HMS Networks: Interim report January - September 2

First nine months * Net sales for the first nine months increased with 27 % reaching SEK 375 m (295), corresponding to a 33 % increase in local currencies * Operating profit reached SEK 73 m (57), equal to a 20 % (20) operating margin * Order intake for the first nine months increased to SEK 384 m (325) corresponding to a 23 % increase in local currencies * Cash flow from operating activities amounted to SEK 65 m (63) * Profit after taxes totaled SEK 53 m (42) and result per share amounted to SEK 4.70 (3.78) * During the period the acquired IXXAT Automation GmbH contributed to group net sales with SEK 78 m. The contribution to operating profit was SEK 8 m. * Net sales for the last twelve months amounted to SEK 463 m (389) corresponding to a 24 % increase in local currencies. Operating result amounted to SEK 79 m (67) corresponding to a 17 % (17) operating margin Third quarter * Net sales for the third quarter reached SEK 140 m (99) corresponding to a 41 % increase. Operating result reached SEK 32 m (23) * Order intake during the third quarter was SEK 125 m (95) Comments from the CEO The quarter saw new record levels for HMS, both in terms of turnover and profit. We have begun to see increased market stability, but we have yet to see clear improvements when it comes to market demand. Consequently, the order intake for the quarter is not quite up to our expectations. Our Anybus® Embedded products continue to deliver and in Q3, we have seen an improvement in IXXAT sales. Our new Netbiter® Remote Management brand continues to generate a lot of interest from the market but we have continued weak growth in sales of this new product. IXXAT Automation, which was acquired earlier this year, performed well in the third quarter. We continue to see good opportunities for synergies in sales and product development in the coming years and we are already seeing the positive effects of our new joint sales organizations in North America and Central Europe for our three brands Anybus , IXXAT and Netbiter. As previously reported, local sales in Japan continue to increase, but this balanced out by the weakened Japanese currency. The German and the U.S. market continue to be cautious but our customers are talking about improvement, although it is hard to determine this time. During the third quarter, we have maintained a high production quality and a good ability to deliver. We also have a good product mix and internal improvement projects have contributed to an improved gross margin. We can conclude that we see stable market conditions, but there is still no strong underlying growth in our markets. We are working to balance our long-term growth strategy with a conservative approach to costs. At present, we see nothing which changes our view that the market for industrial communication and remote management will be growth areas in the future. Halmstad October 28, 2013 Staffan Dahlström Chief Executive Officer Further information can be obtained from: CEO Staffan Dahlström, telephone +46 (0) 35-17 29 01 or CFO Gunnar Högberg, telephone +46 (0) 35-17 29 95. See also: http://investors.hms.se HMS Industrial Networks (publ) is the leading independent supplier of products for industrial communication including remote management. HMS develops and manufactures solutions for connecting automation devices and systems to industrial networks under the Netbiter, Anybus and IXXAT brands. Development and manufacturing take place at the headquarters in Halmstad, Sweden and in Weingarten, Germany. Local sales and support are handled by branch offices in China, Denmark, France, Germany, India, Italy, Japan, UK, and USA. HMS employs over 350 people and reported sales of 45 million EUR in 2012. HMS is listed on the NASDAQ OMX in Stockholm. [HUG#1738668]