Hello, and welcome to Glaston's half year financial report webcast. My name is Agneta Selroos, and I am in charge of investor relations here at Glaston. Today, our CEO, Miika Äppelqvist, will start with the Q2 highlights and the market review. After that, our CFO, Magnus Sjöblom, will continue with the financials. After the presentations, there is a Q&A session. You can submit your questions by using the chat function. Now over to you, Miika.
Thank you, Agneta. As Agneta shortly already introduced, today we will go through quarter 2026 in brief, what were the highlights, what happened during the second quarter this year. We will take a look at the market review, what is happening in the market at the moment, and in what kind of environment we in Glaston are playing at the moment.
Then, of course, looking at the financial development in the second quarter. At the end, we will update our outlook for 2026. Let us start now. Second quarter 2026 in brief. Market in general remained challenging for us. If we look at especially our architectural customers, their demand level was at a clearly lower level compared to last year. As a result, machine investments were limited among our target customer base, especially in architecture side.
But then again, upgrade investment, so service as a whole, but especially upgrades, customers are looking at what they can do with the existing equipment, and there we really gained momentum in that area, and we expect that even to continue. Order intake overall, slightly up, but on an unsatisfactory level. Comparison period last year, second quarter was weak. As a result of the weak market, also second quarter in order intake remained challenging for us. What was very positive was the service orders went up 21%, which is obviously very important for us in this market situation.
Net sales down, as a result already from last quarter's declining order intake and declining order backlog, what has been visible in end of last year, end of 2025, as well as now, first and second quarter this year, net sales was down 20% compared to the comparison period, resulting at EUR 41.5 million. Out of that, close to half was services, and that of course, provides a good mix and supports the profitability. As a result of the mix, as well as different actions done in cost base and fixed cost base, comparable EBITA went down slightly, being EUR 2.7 million from the comparison period of EUR 3.1 million, and the relative profitability actually improved to 6.6%.
If we look at other events, then quarter two, one important event for us was the successful sale of the property in Switzerland. We made the decision already earlier to transfer pre-processing machinery manufacturing to China. In the second quarter, we were able to conclude the sale of the property. In quarter two numbers, we booked a gain of EUR 7.2 million from a total sales value of EUR 9.9 million of the property.
Other events during quarter two, we reorganized our commercial structure. We used to have an area of combined EMEA plus Asia-Pacific, and we split that into two. One EMEA, and then China and Southeast Asia. New commercial leaders were nominated to both positions, and we believe this market closeness will drive our commercial performance forward in the coming quarters. Other events, overall technology portfolio, IP portfolio remains important for us, and we acquired technology rights and patents into a coating area, a new area for us.
That particular technology has niche opportunities in developing new intelligent glass solutions together with our customers. That's just a sign of us investing continuously in new technologies. If we look at our operating environment, architecture, mobility, and solar market, as well as services overall, I start with architectural part, which as a segment, it's the biggest segment that we have in Glaston. There, if we look on a big picture, overall, architecture on how many buildings are being made at the moment, that is on a low level in many of our core markets, and that's visible now in this picture.
Europe, overall, the situation is still, and the architectural market remains at the low activity level. However, there are certain countries where the investment activity is increasing. Overall, in the big picture of our target market, the activity in new machines is still at low level. Americas has been also at low level in the last quarters, but we saw actually quite good uptick in Americas in the end of second quarter.
In Americas, this is important to see that the decisions have been affected by the global situation, and we saw at the end of second quarter that certain projects went already forward. That's a positive sign for us. China architectural remains at the low level. The activity in new buildings especially that driving our customers' business. We still succeed in certain niche areas. Overall, the market activity remains at low level, as well as in Asia-Pacific among our target market.
If we look at our mobility, automotive and solar market, there we saw some activity, challenging situation for many automotive players in Europe, but we also saw activity in niche players, activating investments in getting competitive edge for the future. Americas remained at low level, in mobility and solar market. In China, we saw market activity continuing. That's an area that we also anticipate to continue, and that develops positively. If we look at services definitely the bright spot in the market at the moment, both in terms of numbers that we are reporting today, as well as operating environment and future potential.
In our core markets in EMEA and Americas, service demand continues to be strong. When there are less new machine orders and less new investments, customers are looking a lot on how they can get the best out of their equipment. Our customer closeness is very important in order to capitalize on that opportunity and that potential, and helping our customers in that area, getting everything out from their equipment.
That is already visible also in our numbers. In China, service remains challenging for us as well as in the rest of APAC. But overall, service operating environment developing very positively. That is the second quarter in brief , as well as some words about the operating environment. Now I would like to give the floor to Magnus to go through the financial development part of the presentation.
Thank you, Miika. Let's start with the order intake. The market continued to be soft in the second quarter of 2026. The uncertainty in the global business environment persists. Customer hesitation continued regarding machine investments, and that had a clear impact on the Q2 order intake. Our comparison period, that was low, as Miika told. Hence our order intake increase of 2% is good, however, we landed at EUR 38.9 million, which is not the level where we want to be at. Looking at the order intake by product area, we see order intake for tempering and laminating technologies being up by 19% from a low comparison period and at EUR 7.1 million.
During the quarter, major tempering orders included Jumbo, Chinook and FC and RC Series lines. IG, insulating glass technologies, was mostly affected by the weak market, and order intake was down by 61% and total at EUR 4.6 million. MDS technologies at EUR 5.7 million and up by 124% from a low comparison period. Several automotive orders China customers we received during the quarter. Service order intake up by 21% compared to same period last year.
Demand for upgrades were good for both segments. Moving on to net sales. Our Q2 net sales were down by 20% and landed at EUR 41.5 million. The net sales was impacted by the lower order intake from last year. The low group level net sales was reflected in all machines. Tempering and laminating technologies declined by 19% and were at EUR 7.4 million. Insulating glass technologies declined by 29% and landed at EUR 11.5 million.
Mobility technologies net sales were down by 50% and were EUR 4.1 million level due to lower order intake for 2025. Service net sales were holding quite well and were on the same level as the comparison period. Moving on to net sales by region. The group net sales that fell short by 20% and landed at EUR 41.5 million were visible in all regions. Americas had the biggest decline and was at EUR 10.6 million, which is a decrease of 33% and accounting for 25% of the machines was only partly offset by the service.
That was pretty good. EMEA, EUR 22 million, and continue to be the biggest region, now more than 50%, landed at 53% of the total net sales. A decrease of 5% where the decrease came from the machines. APAC at -30% against the comparison period, and total at EUR 9 million, which is 22% of Glaston net sales in Q2 2026. China was approximately 13% of Glaston's total net sales in Q2 this year. On the profitability, our comparable EBITA was down by 13% and landed at EUR 2.7 million. It was same level as previous quarter, though.
The lower net sales was reflected in the group profitability. However, mainly due to cost actions that were taken, the negative net sales impact could be offset to the extent that EBITA margin percentage, so the relative margin, was at 6.6% and was hence better than the comparison period. Let's move on a bit and look at the segments as a whole. Architecture market remains soft. The whole segment machine orders were down by 34%.
Insulating glass fell short by 61%, which was only partly offset by tempering and laminating that were up 19%. As a positive note was the service order intake that was up by 14%, landed at EUR 14.3 million. Order backlog now 30% lower than Q2 2025. This was then reflected directly into the net sales. Architecture segment net sales decreased in total by 17% and landed at EUR 32.6 million. While service net sales were on the same level as the comparison period, the decline in net sales came from machines which were down by 26%.
Comparable EBITA was affected by the low volume and slightly lower margins and were offset partly only by the lower fixed costs. MDS. Looking at the order intake, that was up 76% to the low comparison period and landed at EUR 11.8 million. The machines order intake increased more than 100% and where China was the most active region. During the quarter, demand for upgrades picked up in Americas and EMEA, with strong year-on-year growth.
Good development was noted, especially in the U.S., where customers initiated upgrades for older lines with orders for, among others, the CNC96 upgrade. Service as a whole was strong and was up by 47%. The order backlog has declined by 9% compared to Q2 2025, which is also reflected in the net sales in this quarter. The mobility segment net sales were down by 26%. However, service net sales increased by 3%, hence the net sales decline was solely coming from machines and due to the lower order backlog from previous, that was reflected in the orders from previous year. Profitability improving. The comparable EBITA and EBITA margin year-on-year was improved.
That comes from the lower fixed cost and the higher margin contributor positively to the comparable EBITA. We move still to the cash flow. Our operating cash flow was barely positive, EUR 0.1 million positive in Q2 2026. The cost-saving measures have been contributing positively, and the cash management actions that we have been taking when it comes to net working capital, those have been both contributing positively to the operative cash flow when the amount of advances due to the lower order intake has been reducing that one.
Net debt was decreased clearly, and this is mainly because of the sale of the Switzerland real estate that occurred in Q2 2026. Impact of that is visible in the numbers, and you can see that the net debt decreased now to EUR 18.2 million, and the net gearing landing at 25% from previous 42%. That was my slides on the financial part, and I now hand over to you, Miika.
Thank you, Magnus. Last part of the presentation, updating the outlook. In the beginning of the year, we entered the year with a lower order backlog compared to the previous year. As a result of the market environment, we then gave the outlook that our sales will decrease to this year. Now, as we have done already in earlier years, we are specifying that in terms of profitability. Now, we update our outlook for comparable EBITA to be in the range from EUR 9 million- EUR 11 million. As a reminder then, the EBITA figure last year 2025 was EUR 14 million. With that, I conclude the presentation. Then forward any questions that there might be.
Thank you, Miika. Thank you, Magnus. As said, now we are ready for the questions. Here we have the first one. How does Glaston plan to allocate the capital from the sales of the Swiss property?
I can take that. Of course, we are continuously looking at how we develop the company. There are different options. I am very happy that we have been able to stabilize the overall company financial situation, and the numbers that Magnus went through show now the very solid balance sheet at the moment, and that give then us a very good base in any kinds of moves, whatever they might be, and we will definitely keep them posted when there is time for that.
Here is another question that is connected to the first one. Could you comment your capital allocation principles like profit distribution?
In general, linked already to the previous answer that regarding capital allocation plans and then whether it is profit distribution or investments or whatever moves, then we will communicate about that when the time comes.
Thank you. Then we go to the next one. Regarding the market situation, should we assume that customers' own activity is at somewhat stable level if we look at your service development besides China, but there is no need for new capacity investments in the short term, especially in the architecture side?
That is, I think, well described. If we look at what has happened now in the last couple of years, even three years, last two years, we can see that our customers' capacity utilization have come down now from the top levels in about 2023- 2024, depending a bit on the market area. At the moment, our customers are concentrating on ensuring the machines are running, ensuring they get everything they can, and ensuring the efficiencies are there. That is where our customer proximity and service approach now is working quite well, and we continue to put efforts on that.
Thank you. We go to the next one. You recorded a nice order growth in services, and the main driver, if not mistaken, was upgrades and modernizations. These are somewhat lumpy in nature, so how should we interpret outlook for upgrades and modernization?
We look at it at the moment so that, as I said in the previous one, we do not expect there to be significant changes in the market environment during the rest of the year. What we are seeing is that our customer base are running with our installed base. They are interested in seeing how they can get the most out of their existing equipment. That means what kind of features can be added, in order to buy a bit more time for the equipment or to gain certain features that are not there in the initial investment.
We see at the same time in our own actions, because of course, we have been aware of the market situation, and we have also made a deliberate pivot in our commercial approach towards the customers that we are more active in service sales as well as especially now in upgrades. I am happy to see that positive development and especially that result that is there due to our actions. We definitely believe that positive trend will continue.
Okay, to the next one. You have sold the factory property in Switzerland. Do you still have operations and employees in Switzerland?
Yes, we do, and Switzerland continues to be very important service location for us. We have great competencies in pre-processing area and in our team in Switzerland. Now when we have structurally, we could use the word fixed, the business, to relatively good profitability levels. The plan is that Switzerland and the team there continues to be a strong service location with strong customer connections and competencies, and that we will invest in service growth also in Switzerland.
Then the next one. During Q2, you made a change in the market area organization. What benefits can you expect from this change?
Well, what is important that we are close to the customers. We are close. We have good activity. We understand what are the customer problems, and what is one factor driving this split is that we get more streamlined approach, and through that, the dedicated leadership to both areas, we believe that can both add and increase the customer proximity as well as then the speed of commercial decision-making.
Okay. Thank you for the answers. As there are no further questions, I believe that we can conclude today's session here. Thank you all for joining this webcast, and I hope you enjoy the rest of your day. Thank you.
Thank you, everybody.