Glaston Oyj: Glaston's half-year financial report January─June 2024: Profitability was supported by the services business, markets still challenging

This release is a summary of Glaston Corporation's Half-Year January-June 2024 financial report. The complete report is attached to this release as a pdf-file. The release is also available on the company's website at the address www.glaston.net.

APRIL-JUNE 2024 IN BRIEF

• Orders received totaled EUR 50.2 (53.6) million
• Net sales totaled EUR 49.9 (55.2) million
• Comparable EBITA was EUR 3.3 (3.4) million, i.e. 6.6 (6.2)% of net sales
• The operating result (EBIT) was EUR 1.0 (1.9) million
• Comparable earnings per share were EUR 0.021 (0.020)

JANUARY─JUNE 2024 IN BRIEF

• Orders received totaled 96.8 (110.5) million
• Net sales totaled EUR 105.7 (106.5) million
• Comparable EBITA was EUR 6.9 (6.4) million, i.e. 6.5 (6.0)% of net sales
• The operating result (EBIT) was EUR 3.0 (3.8) million
• Comparable earnings per share were EUR 0.039 (0.039)

GLASTON SPECIFIES OUTLOOK FOR 2024

In the second quarter of the year, the cautious development in the architectural glass processing equipment markets continued. The earlier expected market recovery has been delayed and the markets are now anticipated to recover towards the end of 2024 at the earliest. For mobility glass processing equipment, the market in China is expected to grow with increased short-term volatility. Amid global economic uncertainty and continued geopolitical tensions, higher-than-normal uncertainty exists concerning customers' decision-making.

Glaston Corporation specifies its outlook and estimates that its net sales will stay at the same level as in 2023. Comparable EBITA is estimated to amount to EUR 14.5−16.0 million. The net sales growth is curbed by the delayed market recovery whereas the planned structural cost-saving actions support profitability. In 2023, Group net sales totaled EUR 219.7 million and comparable EBITA was EUR 14.9 million.

(Previous outlook: Glaston Corporation estimates that its net sales and comparable EBITA will stay at the same level or increase slightly in 2024 from the levels reported for 2023.)

INTERIM CEO ANTTI KAUNONEN:

"In the second quarter, the challenging market environment continued. The Architectural market remained slow. Customers' cautiousness caused by the slowdown of residential markets in Europe and the US also impacted the demand for Insulating Glass (IG) technologies. Demand for tempering and laminating equipment picked up clearly from the previous quarter's very modest level. In China, the good demand for pre-processing technologies continued but the markets are expected to be volatile.

Due to the softer Architectural market, Glaston's second-quarter order intake was down 6% year-on-year. The order intake for tempering and laminating technologies increased slightly, whereas order intake for insulating glass technologies fell compared to the comparison period. As demand for upgrades picked up, Services' order intake saw an increase. In the second quarter, Glaston's main market areas, EMEA and the US, had a come-back after a weaker first quarter.

Second-quarter net sales were down 10% to EUR 49.9 million, primarily due to lower net sales in the machine business of the Architecture segment. Service achieved good growth and its net sales share was at 38%. Comparable EBITA was in line with the level of the comparison period at EUR 3.3 million. The EBITA margin, 6.6%, improved compared to both the previous quarter (6.4%) and the corresponding period in 2023 (6.2%). The growth of the Services business supported profitability development.

Our good progress in sustainability continued. Promoting sustainable development is an integral part of our business strategy as our technologies enable more energy-efficient and safe glass products. We are committed to systematically reducing our carbon footprint and as one of the first glass processing technology companies in the world, we received the Science Based Target initiative's (SBTi) approval for our greenhouse gas emission reduction targets.

Occupational safety is also high on our agenda, and zero lost-time accidents has been set as the Group-wide occupational safety target. Our systematic efforts to improve safety at work is progressing, and during the first half of the year, two lost-time accidents were reported. In the first half of 2023, eight lost-time accidents were reported.

Asia and China, in particular, are the fastest-growing mobility glass processing equipment markets. To further streamline our global production, adjust capacity to meet customer demand, and improve operational efficiencies while serving customers close to their markets, we announced earlier this week the plan to transfer all production of pre-processing equipment from Glaston Switzerland to our factory in Tianjin, China. The estimated costs of the planned production transfer are approximately EUR 6 million. Based on the initial analysis, the annual net cost savings from the transfer would take place in several phases and reach over EUR 2 million by the end of 2025.

In the first half of 2024, the Architectural market softened and currently, there are no clear signs of imminent change. During the rest of the year, our priority is to secure the order intake and project deliveries. We have already initiated cash and cost-control actions and these will continue throughout the year. If needed, we will take further measures. At the same time, we will keep the focus on growing the service business.

Glaston's new President and CEO Toni Laaksonen will take up his position on August 12, 2024. As of the same date, I will step down from the role as interim CEO but will continue as a member of the Board of Directors. For my part, I would like to give thanks for the opportunity and interesting period as interim CEO while wishing Toni welcome to the company."

GLASTON GROUP KEY FIGURES

[]
MEUR 4-6/ 4-6/ Change% 1-6/ 1-6/ Change 1-12/
2024 2023 2024 2023 % 2023
Orders received 50.2 53.6 -6.5% 96.8 110.5 -12.4% 220.3
of which 18.8 17.5 7.8% 37.7 35.9 4.9% 74.4
service
operations
of which 37.5% 32.6% 39.0% 32.5% 33.8%
service
operations, %
Order book at 101.2 115.2 -12.2% 101.2 115.2 -12.2% 106.5
end of period
Net sales 49.9 55.2 -9.7% 105.7 106.5 -0.8% 219.7
of which 18.9 17.2 10.2% 36.7 35.1 4.4% 76.0
service
operations
of which 37.9% 31.1% 34.7% 33.0% 34.6%
service
operations, %
EBITDA 3.2 3.8 -16.6% 7.2 7.5 -3.5% 15.7
Items affecting 1.2 0.7 79.5% 1.8 1.0 76.1% 3.3
comparability
[(1]
Comparable 4.4 4.5 -2.1% 9.0 8.5 6.0% 19.0
EBITDA
Comparable 8.8% 8.1% 8.5% 8.0% 8.7%
EBITDA, %
Comparable 3.3 3.4 -3.5% 6.9 6.4 6.8% 14.9
EBITA
Comparable 6.6% 6.2% 6.5% 6.0% 6.8%
EBITA, %
Operating 1.0 1.9 -45.2% 3.0 3.8 -21.9% 8.1
result (EBIT)
Profit/loss for 0.5 0.9 -43.9% 1.3 2.0 -31.8% 5.0
the period
Comparable 0.021 0.020 5.0% 0.039 0.039 -0.0% 0.104
earnings per
share,
EUR
Cash flow from -4.0 0.9 -522.9% -10.8 1.1 -1095.0% 16.3
operating
activities
Return on 6.0% 7.5% 8.1%
capital
employed
(ROCE), %,
(annualized)
Comparable 9.1% 9.9% 12.7%
return on
capital
employed
(ROCE), %,
(annualized)
Equity ratio, % 43.4% 44.8% 45.2%
Net gearing, % 43.4% 32.2% 15.8%
Number of 823 817 0.7% 802
employees at
end of
period

1. + cost, - income

ANALYST AND PRESS MEETING
Glaston's interim CEO Antti Kaunonen and CFO Päivi Lindqvist will present the financial result to analysts, investors and media representatives on the publication day at 11.00 a.m. (Finnish time) in English. The live webcast can be accessed through the link: https://glaston.videosync.fi/q2-2024/register. After the presentation of the results, Toni Laaksonen, the company's new CEO, will introduce himself. He starts in this position on August 12, 2024.

An on-demand version of the presentation will be available on the company's website later during the same day.

For further information, please contact: 
Interim CEO Antti Kaunonen, tel. +358 10 500 500
Chief Financial Officer Päivi Lindqvist, tel. +358 10 500 500

GLASTON CORPORATION

Pia Posio
VP, Communications, Marketing and IR
Tel. +358 10 500 5076

Glaston in brief
Glaston is the glass processing industry's innovative technology leader supplying equipment, services and solutions to the architectural, mobility, display and solar industries. The company also supports the development of new technologies integrating intelligence to glass.

Glaston is committed to providing its clients with both the best know-how and the latest technologies in glass processing, with the purpose of building a better tomorrow through safer, smarter, and more energy efficient glass solutions. Glaston operates globally with manufacturing, services and sales offices in nine countries and its shares (GLA1V) are listed on Nasdaq Helsinki Ltd.

Distribution: Nasdaq OMX, key media, www.glaston.net