April 27, 2006 Atlas Copco Group Q1 Results April 27, 2006.

1April 27, 2006 www.atlascopco.com

Atlas Copco Group

Q1 Results

April 27, 2006


Contents

Q1 Business Highlights

Market Development

Business Areas

Financials

Outlook


Q1 - Highlights

Very strong start of 2006

Strong growth in all Business Areas and regions – Good demand combined with improved market position

Record profit and margins for a first quarter

The divestment process of the equipment rental business is progressing according to plan


Q1 - Figures in summary

Orders received up 39%, +22% in volume

Revenues up 33% to MSEK 14 863, up 17% in volume

Operating profit up 63% to MSEK 2 771, a margin of 18.6% (15.2)

Profit before tax at MSEK 2 606 (1 709), a margin of 17.5% (15.3)

Basic earnings per share were SEK 2.83 (1.90), up 49%

Operating cash flow totaled MSEK 536 (1 017)

ROCE at 30%

Including discontinued operations


Contents


Market Development

Business Areas

Financials

Outlook


Orders received - Local currencyGroup total +26% YTD – Group excluding Rental Service +28% YTD(Structural change +2% YTD)

March 2006

A B A = Portion of sales, last 12 months, %

B = Year-to-date vs. prev. year, %

5 +8

33 +19

7 +66

14 +35

4 +11

37 +27

+38Continuing operations


Q1 - The Americas

Strong demand in North America– Increased demand from manufacturing and

process industries as well as from the construction industry

– High activity in the mining industry

Healthy demand in South America– Mining and motor vehicle industry

somewhat slower

March 2006



5 +8

37 +27

+38Continuing operations


Q1 - Europe and Africa/Middle East

Improvement in Europe– Increased demand for industrial and

construction equipment

– Positive development in most major markets

Very positive development in the Africa / Middle East region

March 2006



33 +19

7 +66


Q1 - Asia and Australia

Increased demand in Asia– Very good development for industrial

equipment – compressors and tools

– Strong growth in all major markets Japan, India, South Korea and China

March 2006



14 +35

4 +11


Volume Growth per Quarter

Change in orders received in % vs. same Quarter previous year

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Atlas Copco Group – Sales Bridge

January – March

Continuing operations

January – March

Group Total

MSEK

Orders Received

Revenues Orders Received

Revenues

2005 9 832 9 010 11 990 11 168 Structural change, % +2 +2 +2 +2 Currency, % +11 +11 +13 +12 Price, % +2 +2 +2 +2 Volume, % +24 +18 +22 +17 Total, % +39 +33 +39 +33 2006 13 699 11 948 16 614 14 863


Contents


Market Development

Business Areas

Financials

Outlook


Atlas Copco GroupOperating Profit and Return On Capital Employed (ROCE) by Business Areas

MSEK

Revenues Operating profit

Operating margin

ROCE

12 month values, period ending Mar. 2006 Mar. 2006 Mar. 2006 Mar. 2006 Compressor Technique 21 889 4 355 19,9% 71% Construction and Mining Technique 16 510 2 429 14,7% 31% Industrial Technique 6 400 1 289 20,1% 64% Rental Service 12 439 3 023 24,3% 17% Eliminations/Common Group Functions -801 -617 Atlas Copco Group 56 437 10 479 18,6% 30% Rental Service, discontinued operations -11 678 Eliminations, discontiued operations 384 Atlas Copco Group, continuing operations 45 143 7 690 17.0%


Compressor Technique

Very strong order growth– Highest in North America and Asia, robust in Western Europe

– Strong order intake for all types of compressors

Steady positive development of aftermarket

Operating profit up 40%. Margin above 20%– Supported by positive volume, price and currency development


Compressor Technique

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Revenue volume growth: Change vs. same quarter previous year, %

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Operating margins restated (IFRS) from 2004


Construction and Mining Technique

Strong demand from both mining and construction

Order volume up 24% – 16th consecutive quarter with volume growth

– Strong growth in North America, Africa / Middle East and Europe

Operating profit doubled

Acquisition of Canadian drilling consumables manufacturer

Launch of first loader, fully developed in Sweden


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Construction and Mining Technique



Industrial Technique

Order growth resumed after a slow Q4 2005

Strong sales to general industry and vehicle service

Mixed development in motor vehicle industry– Good in Asia and North America

– Weak in Europe

All-time high revenues, operating profit and margin.


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Rental Service

Rental revenues increased 25% in USD– Price +6%, volume +19%

Fleet utilization at 71%– Seasonal weakness mitigated by high utilization and

positive rate development

– Increased investments in equipment to support demand and further improve fleet quality

Operating profit up 92%.



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Rental revenue volume growth: Change vs. same quarter previous year, %

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Rental Service


Rental Revenue Volume Development, incl. discontinued operations


Contents


Market Development

Business Areas

Financials

Outlook


Group Total

January – March continuing operations

January – March including discontinued

operations MSEK 2006 2005 % 2006 2005 %

Orders received 13 699 9 832 +39 16 614 11 990 +39 Revenues 11 948 9 010 +33 14 863 11 168 +33 Operating profit 2 096 1 344 +56 2 771 1 695 +63 – as a percentage of revenues 17.5 14.9 18.6 15.2 Profit before tax 2 264 1 498 +51 2 606 1 709 +52 – as a percentage of revenues 18.9 16.6 17.5 15.3 Profit for the period 1 602 1 078 +49 1 786 1 198 +49 Basic earnings per share, SEK 2.54 1.71 +49 2.83 1.90 +49 Equity per share, SEK 44 39 Return on capital employed, % 30 23


Balance Sheet Including discontinued operations

MSEK March 31, 2006 Dec. 31, 2005 March 31, 2005

Intangible assets 10 556 18% 10 607 19% 9 248 18% Rental equipment 13 719 24% 13 456 24% 10 022 20% Other property, plant and equipment 4 674 8% 4 503 8% 3 923 8% Other fixed assets 1 850 3% 1 818 3% 1 790 4% Inventories 8 055 14% 7 215 13% 6 447 13% Receivables 13 969 24% 13 240 24% 11 191 22% Current financial assets 577 1% 389 1% 287 1% Cash and cash equivalents 3 885 7% 3 727 7% 7 316 15% TOTAL ASSETS 57 285 54 955 50 224

Total equity 27 355 48% 25 808 47% 24 827 49% Interest-bearing liabilities 11 024 19% 11 345 21% 10 531 21% Non-interest-bearing liabilities 18 906 33% 17 802 32% 14 866 30% TOTAL EQUITY AND LIABILITIES 57 285 54 955 50 224


Capital Structure

4%

30%

16%

75%

59%

92% 92%

72%67%

46%

28%24%

32%

0%

20%

40%

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100%

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 March2006

Adjusted for IFRS, but including discontinued operations

Net Debt/Equity


Cash Flow

January – March MSEK 2006 2005 Operating cash surplus after tax 2 693 1 993 of which depreciation added back 924 718 Change in working capital -578 -122 Cash flow from operations 2 115 1 871 Investments in tangible fixed assets - 1 936 -1 336 Sale of tangible fixed assets 680 566 Other investments, net -323 -84 Cash flow from investments -1 579 -854

Operating cash flow 536 1 017 Company acquisitions / divestments -268 3 899 Dividends paid - -2 Change in interest-bearing liabilities -94 -379 Net cash flow 174 4 535


Capital Expenditures

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Net. Rental Eq.+Mach.& buildings, 12 months Net, Rental Equipment, 12 months

2005

MSEK

Quarterly 12 months

Net rental fleet investment = MSEK 4 419

20042002 20032001 2006

Tangible Fixed Assets


Contents


Market Development

Business Areas

Financials

Outlook


Near-term Outlook

The demand for Atlas Copco’s products and services, from all major customer segments such as mining, infrastructure and other non-residential construction, manufacturing and process industry, is expected to remain at the current high level.


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.”

April 27, 2006 Atlas Copco Group Q1 Results April 27, 2006.

Documents

Transcript of April 27, 2006 Atlas Copco Group Q1 Results April 27, 2006.