Glaston January-June 2017 10 August 2017 Q2 in brief In the second - PowerPoint PPT Presentation

Glaston January-June 2017 10 August 2017

Q2 in brief ▪ In the second quarter, the glass processing Orders received: market became more active to some extent EUR 26.6 million, -7%*) ▪ New orders grew by 23% compared to the previous quarter Net sales: ▪ The order book was on the same level as last year EUR 29.1 million, +32%*) ▪ Due to an increased number of deliveries, net sales grew by 32% Comparable operating result: ▪ The comparable operating result improved significantly EUR 1.4 million (EUR -0.4 million) ▪ Negotiations on the sale of the pre-processing business in the USA and Canada were completed Order book: EUR 41.2 million, +1% *) when the sale of the pre-processing business in the USA and Canada are taken into account orders received were down -3% down and net sales up +35%

Operating environment ▪ In the EMEA area, overall market development was good 60 Decision-making slow in many countries, especially in ▪ Eastern Europe Growing demand in Central and Southern Europe ▪ 40 ▪ In the Asian market, development was positive, but varied from region to region In Australia and New Zealand markets remained good 20 ▪ In China, the first signs of a pick-up in construction were ▪ perceptible ▪ The North American market slowed and 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 customers’ pruchasing decisions were delayed 2014 2015 2016 2017 ▪ In the South American market, there were a slight Orders received, M€ Net sales, M€ recovery from a very low level

Q2 net sales Up +32% *) 20.1 31.1 21.9 36.6 26.3 30.1 34.3 32.6 29.4 22.1 20.5 35.1 22.8 29.1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 M€ 2014 2015 2016 2017 *) Net sales were up 35%, if sales of the pre-processing business in the USA and Canada are taken into account 4

Q2 comparable operating result Growth in net sales improved the result 8% 8% 7% 6% 6% 5% 5% 5% 2% 2% 0% 1.8 1.1 3.0 1.2 1.7 2.5 0.6 0.7 2.7 0,0 1.4 -0.3 -0.4 -0.4 -1% -2% -2% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 2016 2017 EBIT, M€ EBIT% 5

Order book at the previous year’s level 56.0 56.0 52.8 47.8 46.0 45.6 45.1 41.7 40.9 41.2 39.0 38.5 34.5 32.7 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 M€ 2014 2015 2016 2017 6

Machines Q2 ▪ In the second quarter, the Machines business market was more active ▪ In the EMEA area, decision-making was slow in 40 many countries, but overall market development was stable ▪ The North American market levelled of. The South 20 American market picked up marginally ▪ In the Asian market area, development was positive, but varied from region to region 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 ▪ Order intake was EUR 15.1 million. The largest 2014 2015 2016 2017 orders were received from the USA, New Zealand Orders received, M€ Net sales, M€ and Australia ▪ Net sales totalled EUR 18.2 million, up 40% from the corresponding period of the previous year

Services Q2 ▪ A cautiously positive development of the Services 20 business market was evident ▪ The development of the EMEA area was double- edged: on the one hand, Glaston received a high number of orders; on the other hand, significant 10 slowdown in some countries ▪ The North American market continued to be challenging. In South America, the market continued to be slow 0 ▪ The markets in Asia picked up. Glaston closed a Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2014 2015 2016 2017 few large modernisation deals Orders received, M€ Net sales, M€ ▪ The market for modernisation products picked up. During Q2 the number of new projects nearly doubled compared with the first quarter ▪ Net sales were 13% up and totalled EUR 11.2 million

Net sales by area EMEA net sales up +29% 60 51.5 52.0 50 19.3 20.4 40 30 7.4 11.5 20 25.3 10 19.6 0 1-6/2016 EMEA Asia Americas 1-6/2017 M€ M€

Cash flow from operating activities Advance payments related to orders declined 0.2 2.0 15.9 2.0 0.6 2.0 4.3 8.9 -1.5 -1.8 -3.3 -2.3 -3.8 -2.2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 M€ 2014 2015 2016 2017 10

Net debt Increased due to the growth in working capital 57.7 11.4 10.9 8.6 7.4 7.7 6.1 5.9 5.2 3.0 -5.0 -1.2 -0.6 M€ 2012 2013 2014 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017 Q2/2017 11

Shareholders Ahlström Capital acquired G.W.Sohlberg’s shares 30 June 2017 Numb mber ers of shares es % of shares es and voting ng rights Chang nge e May ->Ju June ne Ac Invest Eight B.V. 33,931,442 17.52 + 33,931,442 Hymy Lahtinen Oy 23,400,000 12.08 OP-Finland Small Firms Fund 13,918,323 7.19 +8,750,000 (+169,3%) Etera Mutual Pension 13,843,878 7.15 -8,750,000 (-38,73%) Insurance Company Varma Mutual Pension 12,786,643 6.60 Insurance Company Evli Finnish Small Cap Fund 9,732,139 5.02 -58,000 (-0.59%) Päivikki and Sakari Sohlberg 3,965,600 2.05 Foundation Hulkko Juha Olavi 3,530,000 1.82 320,000 (+9.97%) Oy Investsum Ab 3,358,000 1.73 Kirkon eläkerahasto 3,142,600 1.62 Total number of shareholders Q2/2017: 5,578 Q2/2016: 5,947 12

Outlook Good order book at start of the year, positive market development and ▪ the cost-saving measures undertaken create good conditions for the development of operations in 2017. We expect the full-year comparable operating result to improve from ▪ 2016. (In 2016 the comparable operating result was EUR 2.8 million.)

Emerging technologies

Functional glass ▪ Function ional al glass can, for example, ple, increase the livin ving g comfort t and safety y of both buildi ldings gs and users ▪ Adapt pts to its envir ironm nment nt ▪ Saves or generates ates energy gy ▪ Colle ollect cts information mation abou out t its surrou oundin ndings Varsinainen yhtiökokous 2017 15

The smart glass potential is huge 9983 Glaston is actively seeking new business ▪ 10000 8694 opportunities in emerging glass technologies 7565 8000 6561 The Emerging Technologies unit is involved in ▪ 5683 6000 4925 active discussions on solar energy solutions, 4271 3710 demanding architectural solutions and automotive 4000 3224 2806 industry innovations 2446 2136 2000 Glaston’s partner, Heliotrope Technologies, is ▪ 0 developing for the market a new electrochromic 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 smart glass technology that regulates the heat North America Europe Asia Pacific Latin America MEA and light transmissivity of glass precisely and quickly The global smart glass market was valued at USD 2,805 05.7 .7 million ion in 2016 6 and is expected to reach USD 9,983 83.0 .0 million ion by 2025, growing at a CAGR GR of 15.2% 2% from m 2017 to 2025 Source: Glass Magazine, National Glass Association, The Glass Association, IEEE, Hoover’s, Company Annual Reports, and Grand View Research 16

New smart glass technology Heliotrope Technologies The competitive advantage of this new technology over solutions already on the market ▪ is significantly lower production costs and aesthetic qualities in terms of the colour and haze of the glass Room darkening Daylighting & Glare control Privacy El Elimi iminate Glare re Maxim ximize ze Day Dayligh ght Red educ uce Hea eat t Load Elimi El iminate Blin inds and Shades es Daylighting & Glare control Daylighting & Glare control Glare control Source: Heliotrope Technologies 17

Step Change – first glass industry startup event In connection with the Glaston-organised Glass Performance Days conference a glass industry startup event was held for ▪ the first time The aim of the event is to accelerate the development of the sector and introduce new innovations to investors ▪ 660 660 GPD D parti rtici cipants pants ▪ 290 290 First st time me parti rticipa pants nts ▪ 62 62 Step ep Cha hang nge parti rtici cipa pants ts ▪ 35 35 Step ep Cha hang nge start rtup ups ▪ 28 28 Start rtup up exhibi hibitors ors ▪ 26 26 Indu dustry stry exhibito tors rs ▪ 24 24 Pitchi ching teams ms ▪ 13 13 Ment ntors ors ▪ 12 12 Investor vestors ▪

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