Electronics Production | February 17, 2009
PartnerTech net sales for Q4 levelled, Medical segment decreased 17,6%
Fourth quarter net sales were SEK 651.2 million (659.5), in line with the same period of 2007.The group's operating profit for the quarter grew to SEK 19.4 million (-86.6). Sales for the Medical Equipment business segment decreased by SEK 83.4 million or 17.6% to SEK 390.3 million (473.7). The main cause was lower demand by some of the segment's customers.
Financial figures in 4Q The measures and changes implemented in 2008 generated annual cost savings of SEK 100 million, the target that PartnerTech had announced at the beginning of the year, as of the fourth quarter. Return on operating capital was 8.6% (-35.8) during the fourth quarter. Net financial expense was SEK -9.1 million (-3.1). The increase from the fourth quarter of 2007 was due largely to translation of foreign interest-bearing liabilities to Swedish kronor, particularly the currency's lower euro exchange rate. In addition, changes in the value of interest rate derivatives not included in hedge accounting contributed SEK -3.5 million to net financial expense during the quarter. Fourth quarter profit after tax rose to SEK 6.6 million (-66.5), representing earnings per share after tax of SEK 0.52 (-5.25). Due to a conservative assessment of deferred tax assets, tax on pretax profit was relatively high for both the quarter and the year. Cash flow after investments for the fourth quarter was SEK 22.9 million (43.4). Cash flow stemmed primarily from the operating profit and from lower working capital. Divestments, particularly of the Gdynia unit, boosted cash flow by SEK 8.1 million. Financial figures for 2008 Net sales for 2008 were SEK 2,529.0 million (2,643.6). The difference between 2007 and 2008 was slight, given that 2008 divestments reduced sales by SEK 59.8 millions. Exchange rate differences from translation of foreign group companies reduced net sales by SEK 19.9 million. The group's operating profit for 2008 was SEK 28.5 million (-17.7). The difference between 2007 and 2008 was due to the planned impact of the action program and other adjustments. The weakness of the Swedish krona had a negative impact on 2008 sales. But the total effect on net operating earnings was substantially eliminated by currency clauses in customer agreements. Divestments of a number of units boosted operating earnings by approximately SEK 4.9 million. Return on operating capital was 3.1% (-1.8) for the year. Net financial expense for 2008 was SEK -19.3 million (-16.5). The reason for the increase was the same as in the case of the fourth quarter. Earnings per share after tax totaled SEK 0.41 (-1.96). Sales Trends for the business segments Terminals/Machine Solutions was again the business segment whose sales increased.. Sales for the year rose by SEK 67.4 million or 11.3% to SEK 666.1 million (598.7). The increase was due to higher demand by a number of the segment's big customers. Fourth quarter growth was in line with the average for the year. Sales for the Medical Equipment business segment decreased by SEK 83.4 million or 17.6% to SEK 390.3 million (473.7). The main cause was lower demand by some of the segment's customers. The decline slowed down to some extent in the fourth quarter, and the situation was not unequivocal, given that some customers were very strong during the year. Sales for Industry/Telecom, the biggest segment, decreased by SEK 98.6 million or 6.3% to SEK 1,472.6 million (1,571.2). The decrease from 2007 was the result of lower demand by some of the segment's customers, as well as divestment of the Järfälla and Åbo units. Human resources The number of full-time equivalent employees averaged 1,680 (1,886) in 2008. Divestment of units and the action program carried out during the year reduced the number of full-time equivalent employees by 185. The group had 1,596 (1,781) fulltime equivalent employees on December 31. No restructuring provisions were set aside for this purpose, given that notices of termination were issued incrementally. Notices were issued in the fourth quarter at the Åtvidaberg, Sweden and Vantaa, Finland units for approximately 60 employees, most of whom will leave the company in the first half of 2009. Due primarily to PartnerTech's plans to divest or phase out mechanical component production at Åtvidaberg, notices for an additional 54 employees were issued in January 2009. Notices for 35 employees were also issued at the Vellinge, Sweden unit in January. Most of them will be leaving the company in the second and third quarters of 2009. Restructuring & other measures The action program that PartnerTech launched in 2007 to carry out a series of organizational and operational changes was completed in 2008. The main focus was on improving profitability and expanding customer service. The effort also reached its target of SEK 100 million annual cost savings as of the fourth quarter. As a result of divestments and the action program, the number of employees decreased by 185 during the year. The organizations of each customer center became more process-oriented and assembled a dedicated team for every customer. Furthermore, PartnerTech's product development function was incorporated into the various customer centers, while its sales structure was decentralized to ensure greater local proximity. Most of PartnerTech's units took measures during the year to make joint processes and production flows more efficient. Meanwhile, the company strengthened its production expertise in order to offer higher performance and more advanced skills in its four primary areas of proficiency. Thus, PartnerTech's main production units for electronic components, mechanical components, encapsulation and system integration are continuing to develop Centers of Excellence. PartnerTech also reviewed and streamlined its industrial structure during the year, phasing out its smaller, non-strategic units: Järfälla (Sweden), Gdynia (Poland), Åbo (Finland) and electronic component production in Åtvidaberg (Sweden). Furthermore, the company decided in early 2009 to divest its Poole unit, which is part of its UK subsidiary, as well as mechanical components production in Åtvidaberg. PartnerTech will now continue to pursue its ongoing change processes in order to ensure a long-term competitive offering. By means of improved processes, upgraded purchasing procedures and greater presence in the market the company will strengthen the services it provides to its customers. Finally, PartnerTech is planning to broaden its logistics and after-sales services while seeking additional production opportunities in Asia and, above all, Eastern Europe. Challenges & Opportunities PartnerTech has seen clear indications of slowing demand in early 2009. Completed and planned cost adjustments will gradually deal with this decline in sales but will despite this initially affect margins. Thus, market instability and the recession will pose challenges for both PartnerTech and the sector but will also create opportunities. During a recession, many businesses look for contract manufacturers with which they can partner in order to become more competitive and enhance their ability to act. Financial Targets Despite current sector and market conditions, PartnerTech has adjusted its long-term financial targets as follows: • Annual growth: at least 10% (previously 15-20%) • Operating margin: at least 7% (previously 7-8%) • Return on operating capital: at least 20% (previously 30%) • Equity/assets ratio: at least 30% (unchanged)
Bel acquires CUI Inc. power assets Bel Fuse Inc. has closed on its previously-announced deal with CUI Global for the majority of the power business of its subsidiary, CUI Inc.
Accel Robotics more than quadruples initial funding San Diego-based start-up Accel Robotics has announced a USD 30 million Series A funding round led by SoftBank Group Co.
General Motors, LG Chem partner in Ohio General Motors and LG Chem have announced plans to form a joint, equally-owned company to mass-produce electric vehicle battery cells.
Swissbit opens electronics production facility in Berlin Swissbit has been manufacturing in Germany since 2002 and has now official opened its new electronics production facility in Berlin.
Revenue ranking of global top 10 IC design companies The newest analysis from TrendForce shows that several U.S.-based IC design companies experienced continually expanding losses in 3Q19 revenue because of the ongoing China-U.S. trade war and because Huawei had yet to be removed from the Entity List.
Mycronic receives order for an upgrade of a Prexision system Swedish production equipment specialist, Mycronic AB, has received an order to upgrade a system to a full-scale Prexision 8.
Kurtz Ersa inaugurates new extension buildingin Asia Kurtz Ersa Asia Ltd. celebrated its 15th anniversary in China and at the same time opened its extension building in Zhuhai.
Clover Wireless acquires Teleplan Illinois-based Clover Wireless has acquired Teleplan International N.V., a global electronics supply chain services and solutions provider.
FLIR Systems, Providence Photonics finalize deal Oregon-based FLIR Systems has completed its strategic investment in Providence Photonics, developers of advanced software used to quantify invisible gas emissions using FLIR optical gas imaging (OGI) cameras.
Lucid Motors sees EV facility groundbreaking Lucid Motors has officially begun phase-one construction of its EV manufacturing facility in Arizona, representing an investment of more than USD 300 million.
Precogs’ CEO: ‘If we can’t help you, it won’t cost you’ The business model of Precogs, the company that has created a global marketplace that connects a buyers ERP with component distributors, is quite intriguing; you will only pay out of what the company can save you.
Cre8tek invests in robotics to increase efficiency and quality Danish-Chinese electronics manufacturer, Cre8tek, has recently invested in added automation in the shape of robots; which are currently moving into the company’s production plant in Shenzhen with the aim to increase efficiency and quality.
Global semiconductor sales increase 2.9% MoM in October The Semiconductor Industry Association (SIA) today announced worldwide sales of semiconductors reached USD 36.6 billion for the month of October 2019, an increase of 2.9% from the previous month's total of USD 35.6 billion, but down 13.1% compared to the October 2018 total of USD 42.1 billion.
Standex International buys Torotel Inc. Standex International Corporation and Torotel Inc. have reached a definitive agreement for Standex to acquire Torotel for approximately USD 48 million in cash.
SPEA unveils new digs in Chandler, Arizona SPEA, a provider of in-test equipment for electronics, semiconductor, MEMS, and sensor industries, has opened a new office in Chandler, Arizona, in the metropolitan area of Phoenix.
SUSS MicroTec, BRIDG team up on NA applications center SUSS MicroTec has announced a broad collaboration agreement with BRIDG, a Florida not-for-profit microelectronics fabrication facility with 200 mm (8-inch) wafer fab capabilities.
Universal adds software center in Bratislava Universal Instruments has extended its EMEA capabilities with the addition of a Software Center in its Bratislava, Slovakia corporate facility.
Sono Motors launches community funding campaign The German mobility provider Sono Motors launched one of the biggest community funding campaigns in Europe yesterday. The company’s campaign target is to generate EUR 50 million between now and December 30, 2019, with preorders from existing and new supporters.
Filtronic expands hybrid microelectronics manufacturing facility Filtronic, the designer and manufacturer of antennas, says it has invested over USD 1.3 million in new equipment for its manufacturing facility in Sedgefield, UK.
ACM Research aiming for R&D facility in Shanghai ACM Research Inc., provider of single-wafer wet cleaning equipment, has begun the bidding process to acquire land rights in the Shanghai, Lingang region.
DirectMed acquires Medical Systems Technologies San Diego-based DirectMed Parts & Service has acquired Medical Systems Technologies (MST), a specialist in magnetic resonance imaging (MRI) and computed tomography (CT) component level repair and testing.
Gowanda acquires RCD Components New York-based Gowanda Components Group has picked up New Hampshire’s RCD Components, which will be folded into the company’s Magnetics Division.
Eurocircuits biggest investment to date One thing has always been clear for PCB manufacturer Eurocircuits – continues investments have been the key for the company’s success, and investments have been made.Load more news