Transcript Atlas Copco Group
Atlas Copco Group
Q2 Results July 17, 2006
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Contents
Q2 Business Highlights Market Development Business Areas Financials Outlook
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Q2 - Highlights
Another record quarter Strong growth in all regions and most customer segments – Negative development in motor vehicle industry All business areas improved sales, profit and margins Strategic acquisitions – Agreements to acquire two compressor businesses with a total turnover over BSEK 2.2.
The divestment process of the construction equipment rental business continues and is expected to be finalized in the third quarter
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Q2 - Figures in summary
Including discontinued operations
Orders received up 19%, +13% in volume Revenues up 18% to MSEK 15 408, up 12% in volume Operating profit up 41% to MSEK 3 163, a margin of 20.5% (17.2) Profit before tax at MSEK 2 926 (2 170), a margin of 19.0% (16.6) Basic earnings per share were SEK 3.11 (2.36), up 32% Operating cash flow totaled MSEK 799 (955) ROCE at 32% (25)
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Contents
Q2 Business Highlights Market Development Business Areas Financials Outlook
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Orders received - Local currency
Group total +26% YTD + 18% last 3 months Group excluding Rental Service +28% YTD + 19 last 3 months
(Structural change +2% YTD)
32 +13 +8 14 +35 +36 37
Continuing operations
+22 +29 +16 +20 8 +54 +45 5 +12 +16 4 +20 +30
June 2006
A B C
A = B = C = Portion of sales, last 12 months, % Year-to-date vs. prev. year, % Last 3 months vs. prev. year, %
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Q2 - The Americas
Continued strength in North America – Continued investments from most manufacturing and process industries, with the exception of the motor vehicle industry – Improved demand from construction industry – High activity level in the mining industry
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Continuing operations
+22 +29 +16 +20
Solid demand in South America
5 +12 +16
June 2006
A B C
A = B = C = Portion of sales, last 12 months, % Year-to-date vs. prev. year, % Last 3 months vs. prev. year, %
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Q2 - Europe and Africa/Middle East
Robust demand in Europe – Improved demand for industrial equipment, with the exception of advanced assembly tools for the motor vehicle industry – The construction demand increased – Double digit growth in Eastern Europe and in many major markets in Western Europe Very positive development in the Africa / Middle East region
32 +13 +8 8 +54 +45
June 2006
A B C
A = B = C = Portion of sales, last 12 months, % Year-to-date vs. prev. year, % Last 3 months vs. prev. year, %
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Q2 - Asia and Australia
Continued strong growth in Asia – Demand from most customers segments improved – All major markets developed well Mining particularly strong in Australia
14 +35 +36 4 +20 +30
June 2006
A B C
A = B = C = Portion of sales, last 12 months, % Year-to-date vs. prev. year, % Last 3 months vs. prev. year, %
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Volume Growth per Quarter
Including discontinued operations
Change in orders received in % vs. same Quarter previous year 25 20 0 -5 -10 15 10 5
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Atlas Copco Group – Sales Bridge
MSEK 2005 Structural change, % Currency, % Price, % Volume, % Total, % 2006 April – June Continuing operations Orders Received 11 315 +2 +2 +2 +14 +20 13 562 Revenues 10 539 +2 +2 +2 +12 +18 12 444 April - June Group Total Orders Received 13 838 +2 +1 +3 +13 +19 16 526 Revenues 13 062 +2 +1 +3 +12 +18 15 408
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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 Areas
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, discontinued operations
Atlas Copco Group, continuing operations
Revenues Jun. 2006 22 747 17 458 6 565 12 866 -853
58 783
-12 112 +377
47 048
Operating profit Jun. 2006 4 608 2 664 1 345 3 296 -512
11 401 8 630
Operating margin Jun. 2006 20,3% 15,3% 20,5% 25,6%
19,4% 17.8%
ROCE Jun. 2006 72% 33% 65% 18%
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Compressor Technique
Very strong order growth – Strong order intake for all types of compressors – Highest in Asia and North America, robust in Western Europe Steady positive development of aftermarket Strategic acquisitions of BeaconMedaes and ABAC – Total turnover over BSEK 2.2. Operating profit up 26%. Margin at 20% – Positive effect from volume and price
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Compressor Technique
Acquisition of BeaconMedaes – Strong presence in the United States and Great Britain – A solutions provider, predominantly of medical air systems and medical utility delivery systems for hospitals.
Medical air compressors, vacuum systems and pipeline components. The products, for example, supply breathing air for hospitals and compressed air to drive surgical tools. – 2005 turnover approx. MSEK 720 with around 7% operating margin – 386 employees – Purchase price approx. MSEK 700
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Compressor Technique
Acquisition of the industrial division of ABAC – Manufacturing in Italy, Germany and the United States – Complementary product portfolio and a wide international distribution network.
– Multi-brand strategy – Turnover approx. BSEK 1.5 with around 10% operating margin – 650 employees – Purchase price approx. BSEK 1.1
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Compressor Technique
-5 -10 5 0 25 20 15 10 Revenue volume growth: Change vs. same quarter previous year, % Quarterly operating margin, % Operating margins restated (IFRS) from 2004
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5 0 -5 -10 25 20 15 10
Construction and Mining Technique
Strong demand from both mining and construction Order volume up 15% – 17th consecutive quarter with volume growth – Strong growth in all regions Record operating profit, up 49% Investment in increased manufacturing for construction tools Launch of new range of drill rigs for tunneling applications
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Construction and Mining Technique
25 20 15 10 -5 -10 5 0 Revenue volume growth: Change vs. same quarter previous year, % Quarterly operating margin, % 25 20 15 10 5 0 -5 -10 Operating margins restated (IFRS) from 2004
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Industrial Technique
Strong sales to general industry Weaker demand from the motor vehicle industry – Notably in Europe, North and South America Good development of the aftermarket business Increased revenues, operating profit and margin
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Industrial Technique
Revenue volume growth: Change vs. same quarter previous year, % Quarterly operating margin, % 20 15 10 5 0 -5 Operating margins restated (IFRS) from 2004
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20 0 -5 15 10 5
Rental Service
Including discontinued operations
Rental revenues increased 23% in USD – Price +6%, volume +17% Fleet utilization at 72% – Increased investments in equipment to support demand and further improve fleet quality Record operating margin at 27.6%
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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) 10 5 0 -5 -10 -15 25 20 15 25 20 15 10 5 0 -5 -10 -15 Operating margins restated (IFRS) from 2004
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Contents
Q2 Business Highlights Market Development Business Areas Financials Outlook
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Group Total
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, %
April – June
continuing operations 2006 13 562 12 444 2 337
18.8
2 433
19.6
1 695 2.68 2005 11 315 10 539 1 667
15.8
1 766
16.8
1 258 1.99 % +20 +18 +40 +38 +35 +35
April - June
including discontinued operations 2006 2005 % 16 526 15 408 3 163
20.5
2 926
19.0
1 963 3.11 41 32 13 838 13 062 2 241
17.2
2 170
16.6
1 492 2.36 34 25 +19 +18 +41 +35 +32 +32
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Balance Sheet
Including discontinued operations
MSEK Intangible assets Rental equipment Other property, plant and equipment Other fixed assets Inventories Receivables Current financial assets Cash and cash equivalents
TOTAL ASSETS
Total equity Interest-bearing liabilities Non-interest-bearing liabilities
TOTAL EQUITY AND LIABILITIES
June 30, 2006 10 069 14 265 4 750 1 906 8 124 14 673 658 2 968
57 413
26% 1% 5% 25 981 11 840 19 592
57 413
18% 25% 8% 3% 14% 45% 21% 34% Dec. 31, 2005 10 607 13 456 4 503 1 818 7 215 13 240 389 3 727
54 955
25 808 11 345 17 802
54 955
19% 24% 8% 3% 13% 24% 1% 7% 47% 21% 32% June 30, 2005 10 174 11 973 4 179 1 893 7 050 12 760 398 3 174
51 601
21 620 12 484 17 497
51 601
20% 23% 8% 4% 14% 25% 1% 6% 42% 24% 34%
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Capital Structure
Net Debt/Equity
100% 92% 92% 80% 75% 60% 72% 67% 59% 40% 46% 20% 30% 32% 28% 32% 16% 0% 4% 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 June 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 Share redemption Change in interest-bearing liabilities
Net cash flow
April - June 2006 2005 3 396
947
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3 403
-2 813 545 -336 -2 604
799
-145 -2 675 - 1 205
-816
2 487
798
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2 534
-1 993 623 -209 -1 579
955
-99 -1 886 -4 192 856
-4 366
January – June 2006 2005 6 089
1 871
-571
5 518
-4 749 1 225 -659 -4 183
1 335
-413 -2 675 - 1 111
-642
4 480
1 516
-75
4 405
-3 329 1 189 -293 -2 433
1 972
3 800 -1 888 -4 192 477
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Capital Expenditures
Tangible Fixed Assets
Net rental fleet investment = MSEK 5 184 MSEK Quarterly 3000 Machinery & buildings, quarterly Net. Rental Eq.+Mach.& buildings, 12 months 2500 2000 1500 1000 500 0 -500 2001 2002 2003 Net, Rental Equipment, quarterly Net, Rental Equipment, 12 months 12 months 6000 5000 4000 3000 2000 1000 0 -1000 2004 2005 2006
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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, infrastructure and other non residential construction, 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 the major customer credit losses.”
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