Epiroc Ab Class A · OMXSTO:EPI_A
Epiroc Ab Class A — Q3 2020 Earnings Presentation
26 slides from Epiroc Ab Class A's earnings presentation, Oct 23, 2020
Slide 1: Q3 2020
Q3 2020 October 23, 2020 Helena Hedblom, President and CEO Anders Lindén, CFO
Slide 2: Recovery in orders and solid results
Recovery in orders and solid results Key highlights Q3 2020 • Demand improved – Moderate impact from Covid-19 restrictions – Strong development in our resilient service – Customers taking investment decisions • Strong interest for automation, digitalization and electrification – Several orders won –
Slide 3: Key financials
Key financials Q3 2020 Orders received, MSEK and change, % • Order intake decreased 2%, +10% organic 11 000 -2% 10 500 – Equipment recovering, +25% organic 10 000 +10% -12% – Service proving resilient, +9% organic 9 600 9 500 9 373 0% • Revenues decreased 14%, -3% organic • Operating profit was MSEK
Slide 4: Covid-19
Covid-19 Current status • Fewer customers are temporarily closed or work with reduced capacity today compared to Q2 • Covid-19-related restrictions vary among countries, which results in large differences in activities • All distribution centers and manufacturing facilities are operational and capac
Slide 5: Our aftermarket focus pays off
Our aftermarket focus pays off Q3 2020 Revenues • Double-digit organic growth sequentially • Increasing productivity for our customers • Full-service contracts and mid-life rebuilds 25% (27) 31% (32) Aftermarket 69% (68%) 44% (41) Equipment Service Tools & Attachments Aftermarket 5
Slide 6: Actions for operational excellence
Actions for operational excellence Q3 2020 • Cost-savings program – Long-term actions with savings of MSEK +500 annually implemented successfully with full impact in Q3 2020 • Additional savings expected from year end, including savings from planned layoffs – Restructuring costs of MSEK 55 in Q3 • S
Slide 7: Driving the future in intelligent mining and infrastructure
Driving the future in intelligent mining and infrastructure Q3 2020 • Increased interest in automation and information management solutions – Several automation orders won – Deployment of unique solutions for OEM-mixed fleet automation • Growing demand for battery-electric vehicles • Innovations – E
Slide 8: Innovation and sustainability go hand in hand
Innovation and sustainability go hand in hand Q3 2020 • Automation, digitalization and electrification support productivity and sustainability • Sustainability performance continuously improving – Supply-chain program with less air freight – SafeStart builds a safety culture – Energy-efficiency acti
Slide 9: Financials
Financials C Epiroc
Slide 10: Operating profit and margin
Operating profit and margin Q3 2020 Operating profit and margin 4 000 24 21.7 21.3 21.7 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 20.9 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 1 896 12 181 126 59 1 610
Slide 11: Epiroc Group – Profit bridge
Epiroc Group – Profit bridge Looking into the numbers Adj. Margin: Margin: margin: 19.0% 20.9% 21.7% 2 000 1 927 1 896 21 -230 1 820 55 1 800 -2.3pp +202 -79 +2.5pp +1.7pp 1 600 1 400 200 0 Q3 2019 Organic Currency Structure and other Q3 2020 Items affecting LTI Adjusted operating profit comparabili
Slide 12: Segment: Equipment & Service
Segment: Equipment & Service Q3 2020 Orders received, MSEK and change, % • Orders received +15% organic 8 000 +3% – Service orders +9% organic 7 750 7 500 -12% – Equipment orders +25% organic 15% 7 250 7 068 7 000 6 874 0% • Revenues -2% organic 6 750 • Operating profit at MSEK 1 646 (1 923) 0 Q3 20
Slide 13: Equipment & Service – Profit bridge
Equipment & Service – Profit bridge Looking into the numbers Adj. Margin: Margin: margin: 26.2% 25.4% 25.9% 2 000 1 923 -201 1 800 -2.7pp -46 -30 1 679 1 646 +2.4pp 33 1 600 -0.5pp 1 400 1 200 1 000 800 600 400 200 0 Q3 2019 Organic Currency Structure Q3 2020 Items affecting Adjusted and other compa
Slide 14: Segment: Tools & Attachments
Segment: Tools & Attachments Q3 2020 Orders received, MSEK and change, % 3 000 • Orders received -3% organic -16% 2 800 – Orders for hydraulic attachments increased 2 665 2 600 -3% – Large variations among countries depending -11% on restrictions 2 400 -2% 2 249 2 200 • Revenues -8% organic 0 • Oper
Slide 15: Tools & Attachments – Profit bridge
Tools & Attachments – Profit bridge Looking into the numbers Adj. Margin: Margin: margin: 5.7% 11.6% 12.6% 300 276 270 22 254 240 210 180 157 +189 150 +9.1pp -40 -2.5pp 120 -52 90 -0.7pp 60 0 Q3 2019 Organic Currency Structure Q3 2020 Items affecting Adjusted and other comparability operating profit
Slide 16: Costs, net financials and tax
Costs, net financials and tax Q3 2020 • Lower costs Administration, marketing and R&D expenses – Full effect from savings program (MSEK +500 p.a.) 2 000 30 – Quick adjustment to the situation 1 663 1 745 1 671 1 708 1 637 1 640 25 1 569 – Short-term actions maintained 1 500 1 482 1 511 1 386 1 360 2
Slide 17: Capital structure
Capital structure Q3 2020 Net debt and Net debt/EBITDA • Strong financial position 0.6 6 000 – Net cash MSEK 3 638 (net debt MSEK 2 416) 0.5 0.43 5 000 0.39 • Net debt/EBITDA ratio at -0.41 (0.24) 0.4 4 000 0.3 0.24 3 000 • Second dividend of SEK 1.20 per share for 0.2 4 217 2 000 the fiscal year 20
Slide 18: Capital efficiency
Capital efficiency Q3 2020 Net working capital 40 34.4 35.9 34.3 35.9 20 000 • Net working capital decreased 22% of which 12% 31.8 30 14 062 15 120 15 000 was related to currency 13 127 12 158 11 821 20 10 000 10 5 000 0 0 2018 2019 Q3 2020 Q3 2019 Q3 2020 Avg. NWC/revenues, % Avg.NWC, MSEK End of p
Slide 19: Strong operating cash flow
Strong operating cash flow Q3 2020 Operating cash flow and cash conversion rate, % MSEK Q3 2020 Q3 2019 3 000 300 2 827 Operating profit 1 820 1 927 Depreciation, amortization and impairment 426 556 2 500 250 2 242 Capital gain/loss and other non-cash items 80 -104 2 000 1 963 200 1 883 2 326 2 379
Slide 20: Summary and outlook
Summary and outlook C Epiroc
Slide 21: Solid results
Solid results Q3 summary • Demand recovered, but Covid-19 restrictions still impacting • Service proving resilient • Customers investing for the future – with strong interest for automation • Efficiency actions executed according to plan • Solid results and strong cash flow • Second dividend propose
Slide 22: Demand expected to remain stable in the near term
“We expect that the demand, both for equipment and aftermarket, will remain stable in the near term. That said, there are uncertainties regarding the Covid-19 development and related restrictions, which can have an adverse effect on the demand.” 22
Slide 23: Q&A
Q&A
Slide 24: Please join us for our CMDF!
Savte the Please join us for our CMDF*! November 23 at 15:00 CET Two hours with management updates on innovation and aftermarket See you online! *Capital Markets Digital Fika Fika = The Swedish practice of taking a break from daily activities to enjoy coffee, often with something sweet. Like for exa
Slide 25: 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 26: 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