HMS Networks (OM:HMS) 2025 Capital Markets Day Transcript

Summary of HMS Networks Capital Markets Day Company Overview - Company: HMS Networks (OM:HMS) - Event: 2025 Capital Markets Day - Date: September 09, 2025 Key Industry Insights - Industry Focus: Industrial communication solutions, factory automation, and process industry - Market Dynamics: The industry is experiencing behavioral and technological shifts, with a focus on AI and ARR (Annual Recurring Revenue) models [2][3][6] Core Company Strategies - Five Pillars: HMS Networks emphasizes five pillars: access, insights, visualize, connect, and diagnose, which are expected to remain relevant over the next five years [3] - Market Position: HMS Networks considers itself a dominant player in a fragmented market, with no single competitor offering the same comprehensive solutions across all segments [5][4] - M&A Strategy: The company aims to expand its portfolio through acquisitions, focusing on profitable companies with established management teams and a compatible culture [19][20][27] Financial Performance and Projections - Market Share: The company has an 8% market share in the INT segment, with a larger share in embedded business compared to gateways [11] - Revenue Growth: The target is to achieve organic growth of around 8% annually, in line with market growth, with a focus on improving gross margins [29][64] - Investment in R&D: Significant investments in R&D are planned to support product development and enhance competitive positioning [29][51] Competitive Landscape - Competitors: The competitive landscape includes various fragmented technology providers, with specific competitors in niches such as remote access and switches [7][9] - Emerging Trends: There is a shift towards customers preferring complete industrial communication solutions rather than building their own [7][75] Technology and Product Development - AI and Data Utilization: The integration of AI is expected to enhance product offerings and reduce development costs, although there is caution regarding potential new competition [81][83] - Wireless Solutions: The company sees potential in wireless technology, particularly in logistics and remote applications, but acknowledges slow adoption in factory settings [66][68] Geographic Focus - China Strategy: HMS Networks is selectively targeting opportunities in China, focusing on less government-controlled sectors and leveraging local supply chains [34][36] Customer Segmentation - Target Customers: The company segments its customer base into OEMs (45%), system integrators (30%), and end users (25%), with a focus on expanding relationships with system integrators [22] Conclusion - Future Outlook: HMS Networks is positioned for growth through strategic investments, a focus on technology synergies, and a commitment to enhancing its market presence in both existing and new industries [25][36][64]