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Atlas Copco Group Q4 2013 results January 30, 2014
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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 2
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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 3
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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 4
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Orders received - local currency January 30, 2014 5 100-6-2 20-6+1 10-12-15 320+1 11+11 230+2 4-41-35 ABC December 2013 A =Share of orders received, year-to-date, % B =Year-to-date vs. previous year, % C =Last 3 months vs. previous year, %
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20-6+1 10-12-15 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 January 30, 2014 6 ABC December 2013 A =Share of orders received, year-to-date, % B =Year-to-date vs. previous year, % C =Last 3 months vs. previous year, %
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320+1 11+11 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 January 30, 2014 7 ABC December 2013 A =Share of orders received, year-to-date, % B =Year-to-date vs. previous year, % C =Last 3 months vs. previous year, %
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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 January 30, 2014 8 ABC December 2013 A =Share of orders received, year-to-date, % B =Year-to-date vs. previous year, % C =Last 3 months vs. previous year, % 230+2 4-41-35
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Organic* order growth per quarter Atlas Copco Group, continuing operations *Volume and price January 30, 2014 9
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Atlas Copco Group – sales bridge January 30, 2014 10
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Atlas Copco Group January 30, 2014 11 12 months until December 2013 Compressor Technique 40% Industrial Technique 11% Construction Technique 34% Revenues per business area Mining and Rock Excavation Technique 15%
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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 12
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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 13
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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 14
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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 15
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Group total January 30, 2014 16 2013 vs. 2012
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Profit bridge January 30, 2014 17 October – December 2013 vs. 2012
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Profit bridge January 30, 2014 18 January – December 2013 vs. 2012
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Profit bridge – by business area January 30, 2014 19 October – December 2013 vs. 2012
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Profit bridge – by business area January 30, 2014 20 January – December 2013 vs. 2012
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Balance sheet January 30, 2014 21
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Cash flow January 30, 2014 22
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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 23
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Near-term outlook The overall demand for the Group’s products and services is expected to remain at the current level. January 30, 2014 24
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Committed to sustainable productivity. January 30, 2014 26
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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 27
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