HMS Networks AB · OMXSTO:HMS
HMS Networks AB — Q4 2022 Earnings Presentation
25 slides from HMS Networks AB's earnings presentation, Jan 26, 2023
Slide 1: Q4 2022 Conference Call
Staffan Dahlström, CEO, Joakim Nideborn, CFO January 26, 2023
Slide 2: Summary and introduction
Summary and introduction Business update Financial results Q&A
Slide 3: Q4 2022 summary
Q4 2022 • Net sales 764 MSEK (571), +34% • Net sales 2,506 MSEK (1,972), +27% • Order intake 718 MSEK (699), +3% • Order intake 3,064 MSEK (2,538), +21% • EBIT 192 MSEK (109) • EBIT 653 MSEK (446) (Adj. 626 MSEK) • EBIT margin 25.1% (19.2) • EBIT margin 26.0% (22.6) (Adj. 25.0%) • Cash flow from ops
Slide 4: HMS at a glance
wms MS ata glance Our field: eee, Industrial ICT 5 ce At the forefront of +400,000 (Information and Smart Grid = technology machines connected inatl Communication to cloud systems ; Al Oo Technlogy) 750 eh \ Partners in over cmployees Ml 50 countries worldwide Officesinl7 Head office in Halmstad, Sw
Slide 5: HMS makes products which enable machines to communicate
HMS makes products which enable machines to communicate
Slide 6: Manufacturing, Transportation & Infrastructure, Power & Energy
Manufacturing Transportation & Infrastructure Power & Energy Air, roads, railways, ports, Commercial buildings, industrial Factory automation, marine, utilities, data centers, Power generation, power buildings, hotels, offices, Process automation telecom, material handling, distribution, power manag
Slide 7: Makers of industrial equipment / Users of automation systems
Makers of industrial equipment Users of automation systems
Slide 8: Makers of industrial equipment / Users of automation systems
Device Machine End users & manufacturers builders System integrators 44% of revenue 27% of revenue Revenue 29% 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 9: Business update
Summary and introduction Business update Financial results Q&A
Slide 10: Design wins: terminated, new wins and active base
3.0% CAGR+6.5% 1,820 1,790 1,843 1,797 1,693 165 174 146 1,591 199 1,508 177 217 1,381 203 1,241 195 1,061 979 180 146 119 1,797 1,820 1,693 1,790 1,508 1,591 1,381 1,241 979 1,061 909 -49 -64 -55 -76 -134 -75 -95 -142 -93 -204 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Share of Group sa
Slide 11: Closing the year with a record quarter in sales and order intake
• Closing the year with a record quarter in sales and order intake at stable levels • Europe and Asia still holding up well in both sales and orders – some signs of slowdown in Americas • Component shortage is improving and need for spot purchases are declining slowly • HMS improving delivery capabi
Slide 12: HMS closes a fantastic 2022 with record sales in all markets
• HMS closes a fantastic 2022 with record sales in all markets • The control centric Anybus Embedded offer has been the main driver of sales • The year continued on the same trend as in 2021 with major challenges in sourcing – leading to continued long lead times and several spot purchases of compon
Slide 13: Annual net sales, MSEK
ANNUAL NET SALES, MSEK Net sales 3 000 2 506 2 500 2 000 1 972 1 519 1 500 1 467 1 366 1 183 1 000 952 702 589 501 500 345 384 382 270 317 245 150 180 227 63 86 84 114 1 1 1 1 1 1 2 5 5 19 22 33 0 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 2
Slide 14: Financial results
Summary and introduction Business update Financial results Q&A
Slide 15: Order intake, MSEK
ORDER INTAKE, MSEK HIGHLIGHTS +3% 857 • Q4 2022: 718 MSEK (699), +3% (organic -1%) 900 3 250 815 3 000 800 718 2 750 • FY 2022: 3,064 MSEK (2,538), +21% (organic 10%) 699 675 700 669 2 500 600 565 606 2 250 • Book-to-bill of 0.94 in Q4, 1.22 FY 2 000 500 401 408 1 750 • Q4: Declining order trend in
Slide 16: Order intake: FX revaluation, boost and real demand
Order Intake, MSEK 857 815 50 718 699 250 675 669 150 605 50 85 565 140 200 50 65 100 607 615 575 633 500 505 529 499 Q121 Q221 Q321 Q421 Q122 Q222 Q322 Q422 FX revaluation of already existing order book "Boost" Real demand Accumulated boost orders since 2021 above 1 BSEK
Slide 17: Net sales, MSEK
NET SALES, MSEK HIGHLIGHTS +34% 800 764 2 600 • Q4 2022: 764 MSEK (571), +34% (organic 22%) 2 400 700 624 2 200 • FY 2022: 2,506 MSEK (1,972), +27% (organic +17%) 601 600 571 2 000 474 472 517 1 800 • Q4: Delivery of strong backlog of Embedded in Asia and Europe driving 500 455 1 600 405 growth 361
Slide 18: Order backlog and orders for delivery
ORDER BACKLOG, MSEK ORDERS FOR DELIVERY > 3 MONTHS 1 500 1 453 60% 59% 59% 59% 1 408 1 407 56% 49% 6% 12% 13% 12% 1 250 1 194 50% +63% 1 000 40% 36% 864 746 750 30% 28% 535 50% 47% 47% 20% 46% 500 20% 393 261 281 243 238 264 250 10% 0 0% Q419 Q120 Q220 Q320 Q420 Q121 Q221 Q321 Q421 Q122 Q222 Q322 Q4
Slide 19: Sales per region Q4 2022
Sales per region Q4 2022, MSEK EMEA • Net Sales 486 MSEK (349) • 64% of Group sales (61%) • Germany represents 36% Americas 19% 64% • Net Sales 148 MSEK (136) • 19% of Group sales (24%) 17% • USA represents 71% APAC • Net Sales 130 MSEK (86) • 17% of Group sales (15%) • Japan represents 33% • China
Slide 20: EBIT, MSEK
EBIT, MSEK Comments on Q4 results and FY +76% • EBIT Q4: 192 MSEK (109), 25.1% (19.2) margin 200 192 700 • Adj. EBIT FY 2022: 626 MSEK (446) 25.0% (22.6) margin 190 179 650 180 600 • Q4 gross margin of 63.6% (60.8) 170 160 550 • Spot purchases slowly declining 150 143 139 500 140 • Price increases m
Slide 21: EPS, SEK
EPS, SEK Comments on Q4 EPS +76% • EPS of 3.25 SEK (1.85) 3.4 3.25 11 • Net financials of -11 MSEK (5) primarily FX re- 3.2 valuation of option debt and earn-out 10 3.0 2.90 • The board proposes a dividend of 4.00 SEK (3.00) for 2.8 9 2022 2.6 2.41 8 2.4 2.33 2.2 7 2.02 0.57 2.0 1.93 1.81 1.85 1.8 6
Slide 22: Cash flow, MSEK
CASH FLOW, MSEK Comments on Q4 Cash Flow +70% • Cash flow from operating activities of 177 MSEK (104) 180 177 125% • Changes in NWC → -31 MSEK (-24) 170 160 • Inventory buildup of 34 MSEK 150 148 140 100% • NWC in % of sales 8.7% (6.8) 132 130 126 120 115 116 118 110 104 75% 100 90 83 80 80 Comments
Slide 23: Net debt and leverage
Net debt and leverage, MSEK Comments on Net debt and leverage 500 1.8 • Net debt / EBITDA of 0.39 (0.64) 416 347 299 1.7 • Net debt / Equity: 0.19 (0.30) 450 84 78 410 415 1.6 400 390 80 1.5 80 350 1.4 111 163 300 1.3 300 263 95 1.2 250 1.1 198 155 200 103 97 1.0 390 391 161 365 0.9 150 279 101 0.8
Slide 24: Order intake holds up well; outlook and summary
• Order intake holds up well in Q4 and customers remain positive, at the same time leading indicators shows coming slowdown • Positive long-term market drivers, but short-term uncertainty – HMS is prepared for continued growth, but stays agile to adopt to potential slowdowns later in 2023 • Record y
Slide 25: Questions?
Questions? Ss aE, <A SSS