Transcript Atlas Copco Group

Atlas Copco Group
Q4 Results
February 2, 2009
1
February 2, 2009, www.atlascopco.com
Contents
 Q4 Business Highlights
 Market Development
 Business Areas
 Financials
 2008 Summary
 Outlook
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February 2, 2009, www.atlascopco.com
Q4 - Highlights
 Declining demand from most customer segments
– Sharpest drop and order cancellations within the mining business
 Continued growth of the aftermarket business
 Measures taken in all three business areas to reduce capacity
and costs
 Unchanged dividend proposed
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Q4 - Figures in summary
 -19% organic order intake, -27% including cancellations
 Revenues of MSEK 19 731; 3% organic growth
 Operating profit at MSEK 3 288 (3 361)
– Including redundancy costs of MSEK 258
– MSEK 350 in positive currency effect compared to last year
– Adjusted for non-recurring items, operating margin at 18.0% (19.3)
 Profit before tax at MSEK 3 508 (2 134)
– Including capital gains of MSEK 939 (tax-free) and MSEK 33
 Earnings per share for continuing operations SEK 2.39 (1.12)
 Operating cash flow MSEK 2 401 (926)
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February 2, 2009, www.atlascopco.com
Contents
 Q4 Business Highlights
 Market Development
 Business Areas
 Financials
 2008 Summary
 Outlook
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Orders received - Local currency
Group total +7% YTD, -27% last 3 months (-19% organically)
(Structural change +5% YTD, 0% last 3 months)
39
18
0
8
December 2008
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B
-30
-36
18
12
A
+1
C
+23
+29
+3
-26
-4
-15
A = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
C = Last 3 months vs. prev. year, %
5
+9
-22
Q4 - The Americas
 Demand declined in North America
– The construction and automotive industries
remained weak
– Low demand and order cancellations from
the mining industry
18
0
-36
– Relatively stable demand for compressors
 Drop in demand from most mining
customers in South America, other
segments holding up better
December 2008
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, %
8
+23
-15
Q4 - Europe and Africa/Middle East
 Weak Europe
– Continued low activity in the construction
segment
39
+1
-30
– Deteriorating demand from many
manufacturing industries
– Mining segment in Eastern Europe weak
12
 Demand declined also in Africa /
Middle East but to a lesser extent.
December 2008
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, %
+29
-4
Q4 - Asia and Australia
 Substantial slowdown in Asia
– Weaker demand from most customer
segments in the major countries
– Good development of the aftermarket
business
18
+3
-26
– Good quarter in Japan
 Weaker demand in Australia
– Mining segment relatively better than
in other regions
December 2008
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, %
5
+9
-22
Organic* Growth per Quarter
Atlas Copco Group, continuing operations
 Change in orders received in % vs. same quarter previous year
30
25
20
15
10
5
0
-5
-10
-15
-20
-25
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
08 Q1
08 Q2
08 Q3
08 Q4
-30
*Volume and price
Order cancellations
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Atlas Copco
Growth – Orders received
Continuing operations (excl. Professional Electric Tools and Rental Service)
30%
21%
20%
14%
10%
0%
2004
11
2005
2006
2007
2008
Organic growth, %
Structural changes, %
CAGR, 2004 - 2008, organic growth
CAGR, 2004 - 2008, total excl. currency
February 2, 2009, www.atlascopco.com
Atlas Copco Group – Sales Bridge
MSEK
2007
Structural change, %
Currency, %
Price, %
Cancellations, %
Volume, %
Total, %
2008
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October - December
Orders
Revenues
Received
18 816
17 549
0
0
+9
+9
+3
+3
-8
-22
0
-18
+12
15 437
19 731
January - December
Orders
Revenues
Received
69 059
63 355
+5
+5
0
0
+3
+3
-1
+9
+7
+17
73 572
74 177
Contents
 Q4 Business Highlights
 Market Development
 Business Areas
 Financials
 2008 Summary
 Outlook
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Atlas Copco Group
Operating Profit and Return On Capital Employed (ROCE)
by Business Area
MSEK
12 month values, period ending
Compressor Technique
Construction and Mining Technique
Industrial Technique
Eliminations/Common Group Functions
Atlas Copco Group
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Revenues Operating Operating ROCE
profit
margin
Dec. 2008 Dec. 2008 Dec. 2008 Dec. 2008
35 587
7 291
20.5%
57%
31 660
5 602
17.7%
29%
7 450
1 328
17.8%
43%
-520
-415
74 177
13 806
18.6%
34%
Compressor Technique

15% organic order decline
– Lower demand in most customer segments and regions
– Good aftermarket sales

Sustained high operating margin
– 21.4% adjusted for MSEK 93 in
redundancy costs

15
Acquisition of Aggreko’s European
compressor rental business
February 2, 2009, www.atlascopco.com
Compressor Technique
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
25
20
15
15
10
10
5
5
0
0
-5
-5
-10
-10
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
08 Q1
08 Q2
08 Q3
08 Q4
20
*Volume and price
Quarterly operating margins include Prime Energy from Q1 2006.
16
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Construction and Mining Technique
 Sharp decline in order intake
– Organic order decline of 27% and -16% from
cancellations, mainly from mining customers
– Good growth for aftermarket products
 Operating profit up 4%, including MSEK 100 in
redundancy costs
– Comparable operating margin unchanged at 17.2%,
supported by currency
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Construction and Mining Technique
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
30
25
20
20
15
15
10
10
5
5
0
0
-5
-5
-10
-10
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
08 Q1
08 Q2
08 Q3
08 Q4
25
*Volume and price
18
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Industrial Technique
 20% organic order decline
– Both general and motor vehicle industry down
– Service business still growing
 Adjusted operating profit margin at 16.0%, excluding redundancy
costs of MSEK 59
– Previous year at 23.1% adjusted for restructuring costs
– Margin negatively affected by sales mix, production disturbances
related to restructuring of pneumatic tools manufacturing, currency and
under-absorption of fixed costs
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Industrial Technique
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
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08 Q4
08 Q3
08 Q2
08 Q1
07 Q4
07 Q3
07 Q2
07 Q1
06 Q4
06 Q3
06 Q2
-5
06 Q1
-10
05 Q4
0
05 Q3
-5
05 Q2
5
05 Q1
0
04 Q4
10
04 Q3
5
04 Q2
15
04 Q1
10
03 Q4
20
03 Q3
15
03 Q2
25
03 Q1
20
*Volume and price
20
30
Contents
 Q4 Business Highlights
 Market Development
 Business Areas
 Financials
 2008 Summary
 Outlook
21
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Group Total
MSEK
October - December
2008
2007
%
%
Orders received
15 437
18 816
-18
73 572
69 059
+7
Revenues
19 731
17 549
+12
74 177
63 355
+17
Operating profit
3 288
3 361
-2
13 806
12 066
+14
- as a percentage of revenues
16.7*
19.2*
18.6
19.0
Profit before tax
- as a percentage of revenues
3 508
17.8
2 134
12.2
+64
13 112
17.7
10 534
16.6
+24
Profit from continuing operations
2 919
1 376
+112
10 006
7 416
+35
-
-
184
53
2 919
1 376
10 190
7 469
Basic earnings per share, SEK
2.39
1.12
8.33
6.09
- of which continuing operations, SEK
2.39
1.12
8.18
6.05
34
29
Profit from discontinued operations, net of tax
Profit for the period
Return on capital employed, %
* Adjusted operating margins 18.0% in 2008 and 19.3% in 2007
22
January - December
2008
2007
February 2, 2009, www.atlascopco.com
Profit Bridge
October – December, 2008 vs 2007
MSEK
Q4 2008
Organic Grow th
Price/Volum e
Currency
One-tim e item s
Acq./Div.
Q4 2007
Atlas Copco Group
Revenues
19 731
457
1 620
105
17 549
EBIT
3 288
-203
350
-220
3 361
%
16.7%
-44%
-
-
19.2%
One-time items include redundancy costs as well as reversal of previous year’s one-time items.
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Profit Bridge – by Business Area
October – December, 2008 vs 2007
Q4 2008
MSEK
Organic Grow th
Currency
Price/Volum e
One-tim e item s
Q4 2007
Acq./Div.
Com pressor Technique
Revenues
9 866
270
900
20
8 676
EBIT
2 016
45
205
-120
1 886
%
20.4%
17%
-
-
21.7%
Revenues
8 007
346
505
35
7 121
EBIT
1 280
-93
240
-95
1 228
%
16.0%
-27%
-
-
17.2%
2 001
-189
215
55
1 920
261
-140
20
-45
426
13.0%
-
-
-
22.2%
Construction & Mining Technique
Industrial Technique
Revenues
EBIT
%
One-time items include redundancy costs in all three business areas as well as reversal of previous year’s one-time items.
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Balance Sheet
MSEK
Dec 31, 2008
Sep 30, 2008
Dec 31, 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
12 916
2 282
6 353
7 977
17 106
21 603
1 659
5 455
43
75 394
17%
3%
8%
11%
23%
29%
2%
7%
0%
12 177
1 992
5 698
4 797
16 371
19 770
1 531
3 403
39
65 778
19%
3%
9%
7%
25%
30%
2%
5%
0%
11 665
1 906
4 894
4 245
12 725
16 627
1 124
3 473
Total equity
Interest-bearing liabilities
Non-interest-bearing liabilities
TOTAL EQUITY AND LIABILITIES
23 768
30 404
21 222
75 394
32%
40%
28%
18 759
27 694
19 325
65 778
29%
42%
29%
56 659
14 640
24 397
17 622
56 659
The large increase in total assets is partly explained by currency translation effects that have had an
impact of MSEK 4 000 since September and MSEK 5 400 since December 2007
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February 2, 2009, www.atlascopco.com
21%
3%
9%
7%
22%
29%
2%
6%
26%
43%
31%
Capital Structure
Net Debt*/EBITDA
2,5
2,0
1,9
1,5
1,6
1,0
0,5
0,9
0,6
0,8
1,4
1,4
1,2
1,4
1,4
0,8
0,0
-0,5
-1,1
-1,0
-1,1
-1,5
2005 2006 2006 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008
Q1
Q2
Q3
Q1
Q2
Q3
Q1
Q2
Q3
*Net Debt adjusted for the fair value of interest rate swaps
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Atlas Copco AB’s Loan Maturity Profile
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
2009
2010
2011
2012
2013
Public Bonds
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2014
2015
Bank Loans
2016
2017
2018
2019
Cash Flow
Continuing operations
MSEK
Operational cash surplus after tax
of which depreciation added back
Change in working capital
Cash flows from operational activities
Investments in tangible fixed assets
Sale of tangible fixed assets
Other investments, net
Cash flow from investments
Operating cash flow
Company acquisitions/ divestments
28
February 2, 2009, www.atlascopco.com
October- December
2008
2007
3 300
597
112
3 412
-891
145
-265
-1 011
2 401
-55
2 693
498
-865
1 828
-652
180
-430
-902
926
32
January - December
2008
2007
11 857
2 080
-2 991
8 866
-2 899
515
-1 731
-4 115
4 751
-278
10 005
1 800
-2 326
7 679
-2 359
712
-1 443
-3 090
4 589
-5 718
Atlas Copco Group
Earnings per Share, Dividend and Redemption
25
22,38
20
Earnings per
share
Dividend per
share
15
12,24
10
8,33
4,84
5
6,09
5,22
3,71
2,00
0,72
1,92
0,79
1998
1999
2,33
2,44
2,32
2,61
1,50
2004
0,88
0,92
0,96
1,25
2000
2001
2002
2003
Dividend +
redemption
of share
2,13
2,38
2005
2006
3,00
3,00
2007
2008*
0
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February 2, 2009, www.atlascopco.com
* Proposed
by the
Board of
Directors
Contents
 Q4 Business Highlights
 Market Development
 Business Areas
 Financials
 2008 Summary
 Outlook
30
February 2, 2009, www.atlascopco.com
2008 - 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
2004 2005 2006 2007 2008
Revenues, MSEK
Operating margin, %
2004 pro forma, excluding divested businesses
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February 2, 2009, www.atlascopco.com
%
8 000
6 000
4 000
2004
2005
2006
2007
Operating profit, MSEK
2008
2008 - Figures in summary
 Strong demand from most customer segments and high growth in
all regions until September, partly offset by a weak fourth quarter
 Order intake up 7%, 2% organic growth
 Revenues up 17% to 74 177, 12% organic growth
 Operating profit up 14% to MSEK 13 806, a margin of 18.6% (19.0)
 Profit before tax at MSEK 13 112 (10 534)
 Proposed dividend for 2008, at SEK 3.00 (3.00) per share
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February 2, 2009, www.atlascopco.com
Contents
 Q4 Business Highlights
 Market Development
 Business Areas
 Financials
 2008 Summary
 Outlook
33
February 2, 2009, www.atlascopco.com
Near-term Outlook
The current economic situation makes the outlook very uncertain
but demand is expected to remain very weak in most industries and
regions.
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35
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
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.”
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February 2, 2009, www.atlascopco.com