Transcript Atlas Copco Group

Atlas Copco Group
Q2 Results
July 16, 2007
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July 16, 2007, www.atlascopco.com
Contents
 Q2 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
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Q2 - Highlights
 Strong growth in equipment and aftermarket sales
– Double-digit growth in all regions
– Organic order growth 17%
 Operating profit exceeds BSEK 3 for the first time
 Completion of capital restructuring
– Distribution to shareholders of BSEK 27
 ABAC and Dynapac acquisitions finalized
 Investments for increased capacity
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Q2 - Figures in summary
 Revenues up 28% to MSEK 15 985
– 20% organic growth
 Operating profit up 30% to MSEK 3 037
– Operating margin at record 19.0% (18.8)
 Profit before tax at MSEK 3 215 (2 200)
– Including capital gain of MSEK 134
 Profit from continuing operations up 53% to MSEK 2 377
– Earnings per share continuing operations SEK 1.94 (1.23)
 Operating cash flow, continuing operations, MSEK 1 232 (964)
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Contents
 Q2 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
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Orders received - Local currency
Group total +27% YTD, +27% last 3 months
(Structural change +7% YTD, +10% last 3 months)
40
20
18
+18 +25
10
7
June 2007
A
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+27 +28
B
C
+31 +31
+42 +40
+42 +27
A = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
C = Last 3 months vs. prev. year, %
5
+23 +10
Q2 - The Americas
 Solid growth in North America
– Good demand from most customer
segments within mining, process, and
manufacturing industries
– Demand from the motor vehicle industry
still on the weak side
20
+18 +25
 Strong demand continues from all
customer segments in South America
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June 2007
A
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B
C
A = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
C = Last 3 months vs. prev. year, %
+42 +27
Q2 - Europe and Africa/Middle East
 Positive development in Europe
– Healthy demand from manufacturing and
process industries
– Very strong demand from most customer
segments in Eastern Europe
40
+27 +28
10
+42 +40
 Continued good demand in the Africa /
Middle East region
– Very strong increase in sales of mining
equipment in Africa
June 2007
A
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B
C
A = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
C = Last 3 months vs. prev. year, %
Q2 - Asia and Australia
 Asia continues to deliver strong growth
– Good demand for industrial equipment in
most major markets, particularly in China
– Solid growth for construction and mining
equipment
18
+31 +31
 Demand from most customer segments
remained strong in Australia
5
June 2007
A
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B
C
A = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
C = Last 3 months vs. prev. year, %
+23 +10
Volume Growth per Quarter
Atlas Copco Group, continuing operations
 Change in orders received in % vs. same Quarter previous year
25
20
15
10
5
0
-5
00 Q1
00 Q2
00 Q3
00 Q4
01 Q1
01 Q2
01 Q3
01 Q4
02 Q1
02 Q2
02 Q3
02 Q4
03 Q1
03 Q2
03 Q3
03 Q4
04 Q1
04 Q2
04 Q3
04 Q4
05 Q1
05 Q2
05 Q3
05 Q4
06 Q1
06 Q2
06 Q3
06 Q4
07 Q1
07 Q2
07 Q3
07 Q4
-10
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Atlas Copco Group – Sales Bridge
MSEK
2006
Structural change, %
Currency, %
Price, %
Volume, %
Total, %
2007
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April - June
Orders
Revenues
Received
13 562
12 444
+10
+12
-4
-4
+2
+2
+15
+18
+23
+28
16 735
15 985
January - June
Orders
Revenues
Received
27 261
24 392
+7
+7
-6
-6
+2
+2
+18
+17
+21
+20
32 855
29 375
Contents
 Q2 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
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Atlas Copco Group
Operating Profit and Return On Capital Employed (ROCE)
by Business Area
Revenues
MSEK
12 month values, period ending
Compressor Technique
Construction and Mining Technique
Industrial Technique
Eliminations/Common Group Functions
Atlas Copco Group
*including discontinued operations
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Jun. 2007
28 404
21 012
6 440
-361
55 495
Operating
profit
Jun. 2007
5 915
3 623
1 429
-619
10 348
Operating
margin
Jun. 2007
20.8%
17.2%
22.2%
ROCE
Jun. 2007
66%
35%
60%
18.6%
33%*
Compressor Technique
 Strong growth for both equipment and aftermarket sales
– Organic order growth 20%
– Double-digit growth in all regions
 Record operating profit
– Margin affected negatively by recent acquisitions,
comparable units above 21% margin
 ABAC acquisition finalized on April 2
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Compressor Technique
Revenue volume growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
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07 Q4
07 Q3
07 Q2
07 Q1
06 Q4
06 Q3
06 Q2
06 Q1
05 Q4
05 Q3
05 Q2
05 Q1
04 Q4
04 Q3
04 Q2
-10
04 Q1
-10
03 Q4
-5
03 Q3
-5
03 Q2
0
03 Q1
0
02 Q4
5
02 Q3
5
02 Q2
10
02 Q1
10
01 Q4
15
01 Q3
15
01 Q2
20
01 Q1
20
Quarterly operating margins include Prime Energy from Q1 2006.
15
25
Construction and Mining Technique
 Solid demand from both mining and
construction industry
 Organic order growth 16%
– 21st consecutive quarter with volume growth
 Operating profit up 56%
– Margin at record level, 17.9%
– Comparable units 18.5%
 Dynapac acquisition finalized on May 31
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Dynapac
Expanding presence in the road development market
 Consolidated as from June 1
 Revenues increased 7% in the first 6 months of the year
 Operating profit contribution of MSEK 65 in June
– Almost no amortization of intangibles as Dynapac brand
name is deemed to have indefinite useful life and is not
amortized
 Synergy projects under way
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Construction and Mining Technique
Revenue volume growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
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07 Q4
07 Q3
07 Q2
07 Q1
06 Q4
06 Q3
06 Q2
06 Q1
05 Q4
05 Q3
05 Q2
05 Q1
-10
04 Q4
-10
04 Q3
-5
04 Q2
-5
04 Q1
0
03 Q4
0
03 Q3
5
03 Q2
5
03 Q1
10
02 Q4
10
02 Q3
15
02 Q2
15
02 Q1
20
01 Q4
20
01 Q3
25
01 Q2
25
01 Q1
18
30
Industrial Technique
 Strong order growth in general industry offset by
weakness in motor vehicle industry
 2% organic order growth in total
 High operating profit and margin at 22.9%
 New generation of the Tensor tool introduced
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Industrial Technique
Revenue volume growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
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07 Q4
07 Q3
07 Q2
07 Q1
06 Q4
06 Q3
06 Q2
06 Q1
-5
05 Q4
-5
05 Q3
0
05 Q2
0
05 Q1
5
04 Q4
5
04 Q3
10
04 Q2
10
04 Q1
15
03 Q4
15
03 Q3
20
03 Q2
20
03 Q1
20
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Contents
 Q2 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
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Group Total
MSEK
Orders received
Revenues
22
April - June
2007
2006
%
January - June
2007
2006
%
16 735
15 985
13 562
12 444
+23
+28
32 855
29 375
27 261
24 392
+21
+20
Operating profit
- as a percentage of revenues
Profit before tax
- as a percentage of revenues
3 037
19.0
3 215
20.1
2 337
18.8
2 200
17.7
+30
5 578
19.0
5 692
19.4
4 433
18.2
4 232
17.3
+26
Profit from continuing operations
Profit from discontinued operations, net of tax
Profit for the period
2 377
2 377
1 555
743
2 298
+53
4 150
53
4 203
3 018
1 066
4 084
+38
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+46
+34
Balance Sheet
MSEK
23
June 30, 2007
Intangible assets
Rental equipment
Other property, plant and equipment
Other fixed assets
Inventories
Receivables
Current financial assets
Cash and cash equivalents
Assets classified as held for sale
TOTAL ASSETS
11 326
2 018
4 553
4 963
11 962
16 080
1 084
3 609
Total equity
Interest-bearing liabilities
Non-interest-bearing liabilities
Liabilities associated with assets
classified as held for sale
TOTAL EQUITY AND LIABILITIES
11 651
26 627
17 317
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20%
4%
8%
9%
22%
29%
2%
6%
55 595
55 595
Dec 31, 2006
4 299
1 979
3 777
3 161
8 487
12 401
1 016
20 135
8%
4%
7%
6%
15%
22%
2%
36%
3 540
1 987
3 631
1 766
7 986
12 590
602
2 946
22 890
57 938
6%
3%
6%
3%
14%
22%
1%
5%
40%
59%
16%
25%
26 300
10 951
13 403
45%
19%
23%
7 284
57 938
13%
55 255
21%
48%
31%
32 708
8 787
13 760
55 255
June 30, 2006
Capital Structure
Net Debt/EBITDA
3,0
2,5
2,7
2,0
1,5
2,2
1,9
1,9
1,6
1,8
1,5
1,0
1,1
0,8
0,5
0,9
0,0
-0,5
-1,1
-1,0
-1,5
1997
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1998
1999
2000
2001
2002
2003
2004
2005
2006
June
2007
Cash Flow
Continuing operations
MSEK
Operating cash surplus after tax
of which depreciation added back
Change in working capital
Cash flows from operating activities
Investments in tangible fixed assets
Sale of tangible fixed assets
Other investments, net
Cash flow from investments
Operating cash flow
Company acquisitions/ divestments
*Restated, continuing operations
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April - June
2007
2006*
2 718
443
-787
1 931
-544
195
-350
-699
1 232
-5 463
2 491
397
-738
1 753
-618
109
-280
-789
964
-145
January - June
2007
2006*
4 736
857
-1 293
3 443
-1 072
367
-661
-1 366
2 077
-5 682
4 408
787
-1 267
3 141
-1 117
254
-603
-1 466
1 675
-413
Contents
 Q2 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
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Near-term Outlook
The demand for Atlas Copco’s products and services, from most
customer segments such as mining, construction, and the
manufacturing and process industries, 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 major customer credit losses.”
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