Hms Networks Ab · OMXSTO:HMS
Hms Networks Ab — Q3 2024 Earnings Presentation
26 slides from Hms Networks Ab's earnings presentation, Oct 17, 2024
Slide 1: HMS Networks Q3 2024 presentation
HMS Networks Q3 2024 presentation Staffan Dahlström, CEO, Joakim Nideborn, CFO October 18, 2024 Hardware Meets Software
Slide 2: Agenda
Agenda Business update HMS new organization Financial results Q&A
Slide 3: Financial summary of Q3 2024 and YTD
Financial summary of Q3 2024 and YTD Q3 summary YTD • Net sales 792 MSEK (789), +0%, organic -30% • Net sales 2,253 MSEK (2,265), -1%, organic -24% • Order intake 677 MSEK (492), +37%, organic -8% • Order intake 1,918 MSEK (1,877), +2%, organic -23% • Adjusted EBIT 194 MSEK (226) • Adjusted EBIT 503
Slide 4: Business update – third quarter 2024
Business update – third quarter 2024 • North America: Challenging quarter for embedded business and Red Lion • Europe: Germany continues to be slow driven by weak automotive market • Asia: China is developing well and important market in Japan still hesitant • Good development of new design wins • N
Slide 5: Overview PEAK-System Technik GmbH
Overview PEAK-System Technik GmbH PEAK-System – a German based company with a complete product portfolio, global partnerships and profitable growth KEY OFFERING COMPANY HIGHLIGHTS APPLICATIONS Software & Tools sales enabler to § EV/CARS UTILITY VEHICLES mobility related end customers 1999 ≈ 50 2 Fou
Slide 6: Financials and next steps
Financials and next steps FINANCIALS • LTM Sept 24 Net Sales of 25 MEUR • LTM Sept 24 Adj. EBITDA-margin of 30% • Enterprise Value of 69 MEUR • LTM EV/EBITDA multiple of 9.2x • Transaction and integration costs expected to 10 MSEK NEXT STEPS • Expected closing on November 1st • PEAK-System becomes p
Slide 7: Agenda
Agenda Business update HMS new organization Financial results Q&A
Slide 8: A new growth journey for HMS
A new growth journey for HMS HMS current operating model Positives with existing model • Served HMS growth journey well over the last 7 years Customers • Presence in some 20 markets with own staff, promoting HMS’ full offer APAC GC CE NORTH AM • Has brough HMS close to customers in all key markets M
Slide 9: A new growth journey for HMS
A new growth journey for HMS HMS current operating model HMS new operating model – three divisions Customers Customers Market Units APAC GC CE NORTH AM INDUSTRIAL INDUSTRIAL NEW DATA NETWORK INDUSTRIES SOLUTIONS TECHNOLOGY ANYBUS Business Units Red Lion EWON INTESIS IXXAT Shared services Supply chai
Slide 10: Why do we change the organization?
Why do we change the organization? An organization for future growth: Customers Customers Create customer-focused organization from sales Market Units APAC to GC R&D CE NORTH AM INDUSTRIAL INDUSTRIAL NEW DATA NETWORK INDUSTRIES SOLUTIONS TECHNOLOGY ANYBUS Business Units Red Lion EWON Reduce complexi
Slide 11: Our business – Industrial ICT – in three divisions
Our business – Industrial ICT – in three divisions 44% 34% 22% Industrial Data Solutions Industrial Network Technology New Industries (IDS) (INT) (NI) Solutions to connect, secure, diagnose and Technology for communication, control and Industrial communication for niche applications visualize data i
Slide 12: Agenda
Agenda Business update HMS new organization Financial results Q&A
Slide 13: Order intake of 677 MSEK in Q3 2024, +37%
Order intake of 677 MSEK in Q3 2024, +37% Order Intake, MSEK Analysis and conclusions • Q3 2024: 677 MSEK (492), +37% (organic -8%) 1 000 +37% 4 000 857 815 • YTD: 1,918 MSEK (1,877), +2% (organic -23%) 800 769 699 718 682 703 3 000 675 677 253 600 492 426 473 244 2 000 • Continued soft underlying m
Slide 14: Continued de-stocking impacting order intake in Q3
Continued de-stocking impacting order intake in Q3 Normalized order intake excluding Red Lion, MSEK 857 815 50 718 703 669 699 250 675 682 35 150 492 473 605 50 85 426 18 516 565 140 200 50 433 65 100 633 682 698 642 635 607 615 575 618 625 500 505 529 499 533 -30 -42 -9 -150 -100 -100 -150 -180 Q12
Slide 15: Net Sales 792 MSEK in Q3 2024, +0%
Net Sales 792 MSEK in Q3 2024, +0% Net Sales, MSEK Analysis and conclusions 0% • Q3 2024: 792 MSEK (789), +0% (organic -30%) 1 000 5 000 764 773 789 845 792 • YTD: 2,253 MSEK (2,265), -1% (organic -24%) 800 760 4 000 703 571 601 624 616 283 244 • Book-to-bill excluding FX effects of 0.87 in Q3 600 5
Slide 16: Red Lion in Q3 – integration at full speed
Red Lion in Q3 – integration at full speed Red Lion Net Sales & Order intake, MSEK Analysis and conclusions • Net Sales decreased 26% compared to Q3 2023 to 244 MSEK (328) 500 • Order intake decreased 1% to 244 MSEK (247) 400 371 -26% 356 328 • Adjusted EBIT in Q3 2024 of 54 MSEK (80), corresponding
Slide 17: Backlog of 605 MSEK, 17% of R12 Net Sales
Backlog of 605 MSEK, 17% 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 1 106 1 000 864 746 778 713 641 605 535 500 393 281 243 238 264 0 Q120 Q220 Q320 Q420 Q121 Q221 Q321 Q421 Q122 Q222 Q322 Q422 Q123 Q223 Q323 Q423 Q124 Q224 Q32
Slide 18: Q3 2024: Sales per region
Q3 2024: Sales per region Sales per region Q3 2024, MSEK 42% 44% 14% EMEA and Americas now of similar size as expected after finalization of the Red Lion acquisition
Slide 19: Q3 2024: Adjusted EBIT 194 MSEK (24.5%)
Q3 2024: Adjusted EBIT 194 MSEK (24.5%) Adjusted EBIT, MSEK Analysis and conclusions • Adjusted EBIT Q3: 194 MSEK (226) -14% • Adjusted EBIT margin Q3: 24.5% (28.7) 250 800 216 226 4 • Adjusted EBIT YTD 2024: 503 MSEK (596) 4 700 200 197 196 194 • Adjusted EBIT margin : 22.3% (26.3) 185 6 4 6 23 600
Slide 20: New organization from 2025
New organization from 2025 New organization 2025 Impact related to new organization • HMS business will be managed in three Divisions from • Around 40 positions will be redundant, mainly related to 2025: management and positions within sales and marketing • Industrial Data Solutions (IDS) • Yearly c
Slide 21: Q3 2024: Adjusted EPS 2.51 SEK
Q3 2024: Adjusted EPS 2.51 SEK Adjusted EPS, SEK Analysis and conclusions Q3: -33% • Adjusted EPS of 2.51 SEK (3.77) 4.00 3.79 3.77 14 13 • Net financials of -45 MSEK (-2) mainly 3.50 3.37 12 related to interest cost of -36 MSEK 3.02 2.94 11 3.00 10 2.52 2.56 2.51 YTD: 2.45 2.43 9 2.50 2.12 8 • Adju
Slide 22: Q3 2024: Cash flow from ops. of 205 MSEK
Q3 2024: Cash flow from ops. of 205 MSEK Cash flow, MSEK Analysis and conclusions Q3: 250 125% • Cash flow from ops. of 205 MSEK (167) +22% • Changes in NWC → 69 MSEK (-78) 205 200 100% • Inventory levels continue to decline by 79 177 167 MSEK 155 152 150 75% 118 119 YTD: 104 100 50% • Cash flow fro
Slide 23: Q3 2024: Net Debt of 2,571 MSEK
Q3 2024: Net Debt of 2,571 MSEK Net debt and leverage, MSEK Analysis and conclusions 2 800 2 760 3.0 • Net debt / Adj. EBITDA including Red Lion 2 700 2.8 proforma: 2.79 (0.43) 255 2 571 2.6 2 600 • Net debt pre IFRS 16 / Adj. EBITDA incl Red 2 500 2.4 133 248 Lion proforma: 2.72 2 400 2.2 2 300 2.0
Slide 24: Summary of Q3 2024
Summary of Q3 2024 • Solid gross margins and cost control Solid profitability in a continued • Weak market demand across main markets challenging market • Expected to see gradual improvement in 2025 • Three Divisions to reduce complexity and create focus New organization to strengthen on similar cus
Slide 25: Agenda
Agenda Business update HMS new organization Financial results Q&A
Slide 26: Questions?
Questions’? Ss aE, <A SSS