HMS Networks: Interim report January - June 2015

First six months

• Net sales for the first six months increased with 24 % reaching SEK 347 m (281), corresponding to a 13 % increase in local currencies
• Operating profit for the first six months reached SEK 56 m (42), equal to a 16 % (15) operating margin
• Order intake for the first half year increased with 15 % to SEK 345 m (301)
• Cash flow from operating activities amounted to SEK 37 m (38)
• Profit after taxes totalled SEK 37 m (28) and result per share amounted to SEK 3.26 (2.49)
• Net sales for the last twelve months amounted to SEK 655 m (546) corresponding to a 20 % increase. Operating result amounted to SEK 111 m (88) corresponding to a 17 % (16) operating margin.

Second quarter

• Net sales for the second quarter increased with 25 % reaching SEK 177 m (141), corresponding to a 15 % increase in local currencies
• Operating result reached SEK 24 m (21) corresponding to an operating margin of 14 % (15)
• Order intake during the second quarter was SEK 170 m (153)

Comment from the CEO

During the second quarter net sales reached 177 m SEK, a 25 % increase compared to the same quarter previous year and a new sales record for HMS. Net sales was positively affected by currency fluctuations mainly against the US dollar.

Europe and Asia continues to show a growth in sales numbers. At the same time the market in North America is weak mainly due to delays in customer projects and currency head wind on the export market for our US customers. All our product groups show a solid growth during the quarter. Anybus and IXXAT develops well with a healthy mix of repeat business and new customers. Netbiter growth rate continues on a good level but still below our expectations.

A continuing stable gross margin improves our operating profit but higher activity levels increases our expenses mainly within sales and marketing. Simultaneously the proportion of capitalized development costs goes down resulting in an operating margin of 14 % during the second quarter.

The final step in the integration of IXXAT Automation GmbH, which was acquired in 2013, is now completed. Sales and manufacturing are fully integrated in the HMS global organization. The Technology and Product development organization has changed its name to HMS Technology Center Ravensburg GmbH, an operation that moved in to newly built premises in Ravensburg in June. The IXXAT name will live on, with an ever stronger market position, as a product brand name within the HMS Group.

We are cautiously positive to the market development and we are optimistic about the conditions for a long term growth.

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 2015-07-22

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 370 people and reported sales of 63 million EUR in 2014. HMS is listed on the NASDAQ OMX in Stockholm in the category Mid Cap Information Technology.

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