8/14/2020

Interim financial report Q2 2020: GPV comes out strengthened despite coronavirus crisis

Danish electronics giant GPV delivered satisfactory results for Q2 of 2020 despite the ongoing global coronavirus crisis. For the first half of 2020, revenue experienced a slight dip compared to the same period last year, while profit raised 23 per cent to a record of DKK 108 million.

Despite the ongoing coronavirus crisis, GPV – Denmark’s largest EMS manufacturer – owned by Danish industrial conglomerate Schouw & Co., can look back on a satisfactory first half-year of 2020. Revenue saw a slight dip in most business segments while sales to the MedTech and Semicon industries helped raise the top line. According to CEO Bo Lybæk, GPV’s scale, diversity of business areas and geographic reach have benefitted the company:

- Developments in the first half year of 2020, and especially in the second quarter, created uncertainty in the global economy and challenged most businesses. We have experienced a modest drop in revenue of 5 per cent compared to the same period last year, which we consider a satisfactory performance under the prevailing circumstances, he says and he continues:

- The variety of businesses we operate in combined with a fantastic agile organisation have helped us through the crisis. It has allowed us to direct our resources to segments least impacted by the crisis or even in growth.

A few of GPV’s factories have been fully or partially closed down for shorter periods of time due to the lockdown in China and restrictions in other countries. No GPV staff members have been infected with the coronavirus which has enabled the electronics manufacturer to maintain a high level of activity during the crisis.

- The health and safety of our colleagues is our highest priority, and I would like to direct a huge thank you to our employees for their way of handling the crisis, which has been outstanding. I am aware that the crisis has been a cause of concern, but I am proud of the way in which we have managed the situation both internally and externally, says Bo Lybæk.

Record bottom-line
While the top-line experienced a small drop, the Q2 EBITDA improved by 48 per cent reaching a record DKK 62 million. For H1 2020, GPV’s net profit reached DKK 108 million compared with DKK 88 million in the same period last year.

The increased profit was driven by a reduction in operating costs as well as high capacity utilisation in some product lines. The H1 2019 interim report included integration costs after the acquisition of Swiss electronics and cable-harnessing company, CCS.

- Reducing costs is a strategic focus for our company and includes continuous alignment to market requirements. The margins in the electronics industry are low, and it is thus decisive for us to maintain our competitive edge in the global market, explains Bo Lybæk.

He adds that automation and digitalisation are also on the company’s agenda – both in the aim of reducing costs, but also to improve service levels for customers. Therefore, GPV will start to introduce a new Manufacturing Execution System (MES) in H2 2020 which will be rolled out across all factory sites. The ambition is further process digitalisation and resource management and to optimise the production capacity across thirteen factories in Denmark, Switzerland, China, Thailand, Sri Lanka, Slovakia, Austria, Germany, and Mexico.

Reasons for optimism
Despite the uncertain economic times, GPV has a satisfactory outlook for 2020. The electronics manufacturer recently won six major orders representing in the triple-digit millions of Danish kroner in future revenue from existing and new customers. Over the recent months, GPV’s pipeline has grown steadily, and this sparks optimism, says Bo Lybæk:

- It goes without saying that we are monitoring the situation closely and are ready to adjust our operations accordingly. We have a good overview of the ongoing Q3, but the visibility becomes lower when we extend our outlook to Q4 and 2021, he explains and he continues:

- We are convinced that the best shield against all the uncertainty is to maintain our very close relation with our customers. We have a leading position in the niche market for high-mix/low-medium volume production for B2B-electronics businesses where we gain new market shares almost every day.

GPV’s full-year guidance was previously suspended but it has been reinstated in the H1 2020 interim report from Schouw & Co. The electronics manufacturer expects a full-year revenue of DKK 2.7 billion and EBITDA in the DKK 200–230 million range. The guidance is subject to the development of the ongoing coronavirus crisis.


Bo Lybæk, CEO at GPV:

We are convinced that the best shield against all
the uncertainty is to maintain our very close relation
with our customers. We have a leading position in
the niche market for high-mix/low-medium volume
production for B2B-electronics businesses where
we gain new market shares almost every day.