GPV’s pipeline has grown steadily – sparks optimism

For the first half of 2020, revenue experienced a slight dip compared to the same period last year, while profit increased 23% to a record of DKK 108 million (EUR 14.5 million). Despite the ongoing coronavirus crisis, GPV – Denmark’s largest EMS manufacturer – can look back on a satisfactory first half-year of 2020. Revenue saw a slight dip in most business segments while sales to the MedTech and Semicon industries helped raise the top line. According to CEO Bo Lybæk, GPV’s scale, diversity of business areas and geographic reach have benefitted the company. “Developments in the first half year of 2020, and especially in the second quarter, created uncertainty in the global economy and challenged most businesses. We have experienced a modest drop in revenue of 5 percent compared to the same period last year, which we consider a satisfactory performance under the prevailing circumstances,” the CEO say in a press release. He continues to explain that the variety of businesses that the company operate in combined with an agile organisation helped GPV through the crisis. A few of GPV’s factories have been fully or partially closed down for shorter periods of time due to the lockdown in China and restrictions in other countries. No GPV staff members have been infected with the coronavirus which has enabled the electronics manufacturer to maintain a high level of activity during the crisis. While the top-line experienced a drop, the Q2 EBITDA improved by 48% reaching a record DKK 62 million (EUR 8.32 million). For H1 2020, GPV’s net profit reached DKK 108 million (EUR 14.5 million) compared with DKK 88 million (EUR 11.8 million) in the same period last year. The company states that the increased profit was driven by a reduction in operating costs as well as high capacity utilisation in some product lines. The H1 2019 interim report also included integration costs after the acquisition of Swiss electronics and cable-harnessing company, CCS. “Reducing costs is a strategic focus for our company and includes continuous alignment to market requirements. The margins in the electronics industry are low, and it is thus decisive for us to maintain our competitive edge in the global market,” explains Bo Lybæk in the press release. He adds that automation and digitalisation are also on the company’s agenda – both in the aim of reducing costs, but also to improve service levels for customers. Therefore, GPV will start to introduce a new Manufacturing Execution System (MES) in H2 2020 which will be rolled out across all factory sites. Despite the uncertain economic times, GPV says it has a satisfactory outlook for 2020. The electronics manufacturer recently won six major orders from existing and new customers. Over the recent months, GPV’s pipeline has grown steadily, and this sparks optimism. “It goes without saying that we are monitoring the situation closely and are ready to adjust our operations accordingly. We have a good overview of the ongoing Q3, but the visibility becomes lower when we extend our outlook to Q4 and 2021,” the CEO explains. GPV’s full-year guidance was previously suspended but it has been reinstated. The electronics manufacturer expects a full-year revenue of DKK 2.7 billion (EUR 362.5 million) and EBITDA in the DKK 200–230 million (EUR 26.8–30.8 million) range.