Slide 1: Q2 2022
Q2 2022 July 20, 2022 Helena Hedblom, President and CEO Håkan Folin, CFO
Slide 2: Highlights Q2 2022
Highlights Q2 2022 • High demand – Order intake at MSEK 13 377 – Strong growth in service • Best quarter ever for electrification • Record revenues and adjusted operating margin • Agility and resilience • Building for the future Q2 2022
Slide 3: Key financials
Key financials Orders received, MSEK and change, % • Orders received up 21% to 13 377, +6% organic 15 000 +21% – Excluding Russia, +18% organic 14 000 13 377 13 000 +5% o Cancellations of MSEK 480 12 000 +10% 11 070 +6% • Revenues of MSEK 11 868, +9% organic 11 000 • Operating profit increased 9% to
Slide 4: Leading productivity and sustainability partner
Leading productivity and sustainability partner Innovations, acquisitions and partnerships strengthen Epiroc’s position • Innovations – Digital solutions for tunneling construction – Trial of first ever battery-electric surface drill rig • Successful partnerships • Acquisitions – JTMEC, Australia, e
Slide 5: Aftermarket
Aftermarket Revenues • High customer activity and strong orders received 27% (26) 27% (31) • Innovations T&A Equipment – V Cutter – Diamond drill bits Aftermarket 73% (69) • Connected fleet growing • Continuous investments in our aftermarket operations 46% (43) Service Q2 2022 5
Slide 6: Operational excellence
Operational excellence • Relocation of manufacturing from Japan to China • Creation of a Digital Solutions division • Appointment of a Chief Technology Officer (CTO) Q2 2022 6
Slide 7: Sustainability
Sustainability • People • Planet – Increased share of women – Lower CO2e from operations o Women employees 17.9% o More renewable energy and o Women managers 22.4% installation of solar panels – Several activities to – Higher CO2e from transport reduce injuries due to higher volumes Q2 2022 7
Slide 8: Ukraine and Russia
Ukraine and Russia General Information • Focus on the safety and well-being of our colleagues • Financials and exposure – Provision of MSEK 400 in the quarter – Assets o Approx. MSEK 1 000 – June 30, 2022 o Mainly cash – Orders on hand o Approx. MSEK 1 400 – June 30, 2022 o More than halved in local
Slide 9: Operating profit and margin
Operating profit and margin 23.2 23.4 23.3 23.6 4 000 23.0 22.6 22.9 24 21.7 21.3 21.7 23.6 23.7 20.7 20.9 23.2 3 500 22.6 22.4 21 21.3 21.2 18.7 20.9 21.3 19.6 20.1 3 000 19.0 2 801 18 2 554 2 588 16.8 420 2 500 2 302 2 279 2 197 2 331 15 39 2 160 2 131 67 2 016 15 2 000 233 115 1 911 1 896 12 76 1
Slide 10: Epiroc Group: Profit bridge
Epiroc Group: Profit bridge Adj. Margin: Margin: margin: 22.4% 20.1% 23.6% 3 000 2 801 2 800 +169 -0.5pp -415 2 600 -4.2pp +495 +445 2 381 2 400 +2.4pp -75 2 182 2 200 2 000 1 800 400 200 0 Q221 Organic Currency Structure/other Q222 LTI Other adjustments Adjusted operating profit Q2 2022 10
Slide 11: Segment: Equipment & Service
Segment: Equipment & Service Orders received, MSEK and change, % • Orders received up 10% organic +26% 11 000 10 567 – Excluding Russia, +25% organic +5% 10 000 o Cancellations of MSEK 430 +11% 9 000 +10% 8 387 • Revenues up 8% organic • Adjusted operating profit MSEK 2 313 0 – Adjusted margin at 26
Slide 12: Equipment & Service: Profit bridge
Equipment & Service: Profit bridge Adj. Margin: Margin: margin: 26.2% 21.7% 26.6% 2 400 +104 2 313 2 300 -1.0pp 2 200 -459 2 100 +366 -6.1pp +422 2 000 +2.6p 1 880 1 891 1 900 1 800 1 700 1 600 1 500 400 300 200 100 0 Q221 Organic Currency Structure/other Q222 Other adjustments Adjusted operating pr
Slide 13: Segment: Tools & Attachments
Segment: Tools & Attachments Orders received, MSEK and change, % • Orders received -8% organic 3 000 +5% – Excluding Russia, -2% organic 2 900 2 825 2 800 +4% o Cancellations of MSEK 50 2 678 2 700 – Orders for both hydraulic attachments and rock 2 600 -8% +9% drilling tools decreased 2 500 • Revenu
Slide 14: Tools & Attachments: Profit bridge
Tools & Attachments: Profit bridge Adj. Margin: Margin: margin: 16.5% 15.9% 18.2% 600 573 550 +64 -46 +73 -2.1pp 500 500 +0.6pp +66 450 416 +0.9pp 400 350 300 100 50 0 Q221 Organic Currency Structure/other Q222 Other adjustments Adjusted operating profit Q2 2022 14
Slide 15: Costs, net financials and tax
Costs, net financials and tax • Higher costs – Administration, marketing and R&D expenses – Growth, increased activity, R&D, and acquisitions 2 500 35 • Net financial items MSEK -89 (-44) 1 978 30 2 000 – Interest net MSEK -23 (-19) 1 789 1 724 25 1 570 1 595 1 511 • Tax expense MSEK -519 (-445) 1 5
Slide 16: Operating cash flow
Operating cash flow Operating cash flow and cash conversion rate, % MSEK Q2 2022 Q2 2021 2 500 2 415 350 Operating profit 2 381 2 182 Depreciation, amortization and impairment 487 411 2 156 300 2 000 1 963 Capital gain/loss and other non-cash items -129 1 250 Net financial items received/paid -6 -17
Slide 17: Capital efficiency
Capital efficiency • Net working capital up 37% to MSEK 15 561 • ROCE improved to 28.1% (23.4) – Up 18%, excluding acquisitions and currency – Improved to 29.5% (30.8) of revenues Net working capital Capital employed and ROCE 25 000 40 40 000 38 250 38 294 60 36.1 35.9 36 816 33.8 34 583 35 244 34 7
Slide 18: Capital structure
Capital structure Net debt and Net debt/EBITDA • Strong financial position 0.2 2 000 – Net cash MSEK 876 (322) 0.1 1 000 • Net debt/EBITDA ratio at -0.07 (-0.03) 0.0 0 -0.03 -1 819 -322 -0.07 • MSEK 1 810 dividend paid -0.1 -0.12 -0.12 -1 000 -876 -3 638 -1 191 -1 304 -0.16 -0.2 -4 137 -1 844 -2 000
Slide 19: Summary
Summary • High demand • Best quarter ever for electrification • Record revenues and record adjusted operating margin • Agility and resilience • Building for the future • Epiroc 4 years! Q2 2022 19
Slide 20: Looking ahead
Looking ahead “We expect that underlying demand, both for equipment and aftermarket, will remain at a high level in the near term.” Q2 2022 20
Slide 21: Q&A
Q&A
Slide 22: United. Inspired. epiroc.com
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 23: 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