atlas copco q3/2010 results
TRANSCRIPT
Atlas Copco Group
Q3 Results
October 22, 2010
Q3 - highlights
Strong order growth – Sequentially higher volumes in all regions and in most customer segments
– Record order intake, again, in Asia, South America and Australia
– Strong performance in aftermarket
Record operating profit and margin– Revenue volume, sales mix, price, and efficiency measures gave support
Investments in market organization and logistics
October 22, 20102
Q3 - figures in summary
35% organic order growth
Revenues of MSEK 17 743; 18% organic growth
Operating profit at MSEK 3 782 (2 402)– Restructuring cost of MSEK 100
– Adjusted operating margin of 21.9% (15.9)
Profit before tax at MSEK 3 675 (2 210)
Basic earnings per share SEK 2.17 (1.42)
Operating cash flow MSEK 2 479 (4 275)
3October 22, 2010
Orders received - local currencyGroup total +33% YTD (+31% excl. cancellations), +37% last 3 monthsStructural change +2% YTD, +2% last 3 months
September 2010
18 +51 +49
A = Share of orders received, year-to-date, %
B = Year-to-date vs. previous year, %
C = Last 3 months vs. previous year, %
11 +46 +30
A B C
31 +20 +26
10 +11 +1
23 +46 +60
7 +55 +96
4October 22, 2010
Q3 - the Americas
Strong growth in North America– Sequential improvement for most types of equipment and
for the aftermarket.
– The demand from manufacturing and construction industries developed particularly well.
Record level of orders in South America– Continued strong demand from all countries and from most
customer segments
October 22, 20105
September 2010
A B CA = Share of orders received, year-to-date, %
B = Year-to-date vs. previous year, %
C = Last 3 months vs. previous year, %
18 +51 +49
11 +46 +30
Q3 - Europe and Africa/Middle East
Slightly improved activity in Europe– Sequential improvement in most industries, but sales to
construction industry was somewhat weaker than in Q2
– Strong growth vs. weak Q3 2009
– The best development in the east, with the south at the bottom of the list
Mixed picture in Africa / Middle East– Improved sales to mining industry in South Africa
– Lower sales in the Middle East
– Aftermarket business developed favorably
October 22, 20106
September 2010
A B CA = Share of orders received, year-to-date, %
B = Year-to-date vs. previous year, %
C = Last 3 months vs. previous year, %
31 +20 +26
10 +11 +1
Q3 - Asia and Australia
Record order intake in Asia– Strong growth in all major markets
– High activity level in all industries supported strong growth in aftermarket
– Large mining order from Kazakhstan
Continued favorable mining demand in Australia contributed to record orders received
October 22, 20107
September 2010
A B CA = Share of orders received, year-to-date, %
B = Year-to-date vs. previous year, %
C = Last 3 months vs. previous year, %
23 +46 +60
7 +55 +96
Organic* growth per quarter
Change in orders received in % vs. same quarter previous year
October 22, 20108
Atlas Copco Group, continuing operations
*Volume and price
July - September January - September
Orders Orders
MSEK Received Revenues Received Revenues
2009 14 309 15 088 43 175 47 820
Cancellations, % - - +2 * -
Structural change, % +2 +2 +2 +2
Currency, % -2 -2 -4 -4
Price, % +1 +1 +1 +1
Volume, % +34 +17 +28 +7
Total, % +35 +18 +29 +6
2010 19 316 17 743 55 804 50 474
*Cancellations in Q1 2009
Atlas Copco Group – sales bridge
9October 22, 2010
Revenues Operating Operating ROCE
MSEK profit margin
12 month values, period ending sep-10 sep-10 sep-10 sep-10
Compressor Technique 33 295 7 483 22.5% 64%
Construction and Mining Technique 27 378 4 507 16.5% 24%
Industrial Technique 6 042 956 15.8% 38%
Eliminations/Common Group Functions -299 -588
Atlas Copco Group 66 416 12 358 18.6% 25%
Atlas Copco GroupRevenues, operating profit and return on capital employed (ROCE) by business area
10October 22, 2010
Compressor Technique
25% organic order growth vs. Q3 2009– Continued strong demand for stationary and portable
compressors
– Strong growth in North and South America, Asia and eastern Europe
Very strong development in aftermarket with high growth in emerging markets
Operating margin at 26.0%– Positively affected by volume, efficiency improvements,
sales mix, currency and price
Acquisition of Cirmac in October. – Biogas upgrading and gas treatment systems
October 22, 201011
Compressor Technique
12October 22, 2010
*Volume and price
Construction and Mining Technique
Strong growth in both equipment and aftermarket– 47% organic order growth vs. Q3 2009
– Continued strong demand from the mining industry
– Orders for construction equipment somewhat weaker than in Q2
Operating margin at 17.8%– MSEK 100 restructuring cost for consolidating production in Germany
– Record high operating margin, excluding restructuring, at 19.2%
Acquisition of manufacturer of mobile crushers and screeners
October 22, 201013
Construction and Mining Technique
14October 22, 2010
*Volume and price
Industrial Technique
Improved demand from all customer segments – 45% organic order growth vs. Q3 2009
– Strong growth in Asia
– Rapid growth of aftermarket, particularly in emerging markets
Operating margin increased to 20.2%– Positively affected by increased volumes and cost savings
Acquisition of a distributor business in Michigan, the United States
October 22, 201015
Industrial Technique
16October 22, 2010
*Volume and price
Group total
17October 22, 2010
MSEK 2010 2009 % 2010 2009 %
Orders received 19 316 14 309 +35 55 804 43 175 +29
Revenues 17 743 15 088 +18 50 474 47 820 +6
Operating profit 3 782 2 402 +57 9 908 6 640 +49
- as a percentage of revenues 21.3 15.9 19.6 13.9
Profit before tax 3 675 2 210 +66 9 575 5 947 +61
- as a percentage of revenues 20.7 14.6 19.0 12.4
Profit for the period 2 650 1 730 +53 7 028 4 576 +54
Basic earnings per share, SEK 2.17 1.42 5.77 3.75
Return on capital employed, % 25 21
July - September January - September
Organic Growth One-time items
MSEK Price/Volume Acq./Div.
Atlas Copco Group
Revenues 17 743 2 565 -260 350 15 088
EBIT 3 782 1 575 -135 -60 2 402
% 21.3% 61% - - 15.9%
Q3 2010 Currency Q3 2009
Profit bridgeJuly – September, 2010 vs 2009
18October 22, 2010
Organic Growth One-time items
MSEK Price/Volume Acq./Div.
Compressor Technique
Revenues 8 877 953 -190 315 7 799
EBIT 2 312 806 15 40 1 451
% 26.0% 85% - - 18.6%
Construction & Mining Technique
Revenues 7 357 1 346 10 25 5 976
EBIT 1 312 559 30 -100 823
% 17.8% 42% - - 13.8%
Industrial Technique
Revenues 1 569 381 -65 10 1 243
EBIT 317 244 -10 0 83
% 20.2% 64% - - 6.7%
Q3 2010 Currency Q3 2009
Profit bridge – by business areaJuly – September, 2010 vs 2009
19October 22, 2010
MSEK Sep 30, 2010 Dec 31, 2009 Sep 30, 2009
Intangible assets 13 539 20% 12 697 19% 12 593 19%
Rental equipment 1 867 3% 2 056 3% 2 048 3%
Other property, plant and equipment 5 702 8% 5 993 9% 6 046 9%
Other fixed assets 4 452 7% 6 556 10% 6 060 9%
Inventories 12 287 18% 11 377 17% 12 623 19%
Receivables 16 575 25% 15 433 23% 15 883 24%
Current financial assets 1 554 2% 1 530 2% 1 598 2%
Cash and cash equivalents 11 388 17% 12 165 18% 10 005 15%
Assets classified as held for sale 64 0% 67 0% 35 0%
TOTAL ASSETS 67 428 67 874 66 891
Total equity 26 124 39% 25 671 38% 23 404 35%
Interest-bearing liabilities 21 913 32% 25 735 38% 27 498 41%
Non-interest-bearing liabilities 19 391 29% 16 468 24% 15 989 24%
TOTAL EQUITY AND LIABILITIES 67 428 67 874 66 891
Balance sheet
20October 22, 2010
Capital structure
21
Net Debt*/EBITDA
* Net Debt adjusted for the fair value of interest rate swaps
October 22, 2010
Atlas Copco AB’s loan maturity profile
22October 22, 2010
July - September January - SeptemberMSEK 2010 2009 2010 2009
Operating cash surplus after tax 3 739 2 360 9 886 5 383 of which depreciation added back 639 661 1 834 1 840Change in working capital -1 035 2 032 -1 087 5 118Increase in rental equipment, net -92 -35 -274 -140 Cash flows from operating activities 2 612 4 357 8 525 10 361Investments of property, plant & eq. -274 -217 -644 -788Sale of property, plant & eq. 14 29 37 67Other investments, net 127 106 -369 -22Cash flow from investments -133 -82 -976 -743 Operating cash flow 2 479 4 275 7 549 9 618Company acquisitions/ divestments -282 -10 -1 668 -165
Cash flow
Operating cash surplus after tax is adjusted for equity hedges in net financial items.
23October 22, 2010
Capital Markets Day
December 1, 2010, in Nacka, Sweden
www.atlascopco.com/CMD2010
October 22, 201024
Near-term outlook
The overall demand for the Group’s products and services is expected to increase somewhat. The sequential improvement is primarily expected to come from emerging markets.
25October 22, 2010
Committed tosustainable productivity.
26October 22, 2010
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.”
28October 22, 2010