October 22, 2020
Recovery in orders and solid results
The customer demand improved compared to the second quarter as the effects from Covid-19 restrictions were more moderate. Our continued focus on health and business continuity, both for us and our customers, paid off. We achieved organic order growth and I am pleased to see the strong development in our service business and that our customers took decisions to invest. The lower customer activity in some markets following Covid-19 restrictions did however impact the aftermarket business. Internally, we have adapted well and adjusted our cost base. All in all, this translated into a solid result and cash flow.
Organic order growth
Orders received amounted to MSEK 9 373, which corresponds to 23% organic growth sequentially and 10% year-on-year. The order intake was stronger at the end of the quarter, both for equipment and aftermarket.
We expect that the demand, both for equipment and aftermarket, will remain stable in the near term. That said, there are uncertainties regarding the Covid-19 development and related restrictions, which can have an adverse effect on the demand.
Demand for innovative solutions
There is a strong and growing interest from customers in our automation, digitalization and electrification solutions and that is why we continue to invest and bring new solutions to the market. Our automation solutions in operations deliver increased productivity and improved safety to our customers and we won several new automation orders in the quarter. We are happy to report that we have successfully deployed unique solutions for mixed fleet automation - both for underground and surface applications. It is clear that our innovation agenda goes hand in hand with our customers’ sustainability agenda.
Service proving its resilience
Currency headwinds and Covid-19 restrictions impacted revenues negatively in the quarter. In total, the revenues declined 14% to MSEK 8 724. Organically, revenues decreased by 3% supported by the resilient service business, which had an increase in revenues. It also reflects our successful and continuous work to increase productivity for customers.
The adjusted operating margin was 21.7% (21.3). Our efficiency actions were executed according to plan and supported the profit. Worth noting is that the efficiency actions that we execute around the world make us more agile and resilient while allowing us to continue to prioritize innovation and further develop our technology leadership.
Clear priorities for the future
So far, 2020 has been a year heavily impacted by the Covid-19 pandemic, with many related challenges. We have managed the situation well with the support from dedicated colleagues, valued customers and loyal business partners. Together we have made Epiroc stronger for the future. And speaking of the future, with or without the pandemic, we remain focused on our priorities: innovation, aftermarket, operational excellence and sustainability.
President and CEO
For more information please contact:
Karin Larsson, Vice President Investor Relations
+46 10 755 0106
Ola Kinnander, Media Relations Manager
+46 70 347 2455
This information is information that Epiroc AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons above, at 18:01 CEST on October 22, 2020.
Epiroc is a leading global productivity partner for the mining and infrastructure industries. With ground-breaking technology, Epiroc develops and produces innovative, safe and sustainable drill rigs, rock excavation and construction equipment and tools. The company also provides world-class service and solutions for automation and interoperability. Epiroc is based in Stockholm, Sweden, had revenues of SEK 41 billion in 2019, and has about 14 000 passionate employees supporting and collaborating with customers in more than 150 countries. Learn more at www.epirocgroup.com.