Epiroc (EPI) CMD 2024 summary

Strategic Priorities and Growth Outlook

• Focus on attractive niches with structural growth, leveraging innovation in automation, digitalization, and electrification to drive productivity and sustainability in mining and infrastructure sectors.

• Recent acquisitions have increased infrastructure exposure to 25% of orders, with mining remaining the core segment and positioning for growth in urbanization, deconstruction, and recycling.

• Since IPO, revenue has grown 79% (10% CAGR), adjusted operating profit 88% (11% CAGR), and total shareholder return 142.5%.

• Financial goals include 8% annual revenue growth, industry-best operating margins (21.0% EBIT), improved capital efficiency, and rising dividends.

• Long-term growth is supported by urbanization, energy transition, and increasing demand for minerals like copper and gold.

Innovation, Automation, and Sustainability

• Leadership in mixed fleet automation, with 3,100 driverless machines (+29% YoY), and strong growth in tele-remote and autonomous solutions.

• Electrification is advancing, with 600+ battery electric vehicles in operation, recurring orders from 12 customers, and new electric mine trucks and drill rigs.

• By 2030, the ambition is to offer a fully fossil-free product assortment and halve CO₂e emissions in operations and transport; currently, 42% of offerings are available in fossil-free versions.

• R&D investment is 3.2% of revenue, with 9% of workforce in R&D and a fivefold increase in patented inventions since 2018; 61% of equipment revenue comes from products younger than five years.

• Circularity and sustainability are embedded, with initiatives like Batteries as a Service, second-life battery applications, and circular business models supporting new revenue streams.

Aftermarket, Digital Solutions, and Recurring Revenues

• Aftermarket business (tools, attachments, service) is a key profit driver, growing 11% annually since 2018; service revenue CAGR is 13%.

• Service contracts now cover 32% of the addressable fleet, with tailored agreements driving loyalty and doubling revenue per customer.

• Digital Solutions division generated SEK 2.4 billion in revenue, employs 1,300 people, and focuses on safety, productivity, and OEM-agnostic automation for mixed fleets.

• New business models include project-based, hardware, software, and recurring license fees, with automation and digitalization providing resilient, recurring revenue streams.

• Circular services (mid-life upgrades, remanufacturing) are growing at 12% CAGR, extending fleet life and supporting sustainability.