Slide 1: Q3 2023
Q3 2023 October 27, 2023 Helena Hedblom, President and CEO Håkan Folin, CFO
Slide 2: Highlights Q3 2023
Highlights Q3 2023 • High demand in mining – Several large equipment orders, incl. largest order ever of MSEK 700 – Construction customers tentative • Strong revenues but lower EBIT margin • Safety is the top priority – Improved safety indicators – Fatality Q3 2023
Slide 3: Leading productivity and sustainability partner
Leading productivity and sustainability partner • Strengthened partnership with Kamoa Copper – Largest order ever of MSEK 700 • Deepened collaboration with Newcrest – Holistic approach towards the entire mining process • Collaboration for fully autonomous mining – Boliden, Algoryx and Örebro Univers
Slide 4: Video: Epiroc's Automatic Bit Changer available for a larger fleet of Pit Vipers
Video: Epiroc's Automatic Bit Changer available for a larger fleet of Pit Vipers Q3 2023 4
Slide 5: Strategy for profitable growth
Strategy for profitable growth Operational Focus on attractive niches Innovation Aftermarket excellence Outperformance Strong corporate culture Sustainability mindset Q3 2023 5
Slide 6: Aftermarket
Aftermarket • High customer activity, especially in mining • Strong demand for large rebuilds and service • Construction weaker, impacting hydraulic attachments Revenues 21% (21) T&A 31% (33) Equipment Aftermarket 69% (67) 48% (46) Service Q3 2023
Slide 7: Operational excellence
Operational excellence • Adjusting operations • Moving production of low-profile machines from Örebro, Sweden, to Johannesburg, South Africa • RCoE - Regional Centers of Excellence Q3 2023 7
Slide 8: Sustainability
Sustainability People & Planet • Safety first! – Service employee fatality – Safety improved; TRIFR at 5.1 (5.6) • 18 146 employees (16 217) – Acquisitions • Increased share of women employees and managers – Employees 18.8% (18.1) and managers 23.4% (22.7) • CO2e from comparable operations lower • C
Slide 9: Sustainability Share
Sustainability Share CR Powered by Epiroc Large Excavator Cast Lip + GET Systems • 10% increase in productivity • 13% dig energy reduction • Over 350 tonnes CO2e savings p.a. per machine – Corresponding to 130 000 liters of diesel – Taking 194 cars off the road for one year Q3 2023 9
Slide 10: Key financials
Key financials Orders received, MSEK and change, % • Orders MSEK 14 360, +9% organic +17% – Adj. for Russian removal of orders in Q3 2022, 15 000 14 360 organic 0% 14 000 +7% +1% – Several large orders 13 000 12 322 +9% 12 000 • Revenues MSEK 14 997, +7% organic 0 • Operating profit, EBIT, MSEK 3 26
Slide 11: Epiroc Group: Profit bridge
Epiroc Group: Profit bridge Adj. Margin: Margin: margin: 22.7% 21.7% 21.8% 3 400 3 260 3 272 +12 3 200 +279 0.0pp 3 000 2 900 +254 -173 2 800 +1.5pp -2.5pp 2 600 2 400 400 200 0 Q322 Organic Currency Structure/other Q323 IAC in Q323 Adjusted operating profit Q3 2023
Slide 12: Segment: Equipment & Service
Segment: Equipment & Service Orders received, MSEK and change, % • Orders received MSEK 11 311, +9% organic +16% – Equipment, +14% organic and Service, +5% organic 11 500 11 311 11 000 +5% – Adj. for Russian removal of orders in Q3 2022 +2% 10 500 +9% o Equipment & Service: -1% organic 10 000 9 791
Slide 13: Equipment & Service: Profit bridge
Equipment & Service: Profit bridge Margin: Margin: Adj. 24.6% 24.5% margin: 24.4% 2 900 2 868 2 861 7 2 800 +193 +0.1ppt 2 700 2 600 +194 +1.4ppt 2 500 2 474 +7 -1.6ppt 2 400 2 300 2 200 300 200 100 0 Q322 Organic Currency Structure/other Q323 IAC in Q323 Adjusted operating profit Q3 2023
Slide 14: Segment: Tools & Attachments
Segment: Tools & Attachments Orders received, MSEK and change, % • Orders received MSEK 2 924, +2% organic 3 500 +17% – Adj. for Russian removal of orders in Q3 2022, -1% organic 3 000 2 924 +15% – Acquisitions (CR) +15% 2 502 2 500 +2% 0% – Mining and infrastructure demand good – Construction deman
Slide 15: Tools & Attachments: Profit bridge
Tools & Attachments: Profit bridge Margin: Margin: 19.0% 15.1% 550 514 500 481 450 +90 -185 -0.3ppt 400 -5.7ppt +62 350 +2.1ppt 300 250 200 150 100 50 0 Q322 Organic Currency Structure/other Q323 Q3 2023
Slide 16: Costs, net financials and tax
Costs, net financials and tax Administration, marketing and R&D expenses • R&D investments at high level 3 000 22 • High activity level 21 2 564 2 500 2 410 • Net financial items MSEK -331 (-24) 2 367 2 321 20 – Interest net MSEK -146 (-23) 1 978 2 049 19 2 000 1 789 • Tax expense MSEK -685 (-633) 1
Slide 17: Operating cash flow
Operating cash flow Operating cash flow and cash conversion rate, % 3 500 120 MSEK Q3 23 Q3 22 110 Operating profit 3 260 2 900 3 000 99 97 100 Depreciation, amortization and impairment 701 526 90 2 500 2 415 80 82 81 Capital gain/loss and other non-cash items 279 18 80 67 70 Net financial items rec
Slide 18: Working capital
Working capital Net working capital Working capital • Net working capital 34.8 22 978 MSEK 22 978 30 000 35 – Excl. acquisitions and fx +25% 29.8 30.4 17 744 25 000 30 22 978 – 34.8% (30.4) of revenues 20 031 12 104 20 000 25 16 634 17 744 • Strong growth and higher 11 199 equipment volumes 15 000 1
Slide 19: Capital efficiency
Capital efficiency Net debt and Net debt/EBITDA Capital employed and ROCE • Net debt at MSEK 7 643 (-1 545) 1.0 10 000 55 000 60 51 181 – Acquisitions MSEK -7 525 0.8 9 000 50 000 55 7 643 8 000 50 – Working capital MSEK -4 320 0.6 0.49 45 000 42 560 7 000 45 40 000 – Dividend MSEK -3 860 0.4 6 000
Slide 20: Summary
Summary • Safety on the top of the agenda • High demand in mining • Partnership is the new leadership • Weak construction • Strong revenues • Operational excellence • Operating cash flow improved Q3 2023 20
Slide 21: 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.” Q3 2023 21
Slide 22: Save the dates
Save the dates • 2023 – October 27: Dividend payment SEK 1.70 per share • 2024 – January 24: Q4 2023 results – April 23: Q1 2024 results – May 14: AGM in Nacka at 4 PM – July 19: Q2 2024 results – September 24: Capital Markets Day in Las Vegas (in conjunction with MINExpo) – October 25: Q3 2024 resu
Slide 23: Q&A
Q&A C Epiroc
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