Slide 1: Q3 2022
Q3 2022 October 26, 2022 Helena Hedblom, President and CEO Håkan Folin, CFO
Slide 2: Highlights Q3 2022
Highlights Q3 2022 • Strong quarter – Order intake, excl. Russia, +5% organic – Large orders for solutions for safety, productivity and lower emissions – Good aftermarket development, particularly for service – Increased output, despite supply-chain challenges • Profitable growth – Record revenues –
Slide 3: Key financials
Key financials Orders received, MSEK and change, % • Orders, excl. Russia, MSEK 13 324, +5% organic 15 000 – Reported MSEK 12 322, -10 % organic 14 000 +1% 13 000 – All Russian orders removed from book 12 245 -1% 12 322 12 000 +12% -10% • Record revenues MSEK 12 802, +12% organic 11 000 • Operating
Slide 4: Leading productivity and sustainability partner
Leading productivity and sustainability partner Innovations, acquisitions and partnerships strengthen Epiroc’s position • Innovations – Compact face drilling rigs: Boomer E10 and E20 – First-class operator safety thanks to Auto Bolt Reload (ABR) • Acquisitions – RNP México (finalized) – AARD Mining
Slide 5: Aftermarket
Aftermarket Revenues • High customer activity • Strong Service, excl. Russia, 24% (27) T&A 30% (28) +22% organic Equipment • Meaningful order within Aftermarket electrical infrastructure 70% (72) • Connected fleet growing • Regional Parts & Services divisions 46% (45) Service Q3 2022 5
Slide 6: Operational excellence
Operational excellence • Regional Parts & Services divisions • Supply-chain program • Increased output Q3 2022 6
Slide 7: Sustainability
Sustainability • People • Planet – Increased share of women – Lower CO2e from operations o Employees up to 18.1% (16.7) o More renewable energy and o Managers up to 22.7% (21.5) installation of solar panels – Increased number of injuries – Higher CO2e from transport due to higher volumes o TRIFR at
Slide 8: Russia
Russia Orders received, MSEK, excl. Russia • Currently not possible to conduct business +16% • All orders removed from order book – Impact of BSEK -1 in Q3 13 818 13 842 12 961 13 377 13 324 11 493 12 245 12 322 • Provision of MSEK -150 11 070 11 643 10 690 10 698 – Provision of MSEK -400 in Q2 9 82
Slide 9: Operating profit and margin
Operating profit and margin 23.4 23.6 23.9 4 000 23.2 23.0 22.9 23.3 24 22.6 21.3 21.7 23.6 23.7 20.7 20.9 23.2 22.7 3 500 22.6 22.4 21 21.2 18.7 20.9 21.3 20.1 3 064 3 000 19.6 164 18 19.0 2 801 2 554 2 588 16.8 420 2 500 2 279 2 197 2 331 15 2 160 2 131 67 2 016 15 2 000 233 115 1 911 1 896 12 76
Slide 10: Epiroc Group: Profit bridge
Epiroc Group: Profit bridge Adj. Margin: Margin: margin: 23.6% 22.7% 23.9% 3 200 3 064 3 000 +216 -169 2 900 +150 -0.8pp -1.7pp +14 2 800 +501 2 600 +1.6pp 2 400 2 352 2 200 2 000 1 800 400 200 0 Q321 Organic Currency Structure/other Q322 LTI Other adjustments Adjusted operating profit Q3 2022 10
Slide 11: Segment: Equipment & Service
Segment: Equipment & Service Orders received, MSEK and change, % • Orders, excl. Russia, MSEK 10 457, +8% organic 10 500 +2% – Equipment, excl. Russia, -7% organic 10 000 9 526 9 500 9 336 0% – Strong service, excl. Russia, +22% organic 9 000 -10% +12% 8 500 • Revenues +18% organic • Reported operat
Slide 12: Equipment & Service: Profit bridge
Equipment & Service: Profit bridge Adj. Margin: Margin: margin: 26.4% 24.8% 26.2% 2 600 2 555 +159 -131 2 417 +138 2 400 -1.3pp -1.7pp 2 200 +480 +1.4pp 2 000 1 909 1 800 1 600 1 400 400 200 0 Q321 Organic Currency Structure/other Q322 Other adjustments Adjusted operating profit Q3 2022 12
Slide 13: Segment: Tools & Attachments
Segment: Tools & Attachments Orders received, MSEK and change, % • Orders, excl. Russia, -2% organic 3 000 -3% – Orders for both hydraulic attachments and rock 2 900 2 866 -5% drilling tools decreased 2 800 2 767 -10% +12% – Negative acquisition contribution (bridge) 2 700 2 600 • Revenues MSEK 3 03
Slide 14: Tools & Attachments: Profit bridge
Tools & Attachments: Profit bridge Adj. Margin: Margin: margin: 18.6% 18.8% 19.2% 600 583 -7 571 12 -0.5pp 550 +74 +0.5pp 502 +2 500 +0.2pp 450 50 0 Q321 Organic Currency Structure/other Q322 Other adjustments Adjusted operating profit Q3 2022 14
Slide 15: Costs, net financials and tax
Costs, net financials and tax Administration, marketing and R&D expenses • Increased costs – Growth, increased activity, R&D 2 500 35 – Currency and acquisitions 2 049 30 1 978 2 000 • Net financial items MSEK -24 (73) 1 789 1 724 25 1 570 1 595 – Interest net MSEK -23 (-24) 1 500 1 427 1 360 1 380
Slide 16: Operating cash flow
Operating cash flow Operating cash flow and cash conversion rate, % MSEK Q3 2022 Q3 2021 2 500 2 415 350 Operating profit 2 900 2 352 Depreciation, amortization and impairment 526 462 2 156 300 2 000 Capital gain/loss and other non-cash items 18 -51 1 814 250 Net financial items received/paid -23 93
Slide 17: Capital efficiency
Capital efficiency • Net working capital MSEK 17 744 • ROCE improved to 27.9% (25.0) – Excl. acquisitions and currency +23% – 30.4% (29.8) of revenues Net working capital Capital employed and ROCE 30 000 35.9 40 50 000 60 33.8 33.1 42 560 35 25 000 30.8 29.8 29.5 30.4 38 250 38 294 50 29.0 28.9 40 0
Slide 18: Capital structure
Capital structure Net debt and Net debt/EBITDA • Strong financial position 0.2 2 000 – Net cash MSEK 1 545 (1 191) 0.1 1 000 – Green bonds MSEK 2 000 0.0 0 -0.03 -0.1 -322 -0.07 • Net debt/EBITDA ratio at -0.12 (-0.12) -0.12 -0.12 -876 -0.12 -1 000 -0.16 -0.2 -3 638 -4 137 -1 191 -1 304 -1 844 -1 54
Slide 19: Summary
Summary • Strong quarter • Large orders for solutions for safety, productivity and lower emissions • Strong service • Increased output, despite supply- chain challenges • Profitable growth • Several acquisitions • Drive the transformation Q3 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.” Q3 2022 20
Slide 21: Q&A
a Q&A iroc GEp
Slide 22: See more of Epiroc!
See more of Epiroc! Capital Markets Day: June 1-2, 2023, Örebro, Sweden Q3 2022 22
Slide 23: 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 24: 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