Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Epiroc AB (EPIAF, Financial) achieved record heights for orders received and revenues in 2024, supported by strong demand in mining and strategic growth areas.
- The company increased its number of driverless machines by 21% in 2024, with a total of over 3,450 automated machines.
- Epiroc AB (EPIAF) saw a 30% increase in orders for its Digital Solution division, highlighting strong growth in digital solutions.
- The company made significant progress in electrification, with 39 mining sites globally ordering battery electric equipment since 2018.
- Epiroc AB (EPIAF) reduced emissions from operations by 9% on a rolling 12-month basis, emphasizing its commitment to sustainability.
Negative Points
- The operating profit margin decreased due to weaker construction demand and dilution from acquisitions.
- The demand for attachments used in construction was weak, impacting overall performance.
- The tools and attachment segment experienced a negative 1% organic development in revenues.
- The company faced challenges in the construction market, with no near-term uptick in demand expected.
- Acquisitions, particularly Stanley Infrastructure, diluted the EBIT margin by 1.4 percentage points.
Q & A Highlights
Q: Can you explain the sequential development in the tools and attachment margin, considering the seasonality and M&A dilution?
A: Hakan Folin, CFO: The margin was impacted by seasonality, as Q4 is typically weaker. Additionally, there were some one-time related costs in the business, which should not recur in Q1.
Q: With strong equipment deliveries in the quarter, should we expect normal seasonal quarters or better deliveries in H1?
A: Helena Hedblom, CEO: While we have more equipment on its way out, large deals often have delivery plans over several years, so not all will materialize in 6 to 9 months.
Q: What is your outlook on the construction market and acquisition strategy?
A: Helena Hedblom, CEO: We don't see an uptick in construction demand near term. Our acquisition strategy focuses on strengthening automation, electrification, digitalization, and aftermarket, with smaller bolt-on acquisitions.
Q: How has Stanley's profitability developed in Q4, and is the impact of inventory step-ups complete?
A: Hakan Folin, CFO: The impact from inventory step-ups is complete. Some one-time costs affected Stanley's profitability, but these should not recur in Q1.
Q: Can you comment on the regional development in infrastructure demand between North America and Europe?
A: Helena Hedblom, CEO: The pattern is similar in both regions, with slow environments in housing. Inventory reduction is happening at different paces in Europe and the US.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
