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1April 27, 2009, www.atlascopco.com
Atlas Copco Group
Q1 Results
April 27, 2009
2April 27, 2009, www.atlascopco.com
Contents
Q1 Business Highlights
Market Development
Business Areas
Financials
Outlook
3April 27, 2009, www.atlascopco.com
Q1 - Highlights
Demand from most customer segments in all regions remained low– Construction equipment in China was one of the brighter spots
– Still cancellations in mining but at a lower rate
The aftermarket business doing well with growth in many regions
Capacity and cost reductions continued in the quarter – 3 850 employees have left since the beginning of October
Strong cash flow and efficient capital structure
4April 27, 2009, www.atlascopco.com
Q1 - Figures in summary
-33% organic order intake, -37% including cancellations
Revenues of MSEK 16 577; 17% organic decline
Operating profit at MSEK 2 172 (3 248)– Including redundancy costs of MSEK 230
– MSEK 500 in positive currency effect compared to last year
– Adjusted for non-recurring items, operating margin at 14.5% (18.9)
Profit before tax at MSEK 1 794 (3 026)
Earnings per share SEK 1.13 (1.94)
Operating cash flow MSEK 2 851 (900)
5April 27, 2009, www.atlascopco.com
Contents
Q1 Business Highlights
Market Development
Business Areas
Financials
Outlook
6April 27, 2009, www.atlascopco.com
Orders received - Local currencyGroup total -37% YTD(Structural change 0% YTD)
March 2009 A = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %A B
12 -19
21 -26
39 -39
16 -52
4 -308 -35
(-33% organically)
7April 27, 2009, www.atlascopco.com
Q1 - The Americas
Heavy decline in North America– Low demand from most customer
segments and for most product categories
– Still some order cancellations from the mining industry
Low demand for most types of equipment in South America– Construction segment doing
relatively well
March 2009
A B
8 -35
16 -52
A = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
8April 27, 2009, www.atlascopco.com
Q1 - Europe and Africa/Middle East
Weak demand across the board in Europe– Large declines in both Western
and Eastern Europe
– Low mining activity in Eastern Europe
– Large order for tunneling drill rigs in Russia
Pockets of strength in Africa / Middle East but the total region was down
March 2009
A B
12 -19
39 -39
A = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
9April 27, 2009, www.atlascopco.com
Q1 - Asia and Australia
Most parts of Asia weak– Good construction demand in
China, while most other segments were weaker
– Weak demand in India and South Korea
– Relatively better development in Japan
Low demand from the important mining sector in Australia– Good development for
compressed air solutions
March 2009
A B
21 -26
4 -30
A = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
10April 27, 2009, www.atlascopco.com
Organic* Growth per Quarter
Change in orders received in % vs. same quarter previous year
Atlas Copco Group, continuing operations
-40-35-30-25-20-15-10
-505
1015202530
00 Q
100
Q2
00 Q
300
Q4
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
*Volume and price
Order cancellations
11April 27, 2009, www.atlascopco.com
Atlas Copco Group – Sales Bridge
January - MarchOrders Revenues
MSEK Received
2008 19 505 17 122Structural change, % 0 +1Currency, % +10 +13Price, % +1 +2Cancellations, % -4 -Volume, % -34 -19Total, % -27 -32009 14 331 16 577
12April 27, 2009, www.atlascopco.com
Contents
Q1 Business Highlights
Market Development
Business Areas
Financials
Outlook
13April 27, 2009, www.atlascopco.com
Atlas Copco GroupOperating Profit and Return On Capital Employed (ROCE) by Business Area
Revenues Operating Operating ROCEMSEK profit margin12 month values, period ending Mar. 2009 Mar. 2009 Mar. 2009 Mar. 2009
Compressor Technique 35 894 7 032 19.6% 53%Construction and Mining Technique 31 132 5 218 16.8% 26%Industrial Technique 7 108 992 14.0% 32%Eliminations/Common Group Functions -502 -512Atlas Copco Group 73 632 12 730 17.3% 29%
14April 27, 2009, www.atlascopco.com
Compressor Technique
14April 27, 2009, www.atlascopco.com
30% organic order decline– Large decline in equipment sales in most regions
– Aftermarket sales held up well
Good adjusted operating margin at 18.0%, excluding redundancy costs of MSEK 120
– Affected by under-absorption
– Positive currency effect
Aggreko acquisition finalized
15April 27, 2009, www.atlascopco.com
Compressor Technique
-15
-10
-5
0
5
10
15
20
25
-15
-10
-5
0
5
10
15
20
25
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
05
Q2
05
Q3
05
Q4
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
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
Quarterly operating margins include Prime Energy from Q1 2006.*Volume and price
16April 27, 2009, www.atlascopco.com
Order intake continued on levels well below the previous year– Organic order decline of 35% and 9% from cancellations
– Good growth for aftermarket products
Operating profit at MSEK 868, including MSEK 58 in redundancy costs– Adjusted margin at 13.6%, strongly supported by currency but
negatively affected by inventory
Acquisition of two rock tool
Construction and Mining Technique
adjustments and under-absorption
companies in India
17April 27, 2009, www.atlascopco.com
-20
-15
-10
-5
0
5
10
15
20
25
30
-20
-15
-10
-5
0
5
10
15
20
25
30
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
05
Q2
05
Q3
05
Q4
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
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
Construction and Mining Technique
*Volume and price
18April 27, 2009, www.atlascopco.com
Industrial Technique
Tough market situation– 42% organic order decline
– Aftermarket business also affected but to a lesser extent
Adjusted operating profit margin at 8.4% (22.6), excluding redundancy costs of MSEK 49– Margin hurt by falling volumes and under-absorption of
fixed costs
The Chicago Pneumatic divisions Industrial
and Vehicle Service merged to one in March
19April 27, 2009, www.atlascopco.com
Industrial Technique
-35
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
-35
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
03
Q1
03
Q2
03
Q3
03
Q4
04
Q1
04
Q2
04
Q3
04
Q4
05
Q1
05
Q2
05
Q3
05
Q4
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
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
*Volume and price
20April 27, 2009, www.atlascopco.com
Contents
Q1 Business Highlights
Market Development
Business Areas
Financials
Outlook
21April 27, 2009, www.atlascopco.com
Group Total
January - MarchMSEK 2009 2008 %
Orders received 14 331 19 505 -27
Revenues 16 577 17 122 -3
Operating profit 2 172 3 248 -33
- as a percentage of revenues 13.1 19.0
Profit before tax 1 794 3 026 -41
- as a percentage of revenues 10.8 17.7
Profit from continuing operations 1 378 2 192 -37
Profit from discontinued operations, net of tax - 184
Profit for the period 1 378 2 376
Basic earnings per share, SEK 1.13 1.94
- of which continuing operations, SEK 1.13 1.79
Return on capital employed, % 29 331)
1) Excluding non-recurring w rite dow n of RSC notes.
22April 27, 2009, www.atlascopco.com
Profit BridgeJanuary – March, 2009 vs 2008
Organic Growth One-time items
MSEK Price/Volume Acq./Div.
Atlas Copco Group
Revenues 16 577 -2 955 2 310 100 17 122
EBIT 2 172 -1 336 500 -240 3 248
% 13.1% 45% - - 19.0%
Q1 2009 Currency Q1 2008
One-time items include redundancy costs as well as reversal of previous year’s one-time items.
23April 27, 2009, www.atlascopco.com
Profit Bridge – by Business AreaJanuary – March, 2009 vs 2008
Q1 2009 Organic Growth Currency One-time items Q1 2008
MSEK Price/Volume Acq./Div.
Compressor Technique
Revenues 8 360 -998 1 255 50 8 053
EBIT 1 384 -449 325 -135 1 643
% 16.6% 45% - - 20.4%
Construction & Mining Technique
Revenues 6 816 -1 393 835 30 7 344
EBIT 868 -729 405 -60 1 252
% 12.7% 52% - - 17.0%
Industrial Technique
Revenues 1 483 -592 225 25 1 825
EBIT 76 -308 15 -43 412
% 5.1% 52% - - 22.6%
One-time items include redundancy costs in all three business areas as well as reversal of previous year’s one-time items.
24April 27, 2009, www.atlascopco.com
Balance Sheet
MSEK Mar 31, 2009 Dec 31, 2008 Mar 31, 2008
Intangible assets 13 208 17% 12 916 17% 11 475 19%
Rental equipment 2 344 3% 2 282 3% 1 712 3%
Other property, plant and equipment 6 517 8% 6 353 8% 4 914 8%
Other fixed assets 7 804 10% 7 977 11% 4 437 7%
Inventories 17 000 22% 17 106 23% 13 721 23%
Receivables 20 513 26% 21 603 29% 17 737 30%
Current financial assets 1 780 2% 1 659 2% 1 265 2%
Cash and cash equivalents 8 336 11% 5 455 7% 3 975 7%
Assets classified as held for sale 38 0% 43 0%
TOTAL ASSETS 77 540 75 394 59 236
Total equity 25 729 33% 23 768 32% 16 181 27%
Interest-bearing liabilities 30 819 40% 30 404 40% 23 772 40%
Non-interest-bearing liabilities 20 992 27% 21 222 28% 19 283 33%
TOTAL EQUITY AND LIABILITIES 77 540 75 394 59 236
*
* The large increase in total assets is partly explained by currency translation effects that have had an impact of approximately MSEK 9 000 since March 2008.
25April 27, 2009, www.atlascopco.com
0,90,6
0,8 0,8
-1,1 -1,1
1,91,6
1,41,2 1,3
1,4 1,4 1,4
-1,5
-1,0
-0,5
0,0
0,5
1,0
1,5
2,0
2,5
2005 2006Q1
2006Q2
2006Q3
2006 2007Q1
2007Q2
2007Q3
2007 2008Q1
2008Q2
2008Q3
2008 2009Q1
Capital Structure Net Debt*/EBITDA
*Net Debt adjusted for the fair value of interest rate swaps
26April 27, 2009, www.atlascopco.com
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Public Bonds Bank Loans
Atlas Copco AB’s Loan Maturity Profile
27April 27, 2009, www.atlascopco.com
Cash FlowContinuing operations
January - MarchMSEK 2009 2008
Operating cash surplus after tax 1 885 3 304 of which depreciation added back 616 469Change in working capital 1 394 -1 625 Cash flows from operating activities 3 279 1 679Investments in tangible fixed assets -492 -543Sale of tangible fixed assets 129 127Other investments, net -65 -363Cash flow from investments -428 -779 Operating cash flow 2 851 900Company acquisitions/ divestments -142 128
28April 27, 2009, www.atlascopco.com
Contents
Q1 Business Highlights
Market Development
Business Areas
Financials
Outlook
29April 27, 2009, www.atlascopco.com
Near-term Outlook
The economic situation still makes the outlook very uncertain. Demand is however expected to remain weak in most industries and regions and stay around the current level.
30
31April 27, 2009, www.atlascopco.com
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.”