Interim financial report Q1 2021: GPV maintains solid growth in 2021

Danish electronics company GPV delivers record results for Q1 and is off to a good start in 2021. The positive results make GPV upgrade its full-year guidance to a revenue of DKK 2.9-3.0 billion. The positive start is however shadowed by shortage in materials giving challenges and complicating on-time-delivery to customers.

GPV, the European top-10 electronics manufacturer, continues to generate strong growth in its top and bottom lines in 2021, according to the newly published interim financial report for Q1 2021 from owners Schouw & Co.

GPV achieved a revenue of DKK 741 million in the first quarter, a nine per cent increase from DKK 679 million in the same quarter last year. Especially customers within the semiconductor, cleantech and the instrument & industry segments have lifted the sales, and orders are placed from both existing and new customers.

In terms of results, Q1 2021 also exceeded expectations. EBITDA reached DKK 76 million against DKK 46 million last year:

- It is positive that we so far have weathered well through the global coronavirus pandemic. Twelve months ago, the situation was marked by great uncertainty, and now, we are able to present a record-breaking result for both 2020 overall and Q1 2021. Naturally, we are very pleased with the results, however we still have substantial challenges to overcome, says GPV’s CEO Bo Lybæk and continues:

- The rebound in the global economy has led to a significant growth in the demand for electronic components, which has put our procurement department under high pressure to secure delivery of materials. At the moment, we have a record-high order backlog which is partly due to stronger demand from our customers, partly due to close communication with customers in order to secure deliveries at a longer horizon.

The increasing global demand for electronics components and other materials has led to significantly longer lead times and higher prices:

- The materials shortage is currently our single biggest challenge. We receive the materials late, often with partial and unprecise deliveries which complicates on-time delivery to our customers. Everyone in the organisation works hard to handle the situation as well as possible, and for that I am very grateful, remarks Bo Lybæk.

GPV expands capacity in Asia
The positive financial results lead GPV to expand its short and long-term capacity. Today, GPV has production facilities in Denmark, Switzerland, Germany, Austria, Slovakia, Thailand, Sri Lanka, and Mexico, and the first step in further expanding is to invest in new production lines for the factories in Slovakia, Sri Lanka, and Thailand. GPV has invested in SMT lines with short delivery time, making most of the extra capacity ready for use as early as Q2 2021.

Meanwhile, it has been decided to consolidate the production facilities in Asia in the two large sites in Thailand and Sri Lanka, consequently closing down and transferring manufacturing activities in China to the other sites in the group. The Chinese activities will instead extend the focus on material sourcing for the other GPV sites.

In the long run, GPV will also make large capacity expansions in Sri Lanka and Thailand where two planned factory extensions have been put on hold during the coronavirus pandemic. These projects are now resumed. The full effect, however, will first be realised by the beginning of 2023:

- Our ambitious growth plans for GPV are intact, and with a clearer view of the consequences of the coronavirus pandemic, we can resume the short and long-term capacity expansion, which will secure a good future foundation. To summarise, we will invest and are prepared for further growth, says Bo Lybæk.

Following the positive development, the Schouw & Co. owned company now expects a 2021 revenue in the DKK 2.9-3.0 billion range against previously DKK 2.7 billion. EBITDA is now expected to be in the DKK 250-290 million range from previously guided DKK 220-250 million.