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Atlas Copco Group
Q2 Results
July 16, 2010
Contents
Q2 business highlights
Market development
Business areas
Financials
Outlook
2July 16, 2010
Q2 - highlights
Strong order growth – Sequential improvement in all major regions and in most customer segments
– Record orders received in Asia, South America and Australia
– Strong performance in aftermarket
Record operating profit margin at 20.1%– Revenue volume, currency, sales mix, price, and efficiency measures all gave
support
Very strong operating cash flow
July 16, 20103
Q2 - figures in summary
33% organic order growth
Revenues of MSEK 17 430; 9% organic growth
Operating profit at MSEK 3 499 (2 066)– Operating margin of 20.1% (14.4 adjusted for restructuring)
– Restructuring cost of MSEK 259 in 2009
Profit before tax at MSEK 3 403 (1 943)
Basic earnings per share SEK 2.07 (1.20)
Operating cash flow MSEK 2 847 (2 492)
4July 16, 2010
Contents
Q2 business highlights
Market development
Business areas
Financials
Outlook
5July 16, 2010
Orders received - local currencyGroup total +31% YTD (+29 excl. cancellations), +35% last 3 monthsStructural change +1% YTD, +2% last 3 months
June 2010
17 +52 +56
A = Share of orders received, year-to-date, %
B = Year-to-date vs. previous year, %
C = Last 3 months vs. previous year, %
11 +56 +53
A B C
32 +17 +28
11 +17 +19
23 +40 +43
6 +37 +15
6July 16, 2010
Q2 - the Americas
Strong growth in North America– Order intake improved for most types of equipment
and for aftermarket, both sequentially and compared with Q2 2009
– The demand for industrial equipment developed particularly well
Record orders received in South America– Strong demand from all countries and from most
customer segments
June 2010
A B C
17 +52 +56
11 +56 +53
7July 16, 2010
A = Share of orders received, year-to-date, %
B = Year-to-date vs. previous year, %
C = Last 3 months vs. previous year, %
Q2 - Europe and Africa/Middle East
Sequential improvement in Europe– Most positive order development was seen in Russia, many
other eastern European countries and in the Nordic countries
– Southern Europe remained weak
– Recovery in orders for construction equipment
Continued growth in Africa / Middle East– Strong development in central and northern Africa, thanks to
orders from the mining industry
– Flat in South Africa
June 2010
A B C
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32 +17 +28
11 +17 +19
A = Share of orders received, year-to-date, %
B = Year-to-date vs. previous year, %
C = Last 3 months vs. previous year, %
Q2 - Asia and Australia
Record order intake in Asia– Very strong growth in China and India
– Positive development in Japan and South Korea
– Strong growth in aftermarket
– High activity level in manufacturing industry
Continued favorable mining demand in Australia contributed to record orders received
June 2010
A B C
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23 +40 +43
6 +37 +15
A = Share of orders received, year-to-date, %
B = Year-to-date vs. previous year, %
C = Last 3 months vs. previous year, %
Organic* growth per quarter
Change in orders received in % vs. same quarter previous year
July 16, 201010
Atlas Copco Group, continuing operations
*Volume and price
April - June January - June
Orders Orders
MSEK Received Revenues Received Revenues
2009 14 535 16 155 28 866 32 732
Cancellations, % - - +3 * -
Structural change, % +2 +2 +1 +1
Currency, % -3 -3 -5 -4
Price, % +1 +1 +1 +1
Volume, % +32 +8 +26 +2
Total, % +32 +8 +26 +0
2010 19 221 17 430 36 488 32 731
*Cancellations in Q1 2009
Atlas Copco Group – sales bridge
11July 16, 2010
Contents
Q2 business highlights
Market development
Business areas
Financials
Outlook
12July 16, 2010
Revenues Operating Operating ROCE
MSEK profit margin
12 month values, period ending June 2010 June 2010 June 2010 June 2010
Compressor Technique 32 217 6 622 20.6% 56%Construction and Mining Technique 25 997 4 018 15.5% 21%Industrial Technique 5 716 722 12.6% 28%Eliminations/Common Group Functions -169 -384
Atlas Copco Group 63 761 10 978 17.2% 22%
Atlas Copco GroupRevenues, operating profit and return on capital employed (ROCE) by business area
13July 16, 2010
Compressor Technique
28% organic order growth vs. Q2 2009– Increased demand for standard machines, stationary
and portable
– Strong growth in China and other emerging markets
– Improvement also in North America and in Europe
Very strong development in aftermarket with high growth in emerging markets
Operating margin at 23.2%– Positively affected by volume, sales mix, currency, price
and efficiency measures.
Acquisition of American Air Products– Distributor based in Minnesota, the United States
July 16, 201014
Compressor Technique
15July 16, 2010
*Volume and price
Construction and Mining Technique
40% organic order growth vs. Q2 2009– Strong growth in both equipment and aftermarket
– Continued favorable demand from the mining industry
– Increased orders for construction equipment
Operating margin at 18.0%– Supported by volume, mix and efficiency
Successful launch of new products at Bauma in Germany
July 16, 201016
Construction and Mining Technique
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*Volume and price
Industrial Technique
40% organic order growth vs. Q2 2009– Improved demand from all customer segments and all major regions
– Very strong growth in North America and Asia and also Europe improved
– Vehicle manufacturers have started to invest in new equipment, both for existing and new assembly lines
Operating margin increased to 18.8%– Positively affected by increased volumes and cost savings
Strengthened industrial tools distribution in southern United States
July 16, 201018
Industrial Technique
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*Volume and price
Contents
Q2 business highlights
Market development
Business areas
Financials
Outlook
20July 16, 2010
Group total
21July 16, 2010
Preliminary
MSEK 2010 2009 % 2010 2009 %
Orders received 19 221 14 535 +32 36 488 28 866 +26
Revenues 17 430 16 155 +8 32 731 32 732 -0
Operating profit 3 499 2 066 +69 6 126 4 238 +45
- as a percentage of revenues 20.1 12.8 18.7 12.9
Profit before tax 3 403 1 943 +75 5 900 3 737 +58
- as a percentage of revenues 19.5 12.0 18.0 11.4
Profit for the period 2 523 1 468 +72 4 378 2 846 +54
Basic earnings per share, SEK 2.07 1.20 3.60 2.33
Return on capital employed, % 22 24
April - June January - June
Organic Growth One-time items
MSEK Price/Volume Acq./Div.
Atlas Copco Group
Revenues 17 430 1 493 -500 282 16 155
EBIT 3 499 1 023 135 275 2 066
% 20.1% 69% - - 12.8%
Q2 2010 Currency Q2 2009
Profit bridgeApril – June, 2010 vs 2009
22July 16, 2010
Organic Growth One-time items
MSEK Price/Volume Acq./Div.
Compressor Technique
Revenues 8 615 465 -350 279 8 221
EBIT 2 000 458 90 129 1 323
% 23.2% 98% - - 16.1%
Construction & Mining Technique
Revenues 7 393 746 -75 6 722
EBIT 1 331 361 10 85 875
% 18.0% 48% - - 13.0%
Industrial Technique
Revenues 1 535 406 -85 3 1 211
EBIT 289 263 -20 59 -13
% 18.8% 65% - - -1.1%
Q2 2010 Currency Q2 2009
Profit bridge – by business areaApril – June, 2010 vs 2009
23July 16, 2010
MSEK Jun 30, 2010 Dec 31, 2009 Jun 30, 2009
Intangible assets 13 810 20% 12 697 19% 13 121 19%
Rental equipment 2 056 3% 2 056 3% 2 267 3%
Other property, plant and equipment 6 070 9% 5 993 9% 6 387 9%
Other fixed assets 5 074 7% 6 556 10% 7 443 11%
Inventories 12 566 18% 11 377 17% 15 028 21%
Receivables 17 891 26% 15 433 23% 17 668 25%
Current financial assets 1 708 3% 1 530 2% 1 567 2%
Cash and cash equivalents 9 054 13% 12 165 18% 6 727 10%
Assets classified as held for sale 70 0% 67 0% 40 0%
TOTAL ASSETS 68 299 67 874 70 248
Total equity 25 415 37% 25 671 38% 23 349 33%
Interest-bearing liabilities 23 165 34% 25 735 38% 29 424 42%
Non-interest-bearing liabilities 19 719 29% 16 468 24% 17 475 25%
TOTAL EQUITY AND LIABILITIES 68 299 67 874 70 248
Balance sheet
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Capital structure
25
Net Debt*/EBITDA
* Net Debt adjusted for the fair value of interest rate swaps
July 16, 2010
Atlas Copco AB’s loan maturity profile
26July 16, 2010
April - June January - JuneMSEK 2010 2009 2010 2009
Operating cash surplus after tax 3 698 1 138 6 147 3 023 of which depreciation added back 621 563 1 195 1 179Change in working capital -327 1 692 -52 3 086Increase in rental equipment, net -119 -14 -182 -105 Cash flows from operating activities 3 252 2 816 5 913 6 004Investments of property, plant & eq. -193 -280 -370 -571Sale of property, plant & eq. 11 19 23 38Other investments, net -223 -63 -496 -128Cash flow from investments -405 -324 -843 -661 Operating cash flow 2 847 2 492 5 070 5 343Company acquisitions/ divestments -25 -13 -1 386 -155
Cash flow
Operating cash surplus is adjusted for equity hedges in net financial items.
27July 16, 2010
Contents
Q2 business highlights
Market development
Business areas
Financials
Outlook
28July 16, 2010
Near-term outlook
The overall demand for the Group’s products and services is expected to increase somewhat.
In emerging markets, demand is foreseen to develop favorably in all business areas. Demand in North America and parts of Europe is expected to increase gradually.
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Committed tosustainable productivity.
30July 16, 2010
32
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.”
July 16, 2010
