Transcript Atlas Copco Group

Atlas Copco Group
Q1 Results
April 27, 2005
April 27, 2005
1
Contents
 Q1 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
April 27, 2005
2
Q1 - Highlights
 Strong growth
 Record profit margins
 Strong performance from acquired units
 Continued improvement in Rental Service
 Price increases and efficiency measures
offset higher component and energy costs
 Acquisitions strengthen core businesses
within CT, CMT and IT
 Divestment of professional electric tool
business on January 3, 2005
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Q1 - Figures in summary
 Order received up 17%, volume up 8%
 Revenues reached MSEK 11 168 (9 595), up 10% in volume
 Operating profit at MSEK 1 737, a margin of 15.6% (13.8)
– Capital gain on professional electric tools divestment deferred
– 2004 restated for IFRS
 Profit after financial items up 35% to MSEK 1 665 (1 231)
 Earnings per share increased to SEK 5.55 (4.38)
 Operating cash flow at MSEK 685 (862)
 ROCE at 23%
April 27, 2005
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Contents
 Q1 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
April 27, 2005
5
Orders received - Local currency
Group total +8% YTD, +21 excl. discontinued operations
(Structural change +10% YTD, excl. discontinued operations)
34
39
+3
0
+10
+27
12
6
5
+79
+26
+12
+14
+28
+83
4
A
April 27, 2005
March
2005
B
C
+30
A= Portion of Group sales last 12 months, %
B= Year-to-date vs prev. year, %
C= B, excl. discontinued operations
6
+40
Q1 - The Americas
March
2005
 Strong development in North America
– Increased demand from manufacturing and
process industries
– Non-residential construction activity improved
– Very good demand from the mining industry
39
+3
+27
 Continued strong demand in South America
5
A
April 27, 2005
B
C
+79
A= Portion of Group sales last 12 months, %
B= Year-to-date vs prev. year, %
C= B, excl. discontinued operations
7
+83
Q1 - Europe and Africa/Middle East
March
2005
 Demand in Europe increased
– Increased investments in compressed air
equipment and industrial tools in the
manufacturing and process industries
– Improved demand for construction equipment,
still strong for mining equipment
– Best development in Eastern Europe, the Nordic
countries, Great Britain and Spain
34
0
6
+26
 Overall positive demand development in Africa /
Middle East
A
April 27, 2005
B
C
A= Portion of Group sales last 12 months, %
B= Year-to-date vs prev. year, %
C= B, excl. discontinued operations
8
+10
+28
Q1 - Asia and Australia
March
2005
 Continued growth in Asia
– Healthy demand for standard
industrial compressors
– Lower demand from large projects
in China
12
+12
+14
– Strong performance in India, South
East Asia and Japan.
 Strong growth in Australia, primarily
due to mining demand
A
April 27, 2005
B
C
4
+30
A= Portion of Group sales last 12 months, %
B= Year-to-date vs prev. year, %
C= B, excl. discontinued operations
9
+40
Volume Growth
per Quarter
20
15
10
5
0
-5

April 27, 2005
05 Q1
04 Q4
04 Q3
04 Q2
04 Q1
03 Q4
03 Q3
03 Q2
03 Q1
02 Q4
02 Q3
02 Q2
02 Q1
01 Q4
01 Q3
01 Q2
01 Q1
00 Q4
00 Q3
00 Q2
00 Q1
-10
Change in orders received in % vs. same Quarter previous year
10
Group Total
Sales Bridge
January – March
MSEK
2004 reported
Discontinued operations
2004
Structural change, %
Currency, %
Price, %
Volume, %
Total, %
2005
April 27, 2005
Orders
Received
11 577
-1 299
Revenues
10 278
+10
-4
+3
+8
+17
11 990
9 595
+7
-4
+3
+10
+16
11 168
10 858
-1 263
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Contents
 Q1 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
April 27, 2005
12
Compressor Technique
 Record level of order received
– Volume growth 7%
– Positive sales development in the Americas
– Strong growth for portable compressors and
specialty rental business
– Demand for stationary industrial compressors and
related aftermarket business increased further
– Breakthrough order from liquid natural gas market
 Improved operating margin
– Positive volume effect and price increases more
than offset the negative currency impact and higher
components costs
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Compressor Technique
Volume growth: Change in revenues vs. same quarter previous year, %
Quarterly operating margin, %

April 27, 2005
05 Q1
04 Q4
04 Q3
04 Q2
04 Q1
03 Q4
-15
03 Q3
-15
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
Operating margins restated (IFRS) from 2004
14
Construction & Mining Technique
 Orders received up 63%
– 17% volume growth for comparable units
– Continued strong demand from mining
industry and improved demand for light
construction equipment
– Strong contribution from recently acquired
businesses
 Operating profit improved
 Acquisition of Lifton, a manufacturer of hydraulic
handheld breaker equipment
April 27, 2005
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Construction & Mining Technique
Volume growth: Change in revenues vs. same quarter previous year, %
Quarterly operating margin, %
25
25

April 27, 2005
05 Q1
04 Q4
04 Q3
04 Q2
-20
04 Q1
-20
03 Q4
-15
03 Q3
-15
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
Operating margins restated (IFRS) from 2004
16
Rental Service
 Recovery in non-residential construction activity
continued
 Rental revenues increased 13% in USD
– Price +10%, volume +3%
 Fleet utilization at record level
 Profitability improved significantly
– Record operating margin in a first quarter
– Return on total capital employed above the
Group’s WACC
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Rental Service
Rental Revenue Volume Development
Volume growth: Change in rental revenue vs. same quarter previous year, %
Quarterly operating margin, % (Business Area)

April 27, 2005
05 Q1
04 Q4
04 Q3
04 Q2
04 Q1
03 Q4
-15
03 Q3
-15
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
Operating margins restated (IFRS) from 2004
18
Industrial Technique
 Order volume up 9% for industrial tools
– Good demand from all major customer segments
– Strong development in North America
 Record operating margin
 Acquisitions of specialized tightening solutions
businesses
 Divestment of electric tools business finalized on
January 3, 2005.
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Industrial Technique
Volume growth: Change in revenues vs. same quarter previous year, %
Quarterly operating margin, %
0
-5
-5
-10
-10
-15
-15

April 27, 2005
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
Operating margins restated (IFRS) from 2004
20
Contents
 Q1 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
April 27, 2005
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Income Statement
MSEK
Orders received
Revenues
Operating profit
– as a percentage of revenues
Profit after financial items
– as a percentage of revenues
Net profit from continuing operations
Net profit from discontinued operations
Net profit
Earnings per share, SEK
Equity capital per share, SEK
Return on capital employed, %
1)
January – March
2005
2004
11 990
10 278
11 168
9 595
1 737
1 321
15.6
13.8
1 665
1 231
14.9
12.8
1 167
875
47
1 167
922
5.55
4.38 1)
118
104
1)
23
Change
%
+17
+16
+31
+35
+33
+27
+27
Including discontinued operations.
Adjusted for IFRS
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Balance Sheet
MSEK
Property, plant and equipment
Rental equipment
Other property, plant and equipment
Intangible assets
Other fixed assets
Inventories
Receivables
Short-term investments
Cash and cash equivalents
Assets held for sale
Total assets
Total Equity
Interest-bearing loans and borrowings
Non-interest-bearing loans and borrowings
Liabilities held for sale
Total shareholders’ equity and liabilities
Mar. 31, 2005
10 022
3 923
9 248
1 790
6 447
11 110
287
7 316
50 143
24 769
10 531
14 843
50 143
20%
8%
18%
4%
13%
22%
1%
15%
100%
49%
21%
30%
100%
Mar. 31, 2004
9 425
3 535
8 644
2 051
5 187
9 616
312
4 553
6 087
49 410
19%
7%
17%
4%
10%
19%
1%
9%
12%
100%
21 766
13 111
12 162
2 371
49 410
44%
27%
25%
5%
100%
Adjusted for IFRS
April 27, 2005
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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
Cash flow from financing
Net cash flow, after financing
January – March
2005
2004
1 993
1 438
718
674
-454
-81
1 539
1 357
-1 336
-820
566
424
-84
-100
-854
-495
685
862
4 231
-10
-381
-179
4 535
673
Adjusted for IFRS
April 27, 2005
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Capital Expenditures
in Tangible Fixed Assets
Net rental fleet investment
= MSEK 2 421
MSEK
Quarterly
Machinery & buildings, quarterly
Net. Rental Eq.+Mach.& buildings, 12 months
Net. Rental Eq.+Mach.& buildings, quarterly
Net, Rental Equipment, quarterly
Net, Rental Equipment, 12 months
2500
5000
2000
4000
1500
3000
1000
2000
500
1000
0
-500
April 27, 2005
12 months
0
2001
2002
2003
2004
2005
-1000
25
Dividend and Redemption
Dividend per share
Redemption of shares
Line 4
7000
6078
6000
Average annual
dividend growth
(ordinary dividend)
13,6%
5000
4000
4192
3000
2000
1572
1100
1153
1205
2000
2001
2002
1886
1000
0
2003
2004*
* Proposed by the Board of Directors
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Contents
 Q1 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
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Near-term Outlook
The demand for Atlas Copco’s products and services is
expected to remain at current high level.
Demand from manufacturing and process industries is
expected to stay favorable in most markets. Activity in the
construction industry is expected to continue to increase
somewhat in North America and in most developing countries.
Demand from the mining industry is expected to remain strong.
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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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