Epiroc AB (publ)

Revenue increased 10% to SEK 16.7 billion, equal to 11% organic growth. Reported EBIT was SEK 3.3 billion, up 17%, with an operating margin of 19.9% versus 18.7% a year ago. Adjusted EBIT was SEK 3.35 billion, up 12%, and the adjusted margin improved to 20.1% from 19.7%; items affecting comparability were -SEK 33 million, entirely related to the share-based long-term incentive program. Orders received increased 13% organically to SEK 17.3 billion, including SEK 720 million of large orders. Operating cash flow was SEK 1.9 billion versus SEK 1.1 billion last year; net debt was SEK 11.4 billion and net debt/EBITDA was 0.75. Management said near-term demand is expected to stay high in mining and increase somewhat in infrastructure customers.

Helena Hedblom framed the quarter as another strong period driven by high customer activity, especially in mining, and said this marked the ninth consecutive quarter of organic order growth. She emphasized Epiroc’s innovation agenda, highlighting automation, digital solutions, electrification, and safety-focused remote/autonomous technologies as core to the company’s long-term value proposition. Her tone was confident but measured: she repeatedly pointed to a strong pipeline, solid aftermarket demand, and ongoing efficiency work, while noting there is still more margin improvement to capture.

Håkan Folin highlighted the financial delivery: revenue of SEK 16.7 billion, EBIT of SEK 3.3 billion, adjusted EBIT of SEK 3.35 billion, and an adjusted margin of 20.1%. He said profitability benefited from efficiency measures, high invoicing, lower tariff impact than in Q1, and a currency headwind that was more than offset. On cash and balance sheet, he cited operating cash flow of SEK 1.9 billion, cash conversion of 93% on a 12-month basis, net working capital of SEK 24.9 billion, net debt of SEK 11.4 billion, and leverage of 0.75x EBITDA; he also noted tax expense of SEK 760 million and an effective tax rate of 23.9%, within the 22%-24% guidance.

Analysts focused heavily on service mix, mid-life rebuild timing, and whether aftermarket growth could accelerate from the 6% organic rate this quarter after 12% last quarter. Management said the quarter had fewer mid-life upgrades, that these orders are spread out over several months, and that the underlying aftermarket pipeline remains strong given an aging fleet and high activity levels. Questions also centered on equipment margin flow-through, the impact of strong equipment invoicing, tungsten costs, FX, and whether factory utilization can sustain margin improvement; management replied that tungsten was negligible in Q2, FX should be less of a drag if it stabilizes, and ramp-up/efficiency actions are supporting profitable growth, though mix will always create some pressure.