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Atlas Copco Group Q4 2013 Results Summary

Learn about Atlas Copco's Q4 performance with stable industrial demand, service business growth, and new acquisitions. Details on orders, revenues, profit, and more.

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Atlas Copco Group Q4 2013 Results Summary

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  1. Atlas Copco Group Q4 2013 results January 30, 2014

  2. Q4 in brief • Stable industrial demand – mining equipment remained weak • The service business continued to grow • Actions to adjust capacity to the lower mining equipment demand • Acquisition of Edwards finalized on January 9, 2014 January 30, 2014

  3. Edwards Vacuum • Edwards’ preliminary unaudited income statement • Strong end to 2013 • Revenues reached approximately MGBP 680 (MSEK 6 950) • Adjusted EBITDA approximately MGBP 160 (MSEK 1 640) • If the preliminary statement is confirmed, the requirements for full additional payment of USD 1.25 per share are met • Payment is expected within the first quarter of 2014 • The full payment corresponds to an enterprise value of approximately MSEK 9 900 • Edwards will be consolidated as from January 2014 and is part of Atlas Copco’s new Vacuum Solutions division in Compressor Technique • Atlas Copco estimates, based on above preliminary values, that amortization of intangibles will be approximately MSEK 250 in 2014 January 30, 2014

  4. Q4 figures in summary • Orders received were MSEK 19 714, organic decline of 4% • Revenues reached MSEK 21 266, organic decline of 4% • Operating profit decreased to MSEK 4 155 (4 699) • Operating margin at 19.5% (20.7) • Negatively affected by lower volumes, currency and dilution from acquisitions • Profit before tax at MSEK 3 925 (4 488) • Basic earnings per share SEK 2.39 (2.81) • Operating cash flow at MSEK 2 563 (4 339) • Proposed dividend of SEK 5.50 (5.50) per share January 30, 2014

  5. Orders received - local currency December 2013 January 30, 2014

  6. Q4 - the Americas • North America • Increased orders for industrial tools and for gas- and process compressors • Stable development for industrial compressors and construction equipment • Lower order intake for mining equipment • South America • Low mining equipment demand and lower order intake for compressors • Growth in construction December 2013 January 30, 2014

  7. Q4 - Europe and Africa/Middle East • Europe • Overall unchanged, with positive development in Russia, France and Spain • Positive development for industrial tools and negative for mining equipment • The service business grew for all business areas • Africa / Middle East • Good performance for construction and mining December 2013 January 30, 2014

  8. Q4 - Asia and Australia • Asia • Strong order intake for industrial tools and for small and medium compressors • Lower order intake for Construction Technique • Strong development for service • Australia • Mining remained weak December 2013 January 30, 2014

  9. Organic* order growth per quarter Atlas Copco Group, continuing operations *Volume and price January 30, 2014

  10. Atlas Copco Group – sales bridge January 30, 2014

  11. Atlas Copco Group Revenues per business area ConstructionTechnique 15% CompressorTechnique 40% 34% Mining and Rock ExcavationTechnique 11% Industrial Technique 12 months until December 2013 January 30, 2014

  12. Compressor Technique • 2% organic order growth • Stable order intake for small- and medium-sized compressors and lower for large machines • Service continued to grow • Operating margin at 23.0% (24.2) • Acquisition of Edwards vacuum completed on January 9, 2014 • Extended range of breakthrough energy-efficient compressor January 30, 2014

  13. Industrial Technique • 10% organic order growth • Motor vehicle industry grew strongly • General industry and service developed positively • Operating margin at 23.1% (22.3) • Two acquisitions finalized • Assembly solution expert • Bolt tightening solutions January 30, 2014

  14. Mining and Rock Excavation Technique • 17% organic order decline • Continued weak demand for mining equipment • Service and consumables business remained at a good level • Adjusted margin at 18.8% (23.8) • Including MSEK 70 restructuring costs • Negatively affected by lower volumes, currency and acquisitions • Further efficiency measures • Acquisitions • Oil and gas service business • Well- and geotechnical drilling business January 30, 2014

  15. Construction Technique • 1% organic order growth • Growth in South America and Africa/ Middle East, but negative development in Asia • Orders increased for road construction equipment • Operating margin at 8.5% • Negatively affected by currency • Specialty rental business moves from Compressor Technique as from 2014 January 30, 2014

  16. Group total 2013 vs. 2012 January 30, 2014

  17. Profit bridge October – December 2013 vs. 2012 January 30, 2014

  18. Profit bridge January – December 2013 vs. 2012 January 30, 2014

  19. Profit bridge – by business area October – December 2013 vs. 2012 January 30, 2014

  20. Profit bridge – by business area January – December 2013 vs. 2012 January 30, 2014

  21. Balance sheet January 30, 2014

  22. Cash flow January 30, 2014

  23. 2013 in summary • Stable demand for most industrial and construction equipment, but very weak market for mining equipment • Service continued to grow • Continued investments in market presence, service and product development • Healthy profitability despite lower revenues and currency headwind • Orders received decreased by 10% to MSEK 81 290, 7% organic decline • Revenues were MSEK 83 888, 4% organic decline • Operating profit at MSEK 17 056 • Operating margin at 20.3% (21.3) • Operating cash flow of MSEK 9 931 (12 286) • Proposed dividend of SEK 5.50 (5.50) per share, totaling MSEK 6 675 January 30, 2014

  24. Near-term outlook The overall demand for the Group’s products and services is expected to remain at the current level. January 30, 2014

  25. January 30, 2014

  26. 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.” January 30, 2014

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