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Atlas Copco Group
Q3 Results
October 21, 2011
Q3 - highlights
Overall demand remained at a high level– Solid development in manufacturing and mining business
– Weaker demand for most types of construction equipment
Record revenues, record operating profit and record operating margin– Strong growth in aftermarket
Several strategic acquisitions
October 21, 20112
Equipment
59%
Aftermarket
41%
Revenue split in Q3
Q3 - figures in summary
Orders received of MSEK 21 151 (19 316), 14% organic growth
Revenues of MSEK 20 739, 21% organic growth
Operating profit increased 27% to MSEK 4 800– Operating margin at 23.1% (21.3)
– Positive impact from release of provision for share-related long-term compensation program of MSEK 164
– Restructuring costs in Construction Technique of MSEK 30 (100)
Profit before tax at MSEK 4 703 (3 675)– MSEK 82 capital gain related to sale of shares in Rental Service
Basic earnings per share SEK 2.96 (2.17)
Strong operating cash flow at MSEK 2 125 (2 479)
October 21, 20113
A B C
Orders received - local currency
October 21, 20114
Group total +27% YTD, +15% last 3 monthsStructural change +2% YTD, +1% last 3 months
September 2011
19 +43 +29
10 +14 +7
30 +22 +19
12 +40 +39
23 +26 +5
6 +10 -15
A = Share of orders received, year-to-date, %
B = Year-to-date vs. previous year, %
C = Last 3 months vs. previous year, %
Q3 - Americas
Strong growth in North America– High demand for industrial equipment
– Sequentially, sales of mining and construction equipment was lower than in the strong second quarter
– Strong growth in aftermarket
Favorable overall demand in South America– Lower order intake from construction industry
October 21, 20115
A B C
September 2011 A = Share of orders received, year-to-date, %
B = Year-to-date vs. previous year, %
C = Last 3 months vs. previous year, %
19 +43 +29
10 +14 +7
Q3 - Europe and Africa/Middle East
Order intake in Europe increased 19% in local currency– Strong Russia and Germany
– Sequentially, demand from construction industry weakened
Significantly higher orders received in Africa / Middle East– Solid demand from the mining industry
October 21, 20116
A B C
September 2011 A = Share of orders received, year-to-date, %
B = Year-to-date vs. previous year, %
C = Last 3 months vs. previous year, %
30 +22 +19
12 +40 +39
Q3 - Asia and Australia
Continued healthy demand level in Asia– Solid China, but weaker India
– Weak development in construction
– Continued strong growth in aftermarket
Australia down from record levels– Lower equipment orders from the mining industry
– Strong aftermarket
October 21, 20117
A B C
September 2011 A = Share of orders received, year-to-date, %
B = Year-to-date vs. previous year, %
C = Last 3 months vs. previous year, %
23 +26 +5
6 +10 -15
Organic* growth per quarter
Change in orders received in % vs. same quarter previous year
October 21, 20118
Atlas Copco Group, continuing operations
*Volume and price
- 50
- 40
- 30
- 20
- 10
0
10
20
30
40
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
05 Q
2
05 Q
3
05 Q
4
06 Q
1
06 Q
2
06 Q
3
06 Q
4
07 Q
1
07 Q
2
07 Q
3
07 Q
4
08 Q
1
08 Q
2
08 Q
3
08 Q
4
09 Q
1
09 Q
2
09 Q
3
09 Q
4
10 Q
1
10 Q
2
10 Q
3
10 Q
4
11 Q
1
11 Q
2
11 Q
3
11 Q
4
Organic growth, % Order cancellations, %
July - September January - September
Orders Orders
MSEK Received Revenues Received Revenues
2010 19 316 17 743 55 804 50 474Structural change, % +1 +2 +2 +2
Currency, % -6 -6 -10 -10
Price, % +2 +2 +2 +2
Volume, % +12 +19 +23 +23
Total, % +9 +17 +17 +17
2011 21 151 20 739 65 028 58 913
Atlas Copco Group – sales bridge
October 21, 20119
Atlas Copco Group
October 21, 201110
Q3 2011
CompressorTechnique39%
Industrial Technique
9%
ConstructionTechnique
36%
Revenues per business area
Mining and Rock ExcavationTechnique
16%
Compressor Technique
17% organic order growth– Healthy demand for industrial compressors as
well as for air treatment products
– Continued strong growth of the aftermarket business
Solid operating margin at 24.1% (26.7)
Large order for geothermal power plant
Acquisition of medical gas solutions business
October 21, 201111
-20
-15
-10
-5
0
5
10
15
20
25
30
- 20
- 15
- 10
- 5
0
5
10
15
20
25
30
2009 2010 11 Q1 11 Q2 11 Q3 11 Q4
Organic* revenue growth: Change vs. same period previous year, %
Operating margin, %
% %
Industrial Technique
Solid demand from all major customer segments– 24% organic order growth
– Strong growth in the aftermarket business
Operating margin at 21.9% (20.2)– Supported by higher revenue volume
and increased prices, but partly offset by negative mix
Acquisition of adhesive equipment manufacturer in Germany
-40
-35
-30-25
-20
-15-10
-5
05
10
1520
25
30
- 40
- 35
- 30- 25
- 20
- 15- 10
- 5
05
10
1520
25
30
2009 2010 11 Q1 11 Q2 11 Q3 11 Q4
Organic* revenue growth: Change vs. same period previous year, %
Operating margin, %
% %
October 21, 201112
Mining and Rock Excavation Technique
16% organic order growth– Continued high activity in the mining industry
– Increased order intake for underground mining equipment, but lower for surface drilling equipment
– High sales growth for service, parts and consumables
Record operating profit and record operating margin
– Operating margin at 25.6% (23.0).
October 21, 201113
-30-25-20-15-10-505101520253035404550
- 30- 25- 20- 15- 10
- 505
101520253035404550
2009 2010 11 Q1 11 Q2 11 Q3 11 Q4
Organic* revenue growth: Change vs. same period previous year, %
Operating margin, %
% %
-40-35-30-25-20-15-10-50510152025303540
- 40- 35- 30- 25- 20- 15- 10
- 505
10152025303540
2009 2010 11 Q1 11 Q2 11 Q3 11 Q4
Organic* revenue growth: Change vs. same period previous year, %Operating margin, %
% %
Construction Technique
Weak demand for equipment, partly offset by strong aftermarket development– Orders received -1%, organically
Operating margin was 11.8% (10.1)– Affected by restructuring costs MSEK 30 (100)
– The adjusted operating margin was 12.8% (13.4)
Acquisition of Spanish generator manufacturer
Nico Delvaux – new business area president
October 21, 201114
Group total
October 21, 201115
MSEK 2011 2010 %
Orders received 21 151 19 316 +9Revenues 20 739 17 743 +17
Operating profit 4 800 3 782 +27
- as a percentage of revenues 23.1 21.3
Profit before tax 4 703 3 675 +28
- as a percentage of revenues 22.7 20.7
Profit for the period 3 601 2 650 +36
Basic earnings per share, SEK 2.96 2.17
Return on capital employed, % 36 25
July - September
Profit bridge
October 21, 201116
July – September 2011 vs 2010
Q3 2011 Organic Growth Currency One-time items Q3 2010MSEK Price/Volume Acq./Div.
Atlas Copco GroupRevenues 20 739 3 781 -1 155 370 17 743EBIT 4 800 1 088 -150 80 3 782% 23.1% 28.8% 21.3%
Profit bridge – by business area
October 21, 201117
July – September 2011 vs 2010
Q3 2011 Organic Growth Currency One-time items Q3 2010MSEK Price/Volume Acq./Div.
Compressor TechniqueRevenues 8 264 891 -425 200 7 598EBIT 1 990 55 -95 0 2 030% 24.1% 6.2% 26.7%Industrial TechniqueRevenues 1 816 317 -90 20 1 569EBIT 398 66 5 10 317% 21.9% 20.8% 20.2%Mining and Rock Excavation TechniqueRevenues 7 642 2 468 -445 30 5 589EBIT 1 959 792 -110 -10 1 287% 25.6% 32.1% 23.0%Construction TechniqueRevenues 3 292 320 -195 120 3 047EBIT 390 -12 15 80 307% 11.8% -3.8% 10.1%
Balance sheet
October 21, 201118
MSEK
Intangible assets 13 886 19% 13 464 19% 13 539 20%
Rental equipment 2 103 3% 1 843 3% 1 867 3%
Other property, plant and equipment 6 215 9% 5 702 8% 5 702 9%
Other non-current assets 4 161 6% 4 123 6% 4 452 7%
Inventories 16 961 24% 12 939 18% 12 287 18%
Receivables 20 457 28% 17 474 24% 16 575 26%
Current financial assets 1 625 2% 1 734 2% 1 554 3%
Cash and cash equivalents 6 520 9% 14 264 20% 11 388 13%
Assets classified as held for sale 48 0% 79 0% 64 0%
TOTAL ASSETS 71 976 71 622 67 428
Total equity 26 525 37% 29 321 41% 26 124 37%
Interest-bearing liabilities 22 537 31% 21 692 30% 21 913 34%
Non-interest-bearing liabilities 22 914 32% 20 609 29% 19 391 29%
TOTAL EQUITY AND LIABILITIES 71 976 71 622 67 428
Sept. 2011 Dec. 2010 Sept. 2010
Capital structure
1,41,2
1,4 1,4 1,41,3
1,5
1,2
0,90,8 0,8
0,6
0,3 0,3
0,80,7
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
2007 2008 Q1
2008 Q2
2008 Q3
2008 2009 Q1
2009 Q2
2009 Q3
2009 2010 Q1
2010 Q2
2010 Q3
2010 2011 Q1
2011 Q2
2011 Q3
2011
Net Debt/EBITDA
19October 21, 2011
Net Debt*/EBITDA
* Net Debt adjusted for the fair value of interest rate swaps
Cash flow
October 21, 201120
July - SeptemberMSEK 2011 2010
Operating cash surplus 5 132 4 680 of which depreciation added back 644 639Net financial items and taxes received/paid -1 016 -941Change in working capital -925 -1 035Increase in rental equipment, net -330 -92 Cash flows from operating activities 2 861 2 612Investments of property, plant & eq., net -399 -260Other investments, net -337 127Cash flow from investments -736 -133 Operating cash flow 2 125 2 479Company acquisitions/ divestments -490 -282
Near-term outlook
The overall demand for Atlas Copco’s products and services is expected to weaken somewhat from the current high level.
October 21, 201121
Capital Markets Day 2011
November 29, 2011 in Antwerp, Belgium
www.atlascopco.com/CMD2011
October 21, 201122
Committed tosustainable productivity.
October 21, 201123
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.”
October 21, 201125