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

So hello, and a warm welcome to the Epiroc Capital Markets Day 2024. Welcome, to those of you in the room. It's about 90 participants. And also, welcome to you on the webcast. Welcome.

Yes. Hello, and a warm welcome. On my side, I have Karin Larsson, Head of IR and Media here at Epiroc. Karin told me in 2023 when I joined the IR team that IR is way more fun than controlling, and I could not have agreed more.

We're glad to have you in the team, Alexander, and thank you very much for taking so good care of our investors and analysts. As you see on this slide, Alexander is also called "Head of Sports". That's because he's very sporty. In fact, he is so sporty that he is a Swedish champion in tennis. So anyone playing tennis, you can reach out to Alexander.

Yes. I like to stay in shape and be on a winning team and that's why I work for Epiroc.

So we are going to have a blast today. But before having a blast, we do need to speak about safety.

You have the exits over there. And in the unlikely event of an evacuation, we will meet up outside of the hotel.

And now you will see a video on how we do safe blasting at Epiroc. [Presentation]

So the agenda today is very straightforward. We are going to go through our strategy. We are sending the webcast live, and we're also sending it live streamed on Instagram in the Swedish financial channel called [Foreign Language]. You may ask questions in the Q&A form that is on the webcast. But we will not answer the questions until we have the Q&A session, and that, we will have just before lunch. In the midst of the program, we will also have a little break where you can have coffee and refreshments. Yes. At quarter past 12, or 12:15, those of you that participate here in the room will have a seated lunch with management. It will be in that room next to us here. It's free seating for you that are guests. For the Epiroc people, you have designated tables to sit at.

And at 1:30, the bus to the MINExpo leaves at the entrance of the hotel, so make sure you are on time and that you have your ID and your MINExpo ticket with you when we get on the bus. The ticket should be valid for the expo for 3 days, so you will have a lot of time to see all of our fantastic offering there.

As many of you -- sorry, a bit early. As many of you cannot attend online or like here, IRL today, many of you attend online, we actually have made videos from the MINExpo already. So Ola Kinnander, our media relations managers, Alexander and I, we have been sneaking around MINExpo for a few days making videos. So you will see MINExpo before even going there, and you online will also be able to see it. So let's start with the first interview. It's Anna Dahlman Herrgård, our very own project owner of the MINExpo, a video. [Presentation]

Thank you, Anna, and we are all excited to go there and check it out later.

So the strategy for profitable growth, our agenda today. Of course, you have seen this before. We remain loyal to our strategy. It has served us well historically, and we do believe it will serve us well also in the future. But actually, our strategy is also our investment case. So we focus on attractive niches with structural growth. We accelerate the productivity and sustainability transformation in our industry by bringing groundbreaking innovations to the market. We have a high proportion of recurring business aftermarket. We have a well-proven business model, and we create value for our stakeholders. And all of this is made possible by the wonderful people that we have at Epiroc. We have a very strong foundation with a very strong corporate culture.

And now, it's time to introduce the first presenter of the day. She is strong and can see things from another side, like when she does handstands, which is incredible, by the way. And she sees opportunities instead of obstacles. She dares to challenge the status quo and is not afraid of failure. She constantly seeks ways to improve things. And I would like to invite our President and CEO to the stage, Helena Hedblom.

But we would also already now like to invite Mr. NBA to the stage. He is also known as Håkan Folin, CFO. Håkan joined our company in 2021, and he's responsible for finance, sustainability and also most recently, M&A. Håkan, welcome to the stage. So thank you.

Thank you.

Enjoy.

Okay. So from my side, welcome to the Epiroc Capital Markets Day. It's great to have you with us here in Las Vegas. I'm very much looking forward to showcase all the exciting stuff that we have on display at the MINExpo later today, but also to share insights in the strategy moving forward. When looking at this year since the spinoff from Atlas Copco, I think we have always been a very strong productivity partner for our customers, but we're also step-by-step now becoming a true sustainability partner for our customers. And I hope that we will demonstrate this; me together with my team today. So we saw 2 attractive customer groups, mining and infrastructure. As Karin said, they are both set with healthy underlying trends. Our exposure towards infrastructure is right now 90% of orders. Or if we do a pro forma calculation and include then the STANLEY acquisition, as well as the ACB+ acquisition, then we will be at 25% towards infrastructure and the rest is then mining. So we have -- from an exposure standpoint, we are back to where we were when we did the IPO. We have a very strong position. We are a 150-year-old company, even though, I also say that we are a start-up since the creation of Epiroc, but a very strong position globally. We have customers in 150 countries. Very strong customer relationships. We go mainly direct, 89% of our sales is direct, but also a very diverse customer base. Our top 10 customers represents 23% of our revenue. And very strong positions in Australia as well as in North America. Very strong focus on growth as well as on profitability. And since the IPO, our revenue have been growing 79% in revenue, which is 10% CAGR. And we have been growing our adjusted operating profit with 88%, which is 11% CAGR. And the total shareholder return is 142%. And I just must say I'm super pleased when I look back on the development for Epiroc. Of course, now lately, we have had some challenges on the profitability side. And as you are aware of, that is what we're focusing on right now. We stick to our financial goals, which is to grow 8% CAGR over a cycle, to have the industry best operating margin with strong resilience, as well as improve our capital efficiency and resilience to have an efficient capital structure and to provide long-term rising dividends. And we have delivered upon our targets and our goals up until now. If I look on how we report, we report in 2 segments: Equipment & Service, as well as Tools & Attachments. We also give you the revenue streams of Equipment & Service as well as Tools & Attachments. But we run the company in 8 divisions. And majority of the presidents are with us today, and you will also have the opportunity now to listen into more detail what we are doing in the different divisions. If we look on the adjusted operating profit and margin development, as I said, we have been growing 11% CAGR since the spin-off. If we look on Equipment & Service, it's a 12% growth and now Tools & Attachments is a little bit slower at 9%. So looking ahead, this is the outlook that we gave after when we did the Q2 report, that we expect in the near term that the underlying activity levels in mining, both when it comes to Equipment and Aftermarket, will continue at a high level, while the demand from construction is expected to remain weak, and we stick to that outlook. So now moving over to our strategy for profitable growth. So this is very much the agenda for today. And I will start off talking about our foundation, which is sustainability and a strong corporate culture. So when looking back since the IPO and looking at the achievements in this area, I must -- I'm super proud to see the development of the safety in the company. We have put a lot of focus on safety, both when it comes to our culture, but also when it comes to bringing safety solutions to our customers. We're also a strong believer in inclusion and diversity and also happy to see that we have more and more women managers, and more and more women in operational roles, which is the way of future-proofing Epiroc. We also have very good progress when it comes to the reduction of CO2e emissions from our operations, mainly driven by that we have installed solar panels in majority of our factories, but also, that we have our sustainability goals validated by science-based target. The sustainability goals for people, we have this embedded in everything we do. And you see on this slide, the development so far. And I'm, of course, very also focused not only on safety and on the diversity side, but also the way we do business. We do business in 150 countries. So to be -- to have, I would say, our Code of Conduct as a core in the way we do business is extremely important. And also, we have 100% of our managers, 98% of our employees that are signed off on the Code of Conduct. So one thing is me talking about how it is to -- what we try to strive for when it comes to culture. It's better to listen to one of the employees. So you will meet one of our engineer trainees. [Presentation]

If we then move over into our goals for the planet. We have delivered 96% completion of the CO2e emissions from our own operations. But also, we have good development on reducing CO2 emission from our transport. We sit right now on 42% of our offering. We can offer in some type of fossil-free version, and the ambition by 2030 is to have the full assortment ready in a fossil-free version. And this is where we make the biggest difference overall, if more than 80% of our total CO2 emission that relates to the use of our equipment. So now we will move over into the attractive niches. And Håkan, you will start.

Yes. Thank you very much, Helena. And also from me, a very warm welcome to Las Vegas. Really happy to see that so many of you are taking the time to join us here. So I will talk about our attractive niches. And we see that the niches we are in, they are long-term attractive with structural underlying growth. And we see that this growth is coming from growing population and middle class. It's urbanization and it's energy transition and sustainability transformation. We also see a number of challenges for our customers, which we are trying to address when it comes to low utilization rates in the mines, lower ore grades and also a trend towards underground mining. And not the least, we do see, over time, an increased sustainability focus, especially on the safety side, that is #1 for the miners, but also when it comes to lowering of emissions and also deconstruction and recycling. What you can see here is our exposure when it comes to segments and also to minerals. And in the bottom there, you have, as Helena talked about before, the exposure to construction or infrastructure, which was 19% then at the end of Q2 this year. And then you have the different mineral exposures on top of that. And the top 2 one, it's copper and gold and together, they combine for roughly 50% of our total exposure. And as you can see, they are marked in yellow. And the reason is that the yellow ones is where there is a future deficit of mineral expected. And for us, that means then that for these niches where we are in, 50% of our exposure, there is expectations of future deficit, which means our customers will be willing to invest more to get as much as possible out of the current mine, but also do exploration activities in brownfield or in greenfield in order to be able to extract more copper and gold over time. So digging into a bit more on the mining side, which is 81% then of our orders received. We have a very broad offering to our customers. I will not go into all of this because you're going to hear a lot more from our divisional presidents sitting over there. But basically, for surface, we have the complete range of drill rigs from the biggest one to a very, very small one. Underground, we have the drill rigs. We also have load and hauls. Exploration, we have the full range, both for Equipment, but also Tools and spare parts. And then for both surface and underground, we have the spare parts, we have maintenance, we have service. But not the least then, we have actually OEM-agnostic solutions, both for digitalization, but also for mixed fleet automation. But I said, you're going to hear a lot more about this from the division presidents. What you see on this graph is mineral prices versus our order intake. So the dark line or the black line, that is what we call Epiroc Mineral Index. So it's for our mineral exposure, it's a weighted index of the price development. And as you can see, since the spin-off from Atlas Copco, we've had a very favorable development in terms of mineral pricing. The yellow line there, that's our order intake within the mining segment, and it's not a perfect correlation, but it's a fairly good correlation and it's actually 77% positive correlation. And we often get questions, Helena and myself, from investors like you. When prices go up, do we see an immediate impact on order intake? And the easy answer is no, not really. Short term, we see an impact on Service and Tools because the miners want to get as much out as possible from the mines. Midterm, then we can actually see that if prices stay high, midterm, that does have an impact on our equipment orders as well. And then long term, the longer the prices have been on a high level, the more willing the mining industry is to invest more in exploration, be it greenfield or be it brownfield. And I will dig in a little bit more into exploration because our view is that this is actually set for growth. And again, we have the attractive mineral exposure to capture that. From 2000 up until 2012, there was a strong exploration CapEx growth. And we had a peak in 2012 at USD 21 billion. Then we had a quite big drop in demand and actually, it was as low as USD 7 billion in 2016. Since then, we've seen a slow gradual increase in exploration spending from '17 up until now. Right now, the spending is around USD 13 billion, so clearly upwards from the USD 7 billion, but still far way below the USD 21 billion. So why do we then believe that there could be opportunities now for exploration growth? Well, mineral prices are at the high level, as I just showed on the previous page. We do expect long-term deficit for especially copper and gold. There's also new technology coming, including what we can offer that makes exploration that before was not really attractive or feasible, can now actually be attractive to exploit. And then finally, we've had finance costs go up quite a lot during the last few years. Now that curve is bent, and we are now seeing financing costs decreasing. So all in all, we see potential for good exploration growth, and we feel that we are well positioned, both when it comes to our own product program, but also in terms of our own mineral exposure. As I mentioned before, our customers have a number of challenges, with low utilization grade -- rate, sorry. Underground mining, less than 50%. Open pit somewhat better, but still only at around 60%. We also see a long-term trend towards underground mining. And it's quite natural to understand. If you want to get something out of the ground, you take it from the surface first, that's easier, and then you go underground and dig it out, which is a bit harder. So long term, we will see that trend increase, which, again, is a challenge for our customer. And then finally then, on the lefthand side, there is also a long-term depletion of ore grades, meaning that in order to get the same amount of mineral out, well, you need to get more and more rock out of the mine, in order to get the same end result. And we want to help our customers tackle these challenges. The #1, which was not on the previous slide that I mentioned before, is safety. And we are a leader when it comes to safety, I would say, across the mining value chain. And you will hear a lot more about it today. And you will actually -- for the ones of you able to go to MINExpo, you will be able to see it at MINExpo as well. We also can offer higher productivity to our customers. We have world-leading equipment and also solutions and also digitalization and mixed-fleet automation, that all together can really help our customers improve their productivity. And we talked before about being the productivity partner with our customers. We can also offer potential for lower emission with the fossil-free alternatives we already have today. And regardless if it's fossil-free or not, for every new equipment we put on the market, it is going to be more fuel efficient than the predecessor. And then finally, we can help our customers become more precise in their exploration with the new tools that we have available. In 2017, Atlas Copco had a Capital Markets Day. And at that time, Helena talked about the mine of the future. And I think now, 7 years later, it's time for you, Helena, to see if you were actually on the right track and how this has been realized or not.

Thank you so much, Håkan. So how many of you were in the room, 2017, when I was standing on stage there? A couple? Good. So at that point in time, this was very much a vision. We talked about the mine of the future. We had an -- we saw the potential on fossil-free mining. We saw the digitalization playing a big role. We saw interoperability, OEM-agnostic solutions when it comes to automation, et cetera. But we also talked about this having this control tower, where you actually can -- for the mining companies where they can oversee what is ongoing in real time. We talked about automated trucks, trolleys. We talked about ventilation on demand. And it was a vision, clearly. If I look on where -- but we were -- I think this is part of our strength: to see around the corner, what is next and to start early and to invest step-by-step and to stick to that vision that we believe in. And that's very much what we have executed on as Epiroc, both when it comes to the focus, our investments into product development, our focus in acquiring capabilities and companies that would strengthen us and take us to this position. And today, 7 years later, this is actually what we are offering our customers. And you will see a lot of this during today, both from when the presidents are presenting, but also at the MINExpo. It is real right now. And I think it has happened faster maybe than we expected, which is fantastic. So I would like to show a movie of what we are offering right now, and what we bring to the table when it comes to transforming towards the future of mining. [Presentation]

All right. So then move over to construction and infrastructure. We talk a lot about mining, but construction and infrastructure is core for us. It represents 19% of our orders received. And as I said, after the acquisition of STANLEY Infrastructure and ACB+, it will be 25%. And we have also towards this segment, a very strong offering. For surface, we have a full suite of drill rigs, attachments and rock drilling tools. Everything from urban construction site, if it's aggregates or quarries, but also drilling equipment for water or geothermal energy. For underground, we also have a full suite of products, everything from drill rigs, if you -- the rock enforcement, the bolting part of it, everything from trucking and loaders and of course, also ventilation systems. And then we have a full suite of aftermarket components towards the construction market as well. And of course, now with these acquisitions, we have an even stronger position when it comes to attachments and silent [ simulation ] tools, but we also have digital tools for the construction customers. And I would just want to comment on the short-term development because there has been a softening in the demand from construction. It happened in Q2 2023. For us, the Attachment business was, in particular, impacted. We have been taking a lot of efficiency measures, and we continue to do so. And we are also consolidating 2 manufacturing sites to compensate for this drop in volume. I also would like to remind you that short term, the second half of the year is always softer because this is a volatility in that over the year. And we are taking measures to improve the margins, but volumes need to come back for us to be back on the same margins that we delivered in this segment before. And on the righthand side there, you see how much the demand overall for Epiroc has gone down towards this segment. But of course, if you look on this from an overall perspective, it's very much compensated with the high activity levels in mining. But if we talk long term about infrastructure and the construction segments, we believe strongly in this segment. And as I said, it's key to us. We expect between 4% to 5% CAGR underlying growth in this segment. And to the right there in the graph, you see our exposure. We have a big exposure towards tunneling, which is expected to grow 7% CAGR. We also have a big exposure now with the new products and the new solutions towards deconstruction and urban mining, which is expected to grow 5%. So long term, we believe strongly in this, and we are preparing ourselves to be as fit and ready when the market starts to turn up again. We also have a very strong geographical position now. With the STANLEY acquisition, we have a very strong position here now in North America. And, of course, North America is set for growth with the IRA investments that are coming. For Europe, we also have a very strong position already with what we had, but of course, now also with our full offering towards Europe, this will be a good opportunity for us moving forward. Large-scale infrastructure projects is expected in Europe, but also, it's a very clear trend towards sustainable construction activities. Some parts -- some countries in Europe are leading the way. And of course, also the potential when it comes to Asia, both when it comes to India as well as China. And that's been driven then by infrastructure investments mainly and transportation network. So what is then our offering towards the infrastructure customers? But it's also about safety. Safety is also a challenge for this industry and for our customers. So we have solutions, how to automate, take away people from the dangerous places. It's a lot of tele-remote solutions that we are implementing towards construction sites. We also have a full suite now of digital solutions when it comes to that -- to help our customers from a safety perspective. We have the Mobilaris Tunneling Intelligence product, for example. But it's all a lot of focus on productivity. So also in this area, in the segments, in the niches where we play is full focus on productivity. And step-by-step, we also see more and more customers in this segment that want lower emissions and fossil-free versions. And you will have the opportunity to hear more about that later on. So now I will move over into one of our focus areas. That has been a key strategic priority for us since the IPO, and that is innovation, to really be that leader in innovation. And when I look back during the 6 years, what have we delivered, we see now mixed-fleet automation at scale. We have a complete electrification, I would say, offering with solutions not only machines, but also charging stations, infrastructure, service components. We have a full suite of digital products to really deliver upon this mine of the future. And we have taken a leadership in safety when it comes to bringing safety solutions to our customers and include that in our equipment. So we invest 3.2% of our revenue into R&D. So that's our internal R&D. Majority of that goes into the equipment divisions because that's where we make the biggest difference. But we also have a lot of partnerships. So we collaborate both with customers; we collaborate with other companies, technology leaders, also smaller companies to really gain speed; but also our suppliers, of course. So we are a strong believer in speed, that the fastest player will win, and that's why we're leveraging the strength of different type of partners. And of course, the acquisition strategy goes very much hand-in-hand also with the strategy for innovation. In the center there, you see our way of thinking about circularity. We are a true believer that circularity will be key in the future, and it all starts in the R&D. How do you actually design a product for Service, design it for circularity. And I think the Battery as a Service is a great example in how you actually can plan, all the way from R&D, all the way to actually having the batteries circular. So this is something that we are working hard on to make sure that in the future, we can reuse as much as possible of the ingoing material. So 9% of our workforce are working in R&D. That is 1,950 engineers. We have right now R&D hubs in all continents. And the acquisitions have helped us to get this position. And for us, this is a strategic decision to have R&D hubs close to the end markets because the development is happening so fast when it comes to digital, when it comes to automation, and to have engineers close to the largest mining markets and construction markets, that is key. We have increased our pace of inventions. So we're putting a lot of focus in patenting our innovation. So we have 5x higher patent inventions as we speak compared to 2018. We also have a very strong position when it comes to new sales ratio, meaning then, how much of our revenue comes from products that are younger than 5 years. And that corresponds to 61% of the Equipment revenue. And that is due to that we are putting in so much new technology. Could be the RCS system, for example, that we upgrade, but also that we add in the features that we have acquired different type of capabilities. So this means that we are -- we have a very young set of products, which is really good to see. But we have a very strong innovation culture. I usually say that this is embedded in our DNA. We dare to think new. We are pushing the boundaries. We have this way of working that we call nail-and-scale. We really believe in going together with one customer and nail the technology. And you will hear a couple of examples from the presidents about how we do it. And also because these days, we can't spread thin when you're nailing something, when you're really pushing the boundaries. And we are a true believer that inclusion and diversity is needed to be the best when it comes to creativity. So we're focusing a lot on that in R&D as well. And of course, the trends, automation, digitalization and then electrification, that's where we invest majority of R&D investments. So back to some numbers then. We showed this slide at the Capital Markets Day last year. And this is, I will say, maybe what I'm super happy about, because this is taking off really nicely now. So this is our numbers now of mixed-fleet automation in different -- for different products. So in total, we have 3,100 driverless machines, which is up 29% since the last Capital Markets Day. We are growing nicely on the mixed-fleet tele-remote, which is the first step. Many customers go tele-remote as a first step. We're up 18% there. We're up 47% on mixed-fleet automated drills, and we're up 42% of mixed-fleet load and haul in autonomous mode. So clearly, this mixed-fleet automation, that is how do you unlock productivity in the mining industry. And I must say, with our suite and our products with what we have developed ourselves, what we have with RCT, with the ASI Mining acquisition that we just have concluded, we have a very strong set of capabilities to automate more or less whatever site there is in the world when it comes to mining. It doesn't have to be our machines. It doesn't have to be very intelligent machines. We can upgrade also basic machines to become autonomous as we speak with these capabilities. So we expect this to continue to be one very important area for us. And this is in -- you see this is in scaling mode. It's high numbers compared to just a little bit more than a year ago when we had last Capital Markets Day. Some numbers then electrification. It is a little bit, I would say, younger from a technology shift than automation. It represents 4% of the group revenues last year. We have an active fleet, now include the drill -- everything that is electric as well, and BEVs. We have 600-plus machines out in the fleet. And that is both on surface as well as underground, and it's both within mining and construction. We have 34 sites with BEVs running globally. That's in all continents. We have recurring orders from 12 customers, which is, for me, this is the way to really demonstrate that the machines are delivering not just the savings on CO2, but actually also on the productivity. And when we measure the utilization rate of our BEV fleet, it has tripled the last 12 months. So step-by-step, we are getting there, and our customers see the value from our solutions. And you will hear more about this from José and Wayne, when we talk about the different solutions for different customer types. But it is clear that there will be many different solutions, say, to bring to the different parts of these different segments, depending on mining methods, depending on type of customers, et cetera. So we are focusing a lot, of course, on BEVs, but also on cable machines, on trolley systems as well as on hybrid system, a combination of the different solutions. So we believe that will be a full set of different solutions that will play an important role in the coming years, transforming this industry to become lower in emissions. So now you will see a movie of our -- one of the machines that we have on display at MINExpo. This is our Minetruck MT66 S eDrive. So please play the movie. [Presentation]

So you will have the chance to touch and feel that big machine later this afternoon at MINExpo. Some numbers then on digitalization. This has also been one of the focus areas for us during the last 6 years. As I said, we have now more than 3,000 driverless machines in operations. We can automate 150-plus different type of machines. Meaning that many of the machines that you will see at MINExpo, we actually have the capabilities now to automate. We have also taken a very strong position when it comes to safety. We have more than 3,000 systems in place for collision avoidance Level 7 and 8, and we have more than 100 systems implemented on Level 9, which is the highest level of collision avoidance. And we have our situational awareness system in place in 45 sites in the different parts of the world. We have built up the Digital Solutions division step-by-step with acquisitions, with the investments we have been doing organically. Today, we have 1,300 dedicated people working only with our Digital Solutions division, and it corresponds to SEK 2.4 billion of our revenue as we speak. And then we have not included the ASI Mining. We have not included automation that goes together when we're selling new machines. So it starts to be substantial. If we then look on all these trends, automation, digitalization, electrification, what is this -- what does it mean? Of course, it's this new technology. But for us, it's very much, of course, strengthening our position when it comes to our potential to take market share, but it also gives us more resilient and recurring revenue streams, and that is important. So we are -- we see that we are growing our customer share by having these technologies. We also see that we get higher aftermarket penetration when we have more advanced machines out there. And we also, of course, get revenue streams now that is project-based when we roll out this type of technologies. But it also gives us a very good understanding of the challenges that our customers are facing because we become even more embedded in their operation. And that helps us to improve our offering and our solutions moving forward. And I strongly believe that partnership is the new leadership. Our business is not as transactional as it was maybe 10 years ago. It's much more a partnership together with our customers, where we are together, bringing the best out when it comes to productivity and sustainability. And we believe strongly in partnerships. You have seen this a couple of times, and we continue to add more partners to this system because this is how we gain speed. But we also gain speed by doing acquisitions. We have done 27 acquisitions since the listing, adding SEK 12.6 billion in revenue, and it's roughly 5,600 employees. Right now, it's very much focused on integrating the acquisitions and, of course, leveraging the synergies. We have a very solid acquisition model. The way we do it, we look at the stand-alone attractiveness. We look at the culture fit and their innovation capabilities, the fit, of course, and the synergy potential for us. But also that we have the potential to become market leader in that specific segment. And as I said over the years, our acquisition agenda has very much been very much in line with our innovation agenda. And that has taken us to the position where we are today with a very strong offering in these different technologies. So we will see a movie with Schalk, and this is about collision avoidance. [Presentation]

Okay. So now it's time to move over to Surface Equipment. And I would like to welcome José on stage. José has spent many years in the company. He has been based in Sweden, in Chile, in Mexico and lately now, many years in the United States. He has been heading our Surface Equipment division for many years. We call him Mr. Sunshine because whatever we go through, even if we have a lot of challenges, José is always smiling and he sees the world from a very positive way. So welcome, José.

Thank you, Helena. And I would like to start by highlighting the key achievements since we became Epiroc. You have heard from Karin at the beginning, safety is our top priority. And we have a brilliant solution for Live Work Elimination, the Automatic Bit Changer in our Pit Viper series, that allows the operator to change the pit without leaving the cab or the control room. The next dimension will be the evolution of our world-leading Pit Viper series, and I'm coming back to this shortly. And we are in Las Vegas, at MINExpo, the largest mining exhibition in the world. But I want to assure you that our development efforts in the construction and quarrying applications haven't slowed down. Last year, we introduced the SmartROC T25 R, radio-controlled, and this new platform offers significant digitalization and automation benefits for construction companies. At the same time, provides world-class energy efficiency, unbeatable versatility, noise reduction and dust control for sustainable operation. And lastly, we are very proud to be creating the world's largest OEM-agnostic autonomous mine, collaborating with Roy Hill. And talking a little bit more about this Roy Hill project, we are converting the mixed fleet of haul trucks and over 200 ancillary equipment to autonomous operation, meaning that the trucks will be managed autonomously without a driver operating 24/7; monitor and control from the remote operation center located in Perth, 1,100 kilometers away from the mine. After trialing 10 machines over a period of 2 years, we received last year, the largest-ever automation order, SEK 500 million. But what is the current status in that project? Well, more than 25% of the mine is now under autonomous operation. More than 50% of the trucks are prepared, converted into autonomous use. And just to make a little bit of the scale of this project, those trucks have moved over 100 million tonnes of material. That is equivalent of moving 17 pyramids of Giza. But at the same time, those are covered more than 2.5 million kilometers in this autonomous mode. That is like 3.5x round trips to the moon. And I would like to ask my colleague, Tim Ledbetter at the MINExpo to tell you a little bit more about the technology that makes this emblematic project move along. Video, please. [Presentation]

Thank you very much, Tim, for letting us know about this open autonomy. Automation is driving really a revolution in the mining industry. But what about the drilling automation? Well, let me tell you, the numbers speak for themselves. It's a boost of 22% productivity. There is a cost reduction per drill meter of 40%. There is a cut of the carbon emissions by 29%. And on top, we offer drilling accuracy, both spatial and also depth accuracy. And if the machines are more efficient and drill more accurately, what other savings do we have? Well, the machines perform the same job in shorter time. So suddenly, we save 100,000 hours of drilling. Besides that the machine are more efficient in the accuracy of that drilling, we save 5 million meters of over-drilling. And if we put this in another perspective, we are saving over 300,000 tonnes of steel by not using bits and pipes. So suddenly, we have a more safe place because we have less bits to replace. We have also less steel to refine and process. So these are great news for customers, but also for the planet. But is this positive for Epiroc? Definitely, yes. And what happens here is our customers using the autonomous units really demand high-quality bits and pipes that last long. Here is Epiroc, the leading manufacturer of premium quality and durable tools. So talking to my fellow colleague, Martin Hjerpe, President of the Tools division, when he hears about more and more customers embracing this autonomous drilling, he is extremely happy. Since the first Pit Viper 351 came to the mine as full autonomous, all the fleet together have drilled over 2.2 million hours. That represents 250 years of continuous operations. And wonderful constructions and inventions have been created over 250 years. So me being here, as Helena said, living several years in the U.S., let me focus only in those constructions and innovations in the U.S. history. And I must say the first one will be the foundation of the country in '76; next one, the Statue of Liberty; the Empire State Building; the creation of Internet, the WWW in 1983; and last but not least, the closest to my heart, the launch of the Pit Viper in year 2000. And I want to invite my dear colleague, Jon Torpy, at the MINExpo, to tell you a little bit about this creation of the Pit Viper generation. Video. [Presentation]

Thank you, Jon, for this fantastic story and for letting us know also the longevity of a Pit Viper. Interesting. So a Pit Viper is a legend that is synonymous with outstanding productivity. The first one was in the year 2000 in a diesel version, the PV-351. However, an ancient ancestor of this Pit Viper was already electric by late '70s. So electric is nothing new for us. Today, it represents 11% of our fleet population. And I'm glad to say that we have all the models of the Pit Vipers available in 2 power sources: diesel engine or electrical motor. And if you add on that, that all of them are suitable to be drilling autonomously, I tell you, Epiroc is the only one in the market with this wide portfolio. So automation, we have seen that it's powerful on its own. What if we add electrification on top? And of course, the first thing that comes in mind is the impressive opportunity of CO2 emission, completely provided that you get green energy supply, and demands 23% less power requirement that put less pressure on the critical infrastructure that the mines need to be or to build, I mean, for going electric. And what about the productivity and profitability? Well, there is a 38% cost reduction per drill meter having the autonomous and on electric version. And we know there is a global trend. Our customers are extremely interested in the carbon emission reduction, and they are part of the energy transition that is happening in this global trend requires the battery electric technology that, by the way, needs minerals like copper, nickel and lithium. This shift is very positive to Epiroc. We just received a few weeks ago an order of 14 SmartROC D65 from our customer, Pilbara Minerals in Australia. And the SmartROC D65 is making their way in mining. But its brother, the SmartROC D60, is making also their mark in the quarrying industry. And we have a customer who is willing to share with us their story, Luck Stone. Video, please. [Presentation]

When I hear customers talk in this way, it's music to my ears. But as you listen, right choices make huge difference. So yes, we have seen the SmartROC in the DTH version is synonymous of outstanding productivity. However, it's not all about the outstanding productivity; it's also a sustainability focus because all of our crawlers and platform drills are equipped with a diesel engine suitable for biofuel, the HVO100, when available. Besides, for customers, that they want to go full electric, we have now launched the SmartROC D65 battery electric. And on the other side, if still the customer needs a diesel engine crawler, they can also choose, because they are very committed to sustainability, a new technology that is the COPROD technology in our model, SmartROC CL, that have a 50% fuel reduction versus the SmartROC D65. I now want to invite Robin, our expert at MINExpo, to talk about these 2 models. Video, please. [Presentation]

Thank you, Robin. He will be extremely happy if he can answer more questions during your visit to MINExpo. And now just to conclude, I want to give you a glimpse of what the open pit mine of the future looks like, following Helena's vision of the mine of the future. But the true reality is that it's happening now, and Epiroc is leading the race. The mine of the future, open pit mine of the future, is smarter because full autonomous mine, all equipment connected, data at the fingertips, but it's safer and greener. At Epiroc, we make things smarter every day, and we use innovation to stay ahead. And with that, I would like to invite President of the Underground division to give us a little bit also of the situation. Please, Wayne Symes, come on the stage. Mr. Ironman, and I say no more about it, recent President for the Underground division, but with over 25 years of experience in construction and mining industries.

Thank you, José.

Thank you very much.

Welcome, everybody, to Las Vegas. I'm excited to be here amongst, how can I say this without it sounding funny, but people who are as invested in Epiroc is what we are is really important. So yes, that's me. You can probably see -- you probably saw me in the lovely truck movie earlier that I've copped a fair bit of stick about from my friends back in Australia. But it's all part of the game here at Epiroc. So excited to be here and excited to show all of you what we're doing in the Underground division and how we're innovating and continuing to lead the way. So as it says there, I was born in a little town in Tasmania in Australia, that is -- reminds me a lot of Sweden, actually, very innovative place. We had a lot of manufacturing, a lot of timber industry, a lot of farming and fishing. So when I'm now living in Stockholm and traveling to Örebro regularly, I see the similarities. I actually feel like I'm at home, except in January when I definitely don't. But okay, we spoke about safety earlier. And I think everyone at Epiroc, this is one of our most valuable things that we bring to the industry is how we can make things safer. We want people to get home and we want people to be safe. So we've had to really think about this, and I want to use this example today with our battery machines and our battery technology. We had many choices we could have made when we chose a chemistry for our battery machines. We settled on a chemistry that we found was the safest in the industry. But with that safety of chemistry, we also had to think about how can we house the batteries to make sure that we've got protection if we're involved in an incident underground; how can we make sure that we have a battery management system that protects the battery and the environment that it's in. So we put a lot of work into this in designing the cell modules to make sure that they're individually protected. So if we have an incident in one cell, it automatically disconnects the remainder of the cells to keep it safe. So what we're very happy to share with all of you today is that due to this, in all of the batteries we have out there, we've only ever had one incident to date. And that was in a tunneling project in Norway where we actually had all of the batteries become submerged in water. There was a flood within the tunnel. And even though that battery was submerged in water for a great length of time, there was no damage and it actually extinguished itself. So for us, that was, José's words, music to our ears, that all the effort that we'd put into providing a safe battery platform is doing its job and making sure that we've got something that is safe for the industry to use, which is very important to us. So we thought this was important for you guys to know. Now the Underground division, 6 years of achievements since the formation of Epiroc. And there's many things we could put up here today, but these are the ones we wanted to touch on. And I just want to touch on the photo here of the MT66 that you will get to see, and that was the truck in the video. This is the largest underground truck in the world. There is no one that has the capacity that Epiroc has. We already were ahead. We had the MT65. So we're already 2 tonnes clear of our closest competitor. Now we've taken that to another level, and we're 3 tonnes clear. But not only that, we're doing it using less fuel. We're doing it using -- with faster speed on grade. So this is going to be a real game changer for us and our customers. So we're very happy to have this machine on display. So some of the other features we have here. The Avatel machine that is on display, so you'll get to talk to Camilla Spångberg, about that machine, and we'll hear from her a bit later. But this machine is a collaboration, as Helena mentioned, about how important collaboration is to Epiroc. We've done this with Orica. So this is the first semi-automated blasting machine. You will see examples of our mixed-fleet automation that we have underground in conjunction with Paul in Digital and RCT. We are leading the way. No questions asked. We are at the top of the heap. Collaboration. I've spoken about that, and you'll hear that, Epiroc talk about that a lot. It's one of our core values. And it's not just internal collaboration, it's external collaboration. So whether that be with our customers, with universities, with industry bodies, we are always open to talk with the peers within the industry of how we can improve and get better. So that drives our innovation. And then we're very proud of what we're doing in the electrification space. We see this as an enabler moving forward, and it's something that we can't hold back. We have to keep moving. We have to keep pace, and we have to find -- to keep ourselves on top. And to do that, we have to have invested customers, which we have. And I'm going to talk a bit more about that as we go through. But you can see, in 6 years of our Epiroc, as Helena said, we are 150 years old, but these things here are things that we're proud of since we put the Epiroc badge on. So more on electrification. So electrification for us could not be just a one option. We couldn't just say, "Okay, we're going to offer just a straight-up battery machine" because we understand that there's applications globally, where our customers aren't quite ready or the hole profile or what they need to do just doesn't fit. So we had to make sure we've got different options. So we've got cable-electric machine. We've got hybrid machines. We've got diesel-electric machines. We've got trolley-assisted machines, which we'll talk about a bit later. We've got -- we've also invested with acquisitions into infrastructure. So we've acquired JTMEC in Australia, Meglab in Canada. And the idea behind this is we don't want to leave our customers all alone in this journey. We want to make sure that we can partner with them, to make sure that the charging infrastructure is in place, to make sure that they can source the electricity to keep all of their vehicles charged. So that's important to us that we don't just dump a machine on a customer and say, "Good luck, hope you can get it to work." We're there with them for the journey. Helena mentioned a circular piece about Batteries as a Service, and batteries with a service. That's very important to us, to make sure that our customers have batteries that are ready to go every time they need to turn that machine on. And then it gives us the opportunity to keep overall ownership of those batteries, so we can turn them into second-use, third-use opportunities. So we're always exploring new ways of stretching the life of those batteries. We also offer conversions in conjunction with our customers and with our PSD team, where we can actually convert diesel machines at midlife. So if you buy a fleet of diesel equipment 3 years ago, and then you go to do a rebuild now and you go, "Hang on, geez, it would be nice to have some CO2 reduction here", we can offer you that. We can actually turn that battery -- that diesel machine into a BEV unit. So all of these things make, as Helena said, by 2030, we're going to have a complete offering for everything so that you can have faith that if you want to reduce your CO2 emissions, we will have an option available for you to do that. So when everybody thinks electrification, they think straight away that the cost is all around the reduction in fuel, and obviously, the safety aspect, less heat, less noise, less noxious gases underground. If you look at this slide here, it talks about the other hidden costs that people don't always think about, in this case, ventilation. Ventilation accounts for 40% of OpEx costs for an underground mine, and 35% of the overall emissions come from the ventilation. So this was actually a copper mine in Australia. So these statistics come from them. So 35% of their ventilation costs were from emissions. There was a mine in South Africa that we were dealing with, and they had to go deeper. But the problem they had was to economically do that, they were going to have to sink another shaft for emissions, right? It was become -- the mine was going to become unviable. They were going to have to go into care and maintenance and take a step back. But then they partnered with Epiroc, and we partnered with them on a journey into battery-electric vehicles, so they didn't have to do the ventilation shaft. So now that mine is still continuing to this day because we were able to find a solution for them, stopped them having to spend the massive CapEx that they were going to have to and it made that mine sustainable for the future. So it's not all about just the BEV machines; it's about so much more. And what we do know is that by -- well, when I say do, sometimes you are guessing, but statistics tell us that by 2040, 80% of all underground mobile equipment will be powered by electricity. So you can see why we're stepping into this direction. You can see why it's so important to us. There's all the other things we spoke about from a cost and productivity point of view. But we have -- if we're going to be a true partner to our customers, we have to go on this journey with them. And I think Helena mentioned earlier about our investment in R&D. That's why we will succeed, because we're not scared to invest in the technology to support our customers. But going electric, as I said, it's not just about, here's an electric machine, good luck. There's so much more to it. And we think about all of these things. We don't just -- we're not just one-dimensional here. We have the 3D view of what we need to do. So we're looking at the generation of electricity, how we can actually help the customers distribute that electricity through JTMEC, Meglab. Chargers, batteries, energy storage, all of these things are part of our mindset when we're talking battery electric. Then we have the machines themselves. And then we have our PSD colleagues in operate and maintenance competence to lift those levels. And you'll see a lot of the acquisitions that we've done has been to bring that competence in faster. FVT in Canada, one of the companies we acquired, we needed R&D expertise around BEV. So it was going to take us a long time to build that internally. But with the acquisition of FVT, they've brought a lot of in-house competence to Epiroc to make us be able to stand alone and support our customers in this. And then the last point I think is very important is the recycling part. So as I said, we don't just think, like in the old days, we sell you a machine; we now sell you a solution right across the value chain when it comes to electrification. Now we're going to hear from my colleague, Mr. Erik Svedlund, to talk about some of the drivers behind electrification. [Presentation]

Thank you, Erik. Some key points there that is going to become a real value driver for us and our customers. Now some proof points. So here's an example of the collaboration that we did with Boliden in Sweden. Most of you would know this company, of course, very good collaborator with Epiroc, I must say. So this trolley, battery-electric trolley truck, most of you that have been around a while may remember the Kiruna trucks that we had many years ago. This is like a Kiruna truck on steroids, if I'm true. It's the next evolution of that technology, and we've really advanced it, and it's with a battery, so no diesel engine at all. And what we saw at Boliden is 50% increase in speed up the ramp, 23% productivity improvement and each shift per day, we're getting 126 tonnes per shift more by introducing this machine, not to mention the elimination of the CO2 emissions. Energy consumption is obviously reduced and CapEx investments in ventilation have decreased. So for Boliden, this was a real enabler for them to be able to meet legislation requirements, rules and standards. And they got some bonuses along the way with some reduced maintenance costs as well, so much so that we've now received orders for another 2 of these that will be delivered in March next year. So it's a really proven concept, and one that we're proud to have partnered with a forward-looking company like Boliden, that is never scared to take a risk and join with us. So very happy on this one. I'm going to swing around and talk a little bit about automation and what we're doing. It's a key theme for us. And there's so many different facets in underground mining why automation is important. And one of the key ones is to protect our people, to keep them away from dangerous equipment and dangerous situations. Unlike in the surface, where you can see the operation, you can drive around and see what's happening, in underground, there's a lot of hidden areas that get hidden away. So it is important to have some real advanced safety features. It increases productivity and again, we lower the total cost of ownership. But here's an example of a case where we had a Scooptram ST14 loader, the manual versus autonomous. So in autonomous mode, we were 30% more productive, that's a big number, 30% more productive. And 50% reduction in costs due to fuel consumption and maintenance. And if those of you that have been underground and seen, when you see a loader hit the wall, okay, our PSD people love it because it means we're going to sell more spare parts. But when you automate that machine and you limit that damage, you can go faster, you can move more tonnes and you can do it more safely. So it is so important. So this example here shows the difference that we can make by partnering with our customers on this. And thankfully now, we've got some really strong partners to do it with Paul and his RCT team. They are the industry leaders in this, along with Epiroc. So the partnership's a match made in heaven for us and our customers. Now this is the one that I really love. And I know there's some of you guys here that we talked about this in Sweden earlier this year, we talked about drilling automation. So I've saved a little bit of time for this one, because I think this one is really important, and it shows how everything in an underground mine starts with the drill bit, Martin, hitting the rock. That's where it all begins, okay. If you're doing development, so you're trying to drive the tunnel as fast as you possibly can to get to the ore so you can start making some money, it's so important that if your mine is designed and your drill string that you have on your machine is designed to do a 5-meter hole, you want to maximize that length. So you want to make sure if I'm going to drill 5 meters, that I get as close to that as I can, okay? But what we see with manual drilling, we tend to see the operators rush or they try and do it faster or think they can do it faster than we can in autonomous mode, but we never ever gain the consistency. So what we tend to get is we tend to get holes that start where they start, but they don't end where they should. So when you blast that face, you end up with all this overbreak. So your tunnel is not uniform. So then you have to use more ground support. You have to put more shotcrete and mesh within the tunnel profile. Your floor of your mine ends up like this. So then it means your trucking-fleet maintenance goes up because you're doing damage to tires and axles because you're on this rough road. And then it means the fragmentation of material. You end up with these big boulders and you need to send secondary blast in to blast that rock again, to make it so you can move it in your trucks and your loaders. So it creates so many problems. So what we do is we have a system on our machines called ABC and ABC Total, so that's Auto Boom Control (sic) [ Advanced Boom Control ]. And what this system does, it enables -- it ensures that if that hole needs to go from A to B, it goes from A to B. And this graphic down the bottom that you can see here, this is real time. This is what we did with a customer. So that customer was trying to advance 5 meters each time. Generally, when you've got a 5-meter drill string, you have a little bit you lose for the centralized and other things. So you end up at about 4.5 meters of advance is the expectation every time. They were at 3.7, so they were getting 3.7 meters of advance. And they had 17% of overbreak. So that meant their tunnel profile was busted up 17% more than what it should. So guess what? More ground support, more shotcrete, all of those things. And it slowed their cycle time down. So that in mining, they talk about face utilization, and that is getting back to that face and drilling again as quickly as you possibly can. So they had all the metrics were heading in the wrong way. So then they partner with us. They said, "Right, you have these smart drill rigs, how can you help us improve this?" So we visited site. And you can see there, there was a bit of a dip when we trained their people and we introduced the machine. But then look what happened after that. Because what we proved, which we knew was true, was that our machines will drill more consistently than a manual operator every time. You will get a straight hole every time. So we went from 3.7 meters to 4.4 meters. We reduced overbreak from 17% to 5%. So you can imagine, if you're the investor in that mine or you're on the Board and all of a sudden, you're at that ore body 3 months sooner than what you thought you were going to be, and then the costs were less because you weren't doing as much ground support, then you could have automated loading and hauling because your roads were nice and smooth and everything was good. Your rock gets blast, it's like popcorn. You can just walk in and pick it up. It just makes a massive difference. So this type of technology is nothing new, but it's something that we must partner with our customers to take them on the journey with us and show them the real-time results. Doesn't only lend itself to face drilling. It's also important in our long-hole drilling as well. So in our long-hole drilling, so this is the production drilling. So this is the drilling that we do when we want to get the ore out. So it's exactly the same when we're doing production drilling. We want the hole to end up where it should, and we want it to not deviate. So we don't want to get big boomerangs. For those that like Australia, we don't want a boomerang, we want a straight hole. So with our ABC Total on our long-hole drill rigs, it enables us to get the fragmentation absolutely beautiful, but it also reduces the dilution of the ore. So you can imagine if you're in gold, right, you don't want to be putting waste rock through your mill. You don't want to be having to separate the ore from the waste rock. So if you get your hole straight where it should be, all of your spacing correct on your blast pattern, you're actually ending up with more ore. So you're saving money. Your crushing, downstream crushing, you don't end up with these great big boulders that you have to try and blast. You get this lovely dirt that you can take straight into the mill and process, get it on a ship and earn some money. So Epiroc has the tools to enable this for our customers. And we haven't got time today, but we can share a lot of concrete examples where we've made this change with our customers, and they have seen significant savings in cost, continuous. You know what you're going to get every time with this technology. It's safer. I'm not sure many of you have been up to LKAB, but you see the operators up there sitting in the control room with their roast turkey in the oven while they're sitting there in these machines and just drilling all day. It's quite amazing to see that when it happens. And for us at Epiroc, this is what gets my blood going is when, as José said, when you hear this type of thing from your customers and you see it actually working and you see the value that we're providing to them, it's really energizing, and it's great for us to witness this. So please talk to our experts at MINExpo, and they'll be able to fill you in a little bit more on this, and I'm happy to talk to any of you because it is my passion, of course. Now we're going to talk some people up in Sweden. And I won't try and say the name of the mine there with my Aussie accent, but we'll start a movie. Thank you. [Presentation]

And you can meet Camilla at MINExpo. So -- and I think I'm actually going to make time, which is a miracle. But -- so this picture here, this shows what happens when you get a big oversized rock. If you're not doing your drilling correctly, we have to go and get a jumbo and take it out to the mountain to drill it. And if you look closer, you might see Helena in that cabin actually because this was part of our launch of the Boomer M20 that we did. But just to finish, I just want to say that our goal in Underground is exactly what it says there, to be #1 for every customer. And we want to do that day after day. And we think we have the products and the solutions and more importantly, the people to do it. So thanks very much, and please enjoy the rest of your visit in MINExpo. Oh. We've got one more video. Here we go. Camilla again. [Presentation]

So you saw a cup of coffee up in the mine. You saw Camilla at MINExpo. We will have a coffee break. And also to you on the webcast, we will be back at 10:00 a.m. sharp in this room. So about 18 minutes break and see you again at 10:00. Thank you very much, everyone. [Break]

So welcome back, everyone. Let's continue and focus on the aftermarket. Since the creation of Epiroc, we have put a lot of focus in growing our aftermarket business. This is where we make the difference for our customers. This is how we prove the productivity of our products and make sure that they get the best productivity out of the machines, 24/7 in very remote places. But this is also the recurrent business. This is what supports our revenue streams as well as our profit over a cycle. So when we talk about the aftermarket, we talk about Tools & Attachments and the service revenue. And as you can see to the bottom left, we have been growing 7% in revenue CAGR on Tools & Attachments since the spin-off and 13% on Service. And now we will focus on Parts & Service to start with. And with me to present this, we have Nelson Trejo. Nelson has spent many years in the company. He's originally from Chile, but he has been working in the Parts & Service division for many, many years. And we call him Mr. Visionary. Nelson is one of the most strategic brains I have ever seen. So happy to have you and the team, Nelson, and let's share insights.

Thank you, Helena, for the kind introduction, but now I'm feeling more pressure. So yes, okay. But my name is Nelson Trejo. I have been working in the company since 2005 in Atlas Copco and Epiroc. Yes. I have -- I was born in Chile. And so I'm really lucky because I have experience coming from the operation. And Chile in 2023, they produced almost 1/4 of the total copper production globally. So we have the big mining houses working there. Yes, so with that experience, I learned safety first, always. We never compromise safety in our operations. Today, we have 7,400 service technicians working with us. And our goal is every day, they go back home safe. That is the key point for us. So for really achieving that part, it's important to build in a safety culture. But in summary, what means safety culture is really what people, they need to fill the power of daring to say no if they don't feel safe in their operations. So I think that is key. And you can see the trend in our total record level injury frequency rate, it's in a good trend. But actually, I can say broadly, in Service, we have a better performance. So for building this safety culture, it's important to spend time with the people, invest in our people. Actually, we have mandatory training for all of them. Before to start every distance meeting, we have some reflection about safety. That is part of how we are creating this safety culture. And we are making virtual material for supporting this kind of initiative. So let me share with you some video comments from my colleagues from Epiroc already. [Presentation]

[Foreign Language] Safety by choice, not by chance.

So safety by choice, I think that is the most important message. But before to moving forward with the presentation, I want to share with you some achievement in the last 6 years. Yes, as I mentioned recently, improved safety is key. So that is always going to continue working. But other big achievement for us is the double share of female technicians. We are doing a lot of effort now to recruit more female technicians. And today, we have over 800 people working globally as a service female technician. So we are super proud with that. But other achievement, important achievement for us is to have the best feet on the street, and that means we have high educated service technicians on the ground. And we are putting a lot of focus for really training our people in these new technologies, talking about automation, electrification and digitalization. And last but not least, it's really nice to see the strong demand that we have about circular services. I think -- but I want to talk more later about that. So it is our performance today. Helena, you mentioned Aftermarket in generics is growing faster, 11% average year-over-year since 2018. But I'm proud, because in Service, we are growing even faster. So that's important. But it's important as well to understand the Service revenue stream. How come this achievement? Today, we have the traditional business is part of Service. That represents 91% of the total Aftermarket business, and we have Digital, 9%. And, Paul, you will talk later about that. Digital grew mainly based on acquisitions. But I think you will explain with detail about that. But coming back to our traditional business, I think the larger service revenue stream is replacement part and kits. The second largest is service agreements and audits. Circular service is an important business for us because really, we want to create a strong and long-term relationship with customers. So in circular services, we include midlife upgrade and remanufacturing solution for components. And we have other service solution, including custom-engineering solutions, Live Work Elimination and training. But what is the secret here, the secret for really growing and continuous growing in our business? It's really putting focus on creating customer value based on a customer-centric approach. So today, the most important thing for us is our strong presence. We have really strong presence globally. We are putting a lot of focus on technological competence and high availability on components, that is key for our customers. So that is the fundamental for really being successful. And talking about customer centricity or customer-centric approach, we make a decision, and we split Parts & Services division in 3 regions. So the plan is to have a better understanding about our customer market today. And we have -- I'm representing here Parts & Services, but I'm not alone in the team. We have Jodie Velasquez. Actually, Jodie, maybe you can say hello. Jodie is our President for APAC region. Luis Araneda, unfortunately is not here today, but he was presenting in the previous Capital Market Day and representing Parts & Services for North and South America. The fundamentals for really being successful in our Aftermarket business is the fleet for sure because our market is the fleet. So we have a larger addressable Epiroc fleet. Yes, it's larger. Yes, I cannot share with you how large it is, but believe me, it's a large fleet. And that is a fundamental. And on the other hand, the aging fleet is key, because we are taking advantage coming from our machine as an Aftermarket division. So in August 2024, the average in our aging fleet was 8.4 years. So that is -- it's really a good signal for us and always, we can do better service for our machines. But we have more fundamental now. I think that is important because historically, in our traditional business, the fleet is important and the aging fleet was important, but now we have more opportunities actually because we have more autonomous solution. Actually, you have BEVs as an opportunity for Aftermarket division. So when we talk about autonomous solutions, in the left side of the screen, you can see the Simba as an example. Because when the machine is working in autonomous mode, the productivity increase plus 30%. So what means for that as an Aftermarket division, machine are running more hours, so more utilization. And for sure, they are demanding more spare parts and components. So that the impact for us is we saw some increase in our revenue opportunities, plus 14% over 7 years. But in Service division, we have similar situation. When the machine is -- José, you mentioned about it, something about that. So when the machine is working in autonomous mode, the machine increase average 22%, the productivity. And again, that is an opportunity for Aftermarket division because today, we have more opportunity for revenues. We estimate it's plus 33% over 10 years in revenues. So that is key for us. And the other topic, important topic is BEVs. I'm listening to some rumors here, because, okay, maybe BEV electrical vehicles could affect negative the Aftermarket business. I think that is true. We need to be honest. That is true. Because customers, really, they are enjoying some saving coming from this BEV solution. So we estimate between 15% and 35% parts consumption saving. But the good news for us in Epiroc is this saving is mainly related with the engine maintenance. And we are not really taking care of the engine maintenance. It is coming from different OEMs. So for us, it is an opportunity really because we have more opportunities when we talk about electrical infrastructure. Today, we are offering more service and Batteries as a Service. And the opportunity for us is really to increase revenues, plus 15% after 5 years. So I think it's really good to see and understand what is our market potential today. And I want to explain with more details about the largest revenue stream that we have today, which is replacement parts and kits. So when we talk about part and kit, about what we are talking about? We are talking about high-quality genuine parts; we are talking about repair kits and preventive maintenance kits; and we're talking about rock drills, feed and boom parts, hydraulic, rig control system and more. So what is our strength for really support this kind of business is our local presence. And we have the right feet on the street as well, the right feet on the ground. We have a wide product portfolio offering, always close to the customer and high availability. So that is key for growing. I think this is the larger and the most important revenue stream for us. So let's see a video coming from Turkey because I think it's much better to listen to our colleagues, what is their experience. [Presentation]

Okay. Thank you to my colleagues from Epiroc Turkey. So let's go to the second-largest revenue stream, which is service agreements and audits. When we talk about service agreements and audits, we are talking about mainly 2 focus. We have a wide portfolio of tailor-made service agreements. That is one thing. And the second focus is mainly focused on service that enable new technologies, implementation, like automation, digitalization and electrification. But again, our presence is the key in these kind of solutions. And for sure, we have some competitive advantage as well because as a company, we are offering more tailor-made solution to the customers. So we are talking about differentiated value proposition, and that is a real competitive advantage in front of our competitor. And for sure, we are standardizing projects as well and try to move forward to the data-driven services. So that is the future for us. So presence, just reinforcing why it's important, presence for us. Presence is vital. For us, it's really a competitive advantage. And today, we have 7,400 employees and services globally. Actually, we have 1,200-plus customer sites with service agreement. That doesn't mean we have full service agreements. For us, service agreement is when we have different -- we have a wide portfolio for that. So when customers really choose one, this specific service agreement for us is this kind of concept. So on the other hand, we have 300-plus sites with service contracts, that is with people on site. That is more related with the large service agreements. On the other hand, we have 70-plus service workshops for repairs, components and machine overhauls. And the last point, but not least, is the most important because customers really value the high availability from our sites, so we have 10 global and regional distribution centers. But presence is not enough. I think the other key part is to have the right feet on the ground. Today, we have service certification in our team. So I'm proud to mention when we talk about certification Level 1, that includes a skill in hydraulic, pneumatic and electrification. 90% of our service technicians, they got this kind of certification. But now we have more demanding requests coming from these high technological solutions. So in Service Level 2, we are training our people with different skills. It's more focused on electrification, automation and digitalization. And 65% of the total service technicians, they got that certification, so that is important. So other part of -- important part to have the right people in the right place is the strong safety culture that I mentioned before. But actually, we have mentoring program as well. So I think mentoring is a good tool really for ensure that people got the correct culture and skills, technical skills, and we have a clear career path. So having a strong presence and the right people on the ground, our goal is really to increase the service agreement ratio. What means service agreement ratio? Service agreement ratio is the number of fleet -- the addressable fleet that we have some service with them. Just today, we have 32% of our addressable fleet with 1 specific service agreement. So why that is important, I think that is the key message here. Because really, we are looking for building a long-term relationship with customers. Our plan is to grow the share of wallet, taking advantage of our presence and really, for sure, create some loyalty with the customer, close collaboration with the customer. We want to increase the market share, but at the same time, it's mandatory for us to secure the customer share. So it's key for us to create this strong relationship with the customer. And you, Helena, mentioned recently, yes, partnership is the new leadership. So that is important to reinforce. So in the third-largest revenue stream, that's all about circular services. Circular services is a really attractive business for us. The revenues is growing faster. It's 12% average the last 5 years. So in circular services, we have focus in different products, but our main focus today is midlife and reman solutions. But let ask to the expert, maybe for explain more detail about reman solutions. So Christian Précenth is our Global Product Portfolio Manager, so he can explain the details. So please. [Presentation]

Okay. Thank you, Christian, for a good explanation. I hope you got better understanding now. But yes, this slide looks a little bit busy, but let me explain it in a simple way. Yes. The Aftermarket business was designed for take advantage to the full machine life cycle. That is our goal. We are manufacturing high-quality machines. I explained recently the average age is 8.4 years. So the plan is to really take advantage when the machine is new and when the machine is getting older. So when the machine is new, we have opportunities for replace parts and kits for training people for electrical solutions like electrical infrastructure, for example. Actually, you have opportunities for service agreement and audits. So when the machine is new, really is when we have more activity. But what happens when the machine is getting older? So in general, machines getting older are losing productivity. So we have the chance to use these kind of circular services, midlife repairs or a remanufacturing product for really start again with the machine as a new one. And that is an important business for us and customers really appreciate that this kind of services. I have one example from Fresnillo. It's an important customer from Mexico. So let's see what Fresnillo think about our reman solution. Please, video. [Presentation]

So thank you to our customers from Mexico. I want to copy to your phrase, José. When we listen this kind of testimony, it's music for my ear because I think we are doing the right thing. But I think you are here because you want to know more about the business profitability. So Service division is the most profitable division. And overall, it's really building resilience and taking care of the treasure of the company. So that is our goal. So in the graph, you can see the revenue stream, the part and kits. That is the biggest one in volume and profit as well. So maybe the question mark from your side is why we are putting a lot of focus on circular services or agreements? I think the main reason is because we know when we have long-term relationship with customers, we can generate 2x revenues coming from the customers. I think that is key. And in some cases, it's difficult for me to explain. But believe me, when we have this kind of service agreement, it's really huge opportunities for increased revenues and grow the share of wallet. And our strategy continues working in the same direction. That is the key point and continues building resilience to the business, because we need to protect the profitability from the customer. So that is from my side. So just I want to reflect now about our long-term vision. I think we have everything from being successful in our Aftermarket division. We have presence, that is key. We have high quality in our machines. We have reputation, actually. We have a high reputation. So my responsibility is try to take care of the reputation. But actually, we have a challenge. And that is a really good opportunity for us. We need to challenge ourselves every day because the market is changing. The customer has different needs, a lot of different situations. So the vision, the long-term vision for us in Epiroc in the Aftermarket division is really to create -- becoming a more digital company and offering more intelligent services. I think that is the future for us, building again, long-term relationships, developing new solutions and working in this digital world. So talking about digital solutions, I want to invite Paul, our farmer, Mr. Farmer. I'm assuming, Paul, you are farming the digital journey. But at the same time, you're farming your own farm or...

Yes.

Okay.

So I would say I'm now coming the absolutely best position, bringing it all together. I'll do it like this. I'll take you through a little bit of the Digital Solutions division, but I also thought about starting here because this was my first week at work. So I've been roughly here for a year, a little bit more than a year. I think then from a farming perspective, it's always critical to go and kicking the tires, getting the feeling, kicking the tires. But I also think being in all these different kind of digital solutions or you always talk about the cloud and you talk about the software, it is everything starting from the equipment side. And it's not only something that is up in the cloud. I mean when you really get into it and where the value comes from is when you're really marrying it. And then this is up in Kristineberg, then up north in Sweden. And the team behind here is the situational awareness team. The Mobilaris team that you might recognize from the acquisitions. And it's also the team that was behind the first movie that we showed of safe blasting. And I will come into more on the safety side and how we're basically bringing together all the different solutions because I think that's where we're now taking it, having a story that actually align and really fulfilling all the different value propositions that we want to get to. So first, safety. When the collision was not avoided, and this is a mine out in Asia, but it could basically be happening anywhere. It's a heavy vehicle that was then putting the reverse in. So the dozer was putting the reverse in and then you had the light vehicle just behind it. And then, of course, with the collision avoidance systems, it would have been prevented. In this case, you had a collision avoidance system in the light vehicle, but it doesn't really matter if that one is beeping and you're sitting in there and you see this heavy machine coming in front of you and you can't really do anything. The fortunate part in this one was that you're driving on the lefthand side. If you would have been driving on the righthand side, it would have been something completely different. So going here and what is then the prevention, what's the solution? Then of course, you're coming to collision avoidance system, where you have to have it equipped on all the different systems. And then again, you're coming to the mixed fleet, the agnostic part and how you're actually setting it all up. And I will come into this even further. But I think just these first 2 pieces now, situational awareness and collision avoidance system, I mean, it's all in the safety area, where I truly believe when we're bringing this together, we are an industry leader in this. Putting some numbers to it because where I started off in saying that it's not only the cloud and the software; it's directly taking it down to where you see the value. And 2 examples of this one. If I take the safety and productivity, we will have a case of that a little bit later with emergency evacuation, you're able to get the people out and making sure that everybody is safe, 25% to 50% lesser time. And I mean that's both on making sure that you can do it faster, whatever you need to do, if it's done just blasting or if it is an emergency, but it's also for your heart and safety, knowing that you know where all the people are at. And then, of course, you can do a lot more with situational awareness, but that's only one where it's critical for the mining and the mine officer to know where they're at. The second one, and I will also have a case on that one, is optimizing the mine planning -- or the mine production plans. And we see an output increase of more than 8%. And then, of course, that's coming back to a few of the numbers we've spoken about before. If you get an output of an increase of 8%, you can directly put it into dollars. And of course, with those dollars, that's the value of the whole portfolio that we're sitting with. So those would be 2, and I will go into a little bit further throughout the presentation. Where are we today? Helena spoke about the vision, where we were at 7, 8 -- 6, 7, 8 years ago and all the things that we have sort of gone through, making these bets, making sure that we're bringing all these different new companies into the organization. But then, it's also where is our vision and how do we make sure that we get all of this align? One part of it is the fully automated mine. And then, of course, the first step is just to have a fully digital mine having everything connected. But if we're taking as more of all these new companies coming in, fully automated mine, that means that everyone knows how they will actually fit into the solution. And then, I mean, then just starting with the meetings that we had yesterday and the day before, in every customer meeting, you basically have a few points that everybody wants to make sure that they either tick off or they can increase from their own KPIs. Safety, of course, is the first one. Productivity, and I mean then we had the 8% plus in the output there. Operational excellence, you constantly need to take these small steps in order to improve everything, but also take a little bit more of the stepwise and leapfrogs with new processes and getting basically new technology in order to get the operational excellence up higher steps. And then, of course, the data-driven decisions. I see it more as an enabler but also looking upon all the sustainability report, how do you make sure that you get all the data in, but also for taking new investment decisions. So the data-driven decision-making is a critical one, but it's really something that comes out from all the other solutions that we bring in. A key one, and I mean it's been touched upon a few times earlier, but a key one is how do we look upon agnostic solutions and how do we really look upon this mixed fleet. I think the best one is to have the rhetorical questions, how many mines in the world will only have 1 OEM? None, of course. There won't be any single mine or it might be -- no, it won't be any single mine. So of course, you need to make sure that we have to partner up with a mine, whatever kind of landscape they are in, whatever kind of suppliers they are having and then we play by those rules. And then we're setting that if we would call it the ecosystem together with them. And then, of course, it's more of the integration points. You have the SLAs between how do we do it, what do they do, but that's the system that will ultimately make the mine work out. But I also think it's equally much if we're looking upon a software perspective, everybody have all these different sub-suppliers. And then it also comes in, how do we do the systems integration pieces to the other software vendors? So it's equally much of a partnership and agnostic on that side as well. So that's a little bit of the view on the agnostic and mixed fleet where I also think that that's one of the key ones. How do we then bring it all together? Because I mean, then a little bit of the vision and a little bit of the agnostic side. And there is going to be a transformation with all the things that we're doing. I mean a fully automated mine, you need to look into all the processes and how you're actually managing your mine in order to have it fully automated. And I mean also looking upon the organizational structures. For me, it's then also how do we make sure that we bring out these different areas so there is a value augmentation. So I can take that with all the different mines, but I can also have good discussions with the team like we're sitting in here now because then everybody will understand how we're moving forward. So we have set up 6 key areas: Connect, which is basically everything about connectivity. And I mean then it's always interesting how many are connected, how many have the highest level of connectivity. There are quite few. There are a few that are really in the forefront, but there are a lot of them that we really need to make sure that we support taking up that connectivity level with a higher level of Wi-Fi or the LTE and the 5G. Automate, I mean as we all see, I mean that's the larger area. We've been touching upon it. I will touch upon it. José has touched upon it. Wayne has touched upon it. How do we make sure that we have that possibility to really grow with the portfolio now that we're having. Protect, it's all the safety solutions. So everything from the collision avoidance, situational awareness, but just making sure that all of that is being brought together. Very much of software focus. Plan. That's the planning. I will take an example there as well. I mean, how do you make sure that you have the software modules, so you can do the planning. Operate very much of traffic awareness, asset management, dispatching, et cetera, in that area. And the sustain, we touched upon that earlier as well, for example, the ventilation on demand. So those would be the 6 areas and my take on it is that every of these areas, I can go in and I can then do a stepwise approach with any customers and then basically say, this is where we start off and then this is where we're sort of taking it forward. Then I put down further down on the slide, all the different brands. And these are the acquisitions that I have in the portfolio. It's 7 acquisitions and then there is 1 that we have done from an Epiroc perspective. And out of the 1,300 people that we are in the division, 50 are then from the Epiroc team and then 1,250 are then from other areas that comes in, which then means that the talents that we have is amazing. The solutions are amazing. The customer relations are amazing. And now it's just a matter of how do we form that into, going back on Helena and Håkan's views there in the beginning, this is a potential growth. But I mean then we need to have everybody on that same ship. So with these 6 areas, we're making sure that we get these solutions in and I have a few examples here, have all these solutions coming in and everybody is then driving towards the same goal. And if I then come to the 2 different examples. I would take the protect and I would take the plan as examples of what we're having in there. And then on the protect side, if I take the 3 first bullet points on where we're at, the Epiroc offers the highest level of collision avoidance, and then relating it back to the company we have acquired, that's Mernok where we started off then in South Africa and then we're expanding globally. The onboard machine and personnel protection, that's Mobilaris and the team that you saw on the first slide, where we were going -- kicking tires then in Kristineberg. And the OEM-agnostic machine control solutions, that's the RCT, the Australian-based company. But already here, we see that everybody is steering towards the same goal, and this is then a true leadership area in the industry, where we're also then bringing these solutions together to make it even better. Going back on the collision avoidance, there are different levels and maybe you're all aware, but I thought it's always good to bring that up. The collision avoidance level starting from the basics 1 to 6, but then on the Level 7, that's truly where it starts to have an effect. So then when you're sitting in a, for example, light vehicle, like you had on the example there earlier, then you can start hearing the beeping, so it's an alert. The advisory, that's basically when you have someone who tells you to slow down. And the Level 9, it's really when you have an intervention in the machine and the machine will stop. So in the first case, everything would have stopped on the Level 9. An example as well when we bring 2 acquisitions together, collision avoidance systems and traffic awareness. So bringing Mernok and Mobilaris together, that will then drive even more productivity, safety, but also productivity because then you would always know is there someone near around. And if it's someone not near around, you can continue with the speed that you had. If it is someone near around, you really know that you have to slow down, which then means that you can have it on the same display, and you can really keep the full control of what's happening in your surrounding. So I think that's another one where bringing that kind of portfolio together. This is a case from Agnico Eagle and where they've done the evacuations. So if we run the movie. [Presentation]

So that was the protect side and the safety side. And then if I take the mine planning and management, which is done the plan side. Starting from the partnership with exploration, you're building up the life of mine, but then you've taken it all the way down to what happens every month: how does the work schedule look like; how do you do the shift support. And that's then coming into how do you integrate all of this one. But when you're doing it, then I take the next example because here, we're then coming in Rosh Pinah Zinc mine, where they have then brought all of this together. And then we're coming to the 8% output. So we run this case as well. [Presentation]

So that was a little bit of the different cases, but I thought that's good with the cases when we're then coming to the actual numbers. So Helena, you brought up this about the more than 150 different models that have been automated. And then coming back, when you look around in the stand, basically, all the different equipment that you will see on the stand can be automated. It's just about setting the right experts and the right talents with the right solutions there in place. And I think that's a key number. I think another key number is everything about safety and how we bring all of this together, both the situational awareness, that's already 45% and the collision avoidance system. And on that one, when we're looking upon the stand and then looking both as José and Wayne, you will see both on the Pit Viper where we brought this as a factory fit as well as Wayne's truck, the 66 tonnes, where we both have then the situational awareness and onboarding together with the collision avoidance and there we have the AI camera. So we're making sure the AI camera will see and look around when and what happens around. And I mean then as a division, we're now across all the different continents, so we have that kind of footprint with the different kind of knowledge, making sure that we have the focus on where to sell and how to deliver. Roughly, 1,300 dedicated employees and SEK 2.4 billion. So coming back on the cases, this is then the true value that we see that we're building on. And going forward, so what's the growth potential, but then also where do I look upon the portfolio right now? And again, splitting it into a little bit of the different areas. So connectivity, it will always be the critical enabler. But if I look upon the growth, it will be a good growth, but it won't be the exponential growth. It will always be the critical enabler as a starting point, and it's project based. It's a good one, but it's the enabler. Automate, and I think that we touched upon in all different presentations here. And putting it all together, I mean, then we all see what we can do, both from very much a machine perspective, the fleet perspective and then going larger. Software and projects, large scalable possibility. And then the 4 next areas, a lot of software, but also a lot of projects around it. And I see a large potential and, I mean, you see a lot of the other players around as well, where we can go and where we're heading towards. And all of this is basically now a possibility to scale. So the investment that we're doing, putting it all together, is very much in time. Because when we have this platform, we have this potential to put out the value augmentation in the 6 different areas. We then have the possibility to grow from there. The next and the last movie is when we're putting all of this together and making sure that we have 1 direction, everything will be behind the groundbreaking intelligence. And then, of course, that's playing a little bit with words, but it is the groundbreaking intelligence, how do we really drive the fully automated mine with the 6 key areas. So I will take this one, and then I will finish off with a slide afterwards. Please. [Presentation]

And that's also the starting point of how do we look upon the market potential. You start with just the machine, then you have the fleet, you also have the mixed fleet and then you have the full mine. So if I just take my past and my background and now working with telecom IT as well as recurrent revenues, the market potential is there. And I mean it's constantly growing. The complexity then going up as well and how do we then get the premium out of it. We have solutions in all different 3 of them or if we say 4 of them when we bring in the mixed fleet as a fourth box of it. And then it's now just a matter of where we have the investment to continue getting that growth into place. And a vision then, if I take it from my own division together with a lot that has been said, a lot of the cases and movies that were showed earlier in the presentation, we will accelerate the transformation, but not only internally. I mean that's a lot to do with the whole industry. How do we really make that happen. And then we have the agnostic digital solutions, and we have all the mixed fleet automation. So I think with that in total or as a full portfolio, we have everybody basically aligned of that's the direction to go forward. So that was my last slide. I'm at the lunch as well, so then we can have questions and answers. And I will now head over for the next topic or present the next speaker. And that's in the Tools & Attachment space. And it's Mr. Turnaround, Goran Popovski. You had a couple of decades in the industry, so you have all the experience to do the right turnarounds and get the revenues there, and you're also my ski buddy. I hand it over.

Good morning, everyone. Very nice to see you all, and very nice to have the opportunity to chat with most of you yesterday. It's hard to talk about skiing, Paul, when we are in Vegas now and weather conditions are a little bit different than that. And most probably, some of you would have expected to see -- I was pleased to maybe standing here in front of you on the stage, but you have to deal with me, and hopefully, I will give you the goods shortly. So let's move to Tools & Attachments segment. We have grown this business to about 21% of the revenues of the group, and that's a tremendous achievement. And then you have seen this slide before, and I will just remind you that the success is not just one-person game. It's actually a solution, combination of products coming from all our different divisions. So in order to have a happy customer, to deliver superior productivity for them, all our divisions work together and deliver something that cannot be matched by our competitors. The right machine, equipped with the right service, with the right drilling tools delivering the premium results. It's the same thing for the Attachments. How hard can it be? So let's focus a little bit more on Attachments, on my contemporary role in our division. But before that, I would like to basically tell you a little bit about the achievements that all of us are proud that we have delivered in the last 4 years, so Tools & Attachments. First of all, we have managed to double the business by different organic and inorganic activities, which is a tremendous achievement, and this achievement of the whole team, and I'm so blessed to be happy to have such great competent people working with me and take you on this exciting journey. And actually, if you take just the Attachments since the time we split from Atlas Copco, we actually grew the business for almost 3x or more. Great. We have managed to turnaround and understand the success factors in different segments, in the niches where our products are involved and that has helped us build a prospect, but also the fundaments for resilience going forward. We have developed the digital parts of our offer that has helped us actually differentiate from our competitors and deliver the additional value for our customers and make us preferred partner with them. And every successful journey starts with a vision, with a dream, and our dream is that in the fast-moving world, the Attachments division is a fundamental supporter for our customers in building a better infrastructure, better cities, better living standards for all of us. Cities where the traffic jams are going to be something in the past, where the living -- houses and the other residential buildings are going to provide the quality of the better living. That's our strategical purpose to offer customers the right products and solutions, so they build it for us. And we are going to do this with having the best people, the best talent in the industry that are able to deliver the results to our customers and support on the fast and diligent manner. That's a great vision. I have a problem. Okay. The major driver for the demand in the Attachment business is urbanization. And I will share with you a couple of hard facts. Every week, there is about 3 million people moving in the urban areas. Multiplied by 52 weeks per year, that's about 150 million, 160 million people per year moving in the urban areas. By 2050, anticipations are that almost 70% of the people are going to live in the urban areas, and we have to develop the infrastructure and utilities for all these people coming in the urban areas. And also, until 2030, about 1.2 million square kilometers of the urban built area will need to be added. Just to put it in a perspective, that's about 1,000 by 1,200 kilometers of area that needs to be freshly built, which is an enormous task for the humanity going forward. So long term, the organization is going to drive the demand at a very strong pace. And of course, the world is not homogeneous. There is different opportunities and challenges around the world. We have the right presence with our operations, with our sales organization, with the synergies with the sister divisions, with our factories to produce closer to the market and support our customers with actually local expertise and the specifics they need to assure that we are their partner of choice. Our current generation has a major responsibility in front of the next generations. We have to deal with the resources in a very responsible manner. As some of my colleagues mentioned, the mines are becoming bigger, deeper and more costly to get the minerals from the rock. But in the same time, we have a lot of metals and other resources already embedded in the existing cities; bridges, roads at everywhere. And it's our responsibility to assure that with our products, we actually focus on the urban mining which is going to just become bigger and bigger going forward. At this moment, there is, of course, many countries report this construction whereas some countries doesn't. But just to put a perspective, about 2.2 billion tonnes of construction waste per year. And there is a lot of millions of steel, copper and other metals. And by focusing on the urban mining, we are going to be able to reduce, give a new life to all these materials, build better living places for all of us and be responsible citizens and preserve the world in a good place for the next generations. And this is an absolutely incredible opportunity for our company having the right attachments for these kind of applications. Versatility is key. Applications are becoming more complex. And our customers want to become a one-stop shop for their customers. They want to be able with less carriers to be able to deliver different type of applications and keep their customers happy. And that's exactly where we are putting our focus to assure that our concept of a Swiss knife where one carrier can actually use multiple type of attachments by quick coupling tools and deliver efficiency and productivity for their customers and get the job done is ultimately high on our priorities. On the last times when I was standing here in front of you, I'd spent a lot of time talking about hydraulic attachments and the other products that we had in the Attachment business. This time, I would like to focus actually on some of our acquired companies. As all of you know, recently, we have done some major acquisitions, one of them was STANLEY Infrastructure, great company, and there are so many reasons why we went for it. We are definitely looking for growth opportunities, and we have proven that in the past, and we will keep that mindset going forward. We want to grow. And this company has fantastic products and presence, very strong presence in North American market, where we believe a lot of things are going to happen infrastructure-wise. So fantastic also complement with our existing portfolio. The products that we were looking for to have in our portfolio for a long time, and now we have them. And by complementing those 2 portfolios, we are actually becoming one-stop shop for our customers. With that wide portfolio, we can serve the multiple needs of our customers in different applications, which can be a real competitive edge that cannot be matched by our competitors in this field. The synergies when it comes to the operations, research and development, commercials in different parts of the world, excellent. The competence of people and the talents that can work together and help each other to cross-sell and improve our ability to deliver a better service to our customers, even greater. And finally, with the just acquisition that we have communicated a couple of weeks ago, we are actually able to develop that versatility and flexibility for our customers, so they can really enjoy that one-stop shop ability from our division. Let me show you a little bit of what our division is actually about so you don't hear only to my words, but also see some of the experts, what they will tell you about it. [Presentation]

In the first channel is the fast-moving world where the opportunities appears in a very dynamic manner. Successful companies have to strive to always look for ways to improve themselves and their ability how to deliver better productivity and better results together with our business partners. We have seen that our customers are actually having versatile needs. We are dealing with thousands -- hundreds of thousands of customers. In the mining case, there is 5, 6, 10 mines here, there, 100 in some other countries. In the infrastructure and construction space, we are dealing with hundreds of thousands and all of them have different needs, different needs for support, different type of know-how that needs to be given to them to be enabled to deliver value for their customers. That's why, going forward, we are creating a very unique go-to-market strategy, where we are putting our bets on 3 different channels by understanding clearly the needs of our customers. One part of the organization is going to focus on clearly working very closely with our dealers, understanding their needs and supporting their abilities to deliver the best results, the best products, the best know-how to their customers and grow the business together with them. Another part of the organization, highly dedicated, specialized people that work with the OEMs and help them actually reach their ambitions when it comes to the growth. And finally, as we, Epiroc, are one team, with the direct channels that we have in our organization, we are going to work together with our sister divisions in creating a package where we deliver a total solution to our customers for many different steps in the whole process. And by doing that, we are definitely looking into ability to widen the reach to our customers. Strategically, we want to put our products in front of as many customers as possible so we can actually grow the business faster than others. Assure that we have a strategical focus on delivering productivity because that's what matters doing the job on the fast mode, on the safe mode and also on the profitable mode so our customers come back with a repetitive business. And as Nelson said, doing business with us for a long period of time. And Aftermarket, uptime in ensuring that the product is continuously at use is absolutely high in our agenda. Let's talk now a little bit about other business that we have acquired some time ago. Technically, these products is about actually durability, giving the durability to the buckets and improve their loading capability. But why this is so important? I think that Håkan mentioned that actually mining is a lot about processing a lot of material. And we need to find a way how to actually put a full load on the holding machines and assure that they're utilized in the right way, so we reduce the cost for our customers because it's one of the costlier parts or the processes in the mining. And we have already delivered a lot of improvements to many customers around the world, telling us that this is a product, together with our digital part of the offer, which is extremely important gives transparency of the improvements and optimizing of the whole process. And now I would like actually to give you a moment, so you can hear the testimonials from one of my experts who is really eager to meet you at the show and tell you more about this product and how they can help improve the profitability for our customers. [Presentation]

So please remember when you are at the show there to go to our booth and talk to Michael. He's extremely passionate about these products, as you can see and he looks very strong, so he can lift all these heavy products there. To summarize, I'm strongly convinced. I know that we will become the one-stop shop for our customers. And we will deliver unmatched support and productivity for our customers through a very passionate, competent and able-to-deliver-fast-results people by combining our global footprint and presence and the value proposition that comes from the different brands that we have in our division. I would like to thank you for your attention. And of course, we are going to spend some more time after the presentation. So now I would like to actually invite on the stage my dear friend, Martin, Mr. Diver. And he might be new as a President in our company, but he is not new in Epiroc and not new in the industry. So my brother in arms, it is yours.

Thank you very much, Goran, for that nice introduction. Thank you. So let me talk a little bit about the second half of the Tools & Attachments reporting segment that we have, the Tools division. So there's happened quite a lot in the Tools division since the foundation of Epiroc. We've continued to lead the way in innovation such as launching the Powerbit X, our diamond-coated drill bit that I will come back to and talk a little bit more about later. We have increased the availability of our products, which is very important in Tools because if it's not available when the customer wants to use it, they're going to drill the hole with another tool and then you have lost that sales. You need to have the availability there. And we've done that by regionalizing our distribution centers and supply chains. So we have distribution centers on each continent, much closer to the customer. And when we do that, we've also managed to reduce the amount of air freight by 2/3 during this period, which, of course, is great both for the economy and for the planet. We've also continued to optimize our manufacturing footprint. So during this period, we've divested our Ockelbo facility. We have closed a small plant in Australia. But we've also invested in additional capacity. So in Zhangjiakou in China, we've increased the capacity that we have there and also in India in Hyderabad, where we, just a couple of weeks ago, had a groundbreaking ceremony for a new factory building where we will, in a few months' time, then have improved capacity to serve that region and the rest of APAC. We've also put solar panels on a lot of our factories just to make sure, again, to reduce the CO2 footprint and save money, especially some of our factories, which are in locations like South Africa where you might get brownouts, et cetera, then the solar panel gives you additional benefits. So that's also good. We've also continued to build and increase our presence in the ground support, not the least through our acquisition of New Concept Mining in 2019. We also did a smaller acquisition now during the summer of Yieldpoint in Canada, which offers digital solutions connected to the ground support, and we will talk more about that in coming Capital Markets Days, I'm sure, quite excited about that. So what do we have in the Tools division? So the Tools division really provides consumables, tools and digital products for predominantly hard rock excavation. And that goes through mining, construction and infrastructure as well. And we do this through 4 different business lines, you can call it: tophammer, and tophammer goes through both mining and construction and infrastructure; DTH, rotary and raiseboring, which is predominantly going into mining; raiseboring, which is also predominantly going into mining; and finally, digital solutions, like, for example, our DTH Optimizer, which is a sensor you can put on the drill that will help the operator, or later on, the automated system, to drill in an optimal way with the right weight on bit, the right rotation speed and the right percussion speed. Again, driving productivity for the customers and also something that works best when you put those bits with those systems on our machines. So let me give you a few other examples of innovations and how we drive that. We have talked earlier about the Powerbit X. So what we've done here is an innovation where we're basically learning from the oil and gas industry as well. We take polycrystalline diamond coating on the buttons instead of using normal just tungsten carbide. And that means that the buttons on these drill bits become virtually indestructible. And we can drill usually 10x more longer with a drill bit like this than with a normal drill bit, sometimes even 20 or 30x longer if the conditions are right. And that will give you great benefits when it comes to automation, for example, because automation is not going to be very helpful if you need to automate your rig and then stop it every 30 minutes to go and change the drill bit. You really want to be able to drill through the whole shift or at least through shift breaks and ventilations breaks. But also, it cuts CO2 emissions because if you use 1 bit instead of 9 or 10, of course, you're going to use less steel and less transportation and so forth. So this is great. But what do you then do when you then -- basically, if this bit is virtually indestructible, you move the bottleneck further down the drill string. So I'm happy to announce also that here at MINExpo this year, we're launching our all-new ET drill string, a new solution, which is particularly good for long-haul production drilling. It's a shoulder drive instead of a bottom drive. It's a new innovative thread geometry, and it has better bending resistance than before. And this gives you exactly what Wayne was talking about before, those straight holes that really allows you to get better fragmentation in the explosions and much better productivity in your mines. And on top of that, this is actually 3 kilos lighter than the usual -- the previous tubes, which again, means that you use less steel when you manufacture it and you release less CO2 when you ship and freight it all over the world. So again, this shows how 1 piece of this will not solve all the problems, but you combine them together, that's when you get that productivity increase and the ability for the customers to really go all the way. So in terms of mining, if there's one thing that is virtually indistinguishable from magic, if you're a layman, it's ground support. So trying to figure out which bolts you're going to put, where and how you're going to do that thousands of meters underground, you should not listen to me to explain that, you should instead listen to Pieter De Bruin, my colleague in my team who will give you a little bit more information about what ground support is. [Presentation]

So a big thank you to Pieter. And again, he will be in the booth, ask him anything about ground support and make sure that you don't have a very tight deadline afterwards, if you want to know more. But it is fantastic what we're doing here. But I think it's important to know with our ground support unit is that we really target the most advanced applications, the one that we -- where we can make difference again on productivity and safety. And we've launched many new products over -- since the years that we acquired them, including new types of bolts, but also safety solutions like blast on netting, so that you basically can put out the netting in place on top before you blast and make sure that you have much more safety for your operators. So to conclude a bit, what do we see for the Tools division in the future? And I mentioned it a couple of times, right? This solution becomes much better when we do it all together with the equipment and the drill string and the customer in terms of how they do their mining operations. So we see that we will continue to offer the best and most innovative solutions, both for drilling and for ground support and, therefore, help our customers really reduce that drilling cost per meter or drilling cost per tonne even of excavated ore and then also drive safety and sustainability in all applications. So with that, I will say thank you from me, and I will invite back Håkan to the stage, and then I don't need to do any of these introductions anymore because you've already done that.

Thank you.

Thank you.

Thank you very much, Martin. And I will now talk about operational excellence and what we have achieved and what we are doing. So 6 years of achievement, I would like to highlight a few things. Number one, good progress on our 2030 goals for people and planet. You heard about that already today. We also show that we're a fast-paced organization during COVID-19, where we, most importantly, acted quickly in order to protect our people, but also in order to protect our bottom line. We have also taken quite big steps when it comes to sourcing and manufacturing excellence, and we have really built out our production footprint. So now we actually have a true global production footprint. And we have also implemented a Regional Center of Excellence in all continents of the world. Epiroc, we have a well-proven business model. We have focused on decentralization since 1976. That's when Atlas Copco started pushing out the decision-making from the headquarters, closer to actually where the business happens, closer to the customer. And what does that result in? Well, it results in that we have quicker decision-making. We also get organizations that feel accountability and are result-oriented. We have a high degree of direct sales. I'll come back to that shortly. We have a strong Aftermarket business with resilient, recurring and profitable revenue streams. We have an asset-light and flexible manufacturing, where actually 75% of the product cost for these wonderful equipment that you have seen today is things that we -- components that we buy ourselves. And we are leveraging innovation, as you have also heard a lot about today together with our business partners. So coming back to the direct sales. Actually 89% of our sales is direct. In some cases, like you heard just recently from Goran, it makes more sense to use distributors. But in many cases, we get a lot of advantages by working closely with our customers. We understand the challenges. We understand their needs. We have a lot of feet on the ground that builds long-lasting relationship with the customers. And when they have problems, we also get immediate feedback. It doesn't get filtered through 1 layer, but we actually get the feedback firsthand, and we can take action and improve. We also offer financing solutions to our customers. And of course, if we have given the financing to the customer, we built an even closer relationship together. And the growth we have seen and also the direct sales method have an implication on working capital. When we grow and we sell directly, obviously, we don't offload inventory to our distributors, but we keep it ourselves. And you can see in the middle there, the development of large equipment orders, which have grown quite a lot during the last few years. That has an impact because then when we send equipment across the world, it takes time before they get out there. We need to do some local modifications. And then finally then, we can actually invoice. This is an area where we've had a strong focus on and we are taking a lot of actions to make sure that we bend this trend during the second half of this year. And then also higher working capital means higher FX volatility on our operating profit. And I will take some time now to dig into some of the details of the FX and the reason why we spend a lot of time on it internally. And also why I will talk about it now is because we want to strip out the FX component on the bridge that we show you. We also strip out the acquisition impact. We take out some items affecting comparability. And the reason is we want to show you this organic piece to be as clean as possible. So when we show you our organic, that is actually what we have done in terms of volume development, price development, costs, et cetera. So you can really see, okay, this is the things that Epiroc have taken action on and here's the result that it gives. But moving on to FX then, where the profit bridge on currency is what you can see here where actually, in the top, you can see orders received revenues and operating profit from the bridges that we present in the quarterly report, since Q1 '23 up until the last report. In the bottom, you see the operating profit split out into transaction and translation, the 2 components there in the FX bridge. And what you would like to see, which would make life more easy, is if it looks like it did in Q1 2023 where we have a positive impact both on orders received and revenues, we have a positive impact on the operating profit, but it's smaller in size. That's kind of how normally you would think about it. But then you have other quarters like Q2 2023 where we have quite big positive impacts on the top line but actually, a negative impact on the bottom line. And I will dig into that specific quarter to explain what can actually happen in the quarter, which makes the impact not as easy to foresee as you might think. But before getting into that quarter, I will explain what are the different components then. If we start in the black box, that's what you see in the report. That's the total operating profit currency effect in the bridge. Then we also have, as many of you know, on our webpage, we have something we call key figures file. And there you can see the operating profit effect divided into translation and also into transaction. So that, you can find as well. But then there are some more details, which we don't provide you with, which is we divide the translation into 1a, also called translation, into 1b, called internal profit. We divide the transaction into payment flows and into revaluation. So I will try to go through each one of these 4 and explain where they are coming from and how the impact. 1a translation, I mean that's a simple one. We are now in the U.S. So let's say that our U.S. company makes a certain profit each month, we translate that back into Swedish krona. And of course, if the U.S. dollar has strengthened, that profit becomes more when we translate back to Swedish krona, very straightforward. The internal profit one, we have, as you know, businesses across the world, and whether we sell things internally, it could be that we sell a tool that we produced here in the U.S. We sell it to a service center in Chile, which we eventually sell onwards to -- sorry, sell it to a distribution center in Chile and then we sell it to a customer center in Peru. Well, there's a lot of currency impact on that, and we need to eliminate the internal profit until it reaches the end customer, of course. And when we limit internal profit, well, if the exchange rates change between months or between quarters, we will have an impact on that internal profit elimination as well that we need to consider. That basically comes from the balance sheet but then translates into the income statement, the first one, that's purely the income statement effect. If we then move into transaction and we start with payment flows. Well, if we send the machine from Sweden, we sell it in U.S. dollar, once we book that and we send the invoice, we book it, we record the sales, it's at a certain rate. And then when the customer pays, it might be at a different rate. And then the payment flows will then, directly in the income statement, have an impact. The revaluation is income statement effect but coming from the balance sheet. So every month, we have outstanding accounts receivable and account payables. And again, let's take an example from Sweden, if we have accounts payable in euro because we bought something in euro, and we got the invoice at what time, we recorded it at a certain rate. But then at the end of the quarter, that rate has changed, we need to update then the impact of that change in the balance sheet and then translate over to our income statement. So those are the 4 components. And now I will jump back then to Q2 2023. The impact on revenue was SEK 611 million, but the currency impact on EBIT was minus SEK 243 million. If we start with translation and the pure translation effect, well, that was positive SEK 70 million. That's kind of maybe what you would expect, so no big surprise there. Then we had a small negative effect on internal profit elimination, but not that big. The big negative effect was on transaction. Payment flow, SEK 35 million when we have a revenue of around SEK 15 billion in the quarter. That's not so much. But the big impact then is to be the revaluation currency effect. And now you must remember that this is a bridge impact. It's not the absolute effect in the quarter, but we are comparing Q2 2023 with Q2 2022. And in Q2 2022, even though we had stopped delivering to Russia, our Russian entity, which was, at that time, our fourth-largest market, now it's 0, had a lot of outstanding accounts payable to our U.S. entity and our Swedish entity. In Q2 2022, the Russian ruble strengthened significantly, actually 70% against the Swedish krona. So the outstanding payables in the Russian entity where, all of a sudden, less costly for the Russian entity, which recorded a quite big profit at that time, which we recorded in Q2 2022. But again, this is a bridge effect. When we compare the impact in '23, we get a quite large negative impact. So all in all, 2 things to remember then, it's a bridge effect. So you need to consider what was the previous quarter a year ago and what it is now. And secondly, we take quite a lot of -- we dig into this quite a lot in details, again, in order to strip out the FX effect, so we can show you as clean as possible organic effect for all the actions that we are taking to improve the profitability. So moving on then, I will jump into the Aftermarket business. I'm not going to talk about the offering. That, you heard a lot about. But I will talk about the potential we see for increased efficiency. We think that there's more to do when it comes to our service personnel. You saw the vast number of people we have out there. If we can make things a little bit more efficient for each one of them, it's going to give quite a big result. Same things go for new technical tools that we can use. There are some very interesting solutions that we are piloting now. And if we make each service technician a bit more efficient, it can come to training, for example, finding manuals, that will, all in all, give quite big result. We are expanding our workshops, both building new workshops but also actually expanding the ones we have. Some of them are becoming a bit like mini factories, and we think that we can do more in actually running them more like a mini factory and getting more efficiency out of them. And all in all, we believe that there's more that we can do to create customer value while actually using less resources. And then coming back to the flexible manufacturing. I mentioned that roughly 75% of the product cost for equipment is purchased, and we produce equipment to order, and that means that we can go quite quickly up and down in our demand depending on how the demand changes. And we only produce the core components, and those ones we wanted to produce ourselves to safeguard that we actually keep the innovations internally. All in all, this results in quite low CapEx needs, roughly 2% to 3% of revenues over a cycle. And on the picture here, you have a boomer. And for this boomer, well, we designed the product with the best components that we can buy from our suppliers. And in-house, we produce the rock drill, we produce the tool, we produce the brain of the machine, but actually, then the rest we buy in and then we do the assembly ourselves. And that's why we can have this asset-light manufacturing setup with actually buying 75% of the cost basically. We talked a lot about circular offering today. That's an area where we see opportunities to grow. We also see that, that can actually be a way for us to produce once but actually sell twice. And for being a person that sits and counts the money, as I try to explain my work to the kids, producing once and selling twice is actually not that bad. As an example then, our batteries, you heard a lot about the BEV machines. We use them then, obviously, as Batteries as a Service where we offer customers more productivity, reduced ventilation cost, less fossil fuel. But then once they are not performing at their top, we can take them back and they can actually be used for energy storage solutions instead. And we will now see a film how our batteries are supporting the Swedish grid. [Presentation]

Good. Finally, for me, we talked a little about R&D already and how we leverage innovation. We spend around 3%, 3.2% the last 12 months, our expense of R&D in relation to revenues. And most of that, we actually expense. We don't capitalize all that much. As of end of last year, we had capitalized or we had a carrying amount on our balance sheet of SEK 1.4 billion, which is only then 1.7% of total assets. And with that, I will hand back again to Helena who will come up on stage and talk about outperformance.

Thank you, Håkan. So before we will go and see all the exciting things at MINExpo, I will talk about outperformance and what that means for us. Okay. So you recognize our financial goal. We have a goal to grow 8% per year over a cycle. That, we have delivered upon. We have been growing 10% CAGR since the spin-off from Atlas Copco, out of which 3% is acquired growth. Our goal is also to have the industry best operating margin and with strong resilience over the cycle. I think we have shown, as I said, strong resilience during COVID and the pandemic but also with the war in Ukraine. However, we have lost efficiency the last couple of quarters, and that is being addressed as we speak. As we shared, when we did present the Q2 numbers, we are in the mode right now of taking out costs, consolidating entities and bring efficiency back where we want it. So rest assured that this is a very strong priority for me and my team. We also have a target to improve our capital efficiency and resilience over the years. I think, as you have heard, hopefully, during these presentations, we are step-by-step building more and more resilient and recurring revenue streams. Being it circle models, being it the digital offering, being it automation on the electrification side, it's more and more -- we are more and more becoming a recurring revenue stream generator, which is what we want to create really. Working capital is in focus, Håkan has already shared that. We are not happy where we are on the inventory side. And that's more to do on that side, and we are also very focused on improving that. But we have executed 27 acquisitions since the spin-off, generating then SEK 12.6 billion in additional revenue and a lot of employees as well, but focus right now is on profitability. We also have a goal to have an efficient capital structure. And even though we have been busy doing many acquisitions and also lately now, the STANLEY acquisition, which was a fairly big one for us, we have a very strong balance sheet. And we also have a goal to, every year, have a rising and stable dividend to our shareholders. And many of you are shareholders in the room, so you can expect the second installment for this year in October, but we have delivered what we promised with a 50% payout ratio. And for those of you that saw Elvis yesterday, we believe that cash is king, and we are happy to see that we have also improved the performance the last couple of quarters when it comes to our cash conversion. That is mainly mostly the impact from the working capital then. So I will then close this up before we go into the Q&A session and try to summarize the investment case for Epiroc. So you have heard that we focus on the attractive niches where we can outperform, attractive niches where there are healthy underlying trends, where we can grow with the market but also where we can outperform from a technological standpoint, and where customers are prepared to pay for productivity, sustainability, safety. We continue to focus heavily on innovation. This is the way for us to stay ahead, to safeguard that we will be the one with the best solution moving forward. And we do this both internally as well as with partners and we add on acquisitions to speed up our innovation capabilities. We will continue to have a very strong focus on the aftermarket. This is the resilient part of the business over a cycle, it's the profitable part of the business, and it's where we make the difference for our customers. And we will also continue our focus on operational excellence. And we have a strong, strong way of running the company with a decentralized model that has served us well for many, many years, and we continue to build a culture and leaders in the company that work in this decentralized model. And we strongly believe that the culture and sustainability is the foundation for success. In the end, it's a people business, and people make the difference. But we also see sustainability as a business opportunity moving forward. And we're aiming at outperformance. And for us, that is to grow faster than the underlying market, it's to be the most profitable company among our peers and to deliver this continuous value creation for all stakeholders, customers, shareholders, our employees and the society in large. So we stand, I would say, stronger than ever. We have planted a lot of seeds for future growth. I hope you have enjoyed the presentations, and I'm sure you will enjoy to have a look at this in real life at the MINExpo after lunch. So thank you very much. And by that, we will move over to Q&A, and then I will bring up my colleagues.

Yes. Thank you very much. So I see a lot of hands here. I will stop at Gustaf actually over here. Gustaf, Handelsbanken, please go ahead.

Gustaf Schwerin, Handelsbanken. I have two questions on service. And we've asked this before, but I continue to struggle to understand the massive increase you've seen on service contract penetration in less than a year. Can you maybe give us a bit more color on how this has been doable, where the push comes now, and also where you think you can drive this in the short? And then secondly, I think you historically said that you see a 50% higher revenue if you have a service contract in place in the machine. That number is now 2x. So what have you identified here? Is that things like midlife rebuilds, et cetera, coming in?

So if I can start, then you can fill in. So I think on the service contracts, as Nelson was describing, we are doing this with many different types of service contracts. So a service contract is not the same; there's many different types. Of course, what we are aiming at, what we really want, is to have the full type of service contracts where we do everything. But we have many different other smaller service contracts. So that's a way for us to show our capabilities. So that's also why we can have good increases. And this is, as Nelson said, a very strategic area because in the end, it creates loyalty, recurring business and also stability over tougher times for example, and we, in a way, lock out pirates. Do you want to add anything, Nelson?

No, it's perfect. Finally, we have this customer-centric approach. So we know we have different needs coming from different customers. So we really tailormade different solutions.

And your second question, that was on?

The fact that the revenue is now 2x versus the [indiscernible] business [indiscernible].

It's very much that we are creating our own aftermarket and the total potential market, we're in a way creating it ourselves. I think the service products that were developed over the years, that has been a key to success. But also that we add more and more opportunities. If we take a lot of these technologies that we talk about, now we are bringing those technologies on the existing fleet out there. That was not the case before. And of course, we're bringing all these technologies into midlife upgrades or different type of upgrades. So this is a way of expanding the potential in a way. And it's like we're creating our own available market.

Yes. [Operator Instructions] I see we have a lot of questions online, and we have a lot in the room. Klas, Citi.

Klas at Citi. So I just want to start with RCT. I think they had done 1,500 machines when you bought them, now 3,100, a doubling from when included into Epiroc. Is that the same for sales? I think sales was SEK 600 million when you bought them. And I guess the revenue per vehicle will vary a bit depending on size, et cetera, so maybe not doubling, but are we talking SEK 900 million, SEK 1 billion? And then looking at the share of the total fleet, I get this to a low single-digit share of the total fleet, including CAT, Sandvik, and all the players out there, if you could confirm that number, if I'm ballpark right.

So when we look at this triangle and their numbers, that is everything we do organically. So that is Epiroc machines. It's including the mixed fleet automation that comes from RCT then and ASI Mining. So of course, part of that growth is also what we are developing with our own, the rollout of the autonomous Pit Vipers, the autonomous loaders, trucks. So it's a combination. So it's not all related to RCT. The potential, I agree, it's huge. And this is why we very early decided to go with mixed fleet automation because, one, our fleet is one thing, we know that, but there is so many other loaders, trucks, drill rigs in each and every mine from other OEMs. But also there's all these utility vehicles. There's more utility vehicles than there is loaders and trucks. There's more loaders and trucks than there is drill rigs in a mine. So by addressing that total potential of all the vehicles moving around in a mine, that's the opportunity when it comes to mixed fleet automation. And that is what we are right now nailing with Roy Hill, all these utility vehicles as well.

And revenues?

We have not shared that yet.

All right. And my follow-up very quickly is on the margin, maybe to you, Håkan. We didn't touch on it sort of in detail, but the 400 basis points that we've seen in E&S has sort of an organic decline since the fourth quarter last year. Now when we have the SEK 2.4 billion of sales, we can almost back-calculate, maybe I'm wrong, but that this is over 20% CAGR from when you bought them. Obviously, we know the M&A dilution. You said that was 1% roughly when you sort of go back 12 months. But obviously, with that much stronger growth in digital, in the P&L, against lower spare parts growth, which is high margin, I guess that the dilution becomes more than 100 bps. And I get that now, I've just done a quick calculation to be around 200 basis points, 1/2 of the 400. I'm very curious whether I'm ballpark right because that's important for the investment case.

Yes. No, I think you are definitely directionally right, at least, yes.

All right, 1/2. Okay.

Thank you. Should we take Mattias Holmberg, DNB, next to Klas?

Continuing on Roy Hill, the quite amazing numbers you showed on the productivity from automation, does this mean that you have, or you should have, large interest from other mines to do the same thing? And if that is not the case, what's holding your customers back?

Maybe you can answer that, José.

Absolutely. We have many customers, really interesting to join that. And the main reason is that the haulage automation, it started back 15 years ago and because it was really where the big money was in the operational side. However, it has stopped there. And then now, many customers started with a drilling automation to learn the process because you need to change the way that you produce, the way that you handle all the logistics at the mine. So as there have been many more customers having the already experience in the drilling automation, now they are considering to expand really where the big money is, that is in the haulage. So yes, we have a long pipeline of customers knocking the door.

Maybe continuing a bit on Klas' question, is there a point where you would reach sort of critical mass or scale where you could get the profitability up for this business?

I think if we take the Roy Hill for surface, for Roy Hill for autonomous hauling, then we're still in the snail phase. So this, we have seen it, we have been doing this for, is it, 5 years now since we took the first stake in ASI Mining. So that's how we do it. We do it with one, and then, of course, you scale it. So of course, that's an investment that we have been taking organically as part of our R&D-esque, including then an acquisition. But we feel comfortable with the solution now. That was also why we acquired the remaining shares of ASI Mining. And we are coming closer and closer to actually be able scale the solution.

Very good. We can take Christian Hinderaker, Goldman.

I've got another question on productivity in the Digital Services business. Just running some quick math on your revenue and employee stats that you shared. You had SEK 2.4 billion of revenue and 1,300 people in that team, so SEK 1.85 million per employee in sales terms. Group figure is SEK 3.4 million, so it's about 1/2. I just wonder, is that obviously an area -- well, it's obviously an area looking to grow as a business. Should we expect over the long term that that productivity ratio closes? Or is there something structural, that means you need more people in that segment versus the rest of the group?

Well, I think it's fair to say several of these companies that we have acquired, that was regional players and now we're scaling. So this is about scaling especially on the software side. There are different components, as Paul described, where, okay, there's the connectivity piece, which is more project related. You have the automation, the mixed fleet automation dimension, which is you roll it out in a different way. But then, of course, the pure software piece, it's all about scaling. So this division, this is, in a way, an investment for the future, and it's all about scaling. But I think long term, of course, we expect this to both contribute with more growth as well as with the profitability that is in line with our expectations.

I have a question online tied to this one from Magnus Kruber at Nordea. And he also asks if we could add the bubble of the Digital division to the chart on the service page. And no, we will not. But we can say that it's profitable and it's growing well. So then, with that done, Andreas Koski, BNP, please?

Maybe another follow-up on the Roy Hill order. So when exactly -- or not exactly, but when do you plan to open the books for other miners to place similar orders? Because the Roy Hill order was SEK 500 million. And we now have a long line of customers who want to place similar orders. So when do you plan to open the books? Is it already in 2025? Or what should we expect?

I mean we can say it's 2025, absolutely, because we have come so far with this project. But we need to make sure that we deliver. I think, for us, this is -- we need -- because this solution needs to perform better than when you have operators in the cabins. That's what it's all about. So we don't want to spread thin in our resources because this has been a lot of resource going into nail this technology. That's what we're aiming at.

But this would be incremental orders and that could easily be in the billions of SEK, I guess, when it's lost?

This is, I would say, a completely new revenue stream that we have. And it's not related to our equipment at all. And that's, of course, also why we embarked on this journey many years ago.

And then if I could ask the electrification, and there was a slide of what you -- not you but someone expected, in 2040, 80% of underground mines or mobile equipment would be electric. When we look at the revenue potential of a battery electric vehicle for you versus a diesel-driven vehicle, what is the upside today? And do you think that upside will remain all the way to 2030, 2040?

Yes, we believe that because we also see that the more -- if you take -- okay, the equipment is one thing. But where we make the difference and where we will be able to protect the revenue stream, it is in the Aftermarket and all the different things that we have now, the solutions that we have talked about. So we see that our -- let's say, with investing in our people, with having the competence -- because this is new technology. And it's not as easy for the mining houses to do it themselves or to have these more mom-and-pop shops that are sometimes taking the -- they're eating our lunch on the diesel machines because it's common competence how to do maintenance. So we believe we will be able to protect much more of the aftermarket with these machines, also long term because it's completely different, different competencies. And I think also, if we should remember also that this is in very remote places and the machines and technology needs to function 24/7 in the middle of nowhere.

Thank you. Anders Idborg, ABG.

Can I come back to the margins in Equipment & Service? Just if you could clarify a little bit what your ambition level is there. I think on Tools & Attachments, you've been very clear about what you are doing, what volumes did, et cetera. And as we touched upon before, yes, there's been a bit of dilution, et cetera. But should we regard the sort of 26%, 27% that we saw for a few years has basically normalized away to the sort of just above 20% where you also used to be for many years before that? I understand the part about getting the RCT up and all that. But are there also other efforts in the legacy business?

I think there's -- of course, you always have the mix effect. I think that is also what we're trying to explain today. You have the mix effect between Equipment & Service. You have kind of mix effects within the Service, and I hope you have seen some of the numbers today as well. Our ambition is always to improve. I think that is the culture of Epiroc. And there is always room for improvements. If we look at the Service organization, it's a big organization. And as Håkan described and Nelson as well, there is always efficiency opportunities because utilization of the equipment also moves, it's not constant in each and every mine. So we are -- and this is like small, small factories in a way out in the world. Service contract could be anywhere from 100 to -- I think our largest contract is actually 400 employees on site. So of course, there's always efficiency to work on, and we will continue to do that, of course, as we go. But I think there is this, I will say, also the focus in safeguarding growth and that we are also seeing that when we invest in our Service business with presence, with workshops, that's how we create that loyalty among the customers and also how we win next equipment orders. It's so interlinked, the business. But we'll not guide on where we want to be. It will depend. But the focus is always to improve, but we also want to grow. We also to safeguard I think and continue to grow in a very healthy way.

Olof Larshammar, Danske Bank.

It will not be the question on FX for Håkan, so I go to -- I saw that you have reported the average fleet age during the last year, and it has been steadily increasing. And then I guess that it has contributed a bit to Aftermarket revenues. But the question is that, could the fleet age continue to grow? Or is there a big replacement demand for your customers for the coming years?

I think for us, it is good when the fleet gets older because, as Nelson described, it creates more and more opportunities for us from an aftermarket perspective. But of course, at a certain point, you start to lose productivity, and then eventually, you will need to do the replacement. So I think we will see both things. For us, it's actually not a good -- it's not a bad thing if life is actually increasing because if we do the right things on the Aftermarket, that will safeguard that we will get the replacement order. But of course, from an Equipment standpoint, it's good also that we see that the fleet, step by step, year by year, has actually -- the age has increased.

But given the Service offering that you have, is it a potential to further increase the average age? Or have you reached some type of peak?

No, we can further increase this. And I think that is a lot on the circular solutions that we are developing as well.

And I would add, we don't really expect a huge replacement cycle to come. We sometimes get that question. We think it's going to be a steady replacement ongoing, but we also believe the miners probably learned something from the last time around when they did this huge replacement and then the market took a turn clearly downwards. So old fleet means that they need to replace at least gradually, and that's what we expect to see happen.

I will take two questions in the room, and then I will go to online. So it's Vlad from Barclays, and I will not even try to pronounce your surname.

I have two strategic questions, one on growth and one on margin. I'll start with growth. Obviously, 8% growth ambition going forward, that's not just higher than the end market, that's 3 to 4x higher than the end market. My question is, what's the toolkit you have to be confident in continuing to deliver that as the revenue grows? Because as it grows, it becomes harder and harder.

And I think a lot of what you have seen here, of course, we continue to push the foundation, what we have always had. We're very strong on the equipment side. We have a strong presence in the aftermarket, and we continue to push that. But as you say, the underlying growth is lower given also that 2/3 of the company is Aftermarket, which means that we need to overperform, we need to take customer share. And that's why we're developing so many different, let's say, opportunities to organically take a larger share. On the Equipment side, it's a lot about innovation, having the best machines, of course, the total cost of ownership. And that's what we have been doing for years. I think when we look at all the additions that we are taking on or the acquisitions, that's very much to create the next horizon of growth, what will be the organic growth a couple of years from now. And I think that has been the methodology we have been working with over the years, step-by-step, always look 1, 2, 3 steps ahead. And what will then be -- what is it actually that customers -- what are they prepared to pay for maybe 5 years from now? And that's the position we're taking. That's the type of companies where we're investing in, building that solutions and then, step by step, that will support that growth. But we are confident in these 8% growth numbers because I think we have found the methodology how to do this. And of course, you need to know your customers. You need to have the presence out there. You need to have a culture also with very ambitious individuals like the ones I have here in my team, people that really want to -- competitive people that want to outperform.

Can I just add one thing based on my previous role as well because it's very important to define what the end market growth is that you're talking about? Because it's not really GDP growth. For us, it's the amount of rock that you have to take out of the ground. And then that is more than what the mineral demand is, et cetera, right? So that is also helping us.

That's clear. And then on the margin side. Historically, Epiroc has been known as the best in the world supplier of drilling rigs. Listening to the presentations today, it's clear that your ambition is well beyond it. Now, how this will impact profitability overall when you move outside of what I believe is a very, very profitable core?

So when we look at entering into a segment, we look at this from -- we are very precise in what we are doing. We look at the underlying trends. We look at the potential to differentiate yourself from a technological standpoint; we look at the recurring piece of that business; but also, of course, what can we do with that type of product combined with what we already have. We are very, we'll say, well aware of our strength and also our capabilities to scale things. And that's really how we, step-by-step, are building these capabilities as we go.

So Anders Roslund, Pareto.

Yes. I have a question, a follow-up, on the average fleet age. How do you see this demand pattern going forward when you split it up in the large mining companies, smaller mining companies? What will be the driving force for this fleet age to be a growth driver in the coming year?

Would you like to comment on that, large customers or smaller customers?

Thank you. Just a comment from my side, especially on the larger customers. What we're seeing is they're very -- they're in growth mode at the moment, and you'll probably see that a lot of them are -- with the copper price where it is and the gold price where it is, there's a lot of consolidation. So we see a lot of the large mining houses gobbling up other entities to have a bigger footprint across different commodities. So for us, that means expansion. That means growth and opportunity. And if I look at BHP in Australia as one example, they've created a new copper world network. And part of that is good for us. We have Olympic Dam, and then we have 3 other opportunities where that will be expansion in surface mining and underground. So it's a strategy from them. Rio Tinto is doing similar. So Helena, I'm not sure if you want to add further.

No, but I think we work very closely, of course, with the large customers. Of course, with the larger customers, we have also this type of technology development. We know their plans. And I think, of course, smaller customers, if we look at it from a broader perspective, of course, if it comes to construction customers that they are always much smaller and not as easy, I would say, to really have that type of dialogue. But I think, generally speaking, what we hear from all customers, for them, if they can push the life of the machines, then that is of benefit for them. So I think there's also this difference between if it's actually a CapEx or if it is an OpEx expenditure for the customers. So everything they can do to push the life out, that's an OpEx. And also in tougher times, they do those type of investments to bring productivity up and push life. So I think that's also maybe naturally how and what is. So we are trying to more and more move things towards an OpEx offering because that is not the same cycle, the same process, how you get approval, et cetera, for big investments.

So we're going to take one question online here, coming into a bit what Wayne was talking about here. What is the top request you get from largest mine customers on helping reducing their operational cost? And that's from Omid Vaziri from Bloomberg.

The top request for large customers, I would say it's all about TCO in the end. And that's what we're trying to describe here today. It's about having a machine that is reliable and that can actually be as productive as possible. But it's also about having then, I will say, proper maintenance in place, having the total cost of ownership that, in the end, that includes everything we do on the service side and everything we do on rock drilling tools. So it's the combination of all those parts that we add in when we calculate total cost ownership for our machines. And that's the value. That's what we're selling. We're not selling a machine and then later we sell parts. We sell a package. And the discussions with our customers, it's all about, I would say, TCO. And then, of course, these new technologies, they come in and they improve the TCO, as both Wayne and José has been explaining.

Very good. We have also a question here from John Kim from Deutsche Bank. And he's curious about the split between the sales channels within Attachments that Goran was talking about.

Well, I think that's actually very straightforward there. As I said, there's hundreds of thousands of different types of customers and all of them have different success factors related to their customers. And they need a different type of products, different package and different competence transfer to that. And what we have seen is that the people that usually, can say, work very efficiently with the indirect sales channels maybe are not always the most suitable for working with the OEMs because of different type of discussion and different needs they need to serve. So once when we understood those key success factors for different segments and type of customers, it actually became obvious that, if we go for a highly dedicated organization that has the right compass, speaks the same language with those type of customers, we'll actually improve the long-term opportunities, create the loyalty and actually deliver value for both parties. We tested it with a few customers. It worked well. So now we are about to scale it.

Good. Thank you. Should we take one in the room? Yes, Andreas Koski, please, again.

This is not a question about your presentations, but in Sweden, there's been a lot of media focus on Northvolt, which I think is your main, or even sole, battery supplier. So have you experienced any delivery issues? And if the worst thing would happen, is it easy to change supplier from Northvolt to another battery supplier? How are you thinking about that? And what are the risks?

Yes. So over the years, we have Northvolt as our battery partner, but we're using standard cells. So we can source cells from all different type of cell providers. We also have the full IP coverage of what we're doing. And we have actually, the last year, also we have been doing the assembly of the batteries ourselves in Örebro. So let's hope that we can continue to have Northvolt as a very strong partner for the coming years. But I don't see any -- of course, there's always mitigations that you can do.

And we can take Klas from Citi sitting next to you.

Just a question for you, Håkan, on FX. Sorry, I had to.

Fine.

Sort of we get the balance sheet, as I call it, translation or revaluation between sort of quarter end to quarter end and how it works. But is it possible at all, and this is not now, but in the future, to try and help us with sort of the working capital in different currencies, so we can sort of calculate, try and calculate, that affect ourselves? Because doing P&L translation on average exchange rates and the cost/income mismatch on average exchange rates, that's quite straightforward. We do that for other companies. But doing that last bit is sort of the missing part. And I was wondering whether you can provide more color on that in the future maybe.

I think we can do. Obviously, not now. But yes, I think we can do that in the future. We can explain a bit also the setup, how things work, how we sell from one production unit to a distribution center, finally to a customer center, and the main currencies that are involved because there's usually a few of them that have quite a big impact. So yes, I think we can have that discussion later.

Yes. We pass it on to the left, Mattias, DNB, please.

I think you've said in the past, you might have said it today as well, but I missed it in that case, that Batteries as a Service penetration is roughly 80%. But my question is more relating to when will this become a balance sheet issue for you? Because I'm assuming it's already now tying up a couple of hundred million in assets?

Sorry, I missed the first, you mean for Batteries as a Service?

Yes, Batteries as a Service.

Yes. It's still -- I mean, we would like it to be bigger. And you're right, over time, we expect it to become bigger. As of now, it's not really an issue on our total balance sheet. But we are expecting growth range of the long-term expectations. We are waiting for the customers to really take off. And once it does, then yes, then there will be more of an issue on the balance sheet. And then we have actually started already looking into what potential solutions there might be for that. But we don't know. And why we haven't done anything yet, well, we think that Batteries as a Service is going to be the preferred way for the customer. But given that it's still rather small, we don't really know if it's going to be the preferred way. We know some customers, they actually prefer buying the batteries themselves.

Anders Roslund, Pareto.

Yes. I have a question regarding the exploration costs. It was a very high share for gold. I think it was 46%, which is far higher than your share of total business to the gold sector of some 30%, I think. So does it mean that you expect more CapEx to come through here following these exploration activities?

Yes. But I think it's fair to say that there has not been enough exploration drilling over the last 10 years and the exploration drilling that has been done has not been as successful as before, so that explains part of this gap between the demand and the supply moving forward. If we look on the activities, we have a strong performance -- or a strong product offering towards exploration, both equipment, on consumables, digital tools. We see that, I would say, a majority of the activities, we have very long-term relationships also with these type of contractors, which it very often is and, of course, it's also the mining houses doing brownfield exploration. We see that the activity level, it is towards gold, copper and, I would say, iron. So that, we can track ourselves. But I believe that the exploration, there will be more exploration activities moving forward. I think the important thing for us is to improve the productivity and the preciseness and the cost efficiency of exploration because that is actually what is creating the volatility in exploration, it's because it's too costly, it has been too costly. And then it's the fastest way to cut when the mining starts to drop. You cut the exploration budget and then you save. That is not sustainable over time. So together with our customers, we need to work with technology, with solutions to be more precise in exploration.

I think we'll take one here and then we'll take one online. So Anders from ABG, please?

Just to make sure we understand the business model for fleet automation. When we look at this, when it matures, say, 5 years from now, how much of this do you think will be recurring software subscription fees, basically? How much will be products? How much will be sort of onetime installation revenues? Just to get a feel.

I would say it's a mix of all of this. And I think we are step-by-step working out the business models as well. Of course, if you're nailing something, then it's a lot of R&D investments, and it's like a project. The solutions we have that are in scaling mode, okay, that's something completely different. But it will be a mix of projects, it will be hardware, it will be software and recurring license fees. So you will have a combination of all of that. It depends on how many orders of new products we take, but that's very much how it is. But I think the good thing is that it's not connected to new equipment sales only. It is also, of course, that we do that as well, but it's also something we can now do as an aftermarket opportunity.

We will take one last from online and then it's time for lunch. And everyone in this room, of course, can ask questions to the management team as well when we are there. So Magnus from Nordea again: what growth rate do you expect to deliver in your Digital Solutions division over the coming year? And how fast did it grow the past 12 months?

So without getting into a percentage number, I think that we already start to see from a growth perspective when we're bringing the portfolio together, the Codelco deal that we had last December, SEK 250 million over 5 years. that's all of a sudden where you start to see the full potential and the scaling of it. And we already have 4 of the, if we would call it, the companies that was acquired coming into this one. And I think if we're looking upon that as a platform, I mean, that's how we will scale as well, both then geographically, but then also across portfolio. So I mean I look upon all these different areas, connectivity, I mean, there will always be the critical enabler. Automation that you touched upon has this huge potential. But also coming back a little bit on the topics here before, it needs to be delivered all the time because it's such a critical system. And then on the software, I mean, then it is really scalable and really making sure that we take these projects.

So no rates given, but we have a good platform. Thank you very much, everyone, for taking the time today. Thank you also to the webcast. We can wave to the camera. And yes, see you at lunch and enjoy MINExpo. Thank you.

Thank you.