Slide 1: Interim report Q4 2018
Interim report Q4 2018 February 5, 2019 Per Lindberg, President and CEO Anders Lindén, CFO
Slide 2: Key highlights – Full year 2018
Key highlights Full year 2018 • High demand and growth 40,000 24 – Orders received +16% 35,000 21 – Revenues +22% 30,000 18 – Operating profit +25% 25,000 15 – Adjusted operating margin 20.3% 20,000 12 • Increased pace of introducing new products 15,000 9 • Acquisitions to enhance customer offerings
Slide 3: Key highlights – Q4 2018
Key highlights Q4 2018 • A solid finish to a strong year • Continued good customer demand – Organic growth vs. Q4 2017 – Order intake at same level as Q3 2018 • Strong revenue and profit growth • Improved operating margin • Strong operating cash flow – Release of working capital • Four acquisitions
Slide 4: Key financials
Key financials Q4 2018 • Organic order growth of 11% 12,000 30% 10,558 • Organic revenue growth of 19% 10,000 9,468 25% 8,464 • Reported operating profit SEK 2,162 million 8,058 (1,528) – margin at 20.5% (18.1) 8,000 20% – Effect of split cost and change in provision for 6,000 15% incentive programs
Slide 5: Orders received
Orders received Q4 2018 – change in local currency Orders received by region Q4 2018 23% 25% Europe -4% 13% North America 18% +36% 21% North America South America Europe Africa/Middle East Africa/Middle East Asia/Australia +0% Asia/Australia +16% Orders received by customer type 2018 27% South Ameri
Slide 6: Segments
Segments Orders received, SEK million Revenues Organic order growth, % Q4 2018 - aftermarket 59% 10,000 9,000 2,306 8,000 +1% 7,000 2,197 6,000 5,000 +16% 3,761 4,000 3,112 3,000 +17% 2,000 3,355 2,676 1,000 0 Q4 2017 Q4 2018 Equipment Service Tools & Attachments Equipment Service Tools & Attachment
Slide 7: Equipment & Service
Equipment & Service • Good sentiment in the market 9,000 27% 8,000 24% • Organic order growth of 17% 7,000 21% – Equipment +17% 6,000 18% – Service +16% 5,000 15% • Organic revenue growth of 22% 4,000 12% • Operating margin increased to 23.2% (23.0) 3,000 9% • Acquisition of 34% in ASI Mining 2,000
Slide 8: Tools & Attachments
Tools & Attachments • Good business environment 3,000 16% • Organic order growth of 1% 2,500 14% – Impact from measures to improve product mix 12% and efficiency actions 2,000 10% • Organic revenue growth of 10% 1,500 8% • Operating margin improved to 13.3% (10.2) 6% 1,000 • Agreement to acquire man
Slide 9: Business development / Innovations
Business development / Innovations Q4 2018 • Second generation battery equipment – Larger fossil-free machines • Agreement with Ericsson – Ecosystem required for automation and digitalization • New drum cutters strengthen our offering in hydraulic attachments © 2019 by Epiroc. All rights reserved.
Slide 10: Financials
Financials C Epiroc
Slide 11: Orders received and revenues
Orders received and revenues Q4 2018 Trend Sales bridge 12,500 125% Orders received Revenues SEK million SEK million Δ, % Δ, % 10,000 100% Q4 2017 8,058 8,464 Organic +11 +19 7,500 75% Currency +3 +3 5,000 50% Structure and other +3 +3 Total +17 +25 2,500 25% Q4 2018 9,468 10,558 0 0% Q1 Q2 Q3 Q4 Q1
Slide 12: Operating profit and margin
Operating profit and margin Q4 2018 Trend Profit bridge 2,500 25% Operating profit Margin, % SEK million Δ, pp 2,000 20% Q4 2017 1,528 18.1 Organic +407 +1.0 1,500 15% Currency +143 +1.0 1,000 10% Structure and other* +84 +0.4 Total +634 +2.4 500 5% Q4 2018 2,162 20.5 *Includes operating profit/loss
Slide 13: Income statement
Income statement SEK million Q4 2018 Q4 2017* 2018 2017* Q4 2018 Revenues 10,558 8,464 38,285 31,364 Cost of sales -6,721 -5,563 -24,317 -20,101 • Increased R&D expenses Gross profit 3,837 2,901 13,968 11,263 • Tax rate 23.3% (23.5) Gross profit margin 36.3% 34.3% 36.5% 35.9% Marketing and administr
Slide 14: Balance sheet
Balance sheet SEK million Dec 31, 2018 Dec. 31, 2017* • Refinancing Intangible assets 3,620 3,121 – S&P BBB+ long term issuer credit rating with Rental equipment 1,233 1,215 Other non-current assets 4,343 3,891 stable outlook Inventories 10,516 8,440 • IFRS 16 Receivables 9,627 7,920 Current financi
Slide 15: Epiroc Group - Net working capital
Epiroc Group - Net working capital 14,000 42% • Working capital decreased sequentially 12,000 36% – Average net working capital/revenues 31.8% 10,000 30% • Supply-chain program progressing according to plan 8,000 24% 6,000 18% 4,000 12% 2,000 6% 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2017 2017 2017 2017 2018
Slide 16: Epiroc Group - Net debt
Epiroc Group - Net debt 3,500 0.45 • Net debt SEK 1,208 million 0.40 3,000 • Net debt/EBITDA 0.14 0.35 2,500 • IFRS 16 0.30 – Net debt will increase with SEK 2.0 billion 2,000 0.25 • No impact on net debt from refinancing 1,500 0.20 0.15 1,000 0.10 500 0.05 0 0.00 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Net
Slide 17: Cash flow
Cash flow SEK million Q4 2018 Q4 2017* • Operating cash flow SEK 2,242 million Operating profit 2,162 1,528 Depreciation, amortization and impairment 350 341 • Working capital decreased Capital gain/loss and other non-cash items -81 -112 2,431 1,757 Net financial items received/paid -24 -279 Taxes p
Slide 18: Summary
Summary C Epiroc
Slide 19: Key highlights – Q4 2018
Key highlights Q4 2018 • A solid finish to a strong year • Continued good customer demand – Organic growth vs. Q4 2017 – Order intake at same level as Q3 2018 • Strong revenue and profit growth • Improved operating margin • Strong operating cash flow – Release of working capital • Four acquisitions
Slide 20: C Epiroc
C Epiroc
Slide 21: Slide 21
Slide 22: 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