Transcript Atlas Copco Group

Atlas Copco Group
Q1 Results
April 27, 2006
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April 27, 2006 www.atlascopco.com
Contents
 Q1 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
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April 27, 2006 www.atlascopco.com
Q1 - Highlights
 Very strong start of 2006
 Strong growth in all Business Areas and regions
– Good demand combined with improved market position
 Record profit and margins for a first quarter
 The divestment process of the equipment rental
business is progressing according to plan
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Q1 - Figures in summary
Including discontinued operations
 Orders received up 39%, +22% in volume
 Revenues up 33% to MSEK 14 863, up 17% in volume
 Operating profit up 63% to MSEK 2 771, a margin of 18.6% (15.2)
 Profit before tax at MSEK 2 606 (1 709), a margin of 17.5% (15.3)
 Basic earnings per share were SEK 2.83 (1.90), up 49%
 Operating cash flow totaled MSEK 536 (1 017)
 ROCE at 30%
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Contents
 Q1 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
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Orders received - Local currency
Group total +26% YTD – Group excluding Rental Service +28% YTD
(Structural change +2% YTD)
33
37
+27
Continuing operations
+38
+19
14
7
5
+35
+66
+8
4
March 2006
A
6
B
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A=
Portion of sales, last 12 months, %
B=
Year-to-date vs. prev. year, %
+11
Q1 - The Americas
 Strong demand in North America
– Increased demand from manufacturing and
process industries as well as from the
construction industry
– High activity in the mining industry
37
+27
Continuing operations
+38
 Healthy demand in South America
– Mining and motor vehicle industry
somewhat slower
March 2006
A
7
B
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A=
Portion of sales, last 12 months, %
B=
Year-to-date vs. prev. year, %
5
+8
Q1 - Europe and Africa/Middle East
 Improvement in Europe
– Increased demand for industrial and
construction equipment
– Positive development in most major markets
33
+19
 Very positive development in the Africa /
Middle East region
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March 2006
A
8
B
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A=
Portion of sales, last 12 months, %
B=
Year-to-date vs. prev. year, %
+66
Q1 - Asia and Australia
 Increased demand in Asia
– Very good development for industrial
equipment – compressors and tools
– Strong growth in all major markets Japan,
India, South Korea and China
14
+35
4
March 2006
A
9
B
April 27, 2006 www.atlascopco.com
A=
Portion of sales, last 12 months, %
B=
Year-to-date vs. prev. year, %
+11
Volume Growth per Quarter
Including discontinued operations
 Change in orders received in % vs. same Quarter previous year
25
20
15
10
5
0
-5
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06 Q4
06 Q3
06 Q1
06 Q2
05 Q4
05 Q3
05 Q2
05 Q1
04 Q4
04 Q2
04 Q3
04 Q1
03 Q4
03 Q3
03 Q2
03 Q1
02 Q3
02 Q4
02 Q2
02 Q1
01 Q4
01 Q3
01 Q2
00 Q4
01 Q1
00 Q3
00 Q2
00 Q1
-10
Atlas Copco Group – Sales Bridge
MSEK
2005
Structural change, %
Currency, %
Price, %
Volume, %
Total, %
2006
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April 27, 2006 www.atlascopco.com
January – March
January – March
Continuing operations
Group Total
Orders
Received
9 832
+2
+11
+2
+24
+39
13 699
Revenues
9 010
+2
+11
+2
+18
+33
11 948
Orders
Received
11 990
+2
+13
+2
+22
+39
16 614
Revenues
11 168
+2
+12
+2
+17
+33
14 863
Contents
 Q1 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
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April 27, 2006 www.atlascopco.com
Atlas Copco Group
Operating Profit and Return On Capital Employed (ROCE)
by Business Areas
Revenues
MSEK
12 month values, period ending
Compressor Technique
Construction and Mining Technique
Industrial Technique
Rental Service
Eliminations/Common Group Functions
Atlas Copco Group
Rental Service, discontinued operations
Eliminations, discontiued operations
Atlas Copco Group, continuing operations
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Mar. 2006
21 889
16 510
6 400
12 439
-801
56 437
-11 678
384
45 143
Operating
profit
Mar. 2006
4 355
2 429
1 289
3 023
-617
10 479
Operating
margin
Mar. 2006
19,9%
14,7%
20,1%
24,3%
ROCE
Mar. 2006
71%
31%
64%
17%
18,6%
30%
7 690
17.0%
Compressor Technique
 Very strong order growth
– Highest in North America and Asia, robust in Western Europe
– Strong order intake for all types of compressors
 Steady positive development of aftermarket
 Operating profit up 40%. Margin above 20%
– Supported by positive volume, price and currency development
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Compressor Technique
Revenue volume growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
25
15
25
06 Q4
06 Q3
06 Q2
06 Q1
05 Q4
05 Q3
05 Q2
05 Q1
04 Q4
04 Q3
04 Q2
Operating margins restated (IFRS) from 2004
04 Q1
03 Q4
03 Q3

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03 Q2
-10
03 Q1
-10
02 Q4
-5
02 Q3
-5
02 Q2
0
02 Q1
0
01 Q4
5
01 Q3
5
01 Q2
10
01 Q1
10
00 Q4
15
00 Q3
15
00 Q2
20
00 Q1
20
Construction and Mining Technique
 Strong demand from both mining and construction
 Order volume up 24%
– 16th consecutive quarter with volume growth
– Strong growth in North America, Africa / Middle East and Europe
 Operating profit doubled
 Acquisition of Canadian drilling consumables manufacturer
 Launch of first loader, fully developed in Sweden
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Construction and Mining Technique
Revenue volume growth: Change vs. same quarter previous year, %
Quarterly operating margin, %

17
Operating margins restated (IFRS) from 2004
April 27, 2006 www.atlascopco.com
06 Q4
06 Q3
06 Q2
06 Q1
05 Q4
05 Q3
05 Q2
05 Q1
04 Q4
04 Q3
04 Q2
04 Q1
03 Q4
-10
03 Q3
-10
03 Q2
-5
03 Q1
-5
02 Q4
0
02 Q3
0
02 Q2
5
02 Q1
5
01 Q4
10
01 Q3
10
01 Q2
15
01 Q1
15
00 Q4
20
00 Q3
20
00 Q2
25
00 Q1
25
Industrial Technique
 Order growth resumed after a slow Q4 2005
 Strong sales to general industry and vehicle service
 Mixed development in motor vehicle industry
– Good in Asia and North America
– Weak in Europe
 All-time high revenues, operating profit and margin.
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Industrial Technique
Revenue volume growth: Change vs. same quarter previous year, %
Quarterly operating margin, %

19
Operating margins restated (IFRS) from 2004
April 27, 2006 www.atlascopco.com
06 Q4
06 Q3
06 Q2
06 Q1
05 Q4
-5
05 Q3
-5
05 Q2
0
05 Q1
0
04 Q4
5
04 Q3
5
04 Q2
10
04 Q1
10
03 Q4
15
03 Q3
15
03 Q2
20
03 Q1
20
Rental Service
Including discontinued operations
 Rental revenues increased 25% in USD
– Price +6%, volume +19%
 Fleet utilization at 71%
– Seasonal weakness mitigated by high utilization and
positive rate development
– Increased investments in equipment to support demand
and further improve fleet quality
 Operating profit up 92%.
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Rental Service
Rental Revenue Volume Development, incl. discontinued operations
Rental revenue volume growth: Change vs. same quarter previous year, %
Quarterly operating margin, % (Business Area)

21
Operating margins restated (IFRS) from 2004
April 27, 2006 www.atlascopco.com
06 Q4
06 Q3
06 Q2
06 Q1
05 Q4
05 Q3
05 Q2
05 Q1
04 Q4
04 Q3
04 Q2
-15
04 Q1
-15
03 Q4
-10
03 Q3
-10
03 Q2
-5
03 Q1
-5
02 Q4
0
02 Q3
0
02 Q2
5
02 Q1
5
01 Q4
10
01 Q3
10
01 Q2
15
01 Q1
15
00 Q4
20
00 Q3
20
00 Q2
25
00 Q1
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Contents
 Q1 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
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Group Total
January – March
continuing operations
MSEK
Orders received
Revenues
Operating profit
– as a percentage of revenues
Profit before tax
– as a percentage of revenues
Profit for the period
Basic earnings per share, SEK
Equity per share, SEK
Return on capital employed, %
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2006
2005
%
13 699
11 948
2 096
17.5
2 264
18.9
1 602
2.54
9 832
9 010
1 344
14.9
1 498
16.6
1 078
1.71
+39
+33
+56
+51
+49
+49
January – March
including discontinued
operations
2006
2005
%
16 614
14 863
2 771
18.6
2 606
17.5
1 786
2.83
44
30
11 990
11 168
1 695
15.2
1 709
15.3
1 198
1.90
39
23
+39
+33
+63
+52
+49
+49
Balance Sheet
Including discontinued operations
MSEK
24
March 31, 2006
Dec. 31, 2005
March 31, 2005
Intangible assets
Rental equipment
Other property, plant and equipment
Other fixed assets
Inventories
Receivables
Current financial assets
Cash and cash equivalents
TOTAL ASSETS
10 556
13 719
4 674
1 850
8 055
13 969
577
3 885
57 285
18%
24%
8%
3%
14%
24%
1%
7%
10 607
13 456
4 503
1 818
7 215
13 240
389
3 727
54 955
19%
24%
8%
3%
13%
24%
1%
7%
9 248
10 022
3 923
1 790
6 447
11 191
287
7 316
50 224
18%
20%
8%
4%
13%
22%
1%
15%
Total equity
Interest-bearing liabilities
Non-interest-bearing liabilities
TOTAL EQUITY AND LIABILITIES
27 355
11 024
18 906
57 285
48%
19%
33%
25 808
11 345
17 802
54 955
47%
21%
32%
24 827
10 531
14 866
50 224
49%
21%
30%
April 27, 2006 www.atlascopco.com
Capital Structure
Net Debt/Equity
100%
92%
92%
80%
75%
72%
67%
60%
59%
46%
40%
32%
30%
20%
28%
24%
16%
4%
0%
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 March
2006
Adjusted for IFRS, but including discontinued operations
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Cash Flow
MSEK
Operating cash surplus after tax
of which depreciation added back
Change in working capital
Cash flow from operations
Investments in tangible fixed assets
Sale of tangible fixed assets
Other investments, net
Cash flow from investments
Operating cash flow
Company acquisitions / divestments
Dividends paid
Change in interest-bearing liabilities
Net cash flow
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April 27, 2006 www.atlascopco.com
January – March
2006
2005
2 693
1 993
924
718
-578
-122
2 115
1 871
- 1 936
-1 336
680
566
-323
-84
-1 579
-854
536
1 017
-268
3 899
-2
-94
-379
174
4 535
Capital Expenditures
Tangible Fixed Assets
Net rental fleet investment
= MSEK 4 419
MSEK
Machinery & buildings, quarterly
Net, Rental Equipment, quarterly
Quarterly
Net. Rental Eq.+Mach.& buildings, 12 months
Net, Rental Equipment, 12 months
2500
5000
2000
4000
1500
3000
1000
2000
500
1000
0
-500
27
12 months
April 27, 2006 www.atlascopco.com
0
2001
2002
2003
2004
2005
2006
-1000
Contents
 Q1 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
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April 27, 2006 www.atlascopco.com
Near-term Outlook
The demand for Atlas Copco’s products and services, from all major
customer segments such as mining, infrastructure and other nonresidential construction, manufacturing and process industry, is
expected to remain at the current high level.
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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
effected by other factors like for example, the effect of economic
conditions, exchange-rate and interest-rate movements, political
risks, impact of competing products and their pricing, product
development, commercialization and technological difficulties,
supply disturbances, and the major customer credit losses.”
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