april 28, 2010 atlas copco group q1 results april 28, 2010
TRANSCRIPT
April 28, 2010 www.atlascopco.com
Atlas Copco Group
Q1 Results
April 28, 2010
April 28, 2010 www.atlascopco.com2
Contents
Q1 business highlights
Market development
Business areas
Financials
Outlook
April 28, 2010 www.atlascopco.com3
Q1 - highlights
Strong recovery in order intake– Significant growth in most emerging markets and in mining
– Record order level in Asia and South America
– Positive development in North America and still weak in Europe
Sales of aftermarket products and services increased
Operating profit margin at 17.2%– Cost and efficiency measures, price and a favorable sales mix gave
support
Strong operating cash flow
April 28, 2010 www.atlascopco.com4
Q1 - figures in summary
22% organic order growth
Revenues of MSEK 15 301; 3% organic decline
Operating profit at MSEK 2 627 (2 172)– Operating margin of 17.2% (14.5 adjusted for restructuring)
– Restructuring cost of MSEK 230 in 2009
Profit before tax at MSEK 2 497 (1 794)
Basic earnings per share SEK 1.52 (1.13)
Operating cash flow MSEK 2 223 (2 851)
April 28, 2010 www.atlascopco.com5
Contents
Q1 business highlights
Market development
Business areas
Financials
Outlook
April 28, 2010 www.atlascopco.com6
Orders received - local currency
March 2010
A BA = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
10 +60
16 +47
35 +7
12 +16
21 +37
6 +76
Group total +28%Effect of cancellations +5%, structural change +1%
April 28, 2010 www.atlascopco.com7
Q1 - the Americas
Positive development in North America– Strong demand for mining equipment
– Sales of industrial and construction equipment and aftermarket improved
Continued growth in South America– Good demand for all types of equipment
– Order intake at record level
10 +60
16 +47
March 2010
A BA = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
April 28, 2010 www.atlascopco.com8
Q1 - Europe and Africa/Middle East
Still weak demand in Europe– Southern Europe remained weak, while some
positive development was noted in Germany and in the Nordic countries
– Solid aftermarket
Some growth in Africa / Middle East– Increased order intake of mining and industrial
equipment
March 2010
A BA = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
35 +7
12 +16
April 28, 2010 www.atlascopco.com9
Q1 - Asia and Australia
Record order intake in Asia– Growth in India, China and many other
markets for most types of equipment.
– Negative development in Japan and South Korea.
Strong mining demand in Australia– Sales of construction equipment improved
March 2010
A BA = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
21 +37
6 +76
April 28, 2010 www.atlascopco.com10
Organic* growth per quarter
Change in orders received in % vs. same quarter previous year
Atlas Copco Group, continuing operations
*Volume and price
April 28, 2010 www.atlascopco.com11
Atlas Copco Group – sales bridge
January March
Orders
MSEK Received Revenues
2009 14 331 16 577
Cancellations, % +5 * -
Structural change, % +1 1
Currency, % -8 -6
Price, % +1 +1
Volume, % +21 -4
Total, % +20 -8
2010 17 267 15 301
*Cancellations in Q1 2009
April 28, 2010 www.atlascopco.com12
Contents
Q1 business highlights
Market development
Business areas
Financials
Outlook
April 28, 2010 www.atlascopco.com13
Atlas Copco GroupRevenues, operating profit and return on capital employed (ROCE) by business area
Revenues Operating Operating ROCE
MSEK profit margin
12 month values, period ending March 2010 March 2010 March 2010 March 2010
Compressor Technique 31 823 5 945 18.7% 49%Construction and Mining Technique 25 326 3 562 14.1% 18%Industrial Technique 5 392 420 7.8% 16%Eliminations/Common Group Functions -55 -382
Atlas Copco Group 62 486 9 545 15.3% 19%
April 28, 2010 www.atlascopco.com14
Compressor Technique
14February 2, 2010, www.atlascopco.com
Improved demand– 10% organic order growth vs. Q1 2009
– Growth drivers were emerging markets and North America
– Improved demand for portable compressors from low levels
Increased aftermarket business
Operating margin at 20.6% – Positively affected by cost and efficiency
measures, sales mix and price.
Acquisition of Quincy Compressor finalized– Except the Chinese operations, where approvals
are expected in the second quarter
April 28, 2010 www.atlascopco.com15
Compressor Technique
*Volume and price
April 28, 2010 www.atlascopco.com16
Construction and Mining Technique
38% organic order growth vs. Q1 2009– Strong demand from mining industry
– Sales to construction customers improved from low levels with notable improvement in emerging markets and in road construction equipment
– Growth in service, spare parts and consumables
Operating margin at 15.4% – Affected positively by revenue mix, price, and improved utilization in
manufacturing, but negatively by currencies.
April 28, 2010 www.atlascopco.com17
Construction and Mining Technique
*Volume and price
April 28, 2010 www.atlascopco.com18
Industrial Technique
27% organic order growth vs. Q1 2009– Record order intake in Asia.
– Sales in North America increased significantly, but from low levels.
– Aftermarket developed positively.
Operating profit margin at 16.4%– Lower costs thanks to restructuring measures
and improved prices supported the margin.
April 28, 2010 www.atlascopco.com19
Industrial Technique
*Volume and price
April 28, 2010 www.atlascopco.com20
Contents
Q1 business highlights
Market development
Business areas
Financials
Outlook
April 28, 2010 www.atlascopco.com
Group total
21
January - March
MSEK 2010 2009 %
Orders received 17 267 14 331 +20
Revenues 15 301 16 577 -8
Operating profit 2 627 2 171 +21
- as a percentage of revenues 17.2 13.1
Profit before tax 2 497 1 794 +39
- as a percentage of revenues 16.3 10.8
Profit for the period 1 855 1 378 +35
Basic earnings per share, SEK 1.53 1.13
Return on capital employed, % 19 29
April 28, 2010 www.atlascopco.com
Organic Growth One-time items
MSEK Price/Volume Acq./Div.
Atlas Copco Group
Revenues 15 301 -416 -990 130 16 577
EBIT 2 627 286 -75 244 2 172
% 17.2% - - - 13.1%
Q1 2010 Currency Q1 2009
Profit bridge
22
January – March, 2010 vs 2009
April 28, 2010 www.atlascopco.com
Profit bridge – by business area
23
January – March, 2010 vs 2009
Organic Growth One-time items
MSEK Price/Volume Acq./Div.
Compressor Technique
Revenues 7 659 -191 -620 110 8 360
EBIT 1 577 148 -90 135 1 384
% 20.6% - - - 16.6%
Construction & Mining Technique
Revenues 6 233 -358 -245 20 6 816
EBIT 960 127 -95 60 868
% 15.4% - - - 12.7%
Industrial Technique
Revenues 1 483 130 -130 1 483
EBIT 243 137 -20 49 77
% 16.4% 105% - - 5.2%
Q1 2010 Currency Q1 2009
April 28, 2010 www.atlascopco.com24
Balance sheet
MSEK Mar 31, 2010 Dec 31, 2009 Mar 31, 2009
Intangible assets 13 607 20% 12 697 19% 13 208 17%
Rental equipment 1 981 3% 2 056 3% 2 344 3%
Other property, plant and equipment 5 974 9% 5 993 9% 6 517 8%
Other fixed assets 5 681 8% 6 556 10% 7 804 10%
Inventories 11 632 17% 11 377 17% 17 000 22%
Receivables 15 896 23% 15 433 23% 20 513 26%
Current financial assets 1 632 2% 1 530 2% 1 780 2%
Cash and cash equivalents 11 958 17% 12 165 18% 8 336 11%
Assets classified as held for sale 64 0% 67 0% 38 0%
TOTAL ASSETS 68 425 67 874 77 540
Total equity 26 384 39% 25 671 38% 25 729 33%
Interest-bearing liabilities 24 612 36% 25 735 38% 30 819 40%
Non-interest-bearing liabilities 17 429 25% 16 468 24% 20 992 27%
TOTAL EQUITY AND LIABILITIES 68 425 67 874 77 540
April 28, 2010 www.atlascopco.com25
Capital structure Net Debt*/EBITDA
* Net Debt adjusted for the fair value of interest rate swaps
April 28, 2010 www.atlascopco.com26
Atlas Copco AB’s loan maturity profile
April 28, 2010 www.atlascopco.com
Cash flow
27
January - MarchMSEK 2010 2009
Operating cash surplus after tax 2 449 1 885 * of which depreciation added back 574 616Change in working capital 275 1 394Increase in rental equipment, net -63 -91 Cash flows from operating activities 2 661 3 188Investments in tangible fixed assets -177 -291Sale of tangible fixed assets 12 19Other investments, net -273 -65Cash flow from investments -438 -337 Operating cash flow 2 223 2 851Company acquisitions/ divestments -1 361 -142
* Operating cash surplus after tax in 2009 is adjusted for equity hedges in net financial items.
April 28, 2010 www.atlascopco.com28
Contents
Q1 business highlights
Market development
Business areas
Financials
Outlook
April 28, 2010 www.atlascopco.com29
Near-term outlook
The overall demand for the Group’s products and services is expected to improve somewhat from current levels.
Demand in most emerging markets is foreseen to develop favorably in all business areas. Demand in North America is expected to increase gradually, whereas Europe is expected to remain largely unchanged.
April 28, 2010 www.atlascopco.com
Committed tosustainable productivity.
30
3131
April 28, 2010 www.atlascopco.com32
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 and adversely 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.”