HMS Q4 Report and Year-End Report 05

Yearly

Net sales for the full year 2015 increased by 19 % reaching SEK 702 m (589), corresponding to a 10 % increase in local currencies. The revaluation of the Swedish currency had a positive impact of SEK 51 m on net sales.

Operating profit reached SEK 102 m (98) corresponding to a 14 % (17) operating margin.

Order intake for the year increased to SEK 682 m (611), corresponding to a 3 % increase in local currencies.

Cash flow from operating activities amounted to SEK 90 m (93).

Profit after taxes totalled SEK 60 m (63) and the result per share amounted to SEK 5.33 (5.59).

The Board of Directors propose a dividend to the amount of SEK 2.50 (2.50).

Fourth quarter

Net sales for the fourth quarter reached SEK 175 m (156) corresponding to an 8 % increase in local currencies.

Operating result reached SEK 14 m (18) corresponding to an 8 % (12) EBIT margin.

Order intake during the fourth quarter was SEK 157 m (162) corresponding to a 3 % decrease.

Subsequent events

HMS signs an agreement to acquire the Belgian company eWON SA.

Comment from the CEO With continued growth in the last quarter, we sum up 2015 with a turnover of 702 million SEK, a growth of 19% compared to the previous year. During 2015, we had a tailwind from the weakened Swedish krona but also in local currencies, we had double-digit growth rates. As usual, the fourth quarter brought high costs for HMS with a large number of marketing activities. Order intake for the final quarter was weaker than expected.

Furthermore, the continually reduced activation of the company's development costs had a negative effect on the results. Geographically, Germany, Scandinavia and Japan have shown steady growth during the year, while the US market has continued to be relatively weak.

Product-wise, all of our three product lines Anybus, IXXAT and Netbiter show good growth. We also see a continued strong growth in the number of new design wins in 2015. In total, we got 195 new design wins for our products during the year and the total number of active design wins now amounts to 1381, an increase of 12% compared to the previous year. Out of these, 1023 are in production while 358 are expected to go into production in the coming years.

The fact that we received a record number of new design wins during the year, shows that we have an attractive product offering and good prospects for continued growth.

The exciting work of launching new products for the Industrial Internet of Things (IIoT) was initiated in 2015. This has now resulted in the Anybus Wireless Bolt, OPC UA communication, EtherNet/IP Linking Devices and SG-gateways for smart energy grids.

These new products are focused on efficient data collection and data transfer within IIoT applications. The focus on IIoT during the year meant increased investments in sales, marketing and development.

Our efforts to improve efficiency and quality continue. This is seen in a stable gross margin for the year and continued good quality levels. As in previous years, we can conclude that our field returns are just below 200 ppm (0.02%) This is world class!

In early February 2016, HMS signed an agreement to acquire the Belgian company eWON SA. eWON is market leading in the field of remote monitoring and remote control, and will significantly strengthen HMS' position in this field. The company has 58 employees and sales of approximately 140 million SEK with an operating margin of over 20%.

The products that eWON manufacture and market are a strong complement to our existing solution for remote management. Together, these products will become a competitive offer, where we now have a strong position as the leading provider of solutions for remote control and remote monitoring of industrial applications. Particularly gratifying is that the two entrepreneurs behind eWON have chosen to remain in the company and become major shareholders of HMS.

Our focus is to continue to drive growth with our product brands Anybus, Netbiter, IXXAT and the newly acquired eWON. We continue to work with our long-term growth strategy while retaining a balanced view of costs and new resources. In the long term, we believe that the market for industrial data communication and remote management will be an interesting growth area, and we continue to focus on our motto HMS Connecting Devices .

Halmstad February 5, 2016

Staffan Dahlstr m

Chief Executive Officer

HMS Networks Q4 Report 2015 (English)

LINK:	http://www.hms-networks.com/press/2016/02/05/hms-q4-report-and-year-en...
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