We are thrilled to announce that HansaMatrix has officially signed a new manufacturing agreement with a Globally Operating Dual-Use Technology Manufacturer!

This milestone follows an extensive period of constructive and fruitful discussions regarding future collaboration opportunities. We are honored that our new partner has chosen to trust Hansamatrix with their manufacturing operations!

Why HansaMatrix?

Trust and transparency are everything in the dual-use sector, and we are excited to bring our experience to the table. During our discussions, the client also highlighted three critical factors that set us apart:
🔸Uncompromising Quality – Delivering high-precision, high-reliability manufacturing that meets the strict demands of dual-use technology.
🔸Strategic Location – Offering secure, efficient, and well-connected European operations.
🔸Deep Traceability Expertise – A proven track record in end-to-end component and product traceability, ensuring full compliance and transparency.

“Outsourcing manufacturing is a major step, and we are grateful for the trust placed in our team. We look forward to a successful and long-term partnership as we scale production together!” says HansaMatrix Business Development Manager Jussi Mökkönen.

Welcome aboard! 

The rise of Eastern Europe as a hub for electronics manufacturing services (EMS) offers compelling advantages, from cost-efficiency to geographic proximity for European markets. The nearshoring trend, driven by recent global supply chain disruptions and rising labour costs in Asia, has further accelerated this shift. However, navigating this landscape requires a clear understanding of its unique challenges. For original equipment manufacturers (OEMs), partnering with an experienced EMS provider is key to overcoming these hurdles and unlocking the region’s full potential.

Supply Chain and Logistical Hurdles

One of the primary challenges in any manufacturing operation is ensuring a stable and efficient supply chain. While Eastern Europe’s location is a significant advantage, companies can still encounter challenges in sourcing specific materials and managing cross-border logistics. The global component shortages that followed the pandemic highlighted the fragility of supply chains.

A strategic EMS partner mitigates these risks through proactive measures. At HansaMatrix, for instance, we weathered these shortages by fostering close cooperation with our clients and their designers. By proposing alternative suppliers and developing agile stockkeeping and forecasting strategies, we ensured there were no stops in production. This collaborative approach transforms a potential disruption into an opportunity for innovation and strengthens the partnership.

The Regulatory and Quality Assurance Environment

The regulatory landscape in Eastern Europe is complex, requiring strict adherence to international standards. For companies in sectors like medical technology, aviation, or defence, compliance is non-negotiable. Navigating these regulations demands a deep commitment to quality control and certified processes.

Top-tier EMS providers in Eastern Europe address this by embedding quality into every layer of their operations. Hansamatrix maintains a robust quality framework, holding certifications like ISO 9001, ISO 14001, the medical device standard ISO 13485, and the aerospace standard AS 9100. This is reinforced by a stringent inspection policy, where 100% of electronic products are inspected using Solder Paste Inspection (SPI) and Automated Optical Inspection (AOI). Furthermore, our proprietary ERP system provides traceability down to a single component level, offering clients complete transparency and peace of mind.

Overcoming Cultural and Language Barriers

Effective communication is the bedrock of any successful partnership. When working across borders, cultural nuances and language differences can pose significant challenges. Misunderstandings can lead to delays, design errors, and friction in the client relationship.

Experience is the best teacher in this regard. Having worked with international clients since 1999, Hansamatrix has developed a deep understanding of different European cultures. Our customer-facing teams, from sales and engineering to purchasing and quality, are fluent in English, which serves as the primary language for all international projects. We even have team members who speak Finnish and Norwegian, further breaking down barriers with our Nordic partners. This focus on clear, open communication ensures that projects run smoothly from initial concept to final delivery.

Conclusion: Turning Challenges into Strengths

While EMS in Eastern Europe presents certain challenges, they are far from insurmountable. By selecting a partner with a proven track record, robust quality systems, and a culture of transparent communication, companies can effectively mitigate these risks. An experienced provider like Hansamatrix doesn’t just offer manufacturing services; we provide strategic partnerships and problem-solving, turning regional complexities into a powerful competitive advantage.

We are proud to announce that HansaMatrix has been awarded the international AA® Credibility Score certificate, confirming our compliance with a high level of creditworthiness. The certification methodology was developed in cooperation with Dun & Bradstreet Latvia, SIA, the global leader in business information and credit ratings.

The internationally recognised D&B rating system is applied across 14 countries, providing an objective and transparent evaluation of financial stability. Achieving the AA® level demonstrates our company’s strong economic standing, excellent payment discipline, and sustainable business operations.

This achievement is particularly significant as only 7.9% of Latvian companies reach the AA® level of creditworthiness. Being part of this select group highlights HansaMatrix’s reliability as a business partner and our ability to consistently meet commitments with integrity.

We view this recognition not only as a confirmation of our sound business practices but also as motivation to continue striving for higher standards of excellence. It reinforces our long-term commitment to building trust with our clients, partners, and employees, ensuring stable growth and sustainable success.

Introduction: Beyond Nearshoring – The Tangible Benefits of Eastern European EMS

In the previous article, we established Eastern Europe’s growing prominence in the electronics manufacturing services (EMS) landscape, driven by the nearshoring trend and attractive cost advantages. But the benefits extend far beyond geographical convenience and initial savings. Partnering with electronics manufacturing services in Eastern Europe offers a multifaceted strategic advantage for OEMs seeking to optimise their supply chains, enhance product quality, and achieve sustainable growth. In this article, we’ll delve into the core benefits: cost efficiency, quality and expertise, and the often-overlooked aspect of geopolitical stability, with insights from HansaMatrix’s Chief Business Development Officer, Andrius Luinys.

Cost Efficiency: Unlocking Competitive Pricing

One of the most immediate and significant advantages of choosing electronics manufacturing services providers in Eastern Europe is the inherent cost efficiency. This is primarily driven by lower operational expenses compared to traditional manufacturing hubs in Western Europe and North America.

Andrius Luinys highlights this crucial point: “The Eastern European region is attractive for electronics manufacturing with lower operational costs. Especially when comparing with the Nordics and Western Europe. Savings achieved from the manufacturing operations enable OEM companies to be more competitive with end product pricing in the market, resulting in more sales and market expansion.” This isn’t just about cheap labour; it’s about a more favourable overall cost structure that allows OEMs to bring highly competitive products to market without compromising on quality. The region offers a skilled workforce at a more accessible price point, contributing to a substantial reduction in overall manufacturing expenditure. This makes electronics contract manufacturing services in Eastern Europe particularly appealing for businesses looking to scale efficiently.

Quality and Expertise: A Foundation of Excellence

Concerns about quality often arise when discussing lower-cost regions. However, Eastern Europe’s electronics manufacturing industry services providers, such as  HansaMatrix, are increasingly recognised for their commitment to high quality and advanced technical expertise. The region boasts a strong educational foundation, producing a robust pool of skilled engineers and technicians adept in modern manufacturing processes.

HansaMatrix, for instance, has embedded quality into its operational DNA. Andrius Luinys provides clear examples of how this commitment is realised:

• Rigorous Training: “Employees dedicated to manufacturing operations have a minimum target of 8 hours of training per month.” This continuous professional development ensures the workforce remains at the cutting edge of manufacturing techniques.
• Comprehensive Inspection: “All electronic products are 100% inspected with Solder Paste Inspection (SPI) and Automated Optical Inspection (AOI).” This meticulous approach to inspection, further supported by the insights from our “Ensuring Flawless Execution” article, minimises defects and guarantees product integrity.
• Full Traceability: “HansaMatrix uses its own developed ERP system, which enables tracking all materials used in the manufacturing on a single component level.” Such in-depth traceability is critical for quality control, compliance, and rapid problem identification, reflecting the advanced capabilities of full-service electronics manufacturing services providers.
• International Certifications: HansaMatrix’s adherence to global quality standards underscores its reliability. “Complaint to international quality level standards: ISO 9001, ISO 13485, AS 9100, ISO 14001.”

o ISO 9001: Demonstrates a robust quality management system applicable across all industries.
o ISO 13485: Specifically for medical devices, ensuring stringent safety and quality protocols.
o AS 9100: Critical for aerospace, space, and defence industries, indicating the highest standards in quality management.
o ISO 14001: Focuses on environmental management, showcasing a commitment to sustainable practices.

• Internal Audits: “Each year, a special internal team is built to audit manufacturing sites. We have an ISO certified internal auditor who is a HansaMatrix employee.” This proactive approach ensures continuous improvement and adherence to the highest standards.
  This level of dedication to quality assurance positions Eastern European EMS providers as highly dependable partners for even the most complex and critical microelectronics manufacturing services.

Geopolitical Stability: Building Resilient Supply Chains

While no region is entirely immune to global events, many parts of Eastern Europe, particularly those integrated within the European Union, offer a strong degree of geopolitical and economic stability. This stability is a vital factor for OEMs seeking to build resilient and predictable supply chains, reducing risks associated with distant and potentially volatile manufacturing locations.

The shift towards nearshoring is partly a response to past supply chain disruptions. By choosing outsourced electronics manufacturing services closer to home, companies can mitigate risks related to trade wars, pandemics, and transportation bottlenecks. The established infrastructure and strong integration with the broader European economic framework in many Eastern European countries provide a secure environment for long-term manufacturing partnerships. This stability allows for better planning, reduced unexpected delays, and ultimately, greater trust in electronics manufacturing services.

Conclusion: The Eastern European Advantage with HansaMatrix

The decision to partner with an electronics manufacturing services provider is a strategic one, and Eastern Europe presents a compelling case. The region’s blend of cost efficiency, proven quality and technical expertise, and increasing geopolitical stability creates an attractive proposition for OEMs globally.

HansaMatrix stands as a testament to these advantages, offering a full suite of electronics manufacturing services backed by a quarter-century of experience and a steadfast commitment to quality, agility, and customer collaboration. From supporting tech startups in scaling up their innovative products (as detailed in our “Scaling Up with Agility” article) to helping established companies diversify their supply chains (referencing our “Diversifying Your Supply Chain” interview), HansaMatrix leverages the strengths of Eastern Europe to deliver superior value.

For companies ready to explore the strategic benefits of electronics manufacturing services in Eastern Europe and build a more resilient, cost-effective, and high-quality supply chain, we invite you to connect with HansaMatrix. Let’s discuss how our expertise can drive your next product success.

Introduction: The Shifting Sands of Global Electronics Manufacturing

The global electronics industry is in constant flux, with supply chain resilience and strategic sourcing becoming paramount. In this dynamic environment, a new powerhouse for electronics manufacturing services (EMS) is emerging: Eastern Europe. For original equipment manufacturers (OEMs) navigating complex international supply chains, understanding the nuances of this burgeoning market is no longer optional—it’s a strategic imperative. This article will define EMS, provide an overview of the Eastern European market, highlight its importance in global supply chains, and share key insights from HansaMatrix’s Chief Business Development Officer, Andrius Luinys.

What are Electronics Manufacturing Services (EMS)?

At its core, electronics manufacturing services (EMS) refer to companies that design, manufacture, test, distribute, and provide return/repair services for electronic components and assemblies to original equipment manufacturers (OEMs). Rather than maintaining their own factories, OEMs often outsource these functions to specialised EMS providers to achieve greater efficiency, flexibility, and cost-effectiveness. This allows OEMs to focus on their core competencies like product design, marketing, and sales, while leveraging the manufacturing expertise of their partners. The EMS market is a critical backbone of the modern electronics industry, supporting everything from consumer gadgets to sophisticated industrial and medical devices.

Eastern Europe: A Rising Star in the EMS Landscape

For years, Asia, particularly China, dominated the global electronics manufacturing services market. However, recent geopolitical shifts, trade tensions, and logistical disruptions have spurred a significant re-evaluation by OEMs worldwide. “During the last 5 years, manufacturing in Asia, specifically in China, was affected by the Pandemic, trade war with the US, and logistic crisis,” states Andrius Luinys, Chief Business Development Officer at HansaMatrix. “In addition to that, labour costs in China during the last decade have increased, making Chinese manufacturing less competitive compared to Eastern Europe.”

This confluence of factors has given rise to the nearshoring trend, where companies seek manufacturing partners closer to their primary markets. Eastern Europe has stepped into this void, proving to be an exceptionally attractive destination.

“Eastern Europe plays a significant role in the nearshoring trend to transfer the manufacturing from Asia,” Luinys elaborates. “Electronics manufacturing service companies have many locations in Eastern Europe, which are within 1-3 hours flight distance from the OEM headquarters.” This geographical proximity translates directly into reduced lead times, lower transportation costs, and simplified logistics – critical advantages in today’s fast-paced market.

Beyond logistics, the region offers compelling economic incentives. “Eastern Europe is attractive for electronics manufacturing with lower operational costs,” Luinys confirms. “Especially when comparing with the Nordics and Western Europe. Savings achieved from the manufacturing operations enable OEM companies to be more competitive with end product pricing in the market, resulting in more sales and market expansion.” This cost competition is a primary driver for OEMs seeking efficient and sustainable production.

Key Statistics and Market Dynamics

The European EMS market as a whole is substantial. While specific Eastern European market size data can fluctuate, the region is widely recognised as a significant portion of European production. Reports from industry analysts, such as in4ma, indicate that Eastern Europe accounts for a substantial share of the overall European EMS production volume.

The shift towards nearshoring is evident in the market’s trajectory. As global supply chains continue to diversify, the demand for reliable electronics manufacturing services providers outside of traditional hubs is escalating. This rebalancing acts as a powerful catalyst for growth in Eastern Europe.

Conclusion: Understanding the Eastern European EMS Landscape

The electronics manufacturing services industry is undergoing a profound transformation, with Eastern Europe at the forefront of this evolution. Driven by the critical nearshoring trend, attractive cost structures, and strategic geographical positioning, the region offers a compelling alternative for OEMs worldwide.

For companies seeking resilient, cost-effective, and high-quality custom electronics manufacturing services, understanding the opportunities in Eastern Europe is no longer a strategic choice, but a competitive necessity. This region offers specific benefits, including quality, expertise, and geopolitical stability. 

On May 14, HansaMatrix Ventspils hosted a Norwegian space industry delegation.

During the visit, we gave a tour of our Ventspils manufacturing plant and presented our electronics manufacturing capabilities, including the technologies, processes, and quality standards we apply in day-to-day operations. The delegation included representatives from University of Oslo, Spectrum Blue AS, Inventas AS, Nåva Space AS, Space Norway AS, NIFRO, Kongsberg Defence & Aerospace, the Norwegian Geotechnical Institute, and the Norwegian Ambassador to Latvia was also present.

Many thanks to Latvijas Investīciju un attīstības aģentūra – LIAA for organizing the visit and supporting international cooperation in innovation and technology.

We were glad to welcome the Aranet team to our Ogre manufacturing facility! During the visit, we showcased how we use Aranet PRO environmental monitoring solutions on a daily basis – from temperature and humidity tracking to real-time data analysis.

We shared our experience on why we implemented the system and the benefits it has brought PRO to our operations – including improved process control, energy efficiency, and a better working environment.

How did HansaMatrix boost production quality? By switching from paper logs to real-time data wireless sensors:

• Instant issue detection
• Hidden dust sources uncovered
• Temperature spikes spotted early

Click here to view case study with image gallery on Aranet website

or watch the video case study on Youtube!

Thank you to Aranet for the great collaboration, now featured in a detailed case study we’re proud to be part of!

We’re expanding in Finland and recently welcomed a new colleague to support this market – Jussi Mökkönen, our Business Development Manager. His expertise will help us grow and serve more customers.

Check out the article at www.tekniikkatalous.fi about us and our capabilities in Finnish here!

We had the honour of welcoming the President of Latvia, Edgars Rinkēvičs, to our Ogre manufacturing plant. It was a proud moment for us to present HansaMatrix and showcase our capabilities to such an attentive and engaged guest.

Thank you for the visit and the inspiring conversation!

Photo by: Ilmārs Znotiņš, Valsts prezidenta kanceleja

We are thrilled that Hansamatrix has been ranked #8 among the Top 30 Largest Local EMS Providers in Central and Eastern Europe! Read the full article on Evertiq – Global News -> Click here

This ranking is based on revenues reported for the year 2023 and includes companies owned by local investors, showcasing the strength and growth of our region’s manufacturing industry. We are incredibly proud to be recognized alongside such esteemed companies and look forward to continuing to provide exceptional electronics manufacturing services to our clients.

A special thank you to industry analysts Dieter G. Weiss and Mareike Haaß from in4ma for their hard work in data gathering and analysis.

We are excited to support youth education at the start of the new academic year, which is just getting underway!

The materials donated by HansaMatrix will be valuable for robotics clubs and students. A big thank you to the Latvian Electrical Engineering and Electronics Industry Association, LETERA for organizing and helping to deliver these materials to the right recipients! The materials have now reached RTU Faculty of Computer Science, Information Technology and Energy, Vidzeme University of Applied Sciences Robotics Lab “LabLab,” and Preiļi District Children’s and Youth Centre “Robotikas klubs.”

We’re proud to support the growth of future technology enthusiasts!

We’re excited to continue investing in Capex with the recent addition of the Mek ISO-Spector Inline Full 3D SMT Components and Solder Joints AOI (Automated Optical Inspection) System at both our HansaMatrix Ogre and Ventspils plants.

This cutting-edge system, powered by Artificial Intelligence, enables fast, programmer-independent automatic programming, continuously improving solder joint inspections, minimizing false calls, and optimizing defect detection. With a 25-megapixel camera and the industry’s largest field of view (69mm x 69mm), it delivers highly precise measurements. The ISO-Spector’s unique ability for 100% offline programming and debugging reduces downtime while seamlessly integrating with classification and traceability systems.

We continue to invest in automation, and our Ogre plant has just added a new ASYMTEK Select Coat conformal coating system from Nordson Electronics Solutions.

This system delivers  high-quality coating results and enhanced productivity,  featuring a rapid curing process, minimal harmful emissions  compared to solvent-based coatings, and exceptional speed and precision – promoting efficiency and a cleaner work environment.

This year, we have already invested over a million euros in CAPEX,  with more plans in the pipeline for the rest of the year.

July was HansaMatrix’s birthday month.

Throughout the month, our employees participated in an active outdoor game by Cilpo.lv. On July 30th, HansaMatrix’s 25th birthday, we celebrated with cakes and drew the lucky game participant and other fantastic prize winners. Our employee Māra will embark on her dream trip worth 2500 euros, which, thanks to HansaMatrix, will be realized with CelojumuBode.lv.

Special thanks to our founder, Ilmars Osmanis, for his heartfelt video greeting! Here’s to at least another 25 years, as our strength lies in teamwork! 

SEB bank has granted HansaMatrix a long-term loan in the amount of EUR 7.1 million to promote business development and efficiency. 

The long-term loan will enable HansaMatrix to invest in business development, increasing sales, acquiring new customers, developing export markets, and modernising equipment. 

“This is an important step towards strengthening the competitiveness and long-term development of HansaMatrix . We have been a financial partner for this ambitious Latvian company since 2017 and we are pleased that the financing we have provided has enabled HansaMatrix to become one of the leading companies in the region in the production of electronic systems and their components. This is a sector with constantly increasing demand that requires dynamic adaptation to change and the HansaMatrix team has proven its success. We wish the company a successful next development phase,” says Ints Krasts, Management Board member of SEB Latvia.

“This loan is an important step in the development and strengthening of our company’s market position. With Baltcap recently becoming the sole shareholder of the company, this transaction will help us to fulfill our ambitious business goals. The company is working in accordance with its long-term strategy, which is ensuring growth. We appreciate the long-term cooperation and trust of SEB bank,” adds Jānis Sams, Chairman of the Management Board of HansaMatrix. 

The global electronics manufacturing landscape is undergoing a significant shift. Companies are increasingly seeking to diversify their supply chains to mitigate risk and optimize costs. In this interview, Andrius Luinys, Chief Business Development Officer at HansaMatrix, a leading Electronics Manufacturing Services (EMS) provider in Baltics and Eastern Europe, discusses the key drivers behind supply chain diversification and how HansaMatrix positions itself as a reliable partner in this evolving environment.

The Need for Diversification: Balancing Risk and Opportunity

Andrius highlights two main factors driving the trend towards supply chain diversification:

• Risk Mitigation: Overdependence on a single source supplier can be detrimental. “There’s a need to have at least a double source (in some cases even multi-source) supply scenario,” says Andrius. This ensures continuity if a supplier encounters disruptions like “force majeure issues, low capacity, or technical problems.”
• Cost Control and Optimization: Diversification allows companies to leverage competition among EMS providers. “Original equipment manufacturer (OEM) companies can split their total yearly electronic manufacturing need” based on factors like cost, volume, and technical requirements. This allows them to identify the “best possible suppliers for their needs.”

The recent COVID-19 pandemic further emphasized the importance of diversification. Pre-pandemic, “nearshoring” – manufacturing closer to home – was a less popular option. However, “unpredictable local governmental measures” and logistical challenges in Asia during the pandemic highlighted the benefits of geographically diverse supply chains. HansaMatrix, with its facilities in Latvia, is well-positioned to support companies seeking nearshoring solutions.

Expertise for Diverse Needs: A Wealth of Experience

With a 25-year track record, HansaMatrix boasts extensive experience in manufacturing a wide variety of electronic products across multiple sectors. They are a mid-sized company with a team of roughly 500 employees working across four manufacturing sites, primarily serving customers in the Baltics and Eastern Europe. “We focus on Connectivity, Industry and Energy sectors,” says Andrius, “and are involved in applications such as data network devices, optics, IoT devices, hearing protection, machine vision cameras and much more.”

This diverse experience allows HansaMatrix to develop a deep understanding of different technical requirements. Their New Product Introduction (NPI) process includes design reviews for clients, “to adjust design for serial manufacturing for better efficiency, higher first past yield, and smoother production processes.”

One example Andrius shares is the complex underwater cameras they manufacture for the aquaculture sector. These cameras require a high degree of precision and incorporate a variety of built-in sensors. HansaMatrix manufactures the most complex mechanical parts in-house and performs the final assembly and optical testing.

Reliability and Standards: Guaranteeing Quality and On-Time Delivery

For companies diversifying their supply chains, trust in a new EMS provider is paramount. HansaMatrix emphasizes their commitment to quality and on-time delivery through several key practices:

• Industry Certifications: Their adherence to international quality standards like ISO 9001, ISO 13485, AS 9100, and ISO 14001 demonstrates their dedication to quality management.
• In-House Manufacturing Execution System: HansaMatrix leverages their 25 years of experience to create a robust Manufacturing Execution System (MES) tailored to each client’s specific needs.

Building Trust and Long-Term Partnerships: Transparency and Communication

Building strong, long-term partnerships requires trust and open communication. HansaMatrix prioritizes these aspects in their client relationships.

• Customer-Centric Culture: “We see our customers as partners,” explains Andrius. “Our company culture is customer centric.” They gather regular customer feedback and focus on continuous improvement to maintain high satisfaction levels.
• Dedicated Customer Teams: Each client is assigned a dedicated team that supports their product manufacturing on a daily basis, ensuring clear and efficient communication across all levels.
• Transparency and Openness: “Trust is one of our key values,” says Andrius. “We try to be as open as much as possible with our customers.” This level of transparency fosters strong and lasting partnerships.

HansaMatrix: An EMS+ Provider with a Lean Structure and Free Capacity

Beyond the core EMS services, HansaMatrix positions itself as an EMS+ provider, offering additional value-added services to their clients. Andrius elaborates: “We are capable of manufacturing Printed Circuit Boards Assembly (PCBA), metal and plastic mechanical parts and doing final assembly of the product. So, in practice our customers do not need to have 5 different suppliers – HansaMatrix can cover all the needs.”

The Future of Electronics Manufacturing: A Forward-Thinking Approach

HansaMatrix recognizes the importance of flexibility and adaptability in the ever-changing world of electronics manufacturing. Their ability to “adapt to changing technology requirements” and provide “flexible engineering support” will be crucial for success. They are also prepared to accommodate “immediate acceleration in production volumes” as new technologies emerge.

Conclusion

In conclusion, HansaMatrix presents a compelling proposition for companies seeking a reliable and experienced partner to navigate the complexities of supply chain diversification. Their commitment to quality, diverse expertise, open communication, and a forward-thinking approach position them as a valuable asset for companies in the evolving electronics manufacturing landscape.

Audris Lukasevics, Quality and New Product Introduction Manager (Photo: HansaMatrix)

Imagine the pressure of assembling complex electronics – a crucial component for industrial machinery. Every connection, every component placement, hinges on flawless execution. For companies relying on these intricate parts, quality isn’t optional, it’s the lifeblood of their operations. In this interview, Audris Lukasevics, Quality and New Product Introduction Manager at HansaMatrix, unveils their meticulous quality control procedures, industry certifications, and commitment to continuous improvement – the hallmarks that ensure success in this high-wire act of electronics manufacturing.

Here’s a closer look at what you’ll learn in this article:

• HansaMatrix Expertise: Discover how their extensive experience translates to superior quality in complex electronics assembly.
• Deep Dive into Quality Control: Explore Hansamatrix.com’s robust quality control procedures, including meticulous traceability and their ERP system integration.
• The Power of Certifications: Understand how Hansamatrix.com’s certifications, like ISO 9001:2015 and IPC-A-610 certified trainers, build trust and confidence.
• Beyond Certifications: Best Practices Revealed: Learn about Hansamatrix.com’s commitment to best practices, including Lean manufacturing principles and Electrostatic Discharge (ESD) protection.
• Continuous Improvement: A Hallmark of Excellence: See how Hansamatrix.com stays ahead of the curve by continuously refining their quality control procedures.

Experience Breeds Expertise

HansaMatrix extensive experience positions them as a trusted partner for complex electronics assemblies. “With over 20 years in the industry,” says Audris, “we’ve developed a broad set of skills and know-how. Every product, regardless of complexity, undergoes the same rigorous processes, using the same advanced equipment and handled by our team of seasoned professionals.” This ensures consistency and quality across the board.

A Deep Dive into Quality Control

For quality-focused managers, understanding the specifics of quality control procedures is essential. Audris elaborates on HansaMatrix approach:

• Traceability: “We maintain meticulous traceability of every component, linking it to a specific product serial number and the original material packaging box. This ensures complete transparency throughout the manufacturing process.”
• ERP Integration: “Our robust ERP system controls product documentation from the very beginning, starting with the initial request for quotation (RFQ), all the way through procurement, warehousing, and manufacturing. This comprehensive system tracks everything with a full audit history, guaranteeing complete control.”

Certifications: Building Trust and Confidence

Industry certifications demonstrate a company’s commitment to quality. HansaMatrix holds a range of certifications that underscore their dedication to high standards:

• ISO 9001:2015: Quality Management System
• ISO 14001:2015: Environmental Management System
• ISO 13485:2016: Quality Management System for Medical Devices
• EN 9100:2016: Quality Management Systems – Requirements for Aviation, Space and Defense Organizations
• IPC-A-610 Certified Trainers: HansaMatrix has two in-house trainers qualified to certify personnel according to IPC-A-610 standards for electronics assembly acceptability.

“These certifications,” explains Audris, “translate to tangible benefits for our clients. They instill confidence in our integrated management system and the expertise of each employee. Furthermore, the continuous improvement processes implemented for demanding industries benefit all our customers.”

Beyond Certifications: Best Practices for Complex Assemblies

HansaMatrix goes beyond just meeting certification requirements. They actively employ best practices to ensure the highest quality in complex electronics assembly:

• Lean Manufacturing Principles: HansaMatrix incorporates Lean principles like LEAN, MTM (Methods-Time Measurement), and Theory of Constraints (TOC) to optimize production processes and eliminate waste.
• Electrostatic Discharge (ESD) Protection: “All our facilities are equipped with preventive ESD measures,” says Audris. “This includes special flooring, garments, and footwear. Additionally, all workstations, tools, and equipment are ESD-safe and regularly monitored to prevent potential damage to sensitive electronic components.”

Continuous Improvement: A Commitment to Excellence

In the ever-evolving world of electronics manufacturing, continuous improvement is key. “We embrace new challenges presented by our customers and their end-users,” emphasizes Audris. “By constantly learning and growing alongside our clients, we ensure our quality control procedures remain at the forefront of the industry.”

HansaMatrix unwavering commitment to quality, from their experienced staff and robust quality control procedures to their industry certifications and dedication to continuous improvement, positions them as a trusted partner for companies seeking flawless execution in complex electronics manufacturing.

The fast-paced world of tech startups demands a unique approach to electronics manufacturing. Startups need a partner who can not only handle high-mix, low-volume production runs but also adapt to rapidly changing technology needs and frequent design iterations. In this interview, Jevgenijs Kostjukēvičs, Key Account Manager at HansaMatrix, discusses the challenges faced by startups and how HansaMatrix positions itself as a perfect fit for the dynamic world of tech innovation, particularly in the Internet of Things (IoT) and smart sensor space.

Brief overview of this article:

• The Obstacle Course of Startup Manufacturing: Discover the challenges faced by tech startups when it comes to electronics manufacturing, particularly regarding low-volume production and keeping pace with innovation.
• The HansaMatrix Advantage: Explore how HansaMatrix tackles these challenges through dedicated project teams, their extensive knowledge of electronics components, and a commitment to open communication.
• From Prototype to Market: A Success Story: Learn how HansaMatrix approach helped a startup streamline their journey from initial concept to product launch.

Finding the Right Fit: A Challenge for Startups

Finding the right electronics manufacturing services (EMS) partner is crucial for any startup’s success. However, as Jevgenijs highlights, it can be a challenge.

“The biggest challenge is to find the right synergy and a perfect fit EMS partner,” says Jevgenijs. “Lots of EMS allocate their time depending on a business scale. Since startups are unpredictable, not all manufacturers will put in a reasonable effort.”

HansaMatrix solves this problem by dedicating a special team to each project. This team, consisting of a key account manager, procurement specialist, and New Product Introduction (NPI) expert, leverages their combined experience to cater to the specific needs of each startup.

Adapting to Change: Keeping Pace with Innovation

The tech industry is characterized by rapid innovation and frequent design changes. HansaMatrix understands this and has built a system to ensure agility.

“HansaMatrix has a huge catalog of alternative part numbers and electronic component suppliers,” explains Jevgenijs. “Very often, we suggest our clients change the Bill of Materials (BOM) or layout, since our suppliers keep us informed about the latest components available. And yes, a dedicated team is key for agile support.”

 

This deep knowledge of the electronics component landscape allows HansaMatrix to propose alternative components when necessary, potentially reducing costs and lead times. Open communication is another key aspect of their approach.

“Each project has its own communication approach,” says Jevgenijs. “Nevertheless, HansaMatrix will develop an action plan to track the project’s progress. Our doors are always open, and we welcome guests at our facilities.”

 

Making Low-Volume Production Work

High-mix, low-volume production runs are a common reality for startups. HansaMatrix tackles this challenge by utilizing their two production plants, which share the same equipment and Enterprise Resource Planning (ERP) system.

“Using both plants with the same equipment and ERP system, we can easily find a slot and manage low-volume runs,” explains Jevgenijs. “This approach helps us deliver on time and ensures a fast ramp-up.”

 

While confidentiality agreements prevent Jevgenijs from sharing specific client names, he assures us that HansaMatrix consistently works with 2-3 startups at each plant, demonstrating their expertise in handling low-volume production needs.

Success Story: From Prototype to Market

Jevgenijs offered a glimpse into a successful partnership with a startup, highlighting how HansaMatrix’s approach helped them navigate the challenges of bringing their product to market.

“We started working with a client in 2017 who only had a raw BOM and Gerber files,” says Jevgenijs. “Based on our experience, we suggested changes to the layout, component selection, and suppliers. As a result, we were able to reduce BOM costs, lead times, and ensure a faster ramp-up.”

 

Following the initial prototype runs, HansaMatrix implemented a PCBA buffer stock strategy, allowing for increased batch sizes and further cost reduction. This strategy ultimately ensured the fastest possible time to market for the startup’s innovative product.

Conclusion

HansaMatrix commitment to agility, expertise in low-volume production, and open communication make them a valuable partner for tech startups in the connectivity sector. Their ability to adapt to changing needs and leverage their knowledge of the electronics component landscape positions them as a perfect fit for companies seeking to bring their innovative ideas to life.

Let’s meet at Electronics Fair in Stockholm from April 10-11, 2024. Elektronikmässan is the Sweden’s most important meeting place for the electronics industry. The Fair will bring together top suppliers, industry organizations, and will offer an inspiring seminar program, panel discussions, and activities.

Whether you’re interested in exploring potential collaborations, discussing partnership opportunities, or simply curious about what we have to offer, we’d love to connect with you during the exhibition. Come and visit our sales team at Stand D:22!

Click here to get your ticket!
More information about exhibition here!

Address:
Kistamässan
Arne Beurlings Torg 5
164 40 Kista

Opening hours:
Wednesday 10 April: 9.00-17.00
Thursday 11 April : 9.00-16.00

HansaMatrix in Ventspils and Ogre celebrated the end of the year in Matrix style, acknowledging a year filled with significant changes but marked by remarkable success! The HM team is proficient at putting in the hard work, and it certainly knows how to throw a great party!

HansaMatrix becomes a premium sponsor of in4ma to support the work of Dieter G. Weiss, Michael Künsebeck and their dedicated team. The qualified market data of the European EMS industry is very important for the business. This data serves as a significant asset to improve the ability to formulate more effective business strategies.

Please follow the link to find out more about in4ma

HansaMatrix announces that Andrius Luinys has joined the company as the Chief Business Development Officer. Andrius has a strong background and expertise in electronics industry and a proven record of achieving business growth.

He spent a total of 9 years with Kitron Group, initially joining as a Key Account Manager and later transitioning into the role of Business Development Manager.

In this role he will lead the business development initiatives, explore new opportunities, and build strategic partnerships that support company goals and vision.

HansaMatrix has recently transitioned to a private company with Baltcap as its sole shareholder. This strategic move will allow HansaMatrix to pursue its bold vision for the future and expand its market presence in Europe and beyond. The new CBDO role will support this growth strategy.

Photo: Maris Macijevskis (Hansamatrix publicity photo)

Maris Macijevskis is leaving his position as Finance Director and Member of the Board at Hansamatrix. He joined the company in 2017 and has played a significant role in developing financial and risk management directions of a Nasdaq-listed company, as well as management of investor relations.

M. Macijevskis last working day will be September 22 and Aleksis Orlovs, who once held the position of Council Member of HansaMatrix from June 2022 until May this year, will take his place. He has received higher education in business management at the Riga School of Business, as well as higher education at the University of Latvia. He has also previously worked for technology companies, moreover, he has held the positions of manager and finance manager for more than 15 years. Aleksis is described as a professional who prioritizes high-quality performance, operational ethics, and honesty.

HansaMatrix has achieved the status of a “Family-Friendly Workplace” through the program implemented by the Society’s Integration Foundation. The aim of the program is to promote the development of a work environment culture in Latvia that is empathetic, inclusive, and genuinely people-oriented. Dynamic business and social responsibility go hand in hand, so we will continue to work to promote work and private life harmony.

The Family day at HansaMatrix just before the start of the school year was a great opportunity for our team members and their loved ones to come together and create beautiful memories. We were delighted to have more than 600 participants in both plants. Together, we enjoyed delicious food and sweets, games, challenges, engaging activities, as well as exclusive tours, giving a unique insight into our workplace.

Watch the video here: https://www.youtube.com/watch?v=4-hnxtLmoe4

Private equity fund manager BaltCap, through its company Emsco, becomes the sole shareholder of HansaMatrix, which becomes a private company.

On May 30, 2023 Emsco informed Nasdaq Riga that it solely owns 100% or 1 836 381 HansaMatrix shares. Nasdaq Riga decided on May 31, 2023 to approve the application of HansaMatrix and to delist its shares (ISIN LV0000101590, Ticker HMX1R) from the Baltic Main List. The last listing day was set to June 1, 2023.

All the people involved in the purchase process have earned the appreciation of the management team and the recognition of a successful outcome. HansaMatrix has bold goals for the future, but the team believes that they can achieve them with the support of the new shareholder!

(From left: Dagnis Dreimanis (Baltcap), Juris Parups (Baltcap), Janis Sams (CEO, HansaMatrix).

BaltCap, the leading private equity fund manager in the Baltics through its company Emsco, has become the largest shareholder of HansaMatrix. BaltCap has successfully concluded the voluntary share purchase offer by acquiring 93.1% of HansaMatrix shares.

The new ownership structure will now allow the company to better raise additional capital to unlock the company’s further growth potential.

Given that SIA Emsco has acquired more than 90 percent of HansaMatrix’s voting rights, SIA Emsco, per Takeover Law, has the right to redeem the shares of Hansamatrix held by remaining shareholders without their consent. SIA Emsco intends to execute this right and also plans to propose delisting from the regulated market. The representative of the new shareholder has commented that delisting of HansaMatrix will allow company to focus on the long-term development.

Supervisory Committee of the Bank of Latvia on March 1, 2023 has made a decision to allow SIA Emsco (registration no. 40203437904, legal address – Jaunmoku 34, Rīga, LV-1046)  to make a voluntary takeover bid for the shares of joint-stock company “HansaMatrix”.

The price of one share, according to prospectus, is set at EUR 8.50. The offer is valid for 30 days starting from 2nd March till 31th March at 4pm.

According to the information in the prospectus, the offeror SIA Emsco does not hold voting rights arising from the shares of the JSC “HansaMatrix” either directly or indirectly. The prospectus does not contain information about persons who act in concert with the offeror SIA Emsco or the JSC “HansaMatrix” as the target company.

Upon acceptance of the offer, JSC “HansaMatrix” shareholders are required to contact their bank or investment brokerage firm where they have their securities account.

For prospectus translation in English and in Estonian please click here

Based on the preliminary data, in Q4 2022 HansaMatrix consolidated revenue amounted to 7.80 million EUR demonstrating 61.3% increase compared to Q4 2021 and 2.9% increase compared to Q3 2022.

The increase in revenue is explained by strong demand in data networks and industrial sectors, as well as by launching manufacturing for recently acquired customers. Revenue growth was supported by active supply chain management and component sourcing and easing trend of the global component deficit.

HansaMatrix has signed agreements with SEB banka and SEB lizings to extend the maturity of factoring, overdraft, guarantee, reverse factoring and loan facilities until November 30, 2023 for aggregate amount of EUR 5.92 million that are used for investments, working capital financing that also include export financing transactions.

Jānis Sams, Chairman of the Management Board informs that HansaMatrix started cooperation with SEB group in December, 2017. The signed extensions of the financing agreements continue the successful cooperation with the bank and ensure the company with necessary and sufficient financing.

Ints Krasts, Management Board member of SEB Latvia: “SEB banka continues standing alongside competitive and innovative Latvian companies, which, despite the current challenges in the global economy, identify and pursue opportunities for development. We are pleased that HansaMatrix has chosen us as its long-term financial partner, and we continue to support the company in the implementation of its plans.” 

Following HansaMatrix 9-month 2022 financial result announcement, WOOD & Company has updated analysis and forecasts report, maintaining their ‘buy’ rating on the stock. The report indicates that the Company’s potential is greater than currently reflected in the share price, estimating price target per share in amount of EUR 9.10.

The updated report on HansaMatrix has been published under a research programme supported by the EBRD to cover companies listed on the Nasdaq Baltic* and available publicly free of charge to every interested investor on the programme’s website: https://listed-sme.com/CMS/Documents/171f1d11-e7ff-4a1e-bb8b-3ba366f9df06.pdf

HansaMatrix announced in Q4 2020 that, based on HansaMatrix’s memorandum of understanding with Nasdaq Riga, the research program, supported by the European Bank for Reconstruction and Development (EBRD), to cover companies listed on the Nasdaq Baltic will also include HansaMatrix research coverage for two years.

Following the successful launch of its dedicated research program in May 2020, in support of the development of small- and medium-sized enterprises (SMEs), the EBRD was expanding the initiative to the Baltic states.

Funded by the Taiwan Business-EBRD Technical Cooperation Fund, the program provides research coverage for a set of SMEs listed on the stock exchanges in Bulgaria, Croatia, North Macedonia, Romania, Serbia and Slovenia. The reports are publicly available, free of charge, on the program’s website, www.listed-sme.com.

The aim is to produce free, publicly available, high-quality research reports, in order to overcome the information barriers that depress market liquidity. Making markets more transparent by increasing the amount of reliable information is regarded as key for increasing the availability of financing for SMEs.

The two-year research program is being conducted by WOOD & Company, an investment bank specializing in emerging markets. The program is fully aligned with the objectives of the European Commission’s Action Plan on Building a Capital Markets Union, which specifically mentions improving access to finance, including risk capital, notably for SMEs, as one of the five priority areas.

The full text of a joint announcement from the EBRD and Nasdaq Baltic exchanges: research program to cover companies listed on the Nasdaq Baltic, available here (https://bit.ly/35xJj82).

* Nasdaq Baltic is a common name for exchanges, regulated markets, alternative markets First North operated by Nasdaq companies in the Baltic states, i.e. Nasdaq Tallinn AS, Nasdaq Riga AS and AB Nasdaq Vilnius.

HansaMatrix has received new manufacturing order in the amount of USD 4.4 million from existing customer located outside the European Union. The order consists of several products, all of which are high complexity electronic systems. Deliveries are planned from 4th quarter of 2023 until 1st quarter of 2025 and will, among other things, also depend on the availability of components. The execution of order is planned at the Ventspils manufacturing facility.

This large order was received from a customer in aerospace industry, which is currently classified as an industrial customer in the Company’s reports. Customer’s name is not disclosed under the terms of the contract.

Jānis Sams, Chairman of the Management Board of HansaMatrix, states that the new order confirms the Company’s ability to build long-term relationships and proves the technological capabilities in the production of high complexity electronic systems in the global market, as well as the customers’ trust in the delivery discipline, which the Company demonstrates in the conditions of the shortage of electronic components. The development of customer service with new solutions for effective cooperation is one of the Company’s strategic priorities.

As previously announced, the private equity fund manager BaltCap group company, SIA “Emsco”, registration number: 40203437904, legal address: Jaunmoku iela 34, Rīga, LV-1046 plans to issue voluntary share buyback offer to HansaMatrix shareholders in accordance with the procedures specified in the Share Buyback Law of the Republic of Latvia and has submitted a merger notice to the Competition Council.

The Competition Council, after evaluating the information provided by SIA “Emsco” and other information at the disposal of the institution, concluded that the merger participants and their related companies do not operate in one specific market or a vertically related market. As a result, the market structure will not change, competition will not decrease, and a dominant position will not be created or strengthened in the affected markets in Latvia, where the merger participants operate. Accordingly, on November 28, 2022, the Competition Council made a decision to allow SIA “Emsco” to acquire a sole decisive influence over HansaMatrix. (More information in Latvian: http://bit.ly/3OImp2U).

In further process, SIA “Emsco” will apply to the Financial and Capital Market Commission to receive permission to make a voluntary share buyback offer.

The voluntary share buyback offer is planned to be made to all HansaMatrix shareholders in accordance with the relevant regulations and after receiving all necessary approvals.

BaltCap is the largest and most experienced private equity investor in the Baltic states. BaltCap invests in strong company management teams and companies that have a clear vision for growth not only in the Baltic States, but also internationally. 

HansaMatrix is organizing a webinar scheduled on November 29, 2022 at 10:00 AM (EET). The webinar will be open to all registrants signed up through the link below.

The webinar will be hosted by HansaMatrix Chairman of the Management Board Mr. Jānis Sams, Management Board Member, Finance Director Mr. Māris Macijevskis and founder of Lightspace Technologies, Mr. Ilmārs Osmanis. The presentation will be held in English, but there will be an opportunity to ask questions in Latvian as well.

During the webinar Mr. Sams and Mr. Macijevskis will provide information on HansaMatrix financial results of Q3 and 9 months of 2022 as well as other latest activities, while Mr. Ilmārs Osmanis will inform about HansaMatrix associated company Lightspace Technologies business news. After the presentation, company representatives will answer the questions of the webinar participants.

You are welcome to send in your questions to the Company until November 28 to e-mail ieva.unda@nasdaq.com or submit them through the registration link below.

To sign up for the webinar, please use the following link: https://bit.ly/3XkRmOl

After filling in the application form, you will receive a link to the webinar and instructions to your specified e-mail.

HansaMatrix informs that SIA “Emsco”, registration number: 40203437904, legal address: Jaunmoku iela 34, Rīga, LV-1046, which is a group company of the private equity fund manager BaltCap, plans to issue voluntary share buyback offer to HansaMatrix shareholders in accordance with the procedures specified in the Share Buyback Law of the Republic of Latvia.

SIA “Emsco” has submitted a merger notice to the Competition Council, which has recognized the submitted report as complete (more information in Latvian: http://bit.ly/3UYvir4). After receiving a positive decision of the Competition Council, SIA “Emsco” will apply to the Financial and Capital Market Commission to receive permission to make a voluntary share buyback offer.

The voluntary share buyback offer will be made to all HansaMatrix shareholders in accordance with the relevant regulations and after receiving all necessary approvals.

BaltCap is the largest and most experienced private equity investor in the Baltic states. BaltCap invests in strong company management teams and companies that have a clear vision for growth not only in the Baltic States, but also internationally.

During first 9 months of 2022 the Group reported historically highest sales volume of 20.171 million EUR, representing 18% increase compared to the same period of 2021. During first 9 months of 2022 the Group reported 9-month EBITDA result of 1.668 million EUR and operated with 8.3% EBITDA margin. During the third quarter of 2022 the Group reported historically highest revenue in amount of 7.586 million EUR, representing increase by 44% in comparison to the same period of 2021. The Group reported quarterly EBITDA result of 0.430 million EUR and operated with EBITDA margin of 5.67%.

In the third quarter of 2022 the Group reported historically highest revenue from contracts with customers of 7.586 million EUR, representing increase by 44% in comparison to the same period of 2021. The 2022 Q3 sales results showed 16% sales volume increase in comparison with previous quarter – 2022 Q2.

During first 9 months of 2022 the Group reported sales volume increase by 18% compared to the same period of 2021 and revenue reached historically highest 9 months volume 20.171 million EUR.

The growth of revenue was supported by strong demand in key sectors that coupled with active sales process and the global semiconductor deficit has resulted in significant order book volume as at the end of Q3 2022, amounting to 19.2 million EUR, as a result of slightly improving component availability, decreasing by 12% compared to the respective figure as at the end of Q2 2022.

During 2022 Q3 the Group reported quarterly EBITDA result of 0.430 million EUR and operated with net loss result of 0.562 million EUR. The reported EBITDA result shows 54% decrease in comparison with Q3 2021 and remained unchanged compared to previous quarter of 2022 Q2. In Q3 2022 the Group reported net loss 0.562 million EUR as compared to the net profit of 0.295 million EUR in Q3 2021 and net loss of 0.686 million EUR in Q2 2022. Quarterly results represent EBITDA margin of 5.67%.

During the 9m period of 2022 the Group reported EBITDA result of 1.668 million EUR and net loss result of 1.293 million EUR. The reported EBITDA result shows 50% decrease in comparison with 2021 9m. In 9 months of 2022, the Company operated with a net loss of 1.293 million EUR as compared to the net profit of 0.014 million EUR in 9m 2021. In 9 months of 2022, the Company operated with 8.3% EBITDA margin.

Q3 and 9m 2022 EBITDA profitability decrease compared to Q3 2021 and 9m 2021 is explained by changes in the product mix of manufactured products, where higher-added value products proportion decreased, which was influenced by the global semiconductor deficit.

Net profit of the Group in Q3 2022 is negatively influenced by several non-cash related items, the most significant including loss from investments in associates in amount of 0.296 million EUR, USD/EUR exchange rate fluctuations 0.187 million EUR, EIB loan fair value change provisions in amount of 0.083 million EUR and interest expense related to leases in amount of 0.044 million EUR.

The non-cash items negatively influencing net profit of the Company in 9m 2022 include loss from investments in associates 1.081 million EUR, EIB loan fair value change provisions – 0.257 million EUR, USD/EUR exchange rate fluctuations – 0.276 million EUR and interest expense related to leases – 0.128 million EUR.

For better inter-period profitability comparisons, the Company calculates normalized net profit, which in Q3 2022 amounted to negative 0.029 million EUR compared to Q3 2021 0.332 million EUR 9m 2022 normalized net profit amounted to 0.002 million EUR.

In 9m 2022 (including Q2 2022) the Group carried out revaluation of fair value of warrants issued in relation to European Investment Bank (EIB) financing contract, decreasing warrant balance sheet value by 0.498 million EUR (0.083 million EUR in Q3 2022), due to decreasing average weighted price of HansaMatrix stock in 9m 2022 (in Q3 2022), which by the same amount improved net profit in 9m 2022 (in Q3 2022).

TTM – trailing twelve-month period sales ending with September 30, 2022, reached historically highest level of 25.009 million EUR, increasing 10% compared to TTM sales for the period ended at 2021. EBITDA result for the TTM 12-month period reported to be 2.078 million EUR, a decrease of 50% in comparison with 12-month period ended at 2021 Q3, and resulted in a net loss of -3,259 million EUR whereas normalized net profit in this period amounted to -0.308 million EUR. In the end of Q3 2022 averaged EBITDA margin for TTM period of 8.31% was reported.

The definitions of alternative performance indicators (APIs) used in the news release can be found on page 47 of the HansaMatrix Unaudited Interim Condensed Consolidated Financial Statements.

HansaMatrix updates forecast of consolidated revenue and profitability for 2022:

Revenue: 26-28 million EUR
EBITDA margin: between 9% to 12%

The Company announces forecast of consolidated revenue and profitability for 2023:

Revenue: 32-34 million EUR
EBITDA margin: between 10% to 13%

HansaMatrix manufacturing order book volume as of Q3 2022 amounted to strong 19.2 million EUR, as a result of slightly improving component availability, decreasing by 11.9%, compared to the respective figure as at the end of Q2 2022.

Margins in 2022 have been influenced by manufacturing product mix changes, the ongoing global semiconductor deficit and by energy price spikes and volatility among other things fueling general and salary inflation in Latvia, EU and other countries.

In 2023 the Company expects gradual improvements in semiconductor availability. Manufacturing volumes are expected to grow for existing clients as well as for new clients, among other things supported by ongoing near shoring trend, mitigating potential demand contraction effects due to possible economic slowdown.

Please see the definitions of alternative performance indicators (APIs) used in this news release on page 46 of HansaMatrix Unaudited Interim Condensed Consolidated Financial Statements for the Q2 and 6-month period ended June 30, 2022 (available: https://bit.ly/3T78LqH).

People are our greatest asset, so we have started to co-finance lunch for all our employees from November 1st in all HansaMatrix production plants. We believe that hot and healthy lunch provides a supportive environment, boosts productivity and makes our people more satisfied and happier!

Take a look at the video – lunch at HansaMatrix!

Based on the preliminary data, in Q3 2022 HansaMatrix consolidated revenue amounted to 7.59 million EUR demonstrating 44.4% increase compared to Q3 2021 and 15.7% increase compared to Q2 2022. The increase in revenue is explained by strong demand in industrial and internet of things sectors, as well as by launching manufacturing for recently acquired customers. Revenue growth was supported by active supply chain management and component sourcing.  

Macroeconomic factors – general inflation and significant energy cost increase, mostly related to electricity expense, have influenced profitability, however the Company has carried out manufacturing services re-pricing for its customers, which will be gradually reflected in revenue increase starting with September, 2022 up to January 2023. COVID-19 related impact to the operation of a Company is not observed.  

Increasing component prices and long lead-times are still influencing business growth and volumes due to global semiconductor deficit, explained by post pandemic growth in upstream demand in data networks, automotive, medicine and IoT business sectors.

First signs of constraint easing in the supply chain of semiconductors are being observed, explained by some indications of decreasing demand, predominantly in the consumer electronics sector, influenced by global macroeconomic challenges. Nevertheless, this recent semiconductor availability improving is not observed in relation to all component range and does not yet translate into significant shortening of the lead times. Industry experts expect continuation of gradual ending of component deficit period in time interval from Q4 2022 up to Q4 2023.    

This year the event was held with a record number of exhibitors and visitor sign ups. It was a great opportunity to meet existing and potential customers, suppliers and  industry professionals.

The goal of showing the refreshed corporate image was also successfully achieved by receiving many compliments on the new look and tasteful exhibition stand. 

HansaMatrix has concluded a manufacturing contract and received a frame order in the amount of EUR 3 million for the production and delivery of aquaculture systems to a new customer in the Nordic countries in the industrial market sector. The volume of planned deliveries will reach EUR 5 million in three years, starting from the 3rd quarter of 2022.

Customer name according to the concluded non disclosure agreement remains confidential.

Previously, in February 2022, HansaMatrix reported on the first production order for the manufacturing and delivery of aquaculture systems to this customer, with the planned aggregate order volume in 3 years up to EUR 5 million.

The Management Board of HansaMatrix is pleased because the signed contract and received manufacturing order confirm the ability of the team to implement a growth strategy in electronic component shortage circumstances, to utilize the accelerating nearshoring trend of the production relocation closer to domestic countries to reduce the current instability and uncertainty of the global supply chains, and strenghthens market position of the Company in the region.

During first 6 months of 2022 the Group reported sales volume increase by 6% compared to the same period of 2021 and revenue reached 12.585 million EUR. During first 6 months of 2022 the Group reported half year EBITDA result of 1.238 million EUR and normalized net profit amounted to 0.031 million EUR. In 6 months of 2022, the Company operated with 9.8% EBITDA margin. During the second quarter of 2022 the Group reported revenue in amount of 6.555 million EUR, representing increase by 8% in comparison to the same period of 2021. The Group reported quarterly EBITDA result of 0.429 million EUR. Quarterly results represent EBITDA margin of 6.55%.

In the second quarter of 2022 the Group reported revenue from contracts with customers of 6.555 million EUR, representing increase by 8% in comparison to the same period of 2021. The 2022 Q2 sales results showed 9% sales volume increase in comparison with previous quarter – 2022 Q1.

During first 6 months of 2022 the Group reported sales volume increase by 6% compared to the same period of 2021 and revenue reached 12.585 million EUR.

The growth of revenue was supported by strong demand in industrial and data networks sectors that coupled with active sales process and the global semiconductor deficit has resulted in significant order book volume as at the end of Q2 2022, amounting to 21,8 million EUR, growing by 13% compared to the respective figure as at the end of Q1 2022.

During 2022 Q2 the Group reported quarterly EBITDA result of 0.429 million EUR and operated with net loss result of 0.686 million EUR. The reported EBITDA result shows 63% decrease in comparison with Q2 2021 and 47% decrease compared to previous quarter of 2022 Q1. In Q2 2022 the Group reported net loss 0.686 million EUR as compared to the net loss of 0.327 million EUR in Q2 2021 and net loss of 0.046 million EUR in Q1 2022 Quarterly results represent EBITDA margin of 6.55%.

During first 6 months of 2022 the Group reported half year EBITDA result of 1.238 million EUR and half year net loss result of 0.732 million EUR. The reported EBITDA result shows 48% decrease in comparison with 2021 H1 and 8% decrease compared to previous 6-month period of 2021 H2. In 6 months of 2022, the Company operated with a net loss of 0.732 million EUR as compared to the net loss of 0.281 million EUR in H1 2021 and net loss of 1.671 million EUR in H2 2021. In 6 months of 2022, the Company operated with 9.8% EBITDA margin.

Q2 and 6m 2022 EBITDA profitability decrease compared to Q2 2021 and 6m 2021 is explained by changes in the product mix of manufactured products, where higher-added value products proportion decreased, which was influenced by the global semiconductor deficit.

Net profit of the Group in Q2 2022 is negatively influenced by several non-cash related items, the most significant including loss from investments in associates in amount of 0.565 million EUR, EIB loan fair value change provisions in amount of 0.088 million EUR and interest expense related to leases in amount of 0.048 million EUR.

The non-cash items negatively influencing net profit of the Company in 6m 2022 include loss from investments in associates 0.785 million EUR, EIB loan fair value change provisions – 0.174 million EUR, USD/EUR exchange rate fluctuations – 0.088 million EUR and interest expense related to leases – 0.085 million EUR.

For better inter-period profitability comparisons, the Company calculates normalized net profit, which in Q2 2022 amounted to negative 0.150 million EUR compared to Q2 2021 0.547 million EUR and which in 6m 20202 amounted to 0.031 million EUR, decreasing b 97% on year over year basis. 6m 2022 normalized net profit margin amounted to 0.2%.

In 6m 2022 (including Q2 2022) the Group carried out revaluation of fair value of warrants issued in relation to European Investment Bank (EIB) financing contract, decreasing warrant balance sheet value by 0.4125 million EUR (0.248 million EUR in Q2 2022), due to decreasing average weighted price of HansaMatrix stock in 6m 2022 (in Q2 2022), which by the same amount improved net profit in 6m 2022 (in Q2 2022).

TTM – trailing twelve-month period sales ending with June 30, 2022, reached 22.677 million EUR, decreasing 5% compared to TTM sales for the period ended at 2021. EBITDA result for the TTM 12-month period reported to be 2.578 million EUR, a decrease of 42% in comparison with 12-month period ended at 2021 Q2, and resulted in a net loss of -2.402 million EUR. In the end of Q2 2022 averaged EBITDA margin for TTM period of 11.37% was reported.

The definitions of alternative performance indicators (APIs) used in the news release can be found on page 46 of the HansaMatrix Unaudited Interim Condensed Consolidated Financial Statements.

HansaMatrix is organizing a webinar scheduled on August 16, 2022 at 10:00 AM (EEST). The webinar will be open to all registrants signed up through the link below.

The webinar will be hosted by HansaMatrix Chairman of the Management Board Mr. Jānis Sams, Management Board Member, Finance Director Mr. Māris Macijevskis and founder of Lightspace Technologies, Mr. Ilmārs Osmanis. The presentation will be held in English.

During the webinar Mr. Sams and Mr. Macijevskis will provide information on HansaMatrix financial results of Q2 and 6 months of 2022 as well as other latest activities, while Mr. Ilmārs Osmanis will inform about HansaMatrix associated company Lightspace Technologies business news.

You are welcome to send in your questions to the Company until August 15 to e-mail ieva.unda@nasdaq.com or submit them through the registration link below.

To sign up for the webinar, please use the following link: https://bit.ly/3vVvw85

After filling in the application form, you will receive a link to the webinar and instructions to your specified e-mail.

The stock company HansaMatrix publishes a new website, thus completing the refresh of visual identity.

“We are proud to look in a virtual environment according to modern requirements. We are a high-tech company and in business for over 20 years, it is important for us to go along with time.

We felt it was time to give HansaMatrix a new energy – stronger and more convincing. This is how we ourselves have become over the years – confident in the high quality of the service provided, a stable position in the electronics manufacturing industry in this region and proud of what we have achieved together.” says Chairman of the Board Jānis Sams.

“The main goal of the new website is to show who we are, what our values ​​are and what we do as simple as possible. We have created the website entirely from an idea, that was more than a half-year intensive but very exciting project. On the new website, we paid special attention to the page of services we provide, as well as a page for investors, where all our shareholders will be able to easily find information about our performance indicators, corporate governance, shareholder meetings and webinars. However, refreshing the logo is a common practice in the environment of the big brands we all know.” adds Līga Baltiņa, Communications Manager.

Based on the preliminary data, in Q2 2022 HansaMatrix consolidated revenue amounted to 6.47 million EUR demonstrating 7.1% increase compared to Q2 2021 and 7.3% increase compared to Q1 2022. The increase in revenue is explained by strong demand in industrial and internet of things sectors, as well as by launching manufacturing for recently acquired customers, predominantly in industrial sector in Nordic and other European countries.  

Macroeconomic factors – COVID-19 related impact to the operation of a Company is not observed. Overall energy cost increase related to electrical and heating, despite increased costs, represent relatively small share in cost structure and has limited impact on profitability.  

Increasing component prices and extraordinary long lead-times are still influencing business growth and volumes due to global semiconductor deficit, explained by the growth in upstream demand in data networks, automotive, medicine and IoT business sectors.  

Semiconductor component availability has not improved in Q2 2022 and is reported at the same level as in previous period. Industry experts and players expect the increase in manufacturing capacities come into operation, resulting in gradually ending deficit period somewhere in time interval from Q4 2022 up to Q4 2023.  

Associated company of the Group, Lightspace Technologies has started to sell next generation iG1050 AR headset into medical un defence markets. In additional to business activities, it raised bridge 2M EUR funding, and continuing to work with investor networks in North America.    

Baiba Anda Rubesa has been approved as the Chairwoman of the Supervisory Board of HansaMatrix, while Anders Lennart Borg will perform the duties of the Deputy Chairman of the Supervisory Board.

As previously announced, on May 31, 2022, in annual general meeting of HansaMatrix shareholders, the new Supervisory Board was elected, in addition to the previous Supervisory Board members Anders Lennart Borg, Dagnis Dreimanis, Normunds Igolnieks and Baiba Anda Rubesa, the Supervisory Board member Aleksis Orlovs was appointed.

Ingrīda Blūma, who has been an independent member of the Supervisory Board since 2016, and has served as Deputy Chair of the Supervisory Board for the last two years, has left the composition of the Supervisory Board of HansaMatrix.

In the new composition of the Supervisory Board, the independent members are Anders Lennart Borg, Aleksis Orlovs and Baiba Anda Rubesa.

Baiba Anda Rubesa is co-founder of Novatore, she serves as Supervisory Board Chair of Hansamatrix, Lightspace Holding and Coffee Address Holding, as well as a Supervisory Board member of GREN. Her own company RFactor offers consulting and mentoring services to current and future business leaders. Rubesa has previously served on the supervisory boards of the Stockholm School of Economics in Riga, Latvenergo, Citadele banka, DnB NORD banka (now Luminor) and the Board of the Extractive Industry Transparency Initiative. She has worked with many different NGO’s and multi-stakeholder entities, such as chairing the Foreign Investors’ Council in Latvia and serving as Vice-President of the Latvian Chamber of Commerce.

Anders Lennart Borg is an experienced professional in the electronics manufacturing industry. He graduated from Linkoping University in Sweden and is endowed with extensive knowledge in engineering. The years of experience has developed his strong leadership skills. He worked as a director of Eljo AB in Sweden for 11 years, a prominent manufacturer of electric/electronic installation material. Later he was the head of the Schneider Electric electronics factory in Latvia for 5 years and the factory of the same company in Sweden for another 5 years.

Dagnis Dreimanis is an investment professional with 21 years of experience and currently serves as a managing partner of BaltCap, the leading Baltic venture capital investor. He has managed investments in more than 20 companies in a broad range of industries. Dagnis Dreimanis holds a BSBA degree in Finance and Economics from Slippery Rock University of Pennsylvania and is a CFA charter holder. He holds a dual EMBA degree from the University of California Los Angeles / National University of Singapore (2016) and has completed the Professional Board Member Education program at the Baltic Institute of Corporate Governance.

Since 2011, Normunds Igolnieks has been the Chairman of the Board and partner of ZGI Capital, which is one of the most experienced venture capital fund managers in the Baltics. From 2001 to 2011, Normunds Igolnieks was the Chairman of the Board of the asset management company SEB Investment Management as well as held several other positions related to the financial sector.

Aleksis Orlovs obtained an MBA degree from the Riga Business School, as well as higher education at the University of Latvia. He has held senior positions for more than 15 years and is currently the Chief Financial Officer (CFO) of the high-tech company Sonarworks. Prior to that, he worked at Visma Enterprise Latvia, Riga Central Terminal, ITHAL Group, SAF tehnika and Delfi, holding the positions of CEO and CFO. A professional with a focus on high quality results, operating ethics, honesty, integrity.

“Everyone who is looking for a job or wants to change the work environment is invited to consider the vacancies opened by HansaMatrix. Previous work experience is not as important as the desire to learn, ”emphasizes Gatis Grava.

Read the full article “Ventspils – a business-friendly city”, in which HansaMatrix Board member and Ventspils plant manager Gatis Grava talks about the history of Ventspils plant, its development, expansion and future plans, here:

Ventspils – a business-friendly city

HansaMatrix associated company Lightspace Technologies (the Company) has currently attracted an aggregate pre listing bridge convertible loan of 2 million EUR (increased from previously reported 1250 thousand EUR) from business angels, existing shareholders and investment fund Ardelta. These investments will fund Lightspace Technologies to further develop products and start deliveries. Investor names, in accordance with the terms of the agreement, will not be disclosed.

The Management Board of Lightspace is pleased that the agreements confirm attractiveness of company to investments and the potential of augmented reality products produced in the company.

As recently reported, Lightspace Technologies on March 14, 2022 has started a listing process to become a public entity in North America on the Toronto TSX Venture Exchange. In this process, it is planned to attract investments of at least 10 million EUR from private investors, taking 7-8 months for the full listing process.

The Company will disclose further information about the listing process in accordance with the requirements of applicable law.

HansaMatrix through its subsidiary Lightspace Holding AS holds equity of 67.7% shares in the Company before dilution by pre listing bridge round and listing funding.

HansaMatrix has received 5.3 million EUR manufacturing order from existing customer to supply electricity overhead distribution line fault indication systems in 2022 and 2023, starting with Q4 2022. The customer is located in Nordic countries and operates in industrial sector.

17 years of cooperation with this customer and new orders confirm HansaMatrix’s ability to build long-term relationships. The development of customer service with new solutions for effective cooperation is one of the strategic priorities of the company.

Customer name according to the concluded non disclosure agreement remains confidential.

The Management Board of HansaMatrix is pleased that the received manufacturing order confirms the ability of the team to implement a growth strategy in electronic component shortage circumstances, strengthening market position of the Company in the region.

Interview of Jānis Sams, Chairman of the Board of HansaMatrix, on the Delfi business portal about the crisis of component availability, preliminary financial results of the past year, recruitment, competition and other challenges, as well as victories, read here:

https://www.delfi.lv/bizness/biznesa_vide/razosanas-komponentu-tirgu-gruti-konkuret-ar-globalajiem-milziem-atzist-hansamatrix.d?id=54262622

In the fourth episode of the Investors’ Club podcast, Maris Macijevskis, a member of the board of HansaMatrix, talks about development of the company, the main turning points in growth and the potential for the future. In a conversation with Kaspars Peisenieks, Executive Director of the Investors’ Club, Māris also discusses financial data, HansaMatrix shares, their potential and attractiveness for investment.

Listen here (podcast in Latvian): https://www.investoruklubs.lv/podkasts/epizode/investoru-kluba-podkasts-nr4-maris-macijevskis-hansamatrix-valdes-loceklis

Considering recently started Russia and Ukraine conflict (the Conflict) and its influence on economic and business environment situation in Baltics and globally, with this announcement HansaMatrix (the Company) informs about the current business situation of the Company, risks and potential business impact on HansaMatrix of the Conflict and on the actions that the Company is undertaking to mitigate the Conflict potential influence.

The current business situation of the Company:  

All HansaMatrix business units of operate at the available capacity.

HansaMatrix has worked closely with customers to better identify and understand the potential impact the Conflict may have on the manufacturing order book. The Company has no customers in Russia, Ukraine or Belarus, moreover HansaMatrix’s customers do not have significant revenue exposure to the markets directly involved in the Conflict.

HansaMatrix has a diversified supplier base and has no suppliers in Russia, Ukraine or Belarus. The Company has been in contact and discussed the Conflict and risks related to it with the key suppliers and logistics partners.

Key risks:

Energy price and inflation increase risk

Russia, Ukraine and Belarus are countries rich in commodities, including oil, natural gas, metals and crops, disruption of supply of which due to international sanctions and as a result of the Conflict is expected to lead to higher energy, raw material and food prices, contributing to inflation in European Union in 2022 and 2023. Expenses of the Company related to energy and utilities are comparably small in the total cost structure, amounting to around 2.5% of revenues in 2021. Nevertheless, the Company is closely monitoring energy price and general inflation trends, evaluating financial results and budget fulfilment on a monthly basis to ensure that in case necessary the manufacturing services pricing adjustments are negotiated with the clients and carried out on a timely basis to maintain the profitability level.

Supply chain and liquidity risks

Neon gas, which is needed to feed lasers in production of semiconductors and metal palladium, used in later manufacturing stages of chips, are two key raw materials that are at a risk of being constrained. Industry analysts estimate about 25-50% of the world’s semiconductor-grade neon is sourced from Russia and Ukraine, while approximately 30% of the world’s palladium originates from Russia.

The increased demand and supply-chain disruptions after COVID-19 pandemic have resulted in global semiconductor deficit continuing for 1.5 years now, which has at initial stages helped to manage the additional supply chain challenges caused by Russia’s invasion in Ukraine, as many of chip manufactures have significantly improved their supply chain risk management and stockpiled materials needed for manufacturing for 3-12 months ahead (https://cnb.cx/3K1IqGV).

In longer-term and assuming that Russia-Ukraine conflict will not be properly settled in the nearest months, the aforementioned commodity shortages could lead to higher semiconductor prices and further increase chip deficit.

In addition, the supply chain could be expected to be further disrupted by inability of transport companies to supply semiconductors from Asia to Europe through Russia using railroad. Alternative transport links are ships and airplanes, which could increase delivery time (ships) and cost of transport (airplanes).

The electronic component supply chain disruptions due to Russia-Ukraine conflict could be expected to impact HansaMatrix manufacturing order execution, potentially shifting fulfilment times, and could increase component sourcing costs, as well as increase inventory levels.

To mitigate the component shortage HansaMatrix diversifies the supplier base, applies the alternative component management approach, works with component brokers and carries out in advance component sourcing for binding customer orders. Liquidity risk mitigation measures include weekly cash flow management and monthly liquidity planning for the next 12 months, allowing for timely decisions to improve liquidity.

Salary inflation risk

Inflationary pressures could be expected to drive higher salary inflation in 2022 and 2023. Expenses of the Company related to employee salaries are significant in the total cost structure, amounting to around 39.1% of revenues in 2021. The Company is closely monitoring salary inflation trends, evaluating financial results and budget fulfilment on a monthly basis to ensure that the manufacturing services pricing adjustments are negotiated with the clients and carried out on a timely basis to maintain the profitability level as necessary.

Risk of diminishing purchasing power

Higher inflation limiting real growth of economy could lead to diminishing demand and decreased investment in long-term. The manufacturing order volume can be influenced by potential decisions by businesses to postpone investments and by consumers to decrease expenditures. Since the Conflict started the Company has not received any negative indications in relation to decreasing customer orders for the nearest future. To mitigate this risk the Company sales team is continuously and actively looking for new customers, with strategic focus on Nordic countries.

Investment attraction risk

Increased business environment uncertainty might potentially influence investor sentiment in Europe and result in postponed investment decisions. HansaMatrix associated company Lightspace technologies is currently focusing its investment attraction activities in North America.

Potential business impact:

HansaMatrix remains confident in the Company long-term prospects and growth strategy. The Company considers Russia-Ukraine conflict immediate impact to be comparably limited in short-term, however the uncertainty of the business environment has significantly increased and the Conflict impact scale on the Company could change, especially in relation to further challenges related to supply chain and increase in costs that can potentially negatively impact business volumes in the coming quarters of 2022.

HansaMatrix has reviewed the key assumptions of the fair value measurement, carried out for the Group’s annual consolidated andCompany financial statements and has concluded that as of the date of this announcement the fair values of assets and liabilities of the Group have not been significantly impacted by circumstances related to the Conflict. Nevertheless, the value of European Investment Bank (EIB) warrant liability could change starting with Q1 2022, as the Company applies average weighted HansaMatrix share price for the last respective quarter as one of the inputs to determine fair value of this liability. In addition, due to significantly increased industrial building construction costs, the decrease in HansaMatrix and the Group investment fair value in SIA Zinatnes parks as of December 31, 2021 is expected to be announced with the release of the audited financial results of the Company and the Group for year 2021.

In an unfavourable case of the Conflict continuing for long period of time and at a significantly large scale, the impact on the Company could be more significant via the risks described previously.

HansaMatrix has received first manufacturing order to supply aquaculture systems starting with Q2 2022. The planned revenue amount from cooperation with this customer is expected to reach up to 5 million EUR in the following 3 years. The new customer is located in Nordic countries and operates in industrial sector, related to aquaculture industry.

Customer name according to the concluded non disclosure agreement remains confidential.

The Management Board of HansaMatrix is pleased that the received manufacturing order confirms the ability of the team to implement a growth strategy in electronic component shortage circumstances, to utilize the accelerating nearshoring trend of the production relocation closer to domestic countries to reduce the current instability and uncertainty of the global supply chains, and strengthens market position of the Company in the region.

HansaMatrix (hereinafter – Company) has previously informed that in accordance with the decisions adopted by the extraordinary shareholders meeting on 16 February 2018 the issuance of the Company’s employee share options and the related conditional increase of the Company’s share capital was approved.

With the execution of conversion of employee share options, the Management Board of the Company decided on 26 November 2021 to increase the share capital of the Company by EUR 5500 (five thousand five hundred euros), by issuing new 5500 (five thousand five hundred) bearer shares with a nominal value of EUR 1 (one euro) per share, which has been registered in the Commercial Register as of 10 January 2022.

After the increase of the share capital, the total share capital of the Company comprises EUR 1 834 881 (one million eight hundred thirty-four thousand eight hundred eighty-one euros).