HMS Networks: Interim report January - June 2014

First six months

Net sales for the first six months increased with 19 % reaching SEK 281 m (235), corresponding to a 16 % increase in local currenciesOperating profit reached SEK 42 m (41), equal to a 15 % (17) operating margin Order intake for the first half year increased with 31 % to SEK 338 m (259) corresponding to a 27 % increase in local currenciesCash flow from operating activities amounted to SEK 38 m (33)Profit after taxes totaled SEK 28 m (30) and result per share amounted to SEK 2.49 (2.63)Net sales for the last twelve months amounted to SEK 546 m (422) corresponding to a 30 % increase. Operating result amounted to SEK 88 m (70) corresponding to a 16 % (17) operating margin

Second quarter

Net sales for the second quarter reached SEK 141 m (128) corresponding to a 10 % increase. Operating result reached SEK 21 m (27) corresponding to an operating margin of 15 % (21) Order intake for the second quarter was SEK 170 m (140)

Comments from the CEO

We could see an improved stability during the second quarter primarily on our important German market but also in
Japan and to some extent in North America. With an 10 % organic growth this resulted in a new record level in sales, SEK 141 m.

During the first six months we have finalized several major Netbiter and Anybus development projects and we are now in an intense phase of product introductions. For our Anybus Embedded offer the Anybus-CBM product family is now shipping for the five most important network protocols. A new updated version of the Anybus X-gateway has been launched and we have also released a new and improved 3.0 version of the IXXAT CanAnalyzer software. The new Remote Access functionality for Netbiter is being well received on the market and during the second quarter a number of pilot installations were made with positive results. We still see delays in the ramp up of Netbiter sales in the Telecom segment, mainly due to long sales and qualification processes.

The completion of several major development projects in Halmstad means that we now are reallocating resources to customer projects based on our newly developed technology, something that will provide both financing for parts of the development work and future product sales. With a maintained strong gross margin during the first half year we can report a higher gross profit compared to the previous year. Increased operating expenses mainly due to a decreasing level of capitalization of development expenses means that the result is unchanged for the first six months and lower for the second quarter compared to the respective periods the previous year.

IXXAT Automation GmbH, which was acquired in February 2013, developed well during the first six months of 2014. Today the major part of the IXXAT product offer is shipped through the HMS sales channels and we can see increasing activities and cross selling of the IXXAT products. Simultaneously we continue to invest in the product development in Weingarten, Germany to develop the product- and service offering for our IXXAT brand within Machine Communication, Automotive and Safety.

We are cautiously positive to the market development and we are optimistic about the conditions for a long term growth. A good order intake indicates a continuing growth going forward.

Our focus remains to develop growth within our three product trademarks Anybus, Netbiter and IXXAT. We continue to balance our long term growth strategy with a restrictive view on expenses and new resources. Long term we consider the market for industrial data communication and remote monitoring to be interesting growth areas and we continue to focus around our motto "HMS-connecting devices".

Halmstad April 15, 2014

Staffan Dahlström
Chief Executive Officer

Further information can be obtained from: CEO Staffan Dahlström, telephone +46 (0) 35-17 29 01 or CFO Gunnar Högberg, telephone +46 (0) 35-17 29 95. See also: http://investors.hms.se

HMS Industrial Networks is the leading independent supplier of products for industrial communication including remote management. HMS develops and manufactures solutions for connecting automation devices and systems to industrial networks under the Netbiter, Anybus and IXXAT brands. Development and manufacturing take place at the headquarters in Halmstad, Sweden and in Weingarten, Germany. Local sales and support are handled by branch offices in China, Denmark, France, Germany, India, Italy, Japan, UK, and USA. HMS employs over 350 people and reported sales of 58 million EUR in 2013. HMS is listed on the Nasdaq OMX in Stockholm.

Q2 Report 2014


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Source: HMS Networks AB via Globenewswire
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