Epiroc AB (publ) (EPIA) Earnings Call Transcript & Summary

So hello, everyone. Did you like the start? I hope you like what you will enjoy very soon. A warm welcome to Epiroc Capital Market. More than 100 people in this room, and I know also online more than 100 people already now. So a warm welcome and thank you for taking the time. My name Karin Larsson, Head of IR and Media here at Epiroc, and I have been with this fantastic company for 9 years. A few words on safety, as we always do at Epiroc and the emergency exit, as you know, are marked in green behind you. And also in your goody bags, all of you received sunglasses today. Make sure you have your sunglasses at hand during the presentation because you will need them. And if you didn't take a goody bag, try to sneak out and get one. The agenda today is our strategy. We remain loyal to our strategy. We really like it. We will go through attractive niches, innovation, aftermarket, operational excellence, outperformance, and we will also tell you about our strong corporate culture and our sustainability mindset. The speakers will be presented as we go along and this to make the best use of time. We will have a short break in the middle of the program and we will also have time for Q&A in the end. You may also your ask questions online. Tonight, to the lucky ones being here, we're going to have a historical evening. We call it the throwback Thursday. After all, we celebrate 150 years today -- or not today, but this year. And we will have my colleagues, [ Luis Araneda, Alexander ], unfortunately, not [indiscernible], but we will also have myself, and we will have some royalties joining as well. After all, if you celebrate 150 years, you need some fine attendance and you are, of course, included in this statement. The buses leave at quarter past 6 from this very house. Tomorrow, and that's the highlight of the event, we are going to enjoy parts of what our customers have seen this week. As you see, Epiroc World Expo, that's the event that have been running -- has been running all week here in Orebro. It just ended at 3 p.m. in this very room. So tomorrow, make sure you have had a steady breakfast at 7:30 because that's when the buses leave and you will get to see parts of what our customers have seen. The buses, and it's not updated on this slide, we will have 3 buses leaving, 1 quarter 11 to Arlanda Airport because the road is closed, 1 quarter past 11, and we will have 1 to [ Stockholm ] on quarter past 11 tomorrow. So for the ones meeting Epiroc for the very first time today, we are a leading sustainability and productivity partner. You can say it in whatever order you may like because sustainability always comes first as well as safety. We have revenues in more than 150 countries. We have 18,000 employees. We have an industry-leading margin of 22.3%, and that's an EBIT margin. About 2/3 of our revenue stream and orders are from a resilient and fast-growing aftermarket business. So without further ado, I know you're excited to hear everything about this. May I introduce Helena Hedblom, our very much appreciated President and CEO of Epiroc.

Thank you, Karin. And also from my side, welcome to Orebro. It's great to have you all here and to finally be able to meet in person after all these years when interacting only digital. So I will start off and talk about the attractive niches that we have positioned Epiroc in, but we will also cover innovation and then my colleagues will cover the other part of our strategy for profitable growth. But if we start with the niches, I think both mining and infrastructure, they serve a very important purpose for the society because they build sustainable societies. Our revenue split is somewhere around 80% mining and 20% from infrastructure. And both these segments, they have structural underlying healthy demand for the coming years. But it's also clear that our customers have more and more challenges really to meet the demand and to do it in a sustainable way. If we look -- some comments on the short-term, so we are well-positioned when it comes to hard rock. We have a favorable hard rock position. A big portion of our revenue comes from copper and gold. If we look on our basket of mineral prices, as you can see from a historical level, the mineral prices, even though it has been some volatility lately, they're still holding up very well. When we talked about our Q1 result, we continued to see very strong orders, high activity levels in the aftermarket, strong demand on the equipment side, a lot of focus on the technologies, the new, let's say, the shift towards automation, electrification and digitalization and customers are willing also to place larger equipment orders. We have also successfully closed several of the acquisitions that we have been working on, which also now starts to contribute nicely to the growth. And in Q1, as many of the quarters, we are delivering profitable growth. What we also saw in Q1 was that supply chain, step-by-step, is [ easening ] up, which is also contributing then, of course, to higher output in our factories and higher revenue. And we said our near-term outlook that we continue to believe that there will be stable high activity levels in the market. So that's the short-term perspective. But we are also optimistic when it comes to the long-term perspective. There is a growing population in the world and the middle class is expected to grow even faster. And a growing middle class is good because they consume more minerals and metals. So for us, this is one of the healthy underlying trends for the coming years. Also urbanization. More and more people are moving into the cities, if we look on the long-term trend, a bit much bigger portion of the population will live in cities. And that also means, of course, expanding existing cities. It's more buildings, it's more tunnels, roads, bridges, et cetera. So all of that is also good for us. Our exposure towards the construction market, we expect it to grow between 4% and 5% in underlying growth up until 2030. Another very important long-term trend for us is also the green energy transformation that the world is undertaking. And of course, the new renewable power generation, which requires much more minerals in the coming years. And so does also the shift towards battery electric vehicles. And that growth is expected to really take off, of course, in the coming years. And that also will drive the need then for both copper as well as nickel. And as I said, we have a strong -- a high exposure towards copper and gold -- and we look on copper, we strongly believe that the green transformation will really drive the need for copper in the future, while gold will be, of course, very much dependent on the growing middle class. So healthy growth is expected for both these commodities where we have already a strong position. So we have, as I said, a strong position towards hard formations. And when we look at this moving forward as well, there is a clear supply-demand gap, especially on copper as well as on gold, but also on nickel. On the other hand, there is, I will say, there is an overcapacity on iron ore as well as on coal. So what could change these long-term trends? What risks could there be that could change the long-term trends here? Of course, if there will be an economic downturn and the world slowdowns on the transformation on the ESG ambition, that could, of course, be a risk for us or if there would be a substitution, other metals that are competing with copper, for example. We don't see this as likely, especially in the medium term. So what the industry will focus on is, of course, to increase the supply and close the supply-demand gap. And that is what our customers are busy doing, expanding existing mines, increasing exploration activities. So they later on also can start and do greenfield. Of course, technology gives us a huge opportunity and our customers also to improve yield and be much more efficient in the way and how much they actually can extract from what they bring up to the surface. But we also believe that recycling will play an even more important role in the coming years. And as you know, we also -- we have an assortment also for the construction with our portfolio towards demolition and our attachments. And we also here, we expect recycling will increase over the coming years. But also here, we see that, that we will -- that will play out well because we have a strong position also in this segment. And I think it's clear that even if recycling will happen more and more in the coming years, it's not enough. It will not -- it cannot close the gap there between the demand and the supply. So mining, especially when it comes to copper, when it comes to nickel, that is a clear gap that needs to be closed. So moving over then [ a little bit ] to the challenges that our customers are facing, and this is not something new, but I think we have talked about this over many years now that the productivity in mining is rather low compared to many of the other industries. The utilization of our equipment sits around 30% for underground and roughly 40% for surface. So of course, this is where the biggest opportunity for our customers' lives when it comes to productivity. And there are many ways of addressing this and in particular, then using technologies, and that is what we will talk a lot about during these days. But also the fact that it's more -- becoming more and more difficult to find the resources. There is a depletion of ore grades, especially for copper, and it's also becoming more and more complex to bring the same volume of minerals up. We also see the trend that surface mines are going underground. Of course, you always start with the surface mine because it's cheaper when it comes to putting the infrastructure in place, so surface mines are step-by-step going underground. We also see that the underground mines are going deeper every year, and they are also becoming more and more complex. The ore bodies are becoming more and more complex. And that is good for us because that means that you need to drill more, you need to transport the ore longer distance and more complex environment underground. But there's also a very strong focus in these industries when it comes to safety and when it comes to sustainability in general. And of course, the CO2 is, in particular, I would say. But if we start with safety, here you see the fatalities in both mining and construction. And as you can see, even though both of these industries, they are focusing extremely a lot on safety. I would say it's the top priority. But if you look on this from a trend, it's not really -- it has not really been that much improvement over the years. So it's clear that as an industry, we need to do more, much more to make sure that the workers in this industry can come home after their shift. And here, I also strongly believe that technology, we have a plenty of opportunities from a technology standpoint to make these industries more safer in the future. Also our customers, they have committed to decarbonization goals. And you see it's a mixed picture, but it's clear that more or less all the large players, they have committed to reduce CO2, which is good because we have this clear path towards a lower CO2 emission now from both these industries. And of course, here, we have a very strong set of products and solutions now with our electric fleet to help our customers really to reach their goals. So moving over then to my favorite topic, which is innovation. So when we look at -- look into the future, how do we see the future of mining and construction? Well, we would like this to be a safe place where we have eliminated more or less all the dangerous operations in both these industries. And as I said, with the technology, that will be possible in the coming years. And it's everything from different type of safety products, of course, to tele-remote and autonomous solutions. But we also believe that it will be green operations with renewable energy and with fossil free equipment. Also, there is plenty to do when it comes to using the resources in a more efficient way, as it shall improve the productivity. And that is everything from the exploration, using data in exploration and then from drill to mill to optimize the efficiency in the overall processes. We also believe that the mining and construction industry will move towards a more circular and OpEx-driven environment. And that's why we are step-by-step increasing our offering with these type of solutions, everything from battery-as-a-service as a service, midlife upgrades, remanufacturing solutions is something that we're building our capabilities step-by-step as well as recycling of consumables. And we also strongly believe that the industry needs to transform when it comes to water efficiency. So to then bring solutions to our customers, we invest more than we have ever done in product development. Majority of the innovations that you will see tomorrow and today, that's what we have invested in over the last couple of, I would say, 3, 4 years organically. We have more than 1,700 engineers now across the organization. A big portion of them sit in U.S., of course, in Orebro, we have big engineering teams in India, in China. But also all these acquisitions that we have done over the last, I would say, 2, 3 years, that has also added capabilities now with strong engineering capabilities in South Africa, in Australia, for example. That will help us also because that will give us the closeness to our customers. And what we focus on is very much to reduce the time to market or time to revenue. And we're not doing everything ourselves. We are also partnering up with suppliers, with customers, with start-ups to find the fastest way to bring technology to our customers. And Luis will talk about that later in the parts and service presentation, but we're also working with the democratization of innovation using all the good -- with the great ideas from the people working closest to our customers, which is our service technicians. And that has really helped us to grow the portfolio of service products in a much more rapid pace over the last couple of years compared to previously. And then, of course, M&A plays also an important role here. So as I said, it's a lot about safety. And it's, of course, the safety of the workers and the operator. I will share some insights around collision avoidance, but that is one clear safety product that we now have in our offering that will help see the industry to become much more safer. But it's also around personal safety, it could be situational awareness, to have information in real time, et cetera. And then, of course, everything we can do when it comes to automation, also tele-remote solutions, when you bring the operator out from the cabin and you can move that person maybe 30 meters away from the machine, that is also extremely important from a safety standpoint. That might not be the end game when it's, of course, to go fully autonomous and fit in a safe office environment and run machines autonomous, that's something else. But for customers that are not there yet, also tele-remote solutions is a very important step towards a safer environment. So I will then spend some time and talk about collision avoidance. 30% to 40% of the fatalities in mining, they are related to failures in the vehicle interaction control. And historically, the technology has not really been there so that the machine or technology can take over if an operator is doing something that is not safe. So what we now have in our assortment is then the highest level of collision avoidance. And what that means is that the system will take over if we have -- if the machine -- there is an operator running the machine, if a [ pedestrian ] is coming too close, the system will take over and the machine will stop. And that's, of course, extremely important for the coming years to turn this industry into a much safer environment. In some parts of the world, this is already becoming legislation. And I do believe that this will happen across the different regions in the coming years. Technology can now support this safety journey and really reduce a big portion of the fatalities that are happening in the mining industry. Another risky operation in mining, and that is related to the charging of the blasting, and that is done manual today. And we have developed Avatel, together with Orica to automate this process. And this is breaking new ground. It's the first machine in the world that delivers these type of solutions. I would like to show a film so you see the first blast. [Presentation]

So it will be extremely exciting to see this in the coming years, if we can -- together with a partner like Orica, really develop something that will take away one of the most dangerous operations in mining. So we have talked a lot over the years about the technology trend. So there are 3 major technology trends, and this is where we are spending our R&D investments into. It's automation, it's digitalization and electrification. And when it comes to automation, of course, we have, over the years, automated our own equipment. What we have been working on the last couple of years now is also capabilities to automate mixed fleet. When it comes to digitalization, we've been focusing on situational awareness, as well as ore body knowledge to bring much more data-driven insights into exploration and then to bring that data across the value chain. And also mine process optimization and of course, electrification, which is all these 3 trends, we see them as crucial. They will change the mining and construction industry in the coming 10 years. Of course, part of our R&D budget also goes into closing some of the product gaps that there's always product gaps in the different divisions. So that could be expanding products or closing gaps or developing new value propositions for different customer segments. If we then start with automation, so I think for -- when it comes to automation, what this really brings is -- you take away people from the dangerous places in mining. So I think first priority is really safety, but it's also about productivity and reducing energy consumption. So where we look at -- we have a big fleet of Pit Vipers that are autonomous, and we see up to 40% cost reduction per meter drilled for autonomous machines. And the same goes also for CO2. Autonomous machine becomes much more efficient also from an energy consumption perspective, which is great. And now you will see a movie from Quellaveco, one of the surface mines in Peru that have gone fully autonomous. [Presentation]

So -- but we're also adding capabilities through M&A. And I will stay on the automation topic, but we look at companies with stand-alone attractiveness with a strategic fit and, of course, where we can create synergies and where we have the potential to become #1 or #2. We have done 23 acquisitions since the listing of Epiroc and added SEK 7.2 billion in revenue. And a lot of this has happened in the last couple -- last 2 years. And here you see the set of the acquired companies and they all fit into the same innovation trends that we have talked about. So I see acquisitions as something that contributes to our organic investments. Several of them are towards OEM agnostic solutions for automation, also connectivity solution or infrastructure. They are to understand situational awareness in a better way, ore body knowledge, mine process optimization and then several of them towards electrification as well. And then we have also used acquisitions to close some of the product gaps and you see the examples there on the slide. And I will zoom in and just talk about RCT because this is an exciting one. So RCT, they have proven solutions in more than 70 countries. More than 150 different equipment models are -- they have already today automated. It's more than 700 systems implemented and in total, 1,500-plus machines. And if we then add that to all the machines that we have automated over the years, this gives us a very strong position in automation. We have prepared roughly 8,000 of our own equipment out there, of the fleet out there is equipped with our RCS system, which means that they are automation ready. We have now, in total, a mixed fleet of tele-remote equipment, which is more than 1,000 machines. We have more than 750 autonomous drills and we have more than 650 mixed fleet when it comes to load and haul in autonomous mode. And to my knowledge, this puts us in a leading position when it comes to automation, both on surface and underground drilling and load and haul. So both automation and digitalization, they really contribute to profitable growth for us. They give us also recurring revenue. This is -- it's hardware. It's software and its licensing fees. We see higher service penetration of the automated machines. And of course, also as equipment are being used at a higher utilization, that also increased the demand for the aftermarket. And obviously, automation brings us closer to our customers. And we, in Q1, we landed the largest single order for automation towards Roy Hill, SEK 500 million. And here, we are automating a mixed fleet of surface trucks together with roughly 200 light vehicles. And operators will operate these machines 1,100 kilometers from the mine site in Perth. So let's see a movie from the Roy Hill. [Presentation]

I think this is extremely exciting. Here, we are taking a technology position beyond our own equipment, which, of course, is super exciting for the future. It's opened up a completely new opportunities when it comes to new revenue streams. Then just finally, some word on digitalization. I said we're extremely focused when it comes to really bringing digital into the mining and construction industry. This is maybe the easiest way for the industry to address the productivity opportunity. It's about improving safety, but mainly, I would say, productivity. And what we are aiming at is very much optimizing drill to mill, the full set, and that's really where the productivity opportunity lies. But of course, also, it's all about big data and use the predictive maintenance in the best possible way, also the bill intelligence for us as a company. So now it's time for electrification, and I will invite Sami Niiranen, the President for underground to talk about electrification. And Sami is an appreciated member of the management team. Sami and I have been working together since 2014. First, he was a general manager in Ghana and then in Finland and now, 3, 4 years as President for the underground division. Highly appreciated colleague. He's one of the most structured individuals I have met. And he really drives the culture and the diversity in Epiroc in a fantastic way. So welcome, Sami.

Thank you so much. Thank you so much, Helena, and hello, everybody. So my topic is electrification. So Helena has now covered the trends of automation and electrification. I would like to talk about -- more about electrification, which is a common topic in all our customer meetings and discussions these days, very much related to safety and sustainability, of course. And there are many good reasons for our customers to go electric. The operators, for instance, they will enjoy a much better work environment with less emissions and noise and heat as well as less vibration on the machines as well. The lower emissions, of course, that is another key selling point and will help our customers to reach their ambitious sustainability goals. So on this slide, we can see the emissions from a typical underground mine in Australia. The majority of emissions, they are coming from the use of equipment, as you can see, and mainly related to load and haul. [ Here we ] can make a positive impact by providing our customers with battery electric solutions. And 2 years ago, in fact, 2021, we carried out a CO2 emissions value chain analysis, which showed that more than 99% of Epiroc's total emissions fall under Scope 3. And the majority of Scope 3 comes from the use of products, which equals to 83%, as you can see here. So by providing the battery electric equipment, we can help customers to reduce their respective emissions as well as our Scope 3, which is, of course, part of our sustainability 2030 goals, which Hakan will tell more about later on. But our positive contribution goes actually beyond our scope as well. So in an underground mine, the ventilation portion of OpEx, operational expenditures can be around 40%, in some cases, even higher. And 35% of the emissions in this particular case derives from ventilation. As mines go deeper and wider every day, the requirement to increase ventilation capacity, fan capacity, the one that you can see here, really increases continuously. And if customer can reduce the airflow or even skip an investment in the new ventilation shaft, of course, there will be a huge potential for savings, both on costs as well as on emissions. So let me show you now how it works. So in your goody bags, as Karin mentioned, you are supposed to have sunglasses. So it's quite bright here in the room. So please put them on.

Okay. Here we go.

Okay. So everybody I can't see anything because -- Okay. So in a closed mine environment, with several vehicles operating in the same mining area, a customer can sometimes need up to 6 meters per second air flow if they are using diesel equipment. If the machines are electric -- battery electric ones, it can be scaled down to 1 meter per second. And now we are demonstrating too much -- my colleague here is demonstrating 6 meters per second air flow.

So that was -- first, it was 6 meters per second. And then we have slowed it down. You see slowly, we take it down to 1 meter per second. This takes some time. This is the smallest fan that we do. We have fans which are over 2 meters in diameter. This is a typical fan for a small tunnel operation or at the front in the mine as the closest. A mine can then have a primary fan outside, secondary fan on the level and this in the front. You can just count the numbers of fan we can reduce in energy consumption by running it in this speed instead than we did in the beginning. The beauty with this is that we have the fans. We have the digital tool, ventilation on demand, who do this automatically. We have the equipment like the battery, so we can do this step-by-step together, and that's the beauty with Epiroc.

Okay. So everybody is safe here, hopefully. So what did you see the difference? 6 meters per second versus 1 meter per second. 6 meters needed if our customers are using diesel equipment, but we can scale it down to 1 meter per second in case of battery equipment, which is fantastic, of course. So now you can imagine that underground mines, they go deeper, wider, they become more complex all the time when you blast. So basically, their savings potential on ventilation is really meaningful. And of course, ventilation is a huge benefit for our customers and all the savings there. But there are many other benefits like 5% to 10% with our BEV fleet, we can offer in average, 5% to 10% higher productivity, up to 80% lower energy consumption, up to 70% less heat generation as well as around 30% lower maintenance costs. So there are very big numbers that we can gain with our battery electric solutions. And in this particular case, we have an example of MT42 mine truck, MT42, 42 tonnes payload. In an up ramp, the machine carries 9% more tonnes per hour, while consuming 70% less energy. And in a down ramp instead, it carries 7% more tonnes per hour while saving 80% energy. So it's big numbers here as well. It was proven actually yesterday when we had a customer event, Epiroc World Expo, and one customer was talking about the productivity increase that they have gained and it's a South African customer. So -- but as we well know and you know the electrification is nothing new to us actually because, of course, since decades ago, we have been drilling with the help of electric cable. And in 2012, we started to develop our first battery electric loaders in Canada. In 2018, we went to our new generation solutions with the standardized modular and scalable approach. And in 2020, we signed the first global batteries as a service contract with Vale in Canada. And in 2021, we acquired companies with a focus on conversions as well as electric infrastructure. And then by 2025, we will be able, in Underground division where I work at, we will be able to offer the full range of -- or the whole portfolio in emissions-free alternatives. So as you can see -- Okay, sorry. The next one is a film. So in the next film, we will see it and demonstrate the complete electrification offering that we have in April right now. [Presentation]

Okay. So in the movie, you could see that we have a complete offering when it comes to our battery electric solutions to our customers. But why is it so important then because it's not only about just to deliver one piece of equipment, but they have to work as well, of course. And what we have learned in Epiroc during the year is that by having a wide complete offering of electric solutions, with that, we can help our customers to optimize the performance of their equipment fleet. Then when it comes to the Epiroc battery system, a little bit more details into that, and we have compact high energy density batteries for large payload machines. With NMC, nickel manganese cobalt batteries, we can offer longer drive times and balance charging time compared to other chemistries. In short, our key partner, Northvolt, they produce the battery cell, which is put into modules and that is accordingly put into the subpacks. And how many subpacks do we need per machine varies between the machine models. So for instance, ST14, our 14-tonne loader have 4 subpacks that can offer up to 300-kilowatt hours capacity. And safety is, as always, the most important thing. So since 2018, when we introduced our new generation solutions, we haven't had any incidents nor accidents. And of course, we have a very extensive safety and security system in our battery products. So they are designed to prevent thermal runaway yet to capable to handling one. And let me show a short video. It will be very short, 15 seconds. When we make a [indiscernible] runaway, and what happens then. So be careful. Have a look. So almost nothing happened, as you could see which is good, which is good. So in the next couple of slides, I'm going to talk about the standardized modular approach that we have and what kind of benefits it will create for our customers as well as for us in Epiroc. So the design in general, it's safe and made for a harsh environment. It has a smart charging solution that enables equipment to run 24/7. The battery swaps are quick and the charge time is shorter than the discharge time. So in other words, we have a slow charging but quick swapping. This means low demand on grid as well as low investments on grid when it comes to -- when the customers choose to go for BEV. And finally, we are using a universal charging system, which, of course, helps when our customers have different vehicles so they can charge different equipment at the same charging stations. When the BEV flows of -- when the BEV fleet [ flows -- grows ], of course, that will create a lot of benefit. So for us, in Epiroc, this approach has also many advantages. So firstly, it's modular and scalable, which enables quick rollout and monitoring of sales, modules, [ sub-packs ] and even fleets. We can also perform the conversions of the existing fleet from diesel to batteries. And we see a strong demand in this even though volumes are still low. As other OEMs use the same standard, of course, that will benefit in acquiring electric infrastructure solutions. And with batteries as a service, we can maximize the use of each battery. We use it in the vehicle where it is most needed and can move it easily to the other vehicles, thereby optimizing the life of the batteries. So that will be a win for us, for our customers as well as for the environment at the end of the day. And of course, all our battery solutions generate new revenue streams for us as we have lately saw -- as we lately have seen with our batteries as a service offering as well as electric infrastructure solutions. And then when it comes to profitability, it bodes well for profitability as well. So with the NMC, nickel manganese cobalt battery sales, they are expected to improve density, kilowatt hours per kilogram, 7% a year over the next decade. Also, they will last longer in the market today. And 39% of the equipment fleet, including both surface and underground is offered in emission-free versus as per year-end 2022, end of last year, which number is, of course, somewhat higher as of today. So by 2025, as I mentioned, all underground products will be available in emission-free alternatives. In 2023, this year, roughly half of the potential revenue stream within loaders are available in battery electric versions. And by 2030, including both surface and underground, the whole portfolio in Epiroc, will be available in emission-free alternatives. So there is a strong demand for our battery electric solutions. And the -- as well as generally low-emission alternatives. And when it comes to BEV equipment sold, it represented roughly 3% of the equipment revenues, both underground and surface included here. And if we add the vehicles that have low emission capabilities, the number goes up to roughly 32%. And these numbers are based on orders invoiced. If you look at the demand and then use the orders received, order intake, basically, we actually three-folded the number of units in 2022. And as a [ Finnish ] person, there is a nice picture of ice hockey. Ice hockey here. I do like ice hockey, of course. So what we see here with the demand in the battery electric solutions, it's showing like a hockey stick growth here. That's why we want to demonstrate it with this picture here. So hopefully, you have got a little bit wider understanding of our electrification solutions as of today. And our customers also appreciate what we are offering. And yesterday, we announced one very important order for our customer in Sweden, Boliden. You have maybe seen the news about that one. So that is a good example of our growing BEV fleet. So as of today, we have 25 different sites where we have the BEV machines in operation. And 9 out of them, 9%, 9 out of them have placed us or given us recurring orders. And then 80% of our BEV orders go together with batteries as a service offering. And there is a strong demand for battery electric conversions as well from these [indiscernible] to battery. So then I will come back to the topic, what Helena touched upon earlier today in her presentation, innovation. As she said, we are investing more than ever in R&D, 3% of our revenue. But if you look at it a little bit closer, actually, that 3%, most of that is directed into the capital equipment divisions, surface and underground. So there's a lot of money going in there. And then, of course, as we know, we are producing in Epiroc as little as possible, only the core components, basically. So we work with our sub suppliers and to cover for the rest. So 75% of our product cost is purchased material. So basically, with that, we will get our supplier or if I say even collaboration partners' innovation on top of our internal investments of 3%. And one perfect example is on the following slide. MT42 mine truck, MT42, 42 tonnes. Again, there, Epiroc was the first in the mining industry to sign a delivery agreement with Swedish steelmaker SSAB for fossil carbon emission-free recycled steel, which has been produced using sustainable energy sources. The steel will be used in our load and haul equipment, loaders and trucks as soon as in quarter 3 this year. So actually, in addition to saving CO2 emissions, reducing CO2 emissions by implementing battery electric vehicles, we can multiply the positive effect by manufacturing them made of fossil-free steel or low carbon steel. So again, we make a very positive difference here. And this is my last slide, but a very, very important one about partnerships and collaboration that Helena touch upon as well. So here, you can see, of course, many companies that we collaborate with, but there are many others. So some of them have been mentioned already today, Northvolt, SSAB as well as Orica. So we are humble in April by knowing that we are a small player in the global industries, but by having right collaboration partners and right collaboration in our company and with our partners, we can do more, and we can create even greater value for our customers. So we truly believe that partnership is the new leadership. So thank you very much. So I think the next topic is very interesting as well. So we have 5 minutes break. So let's come back 5:00. [Break]

Okay. So now it's time to move over to one of -- which is also my favorite topic, which is aftermarket. And aftermarket, as you know, is extremely important for us because this is what creates the resilience of Epiroc. It's also where we see -- we continue to see really good growth opportunities, and it's when we really make a difference for our customers. This is where we prove the performance of all the great innovations that we are putting on the market, but it's really 24/7 proving these technologies. That is what makes the difference. And you have seen our offering in the aftermarket. It's a broad offering, both of course, when it comes to Parts & Services and Tools & Attachments and now Luis and then later Goran will go into the depth here and really, say, explore the opportunities here and also share the progress over the last coming years. But we have really had a -- really good growth journey when it comes to the aftermarket, especially since the creation of Epiroc. We have had, of course, a bumpy role there with some -- with COVID situation. That was actually one of the largest drop we saw in the aftermarket, but that was related to that many mines were just in lockdown. And of course, when you are in lockdown and the machines are not moving, then you have a drop also there. But over the period, you can see that this is a very resilient business for us. And we have, over the years, really managed to grow this business in a very, very good way. What we also did now from beginning of January is that we have set a new structure in place. So we have 3 regional presidents now heading the different parts of the world with ambition then to grow -- continue this growth journey and to be closer to our customers and be even more focused in developing the service business to the next level. And to take us through all the initiatives within parts & services, we have Luis Araneda. Luis has been working for us for many, many years. The last 5 years, he has been heading our service operations globally. I think he has visited more or less all mine sites in the world, including all our workshops. So this guy, he knows this inside out. So you are in good hands.

Thanks, Helena. In a way to introduce myself, I want to share something personal about myself. I have 2 passions. First one is my family, with 2 young and energetic kids, some time to energize kids. And my second passion is my work. Actually, I will share my passion with you today talking about service, and I want to try to combine your whole [ fun ] service. From the 3 revenue streams, service is 47% of our revenues, as Helena mentioned, is a very strategic action. Service allowed to us to secure performance of our equipment and all our new technology allowed to us to secure our participation in collaboration with our customer as a productivity partner and today, I will be showing to you why we are maintaining this consistent growth, how we are still growing this year and how we will be securing the growth for the coming long-term years. But in this journey, I'm not alone. As Helena mentioned, we have 3 presidents. And today, I have the honor to show the all 3 regions for my partners. We have the structure split in 3 regions; NASA, APAC and myself responsible for EMEA. We have a long history in Epiroc about decentralization and this is the next level of decentralization. With this, we are expecting that our people in our sales company will be more agile, more flexible and with more customer centricity, attending the needs and understanding faster what our customers really want, taking fast decisions, and we are working as a facilitator of this work. With this, we are expecting to have a strong competitive advantage. We will be starting with the one. What our customers want? Probably we have a big list, but we can start with the first and more important that is a common target for both for our customers and for us, that is safety. And then, of course, they want higher productivity. And here is where we can play a very key role as a productivity partner. We can summarize that they are expecting best-class operational excellence and of course, the effect that we are working with customer centricity. This means that the decisions and actions that we are taking has focused on centricity in our customers. For service is digital presence. And in Epiroc, we are doing for several years, a strong investment in this presence. Today, we have more than 7,000 people working in service. We have more than 300 service agreements, people on site close to our customers, and I will explain why this is too critical and very important for the future of our business. We have more than 100 workshops, including mobile workshops. We have 5 dedicated reliability centers, and this is very critical for a circular economy. And today, we have 8 distribution centers to cover better our distribution of parts for our customers. This is a passionate topic for me because I have 23 years in the company. And my first role in this company 23 years ago was service technician. And then I know very well how important is to have the knowledge to perform your job. And in Epiroc, we are doing a strong investment in competence development with everyone in the company, high level, the first line of workers in contact every day with our customers. And we are not considering or we can say regardless economical conditions, because we are not stopping component development. And this is a big differentiator from other industries and other competitors. One demonstration of this is that you can see that during COVID, we still certified our technician. Certification is the more competence development because it's taking 2 weeks, and we are doing this investment. Today, we have 86% of our technicians around the world with one certification. At the same time, we are investing for a long time in a standardization of our activities and process. This is to improve efficiency and to secure customer satisfactions in our workshops, service agreements and also feed service. The next level of competence development is to achieve 2 certification for our technicians. The second level is more ambitious because it has focused in family model of equipment. With these, our technicians are really, really advanced experts. Today, we have in this portfolio of training also automation. And we have already the first prototype draft of battery certification for our technicians. We have a big package of training. We have a big matrix of training for our technicians and this is very critical for the retention plan. Our technicians really appreciate that we are investing in them regardless a bad market conditions or economical conditions. Today, we have 55% of our technicians with 2 certifications, and we are expecting to complete this year with 65% of our technicians with 2 certifications. This is a very ambitious target, and I'm very confident that we will achieve this target. Now that you know our goal and our key to success, we will be talking about what we offer. We have a big list of offers. And for the time today, I will be talking just about the biggest extreme revenues, the 4 biggest. Starting with parts, replacement parts and kits, we offer genuine parts that secure high reliability of our equipment on site. This is very critical for customers with TCO orientation, total cost of ownership, customers that are looking for low cost of production tons. Additional to this, we have other new segments that we are developing very successful here, and I don't really talk too much about this. We have repaired kits that are associated to all old skills maintenance making the life of our customers easier. They can order with just 1 part number, the complete box with the total list of parts that they need for one specific preventive maintenance. And we have also today advanced solutions like rig control system. We have our rock drills part. And today, we have something additional that is very special for us. That is undercarriage road drilling equipment. And we are the first 1 in the market to have this kind of undercarriage. And I will be explaining how this idea appeared in Epiroc in the coming slide. You can see the trend is fantastic. And also we will show to you how we are securing that this growth trend will be still fantastic. Now moving to service. Service agreements and audit is very critical for us because with this, we are moving from one part supplier to one productivity partner. We are moving from part suppliers to service supplier and this is aligned with our digital offer today. If we can move to the service side, in a special -- in the digital area, we can be a more profitable company. And this is very critical. Service agreements allow to us to introduce new features, new technology, new products faster. And this also will be shown in the next slide what is the strategy action that we are taking to increase this portfolio. We are offering simple service agreements like care agreements. [indiscernible] is one technician on site supporting our customers, but super technician that is supporting planning, reliability, engineering and also correcting, maintaining for our customers and supporting all the activities to secure high productivity of our equipment. Today, we have a strong presence. We have a big number of service agreements during the bad market conditions of the pandemic. We increased service agreement. We don't have reduction of service agreement. And this was a big demonstration how resilient is this business when the market conditions are not the best. Our focus, of course, we have very good understanding of our fleet. We are considering 1:1 ratio. We have very good territory management, and we want to go to the next level. We want to incorporate as much as possible equipment with this service agreements. Again, benefit of service agreements are very, very big, but I can summarize in this. One equipment within service agreement is obtaining higher customer share. It's very significant. One full responsibility service agreement is 100% customer share. And when we have 1 technician on site and this technician is really appreciate for our customer, we almost have a 100% customer share. And this is why we are investing in our people to have just super technicians. Midlife Service is other business that is associated to this recycled tendency. This is very connected with a secular economy and allowed to us to extend or to get a new life to these equipment. This is a win-win. Our customers are using the same equipment for a long time. We are recycling -- actually, we are recovering more than 60% of the steel in these very old equipment and these agreements are back to the high productivity like a new. We are offering warranty and of course, they all support. And we are also incorporating in this Midlife some additional upgrade like battery conversion or technology upgrades. And you can see the trend. This is growing. However, the tendency is more optimistic with this circular economy and also with all implications that we'll be coming talking about taxes and motivation from stakeholders for the company to go in this direction in the mining business. Now to understand better what is Midlife, let me show you this very small video about one Midlife in Mongolia. [ Presentation ] It's impressed to see the picture before and after. And I show Mongolia to show you that we have the capability to do this kind of job in every place in the world. Now our manufacturing solutions is a topic that is coming to -- when we are talking about a recycling, it's time for the truth. This is a booster for what is coming. And you can see today how we are performing and the potential is very high. Today, we have 5 big remanufacturing centers dedicated to this job. And we have 3 pilots already, and we are expecting to grow in amazing way for this tendency. We have a larger fleet, and this is increasing more than 30% from 2016. At the same time, we are attending the cycle life of our equipment. These equipment are older than ever. If we are achieving an extended life of our equipment, we have more needs for care and more potential for business, but at the same time, our customers don't need high OpEx investment. This is just to graphic that during the cycle of life for equipment, we are starting with some products from the beginning. We can offer from the beginning of the life of this agreement, these products like electrification, Rig Control Systems or automation. And then when we have the Midlife, also we can offer additional products like remanufacturing components, battery conversions, also some conversions of diesel engines when customers require this. Automation for customers that really love efficiency is amazing. Because they can increase the efficiency of this equipment 40% as Helena show, but also for us is additional 32% potential in business for surface equipment and 14% additional revenues for underground equipment and this is not considering labor or services. Battery equipment, the same. Our customers say between 15% and 20% in maintenance and the high cost for diesel consumption disappear, and this is amazing benefit. And for us, it's 1 potential of more than 12% considering the old aftermarket business including electrification infrastructure. Helena mentioned this, in our DNA, we have innovation. In parts and services, it's very difficult to do innovation. In a way to make a booster with this, we developed 1 platform that we call innovation station. In this, every person in the company can provide any idea. Actually, this undercarriage for drilling equipment is coming from this innovation station. This innovation station is proposing some local parts ideas or solutions to go global. This is not only for components or part or technical aspect, also is for best practices. Just for your reference, from a few developments last year, we launched 24 new products like automatic bit changer, Automatic tricone changer. We have the undercarriage and also several live work elimination products and safety products don't need salespeople. These are safe by themselves. Also, one important point that almost 80% of these ideas are coming from service technicians. And you don't know how they -- a proud feel to do this contribution in R&D, and they say, we are R&D. This is my last slide. I hope so that you can share now my passion and end to support service and how positive we can see what is coming for Epiroc in this area. This is the summary of the 4 big revenue streams, and this look very, very promising. Thank you very much. Now I will leave the stage to my colleague, expert in local tools & attachment, a big fan of watch. He don't have any problem with the timing.

Thank you, Luis. So in that case, I can take off my watch, and I can take as much time as I want to present the Tools & Attachments business, right? Just kidding. Yes, I have a very big passion for the watches in time, not because of the item as such. But because it's about functionality, and it's about doing the things on time. But what I really love is the opportunities that Tools & Attachments division gives to our company. And in this presentation, I'm going to tell you about the journey, the Tools & Attachments is ongoing in providing all these great opportunities ahead for all of us in our company. My name is Goran Popovski and I'm part of the company since 2005, started -- most of my jobs were out there in the customer centers. Luis started as a technician and I started as a salesperson in this company, and that's most probably 1 of the best places to start and grew in different managerial roles in the company. I'm very happy that I was part of creation of Epiroc through creation of Attachments division in that time. And since 2020, I have the responsibility and try to lead the team of 4,400 highly competent and very passionate people that are developing business for the future. Tools & Attachments division is a division with a sizable portfolio. We have the rock drilling tools, top hammer, DTH, rotary, raise boring. We have the attachments. We have the ground support. And since recently, we have also the ground engaging tools. It's a division with a big portfolio, and that's the beauty of it. We have reported a separate segment in our reports, but also our numbers are included in the something that we call the aftermarket. And yes, we have been growing historically for about 4%, 5%. And the question is, can we do better? The reason why I love our company is because in our cultural statement it states there is always a better way. And yes, I think that it can grow better. In the next couple of slides, I'm going to tell you how we plan to do it. I strongly believe, and I'm aligned with some even Jose that we have the best equipment out there in the industry. If we talk in the automobile industry terms, we have the Formula One, fantastic, right? And Luis told us that we have the best technicians, the best trade, best competent technicians out there to serve that Formula One, pit stop, a couple of seconds, formula, run again, was missing, the tires. You can have the best Formula One, but if you choose the wrong tires, that Formula One is not going to perform like Formula One. The rock drilling tools, in our case, is those tires. That's basically the tools that unleash this huge potential for overperformance of our equipment, service, rock-drilling tools. Being customer-centric, easy for our customers to do business, providing the full package. That's my dream. And that's what we are working on together with my peers and my colleagues in our company. And it's same applicable for our hydraulic attachments. Best service for our attachments being put on the best carrier and providing the best hydraulic breaker or silent demolition tools. That's the dream. When it comes to the best products, I'm very actually excited to present to you the product that we call Powerbit X. Can we start the video. Please see on the -- both sides of the screen. On the left-hand side here, we have the Powerbit X versus the standard bit. And there is a different type of actions happening on the both screens, maybe I'm on UI of the screen, so maybe I shall be moved myself there. Powerbit X is a diamond quoted buttons on the bit. And all of us know that diamonds are forever, right? So basically, this bit provides extended service life. When we provide extended service life, that means that we are providing more meters for our customers. When we are providing extended service life for our bit, that means that operator is spending minimal time in the line of fire. So it's about safety. It's not just about productivity, it's also about safety. And finally, it is actually an enabler for automation. So we are really proud with this product, and we know that this is going to create some different type of bar in the industry. Profitable growth journey. In the last couple of years, we have worked very hard and smart to bring the division into some certain stability and we are very proud to bring the division under certain profitability. We have made a journey from 12% to somewhere around 18% where we feel very comfortable, and we know that that's the right level. The next step in our journey is growth. And I strongly believe that, that growth will happen. And in the next couple of slides, I'm going to tell you why I'm so optimistic about that growth. We are going to grow both organically and through the M&As. We have shown in the last period with a couple of very good acquisitions that we can see the right targets, acquire them, integrate them and grow them. On top of that, we have many exciting projects that are going to help us also grow our business organically. Innovation is in everything we do. We are definitely working on improving our value proposition for our customers. And, of course, look for further growth through the next acquisitions. Connecting with what Helena said, we strongly believe that mining and construction business is going to be in a good place in the coming years. The organization is happening. The middle class is growing. People want to move in the series. They want better apartments, better roads, better cars, better mobile phones, all these products are basically coming with derivatives from the mining industry. And we definitely want to grow with that strong demand and more than that. Mining is not only in the mines. There is a major element of the urban mining, and I'm so happy that many of my products find application in those urban mining applications. We have built a lot of buildings, roads and everything throughout the previous centuries. And there is a lot of metals, iron, copper, et cetera -- steel, et cetera that is already embedded in the buildings. And with the new constructions and the space, which is needed in the urban areas, we need to demolish those items, and there is a lot of construction waste. So with our products, with the attachment products from our portfolio, we are actually very active in that green agenda and giving a new life to already used products. About 36% of the steel globally is actually coming from recycling. It's about 16% of copper is coming from recycling. And don't be scared, we are not going to basically compensate for all the needs that the mining operation gives. Mining is still going to be there. It's been with us since the beginning of the humanity and it's going to stay with us until the humanity works on this way. Innovation is not only about innovating products. Innovation is about everything we do, the way we collaborate together, the way we structure ourselves, the way we work together in terms of finding the new solution. But at this particular moment, I want to actually brag a little bit about some of the products or ambitions that we are working on. As I mentioned when I was explaining the case of the Formula One, it's actually the rock drilling tools, the bit, the more point or cheese that makes impact on the ground. We are working very ambitiously to convert our working tools into data harvesters. To harvest the data about truck conditions, take this data, package it in the right format, so we give a different type of visibility to our customers, so they can improve their productivity. Customers that improves productivity, improve the financial resilience that's basically more reoccur in business for us, happy customer, happy supplier. And as Sami also said partnering. So we are in this game to support our customers. The Powerbit X I already talked about, I'm very proud that we are also taking these kind of steps in the construction industry, especially in trenching. And the last Boomer, we have promoted their product which actually could use 40% less energy and gives much better and faster actually trenching application possibilities to the customers. And as urbanization is happening with a big swing, we know how big possibilities are in this particular application. The HATCON and Drilling Tools Optimizer is about the data. It's about traceability. It's about better service and finally, about productivity for our customers. And then I have a separate slide where I'm going to tell you a little bit about a very exciting product that we also get to our most recent acquisition. Our products are applied in mining; open pit mining, underground mining, quarrying both aggregate and limestone quarrying, civil engineering, urban development, demolition, a lot of application now there. All these segments comes with a different specific with a different value proposition. And those segments are also not harmonious, there is customers with different expectations and different value proposition expectations. So what we are working with our team is actually working on widening our ability to give the right value proposition for different type of customers. And of course, that includes the developing further the essential line, extension of the breakers, [ break arrangement ] silent demolition tools. And finally, following our good example from our parts and services brothers and sisters creating a much more reoccurring business to different contractual agreements with the customers. That gives stability, that gives predictability and planning -- better planning for all our activities. We are working on the managing our inventory in a better way. The first items in our journey was to safeguard availability. In our business, having the right product in the right time in the right place is a must. And now we are taking corrective activities that will help us assure the availability by managing our net working capital in a better way. Availability is focus, availability is key. In the next couple of slides, I want to tell you a little bit more about our listed acquisitions, starting with the DandA, the acquisition that happened almost 2 years ago. With this fantastic acquisition, we have enabled in our portfolio of fantastic complement that has helped us reach customers that we were not able to reach before, the right value proposition for different customers that are in the demolition business. The second one that happened in the second half of last year is basically reflecting about our ambitions on the North American market. And also fast-tracking some development projects and also a lot of synergies within the hydraulic attachment business. Finally, the recent acquisition in this year that basically gave us the opportunity to play on a new market, on a new segment, which opens a major prospects for growth in the future. We are talking about advanced ground engaging tools product, which opens the possibilities for synergizing with all of our divisions. CR Digital and CR Mining is most probably 1 of the places we are going to open collaboration with all of our divisions. We have major possibilities for collaboration and working together with underground division, with a surface division, with -- absolutely with parts and services, with our digital division. A product that I'm personally very excited about. It's actually advanced IoT sensoring system that is giving a real-time data, if any of the teeth on the leap of the bucket is lost. And that's something that you don't want to see in your operation. We are talking about very hard for steel that it ends up in a crusher, can do a lot of financial damage, but also major safety problems with the customer. We have the most advanced system actually in the industry that in real time identifies if any of these teeth are lost and with the scanning system find that tooth in the pile and avoid this particular item ending up on the wrong places. And then in combination with a payload system optimization tool, we are actually able to improve the productivity for the loading operations in the surface and underground operations. To summarize, customer is in our focus. We have multiple customers in multiple segments, in multiple industries. Our team is focused on finding the right value proposition for all our customers. We have decentralized organization, but yet very synergistic. Decentralized because we have to really deliver the best value proposition for all our customers in different segments, yet synergistic because there is so many common competencies that are needed in all my business lines. We are working on the -- turning the global production footprint into a clear competitive edge, producing closer to the customers and also utilizing and further improving the logistics and transportation procedures to contribute for the green agenda as well as improve for our customers in terms of availability. If you allow me, I would like to show you one more either. [ Presentation ] And the right tools matter. So I hope that I gave you a little bit of glimpse on what we are working on and how exciting is our journey. And of course, I can spend here much more time, but Luis is going to be angry with me if I take more time. So I'm going to stop here, and I'm going to welcome discussions further on tonight. And now I would like actually to introduce one of our colleagues in the company, Hakan Folin, the CFO, but he's not just CFO. He's also a person. He has a fantastic diagnostical skills. But just looking at the numbers, he can actually open a fantastic discussion with me, my management team, what are the areas where we can do better, so we can prioritize in the right way. Hakan? Welcome.

Thank you very much, Goran, for those kind words. I hope you truly feel that way when we have the monthly performance review meetings with you and dissect your number. Okay. I will talk about outperformance because after all, all the good things that we do and that you've heard about, they need to generate value for our shareholders as well. One of our financial goal is to have a revenue growth of 8% per year and also over the business cycle and also to grow faster than the market. And as you can see, since 2015, we've actually been spoken on this 8%, and it's coming both from organic growth and also, we will add some inorganic growth to that. We have 2 reporting segments, but we have 3 revenue streams. You just heard Goran talk about Tools & Attachments, which is 21% of the revenues. And then we have the Service business, which is 47%. It's the biggest one and also the most profitable one. And then finally, to make it up to 100, we have the Equipment business with 32%. On the margin side, we only report on 2 where Tools & Attachments have 17.3% and the Equipment & Service, 24.4%. Another financial goal when it comes to profitability is that we should have the industry best operating margin, and we should have strong resilience over time. And you can see in the graph, we've been around 22% to 23%. Actually, last year, we had an adjusted operating margin of 23.7%. And I think with those margins on EBIT level, you can say that we are actually best-in-class. Obviously, it doesn't come easy. It takes a lot of hard work from our colleagues all around the world. It also means that we need to continue to innovate and provide the best solutions for our customers. But we don't only want to have a high margin, we want to have a resilient margin. And you can see here the resilience that we've had over the years. And I would say it's a combination of 2 things. One is the large portion of aftermarket business, which is more resilient. And then the second 1 is the decentralization, which is really built into the genes of Epiroc people. And it means that when the market is turning up or turning down, we are very quick in making decisions and making adjustments necessary to keep a stable margin. What you can also see here on this slide is the bars, and they show the adjustment that we've made throughout the years. The gray ones are for the long-term incentive programs and the yellow ones are for other adjustments where the biggest adjustment we've made so far are related to provisions for Russia, where we made the last year, provisions of SEK 550 million. Any successful business need to be able to translate the profit into cash as well. And we've had a very solid and good cash generation over the last years. In terms of good demand, like last year, then we are building more working capital, and we get less cash generation, but on the other hand, in terms when there's less demand on the market, then we -- free working capital, and we get more cash, as you can see in 2020 here. As a business, we have a low CapEx needs, that's part of our strategy, I would say, roughly between 1% to 2% per year. So what do we do then with the cash that we generate? First of all, we want to drive growth. We want to drive organic growth. And you heard Sami talk about how we want to use innovation in order to continuously drive organic growth. Secondly, we want to invest in acquisitions, and we have made 23 acquisitions since the creation of Epiroc, and they are adding in total SEK 7.2 billion in revenues. Most of these are small or medium-sized, and they are bolt-on acquisitions. Many examples are that we are looking for new technologies to really add something to our portfolio that we did not have before. We will continue to look to make acquisitions, most likely in the same, call it, context as where we've done it before, but we will keep our eyes open for everything that basically moves in the space where we act. Lastly then, what we do with our cash? Well, we give dividend to our shareholders. We have a goal to provide long-term stable and rising dividend to our shareholders. And it should be 50% of net profit. And as you can see, that's roughly where we've been through these years. We also have, of course, the possibility in times when we're sitting on excess cash. We can also hand out extra cash to our shareholders as we did in '21. Moving on then to capital efficiency and resilience and also that, of course, our investment acquisitions shall create value, we measure capital efficiency in terms of return on capital employed, where we've been the last 5 years between 21% and 31%, and when we were actually down at 21%, it was, to a large extent, given that we were sitting on a lot of excess cash before we did this distribution that you just saw. On the right-hand side of this graph, you also can see the working capital development. And since last year, our working capital has increased to 32%, even when we exclude acquisitions and currency. So we will dive a little bit deeper into the working capital development. Working capital have been impacted by growth. You saw the growth that we have done within services. And if we want to have the spare parts available all around the world, that also will drive some inventory. And I would say the service growth is enabled by us having good availability. We've also had good demand for our equipment. And even though Helena said supply chain issues are easing up on the outbound side, we definitely still have them there, and we have issues getting the machines out and also they are very long on the sea before they actually arrive at our customers. We are also building up regional distribution centers, and the idea is that we will take the inventory basically from the sales companies, we'll move them into distribution centers. But in the meantime, while we are doing this, you can say in a way, we are actually having double inventory. But once we get our new way of working in place, that obviously should disappear. Looking at the ratios since the creation of Epiroc, on both accounts receivable and accounts payable, we are actually seeing an improvement over the last 5 years. However, on inventory then, the trend has gone in the other direction. And this is something we need to work harder on. We have actions in place, and we are expecting improvement throughout this year. We also want to have an official capital structure and maintain investment-grade rating. We have a rating of BBB+. We don't have a target as such for net debt to EBITDA, but being a cash-generative company as we are, and right now, we are at 0.52, I would say that we have plenty of opportunity and room to continue to invest in growth, both organic growth, but also inorganic growth. And here is an overview of our funding and our maturity profile. We usually take up that on group level, and then we transfer it out into the subsidiaries where it's needed. I'm glad and happy to say that we have emitted 2 green bonds, 1 in September last year of SEK 2 billion and one just about a month ago of SEK 1.5 billion. And with this money, of course, we will continue to accelerate the transformation. But all in all, I would say we have a fairly solid maturity profile, 3.3 years on average and interest duration rate of -- sorry, 17 months. So this is what we get when you summarize all the financial goals. I'm not going to go through each 1 of them again since I just talked about all of them. But I would say that overall, over the last 7, 8 years, I think Epiroc has actually had a very solid and strong performance. But it's not only about finance. And since the beginning of this year, I'm also on group level responsible for sustainability. So now I will talk more about our strong corporate culture and the sustainability mindset. And for us, sustainability is really a business driver. And having spent the last 2 days here together with our customers, it's very obvious that the corporate culture we have, the innovative agenda that we have, it really goes hand-in-hand with how our customers want to drive their sustainability agenda. And our customers in the mining industry, in the infrastructure industry, they are vital in really helping the world to transform into a low-carbon society. And we heard a lot about it already in terms of recycling, the need for copper and nickel, et cetera. And we are vital in helping our customers be vital in doing this transformation. Obviously, operations need to be sustainable as well, being low carbon, having a low environmental impact, safe environment, productive and cost efficient both for us, but obviously for our customers as well. And what we clearly can see is that our innovation, especially within automation, within electrification and also within digitalization, it really leads to measurable impact, both on safety and environmental. We have set goals for 2030 for both what we call people and planet. I'll get back to those shortly. And also since last year, remuneration for group management includes ESG metrics. So our 2030 goals for planet. The first one we have is that we should have the CO2 emission in our operations. And there, we have actually already reached 84% completion very much by usage of renewable energy, including installing solar panels. The second one is that we should also have the CO2 emission in transportation. This -- a big enabler for this is that we will move transport from air and we will take it on sea instead and being a CFO, this hurts a little bit because lead times are much, much longer on sea than they are on air, which means that, that will also drive an increase in inventory. But okay, I would need to accept that and instead be happy that we have actually already accomplished 60% of this target. You've already heard that we want to offer a full range of emission-free products, 25% for underground, 20%, 30% also for surface and there, we have reached around 40% completion. But then as you also heard before, the majority of our CO2 impact, if not within scope 1 or within scope 2, but it's really within the use of our machines, so-called scope 3 and actually, 83% of our CO2 impact comes from the use of machines. And here, we have an ambition that we should have the CO2 emissions from our machines sold by 2030. And we've only reached 5% completion. But on the other hand, you also heard Sami mention how we expect this to be more of a hockey stick development for the battery electric vehicles going forward. Finally, we also require -- put requirements on our suppliers, and we tell them that you need to reduce your emissions by 50% by 2030. And here, there are a few large suppliers, which play a large portion of this role, and we are working very closely with them and have actions in place to make sure that they will also reach their targets, so we can all in all, reach our targets. Last but not least, people. And for us, safety comes first and always. We have an ambition by 2030 to have no work-related injuries. We have seen an improvement in our recordable frequency, but it's not moving fast enough, and we have a lot of actions and programs in place to improve here. We want to be an inclusive workplace, and inclusion can obviously be many things, but being in a male-dominated industry, as we are, we have focused a lot on increasing the number of women and especially in operational roles. And here, we see a steady improvement year-over-year. Then we also say we want to walk the talk. We want to have all our employees and all our business partners comply with our Code of Conduct and also our Responsible Sales Assessment Process to be implemented. And again, also here, we are making progress. As an example, we have 98% of our managers last year that complied with our code of conduct, which was up slightly from the year before. One area that we have not mentioned today is operational excellence. That's also a vital part of our strategy. And here, I could definitely give a long list of all the things we are doing. But I think actually, you've heard it from our speakers indirectly. You heard Helena start talking about the attractive niches that we are in and also talk about innovation. You heard Sami talk about the electrification journey that we started quite long ago and that we are still on and that we are refining as we move along. You heard Luis talk about the democratization of innovation and finally, you heard Goran talk about how you're going to get the best performance by having the best equipment match with the best Tools & Attachments. And I think actually, our vision very much summarizes how we work with operational excellence. And our vision, as many of you know, is there to think new. And in order to be an innovative leader, we must dare to think new in how we work with our customers, how we work with partners and how we work with suppliers. And how we work with our customers, you will get to see tomorrow what they have seen yesterday and today. And I can promise you, you should be glad that you have actually come here to [ rebrew ] because it's going to be really good. You're going to get to see some good things tomorrow. Now we also have a special treat for you because you will get to see what our employees have seen when we talk about our strategy and when we talk about where Epiroc wants to be in 2032. So here comes a final video for today. [Presentation]

Thank you, Hakan. Please, all great colleagues come up on stage again. My plan was to read the investment case, but I'm very well aware that all of you can read and you will fit through this presentation later. It will only be a repeat of what everyone said today. I said also that we would have a short Q&A session, and it's going to be shorter than I planned. But I will stretch it another 5 minutes, so we will have until 5 minutes past 6. But that also means that to you asking questions, please make sure you are precise in your questions. We have 3 colleagues with microphones, so please just raise your hand. I have -- if we start there with yes, presenters out as well, please.

Magnus here with Nordea. You showed a slide suggesting that 39% of the models you sell have an emissions-free option or alternative. How large proportion is that from your sales? And if I can [indiscernible] sales of underground as well?

I think I can take that one. And we have chosen not to disclose that figure at this Capital Markets Day. Should we take [indiscernible] over here -- in the front line?

Gustaf Schwerin from Handelsbanken. We're, of course, here to talk about you, but your biggest competitor quite recently were saying that they are the clear market leader on autonomous load and haul. And my impression is that you do not agree on that. So I'm just wondering here, is the difference in communication simply that you are including autonomy and other OEM machines? Or are you also including open pit here? Because it looks like you have 70% market share on the installed base that they were referring to. Can you clarify that?

So it's a mixed fleet and more or less all of it is underground.

So 70% market share?

We don't give market shares. We speak our own numbers. [indiscernible] has been in hand for quite a while.

So I had a question on the target. So obviously, I guess it's sensible to keep them. But if I can just elaborate a bit. So the 8% growth, you said construction should grow 4% to 5% CAGR, you should probably outgrow that. Your larger division or share is mining, should probably grow much faster than construction. I mean the list is long, shift to underground, lower ore grades, upside from RCT on mixed lead automation, battery as a service, a very long list of growth drivers. So why are we keeping the 8, because previously, you said 5 organic, 3 M&A, you're not going to slow the pace of M&A, so the organic should go higher. Is that caution on the cycle? Or yes, I just want to hear your...

But also that 2/3 of the company's is aftermarket, which is more reflecting then the run of mine activities. But I think over a cycle, I think 8% growth is a good target. And as you have seen, we work very diligent to make sure that we deliver upon that. And we continue to see a lot of opportunities in all these areas. And I think that is the good thing with this journey that we continue to find more and more opportunities.

Very quick final follow-up. On the battery service, last in the -- you also gave a 12% revenue stream, incremental versus [ ICE ] over the next 5 years. Some of your competitors, I'll guess one -- guess which one, talks about load and haul being 60% opportunity. Is that 12% still only drilling because if you blend that we load and haul, that should be much, much larger?

Well, I can take that one. The calculations that we have used, we took the most conservative number as we always do.

Drilling?

Christian at Goldman.

Christian Hinderaker here from Goldman Sachs. You talked about the recycling opportunity within T&A and specifically the crushers product. I know we hear mostly talk about mining, but at the last earnings update, you very helpfully set out the end market demand levels across infrastructure, demolition, tunneling and housing. I just wondered if you could scale the respective end markets within that 21% of orders you have in infrastructure and how we should think about what is the most important driver of revenue for that business?

Absolutely, I'm not sure that [indiscernible] the question.

I could rephrase. So if you just would -- you mentioned a lot of drivers and markets -- end markets. If you could just say which 1 is the most important, maybe the top 3 ones?

In terms of geography or in terms of application?

Sorry, just to be clear, 21% of sales from infrastructure. Within that, if you could segment demolition, housing, tunneling, what are the most important drivers in terms of revenue within that 21% recycling included?

Housing and office building space is obviously a driver and in different parts of the world impacts on a different way. At this moment, what we see is that in some particular parts of the world, there is some tendencies for slowing down in that area. But in the same time, we see that alternative applications like the steel engineering or urban development are actually going in the right direction through the investments from the government. So this is basically offset to some extent, if that was the question.

And maybe we should also add that infrastructure is, of course, also tunneling underground, and it's also surface drilling rigs is on the equipment side and as well as service. So even if Goran took the question, infrastructure actually covers all divisions. There are so many hands. We will take Olof.

Olof Larshammar from Danske Bank. One on Avatel, I think you launched that product in 2020 or something like that. Do you have I guess that it's a new product for the mining customers. Do you have any competition? Could you say something about order intake and the potential market for that product in a couple of years?

Yes, [ Mike ], I can answer to that. So basically, we are in the field test phase right now or so and the movie that you saw, that was from Kittila mine in Finland. And we have taken the second machine, a second prototype now to Australia as well. So we are in the field test phase right now. So this year, as well as, I would say, the majority of the next year goes into the field testing. And thereafter, of course, we have high expectations, of course, to generate good revenue stream. I hope that answers as well.

But there's no other solution available from any other OEMs. So we are the first one. But this is also crucial from a safety standpoint to make sure that this is done in a controlled way, and that's also why we are spending years now when it comes to the field test to make sure that it's explosives that we are managing.

Number 2 here on the front row, I pointed to you. And then we have James after.

[ Anders Roslund ] Pareto Asset Management. I appreciate that you sort of challenge yourself in the sense that you want to electrify products that reduces the need for maintenance, which may hit your profitability actually and secondly, you're extending the lifetime of your equipment, remaking, et cetera. And on top of all that, you have your customers perhaps recycling more metals, so you're obviously improving the whole industry, but I question will that lead to lower profitability for you?

We see this rather as opportunities really because we can -- we find new revenue streams related to these transformations and also the opportunities to develop completely new business models. And as we have said also that with these new technologies, the machines are becoming more and more advanced. It's more and more difficult for other small players to take that aftermarket and that service portion from us. So we see it rather as a great opportunity when we look at it, the full picture -- the consolidated picture, including all the divisions. So that's also why we are happy to push this and push the boundaries because we see that it's -- from a business case standpoint, this is actually good. This is a good business for us.

And we take the last question from James. And then all of you guys raising your hands, they will join us for the dinner. We will have time for mingling, just go and ask your questions. And also online, you can send the questions to us either through this formula on the web, and we will get back to you or you can also e-mail us, of course.

It's 3 on the new business models inside aftermarket. You've been adding more remanufacturing, more Midlife upgrades. And that's a business model that didn't really exist 5, 10 years ago in the same way. Why really is the customer heading in that direction? Is it circular? Is it OpEx versus CapEx because in the end, if you rebuild the BMW X5 from spare parts, it costs 5x the price of the BMW X5. So it's great for you. And do you think that if business shifts in this direction away from OE that it could drive the group profitability forward from the current levels over time?

I think it is shifting towards an OpEx. But I think it's mainly related to the speed really because we can be quicker. When we can respond with initiatives like this in the region, in the local market on that side, we are also quicker responding. And as Luis said, we can also constantly now upgrade the machines with the latest technology. We can add the features that we have developed during the last 3 years and embed them in the machine that they get back. But I think it's also, say, the very strong focus from our customers on productivity. And of course, if you -- to take out a machine for Midlife upgrade or a larger rebuild, that goes faster than to wait for a new machine. So I think it is -- I think that's the driver. And we have developed this portfolio over the last, I would say, 5, 6 years. And as Luis said, we continue to find more and more opportunities. So we are step-by-step going away from selling parts and ours, we're selling value now, which is -- that's also when we can make a bit of difference.

Perfect. Thank you very much. We create value, and we make it positive, different. Thank you very much, everyone, for joining. Thank you online for joining.

Thank you.