of personnel, end of | | | 707 | 822 | 841 | | period | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Services | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ | | | 2009 | 2008 | 2009 | 2008 | 2008 | -------------------------------------------------------------------------------- | External sales | 11.0 | 20.0 | 35.6 | 56.1 | 74.8 | -------------------------------------------------------------------------------- | Intersegment sales | 0.7 | 0.2 | 1.5 | 0.6 | 1.2 | -------------------------------------------------------------------------------- | Net sales | 11.6 | 20.2 | 37.1 | 56.8 | 76.0 | -------------------------------------------------------------------------------- | EBITDA excluding | 1.0 | 2.8 | 0.0 | 5.8 | 7.4 | | non-recurring items | | | | | | -------------------------------------------------------------------------------- | EBIT excluding non-recurring | -0.1 | 2.0 | -2.1 | 3.9 | 4.9 | | items | | | | | | -------------------------------------------------------------------------------- | EBIT-%, excl. non-recurring | -0.8 | 10.0 | -5.6 | 6.9 | 6.5 | | items | | | | | | -------------------------------------------------------------------------------- | Non-recurring items | - | - | -0.3 | - | -2.2 | -------------------------------------------------------------------------------- | EBIT | -0.1 | 2.0 | -2.3 | 3.9 | 2.7 | -------------------------------------------------------------------------------- | EBIT-% | -0.8 | 10.0 | -6.3 | 6.9 | 3.5 | -------------------------------------------------------------------------------- | Net working capital | | | 15.7 | 21.8 | 22.7 | -------------------------------------------------------------------------------- | Number of personnel, average | | | 330 | 435 | 434 | -------------------------------------------------------------------------------- | Number of personnel, end of | | | 274 | 431 | 414 | | period | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Software Solutions | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ | | | 2009 | 2008 | 2009 | 2008 | 2008 | -------------------------------------------------------------------------------- | External sales | 5.8 | 7.8 | 17.6 | 21.5 | 28.1 | -------------------------------------------------------------------------------- | Intersegment sales | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -------------------------------------------------------------------------------- | Net sales | 5.8 | 7.8 | 17.6 | 21.5 | 28.2 | -------------------------------------------------------------------------------- | Share of associates' and | 0.0 | - | 0.0 | - | 0.0 | | joint ventures' results | | | | | | -------------------------------------------------------------------------------- | EBITDA excluding | 0.9 | 1.9 | 2.4 | 4.9 | 5.5 | | non-recurring items | | | | | | -------------------------------------------------------------------------------- | EBIT excluding non-recurring | 0.5 | 1.4 | 0.6 | 3.6 | 3.7 | | items | | | | | | -------------------------------------------------------------------------------- | EBIT-%, excl. non-recurring | 7.7 | 18.1 | 3.4 | 16.8 | 13.3 | | items | | | | | | -------------------------------------------------------------------------------- | Non-recurring items | - | - | -0.3 | - | -0.6 | -------------------------------------------------------------------------------- | EBIT | 0.5 | 1.4 | 0.3 | 3.6 | 3.2 | -------------------------------------------------------------------------------- | EBIT-% | 7.7 | 18.1 | 1.9 | 16.8 | 11.3 | -------------------------------------------------------------------------------- | Net working capital | | | 6.4 | 7.0 | 5.8 | -------------------------------------------------------------------------------- | Number of personnel, average | | | 252 | 251 | 255 | -------------------------------------------------------------------------------- | Number of personnel, end of | | | 238 | 254 | 261 | | period | | | | | | -------------------------------------------------------------------------------- In segment reporting net working capital consists of inventory, external trade receivables and trade payables and advances received. Non-recurring items of 2009 consist mainly of expenses arising from rationalization measures, write-down of inventory and costs arising from agreements made in the previous years. The 2009 non-recurring items are mainly related to the Machines segment. Non-recurring items of 2008, in total EUR 12.3 million, consist of expenses arising from rationalization measures as well as non-recurring costs for agreements and doubtful receivables from previous years. In addition, the non-recurring items include impairment losses of assets. -------------------------------------------------------------------------------- | Glaston Group | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ | | | 2009 | 2008 | 2009 | 2008 | 2008 | -------------------------------------------------------------------------------- | Machines | 14.7 | 38.2 | 63.1 | 124.6 | 168.5 | -------------------------------------------------------------------------------- | Services | 11.6 | 20.2 | 37.1 | 56.8 | 76.0 | -------------------------------------------------------------------------------- | Software Solutions | 5.8 | 7.8 | 17.6 | 21.5 | 28.2 | -------------------------------------------------------------------------------- | Other and intersegment sales | -0.7 | -0.4 | -1.9 | -1.4 | -2.2 | -------------------------------------------------------------------------------- | Glaston Group total | 31.5 | 65.8 | 115.9 | 201.5 | 270.4 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EBIT | | | | | | -------------------------------------------------------------------------------- | | 7-9/ | 7-9/ | 1-9/ | 1-9/ | 1-12/ | | | 2009 | 2008 | 2009 | 2008 | 2008 | -------------------------------------------------------------------------------- | Machines | -4.9 | -0.4 | -14.6 | 4.7 | 5.1 | -------------------------------------------------------------------------------- | Services | -0.1 | 2.0 | -2.1 | 3.9 | 4.9 | -------------------------------------------------------------------------------- | Software Solutions | 0.5 | 1.4 | 0.6 | 3.6 | 3.7 | -------------------------------------------------------------------------------- | Other and eliminations | -2.9 | -2.0 | -6.5 | -5.8 | -7.6 | -------------------------------------------------------------------------------- | EBIT excluding | -7.4 | 1.1 | -22.6 | 6.5 | 6.2 | | non-recurring items | | | | | | -------------------------------------------------------------------------------- | Non-recurring items | - | - | -4.3 | - | -12.3 | -------------------------------------------------------------------------------- | EBIT | -7.4 | 1.1 | -26.9 | 6.5 | -6.1 | -------------------------------------------------------------------------------- | Net financial items | -0.9 | -1.1 | -1.7 | 0.2 | -2.0 | -------------------------------------------------------------------------------- | Result before income taxes | -8.4 | 0.0 | -28.6 | 6.7 | -8.1 | | and non-controlling | | | | | | | interest | | | | | | -------------------------------------------------------------------------------- | Income taxes | -0.3 | -0.6 | 1.8 | -3.6 | -1.1 | -------------------------------------------------------------------------------- | Result | -8.7 | -0.6 | -26.8 | 3.1 | -9.2 | -------------------------------------------------------------------------------- | Number of personnel, | | | 1,392 | 1,507 | 1,519 | | average | | | | | | -------------------------------------------------------------------------------- | Number of personnel, end of | | | 1,244 | 1,534 | 1,541 | | period | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net working capital | 30.9.2009 | 30.9.2008 | 31.12.2008 | -------------------------------------------------------------------------------- | Machines | 37.4 | 62.0 | 64.0 | -------------------------------------------------------------------------------- | Services | 15.7 | 21.8 | 22.7 | -------------------------------------------------------------------------------- | Software Solutions | 6.4 | 7.0 | 5.8 | -------------------------------------------------------------------------------- | Other | -0.1 | -0.6 | -0.4 | -------------------------------------------------------------------------------- | Total Glaston Group | 59.5 | 90.1 | 92.1 | -------------------------------------------------------------------------------- Order intake has been restated to include also order intake of the tools business. -------------------------------------------------------------------------------- | Order intake | | | | -------------------------------------------------------------------------------- | EUR million | 1-9/2009 | 1-9/2008 | 1-12/2008 | -------------------------------------------------------------------------------- | Machines | 61.1 | 118.0 | 144.4 | -------------------------------------------------------------------------------- | Services | 31.7 | 56.8 | 72.3 | -------------------------------------------------------------------------------- | Software Solutions | 7.6 | 11.1 | 13.9 | -------------------------------------------------------------------------------- | Total Glaston Group | 100.3 | 185.9 | 230.5 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales by geographical | | | | | areas | | | | -------------------------------------------------------------------------------- | | 1-9/2009 | 1-9/2008 | 1-12/2008 | -------------------------------------------------------------------------------- | Europe | 58.6 | 94.8 | 130.0 | -------------------------------------------------------------------------------- | MEAI | 13.3 | 38.8 | 48.0 | -------------------------------------------------------------------------------- | Asia | 16.9 | 28.8 | 36.5 | -------------------------------------------------------------------------------- | America | 27.2 | 39.0 | 56.0 | -------------------------------------------------------------------------------- | Total | 115.9 | 201.5 | 270.4 | -------------------------------------------------------------------------------- MEAI = Middle East, Africa, India, Pakistan, Bangladesh NET SALES, OPERATING RESULT AND ORDER BOOK BY QUARTER EUR million -------------------------------------------------------------------------------- | Machines | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | 7-9/ | 4-6/ | 1-3/ | 10-12/ | 7-9/ | 4-6/ | 1-3/ | | | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 | -------------------------------------------------------------------------------- | External sales | 14.7 | 27.4 | 20.5 | 43.7 | 38.0 | 46.3 | 39.6 | -------------------------------------------------------------------------------- | Intersegment | 0.0 | -0.3 | 0.7 | 0.3 | 0.2 | 0.3 | 0.2 | | sales | | | | | | | | -------------------------------------------------------------------------------- | Net sales | 14.7 | 27.1 | 21.2 | 43.9 | 38.2 | 46.6 | 39.7 | -------------------------------------------------------------------------------- | Share of | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | | associates' and | | | | | | | | | joint ventures' | | | | | | | | | results | | | | | | | | -------------------------------------------------------------------------------- | EBITDA | -3.9 | -3.6 | -4.3 | 2.5 | 0.6 | 4.0 | 2.9 | -------------------------------------------------------------------------------- | EBIT excluding | -4.9 | -4.5 | -5.2 | 0.4 | -0.4 | 3.1 | 2.0 | | non-recurring | | | | | | | | | items | | | | | | | | -------------------------------------------------------------------------------- | EBIT-%, excl. | -33.1 | -16.7 | -24.7 | 0.8 | -1.0 | 6.7 | 5.0 | | non-recurring | | | | | | | | | items | | | | | | | | -------------------------------------------------------------------------------- | Non-recurring | - | -3.8 | - | -9.5 | - | - | - | | items | | | | | | | | -------------------------------------------------------------------------------- | EBIT | -4.9 | -8.3 | -5.2 | -9.1 | -0.4 | 3.1 | 2.0 | -------------------------------------------------------------------------------- | EBIT-% | -33.1 | -30.6 | -24.7 | -20.7 | -1.0 | 6.7 | 5.0 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Services | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | 7-9/ | 4-6/ | 1-3/ | 10-12/ | 7-9/ | 4-6/ | 1-3/ | | | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 | -------------------------------------------------------------------------------- | External sales | 11.0 | 11.9 | 12.8 | 18.7 | 20.0 | 19.9 | 16.2 | -------------------------------------------------------------------------------- | Intersegment | 0.7 | 0.6 | 0.3 | 0.5 | 0.2 | 0.3 | 0.1 | | sales | | | | | | | | -------------------------------------------------------------------------------- | Net sales | 11.6 | 12.4 | 13.0 | 19.2 | 20.2 | 20.2 | 16.4 | -------------------------------------------------------------------------------- | EBITDA | 1.0 | 0.0 | -1.1 | 1.6 | 2.8 | 2.0 | 0.9 | -------------------------------------------------------------------------------- | EBIT excluding | -0.1 | -0.2 | -1.7 | 1.0 | 2.0 | 1.4 | 0.5 | | non-recurring | | | | | | | | | items | | | | | | | | -------------------------------------------------------------------------------- | EBIT-%, excl. | -0.8 | -2.0 | -13.3 | 5.1 | 10.0 | 7.2 | 2.9 | | non-recurring | | | | | | | | | items | | | | | | | | -------------------------------------------------------------------------------- | Non-recurring | - | -0.3 | - | -2.2 | - | - | - | | items | | | | | | | | -------------------------------------------------------------------------------- | EBIT | -0.1 | -0.5 | -1.7 | -1.3 | 2.0 | 1.4 | 0.5 | -------------------------------------------------------------------------------- | EBIT-% | -0.8 | -4.1 | -13.3 | -6.5 | 10.0 | 7.2 | 2.9 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Software | | | | | | | | | Solutions | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | 7-9/ | 4-6/ | 1-3/ | 10-12/ | 7-9/ | 4-6/ | 1-3/ | | | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 | -------------------------------------------------------------------------------- | External sales | 5.8 | 5.9 | 6.0 | 6.6 | 7.8 | 6.4 | 7.3 | -------------------------------------------------------------------------------- | Intersegment | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | | sales | | | | | | | | -------------------------------------------------------------------------------- | Net sales | 5.8 | 5.9 | 6.0 | 6.6 | 7.8 | 6.4 | 7.3 | -------------------------------------------------------------------------------- | Share of | 0.0 | - | - | 0.0 | - | - | - | | associates' and | | | | | | | | | joint ventures' | | | | | | | | | results | | | | | | | | -------------------------------------------------------------------------------- | EBITDA | 0.9 | 1.0 | 0.4 | 0.5 | 1.9 | 1.7 | 1.4 | -------------------------------------------------------------------------------- | EBIT excluding | 0.5 | 0.5 | -0.4 | 0.1 | 1.4 | 1.2 | 1.0 | | non-recurring | | | | | | | | | items | | | | | | | | -------------------------------------------------------------------------------- | EBIT-%, excl. | 7.7 | 8.7 | -6.0 | 1.8 | 18.1 | 19.3 | 13.2 | | non-recurring | | | | | | | | | items | | | | | | | | -------------------------------------------------------------------------------- | Non-recurring | - | -0.3 | - | -0.6 | - | - | - | | items | | | | | | | | -------------------------------------------------------------------------------- | EBIT | 0.5 | 0.2 | -0.4 | -0.4 | 1.4 | 1.2 | 1.0 | -------------------------------------------------------------------------------- | EBIT-% | 7.7 | 4.1 | -6.0 | -6.5 | 18.1 | 19.3 | 13.2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net sales | | | | | | | | -------------------------------------------------------------------------------- | | 7-9/ | 4-6/ | 1-3/ | 10-12/ | 7-9/ | 4-6/ | 1-3/ | | | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 | -------------------------------------------------------------------------------- | Machines | 14.7 | 27.1 | 21.2 | 43.9 | 38.2 | 46.6 | 39.7 | -------------------------------------------------------------------------------- | Services | 11.6 | 12.4 | 13.0 | 19.2 | 20.2 | 20.2 | 16.4 | -------------------------------------------------------------------------------- | Software | 5.8 | 5.9 | 6.0 | 6.6 | 7.8 | 6.4 | 7.3 | | Solutions | | | | | | | | -------------------------------------------------------------------------------- | Other and | -0.7 | -0.2 | -1.0 | -0.8 | -0.4 | -0.6 | -0.4 | | intersegment | | | | | | | | | sales | | | | | | | | -------------------------------------------------------------------------------- | Glaston Group | 31.5 | 45.2 | 39.2 | 68.9 | 65.8 | 72.6 | 63.1 | | total | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EBIT | | | | | | | | -------------------------------------------------------------------------------- | | 7-9/ | 4-6/ | 1-3/ | 10-12/ | 7-9/ | 4-6/ | 1-3/ | | | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 | -------------------------------------------------------------------------------- | Machines | -4.9 | -4.5 | -5.2 | 0.4 | -0.4 | 3.1 | 2.0 | -------------------------------------------------------------------------------- | Services | -0.1 | -0.2 | -1.7 | 1.0 | 2.0 | 1.4 | 0.5 | -------------------------------------------------------------------------------- | Software | 0.5 | 0.5 | -0.4 | 0.1 | 1.4 | 1.2 | 1.0 | | Solutions | | | | | | | | -------------------------------------------------------------------------------- | Other and | -2.9 | -1.9 | -1.6 | -1.8 | -2.0 | -2.0 | -1.8 | | eliminations | | | | | | | | -------------------------------------------------------------------------------- | EBIT excluding | -7.4 | -6.2 | -9.0 | -0.3 | 1.1 | 3.8 | 1.6 | | non-recurring | | | | | | | | | items | | | | | | | | -------------------------------------------------------------------------------- | Non-recurring | - | -4.3 | - | -12.3 | - | - | - | | items | | | | | | | | -------------------------------------------------------------------------------- | EBIT | -7.4 | -10.5 | -9.0 | -12.6 | 1.1 | 3.8 | 1.6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Order book | 30.9. | 30.6. | 31.3. | 31.12. | 30.9. | 30.6. | 31.3. | | | 2009 | 2009 | 2009 | 2008 | 2008 | 2008 | 2008 | -------------------------------------------------------------------------------- | Machines | 35.8 | 30.8 | 38.2 | 47.3 | 64.8 | 78.0 | 79.8 | -------------------------------------------------------------------------------- | Services | 1.6 | 2.3 | 4.0 | 11.6 | 15.0 | 16.2 | 7.5 | -------------------------------------------------------------------------------- | Software | 3.5 | 4.0 | 3.7 | 3.5 | 4.5 | 6.0 | 9.5 | | Solutions | | | | | | | | -------------------------------------------------------------------------------- | Total Glaston | 40.9 | 37.1 | 45.9 | 62.5 | 84.4 | 100.3 | 96.9 | | Group | | | | | | | | -------------------------------------------------------------------------------- CONTINGENT LIABILITIES -------------------------------------------------------------------------------- | EUR million | 30.9.2009 | 30.9.2008 | 31.12.2008 | -------------------------------------------------------------------------------- | Mortgages | | | | -------------------------------------------------------------------------------- | On own behalf | 0.2 | 0.2 | 0.2 | -------------------------------------------------------------------------------- | Guarantees | | | | -------------------------------------------------------------------------------- | On own behalf | 0.7 | 0.6 | 0.8 | -------------------------------------------------------------------------------- | On behalf of others | 0.1 | 0.2 | 0.1 | -------------------------------------------------------------------------------- | Lease obligations | 14.7 | 18.2 | 19.0 | -------------------------------------------------------------------------------- | Repurchase obligations | 0.3 | 1.4 | 0.5 | -------------------------------------------------------------------------------- | Other obligation on own behalf | 0.1 | - | 0.3 | -------------------------------------------------------------------------------- | Capital commitments in relation to | 0.7 | - | - | | interests in joint ventures | | | | -------------------------------------------------------------------------------- A customer of the US subsidiary Glaston USA, Inc. had made a claim of approximately USD 22 million due to a sale of a machine in 2004. The arbitration proceeding initiated by the customer against the US subsidiary Glaston USA, Inc. was concluded in April. Majority of the customer's claim were denied. The matter has no material effect on Glaston's 2009 result, because it was included in 2008 result as a non-recurring item, but the compensation paid by Glaston has affected Glaston's cash flow. The Group recognized a tax refund of approximately EUR 2 million in 2006 after having received an affirmative decision according to which the expenses arising from the management incentive scheme of the Group are deductible in taxation. The tax authorities of the Tax Office for Major Corporations appealed against the decision to the Administrative Court of Helsinki. Administrative Court of Helsinki decided the case on Glaston's favour in January 2009. The decision is final, since no appeal was made. Glaston Group has international operations and can be a defendant or plaintiff in a number of legal proceedings incidental to those operations. The Group does not expect the outcome of any unmentioned legal proceedings currently pending, either individually or in the aggregate, to have material adverse effect upon the Group's consolidated financial position or results of operations. DERIVATIVE INSTRUMENTS -------------------------------------------------------------------------------- | EUR million | 30.9.2009 | | 30.9.2008 | | 31.12.200 | | | | | | | | 8 | | -------------------------------------------------------------------------------- | | Nominal | Fair | Nominal | Fair | Nominal | Fair | | | value | value | value | value | value | value | -------------------------------------------------------------------------------- | Currency | | | | | | | | derivatives | | | | | | | -------------------------------------------------------------------------------- | Currency | 2.7 | 0.0 | 10.7 | -0.3 | 6.2 | -0.1 | | forwards | | | | | | | -------------------------------------------------------------------------------- Derivative instruments are used only for hedging purposes. Nominal values of derivative instruments do not necessarily correspond with the actual cash flows between the counterparties and do not therefore give a fair view of the risk position of the Group. The fair values are based on market valuation on the date of reporting. PROPERTY, PLANT AND EQUIPMENT -------------------------------------------------------------------------------- | EUR million | | | -------------------------------------------------------------------------------- | Changes in property, plant and equipment | 1-9/2009 | 1-9/2008 | -------------------------------------------------------------------------------- | Carrying amount at beginning of the period | 35.0 | 32.5 | -------------------------------------------------------------------------------- | Additions | 1.2 | 9.7 | -------------------------------------------------------------------------------- | Disposals | -5.3 | -0.1 | -------------------------------------------------------------------------------- | Depreciation and amortization | -3.1 | -3.5 | -------------------------------------------------------------------------------- | Impairment losses and reversals of impairment | -1.0 | 0.0 | | losses | | | -------------------------------------------------------------------------------- | Reclassification and other changes | 0.5 | -1.4 | -------------------------------------------------------------------------------- | Exchange differences | -0.1 | 0.3 | -------------------------------------------------------------------------------- | Carrying amount at end of the period | 27.1 | 37.4 | -------------------------------------------------------------------------------- At the end of the review period, Glaston Group did not have contractual commitments to acquire property, plant and equipment. RELATED PARTY TRANSACTIONS Glaston Group's related parties include the parent, subsidiaries, associates and joint ventures. Related parties also include the members of the Board of Directors and the Group's Executive Management Group, the CEO and their family members. Glaston follows the same commercial terms in transactions with associates and joint ventures and other related parties as with third parties. During the review period Glaston's related party transactions included leasing of premises to a joint venture. In addition, the Group has leased premises from companies owned by individuals belonging to the management. The lease payments were in January - September EUR 0.5 (0.5) million. During the review period there were no related party transactions whose terms would differ from the terms in transactions with third parties. Glaston paid in August to CEO Mika Seitovirta additional remuneration in total of EUR 0.5 million relating to termination of his employment. Glaston has paid to other members of the executive management group remuneration in total of EUR 0.4 million relating to termination of their employment. Transactions with joint ventures and associates Glaston has leased property to the joint venture in 2009. In January - September 2009 or 2008 Glaston had no other material transactions with the joint venture. Glaston did not have transactions with the associate. EUR million -------------------------------------------------------------------------------- | Transactions with joint ventures | | | | -------------------------------------------------------------------------------- | | 1-9/2009 | 1-9/2008 | 1-12/2008 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Sales to joint ventures | - | 0.0 | 0.0 | -------------------------------------------------------------------------------- | Other operating income from joint | 0.2 | - | - | | ventures | | | | -------------------------------------------------------------------------------- | Interest income from joint ventures | 0.2 | - | - | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Receivables from and liabilities to | 1-9/2009 | 1-9/2008 | 1-12/2008 | | joint ventures | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current receivables | 0.7 | 0.1 | 0.0 | -------------------------------------------------------------------------------- | Non-current loan receivables | 5.8 | - | - | -------------------------------------------------------------------------------- | Trade payables | 0.0 | - | - | -------------------------------------------------------------------------------- |
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