Slides
Page 1
Hardware Meets Software HMS Networks Q2 2025 presentation Staffan Dahlström, CEO, Joakim Nideborn, CFO July 11, 2025
Page 2
Agenda Business update from Q2 20251 3 Financial summary Q2 2025 4 Q&A
Page 3
Financial summary of Q2 2025 and YTD Q2 summary YTD • Net sales 843 MSEK (845), 0%, organic -5% • Order intake 816 MSEK (769), +6%, organic +8% • Adjusted EBIT 181 MSEK (172) • Adjusted EBIT margin 21.4% (20.4) • Cash flow from ops. of 201 MSEK (152) • Adjusted EPS 2.52 (2.12) • Net sales 1,733 MSEK (1,461), +19%, organic -10% • Order intake 1,746 MSEK (1,242), +41%, organic +10% • Adjusted EBIT 399 MSEK (309) • Adjusted EBIT margin 23.0% (21.1) • Cash flow from ops. of 388 MSEK (210) • Adjusted EPS 5.69 SEK (4.55)
Page 4
Our business – Industrial ICT – in three divisions Industrial communication for niche applications in growing industries Industrial Data Solutions (IDS) Solutions to connect, secure, diagnose and visualize data in industrial applications. Industrial Network Technology (INT) Technology for communication, control and security in industrial devices. New Industries (NI) INDUSTRIAL AUTOMATION INDUSTRIAL AUTOMATION BUILDING AUTOMATION VEHICLE COMMUNICATION Direct sales, distribution, e-commerce Direct sales Direct sales, distribution, e-commerce Machine builders System integrators End users Device Manufacturers System integrators OEMs Special machines Industrial communication for niche applications in growing industries. 46% 30% 24% Above shows share of Group Net Sales YTD 2025
Page 5
Business update – second quarter 2025 • Order intake; organic growth of 8%, third quarter in a row with organic growth • Organic net sales still behind last years level (-5% vs Q224) – growth expected onwards • Uncertain market conditions during the quarter related to tariffs and macroeconomic concerns • IDS division shows stable development in order intake, but net sales somewhat negatively impacted by temporary delivery issues in the end of the quarter • INT division is improving in order intake and sees signs of increasing business in Europe • NI division is experiencing a more hesitant market • Red Lion integration finalized with ERP and CRM implementation • Investments made in production facility in York, USA – will result in improvements in gross margin in IDS and expanded production capacity
Page 6
Tariff situation for HMS EU → North America: 15% of group sales. Finished Goods, expected 10% tariffs 1 China and Asia → USA: Components to US manufacturing, expected +20% 3 EU → USA → Non-USA Americas: Finished Goods <5% of group sales , expected 10% tariffs 2 USA → China: Finished Goods < 0.5% of group sales 4 HMS tariff strategy 1. Short Term – cover increasing tariff cost through price increases and logistic flow adjustments 2. Mid Term – minimize impact through local manufacturing in the USA
Page 7
Agenda Business update from Q2 20251 3 Financial summary Q2 2025 4 Q&A
Page 8
Order intake of 816 MSEK in Q2 2025, +6% Order intake, MSEK Analysis and conclusions 703 492 426 72 0 1 000 2 000 3 000 4 000 0 200 400 600 800 1 000 Q323 Q423 Q124 253 516 Q224 244 433 Q324 390 503 Q424 418 Q322 Q125 744 Q225Q422 Q123 Q223 675 718 682 473 769 677 893 930 816 512 +6% Order intake LTM Acquisitions LTM HMS excl acquisitions • Q2 2025: 816 MSEK (769), +6% (organic +8%) • YTD: 1,746 MSEK (1,242), +41% (organic +10%) • From Q2 2025, Red Lion is part of the organic numbers • All sales regions are growing – positive signs from Europe • APAC and especially China developed well in the quarter, >+30% growth compared to Q2 2024 • Large negative impact from strengthened SEK in the quarter, revaluation of order book of -41 MSEK Bridge Q224-Q225, MSEK Bridge YTD, MSEK 62 72 Q2 2024 Organic -87 FX* Acquisitions Q2 2025 769 816 119 491 YTD 2024 Organic -105 FX* Acquisitions YTD 2025 1 242 1 7468% -11% 9% 10% -8% 40% *Including FX revaluation of orderbook
Page 9
Net sales 843 MSEK in Q2 2025 Net sales, MSEK Analysis and conclusions Bridge Q224-Q225, MSEK Bridge YTD, MSEK 624 764 773 703 789 760 616 76 0 1 000 2 000 3 000 4 000 0 200 400 600 800 1 000 Q322 Q422 Q123 Q223 Q323 Q423 Q124 283 562 Q224 244 548 Q324 304 503 Q424 364 526 Q125 767 Q225 845 792 807 890 843 0% Net Sales LTM Acquisitions LTM HMS excl acquisitions 76 Q2 2024 -39 Organic -39 FX Acquisitions Q2 2025 845 843 440 YTD 2024 -143 Organic -25 FX Acquisitions YTD 2025 1 461 1 733 • Q2 2025: 843 MSEK (845), 0% (organic -5%) • YTD: 1,733 MSEK (1,461), +19% (organic -10%) • Book-to-bill in constant currencies of 1.01 in Q2 • From Q2 2025 Red Lion is a part of the organic numbers • Temporary delivery disturbances in USA affects the net sales by approximately -15 MSEK, expected to recover in H2 • Negative FX impact from strengthened SEK -5% -5% 9% -10% -2% 30%
Page 10
412 391 386 492 459 382 0 100 200 300 400 500 Q124 Q224 Q324 Q424 Q125 Q225 -2% IDS order intake & net sales (incl proforma Q124), MSEK Analysis and conclusions • Order intake 382 MSEK (391), -2%, organic +10% • Net sales 377 (436), -14%, organic -7% • Adjusted EBIT in Q2 2025 of 65 MSEK, margin of 17.1% • Some uncertainty related to tariffs and macroeconomic concerns, but underlying core business is similar as previous quarters – less project orders than Q4 2024 and Q1 2025 • 70%+ of sales in US-dollars gives major FX impact Q2 2025: Industrial Data Solution 409 436 399 395 418 377 0 100 200 300 400 500 Q124 Q224 Q324 Q424 Q125 Q225 -14% Net Sales Order intake 36% 27% 66% 7% EMEA Americas APAC Part of HMS adj. EBIT
Page 11
203 239 190 234 250 250 0 100 200 300 400 Q124 Q224 Q324 Q424 Q125 Q225 +5% INT order intake & net sales, MSEK Analysis and conclusions • Order intake 250 MSEK (239) +5%, organic +15% • Net sales 269 MSEK (271), -1%, organic +6% • Adjusted EBIT in Q2 2025 of 75 MSEK, margin of 27.9% • European customers, including larger accounts, are increasing volume • APAC and especially China developing very good and almost doubling order intake compared to Q2 2024 Q2 2025: Industrial Network Technology 345 271 275 246 257 269 0 100 200 300 400 Q124 Q224 Q324 Q424 Q125 Q225 -1% Net Sales Order intake 41% 55% 17% 28% EMEA Americas APAC Part of HMS adj. EBIT
Page 12
210 208 174 190 221 184 0 100 200 300 Q124 Q224 Q324 Q424 Q125 Q225 -11% NI order intake & net sales (incl proforma), MSEK Analysis and conclusions • Order intake 184 MSEK (208), -11%, organic -4% • Net sales 197 (206), -4%, organic 0% • Adjusted EBIT in Q2 2025 of 41 MSEK, margin of 20.7% • The division have been facing an overall hesitant market in Q2 • Pre-tariff orders from USA in Q1 impact Q2 negative Q2 2025: New Industries 213 206 190 192 215 197 0 100 200 300 Q124 Q224 Q324 Q424 Q125 Q225 -4% Net Sales Order intake 23% 68% 18% 14% EMEA Americas APAC Part of HMS adj. EBIT
Page 13
Q2 2025: Adjusted EBIT 181 MSEK (21.4%) Adjusted EBIT, MSEK Analysis and conclusions • Adjusted EBIT Q2: 181 MSEK (172) • Adjusted EBIT margin Q2: 21.4% (20.4) • Adjusted EBIT YTD: 399 MSEK (309) • Adjusted EBIT margin YTD : 23.0% (21.1) • Q2 2025 gross margin of 61.8% (61.9) • Extra costs related to tariffs impacts the gross margin negative, price increases have not yet had any significant impact to mitigate the effects • Negative effects from FX • OPEX Q2: 383 MSEK (423), (organic -1%) • Continued careful approach in OPEX • Net R&D -10 MSEK vs Q2 2024 Adj.EBIT, % 179 192 211 150 223 169 130 104 163 106 175 138 27 27 30 31 29 23 42 26 13 14 0 100 200 300 400 500 600 700 800 0 50 100 150 200 250 4 Q123 4 Q223 4 Q323 4 Q423 34 Q124 Q224 4 Q324 Q424 6 Q225Q322 6 Q422 185 197 216 154 226 196 137 172 194 163 218 181 Q125 +5% Adj. EBIT LTM Items affecting comparability Amort. of excess values EBIT 25%26%30% 28% 22% 29% 26% 22% 20% 20% 25% 21%
Page 14
Q2 2025: Adjusted EPS 2.52 SEK Adjusted EPS, SEK Analysis and conclusions 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 0.00 Q322 Q422 Q123 Q223 Q323 Q423 Q124 Q224 Q324 Q424 Q225 3.02 3.37 3.79 2.56 3.77 2.94 2.43 2.12 2.51 2.60 3.17 2.52 Q125 +16% Adjusted EPS LTM Adjusted EPS Q2: • Adjusted EPS of 2.52 SEK (2.12) • Net financials of -27 MSEK (-61) mainly related to interest cost of -33 MSEK (-43) YTD 2025: • Adjusted EPS of 5.69 (4.55)
Page 15
Q2 2025: Cash flow from ops. of 201 MSEK Q2: • Cash flow from ops. of 201 MSEK (152) • Changes in NWC → 70 MSEK (18) with the majority related to inventory reduction and reduced receivables YTD 2025: • Cash flow from ops. of 388 MSEK (210) • Changes in NWC → 118 MSEK (-54) 177 155 167 119 152 205 177 187 201 0% 25% 50% 75% 100% 125% 0 50 100 150 200 250 Q322 Q422 Q123 Q223 Q323 Q423 Q124 Q224 Q324 Q424 Q125 118 78 58 Q225 +32% Cash conversion (cash flow ops./adj.EBITDA) Cash flow Cash flow, MSEK Analysis and conclusions
Page 16
Q2 2025: Net debt of 2,823 MSEK Net debt and leverage, MSEK Analysis and conclusions 155 127 113 274 284 261 133 137 197 185 194 163 160 295 -99 -98 248 276 266 259 2 300 2 400 2 500 2 600 200 0 2 800 100 2 900 300 3 000 400 3 100 500 3 200 -100 3 300 2 200 0.0 0.5 1.0 2 700 2.0 2.5 3.0 3.5 4.0 1.5 Q224 2 186 Q324 2 820 Q424 2 499 Q125 2 370 Q225 415 300 383 540 -19 Q423 309 2 760 2 571 3 293 2 950 2 823 97 Q322 132 99 41 Q123Q422 127 Q223 275 132128 289 Q124 -22 255 2 372 Q323 390 Net debt/Adj.EBITDA IFRS16 Non interest bearing debt All other net debt • Net debt / Adj. EBITDA including proforma from acquisitions: 2.97 (2.65) – 3.10 in Q1 2025 • Net debt pre IFRS 16 / Adj. EBITDA incl proforma from acquisitions: 2.92 (2.58) • Strong cash flow supporting the leverage reduction
Page 17
Key takeaways from the second quarter 2025 Strong cash flow and continued reduction in financial leverage Organic growth in order intake in a challenging market INT division continues to recover • European customers, including larger accounts, are increasing volume • APAC and especially China developing very good • Reduction in inventory levels and receivables as planned • Strong cash flow of 201 MSEK, supporting the leverage reduction to Net Debt/adjusted EBITDA 2.97x • 8% organic growth in order intake and growth in acquired entities • Stable development in core business • Book-to-bill of 1.01 in constant currencies
Page 18
Questions?