Epiroc AB (publ)

Orders received increased 13% organically to SEK 17.3 billion. Revenue increased 10% to SEK 16.7 billion, or 11% organically. EBIT increased 17% to SEK 3.3 billion, with an operating margin of 19.9% versus 18.7% a year ago; adjusted EBIT was SEK 3.35 billion, up 12%, with an adjusted margin of 20.1% versus 19.7%. Equipment & Service orders rose 17% organically to SEK 13.4 billion and revenue rose 12% to SEK 12.8 billion, while Tools & Attachments orders were SEK 3.9 billion and revenue was SEK 3.9 billion. 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. Guidance/commentary: management expects mining demand to remain high and infrastructure demand to increase somewhat. The effective tax rate was 23.9%, within the 22%-24% guidance range. No explicit next-quarter revenue or EPS guidance was given.

Helena Hedblom framed the quarter as broad-based strong execution, with mining demand, exploration, and customer activity remaining high. She emphasized that Epiroc’s innovation agenda is aligned with customer priorities, especially safety, automation, digitalization, and electrification, and pointed to the Epiroc World Expo as evidence of strong customer engagement. Her tone was optimistic but measured: she said she remains optimistic on the pipeline, while also stressing continued focus on efficiency and profitable growth.

Håkan Folin highlighted the financial leverage from strong execution: revenue rose to SEK 16.7 billion, EBIT to SEK 3.3 billion, and adjusted EBIT margin to 20.1%. He said tariff impact was lower than in Q1, currency was a headwind on EBIT, and the positive effect from efficiency and high invoicing more than offset FX. On cash and balance sheet, operating cash flow improved to SEK 1.9 billion, cash conversion was 93%, net working capital was SEK 24.9 billion or 37.1% of revenue, net debt fell to SEK 11.4 billion, and leverage was 0.75x EBITDA. He also noted the effective tax rate of 23.9% was within guidance and said equipment production ramp-up has kept lead times at normal levels.

Analysts focused on service mix, whether mid-life rebuilds would create a mix drag later, and whether service growth could accelerate toward double digits. Management said Q2 had fewer mid-life upgrades than Q1, that these orders are spread over longer periods, and that the aftermarket opportunity remains strong due to an aging fleet and rising technology content. Questions also centered on equipment mix/margins, tungsten cost relief, FX, and whether factory utilization or capacity could constrain growth; management said tungsten was negligible in Q2, FX should be less of a drag if rates stay stable, and capacity is being managed through added shifts and multi-site manufacturing rather than major bottlenecks. On large orders, management said SEK 720 million was normal quarter-to-quarter lumpiness, not a sign of weak demand.