Epiroc

Quarterly Report • Apr 28, 2021

Interim report Q1 2021

Epiroc AB Interim Report January – March 2021 1 (26)

Q1 2021

April 28, 2021

Epiroc interim report Q1 3
Financial overview 3
CEO comments 4
Orders and revenues 5
Profits and returns 6
Balance sheet 7
Cash flow 7
Covid-19 8
Equipment & Service 9
Tools & Attachments 11
Sustainability: People & Planet 13
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 and borrowings 23
Note 4: Share-buy backs 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 increased 9% to MSEK 10 690 (9 772), organic increase of 21%.
• Revenues decreased 4% to MSEK 8 773 (9 134), organic increase of 6%.
• Operating profit decreased 3% to MSEK 1 867 (1 932), including items affecting comparability of MSEK -149 (21)*.
• Operating margin was 21.3% (21.2) and the adjusted operating margin was 23.0% (20.9).
• Basic earnings per share was SEK 1.15 (1.18).
• Operating cash flow was MSEK 1 610 (1 532).
• Agreement to acquire Meglab, a Canadian company with expertise in providing electrification infrastructure solutions to the mining industry and DandA Heavy Industries, a South Korean manufacturer of hydraulic breakers for the construction industry.

Financial overview

Epiroc interim report Q1
 Orders received increased 9% to MSEK 10 690 (9 772), organic increase of 21%.  Revenues decreased 4% to MSEK 8 773 (9 134), organic increase of 6%.
 Operating profit decreased 3% to MSEK 1 867 (1 932), including items affecting comparability of MSEK -149 (21)*.
 Operating margin was 21.3% (21.2) and the adjusted operating margin was 23.0% (20.9).
 Basic earnings per share was SEK 1.15 (1.18).
 Operating cash flow was MSEK 1 610 (1 532).
 Agreement to acquire Meglab, a Canadian company with expertise in providing
electrification infrastructure solutions to the mining industry and DandA Heavy Industries,
a South Korean manufacturer of hydraulic breakers for the construction industry.
Financial overview
	2021	2020
MSEK	Q1	Q1	Δ,%
Orders received	10 690	9 772	9
Revenues	8 773	9 134	-4
Operating profit	1 867	1 932	-3
Operating margin, %	21.3	21.2
Profit before tax	1 834	1 886	-3
Profit margin, %	20.9	20.6
Profit for the period Operating cash flow	1 390 1 610	1 422 1 532	-2 5
Basic earnings per share, SEK	1.15	1.18	-3
Diluted earnings per share, SEK	1.15	1.18	-3
Return on capital employed, %, 12 months	20.9	26.2

CEO comments

High customer activity and record orders received

The Covid-19 pandemic is still affecting our everyday lives and the main priority in the quarter has been to keep employees, customers and partners safe.

Despite the pandemic, the customer activity was high and we saw good demand for our aftermarket offering. On the equipment side, our customers continued to take investment decisions and we won several medium/large equipment orders.

The orders received increased 9% to a record high of MSEK 10 690, corresponding to 21% organic growth. Sequentially, i.e. compared to the previous quarter, the orders increased 16% organically.

We expect that the demand, both for equipment and aftermarket, will remain at a stable high level in the near term.

Improved profitability and stable cash flow

Revenues increased 6% organically to MSEK 8 773 with organic growth for both equipment and aftermarket.

The adjusted operating margin was positively impacted by increased volumes and cost savings and improved to 23.0% (20.9).

The operating cash flow was stable at MSEK 1 610.

Strong demand for autonomous solutions

The demand for autonomous solutions both for surface and underground applications remained high in the quarter. It is clear that our globally deployed and proven solutions have increased our customers' willingness to invest in these technologies. We see similar trends in digitalization and electrification.

We dare to think new

In the beginning of the year, we introduced our new vision - Dare to think new - highlighting our relentless focus on providing innovations that improve efficiency and safety for our customers.

One innovation presented in the quarter is the Boomer M20. It is a new generation of one of our most sold underground drill rigs and it has unique features, such as protected hydraulics, electronics and sensors.

Another innovation is the battery retrofit for existing equipment, in which the diesel engine is replaced with a battery-electric driveline. The ST1030 loader, which is one of our most popular loaders, is the first model for which the retrofit solution will be available.

Creating options for the future

In addition to investing in innovation to support organic growth, we also grow through acquisitions. This year, we have announced two acquisitions. In March, we announced the acquisition of Meglab, a Canadian company with expertise in providing electrification infrastructure solutions to the mining industry. In April, we announced the acquisition of DandA Heavy Industries, a South Korean manufacturer of hydraulic breakers for the construction industry. Both companies will strengthen our offering and contribute to profitable growth.

Strengthen customer relationships

Financial results are of course important and a good measurement of our success, but just as important is how we achieve these results. Therefore, in February, we launched an updated version of our Code of Conduct, which supports us to walk the talk. By conducting our business in an ethical and socially responsible manner while offering the best products, solutions and services, we will strengthen our customer relationships further.

Helena Hedblom President and CEO

Q1 2021

Orders and revenues

Revenues and book to bill

Aftermarket

Orders and revenues

					Q1 2021
	Orders and revenues
			Orders and revenues
	Orders received			2021	2020
			MSEK	Q1	Q1	Δ,%
		10 690	Orders received	10 690	9 772	9
9 772	9 373 9 329		Revenues	8 773	9 134	-4
8 105			Operating profit	1 867	1 932	-3
			Operating margin, %	21.3	21.2
			Orders received
			Orders received for the Group increased 9% to MSEK 10 690 (9 772),
			corresponding to an organic growth of 21%. Currency impacted orders
			with -12%. Growth was achieved in all businesses, with a particularly
Q120 Q220	Q320 Q420	Q121
	Orders received, MSEK		strong growth in Equipment. Sequentially, orders received increased
			16% organically.
			Compared to the previous year, orders received in local currency
	Revenues and book to bill		increased in double digits in all regions except South America, which
9 134	9 806		grew single digit. The highest growth was achieved in Africa/Middle East.
8 458	8 724	8 773	Mining customers represented 72% (76) of orders received in the quarter
			and infrastructure customers 28% (24).
107	107		Revenues
96	95		Revenues decreased 4% to MSEK 8 773 (9 134), corresponding to an

Orders received

Orders received for the Group increased 9% to MSEK 10 690 (9 772), corresponding to an organic growth of 21%. Currency impacted orders with -12%. Growth was achieved in all businesses, with a particularly strong growth in Equipment. Sequentially, orders received increased 16% organically. Orders received, MSEK ¹²² Q120 Q220 Q320 Q420 Q121

Revenues

Orders received, MSEK	Orders received 16% organically.	Orders received for the Group increased 9% to MSEK 10 690 (9 772), corresponding to an organic growth of 21%. Currency impacted orders with -12%. Growth was achieved in all businesses, with a particularly strong growth in Equipment. Sequentially, orders received increased
Revenues and book to bill		Compared to the previous year, orders received in local currency increased in double digits in all regions except South America, which grew single digit. The highest growth was achieved in Africa/Middle East.
122	and infrastructure customers 28% (24).	Mining customers represented 72% (76) of orders received in the quarter
107 95 Q220 Q320 Q420 Q121	Revenues to bill ratio was 122% (107).	Revenues decreased 4% to MSEK 8 773 (9 134), corresponding to an organic growth of 6%. Currency impacted revenues with -10%. The book The aftermarket represented 71% (72) of revenues in the quarter.
		Orders receiv ed	Rev enues
Book to bill, %	Sales Bridge
		MSEK,Δ,%	MSEK,Δ,%
	Q1 2020	9 772	9 134
	Organic	21	6
	Currency	-12	-10
	Structure/other	0	0
Revenues, MSEK Revenues by business type 27% (27) 29% (28)	Total	9	-4

Profits and returns

Capital employed, cash, MSEK, period end Return on capital employed, %, 12 months

						Q1 2021
	Profits and returns
	Operating profit and margin			Profit bridge	Operating profit
		22.6			MSEK,Δ	Margin,Δ,pp
21.2	20.9		21.3	Q1 2020	1 932	21.2
	16.8			Organic	307	2.2
1 932		2 212		Currency	-192	0.0
	1 820		1 867	Structure/other*	-180	-2.1
1	418			Total	-65	0.1
				Q1 2021	1 867	21.3
					* Includes operating profit/loss from acquisitions and divestments, one-time items and items affecting comparability (incl. change in provision for share-based long-term incentive
Q120	Q220 Q320	Q420	Q121	programs).
		Operating profit, MSEK
	Operating margin, %				Operating profit decreased 3% to MSEK 1 867 (1 932), including items
					affecting comparability of MSEK -149 (21). These items include change
	Capital employed and return on capital employed				in provision for share-based long-term incentive programs of MSEK -149
			36 816		(65). The previous year included restructuring costs of MSEK -44. Opera
34 33 800	35 244 583	34 700	40		ting profit was positively impacted by increased revenue volumes and
			35		cost savings, but negatively impacted by currency. The operating margin
26.2			30		increased to 21.3% (21.2). Excluding items affecting comparability, the
	22.7 21.6	21.6	20.9 25	margin was 23.0% (20.9).
			20		Net financial items amounted to MSEK -33 (-46) and the interest net was

Operating profit decreased 3% to MSEK 1 867 (1 932), including items affecting comparability of MSEK -149 (21). These items include change in provision for share-based long-term incentive programs of MSEK -149 (65). The previous year included restructuring costs of MSEK -44. Operating profit was positively impacted by increased revenue volumes and cost savings, but negatively impacted by currency. The operating margin increased to 21.3% (21.2). Excluding items affecting comparability, the margin was 23.0% (20.9). 40 000 Q120 Q220 Q320 Q420 Q121 25 30 35 ⁴⁰ Capital employed and return on

Net financial items amounted to MSEK -33 (-46) and the interest net was MSEK -20 (-33). 15 20

Profit before tax was MSEK 1 834 (1 886). Income tax expense amounted to MSEK -444 (-464), corresponding to an effective tax rate of 24.2% (24.6). 10 Capital employed, excl. cash, MSEK, period end

Profit for the period totaled MSEK 1 390 (1 422). Basic earnings per share were SEK 1.15 (1.18).

Return on capital employed, 12 months, was 20.9% (26.2), affected by increased capital employed, mainly from accumulation of cash. The return on equity was 21.9% (27.0).

Q1 2021

Balance sheet

Net cash/debt

Net working capital

Compared to the previous year, the net working capital decreased 16%, of which 6% related to currency, to MSEK 11 245 (13 457). As a percentage of revenues the last 12 months, the average net working capital was 33.1% (35.3).

Efficiency improvements

• The cost-savings program of more than MSEK 500 annually was completed in 2020, with full impact from the third quarter 2020. In the quarter, discretionary savings remained at a good level and savings from planned actions, including reduction of staff, has had some positive effect on the costs. -0.64 Q120 Q220 Q320 Q420 Q121
  • The supply-chain improvement program for parts and consumables continues to be implemented according to plan, with some delays in positive effects due to the pandemic.

-0.12 -0.20 -0.41 -0.45 Net debt (+) / net cash (-), MSEK, period end Net debt/EBITDA, ratio 1 963 7 748 8 205

Net cash / net debt

The Group's net cash position amounted to MSEK 5 747 (1 191) and the net debt/EBITDA ratio was -0.64 (-0.12).

Cash flow

Operating cash flow Operating cash flow

Operating cash flow was MSEK 1 610 (1 532), negatively impacted by higher taxes paid and lower operating profit. Cash flow from change in working capital was MSEK -156 (-519), which was less negative than in the previous year. 1 355 2 156 1 610 7 677

Acquisitions and divestments

Cash flow from acquisitions and divestments was MSEK 0 (15).

Covid-19

Aftermarket

Epiroc continues to focus on safeguarding the availability and the supply of spare parts, rock drilling tools and other essential products in order to support customers' operations.

The distribution centers and manufacturing facilities are operational. Transports are relatively stable, even if there are disruptions caused by the Covid-19 pandemic and related impact on freight lanes by air, road and sea. The impact from these disruptions was limited in the first quarter.

A few customers are working with reduced capacity, but the number is considerably lower than in the second quarter 2020, and has gradually decreased since then.

Equipment

The manufacturing facilities are operational. Deliveries and commissioning of equipment are, by and large, being carried out as planned even if they are sometimes impacted by disturbances related to the Covid-19 pandemic.

Equipment & Service

6 579 6 422 6 471 7 455 6 391 108 95 109 93 125 Q120 Q220 Q320 Q420 Q121 Revenues, MSEK

Book to bill, %

^{38 43 42 46 40} Revenue split Equipment, % Service, %

Orders and revenues

							Q1 2021
		Equipment & Service
					Equipment & Service provides rock drilling equipment, equipment for mechanical rock excavation, rock reinforce
					ment, loading and haulage, ventilation systems, drilling equipment for exploration, water, oil and gas, as well as
					related spare parts and service for the mining and infrastructure industries.
					Orders and revenues
		Orders received				2021	2020
								Δ,%
				7 991	MSEK	Q1	Q1
7 101		7 068	6 954		Orders received	7 991	7 101	13
	6 129				Revenues	6 391	6 579	-3
					Operating profit	1 696	1 586	7
					Operating margin, %	26.5	24.1
					Orders received
					Orders received for Equipment & Service increased by 13% to
					MSEK 7 991 (7 101), corresponding to an organic growth of 25%.
Q120	Q220	Q320	Q420	Q121	Currency impacted negatively with -12%. The growth was particularly
		Orders received, MSEK			strong for equipment. Sequentially, orders received increased 16% organically.
		Revenues and book to bill			Compared to the previous year, orders received in local currency increased double digit in all regions, with the highest growth rate

Orders received

Compared to the previous year, orders received in local currency increased double digit in all regions, with the highest growth rate achieved in Africa/Middle East.

For service, the orders received was MSEK 3 963 (4 251), corresponding to 4% organic growth. The growth was supported by a combination of a high customer activity and a strong service offering. The share of orders from service was 50% (60) in the segment.

For equipment, the orders received increased 55% organically to MSEK 4 028 (2 850). A good underlying demand for equipment as well as several medium/large orders in the quarter led to a strong growth in equipment orders. The order intake increased both for underground and surface equipment. The share of orders from equipment was 50% (40) in the segment. ^{62 57 58 54 60} Q120 Q220 Q320 Q420 Q121

Revenues

Revenues decreased 3% to MSEK 6 391 (6 579), corresponding to an organic growth of 7%. Currency impacted negatively with -10%. For service and equipment, the revenues increased 5% and 11% organically, respectively. The share of revenues from service was 60% (62). The book to bill ratio was 125% (108).

Revenues and book to bill

Equipment & Service

						Q1 2021
Equipment & Service
	Equipment & Serv	ice	Equipment		Serv ice
Sales Bridge	Orders receiv ed	Rev enues	Orders receiv ed	Rev enues	Orders receiv ed	Rev enues
	MSEK,Δ,%	MSEK,Δ,%	MSEK,Δ,%	MSEK,Δ,%	MSEK,Δ,%	MSEK,Δ,%
Q1 2020	7 101	6 579	2 850	2 519	4 251	4 060
Organic	25	7	55	11	4	5
Currency	-12	-10	-14	-9	-11	-11
Structure/other	0	0	0	0	0	0
Total	13	-3	41	2	-7	-6
Q1 2021	7 991	6 391	4 028	2 562	3 963	3 829
			Operating profit and margin
Operating profit and margin			Operating profit increased 7% to MSEK 1 696 (1 586). The previous year
	26.5 26.4		included restructuring costs of MSEK -34. The operating profit was posi
25.4 24.1 22.4			tively impacted by increased volumes and cost savings, while currency
			had a negative impact. The operating margin improved to 26.5% (24.1),
	1 966 1 696		supported by increased volumes and cost savings. The adjusted opera
1 646 1 586 1 441			ting margin was 26.5% (24.6).
		Profit bridge			Operating profit
					MSEK,Δ	Margin,Δ,pp
		Q1 2020			1 586	24.1
Q220 Q320 Q120	Q420 Q121	Organic			262	2.3
	Operating profit, MSEK	Currency			-186	-0.4
		Structure/other			34	0.5
Operating margin, %
		Total			110	2.4

Operating profit and margin

Innovation

The Boomer M20 – the world´s first face drill rig with protected hydraulics, electronics and sensors – was presented in the quarter. It minimizes unplanned maintenance and maximizes uptime and performance. The underground drill rig is available with a battery electric driveline and can operate by cable while the battery is charging, enabling full drift cycle.

Acquisition

Epiroc has agreed to acquire Meglab, a Canadian company with expertise in providing electrification infrastructure solutions to the mining industry. The company has about 240 employees and had revenues in 2020 of about MCAD 49 (MSEK 335). The acquisition is expected to be completed in Q2 2021.

The Boomer M20 is the world´s first face drill rig with protected hydraulics, electronics and sensors.

Tools & Attachments

Revenues and book to bill

Orders and revenues

	Tools & Attachments		Tools & Attachments provides rock drilling tools and hydraulic attachments that are attached to machines used		Q1 2021
			mainly for drilling, deconstruction and recycling as well as rock excavation. It also provides related service and spare parts and serves the mining and infrastructure industries. Orders and revenues
	Orders received			2021	2020
2 619		2 674	MSEK	Q1	Q1	Δ,%
	2 2 249	337	Orders received	2 674	2 619	2
1	980		Revenues	2 345	2 505	-6
			Operating profit	386	337	15
Q120 Q220	Q320 Orders received, MSEK	Q420 Q121	Operating margin, % Orders received Orders received for Tools & Attachments increased 2% to MSEK 2 674 (2 619), corresponding to an organic increase of 14%. Currency impacted the orders received with -12%. Orders received increased both for hydraulic attachments and for consumables, with the highest growth	16.5	13.5
			rate achieved for exploration drilling tools. Sequentially, orders received increased 16% organically.
505 2	Revenues and book to bill 2 2 196 035	2 345 288	Compared to the previous year, orders received in local currency increased in all regions with the highest growth rates in Asia/Australia and Europe.
			Revenues Revenues decreased 6% to MSEK 2 345 (2 505), corresponding to an organic increase of 4%. Currency impacted the revenues with -10%. The book to bill ratio was 114% (105).

Orders received

Revenues

				Orders received
				Orders received for Tools & Attachments increased 2% to MSEK 2 674
				(2 619), corresponding to an organic increase of 14%. Currency
				impacted the orders received with -12%. Orders received increased both
	Orders received, MSEK			for hydraulic attachments and for consumables, with the highest growth
				rate achieved for exploration drilling tools. Sequentially, orders received
				increased 16% organically.
Revenues and book to bill				Compared to the previous year, orders received in local currency
				increased in all regions with the highest growth rates in Asia/Australia
				and Europe.
			114	Revenues
	102	102		Revenues decreased 6% to MSEK 2 345 (2 505), corresponding to an
97				organic increase of 4%. Currency impacted the revenues with -10%. The
				book to bill ratio was 114% (105).
				Sales Bridge	Orders received	Revenues
Q220	Q320	Q420	Q121		MSEK,Δ,%	MSEK,Δ,%
		Revenues, MSEK		Q1 2020	2 619	2 505
	Book to bill, %			Organic	14	4
				Currency	-12	-10
				Structure/other	-	-
				Total	2	-6

Tools & Attachments

Operating profit and margin

			Q1 2021
Tools & Attachments
		Operating profit increased 15% to MSEK 386 (337), supported by increased volumes and cost savings. Currency on the contrary impacted the profit negatively. The previous year included restructuring costs of MSEK -10. The operating margin improved to 16.5% (13.5), supported by increased volumes, cost savings and currency. The adjusted margin
16.5 15.9 13.5 11.6 7.0 386 363 337	was 16.5% (13.9). Profit bridge
254		Operating profit MSEK,Δ	Margin,Δ,pp
143	Q1 2020	337	13.5
Q220 Q320 Q420 Q121	Organic	74	2.5
Q120	Currency	-18	0.8
Operating profit, MSEK	Structure/other	-7	-0.3
Operating margin, %	Total	49	3.0

Innovation

Epiroc's valued Smart Inventory Management system, designed to offer 24/7 self-serviced storage on consumables on site, will launch in even more countries. It helps customers save time, reduce cost per drilled meter and have full control of consumption per machine and/or operator.

Acquisition

In April, Epiroc agreed to acquire DandA Heavy Industries, a South Korean manufacturer of hydraulic breakers. The company has about 60 employees and had revenues in 2020 of about MSEK 210. The acquisition is expected to be completed at the end of Q2 2021.

The Smart Inventory Management system, designed to offer 24/7 self-serviced storage on site, will launch in even more countries.

Sustainability: People & Planet

Sick leave and LTIFR

MWh energy from operations/COS, MSEK, 12 months

Employees

On March 31, 2021, the number of employees was 13 947 (14 177). External workforce amounted to 1 200 (1 332). For comparable units, the total workforce changed with -364 compared to the previous year. The reduction is mainly related to production, administration and marketing, sales and support, while the workforce in service & supply chain has increased somewhat. 2.0 1.5 2.1 2.0 2.1 2.1 2.1 Q120 Q220 Q320 Q420 Q121

The proportion of women employees and women managers at the end of the period was 15.8% (15.5) and 21.3% (20.1) respectively.

Safety and health

The number of work-related lost-time injuries per million working hours (LTIFR) the last 12 months decreased to 1.5 (2.6). A continued focus on safety and several preventive measures contributed to the reduction. Sick leave was 2.1 (2.1). Sick leave %, 12 months Energy

Energy

The MWh energy from operations decreased 5% to 147 994 (156 164). Several initiatives to increase energy efficiency supported the improvement. The ratio, MWh energy from operations in relation to cost of sales (COS) was 7.3 (6.8).

CO2 emissions from transport

The CO2 emissions from transport the last 12 months decreased 17% to 79 967 (96 411) tonnes. The reduction was achieved mainly due to lower volumes and a higher share of shipments by sea instead of air. The ratio, CO2 from transport in relation to COS, decreased to 3.9 (4.2). Total energy use in GWh, 12 months

Walk the talk: New Code of Conduct

In February, an updated version of Epiroc Code of Conduct was launched. It is based on applicable law and internationally recognized principles for how companies should conduct business responsibly. Some of the topics included are highest ethical standards, integrity, diversity and inclusion as well as collaboration. All employees in the Group are required to adhere to the Code of Conduct. CO₂ transport

Key risks

Epiroc is exposed to strategic, operational, legal and compliance as well as financial risks. The key risks include market, competition, product development, supply chain, employee, environment and climate, reputation, corruption and fraud, safety and health. Further information on risks, opportunities and risk management can be found in Epiroc's Annual and Sustainability Report 2020.

Signature of the President

The President and CEO of Epiroc AB declare 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, April 28, 2021

Helena Hedblom President and CEO, Epiroc AB

This report has not been audited nor reviewed.

Financial Statements

Condensed consolidated income statement

Q1 2021 Financial Statements Condensed consolidated income statement 2021 2020 2020 MSEK Q1 Q1 Revenues 8 773 9 134 36 122 Cost of sales -5 433 -5 571 Gross profit 3 340 3 563 Administrative expenses -819 -667 Marketing expenses -528 -664 Research and development expenses -229 -271 -1 032 Other operating income and expenses 103 -29 Operating profit 1 867 1 932 7 382 Net financial items -33 -46 -295 Profit before tax 1 834 1 886 7 087 Income tax expense -444 -464 -1 677 Profit for the period 1 390 1 422 5 410 Profit attributable to - owners of the parent 1 387 1 420 5 399 - non-controlling interests 3 2 11 Basic earnings per share, SEK 1.15 1.18 4.48 Diluted earnings per share, SEK 1.15 1.18 4.48
				FY
				-22 418
				13 704
				-2 817
				-2 225
				-248
Condensed consolidated statement of comprehensive income
2021 2020 2020
MSEK Q1 Q1 FY
Profit for the period 1 390 1 422 5 410
Other comprehensiv e income
Items that will not be reclassified to profit or loss				-147
Remeasurements of defined benefit pension plans 278 77	Income tax relating to items that will not be reclassified	-58	-17	32
		220		-115
Total items that will not be reclassified to profit or loss 60

Condensed consolidated statement of comprehensive income

Profit attributable to
Condensed consolidated statement of comprehensive income
MSEK	Q1	Q1	FY
Profit for the period	1 390	1 422	5 410
Other comprehensiv e income
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit pension plans	278	77	-147
Income tax relating to items that will not be reclassified	-58	-17	32
Total items that will not be reclassified to profit or loss	220	60	-115
Items that may be reclassified subsequently to profit or loss
Translation differences on foreign operations	811	322	-1 812
- realized and reclassified to profit and loss	-	-	-33
Total items that may be reclassified subsequently to profit or loss	811	322	-1 845
Other comprehensiv e income for the period, net of tax	1 031	382	-1 960
Total comprehensiv e income for the period	2 421	1 804	3 450
Total comprehensive income attributable to
		1 800	3 447
- owners of the parent - non-controlling interests	2 415 6	4	3

Condensed consolidated balance sheet

			Q1 2021
Condensed consolidated balance sheet
	2021	2020	2020
Assets, MSEK	Mar 31	Mar 31	Dec 31
Intangible assets Rental equipment	4 249 1 015	4 341 1 187	4 111 999
Other property, plant and equipment	4 342	4 534	4 150
Investments in associated companies and joint ventures	191	208	188
Other financial assets and other receivables	802	949	751
Deferred tax assets	1 359	1 383	1 374
Total non-current assets	11 958	12 602	11 573
Inventories	9 808	10 933	8 930
Trade receivables	6 391	7 300	6 045
Other receivables	1 397	1 553	1 414
Current tax receivables	213	144	189
Financial assets	893	932	682
Cash and cash equivalents	16 191	10 225	15 053
Total current assets	34 893	31 087	32 313
Total assets	46 851	43 689	43 886
Equity and liabilities, MSEK
Share capital	500	500	500
Retained earnings	25 654	24 157	23 193
Total equity attributable to owners of the parent	26 154	24 657	23 693
Non-controlling interest	52	55	46
Total equity	26 206	24 712	23 739
Interest bearing liabilities	9 585	7 730	9 491
Post-employment benefits	553	540	806
Other liabilities and provisions	511	327	377
Deferred tax liabilities	560	730	606
Total non-current liabilities	11 209	9 327	11 280
Interest bearing liabilities	470	819	664
	4 172	4 108	3 605
Trade payables		465	391
Current tax liabilities	447
Other liabilities and provisions Total current liabilities	4 347 9 436	4 258 9 650	4 207 8 867

Condensed consolidated statement of changes in equity

Condensed consolidated statement of changes in equity			Q1 2021
		Equity attributable to
	owners of the parent	non-controlling interests	Total equity
Opening balance, Jan 1, 2021	23 693	46	23 739
Total comprehensive income for the period	2 415	6	2 421
Dividend	-	0	0
Acquisition and divestment of own shares	44	-	44
Share-based payments, equity settled	2	-	2
Closing balance, Mar 31, 2021	26 154	52	26 206
Opening balance, Jan 1, 2020	22 761	52	22 813
Total comprehensive income for the period	1 800	4	1 804
Dividend	-	-1	-1
Acquisition and divestment of own shares	96	-	96
Share-based payments, equity settled	0	-	0
Closing balance, Mar 31, 2020	24 657	55	24 712
Opening balance, Jan 1, 2020	22 761	52	22 813
Total comprehensive income for the period	3 447	3	3 450
Dividend	-2 892	-9	-2 901
Acquisition and divestment of own shares	370	-	370
Share-based payments, equity settled	7	-	7
Closing balance, Dec 31, 2020	23 693	46	23 739

Condensed consolidated statement of cash flows

			Q1 2021
Condensed consolidated statement of cash flows
	2021	2020	2020
MSEK	Q1	Q1	FY
Cash flow from operating activ ities
Operating profit	1 867	1 932	7 382
Depreciation, amortization and impairment	382	440	1 746
Capital gain/loss and other non-cash items	6	110	252
Net financial items received/paid	235	263	-94
Taxes paid	-471	-385	-1 800
Pension funding and payment of pension to employees	-10	-1	-54
Change in working capital	-156	-519	1 121
Increase in rental equipment	-113	-120	-595
Sale of rental equipment	83	61	376
Net cash flow from operating activ ities	1 823	1 781	8 334
Cash flow from investing activ ities
Investments in other property, plant and equipment	-141	-120	-507
Sale of other property, plant and equipment	-1	20	84
Investments in intangible assets	-112	-120	-498
Sale of intangible assets	-	0	4
Acquisition of subsidiaries and associated companies	-	-15	-63
Sale of subsidiaries	-	0	-12
Proceeds to/from other financial assets, net	-79	35	384
Net cash flow from investing activ ities	-333	-200	-608
Cash flow from financing activities
Dividend	-	-	-2 892
Dividend to non-controlling interest	-	-1	-9
Sale/Repurchase of own shares	44	96	370
Change in interest-bearing liabilities	-457	1	1 541
Net cash flow from financing activities	-413	96	-990
Net cash flow for the period	1 077	1 677	6 736
Cash and cash equivalents, beginning of the period	15 053	8 540	8 540
Exchange differences in cash and cash equivalents	61	8	-223
Cash and cash equiv alents, end of the period	16 191	10 225	15 053
Operating cash flow
Net cash flow from operating activities	1 823	1 781	8 334
Net cash flow from investing activities	-333	-200	-608
Acquisitions and divestments of subsidiaries	-	15	75
Other adjustments	120	-64	-795
Operating cash flow	1 610	1 532

Condensed parent company income statement

			Q1 2021
Condensed parent company income statement
	2021	2020	2020
MSEK	Q1	Q1	FY
Administrative expenses	-70	-34	-210
Marketing expenses	-5	-4	-16
Other operating income and expenses	17	1	116
Operating profit/loss	-58	-37	-110
Financial income and expenses	-4	-4	-17
Appropriations	-	-	3 463
Profit/loss before tax	-62	-41	3 336
	15	7	-702
Income tax
Profit/loss for the period
	-47	-34	2 634
Condensed parent company balance sheet
	2021	2020	2020
MSEK	Mar 31	Mar 31	Dec 31
Total non-current assets	54 208	52 026	54 061
Total current assets	5 064	5 128	5 239
Total assets	59 272	57 154	59 300
Total restricted equity	503	503	503
Total non-restricted equity	50 396	50 339	50 397

Condensed parent company balance sheet

MSEK
	Mar 31	Mar 31	Dec 31
Total non-current assets	54 208	52 026	54 061
Total current assets	5 064	5 128	5 239
	59 272	57 154	59 300
Total assets
Total restricted equity Total non-restricted equity	503 50 396	503 50 339	503 50 397
Total equity	50 899	50 842	50 900
Total provisions	304	137	201
Total non-current liabilities	8 008	6 095	7 987
Total current liabilities	61	80	212

Condensed segments quarterly

Condensed segments quarterly
					Q1 2021
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.
	2020				2020	2021
Orders receiv ed, MSEK	Q1	Q2	Q3	Q4	FY	Q1
Equipment & Service	7 101	6 129	7 068	6 954	27 252	7 991
Equipment	2 850	2 410	3 099	2 967	11 326	4 028
Service	4 251	3 719	3 969	3 987	15 926	3 963
Tools & Attachments	2 619	1 980	2 249	2 337	9 185	2 674
Common group functions	52	-4	56	38	142	25
Epiroc Group	9 772	8 105	9 373	9 329	36 579	10 690
Revenues, MSEK
Equipment & Service	6 579	6 422	6 471	7 455	26 927	6 391
Equipment	2 519	2 768	2 688	3 407	11 382	2 562
Service	4 060	3 654	3 783	4 048	15 545	3 829
Tools & Attachments	2 505	2 035	2 196	2 288	9 024	2 345
Common group functions	50	1	57	63	171	37
Epiroc Group	9 134	8 458	8 724	9 806	36 122	8 773
Operating profit and profit before tax, MSEK
Equipment & Service*	1 586	1 441	1 646	1 966	6 639	1 696
Tools & Attachments	337	143	254	363	1 097	386
Common group functions	9	-166	-80	-117	-354	-215
Epiroc Group	1 932	1 418	1 820	2 212	7 382	1 867
Net financial items	-46	-51	-76	-122	-295	-33
Profit before tax	1 886	1 367	1 744	2 090	7 087	1 834
Operating margin, %
Equipment & Service	24.1	22.4	25.4	26.4	24.7	26.5
Tools & Attachments	13.5	7.0	11.6	15.9	12.2	16.5
Epiroc Group	21.2	16.8	20.9	22.6	20.4	21.3
Items affecting comparability, MSEK
Change in provision for LTI-program**	-65	91	21	52	99	149
Costs in Equipment & Service	34	17	33	0	84	-
Costs in Tools & Attachments	10	57	22	15	104	-
Epiroc Group	-21	165	76	67	287	149
Adj. margin for items affecting comparability, %
Adjusted operating margin, E&S, %	24.6	22.7	25.9	26.4	25.0	26.5
Adjusted operating margin, T&A, %	13.9	9.8	12.6	16.5	13.3	16.5
Adjusted operating margin, %	20.9	18.7	21.7	23.2	21.2	23.0

Geographical distribution of orders received

						Q1 2021
Geographical distribution of orders received
MSEK	2020				2020	2021	Δ,%
% currency adjusted	Q1	Q2	Q3	Q4	FY	Q1	Y-o-Y
Epiroc Group	9 772	8 105	9 373	9 329	36 579	10 690	22%
North America	2 168	1 654	2 002	1 869	7 693	2 226	16%
South America	1 284	1 175	1 157	1 264	4 880	1 177	5%
Europe	2 381	1 891	2 092	2 210	8 574	2 623	24%
Africa/Middle East	1 409	943	1 411	1 295	5 058	1 629	35%
Asia/Australia	2 530	2 442	2 711	2 691	10 374	3 035	28%
Equipment & Serv ice	7 101	6 129	7 068	6 954	27 252	7 991	26%
North America	1 427	1 108	1 355	1 290	5 180	1 489	18%
South America	1 011	982	960	1 052	4 005	911	2%
Europe	1 623	1 320	1 461	1 467	5 871	1 824	27%
Africa/Middle East	934	641	955	880	3 410	1 190	50%
Asia/Australia	2 106	2 078	2 337	2 265	8 786	2 577	30%
Tools & Attachments	2 619	1 980	2 249	2 337	9 185	2 674	14%
North America	714	524	616	597	2 451	726	14%
South America	273	193	197	211	874	267	15%
Europe	745	600	618	733	2 696	787	18%
Africa/Middle East	475	302	457	414	1 648	440	5%
Asia/Australia	412	361	361	382	1 516	454	19%
Geographical distribution of revenues
MSEK
% currency adjusted	2020 Q1	Q2	Q3	Q4	2020 FY	2021 Q1	Δ,% Y-o-Y
Epiroc Group	9 134	8 458	8 724	9 806	36 122	8 773	7%
North America	2 099	1 841	1 962	1 829	7 731	1 915	3%
South America	1 116	1 251	994	1 275	4 636	1 156	17%
Europe	2 132	1 959	2 096	2 491	8 678	1 992	5%
Africa/Middle East	1 369	1 063	1 283	1 305	5 020	1 208	4%
Asia/Australia	2 418	2 344	2 389	2 906	10 057	2 502	10%
Equipment & Serv ice	6 579	6 422	6 471	7 455	26 927	6 391	8%
	1 332	1 261	1 343	1 244	5 180	1 233	5%
North America

Geographical distribution of revenues

Geographical distribution of revenues
% currency adjusted	Q1	Q2	Q3	Q4	FY	Q1	Y-o-Y
Epiroc Group	9 134	8 458	8 724	9 806	36 122	8 773	7%
North America	2 099	1 841	1 962	1 829	7 731	1 915	3%
South America	1 116	1 251	994	1 275	4 636	1 156	17%
Europe	2 132	1 959	2 096	2 491	8 678	1 992	5%
Africa/Middle East	1 369	1 063	1 283	1 305	5 020	1 208	4%
Asia/Australia	2 418	2 344	2 389	2 906	10 057	2 502	10%
Equipment & Serv ice	6 579	6 422	6 471	7 455	26 927	6 391	8%
North America	1 332	1 261	1 343	1 244	5 180	1 233	5%
South America	875	1 073	789	1 061	3 798	930	19%
Europe	1 427	1 362	1 472	1 813	6 074	1 308	4%
Africa/Middle East	923	761	868	875	3 427	825	7%
Asia/Australia	2 022	1 965	1 999	2 462	8 448	2 095	10%
Tools & Attachments	2 505	2 035	2 196	2 288	9 025	2 345	5%
North America	735	575	588	577	2 475	659	0%
South America	241	177	205	214	838	227	12%
Europe	703	614	611	666	2 594	672	6%
Africa/Middle East Asia/Australia	446 380	302 367	415 377	431 400	1 594 1 524	384 403	-2% 14%

Group notes

Note 1: Accounting principles

The consolidated financial statements of the Epiroc Group are prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed by the EU. 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 2020, in note 1 Significant accounting principles. No new and revised standards and interpretations effective from January 1, 2021, are considered to have any material impact on the financial statements. Date Acquisitions Segment Revenues* Employees 2020 Aug 26 ItalParts E&S 2

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 2020, note A1 in the Parent Company accounts. No new and revised standards and interpretations effective from January 1, 2021, are considered to have any material impact on the Parent Company´s financial statements.

Note 2: Acquisitions and divestments

Date	Acquisitions	Segment	Revenues*	Employees
2020 Aug 26	Ital Parts	E&S

* For distributors, revenues are not disclosed.

• Epiroc has agreed to acquire MineRP, a mining software company specializing in increasing productivity for mines through integrated planning, execution and analytics. The company has about 200 employees and had revenues of about MUSD 16 (MSEK 135) for the 12 months ending June 30, 2020. The acquisition is expected to be completed, after regulatory approvals, in the first half 2021.
• Epiroc has agreed to acquire Meglab, a Canadian company with expertise in providing electrification infrastructure solutions to mines. The company has about 240 employees and had revenues in 2020 of about MCAD 49 (MSEK 335). The acquisition is expected to be completed in Q2 2021.
• Epiroc has agreed to acquire DandA Heavy Industries, a South Korean manufacturer of hydraulic breakers. The company has about 60 employees and had revenues in 2020 of about MSEK 210. The acquisition is expected to be completed at the end of Q2 2021.

The purchase prices for the acquisitions are not material for the Group and are not disclosed.

Note 3: Fair value of derivatives and borrowings

				Q1 2021
Note 3: Fair value of derivatives and borrowings
The carrying value and fair value of the Group's outstanding derivatives and borrowings are shown in the tables
below. The fair values of bonds are based on level 1 and the fair values of derivatives and other loans are based
on level 2 in the fair value hierarchy. Compared to 2020, no transfers have been made between different levels in
the fair value hierarchy for derivatives and borrowings and no significant changes have been made to valuation
techniques, inputs or assumptions.
Outstanding deriv ativ es recorded to fair v alue			2021	2020
MSEK			Mar 31	Dec 31
Non-current assets and liabilities
Assets			-	-
Liabilities			-	-
Current assets and liabilities
Assets			12	167
Liabilities			149	56
Carrying v alue and fair v alue
MSEK	2021 Mar 31	2021 Mar 31	2020 Dec 31	2020 Dec 31
	Carrying value	Fair value	Carrying value	Fair value
Bonds	3 988	4 148	3 989	4 163
Other loans	6 067	6 142	6 166	6 269
Total interest bearing loans	10 055	10 290	10 155	10 432
Note 4: Share-buy backs
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.
MSEK		A share	B share	Total
		823 765 854	389 972 849	1 213 738 703
Total number of shares Whereof shares held by Epiroc		7 570 886
Divestments in the quarter, number		243 327

Note 4: Share-buy backs

Whereof shares held by Epiroc	7 570 886
Divestments in the quarter, number	243 327
Divestment value, SEK	44 067 886

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

Key figures	Q1 2021
	2021 Q1	2020 Q1	2020 FY
Growth
Orders received, MSEK	10 690	9 772	36 579
Revenues, MSEK	8 773	9 134	36 122
*Total revenue growth, %	-4	-7	-12
*Organic revenue growth, %	6	-8	-5
Profitability
*Gross margin, %	38.1	39.0	37.9
*EBITDA margin, %	25.6	26.0	25.3
*Adjusted operating margin, %	23.0	20.9	21.2
*Operating margin, %	21.3	21.2	20.4
*Profit margin, %	20.9	20.6	19.6
Capital efficiency
*Return on capital employed, %	20.9	26.2	21.7
*Net debt / EBITDA, ratio	-0.64	-0.12	-0.45
*Nebt debt / equity ratio, period end	-21.9	-4.8	-17.4
*Average net working capital / revenues, %	33.1	35.3	33.8
Cash generation
*Operating cash flow, MSEK	1 610	1 532	7 006
*Cash conversion rate, %, 12 months	132	130	130
Equity information
Basic number of shares outstanding, millions	1 206	1 203	1 204
Diluted number of shares outstanding, millions	1 208	1 204	1 205
*Equity per share, SEK, period end	21.7	20.6	19.7
Earnings per share, SEK	1.15	1.18	4.48
*Return on equity, %	21.9	27.0	22.7
*Operating cash flow per share, SEK	1.34	1.27	5.82
People & Planet
Employees, period end	13 947	14 177	13 840
Lost-time injury frequency rate, LTIFR, 12 months	1.5	2.6	2.0
Women employees, period end, %	15.8	15.5	15.7
MWh energy from operations/COS, MSEK, 12 months	7.3	6.8	7.1
Transport CO2, tonnes/COS, MSEK, 12 months	3.9

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 full list of financial definitions, non-IFRS measures and calculations, visit the Epiroc website.

Epiroc in brief

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.

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.

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 (Investment case)

• We are a leading productivity and sustainability partner in attractive niches.
• We have a high proportion of recurring business.
• We drive the future in intelligent mining and infrastructure.
• We have a strong and proven operating model.
• We create value for our stakeholders.

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

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.

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 and the Securities Markets Act. The information was submitted for publication, through the agency of the contact persons on page 26, at 12:00 noon CEST on April 28, 2021.

Further information

Analysts and investors:

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

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 14.00 CEST on April 28, 2021, Epiroc will host a report presentation and conference call for investors, analysts and media. The report will be presented by President and CEO Helena Hedblom and CFO Anders Lindén. Please find webcast link and presentation material here: www.epirocgroup.com/en/investors/financialpublications

Dial-in numbers for the conference call:

• Sweden: +46 8 5055 8354
• United Kingdom: +44 333 3009 263
• United States: +1 833 526 8383

Upcoming investor events:

• July 20, 2021: Q2 2021 report
• October 21, 2021: Q3 2021 report
• December 1, 2021: Capital Markets Day