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Electronics Production | February 27, 2007

Neways books record profit of €11.2M

Holland's biggest EMS-provider Neways booked the highest turnover and highest profit in its existence in 2006.
Driven by more demand from all sectors of the Electronic Manufacturing Services (EMS) market, turnover increased fully organically by 15% to EUR 238.6 million. Net profit more than doubled to EUR 11.2 million. The strong increase in net profit was due primarily to a strong improvement in the operating margin to 7.0% from 4.3% and a slightly reduced tax rate. The order portfolio as per end of December is 27% higher than a year earlier. On that basis, the outlook for the first half of 2007 is good.

Gross turnover in 2006 increased by 17.6% to EUR 258.7 million. As a result of the intensification of the cooperation between its operating companies, Neways was able to profile itself more strongly in the market as a one-stop provider. This has resulted in an increase in the internal turnover by 67.5% compared with 2005.

Net turnover rose by 15% to EUR 239 million. This increase was entirely organic. All segments of the EMS market in which Neways is active recorded an increase in turnover.

Net turnover rose by 15% to EUR 239 million. This increase was entirely organic. All segments of the EMS market in which Neways is active recorded an increase in turnover.

Turnover per market segment


For Neways, the priority in the coming years will be to further strengthen its position as a one-stop provider. To achieve this goal, the activities with a high know-how component and high added value, such as development and engineering, will be given greater weight within the company.

In addition, the focus will be on reducing Neways´ sensitivity to market fluctuations. The company will be structured in such a way, and made more flexible where possible, to ensure that the development of returns is made more resistant to a drop in market demand. Intensification of the cooperation and communication are important in this context, both among the Neways operating companies themselves and with suppliers and clients in the business chain. A better balance in the activities mix, increasing the innovative capabilities and further improvement of the delivery reliability, should also contribute in this respect.

Neways´ strategy in the coming years will remain focused on realising organic growth combined with suitable acquisitions and a further increase in the added value and the returns. In this context, the outsourcing of production activities to the Neways operating companies in Eastern Europe and China will be further expanded in the coming years. Neways has also begun developing a supplier portfolio, on the basis of which the company will be able to make better use of opportunities to purchase more favourably in China.

The outlook for the first half of 2007 is positive. The order portfolio at the end of December 2006, at EUR 65.9 million, is up 27% compared with year-end 2005. However, insight into the developments in the EMS market is too limited at the moment to make concrete statements on a profit forecast for the full year 2007.

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