Atlas Copco Group - Q1 2009 Results

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Published 09/April 2009

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Atlas Copco Group - Q1 2009 Results

  1. 1. Atlas Copco Group Q1 Results April 27, 2009
  2. 2. Contents <ul><li>Q1 Business Highlights </li></ul><ul><li>Market Development </li></ul><ul><li>Business Areas </li></ul><ul><li>Financials </li></ul><ul><li>Outlook </li></ul>
  3. 3. Q1 - Highlights <ul><li>Demand from most customer segments in all regions remained low </li></ul><ul><ul><li>Construction equipment in China was one of the brighter spots </li></ul></ul><ul><ul><li>Still cancellations in mining but at a lower rate </li></ul></ul><ul><li>The aftermarket business doing well with growth in many regions </li></ul><ul><li>Capacity and cost reductions continued in the quarter – 3 850 employees have left since the beginning of October </li></ul><ul><li>Strong cash flow and efficient capital structure </li></ul>
  4. 4. Q1 - Figures in summary <ul><li>-33% organic order intake, -37% including cancellations </li></ul><ul><li>Revenues of MSEK 16 577; 17% organic decline </li></ul><ul><li>Operating profit at MSEK 2 172 (3 248) </li></ul><ul><ul><li>Including redundancy costs of MSEK 230 </li></ul></ul><ul><ul><li>MSEK 500 in positive currency effect compared to last year </li></ul></ul><ul><ul><li>Adjusted for non-recurring items, operating margin at 14.5% (18.9) </li></ul></ul><ul><li>Profit before tax at MSEK 1 794 (3 026) </li></ul><ul><li>Earnings per share SEK 1.13 (1.94) </li></ul><ul><li>Operating cash flow MSEK 2 851 (900) </li></ul>
  5. 5. Contents <ul><li>Q1 Business Highlights </li></ul><ul><li>Market Development </li></ul><ul><li>Business Areas </li></ul><ul><li>Financials </li></ul><ul><li>Outlook </li></ul>
  6. 6. Orders received - Local currency Group total -37% YTD (Structural change 0% YTD) March 2009 (-33% organically) Portion of sales, Year-to-date, % A = Year-to-date vs. prev. year, % B = B A -19 12 -26 21 -39 39 -52 16 -30 4 -35 8
  7. 7. Q1 - The Americas <ul><li>Heavy decline in North America </li></ul><ul><ul><li>Low demand from most customer segments and for most product categories </li></ul></ul><ul><ul><li>Still some order cancellations from the mining industry </li></ul></ul><ul><li>Low demand for most types of equipment in South America </li></ul><ul><ul><li>Construction segment doing relatively well </li></ul></ul>March 2009 B A -35 8 -52 16 Portion of sales, Year-to-date, % A = Year-to-date vs. prev. year, % B =
  8. 8. Q1 - Europe and Africa/Middle East <ul><li>Weak demand across the board in Europe </li></ul><ul><ul><li>Large declines in both Western and Eastern Europe </li></ul></ul><ul><ul><li>Low mining activity in Eastern Europe </li></ul></ul><ul><ul><li>Large order for tunneling drill rigs in Russia </li></ul></ul><ul><li>Pockets of strength in Africa / Middle East but the total region was down </li></ul>March 2009 B A -19 12 -39 39 Portion of sales, Year-to-date, % A = Year-to-date vs. prev. year, % B =
  9. 9. Q1 - Asia and Australia <ul><li>Most parts of Asia weak </li></ul><ul><ul><li>Good construction demand in China, while most other segments were weaker </li></ul></ul><ul><ul><li>Weak demand in India and South Korea </li></ul></ul><ul><ul><li>Relatively better development in Japan </li></ul></ul><ul><li>Low demand from the important mining sector in Australia </li></ul><ul><ul><li>Good development for compressed air solutions </li></ul></ul>March 2009 B A -26 21 -30 4 Portion of sales, Year-to-date, % A = Year-to-date vs. prev. year, % B =
  10. 10. Organic * Growth per Quarter <ul><li>Change in orders received in % vs. same quarter previous year </li></ul>Atlas Copco Group, continuing operations *Volume and price Order cancellations
  11. 11. Atlas Copco Group – Sales Bridge
  12. 12. Contents <ul><li>Q1 Business Highlights </li></ul><ul><li>Market Development </li></ul><ul><li>Business Areas </li></ul><ul><li>Financials </li></ul><ul><li>Outlook </li></ul>
  13. 13. Atlas Copco Group Operating Profit and Return On Capital Employed (ROCE) by Business Area
  14. 14. Compressor Technique <ul><li>30% organic order decline </li></ul><ul><ul><li>Large decline in equipment sales in most regions </li></ul></ul><ul><ul><li>Aftermarket sales held up well </li></ul></ul><ul><li>Good adjusted operating margin at 18.0%, excluding redundancy costs of MSEK 120 </li></ul><ul><ul><li>Affected by under-absorption </li></ul></ul><ul><ul><li>Positive currency effect </li></ul></ul><ul><li>Aggreko acquisition finalized </li></ul>,
  15. 15. Compressor Technique Quarterly operating margins include Prime Energy from Q1 2006. *Volume and price
  16. 16. <ul><li>Order intake continued on levels well below the previous year </li></ul><ul><ul><li>Organic order decline of 35% and 9% from cancellations </li></ul></ul><ul><ul><li>Good growth for aftermarket products </li></ul></ul><ul><li>Operating profit at MSEK 868, including MSEK 58 in redundancy costs </li></ul><ul><ul><li>Adjusted margin at 13.6%, strongly supported by currency but negatively affected by inventory </li></ul></ul><ul><li>Acquisition of two rock tool </li></ul>Construction and Mining Technique adjustments and under-absorption companies in India
  17. 17. Construction and Mining Technique *Volume and price
  18. 18. Industrial Technique <ul><li>Tough market situation </li></ul><ul><ul><li>42% organic order decline </li></ul></ul><ul><ul><li>Aftermarket business also affected but to a lesser extent </li></ul></ul><ul><li>Adjusted operating profit margin at 8.4% (22.6), excluding redundancy costs of MSEK 49 </li></ul><ul><ul><li>Margin hurt by falling volumes and under-absorption of fixed costs </li></ul></ul><ul><li>The Chicago Pneumatic divisions Industrial </li></ul>and Vehicle Service merged to one in March
  19. 19. Industrial Technique *Volume and price
  20. 20. Contents <ul><li>Q1 Business Highlights </li></ul><ul><li>Market Development </li></ul><ul><li>Business Areas </li></ul><ul><li>Financials </li></ul><ul><li>Outlook </li></ul>
  21. 21. Group Total
  22. 22. Profit Bridge January – March, 2009 vs 2008 One-time items include redundancy costs as well as reversal of previous year’s one-time items.
  23. 23. Profit Bridge – by Business Area January – March, 2009 vs 2008 One-time items include redundancy costs in all three business areas as well as reversal of previous year’s one-time items.
  24. 24. Balance Sheet * * 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.
  25. 25. Capital Structure Net Debt*/EBITDA *Net Debt adjusted for the fair value of interest rate swaps
  26. 26. Atlas Copco AB’s Loan Maturity Profile
  27. 27. Cash Flow Continuing operations
  28. 28. Contents <ul><li>Q1 Business Highlights </li></ul><ul><li>Market Development </li></ul><ul><li>Business Areas </li></ul><ul><li>Financials </li></ul><ul><li>Outlook </li></ul>
  29. 29. Near-term Outlook <ul><li>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. </li></ul>
  30. 30.
  31. 31. Cautionary Statement <ul><li>“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.” </li></ul>

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