Epiroc AB (publ)

Hello and a warm welcome to the Epiroc Q2 results presentation and thank you for joining us this very busy reporting day. My name is Karin Larsson. I'm head of IR and media here at Epiroc and by my side I have our CEO Helena Hedblom and our CFO Håkan Folin. As always, they will briefly present the results before we do a Q&A session. You know the drill. Helena, please, the stage is yours.

Thank you, Karin. And also from me, a warm welcome to all of you. So let me start with the Q2 highlights. So we enjoyed another quarter with high mining demand supporting the organic growth, both year on year and sequentially. A major highlight on the equipment side was the largest contract ever for Epiroc, 2.2 billion over five years to deliver a fleet of fully autonomous and electric surface mining equipment to Fortescue in Australia. We mentioned this contract already when we reported Q1, but it was signed in April and the first firm order booking was done now in Q2. the demand for both service and tools was good. We remain focused on delivering profitable growth in the near term and to safeguard agility and deliver towards both shareholders and customers over time. And I will tell you more about this soon. We had a successful quarter when it comes to innovations. For example, we have added automation features in our exploration offering, and we have had great success for our BEV trolley truck solution with Boliden, which increases productivity by 23%. So more on these innovations soon. A few more words on the demand side. In total, our orders declined 7%, which is fully explained by currency. The FX impact was negative 9% in the quarter. Organically, we achieved 2% growth driven by mining. There is a strong underlying demand and the business cooking looks very good. Our large orders amounted to 500 million versus 950 last year and included in these are 100 million from the large contract from Fortescue. and the contract will be booked continuously throughout the five years period. Construction was weak, which impacted demand for attachments. On the infrastructure side, things were moving along well in the quarter and the projects are normally long-term in nature and rather stable. And then over to the topic of innovation. So with a background in R&D, I feel proud to represent Epiroc when we are bringing leading solutions to the market. I mentioned initially the success for our electrified ramp haulage solution in the Boliden Kristineberg mine in Sweden. And it's a result of our collaboration with Boliden and ABB. And compared to a diesel driven equivalent, the trolley solution has increased the productivity by 23%. The truck's speed up ramp is 50% higher, the maintenance cost is reduced by 25% and the energy regeneration to the battery when the truck goes downhill or is connected to the pantograph is unlimited. And while on the topic of electrification, in Q3 2022, a fleet of underground BEV machines began production at the Asmang black rock mine in South Africa. And this is the largest BEV underground fleet in the southern hemisphere. And since then, tons of ore excavated per hour have increased by 11%, and the ventilation need has decreased by 42%, and energy cost has decreased by 18%. And CO2 savings have exceeded 8,200 tons, and this is corresponding to around 2,000 cars with a combustion engine. This mine primarily uses fossil fuel-generated electricity, demonstrating that Epiroc's battery electric fleet can reduce CO2e emissions even without renewable electricity. Automation is, as you know, another strong trend for our customers, as is exploration. And we have a unique offering within exploration, and we had strong growth in the quarter. In total, our exploration offering represents roughly 5% of our orders. And within this offering, we have a popular core drilling rig called Dimecq. And now we have launched an automated rod magazine for the Dymec product range, which increases safety while boosting productivity. So let me share a short movie on this.

Hi there, I'm Indrawan Sukarya, Global Product Manager for Specialty Drilling here at Epiroc. Today I would like to give you the opportunity to have a look at our brand new product in the Diamex Smart Range family, which I know we have many customers are waiting for it. So this is the Diamex Automated Rod Magazine. There are many benefits that the Diamec automated road magazine can give you. Here are the three main ones I would like to highlight briefly. The magazine will increase safety and reduce fatigue, boost productivity. It is also easy to set up and use. The Diamec automated road magazine dramatically reduces the amount of heavy manual tasks which the operator needs to do. This reduces operator fatigue and increases safety. If you're running a Diamex Smart 6M rig or Diamex Smart 6 or 8 skid rig, then this automated rod magazine will boost your productivity, increase safety, and reduce your operational cost. Please contact Epiroc representative closest to you to learn how you can take the Diamex operation to the next level.