January 26, 2021
Agility in a challenging 2020
The Covid-19 pandemic affected us significantly in 2020, yet we managed to adapt our way of working, lower our costs, prioritized innovation, show resilience in our profitability, and deliver a solid result. We did this while prioritizing health and safety and supporting our customers in this unique and challenging situation. I am proud to see the way our organization has been able to adapt to the situation.
The demand recovered in the second half of the year and for the full year 2020, our organic order intake was unchanged and amounted to MSEK 36 579. Revenues, however, declined 5% organically to MSEK 36 122, mainly due to lower equipment volumes. Our service business showed resilience throughout the year. This in combination with our efficiency measures supported our operating margin, which improved to 20.4%. We also had a solid operating cash flow of MSEK 7 006. The Board proposes a distribution to shareholders of SEK 5.50 per share; a dividend of SEK 2.50 and SEK 3.00 through mandatory redemption.
Organic order growth in all businesses in Q4
The customer demand remained largely at the same level as in Q3. Both our customers’ and our own operations were, with few exceptions, up and running. We continued to see that our customers took decisions to invest in new equipment and we achieved organic order growth in all our businesses, with the highest growth achieved in Equipment & Service. Orders received for the Group were MSEK 9 329, corresponding to 13% organic growth compared to last year and to 2% organic growth sequentially.
We expect that the demand, both for equipment and aftermarket, will remain stable in the near term. Uncertainty, however, still remains regarding the Covid-19 development and any further related restrictions.
Organic revenue growth and improved profitability
Revenues were MSEK 9 806, up 6% organically with solid growth for our aftermarket business. Service performed particularly well and had an organic revenue growth of 13%. This in combination with cost savings contributed to an improved operating margin, despite a negative currency effect. The adjusted margin improved to 23.2%, with strong contribution from Tools & Attachments.
Automation, digitalization and electrification solutions are in high demand and we connect more and more machines. We continue to win orders and we are proud of our market-leading solutions that are globally deployed and proven. They enable increased productivity, safety and sustainability for our customers.
We invest heavily in research and development to remain the technology leader. In Q4 we agreed to acquire MineRP that supports large and medium-sized mines in optimizing their operational efficiency by providing a leading software platform solution that integrates all technical mining data.
Engaged employees and improved sustainability results
Our employee survey showed that the engagement level rose in 2020, despite the pandemic, and remained well above the external benchmark. We also achieved improved sustainability results, with a significant reduction in lost-time injury frequency rate and decreased CO2 emissions, both from operations and from transport.
Strategy for profitable growth
Our strategy is to be the market leader in our selected niches and we continue to prioritize innovation, aftermarket, operational excellence and sustainability. Our innovation agenda goes hand-in-hand with our customers’ sustainability agenda, which creates many opportunities for us. I see Epiroc as an enabler in the transition towards sustainable mining and infrastructure. By offering best-in-class solutions – with automation, digitalization and electrification – and always being close to our customers, we will further strengthen the relationships with our customers and make Epiroc even stronger.
President and CEO
Please find the full report in the attached pdf. Additional financial documents are found on Epiroc’s Financial publications page.
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 12:00 noon CET on January 26, 2021.
Epiroc is a vital part of a sustainable society and a global productivity partner for mining and infrastructure customers. 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, Sweden, had revenues of SEK 36 billion in 2020, and has 14 000 passionate employees supporting and collaborating with customers in about 150 countries. Learn more at www.epirocgroup.com.