Transcript Atlas Copco Group

Atlas Copco Group
Q3 Results
October 21, 2005
October 21, 2005
www.atlascopco.com
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Contents
 Q3 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
October 21, 2005
www.atlascopco.com
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Q3 - Highlights
 Stronger than ever
 Strengthened market positions
– Demand remained strong
 Record performance by all business areas
– Double digit organic revenue growth in all business areas
– Operating profit and profit margins at all time highs
 Several acquisitions in focused areas
October 21, 2005
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Q3 - Figures in summary
 Order received up 25%, up 15% in volume
 Revenues reached MSEK 13 479 (11 325), up 19%
 Operating profit at MSEK 2 562, a margin of 19.0% (17.3)
 Profit after financial items up 33% to MSEK 2 470 (1 851)
 Earnings per share increased to SEK 2.65 (2.13)
 Operating cash flow at MSEK 1 671 (1 661)
 ROCE at 26%
October 21, 2005
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Contents
 Q3 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
October 21, 2005
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Orders received - Local currency
September
2005
Group total +22% YTD, +21% last 3 months
(Structural change +7% YTD, +3% last 3 months)
34
37
+24
+15
+16
+20
13
7
5
+45
+32
+24
+36
+36
+21
4
A
October 21, 2005
B
C
+22
A= Portion of Group sales last 12 months, %
B= Year-to-date vs prev. year, %
C= Last 3 months vs prev. year, %
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+4
Q3 - The Americas
September
2005
 Strong development in North America
– Increased demand from manufacturing and
process industries
– Good demand for equipment and rental
from construction industry
– Continued high activity in the mining
industry
 Continued positive development in South
America
A
October 21, 2005
B
C
37
+24
+20
5
+45
A= Portion of Group sales last 12 months, %
B= Year-to-date vs prev. year, %
C= Last 3 months vs prev. year, %
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+21
Q3 - Europe and Africa/Middle East
September
2005
 Favorable demand in Europe
– Strong development in Eastern Europe, while
only moderate growth in Western Europe
– Increased sales of mining, construction and
compressed air equipment
 Africa / Middle East region developed well
A
October 21, 2005
B
C
34
+15
7
+32
A= Portion of Group sales last 12 months, %
B= Year-to-date vs prev. year, %
C= Last 3 months vs prev. year, %
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8
+16
+36
Q3 - Asia and Australia
September
2005
 Strong development in Asia
– Accelerated growth in Japan, India,
South Korea and China
 Investments in India to increase
capacity
13
+24
+36
4
A
October 21, 2005
B
C
+22
A= Portion of Group sales last 12 months, %
B= Year-to-date vs prev. year, %
C= Last 3 months vs prev. year, %
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+4
Volume Growth
per Quarter
20
15
10
5
0
-5

05 Q4
05 Q3
05 Q2
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
October 21, 2005
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Group Total
Sales Bridge
July – September
MSEK
2004 reported
Discontinued operations
2004
Structural change, %
Currency, %
Price, %
Volume, %
Total, %
2005
October 21, 2005
Orders
Received
12 860
-1 442
11 418
+3
+4
+3
+15
+25
14 257
Revenues
12 760
-1 435
11 325
+2
+4
+3
+10
+19
13 479
www.atlascopco.com
January – September
Orders
Received
37 036
-4 139
32 897
+8
0
+3
+11
+22
40 085
Revenues
35 697
-4 097
31 600
+6
0
+3
+10
+19
37 709
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Contents
 Q3 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
October 21, 2005
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Compressor Technique
 Strong order intake in all regions and for all types
of compressors and its aftermarket
– Best development in North America, Eastern
Europe and Asia
 Acquisitions within focused areas
– Intermech – Compressed natural gas
 Divestment of stationary generator business
 Record revenues and operating profit
– Operating profit more than 1 billion SEK and
highest operating margin ever
October 21, 2005
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Compressor Technique
Revenue volume growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
25
25

05 Q4
05 Q3
05 Q2
05 Q1
04 Q4
04 Q3
04 Q2
04 Q1
03 Q4
03 Q3
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
October 21, 2005
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Construction & Mining Technique
 Continued strong demand from both mining
construction
 Order volume up 28%
– 14th consecutive quarter with volume growth
– Very strong growth in Asia, North America and
Eastern Europe
 Product launches
– Rigs for scaling, exploration drilling and silent
drilling
 Record revenues and profits
– Operating margin at all-time high 14.6%
October 21, 2005
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Construction & Mining Technique
Revenue volume growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
25
25

05 Q4
05 Q3
05 Q2
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
October 21, 2005
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Rental Service
 Rental revenues increased 13% in USD
– Price +8%, volume +5%
 Fleet utilization at record level
– Improved fleet quality with increased
investments in equipment
 Profitability improved significantly
– Increased rental volume and rental rates
combined with efficiency measures
– All-time high operating profit margin at 25.6%
October 21, 2005
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Rental Service
Rental Revenue Volume Development
Rental revenue volume growth: Change vs. same quarter previous year, %
Quarterly operating margin, % (Business Area)

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
25
Operating margins restated (IFRS) from 2004
October 21, 2005
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Industrial Technique
 Favorable sales growth in Asia and North
America
 Focus on sales and product development
– Investment in sales engineers and
training activities
– New tools and aftermarket products
 Agreement to acquire Fuji Air Tools
 Record revenues and operating profit
– Operating margin above 20%
October 21, 2005
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Industrial Technique
Revenue volume growth: Change vs. same quarter previous year, %
Quarterly operating margin, %

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
Operating margins restated (IFRS) from 2004
October 21, 2005
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Contents
 Q3 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
October 21, 2005
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Income Statement
MSEK
Jul. – Sept.
2005
2004
14 257 11 418
13 479 11 325
2 562
1 962
19.0
17.3
2 470
1 851
18.3
16.3
1 670
1 281
64
1 670
1 345
1)
2.65 2.13
37
35
1)
26
%
+25
+19
+31
Jan. – Sept.
2005
2004
Orders received
40 085
Revenues
37 709
Operating profit
6 591
– as a percentage of revenues
17.5
+33
Profit after financial items
6 263
– as a percentage of revenues
16.6
+30
Net profit from continuing operations
4 298
Net profit from discontinued operations
+24
Net profit
4 298
2)
Earnings per share, SEK
6.81
2)
Equity capital per share, SEK
Return on capital employed, %
1)
Including discontinued operations.
2)
Earnings per share and equity capital per share are adjusted for share split.
October 21, 2005
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32 897
31 600
4 867
15.4
4 584
14.5
3 202
177
3 379
1)
5.35
22
%
+22
+19
+35
+37
+34
+27
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
Sep 30
2005
12 712
4 266
10 250
1 692
7 137
12 700
325
3 364
52 446
24%
8%
20%
3%
14%
24%
1%
6%
0%
9 154
3 742
8 559
1 825
5 647
10 687
327
2 386
5 841
48 168
Total Equity
Interest-bearing loans and borrowings
Non-interest-bearing loans and borrowings
Liabilities held for sale
Total shareholders’ equity and liabilities
23 145
11 303
17 998
52 446
44%
22%
34%
0%
22 601
10 573
12 782
2 212
48 168
October 21, 2005
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Dec. 31 2004
Sep 30
2004
19%
8%
18%
4%
12%
22%
1%
5%
12%
10 424
3 789
9 358
1 587
5 896
10 818
356
1 939
6 150
50 317
21%
8%
19%
3%
12%
21%
1%
4%
12%
47%
22%
27%
5%
22 213
12 589
12 993
2 522
50 317
44%
25%
26%
5%
23
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
Unclaimed shares from bonus issue 1989
Change in interest-bearing liabilities
Net cash flow
October 21, 2005
July - September
2005
2004
2 796
2 381
875
838
362
403
3 158
2 784
-2 174
-1 728
635
588
52
17
-1 487
-1 123
1 671
1 661
-150
-793
-2
2
-1 434
-923
85
-53
www.atlascopco.com
January – September
2005
2004
7 276
5 713
2 391
2 313
287
296
7 563
6 009
-5 674
-4 191
1 824
1509
-70
-30
-3 920
-2 712
3 643
3 297
3 650
-2 524
-1 890
-1 575
-4 192
2
-957
-1 060
254
-1 860
24
Capital Expenditures
in Tangible Fixed Assets
MSEK
Quarterly
Net rental fleet investment
= MSEK 3 220
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
12 months
2500
5000
2000
4000
1500
3000
1000
2000
500
1000
0
-500
October 21, 2005
0
2001
2002
2003
www.atlascopco.com
2004
2005
-1000
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Contents
 Q3 Business Highlights
 Market Development
 Business Areas
 Financials
 Outlook
October 21, 2005
www.atlascopco.com
26
Near-term Outlook
The demand for Atlas Copco’s products and services is
expected to remain at a high level.
Demand from manufacturing and process industries is
expected to stay favorable. Activity in the construction industry
is expected to continue to increase somewhat. Demand from
the mining industry is expected to remain strong.
October 21, 2005
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October 21, 2005
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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.”
October 21, 2005
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