HMS Networks: Interim report 2017, January - September

First nine months 

• Net sales for the first nine months increased with 28 % reaching SEK 882 m (687), corresponding to a 25 % increase in local currencies
• Operating profit for the first nine months reached SEK 181 m (110), equal to a 21 % (16) operating margin
• Order intake for the first nine months increased with 31 % to SEK 916 m (698)
• Cash flow from operating activities amounted to SEK 171 m (119)
• Profit after taxes totaled SEK 123 m (75) and result per share amounted to SEK 2.62 (1.62)
• Net sales for the last twelve months amounted to SEK 1 147 m (862) corresponding to a 29 % increase in local currencies
• Operating profit for the last twelve months amounted to SEK 221 m (124) corresponding to a 19 % (14) operating margin

Third quarter

• Net sales for the third quarter increased with 20 % reaching SEK 305 m (254), corresponding to a 20 % increase in local currencies
• Operating profit reached SEK 65 m (55) corresponding to an operating margin of 21 % (21)
• Order intake during the third quarter was SEK 289 m (252)

Comment from the CEO

We see a continued good development of our business and can conclude another quarter of record sales, SEK 305 m. This gives us seven consecutive quarters of increased sales.

The 20 % growth during the third quarter is entirely organic and without tailwind from currency effects. We see a strong demand for our products in our major markets as there is currently a high investment rate within industrial automation.

On the cost side, we have seasonally lower costs in the third quarter. This, together with a good turnover and a stable gross margin, result in a new record level profit, SEK 65 m, equivalent to an EBIT margin of 21 %.

Our cash-flow remains strong and amounted to SEK 62 m during the quarter, which further strengthens our financial position.

During the year, we have strengthened our organization in order to create an efficient platform for future growth. The new organization has clear responsibilities for our product lines and a market organization with global coverage.

We already see positive effects of this in the form of new innovative products and high activity within our market organization. For example, during the quarter, we launched our new eWON Netbiter LC - a remote gateway which enables valuable operational data from industrial machines to be communicated directly to ThingWorx - a leading cloud solution from the American company PTC. This opens up new opportunities to optimize and develop maintenance and service of production equipment - a good example of how HMS adds value by connecting industrial hardware and IT software, or as we say, Hardware Meets Software - HMS.

Another example is that we have now implemented a generation shift to the new CAN FD technology for most of our IXXAT products. This allows our customers in transportation, automotive and machinery to combine their established CAN technology with the new CAN FD standard which is expected to get a big impact during the coming years.

We are ready to continue to grow further in accordance to our ambitious growth targets - a long-term annual growth of 20 % per year and an operating margin above 20 %.

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 October 26, 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 October 27, 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.

Q3 Report 2017

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Source: HMS Networks AB via Globenewswire