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Atlas Copco Group. Q3 Results October 24, 2007. Contents. Q3 Business Highlights Market Development Business Areas Financials Outlook. Q3 - Highlights. Strong order and revenue growth continue Solid market conditions Excellent growth in BRIC countries Organic order growth 15% - PowerPoint PPT Presentation
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1 October 24, 2007, www.atlascopco.com Atlas Copco Group Q3 Results October 24, 2007
Transcript
Page 1: Atlas Copco Group

1October 24, 2007, www.atlascopco.com

Atlas Copco Group

Q3 Results

October 24, 2007

Page 2: Atlas Copco Group

2October 24, 2007, www.atlascopco.com

Contents

Q3 Business Highlights

Market Development

Business Areas

Financials

Outlook

Page 3: Atlas Copco Group

3October 24, 2007, www.atlascopco.com

Q3 - Highlights

Strong order and revenue growth continue– Solid market conditions

– Excellent growth in BRIC countries

– Organic order growth 15%

Both capital equipment and aftermarket sales show strength

All-time high operating profit

Strong cash flow generation

Acquisition of Mafi-Trench expands offer to oil and gas industry

Page 4: Atlas Copco Group

4October 24, 2007, www.atlascopco.com

Q3 - Figures in summary

Revenues up 31% to MSEK 16 431– 19% organic growth

Operating profit up 36% to MSEK 3 127– 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)

Page 5: Atlas Copco Group

5October 24, 2007, www.atlascopco.com

Contents

Q3 Business Highlights

Market Development

Business Areas

Financials

Outlook

Page 6: Atlas Copco Group

6October 24, 2007, www.atlascopco.com

Orders received - Local currencyGroup total +27% YTD, +29% last 3 months(Structural change +9% YTD, +14% last 3 months)

September 2007

7 +46 +53

10 +39 +33

19 +33 +40

5 +28 +38

40 +25 +21

19 +20 +26

A B CA = Portion of sales, Year-to-date, %

B = Year-to-date vs. prev. year, %

C = Last 3 months vs. prev. year, %

Page 7: Atlas Copco Group

7October 24, 2007, www.atlascopco.com

Q3 - The Americas

Solid growth in North America– 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

September 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 +46 +53

19 +20 +26

Page 8: Atlas Copco Group

8October 24, 2007, www.atlascopco.com

Q3 - Europe and Africa/Middle East

Robust demand in Europe– Good development within the manufacturing

and process segments

– Demand from construction industry softened in some markets

– Best growth found in Eastern Europe and the Nordic region

Positive development in the Africa / Middle East region

September 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 +39 +33

40 +25 +21

Page 9: Atlas Copco Group

9October 24, 2007, 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 = Portion of sales, Year-to-date, %

B = Year-to-date vs. prev. year, %

C = Last 3 months vs. prev. year, %

A B C

19 +33 +40

5 +28 +38

Page 10: Atlas Copco Group

10October 24, 2007, www.atlascopco.com

Organic* Growth per Quarter

Change in orders received in % vs. same Quarter previous year

Atlas Copco Group, continuing operations

-10

-5

0

5

10

15

20

25

30

00 Q

100

Q2

00 Q

300

Q4

01 Q

101

Q2

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301

Q4

02 Q

102

Q2

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302

Q4

03 Q

103

Q2

03 Q

303

Q4

04 Q

104

Q2

04 Q

304

Q4

05 Q

105

Q2

05 Q

305

Q4

06 Q

106

Q2

06 Q

306

Q4

07 Q

107

Q2

07 Q

307

Q4

*Volume and price

Page 11: Atlas Copco Group

11October 24, 2007, www.atlascopco.com

Atlas Copco Group – Sales Bridge

Orders Revenues Orders RevenuesMSEK Received Received2006 13 847 12 538 41 108 36 930Structural change, % +14 +15 +9 +10Currency, % -3 -3 -5 -5Price, % +3 +3 +2 +2

Volume, % +12 +16 +16 +17Total, % +26 +31 +22 +242007 17 388 16 431 50 243 45 806

July - September January - September

Page 12: Atlas Copco Group

12October 24, 2007, www.atlascopco.com

Contents

Q3 Business Highlights

Market Development

Business Areas

Financials

Outlook

Page 13: Atlas Copco Group

13October 24, 2007, www.atlascopco.com

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 Sep. 2007 Sep. 2007 Sep. 2007 Sep. 2007Compressor Technique 30 168 6 274 20.8% 65%Construction and Mining Technique 23 079 3 994 17.3% 33%Industrial Technique 6 593 1 461 22.2% 58%Eliminations/Common Group Functions -452 -560Atlas Copco Group 59 388 11 169 18.8% 31%*

Page 14: Atlas Copco Group

14October 24, 2007, www.atlascopco.com

Compressor Technique

Continued strong development for all product areas– 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

14October 24, 2007, www.atlascopco.com

Page 15: Atlas Copco Group

15October 24, 2007, www.atlascopco.com

Compressor Technique

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Organic* revenue growth: Change vs. same quarter previous year, %

Quarterly operating margin, %

Quarterly operating margins include Prime Energy from Q1 2006.*Volume and price

Page 16: Atlas Copco Group

16October 24, 2007, www.atlascopco.com

Continued strong demand, particularly from mining industry

Organic order growth 21%– 22nd consecutive quarter with volume growth

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

Construction and Mining Technique

Page 17: Atlas Copco Group

17October 24, 2007, 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

Page 18: Atlas Copco Group

18October 24, 2007, www.atlascopco.com

-10

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30

-10

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Q1

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Q4

Organic* revenue growth: Change vs. same quarter previous year, %

Quarterly operating margin, %

Construction and Mining Technique

*Volume and price

Page 19: Atlas Copco Group

19October 24, 2007, www.atlascopco.com

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

Page 20: Atlas Copco Group

20October 24, 2007, www.atlascopco.com

Industrial Technique

-5

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5

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15

20

25

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Q1

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Q2

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Q4

Organic* revenue growth: Change vs. same quarter previous year, %

Quarterly operating margin, %

*Volume and price

Page 21: Atlas Copco Group

21October 24, 2007, www.atlascopco.com

Contents

Q3 Business Highlights

Market Development

Business Areas

Financials

Outlook

Page 22: Atlas Copco Group

22October 24, 2007, www.atlascopco.com

Group Total

MSEK 2007 2006 % 2007 2006 %Orders received 17 388 13 847 +26 50 243 41 108 +22

Revenues 16 431 12 538 +31 45 806 36 930 +24

Operating profit 3 127 2 306 +36 8 705 6 739 +29

- as a percentage of revenues 19.0 18.4 19.0 18.2

Profit before tax 2 708 2 081 +30 8 400 6 313 +33

- as a percentage of revenues 16.5 16.6 18.3 17.1

Profit from continuing operations 1 890 1 475 +28 6 040 4 493 +34

Profit from discontinued operations, net of tax - 642 53 1 708

Profit for the period 1 890 2 117 6 093 6 201

July - September January - September

Page 23: Atlas Copco Group

23October 24, 2007, www.atlascopco.com

Balance Sheet

MSEK Sep 30, 2007 Dec 31, 2006 Sep 30, 2006

Intangible assets 11 578 21% 4 299 8% 4 240 7%

Rental equipment 1 920 3% 1 979 4% 2 072 3%

Other property, plant and equipment 4 629 8% 3 777 7% 3 722 6%

Other fixed assets 4 793 9% 3 161 6% 2 050 3%

Inventories 11 962 21% 8 487 15% 8 522 14%

Receivables 16 141 29% 12 401 22% 12 573 21%

Current financial assets 1 131 2% 1 016 2% 597 1%

Cash and cash equivalents 4 020 7% 20 135 36% 2 616 4%

Assets classified as held for sale 24 107 40%

TOTAL ASSETS 56 174 55 255 60 499

Total equity 13 054 23% 32 708 59% 28 449 47%

Interest-bearing liabilities 25 403 45% 8 787 16% 11 197 19%

Non-interest-bearing liabilities 17 717 32% 13 760 25% 13 447 22%

Liabilities associated with assets classified as held for sale 7 406 12%

TOTAL EQUITY AND LIABILITIES 56 174 55 255 60 499

Page 24: Atlas Copco Group

24October 24, 2007, www.atlascopco.com

1,9

1,6

2,7

2,21,9

1,5

1,10,8 0,9

-1,1

1,6

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-1,0

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1,0

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1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Q3

Capital Structure Net Debt/EBITDA

Page 25: Atlas Copco Group

25October 24, 2007, www.atlascopco.com

Cash FlowContinuing operations

MSEK 2007 2006* 2007 2006*

Operating cash surplus after tax 2 576 2 012 7 312 6 420 of which depreciation added back 445 379 1 302 1 196Change in working capital -168 -315 -1 461 -1 582 Cash flows from operating activities 2 408 1 697 5 851 4 838Investments in tangible fixed assets -635 -509 -1 707 -1 625Sale of tangible fixed assets 165 170 532 423Other investments, net -352 -442 -1 013 -1 045Cash flow from investments -822 -781 -2 188 -2 247 Operating cash flow 1 586 916 3 663 2 591Company acquisitions/ divestments -68 -637 -5 750 -1 050

*Restated, continuing operations

July - September January - September

Page 26: Atlas Copco Group

26October 24, 2007, www.atlascopco.com

Contents

Q3 Business Highlights

Market Development

Business Areas

Financials

Outlook

Page 27: Atlas Copco Group

27October 24, 2007, 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.

Page 28: Atlas Copco Group

28

Page 29: Atlas Copco Group

29October 24, 2007, www.atlascopco.com

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.”


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