Epiroc AB (publ)

Hello, and a warm welcome to the Epiroc Q3 results presentation. My name is Karin Larsson, Head of Investor and Media Relations here at Epiroc. As always, when we present the results, I have the pleasure to stand here with Helena Hedblom, our CEO, and Håkan Folin, our CFO. They will briefly present the results before we host a shorter Q&A session. Helena, please, the stage is yours.

Thank you, Karin. Hello and a warm welcome from my side as well. Let me jump straight into the quarter. As anticipated, the demand in the third quarter was seasonally weaker than in the previous quarter. The demand and activity level remained high within mining and several large mining equipment orders were won. Construction customers, on the other hand, remained hesitant and tentative. So within mining, it was a particularly strong demand for automation and connectivity solutions, both for acquired solutions as well as for our own solutions. So in total, our orders increased 17% year on year to 14.4 billion. In September, we announced our largest ever order, 700 million, to provide Kamoa copper in Democratic Republic of the Congo with underground equipment. So after several years with local presence and highly skilled and committed service technicians on site, the collaboration between EPROC and Kamoa copper has deepened into a real productivity and sustainability partnership. And it's especially exciting to contribute to the success of the Kamuakakula copper mining complex, as it is projected to be among the world's lowest greenhouse gas emitting copper mines per unit of metal produced. Our revenues increased 17% to 15 billion, driven both by acquisitions and the organic development. And our operating margin EBIT increased sequentially versus last quarter, but decreased year on year. It was supported by currency, but acquisitions under absorption, investments in R&D and marketing, as well as product mix impacted negatively. And Håkan will elaborate more on the margin later, but I can assure you that we are taking measures where needed while continuing to invest to remain a technology leader also in the future. So with more advanced technology, automation, digitalization and electrification, it is more likely that we at EPPROC will also perform the service on the equipment. And this drives both revenues and profit. But the increasing number of service technicians in the field comes with a great responsibility. We must continue to make sure all our employees always act with safety in mind. Several actions have been taken to reduce injuries, and we have a positive trend in the development of our safety indicators. But that said, I'm very sad to share that we have lost a service employee in a fatal accident in the quarter. Safety is our top priority, and it is crucial that all Epbrock employees come home safe and sound after the working day. In my next slide, I would like to speak about that partnership is the new leadership. So this is something that I truly believe in. And the order I just mentioned from Kamowa Copper is one good example. But there are more good examples, like our partnership with Newcrest, one of the world's largest gold mining companies. In 2021, we announced that we created a semi-autonomous production level in the Acadia mine. And this project with mixed fleet equipment is developing well. And in this quarter we now take our collaboration even further. So we will now take a holistic approach towards the entire mining processes at several of Newcrest's mines, supported by EPROC's leading portfolio of automation, digitalization and electrification solutions. So in short, it means that we share a vision on how to make the whole mining process more efficient. And we will together invest to finding the best solutions to do so. Another collaboration we are engaged in is with Boliden and Algoryx and Örebro University. And the project includes the creation of a digital twin of a mine, a simulated testing environment for artificial machine learning, which greatly reduces the need for physical testing. And speaking of reducing the need for physical interaction, do you remember our automatic bit changer, which enables hand-free bit changes and enhances productivity and safety by eliminating human interaction with the drill string? So following the very positive customer feedback, we have now extended this solution to include a wider fleet of pit wipers. So please let me share a short video on the automatic bit changer.

At Epiroc, we strive to eliminate live work and improve the mining value chain through solutions that enable automation and digitalization. And after years of meticulous research and thoughtful design in collaboration with our partners, we engineered an automatic drill bit changing solution that's simple, safe, and effective, whether you're in the cab or operating remotely. Carefully developed to deliver effective bit changes, Epiroc's automatic bit changer is the next future ready advancement in autonomous drilling. With the ability to change out bits significantly faster than any single manual exchange, the automatic bit changer eases your team's workloads and ups drill times. The unique removable bit carousel design enables you to select a range of bit types and sizes, while the hands-free bit change and above deck design ensures ease of maintenance, ideal operator viewing angles, and retrofit opportunities. Plus, the decrease in manual live work and machine downtime helps support a more productive and profitable operation, making Epiroc's automatic bit changer a game changer in bit replacement.