Transcript Slide 1

Atlas Copco Group
Q4 Results
February 2, 2011
Q4 - highlights
 Order growth continued
 Record operating profit
– All business areas above 20% operating margin
 Investments in market organization and production capacity
 Proposed dividend of 4.00 (3.00) and redemption of 5.00 per share
– Totaling BSEK 11 in capital distribution
 Updated goals for sustainable, profitable development
2
February 2, 2011
Q4 - figures in summary
 28% organic order growth
 Revenues of MSEK 19 401; 23% organic growth
 Operating profit increased 64% to MSEK 4 007
– Operating margin at 20.7% (15.4)
 Profit before tax at MSEK 3 920 (2 324)
 Basic earnings per share SEK 2.39 (1.39)
 Operating cash flow MSEK 2 529 (4 131)
3
February 2, 2011
Orders received - local currency
Group total +33% YTD (+31% excl. cancellations), +31% last 3 months
Structural change +2% YTD, +3% last 3 months
31
18
+20 +20
+50 +47
23
11
11
+41 +24
+22 +61
+40 +26
6
December 2010
A
B
C
4
February 2, 2011
A=
B=
C=
Share of orders received, year-to-date, %
Year-to-date vs. previous year, %
Last 3 months vs. previous year, %
+50 +38
Q4 - the Americas
 Order intake continued to improve in North America
– Demand from the mining industry particularly strong
– Positive development in the manufacturing sector
18
+50 +47
 Demand remained strong in South America
– Stable growth in all countries and most customer
segments
December 2010
A
B
C
5
February 2, 2011
A=
B=
C=
Share of orders received, year-to-date, %
Year-to-date vs. previous year, %
Last 3 months vs. previous year, %
11
+40 +26
Q4 - Europe and Africa/Middle East
 Strong and soft in Europe
– Eastern Europe continued to recover at a good pace
– Continued soft demand for construction equipment
31
+20 +20
 Strong quarter in Africa / Middle East
– High demand from mining customers in southern and
central Africa
– Good development in the Middle East
December 2010
A
B
C
6
February 2, 2011
A=
B=
C=
Share of orders received, year-to-date, %
Year-to-date vs. previous year, %
Last 3 months vs. previous year, %
11
+22 +61
Q4 - Asia and Australia
 Order intake remained high in Asia
– Strong demand for construction and mining equipment
– Good demand for small to medium sized compressed
air equipment
– Positive development for industrial tools
23
+41 +24
 Demand from mining customers remained at a high
level in Australia
6
December 2010
A
B
C
7
February 2, 2011
A=
B=
C=
Share of orders received, year-to-date, %
Year-to-date vs. previous year, %
Last 3 months vs. previous year, %
+50 +38
Organic* growth per quarter
Atlas Copco Group, continuing operations
 Change in orders received in % vs. same quarter previous year
*Volume and price
8
February 2, 2011
Atlas Copco Group – sales bridge
October - December
Orders
Received
Revenues
2009
Cancellations, %
Structural change, %
Currency, %
15 276
+3
-4
15 942
+3
-4
58 451
+2 *
+2
-4
63 762
+2
-4
Price, %
Volume, %
Total, %
2010
+1
+27
+27
19 374
+1
+22
+22
19 401
+1
+28
+29
75 178
+1
+11
+10
69 875
MSEK
*Cancellations in Q1 2009
9
February 2, 2011
January - December
Orders
Received
Revenues
Atlas Copco Group
Revenues, operating profit and return on capital employed (ROCE) by
business area
Revenues
Operating
Operating
ROCE
2010
profit
2010
margin
2010
2010
Compressor Technique
34 602
8 127
23.5%
69%
Construction and Mining Technique
29 156
5 243
18.0%
27%
Industrial Technique
Eliminations/Common Group Functions
Atlas Copco Group
6 472
-355
69 875
1 262
-717
13 915
19.5%
50%
19.9%
29%
MSEK
12 month values, period ending
10
February 2, 2011
Compressor Technique
 21% organic order growth vs. Q4 2009
– Demand for stationary and portable compressors remained solid
– Soft demand for larger units in the quarter
– Continued good development in the aftermarket business
 Operating margin at 23.7% (19.6)
– Supported by volume, efficiency improvements, currency and price
– Higher share of equipment revenues in Q4 compared to Q3
 Expansion in production capacity
11
February 2, 2011
Compressor Technique
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
30
25
20
15
10
5
0
-5
- 10
- 15
- 20
- 25
10 Q4
10 Q3
10 Q2
10 Q1
09 Q4
09 Q3
09 Q2
09 Q1
08 Q4
08 Q3
08 Q2
08 Q1
07 Q4
07 Q3
07 Q2
07 Q1
06 Q4
February 2, 2011
06 Q3
12
06 Q2
06 Q1
*Volume and price
30
25
20
15
10
5
0
-5
-10
-15
-20
-25
Construction and Mining Technique
 Strong development for both equipment and aftermarket
– 39% organic order growth vs. Q4 2009
– Very strong demand from the mining industry
– Large order for road development equipment in China
 Record operating profit and margin
– Operating margin at 20.1% (14.1), supported by volume, price
and efficiency improvements
 New customer center and production facility investments
13
February 2, 2011
Construction and Mining Technique
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
30
25
20
15
10
5
0
-5
- 10
- 15
- 20
- 25
- 30
- 35
10 Q4
10 Q3
10 Q2
10 Q1
09 Q4
09 Q3
09 Q2
09 Q1
08 Q4
08 Q3
08 Q2
08 Q1
07 Q4
07 Q3
07 Q2
07 Q1
06 Q4
February 2, 2011
06 Q3
14
06 Q2
06 Q1
*Volume and price
30
25
20
15
10
5
0
-5
-10
-15
-20
-25
-30
-35
Industrial Technique
 Good demand from all customer segments
– 19% organic order growth vs. Q4 2009
– Positive development in Asia
 High operating profit and margin
– Operating margin at 21.9% compared to 12.9%
previous year (adjusted for restructuring costs)
– Positively affected by increased volumes, price
and cost savings
 Awarded for product design (iF design award)
15
February 2, 2011
Industrial Technique
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
40
30
30
20
20
10
10
0
0
10 Q4
10 Q3
10 Q2
10 Q1
09 Q4
09 Q3
09 Q2
09 Q1
08 Q4
08 Q3
February 2, 2011
08 Q2
-50
08 Q1
- 50
07 Q4
-40
07 Q3
- 40
07 Q2
-30
07 Q1
- 30
06 Q4
-20
06 Q3
- 20
06 Q2
-10
06 Q1
- 10
*Volume and price
16
40
Group total
October - December
MSEK
2010
2009
%
2010
2009
%
19 374
19 401
15 276
15 942
+27
+22
75 178
69 875
58 451
63 762
+29
+10
Operating profit
- as a percentage of revenues
Profit before tax
- as a percentage of revenues
4 007
20.7
3 920
20.2
2 450
15.4
2 324
14.6
+64
13 915
19.9
13 495
19.3
9 090
14.3
8 271
13.0
+53
Profit for the period
Basic earnings per share, SEK
Return on capital employed, %
2 916
2.39
1 700
1.39
+72
9 944
8.16
28.6
6 276
5.14
17.7
+58
Orders received
Revenues
17
January - December
February 2, 2011
+69
+63
Profit bridge
October – December, 2010 vs 2009
MSEK
Atlas Copco Group
18
Q4 2010
Organic Grow th
Price/Volum e
Currency
One-tim e item s
Acq./Div.
Q4 2009
Revenues
19 401
3 689
-680
450
15 942
EBIT
4 007
1 437
10
110
2 450
%
20.7%
39%
-
-
15.4%
February 2, 2011
Profit bridge – by business area
October – December, 2010 vs 2009
MSEK
Compressor Technique
Q4 2010
Organic Grow th
Price/Volum e
Currency
One-tim e item s
Acq./Div.
Q4 2009
Revenues
9 451
1 392
-425
340
8 144
EBIT
2 238
624
5
15
1 594
%
23.7%
45%
-
-
19.6%
Revenues
8 173
1 853
-145
70
6 395
EBIT
1 640
751
0
-15
904
%
20.1%
41%
-
-
14.1%
1 885
500
-110
40
1 455
413
226
-25
105
107
21.9%
45%
-
-
7.4%
Construction & Mining Technique
Industrial Technique
Revenues
EBIT
%
19
February 2, 2011
Balance sheet
MSEK
20
Dec 31, 2010
Dec 31, 2009
Intangible assets
Rental equipment
Other property, plant and equipment
Other non-current assets
Inventories
Receivables
Current financial assets
Cash and cash equivalents
Assets classified as held for sale
TOTAL ASSETS
13 464
1 843
5 702
4 123
12 939
17 474
1 734
14 264
79
71 622
19%
3%
8%
6%
18%
24%
2%
20%
0%
12 697
2 056
5 993
6 556
11 377
15 433
1 530
12 165
67
67 874
19%
3%
9%
10%
17%
23%
2%
18%
0%
Total equity
Interest-bearing liabilities
Non-interest-bearing liabilities
TOTAL EQUITY AND LIABILITIES
29 321
21 692
20 609
71 622
41%
30%
29%
25 671
25 735
16 468
67 874
38%
38%
24%
February 2, 2011
Capital structure
Net Debt*/EBITDA
* Net Debt adjusted for the fair value of interest rate swaps
21
February 2, 2011
Cash flow
MSEK
Operating cash surplus after tax
of which depreciation added back
Change in working capital
Increase in rental equipment, net
Cash flows from operating activities
Investments of property, plant & eq.
Sale of property, plant & eq.
Other investments, net
Cash flow from investments
Operating cash flow
Company acquisitions/ divestments
22
February 2, 2011
October - December
2010
2009
3 394
664
-643
-71
2 680
-224
16
57
-151
2 529
-23
2 706
630
1 597
-72
4 231
-166
12
54
-100
4 131
-6
January - December
2010
2009
12 900
2 498
-1 730
-345
10 825
-868
53
-312
-1 127
9 698
-1 691
8 101
2 470
6 715
-212
14 604
-954
79
32
-843
13 761
-171
2010 - Highlights
 Strong recovery in all business areas and all regions
 Investments in market presence and production capacity – focus on
emerging markets
 Many new energy efficient products launched
 Order intake increased 29% to MSEK 75 178
 Revenues up 10% to MSEK 69 875, a 12% organic increase
 Operating profit up 53% to a record MSEK 13 915
– Record operating margin of 19.9%
 Operating cash flow of MSEK 9 698 (13 761)
 Proposed dividend of 4.00 (3.00) and redemption of 5.00 per share
– Totaling BSEK 11 in capital distribution
23
February 2, 2011
2010 - Figures in summary
Revenues and operating margin
MSEK
%
MSEK
80 000
40
14 000
70 000
35
12 000
60 000
30
10 000
50 000
25
40 000
20
30 000
15
20 000
10
10 000
5
2 000
0
0
0
2006 2007 2008 2009 2010
Revenues, MSEK
24
February 2, 2011
Operating margin, %
8 000
6 000
4 000
2006 2007 2008 2009 2010
Operating profit, MSEK
Atlas Copco Group
Earnings per Share, Dividend and Redemption
* Proposed
by the
Board of
Directors
25
February 2, 2011
Near-term outlook
The overall demand for the Group’s products and services is expected to
increase somewhat. The demand in the emerging markets as well as from
the mining industry is expected to stay strong. Some mature markets, like
North America, are expected to continue the recent improvement.
26
February 2, 2011
Goals for sustainable, profitable development
Historic performance – average
27
February 2, 2011
Goals for sustainable, profitable development
Products,
services
and solutions
Increase customer
satisfaction year-on-year.
Increase customer energy
efficiency by 20% by
2020*.
Offer safe and reliable
products and services.
Develop new products and
services with a life -cycle
perspective.
Decrease CO2 emissions
from operations by 20% in
relation to cost of sales by
2020*.
Decrease CO2 emissions
from transport of goods by
20% in relation to cost of
sales by 2020*.
Keep water consumption
at current level.
Reuse or recycle waste.
Construct Atlas Copco
buildings according to
sustainable building
standards**.
No corruption or bribes.
Work with business
partners committed to high
ethical, environmental and
social standards.
Zero work-related
accidents.
Competence development
and yearly appraisals to all
employees.
Safe and healthy working
environment for all
employees.
Sick leave below 2.5%.
Increase diversity in both
gender and nationality.
Encourage internal
mobility.
Annual revenue growth of
8% over a business cycle.
Sustained high return on
capital employed.
All acquired businesses to
contribute to economic
value added.
Annual dividend
distribution about 50% of
earnings per share.
Operations
Financials
* Base year 2010
** Leadership in Energy and Environmental Design (LEED) or comparable green building criteria
28
February 2, 2011
Committed to
sustainable productivity.
29
February 2, 2011
Cautionary Statement
“Some statements herein are forward-looking and the actual outcome
could be materially different. In addition to the factors explicitly commented
upon, the actual outcome could be materially and adversely affected by
other factors such as the effect of economic conditions, exchange-rate and
interest-rate movements, political risks, the impact of competing products
and their pricing, product development, commercialization and
technological difficulties, supply disturbances, and major customer credit
losses.”
31
February 2, 2011