HMS Networks AB · OMXSTO:HMS
HMS Networks AB — Q3 2022 Earnings Presentation
21 slides from HMS Networks AB's earnings presentation, Oct 19, 2022
Slide 1: Q3 2022 Conference Call
Staffan Dahlström, CEO, Joakim Nideborn, CFO October 19, 2022
Slide 2: Summary and introduction
Summary and introduction Business update Financial results Q&A
Slide 3: Q3 and YTD 2022 summary
Q3 YTD • Net sales 624 MSEK (472), +32% • Net sales 1,742 MSEK (1,401), +24% • Order intake 675 MSEK (669), +1% • Order intake 2,346 MSEK (1,839), +28% • EBIT 179 MSEK (101) • EBIT 461 MSEK (336) (Adj. 434 MSEK) • EBIT margin 28.7% (21.5) • EBIT margin 26.5% (24.0) (Adj. 24.9%) • Cash flow from ops.
Slide 4: HMS - Hardware Meets Software
nis HMS - Hardware Meets Software AIT ise, 3 Anyous" Ewon intesis’ Ixxat’ WEBfactory PROCENTEC owasys° Member of the HMS grou Member of the HMS group. Member ofthe WMS group
Slide 5: Makers of industrial equipment, Users of automation systems
Makers of industrial equipment Users of automation systems
Slide 6: Makers of industrial equipment, Users of automation systems
Device Machine End users & manufacturers builders System integrators 43% of revenue 35% of revenue Revenue 22% of revenue Specified as standard Project Sales Design Wins or Business model Product Sales option in BOM Direct Sales & Traditional E-Commerce Direct Sales Distribution Go-to-market Distrib
Slide 7: Vision and mission 2025 Group objectives
Vision and mission 2025 Group objectives +0 Net Positive in CO2 emissions Environment Vision +25 Staff NPS Staff & Customer NPS Customers “HMS enables valuable data and insights allowing our customers to increase productivity and 3.14 BSEK Mission sustainability” Financial 20% EBIT
Slide 8: Business update
Summary and introduction Business update Financial results Q&A
Slide 9: Business update: record sales in the third quarter
• With continued solid demand, improved component availability and beneficial currency situation, sales reached record levels in the third quarter • Still no signs of market slowdown • Customer’s inventory build-up pace is significantly reduced – partly driven by HMS’ improved delivery capacity – bo
Slide 10: Financial results
Summary and introduction Business update Financial results Q&A
Slide 11: Order intake
ORDER INTAKE, MSEK HIGHLIGHTS +1% 857 • Q3 2022: 675 MSEK (669), +1% (organic -11%) 900 3 250 815 3 000 800 2 750 • YTD 2022: 2,346 MSEK (1,839), +28% (organic +14%) 699 675 700 669 2 500 600 565 606 2 250 • Boost orders dropped from previous high levels to ~50 MSEK in Q3 2 000 500 401 408 1 750 • F
Slide 12: Underlying demand still holds up well
Order Intake, MSEK 857 815 50 699 250 675 669 150 606 50 565 140 200 50 65 100 607 615 575 500 506 529 499 Q121 Q221 Q321 Q421 Q122 Q222 Q322 FX revaluation of already existing order book "Boost" Real demand Underlying demand still holds up well despite worrying macro signals. HMS now has a total of
Slide 13: Order backlog
ORDER BACKLOG, MSEK ORDERS FOR DELIVERY > 3 MONTHS 1 500 1 453 70% 1 408 61% 61% 61% 59% 59% 59% 59% 59% 1 250 1 194 60% 57% 56% 10% 13% +95% 6% 6% 12% 14% 12% 11% 13% 11% 50% 49% 1 000 46% 864 39% 40% 37% 36% 746 35% 750 30% 28% 535 25% 51% 51% 50% 500 20% 20% 47% 47% 47% 49% 48% 46% 48% 393 20% 16
Slide 14: Net sales
NET SALES, MSEK HIGHLIGHTS +32% 700 2 400 • Q3 2022: 624 MSEK (472), +32% (organic +23%) 601 624 2 200 600 571 2 000 • Net Sales YTD: 1,742 MSEK (1,401), +24% (organic +15%) 517 474 472 1 800 500 455 • Improved component availability, strong demand and currency situation 405 1 600 400 346 361 355 34
Slide 15: Sales per region Q3 2022
Sales per region Q3 2022, MSEK EMEA • Net Sales 378 MSEK (296) • 61% of Group sales (63%) • Germany represents 36% Americas 20% 61% • Net Sales 127 MSEK (96) • 20% of Group sales (20%) 19% • USA represents 66% APAC • Net Sales 119 MSEK (80) • 19% of Group sales (17%) • Japan represents 43% • China 2
Slide 16: EBIT
EBIT, MSEK Comments on Q3 results +77% • EBIT Q3: 179 MSEK (101), 28.7% (21.5) margin 179 180 600 • Adj. EBIT YTD: 434 MSEK (336) 24.9% (24.0) margin 170 550 160 150 143 500 139 140 • Q3 gross margin of 63.6% (61.4) 450 130 121 27 • Price increases now making up for COGS increase 120 114 400 109 110
Slide 17: EPS
EPS, SEK Comments on Q3 EPS +60% • EPS of 2.90 SEK (1.81) 3.0 2.90 9.5 • Net financials of -11 MSEK (1) as the weakening of 9.0 the SEK gave negative effects on option debt and 8.5 additional purchase price reservations 2.5 2.41 8.0 2.33 7.5 7.0 2.02 0.57 2.0 1.93 6.5 1.81 1.85 6.0 5.5 1.46* 5.0 1.5
Slide 18: Cash flow
CASH FLOW, MSEK Comments on Q3 Cash Flow • Cash flow from operating activities of 118 MSEK (148) 160 -20% 125% • Changes in NWC → -52 MSEK (20) 150 148 140 • Inventory buildup of 50 MSEK 132 130 126 100% • AR buildup of 18 MSEK 120 116 118 115 110 • NWC in % of sales 7.7% (7.4) 104 100 75% 90 83 80
Slide 19: Net debt and leverage
Net debt and leverage, MSEK Comments on Net debt and leverage 500 1.8 • Net debt / EBITDA of 0.62 (0.81) 416 347 299 1.7 • Net debt / Equity: 0.29 (0.38) 450 84 78 410 415 1.6 390 80 400 1.5 • Increased Net debt IFRS 16 refers to new rental 80 agreements 350 1.4 111 163 1.3 300 263 95 1.2 250 1.1 10
Slide 20: Summary and outlook
• Order intake softer in line with HMS expectations due to large orderbook and previous major “boost orders” • Component availability situation improving • Customers remain positive, but leading indicators (PMI) shows slowdown • Improved gross margins • Expanded inventory to improve delivery capacit
Slide 21: Questions?
Questions? Ss aE, <A SSS