Neways Records Strong Turnover Growth in 1H 2017

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Neways Electronics International N.V., today announced its results for the first half year (1H) ending 30 June 2017.


  • Net turnover rises to € 213.6 million, up 7.9% year-on-year, largely on the back of strong contributions from semiconductor, automotive and defense.
  • Order intake increased by 12.1% year-on-year, primarily driven by new contracts at semiconductor and automotive. Order book stood at € 218.0 million at end-June 2017, up from € 184.4 million at end-June 2016.
  • Gross margin at € 84.8 million, an increase of 9.3% compared with the first half of 2016, on the back of higher sales and the realisation of purchasing benefits.
  • Normalised operating result at € 7.2 million, in line with the first half of 2016. Faster than anticipated growth in activity levels and late deliveries due to scarcity in the components market resulted in inefficiency in the production process and the greater use of temporary staff. In addition, Neways made extra investments in the organisation to facilitate the realisation of larger and more complex development projects, which had a dampening effect on the operating result.
  • Net income came in 11.4% higher at € 4.9 million, due to a one-off tax gain of € 0.4 million and lower interest expenses.

Message from the CEO

Huub van der Vrande, CEO: “The increase in orders and turnover in the first half of the year shows that we are growing strongly and that OEMs clearly recognise the added value of our proposition as a fully-fledged development and lifecycle partner. Both new and existing clients increasingly approach and engage Neways in the early stages in the development of electronic components and systems. This was a particularly busy first half for our developers and engineers.

In addition to strong growth in the number of orders, the average volume of orders also increased. This increased the range of demands and requirements from our clients and the complexity of the orders.

A number of projects required additional efforts due to the rapid upscaling in terms of both the size and complexity of development projects. We see clear potential to improve the execution of projects in term of both effectiveness and efficiency. However, we are not satisfied with the development of the result in the past six-month period.

In the context of our ‘Up to the next level’ programme, we are structuring our organisation and the deployment of resources to make these more robust, which will improve the efficiency of our logistics and production processes. This will take time, however, especially as it requires greater awareness on the part of our people and the realisation of a new way of working.”

Net turnover increase was fully based on organic growth of 7.9% and came in at € 213.6 million in the first half of 2017, largely due to a strong contribution from Semiconductor, as well as the Automotive and Defence sectors. The order intake increased by 12.1% or € 28.4 million in the first half of the year, which resulted in an increase in the order book of 18.2% to € 218.0 million, from € 184.4 million at end-June 2016. The book-to-bill ratio was 1.1, largely driven by new orders from the Semiconductor and Automotive sectors.

The gross margin was up 9.3% on the back of higher sales and the realisation of purchasing benefits. Relative to net turnover, the gross margin was also higher at 39.7% in the first half of 2017, compared with 39.2% in the first half of 2016 (H2 2016: 39.0%).

Operating expenses were up 10.2%, largely due to an increase in the use of temporary staff, as a result of higher activity levels and the resulting need to safeguard the quality and delivery reliability levels. The increase in both size and complexity of projects also required additional investments in the organisation. The normalised operating result remained stable at € 7.2 million, which translates into a margin of 3.4%.

Financial expenses declined by 22.2%, largely due to improved terms. Neways repaid a total of € 4.3 million in loans with a higher interest rate in the past 12 months to 30 June 2017. 

The tax rate increased to 24.6% in the first half of 2017, slightly higher than the 23.8% reported in the first half of 2016. Net income was 11.4% higher at € 4.9 million, due to a one-off tax gain of € 0.4 million. Earnings per share were up 10.3% at € 0.43 per share, based on 11,478,801 shares outstanding as at end-June 2017.

Operating cash flow came in at minus € 5.7 million, largely due to higher inventory levels as a result of higher activity levels and in anticipation of shortages in the components market. 

Net working capital increased to € 79.6 million, from € 69.5 million at the end-June 2016. Both inventories and receivables increased on the back of the strong increase in activity levels and order levels. DIO remained unchanged from end-June 2016 at 82 days. DSO was stable at 36, unchanged from a year-earlier. In terms of the number of days outstanding, accounts payable remained stable at 59 in line with the number of days at end-June 2016.

Net debt was € 37.5 million at end-June 2017, up 17.9% compared with end-June 2016 on a comparable basis. At the same time, LTM EBITDA increased by 12.0% to € 20.5 million, compared with € 18.3 million in the year-earlier period. The net debt/EBITDA ratio stood at 1.8; including guaranteed capital, the net debt/EBITDA ratio would have stood at 2.1. The interest coverage ratio improved to 10.4, from 9.5 at end-June 2016.

Solvency stood at 42.1% at the end of the first half of 2017, an improvement on the 41.7% reported for the end of H1 2016. Solvency stood at 44.6% at year-end 2016.


Neways will continue the roll-out of its group-wide improvement programme “Up to the next level” in the second half of 2017 and as part of this programme will prioritise improvements in operational efficiency. Thanks to these efforts and the strong increase in the order book, Neways expects to record higher net turnover and normalised operating result for the full-year 2017 compared to the full-year 2016.

About Neways

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-build) 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 semiconductor, 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 the end of 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, click here.


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