Investment thesis
Business platform and core expertise are established and provide strong base for future growth
Mature Business Platform
- HMS Group has acquired main production and project capacities
- The company has “know-how” production documentation and certificates
- The company has established long-term relations with its clients
- HMS Group has decided to exit the construction segment and significantly reduced its exposure to construction
Achievements in the past few years
- HMS has entered into a market of gas transportation units for Gazprom. There is growth of revenue from cooperation with Gazprom not only in the field of compressors but of gas transportation units.
- The Group has two new large clients – strategic cooperation with Gazpromneft and NOVATEK.
- Revenue from nuclear pumps and oil processing pumps grows.
- Revenue from construction reduces.
- HMS has entered into the LNG market (compressors, pumps, special equipment).
- The company has completed a pilot “green” project (BOSK).
Targets
- Growth of export to the CIS and far abroad.
- National project “Ecology of Russia”: these are new markets, supported by state financing and with limited competition, where HMS has already experience and competences.
- HMS expects further development in the field of LNG.
Factors of Business Sustainability
HMS Group has a stable business platform and controlled level of leverage

Delivery of Mission-critical equipment
- HMS’ equipment is crucial to clients. It is installed at the final stage of construction projects and is difficult to replace.
- The project cost is affordable within clients’ project budgets: equipment accounts for less than 2-3% of the total project CAPEX. As a result, clients do not postpone their purchases.

Leader in both large projects and standard production segments
- HMS is the established top player in large-scale projects (with a “blue-chip” client base).
- The company enjoys sustainable, recurring business from standard pumps and compressors with over six thousand clients.

Management focuses on maintaining a moderate debt position
- The target level of Net debt-to-EBITDA LTM ratio is 2.5 despite any extraordinary events and M&As. When the ratio exceeds the 2.5x level, imposition of step-by-step constrains on dividend size is started.
- Debt is naturally hedged as HMS follows a strategy of a match in revenues, costs and debt currency structures – ca. 98% of debt is Russian ruble denominated.
- Short-term debt remains at low levels and is actively managed.
- Conservative budgeting of debt level.

Well-diversified quality client base
- Over 6,000 small and medium clients generate on average 75% of revenue.
- The blue-chip client base covers nearly all Russia’s oil and gas major players.
- Our largest clients operate through numerous contracts in different subsidiaries, taking independent purchasing decisions and offering numerous points of entry.

Low capex needs and flexible dividend policy
- HMS Group is a fully invested business with modest maintenance capital expenditure needs at c. Rub 1-1.5 billion.
- All major acquisitions have already been completed.
- There are no strict dividend commitments, which allows us to minimize payments in a harsh market environment.
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