HMS Networks AB (publ) (HMS) Q1 2025 Earnings Call

Investor webinar replay

Replay transcript excerpt

and doing more investments in becoming a manufacturing company again, we think that this is a midterm opportunity for HMS. But tariffs is complex, and I just want to show one picture that illustrate how we see this. And sorry for the bit crowded picture, but let's focus on the circle one here. Made in Europe, sold to North America. This is around 15% of our group sales of finished goods. And right now we see that there's a tariff of 10%. Some of our products is under this exempt rules as well, but it's still unclear with this custom codes and things like this. So that's one part. Second part, and the bullet with the two here, made in Europe that is sold, well, shipped to US, but it's for customers in Canada and Mexico. This is less than 5% of our revenue. Same here, 10% tariffs. But here we also have other opportunities to do direct shipment to Canada or Mexico. So all in all, you can see that made in Europe and for the U.S. market is some 10% of our revenue. Number three here, Asia and China to U.S. This is mainly components that we use in our red line or our North American manufacturing. Very high tariffs from China and then 10 percent from rest of them from Asia. And here we have some impact on the cost of the material. And number four here, this is what we sell from U.S., mainly Red Lion, to China. And this is less than half percent of our group sales. So that part of the business is really, really small. So our strategy right now, short term, is to make sure that whatever will be the cost increase of tariffs, we will pass that through customers to price increases. to cover that cost. And we also do some logistic flow adjustments to make sure that we navigate well in this. But also midterm, we think that we have a great opportunity with our own manufacturing in U...