Slide 1: Q2 2024
Q2 2024 July 19, 2024 Helena Hedblom, President and CEO Håkan Folin, CFO
Slide 2: Highlights Q2 2024
Highlights Q2 2024 • Strong mining, weak construction – Large equipment orders MSEK 950 (550) – Strong organic service growth – Construction weakened • Building position for future growth – Closed the acquisition of Stanley Infrastructure – Announced acquisition of ACB+ • Actions to improve profitab
Slide 3: Group orders received: Strong mining, weak construction
Group orders received: Strong mining, weak construction • Orders received +6% • Strong mining • +1% organic growth • MSEK 16 349 (15 436) • High demand for larger rebuilds • +7% acquisition growth and mixed-fleet automation • Weakened construction Orders received Organic growth Orders received bridg
Slide 4: Innovation
Innovation • Accelerated leadership within automation – Strong demand for mixed-fleet automation – Acquisition of remaining shares of ASI Mining (66%) – One-stop shop for mixed-fleet automation and remote-control solutions • Program for recycled steel and carbides • Battery-electric trolley truck sy
Slide 5: Aftermarket
Aftermarket • Strong demand for service (larger rebuilds and automation) • Construction weakened, impacting aftermarket negatively Revenue split Recurring aftermarket revenues 14 000 12 000 10 960 10 439 10 054 24% (22) 10 000 9 738 9 612 9 453 T&A 8 304 8 626 8 965 34% (34) 8 000 Equipment 6 000 Af
Slide 6: Operational excellence
Operational excellence • Actions to improve profitability – Adjusted operating margin, EBIT, 19.7% (21.6) – Efficiency measures were carried out as planned – Reduction of employees by around -450 sequentially (comparable units) • Taking sourcing to the next level – Cross-functional effort, incl. R&D
Slide 7: Sustainability: People
Sustainability: People • Improved safety – Focus on a strong safety culture – Total recordable injury frequency rate decreased to 4.7 (5.5) • Employees up 6%* to 19 081 (18 056) – Core values - Innovation, commitment and collaboration • Increased number of women – Employees 19.2% (18.8) – Managers 2
Slide 8: Sustainability: Planet
Sustainability: Planet • CO2e emissions from operations -32% to 15 692 (23 026) tonnes – Higher share of renewable energy purchased and installation of solar panels • CO2e emissions from transport +11% to 102 310 (91 822) tonnes – Higher volumes delivered • The world’s 95th most sustainable company
Slide 9: Group revenues and EBIT
Group revenues and EBIT • Revenues -1% organic to MSEK 16 511 • Operating profit MSEK 2 921, incl. IAC of MSEK -325 (-16) – Transaction and integration costs MSEK -130, restructuring costs MSEK -104, earn-out MSEK -73 and change in provision for LTIP -18 (-16) • Adjusted operating profit MSEK 3 246
Slide 10: Group EBIT profit bridge
Group EBIT profit bridge Adj. Margin: Margin: margin: 21.5% 17.7% 19.7% 3 600 -14% 3 413 3 400 3 246 3 200 -631 -254 +325 3 000 -3.6 ppt +393 2 921 -3.0 ppt +2.8 ppt 2 800 2 600 2 400 +16 Adj. opening balance +55 Structure incl. acq. -325 IAC 400 200 0 Q223 Organic Currency Structure/other Q224 IAC
Slide 11: Equipment & Service orders received: Good demand
Equipment & Service orders received: Good demand • Orders received +1% • High mining activity • +3% organic growth • MSEK 12 388 (12 276) • Large orders MSEK 950 (550) • Strong demand for mixed-fleet automation and midlife upgrades Orders received Organic growth Orders received bridge +9% organic 14
Slide 12: E&S revenues and EBIT
E&S revenues and EBIT • Revenues +1% organic to MSEK 12 516 • Operating profit MSEK 2 763, incl. IAC of MSEK -142 (0) – Earn-out of MSEK -73 for RCT and restructuring costs of MSEK -69 • Adjusted operating profit MSEK 2 905 (2 995) – Adj. EBIT margin 23.2% (23.9) – Higher costs and negative mix effe
Slide 13: E&S profit bridge
E&S profit bridge Adj. Margin: Margin: margin: 23.9% 22.1% 23.2% -8% 2 995 3 000 2 905 2 900 -130 -440 +142 2 800 -1.1ppt 2 763 -3.7ppt +338 2 700 +3.0ppt 2 600 2 500 2 400 2 300 +/-0 Adj. opening balance +12 Structure incl. acq. -142 IAC 300 200 100 0 Q223 Organic Currency Structure/other Q224 IAC
Slide 14: Tools & Attachments orders received: Mixed demand
Tools & Attachments orders received: Mixed demand • Orders received +24% • Construction weak, impacting • -6% organic growth – Acquisition of Stanley infrastructure both attachments and tools • +31% acquisition growth • MSEK 3 947 (3 180) • Weakened demand in important markets such as the United Sta
Slide 15: T&A revenues and EBIT
T&A revenues and EBIT • Revenues up 17% to MSEK 3 991, -10% organic • Operating profit MSEK 283, incl. IAC of MSEK -165 (0) – Transaction and integration costs for acquisitions MSEK -130 and restructuring costs MSEK -35 • Adjusted operating profit MSEK 448 (524) – Adj. EBIT margin 11.2% (15.3) – Und
Slide 16: T&A profit bridge
T&A profit bridge Adj. Margin: Margin: margin: 15.3% 7.1% 11.2% 600 -46% 550 524 500 448 450 -184 -1.5ppt 400 +64 +2.2ppt -121 +165 350 -8.9ppt 300 283 +0 Adj. opening balance 250 +44 Structure incl. acq. 200 -165 IAC 150 100 50 0 Q223 Organic Currency Structure/other Q224 IAC Adjusted operating pro
Slide 17: Costs, net financials and tax
Costs, net financials and tax • Administration, marketing and R&D expenses Administration, marketing and R&D expenses – Acquisitions explaining increase both y-o-y and sequentially 3 000 22 2 746 – Down as percent of revenues, sequentially, to 2 564 2 557 21 2 500 2 367 2 410 2 411 16.6% (17.0) 2 32
Slide 18: Operating cash flow
Operating cash flow Operating cash flow and cash conversion rate, % 3 500 130 MSEK Q224 Q223 120 Operating profit 2 921 3 413 3 000 110 Depreciation, amortization and impairment 788 644 100 2 500 2 435 90 Capital gain/loss and other non-cash items 28 -254 82 81 90 80 83 Net financial items received/
Slide 19: Working capital
Working capital Net working capital Working capital • Net working capital +12% +12% MSEK 25 045 35 000 40 37.8 25 045 – Acquisitions and lower payables 22 420 30 000 33.5 35 – 37.8% (33.5) of revenues 29.5 25 045 15 561 25 000 30 22 420 20 157 21 373 20 000 25 15 119 15 561 15 000 20 11 082 11 271 1
Slide 20: Capital efficiency
Capital efficiency Net debt and Net debt/EBITDA Capital employed and ROCE • Net debt at MSEK 15 801 (9 099) 1.2 20 000 65 000 60 1.04 60 750 – Higher debt level 60 000 1.0 18 000 55 – Dividend paid 15 801 55 000 0.8 16 000 50 0.60 49 523 14 000 50 000 45 • Net debt/EBITDA 1.04 (0.60) 0.6 45 000 12 0
Slide 21: Building position for future growth
Building position for future growth Stanley Infrastructure ACB+ Supports our Expands our high- Significant sales Excellent Strengthen growth strategy end attachments synergies cultural fit offering of • Construction and portfolio • Stronger presence • Strong focus on attachments and deconstruction i
Slide 22: Financial impacts of the acquisition of Stanley Infrastructure
Financial impacts of the acquisition of Stanley Infrastructure Deal closed April 1, 2024 Reporting Segment: Tools & Attachments (Attachments Division) Employees 1 200 employees Revenues and EBITA 2023 Revenues of MUSD 447 / MSEK 4 725*. Adjusted EBITA 16% EBITA margin, Q2 2024 Low double digit (adju
Slide 23: Summary
Summary • Strong mining (77% of orders) ‒ Large orders MSEK 950 (550) ‒ Service growth 5% organic • Weak construction (23% of orders) • Actions to improve profitability • Building position for future growth • Accelerated leadership within automation • Battery-electric trolley truck system for underg
Slide 24: Looking ahead
Looking ahead In the near term, we expect that the underlying mining demand, both for equipment and aftermarket, will remain at a high level, while the demand from construction customers is expected to remain weak 24
Slide 25: Capital Markets Day
Capital Markets Day CAPITAL MARKETS DAY Join us in Las Vegas + MinEXPO or join us online! Tuesday September 24, 2024 www.epirocgroup.com/en/cmd-2024 Q1 2024 25
Slide 26: Q&A
Q&A ir@epiroc.com C Epiroc a ———
Slide 27: Appendix
Appendix C Epiroc Be ——=
Slide 28: Investment case
Investment case We accelerate the Our success is We focus on We have a high productivity and We have a well- We create value based on attractive proportion sustainability proven business for our sustainability and niches with of recurring transformation in model stakeholders a strong corporate struc
Slide 29: A 151-year old start-up company and a leading productivity and sustainability partner
A 151-year old start-up company and a leading productivity and sustainability partner Orders received Orders received Revenues in ~150 countries 58 899 59 259 Europe 53 222 ~ 19 000 North America 13% employees 27% 45 648 39 400 39 492 36 579 EBIT margin* 20.1% Africa/ Asia / Australia Middle East 30
Slide 30: Strategy and foundations for success
Strategy and foundations for success . Operational Focus on attractive niches Innovation Aftermarket excellence Outperformance Sustainability and a strong company culture 3
Slide 31: Financial goals at a glance
Financial goals at a glance Goals Description Q2 2024 2023 2015-2023 Growth Annual revenue growth of 8% over a business cycle. 4% 21% 10% Industry-best operating margin, with strong 17.7% 21.8% Profitability (EBIT) 20.4% resilience over the cycle. Adj. 19.7% Adj. 21.7% Improve capital efficiency and
Slide 32: 2030 goals for people and planet
2030 goals for people and planet • No work-related injuries • Balanced workforce and double the number of women in operational roles • Have all employees and business partners comply with our Code of Conduct and Responsible Sales Assessment Process implemented • Halve CO2e emissions in operations* •
Slide 33: Debt information and maturity profile
Debt information and maturity profile Maturity profile 5 661 • Net debt/EBITDA: 1.04 4 500 4 500 • S&P rating: BBB+ Stable outlook 500 • External financing: BSEK 19.1 1 500 • 82% long term financing 3 000 • 37% green or sustainability linked 2 145 145 2 000 • 4.5 years average tenor (long-term) 2 00
Slide 34: 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 35: 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