atlas copco q1/2011 results
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Atlas Copco Group
Q1 Results
April 20, 2011
Q1 - highlights
Very strong order intake– Record orders received in all business areas
Record operating margin– All business areas improved
New business area structure as of July 1
April 20, 20112
Strengthen focus on specific product and customer segments
Capture more of the aftermarket potential
Increase sales and service synergies between construction related divisions
New business area structureWhy?
3April 20, 2011
Four business areasCompressor
TechniqueIndustrial Technique
Mining and Rock Excavation
Technique
Construction Technique
Industrial compressors Gas and process compressors Air and gas treatment Service
Industrial tools Assembly systems Service
Rock drilling equipment - underground and surface Loaders and trucks Mobile crushing Exploration drilling and ground engineering Rock drilling tools Service
Light construction equipment Road development equipment Portable compressors and generators Service
2010 figures pro-forma
• Revenues BSEK 30.0
• Operating margin ~25%
2010 figures reported
• Revenues BSEK 6.5
• Operating margin 19.5%
2010 figures pro-forma
• Revenues BSEK 22.5
• Operating margin ~22%
2010 figures pro-forma
• Revenues BSEK 11.2
• Operating margin ~10%
April 20, 20114
New business area presidentMining and Rock ExcavationTechnique
Bob Fassl
5April 20, 2011
Q1 - figures in summary
Orders received MSEK 21 675, 33% organic growth
Revenues of MSEK 18 223; 27% organic growth
Operating profit increased 52% to MSEK 3 987– Operating margin at 21.9% (17.2)
Profit before tax at MSEK 4 056 (2 497)– MSEK 151 capital gain related to sale of shares in Rental Service
Basic earnings per share SEK 2.48 (1.53)
Operating cash flow MSEK 2 026 (2 223)
April 20, 20116
Orders received - local currencyGroup total +36% YTDStructural change +3% YTD
March 2011
19 +50
A = Share of orders received, year-to-date, %
B = Year-to-date vs. previous year, %
10 +24
A B
29 +24
10 +26
25 +53
7 +23
7April 20, 2011
Q1 - the Americas
Strong growth in North America– Record quarter for the mining business
– Order intake for compressed air equipment and industrial tools remained strong
– Favorable demand development for construction equipment
Record orders received in South America– Strong demand from all customer segments
April 20, 20118
March 2011 A = Share of orders received, year-to-date, %
B = Year-to-date vs. previous year, %A B
19 +50
10 +24
Q1 - Europe and Africa/Middle East
April 20, 20119
Order growth in all parts of Europe– Strong growth in western and eastern Europe, moderate in
the south
– Orders received for all major types of equipment improved
– Solid growth in the aftermarket
Africa / Middle East remained strong– Strong demand in southern Africa, especially from mining
– Turmoil in northern Africa and the Middle East had a slight negative impact
March 2011 A = Share of orders received, year-to-date, %
B = Year-to-date vs. previous year, %A B
29 +24
10 +26
Q1 - Asia and Australia
Strong demand for all types of equipment in Asia– Record orders received
– Very strong order intake in China
– Great quarter in India
Record orders received in Australia– Continued strong demand in mining
April 20, 201110
March 2011 A = Share of orders received, year-to-date, %
B = Year-to-date vs. previous year, %A B
25 +53
7 +23
Organic* growth per quarter
Change in orders received in % vs. same quarter previous year
April 20, 201111
Atlas Copco Group, continuing operations
*Volume and price
- 50
- 40
- 30
- 20
- 10
0
10
20
30
40
01 Q
101
Q2
01 Q
301
Q4
02 Q
102
Q2
02 Q
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
08 Q
108
Q2
08 Q
308
Q4
09 Q
109
Q2
09 Q
309
Q4
10 Q
110
Q2
10 Q
310
Q4
11 Q
111
Q2
11 Q
311
Q4
Organic growth, % Order cancellations, %
Atlas Copco Group – sales bridge
12April 20, 2011
January - March
Orders
MSEK Received Revenues
2010 17 267 15 301
Structural change, % +3 +2
Currency, % -10 -10
Price, % +2 +2
Volume, % +31 +25
Total, % +26 +19
2011 21 675 18 223
Compressor Technique
Strong demand and record order intake – 31% organic order growth vs. Q1 2010
– Strong order intake for stationary industrial compressors as well as for portable compressors and generators
– Improved sales for gas and process compressors
– Continued good development in the aftermarket business
Operating margin at 23.9% (20.6)– Supported by volume and price
Acquisition of cryogenic pump business
April 20, 201113
Compressor Technique
14April 20, 2011
*Volume and price
-25-20-15-10-5051015202530
- 25
- 20
- 15
- 10
- 5
0
5
10
15
20
25
30
06 Q1
06 Q2
06 Q3
06 Q4
07 Q1
07 Q2
07 Q3
07 Q4
08 Q1
08 Q2
08 Q3
08 Q4
09 Q1
09 Q2
09 Q3
09 Q4
10 Q1
10 Q2
10 Q3
10 Q4
11 Q1
11 Q2
11 Q3
11 Q4
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
Construction and Mining Technique
Record order intake – 35% organic order growth– Very strong demand from the mining industry
– Further improvement for construction equipment
Record operating profit and margin– Operating margin at 20.6% (15.4), supported by higher production
volumes and price. Negative currency effect.
Several new products launched
April 20, 201115
Construction and Mining Technique
16April 20, 2011
*Volume and price
-40
-30
-20
-10
0
10
20
30
40
- 40
- 30
- 20
- 10
0
10
20
30
40
06 Q1
06 Q2
06 Q3
06 Q4
07 Q1
07 Q2
07 Q3
07 Q4
08 Q1
08 Q2
08 Q3
08 Q4
09 Q1
09 Q2
09 Q3
09 Q4
10 Q1
10 Q2
10 Q3
10 Q4
11 Q1
11 Q2
11 Q3
11 Q4
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
Industrial Technique
Record orders received– 33% organic order growth vs. Q1 2010
– Good demand from all customer segments
– Strong development in the Americas, Europe and Asia
Operating profit increased 65%– Operating margin at 22.7% (16.4)
– Positively affected by increased higher volumes and price
April 20, 201117
Industrial Technique
18April 20, 2011
*Volume and price
-50
-40
-30
-20
-10
0
10
20
30
40
- 50
- 40
- 30
- 20
- 10
0
10
20
30
40
06 Q1
06 Q2
06 Q3
06 Q4
07 Q1
07 Q2
07 Q3
07 Q4
08 Q1
08 Q2
08 Q3
08 Q4
09 Q1
09 Q2
09 Q3
09 Q4
10 Q1
10 Q2
10 Q3
10 Q4
11 Q1
11 Q2
11 Q3
11 Q4
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
Group total
19April 20, 2011
MSEK 2011 2010 %
Orders received 21 675 17 267 +26
Revenues 18 223 15 301 +19
Operating profit 3 987 2 627 +52
- as a percentage of revenues 21.9 17.2
Profit before tax 4 056 2 497 +62
- as a percentage of revenues 22.3 16.3
Profit for the period 3 033 1 855 +64
Basic earnings per share, SEK 2.48 1.53
Return on capital employed, % 32 19
January - March
Organic Growth One-time items
MSEK Price/Volume Acq./Div.
Atlas Copco Group
Revenues 18 223 4 022 -1 475 375 15 301
EBIT 3 987 1 860 -545 45 2 627
% 21.9% 46% - - 17.2%
Q1 2011 Currency Q1 2010
Profit bridgeJanuary – March, 2011 vs 2010
20April 20, 2011
Organic Growth One-time items
MSEK Price/Volume Acq./Div.
Compressor Technique
Revenues 8 405 1 241 -745 250 7 659
EBIT 2 006 649 -240 20 1 577
% 23.9% 52% - - 20.6%
Construction & Mining Technique
Revenues 8 163 2 420 -565 75 6 233
EBIT 1 681 1 036 -315 0 960
% 20.6% 43% - - 15.4%
Industrial Technique
Revenues 1 768 405 -170 50 1 483
EBIT 401 183 -50 25 243
% 22.7% 45% - - 16.4%
Q1 2011 Currency Q1 2010
Profit bridge – by business areaJanuary – March, 2011 vs 2010
21April 20, 2011
Balance sheet
22April 20, 2011
MSEK Mar 31, 2011 Dec 31, 2010 Mar 31, 2010
Intangible assets 13 154 18% 13 464 19% 13 607 20%
Rental equipment 1 774 2% 1 843 3% 1 981 3%
Other property, plant and equipment 5 555 8% 5 702 8% 5 974 9%
Other non-current assets 4 080 6% 4 123 6% 5 681 8%
Inventories 13 969 19% 12 939 18% 11 632 17%
Receivables 17 586 24% 17 474 24% 15 896 23%
Current financial assets 1 369 2% 1 734 2% 1 632 2%
Cash and cash equivalents 14 412 20% 14 264 20% 11 958 17%
Assets classified as held for sale 59 0% 79 0% 64 0%
TOTAL ASSETS 71 958 71 622 68 425
Total equity 29 730 41% 29 321 41% 26 384 39%
Interest-bearing liabilities 21 003 29% 21 692 30% 24 612 36%
Non-interest-bearing liabilities 21 225 29% 20 609 29% 17 429 25%
TOTAL EQUITY AND LIABILITIES 71 958 71 622 68 425
Capital structure
23
Net Debt*/EBITDA
* Net Debt adjusted for the fair value of interest rate swaps
April 20, 2011
Cash flow
24April 20, 2011
January - MarchMSEK 2011 2010
Operating cash surplus after tax 4 447 2 449 of which depreciation added back 586 574Change in working capital -2 350 275Increase in rental equipment, net -126 -63 Cash flows from operating activities 1 971 2 661Investments of property, plant & eq. -301 -177Sale of property, plant & eq. 16 12Other investments, net 340 -273Cash flow from investments 55 -438 Operating cash flow 2 026 2 223Company acquisitions/ divestments -813 -1 361
Near-term outlook
The overall demand for the Group’s products and services is expected to increase somewhat. The demand in the emerging markets as well as from the mining industry is expected to stay strong. Most other markets, except southern Europe and northern Africa, are expected to continue to develop positively.
25April 20, 2011
Committed tosustainable productivity.
26April 20, 2011
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.”
28April 20, 2011