1February 2, 2010 www.atlascopco.com
Atlas Copco Group
Q4 Results
February 2, 2010
2February 2, 2010 www.atlascopco.com
Contents
Q4 Business Highlights
Market Development
Business Areas
Financials
2009 Summary
Outlook
3February 2, 2010 www.atlascopco.com
Q4 - Highlights
Slight improvement in demand compared with previous quarters– Noticeable in most emerging markets…
– …and from the mining industry
– Still low investment level
Sales of aftermarket products and services increased
Healthy profit margins– Low volumes continue to affect negatively
– Cost reductions, favorable sales mix and low financial costs gave support
Operating cash flow remained very strong
Proposed dividend of SEK 3.00 (3.00) per share and a share buyback program
4February 2, 2010 www.atlascopco.com
Q4 - Figures in summary
Organic order intake down 9%...– …but flat if adjusted for cancellations previous year
Revenues of MSEK 15 942; 18% organic decline
Operating profit at MSEK 2 450 (3 288)– Restructuring cost of MSEK 80 (258)
– Adjusted operating margin of 15.9% (18.7)
Profit before tax at MSEK 2 324 (3 508)– Previous year included tax-free gain of MSEK 939
Earnings per share SEK 1.39 (2.39)
Operating cash flow MSEK 3 672 (2 401)
5February 2, 2010 www.atlascopco.com
Contents
Q4 Business Highlights
Market Development
Business Areas
Financials
2009 Summary
Outlook
6February 2, 2010 www.atlascopco.com
Orders received - Local currency
December 2009
A B CA = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
C = Last 3 months vs. prev. year, %
10 -15 +25
16 -38 -12
36 -30 0
12 -28 -23
21 -15 +15
5 -25 -9
Group total -27% YTD, 0% last 3 monthsEffect of cancellations 1% YTD, 9% last 3 months
7February 2, 2010 www.atlascopco.com
Q4 - The Americas
Slight sequential improvement in North America– Sales of industrial equipment and related
aftermarket improved somewhat
– Construction remain very weak
Order growth in South America– Improved demand for mining and
construction equipment
December 2009
A B CA = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
C = Last 3 months vs. prev. year, %
10 -15 +25
16 -38 -12
8February 2, 2010 www.atlascopco.com
Q4 - Europe and Africa/Middle East
Overall demand remained low in Europe, but…– …slight improvement in Germany and in the
Nordic countries
– …improved demand from mining industry in Eastern Europe
– Solid aftermarket
Weak quarter in Africa / Middle East– Sales of gas and process compressors declined
– No improvement in Southern Africa
December 2009
A B CA = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
C = Last 3 months vs. prev. year, %
36 -30 0
12 -28 -23
9February 2, 2010 www.atlascopco.com
Q4 - Asia and Australia
Positive development for all business areas in Asia– Growth in China, India and many other
markets in South Asia.
– Negative development in Japan and South Korea
Gradual recovery of demand in Australia– Pick-up in the mining industry
December 2009 A = Portion of sales, Year-to-date, %
B = Year-to-date vs. prev. year, %
C = Last 3 months vs. prev. year, %A B C
21 -15 +15
5 -25 -9
10February 2, 2010 www.atlascopco.com
Organic* Growth per Quarter
Change in orders received in % vs. same quarter previous year
Atlas Copco Group, continuing operations
-40
-30
-20
-10
0
10
20
30
00
Q1
00
Q2
00
Q3
00
Q4
01
Q1
01
Q2
01
Q3
01
Q4
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 growth Order cancellations
*Volume and price
11February 2, 2010 www.atlascopco.com
Atlas Copco Group – Sales Bridge
October - December January - December
Orders Orders
MSEK Received Revenues Received Revenues
2008 15 437 19 731 73 572 74 177
Cancellations, % +9 * - +1 * -
Structural change, % 0 0 0 0
Currency, % -1 -1 +7 +8
Price, % +1 +1 +1 +1
Volume, % -10 -19 -30 -23
Total, % -1 -19 -21 -14
2009 15 276 15 941 58 451 63 762
* Cancellations in Q4 2008 and Q1 2009
12February 2, 2010 www.atlascopco.com
Contents
Q4 Business Highlights
Market Development
Business Areas
Financials
2009 Summary
Outlook
13February 2, 2010 www.atlascopco.com
Atlas Copco GroupOperating Profit and Return On Capital Employed (ROCE) by Business Area
Revenues Operating Operating ROCE
MSEK profit margin
12 month values, period ending Dec. 2009 Dec. 2009 Dec. 2009 Dec. 2009
Compressor Technique 32 524 5 752 17.7% 45%
Construction and Mining Technique 25 909 3 470 13.4% 17%
Industrial Technique 5 392 253 4.7% 9%
Eliminations/Common Group Functions -63 -385
Atlas Copco Group 63 762 9 090 14.3% 18%
14February 2, 2010 www.atlascopco.com
Compressor Technique
Overall demand remained on low level– 12% organic order decline vs. Q4 2008
– Good development in emerging markets
– Improved demand for standard compressors
– Weak order intake for gas and process compressors
– Stable aftermarket business
Operating margin at 19.6% – Improvement from previous quarters thanks to
increased revenues and favorable sales mix
Agreement to acquire Quincy Compressor
Investment in manufacturing facility in China
14February 2, 2010, www.atlascopco.com
15February 2, 2010 www.atlascopco.com
Compressor Technique
-25
-20
-15
-10
-5
0
5
10
15
20
25
-25
-20
-15
-10
-5
0
5
10
15
20
25
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
Organic* revenue growth: Change vs. same quarter previous year, %
Quarterly operating margin, %
Quarterly operating margins include Prime Energy from Q1 2006.*Volume and price
16February 2, 2010 www.atlascopco.com
Construction and Mining Technique
Improved order intake compared with previous quarters– Demand in mining and infrastructure construction developed positively
– Growth in aftermarket and consumables
– Organic order decline of 5% vs. Q4 2008
Operating margin at 14.1% – Low volumes compared with previous year affected negatively, while
cost savings gave support
– Less favorable sales mix compared with Q3
17February 2, 2010 www.atlascopco.com
-35
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
-35
-30
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
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
18February 2, 2010 www.atlascopco.com
Industrial Technique
Slight improvement in order intake compared with previous quarters– Continued weak demand in most developed
markets
– Growth in Asia, both from the motor vehicle industry and the general industry.
– Organic order intake down 14% vs. Q4 2008
Adjusted operating profit margin at 12.9%– Restructuring costs of MSEK 80, primarily
related to closure of manufacturing facilities in Germany and Japan.
19February 2, 2010 www.atlascopco.com
Industrial Technique
-50
-40
-30
-20
-10
0
10
20
30
-50
-40
-30
-20
-10
0
10
20
30
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
20February 2, 2010 www.atlascopco.com
Contents
Q4 Business Highlights
Market Development
Business Areas
Financials
2009 Summary
Outlook
21February 2, 2010 www.atlascopco.com
Group Total
October - December January - December
MSEK 2009 2008 % 2009 2008 %
Orders received 15 276 15 437 -1 58 451 73 572 -21
Revenues 15 942 19 731 -19 63 762 74 177 -14
Operating profit 2 450 3 288 -25 9 090 13 806 -34
- as a percentage of revenues 15.4 16.7 14.3 18.6
Profit before tax 2 324 3 508 -34 8 271 13 112 -37
- as a percentage of revenues 14.6 17.8 13.0 17.7
Profit from continuing operations 1 700 2 919 -42 6 276 10 006 -37
Profit from discontinued operations, net of tax - - - 184
Profit for the period 1 700 2 919 6 276 10 190
Basic earnings per share, SEK 1.39 2.39 5.14 8.33
- of which continuing operations, SEK 1.39 2.39 5.14 8.18
Return on capital employed, % 18 34
22February 2, 2010 www.atlascopco.com
Profit BridgeOctober – December, 2009 vs 2008
Organic Growth One-time items
MSEK Price/Volume Acq./Div.
Atlas Copco Group
Revenues 15 942 -3 684 -160 55 19 731
EBIT 2 450 -1 016 0 178 3 288
% 15.4% 28% 16.7%
Q4 2009 Currency Q4 2008
23February 2, 2010 www.atlascopco.com
Profit Bridge – by Business AreaOctober – December, 2009 vs 2008
Organic Growth One-time items
MSEK Price/Volume Acq./Div.
Compressor Technique
Revenues 8 144 -1 617 -135 30 9 866
EBIT 1 594 -495 -20 93 2 016
% 19.6% 31% - - 20.4%
Construction & Mining Technique
Revenues 6 395 -1 607 -30 25 8 007
EBIT 904 -436 -40 100 1 280
% 14.1% 27% - - 16.0%
Industrial Technique
Revenues 1 455 -551 5 0 2 001
EBIT 107 -113 -20 -21 261
% 7.4% 21% - - 13.0%
Q4 2009 Currency Q4 2008
24February 2, 2010 www.atlascopco.com
MSEK Dec 31, 2009 Sep 30, 2009 Dec 31, 2008
Intangible assets 12 697 19% 12 593 19% 12 916 19%
Rental equipment 2 056 3% 2 048 3% 2 282 3%
Other property, plant and equipment 5 993 9% 6 046 9% 6 353 9%
Other fixed assets 6 556 10% 6 060 9% 7 977 12%
Inventories 11 377 17% 12 623 19% 17 106 26%
Receivables 15 433 23% 15 883 23% 21 603 32%
Current financial assets 1 530 2% 1 598 2% 1 659 2%
Cash and cash equivalents 12 165 18% 10 005 15% 5 455 8%
Assets classified as held for sale 67 0% 35 0% 43 0%
TOTAL ASSETS 67 874 66 891 75 394
Total equity 25 671 38% 23 404 34% 23 768 36%
Interest-bearing liabilities 25 735 38% 27 498 41% 30 404 45%
Non-interest-bearing liabilities 16 468 24% 15 989 24% 21 222 32%
TOTAL EQUITY AND LIABILITIES 67 874 66 891 75 394
Balance Sheet
25February 2, 2010 www.atlascopco.com
Capital Structure Net Debt*/EBITDA
0,90,6
0,8 0,8
-1,1 -1,1
1,91,6
1,41,2 1,3
1,5
1,20,9
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
2009Q2
2009Q3
2009
*Net Debt adjusted for the fair value of interest rate swaps
26February 2, 2010 www.atlascopco.com
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Public Bonds Bank Loans
Atlas Copco AB’s Loan Maturity Profile
27February 2, 2010 www.atlascopco.com
Cash Flow
October - December January - DecemberMSEK 2009 2008 2009 2008
Operating cash surplus after tax 2 247 3 300 7 630 11 857 of which depreciation added back 614 597 2 454 2 080Change in working capital 1 597 112 6 715 -2 991 Cash flows from operating activities 3 844 3 412 14 345 8 866Investments in tangible fixed assets -391 -891 -1 723 -2 899Sale of tangible fixed assets 165 145 636 515Other investments, net 54 -265 32 -1 731Cash flow from investments -172 -1 011 -1 055 -4 115 Operating cash flow 3 672 2 401 13 290 4 751Company acquisitions/ divestments -6 -55 -171 -278
28February 2, 2010 www.atlascopco.com
Contents
Q4 Business Highlights
Market Development
Business Areas
Financials
2009 Summary
Outlook
29February 2, 2010 www.atlascopco.com
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
2005 2006 2007 2008 20090
5
10
15
20
25
30
35
40
Revenues, MSEK Operating margin, %
MSEK %
Revenues and operating margin
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
2005 2006 2007 2008 2009
Operating profit, MSEK
MSEK
2004 pro forma, excluding divested businesses
2009 - Figures in summary
30February 2, 2010 www.atlascopco.com
2009 - Highlights
Healthy profitability in very challenging business climate
Quick adaptation to low demand
Sustained strong focus on market presence and product development
Order intake declined 21%, 29% organic decline
Revenues declined 14% to 63 762, 22% organic decline
Operating profit down 34% to MSEK 9 090– Restructuring costs of MSEK 569, adjusted margin of 15.1% (19.0)
Very strong cash flow of MSEK 13 290 (4 751)
31February 2, 2010 www.atlascopco.com
2,00 1,92 2,33 2,44 2,32 2,613,71
6,09
8,33
5,14
0,79 0,88 0,92 0,96 1,25 1,502,13 2,38
3,00 3,00 3,00
12,24
5,22
0,72
4,84
22,38
0
5
10
15
20
25
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*
Earnings pershare
Dividend pershare
Dividend +redemptionof share
Atlas Copco GroupEarnings per Share, Dividend and Redemption
* Proposed by the Board of Directors
32February 2, 2010 www.atlascopco.com
Committed to Sustainable Productivity
Committed to sustainable productivity means:
… that Atlas Copco people do everything they can to ensure reliable, lasting results with responsible use of resources; human, natural, and capital.
32
New brand promise for Atlas Copco
33February 2, 2010 www.atlascopco.com
Contents
Q4 Business Highlights
Market Development
Business Areas
Financials
2009 Summary
Outlook
34February 2, 2010 www.atlascopco.com
Near-term Outlook
The overall demand for the Group’s products and services is expected to improve somewhat.
Many emerging markets are foreseen to have a continued favorable development and demand from the mining industry is expected to improve.
35
36February 2, 2010 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.”
Top Related