Neways sees slight recovery in turnover in third quarter
Neways Electronics International N.V. (Euronext: NEWAY) (“Neways”; the “Company”) today announces its trading update for the third quarter (Q3) and the first nine months (9M) ending on 30 September 2020.
• Net turnover of € 121.2 million, a decline of 8.9% compared with Q3 2019 and a rise of 4.7% compared with Q2 2020; Automotive sector turnover shows signs of recovery after dip in Q2 2020;
• Order intake of € 90.2 million, a decline of 17.8% compared with Q3 2019 and a recovery of 5.4% compared with Q2 2020 driven by a slight recovery in demand in Automotive and growth in Semiconductor;
• On balance, market sees cautious recovery, but fourth quarter will remain volatile due to Covid-19-related uncertainty; focus in 2020 will remain on cash flow and cost management to protect profitability.
DEVELOPMENTS IN THE THIRD QUARTER
In the third quarter, net turnover fell 8.9% year-on-year, largely due to a sharp decline in Automotive. Industrial saw a slight decline in turnover, Medical remained stable, while Semiconductor saw a rise in
turnover. Net turnover was 4.7% higher than in the second quarter, driven by a recovery in demand in Automotive, primarily in e-Mobility.
Order intake fell by 17.8% year-on-year. The order book stood at € 221 million at end-September, compared with € 291 million at year-end 2019. This decline was due to a drop in demand, largely from Automotive
and to a lesser extent from Industrial. Order intake from Medical and Semiconductor remained stable or was slightly higher. Order intake was 5.4% higher than in the second quarter, which points to a cautious
recovery in demand from Automotive clients.
Due to continued pandemic-related uncertainty, we expect the market to remain volatile in the fourth quarter. In this context and as previously announced, Neways will make a number of structural adjustments
at certain operating companies to bring the organisation and capacity utilisation more in line with the current environment.
Eric Stodel, CEO: “In the third quarter, we saw a cautious recovery in the Automotive sector, primarily in eMobility. However, the decline in demand due to the pandemic and the lockdowns was so large in this
industry that we will not be able to make up the decline this year. In these exceptional circumstances, we have acted as effectively as possible by continuously ensuring a safe working environment for our
employees, by adjusting the organisation and capacity utilisation at certain operating companies where necessary and by continuing to reduce our cost base.
For the remainder of this year, we are assuming market volatility to remain high, driven by pandemic-related uncertainty. We will continue to focus on profitable turnover, cost controls and cash flow. At the same time, we will continue to implement our internal improvement programme One Neways, and will make additional adjustments to accelerate this transformation process and increase the effectiveness of our organisation.
If we look further ahead, we see that Neways remains in an excellent position for growth, which will to a large extent be driven by technological progress with and the proliferation of smart devices. Due to the ever-increasing complexity of components and the electrification of subsystems, combined with the reinforcement of our role as system innovator and product lifecycle partner, we are able to offer greater
added value in the four core markets in which we are active.”