While Glaston Corp.’s orders received for the fourth quarter of 2020 was higher than its 2019 level, the company’s net sales remained below the 2019 number. Glaston’s fiscal year orders received and net sales were also down compared to 2019.
The company’s orders received for the fourth quarter of 2020 were $63.1 million*, an increase from $59.5 million in the fourth quarter of 2019. Its net sales for Q4 2020 were $46.4 million, down from $47.3 million in Q4 2019.
Glaston’s fiscal year 2020 orders received was $185.8 million, down from the company’s pro forma amount of $223.4 million in fiscal year 2019. The unaudited pro forma financial information presented in the report is presented as if the acquisition of Bystronic glass, which occurred in April 2019, would have already been completed on January 1, 2019. The company’s fiscal year 2020 net sales totaled $205.9 million, a decrease from the pro forma amount of $247.6 in fiscal year 2019.
“As to Glaston’s performance in the fourth quarter 2020, the demand for heat treatment equipment in particular increased toward the end of the quarter, resulting in a higher-than-expected order intake. Recovery was also noted in the automotive market. The insulating glass business continued to experience high demand driven by the necessity to improve the energy efficiency of buildings. The services business picked up in the fourth quarter with increasing activity across all regions,” says Glaston president and CEO Anders Dahlblom. “Despite the pick-up in the final quarter, orders received for the full year ended at 17% below the level of the previous year … Net sales for the fourth quarter and for the full year decreased, mainly due to the lower order intake in the previous quarters.”
“Profitability in 2020 was impacted by low sales volumes in both heat treatment and automotive equipment but considering the prevailing circumstances during the year, was at a satisfactory level. Our prompt actions to adapt our operations to market demand, significantly impacted the outcome,” he adds. “… Last year due to the integration of Bystronic glass and various coronavirus-related adjustment measures, the focus of the organization was mainly internal. However, we are now in a position in which the organization can move forward and shift its focus to being more customer oriented with the target to create growth.”
The company’s first priority in 2021 is to review Glaston’s strategy. Another key priority on Glaston’s agenda is phase two of the integration. In the first phase, the focus was on integrating and streamlining organizations. As a result, the overlapping activities were discontinued, offices merged and the estimated cost synergies were achieved and even exceeded in many areas, according to Dahlblom. Phase two focuses on how to use the full potential of the integration. This covers the commercial potential for both equipment and services.
“For Glaston, 2020 ended on a positive note with a strong recovery in orders received in the final quarter of the year. Good market activity has continued during the first weeks of 2021, indicating positive volume development for both machines and services businesses,” he says. “Based on the expected continued market recovery, we estimate that the company’s 2021 net sales and comparable EBITA will improve from the previous year. Due to the coronavirus pandemic, uncertainty related to the pace and extent of market recovery is higher than normal, however.”
The strong recovery in orders received toward the end of 2020 and continued positive market environment during the first weeks of 2021 indicate positive development for both the machines and services business throughout 2021. However, reflecting the lower order intake in 2020 compared to the previous year, Glaston will start 2021 with a 20% lower order backlog than the previous year. This will impact Glaston’s net sales and comparable operating profit for the first half of 2021. The uncertainty related to the pace and extent of market recovery continues to be higher than normal due to the COVID-19 pandemic and its implications on economic activity, investments and travel restrictions.
Based on the expected continued market recovery, Glaston Corp. estimates that its net sales and comparable EBITA will improve in 2021 from the levels reported for 2020.
*The financial information was converted from Euros to U.S. dollars on February 9, 2021.