Financial Flash

Glaston’s Acquisition of Bystronic Spurs Q2 2019 Sales Growth

The second quarter of 2019 marked the first combined financial period for Glaston Corp. since its acquisition of Bystronic Glass. The company’s net sales totaled $65.4 million* (EUR 58.4 million), up from $23.3 million (EUR 20.8 million) last quarter. The company’s orders received totaled $49.8 million (EUR 44.5 million), up from $25.6 million (EUR 22.9 million) in the first quarter.

GLASTON’S 2019 OUTLOOK

Glaston Corp. expects 2019 comparable pro forma earnings before interest, taxes, depreciation, and amortization (EBITA) to be at the 2018 level or slightly better. The 2018 comparable pro forma EBITA was $12.9 million (EUR 11.5 million). Since the integration process is still early, 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 its 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 toward the second half of the year and particularly to the fourth quarter, when several orders received at the end of 2018 will be delivered.

ARTO METSÄNEN’S REMARKS

Glaston Corp. president and CEO Arto Metsänen says that the second quarter was a busy one for the company.

“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, Glass Performance Days (GPD), at the end of June,” he says. “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 $4.5 million (EUR 4 million) achieved by 2021.

“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 Europe, Middle East and Africa (EMEA) area and China, which was reflected in the Glaston segment’s second-quarter order intake,” adds Metsänen. “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.”

*Editor’s Note: The financial results were converted from Euros to U.S. dollars on August 8, 2019.

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