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Atlas Copco Group

Atlas Copco Group. Q2 Results July 17, 2006. Contents. Q2 Business Highlights Market Development Business Areas Financials Outlook. Q2 - Highlights. Another record quarter Strong growth in all regions and most customer segments Negative development in motor vehicle industry

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Atlas Copco Group

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  1. Atlas Copco Group Q2 Results July 17, 2006

  2. Contents • Q2 Business Highlights • Market Development • Business Areas • Financials • Outlook

  3. Q2 - Highlights • Another record quarter • Strong growth in all regions and most customer segments • Negative development in motor vehicle industry • All business areas improved sales, profit and margins • Strategic acquisitions • Agreements to acquire two compressor businesses with a total turnover over BSEK 2.2. • The divestment process of the construction equipment rental business continues and is expected to be finalized in the third quarter

  4. Q2 - Figures in summary Including discontinued operations • Orders received up 19%, +13% in volume • Revenues up 18% to MSEK 15 408, up 12% in volume • Operating profit up 41% to MSEK 3 163, a margin of 20.5% (17.2) • Profit before tax at MSEK 2 926 (2 170), a margin of 19.0% (16.6) • Basic earnings per share were SEK 3.11 (2.36), up 32% • Operating cash flow totaled MSEK 799 (955) • ROCE at 32% (25)

  5. Contents • Q2 Business Highlights • Market Development • Business Areas • Financials • Outlook

  6. Orders received - Local currency Group total +26% YTD + 18% last 3 months Group excluding Rental Service +28% YTD + 19 last 3 months(Structural change +2% YTD) Continuing operations June 2006

  7. Q2 - The Americas • Continued strength in North America • Continued investments from most manufacturing and process industries, with the exception of the motor vehicle industry • Improved demand from construction industry • High activity level in the mining industry • Solid demand in South America Continuing operations June 2006

  8. Q2 - Europe and Africa/Middle East • Robust demand in Europe • Improved demand for industrial equipment, with the exception of advanced assembly tools for the motor vehicle industry • The construction demand increased • Double digit growth in Eastern Europe and in many major markets in Western Europe • Very positive development in the Africa / Middle East region June 2006

  9. Q2 - Asia and Australia • Continued strong growth in Asia • Demand from most customers segments improved • All major markets developed well • Mining particularly strong in Australia June 2006

  10. Volume Growth per Quarter Including discontinued operations • Change in orders received in % vs. same Quarter previous year

  11. Atlas Copco Group – Sales Bridge

  12. Contents • Q2 Business Highlights • Market Development • Business Areas • Financials • Outlook

  13. Atlas Copco Group Operating Profit and Return On Capital Employed (ROCE) by Business Areas

  14. Compressor Technique • Very strong order growth • Strong order intake for all types of compressors • Highest in Asia and North America, robust in Western Europe • Steady positive development of aftermarket • Strategic acquisitions of BeaconMedaes and ABAC • Total turnover over BSEK 2.2. • Operating profit up 26%. Margin at 20% • Positive effect from volume and price

  15. Compressor Technique • Acquisition of BeaconMedaes • Strong presence in the United States and Great Britain • A solutions provider, predominantly of medical air systems and medical utility delivery systems for hospitals. • Medical air compressors, vacuum systems and pipeline components. The products, for example, supply breathing air for hospitals and compressed air to drive surgical tools. • 2005 turnover approx. MSEK 720 with around 7% operating margin • 386 employees • Purchase price approx. MSEK 700

  16. Compressor Technique • Acquisition of the industrial division of ABAC • Manufacturing in Italy, Germany and the United States • Complementary product portfolio and a wide international distribution network. • Multi-brand strategy • Turnover approx. BSEK 1.5 with around 10% operating margin • 650 employees • Purchase price approx. BSEK 1.1

  17. Compressor Technique • Operating margins restated (IFRS) from 2004

  18. Construction and Mining Technique • Strong demand from both mining and construction • Order volume up 15% • 17th consecutive quarter with volume growth • Strong growth in all regions • Record operating profit, up 49% • Investment in increased manufacturing for construction tools • Launch of new range of drill rigs for tunneling applications

  19. Construction and Mining Technique • Operating margins restated (IFRS) from 2004

  20. Industrial Technique • Strong sales to general industry • Weaker demand from the motor vehicle industry • Notably in Europe, North and South America • Good development of the aftermarket business • Increased revenues, operating profit and margin

  21. Industrial Technique • Operating margins restated (IFRS) from 2004

  22. Rental Service Including discontinued operations • Rental revenues increased 23% in USD • Price +6%, volume +17% • Fleet utilization at 72% • Increased investments in equipment to support demand and further improve fleet quality • Record operating margin at 27.6%

  23. Rental Service Rental Revenue Volume Development, incl. discontinued operations • Operating margins restated (IFRS) from 2004

  24. Contents • Q2 Business Highlights • Market Development • Business Areas • Financials • Outlook

  25. Group Total

  26. Balance Sheet Including discontinued operations

  27. Capital Structure Net Debt/Equity Adjusted for IFRS, but including discontinued operations

  28. Cash Flow

  29. Capital Expenditures Tangible Fixed Assets Net rental fleet investment = MSEK 5 184 MSEK 12 months Quarterly 2006 2001 2002 2003 2004 2005

  30. Contents • Q2 Business Highlights • Market Development • Business Areas • Financials • Outlook

  31. Near-term Outlook The demand for Atlas Copco’s products and services, from most customer segments such as mining, infrastructure and other non-residential construction, the manufacturing and process industries, is expected to remain at the current high level.

  32. 32 July 17, 2006 www.atlascopco.com

  33. 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.”

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