atlas copco group q1 results april 28, 2003. 2 contents q1 business highlights market development ...

Atlas Copco Group

Q1 Results

April 28, 2003

April 28, 2003 2

Contents

Q1 Business Highlights

Market Development

Business Areas

Financials

Outlook

April 28, 2003 3

Q1 Highlights

Weaker demand - order volumes down 1%– Weak market conditions in the United States– Good growth in high potential markets

Operating margin at 10.3% (10.0)– Cost savings and price increases offset effect of lower

volumes– Large negative currency effects on sales and profits

Profit after financial items MSEK 956 (912)

EPS up 8% to SEK 3.03

April 28, 2003 4

Contents


Market Development

Business Areas

Financials

Outlook

April 28, 2003 5

-4 46

3

+153

33

+125

+1710

Orders received Change in Local Currency

Portion of Group Sales, %

Change in %, Q1 2003 vs. Q1 2002

March 2003

+6

+4

April 28, 2003 6

-446

+63


Change in %, Q1 2003 vs. Q1 2002

March 2003

Q1 - The Americas

Weak demand in the U.S.– Sluggish construction activity, low

manufacturing capacity utilization and effects of the war in Iraq affected market conditions

– Good level of mining activity

South America improved from low level

April 28, 2003 7

+433

+125


Change in %, Q1 2003 vs. Q1 2002

Q1 - Europe and Africa/Middle East

Demand in Europe remained on a relatively good level– Steady growth in Eastern Europe– Stable level of industrial demand offset

weak construction activity in Western Europe

– Good demand for consumables and service

Favorable development in Africa / Middle East, in spite of the war in Iraq.

March 2003

April 28, 2003 8

+153

+1710


Change in %, Q1 2003 vs. Q1 2002

Q1 - Asia and Australia

Another quarter of strong growth in China fuel growth in Asia

Continued growth in Australia

March 2003

April 28, 2003 9

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

Volume Growth per Quarter

-10

-5

0

5

10

15

20

April 28, 2003 10

January – MarchMSEK Orders Received Revenues2002 12,058 11,635Structure, % +1 +1Currency, % -11 -11Price, % +1 +1Volume, % -1 -2Total, % -10 -112003 10,903 10,400

Group Total

April 28, 2003 11

Contents


Market Development

Business Areas

Financials

Outlook

April 28, 2003 12

Compressor Technique

Order volume up 1%

Growth continued for industrial compressors and aftermarket– New products and successful territory management

improve market position

Sales of portable compressors and generators negatively affected by weak construction market

China largest market for the business area

Profit margin improved, despite negative currency effects

April 28, 2003 13


%

-15

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0

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-15

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-5

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2098

Q1

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Volume growth: Change in revenues vs. same quarter previous year, %Quarterly operating margin, % %

April 28, 2003 14

Rental Service

Non-residential building market remained weak

Industrial business increased

Rental volumes affected by weak demand and store closures– Flat same store rental revenues

Improved rental rates and higher fleet utilization

EBITDA margin unchanged

Strong cash flow continued

April 28, 2003 15

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Volume growth: Change in rental revenue vs. same quarter previous year, %Quarterly operating margin, % (Business Area)

Rental ServiceRental Revenue Growth

% %

April 28, 2003 16

EBIT - Bridge

EBIT, MUSD Q1 2002 12 3.6%

Contribution Rental Revenue -8 Merchandise & Equipment -4 Used Equipment -2 -14 Price +3 Lower goodwill amortization +5 Cost savings, net +6

Q1 2003 12 4.2%

April 28, 2003 17

Industrial Technique

Order volume flat– Growth for industrial tools through improved

market position– Lower volumes for professional electric tools

in North America

Acquisition of DreBo Werkzeugfabrik completed April 4, 2003 – Turnover MSEK 230

Operating margin negatively affected by currency effects and lower revenues

April 28, 2003 18

%

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-10

-5

0

5

10

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20

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-10

-5

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April 28, 2003 19

Construction & Mining Technique

Sustained volume growth, + 3% – Increased investments from underground

mines – Continued growth for drilling equipment for

surface applications– Weak demand for light construction equipment

Restructuring charge MSEK 12

Margins negatively affected by weak US dollar

April 28, 2003 20

%

-20

-15

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0

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25

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April 28, 2003 21

Contents


Market Development

Business Areas

Financials

Outlook

April 28, 2003 22

Income Statement

MSEK January - March Change2003 2002 %

Orders Received 10,903 12,058 -10Revenues 10,400 11,635 -11EBIT 1,072 1,166 -8- margin, % 10.3 10.0Profit after financialitems (PAFI)

956 912 +5

- margin, % 9.2 7.8

April 28, 2003 23

Balance Sheet March 31, 2003

MSEK Mar. 31,2003 %

Dec. 31,2002 %

Mar. 31,2002 %

Intangible fixed assets 12,598 26 12,956 27 21,909 35Rental equipment 10,616 22 11,294 23 14,770 23Other fixed assets 6,463 14 6,726 14 7,461 12Inventories 6,300 13 5,782 12 6,505 10Receivables 10,225 21 10,554 22 11,094 18Cash and bank 1,516 3 1,356 3 1,486 2Total assets 47,718 48,668 63,225

Equity 20,643 43 20,194 41 27,578 44Minority interest 63 0 160 0 218 0Interest-bearing liabilities 13,749 29 15,050 31 19,682 31Non-interest-bearing liabilities 13,263 28 13,264 27 15,747 25Total liabilities and equity 47,718 48,668 63,225

April 28, 2003 24

Cash Flow

January – MarchMSEK 2003 2002Operating cash surplus after tax 1,425 1,553Of which depreciation added back 837 1,057Change in working capital -36 668 Cash flow from operations 1,389 2,221Investments in tangible fixed assets -496 -1,174Sale of tangible fixed assets 342 502Other investments, net -44 -26Cash flow from investments -198 -698 Operating cash flow 1,191 1,523Company acquisitions / divestments -207 -5Dividend paid 0 -4 Net Cash flow 984 1,514

April 28, 2003 25

Capital Expenditures in Tangible Fixed Assets

-500

0

500

1000

1500

2000

2500

-1000

0

1000

2000

3000

4000

5000

Machinery & buildings, quarterly Net, Rental Equipment, quarterlyNet. Rental Eq.+Mach.& buildings, 12 months Net, Rental Equipment, 12 monthsNet. Rental Eq.+Mach.& buildings, quarterly

1999 2000 2001 2002 2003

MSEKQuarterly 12 months

Net rental fleet investment = MSEK 353

April 28, 2003 26

Contents


Market Development

Business Areas

Financials

Outlook

April 28, 2003 27

Near-term Outlook

Demand in the Group’s two main regions, North America and Europe, is not expected to show any material change in the near term. Key business indicators such as capacity utilization, industrial production and building and construction activity in these regions are still weak.

Demand from the mining industry and the overall demand in Asia is expected to remain favorable.

April 28, 2003 28

The

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April 28, 2003 29

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.”

April 28, 2003 30

Contents


Market Development

Business Areas

Financials

Outlook

Additional Information

April 28, 2003 31

0

10000

20000

30000

40000

50000

60000

70000

9012 9112 9212 9312 9412 9512 9612 9712 9812 9912 0012 0112 02120

1000

2000

3000

4000

5000

6000

7000

Revenues, 12 month values, MSEK (left axis)Earnings before interest and tax, MSEK (right axis)

Long Term Trend

Excluding goodwill impairment charge in Q3 2002

April 28, 2003 32

0

5000

10000

15000

20000

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35000

9012 9112 9212 9312 9412 9512 9612 9712 9812 9912 0012 0112 02120

500

1000

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2000

2500

3000

3500



April 28, 2003 33

Rental Service

0

5000

10000

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20000

9712 9812 9912 0012 0112 02120

500

1000

1500

2000



April 28, 2003 34


0

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10000

15000

9012 9112 9212 9312 9412 9512 9612 9712 9812 9912 0012 0112 02120

500

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April 28, 2003 35


-3000

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9000

9012 9112 9212 9312 9412 9512 9612 9712 9812 9912 0012 0112 0212-300

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April 28, 2003 36

Items Affecting Comparability

MSEK Q1 ‘03 Q4 ‘02 Q3 ‘02 Q2 ‘02 Q1 ‘02Rental Service Goodwill impairment charge -6,950 Reduced goodwill amortization +45 +51Industrial Technique Restructuring cost AET/Milwaukee -48Construction & Mining Technique Restructuring cost Wagner -12 -68Group Total +33 -17 -6,950 -48 0

April 28, 2003 37

Group Totalexcl. items affecting comparability

MSEK January - March Change2003 2002 %

Orders Received 10,903 12,058 -10Revenues 10,400 11,635 -11EBIT 1,039 1,166 -11- margin, % 10.0 10.0Profit after financialitems (PAFI)

923 912 +1

- margin, % 8.9 7.8

April 28, 2003 38

Return on Capital Employed

12 month values

0%

5%

10%

15%

20%

25%

ROCE Weighted average cost of capital (WACC), pre-tax

1999 2000 2001 2002 2003


April 28, 2003 39

Inventories, Customer Receivables and Net Rental Equipment

0

5

10

15

20

25

30

35Inventories Customer receivables Net Rental Equipment

Percent of Sales12 Month Values

1999 2000 2001 2002 2003

April 28, 2003 40

Cash and Interest-Bearing Debt

12,233

Mar.2003

Net borrowings

-8192 -9987 -8091 -2450

-11999-11594

-10822-10543

-1450

1286 13431237 1356 1516

-1388

-10969

-1521

-1736

-1778-1818

Cash Short-term loans Long-term loans PensionsMSEK

13,694

Dec.2002

19,325

Dec.1999

22,270

Dec.2000

20,078

Dec.2001

April 28, 2003 41

The

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atlas copco group q1 results april 28, 2003. 2 contents q1 business highlights market development ...

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