GLASTON’S OUTLOOK FOR 2019
Glaston Corporation expects 2019 comparable pro forma EBITA to be at the 2018 level or slightly improve (2018 comparable pro forma EBITA EUR 11.5 million). As the integration process is at an early stage, more uncertainty than usual is associated with the outlook and the company’s estimate.
At the end of 2018, Bystronic glass had a significant number of orders that will be recognized as revenue in the second and third quarters of 2019, thereby improving Bystronic glass’s net sales and profitability at the beginning of the year. Bystronic glass’s fourth quarter net sales and profitability will be significantly lower than in the early part of the year. The Glaston segment’s lower than 2018 first half order intake and result will affect the segment’s 2019 result. The segment’s net sales and result will be skewed towards the second half of the year and particularly to the fourth quarter, when several orders received at the end of 2018 will be delivered.
PRESIDENT & CEO ARTO METSÄNEN: A busy quarter - good start to the integration
“The second quarter was very busy for Glaston. The integration of Bystronic glass started actively and in addition to the rights issue related to the acquisition, we arranged the glass industry’s biggest conference, the Glass Performace days (GPD), at the end of June.
The start of the integration of Bystronic glass into Glaston has been very positive. It has been a pleasure to see how enthusiastic our customers are about our merger and how quickly our personnel have embraced the new situation. During the quarter, we have published a new strategy and financial targets, merged our sales and services organizations, and succeeded in our first cross-selling efforts. The integration is just beginning, but we have already achieved a great deal. I firmly believe that the acquisition will bring value added to our shareholders through synergies achieved by cross-selling of equipment and services, as well as through annual cost synergies of approximately 4 million euros achieved by 2021.
The rights issue we arranged in June was a success and it was oversubscribed. I want to thank all our shareholders and I am proud that so many want to participate in our growth story. With the proceeds received from the rights issue we repaid the bridgeloan related to the acquisition.
At the end of June, we arranged the glass industry’s biggest conference, the Glass Performance Days (GPD) in Tampere, Finland. The objective of the conference is to bring together glass industry specialists from around the world and the event is dedicated to developing the global glass industry. More than 1,000 specialists participated in the 2019 conference. Presentations included topics covering the energy efficiency of glass, environmental sustainability, digitalization and smart glass in addition to the traditional technical presentations. To increase innovation and increase business potential brought through digitalization Glaston also arranged, for the second time, the Step Change start up event in connection to the conference. Step change aims to boost the development of the industry as well as enable encounters between innovators, partners, customers and investors. Some 40 start ups participated in the event this year.
The activity in our Emerging Technologies product area has increased and we are negotiating about several interesting projects. Our new engineering projects for the automotive and aviation industries also developed well during the quarter.
There were no major changes in our markets in the second quarter, although the markets picked up slightly despite the uncertainty. Market uncertainty postponed decision-making on the heat treatment side in the EMEA area and China, which was reflected in the Glaston segment’s second-quarter order intake. Processing times for financing related to EMEA area projects have lengthened, which delays decision-making and payment of deposits. In Bystronic glass, demand for insulating glass and for services was strong, and the decline in orders received was mainly due to weak demand in the automotive glass market.
Our second-quarter net sales totaled EUR 58.4 million and comparable EBITA was EUR 3.6 million, i.e. 6.2% of net sales. Bystronic glass’s second-quarter comparable EBITA was very good, but as previously stated the Glaston segment’s result will be skewed this year towards the fourth quarter.
We expect comparable pro forma EBITA for the year to be at the 2018 level or improve slightly. With integration at such an early stage, and due to the uncertain market situation, more uncertainty than usual is associated with the forecast.”