Slide 1: Interim report Q4 2019
Interim report Q4 2019 January 31, 2020 Per Lindberg, President and CEO Anders Lindén, CFO
Slide 2: Record revenues and profit in a strong 2019
Record revenues and profit in a strong 2019 Key highlights full-year 2019 Revenues and operating margin • Strong growth of our service business, but negative development for equipment 45 000 45 40 849 • High interest for automation and information 40 000 +9% 38 285 40 management, and for battery-ele
Slide 3: Continued growth in service
Continued growth in service Key highlights Q4 2019 • Order intake at similar level as in Q3 – Equipment orders decreased year-on-year, but were stable sequentially – Solid service growth year-on-year • Lower revenues • Improved underlying margin • Strong cash flow • Continued focus on innovation • E
Slide 4: Key financials Q4 2019
Key financials Q4 2019 Orders received, MSEK and change, % • Order intake declined 2%, -7% organic 9 800 -2% 9 600 9 468 • Revenues declined 3%, -7% organic 9 400 9 276 9 200 -7% +2% • Operating profit at MSEK 2 016 9 000 +3% 8 800 – Items affecting comparability of MSEK -115 – Mainly restructuring
Slide 5: Leading the way in innovation
Leading the way in innovation Q4 2019 • Continued focus on innovations • Orders received to digitalize Pocubre’s mining operations • Partnership with Orica to develop a semi-automated explosives delivery system • Pit Viper 270 XC series with advanced rig control system • PowerROC D60 with Tier 4 eng
Slide 6: Continuous strive to improve operational excellence
Continuous strive to improve operational excellence Q4 2019 • Workforce reduced by 521 in the quarter • Efficiency improvements initiated and will continue in the coming quarters and expected to give visible effects in the first half of 2020 • Rock drilling tools factory in China closed and facility
Slide 7: High proportion of recurring business
High proportion of recurring business Per segment Q4 2019 Order intake, MSEK and growth, % Revenues in the quarter (Total growth / Organic growth) Equipment Service Tools & Attachments -2% / -7% 9 468 9 276 Equipment 3 355 2 606 25% -22% / -22% 36% 64% Aftermarket 4 104 (59) +9% / +6% Service 3 761
Slide 8: Segment: Equipment & Service
Segment: Equipment & Service Orders received, MSEK and change, % • Orders received -6%, -7% organic 7 400 -6% 7 200 7 116 • Service orders up 6% organic 7 000 – High customer activity 6 800 -7% -1% 6 710 +2% 6 600 • Equipment orders down 22% organic – Investment decisions postponed 0 Q4 2018 Organic
Slide 9: Segment: Tools & Attachments
Segment: Tools & Attachments Orders received, MSEK and change, % • Orders received up 9%, -4% organic 2 700 +9% 2 600 – Rock drilling tools orders negatively impacted by exit 2 517 2 500 of handheld rock drilling tools and optimization of 2 400 +10% 2 306 product offering 2 300 -4% +3% 2 200 – Hydra
Slide 10: Financials
Financials CEpiroc
Slide 11: Profit impacted by items affecting comparability
Profit impacted by items affecting comparability Q4 2019 Operating profit and margin 4 000 24 21.7 21.3 21.0 20.7 3 500 20.2 20.2 20.4 20.3 21 19.7 19.3 19.6 21.3 18.6 20.5 20.0 19.7 19.7 19.6 3 000 19.1 19.0 18 18.6 18.1 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
Slide 12: Epiroc Group – Profit bridge
Epiroc Group – Profit bridge Looking into the numbers Margin: 20.5 % Margin: 19.6% Adj. margin: 20.7 % -1% 2 200 2 162 2 131 2 100 -149 +42 -172 +175 -1.8 pp -0.3 pp +1.2 pp +73 2 016 2 000 1 900 0 Q4 2018 Organic Currency Structure and other Q4 2019 Items affecting LTI Adjusted operarting profit co
Slide 13: Equipment & Service – Profit bridge
Equipment & Service – Profit bridge Looking into the numbers Margin: 23.2% Margin: 23.9% Adj. margin: 24.3% 0% 1 900 1 876 1 881 -29 1 853 28 -0.1 pp -139 +145 1 800 -0.4 pp +1.2 pp 1 700 0 Q4 2018 Organic Currency Structure Q4 2019 Items affecting Adjusted and other comparability operating profit 1
Slide 14: Tools & Attachments – Profit bridge
Tools & Attachments – Profit bridge Looking into the numbers Margin: 13.3% Margin: 11.8% Adj. margin: 12.5% -4% 330 324 312 -30 -34 35 -2.9 pp +0.2 pp +1.2 pp 17 300 295 270 0 Q4 2018 Organic Currency Structure Q4 2019 Items affecting Adjusted and other comparability operating profit Operating profi
Slide 15: Costs, net financials and tax
Costs, net financials and tax Q4 2019 • Lower comparable costs Administration, marketing and R&D expenses – Acquisitions and currency reason for the increase 2 000 30 year-on-year 1 745 1 637 1 663 1 671 1 708 25 – Expenses adjusted for change in provision for 1 569 1 482 1 500 LTI and items affecti
Slide 16: Capital structure
Capital structure Q4 2019 Net debt and Net debt/EBITDA • Net debt was MSEK 483 (1 208) 0.5 6 000 – Post-employment benefits MSEK 596 (283) 0.43 0.40 0.39 0.39 5 000 0.4 0.35 4 217 • IFRS 16 increased net debt by MSEK 1 956 3 641 4 000 0.3 3 027 3 146 0.24 • Net debt/EBITDA ratio at 0.05 (0.14) 2 125
Slide 17: Capital efficiency
Capital efficiency Q4 2019 Net working capital • Net working capital up 2% 40 20 000 34.4 34.4 31.9 31.8 31.8 30 14 062 15 000 – For comparable units and currency adjusted, net 12 897 13 153 12 158 working capital decreased 6% 9 991 20 10 000 – A reduction in both trade receivables and inventories 1
Slide 18: Operating cash flow
Operating cash flow Q4 2019 MSEK Q4 2019 Q4 2018 Operating cash flow and Net profit Operating profit +2 016 +2 162 3 000 2 827 Depreciation, amortization and impairment +482 +350 Capital gain/loss and other non-cash items -28 -18 2 500 2 242 +2 470 +2 431 2 000 1 883 Net financial items received/pai
Slide 19: Summary and outlook
Summary and outlook C Epiroc
Slide 20: Continued growth in service
Continued growth in service Key highlights Q4 2019 • Order intake at similar level as in Q3 – Equipment orders decreased year-on-year, but were stable sequentially – Solid service growth year-on-year • Lower revenues • Improved underlying margin • Strong cash flow • Continued focus on innovation • E
Slide 21: Demand expectations
Demand expectations “It is clear that our customers remain cautious in making investment decisions. In the near-term we expect that demand will remain largely at the level seen in the fourth quarter.”
Slide 22: C Epiroc
C Epiroc
Slide 23: 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
Slide 24: Appendix
Appendix C Epiroc
Slide 25: Geographical overview
Geographical overview Orders received, MSEK and % of Group orders Equipment & Service North Tools & Attachments Europe % of Group orders America 23% 22% 8 814 8 628 9 298 9 005 7 481 8 337 69% 64% 70% 69% 66% 68% 34% 31% 36% 32% 30% 31% 2017 2018 2019 2017 2018 2019 Africa/ Asia/ South Middle Austra
Slide 26: Income statement
Income statement Q4 2019 2017 2018 2019 2018 2019 MSEK Full year Full year Full year Q4 Q4 Revenues 31 364 38 285 40 849 10 558 10 280 Cost of sales -20 101 -24 317 -25 547 -6 721 -6 377 Gross profit 11 263 13 968 15 302 3 837 3 903 Gross margin, % 35.9% 36.5% 37.5% 36.3% 38.0% Marketing expenses -2
Slide 27: Balance sheet
Balance sheet Q4 2019 2017 2018 2019 2017 2018 2019 MSEK Dec. 31 Dec. 31 Dec. 31 % of BS MSEK Dec. 31 Dec. 31 Dec. 31 % of BS Intangible assets 3 121 3 620 4 226 10% Share capital 21 500 500 1% Rental equipment 1 215 1 233 1 213 3% Retained earnings 12 020 18 297 22 261 54% Other property, plant and
Slide 28: Cash flow
Cash flow Q4 2019 2017 2018 2019 2018 2019 2017 2018 2019 2018 2019 MSEK Full year Full year Full year Q4 Q4 MSEK Full year Full year Full year Q4 Q4 Operating cash flow Cash flow from operating activities Net cash flow from operating activities 5 176 4 324 7 228 2 487 3 177 Operating profit 5 930 7
Slide 29: Key ratios
Key ratios Q4 2019 2017 2018 2019 MSEK Full year Full year Full year Basic earnings per share, SEK 3.55 4.50 4.89 Diluted earnings per share, SEK - 4.49 4.89 Basic number of shares outstanding, millions 1 212 1 206 1 201 Diluted number of shares outstanding, millions - 1 206 1 202 Equity per share,
Slide 30: 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