Glaston Oyj Abp — Earnings Release 2021

Oct 28, 2021

Glaston’s interim report January–September 2021: Strong EBITA margin in third quarter, net sales up 29%

Glaston’s interim report January–September 2021: Strong EBITA margin in third quarter, net sales up 29%

GLASTON CORPORATION              INTERIM  REPORT            28.10.2021 AT 13.00

This release is a summary of Glaston Corporation's January-September 2021
interim 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.

JULY–SEPTEMBER 2021 IN BRIEF

· Orders received totaled EUR 45.4 (33.3) million
· Net sales totaled EUR 46.4 (35.9) million
· Comparable EBITA was EUR 3.2 (1.3) million, i.e. 6.9 (3.6)% of net sales
· The operating result (EBIT) was EUR 2.3 (-0.5) million
· The comparable operating result (EBIT) was EUR 2.1 (0.2) million, i.e. 4.4
(0.5)% of net sales
· Items affecting comparability totaled EUR 0.2 (-0.7) million
· Comparable earnings per share were EUR 0.019 (-0.005)
· Cash flow from operating activities was EUR -0.5 (0.6) million

JANUARY–SEPTEMBER 2021 IN BRIEF

· Orders received totaled 158.5 (102.9) million
· Net sales totaled EUR 130.1 (131.8) million
· Comparable EBITA was EUR 7.6 (5.7) million, i.e. 5.9 (4.3)% of net sales
· The operating result (EBIT) was EUR 3.9 (0.2) million
· The comparable operating result (EBIT) was EUR 4.3 (2.3) million, i.e. 3.3
(1.8)% of net sales
· Items affecting comparability totaled EUR -0.3 (-2.1) million
· Comparable earnings per share were EUR 0.038 (0.012)
· Cash flow from  operating activities was EUR 13.8 (-2.8) million

GLASTON’S OUTLOOK FOR 2021 REMAINS UNCHANGED
From January−September, orders received saw a healthy recovery,
indicating positive development for both the machines and services business
throughout 2021. As anticipated, after the record high second-quarter order
intake, order intake returned to pre-COVID-19 levels in the third quarter.

Glaston expects the heat treatment and insulating glass technology markets to
continue to perform well during the rest of the year. In the short term, demand
for automotive glass processing technology has shown some recovery but remains
volatile due to structural changes and supply chain driven challenges in the
market. Generally, there is higher than normal level of uncertainty associated
with the outlook due to increased component prices and delivery times.

Based on the high order intake since the fourth quarter of 2020, Glaston
Corporation estimates that its net sales in 2021 will improve from the level
reported for 2020 and comparable EBITA will increase to EUR 10.5−12.5 million.
In 2020, Group net sales totaled EUR 170.1 million and comparable EBITA was EUR
7.7 million.

PRESIDENT & CEO ANDERS DAHLBLOM:
“In the third quarter, our orders received grew by 36% to EUR 45.4 million. A
major part of this recovery was in our Heat Treatment business, which was very
low in the comparison period and was strongly impacted by the pandemic. For the
January−September period, orders received totaled EUR 158.5 million, already
exceeding the full-year 2020 order intake level.  The strong order intake
development in the previous quarters favorably impacted net sales and
profitability. Third-quarter net sales totaled EUR 46.4 million, up 29% compared
to the corresponding period in the previous year. Comparable EBITA improved
significantly compared to the previous year (+145%) as higher net sales and
synergies as well as re-structuring in Heat Treatment partially contributed to
the outcome. Comparable EBITA totaled EUR 3.2 million with an EBITA-margin of
6.9%, which is the highest quarterly margin level we have achieved for the new
Glaston combined with Bystronic glass.

Our strategy for the period 2021−2025 was finalized in August, and is targeting
clearly improved organic growth and profitability. Currently several strategic
initiatives are executed, one of them focusing on common leadership principles,
which play a key role in implementing our strategy and embedding it into our
everyday working life. Safety is high on our agenda and we have set a group-wide
safety target measured as zero lost time accidents (LTA). In order to meet this
target, safety has to be integrated into our ways of working, and for the
development and management of safety related topics we have established a cross
-functional safety team. Another strategic cornerstone project, Innovate with
customers to win, focuses on strengthening Glaston’s technological leadership by
seamless integration of understanding customer needs, as well as joint and more
rapid innovation and development work. Sustainability is our strategic focus
area. We will systematically advance our sustainability agenda and have
established a management structure and clear responsibilities for implementing
Glaston’s sustainability related practices, as well as developing sustainability
further to capture business opportunities and to meet continuously increasing
stakeholder expectations and regulatory requirements.

Supply chain disruptions continued during the quarter with longer delivery times
for certain components and increasing raw material prices, freight costs and
logistics availability concerns. Managing the situation requires additional work
on a daily basis from our teams and has had some impact on the timing of
revenue, particularly for spare parts. As we do not anticipate that the
challenges will disappear in the short term, mitigating the impact of supply
chain related disruptions is high on our agenda. We want to deliver on our
promises to our customers and Glaston’s teams are working persistently to give
rapid responses and keep to delivery times.

After a break of almost two years, we finally had the opportunity to meet our
customers face to face at two trade shows: Glassbuild America in Atlanta in mid
-September and the VITRUM exhibition in Milan in October. For me personally, it
was a great experience to attend the events. I eventually had the opportunity to
meet several Glastonians in person, as well as a number of customers. The events
were highly appreciated by us as a company and by our customers, with great
activities and good customer discussions at our stands, even though visitor
numbers were lower compared to pre-COVID-19 times.

The positive development in cross-selling heat treatment and insulating glass
technologies has continued and an example of this was the close to EUR 5 million
deal we closed with a customer in the Americas.The product combination reflects
the need for advanced glass processing technology resulting from more stringent
safety and quality regulations in commercial building construction – a growing
trend that is evident in many of our markets areas.

The review period saw a continued recovery in investment confidence with
improved customer activity. We expect the good level of activity to continue
during the last quarter of 2021.”

GLASTON GROUP’S KEY FIGURES

[]
MEUR 7−9/20 7−9/20 1−9/20 1−9/20 1−12/2020
21 20 21 20
Orders received 45.4 33.3 158.5 102.9 153.5
of which service 16.2 14.2 50.5 39.6 57.1
operations
of which service 35.7% 42.5% 31.9% 38.4% 37.2%
operations, %
Order book at end 86.1 47.8 86.1 47.8 63.9
of period
Net sales 46.4 35.9 130.1 131.8 170.1
of which service 17.9 13.3 49.2 41.0 58.1
operations
of which service 38.6% 36.9% 37.8% 31.1% 34.1%
operations, %
EBITDA 4.3 1.5 9.8 6.3 7.6
Items affecting -0.2 0.7 0.3 2.1 3.8
comparability[(1]
Comparable EBITDA 4.1 2.2 10.1 8.4 11.3
Comparable EBITDA, 8.8% 6.0% 7.8% 6.4% 6.7%
%
Comparable EBITA 3.2 1.3 7.6 5.7 7.7
Comparable EBITA, % 6.9% 3.6% 5.9% 4.3% 4.6%
Operating result 2.3 -0.5 3.9 0.2 -0.5
(EBIT)
Comparable 2.1 0.2 4.3 2.3 3.2
operating result
(EBIT)
Comparable 4.4% 0.5% 3.3% 1.8% 1.9%
operating result
(EBIT), %
Profit/loss before 1.9 -1.4 2.2 -1.9 -3.3
taxes
Profit/loss for the 1.3 -1.8 1.0 -3.2 -5.5
period
Comparable earnings 0.019 -0.005 0.038 0.012 0.013
per share, adjusted
with share issue,
EUR
Number of 84290 84290 84290 84290 84290
registered shares
at end of
period adjusted
with share issue
(1
000)
Cash flow from -0.5 0.6 13.8 -2.8 0.7
operating
activities
Net interest 23.0 37.2 33.6
-bearing debt at
end of
period
Return on 4.5% 0.1% -0.4%
investment (ROI),
%,
(annualized)
Comparable return 6.9% 4.0% 4.7%
on capital employed
(ROCE), %,
(annualized)
Equity ratio, % 42.4% 41.4% 41.2%
Net gearing, % 33.6% 53.5% 48.8%
Number of employees 743 740 723
at end of period

[(1] + cost, - income

UNCERTAINTES AND FACTORS AFFECTING SHORT-TERM DEVELOPMENT
In the third quarter of 2021, the global economic outlook continued to improve
and stable market activity was noted in Glaston’s markets. Currently, supply
chain disruptions constitute the main short-term risk for business operations.
These disruptions are expected to continue in the foreseeable future and Glaston
is actively mitigating the higher than normal risks related to raw material and
component prices and availability, as well as logistics cost increases and
freight availability. Major supply chain disruptions may impact the company’s
performance.

Even though the impact of the COVID-19 pandemic has decreased, there is still
significant uncertainty over the duration of the pandemic and the rollout of
vaccination programmes on a global scale. This could lead to new lockdowns and
more stringent travel restrictions, particularly affecting service work and the
spare parts business, as well as machine installations. Under the prevailing
circumstances, there is also a higher-than-normal uncertainty related to
customers’ investment behavior.

PRESS MEETING

Glaston’s CEO Anders Dahlblom and CFO Päivi Lindqvist will present the financial
result to analysts, investors and media representatives today at 15:00 (Finnish
time) in English.

The live audiocast can be accessed through the link:
https://glaston.videosync.fi/2021-10-28
-glastonirq3 (https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fg
laston.videosync.fi%2F2021-10-28
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d992f02ba4%7C45fc813ada604f18a6e3f5bbffa55156%7C0%7C0%7C637702382523217269%7CUnkn
own%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0
%3D%7C1000&sdata=OMG0J3S1VuJPnaiR3yHvv6vlITNr3nbaIYvD6P0%2BYGg%3D&reserved=0)

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

For further information, please contact:
President & CEO Anders Dahlblom, 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, automotive,
solar and appliance 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 10 countries and its shares (GLA1V) are listed on NASDAQ Helsinki
Ltd.

Distribution: Nasdaq Helsinki Ltd, key media, www.glaston.net.

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