The Swedish mining, quarrying and construction equipment manufacturer says that activity remained high in Q2 and customers continued to invest, which contributed to strong demand and an increased order intake for all businesses.
Orders received increased by 37% to a record high of SEK11,070m (€1,080.12m), corresponding to 45% organic growth compared to Q2 2020. However, Epiroc notes that last year's figures were significantly impacted by the Covid-19 pandemic. Equipment had the highest organic order growth of 76%, supported by a few large orders. The aftermarket also had a strong development, with organic growth of 26% for service and 42% for Tools & Attachments.
Sequentially (i.e. compared to the previous quarter) the orders received increased 2% organically. Epiroc says it expects that the demand, both for equipment and aftermarket, will remain at a stable high level in the near term.
Group revenues increased 22% organically to SEK9,733m (€949.67m) with strong growth for both equipment and aftermarket. The manufacturer continues to experience supply-chain challenges, but says the impact on revenues was limited in the quarter. The operating profit increased 54% to SEK2,182m (€212.90m) and adjusted operating margin was 22.6% (18.7), supported by increased volumes. As a result of the growth, the working capital in¬creased, and the operating cash flow was SEK1,229m (€119.92m).
Epiroc says it is encouraged by the way its customers are embracing battery-electric vehicles. It adds that the technology provides CO2 emissions-free operations, increased productivity and lower operating costs, and that it won several orders in Q2, including one for a greenfield project in South Africa. The company also received the first orders for its diesel-to-battery retrofit solution.
Epiroc has a growth target of 8% per year over a cycle and says it is investing in innovation and its aftermarket activities to achieve this. In addition, it is creating options for the future through acquisitions. Since the start of Q2, the company has announced four acquisitions - D&A Heavy Industries, Kinetic Logging Services, 3D-P and Mining Tag. It says these companies will strengthen its technology leadership and customer offering further.
President and CEO Helena Hedblom commented: "In June, we hosted a virtual leadership conference with more than 500 employees from 67 countries. We are on an exciting journey together. With innovative equipment and aftermarket solutions, we continuously grow and develop our offering to support our customers’ success. Guided by our vision, Dare to think new, we drive the productivity and sustainability transformation in our industry."