Epiroc

Quarterly Report • Apr 23, 2024

Interim report Q1 2024

Epiroc AB Interim Report January – March 2024 1 (26)

Q1 2024

April 23, 2024

160

Epiroc interim report Q1 3
Financial overview 3
CEO comments 4
Orders and revenues 5
Profits and returns 6
Dividend 6
Balance sheet 7
Cash flow 7
Leading productivity and sustainability partner 8
Equipment & Service 9
Tools & Attachments 11
Sustainability: People & Planet 13
Other information 14
Key risks 14
Signature of the President 14
Financial Statements 15
Condensed consolidated income statement 15
Condensed consolidated statement of comprehensive income 15
Condensed consolidated balance sheet 16
Condensed consolidated statement of changes in equity 17
Condensed consolidated statement of cash flows 18
Condensed parent company income statement 19
Condensed parent company balance sheet 19
Condensed segments quarterly 20
Geographical distribution of orders received 21
Geographical distribution of revenues 21
Group notes 22
Note 1: Accounting principles 22
Note 2: Acquisitions and divestments 22
Note 3: Fair value of derivatives, earn-out and borrowings 23
Note 4: Share buybacks and divestments 23
Note 5: Transactions with related parties 23
Key figures 24
Epiroc in brief 25
About this report 25
Further information 26
Financial calendar 26

Epiroc interim report Q1

• Orders received decreased -4% to MSEK 14 162 (14 715*). The organic decrease was -3%. o 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.***

Financial overview

	2024	2023
MSEK	Q1	Q1	Δ,%
Orders received	14 162	14 715	-4
Revenues	14 143	13 868	2
EBITA	2 976	3 374	-12
EBITA, margin, %	21.0	24.3
Operating profit, EBIT	2 760	3 161	-13
Operating margin, EBIT, %	19.5	22.8
Profit before tax	2 644	2 964	-11
Profit margin, %	18.7	21.4
Profit for the period	2 010	2 293	-12
Operating cash flow	1 778	338	426
Basic earnings per share, SEK	1.66	1.90	-12
Diluted earnings per share, SEK	1.66	1.90	-12
Return on capital employed, %, 12 months	24.5	27.7
Net debt/EBITDA, ratio	0.39	0.52

* As from January 1, 2024, Epiroc will not include orders on hand (order book) in orders received when acquiring companies. The previously reported orders received in the first quarter 2023 of MSEK 15 148 included orders on hand from acquired companies of MSEK 433. All figures in this report have been restated, unless otherwise stated.

** For further information, see page 6.

*** See page 22.

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

Orders and revenues

Financial overview

	2024	2023
MSEK	Q1	Q1	Δ,%
Orders received	14 162	14 715	-4
Revenues	14 143	13 868	2
EBITA	2 976	3 374	-12
EBITA, margin, %	21.0	24.3
Adj. operating profit, EBIT	2 887	3 187	-9
Adj. operating profit, EBIT, %	20.4	23.0
Operating profit, EBIT	2 760	3 161	-13
Operating margin, EBIT, %	19.5	22.8

Orders received

Orders received decreased -4% to MSEK 14 162 (14 715). The organic decrease was -3%. The customer activity remained high in mining. On the construction side, the demand remained weak, especially for hydraulic attachments. Structure and currency impacted the growth with 2% and -3%, respectively. In the quarter, acquisitions contributed with 2%.

Compared to the previous year, orders received in local currency increased in South America and Europe, while it decreased in all other regions. The strongest growth was achieved in South America, which grew by double digits, supported by a large order.

Mining customers represented 79% (81) of orders received in the quarter and construction customers 21% (19).

Sequentially, compared to the previous quarter, orders received increased 2% organically.

Revenues

Revenues increased by 2% to MSEK 14 143 (13 868), corresponding to an organic growth of 3%. Acquisitions impacted revenues positively with 2% while currency impacted negatively with -3%. The book-to-bill ratio was 100% (106).

The aftermarket represented 67% (70) of revenues in the quarter.

Sales Bridge	Orders received	Revenues
	MSEK,Δ,%	MSEK,Δ,%
Q1 2023	14 715	13 868
Organic	-3	3
Currency	-3	-3
Structure/other	2	2
Total	-4	2
Q1 2024	14 162	14 143

Revenues by business type

Equipment Service Tools & Attachments

Profits and returns

Operating profit and margin

Adjusted operating profit and margin

Profit bridge	Operating profit
	MSEK,Δ	Margin,Δ,pp
Q1 2023	3 161	22.8
Organic	-362	-3.3
Currency	49	1.0
Structure/other*	-88	-1.0
Total	-401	-3.3
Q1 2024	2 760	19.5

* Includes operating profit/loss from acquisitions and divestments and items affecting comparability (incl. change in provision for share-based long-term incentive programs).

Operating profit, EBIT, decreased by -13% to MSEK 2 760 (3 161). Items affecting comparability amounted to MSEK -127 (-26), including transaction and integration costs of MSEK -125 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, EBIT, was 19.5% (22.8). The adjusted operating margin, excluding items affecting comparability, was 20.4% (23.0). The margin was positively impacted by currency, while the organic contribution was negative. The lower margin is mainly explained by higher costs and negative mix effects, such as a lower proportion of service and attachments revenues. The dilution from acquisitions was -0.2 percentage points.

Net financial items amounted to MSEK -116 (-197), where the lower cost is mainly explained by exchange rate differences on financial items. Net interest increased to MSEK -128 (-89), explained by higher interestbearing debt and an increased average interest rate.

Profit before tax was MSEK 2 644 (2 964). Income tax expense amounted to MSEK -634 (-671). The effective tax rate was 24.0% (22.6). Profit for the period totaled MSEK 2 010 (2 293). Basic earnings per share were SEK 1.66 (1.90). Return on capital employed was 24.5% (27.7), negatively impacted by the high cash position ahead of the Stanley infrastructure acquisition. The return on equity was 24.9% (27.7).

Dividend

Dividend and payout ratio

Dividend

0.00 1.50 3.00 4.50 6.00 The Board of Directors has proposed to the Annual General Meeting an ordinary dividend to shareholders of SEK 3.80 (3.40) per share, equal to MSEK 4 589 (4 103). The dividend is proposed to be paid in two equal installments with record dates May 16 and October 22, 2024.

Balance sheet

7 281 9 099 7 643 7 824 6 076

Net debt

Q123 Q223 Q323 Q423 Q124

Net debt (+) / net cash (-), MSEK, period end Net debt, period end/EBITDA, 12 months

0.49 0.49

0.39

Net working capital

Compared to the previous year, net working capital increased 15% to MSEK 23 520 (20 442). The inventory is higher, mainly explained by an increase in finished goods of equipment. The average net working capital in relation to revenues in the last 12 months was 36.7% (32.8).

Net debt

Epiroc ended the quarter with a cash and cash equivalents position of MSEK 13 879 (4 587). In February, Epiroc issued a bond with a 7-year tenor amounting to MEUR 500 (BSEK 5.6), which explains the increase in cash. The net debt was MSEK 6 076 (7 281), supported by higher operating cash flow. The net debt/EBITDA ratio was 0.39 (0.52).

The average tenor of Epiroc's long-term debt was 4.8 years. The average interest duration is 25 months (15) and the average interest rate at the end of the quarter was 4.80% (3.55).

On April 1, Epiroc finalized the acquisition of Stanley Infrastructure and paid BSEK 8.2. The net debt/EBITDA ratio post the acquisition remains below 1.0. On April 10, Epiroc signed a MSEK 4 000 revolving credit facility. The facility has a maturity of five years with two one-year extension options and replaces an existing facility with the same value.

Cash flow

0.52

0.60

Operating cash flow

Operating cash flow increased to MSEK 1 778 (338). Compared to the previous year, it was positively impacted by mainly a lower build-up of working capital. Working capital impacted negatively with MSEK -643 (-1 839).

Acquisitions and divestments

The net cash flow from acquisitions and divestments was MSEK 0 (-3 279).

Leading productivity and sustainability partner

Innovations, acquisitions, and partnerships strengthen Epiroc's position as a leading global productivity and sustainability partner. Below are some highlights from the quarter.

Acquisitions – Creating options for the future

No acquisition was announced or completed in the first quarter. On April 1, Epiroc completed the acquisition of Stanley Infrastructure. See page 22.

• Stanley Infrastructure manufactures attachments and handheld hydraulic and battery-powered tools for applications in infrastructure and strengthens Epiroc's construction business, especially in North America.

Partnership – Strengthened partnership with Dumas

In the quarter, Epiroc won a large order, MSEK 200, for underground equipment and related services and solutions in Mexico from Canadian mining services provider Dumas Contracting Ltd. Dumas, a subsidiary of STRACON Group, is a leading provider and contractor of state-of-the-art underground and surface mining services throughout the Americas.

Partnership - Agnostic machine control for Barminco

Epiroc's RCT automation solution has been selected as the preferred automation solution by Barminco, a subsidiary of the global mining services group Perenti. Due to the quick set-up times and ease of use for operators, RCT's agnostic automation solutions can already be found at many of Barminco's operations throughout the Goldfields region in Australia.

Batteries with Service

The transition to BEVs (battery-electric vehicles) is accelerating as mining companies discover advantages such as higher productivity, less maintenance needs and no emissions. The latest addition to the electrification portfolio is a new type of service agreement, "Batteries with Service", which offers the same benefits as Batteries as a Service (BaaS), such as battery telematics, equipment audits and extended warranties, but with the difference being that the customers, instead of Epiroc, own the batteries.

Equipment & Service

Equipment & Service provides rock drilling equipment, equipment for rock excavation, rock reinforcement, loading and haulage, ventilation systems, drilling equipment for exploration, water and energy, exploration tools and solutions, as well as related spare parts and service for the mining and construction industries. The segment also provides solutions for automation, digitalization and electrification.

Orders received

Revenues and book-to-bill

Revenue split

Financial overview

	2024	2023
MSEK	Q1	Q1	Δ,%
Orders received	11 025	11 539	-4
Revenues	11 212	10 733	4
EBITA	2 685	2 901	-7
EBITA, margin, %	23.9	27.0
Adj. operating profit, EBIT	2 503	2 718	-8
Adj. operating profit, EBIT, %	22.3	25.3
Operating profit, EBIT	2 503	2 718	-8
Operating margin, EBIT, %	22.3	25.3

Orders received

Orders received decreased -4% to MSEK 11 025 (11 539). The organic decrease was -2% and currency impacted negatively with -3%. Acquisitions contributed with 1%.

Compared to the previous year, orders received in local currency increased in South America, North America and Europe, while it decreased in Africa/Middle East and in Asia/Australia. The strongest growth was achieved in South America, which grew high double digit, supported by a large order.

For equipment, orders received amounted to MSEK 4 404 (5 151), corresponding to an organic decrease of -16%. The large orders, i.e. orders above MSEK 100, totaled MSEK 400 (900). The share of orders from equipment was 40% (45).

For service, orders received increased 4% to MSEK 6 621 (6 388). The organic growth was 9% and reflected a continued high activity level, a good demand for mid-life upgrades and digital solutions, including mixed-fleet automation solutions. The share of orders from service was 60% (55).

Sequentially, orders received decreased -1% organically for the segment.

Revenues

Revenues increased 4% to MSEK 11 212 (10 733), corresponding to an organic growth of 6%. Acquisitions contributed with 1% while currency impacted negatively with -3%. Equipment revenues increased 13% organically, while service revenues increased 2% organically. The share of revenues from service was 58% (62). The book-to-bill ratio was 98% (108).

Equipment & Service

	Equipment & Service		Equipment		Service
Sales Bridge	Orders received	Revenues	Orders received	Revenues	Orders received	Revenues
	MSEK,Δ,%	MSEK,Δ,%	MSEK,Δ,%	MSEK,Δ,%	MSEK,Δ,%	MSEK,Δ,%
Q1 2023	11 539	10 733	5 151	4 120	6 388	6 613
Organic	-2	6	-16	13	9	2
Currency	-3	-3	-3	-3	-3	-3
Structure/other	1	1	5	4	-2	-1
Total	-4	4	-14	14	4	-2
Q1 2024	11 025	11 212	4 404	4 708	6 621	6 504

Operating profit and margin

Adjusted operating profit and margin

Operating profit and margin

Operating profit, EBIT, decreased -8% to MSEK 2 503 (2 718). The operating margin, EBIT, was 22.3% (25.3), negatively impacted by higher costs, and negative mix effects, while it was supported by currency. The mix effects are explained by a higher share of equipment revenues and a negative mix effect within service. The dilution from acquisitions was -0.1 percentage points.

Profit bridge	Operating profit
	MSEK,Δ	Margin,Δ,pp
Q1 2023	2 718	25.3
Organic	-273	-4.1
Currency	59	1.3
Structure/other	-1	-0.2
Total	-215	-3.0
Q1 2024	2 503	22.3

Organizational changes

On April 1, 2024, Wayne Symes assumed the role as President of the Underground division.

Tools & Attachments

Tools & Attachments provides rock drilling tools, ground engaging tools and hydraulic attachments that are attached to machines used mainly for drilling, deconstruction and recycling as well as rock excavation. It also provides related service, spare parts and digital solutions, and serves the mining and construction industries.

Revenues and book-to-bill

Financial overview

	2024	2023
MSEK	Q1	Q1	Δ,%
Orders received	3 122	3 133	0
Revenues	2 949	3 125	-6
EBITA	369	561	-34
EBITA, margin, %	12.5	18.0
Adj. operating profit, EBIT	460	532	-14
Adj. operating profit, EBIT, %	15.6	17.0
Operating profit, EBIT	335	532	-37
Operating margin, EBIT, %	11.4	17.0

Orders received

Orders received was flat and amounted to MSEK 3 122 (3 133), corresponding to an organic decrease of -1%. The demand from mining customers was high, which was reflected in the orders received for rock drilling tools. The demand from construction customers, on the other hand, remained weak, impacting mainly the hydraulic attachments business negatively. Structure and currency impacted the growth with 3% and -2%, respectively. In the quarter, acquisitions contributed with 3%.

Compared to the previous year, orders received in local currency, including acquisitions, decreased in all regions except Africa/Middle East.

Sequentially, orders received increased 14% organically for the segment, supported by high demand for rock drilling tools.

Revenues

Revenues decreased -6% to MSEK 2 949 (3 125), corresponding to an organic decrease of -8%. Acquisitions contributed with 4% while currency impacted revenues negatively with -2%. The book-to-bill ratio was 106% (100).

Sales Bridge	Orders received	Revenues
	MSEK,Δ,%	MSEK,Δ,%
Q1 2023	3 133	3 125
Organic	-1	-8
Currency	-2	-2
Structure/other	3	4
Total	-	-6
Q1 2024	3 122	2 949

Tools & Attachments

Operating profit and margin

Q123 Q223 Q323 Q423 Q124 Adj. operating profit, MSEK

Adj. operating margin, %

Operating profit and margin

Operating profit, EBIT, decreased -37% to MSEK 335 (532) It includes items affecting comparability of MSEK -125 relating to transaction and integration costs for acquisitions. The adjusted operating profit was MSEK 460 (532), corresponding to a margin of 15.6% (17.0). The margin was negatively impacted by product mix and underabsorption from lower revenues from the hydraulic attachment business. The dilution from acquisitions was -0.2 percentage points.

Profit bridge	Operating profit
	MSEK,Δ	Margin,Δ,pp
Q1 2023	532	17.0
Organic	-73	-0.8
Currency	-14	-0.1
Structure/other	-110	-4.7
Total	-197	-5.6
Q1 2024	335	11.4

Acquisitions

On April 1, 2024, Epiroc completed the acquisition of Stanley Infrastructure. See page 22.

Organizational changes

Epiroc will from May 1, 2024, split the Tools & Attachments division into two divisions: the Tools division and the Attachments division. Martin Hjerpe, currently SVP M&A, Strategy and Supply Chain, will become President of the Tools division. Goran Popovski, currently President of the Tools & Attachments division, will become President of the Attachments division. The external reporting segment "Tools & Attachments" will not change, only comprise two divisions instead of one.

Sustainability: People & Planet

Employees

Compared to the first quarter 2023, the number of employees increased to 18 157 (17 586). External workforce amounted to 1 743 (1 722). For comparable units, the total workforce increased by 377 compared to the previous year. Sequentially, the number of employees decreased with approximately a hundred people, including additional workforce.

The proportion of women employees and women managers at the end of the period was 19.0% (18.6) and 23.5% (23.5), respectively.

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

Sick leave and TRIFR

Safety and health

The total recordable injury frequency rate (TRIFR) per one million working hours the last 12 months decreased to 4.6 (6.2). Actions are continuously taken to reduce injuries. The sick leave was stable at 2.2% (2.2).

CO₂e emissions

Sick leave %, 12 months TRIFR, 12 months

*

CO2e emissions from operations

The CO2e emissions from operations for comparable units* the last 12 months decreased -28% to 17 266 (23 957) tonnes. The improvement is driven by several initiatives, including the installation of solar panels and a higher share of renewable electricity.

* Comparable units, base line, are production companies, distribution centers and our largest customer centers 2022.

CO2e emissions from transport

The CO2e emissions from transport for comparable units* the last 12 months increased 5% to 96 987 (91 948) tonnes. The increase is mainly explained by higher volumes delivered.

* Comparable units, base line, are production companies and distribution centers in 2022.

Other information

In the quarter

• 2024-02-22 Epiroc made its first euro-denominated bond issuance, MEUR 500 (MSEK 5 600).
• 2024-03-07 Epiroc published its Annual and Sustainability Report for 2023.
• 2024-03-11 Epiroc announced it won a large order in Mexico, MSEK 200, from Canadian mining services provider Dumas Contracting Ltd. for underground mining equipment and related services and solutions.

After the period end

• 2024-04-01 Wayne Symes assumed the role as President of the Underground division.
• 2024-04-01 Epiroc AB completed the acquisition of Stanley Infrastructure. See page 22.
• 2024-05-01 Epiroc will split the Tools & Attachments division into two: the Tools division and the Attachments division. Martin Hjerpe, currently SVP M&A, Strategy and Supply Chain, will become President of the Tools division. Goran Popovski, currently President of the Tools & Attachments division, will become President of the Attachments division.
• 2024-05-14 Epiroc will host its Annual General Meeting in Sickla, Sweden; the notice has been published.
• 2024-09-24 Epiroc will host a Capital Markets Day (CMD) for institutional investors, analysts, and financial media in Las Vegas, United States.

Key risks

Epiroc is exposed to strategic, operational, legal and compliance as well as financial risks. The key risks include climate change and environment, competition, geopolitical and regulatory, market, corruption and fraud, cyber security and information risk, employees, product development, production, reputation, safety and health, and supply chain. Further information on risks, opportunities and risk management can be found in Epiroc's Annual and Sustainability Report 2023.

Signature of the President

The President and CEO of Epiroc AB declares that the interim report gives a fair view of the business development, financial position and result of operation of the Parent Company and the consolidated Group and describes significant risks and uncertainties that the Parent Company and its subsidiaries are facing.

Nacka, Sweden, April 23, 2024

Helena Hedblom

President and CEO, Epiroc AB

The company's auditors have not reviewed this report.

Financial Statements

Condensed consolidated income statement

	2024	2023	2023
MSEK	Q1	Q1	FY
Revenues	14 143	13 868	60 343
Cost of sales	-8 961	-8 272	-37 197
Gross profit	5 182	5 596	23 146
Administrative expenses	-1 124	-969	-4 105
Marketing expenses	-953	-926	-3 959
Research and development expenses	-461	-452	-1 930
Other operating income and expenses	116	-88	31
Operating profit	2 760	3 161	13 183
Net financial items	-116	-197	-948
Profit before tax	2 644	2 964	12 235
Income tax expense	-634	-671	-2 777
Profit for the period	2 010	2 293	9 458
Profit attributable to
- owners of the parent	2 008	2 290	9 431
- non-controlling interests	2	3	27
Basic earnings per share, SEK	1.66	1.90	7.82
Diluted earnings per share, SEK	1.66	1.90	7.81

Condensed consolidated statement of comprehensive income

	2024	2023	2023
MSEK	Q1	Q1	FY
Profit for the period	2 010	2 293	9 458
Other comprehensive income
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit pension plans	99	-86	-387
Income tax relating to items that will not be reclassified	-23	18	81
Total items that will not be reclassified to profit or loss	76	-68	-306
Items that may be reclassified subsequently to profit or loss
Translation differences on foreign operations	1 415	-296	-1 372
Cash flow hedges	-41	-78	-81
Income tax relating to items that may be reclassified	8	16	17
Total items that may be reclassified subsequently to profit or loss	1 382	-358	-1 436
Other comprehensive income for the period, net of tax	1 458	-426	-1 742
Total comprehensive income for the period	3 468	1 867	7 716
Total comprehensive income attributable to
- owners of the parent	3 459	1 876	7 706
- non-controlling interests	9	-9	10

Condensed consolidated balance sheet

	2024	2023	2023
Assets, MSEK	Mar 31	Mar 31	Dec 31
Intangible assets	16 184	15 966	15 843
Rental equipment	1 580	1 420	1 582
Other property, plant and equipment	6 334	5 754	6 032
Investments in associated companies and joint ventures	38	64	49
Other financial assets and other receivables	1 804	1 634	1 649
Deferred tax assets	1 597	1 729	1 509
Total non-current assets	27 537	26 567	26 664
Inventories	20 592	18 930	18 747
Trade receivables	10 607	10 088	10 455
Other receivables	3 131	3 331	3 093
Current tax receivables	708	292	721
Financial assets	1 480	1 406	1 703
Cash and cash equivalents	13 879	4 587	6 401
Assets held for sale	-	101	-
Total current assets	50 397	38 735	41 120
Total assets	77 934	65 302	67 784
Equity and liabilities, MSEK
Share capital	500	500	500
Retained earnings	39 867	34 485	36 322
Total equity attributable to owners of the parent	40 367	34 985	36 822
Non-controlling interest	397	479	388
Total equity	40 764	35 464	37 210
Interest-bearing liabilities	17 694	8 813	11 822
Post-employment benefits	153	139	251
Other liabilities and provisions	607	697	576
Deferred tax liabilities	955	1 207	922
Total non-current liabilities	19 409	10 856	13 571
Interest-bearing liabilities	2 285	2 985	2 153
Trade payables	6 213	7 017	5 902
Current tax liabilities	428	530	483
Other liabilities and provisions	8 835	8 450	8 465
Total current liabilities	17 761	18 982	17 003
Total equity and liabilities	77 934	65 302	67 784

Condensed consolidated statement of changes in equity

	Equity attributable to
MSEK	owners of the parent	non-controlling interests	Total equity
Opening balance, Jan 1, 2024	36 822	388	37 210
Total comprehensive income for the period	3 459	9	3 468
Acquisition and divestment of own shares	120	-	120
Share-based payments, equity settled	-34	-	-34
Closing balance, Mar 31, 2024	40 367	397	40 764
Opening balance, Jan 1, 2023	33 020	488	33 508
Total comprehensive income for the period	1 876	-9	1 867
Acquisition and divestment of own shares	160	-	160
Share-based payments, equity settled	-71	-	-71
Closing balance, Mar 31, 2023	34 985	479	35 464
Opening balance, Jan 1, 2023	33 020	488	33 508
Total comprehensive income for the period	7 706	10	7 716
Dividend/Redemption	-4 103	-3	-4 106
Transactions with non-controlling interests	1	-107	-106
Acquisition and divestment of own shares	279	-	279
Share-based payments, equity settled	-81	-	-81
Closing balance, Dec 31, 2023	36 822	388	37 210

Condensed consolidated statement of cash flows

	2024	2023	2023
MSEK	Q1	Q1	FY
Cash flow from operating activities
Operating profit	2 760	3 161	13 183
Adjustments for depreciation, amortization and impairment	673	635	2 663
Adjustments for capital gain/loss and other non-cash items	-222	-226	-220
Net financial items received/paid	610	42	-599
Taxes paid	-714	-922	-3 531
Pension funding and payment of pension to employees	7	-20	-71
Change in working capital	-643	-1 839	-3 708
Increase in rental equipment	-214	-222	-1 095
Sale of rental equipment	147	130	521
Net cash flow from operating activities	2 404	739	7 143
Cash flow from investing activities
Investments in other property, plant and equipment	-215	-234	-1 044
Sale of other property, plant and equipment	11	7	53
Investments in intangible assets	-176	-111	-643
Sale of intangible assets	-	-	3
Acquisition of subsidiaries and associated companies	-	-3 279	-3 666
Proceeds to/from other financial assets, net	-131	-122	-467
Sale of assets held for sale	-	-	527
Net cash flow from investing activities	-511	-3 739	-5 237
Cash flow from financing activities
Dividend	-	-	-4 103
Dividend to non-controlling interest	-	-	-3
Acquisition of non-controlling interest	-	-	-105
Sale/Repurchase of own shares	120	160	279
Change in interest-bearing liabilities	5 331	146	1 291
Net cash flow from financing activities	5 451	306	-2 641
Net cash flow for the period	7 344	-2 694	-735
Cash and cash equivalents, beginning of the period	6 401	7 326	7 326
Exchange differences in cash and cash equivalents	134	-45	-190
Cash and cash equivalents, end of the period	13 879	4 587	6 401
	2024	2023	2023
Operating cash flow*	Q1	Q1	FY
Net cash flow from operating activities	2 404	739	7 143
Net cash flow from investing activities	-511	-3 739	-5 237
Acquisitions and divestments, net	-	3 279	3 666
Other adjustments	-115	59	639
Operating cash flow	1 778	338	6 211

* Operating cash flow is not defined according to IFRS. See page 24.

Condensed parent company income statement

	2024	2023	2023
MSEK	Q1	Q1	FY
Administrative expenses	-77	-68	-294
Marketing expenses	-8	-7	-30
Other operating income and expenses	49	0	144
Operating profit/loss	-36	-75	-180
Financial income and expenses	-31	-27	-82
Appropriations	-	-	5 847
Profit/loss before tax	-67	-102	5 585
Income tax	17	22	-1 141
Profit/loss for the period	-50	-80	4 444

Condensed parent company balance sheet

	2024	2023	2023
MSEK	Mar 31	Mar 31	Dec 31
Total non-current assets	56 835	53 301	56 334
Total current assets	10 782	5 572	5 013
Total assets	67 617	58 873	61 347
Total restricted equity	503	503	503
Total non-restricted equity	49 461	48 895	49 425
Total equity	49 964	49 398	49 928
Total provisions	178	220	204
Total non-current liabilities	15 689	6 984	9 982
Total current liabilities	1 786	2 271	1 233
Total equity and liabilities	67 617	58 873	61 347

Condensed segments quarterly

Epiroc has two reporting segments; Equipment & Service and Tools & Attachments. In addition, Epiroc reports common Group functions, including Financial Solutions, Group Management, support functions and eliminations.

As from January 1, 2024, Epiroc will not include orders on hand (order book) in orders received when acquiring companies. The previously reported orders received in the first quarter 2023 of MSEK 15 148 included orders on hand from acquired companies of MSEK 433. Figures in this table have not been restated.

	2023				2023	2024
Orders received, MSEK	Q1	Q2	Q3	Q4	FY	Q1
Equipment & Service	11 570	12 276	11 311	11 551	46 708	11 025
Equipment	5 151	5 404	4 739	4 924	20 218	4 404
Service	6 419	6 872	6 572	6 627	26 490	6 621
Tools & Attachments	3 535	3 180	2 924	2 827	12 466	3 122
Common group functions	43	-20	125	10	158	15
Epiroc Group	15 148	15 436	14 360	14 388	59 332	14 162
Revenues, MSEK
Equipment & Service	10 733	12 510	11 729	12 558	47 530	11 212
Equipment	4 120	5 489	4 870	5 931	20 410	4 708
Service	6 613	7 021	6 859	6 627	27 120	6 504
Tools & Attachments	3 125	3 418	3 195	2 985	12 723	2 949
Common group functions	10	-18	73	25	90	-18
Epiroc Group	13 868	15 910	14 997	15 568	60 343	14 143
Operating profit, EBIT, and profit before tax, MSEK
Equipment & Service	2 718	2 995	2 868	3 211	11 792	2 503
Tools & Attachments	532	524	481	243	1 780	335
Common group functions	-89	-106	-89	-105	-389	-78
Epiroc Group	3 161	3 413	3 260	3 349	13 183	2 760
Net financial items	-197	15	-331	-435	-948	-116
Profit before tax	2 964	3 428	2 929	2 914	12 235	2 644
Operating margin, EBIT, %
Equipment & Service	25.3	23.9	24.5	25.6	24.8	22.3
Tools & Attachments	17.0	15.3	15.1	8.1	14.0	11.4
Epiroc Group	22.8	21.5	21.7	21.5	21.8	19.5
Items affecting comparability, MSEK*
Change in provision for LTIP**	26	16	19	2	63	2
Items in Equipment & Service	-	-	-7	-280	-287	-
Items in Tools & Attachments	-	-	-	158	158	125
Epiroc Group	26	16	12	-120	-66	127
Adj. margin for items affecting comparability, EBIT, %
Adjusted operating margin, E&S, %	25.3	23.9	24.4	23.3	24.2	22.3
Adjusted operating margin, T&A, %	17.0	15.3	15.1	13.4	15.2	15.6
Adjusted operating margin, %	23.0	21.6	21.8	20.7	21.7	20.4

* Items affecting comparability are shown with reverse sign. I.e. a positive number indicates a cost and vice versa. In Q1 2024, Tools & Attachments included items affecting comparability of MSEK -125, which was transaction costs related to acquisitions.

** Change in provision for long-term incentive programs is reported as administrative expenses.

Geographical distribution of orders received

As from January 1, 2024, Epiroc will not include orders on hand (order book) in orders received when acquiring companies. The previously reported orders received in the first quarter 2023 of MSEK 15 148 included orders on hand from acquired companies of MSEK 433. Figures in this table have not been restated.

MSEK	2023				2023	2024	Δ,%
% currency adjusted	Q1	Q2	Q3	Q4	FY	Q1	Y-o-Y
Epiroc Group	15 148	15 436	14 360	14 388	59 332	14 162	-3%
North America	3 608	3 651	3 825	3 676	14 760	3 611	-1%
South America	1 803	2 257	1 937	2 436	8 433	2 023	18%
Europe	2 304	2 120	1 589	1 761	7 774	2 191	1%
Africa/Middle East	2 561	2 885	2 919	2 020	10 385	2 094	-13%
Asia/Australia	4 872	4 523	4 090	4 495	17 980	4 243	-10%
Equipment & Service	11 570	12 276	11 311	11 551	46 708	11 025	-1%
North America	2 511	2 735	2 769	2 767	10 782	2 608	2%
South America	1 427	1 862	1 664	2 242	7 195	1 747	30%
Europe	1 613	1 599	1 108	1 199	5 519	1 525	1%
Africa/Middle East	2 015	2 359	2 342	1 498	8 214	1 532	-19%
Asia/Australia	4 004	3 721	3 428	3 845	14 998	3 613	-7%
Tools & Attachments	3 535	3 180	2 924	2 827	12 466	3 122	-9%
North America	1 065	929	945	899	3 838	1 002	-6%
South America	376	396	272	194	1 238	276	-24%
Europe	680	535	472	564	2 251	650	-0%
Africa/Middle East	548	524	577	523	2 172	561	8%
Asia/Australia	866	796	658	647	2 967	633	-25%

Geographical distribution of revenues

MSEK	2023				2023	2024	Δ,%
% currency adjusted	Q1	Q2	Q3	Q4	FY	Q1	Y-o-Y
Epiroc Group	13 868	15 910	14 997	15 568	60 343	14 143	5%
North America	3 759	3 954	3 817	3 898	15 428	3 927	3%
South America	1 985	2 116	2 194	2 176	8 471	1 737	-9%
Europe	2 155	2 426	1 850	2 195	8 626	2 022	0%
Africa/Middle East	2 048	2 786	2 611	2 455	9 900	2 254	17%
Asia/Australia	3 921	4 628	4 525	4 844	17 918	4 203	10%
Equipment & Service	10 733	12 510	11 729	12 558	47 530	11 212	8%
North America	2 706	2 960	2 803	2 958	11 427	2 995	9%
South America	1 716	1 772	1 798	1 915	7 201	1 473	-10%
Europe	1 463	1 713	1 299	1 616	6 091	1 489	10%
Africa/Middle East	1 545	2 219	2 013	1 935	7 712	1 718	18%
Asia/Australia	3 303	3 846	3 816	4 134	15 099	3 537	10%
Tools & Attachments	3 125	3 418	3 195	2 985	12 723	2 949	-3%
North America	1 056	1 028	956	928	3 968	924	-13%
South America	269	344	396	261	1 270	264	1%
Europe	681	701	539	571	2 492	557	-14%
Africa/Middle East	504	566	597	521	2 188	536	13%
Asia/Australia	615	779	707	704	2 805	668	12%

Group notes

Note 1: Accounting principles

The interim report is prepared in accordance with IAS 34 Interim financial reporting. The accounting principles applied in the preparation of this interim report apply to all periods and comply with the accounting principles presented in the Annual and Sustainability Report 2023. No new and revised standards and interpretations effective from January 1, 2024, are considered to have any material impact on the financial statements.

Accounting principles of the Parent Company

The interim financial statements of Epiroc AB have been prepared in accordance with the Swedish Annual Accounts Act and the recommendation RFR 2, Accounting for Legal Entities, issued by the Swedish Financial Reporting Board. The accounting principles applied in the preparation of this interim report apply to all periods and comply with the accounting principles presented in the Annual and Sustainability Report 2023, note A1 in the Parent Company accounts. No new and revised standards and interpretations effective from January 1, 2024, are considered to have any material impact on the Parent Company´s financial statements.

Note 2: Acquisitions and divestments

Date	Completed acquisitions	Divestments	Segment	Revenues	Employees
2024 Apr 1	Stanley Infrastructure		T&A	4 700	1 380
2023 Apr 3	AARD Mining Equipment		E&S	650	200
2023 Feb 2	CR		T&A	1 700	400
2023 Feb 2	Mernok Elektronik (Pty) Ltd		E&S	50	45

The table presents annual revenues in MSEK and employees at the time of the acquisition.

Acquisitions completed in 2024

• Stanley Infrastructure designs, manufactures, and sells attachments, typically used on excavators, and handheld hydraulic and battery-powered tools for applications in infrastructure, construction, scrap recycling, deconstruction, and railroad infrastructure. Its strong and innovative brands include LaBounty, Paladin, Pengo and Dubuis. The acquisition will strengthen Epiroc's presence especially in the United States.

Stanley Infrastructure had revenues in 2023 of MUSD 447 (MSEK 4 725), an adjusted EBITA margin of 16% and 1 380 employees. The acquisition was announced on December 15, 2023, and was completed on April 1, 2024. Revenues from the acquisition will be reported in "Tools & Attachments". The purchase price amounted to MUSD 760 (BSEK 8.2) and will mainly be allocated to intangible assets and goodwill. The acquisition was an all-cash transaction. The acquisition will dilute both the Group and the Tools & Attachments full year 2024 adjusted EBITA margins with approximately 0.5-0.7 percentage points. Integration and transaction costs amounted to MSEK 125 in the first quarter 2024 and for the second quarter, additional integration and transaction costs are expected to be around MSEK 135.

Announced, but not yet completed acquisitions

• Weco Proprietary Limited manufactures precision-engineered rock drilling parts and provides related repairs and services in the Southern African region. The company has approximately MSEK 90 in annual revenues and 80 employees. The acquisition was announced on December 12, 2023, and is expected to be completed in the second quarter 2024. Revenues from the acquisition will be reported in "Service".

Note 3: Fair value of derivatives, earn-out and borrowings

The carrying value and fair value of the Group's outstanding derivatives, earn-out and borrowings are shown in the tables below. The fair values of bonds are based on level 1, the fair values of derivatives and other loans are based on level 2 and the fair values of earn-out are based on level 3 in the fair value hierarchy. Compared to 2023, no transfers have been made between different levels in the fair value hierarchy and no significant changes have been made to valuation techniques, inputs or assumptions.

Outstanding derivatives recorded to fair value			2024	2023
MSEK			Mar 31	Dec 31
Non-current assets and liabilities
Assets			37	4
Liabilities			8	5
Current assets and liabilities
Assets			109	512
Liabilities			389	63
Carrying value and fair value	2024	2024	2023	2023
MSEK	Mar 31	Mar 31	Dec 31	Dec 31
	Carrying value	Fair value	Carrying value	Fair value
Earn-out	181	181	176	176
Bonds	11 698	11 962	5 992	6 123
Other loans	8 281	8 423	7 983	8 151
Total	20 160	20 566	14 151	14 450

Note 4: Share buybacks and divestments

The Board of Directors has been authorized to purchase, transfer and sell Epiroc shares in relation to Epiroc's share-based long-term incentive programs.

	A share	B share	Total
Total number of shares	823 765 854	389 972 849	1 213 738 703
Whereof shares held by Epiroc	6 168 476
Change in the quarter
Purchased (+) / divested (-) shares, number	-599 539
Value of purchased (+) / divested (-) shares, SEK	-119 989 987

Note 5: Transactions with related parties

In the quarter, no material changes have taken place, and no significant related-party transactions were made.

Key figures

	2024	2023	2023
	Q1	Q1	FY
Growth
*Orders received, MSEK	14 162	14 715	58 899
Revenues, MSEK	14 143	13 868	60 343
*Total revenue growth, %	2	25	21
*Organic revenue growth, %	3	8	9
Profitability
*Gross margin, %	36.6	40.4	38.4
*EBITDA margin, %	24.3	27.4	26.3
*EBITA margin, %	21.0	24.3	23.3
*Adjusted operating margin, EBIT, %	20.4	23.0	21.7
*Operating margin, EBIT, %	19.5	22.8	21.8
*Profit margin, %	18.7	21.4	20.3
Capital efficiency
*Return on capital employed, %	24.5	27.7	27.0
*Net debt / EBITDA, ratio	0.39	0.52	0.49
*Net debt / equity, %, period end	14.9	20.5	21.0
*Average net working capital / revenues, %	36.7	32.8	35.2
Cash generation
*Operating cash flow, MSEK	1 778	338	6 211
*Cash conversion rate, %, 12 months	83	59	66
Equity information
Basic number of shares outstanding, millions	1 207	1 206	1 206
Diluted number of shares outstanding, millions	1 208	1 207	1 207
*Equity per share, SEK, period end	33.8	29.4	30.8
Basic earnings per share, SEK	1.66	1.90	7.82
*Return on equity, %	24.9	27.7	26.8
*Operating cash flow per share, SEK	1.47	0.28	5.15
Dividend per share, SEK			3.80**
Payout ratio, %			49**
People & Planet
Employees, period end	18 157	17 586	18 211
Women employees, %, period end	19.0	18.6	19.0
Women managers, %, period end	23.5	23.5	23.4
Total recordable injury frequency rate, TRIFR, 12 months	4.6	6.2	5.1
Sick leave, %, 12 months	2.2	2.2	2.1
CO2e emissions from operations, tonnes, 12 months	17 266	23 957	18 879
CO2e emissions from transport, tonnes, 12 months	96 987	91 948	93 258

Several key figures in this report are not defined according to IFRS. The alternative performance measures are marked with a *. They provide complementary information aiming to help readers to analyze the company's operations and facilitate an evaluation of the performance. Since not all companies calculate financial performance measures in the same manner, these are not always comparable with measures used by other companies. These financial performance measures should therefore not be regarded as a replacement for measures as defined according to IFRS. For a list of financial definitions, non-IFRS measures and calculations, visit the Epiroc Group website.

** Proposal by the Board.

Epiroc in brief

Epiroc is a global productivity partner for mining and construction customers, and accelerates the transformation toward a sustainable society. 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 more than SEK 60 billion in 2023, and has around 18 200 passionate employees supporting and collaborating with customers in around 150 countries.

Financial goals

• To achieve annual revenue growth of 8% over a business cycle and to grow faster than the market. Growth will be organic and supported by selective acquisitions.
• To have an industry-best operating margin, with strong resilience over the cycle.
• To improve capital efficiency and resilience. Investments and acquisitions shall create value.
• To have an efficient capital structure and the flexibility to make selective acquisitions. The goal is to maintain an investment grade rating.
• To provide long-term stable and rising dividends to its shareholders. The dividend should correspond to 50% of net profit over the cycle.

Sustainability ambition and KPIs

Epiroc has four prioritized areas within sustainability:

• We live by the highest ethical standards.
• We invest in safety and health.
• We grow together with passionate people and courageous leaders.
• We use resources responsibly and efficiently.

For each area there are several targets and key performance indicators, including the long-term goals for 2030 that further advance the Group's ambitions on e.g. climate change and diversity.

About this report

Forward-looking statements

Some statements in this report are forward looking, and the actual outcomes could be materially different. In addition to the factors explicitly discussed, other factors could have a material effect on the actual outcomes.

Language

In the event of inconsistency or discrepancy between the English and the Swedish version of this publication, the Swedish version shall prevail.

Our vision

Dare to think new.

Our mission

Drive the productivity and sustainability transformation in our industry.

Our core values

Innovation, Commitment and Collaboration.

Strategy

By being in attractive niches and prioritizing innovation, aftermarket and operational excellence, we strive to achieve outperformance. Our success is reinforced by our strong company culture and our integrated approach to sustainability.

Our strengths

• We focus on attractive niches with structural growth.
• We drive the productivity and sustainability transformation in our industry.
• We have a high proportion of recurring business.
• We have a well-proven business model.
• We create value for our stakeholders.
• Our success is based on sustainability and a strong corporate culture.

See Epiroc's Annual and Sustainability report for more information.

Totals and roundings

Totals quoted in tables and statements may not always be the exact sum of the individual items because of rounding differences. The aim is that each line item should correspond to its source, and rounding differences may therefore arise.

This information is information that Epiroc AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons on the next page, at 08:00 CEST on April 23, 2024.

Further information

Analysts and investors:

Karin Larsson Vice President Investor Relations & Media E-mail: ir@epiroc.com Tel: +46 10 755 0106

Alexander Apell IR Controller E-mail: ir@epiroc.com Tel: +46 10 755 0719

Journalists and media:

Ola Kinnander Media Relations Manager E-mail: media@epiroc.com Tel: +46 70 347 2455

Epiroc AB (publ)

Reg. No. 556041-2149 Box 4015 SE-131 04 Nacka, Sweden Tel: +46 10 755 0000

www.epirocgroup.com/en/investors

Financial calendar

Webcast & conference call:

At 10:00 CEST on April 23, Epiroc will host a report presentation and Q&A session for investors, analysts and media. The report will be presented by President and CEO Helena Hedblom and CFO Håkan Folin.

Q1 2021

Webcast link and presentation material can be found here: www.epirocgroup.com/en/investors/financial-

publications

Upcoming investor events:

• May 14: Annual General Meeting in Nacka at 4 PM.
• May 16: Record date for dividend*
• May 21: Dividend payment*
• July 19: Q2 2024 results
• September 24: Capital Markets Day in Las Vegas (in conjunction with MINExpo)
• October 22: Record date for dividend*
• October 25: Q3 2024 results
• October 25: Dividend payment*
• January 30, 2025: Prel. Q4 2024 results

* Proposal by the Board.

Epiroc AB Interim Report January – December 2023 26 (26)