In the third quarter of 2019, Glaston’s orders received totaled $50.6 million* (EUR 45.6 million), up slightly from $49.8 million (EUR 44.5 million) last quarter. The company’s net sales totaled $60.4 million (EUR 54.5 million) in the third quarter compared to $65.4 million (EUR 58.4 million) last quarter. Bystronic glass, recently acquired by Glaston, had a significant number of orders at the end of 2018 that were recognized as revenue in the second and third quarters of 2019, improving its actual net sales and profitability. The company’s fourth quarter net sales and profitability will be significantly lower than earlier in the year, according to Glaston’s third quarter financial report.

Orders received for the period of January to September 2019 totaled $125.3 million (EUR 113 million) and its net sales totaled $148.2 million (EUR 133.7 million) for the period.

“Despite weak development of heat treatment machines market, the quarter was satisfactory,” says president and CEO Arto Metsänen. “Our third-quarter net sales grew by 15% (pro forma) and the comparable EBITA margin was 5.7% of net sales. Total orders received also grew slightly. The slowdown in the heat treatment machines market has continued in 2019 and this was already the second quarter of a difficult market. Third-quarter orders received in the heat treatment technologies product area decreased by nearly 30% from the corresponding period of the previous year. This was clearly below our expectations and that’s why we reacted to the situation rapidly. In early October, we initiated measures adjusting the Glaston segment’s operations to this lower-than-expected demand.

“At the same time, demand for insulating glass machines continued to be strong and the number of orders increased. The benefits of insulating glass, for example in improving the energy efficiency of buildings, are increasing demand for insulating glass machines. Demand for insulating glass and heat treatment machine services was good in the third quarter,” Metsänen adds. “The downturn in the automotive glass market continued, and at the beginning of October we also took steps to adjust the automotive business to a low order book, among other things by introducing reduced working hours at Bystronic glass’ Bützberg location in Switzerland.

The integration of Bystronic glass with Glaston has continued well and we have succeeded in combining our operations faster than expected. During the fall, we have, among other things, merged our sales offices in Singapore and China, eliminated overlapping functions, started integrating various IT and CRM systems, and enabled the development of a common digital product platform. Thanks to the measures taken, we have already achieved annual cost savings of $2.6 million (EUR 2.3 million). This is more than half of those annual cost synergies of around $4.4 million (EUR 4 million) that we expect to achieve by 2021.”

Metsänen notes that Heliotrope development has taken longer than Glaston expected, mainly due to the complexity of the product’s technical features but also due to the financing of the project. Negotiations regarding financing, in which Glaston is considering participating, are currently on-going.

“Heliotrope and other smart glass products are getting a lot of interest in the markets. As a result of the Heliotrope-cooperation Glaston has also found other interesting cooperation opportunities among other smart glass parties, and discussions are expected to lead to orders shortly,” he says.

*Editor’s Note: This quarter’s financial results were converted from Euros to U.S. dollars on October 28, 2019. Results from the second quarter were converted on August 8, 2019.