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Electronics Production | October 10, 2008

Neways cuts 70 jobs in the Netherlands

Neways will restructure a limited part of its production activities in Son. The restructuring concerns the subsidiary Neways Electronic Assemblies.
The move is necessary in order improve Neways’ competitive position and offers possibilities to realize required organisational adjustments which will also benefit clients, staff and suppliers.

Neways Electronic Assemblies specializes in electronic assembly solutions. During the past years, the subsidiary performed below the average return of the group. In the last few months the performance further weakened, due to the softened demand from the semiconductor industry. Turnover of Neways Electronic Assemblies amounts to approximately €20 million on an annual basis.

The one-off costs related to this restructuring of production activities will be accounted for in the second half of 2008 and amount to approximately €4.5 million (gross). This amount includes the costs of a redundancy programme for approximately 70 jobs to be cut. The works council will be asked for advice and trade unions will be informed.

The restructuring will lead to a significant and structural reduction of the cost base. Cost savings are expected to come in at around €3.5 million annually, of which a large part will already be realized in 2009.

Outlook
Earlier this year, Neways stated that it expects net profit for the full year 2008 to come in at approximately €3 – 4 million. Taking into account the estimated one-off costs related to the restructuring and barring unforeseen circumstances, Neways now expects the net result to come in around break even. With this move, Neways is better positioned for the years to come.

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