Glaston Corporation Financial Statement 1 January-31 December 2013: Result positive – financial position good

President & CEO Arto Metsänen: “We can be relatively satisfied with 2013. The company’s operational result returned to positive and we restored our financial position.   During the first quarter, we implemented an extensive number of measures aimed at strengthening our financial position.

Full-year cash flow from operating activities, after the change in working capital, was positive at EUR 7.1 million. As a result of the measures undertaken, our net debt decreased by nearly EUR 50 million from the end of the previous year to stand at less than EUR 10 million.

With respect to the improvement in earnings, the most significant factor was full implementation of a savings programme amounting to around EUR 5 million. Due to this and good sales of heat treatment machines, we managed to restore our operating result to profit after a number of lossmaking years. The operating result, excluding non-recurring items, was clearly positive, namely a profit of EUR 2.1 million.

The global market was relatively subdued and provided very limited support. A positive note was perceptible in North America throughout the year and also in Europe, particularly in the final quarter. Despite the low market activity, our net sales grew by 5.7% to EUR 122.2 million. Sales of heat treatment machines developed positively throughout the year, with the final quarter being particularly strong. Our flagship products, the FC and RC product lines, further strengthened their position among customers. The pre-processing machines market continued to be challenging.

We look forward to 2014 with confidence. Our company is on a solid foundation and our product portfolio is the most up-to-date on the market and meeting customers’ needs. We believe that our markets will develop positively but cautiously, giving us a good possibility of profitable growth.”

 

Markets

Glaston’s market developed positively but cautiously in 2013. The recovery of the North American market continued throughout the year. In the EMEA area, the market situation was challenging but positive trends were evident, for example in Eastern Europe, the UK and Germany. In the South American and Asian markets, development was stable.

Machines

The market situation of the Machines segment was satisfactory in 2013. In North America, the cautious recovery from a low level continued throughout the year, which boosted customers’ willingness to invest. In South America and Asia, development was stable. In the EMEA area, the market continued to be challenging, but it picked up in the final quarter, particularly in the UK and Eastern Europe.

The heat treatment machines market developed positively in the second half of the year, with demand being directed at new products. The popularity of the Glaston FC 500™ machine in particular grew, but high-capacity multi-chamber solutions also met with success. In pre-processing machines, the market situation was challenging throughout the year. Demand for tools was on the previous year’s level.

Investments in product development continued. In pre-processing machines, the new UC1000™ cutting line and the Omnia double edging machine were launched onto the market at the end of the year. In heat treatment machines, the Glaston FC 500™ product line further strengthened its position, and deals for more than 30 machines were signed in the review period. In the second half of the year, a new product, the ProL500 flat laminating line, was launched onto the market. The lines are manufactured at Glaston’s factory in Brazil. The development continued of the GlastonAir™ air flotation technology, intended for the tempering of thin (2 mm) glass.

Determined work to cut delivery times and reduce the production costs of main products also continued. As a result of efficiency measures, Glaston managed to cut the delivery time of the RC 200™ machine by more than 30 per cent during the year.

Orders received in the Machines segment totalled EUR 94.5 (86.3) million in 2013. January-December net sales totalled EUR 92.6 (84.7) million. The January-December operating result was a profit of EUR 2.3 (7.3 loss) million, and the operating result excluding non-recurring items was a profit of EUR 2.3 (2.6 loss) million. At the end of 2013, the segment had 441 (461) employees. The segment’s result was positively influenced by the successful execution of a fairly high production load in the final quarter, an acceleration of deliveries, and lower costs in the quality and delivery chain.

Orders received in the Machines segment totalled EUR 26.3 (25.5) million in October-December. October-December net sales were EUR 28.1 (22.7) million and the operating result was a profit of EUR 1.7 (1.3 loss) million. The operating result, excluding non-recurring items, was a profit of EUR 1.7 (0.5) million.

Services

As in the previous year, the operating environment of the Services segment remained challenging in 2013, particularly with respect to upgrade products. In Asia, sales of maintenance work on pre-processing machines developed positively, as challenges were related to sales of heat treatment machine spare parts and upgrade products. In the South and North American markets, other product groups, excluding upgrades, did well. The EMEA area developed positively in all product groups.

During the year, the global launch of new products brought to the market in 2012 continued and the Glaston Genuine Care concept was developed further. The segment’s product portfolio corresponds well with customer needs, which without exception relate to improving energy efficiency and quality, increasing capacity, and boosting the performance and utilisation efficiency of machines and equipment.

 

The service network, the industry’s largest, maintained its position during the year.

Orders received in the Services segment totalled EUR 28.7 (31.8) million in 2013. January-December net sales totalled EUR 30.2 (32.3) million. The January-December operating result was a profit of EUR 5.3 (5.8) million, and the operating result excluding non-recurring items was a profit of EUR 5.3 (5.9) million. More intense competition in spare parts, customers’ removal of their oldest machines, and more buoyant sales of new machines impacted the development of the segment’s net sales, while profitability was maintained at a good level. At the end of 2013, the segment had 128 (130) employees.

Orders received in the Services segment totalled EUR 7.1 (7.9) million in the final quarter of 2013. October-December net sales totalled EUR 8.0 (9.9) million and the operating result was a profit of EUR 1.7 (1.9) million. The operating result, excluding non-recurring items, was a profit of EUR 1.7 (2.0) million.

Continuing Operations’ orders received and order book

Glaston’s order intake in the review period totalled EUR 123.3 (118.1) million. Of orders received, the Machines segment accounted for 77% and the Services segment for 23%.

Orders received during the final quarter of the year totalled EUR 33.3 (33.3) million.

Glaston’s order book on 31 December 2013 was EUR 39.1 (34.2) million. Of the order book, the Machines segment accounted for EUR 38.0 (33.1) million and the Services segment EUR 1.1 (1.1) million.

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600450 Glaston Corporation Financial Statement 1 January-31 December 2013: Result positive – financial position good glassonweb.com

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