q2 2021 · 2021. 7. 28. · * q2 2021 includes items affecting comparability of msek -15 related to...
TRANSCRIPT
Q2 2021
July 20, 2021
Helena Hedblom, President and CEO
Anders Lindén, CFO
Highlights Q2 2021
• Record orders received
– High customer activity
– Strong demand for both aftermarket and equipment
• Covid-19 pandemic affects us all
– Safety first
– Limited impact on the business
• Increased revenues
– Limited impact from supply-chain challenges
• Improved profitability
• Battery-electric advancements
• Several acquisitions announced – creating options for the future
Q2 2021
2 263 1 927 2 016 1 932 1 418 1 820 2 212 1 867 2 182
21.319.0 19.6
21.2
16.8
20.922.6 21.3 22.4
21.7 21.3 20.7 20.918.7
21.7 23.2 23.0 22.6
0
5
10
15
20
25
30
35
40
45
0
2 000
4 000
6 000
8 000
10 000
12 000
Q121Q320Q319 Q120Q219 Q419 Q220 Q420 Q221
10 626
9 134
10 158 10 280
8 458 8 724
9 806
8 7739 733
Operating margin, %
Adj. Operating margin, %
Operating Profit, MSEK
Revenues, MSEK
• Orders received up 37% to 11 070, +45% organic
– Equipment +76% organic
– Service +26% organic
– Tools & Attachments +42% organic
• Organic revenue growth of 22%
• Operating profit increased 54% to MSEK 2 182
(1 418)
– MSEK -15 (-165) affecting comparability
• Adjusted margin improved to 22.6% (18.7)
– Reported margin 22.4% (16.8)
• Operating cash flow of MSEK 1 229 (1 963)
Key financials
12 000
11 000
10 000
0
8 000
9 000
Structure/other Q221
+1%
Q220
11 070
Currency
+45%
Organic
-9%
8 105
+37%
Orders received, MSEK and change, %
Revenues, operating profit and margin
Q2 2021 3
• Innovations
– Dynamic Tunneling Package
– Essential Line working tools
• Partnership
– NEXGEN SIMS
• Acquisitions - Creating options for the future
– Kinetic Logging Services
– MineRP
– Mining Tag
– 3D-P
– Meglab
– DandA Heavy Industries
Innovations, acquisitions and partnerships strengthen Epiroc’s position
Q2 2021
Leading productivity and sustainability partner
4
• High customer activity
• Strong offering
– Connected fleet growing
• Training
• Supply chain
Strong demand for all types of aftermarket solutions
31% (33)Equipment
43% (43)Service
26% (24)T&A
Revenues
Aftermarket 69% (67)
Q2 2021 5
Actions for operational excellence
• Supply-chain improvement program continues
– Higher availability
– Positive financial effect offset by supply-chain
challenges
• Supply-chain challenges
– Limited effect on revenues
• Previously announced initiatives finalized
• RPA - Robotic Process Automation
Q2 2021 6
• Leadership conference
• Planet:
– Battery-electric advancements
– Lower CO2 emissions from transport
• People:
– Increased share of women
– Higher sick leave due to Covid-19
Sustainability: People & planet
Q2 2021
Before: Diesel
After:
Battery electric
7
Operating profit and margin
Operating profit and margin
* Q1 2018-Q4 2018 includes costs related to the split from Atlas Copco.
* Q2 2021 includes items affecting comparability of MSEK -15 related to change in provision for long-term incentive programs. (LTI)
All details can be found in the quarterly report.
1 810 1 8982 162
1 9302 263
1 927 2 016 1 932
1 4181 820
2 2121 867
2 182
233
18.419.7
20.519.7
21.3
19.019.6
21.2
16.8
20.9
22.621.3
22.420.221.0
20.4 20.321.7 21.3
20.7 20.9
18.7
21.7
23.2 23.0 22.6
-3
0
3
6
9
12
15
18
21
24
2 500
3 500
2 000
4 000
0
500
3 000
1 000
1 500
2 024
Q119 Q219
2 279
-8
181
Q418Q218
126
2 160
Q318
591 583
391 896
Q319
115
Q419
2 154
Q121Q320
76
-21
Q120
165
Q221Q220
67
Q420
2 197
149
2 302
1 991 1 9892 131
1 9112 016 15
Operating margin, % Items affecting comparability*, MSEK Operating profit, MSEK Operating margin, adj., %*
Q2 2021 8
Epiroc Group – Profit bridge
2 200
1 000
0
200
1 200
400
1 400
1 600
1 800
2 000
-139
-0.1pp
+766
+4.4pp
2 197
Q220 Organic Currency
+137
+1.3pp
15
Structure/other* Q221 LTI Adjusted operating profit
2 182
1 418
Margin: 16.8%
Margin: 22.4%
Adj. margin: 22.6%
Q2 2021 9
• Orders received up 46% organic
– Equipment +76%, a few large orders
– Service +26%, high customer activity and strong
service offering
• Revenues up 19% organic
• Operating profit up 30% to MSEK 1 880 (1 441)
– Operating margin 26.2% (22.4)
– Positive impact from higher volumes, but diluted by
acquisitions
• MineRP, Kinetic Logging Services and 3D-P
acquired
Segment: Equipment & Service
7 000
0
6 000
8 000
9 000
Q220
+46%
Organic Structure/otherCurrency
+1%-10%
6 129
8 387
Q221
+37%
Orders received, MSEK and change, %
Orders received, revenues and operating margin
As from Q2 2020, the Epiroc IT-function is included in the segment E&S instead of in common group functions. Figures for 2019 have been restated and are not material.
6 874 6 7107 101
6 129
7 068 6 9547 991
8 3877 702 7 334 7 740
6 5796 422 6 471
7 455
6 391
0
10
20
30
40
50
0
2 000
4 000
6 000
8 000
10 000
Q319
24.626.425.925.5
Q219 Q420
24.226.2
23.8
Q419
24.1
7 677
Q120
26.222.7
22.4
Q220
25.4
Q320
26.5
Q121 Q221
7 187
Revenues, MSEKAdj. operating margin, % Order intake, MSEK Operating margin, %Q2 2021 10
Equipment & Service – Profit bridge
Margin:
22.4%
Margin: 26.2%
200
400
0
1 400
1 200
1 600
1 800
2 000
Currency
+9
0.0pp
Q220
+555
+3.9pp
Organic
-125
-0.1pp
Structure/other Q221
1 880
1 441
Q2 2021 11
• Orders received up 42% organic
– Orders for both hydraulic attachments and
consumables increased
– Strong growth in exploration consumables
• Revenues up 31% organic
• Operating profit up 191% to MSEK 416 (143)
– Increased volumes and successful actions, negative
currency
– Adj. operating margin of 16.5% (9.8)
Segment: Tools & Attachments
3 000
0
2 000
2 500
CurrencyQ220 Structure/other Q221Organic
1 980
2 678
+42%
-7%0%
+35%
2 8262 665
2 517
2 619
1 980
2 2492 337
2 674 2 678
2 9262 765
2 503 2 505
2 0352 196 2 288 2 345
2 517
0
5
10
15
20
25
30
35
0
500
1 000
1 500
2 000
2 500
3 000
3 500
12.2
13.5
Q319
5.7
13.9
14.6
Q320
14.6
Q219
12.5
11.8
Q420Q419 Q120
11.6
9.812.6
7.0
Q220
16.5
15.9
16.5
Q121
16.5
Q221
Revenues, MSEKAdj. operating margin, % Operating margin, %Order intake, MSEK
Orders received, revenues and operating margin
Orders received, MSEK and change, %
Q2 2021 12
Tools & Attachments – Profit bridge
143
416
0
50
100
150
200
250
300
350
400
450
Q221Q220
249
+8.0pp
Organic
-18
-0.2pp
Structure/other
42
+1.7pp
Currency
Margin: 7.0%
Margin: 16.5%
Q2 2021 13
• Increasing costs
– Growth and increased activity
– Investments for the future
– Positive effects from finalized initiatives
• Net financial items MSEK -44 (-51)
– Interest net MSEK -19 (-19)
• Tax expense MSEK -445 (-340)
– Effective tax rate 20.8% (24.8)
– Guidance: below 25%
Administration, marketing and R&D expenses
Costs, net financials and tax
1 7451 671 1 708
1 640
1 511
1 360 1 3801 427
1 570
16.4 16.5 16.618.0 17.9
15.614.1
16.3 16.1
0
5
10
15
20
25
30
0
500
1 000
1 500
2 000
Q220 Q121Q219 Q319 Q320Q419 Q420Q120 Q221
Expenses in % of revenues
A, M and R&D expenses, adj. for items affecting comparability, MSEK
Q2 2021 14
• Strong financial position, despite distribution
to shareholders
– MSEK 5 127 paid in dividend and redemption
– Net cash MSEK 322 (1 819)
• Net debt/EBITDA ratio at -0.03 (-0.20)
Capital structure
Net debt and Net debt/EBITDA
4 217
2 416
-1 191-1 819
-3 638 -4 137
-5 747
0.43
-0.03
-0.7
-0.6
-0.5
-0.4
-0.3
-0.2
-0.1
0.0
0.1
0.2
0.3
0.4
0.5
0.6
-6 000
-5 000
-4 000
-3 000
-2 000
-1 000
0
1 000
2 000
3 000
4 000
5 000
6 000
0.24
Q219
0.05
Q319
483
-0.12
Q419 Q120
-0.20
Q220
-0.41
Q320
-0.45
Q420
-0.64
Q121 Q221
-322
Net debt/EBITDA ratio
Net cash (-) / net debt (+), end of period, MSEK
Q2 2021 15
Net working capital was MSEK 11 368 (12 084)
– Down 6%, of which 4% currency
ROCE at 23.4% (22.7)
Capital efficiency
Capital employed and ROCE Net working capital
14 791 15 12013 153 13 457
12 084 11 82110 571 11 245 11 368
33.8 34.3 34.4 35.3 36.1 35.933.8 33.1
30.8
0
5
10
15
20
25
30
35
40
0
5 000
10 000
15 000
20 000
25 000
Q219 Q120 Q221Q319 Q419 Q220 Q320 Q420 Q121
Net working capital, period end
Net working capital, % of revenues, 12 months
30.8
29.5 27.6 26.222.7 21.6 21.6 20.9
23.4
0
10
20
30
40
50
60
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
Q121
31 698
Q320Q219 Q319 Q419 Q220Q120 Q420 Q221
29 001
34 583
31 101
34 70031 838
33 80035 244
36 816
Capital employed, cash, MSEK, period end
Return on capital employed, %, 12 months
Capital employed, ex cash, MSEK, period endQ2 2021 16
MSEK Q2 2021 Q2 2020
Operating profit 2 182 1 418
Depreciation, amortization and impairment 411 441
Capital gain/loss and other non-cash items 1 49
2 594 1 908
Net financial items received/paid -172 -32
Taxes paid -581 -344
Change in working capital -223 985
Investments, incl. rental equipment* -386 -344
Pension funding and other** -3 -210
Operating cash flow 1 229 1 963
Acquisitions and divestments -1 282 -28
Operating cash flow
* Investments include rental investments, net, other PPE, net, and intangible assets, net.
** Other includes adjustments for currency hedges of loans and proceeds to/from other financial assets,
adjusted for divestment of Financial Solutions credit portfolios.
Operating cash flow and cash conversion rate, %
1 506
1 883
2 827
1 532
1 963
2 156
1 610
1 229
82
101113
130
155
130 132
0
50
100
150
200
250
300
0
500
1 000
1 500
2 000
2 500
3 000
Q419 Q420Q319Q219 Q120 Q320Q220
145
Q121
105
Q221
1 355
Cash conversion rate, %, 12 months (Operating cash flow / Net profit)
Operating cash flow, MSEK
Q2 2021 17
Summary
• High customer activity
• Record high orders received
• High revenue growth
• Improved profitability
• Several acquisitions
• Good development for BEV
• Dare to think new
Q2 2021 18
Looking ahead
“We expect that
the demand,
both for equipment
and aftermarket,
will remain at a
stable high level
in the near term.“
Q2 2021 19
Save the date
Capital Markets DayDecember 1, 15:00 CET
See you online!
Q2 2021 20
Q&A
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
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 exchange- and interest-rates, political risks, competitor behavior, supply- and IT-disturbances.