Epiroc Delivers Record Revenue and Profitability Despite Pausing Deliveries to Russia; Maintain FVE

Narrow-moat Epiroc broadly met company-compiled consensus in the second quarter, despite pausing deliveries to Russia since the beginning of March. Organic order intake grew 6%, or 18% if we exclude the impact of lost Russian orders. High customer activity has meant that demand for services continues to outpace equipment as customers look to take advantage of high commodity prices. Demand was also supported by a record number of orders during the quarter for Epiroc’s fleet of battery-powered equipment and midlife battery retrofits. We rate Epiroc’s capabilities in this department as superior to direct competitors, which we believe will help reduce the cyclicality of the business as customers look to improve their productivity and reduce their carbon emissions. The shares are trading at 24 times consensus earnings per share estimates, which we view as slightly rich. We reiterate our SEK 143 fair value estimate.