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Neways Electronics International N.V. announces its results for the financial year ending 31 December 2020.
- Net turnover declines by 10.3% to €6 million due to reduced demand in Automotive and the automotive-related part of Industrial
- Net cash flow increases to €37.6 million due to focus on cash and strong improvement in working capital, and in particular inventories. €8.8 million of this was due to the deferral of taxes and social security payments
- Order book declines by 22.8% to €225 million compared to last year, due to decline in orders from Automotive sector; orders from Medical and Semiconductor were stable or higher
- Normalised operating result of €9 million; decline limited due to rapid reduction of 200 (flexibly deployable) employees and strict cost controls
- One-off charge of €6 million (gross) for costs related to the previously announced reorganisation in Germany and the Netherlands; structural annual cost savings of around €8 million in total
- Net result including one-off reorganisation expense comes in at €-3.9 million
Message from the CEO:
Eric Stodel: “2020 was a challenging year, as we saw a drop in demand in Automotive due to the Covid19 pandemic, translating into a decline in both turnover and result. The effective strategic spread across various sectors and, in particular, strong growth in Semiconductor partly compensated for the decline in turnover in Automotive. To offset the sharp and abrupt drop in demand in Automotive in the spring, we responded quickly through strict control of costs and investments and a strong focus on cash and working capital. In addition, we were able to close better agreements with clients, which greatly improved our inventories position and enabled us to realise a strong positive cash flow. We also immediately scaled down production and reduced working hours. Thanks to all the measures we took and the adaptability of our employees, we were able to ensure a safe working environment for everyone within the group without any significant disruptions to production.
The reorganisation announced in November is necessary to adapt the capacity utilisation in Germany to the reduced demand from Automotive on a structural basis. At the same time, we are implementing a number of organisational adjustments to bring the management of the operating companies involved, more in line with that of the group. For this purpose, we are taking a provision of € 9.6 million in total, which will be charged to the result for 2020. The structural cost savings will amount to approximately €8 million on an annual basis and will be fully reflected in our results as from 2022.
If we look ahead, the Covid-19 pandemic is still creating a lot of uncertainty and increased vigilance. We do see an increase in order intake in the first two months of this year. Our priority for this year is to restructure the organisation and operations to align more effectively with our role as System Innovator and Product Life Cycle Partner, for which we see an increasing demand from our clients. We see this as the most important condition if we are to take profitability to a higher level. We will also invest in those knowledge areas where we see opportunities as a System Innovator to offer more advanced solutions that simultaneously help us to meet the growing demand for more complex (box-build) systems. Strengthening long-term partnerships with clients, standardising business processes and intensifying knowledge exchange will provide the basis for more profitable turnover and growth on a structural basis".