Strategy, Financial Targets and Non-Financial Targets
Glaston’s Board of Directors has approved a revised strategy with key objectives for 2021–2025. The key objectives are clearly improved organic growth and profitability, based on Glaston’s own strategic initiatives and the expected market growth.
Glaston’s addressable glass processing equipment market is expected to grow by more than 5% annually, on average, during the strategy period, and Glaston’s ambition is to clearly exceed this market growth. Strategic must-win development initiatives securing net sales growth and improved profitability have been identified in all Glaston’s business areas and the services business. These initiatives are supported by Group-wide cornerstone initiatives that target improved commercial and operational excellence.
Glaston’s core technologies and lifecycle solutions continue to be at the center of its strategy and Glaston aims to take market share in all its business areas. As the frontrunner in its industry, Glaston plans to increase its investments in innovation and development. Glaston is also continuing its commitment to leading the industry’s digital transformation. Profitability improvement is supported by net sales growth, an optimal product offering, as well as productivity improvements.
Along with its strategy, Glaston has set a new vision, which is to ‘lead the global glass processing industry forward with innovative technologies and lifecycle solutions’. The company’s purpose continues to be ‘build a better tomorrow through safer, smarter and more energy-efficient glass solutions’.
As glass processing technologies continue to be a fragmented industry, Glaston is maintaining an interest in participating in industry consolidation.
Glaston’s new financial targets for the strategy period 2021–2025 are:
Annual average net sales growth (CAGR) clearly exceeding the addressable equipment market growth of more than 5% (1
Comparable operating margin (EBITA) of 10% at the end of the strategy period (2
Comparable return on capital employed (ROCE) of 16% at the end of the strategy period (3
As glass processing technologies continue to be a fragmented industry, Glaston is maintaining an interest in participating in industry consolidation.
Addressing the company’s focus on sustainability, in addition to its financial targets, Glaston has set new non-financial strategic targets:
- Customer satisfaction score (Net Promoter Score, NPS) above 40
- Group-wide safety target measured as zero lost time accidents (LTA)
- Employee Engagement target above 75 (out of 100)
- Glaston’s CO2 emissions (Scope 1 + 2)(4 in relation to net sales down by 50% from the 2020 level. In 2020, greenhouse gas emissions were 2,777 tons of CO2 with net sales of EUR 170.1 million.
1) Glaston estimate, in euros. Glaston’s addressable equipment market is expected to grow on average by more than 5% annually during 2021–2025. The growth rate of the addressable equipment market is expected to exceed that of the global flat glass market, which is expected to grow 3–4 % annually in 2021−2025, according to Grand View Research, 2021.
Glaston’s product portfolio is targeting those end-use areas of flat glass that are growing faster than average (e.g. insulating glass). The addressable equipment market also includes the customers’ replacement investments after the operational life of machinery. During 2021−2025, replacement investments will be further derived from productivity gains, especially through automation, as well as technology and regulatory changes. Also, inflation explains part of the difference between volume-based and euro-based market estimates.
2) Calculation of key ratio: Comparable EBITA: Operating result before amortization, impairment of intangible assets and purchase price allocation +/- items affecting comparability
3) Calculation of key ratio: Comparable return on capital employed, % (Comparable ROCE): (Profit/loss before taxes + amortization of purchase price allocations +/- items affecting comparability + financial expenses x 100)/Equity + interest-bearing liabilities, average as of 1 January and end of the reporting period
4) Scope 1 emissions: direct greenhouse gas (GHG) emissions that occur from sources that are controlled or owned by Glaston (e.g., emissions associated with fuel oil, diesel and natural gas).
Scope 2 emissions: indirect GHG emissions associated with the purchase of electricity, heat, and cooling.
President & CEO's Review
President & CEO Anders Dahlblom in the January-June 2021 half year financial report, published on 5 August 2021:
“In the second quarter of 2021, the strong recovery of Glaston’s markets continued and orders received increased to a record high EUR 65.9 million. This increase is, of course, significant compared to the COVID-19 impacted second quarter of 2020 but, more importantly, new orders were as much as 48% higher than in the second quarter of 2019. The strong demand for heat treatment equipment, already noted in the previous two quarters, continued throughout the second quarter, and orders received increased to EUR 24.4 million. Orders received in the Insulating Glass segment saw excellent development and increased to EUR 30.9 million. Also, order intake in the Automotive & Display segment noted good recovery to EUR 10.3 million. Due to the strong development in order intake, cash flow was excellent and the order backlog increased to EUR 87.8 million.
Second-quarter net sales were EUR 43.3 million, down 12% compared to the corresponding period in the previous year. Comparable EBITA was slightly above the previous year’s level (EUR 2.4 million), despite lower net sales.
During the quarter, supply chain disruptions were a growing concern. Raw material prices are increasing and the delivery times for certain components are becoming longer. Currently, material shortages are primarily putting pressure on spare parts and we can see our own delivery times becoming longer for certain products, which is impacting the timing of our services revenue. We proactively take actions to secure the availability of the critical components to avoid delivery delays. Due to increasing material and freight costs, we are focusing on managing our product pricing accordingly.
Differentiating us from the competition, Glaston’s wide product portfolio and comprehensive services add value to our customers, who can benefit from unifying their technology solutions. During the first half of the year, we have noted good development in cross-selling heat treatment and insulating glass technologies. Disclosed in April, the strategic and commercial importance of cross-selling was clearly demonstrated when PRESS GLASS UAB, part of PRESS GLASS Group, the leading European producer of processed flat glass for the construction industry, placed an order for several insulating glass lines, one tempering line, a grinding line, as well as other equipment.
Glaston’s revised strategy for 2021−2025 was approved on 5 August. The key objectives of the strategy are clearly improved organic growth and profitability. Growth is driven by our strategic initiatives and the expected over 5% annual addressable equipment market growth. Strategic must-win development initiatives securing net sales growth and improved profitability have been identified in all Glaston business areas, as well as in the services business. As the industry frontrunner, Glaston plans to increase investments in innovation and development initiatives. Profitability improvement is supported by net sales growth, an optimal product offering, as well as productivity improvements.
For Glaston, sustainability is a strategic focus area. Our ambition is to maintain leadership in developing the industry towards a more sustainable future. As societies take actions towards carbon neutrality, there is increased focus on the energy performance of buildings. Glaston’s technologies are at the core of promoting sustainability as the majority of our business is targeted at the architectural segment in which our products provide key technologies for improved energy efficiency and building safety. The increased focus on reducing the energy consumption of buildings is expected to boost demand for insulating glass technologies, in particular. In addressing our focus on sustainability, in addition to financial targets, we have also set new non-financial targets, for example for CO2 emissions and health and safety.
The review period saw a recovery in investment confidence. In most regions and markets, our customers’ business activity improved. Considering the increasing customer activity and resumed customer projects, we expect the positive market development to continue during the second half of 2021, indicating a healthy, pre-COVID-19 order intake level.”
GLASTON SPECIFIES OUTLOOK FOR 2021
as published in the half year financial report 2021, 5 August 2021
The strong recovery in orders received in the first half of 2021 indicates positive development for both the machines and services business throughout 2021. The low order backlog at the start of 2021 (20% lower compared to the previous year) impacted Glaston’s January–June 2021 net sales and comparable operating profit. Moreover, the second half of 2021 will benefit from the strong order intake development seen in the first half of the year.
Glaston expects the heat treatment and insulating glass technology markets to continue to perform well. However, order intake for the rest of the year is expected to return to pre-COVID-19 levels after the record high second quarter. In the short-term demand for automotive glass processing technology shows recovery but remains uncertain due to structural changes and supply chain driven challenges in the market. There is higher than normal uncertainty connected to the outlook due to increasing component pricing and delivery times, as well as potential ongoing travel restrictions.
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 specifies its outlook for comparable EBITA, which is estimated to 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.
(Previous outlook: Glaston Corporation estimates that its net sales and comparable EBITA will improve in 2021 from the levels reported for 2020.)
Glaston’s outlook as published in the Q1 2021 interim report published on 29 April 2021:
The strong recovery in orders received in the fourth quarter of 2020 and its continuation in the first quarter of 2021 indicate positive development for both the machines and services business throughout 2021. Glaston started 2021 with a 20% lower order backlog than the previous year, impacting net sales and comparable operating profit for the first half of 2021. The second half of 2021 will benefit from the order intake recovery. Glaston expects the heat treatment and insulating glass technology markets to perform well, but visibility continues to be shorter than normal due to the COVID-19 pandemic and its implications on economic activity, investments and travel restrictions. The demand for automotive glass processing technology is volatile and uncertain due to COVID-19, structural changes in the market and automotive supply chain disruptions.
Based on the expected continued positive market development, Glaston Corporation estimates, that its net sales and comparable EBITA will improve in 2021 from the levels reported for 2020. In 2020, Group net sales totaled EUR 170.1 million and comparable EBITA was EUR 7.7 million.
GLASTON’S OUTLOOK FOR 2021
published on 9 February 2021:
The strong recovery in orders received towards 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 on 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 Corporation estimates, that its net sales and comparable EBITA will improve in 2021 from the levels reported for 2020. In 2020, Group net sales totaled EUR 170.1 million and comparable EBITA was EUR 7.7 million.
GLASTON’S OUTLOOK FOR 2020 REMAINS UNCHANGED
published on 27 October 2020 in the Q3 2020 interim report:
Glaston Corporation estimates that comparable EBITA for 2020 will decline from the 2019 level. The company’s current assessment is that fourth-quarter orders will improve from the third quarter but remain below the previous year’s levels. The lower than 2019 order intake and lower than normal volume in services business impacts the development of net sales and earnings in 2020. The uncertainty surrounding the assessment remains, and the situation might change quickly depending on the development of the COVID-19 pandemic and the general economic climate.
GLASTON’S OUTLOOK FOR 2020 UNCHANGED,
as communicated in the January-June 2020 Half-Year Financial Report on 6 August 2020:
Glaston Corporation estimates that comparable EBITA for 2020 will decline from the 2019 level. The company’s current assessment is that the market will recover gradually and that third- and fourth-quarter orders will improve from the second quarter but stay below the previous year’s levels. The lower than 2019 order intake and slower than normal volume in services business impacts the development of net sales and earnings in 2020. The uncertainty surrounding the assessment remains, and the situation might change quickly depending on the development of the COVID-19 pandemic and the general economic climate.
Glaston’s outlook as in the January-March 2020 interim report, published on 28 April 2020:
GLASTON’S OUTLOOK FOR 2020 UPDATED
Glaston Corporation estimates that comparable EBITA for 2020 will decline from the 2019 level. Due to low visibility and rapid market movements, the extent of the decline cannot be reliably assessed at this stage. The company’s current assessment is that orders received in the second and third quarters will be at a lower level than normal. The postponement of the delivery of some orders will impact the development of net sales and earnings in the near future. Exceptionally high uncertainty surrounds the assessments, and the situation might change very quickly.
On 20 March 2020, Glaston Corporation published a stock exchange release which stated that, due to the significant deterioration in the global financial situation following the coronavirus situation and the rapid changes in the company’s business environment, Glaston was withdrawing its guidance issued on 11 February 2020 and that it was improbable that company’s comparable EBITA will grow in 2020.
GLASTON’S OUTLOOK FOR 2020 as communicated on 20 March 2020
Glaston Corporation comparable EBITA unlikely to improve in 2020
Due to the significant deterioration in the global financial situation following the coronavirus and the rapid changes in the company’s business environment Glaston withdraws its guidance for the 2020 outlook, in which it expected the 2020 comparable EBITA to improve from the 2019 level.
Due to the weak visibility and high market volatility Glaston has decided to suspend its outlook for 2020. The company’s aim is to give an update on the outlook once a more reliable estimate on the potential impact can be made.
GLASTON’S OUTLOOK FOR 2020,
published in the Financial Statements Bulletin on 11 February 2020
Glaston Corporation expects that 2020 comparable pro forma EBITA will improve from the 2019 level (2019 comparable pro forma EBITA EUR 12.1 million).
Glaston Corporation develops, manufactures, sells and services glass processing machines, equipment, and technology to glass processors who provide glass products for different needs. Main customers are glass processors in the architectural glass, automotive and display glass, and solar energy equipment.
In order to better reflect business dynamics and market drivers, our operations are, as of January 2021 divided into three business areas: Glaston Heat Treatment Technologies, Glaston Insulating Glass Technoogies and Glaston Automotive & Display Technologies. The business areas also form the company’s three reporting segments in which Services are included.
Glaston Heat Treatment Technologies
Glaston offers a wide and technically advanced range of glass heat treatment machinery, services, upgrades and modernizations as well as spare parts for flat tempering, bending, bending-tempering and laminating lines.
Glaston is the most known tempering line manufacturer in the market and the fastest growing manufacturer of laminating lines. We differentiate ourselves in the market through industry-leading know-how to provide our customers with the most innovative technology and the lowest operating costs.
More information about our products is available in the Offering section.
Glaston Insulating Glass Technologies
In insulating glass technologies, Glaston offers tailor-made and flexible solutions to meet the most demanding customer needs. We have a more than 25 years experience as a leader in «warm edge» technology and inventor of the TPS® spacer system.
Energy efficiency and the need to improve the energy performance of buildings is gaining more importance in the market and drives the demand for insulating glass.
Please click to see our Offering.
Glaston Automotive & Display Technologies
Glaston is the leading supplier for pre-processing solutions for automotive glass with a >40% market share.
We offer standardized and tailor-made solutions for the processing of automotive and display glass from the raw glass to the final product.
In the automotive industry, the use of glass is increasing in the exterior and the interior and new functionalities and glass types like thin glass increase processing complexity and quality requirements.
Research and Development
Glaston is a frontrunner in its field, and known in the glass industry for its technology leadership and high quality. Our position is particularly strong in developing technologically demanding products. Glaston carries out product development in close cooperation with its customers and partners, such as research institutes, universities and other higher education institutions.
The most advanced glass processing machines developed by Glaston have risen to the status of standards in many countries. We hold patents for all of our key solutions.
At the forefront of product development are new digital and IoT-based products that facilitate the transition to fully automated glass processing.
Glaston participated in the industrial machine-learning project MIDAS, which developed and introduced a number of artificial intelligence applications to improve the quality and control of the tempering process. Data collected in the Glaston Insight service from close to 200 tempering machines creates the basis for artificial intelligence development. For this platform, Glaston is developing new technologies such as deep-learning neural networks to increase the automation of the tempering process and to create preventive maintenance functionalities.
New glass technologies and glass products providing added value, such as smart glass, are also increasingly entering the market, and the energy-saving potential of smart glass products, for example, is boosting demand for them. Glaston provides engineering and consulting services for the production of smart glass and energy glass windows as well as for solar energy applications.
Glaston has been involved in a nanotechnology project in California since the latter part of 2015. Heliotrope Technologies is developing for the market a new electrochromic smart glass technology, which gives end-users the opportunity of regulating, for example, the heat and light transmittance of glass in a building or vehicle, precisely and quickly.
More information about our major technology innovations here.
Why invest in Glaston
- Global megatrends support demand for Glaston’s products
- Glaston’s addressable glass processing equipment market is expected to grow by more than 5% annually, on average, during the strategy period, and Glaston’s ambition is to clearly exceed this market growth*)
*) Source: Glaston’s etimate
- Long history of developing glass processing equipment
- Technology leadership based on continuous, customer-oriented product development, enabling us to consistently bring to the market more advanced technology to meet customers’ changing needs
- At the heart of product development is digitalisation, which facilitates the shift towards automatic glass processing
As the innovative frontrunner in its industry, Glaston’s ambition is to continue being the leader in developing the industry towards a more sustainable future. The majority of Glaston’s business is targeted at the architectural customer segment in which the company’s products provide key technologies for improving energy efficiency and the safety of buildings.
Mergers and Acquisitions
|1981||Tamglass Oy||Acquisition||Kyro acquires the entire share stock of Tamglass Oy, founded in 1970. Exports already account for 93 % of Tamglass’ net sales of FIM 54.7 million and the company has 148 employees. Kyro becomes a diversified company.|
|1985||Tecnomen||Acquisition||Kyro expands its electronics business by acquiring Tecnomen, which supplies Tamglass with automation and control systems. The company also operates in the field of telecommunications.|
|1986||Glaston forest holdings and local electricity network||Divestment||The company sells its forest holdings to Suomi-Salama and its local electricity distribution network to Oy Nokia Ab.|
|1995||Glaston’s forest industry business||Divestment||Kyro sells its forest industry business to Metsä-Serla Oy, amid a major restructuring of the entire sector.|
|1996||Cattin Machines||Acquisition||Cattin Machines, a Swiss manufacturer of safety glass machines, is acquired for the Tamglass Group.|
|2002||Finton Oy||Acquisition||The Tamglass Group’s glass processing business is supplemented by the balcony glazing manufacturer Finton Oy from Lahti Finland.|
|2002||Uniglass Oy||Acquisition||The Tamglass Group’s machine business is supplemented by the flat tempering machine manufacturer Uniglass Oy from Tampere Finland.|
|2003||Z. Bavelloni Immobiliare S.p.A. and Glasto Holding B.V. as well as Suomen Lämpölasi Oy||Acquisition||Kyro acquires Italian Z. Bavelloni Immobiliare S.p.A’s and Dutch Glasto Holding B.V’s all share as well as a majority shareholding in Suomen Lämpölasi Oy. Glaston Technologies, consisting of Tamglass and Bavelloni, becomes the world’s largest comprehensive supplier of glass processing machines, and its glass processing product range becomes the biggest in Finland.|
|2005||Glaston’s hydropower and district heat distribution businesses||Divestment||At the end of the year, the Group sells its hydropower and district heat distribution businesses.|
|2007||Glaston’s Energy Business||Divestment||Kyro sells its energy business area to M-real Oyj.|
|2007||A+W Software AG Group||Acquisition||Glaston acquires the German A+W Software Group in July 2007, after which the Business Area, Software Solutions, is formed.|
|2009||Tamglass Glass’s insulated and architectural glass processing operations||Divestment||Glaston Corporation’s subsidiary Tamglass Glass Processing Ltd. sells its insulated and architectural glass processing operations to INTERPANE Glass Oy.|
|2010||Glass processing operations||Divestment||Glaston’s joint venture, the glass processing company INTERPANE Glass Oy, is sold to Rakla Finland Oy.|
|2013||A+W Software GmbH||Divestment||Glaston sells A+W Software to Constellation Software Inc. acting through its Friedman Operating Group.|
|2014||Glassrobots||Acquisition||Glaston acquires the industrial property rights to all Glassrobots products.|
|2015||Pre-processing machines business||Divestment||Glaston sells 100% of the shares of Glaston Italy S.p.A. to the local management of Glaston Italy S.p.A.|
|2017||Pre-processing machines business in USA and Canada||Divestment||Glaston continues as a reseller of Bavelloni’s Pre-Processing machines in Mexico, Brazil and Singapore.|
|2018||Tools business||Divestment||Glaston sells its Tools business to Italian Bavelloni S.p.A. The sale is carried out through a share deal of Glaston Tools S.r.l in Italy.|
|2019||Bystronic glass||Acquisition||Glaston acquires Bystronic Maschinen AG and Bystronic Lenhardt GmbH and their subsidiaries (“Bystronic glass”) from Conzzeta Group|