Epiroc-Quality on display, but priced for it-06/09/2026

Research evidence excerpt

Epiroc-Quality on display, but priced for it-06/09/2026

machines generating at least 15% more service revenue over ve years

• By 2035 most large orders are expected to be both automated and fossil-free, building a "brick wall" around the aftermarket for smaller

competitors

• Mixed-fleet automation still early, at 3,900 driverless machines versus stated potential near 112,000

Recovering margins

• The group margin decline reflects three factors, acquisitions (around half), the weaker construction market, and revenue mix, the latter

being both a lower share of attachment and service and an unfavorable mix within service

• T&A weakened rst on the construction slowdown and manufacturing under-absorption, framed as cyclical rather than structural; actions

including portfolio rationalization, footprint consolidation and pricing have restored positive organic flow-through

• E&S declined later on acquisitions and mix; service ef ciency and footprint actions brought it back to a 24% margin in Q1 despite revenue

headwinds

• The group margin was below 20% last year, a level management was not happy with, and back to around 20% in Q1

• A new margin peak was called "not impossible" but a stretch, reflecting both the very strong 2022-2023 margin base and at least one

large dilutive acquisition that will be hard to bring to group margin

Conclusions for the share

• The CMD was, as anticipated, educational rather than a share-price trigger, with no new nancial anchor introduced

• We continue to view Epiroc as a high-quality business exposed to positive long-term trends, but with a valuation that already reflects this

quality

• Cons sees org sales growing 9%/11%/7% in 2026/27/28, and an adj EBIT margin expanding from 20.5% in 2026 to 22% in 2028, and we

are relatively aligned