Epiroc Navigates Market Dynamics with Strong Mining Demand
Epiroc, a global productivity partner for mining and infrastructure customers, has released its third-quarter results, showcasing resilience and strategic advancements amidst fluctuating market conditions. The company reported a strong organic order growth driven by high demand from mining customers, while also navigating challenges in the construction sector.
Key Financial Highlights
- Order intake decreased by 2% to MSEK 15,142 (15,520), impacted by a negative currency effect of -9%. However, organic growth reached 7%.
- Revenues declined by 3% to MSEK 15,242 (15,699), with a negative currency impact of -8%. Organic growth stood at 5%.
- Operating profit amounted to MSEK 2,802 (3,277), including items affecting comparability of MSEK -94 (191), primarily related to efficiency measures.
- Adjusted operating profit was MSEK 2,896 (3,086), with an adjusted operating margin of 19.0% (19.7).
- Basic earnings per share were SEK 1.62 (1.92).
- Operating cash flow increased by 38% to MSEK 2,476 (1,789).
- Net debt/EBITDA ratio was 0.73 (0.97).
CEO Insights: Helena Hedblom on Market Trends and Strategic Priorities
“The third quarter saw high customer activity in the mining sector, leading to strong order growth in both equipment and rock drilling tools, as well as good demand for service. We also noted high demand in exploration.”
Hedblom highlighted the increasing adoption of Epiroc’s latest technology in automation and electrification, leading to higher productivity, increased safety, reduced energy consumption, and lower total cost of ownership for customers.
After a prolonged period of low demand for construction-related accessories, Epiroc observes that the destocking phase among distributors is largely complete.
Looking ahead, Epiroc anticipates continued high demand from mining customers in the short term, while demand from construction customers is expected to remain stable at a low level.
Profitability and Efficiency Measures
Despite a slight decrease in the adjusted operating margin to 19.0% (19.7), Epiroc is committed to returning to profitable growth. Measures taken, especially within Tools & Attachments, have begun to yield results, with the adjusted margin improving to 11.6% (11.3).
Cash Flow and Capital Management
Epiroc’s operating cash flow saw a significant increase of 38%, positively impacted by an improvement in working capital. The cash conversion rate for the last 12 months was 105% (88).
Safety and Innovation: Key Priorities
Epiroc emphasizes safety, offering solutions like Collision Avoidance Systems (CAS) to enhance safety in existing vehicle fleets. A strategic partnership with Hindustan Zinc Limited in India will equip all their mines with Epiroc’s CAS.
Milestones and Celebrations
- Hancock Iron Ore’s Roy Hill mine in Australia achieved a milestone by converting all 78 mining trucks to fully autonomous operation using Epiroc’s LinkOA solution.
- The iconic Pit Viper rig celebrates 25 years, including a decade of autonomous operation, revolutionizing surface drilling with its power, safety, and energy efficiency.
Strategic Outlook
Epiroc is well-positioned for future growth, with a broad portfolio and a strong presence in the mining sector, particularly in gold and copper mines. The company’s unique exploration offering, including advanced digital solutions, caters to the increasing demand for exploration.
Epiroc’s Commitment
Epiroc remains focused on making customers’ operations safer and more productive, driving the transformation towards a sustainable society.
Epiroc is a global productivity partner providing 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, Sweden, had revenues of approximately SEK 64 billion in 2024, and has around 19,000 passionate employees supporting and collaborating with customers in around 150 countries.
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