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Neways Electronics International N.V. has announced its results for the financial year ending December 31, 2017. Net turnover rises to €438.7 million, up 11.6% compared with the previous year, largely on the back of a stronger contribution from the semiconductor and automotive sectors. Order intake went up by 21.3% year-on-year, largely driven by new orders in the semiconductor, automotive and industrial sectors. Meanwhile, net income was 2.1% higher at €9.9 million, as a result of the improved operating result and reduced financing costs. This was largely mitigated by a higher tax rate in 2017. Net result in 2016 was positively impacted by a recognition of a tax claim in Germany of € 1.8 million compared to € 0.6 million in 2017.
"The year 2017 was in every respect a busy and eventful year, in which the bar was set higher than in the previous year. We saw turnover increase more than expected, by 11.6% to € 438.7 million. This shows that Neways is in a good position to grow with clients and benefit from economic growth. This rapid growth, however, together with the greater scope and complexity of projects, did have an impact on the organisation. We will need to continue to improve our logistical process this year, so we can continue to work efficiently, particularly in view of the shortages in the market for components that we will certainly have to take into account this year," says Huub van der Vrande, CEO of Neways. "As a result of our investments in customer intimacy – the ability to be increasingly closely involved in our clients’ operations – our role is shifting from an operational and tactical one to a more strategic one. Closer cooperation with both clients and suppliers enables us to respond more effectively to the shortage of components in the market, as well as respond more effectively to greater demand and reap the benefits of higher activity levels. Thanks to our new performance-focused way of working and the successful implementation of our strategy, we are well on our way to engaging with our clients at an early stage as a product lifecycle partner and offering them greater added value."
Activity levels were higher, especially in the second half of the year, and this also had a positive impact on the order book, which had increased by 37.8% to €263.6 million at year-end 2017, from €191.3 million at the end of December 2016. The book-to-bill ratio stood at 1.15. The increase in the order book and book-to-bill-ratio was largely driven by an increase in orders in the semiconductor, automotive and industrial sectors.
The gross margin came in 11.4% higher as a result of increased activity levels. The growing demand for complex box-build systems has resulted in an increase in the share of materials in the deliveries. The realization of procurement benefits resulting from the supplier program also made a contribution to the higher gross margin. The gross margin as a percentage of turnover amounted on balance to 39%, virtually unchanged from 2016.
Looking at the order book, 2018 is off to a good start. Neways does expect the higher activity levels and persistent shortages on the components market to remain challenges for the organisation. In 2018, Neways will focus on making improvements to its organization, particularly in the fields of procurement and logistics.
Based on the economic outlook and the current order book, Neways expects net turnover and the normalized operating result for the full year 2018 to be higher than in 2017.