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Electronics Production |

Neways post first half loss of EUR 4.2 million

Neways realised a net turnover of EUR 93.4 million in the first six months of 2009. This is a drop of around 28 percent compared with the same period last year.

The strong decline in turnover was the result of a decline in demand, particularly in the semiconductor sector, but also in other sectors. In the past six months, the cost base was reduced by 7% to a break-even net turnover level of approximately EUR 195 million annually. The reduced turnover means capacity remained underutilised which led to an operating loss of EUR 3.1 million. This is excluding a one-off reorganisation charge of EUR 1.3 million (gross). The net result came in at EUR -/- 4.2 million. The order portfolio as of 30 June was EUR 52.6 million, a drop of 8% compared to year-end 2008 and down 23% compared with 30 June 2008. July saw a higher order intake than June. Various market sectors are also clearly showing more activity at the moment. Partly as a result of increasing demand from the semiconductor sector, Neways expects the fourth quarter to show improvements and thus expects the result in the second half to be better than in the first half of 2009. Turnover and order portfolio In the first six months of 2009, gross turnover fell 28% to EUR 102.1 million, from EUR 142.8 million in the same period in 2008. Internal turnover was down 32%, but remained virtually unchanged as a percentage of turnover when compared to the first half of 2008. Year-on-year, net turnover in the first half also dropped 28% to EUR 93.4 million. The decrease was largely due to a sharp fall in demand from the semiconductor sector and reduced demand from the industrial and automotive sectors. Turnover in the medical industry, the high-end telecommunications and defence sectors is relatively less sensitive to economic fluctuations and showed a more stable picture. Neways believes that in the longer term, a relative increase in turnover in the defence and medical sectors is of strategic importance in the efforts to realise a more stable turnover development. The order portfolio as of 30 June 2009 stood at EUR 52.6 million, down 8% compared with year-end 2008 and 23% compared with the end of June 2008. This is largely due to the lower order intake from the semiconductor sector. However, there was also a notable reluctance in order placements in a number of other market sectors in the first half of the year. The gross margin as a percentage of turnover remained at 40.7% in the first half of 2009. Neways continues to focus on shifting the product mix towards activities with a higher added value, such as development, prototyping and engineering. In the past six months, many of such activities were initiated which allow Neways to cooperate with clients in the early stages of the life cycle of a component or system. Once the economy recovers, these activities will form an important basis in order for Neways to grow alongside its Original Equipment Manufacturer (OEM) clients as their high-tech expertise and production partner. The bulk of the operational expenses are personnel costs. These were reduced to EUR 29.5 million, down 18% compared with the first half of 2008. The average number of FTEs dropped by 19% (432) to 1804 (compared to the first half of 2008), largely due to the reduction in flex-workers. Other costs, including real estate costs, production costs, cost of sales and consultancy costs were also reduced. The other costs include an exceptional charge for reorganisation of EUR 1.3 million (gross) relating to the previously announced merger of Neways Electronic Assemblies and Neways Industrial Systems in Son. This reorganisation is on schedule and will be completed in the third quarter. It will result in structural annual savings of around EUR 1.5 million. The cost reduction programmes launched in mid-2008 resulted in cost savings of around EUR 4 million in the first half of 2009. This means the breakeven net turnover level has dropped to approximately EUR 195 million. Depreciations increased slightly to EUR 2.4 million from EUR 2.2 million, largely due to higher investments in tangible fixed assets in 2008. The operating result excluding reorganisation costs was EUR -/- 3.1 million, compared with an operating profit of EUR 4.4 million in the first half of 2008. Including the reorganisation costs of EUR 1.3 million, the operating result amounted to EUR -/- 4.4 million. Financing costs were EUR 0.6 million, down 40% compared with the same period last year, largely due to lower interest rates and a reduced average debt position.

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March 28 2024 10:16 am V22.4.20-2
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