Transcript Geen diatitel

Presentation of 2006 Annual Accounts
Neways Electronics International N.V.
27 February 2007
Highlights 2006
2006 absolute record year!
Highest turnover and highest profit in the existence of the company
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•
•
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Increased demand from all market segments
Organic growth of turnover by 14.8% to EUR 238.6 million
Net profit more than doubled to EUR 11.2 million
Order portfolio well-filled with EUR 66 million
Operational margin strongly improved from 4.3% to 7.0%
•
In line with minimum margin target of 7% a year
Financial position further strengthened
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•
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Good working capital control at higher activity level
Solvency rate increased to 41.0%
Positive net cashflow / reduction of interest-bearing debts
Position as one-stop provider strengthened
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Cooperation between the operating companies intensified
Transition to lead-free production finalized
Cancellation of all 3 million outstanding preference shares / improvement of
transparency of capital structure
Key figures 2006
EUR millions
year
2006
H2
H1
2005
year
Gross turnover
258.7
137.6
121.1
219.9
Net turnover
238.6
126.9
111.7
207.9
Operating result
16.7
9.6
7.1
9.0
Net result
11.2
6.5
4.7
5.1
65.9
64.5
51.9
Order portfolio per year-end
Positioning of Neways
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Market:
- EMS (Electronic Manufacturing Services)
- Core market Benelux / Germany
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Customers:
- Industrial / professional market
- B2B (OEMs)
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Specialisation:
- Small complex / specialist series
- Development / production / systems assembly
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Core competency:
- Close to the customer (Netherlands / Germany)
- High added value / service
- Low production costs (Eastern Europe. China)
From capacity to knowledge supplier
Systems
Marketing R&D
Sales
S&R
Neways Business Model
C.P.
Q-nova
Customers
A
B
C
Wuxi
D
T.R.
ERP
etc.
Suppliers
Service providers
Less flexibility / added value
Competences
West-European companies
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More complex components and systems with high knowledge level
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Early direct involvement in product life cycle – development,
prototyping, engineering
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More complex logistic planning – frequent changes in quantities and
delivery times caused by nature / application of component or system
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Frequent product changes – more re-engineering
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Smaller high tech series production
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Relatively high degree of automated production processes
Competences
East-European companies
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Focus on testing and production
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Larger, logistically stable series
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Repeating character
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Relatively labour-intensive production processes
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Primarily by order of West-European operating companies
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European sales area
Competences
Chinese companies
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Focus on testing and production
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Totally stable (less complex) components and systems
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Predicable logistic process – relatively easy logistical planning
based on customers demands (quantities, delivery times, etc)
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Relatively labour-intensive production processes
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Primarily by order of West-European operating companies
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Asia as a market segment – OEMs
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Local purchase of raw materials
Development of turnover
EUR millions
250
239
200 202
155
150
100
190
114
208
136
109
78
69
112
72
50
0
2001
2002
Net turnover
2003
2004
2005
Net turnover 1st half-year
2006
Net turnover per market segment
EUR millions
Industrial
Semiconductors
Medical
Automotive
Telecom
Defence
Others
Total
2006
%
H1
2006
%
2005
%
2004
%
73
65
64
12
7
5
13
31
27
27
5
3
2
5
33
31
31
6
3
2
6
29
28
28
5
3
2
5
65
54
59
10
5
3
12
31
26
28
5
2
2
6
63
48
49
9
6
33
25
15
8
239
100
112
100
208
100
190
100
26
5
3
Profit and loss account
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Strong increase of internal turnover with 67.5%
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Gross margin held up well
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Personnel cost as percentage of gross-turnover decreased (higher
contribution low-wage countries)
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Additional costs for the acquisition of all preference shares
entered as interest charges
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Tax burden 26.7% against 32.7% in 2005 (due to negative tax
burden in Germany)
Ratios and key indicators
Year
2006
H1
2006
Year
2005
41.3%
41.9%
40.5%
Operating result / net turnover
7.0%
6.4%
4.3%
Net result / net turnover
4.7%
4.2%
2.5%
Value added / net turnover
Debt/EBITDA
0.7
1.6
Interest coverage
9.9
6.7
Average no. of employees (in FTEs)
- of which Eastern Europe and China
2,097
1,969
1,851
885
813
715
Operational margin
Developments 2006
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Better occupation
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Better purchase conditions
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Increased development and engineering activities / prototyping,
a.o. start-up Hägglunds project
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One-stop-providership / internal cooperation  increased
intercompany deliveries
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More outsourcing to Slovakia / China
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Higher efficiency
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Good product mix
Operational margin
Potential improvements
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Supplier reduction / preferred suppliership
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Extension of component purchase in China
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Expanding capacity Slovakia / China in people and equipment (SMDcapacity / test equipment)
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Growth development and engineering activities and prototyping
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Increase of intercompany deliveries by strengthening one-stopprovidership / intensifying of internal cooperation
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Growth in defence-orders → higher added value and more stability in
turnover
Balance sheet and cash flow
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Strong increase in equity by;
– Net profit
– Conversion subordinated bond loan of EUR 3 million on April 3rd 2006 with
a conversion price of EUR 5.25 per share
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Cancellation of all 3 million outstanding preference shares;
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Good working capital control at higher activity level;
– Inventory from EUR 39.4 million to EUR 47.8 million (61 days)
– Account receivable from EUR 32.3 million to EUR 41.6 million (48 days)
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Solvency rate increased to 41.0% (year-end 2005: 40.0%);
– Adjusted for deferred tax and goodwill 39.6% (year-end 2005: 35.9%)
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Positive net cash flow EUR 4.6 million (2005: EUR 11.5 million);
– Positive result
– Increase in working capital due to increase of accounts receivable /
inventories (financing of growth)
Development inventory position
EUR millions
31.12.06
31.12.05
31.12.04
1.6
1.5
1.7
Order-related stock
34.3
29.9
31.4
Work in progress
11.9
8.0
8.6
47.8
39.4
41.7
61
62
68
Free stock
Total
In days of turnover
Solvency rate
(guaranteed equity as % of balance sheet total)
45
40
35
30
25
20
15
10
5
0
36,1
33,5
30,3
2002
2003
2004
26,6
2001
Percentages from 2004 onwards based on IFRS
40,0
41,0
2005
2006
Net cash flow
EUR millions
15
10
5
9,4
5,2
8,8
11,5
2004*
2005
4,6
0
-5
-10
-18,2
-15
-20
2001
2002
2003
* 2004 exclusive of financing of takeover of Stork Electronics
2006
(Bank)debts
EUR millions
50,0
40,0
30,0
38,7
23,6
20,0
18,5
10,0
19,5
9,7
8,2
9,1
12,6
10,7
12,9
11,4
2001
2002
2003
2004
2005
0,0
subordinated
others
5,7
2006
Data per share
EUR
2006
H1 2006
2005
Operating result
1.81
0.77
1.06
Net result
1.21
0.51
0.59
Dividend
0.36
Shareholders’ equity
4.08
3.38
2.78
9,202
9,191
8,526
Number of outstanding shares
(x 1.000 at year-end)
0.10
Market trends
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International development of OEMs / Increase in outsourcing by OEMs
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Growing demand for life cycle management (component management,
cost price reduction programs and after sales service)
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Earlier involvement in development (one-stop-providership)
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More and more production in low-wage countries (Eastern Europe and
China)
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Increasing transparency due to modern communication media /
globalisation
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Growing demand for SMOI (Supplier Managed Owned Inventory)
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Further intensification of partnerships / customer and supplier relations
Strategy
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Realization of organic growth, supplemented by suitable acquisitions
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Expansion of one-stop-provider concept / increase in added value
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–
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Strengthening of development side and systems assembly
Selective building up own design competences
Expansion of Electronic Mechanical Repair (EMR) activities
More balanced spread of activities over market segments
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Geographic presence
Military / medical
Medical sector
Defence market
Improvements in efficiency
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More outsourcing of production to Eastern Europe and China (own facilities)
Ongoing new cost control initiatives
Outlook 2007
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Outlook for the first half of 2007 is positive
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Excellent filled order portfolio (up 27% compared with year-end
2005)
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Insight too limited to make concrete statements on a profit forecast
for the full year 2007
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Basic position has again been considerably improved and provides a
strong foundation for growth