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Atlas Copco Group's Q3 results show record revenues, operating profit, and operating margin. The company experienced solid growth in the manufacturing and mining businesses, but weaker demand for construction equipment. The aftermarket equipment sector saw significant growth. Several strategic acquisitions were made to support future growth.
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Atlas Copco Group Q3 Results October 21, 2011
Q3 - highlights • Overall demand remained at a high level • Solid development in manufacturing and mining business • Weaker demand for most types of construction equipment • Record revenues, record operating profit and record operating margin • Strong growth in aftermarket • Several strategic acquisitions Aftermarket Equipment 41% 59% Revenue split in Q3 October 21, 2011
Q3 - figures in summary • Orders received of MSEK 21 151 (19 316), 14% organic growth • Revenues of MSEK 20 739, 21% organic growth • Operating profit increased 27% to MSEK 4 800 • Operating margin at 23.1% (21.3) • Positive impact from release of provision for share-related long-term compensation program of MSEK 164 • Restructuring costs in Construction Technique of MSEK 30 (100) • Profit before tax at MSEK 4 703 (3 675) • MSEK 82 capital gain related to sale of shares in Rental Service • Basic earnings per share SEK 2.96 (2.17) • Strong operating cash flow at MSEK 2 125 (2 479) October 21, 2011
Orders received - local currency Group total +27% YTD, +15% last 3 months Structural change +2% YTD, +1% last 3 months September 2011 October 21, 2011
Q3 - Americas • Strong growth in North America • High demand for industrial equipment • Sequentially, sales of mining and construction equipment was lower than in the strong second quarter • Strong growth in aftermarket • Favorable overall demand in South America • Lower order intake from construction industry September 2011 October 21, 2011
Q3 - Europe and Africa/Middle East • Order intake in Europe increased 19% in local currency • Strong Russia and Germany • Sequentially, demand from construction industry weakened • Significantly higher orders received in Africa / Middle East • Solid demand from the mining industry September 2011 October 21, 2011
Q3 - Asia and Australia • Continued healthy demand level in Asia • Solid China, but weaker India • Weak development in construction • Continued strong growth in aftermarket • Australia down from record levels • Lower equipment orders from the mining industry • Strong aftermarket September 2011 October 21, 2011
Organic* growth per quarter Atlas Copco Group, continuing operations • Change in orders received in % vs. same quarter previous year *Volume and price October 21, 2011
Atlas Copco Group – sales bridge October 21, 2011
Atlas Copco Group Revenues per business area ConstructionTechnique 16% CompressorTechnique 39% 36% Mining and Rock ExcavationTechnique 9% Industrial Technique Q3 2011 October 21, 2011
Compressor Technique • 17% organic order growth • Healthy demand for industrial compressors as well as for air treatment products • Continued strong growth of the aftermarket business • Solid operating margin at 24.1% (26.7) • Large order for geothermal power plant • Acquisition of medical gas solutions business October 21, 2011
Industrial Technique • Solid demand from all major customer segments • 24% organic order growth • Strong growth in the aftermarket business • Operating margin at 21.9% (20.2) • Supported by higher revenue volume and increased prices, but partly offset by negative mix • Acquisition of adhesive equipment manufacturer in Germany October 21, 2011
Mining and Rock Excavation Technique • 16% organic order growth • Continued high activity in the mining industry • Increased order intake for underground mining equipment, but lower for surface drilling equipment • High sales growth for service, parts and consumables • Record operating profit and record operating margin • Operating margin at 25.6% (23.0). October 21, 2011
Construction Technique • Weak demand for equipment, partly offset by strong aftermarket development • Orders received -1%, organically • Operating margin was 11.8% (10.1) • Affected by restructuring costs MSEK 30 (100) • The adjusted operating margin was 12.8% (13.4) • Acquisition of Spanish generator manufacturer • Nico Delvaux – new business area president October 21, 2011
Group total October 21, 2011
Profit bridge July – September 2011 vs 2010 October 21, 2011
Profit bridge – by business area July – September 2011 vs 2010 October 21, 2011
Balance sheet October 21, 2011
Capital structure Net Debt*/EBITDA * Net Debt adjusted for the fair value of interest rate swaps October 21, 2011
Cash flow October 21, 2011
Near-term outlook The overall demand for Atlas Copco’s products and services is expected to weaken somewhat from the current high level. October 21, 2011
Capital Markets Day 2011 November 29, 2011 in Antwerp, Belgium www.atlascopco.com/CMD2011 October 21, 2011
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.” October 21, 2011
