Epiroc CEO Helena Hedblom says the company has the mining digital business platform it needs to scale revenues and profits and it will seek only bolt-on acquisitions in 2025.
One of the most prolific participants in M&A in the mining and metals technology space over the past five years, the Swedish equipment manufacturer has made a series of chunky software, automation and communication systems acquisitions and built a circa-US$250 million-a-year mining tech arm around its core digital solutions unit.
At the same time it has significantly expanded its construction and mining tools and attachments businesses, where it is also now pulling back from major new deals.
“I don’t see any big acquisitions in software or in construction moving forward,” Hedblom said on Epiroc’s latest financial results call.
“We have a very good platform now when it comes to the digital side.
“It has taken us some years to put the full assortment together.
“We have a full offering now so it is not as if we have to scale each and every component. We have managed to bundle the solutions which is also why the scaling goes faster. The deals we are negotiating for digital today consist of many components of our offering.
“We believe both long-term and I would say mid and short-term that to digitise mining is one of the fastest ways to improve productivity for our customers.
“But I’m super-pleased to see now that we are up 30% in orders in 2024 on digital solutions. It is really now time to start harvesting this and really get the scaling going.
“We see huge potential when it comes to growing this business.”
Epiroc achieved record orders (SEK62.2 billion, or US$5.88 billion) and revenues (SEK63.3b/US$6.01b) in 2024 on the back of “strong mining, stable infrastructure and weak construction” markets.
Robust mining market conditions continued in the December quarter when the company booked SEK820 million in large equipment orders and more than SEK250m of mining digital solutions orders.
The latter included wireless connectivity networks vital for supporting mining automation and digitalisation.
Hedblom said order levels were indicative of the outlook for mining in 2025.
“In the near term we expect that the underlying mining demand, both for equipment and aftermarket, will remain at a high level,” she said.
“Demand from construction customers is expected to remain weak.”