Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Glaston Oyj (OHEL:GLA1V, Financial) maintained its EBITA margin at 6.6% despite a 10% decline in net sales, showcasing strong cost management.
- The services segment experienced growth across all regions, contributing positively to the company's profitability.
- Order intake improved from the first quarter, reaching over EUR 50 million, indicating a potential recovery in demand.
- The company successfully increased its services share in the Architecture segment to 37%, up from 30% in the previous year.
- Glaston Oyj (OHEL:GLA1V) plans to transfer preprocessing production from Switzerland to China, which is expected to improve future profitability.
Negative Points
- The overall market environment remains challenging, with a 6% decline in order intake compared to the previous year.
- Net sales decreased by 10%, primarily due to declines in the Architectural Technologies segment.
- The company faces significant competition in the heat treatment segment, particularly from Asian markets.
- Cash flow was negative in the second quarter, driven by lower advance payments and changes in order intake.
- There are expected one-off costs related to the production transfer from Switzerland to China, impacting financials in the short term.
Q & A Highlights
Q: How would you describe the current machine sales funnel compared to three or six months ago, and are there more postponements or cancellations?
A: The sales funnel remains strong, with no cancellations, only postponements. The focus is on securing orders, which is a top priority. The upcoming glasstec trade show in October is expected to positively impact order timing and intake.
Q: What makes you confident that demand will turn around in 2024, and are there any early indicators?
A: The sales funnel and the significance of trade shows like glasstec provide confidence. Historically, trade shows have been pivotal for deal signings, suggesting a better order intake in 2024.
Q: Can you discuss the volatility in Insulating Glass (IG) and Tempering and Laminating orders in Q2?
A: Orders fluctuate between business segments. IG orders were low, but the segment is expected to grow due to mega trends. Heat treatment faces more competition, but order intake is expected to improve.
Q: How significant is the IG business in China, and what are the opportunities and threats?
A: The IG business in China is challenging, with growth expected to take time. However, the mobility market in China is strong, compensating for slower growth in architectural markets.
Q: What is the outlook for services, and do you expect similar seasonality this year?
A: Services are stable, driven by spare parts and customer site services. The upgrade business causes fluctuations. The services share is influenced by machine volume development, which tends to be more stable.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
