Atlas Copco Group Solid market conditions
Organic order growth 15%
All-time high operating profit
Strong cash flow generation
Acquisition of Mafi-Trench expands offer to oil and gas industry
www.atlascopco.com
19% organic growth
Operating margin at record 19.0% (18.4)
Profit before tax at MSEK 2 708 (2 081)
Profit from continuing operations up 28% to MSEK 1 890
Earnings per share continuing operations SEK 1.54 (1.17)
Operating cash flow, continuing operations, MSEK 1 586 (916)
www.atlascopco.com
September 2007
www.atlascopco.com
Good demand from most customer segments within mining, process, and manufacturing industries
Weaker demand from the motor vehicle industry and parts of the construction market
Continued good demand from all customer segments in South America
Strong growth in Brazil
A
B
C
7
+46
+53
19
+20
+26
www.atlascopco.com
Robust demand in Europe
Best growth found in Eastern Europe and the Nordic region
Positive development in the Africa / Middle East region
September 2007
10
+39
+33
40
+25
+21
www.atlascopco.com
Q3 - Asia and Australia
Asia continues to deliver
Strong demand for all types of equipment in most parts of the region
China and India recorded even higher growth than in recent quarters
High demand from most customer segments in Australia
September 2007
A
B
C
19
+33
+40
5
+28
+38
www.atlascopco.com
Change in orders received in % vs. same Quarter previous year
Atlas Copco Group, continuing operations
*Volume and price
www.atlascopco.com
Atlas Copco Group
Operating Profit and Return On Capital Employed (ROCE) by Business Area
*including discontinued operations
Organic order growth 11% vs very strong previous year
All regions showed good growth
Record operating profit at MSEK 1 801
Includes MSEK 78 gain from sale of rental assets in Australia
Underlying margin very strong considering currency and acquisition effects
Acquisition of Mafi-Trench finalized on August 1
*
*, *
*Volume and price
Organic order growth 21%
Operating profit up 50%, margin at 16.9%
19% margin for comparable units
Low Dynapac margin due to seasonal variances as well as production disturbances
www.atlascopco.com
Dynapac
Market development and order growth is good and in line with expectations
Production disturbances primarily related to Germany and one business line
New product allocation between factories
Move from station-based assembly to line-assembly
Introduction of revamped paver-line
Industrial Technique
Continued very strong development in general industry and resumed order growth in the motor vehicle industry
13% organic order growth in total
Operating profit up 10%, margin at 20.8%
Negatively affected by restructuring costs
Suggested move of assembly operations from UK to Hungary
New advanced battery tool introduced
www.atlascopco.com
Near-term Outlook
The demand for Atlas Copco’s products and services from most customer segments and regions is expected to remain at the current high level.
The positive outlook includes the main part of the construction segment, while construction related to housing is expected to slow down, primarily in North America.
www.atlascopco.com
“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.”
www.atlascopco.com
RevenuesOperatingOperatingROCE
MSEKprofitmargin
Compressor Technique30 1686 27420.8%65%
Construction and Mining Technique23 0793 99417.3%33%
Industrial Technique6 5931 46122.2%58%
Eliminations/Common Group Functions-452-560
MSEK20072006*20072006*
of which depreciation added back4453791 3021 196
Change in working capital-168-315-1 461-1 582
Cash flows from operating activities2 4081 6975 8514 838
Investments in tangible fixed assets-635-509-1 707-1 625
Sale of tangible fixed assets165170532423
Other investments, net-352-442-1 013-1 045
Cash flow from investments-822-781-2 188-2 247
Operating cash flow1 5869163 6632 591
Company acquisitions/ divestments-68-637-5 750-1 050
*Restated, continuing operations
July - SeptemberJanuary - September
-5
0
5
10
15
20
25
-5
0
5
10
15
20
25
03 Q103 Q203 Q303 Q404 Q104 Q204 Q304 Q405 Q105 Q205 Q305 Q406 Q106 Q206 Q306 Q407 Q107 Q207 Q307 Q4
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
-10
-5
0
5
10
15
20
25
30
00 Q100 Q200 Q300 Q401 Q101 Q201 Q301 Q402 Q102 Q202 Q302 Q403 Q103 Q203 Q303 Q404 Q104 Q204 Q304 Q405 Q105 Q205 Q305 Q406 Q106 Q206 Q306 Q407 Q107 Q207 Q307 Q4
1,9
1,6
2,7
2,2
1,9
1,5
1,1
0,8
0,9
-1,1
1,6
-1,5
-1,0
-0,5
0,0
0,5
1,0
1,5
2,0
2,5
3,0
19971998199920002001200220032004200520062007
Q3
-10
-5
0
5
10
15
20
25
-10
-5
0
5
10
15
20
25
01 Q101 Q201 Q301 Q402 Q102 Q202 Q302 Q403 Q103 Q203 Q303 Q404 Q104 Q204 Q304 Q405 Q105 Q205 Q305 Q406 Q106 Q206 Q306 Q407 Q107 Q207 Q307 Q4
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
Revenues16 43112 538+3145 80636 930+24
Operating profit3 1272 306+368 7056 739+29
- as a percentage of revenues19.018.419.018.2
Profit before tax2 7082 081+308 4006 313+33
- as a percentage of revenues16.516.618.317.1
Profit from continuing operations1 8901 475+286 0404 493+34
Profit from discontinued operations, net of tax-642531 708
Profit for the period1 8902 1176 0936 201
July - SeptemberJanuary - September
Orders RevenuesOrders Revenues
Structural change, %+14+15+9+10
Currency, %-3-3-5-5
July - SeptemberJanuary - September
Intangible assets
Rental equipment
Other property, plant and equipment
4 6298%3 7777%3 7226%
Other fixed assets
Inventories
Receivables
Current financial assets
Cash and cash equivalents
24 10740%
TOTAL ASSETS
Interest-bearing liabilities
Non-interest-bearing liabilities
Liabilities associated with assets
7 40612%
-10
-5
0
5
10
15
20
25
30
-10
-5
0
5
10
15
20
25
30
01 Q101 Q201 Q301 Q402 Q102 Q202 Q302 Q403 Q103 Q203 Q303 Q404 Q104 Q204 Q304 Q405 Q105 Q205 Q305 Q406 Q106 Q206 Q306 Q407 Q107 Q207 Q307 Q4
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
-10
-5
0
5
10
15
20
97 Q197 Q297 Q397 Q498 Q198 Q298 Q398 Q499 Q199 Q299 Q399 Q400 Q100 Q200 Q300 Q401 Q101 Q2
-10
-5
0
5
10
15
20
25
30