Hms Networks Ab · OMXSTO:HMS
Hms Networks Ab — Q2 2024 Earnings Presentation
26 slides from Hms Networks Ab's earnings presentation, Jul 11, 2024
Slide 1: HMS Networks Q2 2024 presentation
HMS Networks Q2 2024 presentation Staffan Dahlström, CEO, Joakim Nideborn, CFO July 12, 2024 Hardware Meets Software™
Slide 2: Agenda
Agenda Summary and introduction Business update Financial results Q&A
Slide 3: Financial summary of Q2 2024 and YTD
Financial summary of Q2 2024 and YTD Q2 summary YTD • Net sales 845 MSEK (703), +20%, organic -20% • Net sales 1,461 MSEK (1,476), -1%, organic -20% • Order intake 769 MSEK (703), +9%, organic -22% • Order intake 1,242 MSEK (1,384), -10%, organic -29% • Adjusted EBIT 172 MSEK (154) • Adjusted EBIT 3
Slide 4: HMS at a glance
+9,000,000 devices connected to networks 1200 employees worldwide +500,000 machines connected to cloud systems 33% in RED 33% in Sales Our field: Industrial ICT 5 cl (Information and Smart Grid = Communication Technlogy) Al | oT reales Offices in 18 countries Partners in 50 EBIT margin 2023 At the f
Slide 5: HMS Playing Field - Overall Market Segments
HMS Playing Field - Overall Market Segments Industrial Building Automation Automation Transportation & Manufacturing Power & Energy Infrastructure Ports, Marine, Power Generation, Commercial buildings, Factory Automation, Utilities, Data Centers, Power Distribution, Industrial buildings, Process Aut
Slide 6: Two main customer groups – Makers and Users
Two main customer groups – Makers and Users Makers of industrial equipment Users of automation systems
Slide 7: Different market channels for Makers and Users
Different market channels for Makers and Users Makers of industrial equipment Users of automation systems Device Machine End users & manufacturers builders System integrators 44% of revenue 25% of revenue Revenue 31% of revenue Specified as standard Project Sales Design Wins or Business model Produc
Slide 8: HMS Strategic framework until 2025
HMS Strategic framework until 2025 Organic growth M&A People Planet Organic growth M&A People Operational Efficiency Sales Excellence Planet Operational Efficiency Sales Excellence
Slide 9: HMS Strategic Targets 2025
HMS Strategic Targets 2025 Science The HMS Effect yf, based foam x3 eerey targets by 2030 lu z x i ral 7H +50 Oye Customer Female managers NPS sr Won | ] Gf SEK » by 2025 PEOPLE GROWTH
Slide 10: Agenda
Agenda Summary and introduction Business update Financial results Q&A
Slide 11: Business update – second quarter 2024
Business update – second quarter 2024 • North America shows improvement compared to the temporary decline in Q1 2024 • Europe in line with previous quarter – slower recovery than expected • China market developing well, Japan shows small signs of improvement • Launch of Anybus Wireless Bolt 5G, HMS
Slide 12: Agenda
Agenda Summary and introduction Business update Financial results Q&A
Slide 13: Order intake of 769 MSEK in Q2 2024, +9%
Order intake of 769 MSEK in Q2 2024, +9% Order Intake, MSEK Analysis and conclusions • Q2 2024: 769 MSEK (703), +9% (organic -22%) 1 000 +9% 4 000 857 815 • YTD: 1,242 MSEK (1,384), -10% (organic -29%) 800 769 699 718 703 3 000 669 675 682 • Sequential organic growth of 9% 253 600 492 426 473 2 000
Slide 14: Continued de-stocking impacting order intake in Q2
Continued de-stocking impacting order intake in Q2 Normalized order intake excluding Red Lion, MSEK 857 815 50 718 703 669 699 250 675 682 35 492 473 150 605 50 85 0 426 18 516 565 140 200 50 65 100 633 682 698 642 635 607 615 575 618 625 500 505 529 499 -30 -42 -150 -180 -100 -9 -150 Q121 Q221 Q321
Slide 15: Order intake Q2 2023 – Q2 2024
Order intake Q2 2023 – Q2 2024 Order intake excluding Red Lion, MSEK -27% -10% 703 30 35 698 73 625 100 516 9 Order Destocking Revaluation Normalized Underlying Normalized Destocking Revaluation Reported Order intake Q223 backlog OI Q223 market decline OI Q224 in Q224 backlog intake Q224
Slide 16: Net Sales 845 MSEK in Q2 2024, +20%
Net Sales 845 MSEK in Q2 2024, +20% Net Sales, MSEK Analysis and conclusions +20% • Q2 2024: 845 MSEK (703), +20% (organic -20%) 1 000 5 000 845 • YTD: 1,461 MSEK (1,476), -1% (organic -20%) 764 773 789 760 800 4 000 703 571 601 624 616 283 • Book-to-bill excluding FX effects of 0.92 in Q2 600 517 3
Slide 17: Red Lion in Q2
Red Lion in Q2 Red Lion Net Sales & Order intake, MSEK Analysis and conclusions • Net Sales decreased 21% compared to Q2 2023 to 283 MSEK (356) 600 • Order intake decreased 8% to 253 MSEK (276) -21% • Adjusted EBIT in Q2 2024 of 52 MSEK (80), corresponding to a margin 400 371 356 328 of 18.4% (22.4)
Slide 18: Backlog of 713 MSEK, 18% of R12 Net Sales
Backlog of 713 MSEK, 18% of R12 Net Sales Backlog, 2020 – 2024, MSEK 4 000 3 500 3 000 2 500 2 000 1 500 1 408 1 453 1 407 1 316 1 316 1 195 +11% 1 106 1 000 864 746 778 713 641 535 115 500 393 281 243 238 264 597 0 Q120 Q220 Q320 Q420 Q121 Q221 Q321 Q421 Q122 Q222 Q322 Q422 Q123 Q223 Q323 Q423 Q124
Slide 19: Q2 2024: Sales per region
Q2 2024: Sales per region Sales per region Q2 2024, MSEK 42% 44% 14% EMEA and Americas now of similar size as expected after finalization of the Red Lion acquisition
Slide 20: Q2 2024: Adjusted EBIT 172 MSEK (20.4%)
Q2 2024: Adjusted EBIT 172 MSEK (20.4%) Adjusted EBIT, MSEK Analysis and conclusions • Adjusted EBIT Q2: 172 MSEK (154) +12% • Adjusted EBIT margin Q2: 20.4% (21.9) 250 800 226 • Adjusted EBIT YTD 2024: 309 MSEK (370) 216 4 4 700 197 196 • Adjusted EBIT margin : 21.1% (25.0) 200 6 185 6 23 600 172 4
Slide 21: Red Lion and restructuring impact on Q2 cost
Red Lion and restructuring impact on Q2 cost Impact from Red Lion acquisition Impact from the restructuring program • Amortizations of excess values: 24 MSEK The restructuring program initiated in early Q2 has been completed with the following results: • Transaction and integration costs: 15 MSEK (Y
Slide 22: Q2 2024: Adjusted EPS 2.12 SEK
Q2 2024: Adjusted EPS 2.12 SEK Adjusted EPS, SEK Analysis and conclusions Q2: -17% • Adjusted EPS of 2.12 SEK (2.56) 4.00 3.79 3.77 14 13 • Net financials of -61 MSEK (-7) mainly 3.50 3.37 12 related to interest cost of 43 MSEK related to 3.02 2.94 11 the acquisition of Red Lion 3.00 10 • Dividend o
Slide 23: Q2 2024: Cash flow from ops. of 152 MSEK
Q2 2024: Cash flow from ops. of 152 MSEK Cash flow, MSEK Analysis and conclusions Q2: 200 125% • Cash flow from ops. of 152 MSEK (78) 177 +95% • Changes in NWC 18 MSEK (-56) 167 155 100% 148 152 • Inventory levels starting to decline 150 118 119 75% 104 YTD: 100 80 78 • Cash flow from operating ac
Slide 24: Q2 2024: Net Debt of 2,760 MSEK
Q2 2024: Net Debt of 2,760 MSEK Net debt and leverage, MSEK Analysis and conclusions 2 800 2 760 3.4 • Net debt / Adj. EBITDA: 3.05 (0.64) 3.2 2 700 • Net debt pre IFRS 16 / Adj. EBITDA: 2.58 255 3.0 2 600 2.8 • Net debt / Equity: 0.85 (0.32) 2 500 2.6 133 2.4 2 400 540 2.2 500 2.0 299 410 415 383 3
Slide 25: Agenda
Agenda Summary and introduction Business update Financial results Q&A
Slide 26: Questions?
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