HMS presents its half-yearly report 2021 and updated
- Second quarter net sales reached SEK 474 million (355), which is an increase of 33%. Currency conversions had a negative effect of SEK 33 million on net sales
- Order intake amounted to SEK 606m (302), which corresponds to an increase of 100%
- Operating profit reached SEK 121 million (69), an operating margin of 25.5% (19.4)
- Profit after tax was SEK 98 million (54) and earnings per share was SEK 2.02 (1.24)
- Cash flow from operating activities amounted to SEK 126 million (115)
First six month
- Net sales for the first six months reached 929m SEK (716), which corresponds to an increase of 30%. Currency conversions had a negative effect of SEK 62 million on net sales
- Order intake amounted to SEK 1,170m (703), which corresponds to an increase of 67%
- Operating profit amounted to SEK 235 million (136), an operating margin of 25.3% (18.9)
- Profit after tax was SEK 192 million (102) and earnings per share was SEK 3.94 (2.26)
- Cash flow from operating activities amounted to SEK 257 million (170)
- Acquisition of 60% of all the shares of the Spanish company Owasys Advanced Wireless Devices SL
The company also announces that the date previously communicated for the 2021 year-end report has been changed to January 26, 2022. The dates of the next financial reports and of the annual general meeting are indicated in the half-year report and on the website of the society.
Continued strong development but difficult component supply situation
Underlying demand continues to be strong for HMS products and we can conclude that we still have a record quarter in terms of sales, order intake and operating profit.
Order intake during the quarter reached a record high of SEK 606 million, representing a growth of 100%, of which 88% on an organic basis compared to the previous year. For the first half of the year, the corresponding figures are 67% and 60% respectively.
The record order intake was driven by a strong recovery in all markets and increased interest in connection machines. But this is also due to an increasingly difficult component shortage situation forcing our customers to build up safety stocks to prepare for longer delivery times. We estimate that we are having anticipatory buying effects, due to customer concerns about component shortages, of around 100m SEK, with some of our larger customers placing orders further in advance than normal. This means that we have a significantly larger order book than usual, more than twice as large as at the end of the second quarter of 2020.
The lack of components partly affected our delivery capacity and we had to postpone some deliveries. This had a negative impact on sales for the quarter of around SEK 30 million. In total, sales for the quarter reached a new record high of SEK 474 million, corresponding to a growth of 33% over the previous year, of which 28% was organic.
Furthermore, we see a continued strengthening of gross margins amounting to 63.7% (62.0%) and we are now seeing the full effect of the price adjustments that were implemented at the end of the year. We are seeing some negative effects of higher component prices, which could affect gross margin by a few percentage points in the coming quarters.
During the quarter, we made several long-term investments within our development and marketing organizations to take advantage of trends we see in increased automation and a stronger focus on sustainability among our customers. These investments combined with a return to more normal business travel will gradually increase our operating costs by approximately 10% through the fourth quarter.
We can also conclude another record quarter for our operating profit, which amounted to SEK 121 million, corresponding to an operating margin of 26%, an increase of 76% compared to the second quarter of the last year. The positive result is driven by expansive sales combined with good gross margins and low operating expenses.
Cash flow continues to be strong at SEK 126 million (115) for the quarter which has helped reduce our debt. At the end of the quarter, we had a net debt of SEK 78 million.
All markets at record highs in the second quarter
In our large and important European markets, such as Germany, France and Italy, the strong market recovery continues and our order intake has more than doubled compared to last year’s quarters, which were weak . A strong machine building market and robot industry, along with the conversion of the automotive industry to electric car manufacturing and generally large investments in increased automation and digitization in the industry are driving the growth of the industry. HMS in Europe.
North America is also showing positive results with a strong economy and continuing strong end customer verticals. Among other things, we have won new business in the growing field of battery manufacturing.
In Asia, China and Japan are continuing their strong development. Demand from Japanese robot makers is at record levels and despite a good quarterly comparison last year, order intake is up more than 60% in Asia.
We are also seeing increased demand in our machine remote control offering where more and more machine manufacturers are choosing to integrate remote control as standard in their machines which has resulted in sales growth of over 50%. % and order intake which more than doubled.
The acquisition of Owasys Advanced wireless devices after quarter end
On July 1, HMS acquired 60% of the Spanish company Owasys Advanced Wireless Devices SL, with 20 employees and based in Bilbao. Owasys offers wireless communication platforms that allow remote monitoring and control of various types of commercial vehicles and industrial machines. The acquisition allows HMS to tackle the mobile machinery and utility vehicles vertical, an interesting addition to the âinformation-centricâ part of our playground. Owasys is expected to achieve sales of 5.5 million euros and an operating profit of 1.4 million euros in 2021.
Positive outlook but delivery difficulties in the third quarter
The recovery from the pandemic continued at a good pace in the second quarter and the underlying demand from our customers is also expected to continue in the coming quarters. The challenges of sourcing components mean that delivery times to customers are now longer, which will affect our sales in the third quarter, as deliveries may be postponed to the following quarter. During the fourth quarter, we believe the situation will stabilize and we expect to be able to deliver the majority of orders that were carried over from previous quarters.
We continue to work with a focus on long-term growth based on a balanced view of our costs. In the long term, we continue to believe that the industrial ICT (Information and Communication Technologies) market will be an interesting area, both in terms of organic growth and acquisitions.
Halmstad July 14, 2021
Staffan DahlstrÃ¶m Charlotte Brogren
Chief executive officer President of the council
Fredrik Hansson Anders MÃ¶rck
Crew member Crew member
Cecilia Wachtmeister Ulf SÃ¶dergren
Crew member Crew member
Niklas Edling Tobias Persson
Crew member Employee representative
Further information can be obtained from:
Staffan DahlstrÃ¶m, CEO, +46 (0) 35 17 2901
Joakim Nideborn, Chief Financial Officer, +46 (0) 35 710 6983
This information is such that HMS Networks AB (publ) is required to make it public under EU Market Abuse Regulation and Securities Law. The information has been submitted for publication, through the contact persons indicated above, at 08:00 CET on July 14, 2021.
HMS Networks AB (pub) is one of the leading providers of solutions in the field of industrial information and communication technologies (Industrial ICT). HMS develops and manufactures products under the AnybusÂ®, IxxatÂ®, EwonÂ® and IntesisÂ® brands. The development takes place at the head office in Halmstad as well as in Ravensburg, Nivelles, Igualada, Wetzlar Buchen and Delft. Local sales and support are handled by branches in Germany, USA, Japan, China, Singapore, Italy, France, Spain, Netherlands, India, UK , in Sweden, South Korea and the United Arab Emirates, as well as through a global network of distributors and partners. HMS employs more than 700 people and achieved a turnover of SEK 1,467 million in 2020. HMS is listed on the NASDAQ OMX in Stockholm, category Mid Cap, Information Technology
HMS Networks Second Quarter 2021 Report