october 21, 2005 atlas copco group q3 results october 21, 2005
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October 21, 2005 www.atlascopco.com 1
Atlas Copco Group
Q3 Results
October 21, 2005
October 21, 2005 www.atlascopco.com 2
Contents
Q3 Business Highlights
Market Development
Business Areas
Financials
Outlook
October 21, 2005 www.atlascopco.com 3
Q3 - Highlights
Stronger than ever
Strengthened market positions– Demand remained strong
Record performance by all business areas– Double digit organic revenue growth in all business areas
– Operating profit and profit margins at all time highs
Several acquisitions in focused areas
October 21, 2005 www.atlascopco.com 4
Q3 - Figures in summary
Order received up 25%, up 15% in volume
Revenues reached MSEK 13 479 (11 325), up 19%
Operating profit at MSEK 2 562, a margin of 19.0% (17.3)
Profit after financial items up 33% to MSEK 2 470 (1 851)
Earnings per share increased to SEK 2.65 (2.13)
Operating cash flow at MSEK 1 671 (1 661)
ROCE at 26%
October 21, 2005 www.atlascopco.com 5
Contents
Q3 Business Highlights
Market Development
Business Areas
Financials
Outlook
October 21, 2005 www.atlascopco.com 6
Orders received - Local currency
Group total +22% YTD, +21% last 3 months(Structural change +7% YTD, +3% last 3 months)
B CAA= Portion of Group sales last 12 months, %B= Year-to-date vs prev. year, % C= Last 3 months vs prev. year, %
September 2005
+24 +2037
+45 +215
+15 +1634
+32 +367
+22 +44
+24 +3613
October 21, 2005 www.atlascopco.com 7
Q3 - The Americas
Strong development in North America– Increased demand from manufacturing
and process industries
– Good demand for equipment and rental from construction industry
– Continued high activity in the mining industry
Continued positive development in South America
B CAA= Portion of Group sales last 12 months, %B= Year-to-date vs prev. year, % C= Last 3 months vs prev. year, %
September 2005
+24 +2037
+45 +215
October 21, 2005 www.atlascopco.com 8
Q3 - Europe and Africa/Middle East
Favorable demand in Europe– Strong development in Eastern Europe, while
only moderate growth in Western Europe
– Increased sales of mining, construction and compressed air equipment
Africa / Middle East region developed well
B CAA= Portion of Group sales last 12 months, %B= Year-to-date vs prev. year, % C= Last 3 months vs prev. year, %
September 2005
+15 +1634
+32 +367
October 21, 2005 www.atlascopco.com 9
Q3 - Asia and Australia
Strong development in Asia– Accelerated growth in Japan, India,
South Korea and China
Investments in India to increase capacity
September 2005
B CAA= Portion of Group sales last 12 months, %B= Year-to-date vs prev. year, % C= Last 3 months vs prev. year, %
+22 +44
+24 +3613
October 21, 2005 www.atlascopco.com 10
Volume Growth
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per Quarter
Change in orders received in % vs. same Quarter previous year
October 21, 2005 www.atlascopco.com 11
Group Total
Sales Bridge
July – September January – September
MSEK
Orders Received
Revenues Orders Received
Revenues
2004 reported 12 860 12 760 37 036 35 697 Discontinued operations -1 442 -1 435 -4 139 -4 097 2004 11 418 11 325 32 897 31 600 Structural change, % +3 +2 +8 +6 Currency, % +4 +4 0 0 Price, % +3 +3 +3 +3 Volume, % +15 +10 +11 +10 Total, % +25 +19 +22 +19 2005 14 257 13 479 40 085 37 709
October 21, 2005 www.atlascopco.com 12
Contents
Q3 Business Highlights
Market Development
Business Areas
Financials
Outlook
October 21, 2005 www.atlascopco.com 13
Compressor Technique
Strong order intake in all regions and for all types of compressors and its aftermarket– Best development in North America, Eastern
Europe and Asia
Acquisitions within focused areas– Intermech – Compressed natural gas
Divestment of stationary generator business
Record revenues and operating profit– Operating profit more than 1 billion SEK and
highest operating margin ever
October 21, 2005 www.atlascopco.com 14
Compressor Technique
-10
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Revenue volume growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
Operating margins restated (IFRS) from 2004
October 21, 2005 www.atlascopco.com 15
Construction & Mining Technique
Continued strong demand from both mining construction
Order volume up 28% – 14th consecutive quarter with volume growth
– Very strong growth in Asia, North America and Eastern Europe
Product launches– Rigs for scaling, exploration drilling and silent
drilling
Record revenues and profits– Operating margin at all-time high 14.6%
October 21, 2005 www.atlascopco.com 16
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Revenue volume growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
Construction & Mining Technique
Operating margins restated (IFRS) from 2004
October 21, 2005 www.atlascopco.com 17
Rental Service
Rental revenues increased 13% in USD– Price +8%, volume +5%
Fleet utilization at record level– Improved fleet quality with increased
investments in equipment
Profitability improved significantly– Increased rental volume and rental rates
combined with efficiency measures
– All-time high operating profit margin at 25.6%
October 21, 2005 www.atlascopco.com 18
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Rental revenue volume growth: Change vs. same quarter previous year, %
Quarterly operating margin, % (Business Area)
Rental Service
Rental Revenue Volume Development
Operating margins restated (IFRS) from 2004
October 21, 2005 www.atlascopco.com 19
Industrial Technique
Favorable sales growth in Asia and North America
Focus on sales and product development– Investment in sales engineers and
training activities
– New tools and aftermarket products
Agreement to acquire Fuji Air Tools
Record revenues and operating profit– Operating margin above 20%
October 21, 2005 www.atlascopco.com 20
Industrial Technique
-5
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Q1
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Q1
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Q4
Revenue volume growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
Operating margins restated (IFRS) from 2004
October 21, 2005 www.atlascopco.com 21
Contents
Q3 Business Highlights
Market Development
Business Areas
Financials
Outlook
October 21, 2005 www.atlascopco.com 22
Income Statement
Jul. – Sept. Jan. – Sept. MSEK 2005 2004 % 2005 2004 %
Orders received 14 257 11 418 +25 40 085 32 897 +22 Revenues 13 479 11 325 +19 37 709 31 600 +19
Operating profit 2 562 1 962 +31 6 591 4 867 +35 – as a percentage of revenues 19.0 17.3 17.5 15.4
Profit after financial items 2 470 1 851 +33 6 263 4 584 +37 – as a percentage of revenues 18.3 16.3 16.6 14.5 Net profit from continuing operations 1 670 1 281 +30 4 298 3 202 +34 Net profit from discontinued operations - 64 - 177 Net profit 1 670 1 345 +24 4 298 3 379 +27 Earnings per share, SEK 2) 2.65 2.13 1) 6.81 5.35 1) Equity capital per share, SEK 2) 37 35 Return on capital employed, % 26 1) 1) Including discontinued operations. 2) Earnings per share and equity capital per share are adjusted for share split.
October 21, 2005 www.atlascopco.com 23
Balance Sheet
MSEK Sep 30 2005 Dec. 31 2004 Sep 30 2004 Property, plant and equipment Rental equipment 12 712 24% 9 154 19% 10 424 21% Other property, plant and equipment 4 266 8% 3 742 8% 3 789 8% Intangible assets 10 250 20% 8 559 18% 9 358 19% Other fixed assets 1 692 3% 1 825 4% 1 587 3% Inventories 7 137 14% 5 647 12% 5 896 12% Receivables 12 700 24% 10 687 22% 10 818 21% Short-term investments 325 1% 327 1% 356 1% Cash and cash equivalents 3 364 6% 2 386 5% 1 939 4% Assets held for sale - 0% 5 841 12% 6 150 12% Total assets 52 446 48 168 50 317 Total Equity 23 145 44% 22 601 47% 22 213 44% Interest-bearing loans and borrowings 11 303 22% 10 573 22% 12 589 25% Non-interest-bearing loans and borrowings 17 998 34% 12 782 27% 12 993 26% Liabilities held for sale - 0% 2 212 5% 2 522 5% Total shareholders’ equity and liabilities 52 446 48 168 50 317
October 21, 2005 www.atlascopco.com 24
Cash Flow
July - September January – September MSEK 2005 2004 2005 2004
Operating cash surplus after tax 2 796 2 381 7 276 5 713 of which depreciation added back 875 838 2 391 2 313 Change in working capital 362 403 287 296
Cash flow from operations 3 158 2 784 7 563 6 009 Investments in tangible fixed assets -2 174 -1 728 -5 674 -4 191 Sale of tangible fixed assets 635 588 1 824 1509 Other investments, net 52 17 -70 -30
Cash flow from investments -1 487 -1 123 -3 920 -2 712
Operating cash flow 1 671 1 661 3 643 3 297 Company acquisitions / divestments -150 -793 3 650 -2 524 Dividends paid -2 - -1 890 -1 575 Share redemption - - -4 192 - Unclaimed shares from bonus issue 1989 - 2 - 2 Change in interest-bearing liabilities -1 434 -923 -957 -1 060
Net cash flow 85 -53 254 -1 860
October 21, 2005 www.atlascopco.com 25
Capital Expenditures
in Tangible Fixed Assets
-500
0
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2000
2500
-1000
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1000
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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 3 220
20042002 20032001
October 21, 2005 www.atlascopco.com 26
Contents
Q3 Business Highlights
Market Development
Business Areas
Financials
Outlook
October 21, 2005 www.atlascopco.com 27
Near-term Outlook
The demand for Atlas Copco’s products and services is expected to remain at a high level.
Demand from manufacturing and process industries is expected to stay favorable. Activity in the construction industry is expected to continue to increase somewhat. Demand from the mining industry is expected to remain strong.
October 21, 2005 www.atlascopco.com 28
October 21, 2005 www.atlascopco.com 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.”
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