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1July 16, 2007, www.atlascopco.com
Atlas Copco Group
Q2 Results
July 16, 2007
2July 16, 2007, www.atlascopco.com
Contents
Q2 Business Highlights
Market Development
Business Areas
Financials
Outlook
3July 16, 2007, www.atlascopco.com
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
6July 16, 2007, www.atlascopco.com
Orders received - Local currencyGroup total +27% YTD, +27% last 3 months(Structural change +7% YTD, +10% last 3 months)
June 2007
7 +42 +27
10 +42 +40
18 +31 +31
5 +23 +10
40 +27 +28
20 +18 +25
A B CA = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
C = Last 3 months vs. prev. year, %
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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
Strong demand continues from all customer segments in South America
June 2007 A = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
C = Last 3 months vs. prev. year, %
A B C
7 +42 +27
20 +18 +25
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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
Continued good demand in the Africa / Middle East region – Very strong increase in sales of mining
equipment in Africa
June 2007
A B CA = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
C = Last 3 months vs. prev. year, %
10 +42 +40
40 +27 +28
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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
Demand from most customer segments remained strong in Australia
June 2007 A = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
C = Last 3 months vs. prev. year, %
A B C
18 +31 +31
5 +23 +10
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Volume Growth per Quarter
Change in orders received in % vs. same Quarter previous year
Atlas Copco Group, continuing operations
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100
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101
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301
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102
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302
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103
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303
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104
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304
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105
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305
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106
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Atlas Copco Group – Sales Bridge
Orders Revenues Orders RevenuesMSEK Received Received2006 13 562 12 444 27 261 24 392Structural change, % +10 +12 +7 +7Currency, % -4 -4 -6 -6Price, % +2 +2 +2 +2
Volume, % +15 +18 +18 +17Total, % +23 +28 +21 +202007 16 735 15 985 32 855 29 375
April - June January - June
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Contents
Q2 Business Highlights
Market Development
Business Areas
Financials
Outlook
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Atlas Copco GroupOperating Profit and Return On Capital Employed (ROCE) by Business Area
*including discontinued operations
Revenues Operating Operating ROCEMSEK profit margin12 month values, period ending Jun. 2007 Jun. 2007 Jun. 2007 Jun. 2007Compressor Technique 28 404 5 915 20.8% 66%Construction and Mining Technique 21 012 3 623 17.2% 35%Industrial Technique 6 440 1 429 22.2% 60%Eliminations/Common Group Functions -361 -619Atlas Copco Group 55 495 10 348 18.6% 33%*
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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
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Quarterly operating margins include Prime Energy from Q1 2006.
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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
Construction and Mining Technique
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Dynapac
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
Expanding presence in the road development market
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Construction and Mining Technique
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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
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Contents
Q2 Business Highlights
Market Development
Business Areas
Financials
Outlook
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Group Total
MSEK 2007 2006 % 2007 2006 %Orders received 16 735 13 562 +23 32 855 27 261 +21
Revenues 15 985 12 444 +28 29 375 24 392 +20
Operating profit 3 037 2 337 +30 5 578 4 433 +26
- as a percentage of revenues 19.0 18.8 19.0 18.2
Profit before tax 3 215 2 200 +46 5 692 4 232 +34
- as a percentage of revenues 20.1 17.7 19.4 17.3
Profit from continuing operations 2 377 1 555 +53 4 150 3 018 +38
Profit from discontinued operations, net of tax - 743 53 1 066
Profit for the period 2 377 2 298 4 203 4 084
April - June January - June
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Balance Sheet
MSEK June 30, 2007 Dec 31, 2006 June 30, 2006
Intangible assets 11 326 20% 4 299 8% 3 540 6%
Rental equipment 2 018 4% 1 979 4% 1 987 3%
Other property, plant and equipment 4 553 8% 3 777 7% 3 631 6%
Other fixed assets 4 963 9% 3 161 6% 1 766 3%
Inventories 11 962 22% 8 487 15% 7 986 14%
Receivables 16 080 29% 12 401 22% 12 590 22%
Current financial assets 1 084 2% 1 016 2% 602 1%
Cash and cash equivalents 3 609 6% 20 135 36% 2 946 5%
Assets classified as held for sale 22 890 40%
TOTAL ASSETS 55 595 55 255 57 938
Total equity 11 651 21% 32 708 59% 26 300 45%
Interest-bearing liabilities 26 627 48% 8 787 16% 10 951 19%
Non-interest-bearing liabilities 17 317 31% 13 760 25% 13 403 23%
Liabilities associated with assets classified as held for sale 7 284 13%
TOTAL EQUITY AND LIABILITIES 55 595 55 255 57 938
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1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 June2007
Capital Structure Net Debt/EBITDA
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Cash FlowContinuing operations
MSEK 2007 2006* 2007 2006*
Operating cash surplus after tax 2 718 2 491 4 736 4 408 of which depreciation added back 443 397 857 787Change in working capital -787 -738 -1 293 -1 267 Cash flows from operating activities 1 931 1 753 3 443 3 141Investments in tangible fixed assets -544 -618 -1 072 -1 117Sale of tangible fixed assets 195 109 367 254Other investments, net -350 -280 -661 -603Cash flow from investments -699 -789 -1 366 -1 466 Operating cash flow 1 232 964 2 077 1 675Company acquisitions/ divestments -5 463 -145 -5 682 -413
*Restated, continuing operations
April - June January - June
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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, 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.”