HMS Networks: Interim report January - June 2013 F

First six months * Net sales for the first six months increased with 21 % reaching SEK 235 m (195), corresponding to a 27 % increase in local currencies * Operating profit reached SEK 41 m (34), equal to a 17 % (18) operating margin * Order intake for the first half year increased with 13 % to SEK 259 m (229) corresponding to a 19 % increase in local currencies * Cash flow from operating activities amounted to SEK 67 m (38) * Profit after taxes totaled SEK 30 m (26) and result per share amounted to SEK 2.63 (2.29) * Net sales for the last twelve months amounted to SEK 422 m (391) corresponding to a 14 % increase in local currencies. Operating result amounted to SEK 70 m (69) corresponding to a 17 % (18) operating margin Second quarter * Net sales for the second quarter reached SEK 128 m (99) corresponding to a 29 % increase Operating result reached SEK 27 m (20) corresponding to a operating margin of 21 % (20) * Order intake during the second quarter was SEK 140 m (113) Comments from the CEO During the second quarter we saw order intake, revenues, operating result and earnings per share on levels not seen before in the Group. The acquisition of IXXAT Automation GmbH earlier this year contributes to these improvements but we can also see tendencies of improved demands. Japan shows growth due to our Japanese customer's competitive advantage from a weak Japanese currency. Germany shows sign of some growth. The expected positive development in the US has not materialized and we can see a cautious approach. We see continuing progress with new and existing customers and the order intake during the period indicates future growth. Our new product platform in the Embedded product group is attracting considerable interest and already starting to generate design wins. We are expecting a positive development in volumes from this platform during 2014 and going forward. The core technology of this product offer, our new NP40 processor was recently awarded the "2013 New Product Innovation Award" by Frost & Sullivan providing good attention for our new product offer in the embedded area. The product- and market development within Remote Management continues. We have experienced longer sales cycles than expected and despite many pilot series with interesting customers the sales volumes from the Remote Management products are delayed. The development of IXXAT Automation that was acquired earlier this year is not in line with expectations but we see good opportunities for future synergies in the areas of sales and product development. During the second quarter the coordination of the sales and marketing organizations contin­ued and we now have established common sales organizations in North America and Central Europe for our three brand names Anybus, IXXAT and Netbiter. We can conclude that we see a mixed picture going forward. On the one hand we had a positive second quarter with good levels of order intake, sales, operating profit and earnings per share. On the other hand the market is difficult to predict in the near future. We continue to balance our long-term growth strategy with a restrictive view on costs. In the long term, we see the markets for industrial communica­tion and remote management to be growth sectors. Halmstad July 22, 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 58 million EUR in 2012. HMS is listed on the NASDAQ OMX in Stockholm. [HUG#1717925]