Epiroc Ab Class A · OMXSTO:EPI_A
Epiroc Ab Class A — Q4 2020 Earnings Presentation
26 slides from Epiroc Ab Class A's earnings presentation, Jan 26, 2021
Slide 1: Q4 2020
Q4 2020 January 26, 2021 Helena Hedblom, President and CEO Anders Lindén, CFO
Slide 2: Agility in a challenging 2020
Agility in a challenging 2020 Key highlights FY 2020 • Significant Covid-19 impact – Priorities: Health, safety and customer support – Orders received down 7%, flat organic – Revenues down 12%, down 5% organic, strong growth in service • Quick adaption and efficiency initiatives • Solid profit and r
Slide 3: Organic order growth in all businesses
Organic order growth in all businesses Key highlights Q4 2020 • Organic order growth in all businesses – Highest growth in Equipment & Service • Organic revenue growth – Solid growth in aftermarket • Record operating margin • Technology leadership and high demand for automation, digitalization and e
Slide 4: Key financials
Key financials Q4 2020 Orders received, MSEK and change, % • Order intake up 1% to 9 329, +13% organic 10 500 +1% – Equipment +26% organic 10 000 +13% -12% – Service +9% organic 9 500 9 329 9 276 – Tools & Attachments +5% organic 0% • Organic revenue growth of 6% 0 • Operating profit increased 10% t
Slide 5: Covid-19
Covid-19 Current status • Despite the deteriorating situation, customers’ operations are, with few exceptions, up and running • All Epiroc distribution centers and manufacturing facilities are operational • The uncertainty regarding the Covid-19 development and related restrictions remains with conc
Slide 6: Driving the future in intelligent mining and infrastructure
Driving the future in intelligent mining and infrastructure Q4 2020 • High demand for automation, digitalization and electrification solutions – Market-leading solutions deployed and proven – Increased productivity, safety and sustainability for our customers • Innovations – Avatel: Advanced undergr
Slide 7: Strong aftermarket
Strong aftermarket Q4 2020 Revenues • Strong focus on safeguarding customers’ continuous operations • Strengthening of our offering and presence • Increased customer share 23% (25) • Connecting the fleet enables proactivity 35% (36) Aftermarket 65% (64%) 42% (39) Equipment Service Tools & Attachment
Slide 8: Actions for operational excellence
Actions for operational excellence Q4 2020 • Cost-savings program of MSEK +500 annually – Implemented with full impact as from Q3 2020 • Additional savings achieved at the end of the quarter, including savings from planned layoffs • Supply-chain program continues to be implemented according to plan
Slide 9: Engaged employees and improved sustainability results
Engaged employees and improved sustainability results Q4 2020 • Appreciated employer with highly engaged employees • Sustainability performance improving – SafeStart builds a safety culture – Significant reduction in lost-time injury frequency rate – Supply-chain program leads to less air freight –
Slide 10: Financials
Financials C Epiroc
Slide 11: Operating profit and margin
Operating profit and margin Q4 2020 Operating profit and margin 4 000 23.2 24 21.7 21.3 21.7 21.0 20.7 20.9 3 500 20.2 20.4 20.3 22.6 21 19.6 21.3 21.2 18.7 20.9 20.5 3 000 19.7 19.7 19.6 18 19.0 18.4 18.4 2 302 16.8 2 500 2 279 15 2 154 39 2 160 2 131 67 1 991 2 024 1 989 2 000 233 115 1 911 1 896
Slide 12: Epiroc Group – Profit bridge
Epiroc Group – Profit bridge Q4 2020 Adj. Margin: Margin: margin: 19.6% 22.6% 23.2% 2 600 2 400 -318 2 279 +436 -0.9pp 2 212 52 2 200 +3.1pp +78 15 +0.8pp 2 016 2 000 1 800 200 0 Q4 2019 Organic Currency Structure and other Q4 2020 Items affecting LTI Adjusted operating profit comparability, excl. L
Slide 13: Segment: Equipment & Service
Segment: Equipment & Service Q4 2020 Orders received, MSEK and change, % • Orders received up 16% organic 8 000 +4% – Equipment +26% and Service +9% 7 750 7 500 -12% 7 250 16% • Revenues up 7% organic 7 000 0% 6 954 6 710 6 750 – Equipment flat and Service +13% • Operating profit up 7% to MSEK 1 966
Slide 14: Equipment & Service – Profit bridge
Equipment & Service – Profit bridge Q4 2020 Margin: Margin: 23.8% 26.4% 2 200 +290 -200 2 000 +32 1 966 +2.2pp 0.0pp 1 844 +0.4pp 1 800 1 600 1 400 1 200 1 000 800 600 400 200 0 Q4 2019 Organic Currency Structure Q4 2020 and other 14
Slide 15: Segment: Tools & Attachments
Segment: Tools & Attachments Q4 2020 Orders received, MSEK and change, % 2 900 • Orders received up 5% organic 2 800 -7% 2 700 – Orders for both hydraulic attachments and rock 2 600 +5% drilling tools increased 2 517 2 500 -11% – Strong growth in Europe 2 400 2 337 -1% 2 300 • Revenues up 3% organic
Slide 16: Tools & Attachments – Profit bridge
Tools & Attachments – Profit bridge Q4 2020 Adj. Margin: Margin: margin: 11.8% 15.9% 16.5% 480 450 420 -113 390 +160 -3.3pp 378 363 15 360 +6.3pp +21 330 +1.1pp 295 300 270 240 210 180 150 120 90 60 30 0 Q4 2019 Organic Currency Structure Q4 2020 Items affecting Adjusted and other comparability oper
Slide 17: Costs, net financials and tax
Costs, net financials and tax Q4 2020 • Lower costs Administration, marketing and R&D expenses – Full effect from savings program (MSEK +500 p.a.) 2 000 30 – Successful adjustment to the situation 1 663 1 745 1 671 1 708 1 637 1 640 25 – Short-term actions maintained 1 500 1 511 1 360 1 380 20 • Net
Slide 18: Capital structure
Capital structure Q4 2020 Net debt and Net debt/EBITDA • Strong financial position 0.6 6 000 – Net cash MSEK 4 137 (net debt 483) 0.5 0.43 5 000 0.4 0.39 4 000 • Net debt/EBITDA ratio at -0.45 (0.05) 0.3 0.24 3 000 • Proposed distribution to shareholders of 0.2 0.14 4 217 2 000 3 641 SEK 5.50 per sh
Slide 19: Capital efficiency
Capital efficiency Q4 2020 Net working capital 40 34.4 34.4 20 000 • Net working capital was MSEK 10 571 33.8 33.8 31.8 31.8 30 14 062 15 000 (13 153) 12 897 13 153 12 158 12 217 10 571 – Down 20%, of which 13% currency 20 10 000 10 5 000 0 0 2018 2019 2020 Q4 2018 Q4 2019 Q4 2020 Avg. NWC/revenues,
Slide 20: Solid operating cash flow
Solid operating cash flow Q4 2020 Operating cash flow and cash conversion rate, % MSEK Q4 2020 Q4 2019 3 000 300 Operating profit 2 212 2 016 2 827 Depreciation, amortization and impairment 439 482 2 500 250 Capital gain/loss and other non-cash items 13 -28 2 242 2 156 2 664 2 470 2 000 1 963 200 1
Slide 21: Financial goals for value creation
Financial goals for value creation Goals Description 2015 – 2020 2020 Annual revenue growth of 8% over a business cycle and Compound annual Revenue growth to grow faster than the market. growth rate 5% -12% Industry-best operating margin, with strong Average Margin resilience over the cycle. operati
Slide 22: Organic order growth in all businesses
Organic order growth in all businesses Q4 summary • Order growth in all businesses • Improved profitability and record margin • Solid cash flow • Technology leadership with high demand for automation, digitalization and electrification solutions • Agreement to acquire MineRP • Engaged employees and
Slide 23: Near-term demand outlook
“We expect that the demand, both for equipment and aftermarket, will remain stable in the near term. Uncertainty, however, still remains regarding the Covid-19 development and any further related restrictions.” 23
Slide 24: Q&A
Q&A
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