8/12/2021

Interim financial report Q2 2021 - GPV delivers record results and order intake

Record high demand from customers at Danish-based European top-10 electronics manufacturer GPV drove double-digit growth in both revenue and earnings in H1 2021. The electronics industry and other industries continue to struggle with the global shortage of materials which has also challenged GPV. However, through strategic control of procurement, production, sales, combined with close communication and a high degree of transparency, GPV has been able to support its customers in the best possible way. Meanwhile, GPV has experienced a record order intake and is investing significantly in expanding capacity to meet the growing demand. GPV maintains its sales guidance at DKK 2.9-3.0 billion and raises its EBITDA guidance for the year to DKK 260-300 million.

Today, the international electronics manufacturer GPV presented its interim financial report for Q2 2021, announcing record top and bottom-line results for the first half year. The electronics manufacturer recorded revenue of DKK 1,504 million in H1 2021 against DKK 1,355 million in the same period last year which amounts to an increase of 11 per cent. Adding to the positive results, total earnings (EBITDA) reached DKK 152 million against DKK 108 million last year. CEO Bo Lybæk and the executive management are very pleased with the performance:

“Early 2021, we experienced a strong increase in demand. This development continued well into the second quarter, and we’ve now delivered our best first half-yearly financial report ever. We’re naturally very pleased with the results, and I would like to thank all our employees for their skilled and motivated efforts. The material supply situation has been difficult to manage and still is. On a daily basis, we have to stir, adjust, and coordinate with all our sites across the organisation, and it’s now more crucial than ever to secure that procurement, production, sales, and delivery work closely together,” he explains.

GPV has launched several initiatives to mitigate the effects of the current global shortage of materials and the ensuing logistical challenges. On a weekly basis, executive management meets with the local management teams at the group’s largest sites to support and facilitate steering, share knowledge, and to coordinate how to distribute the scarce resources of materials and capacity as optimally as possible.

GPV is also successfully supporting the redesign of products. If a product cannot be produced due to a lack of materials, GPV helps with the redesign and production of a customer’s products or introduces alternative components in close collaboration with customers. When successful, this gives the customers a significant competitive advantage:

”We’re currently in a situation where our customers are often forced to think about redesigning specific components because of the material supply situation. When that happens, we help them redesign or find full-fledged alternatives and available components so we can secure production. In short, when we reduce one of our customers’ current biggest challenges, this reflects positively on us in terms of goodwill and growth,” remarks Bo Lybæk.

While last year’s growth at GPV was primarily driven by the MedTech segment, the increasing demand in the first half of 2021 was driven by the group’s three other main segments, i.e., Instruments & Industry, CleanTech, and Transport. The global economy is steadily recovering in the wake of the coronavirus pandemic, and that has made GPV increase capacity at several of its factories. Today, GPV has production sites in Denmark, Switzerland, Germany, Austria, Slovakia, Thailand, Sri Lanka, China, and Mexico, and in the first half of 2021 alone, GPV has implemented two new full SMT lines and two new THT lines at its Thai Electronics site. Two similar lines are expected for delivery and operation at our sites in the second half-year of 2021. Meanwhile, the capacity at existing SMT lines in Slovakia, Sri Lanka, and Mexico has been expanded in recent months.

On the longer term, the capacity is to be expanded at several of GPV’s factories. GPV has initiated the construction of a new and bigger factory in Sri Lanka as a replacement for the existing Electronics factory which will be completed end of 2022. Early 2022, GPV also begins the construction of a new Mechanics site in Thailand which will be completed in the beginning of 2023:

“Due to our long-term growth strategy, we have continuously scheduled capacity expansions. This now results in great advantages where more companies wish to invest in e.g., new SMT lines. The first lines have already been set into operation, and the next have been ordered. It has been a strategic move to invest, as we did not want equipment blocking to keep us from meeting the high demand from our customers, and I strongly believe that this will continue to give us an advantage in the long run,” explains Bo Lybæk.

He also stresses, however, that several significant elements of uncertainty will continue at least into the second half of 2021. At the moment, the shortage of materials is most prominent, but also the following increase in material prices has proven to be a challenge. There has been a resurgence of COVID-19 cases in many parts of Southeast Asia, which risks further worsening and prolonging the challenges, but production is not affected:

“We’re monitoring the situation closely and are in close dialogue both with our sites and individual customers. Everyone is aware of the situation, so we try to be transparent to make it easier for us to react as quickly as possible. All things considered, I’m optimistic and believe that we’ll come out stronger from this unique situation that we and the rest of the industry have been put in,” he concludes.

In light of the positive development, GPV still expects full-year 2021 revenue in the DKK 2.9-3.0 billion range and raises its EBITDA guidance to the DKK 260-300 million range.