HMS Networks: Year-end report 2017, January - December

Yearly

• Net sales for the full year 2017 increased with 24 % reaching SEK 1,183 m (952), corresponding to a 23 % increase in local currencies. The devaluation of the Swedish currency had a positive effect of SEK 16 m on net sales.
• Operating profit reached SEK 212 m (149), equal to a 18 % (16) operating margin.
• Order intake increased with 25 % to SEK 1,204 m (966).
• Cash flow from operating activities amounted to SEK 207 m (155).
• Profit after taxes totaled SEK 143 m (100) and result per share amounted to SEK 3.06 (2.16)
• The Board of Directors propose a dividend to the amount of SEK 1.50 (1.00) per share.

Fourth quarter

• Net sales reached SEK 301 m (265), corresponding to a 15 % increase in local currencies.
• Operating profit reached SEK 31 m (40) corresponding to an operating margin of 10 % (15).
• Order intake was SEK 288 m (267).

Comment from the CEO
The growth we saw during 2017 continues, but with somewhat reduced strength in the fourth quarter.

We still see very good development in Asia, stable development in Europe, but the quarter has been somewhat deplorable in the United States. However, we see that the trend in the early 2018 turns around and, among other things, decisions on tax cuts allow US customers to take action on planned projects and place new orders. After the end of the year we have received a major breakthrough order from a leading Japanese customer within our IXXAT-Safety area, so overall we still see good progress ahead.

The quarter has been intensive with many sales and marketing activities, and HMS has participated in several fairs, resulting in the best inflow of leads ever in a quarter. Increased sales and marketing resources have increased our costs during the quarter. In addition, we have revalued the expected outcome in ongoing shareholder programs, which resulted in increased costs of approximately SEK 5 m in the fourth quarter.

Productwise all of our trademarks Anybus, eWON, IXXAT and the Intesis subsidiary show a good growth in 2017. For those of our products sold according to our Design-Win business model, we can see continued strong growth in new business in 2017. In total, we received 217 (203) new Design-Wins during the year which causes the total number of active Design-Wins to amount to 1,591 (1,508), an increase of 6% compared to the previous year. Of these are 1,192 (1,137) in production, while 398 (371) are expected to come into production in the coming years. The fact that we have received a lot of new Design-Wins is proof of HMS's attractive product offering and provides us with good conditions for future growth.

It is gratifying that the companies acquired in 2016, eWON and Intesis, developed strongly in 2017.

In conjunction with international fairs in the fourth quarter, HMS launched eWON Flexy 205, an industrial gateway addressing the growing interest in remote monitoring and Industrial Internet of Things (IIoT). By linking a Flexy 205 to its machine, machine builders, system integrators and automation engineers can access and monitor the machine without being in place and make correct operating decisions depending on the machine's current status. Thanks to Flexy 205, important machine data can be collected, logged, visualized and analyzed in a flexible way, which is central to new IIoT-applications.

As a result of increased volumes, we have initiated an expansion of the production facility in Halmstad during the fourth quarter and this work will continue in 2018.

We are ready to continue to grow further with our ambitious growth targets in the coming year - long-term annual growth of 20% per annum and an operating margin of more than 20%. Our focus is to drive continued growth in all our business areas. We continue to focus on our long-term growth goals based on a balanced view of our 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 February 16, 2018

Staffan Dahlström
Chief Executive Officer

Further information can be obtained from: CEO Staffan Dahlström, telephone [phone] or CFO Joakim Nideborn, 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 08.00 CET on February 16, 2018.

HMS Networks AB (publ) is the leading independent supplier of products for industrial communication and remote management. Reported sales reached SEK 1,183 m in 2017 with more than 94 per cent outside Sweden. Development and manufacturing take place at the headquarter in Halmstad and in Ravensburg, Nivelles and Igualada. Local sales and support are handled by branch offices in Japan, China, Germany, USA, Italy, France, Belgium, Singapore, Spain, India, UK, Finland and Denmark. HMS employs more than 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 solutions and control under the eWON® brand. HMS is listed on the NASDAQ OMX in Stockholm, category Mid Cap, Information Technology.

Q4 Report 2017

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Source: HMS Networks AB via Globenewswire