Slide 1: Interim report Q2 2019
Interim report Q2 2019 July 18, 2019 Per Lindberg, President and CEO Anders Lindén, CFO
Slide 2: Record-breaking quarter
Record-breaking quarter Key highlights Q2 2019 • Robust demand with record high order intake – Strong aftermarket – Order intake of equipment in line with previous quarters, but lower than strong Q2 2018 • Record revenues, up 8% y-o-y – Supported by acquisitions and currency • Operating profit at al
Slide 3: Key financials Q2 2019
Key financials Q2 2019 Orders received, SEK million, and change % • Order intake up 1%, -4% organic +1% 10,600 10,553 • Revenues up 8%, +3% organic 10,483 10,400 +3% • Operating profit up 25% -4% – Currency and volumes contributed positively 10,200 +2% – Change in provision for LTI of SEK -39 millio
Slide 4: Leading the way in innovation
Leading the way in innovation Q2 2019 • 6th Sense introduced. Benefits for customers: – Optimizing processes by connecting machines, systems and people – Production gains and lower operating costs • Market leading offering in automation, connectivity, and battery electric vehicles – Customer demand
Slide 5: Operational excellence
Operational excellence Q2 2019 • Supply chain program for spare parts and consumables is progressing according to plan – Improved availability – Lower transport costs – Lower inventory levels • Continued positive effects from efficiency actions in Tools & Attachments – Agreement signed to divest geo
Slide 6: Sustainability as a competitive advantage
Sustainability as a competitive advantage Q2 2019 • Safety and well-being – Fatal accident in India – Work-related injuries decreased – Launch of SAFESTART® • Passionate people – First employee survey – Engaged employees that view Epiroc as a great place to work • Responsible use of resources – CO2
Slide 7: High proportion of recurring business
High proportion of recurring business Per segment Q2 2019 Order intake, SEK million and growth, % Revenues (Total growth / Organic growth) Equipment Service Tools & Attachments +1% 10,417 10,503 3,580 28% Equipment 4,234 -15 / -15 34% 66% Aftermarket 4,097 Service 3,713 +10 / +7 38% Tools & Attachme
Slide 8: Segment: Equipment & Service
Segment: Equipment & Service Orders received, SEK million and change, % • Organic order down 4% vs. strong Q2 2018 8,000 -3% 7,947 • Service +7% organic 7,900 – Orders increased in all regions 7,800 -4% 7,700 -1% 7,677 +2% • Equipment -15% organic – Negative both for underground and surface 0 Q2 201
Slide 9: Segment: Tools & Attachments
Segment: Tools & Attachments Orders received, SEK million and growth, % • Orders received up 14%, -2% organic +14% 2,900 2,826 – Rock drilling tools orders negatively impacted by 2,800 optimization of product offering 2,700 +14% – Hydraulic attachment tools increased organically 2,600 2,500 2,470 –
Slide 10: Financials
Financials C Epiroc
Slide 11: Record profit
Record profit Q2 2019 Operating profit and margin Profit bridge, SEK million 4,000 24 2,300 2,263 22 3,500 139 21.3 20 2,200 20.0 20.5 +0.9pp 3,000 19.1 19.7 19.7 18 18.6 18.1 18.4 18.4 16 2,100 2,500 2,302 2,154 14 170 1,991 2,024 1,989 39 12 +1.2pp 2,000 126 59 2,000 1,578 1,610 181 1,459 1,521 1,
Slide 12: Costs, net financials and tax
Costs, net financials and tax Q2 2019 • Marketing and administration expenses higher Administration, marketing and R&D expenses – Growth, but also some inefficiencies 2,000 30 1,745 – Acquisitions and currency 1,637 1,663 1,569 25 1,482 – Expenses adjusted for change in provision for LTI 1,500 1,386
Slide 13: Capital structure
Capital structure Q2 2019 Net debt and Net debt/EBITDA • Net debt was SEK 4,217 million (3,027) 0.50 6,000 – Post-employment benefits SEK 460 million (176) 0.45 0.43 5,500 0.40 0.40 0.39 0.39 5,000 • IFRS 16 increased net debt by SEK 2,037 million 0.35 4,217 4,500 0.35 4,000 • First part of the divi
Slide 14: Capital efficiency
Capital efficiency Q2 2019 Net working capital • Net working capital up 13% to SEK 14,791 50 30,000 40 33.8 33.8 25,000 million (13,102) 31.9 31.8 31.7 20,000 30 14,791 14,791 – Increased trade receivables and inventories 12,897 13,102 15,000 20 10,173 following higher volumes. Trade payables decrea
Slide 15: Operating cash flow
Operating cash flow Q2 2019 SEK million Q2 2019 Q2 2018 Operating cash flow and Net profit Operating profit 2,263 1,810 2,400 100 2,242 Depreciation, amortization and impairment 468 340 2,200 90 Capital gain/loss and other non-cash items -36 54 2,000 80 1,800 1,680 2,695 2,204 1,623 70 1,600 1,506 N
Slide 16: Summary and outlook
Summary and outlook C Epiroc
Slide 17: Record-breaking quarter
Record-breaking quarter Key highlights Q2 2019 • Robust demand with record high order intake – Strong aftermarket – Order intake of equipment in line with previous quarters, but lower than strong Q2 2018 • Record revenues, up 8% y-o-y – Supported by acquisitions and currency • Operating profit at al
Slide 18: Demand expected to remain at a good level
Demand expected to remain at a good level “Going forward, we do not see any clear signs that the current market situation will change. Hence, we reiterate our view that the demand will remain at the current level in the near term, however noting that Q3 is in general slightly weaker than Q2.” 1 8
Slide 19: Save the date: Capital Markets Day
SAVE THE DATE Capital Markets Day November 14, 2019 Stockholm
Slide 20: C Epiroc
C Epiroc
Slide 21: 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
Slide 22: Appendix
Appendix C Epiroc
Slide 23: Geographical overview
Geographical overview Orders received, SEKm and % of Group orders Equipment & Service Tools & Attachments North Europe Top 10 areas America % of Group orders 23% % of revenues in 2018 23% 8,814 8,963 9,298 9,161 8,337 7,481 Australia 11% 69% 67% 70% 70% USA 10% 66% 68% Canada 8% 33% Russia 7% 34% 31
Slide 24: Income statement
Income statement Q2 2019 2017 2018 June 2019 2018 2019 SEK million Full year Full year 12 months Q2 Q2 Revenues 31,364 38,285 40,620 9,843 10,626 Cost of sales -20,101 -24,317 -25,555 -6,275 -6,550 Gross profit 11,263 13,968 15,065 3,568 4,076 Marketing expenses -2,280 -2,574 -2,671 -676 -710 Admini
Slide 25: Balance sheet
Balance sheet Q2 2019 2017 2018 2018 2019 2017 2018 2018 2019 SEK million Full year Full year Q2 Q2 % of BS SEK million Full year Full year Q2 Q2 % of BS Intangible assets 3,121 3,620 3,637 4,224 11% Share capital 21 500 500 500 1% Rental equipment 1,215 1,233 1,300 1,363 3% Retained earnings 12,020
Slide 26: Cash flow
Cash flow Q2 2019 2017 2018 June 2019 2018 2019 2017 2018 June 2019 2018 2019 SEK million Full year Full year 12 months Q2 Q2 SEK million Full year Full year 12 months Q2 Q2 Cash flow from operating activities Operating cash flow Operating profit 5,930 7,385 8,253 1,810 2,263 Net cash flow from oper
Slide 27: Key ratios
Key ratios Q2 2019 2017 2018 2019 SEK million Full year Full year Q2 Basic earnings per share, SEK 3.55* 4.50 1.40 Diluted earnings per share, SEK - 4.49 1.40 Basic number of shares outstanding, millions 1,212* 1,206 1,200 Diluted number of shares outstanding, millions - 1,206 1,200 Equity per share
Slide 28: 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