Slide 1: Q4 2021
Q4 2021 January 26, 2022 Helena Hedblom, President and CEO Håkan Folin, CFO
Slide 2: Highlights 2021 – A successful year
Highlights 2021 – A successful year • High customer activity and investment willingness – Record orders received of MSEK 45 648, +26% organic • Increased revenues and record profit and margin – Adjusted operating margin of 22.9% (21.2) • Solid cash flow • Proposed dividend SEK 3.00 (2.50) per share
Slide 3: Highlights Q4 2021
Highlights Q4 2021 • Strong demand – High customer activity – Strong aftermarket – Investment willingness remains • Record-high revenues and profit – Supply-chain challenges increased • Acquisitions • Ambitious 2030 sustainability goals validated by SBTi Q4 2021
Slide 4: Key financials
Key financials Orders received, MSEK and change, % • Orders received up 25% to 11 643, +19% organic 16 000 – Equipment +20% organic 14 000 +25% – Service +19% organic 12 000 +4% 11 643 +2% 9 329 +19% – Tools & Attachments +16% organic 10 000 • Record revenues of MSEK 11 173, +9% organic 0 • Operatin
Slide 5: Leading productivity and sustainability partner
Leading productivity and sustainability partner Innovations, acquisitions and partnerships strengthen Epiroc’s position • Innovations – Reman Program – Charging products • Acquisitions – FVT Research – Mobilaris MCE • Partnership – Newcrest – Mixed-fleet automation underground Q4 2021 5
Slide 6: Aftermarket
Aftermarket Revenues • High customer activity • Local presence 24% (23) T&A 34% (35) • Rebuild orders Equipment • Connected fleet growing Aftermarket 66% (65) • Improved availability, despite supply-chain challenges 42% (42) Service Q4 2021 6
Slide 7: Operational excellence
Operational excellence • Supply-chain excellence – Improvement program continues with higher availability and lower emissions – Positive financial effect offset by increased transport costs • Administration excellence – Simplify and increase process effectiveness – Established Regional Centers of Ex
Slide 8: Sustainability
Sustainability • People • Planet – Increased share of women – Ambitious climate targets and women managers up to validated by SBTi 17.1% (15.7) and 22.5% – Increased energy (21.0), respectively consumption in operations – Numerous activities to o Higher activity level reduce injuries – Lower CO2 fro
Slide 9: Operating profit and margin
Operating profit and margin 4 000 23.2 23.0 23.4 22.9 24 22.6 21.7 21.3 21.7 23.6 20.4 20.7 20.9 23.2 3 500 20.3 22.6 22.4 21 21.3 21.2 18.7 20.9 21.3 20.5 3 000 19.7 19.6 18 19.0 2 554 16.8 2 500 2 302 2 279 2 197 2 331 15 2 154 39 2 160 2 131 67 1 989 2 016 15 2 000 233 115 1 911 1 896 12 59 149 7
Slide 10: Epiroc Group: Profit bridge
Epiroc Group: Profit bridge Adj. Margin: Margin: margin: 22.6% 23.2% 22.9% 2 800 2 594 +127 -167 2 600 +93 2 554 +83 +0.2pp 2 400 +0.3pp +206 2 212 +0.1pp 2 200 2 000 200 0 Q420 Organic Currency Structure/other Q421 LTI Positive revaluation Adjusted operating profit effect of Mobilaris shares Q4 202
Slide 11: Segment: Equipment & Service
Segment: Equipment & Service Orders received, MSEK and change, % • Orders received up 20% organic 11 000 +27% – Equipment +20%, strong underlying growth 10 000 9 000 8 799 – Service +19%, high customer activity, 8 000 +3% +4% 6 954 +20% strong service offering and presence 7 000 • Revenues up 9% org
Slide 12: Equipment & Service: Profit bridge
Equipment & Service: Profit bridge Margin: Margin: Margin: 26.4% 27.3% 25.4% 2 400 2 323 +141 +1.0pp -167 2 200 +28 2 156 -0.1pp +188 1 966 +0.0pp 2 000 1 800 200 0 Q420 Organic Currency Structure/other Q421 Positive Q421 revaluation effect of Mobilaris MCE Q4 2021 shares 12
Slide 13: Segment: Tools & Attachments
Segment: Tools & Attachments Orders received, MSEK and change, % • Orders received up 20% 3 200 +20% – 16% organic growth 3 000 2 807 2 800 – Orders for both hydraulic attachments and rock +1% +3% 2 600 drilling tools increased, with higher growth rate for +16% 2 400 2 337 hydraulic attachments • Re
Slide 14: Tools & Attachments: Profit bridge
Tools & Attachments: Profit bridge Margin: Margin: 15.9% 18.2% 500 480 +31 450 +0.5pp +48 +1.5pp 400 +38 363 +0.3pp 350 300 100 50 0 Q420 Organic Currency Structure/other Q421 Q4 2021 14
Slide 15: Costs, net financials and tax
Costs, net financials and tax • Costs are increasing Administration, marketing and R&D expenses – Growth, increased activity and acquisitions 2 500 35 – Investments for the future with R&D at all-time high 30 2 000 • Net financial items MSEK -27 (-122) 1 708 1 789 25 1 640 1 595 1 570 – Interest net
Slide 16: Operating cash flow
Operating cash flow Operating cash flow and cash conversion rate, % MSEK Q4 2021 Q4 2020 3 000 350 Operating profit 2 594 2 212 2 827 Depreciation, amortization and impairment 491 439 300 2 500 2 415 Capital gain/loss and other non-cash items -148 13 2 156 250 Net financial items received/paid -17 -
Slide 17: Capital efficiency
Capital efficiency • Net working capital up 15% to MSEK 12 186 • ROCE improved to 26.1% (21.7) – Up 6% when excluding acquisitions and currency – Distribution to shareholders of MSEK 1 508 – Improved to 29.0% (33.8) of revenues – Repayment of a loan of MEUR 100 Net working capital Capital employed a
Slide 18: Capital structure
Capital structure Net debt and Net debt/EBITDA • Strong financial position 0.7 6 000 – Net cash MSEK 1 304 (4 137) 0.6 5 000 0.5 4 000 • Net debt/EBITDA ratio at -0.12 (-0.45) 0.4 3 000 0.3 2 000 0.2 0.1 0.05 1 000 0.0 483 0 -0.03 -0.1 -1 191 -1 819 -322 -0.12 -0.12 -1 000 -0.2 -0.12 -3 638 -1 191 -
Slide 19: Proposed distribution to shareholders
Proposed distribution to shareholders Dividend and payout ratio • Epiroc’s goal is to provide • Proposed distribution to 6.0 80 long-term stable and rising shareholders 5.5 5.50 70 dividends to its shareholders – Dividend of SEK 3.00 (2.50) 5.0 per share 4.5 56 60 • The dividend should 4.0 3.00 51 –
Slide 20: Summary
Summary Strong demand Record-high revenues and profit Supply-chain challenges Acquisitions Good progress on sustainability - Ambitious targets validated We achieve great things together Q4 2021 20
Slide 21: Looking ahead
Looking ahead “We expect that demand, both for equipment and aftermarket, will remain at a high level in the near term.“ Q4 2021 21
Slide 22: Q&A
Q&A
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