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Year-end report 2022, January – December

HMS Networks AB
HMS Networks AB

Fourth quarter

  • Net sales for the fourth quarter reached SEK 764 m (571), corresponding to an increase of 34%. Currency translations had a positive effect of SEK 65 m on net sales

  • Order intake was SEK 718 m (699), corresponding to an increase of 3%

  • Operating profit reached SEK 192 m (109), equal to a 25.1% (19.2) operating margin

  • Profit after taxes totalled SEK 151 m (86) and earnings per share was SEK 3.25 (1.85)

  • Cash flow from operating activities amounted to SEK 177 m (104)

  • Acquisition of all shares in the British company Control Specialists Ltd.


  • Net sales for the year reached SEK 2,506 m (1,972), corresponding to a 27% increase. Currency translations had a positive effect of SEK 158 m on net sales

  • Order intake was SEK 3,064 m (2,538), corresponding to an increase of 21%

  • Operating profit reached SEK 653 m (446), equal to a 26.0% (22.6) operating margin. Adjusted operating profit reached SEK 626 m, equal to a 25.0% adjusted operating margin

  • Profit after taxes totalled SEK 508 m (362) and earnings per share was SEK 10.89 (7.61). Adjusted profit after taxes totalled SEK 481 m and adjusted earnings per share was SEK 10.31

  • Cash flow from operating activities amounted to SEK 431 m (508)

  • Acquisition of the remaining 30% of the shares in Procentec B.V.

  • Acquisition of all shares in the Australian company Global M2M Pty Ltd.

  • The Board of Directors propose a dividend to the amount of SEK 4.00 (3.00) per share

Subsequent events

  • Acquisition of additional 20% of the shares in Owasys Advanced Wireless Devices S.L.

CEO comments

A strong finish to the record year 2022
We finish the year with yet another strong quarter where we deliver a new turnover record and continued stable order intake.

Order intake amounted to SEK 718 million (699). We continue to see some customers who place large orders earlier as a consequence of long delivery times in the market and continued uncertainty regarding the supply of semiconductors. In the quarter, we estimate that these orders amount to approximately SEK 85 million.

Turnover amounted to a record level of SEK 764 million (571), corresponding to an organic growth of 22%. We can conclude that during the quarter, we managed to handle the component supply issues better than expected, and we see a gradual improvement in our capacity to deliver.

In Europe, both order intake and turnover remain strong, while we are beginning to see signs of a slowdown in order intake in North America. In Asia, we continue to see order growth compared to the previous year, although at a lower level than earlier in 2022.

For the full year 2022, we reach an order intake of SEK 3,064 million (2,538). A part of this consists of early orders from customers who want to secure future deliveries in an uncertain market. This year’s turnover amounts to SEK 2,506 million (1,972), corresponding to an organic increase of 17%, which we are very satisfied with.

During the fourth quarter, we see a continued good gross margin of 63.6% (60.8), the same level as we had in the previous quarter. Our price increases in 2022 mean that we compensate for the cost increases we have seen on components during the quarter. Although we still make purchases on the spot market at a significantly higher cost, we see that the need for these purchases decreases every quarter. Our operating costs increased organically by 14%, which is primarily explained by a general cost inflation, investments in our sales and marketing organization and improved IT support in our operations. All in all, we end the year with an operating result on record levels for the fourth quarter — SEK 192 million (109), corresponding to an operating margin of 25%. Also for the full year, we see a new record with an adjusted operating profit of SEK 626 million (446).

After a couple of quarters with weaker cash flow, we now see an improvement as our cash flow amounts to SEK 177 million (103). With a sequential turnover growth of over 20%, our working capital is also increasing. Our net debt continues to decrease and is now down to SEK 300 million, which means that we have a strong balance sheet that brings good opportunities for the future.

Steady inflow of new Design-Wins
The continued component shortage and delivery problems in the electronics industry during 2022 have forced many of our customers to modify their existing products in order to deliver, thus reducing their focus on new development in the short term. Even though, for those of our products that are sold according to our Design-Win business model (approximately 44% of HMS’s turnover) we can still see a continued stable inflow of new customers in 2022. In total, we received 146 (174) new Design-Wins during the year, and the total number of active Design-Wins now amounts to 1,843 (1,790). Of these, 1,493 (1,447) are in production, while 280 (343) are expected to go into production in the coming years.

Acquisitions and strategic collaborations
During the quarter, HMS acquired all shares in Control Specialists Ltd., a small British company with three employees and an annual turnover of 0.5 MGBP. The company has a long-standing collaboration with the Procentec business in technical certifications and training. We see an opportunity to develop our customer relations in United Kingdom by also providing these services for our customers within industrial networks.

After the end of the year, an additional 20% of the shares in Owasys were acquired. HMS now owns 80% and the other 20% is owned by four entrepreneurs, all active in the company.

We end the year with an order book of SEK 1.4 billion, which means that we are well equipped for 2023. We expect to gradually reduce our large order book in the coming quarters as our customers’ pre-purchasing start to normalize due to improved component availability and shorter lead times. At what pace this will happen and to what extent, is difficult to say, but we see that the majority of our customers are still prepared to keep large stocks to ensure their ability to deliver.

Customers’ willingness to invest in digitalization, productivity and sustainability is high and the underlying demand is still considered to be good, even if there is some concern linked to how the industry will be affected by weaker consumer purchasing power, increasing energy costs and the macro political uncertainty.

We continue to work with a focus on long-term growth based on a balanced view of our costs. In the long term, we consider the market for Industrial ICT (Information & Communication Technology) to be an interesting area, both in terms of organic growth and acquisitions.

Halmstad January 26, 2023

Staffan Dahlström

Chief Executive Officer

Further information can be obtained from:
Staffan Dahlström, CEO, +46 (0) 35 17 2901
Joakim Nideborn, CFO, +46 (0) 35 710 6983

This information is such that HMS Networks AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the contact persons set out above, at 07.30 CET on January 26, 2023.

HMS Networks AB (publ) is a market-leading provider of solutions in industrial information and communication technology (Industrial ICT). HMS develops and manufactures products under the Anybus®, Ixxat®, Ewon® and Intesis® brands. Development takes place at the headquarter in Halmstad and also in Ravensburg, Nivelles, Igualada, Wetzlar, Buchen, Delft, Sibiu, Rotterdam and Bilbao. Local sales and support are handled by branch offices in Germany, USA, Japan, China, Singapore, Italy, France, Spain, the Netherlands, India, UK, Sweden, South Korea, Australia and UAE, as well as through a worldwide network of distributors and partners. HMS employs over 780 people and reported sales of SEK 2,506 million in 2022. HMS is listed on the NASDAQ OMX in Stockholm in the Large Cap segment and Telecommunications sector.