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EMS firm Neways Electronics International N.V. has announced its results for the full year ending 31 December 2016. The company reported net turnover of €393.2 million, up by 5.1% year-on-year and primarily driven by automotive, semiconductor, and defense sectors.
Order intake increased by 10.1% year-on-year, mainly due to new orders in automotive and semiconductors. Order book stood at €191.3 million, compared to €167.6 million at year-end 2015. Normalized operating result came in at €12.7 million, up 26.4% year-on-year driven by better capacity utilisation, stricter operational control and positive impact of organisational adjustments
Neways' net income came in at €9.7 million, up by 201.1% compared to €3.2 million in 2015, mainly as result of top line growth and efficiency improvements and supported by a one-off tax revaluation of €1.2 million.
"We saw continued good top line growth throughout the year and ended with better than anticipated fourth quarter sales and order intake. This proves our strong client proposition as a trusted development and technology partner. Our normalized operating result increased 26% to € 12.7 million and net income tripled to € 9.7 million. These positive developments reflect the strategic reform at Neways and the first concrete results of our operational improvement initiatives under our 'Up to the next level' program," said Huub van der Vrande, CEO. "In 2016 we focused on group-wide business processes by strengthening the coordinating role of the holding across various disciplines such as logistics and procurement. We will continue to further execute our strategy to improve our customer intimacy, technological leadership and operational efficiency. All this is done to ensure the following objective: to position Neways as the logical technology and product life cycle partner."
The 5.1% net turnover increase was fully organic. Order intake was sound during the year and particularly strong in the fourth quarter, resulting in a 14.2% increase in the order book to €191.3 million and a slightly higher book-to-bill ratio of 1.06. The increase in the order book and book-to-bill was largely due to new orders in Automotive and Semiconductor and benefited from a strong intake and higher activity level in development projects.
The gross margin came in 4.0% higher on the back of the increase in net turnover. Relative to net turnover, gross margin slightly decreased to 39.1%. Demand for more complex box-built systems continued to grow, which in turn led to an increase in the level of required material components. This was partly offset by the first results from our supply chain improvement initiatives which have led to reduction of the number of suppliers and improvement of purchase conditions.
Operating expenses increased by 2.4%, mainly as a consequence of higher activity levels which required more use of flexible staff in production across the group and additional costs related to enhancements in the organization to improve the centrally coordinated processes. These cost increases were partly offset by the improvements in operational execution and the savings from completed organisational adjustments at two operating companies. Furthermore the 2015 operating expenses were unfavourable impacted by the subsequent acquisition integration costs of BuS Group. The normalized operating result came in 26.4% higher at €12.7 million, reflecting a margin of 3.2%, an improvement of 5 basis points.
Financial expenses remained almost flat in the period under review. The expenses were unfavorably affected by higher average outstanding loans due to the higher activity level, currency differences and the costs incurred for the group refinancing. This was partly offset by €5.9 million of debt repayments during the year, which carried higher interest rates.
Neways will continue with the roll out of its group-wide improvement program "Up to the next level" in 2017. While it is recognized that the geo economic circumstances remain uncertain, the order book is at a relatively high level when compared to the same period last year.
Based on the strategic progress made in 2016 and the current order book, Neways expects to record a higher net turnover and operating result for the full year 2017 than in 2016.
Neways Electronics International N.V. (Neways) is an international company active in the EMS (Electronic Manufacturing Services) market. Neways offers its clients custom-made solutions for the complete product life cycle (from product development to after-sales service) of both electronic components and complete (box-built) electronic control systems. Neways operates in a niche of the EMS market and focuses primarily on small to medium-sized specialist series, in which quality, flexibility and time-to-market play a crucial role. Neways products are used in sectors such as the semi-conductor, medical, automotive, telecom and defence industries. Neways has operating companies in the Netherlands, Germany, the Czech Republic, Slovakia and China, with a total of 2.612 employees at 31 December 2016. Neways recorded net turnover of € 393 million in 2016. Neways shares are listed on the Euronext Amsterdam stock exchange (symbol: NEWAY). For more information, visit www.newayselectronics.com.