HMS Networks Sets Ambitious Goals Leading Up to 2030
HMS Networks AB (publ) has introduced new financial and sustainability objectives, aiming to shape their business strategy as they look towards 2030. These targets are being unveiled during HMS' Capital Markets Day, showcasing their commitment to innovation and growth.
With the strategic period of 2020-2025 nearing its conclusion, HMS Networks remains on track to meet its targets initially set in 2020. The focus now shifts to an aggressive strategy for the years 2026-2030, which includes not only organic growth but also plans for mergers and acquisitions. This approach aims to further enhance their business across various divisions.
HMS Networks intends to invest significantly in an updated product portfolio over the next few years. This is designed to increase customer service engagement and expand their Annual Recurring Revenue (ARR). Furthermore, operational efficiency will remain a top priority to secure sustained profitability.
2030 Strategy and Sustainability Initiatives
Among the key targets set for 2030 are specific goals related to sustainability, customer satisfaction, and growth in revenue and profitability. One major initiative includes applying for the Science-Based Targets Initiative to achieve a net positive carbon footprint by 2050. In addition, HMS aims to be awarded an EcoVadis Gold rating, positioning them in the top 5% of their industry.
Employee Engagement and Customer Loyalty
HMS acknowledges that a satisfied workforce leads to loyal customers. Therefore, improving employee happiness is paramount. They have set an ambitious Employee Engagement Index target of 80 and strive to ensure that at least 30% of management positions are held by women by the year 2030.
The company is also committing to enhancing long-term customer value, with a goal for their Customer Net Promoter Score to reach at least 50 during this period.
Financial Growth and Profit Goals
Financially, HMS has set its sights on achieving net sales of SEK 7.5 billion by 2030, accompanied by an EBITA-margin target of 25%. The approach to assessing profitability will transition from an "adjusted EBIT" metric to a more direct EBITA calculation, adjusting for regular amortization yet maintaining transparency regarding costs associated with integration and restructuring.
Additionally, HMS plans for dividends to be distributed in the range of 30-50% of adjusted Earnings Per Share (EPS). The company also sets a long-term guideline for its financial leverage to maintain a Net Debt to EBITDA ratio below 2.5x.
For the upcoming years, growth in ARR is projected to constitute 10% of their net sales, significantly contributing to achieving their target gross margin surpassing 65%.
Business Update: Current Market Conditions
As for the current business environment, recent analysis shows continued stability in key markets such as the USA and Germany, marking an improvement from the first half of the year. Nevertheless, other regions within the EU and Japan have depicted slightly weaker performance.
A brief setback was experienced due to a temporary halt in deliveries from the US facility stemming from the implementation of a new ERP system. Supplies expected to be worth 15 MSEK were previously postponed but are now scheduled for delivery in the upcoming quarter.
Moreover, the challenges posed by US tariffs negatively impacting gross margins previously have been mitigated by corresponding price increases, leading to a mildly improved gross margin outlook.
HMS continues actively working on reducing the company's debt each month, aiming to stabilize the ratio of Net Debt to EBITDA at approximately 2.5x by year-end.
Engagement at HMS’ Capital Markets Day
Today marks the commencement of HMS' Capital Markets Day, where presentations will begin at 09.00 CEST and conclude by 12.00 CEST. Participants who join digitally can even submit questions through the live webcast interface. For those who miss the live event, the webcast will be available for later viewing. This event highlights HMS Networks' transparency and efforts to engage actively with stakeholders.
For further inquiries, please reach out to:
Staffan Dahlström, CEO HMS, +46 (0)35 17 29 01
Joakim Nideborn, CFO HMS, +46 (0)35 710 6983
HMS Networks AB (publ), a leader in Industrial Information and Communication Technology (Industrial ICT), employs over 1,100 individuals and operates through more than 20 global sales offices. The company reported robust sales of SEK 3,059 million and is proudly listed on NASDAQ OMX Stockholm within the Large Cap segment focused on telecommunications.
Frequently Asked Questions
What are HMS Networks' targets for 2030?
HMS Networks has set targets to achieve net sales of SEK 7.5 billion, a 25% EBITA margin, and expand its Annual Recurring Revenue to 10% of net sales by 2030.
How does HMS plan to improve sustainability?
HMS aims to achieve a net positive carbon footprint by 2050 and secure an EcoVadis Gold rating, which places them in the industry’s top tier.
What is the importance of employee engagement for HMS?
HMS believes that engaged and satisfied employees lead to loyal customers, setting a target Employee Engagement Index of 80 by 2030.
What recent market conditions has HMS observed?
HMS has noted improvements in demand from the USA and Germany, while parts of the EU and Japan have shown weaker performance.
How is HMS addressing its debt levels?
HMS is actively working towards reducing its debt, aiming for a Net Debt to EBITDA ratio of around 2.5x by the end of the year.
