Epiroc Reports Second Quarter Results

Key Highlights:

Order intake decreased by 7% to MSEK 15,276 (16,349), with currency impacting negatively by -9%. Organic growth was 2%.
Revenues decreased by 8% to MSEK 15,130 (16,511), with currency impacting negatively by -9%. Organic growth was 1%.
Operating profit amounted to MSEK 2,831 (2,921), including items affecting comparability of MSEK -153 (-325), mainly related to efficiency measures. The operating margin was 18.7% (17.7).
Adjusted operating profit amounted to MSEK 2,984 (3,246), corresponding to an adjusted operating margin of 19.7% (19.7).
Earnings per share before dilution increased by 3% to SEK 1.74 (1.69).
Operating cash flow amounted to MSEK 1,104 (1,609).
Net debt/EBITDA was 0.82 (1.04).
Epiroc secured a significant contract, MAUD 350 (SEK 2.2 billion) over five years, to deliver a fleet of fully autonomous and electric surface mining equipment to Fortescue in Australia. The first part of the contract, approximately MSEK 100, was booked as order intake during the quarter.

CEO’s Statement

Strong Mining Demand
Order intake in the second quarter increased by 2% organically and amounted to MSEK 15,276 (16,349). Currency impacted negatively by -9%. Customer activity in the mining industry was high, and large mining equipment orders, which are uneven in nature, amounted to MSEK 500 (950). These include MSEK 100 from Fortescue in Australia, which in April awarded Epiroc our largest contract ever, SEK 2.2 billion over five years. We will deliver a fleet of fully autonomous and electric surface mining equipment to Fortescue. Mining customers’ willingness to invest has increased recently, including in exploration, and we continue to see increased interest in our automation and electrification solutions. However, demand for accessories from the construction industry remained weak.

Sequentially, compared to the previous quarter, the Group’s order intake increased by 1% organically.

In the short term, we expect demand from mining customers to remain at a high level, while demand from construction customers is expected to remain weak.

Revenues and Profitability
Our revenues amounted to MSEK 15,130 (16,511), corresponding to 1% organic growth. The currency effect was negative by -9%. Operating profit, EBIT, amounted to MSEK 2,831 (2,921), corresponding to a margin of 18.7% (17.7). Operating profit includes items affecting comparability of MSEK -153, of which the change in the provision for the share-based long-term incentive programs amounted to MSEK -6 (-18). The other MSEK -147 relates to efficiency measures, such as MSEK -70 attributable to the closure of the rock drilling tools factory in Langley, Canada. The adjusted operating margin, EBIT, was unchanged at 19.7% (19.7), and was supported by, mainly, increased efficiency within Tools & Attachments.

Profitable Growth
We remain focused on delivering profitable growth and are continuously taking measures such as consolidating units and discontinuing non-strategic product lines. Given the prevailing uncertainty regarding tariffs, we are working for increased flexibility and improved global reach by optimizing logistics and distribution, utilizing global manufacturing, exploring alternative suppliers, and implementing measures together with customers and suppliers.

Cash Flow
Our operating cash flow was MSEK 1,104 (1,609), negatively impacted by lower operating profit and higher working capital. The cash conversion rate for the last 12 months was 94% (90).

Innovation Driving Value
With a background in research and development, I am particularly proud to represent Epiroc as we provide the market with leading solutions. We launched several innovations during the quarter, including an automated rod magazine for the Diamec exploration rig, which keeps the operator away from danger while increasing productivity. Another example that makes a big positive difference is the electric solution for ramp transport in Boliden’s Kristineberg mine in Sweden, which is the result of our collaboration with Boliden and ABB. Compared to a diesel-powered counterpart, the trolley solution has increased productivity by 23%. The mining truck’s speed up the mine ramp is 50% higher, the maintenance cost has decreased by 25%, and the energy regeneration to the battery when the truck drives down and/or is connected to the pantograph is unlimited.

Stability and Long-Term Delivery
In an ever-changing and volatile world, with increasing uncertainty, our commitment to stability and delivering long-term to customers and investors remains firm. Our goal is to achieve better financial results by being active in attractive niches where we offer our customers the most innovative and productive solutions. We will cherish our customers’ business through precision in our service and aftermarket offering and consistently strive to deliver first-class in everything we do. We will adapt faster, innovate more, and always try to do things in a better way.

Helena Hedblom
CEO and President

For more information, please contact:
Karin Larsson, VP Investor Relations and Media
010 755 0106
ir@epiroc.com
Alexander Apell, Investor Relations Officer
010 755 0719
ir@epiroc.com
Ola Kinnander, Press Officer
070 347 2455
media@epiroc.com

Epiroc is a global productivity partner for mining and infrastructure customers, and accelerates the transformation towards a sustainable society. With ground-breaking technology, Epiroc develops and provides innovative and safe equipment such as drill rigs, rock excavation and construction equipment and tools for surface and underground applications. The company also offers world-class service and other aftermarket support as well as solutions for automation, digitalization and electrification. Epiroc is based in Stockholm, had revenues of approximately SEK 64 billion in 2024, and has approximately 19,000 passionate employees supporting and collaborating with customers in approximately 150 countries. More information is available at www.epirocgroup.com/se.

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