Epiroc Conference Call Summary Company Overview - **Company**: Epiroc (OTCPK:EPOA.Y) - **Industry**: Mining Equipment - **Listing**: Separately listed on the Stockholm NASDAQ exchange in 2018 after being part of Atlas Copco for 145 years - **Employees**: Approximately 19,000 globally - **Revenue Composition**: 67% aftermarket services, 33% equipment sales [6][10] Key Points and Arguments Safety and Technology - Highlighted a recent incident at Red Chris Mine where Epiroc's technology was used to rescue trapped workers, showcasing the importance of mixed fleet automation [4] - Emphasized the role of technology in enhancing safety in the mining industry [3] Market Position and Growth - Orders increased from SEK 39 billion to SEK 63 billion since the company's listing [6] - 78% of orders are from mining, with copper and gold making up over 60% of orders [9] - Anticipated mineral deficits by 2030 could drive demand for mining equipment [9] Innovation and R&D - R&D spending is about 3% of revenues, with a focus on equipment innovation [12] - 61% of equipment sold in 2024 was launched within the last five years, indicating a strong innovation pipeline [13] Megatrends in Mining 1. **Automation**: - Automation can boost productivity by up to 22% and reduce costs by 40% [15] - Epiroc is developing the world's largest OEM agnostic autonomous mine in Australia, automating 78 trucks [16][17] 2. **Electrification**: - Transitioning to electric equipment can reduce carbon emissions by 29-30% and significantly lower ventilation costs in underground mining [21][22] - Revenues from electrification-related products were 4.2% in 2024, with a doubling of battery electric vehicle utilization [23] 3. **Digitalization**: - Enhanced safety features, such as collision avoidance systems, can reduce evacuation times by 25-50% [25] - Epiroc's collision avoidance system was recently ordered by Hindustan Zinc for their mines in India [26] Financial Performance - EBIT margin is around 20%, with a historical CAGR of 8% for orders and revenues since 2018 [32][33] - Cash flow decreased by 38% year-on-year to SEK 2.5 billion, but the company remains cash-generative due to its strong aftermarket business [41] Future Outlook - High mining demand is expected to continue, while construction markets are stabilizing at lower levels [42] - Epiroc aims to grow 8% per year over the cycle, with a focus on innovation and shareholder returns [35][36] Additional Important Insights - The company is committed to safety and sustainability, with goals to double the number of women in operational roles and reduce CO2 emissions [37][38] - Recent challenges include a downturn in the construction market affecting the Tools and Attachments segment, but measures are being taken to improve margins [31][32] - The company is actively mitigating supply chain and tariff risks through rerouting shipments and adjusting operational strategies [47][49] Conclusion Epiroc is positioned as a leader in the mining equipment industry, focusing on innovation, safety, and sustainability. The company is navigating current market challenges while maintaining a strong outlook for future growth driven by automation, electrification, and digitalization trends.