SON, THE NETHERLANDS – Neways Electronics reported first quarter revenue of €119.3 million (US$143.6 million), down 6.2% year-over-year and up 4.2% sequentially.

First quarter revenue was hampered by the worldwide component shortage for automotive that arose in early 2021. Neways expects the component shortage to continue to put downward pressure on revenue growth in the coming quarters, primarily in automotive.

Orders increased to €273.7 million, up 21.6% compared to year-end 2020 as a result of renewed demand in automotive and continued strong demand in other market sectors. Orders were down 3.2% compared to the end of March. Orders were up 42% in all market sectors compared to the first quarter of 2020.

The component shortage for automotive provided an extra boost to the increase in orders, but also creates uncertainty regarding the timing of order delivery.

The company’s downscaling of production capacity utilization in Germany and the integration of two Dutch business units is nearing completion, with cost savings of some €8 million on an annual basis, which will be fully visible in the results from 2022 onward.

“We got off to a good start in 2021, with higher turnover than in the fourth quarter of 2020,” said CEO Eric Stodel. “At the same time, we are seeing a healthy recovery in turnover, especially if we compare this with the turnover level in the first quarter of 2020, when the impact of Covid-19 was still limited. Our order book was up across the board and showed a clear recovery in demand in the automotive sector. We do expect the worldwide shortage of components to put a clear brake on order execution and turnover growth within automotive. The fact that the e-mobility segment still needs to settle also has an impact in this sector. On the one hand, e-mobility clients are opting for more outsourcing to EMS partners, while on the other hand certain production activities are insourced.”

Neways expects to see “full recovery from Covid-19 impact, including the related component shortage, in 2022. Neways is well positioned in strategic growth sectors, with increasing demand for ever more complex systems and technological innovations. Continued growth in our role as system innovator will put us in an excellent position to anticipate and respond to this trend. I am convinced this will help us take our profitability to a higher level on a structural basis in the years to come.”

Ed.: €1 = US$1.20

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