april 27, 20051 atlas copco group q1 results april 27, 2005
TRANSCRIPT
April 27, 2005 1
Atlas Copco Group
Q1 Results
April 27, 2005
April 27, 2005 2
Contents
Q1 Business Highlights
Market Development
Business Areas
Financials
Outlook
April 27, 2005 3
Q1 - Highlights
Strong growth
Record profit margins
Strong performance from acquired units
Continued improvement in Rental Service
Price increases and efficiency measures offset higher component and energy costs
Acquisitions strengthen core businesses within CT, CMT and IT
Divestment of professional electric tool business on January 3, 2005
April 27, 2005 4
Q1 - Figures in summary
Order received up 17%, volume up 8%
Revenues reached MSEK 11 168 (9 595), up 10% in volume
Operating profit at MSEK 1 737, a margin of 15.6% (13.8)– Capital gain on professional electric tools divestment deferred
– 2004 restated for IFRS
Profit after financial items up 35% to MSEK 1 665 (1 231)
Earnings per share increased to SEK 5.55 (4.38)
Operating cash flow at MSEK 685 (862)
ROCE at 23%
April 27, 2005 5
Contents
Q1 Business Highlights
Market Development
Business Areas
Financials
Outlook
April 27, 2005 6
March 2005
Orders received - Local currency
Group total +8% YTD, +21 excl. discontinued operations(Structural change +10% YTD, excl. discontinued operations)
B CA
+3 +2739
+79 +835
0 +1034
+26 +286
+30 +404
+12 +1412
A= Portion of Group sales last 12 months, %B= Year-to-date vs prev. year, % C= B, excl. discontinued operations
April 27, 2005 7
Q1 - The Americas
Strong development in North America– Increased demand from manufacturing and
process industries
– Non-residential construction activity improved
– Very good demand from the mining industry
Continued strong demand in South America
+3 +2739
+79 +835
B CAA= Portion of Group sales last 12 months, %B= Year-to-date vs prev. year, % C= B, excl. discontinued operations
March 2005
April 27, 2005 8
Q1 - Europe and Africa/Middle East
Demand in Europe increased– Increased investments in compressed air
equipment and industrial tools in the manufacturing and process industries
– Improved demand for construction equipment, still strong for mining equipment
– Best development in Eastern Europe, the Nordic countries, Great Britain and Spain
Overall positive demand development in Africa / Middle East
B CAA= Portion of Group sales last 12 months, %B= Year-to-date vs prev. year, % C= B, excl. discontinued operations
0 +1034
+26 +286
March 2005
April 27, 2005 9
Q1 - Asia and Australia
Continued growth in Asia
– Healthy demand for standard industrial compressors
– Lower demand from large projects in China
– Strong performance in India, South East Asia and Japan.
Strong growth in Australia, primarily due to mining demand
B CAA= Portion of Group sales last 12 months, %B= Year-to-date vs prev. year, % C= B, excl. discontinued operations
+30 +404
+12 +1412
March 2005
April 27, 2005 10
Volume Growth
-10
-5
0
5
10
15
20
00 Q
1
00 Q
2
00 Q
3
00 Q
4
01 Q
1
01 Q
2
01 Q
3
01 Q
4
02 Q
1
02 Q
2
02 Q
3
02 Q
4
03 Q
1
03 Q
2
03 Q
3
03 Q
4
04 Q
1
04 Q
2
04 Q
3
04 Q
4
05 Q
1
per Quarter
Change in orders received in % vs. same Quarter previous year
April 27, 2005 11
Group Total
Sales Bridge
January – March
MSEK
Orders Received
Revenues
2004 reported 11 577 10 858 Discontinued operations -1 299 -1 263
2004 10 278 9 595 Structural change, % +10 +7 Currency, % -4 -4 Price, % +3 +3 Volume, % +8 +10 Total, % +17 +16 2005 11 990 11 168
April 27, 2005 12
Contents
Q1 Business Highlights
Market Development
Business Areas
Financials
Outlook
April 27, 2005 13
Compressor Technique
Record level of order received– Volume growth 7%
– Positive sales development in the Americas
– Strong growth for portable compressors and specialty rental business
– Demand for stationary industrial compressors and related aftermarket business increased further
– Breakthrough order from liquid natural gas market
Improved operating margin– Positive volume effect and price increases more
than offset the negative currency impact and higher components costs
April 27, 2005 14
Compressor Technique
-15
-10
-5
0
5
10
15
20
-15
-10
-5
0
5
10
15
20
00
Q1
00
Q2
00
Q3
00
Q4
01
Q1
01
Q2
01
Q3
01
Q4
02
Q1
02
Q2
02
Q3
02
Q4
03
Q1
03
Q2
03
Q3
03
Q4
04
Q1
04
Q2
04
Q3
04
Q4
05
Q1
Volume growth: Change in revenues vs. same quarter previous year, %
Quarterly operating margin, %
Operating margins restated (IFRS) from 2004
April 27, 2005 15
Construction & Mining Technique
Orders received up 63%
– 17% volume growth for comparable units
– Continued strong demand from mining industry and improved demand for light construction equipment
– Strong contribution from recently acquired businesses
Operating profit improved
Acquisition of Lifton, a manufacturer of hydraulic handheld breaker equipment
April 27, 2005 16
-20
-15
-10
-5
0
5
10
15
20
25
-20
-15
-10
-5
0
5
10
15
20
25
00
Q1
00
Q2
00
Q3
00
Q4
01
Q1
01
Q2
01
Q3
01
Q4
02
Q1
02
Q2
02
Q3
02
Q4
03
Q1
03
Q2
03
Q3
03
Q4
04
Q1
04
Q2
04
Q3
04
Q4
05
Q1
Volume growth: Change in revenues vs. same quarter previous year, %
Quarterly operating margin, %
Construction & Mining Technique
Operating margins restated (IFRS) from 2004
April 27, 2005 17
Rental Service
Recovery in non-residential construction activity continued
Rental revenues increased 13% in USD– Price +10%, volume +3%
Fleet utilization at record level
Profitability improved significantly– Record operating margin in a first quarter
– Return on total capital employed above the Group’s WACC
April 27, 2005 18
-15
-10
-5
0
5
10
15
20
-15
-10
-5
0
5
10
15
20
00 Q
1
00 Q
2
00 Q
3
00 Q
4
01 Q
1
01 Q
2
01 Q
3
01 Q
4
02 Q
1
02 Q
2
02 Q
3
02 Q
4
03 Q
1
03 Q
2
03 Q
3
03 Q
4
04 Q
1
04 Q
2
04 Q
3
04 Q
4
05 Q
1
Volume growth: Change in rental revenue vs. same quarter previous year, %
Quarterly operating margin, % (Business Area)
Rental Service
Rental Revenue Volume Development
Operating margins restated (IFRS) from 2004
April 27, 2005 19
Industrial Technique
Order volume up 9% for industrial tools– Good demand from all major customer segments
– Strong development in North America
Record operating margin
Acquisitions of specialized tightening solutions businesses
Divestment of electric tools business finalized on January 3, 2005.
April 27, 2005 20
Industrial Technique
-15
-10
-5
0
5
10
15
20
-15
-10
-5
0
5
10
15
200
3 Q
1
03
Q2
03
Q3
03
Q4
04
Q1
04
Q2
04
Q3
04
Q4
05
Q1
Volume growth: Change in revenues vs. same quarter previous year, %
Quarterly operating margin, %
Operating margins restated (IFRS) from 2004
April 27, 2005 21
Contents
Q1 Business Highlights
Market Development
Business Areas
Financials
Outlook
April 27, 2005 22
Income Statement
January – March Change MSEK 2005 2004 %
Orders received 11 990 10 278 +17
Revenues 11 168 9 595 +16
Operating profit 1 737 1 321 +31 – as a percentage of revenues 15.6 13.8
Profit after financial items 1 665 1 231 +35 – as a percentage of revenues 14.9 12.8 Net profit from continuing operations 1 167 875 +33 Net profit from discontinued operations - 47 Net profit 1 167 922 +27 Earnings per share, SEK 5.55 4.38 1) +27 Equity capital per share, SEK 118 104 Return on capital employed, % 23 1) 1) Including discontinued operations. Adjusted for IFRS
April 27, 2005 23
Balance Sheet
Adjusted for IFRS
MSEK Mar. 31, 2005 Mar. 31, 2004 Property, plant and equipment Rental equipment 10 022 20% 9 425 19% Other property, plant and equipment 3 923 8% 3 535 7% Intangible assets 9 248 18% 8 644 17% Other fixed assets 1 790 4% 2 051 4% Inventories 6 447 13% 5 187 10% Receivables 11 110 22% 9 616 19% Short-term investments 287 1% 312 1% Cash and cash equivalents 7 316 15% 4 553 9% Assets held for sale - 6 087 12% Total assets 50 143 100% 49 410 100% Total Equity 24 769 49% 21 766 44% Interest-bearing loans and borrowings 10 531 21% 13 111 27% Non-interest-bearing loans and borrowings 14 843 30% 12 162 25% Liabilities held for sale - 2 371 5% Total shareholders’ equity and liabilities 50 143 100% 49 410 100%
April 27, 2005 24
Cash Flow
January – March MSEK 2005 2004
Operating cash surplus after tax 1 993 1 438 of which depreciation added back 718 674 Change in working capital -454 -81
Cash flow from operations 1 539 1 357 Investments in tangible fixed assets -1 336 -820 Sale of tangible fixed assets 566 424 Other investments, net -84 -100 Cash flow from investments -854 -495 Operating cash flow 685 862 Company acquisitions / divestments 4 231 -10 Cash flow from financing -381 -179 Net cash flow, after financing 4 535 673
Adjusted for IFRS
April 27, 2005 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
2005
MSEK
Quarterly 12 months
Net rental fleet investment = MSEK 2 421
20042002 20032001
April 27, 2005 26
Dividend and Redemption
1886
4192
1100 1153 1205
6078
1572
0
1000
2000
3000
4000
5000
6000
7000
2000 2001 2002 2003 2004
Dividend per share Redemption of shares Line 4
* Proposed by the Board of Directors
*
Average annual dividend growth
(ordinary dividend) 13,6%
April 27, 2005 27
Contents
Q1 Business Highlights
Market Development
Business Areas
Financials
Outlook
April 27, 2005 28
Near-term Outlook
The demand for Atlas Copco’s products and services is expected to remain at current high level.
Demand from manufacturing and process industries is expected to stay favorable in most markets. Activity in the construction industry is expected to continue to increase somewhat in North America and in most developing countries. Demand from the mining industry is expected to remain strong.
April 27, 2005 29
April 27, 2005 30
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.”