First nine months
Net sales for the first nine months increased with 15 % reaching SEK 433 m (375), corresponding to an 11 % increase in local currencies
Operating profit reached SEK 80 m (73), equal to an 18 % (20) operating margin
Order intake for the first nine months increased to SEK 448 m (384) corresponding to an 13 % increase
Cash flow from operating activities amounted to SEK 67 m (65)
Profit after taxes totaled SEK 54 m (53) and result per share amounted to SEK 4.76 (4.70)
Net sales for the last twelve months amounted to SEK 559 m (463) corresponding to an 17 % increase in local currencies. Operating result amounted to SEK 93 m (79) corresponding to an 17 % (17) operating margin
Third quarter
Net sales for the third quarter reached SEK 152 m (140) corresponding to an 9 % increase. Operating result reached SEK 37 m (32)
Order intake for the third quarter was SEK 148 m (125)
Comments from the CEO
During the third quarter, HMS could present new record levels for net sales and operating result despite an increased precaution and hesitance in our market during recent months. Our Anybus products continue to perform well and sales are at a steady level. The IXXAT operations, acquired at the beginning of 2013, grows and develops well while our solution’s for Remote Management under the brand name Netbiter is not gaining the expected momentum although the product continues to generate interest from the market.
The strong development of the Japanese market continues. The important German market had a solid development during the first nine months although we see indications of a weaker development going forward. Our sales on the US market shows a slightly positive development.
Increasing sales volumes and a retained strong gross margin enable us to show a higher gross profit compared to the previous year. Despite increasing operating expenses, mainly due to a lower level of capitalized development expenses compared to 2013, we can present an improved operating result for the first nine months and for the third quarter.
After closing the third quarter, HMS acquired a product line for wireless communication from the Swiss company u-blox AG. This acquisition was an asset deal and HMS takes over product rights, Intellectual Property and existing customer base for these products. In 2013, this product line generated an annual turnover of approximately SEK 9 m. These products will be offered to the market under our Anybus brand. We see wireless communication as an important area for industrial applications going forward. Gaining acceptance for wireless communication within industrial applications is a long process but we can see progress in this field, primarily in the areas of diagnostics and monitoring. We can also see a major potential in the area of connecting existing equipment —retrofitting — in areas without existing infrastructure for communication. The increasing demand to connect more and more devices, driven by trends like “Internet of things” and “industry 4.0,” will increase the need for wireless connectivity and this product line will represent a foundation in our future investment in the area of wireless communication.
We assume a cautious approach to the market development and we consider the conditions for a long-term growth as positive.
Our focus remains to grow our three product brands Anybus, Netbiter and IXXAT. We continue to balance our long-term growth strategy with a restrictive approach to expenses and new resources. In the long term, we consider the market for industrial data communication and remote monitoring to be interesting growth areas and we continue to focus on our motto “Connecting devices”.
Staffan Dahlström
Chief Executive Officer
HMS Network Q3 Report 2014 (English)