HMS Networks: Interim report 2017, January - June

First six months

• Net sales for the first six months increased with 33 % reaching SEK 577 m (433), corresponding to a 29 % increase in local currencies
• Operating profit for the first six months reached SEK 117 m (55), equal to a 20 % (13) operating margin
• Order intake for the first six months increased with 40 % to SEK 626 m (447)
• Cash flow from operating activities amounted to SEK 109 m (51)
• Profit after taxes totaled SEK 80 m (38) and result per share amounted to SEK 1.72 (0,84)
• Net sales for the last twelve months amounted to SEK 1 096 m (788) corresponding to a 39 % increase. Operating result amounted to SEK 211 m (101) corresponding to a 19 % (13) operating margin

Second quarter

• Net sales for the second quarter increased with 29 % reaching SEK 299 m (232), corresponding to a 23 % increase in local currencies
• Operating result reached SEK 59 m (35) corresponding to an operating margin of 20 % (15)
• Order intake during the second quarter was SEK 328 m (247)
• During the second quarter was a split of shares 4:1 performed, the total number of shares are 46 818 868 after the split

Comment from the CEO
The strong development continues during the second quarter, with new record levels of revenue, profit and order intake. The growth of 29% is to a large extent driven by our organic growth, adjusted for acquisition and currency effect, 15% compared with the second quarter 2016.

We continue to increase costs in line with our expansion plan. Despite the increased cost levels, we are meeting our profitability target of 20 % operating margin in the quarter. This is driven by the increased sales and stable gross margins.

Growth was good in all geographic markets with stable development in Japan and Germany. In North America, the positive trend we reported in the last quarter continued with optimistic signals from our customers and an increased investment willingness in the industry. The growth is driven by a positive development of our brands, Anybus, IXXAT and eWON. Spanish Intesis, acquired in July 2016, shows an outstanding development and we are now establishing Intesis staff in the United States to expand the Intesis business in the American market.

The quarter has included several marketing activities and trade fairs, as well as several new product launches.

In the first half of 2017 we see an underlying enhanced business climate, new design wins and a good demand in our key markets. We are pleased to exceed both our long-term goals of 20% sales growth and 20% operating margin, with a total growth of 33% and operating margin of 20%.

We are beginning to see longer delivery times on electronic components, which will increase our delivery lead times in the coming months. To minimize the impact for our customers, we are strengthening our safety stocks of critical components as well as expanding our production capabilities in Halmstad and Nivelles, Belgium to meet future volume increases.

Our focus is to continue drive growth in our current areas of business. We continue to balance our long-term growth strategy with a restrained view of costs. In the long run, we estimate that the market for industrial data communications will constitute an interesting growth area and we continue to focus on our motto "HMS Connecting Devices".

Halmstad July 20, 2017

Staffan Dahlström
Chief Executive Officer

Further information can be obtained from: CEO Staffan Dahlström, telephone [phone] or CFO Gunnar Högberg, telephone [phone]. www.hms-networks-com/ir

This information is such that HMS Networks AB (publ) is required to disclose in accordance with the Swedish Financial Instruments Trading Act and/or the Swedish Securities Market Act. The information was submitted for publication at 07.50 CET on July 20, 2017.

HMS Networks AB (publ) is the leading independent supplier of products for industrial communication and remote management. Reported sales reached SEK 952 m in 2016. Development and manufacturing take place at the headquarter in Halmstad, Sweden, in Nivelles Belgium, in Igualada, Spain and in Weingarten, Germany. Local sales and support are handled by branch offices in China, Denmark, Finland, France, Belgium, Germany, Spain, India, Italy, Japan, UK, and USA. HMS employs over 500 people and develops and manufactures solutions for connecting automation devices and systems to industrial networks under the Anybus®, IXXAT® and Intesis® brand and products for remote management and control under the eWON® brand. HMS is listed on the NASDAQ OMX in Stockholm, category Mid Cap, Information Technology.

Q2 Report 2017

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Source: HMS Networks AB via Globenewswire