Annual

Review

2020

Glaston Annual Review 2020 2

Contents

Stronger together with new branding ................................3

Acting President & CEO’s Review ..........................................4

Corporate responsibility

The frontrunner in glass processing ............................... 6

Responsible corporate citizen .......................................... 26

Corporate Governance Statement 2020 ....................... 28

Remuneration report 2020 ......................................................40

The Board of Directors’ Review ............................................. 46

Per Share Data .................................................................................67

Financial Ratios ................................................................................68

Consolidated Statement of Changes in Equity .......... 75

Consolidated Statement of Cash Flows .........................77

Supplemental Information for

Statement of Cash Flows..........................................................78

Summary of Significant Accounting Policies

– Consolidated Financial Statements ...............................79

Auditor’s report ............................................................................. 155

Glaston Annual Review 2020 3

Glaston – seeing it through

Stronger together with new branding

In 2020, Glaston launched its new brand to communicate

the full strength of the new Glaston. Glaston has strengthened

its commitment to being the innovative glass processing

technology leader and delivers on its promise of enabling to

build a better tomorrow through safer, smarter and more

energy-efficient glass processing solutions.

capabilities with strong partnerships.

As a technology leader and with

our strong drive to see our custom-

ers succeed, Glaston will be actively

shaping the glass processing indus-

try and taking the lead in defining its

future.

The new era of “Seeing it through”

expands the breadth of Glaston’s ear-

decades of experience and refer-

ences from all around the world. Glas-

ton is seeing it through and delivers on

its vision for the future of glass.

Today environmental awareness and

top of policy makers’ agendas and the

need for safe and sustainable living

environments has never been higher.

Glaston Annual Review 2020 4

were evident from the beginning of

the year in a weakening of demand in

Asia and particularly in China. Towards

the end of the first quarter, the effects

ment of Western countries and from

the second quarter onwards in all

market areas, affecting the work and

ations throughout the year. Right at

the start of the pandemic, we initiated

immediate measures to safeguard the

health and safety of personnel and

the financial stability of the company.

Thanks to preventive measures intro-

duced at an early stage, such as strict

dation for remote work, we were able

to maintain our production operations

throughout the year, except for a brief

and national containment measures in

different countries limited the mobil-

ity of sales and service personnel.

Glaston Annual Review 2020 5

Despite the pick-up in the fourth quar-

ter, orders received for the full year fell

17% short of the previous year’s level

(pro forma). Net sales also declined.

Profitability was on a satisfactory level,

however, given the prevailing condi-

tions.

Profitability was supported by

implementing the integration of

Bystronic glass, aquired in 2019, on a

at the heart of the measures under-

taken. We accordingly concentrated

our Chinese production in Tianjin in

early 2020, at which time we closed

the Bystronic glass plant in Shanghai.

As an important part of the inte-

gration process, towards the end

of the year we launched Glaston’s

new brand, which better reflects our

company’s current, broader and more

diverse product offering following the

Glaston’s roots go back to 1870, and

Throughout our history, our com-

vations remain firmly at the center

of product development, and the

pandemic has further underlined the

importance of digital and remote

services. New digital and IoT-based

products are also facilitating the

transition to fully automated glass

processing.

new position on 1 January 2021. I wish

him success in this task.

For my part, I would like to thank

our personnel for your flexibility and

contribution throughout the year. I

would also like to thank our customers

and shareholders for your support

Sasu Koivumäki

Acting President & CEO

Glaston Corporate Responsibility 2020 6

The frontrunner

in glass

processing

Glaston’s purpose is to build a better

tomorrow through safer, smarter, and

with the company’s technology is supplied to the

construction industry.

Greater attention is being paid to the safety

of buildings, and for glazing solutions this means

increasing use of tempered and laminated glass.

Tempering, laminating and insulating glass pro-

cesses are Glaston’s core expertise, and in these the

company offers the most advanced technology.

The debate on climate change is also strongly

reflected in the glass industry. This has led to rapid

involved in this development, and we are continually

launching more advanced technology to meet the

tainable glass solutions is continually growing. Ener-

gy-efficient double- or triple-glazed insulating glass

Glaston Corporate Responsibility 2020 7

pre-processing in the automotive and

display markets.

Glaston has production in Ger-

many, Finland, China and Switzerland.

Glaston’s factories in Finland, Switzer-

land and China assemble machines,

while machines are manufactured in

the company has sales and service

points in ten countries. From these

locations, Glaston serves its custom-

In addition, Glaston offers digital

services, such as glass processing

machine remote monitoring and fault

analysis services, and consulting and

engineering services. Personnel also

work in sales of machinery and ser-

vices and in Group functions.

Glaston’s ownership structure

Glaston Corporation’s share (GLA1V)

is listed on the main list of Nasdaq Hel-

The coronavirus pandemic has

also had a negative impact on

Glaston’s customers, as a result of

which the number of orders received

by the company decreased and some

equipment deliveries were post-

poned. In addition, different countries’

travel restrictions and virus preven-

tion measures as well as restrictions

on customers’ factory visits have

adversely affected maintenance and

throughout the year. Corresponding

measures, such as a reduced working

Technologies provides glass pro-

cessing machines and maintenance,

upgrade and modernization services

as well as spare parts for the automo-

tive, appliance and display industries.

provides

high technology machines for the

manufacture of insulating glass,

handling equipment and systems,

maintenance, upgrade and mod-

ernization services, as well as spare

Glaston Heat Treatment encompasses a

wide and technologically advanced range

of heat treatment machines, maintenance,

upgrade and modernization services,

and spare parts for glass flat tempering,

bending, bending tempering and laminat-

Glaston Corporate Responsibility 2020 8

week, have been taken in Switzerland,

the USA and the UK.

In order to adjust its operations

to lower-than-expected demand,

Glaston entered into two cooperation

procedures in Finland in 2020. The

cooperation procedures covered all

personnel in Finland and the second

set of discussions resulted in the termi-

opportunities to arrange face-to-face

sales meetings and organize events.

Glaston has utilized the situation as

an opportunity to renew and develop

sales and marketing activities, for

example through digital marketing

and virtual product demonstrations.

Continuous dialogue and

development work

Glaston’s goal is to be a reliable and

and employees, shareholders and

investors, suppliers and subcontrac-

tors, the media, public authorities and

local communities as well as research

institutes and higher education institu-

tions. Glaston engages in continuous

of current interest and to fulfill stake-

holders’ expectations.

introduced a new cup wheel technol-

ogy for edge grinding of architectural

glass in autumn 2020. Demand for

edge-ground glass is driven particu-

larly by stricter safety regulations and

quality requirements.

This corporate responsibility report

describes Glaston Group’s operations

in 2020. The content of the report

entire Group.

Glaston Corporate Responsibility 2020 9

Glaston Corporate Responsibility 2020 16

<20

2020

20–29

2019

50 100 150 200 250

Employee age distribution

Employees at end of year

Employees by country or region (FTE)

Employees by type of employment Personnel per function

Safeguarding employee safety and

wellbeing

In spring 2020, as the coronavirus

ries, such as cuts and various sprains.

The day-to-day management and

development of occupational safety

is the responsibility of the compa-

ny’s various units in line with local

legislation, and occupational safety

issues are discussed in local occupa-

tional safety committees. On aver-

age, occupational safety reviews are

exercise. In Finland, Glaston offers joint

activity opportunities and exercise

benefits. In Germany, personnel have

the option of using a company bicycle.

With the shift to remote working, we

sought to ensure our employees’

coping in work and physical condition.

app was introduced to remind per-

sonnel to move and stretch also in the

middle of the working day.

as the continuity of operations. The

safety of those working in production

was ensured by, for example, prohib-

Due to preventive measures intro-

During the pandemic, Glaston’s

Operational and safety instructions

In the exceptional circumstances,

Glaston Corporate Responsibility 2020 17

Towards a common corporate culture

With the major acquisition of Bystronic

glass, Glaston’s employee numbers

more than doubled in 2019. Work to

find a common operating approach

began immediately, activities such as

sales and service points were merged,

and the basis for a common digital

product platform was created.

work. Glaston’s values were renewed

after the acquisition, and during 2020

the company held internal discussions

on common values and their signifi-

cance for employees’ own work. The

views of personnel were examined in

the One Glaston Survey, conducted

in November. Work to identify and

develop common operating practices

will also continue in 2021. Working as a

goals and priorities will increasingly

local needs. 2020 saw the continua-

tion of sales training. Another area of

focus was training of supervisors in

Finland, Germany and Switzerland. In

addition, product and safety training

was provided to sales, service and

production personnel.

Thanks to Glaston’s internal eSkills

online learning platform, training is

flexibly available online, and all of our

Each year, performance appraisals

are conducted within Glaston and

all employees are covered by the

appraisal process. In the performance

appraisals, targets are jointly agreed

for the coming year and an evaluation

is made of performance during the

previous year and of the achieve-

ment of targets set for the previous

year. Particular attention is paid to the

planning of each person’s own skills

development.

The annual bonus is based on Glas-

issues for Glaston, and the company

business ethically and responsibly. In

late 2020, Glaston’s Board of Directors

approved the Group's anti-bribery and

anti-corruption policy. The purpose

of the policy is to increase Glaston

employees’ awareness of the risk of

corruption and conflicts of interest, to

unequivocally prohibit the payment of

bribes, and to ensure that the com-

pany conducts business honestly, in

accordance with our Code of Con-

duct and in compliance with anti-cor-

Glaston Corporate Responsibility 2020 18

Promoting sustainable development

has become a global norm, and

discussions on measures to combat

climate change are also under way in

the glass industry. Glaston views the

promotion of sustainable develop-

as Renovate Europe, for example, are

supporting the development of

environmentally aware and energy-

efficient solutions.

Energy efficiency of buildings has

a key role

has a key role in combating climate

change. In the EU, for example, build-

ings account for 40%* of total energy

in the renovation of existing buildings.

The goal of the Renovation Wave

Strategy, published by the European

Commission in October 2020, is to

at least double the number of reno-

vations over the next decade and to

ensure that they lead to better energy

and resource efficiency.

According to the Commission, 35

energy consumption and carbon diox-

ide emissions of buildings would be

approximately 30% lower than today**.

The glass processing industry has

actively developed types of glass that

can be used effectively to optimize

the need for heating and cooling in

consumption. Of these, energy-sav-

ing glass causes heat radiation to

be largely reflected back indoors,

As environmental awareness grows,

consumption of the machines.

Glaston continually develops the

quality, reliability and energy-efficiency of

its products. At Glaston’s assembly and

production units, the company operates

in accordance with the ISO 9001 quality

management system. In Finland, Glaston

manages environmental issues in accord-

ance with the ISO 14001 environmental

duction facilities is being made more effi-

cient by renewing and replacing lighting

with LEDs. In Germany, the compressed

air system is inspected annually for possi-

ble leaks, thereby preventing unnecessary

carbon dioxide emissions. In Switzerland,

the company only uses electricity pro-

During 2020, we studied and calculated

for the first time Group-wide energy con-

sumption and greenhouse gas emissions

Glaston Corporate Responsibility 2020 19

the generation of waste, and sorting

and recycling of generated waste

is arranged taking into account the

activities of each operating location

and local recycling opportunities.

The goal is to minimize the amount

of waste in general, and particularly

final disposal.

Glaston’s operations give rise to a

lot of packaging materials, and they

Transport of machines to customers

Glaston’s glass processing

significant products in our tempering

machine portfolio. For example, in the

tempering process of low-emissivity

glass, energy consumption has been

reduced by around 30% over the last

decade.

Electricity consumption in the

manufacturing of glass pre-process-

ing machines and insulating glass

its customers to use their machines

as efficiently as possible. A real-time

quality measurement system detects

deviations in the quality of processed

glass immediately, thereby minimizing

material waste.

The architectural and construction

industry is Glaston’s largest customer

segment. Therefore, the positive

Glaston Corporate Responsibility 2020 20

Energy is the biggest cost item

in the lifetime of buildings, and heat

generation and loss through windows

accounts for 25–30% of the energy

used for heating and cooling buildings.

New energy standards and stricter

legislation are driving demand for

more energy-efficient and environ-

mentally conscious solutions in both

The glass processing industry has

actively developed types of glass that

can be used to optimize the need for

heating and cooling in buildings and

thereby reduce energy consumption.

Solar energy is growing in popular-

ity, and strict quality requirements, for

example in relation to glass thickness

and curved surfaces, are being set

for the glass used in solar panels and

cells. In smart glass applications, win-

dows that react to fluctuations in light

Glaston’s financial responsibility is

centered on maintaining the compa-

ny’s profitability and competitiveness,

and its key objective is to ensure prof-

Financial responsibility is reflected

in Glaston’s responsible, long-term

and sound financial management. In

its tax information in accordance with

applicable legislation.

Generating economic value added

Sustainable value creation requires

motivated employees, competitive

customers.

Through profitable operations,

Glaston ensures that the company is

Glaston Corporate Responsibility 2020 21

providers, social taxes, and potential

dividends and returns of capital for

shareholders are our most important

obligations, as are the means to cre-

ate economic value added.

Glaston strives to ensure high qual-

ity management of its tax affairs in all

countries of operation and to maintain

accounting systems and controls that

million, of which service operations

accounted for 34%. Comparable EBITA

was EUR 7.7 million. In financial year

2020, Glaston paid interest and finan-

cial expenses totaling EUR 2.3 million.

Glaston paid EUR 0.9 million

in income taxes in 2020. Salaries

and bonuses paid to personnel

totaled EUR 44.9 million and pension

expenses EUR 3.2 million. Glaston had

an average of 744 employees in 2020.

Glaston’s investments in tangible

Glaston Corporate Responsibility 2020 22

from Asia and approximately 5% from the

Americas. The most significant materials pur-

chased for machine manufacturing include

steel structures, electrical and automation

components, power centers and process

blowers.

Glaston is committed to responsible pro-

Code of Conduct, Glaston acts fairly towards

its suppliers, service providers and subcon-

tractors, and respects human rights in all of its

business

Supplier Code of Conduct), a commitment to

which will be part of the company’s purchase

to both processes and products.

In Europe, Glaston accepts as its suppliers

only companies that have not violated the law

and are not subject to sanctions of any kind.

Glaston’s quality and purchasing organizations

audit the most significant suppliers regularly in

order to monitor the safety and quality of sup-

were audited. All new suppliers go through

an audit process before being approved. In

addition, visits are made to suppliers, if neces-

Glaston Corporate Responsibility 2020 23

Fair business

In its Code of Conduct, Glaston

undertakes to promote fair competi-

tion and to comply with the law in all of

its activities. Furthermore, in its every-

day activities, Glaston is committed to

combating bribery and corruption.

The Group's anti-bribery and

anti-corruption policy unequivocally

lations.

No direct or indirect payments

can be made, nor can the company's

funds be conveyed directly or indi-

rectly to any party to gain an improper

advantage. In addition, the compa-

ny’s personnel are instructed to avoid

conflicts of interest and to refuse all

improper payments and benefits.

Glaston regularly arranges training

for its personnel on its Code of Con-

duct and fair business issues. In addi-

Glaston Corporate Responsibility 2020 24

Glaston wants to be the most customer-ori-

products. Glass processing machines must

be able to produce larger, more uniform and

thinner glass surfaces. Production must also

be able to adapt flexibly to making different

types of glass. As a glass industry frontrunner,

Glaston develops technologies and solutions

that meet these changing customer needs,

partnership with customers.

Customer support throughout the life cycle

operating lives, up to 20 years or more. The

experience

machines are designed to withstand constant

use at high utilization rates.

Glaston pays special attention to the quality

sis of the machine, describing possible risks to

personnel during the various stages of using

the machine, and measures to reduce risks as

well as information on any residual risk, which

must be mentioned in operating instructions

and in which the user must be trained. Once

the machine has been installed, tested, users

ready for production, a CE plate is affixed to

the machine. All Glaston machines manufac-

tured in Europe comply with the EU Directive.

Glaston Corporate Responsibility 2020 25

increase product life and safety. Glas-

ton has a total of approximately 4,500

installed and operating machine lines,

some of which are up to 40 years old

or more. Glaston has over 100 different

upgrade products for different models

of machine. Modernizing machines

with new technology, such as a new

control system, a new tempering

Digital services

Preventive maintenance extends the

useful life of machines, while planned

service intervals ensure production

quality and efficiency. The MyGlaston

customer portal contains all infor-

mation between Glaston and the

customer, such as machine service

reports, technical manuals and oper-

ating instructions, and links to the

Glaston Insight cloud service. Con-

necting machines to the cloud service

vision-based services.

At the end of 2020, more than

180 tempering machines had been

connected to the Glaston Insight ser-

vice and more than four million glass

processing loads had been registered.

The first laminating machines were

also connected to the Insight ecosys-

tem, and test connections for insulat-

ing glass lines have been made to the

cial attention to managing information

security risks, with regard to both the

company's own and its customers’

data. Information security practices

and responsibilities are guided by

Glaston’s information security policy,

and information security is regularly

monitored and audited. Glaston’s

partners and subcontractors are also

required to adhere to the company's

information security guidelines.

technologically demanding products.

Glaston participated in the indus-

technologies such as deep-learning

neural networks to increase the auto-

mation of the tempering process and to

create preventive maintenance func-

tionalities.

By utilizing cloud services and the

opportunities provided by IoT, Glaston

helps its customers use their machines

as efficiently as possible. As a by-prod-

and the glass used in solar cells and

panels is subject to exacting quality

requirements, for example with respect

to glass thickness and curved surfaces.

Glaston has taken this into account in its

product development, and the Glas-

tonAir™ tempering machine developed

by Glaston responds well to this need.

Emerging glass technologies and

glass products providing added value,

such as smart glass, are also increas-

ingly entering the market, and the

solar energy applications.