Epiroc Ab Class A · OMXSTO:EPI_A
Epiroc Ab Class A — Q4 2023 Earnings Presentation
25 slides from Epiroc Ab Class A's earnings presentation, Jan 24, 2024
Slide 1: Q4 2023
Q4 2023 January 24, 2024 Helena Hedblom, President and CEO Håkan Folin, CFO
Slide 2: Highlights 2023
2023 Highlights 2023 Orders received +11% BSEK 59.3 Revenues +21% • Major achievements and partnerships BSEK 60.3 • Orders received +11% Operating profit +18% – Strong mining business and several large orders BSEK 13.2 – Weak construction • Record revenues, +21% to BSEK 60.3 • Cash-generating busine
Slide 3: Highlights Q4 2023
Highlights Q4 2023 • Mixed demand – Strong mining and several large orders – Multi-year order for digital solutions – Construction weak • Strong revenues • Improved cash flow • Investing for long-term growth Q4 2023 3
Slide 4: Leading productivity and sustainability partner
Leading productivity and sustainability partner • Acquisitions – Creating options for the future – STANLEY Infrastructure strengthens Epiroc’s construction business, especially in North America – Weco Proprietary Limited expands Epiroc’s portfolio of spare parts in the growing and important African
Slide 5: Aftermarket
Aftermarket • High customer activity in mining • Strong demand for large rebuilds and service • Construction weak Revenues 20% (19) T&A 36% (36) Equipment Aftermarket 64% (64) 44% (45) Service Q4 2023 5
Slide 6: Operational excellence
Operational excellence • High parts availability drives growth • Adjusting operations to demand and volumes – Closing manufacturing in Essen, Germany in 2025 o Restructuring costs MSEK -158 – Investing in R&D, sales and marketing • Increased production capacity in Örebro, Sweden Q4 2023 6
Slide 7: Sustainability – People & Planet
Sustainability – People & Planet • Safety first! – Safety improved; TRIFR at 5.1 (5.7) – Sick leave decreased to 2.1% (2.4) – Fatal road traffic accident in January 2024 • 18 211 employees (16 996) – Acquisitions • Increased share of women employees and managers – Employees 19.0% (18.2) and managers
Slide 8: Key financials
Key financials Orders received, MSEK and change, % • Orders MSEK 14 388, +7% organic 15 000 +5% – Several large mining orders 14 500 -1% 14 388 -1% +7% • Revenues MSEK 15 568, +8% organic 14 000 13 705 • Operating profit, EBIT, MSEK 3 349 (3 235) 13 500 – Reported EBIT margin 21.5% (23.2) 0 – Items
Slide 9: Epiroc Group: Profit bridge
Epiroc Group: Profit bridge Margin: Adj. Margin: 21.5% margin: 23.2% 20.7% +4% 3 400 3 349 3 235 +249 -120 3 229 3 200 +0.5pp -449 3 000 -4.4pp +314 +2.2pp 2 800 2 600 2 400 400 200 0 Q422 Organic Currency Structure/other Q423 IAC Adjusted operating profit Q4 2023 9
Slide 10: Segment: Equipment & Service
Segment: Equipment & Service Orders received, MSEK and change, % • Orders received MSEK 11 551, +8% organic +3% 12 250 – Equipment, +13% organic and Service, +6% organic 12 000 -1% 11 750 -4% +8% 11 551 • Several large orders 11 500 11 250 11 163 – Total large orders BSEK 1.2 (0.4) 11 000 • Revenues
Slide 11: Equipment & Service: Profit bridge
Equipment & Service: Profit bridge Adj. Margin: Margin: margin: 25.5% 25.6% 23.3% +12% 3 400 3 211 3 200 +302 -280 3 000 +1.8ppt 2 931 2 874 2 800 -256 +291 -4.2ppt +2.5ppt 2 600 2 400 2 200 600 400 200 0 Q422 Organic Currency Structure/other Q423 IAC Adjusted operating profit Q4 2023 11 In Q4 2023,
Slide 12: Segment: Tools & Attachments
Segment: Tools & Attachments Orders received, MSEK and change, % • Orders received MSEK 2 827, -6% organic 3 000 +5% 2 900 2 827 – Weak construction demand, mainly within 2 800 hydraulic attachments 2 703 2 700 +12% 2 600 -6% • Revenues MSEK 2 985, -4% organic 2 500 -1% • Operating profit, EBIT, MSE
Slide 13: Tools & Attachments: Profit bridge
Tools & Attachments: Profit bridge Margin: Margin: Adj. 17.5% 8.1% margin: 13.4% 600 550 -49% 500 476 450 -151 401 400 -3.8ppt 350 +37 +1.7ppt -119 +158 300 -7.3ppt 250 243 200 150 100 50 0 Q422 Organic Currency Structure/other Q423 IAC Adjusted operating profit Q4 2023 13 In Q4 2023, Tools & Attach
Slide 14: Costs, net financials and tax
Costs, net financials and tax Administration, marketing and R&D expenses • Investments in R&D and sales 3 000 22 to cater to a high activity level 2 564 2 557 21 • Net financial items MSEK -435 (-189) 2 500 2 367 2 321 2 410 20 – Interest net MSEK -110 (-67) 2 049 1 978 19 2 000 • Tax expense MSEK -
Slide 15: Operating cash flow
Operating cash flow Operating cash flow and cash conversion rate, % 3 500 120 MSEK Q4 23 Q4 22 110 Operating profit 3 349 3 235 3 000 97 100 Depreciation, amortization and impairment 683 651 90 2 500 2 415 82 81 2 435 80 Capital gain/loss and other non-cash items -19 124 80 67 70 Net financial items
Slide 16: Working capital
Working capital Net working capital Working capital • Net working capital MSEK 21 736 21 736 30 000 40 18 564 – Excl. acquisitions and fx +20% 35.2 35 25 000 31.3 – 35.2% (31.3) of revenues 29.0 21 736 12 186 18 747 30 16 945 20 000 18 564 • Strong growth and higher 25 11 861 equipment volumes 15 00
Slide 17: Capital efficiency
Capital efficiency Net debt and Net debt/EBITDA Capital employed and ROCE • Net debt at MSEK 7 824 (3 691) 1.0 10 000 55 000 60 51 437 – Acquisitions MSEK -3 666 0.8 9 000 50 000 55 7 824 8 000 44 534 – Working capital MSEK -3 708 45 000 50 0.6 0.49 7 000 45 40 000 – Dividend MSEK -4 103 0.4 0.28 6
Slide 18: Dividend
Dividend* Dividend and payout ratio • Dividend of SEK 3.80 (3.40) 8 60 per share 56 7 55 • Two equal installments with 51 record dates May 16 and 6 49 49 49 50 5.50 October 22, 2024 5 45 • MSEK 4 586 (4 103) 3.80 4 3.00 40 3.40 3.00 3 35 2.40 2 30 2.50 1 25 0 20 2019 2020 2021 2022 2023* Payout rati
Slide 19: Summary
Summary Major achievements and partnerships Strong mining and several large orders Weak construction Improved cash flow Solid financial position Investing for the future Five successful years Q4 2023 19
Slide 20: 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. Demand from construction customers is expected to be soft.” Q4 2023 20
Slide 21: Save the dates
Save the dates • 2024 – April 23: Q1 2024 results – May 14: AGM in Nacka at 4 PM – May 16: Record date for dividend* – May 21: Dividend payment* – July 19: Q2 2024 results – September 24: Capital Markets Day in Las Vegas (incl. MINExpo International) – October 22: Record date for dividend* – October
Slide 22: Q&A
Q&A C Epiroc
Slide 23: Movie: MINExpo Recap 2021
Movie: MINExpo Recap 2021 Capital Markets Day in Las Vegas incl. MINExpo International September 24 Registration open: www.epirocgroup.com/en/cmd-2024 Q4 2023 23
Slide 24: 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 25: 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