• Orders received decreased -4% to MSEK 14 162 (14 715*). The organic decrease was -3%.
  • Large orders amounted to MSEK 400 (900).
• Revenues increased 2% to MSEK 14 143 (13 868), organic increase of 3%.
• Operating profit decreased -13% to MSEK 2 760 (3 161). Items affecting comparability amounted to MSEK -127 (-26), including transaction and integration costs related to the acquisition of Stanley Infrastructure and change in provision for the share-based long-term incentive programs of MSEK -2 (-26).** The operating margin was 19.5% (22.8).
• The adjusted operating profit was 2 887 (3 187), corresponding to an adjusted operating margin of 20.4% (23.0).
• Basic earnings per share were SEK 1.66 (1.90).
• Operating cash flow increased to MSEK 1 778 (338).
• The acquisition of Stanley Infrastructure was completed on April 1.***

The Epiroc SmartROC T40  surface drill rig

CEO Comments 

Mixed demand, with solid mining activity
The underlying mining activity continued to be high in the quarter. However, the level of large orders received was lower than in the comparable period, MSEK 400 vs. MSEK 900. The orders received decreased to MSEK 14 162 (14 715), corresponding to an organic decline of -3%. The organic order growth for service was strong at 9%, supported by mid-life upgrades and strong demand for mixed-fleet automation. On the construction side, the demand for hydraulic attachments remained weak. Demand within tunneling and infrastructure was stable.

Sequentially, compared to the previous quarter, we achieved 2% organic growth, driven by the higher order intake for service and rock drilling tools.

In the near term, we expect that the underlying mining demand, both for equipment and aftermarket, will remain at a high level. Demand from construction customers is expected to remain soft.

Increasing the focus on profitability   
Our revenues increased 3% organically to MSEK 14 143 (13 868). Adjusted for items affecting comparability, mainly transaction and integration costs for acquisitions, the adjusted operating profit was MSEK 2 887 (3 187). This corresponds to an adjusted operating margin of 20.4% (23.0). The lower margin is mainly explained by higher costs and negative mix effects, such as a lower proportion of service and attachments revenues.

Several measures have been taken to strengthen efficiency and profitability. Costs were higher than in the first quarter 2023, but sequentially, we have already achieved structural savings. Further measures will be taken throughout the organization. For example, we will increase efficiency within our service operations as well as in our manufacturing entities.

Cash flow and working capital
Operating cash flow increased to MSEK 1 778 (338). The improvement in cash flow is mainly explained by a better working capital development compared to the first quarter in previous year. The working capital is still at levels that we are not satisfied with, mainly due to high inventories of finished goods of equipment (machines ordered by, and on its way to, customers around the world).

We are increasing capacity in customer centers to speed up final modifications to shorten delivery time and improve invoicing.

Positioning for growth in hydraulic attachments
On April 1, we finalized the acquisition of Stanley Infrastructure, with revenues in 2023 of MSEK 4 700 and 1 380 employees. This acquisition strengthens our position in hydraulic attachments, especially in the United States, and positions us well to grasp future growth opportunities in construction and urban development.

Leaders in safety
With our Collision Avoidance System Level 9 (CAS 9), the market’s highest level of collision prevention system, we help customers save lives. It is a proactive intervention system that takes control of a vehicle in dangerous situations and intervenes if the operator fails to act in response to warnings. In the quarter, we won our largest order this far for this solution, at MSEK 36.

We are committed to improve safety and productivity for our customers and CAS 9 is only one of several examples of how our digitalization solutions enable this. We are proud to be leading the way, and we have an exciting journey ahead of us.   

Helena Hedblom
President and CEO

Please find the full report here. Additional financial documents are found on Epiroc’s Financial publications page.