Epiroc Ab Class A · OMXSTO:EPI_A
Epiroc Ab Class A — Q1 2020 Earnings Presentation
26 slides from Epiroc Ab Class A's earnings presentation, Apr 23, 2020
Slide 1: Interim report Q1 2020
Interim report Q1 2020 April 23, 2020 Helena Hedblom, President and CEO Anders Lindén, CFO
Slide 2: Direction forward
Direction forward Innovation Aftermarket Operational excellence Sustainability 2
Slide 3: Limited effect on Q1 results from Covid-19
Limited effect on Q1 results from Covid-19 Key highlights Q1 2020 • Impact on operations • High customer activity – Continued growth in service – Stable equipment demand, sequentially – Order intake somewhat higher than in Q4 • Lower revenues – Negative impact from Covid-19 • Improved underlying mar
Slide 4: Key financials Q1 2020
Key financials Q1 2020 Orders received, MSEK and change, % • Order intake declined 3%, -4% organic 10 200 -3% 10 063 • Revenues declined 7%, -8% organic 10 000 -4% • Operating profit at MSEK 1 932 9 800 +1% 0% 9 772 – Items affecting comparability of MSEK +21 (costs related to efficiency improvement
Slide 5: Covid-19
Covid-19 Current status Impact Equipment Impact Aftermarket • Operational, but with negative impact on • Our sales, service and distribution in the field supply of components are operational in most places, with restrictions • Equipment manufacturing closed in India • Consumables manufacturing close
Slide 6: Efficiency improvements
Efficiency improvements Q1 2020 Actions with short-term impact • Reduce additional workforce and consultants • Work-time reductions and temporary layoffs • Reduce expenses Actions with long-term impact • Efficiency initiatives with expected annual savings of more than MSEK 500 • Consolidation of man
Slide 7: Increased resilience through the aftermarket
Increased resilience through the aftermarket Q1 2020 • Solid development in service Aftermarket revenues, MSEK – Service products 30 000 26 829 26 987 • Rock drilling tools affected by optimization of the +6% product offering 25 000 23 822 21 348 Revenues in the quarter 19 895 20 000 19 113 Equipmen
Slide 8: Leading the way in innovation
Leading the way in innovation Q1 2020 • Epiroc, in partnership with automation specialist ASI Mining, to convert Roy Hill’s haul trucks to autonomous use • HATCON – remote monitoring for hydraulic attachments using MyEpiroc platform • Epsilon premium tricone bits • DM30 II SP – Rotary blasthole dril
Slide 9: New long-term sustainability goals
New long-term sustainability goals 2030 goals • Halve CO2 emissions • Health and safety • Diversity and inclusion – From operations – No work-related injuries – Double the number of women – From transport in operational roles • Code of Conduct – From our equipment 9
Slide 10: Financials
Financials CEpiroc
Slide 11: Profit impacted by items affecting comparability
Profit impacted by items affecting comparability Q1 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 19.7 19.7 19.6 3 000 19.0 18 18.4 18.4 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 50
Slide 12: Epiroc Group – Profit bridge
Epiroc Group – Profit bridge Looking into the numbers Margin: 19.7% Margin: 21.2% Adj. margin: 20.9% 2 000 -1% 1 930 1 932 44 +91 65 1 911 +1.1 pp -222 1 800 -0.9 pp +133 +1.3 pp 1 600 0 Q1 2019 Organic Currency Structure and other Q1 2020 Items affecting LTI Adjusted operarting profit comparability
Slide 13: Segment: Equipment & Service
Segment: Equipment & Service Q1 2020 Orders received, MSEK and change, % • Orders received -3% organic 7 400 -2% 7 300 • Service orders +12% organic 7 248 7 200 – High customer activity -3% 7 101 7 100 +1% 0% • Equipment orders -17% organic – Investment decisions postponed 0 Q1 2019 Organic Currency
Slide 14: Equipment & Service – Profit bridge
Equipment & Service – Profit bridge Looking into the numbers Margin: 24.2% Margin: 24.2% Adj. margin: 24.8% 1 800 -5% 1 719 1 700 -185 1 629 -33 1 595 1 600 -0.8 pp +94 34 -0.5 pp +1.3 pp 1 500 1 400 0 Q1 2019 Organic Currency Structure Q1 2020 Items affecting Adjusted and other comparability operat
Slide 15: Segment: Tools & Attachments
Segment: Tools & Attachments Q1 2020 Orders received, MSEK and change, % • Orders received -7% organic 2 900 -5% – Negative for both rock drilling tools and orders for 2 800 2 760 hydraulic attachment tools 2 700 -7% 2 619 • Revenues -5% organic 2 600 +2 0% • Reported margin of 13.5% (14.2) 0 – Cost
Slide 16: Tools & Attachments – Profit bridge
Tools & Attachments – Profit bridge Looking into the numbers Margin: 14.2% Margin: 13.5% Adj. margin: 13.9% 390 -6% 371 360 347 -11 337 -69 10 +46 -0.4 pp 330 -2.1 pp +1.7 pp 300 270 240 60 0 Q1 2019 Organic Currency Structure Q1 2020 Items affecting Adjusted and other comparability operating profit
Slide 17: Costs, net financials and tax
Costs, net financials and tax Q1 2020 • Lower comparable costs Administration, marketing and R&D expenses – Expenses adjusted for change in provision for 2 000 30 LTI and items affecting comparability 1 745 1 708 1 637 1 663 1 671 1 640 1 569 25 • Net financial items MSEK -46 (-100) 1 500 1 482 1 38
Slide 18: Capital structure
Capital structure Q1 2020 Net debt and Net debt/EBITDA • Net cash position of MSEK 1 191 0.6 3 000 – Previous year net debt of MSEK 3 641 2 125 0.5 1 982 2 500 0.43 0.4 0.39 2 012 2 000 • Net debt/EBITDA ratio at -0.12 (0.39) 0.3 0.24 1 500 • Strong financial position 0.2 1 000 – Long-term financing
Slide 19: Capital efficiency
Capital efficiency Q1 2020 Net working capital • Net working capital decreased 6% 40 35.3 35.3 20 000 34.4 32.6 31.8 30 14 062 14 174 14 348 15 000 – Reduction in both trade receivables and inventories 13 457 12 158 – Trade payables also lower, which partly offset the 20 10 000 improvement year-on-y
Slide 20: Operating cash flow
Operating cash flow Q1 2020 MSEK Q1 2020 Q1 2019 Operating cash flow and Net profit Operating profit 1 932 1 930 3 000 2 827 Depreciation, amortization and impairment 440 472 Capital gain/loss and other non-cash items 110 - 84 2 500 2 242 2 482 2 318 2 000 1 883 Net financial items received/paid 263
Slide 21: Summary and outlook
Summary and outlook C Epiroc
Slide 22: Limited effect on Q1 results from Covid-19
Limited effect on Q1 results from Covid-19 Key highlights Q1 2020 • Impact on operations • High customer activity – Continued growth in service – Stable equipment demand, sequentially – Order intake somewhat higher than in Q4 • Lower revenues – Negative impact from Covid-19 • Improved underlying mar
Slide 23: Q2 comment
Q2 comment “We expect that the demand both for equipment and in the aftermarket will be lower and that the effects of the pandemic will have a significant negative impact on revenues and profit in Q2.”
Slide 24: Epiroc
C Epiroc
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