Slide 1: Q2 2020
Q2 2020 July 23, 2020 Helena Hedblom, President and CEO Anders Lindén, CFO
Slide 2: Agility in challenging times
Agility in challenging times Key highlights Q2 2020 • Large impact from Covid-19 – Lower order intake – Restrictions impacted customer activity – Customers hesitant to place equipment orders • Fast response – Adaption of way of working – Cost savings from efficiency actions – Resilience in profitabi
Slide 3: Key financials Q2 2020
Key financials Q2 2020 Orders received, MSEK and change, % • Order intake declined 23%, -17% organic -23% 11 000 10 553 – Service proving resilience, down 3% 10 000 -17% • Revenues declined 20%, -15% organic 9 000 -5% 8 105 -1% • Operating profit was MSEK 1 418 8 000 – Items affecting comparability
Slide 4: Covid-19
Covid-19 Current status • Covid-19-related restrictions vary among countries, which results in large differences in activities • Fewer customers are temporarily closed or work with reduced capacity today compared to April and May • All distribution centers and manufacturing facilities are operationa
Slide 5: Efficiency improvement activities
Efficiency improvement activities Quick adaptation to the Covid-19 situation • Cost-savings program – Long-term actions with expected savings of more than MSEK 500 annually as from Q3 2020 – Restructuring costs of MSEK 74 in Q2 • Additional savings expected from year end, including savings from plan
Slide 6: Mixed picture in a resilient service business
Mixed picture in a resilient service business Q2 2020 • Activity-driven business impacted by restrictions Aftermarket revenues 5 000 • Large variations among countries 4 064 4 136 4 060 4 028 4 000 3 685 3 608 3 744 3 802 3 654 3 265 3 000 Revenues in the quarter 2 000 Equipment Service Tools & Atta
Slide 7: Leading the way in innovation
Leading the way in innovation Q2 2020 • Increased interest in solutions for automation and R&D expenses, MSEK and in % of revenues connectivity 1 200 6.0 • Large order from Codelco in Chile 1 100 1 035 1 047 5.5 1 000 977 5.0 – Order value: > MUSD 20 (MSEK 190) 900 4.5 – Multiple underground units w
Slide 8: Sustainability
Sustainability Q2 2020 • Continued focus on safety – Decreased number of work-related injuries – Sick leave low despite Covid-19 • CO2 emissions from transport decreased – Lower volumes and higher share sea freight • MWh energy from operations decreased • Sustainability goals for 2030 announced 8
Slide 9: Financials
Financials C Epiroc
Slide 10: Operating profit and margin
Operating profit and margin Q2 2020 Operating profit and margin 4 000 24 21.7 21.3 21.0 20.7 20.9 3 500 20.2 20.4 20.3 21 19.6 21.3 21.2 20.5 18.7 19.7 19.7 19.6 3 000 19.0 18 18.4 18.4 16.8 2 500 2 302 15 2 154 39 2 160 2 131 1 991 2 024 1 989 2 000 233 115 1 911 12 181 126 59 1 610 1 583 1 500 95
Slide 11: Epiroc Group – Profit bridge
Epiroc Group – Profit bridge Looking into the numbers Adj. Margin: Margin: margin: 21.3% 16.8% 18.7% 2 400 2 263 2 200 2 000 -635 -3.5 pp 1 800 -90 1 583 1 600 +0.0 pp -120- 1 418 91 -1.0 pp 74 1 400 1 200 1 000 800 600 400 200 0 Q2 2019 Organic Currency Structure and other Q2 2020 Items affecting L
Slide 12: Segment: Equipment & Service
Segment: Equipment & Service Q2 2020 Orders received, MSEK and change, % • Orders received -15% organic -20% 8 000 7 677 – Service orders -3% organic 7 500 o Activity-driven demand impacted by restrictions 7 000 -15% 6 500 – Equipment orders -29% organic -5% 0% 6 129 6 000 o Large order from Codelco
Slide 13: Equipment & Service – Profit bridge
Equipment & Service – Profit bridge Looking into the numbers Adj. Margin: Margin: margin: 25.5% 22.4% 22.7% 2 000 1 961 1 800 -430 -3.0 pp 1 600 -69 1 458 -21 1 441 +0.2 pp 17 1 400 -0.3 pp 1 200 1 000 800 600 400 200 0 Q2 2019 Organic Currency Structure Q2 2020 Items affecting Adjusted and other co
Slide 14: Segment: Tools & Attachments
Segment: Tools & Attachments Q2 2020 Orders received, MSEK and change, % -30% • Orders received -22% organic 3 000 2 826 – Decline relatively larger for hydraulic attachments 2 500 -22% – Large variations among countries depending on restrictions -4% -4% 1 980 2 000 • Revenues -22% organic 0 • Opera
Slide 15: Tools & Attachments – Profit bridge
Tools & Attachments – Profit bridge Looking into the numbers Adj. Margin: Margin: margin: 14.6% 7.0% 9.8% 450 429 420 390 360 -201 330 -5.1 pp 300 270 240 -26 210 200 -0.6 pp 180 -59 -1.9 pp 57 150 143 120 90 60 0 Q2 2019 Organic Currency Structure Q2 2020 Items affecting Adjusted and other comparab
Slide 16: Costs, net financials and tax
Costs, net financials and tax Q2 2020 • Lower costs Administration, marketing and R&D expenses – Quick adjustment to the situation 2 000 30 1 745 1 708 • Net financial items MSEK -51 (-38) 1 637 1 663 1 671 1 640 25 1 569 1 511 – Interest net MSEK -19 (-57) 1 500 1 386 1 482 20 18.0 • Tax expense MS
Slide 17: Capital structure
Capital structure Q2 2020 Net debt and Net debt/EBITDA • Strong financial position 0.6 6 000 – Net cash position of MSEK 1 819 (net debt position of MSEK 4 217) 0.5 5 000 0.43 0.39 – Dividend paid: MSEK 1 445 (1.20 per share) 0.4 4 000 – In response to Covid-19 uncertainty funding 0.3 3 000 0.24 inc
Slide 18: Capital efficiency
Capital efficiency Q2 2020 Net working capital 40 34.4 36.1 36.1 20 000 • Net working capital decreased 12% ex. currency 33.8 31.8 30 14 062 13 721 14 791 15 000 – Reduction in trade receivables and inventories 12 158 12 084 – Trade payables also lower, which partly offset the 20 10 000 improvement
Slide 19: Strong operating cash flow
Strong operating cash flow Q2 2020 MSEK % Operating cash flow and cash conversion rate, % MSEK Q2 2020 Q2 2019 3 000 300 2 827 Operating profit 1 418 2 263 Depreciation, amortization and impairment 441 468 2 500 250 2 242 Capital gain/loss and other non-cash items 49 -36 2 000 1 963 200 1 883 1 908
Slide 20: Summary and outlook
Summary and outlook C Epiroc
Slide 21: Agility in challenging times
Agility in challenging times Q2 summary • Big impact from Covid-19 • Fast response • Efficiency actions • Service proving resilience • Safeguarding innovation • High sustainability ambition • Strong cash flow and financial position 21
Slide 22: We expect that the demand will continue to be negatively impacted
“We expect that the demand, both for equipment and for aftermarket, will continue to be negatively impacted by the pandemic in the near term.” 22
Slide 23: Epiroc
C Epiroc
Slide 24: United. Inspired.
United. Inspired. Performance unites us, innovation inspires us, and commitment drives us to keep moving forward. Count on Epiroc to deliver the solutions you need to succeed today and the technology to lead tomorrow. epiroc.com
Slide 25: Disclaimer
Disclaimer - Some statements in this presentation, or in conclusion to it, are forward-looking and the actual outcome may be different. In addition to the factors explicitly commented upon, the actual outcome may be affected by other factors such as macroeconomic conditions, movements in foreign exc