HMS Networks (HMS) CMD 2025 summary

Strategic direction and organizational structure

• Focus on three divisions: Industrial Data Solutions (IDS), Industrial Network Technology (INT), and New Industries, each with tailored strategies and customer approaches, prioritizing new customer acquisition and divisional strengthening through M&A.

• Emphasis on proximity to customers, decentralized decision-making, and divisional accountability, with each division responsible for its own pipeline and product development.

• Strategic priorities include operational efficiency, portfolio evolution, and leveraging AI, cloud, and digital-first models across all divisions.

• Organizational culture prioritizes high-performing, engaged employees and leadership development, with targets for employee engagement and female managers.

• Customer Net Promoter Score target set at a minimum of 50.

Financial performance and targets

• Achieved 18% CAGR in net sales from 2020 to 2025, reaching 3,427 MSEK, with six acquisitions contributing 1.6 BSEK in acquired sales volume.

• Gross margin improved to 65% in 2023/2025, with a target to exceed 65% long-term, despite dilution from acquisitions and tariffs offset by price increases.

• Adjusted EBIT margin reached 27% in 2023, with a new target of 25% EBITDA/EBITA margin for 2030, reflecting a shift from EBIT to EBITDA/EBITA for clarity.

• Cash conversion normalized to 93% in 2025 after inventory normalization, with leverage expected to fall below 2.5x net debt/EBITDA.

• Dividend policy remains at 30%-50% of adjusted EPS.

Growth initiatives and market trends

• Market growth expected at 6%-10% CAGR, with IDS and INT targeting increased market share through new platforms, expanded offerings, and direct/cross-selling.

• Key trends: deglobalization, automation, digitalization, cybersecurity, and AI, all seen as growth drivers.

• ARR targeted to exceed 10% of revenue by 2030, up from 3% today, with new business models and services enabled by unified platforms.

• Direct sales to increase from 53% to over 55% of revenue, focusing on large customers and cross-selling opportunities.

• Addressable market of 3 BEUR in 2025, with region-specific strategies for USA and China.