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Electronics Production | August 25, 2010

Neways benefits from EMS market recovery

Dutch based EMS provider Neways Electronics International N.V. recorded an increase in net turnover of approximately 25% in the first half of 2010 compared to the first half of 2009.
According to Neways, this increase was due to a rise in demand in the market for Electronic Manufacturing Services (EMS). Due to the increase in turnover, the net profit for the first half of 2010 improved to €1.5 million against €4.2 million in the first half of 2009.

The rise in profit was pressured since suppliers were not always able to meet their agreed delivery obligations due to the strong increase in demand, which led to inefficiencies throughout the chain, Neways reported.

The order portfolio as at 30 June 2010 was up 20% compared to the end of December 2009, and increased further in July. Neways expects its results in the second half of 2010 to exceed the first half 2010 results.

In July, Neways further expanded the collaboration with Sensus in the field of development and production of heat meters. Extra capacity has been created at Neways Neunkirchen for this.

Also in July, Neways won a large order from a German industrial company worth over €5 million per year for the development and production of electronic operating systems for the automotive sector. The development and production process will be carried out at Neways Neunkirchen and Neways Kassel.

As part of the current collaboration between Neways and ThyssenKrupp, the two parties have agreed that from August 2010, Neways will become the strategic partner of ThyssenKrupp Transrapid (maglev train) for the entire service and repair operation, as well as for future new developments. The background for this decision is that ThyssenKrupp Transrapid has ceased its current production facility in Kassel. Neways will thus be responsible for the entire spare parts operation, including repairs to the electronic systems. At the same time Neways will for new orders also produce the electronic systems for the Transrapid trains. For Neways Kassel in Germany, this contract is an important step in its further growth.

Investments will increase in the second half, and are expected to double in comparison to the low level seen in the first half of 2010. Partly due to the increasing demand, investments will be made in expanding the clean-room facilities and some of the existing SMD production lines will be replaced by new advanced production lines with the latest technology. There will also be investments in the new ERP platform and in systems to enable faster and better analysis of production data as part of quality control.

Based on these developments, Neways expects its results in the second half of 2010 to exceed the first half 2010 results.

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