Annual Report • Feb 16, 2018
Annual Report
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YEAR-END REPORT 2017 JANUARY - DECEMBER
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".
Staffan Dahlström, CEO, HMS Networks AB
Net sales for 2017 amounted to SEK 1,183 m (952) corresponding to a 24 % increase. In total, the devaluation of the Swedish currency in relation to the major HMS currencies had a positive effect of SEK 16 m on net sales compared to last year. The order intake amounted to SEK 1,204 m (966). The underlying organic growth excluding acquisitions and currency effects amounted to 18 % for the year. The acquired subsidiaries in 2016 eWON and Intesis had a positive impact on sales during the year by SEK 275 m (181).
Net sales for the fourth quarter 2017 totaled SEK 301 m (265), corresponding to a 14 % increase compared to the same quarter the previous year. In total, the devaluation of the Swedish currency in relation to the major HMS currencies had a negative effect of SEK 4 m on net sales compared to the same quarter the previous year.
Order intake during the fourth quarter increased with SEK 21 m to SEK 288 m (267) whereof SEK 287 m (256) with calculated delivery within twelve months.
The graph shows turnover per quarter on the bars referring to the scale on the left axis. The line shows turnover for the latest 12 month period referring to the scale on the axis to the right.
| Quarterly data | Q4 2017 |
Q3 2017 |
Q2 2017 |
Q1 2017 |
Q4 2016 |
Q3 2016 |
Q2 2016 |
Q1 2016 |
|---|---|---|---|---|---|---|---|---|
| Net sales (SEK m) | 301 | 305 | 299 | 279 | 265 | 254 | 232 | 201 |
| Order intake (SEK m) | 288 | 289 | 328 | 299 | 267 | 252 | 247 | 199 |
| Gross margin (%) | 60.3 | 60.9 | 61.8 | 61.0 | 61.5 | 62.2 | 60.9 | 59.2 |
| EBITDA (SEK m) | 43 | 77 | 71 | 68 | 51 | 65 | 44 | 30 |
| EBITDA (%) | 14.3 | 25.1 | 23.7 | 24.5 | 19.1 | 25.4 | 18.8 | 14.8 |
| EBIT (SEK m) | 31 | 65 | 59 | 57 | 40 | 55 | 35 | 20 |
| EBIT (%) | 10.2 | 21.2 | 19.9 | 20.6 | 14.9 | 21.5 | 15.0 | 10.1 |
| Cash flow for operating activities per share (SEK)* |
0.77 | 1.33 | 1.21 | 1.13 | 0.77 | 1.47 | 0.98 | 0.11 |
| Earnings per share before dilution (SEK)* | 0.43 | 0.90 | 0.86 | 0.86 | 0.55 | 0.79 | 0.56 | 0.27 |
| Earnings per share after dilution (SEK)* | 0.43 | 0.90 | 0.86 | 0.86 | 0.54 | 0.78 | 0.55 | 0.27 |
| Equity per share (SEK)* | 15.37 | 14.76 | 14.32 | 13.94 | 13.35 | 12.55 | 12.00 | 10.86 |
* Key ratios have been recalculated based on the 4:1 share split in the second quarter of 2017.
.
Operating profit before depreciation EBITDA for 2017 totaled SEK 259 m (188), equivalent to an operating margin of 22 % (20). Operating profit EBIT for 2017 amounted to SEK 212 m (149) corresponding to a 18% (16) margin. Currency effects related to income and expenses had a SEK 9 m positive impact on EBIT compared to 2016. The, during 2016, acquired subsidiaries eWON and Intesis contributed with SEK 97 m (46, including acquisition cost) on the Group EBIT.
EBITDA for the fourth quarter 2017 totaled SEK 43 m (51), corresponding to a 14 % (19) EBITDA margin. EBIT totaled SEK 31 m (40) corresponding to a 10 % (15) margin. Changes in exchange rates related to income and expenses had no impact on EBIT compared to the same period the previous year.
The fourth quarter's EBITDA was adversely affected by SEK 5 m due to increased costs for ongoing share saving programs. The cost increase is a consequence of a changed assessment on the allocation of performance shares as a result of the Group's strong development during the year.
The two graphs above show operating profit EBITDA and EBIT per quarter. The bars refer to the scale on the left axis. The line shows operating profit for the last 12 month period referring to the scale on the axis to the right.
The Group's equity for 2017 amounted to SEK 721 m (636). The total number of shares at the end of the period was 46,818,868. The Group's equity/assets ratio amounted to 50.2 % (45.3).
On December 31, 2016 the share saving program from 2013 was concluded. During 2017, 112,468 shares, of which 22,636 were performance shares, were distributed free of charge to the participants. For the allocation of these shares, HMS used shares in own possession.
Based on the authorization of Annual General Meeting the Board has decided to repurchase own shares. The purpose of the repurchase is to ensure HMS's commitments to deliver shares in the HMS share saving program. In total, 90,200 shares were acquired in the first quarter at a value of SEK 8 m and 260,000 shares at a value of SEK 32 m in the fourth quarter. The total holding of own shares at the end of the period were 361,732 shares.
| Change in Group Equity | ||
|---|---|---|
| SEK thousands | Dec 31 2017 | Dec 31 2016 |
| Balance at January 1 | 636,444 | 455,482 |
| Total comprehensive income for the period | 163,232 | 115,001 |
| Repurchase of own shares | -39,482 | 0 |
| Issue of new shares | 0 | 92,715 |
| Share-related payment | 7,818 | 2,430 |
| Dividends | -46,717 | -29,184 |
| Closing balance | 721,295 | 636,444 |
The tax charge for 2017 was SEK 52 m (39). The tax charge has been calculated based on the tax situation applying to the Group at present and the profit development of the reporting entities belonging to the Group.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing on the transaction dates or the date when items were remeasured. Foreign exchange gains or losses resulting from the settlement of such transactions and from the translation of closing day rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement. However, this does not apply to transactions that fulfill the requirements for hedge accounting of cash flows or net investments. Such gains or losses are recognized in other comprehensive income.
Foreign exchange gains and losses attributable to loans and cash equivalents are reported in the income statement as financial revenue or financial expenses. Exchange profits and losses attributable to the purchasing of raw materials and products are reported in the income statement as cost of goods sold. Other foreign exchange gains and losses are reported in the income statement as 'Other operating income' and 'Other operating expenses' respectively.
Net sales for 2017 consist of 62 % in EUR, 24 % in USD, 8 % in JPY and 6 % in other currencies. Cost of goods sold consists of 63 % in EUR, 26 % in USD and 1 % in JPY and 10 % in other currencies. Operating expenses consists of 44 % in EUR, 13 % in USD, 4 % in JPY and 39 % of other currencies.
The Group applies a policy for currency hedging described in the Annual Report.
Cash flow from operating activities during the year amounted to SEK 207 m (155).
The investments in tangible assets for 2017 totaled SEK 22 m (11). Investments in intangible assets totaled SEK 10 m (28) and consist of capitalized expenses related to development of new technology platforms. Depreciation on capitalized development costs for 2017 amounted to SEK 23 m (18) and write-downs to SEK 4 m (3).
The acquisition of IXXAT in February 2013 has generated a SEK 255 m overvalue before tax for the group of which SEK 144 m is allocated to technology platforms, customers and brand name included in the acquisition. Amortization on overvalues acquired was recognized with SEK 8 m (7) during 2017.
The acquisition of eWON in February 2016 generated a SEK 233 m overvalue before tax, of which SEK 20 m is allocated on brand name and customers included in the acquisition. Amortization on overvalues acquired was recognized with SEK 2 m (2) during 2017.
The acquisition of Intesis in June 2016 generated a SEK 131 m overvalue before tax of which approximately SEK 18 m was allocated to brand and customers included in the acquisition. Amortization on overvalues acquired was recognized with SEK 2 m (1) during 2017.
HMS distributed dividend payment to its shareholders of SEK 47 m (29) in 2017.
During 2017 a renewed financing agreement was signed with the existing bank. The agreement concerns a revolving facility of EUR 45 m, running over three years with the opportunity to extend further one plus one year. The financing agreement replaces the previous financing agreement which was supposed to expire in February 2019. The new agreement will come to lower the Group's borrowing cost and give a higher flexibility.
Of the Group's existing loans, a total of SEK 32 m (61) has been amortized and SEK 443 m was dissolved during 2017. Of the revolving facility, SEK 347 m has been included in new loans. At the end of the period, cash and cash equivalents amounted to SEK 91 m (99) and unused credit facilities to SEK 126 m (30). The repurchase of own shares of SEK 32 m in December has not affected liquidity until the first quarter of 2018. The Group's net debt amounted to SEK 304 m (421).
The Parent Company's operations are primarily focused on Groupwide management and financing. Apart from the Group's CEO, the Parent Company has no employees. The operating profit for 2017 amounted to SEK 0 m (0). Cash and cash equivalents amounted to SEK 0 m (0) and borrowing amounted to SEK 0 m (0).
HMS Networks AB (publ) is listed on the Nasdaq OMX Stockholm Mid Cap list, in the Information Technology sector. The total number of shares amounted to 46,818,868 of which 361,732 shares are held by the company.
The Company has launched four share saving programs. Based on a decision by the Annual General Meeting permanent employees are offered to save in HMS shares in an annual share saving program. Between 43 % and 60 % of the employees opted to participate in the respective program. If certain criterias are met the Company is committed to give the participant a maximum of two HMS shares for every share saved by the employee. As of December 31, 2017, the total number of saved shares in custody amounted to approximately 285,000, whereof approximately 196,000 are within the four ongoing programs.
On December 31, 2016 we concluded the share saving program from 2013. In the first quarter of 2017, 112,468 shares, of which 22,636 were performance shares, were distributed free of charge to the participants. For the allocation of these shares, HMS used shares in its own possession.
Based on the authorization of the Annual General Meeting on April 28, 2016, the Board of HMS Networks AB (publ) ("HMS") has de cided to repurchase own shares. The purpose of the repurchase is to ensure HMS's commitments to deliver shares in the HMS share savings program. In total, 90,200 shares were acquired at a value of SEK 8 m during the first quarter of 2017. The total holding of own shares at the end of the first quarter were 101,732 shares.
HMS General Annual Meeting was held on April 26, 2017.
HMS General Annual Meeting decided a dividend of 4.00 kr (2.50), which after the later split of shares 4:1 equals 1.00 kr (0.63). The divi dend was distributed in the second quarter of 2017.
During the second quarter, a split of shares 4:1 was carried out, the total number of shares are 46,818,868 after the split. All key ratios in this report that relates to number of shares have been recalculated even historically.
The acquisition analysis from the acquisition of Intesis has been final ized in the second quarter of 2017 as one year has passed since the acquisition. No changes have been made compared to the preliminary acquisition analysis presented in note 34 in the Annual Report of 2016.
A renewed financing agreement of EUR 45 m was signed during the third quarter. In conjunction with renewed loans from this agreement, earlier loans were resolved. All renewed loans are free from amortiza tion. The agreement running over three years with the opportunity to extend one year plus one year.
Joakim Nideborn took over as new CFO and member of HMS Group Management on December 1, 2017.
Based on the authorization of the Annual General Meeting on April 26, 2017, the Board of HMS Networks AB (publ) ("HMS") has decided to repurchase own shares in purpose to ensure HMS's commitments to de liver shares in the HMS share savings program. In total, 260,000 shares were acquired at a value of SEK 32 m during the fourth quarter of 2017. The total holding of own shares at the end of 2017 were 361,732 shares.
Life-Science
Manufacturing
Transport
This report has been prepared in accordance with International Fi nancial Reporting Standards (IFRS) and IAS 34, for Interim Report ing. Amendments to existing standards, new interpretations and new standards that came into effect as of January 1, 2017 did not affect the Groups reporting as of December 31, 2017.
As of 1 January 2018, HMS applies IFRS 9 Financial Instruments and IFRS 15 Revenue from Contracts with Customers. None of the new standards that have come into force on January 1, 2018 or later have been early adopted by the Group.
IFRS 9 "Financial Instruments" covers the classification, measure ment and recognition of financial assets and liabilities. It replaces the parts of IAS 39, which deals with classification and measure ment of financial instruments. The Group's analysis has shown that the implementation of IFRS 9 will have no material effect on the Group's financial reports. Accordingly, no transition effects will arise as a result of the implementation of this accounting standard.
IFRS 15 "Revenue from Contracts with Customer" contains a single model for recognizing revenue from customers that is not encom passed by other standards. In 2017, HMS conducted an analysis of the effects of the transition to IFRS 15, the analysis was completed in 2017. The Group's previous principles of revenue recognition essentially complies with IFRS 15.
IFRS 15 will have no significant impact on the Group's financial statements in the future, in addition to extended disclosures of rev enues. The Group will apply the new standard in its entirety as of January 1, 2018. Due to the non-material effects of the new stand ard, previous periods will not be restated.
IFRS 16 "Leases" replaces the previous IAS 17 Leases and enters into force as of January 1, 2019. The Group has started a project to evaluate the impact of the new standard on the Group's financial reports.
HMS continues to apply the same accounting principles and valua tion methods as those described in the most recent Annual Report. The parent company report is prepared in accordance with RFR2, accounting for legal entities, and the Swedish Annual Accounts Act and accounting principles and the valuation methods as those described in the most recent Annual Report.
HMS applies the European Securities and Market Au thority's (ESMA) guidelines on alternative key indicators (measures that are not defined in accordance with IFRS).
There are no events after the end of the year which have had a significant impact on the results or financial position of the company.
The HMS Group long term growth is supported by a continued inflow of Design-Wins, a broader product offering within the Industrial Internet of Things (IIoT) and Wireless, supplementary technology platforms from earlier acquisitions, an expansion of the HMS sales channels according to the existing strategy. The global economic development for the HMS market areas has stabilized during 2017. The impact that economic developments and currency fluctuations have on HMS are difficult to assess. HMS long-term goals are unchanged: Long-term growth on average 20 % per annum and an operating margin of above 20 %.
In accordance with principles adopted at HMS 2017 Annual General Meeting, the following persons have been assigned to be a part of the Nomination Committee: Jan Svensson, Investment AB Latour, representing 26 % of the shares, Staffan Dahlström representing 14 % of the shares, Evert Carlsson, Swedbank Robur Fonder AB representing 9 % of the shares, Per Trygg, SEB Fonder representing 9 % of the shares and Charlotte Brogren, Chairman of the Board. The Nomination Committee has appointed Jan Svensson as its Chairman.
The HMS Group is exposed to business and financial risks through its operations. These risks have been described at length in the Company's Annual Report 2016. In addition to the risks described in these documents, no additional significant risks have been identified.
Halmstad February 16, 2018
Staffan Dahlström Chief Executive Officer
Further information can be obtained by: CEO Staffan Dahlström, telephone +46 (0) 35 17 29 01 or CFO Joakim Nideborn, telephone +46 (0) 707 72 29 83
This report has not been audited
This information is such that HMS Networks AB (publ) is required to disclose in accordance with the Swedish Financial Instruments Trading Act and the Swedish Securities Market Act. The information was submitted for publication at 08.00 CET on February 16, 2018.
GROWTH STRATEGY – HMS's main focus is on organic growth. Expansion on existing markets will be through improved and extended product ranges, new technology, high level of service and new sales channels. A certain degree of growth can be through the selective acquisition of businesses that will be a valuable complement to the company's organic growth strategy.
DEVELOPMENT STRATEGY – The Company's core expertise is made up of an extensive understanding of industrial network communication.
PRODUCT STRATEGY – HMS markets five product lines, which to a certain degree are based on a common technical platform:
PRODUCTION STRATEGY – HMS maintains an in-house lowvolume production in Halmstad, Nivelles and Igualada. Volume production takes place in close partnership with subcontractors (in Europe and Asia) in order to achieve flexible costs and to make use of economies of scale.
MARKETING STRATEGY – The Anybus network interface cards are marketed and sold to players in industrial and infrastructure automation and Anybus Gateways to system integrators, machine manufacturers and end-users in industrial and infrastructure automation. IXXAT communication platforms are marketed and sold to machine builders of industrial applications, medical equipment and the automotive industry. eWON products are marketed and sold mainly through a network of distributors to a wide range of customers, from device manufacturers to owners of installations in need of remote monitoring and management. Intesis products are marketed and sold to manufacturers, system integrators and end users in the area of building automation.
SALES STRATEGY – Sales take place via the company's sales offices on defined key markets in 14 countries. Sales on the company's other markets, in some 50 countries, take place via agents and/or distributors.
HMS has designed its business models to fit each market and product line. For the Embedded market, most business is via framework agreements (i.e. design-wins). The sales cycle is relatively long and the design phase is performed in close cooperation with the customer. After that, there is steady revenue over a long period of time. For Gateways and eWON the business model is more traditional, with a short business cycle and manufacturing based on customer orders. IXXAT and Intesis uses a mix of the above mentioned business models.
| Q4 2017 |
Q4 2016 |
Q1-Q4 2017 |
Q1-Q4 2016 |
|---|---|---|---|
| 13.6 | 51.5 | 24.3 | 35.7 |
| 60.3 | 61.5 | 61.0 | 61.0 |
| 43 | 51 | 259 | 188 |
| 14.3 | 19.1 | 21.9 | 19.7 |
| 31 | 40 | 212 | 149 |
| 10.2 | 14.9 | 17.9 | 15.7 |
| - | - | 18.7 | 14.8 |
| - | - | 21.0 | 17.8 |
| - | - | 5.1 | 7.2 |
| - | - | 0.83 | 0.77 |
| - | - | 0.42 | 0.66 |
| - | - | 50.2 | 45.3 |
| 10,183 | 2,619 | 22,227 | 11,081 |
| 3,129 | 6,524 | 9,710 | 27,778 |
| -3,065 | -2,729 | -10,852 | -10,356 |
| -9,094 | -8,294 | -35,456 | -28,929 |
| 512 | 474 | 486 | 437 |
| 0.6 | 0.6 | 2.4 | 2.2 |
| 15.37 | 13.35 | 14.65 | 12.09 |
| 0.77 | 0.77 | 4.44 | 3.35 |
| 46,819 | 46,819 | 46,819 | 46,513 |
| 232 | 124 | 158 | 124 |
| 46,587 | 46,695 | 46,661 | 46,414 |
* Key ratios have been recalculated based on the 4:1 share split in the second quarter of 2017.
| SEK thousands | Q4 2017 |
Q4 2016 |
Q1-Q4 2017 |
Q1-Q4 2016 |
|---|---|---|---|---|
| Net sales | 301,312 | 265,226 | 1,183,290 | 952,282 |
| Cost of goods and services sold | -119,692 | -102,241 | -461,625 | -370,964 |
| Gross profit | 181,620 | 162,986 | 721,665 | 581,318 |
| Sales and marketing costs | -83,212 | -66,990 | -267,845 | -226,029 |
| Administrative expenses | -30,768 | -20,372 | -103,246 | -78,987 |
| Research and development costs | -36,384 | -32,324 | -140,269 | -119,079 |
| Other operating income | 12 | 0 | 2,469 | 0 |
| Other operating costs | -398 | -3,727 | -424 | -7,911 |
| Operating profit | 30,870 | 39,574 | 212,350 | 149,313 |
| Financial income | 0 | 0 | 768 | 419 |
| Financial costs | -5,908 | -3,924 | -17,957 | -9,999 |
| Profit before tax | 24,961 | 35,650 | 195,161 | 139,734 |
| Tax | -4,760 | -10,125 | -52,416 | -39,269 |
| Profit for the period | 20,201 | 25,525 | 142,745 | 100,466 |
| Earnings per share before dilution, SEK* | 0.43 | 0.55 | 3.06 | 2.16 |
| Earnings per share after dilution, SEK* | 0.43 | 0.54 | 3.04 | 2.16 |
* Key ratios have been recalculated based on the 4:1 share split in the second quarter of 2017.
| SEK thousands | Q4 2017 |
Q4 2016 |
Q1-Q4 2017 |
Q1-Q4 2016 |
|---|---|---|---|---|
| Profit for the period | 20,201 | 25,525 | 142,745 | 100,466 |
| Other comprehensive income | ||||
| Items that may be reclassified subsequently to income statement |
||||
| Cash flow hedges | -1,183 | 2,821 | -555 | 483 |
| Hedging of net investments | -8,234 | 2,414 | -7,360 | -9,620 |
| Translation differences | 28,262 | -3,962 | 26,661 | 21,662 |
| Income tax relating to components of other comprehensive income |
2,071 | -1,152 | 1,741 | 2,010 |
| Other comprehensive income for the period, net of tax | 20,916 | 121 | 20,487 | 14,535 |
| Total comprehensive income for the period | 41,117 | 25,646 | 163,232 | 115,001 |
| SEK thousands | Dec 31 2017 | Dec 31 2016 |
|---|---|---|
| ASSETS | ||
| Goodwill | 759,460 | 744,433 |
| Other intangible assets | 261,072 | 285,851 |
| Property, plant and equipment | 49,320 | 38,977 |
| Deferred tax assets | 1,301 | 1,440 |
| Other long term receivables | 1,178 | 2,174 |
| Total fixed assets | 1,072,331 | 1,072,874 |
| Inventories | 117,145 | 86,095 |
| Trade and other receivables | 132,863 | 123,170 |
| Other current receivables | 24,945 | 24,976 |
| Cash and cash equivalents | 90,982 | 99,036 |
| Total current assets | 365,936 | 333,278 |
| TOTAL ASSETS | 1,438,267 | 1,406,152 |
| EQUITY AND LIABILITIES | ||
| Equity | 721,295 | 636,444 |
| Liabilities | ||
| Non-current liabilities | 390,755 | 433,603 |
| Deferred income tax liabilities | 83,621 | 88,121 |
| Total non-current liabilities | 474,376 | 521,724 |
| Interest-bearing current liabilities | 3,775 | 86,095 |
| Trade payables | 98,708 | 64,275 |
| Other current liabilities | 140,112 | 97,615 |
| Total current liabilities | 242,596 | 247,984 |
| TOTAL EQUITY AND LIABILITIES | 1,438,267 | 1,406,152 |
| SEK thousands | Q4 2017 |
Q4 2016 |
Q1-Q4 2017 |
Q1-Q4 2016 |
|---|---|---|---|---|
| Cash flow from operating activities before changes in working capital |
27,204 | 39,981 | 201,256 | 149,530 |
| Cash flow from changes in working capital | 8,541 | -3,911 | 5,871 | 5,792 |
| Cash flow from operating activities | 35,745 | 36,070 | 207,127 | 155,322 |
| Cash flow from investing activities* | -6,619 | -9,400 | -25,075 | -308,236* |
| Cash flow from financing activities | -21,852 | -16,818 | -190,193 | 231,313 |
| Cash flow for the period | 7,273 | 9,852 | -8,141 | 78,399 |
| Cash and cash equivalents at beginning of the period | 82,257 | 89,554 | 99,036 | 19,503 |
| Translation differences in cash and cash equivalents | 1,452 | -370 | 87 | 1,135 |
| Cash and cash equivalents at end of period | 90,982 | 99,036 | 90,982 | 99,036 |
*The impact on the Group's cash and cash equivalents related to the acquisition of eWON amounted to SEK -152 m in Q1 2016, net of eWON's liquid funds. Cash and cash equivalents in eWON amounted to SEK 27 m.
The impact on the Group's cash and cash equivalents related to the acquisition of Intesis amounted to SEK -119 m in Q2 2016, net of Intesis' liquid funds. Cash and cash equivalents in Intesis amounted to SEK 29 m.
| Net sales per region SEK thousands |
Q4 2017 |
Q3 2017 |
Q2 2017 |
Q1 2017 |
Q4 2016 |
Q3 2016 |
Q2 2016 |
Q1 2016 |
|---|---|---|---|---|---|---|---|---|
| EMEA | 180,995 | 185,410 | 184,490 | 175,160 | 162,139 | 157,289 | 144,356 | 121,420 |
| Americas | 62,394 | 64,183 | 62,193 | 64,530 | 63,714 | 53,359 | 48,548 | 46,424 |
| Asia | 57,923 | 55,203 | 51,977 | 38,833 | 39,373 | 43,208 | 39,223 | 33,230 |
| Income statement SEK thousands |
Q4 2017 |
Q3 2017 |
Q2 2017 |
Q1 2017 |
Q4 2016 |
Q3 2016 |
Q2 2016 |
Q1 2016 |
| Net sales | 301,312 | 304,795 | 298,659 | 278,523 | 265,226 | 253,856 | 232,127 | 201,073 |
| Gross profit | 181,620 | 185,721 | 184,527 | 169,797 | 162,986 | 157,968 | 141,330 | 119,035 |
| Gross margin | 60.3% | 60.9% | 61.8% | 61.0% | 61.5% | 62.2% | 60.9% | 59.2% |
| Operating profit | 30,870 | 64,752 | 59,307 | 57,422 | 39,574 | 54,538 | 34,827 | 20,374 |
| Operating margin | 10.2% | 21.2% | 19.9% | 20.6% | 14.9% | 21.5% | 15.0% | 10.1% |
| Profit before tax | 24,961 | 58,499 | 55,715 | 55,985 | 35,650 | 50,953 | 35,977 | 17,154 |
Net sales by geographical area for 2017 are presented in the graph to the right.
Anybus represented 59 % (59) of the Group's total net sales, IXXAT 13 % (14), Remote Solutions 19 % (20) and Intesis 6 % (3).
All product groups are based on a common technology platform and are marketed and sold in the common sales channels. Therefore, no complete segment follow-up is reported.
| SEK thousands | Q4 2017 |
Q4 2016 |
Q1-Q4 2017 |
Q1-Q4 2016 |
|---|---|---|---|---|
| Net sales | 5,609 | 4,004 | 15,680 | 14,168 |
| Gross profit | 5,609 | 4,004 | 15,680 | 14,168 |
| Administrative expenses | -5,594 | -4,023 | -15,665 | -14,187 |
| Operating profit | 15 | -19 | 15 | -19 |
| Profit from participations in subsidiaries | 0 | 50,000 | 0 | 50,000 |
| Profit before tax | 15 | 49,981 | 15 | 49,981 |
| Tax | -12 | -49 | -12 | -49 |
| Profit for the year | 3 | 49,931 | 3 | 49,931 |
| SEK thousands | Dec 31 2017 | Dec 31 2016 |
|---|---|---|
| ASSETS | ||
| Participations in Group companies | 337,324 | 337,324 |
| Total financial assets | 337,324 | 337,324 |
| Other receivables | 230 | 255 |
| Cash and cash equivalents | 299 | 406 |
| Total current assets | 529 | 662 |
| TOTAL ASSETS | 337,853 | 337,986 |
| EQUITY AND LIABILITIES | ||
| Equity | 118,168 | 203,905 |
| Current liabilities | ||
| Accounts payables - trade | 1,147 | 50 |
| Liabilities to Group companies | 182,660 | 131,198 |
| Other current liabilities | 35,877 | 2,833 |
| Total current liabilities | 219,685 | 134,081 |
| TOTAL EQUITY AND LIABILITIES | 337,853 | 337,986 |
The number of registered shares, less repurchased own shares that are held as treasury shares.
Share of the profit after tax attributable to the parent company shareholders in relation to the average of Shareholder's equity.
Profit after financial income in relation to the average capital employed.
Operating income according to income statement.
Operating profit excluding depreciation and amortization of tangible and intangible assets.
Average equity attributable to the Parent Company's shareholders divided by the number of outstanding shares at the end of the period.
Long-term and short-term financial receivables plus cash and cash equivalents.
The average number of registered shares less repurchased own shares that are held as treasury shares.
Net sales in relation to average balance sheet total.
Cash flow from operating activities in relation to the average number of outstanding shares.
Long-term and current interest-bearing financial liabilities less financial assets.
Net debt in relation to Shareholders' equity.
Share of the profit after tax attributable to the parent company shareholders in relation to the average number of outstanding shares.
Share of the profit after tax attributable to the parent company shareholders in relation to the average number of outstanding shares plus an adjustment for the average number of shares that are added when converting the outstanding number of convertibles and options.
Current assets less cash and cash equivalents and current liabilities calculated on average values.
Operating profit in relation to net sales.
Shareholders' equity in relation to total assets.
Total assets less non-interest-bearing current liabilities, provisions, and total deferred tax liabilities.
HMS presents certain financial measures in the interim report that has not been defined in accordance with IFRS. The company considers that these measures provide valuable additional information for investors and the company's management, as they enable the evaluation of relevant trends and the company's performance. As not all companies calculate financial measures in the same way, these are not always comparable with the measures used by other companies. These financial measures should therefore not be viewed as substitutes for IFRS-defined measures, unless otherwise stated.
| EBITDA SEK thousands |
2017 Q4 |
2016 Q4 |
2017 Q1-Q4 |
2016 Q1-Q4 |
|---|---|---|---|---|
| Operating profit | 30,870 | 39,574 | 212,350 | 149,313 |
| Depreciation/amortization | 12,159 | 11,023 | 46,309 | 39,185 |
| EBITDA | 43,028 | 50,597 | 258,659 | 188,498 |
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.
"In a world where all devices are intelligent and networked… HMS is the leader in making industrial devices and systems communicate – for a more productive and sustainable world."
"We drive innovation in collaboration with partners and customers creating leading technologies, products and solutions bringing value to real-world challenges."
HMS Networks AB (publ) Org.Nr. 556661-8954 Box 4126 | 300 04 Halmstad | Sweden Tel: +46 35 172 900 Fax: +46 35 172 909 http://investors.hms.se
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