Danish-based GPV Posts Interim Financial Report, Q2 2023

High activity level continues throughout 2023

The second-largest electronics manufacturing service company with European headquarter, Danish-based GPV, once again raises its outlook for 2023. In the second quarter of 2023, the company achieved record revenue of DKK 2.7 billion and earnings (EBITDA) of DKK 189 million. Combined with a more positive outlook for the remainder of the year, this has prompted an upgrade of GPV’s expectations for the full year.

The quarterly report shows a sustained positive performance for the first half year of 2023 and as a result of the continued optimism, the Danish electronics manufacturer is now targeting revenue in the range of DKK 9.9-10.3 billion, up from the previously expected DKK 8.8-9.2 billion. At the same time, expectation for full-year earnings (EBITDA) is raised from DKK 590-640 million to the DKK 650-700 million range.

“We are on a positive journey, and first and foremost, I would like to thank my many colleagues for their dedication and commitment, which I see every day at our sites and offices around the world. The combination with Enics, which has now been in effect for three quarters, is progressing as planned, and in June 2023, we launched a common organisational structure. We continue to see strong demand with customers supporting the green transition, and this is an important driver in the current positive development,” says CEO of GPV Bo Lybæk and continues:

“Despite the good progress we are making, there is still a lot of work to do, and we are far from finished integrating and getting better together. However, along with the positive development, we see signs of slowdown and declining growth rates. However, we are still quite pleased with the current situation.”

GPV realised revenue of DKK 2.7 billion in Q2 2023, bringing the total revenue for the first half of the year to DKK 5.4 billion. This is an increase of 151% compared with the first half of 2022, when revenue totalled DKK 2.1 billion. Earnings (EBITDA) in Q2 2023 amounted to DKK 189 million and DKK 368 million overall for the first half-year. This is a 95% increase over the first half of 2022: “Both revenue and earnings are developing satisfactorily, but we still struggle with high component prices among other post corona effects. The high prices on input materials have a positive impact on the top line but challenges the bottom line. In general, however, we see improvements in the availability of electronics components,” says Bo Lybæk.

The continued shortage of components is the primary reason why GPV still has an above-normal working capital. Reducing the working capital is a focal point, but securing supply to customers also weighs heavily, and therefore the company will still be using a large the part of the working capital to build up inventories.

Significant expansions

Another focal point before, during and after the combination with Enics is a significant expansion of production capacity. In the first half of 2023, GPV commissioned a new mechanics factory in Thailand and a new electronics factory building in Sri Lanka. In Mexico, the total area will double to 8,200 sqm by the end of 2023, and in Slovakia, GPV is preparing a new electronics site covering 11,000 sqm which is expected to be operational in Q1 2024: “The strong demand from customers creates a need for continued capacity improvements, but there are also other factors at play. On the one hand, US customers want to reduce their
dependence on China, and while on the other hand, a region-for-region approach has become a key focus, which increases the need for production capacity at best-cost locations in Europe and Americas,” explains Bo Lybæk.

In addition to the above-mentioned factory expansions, GPV has invested in capacity expansions at its factories in Estonia, Sweden, and Finland, which specialise in different branches of the EMS industry:
“One of our strengths is our close and confidential dialogue with customers. This helps to ensure that we can stay ahead of market developments and customer demand, and it will also benefit us in case market growth slows down at some point,” concludes Bo Lybæk.