First in Mind First in Choice. Capital Markets Day 2006 Gunnar Brock, President and CEO

Transcription

1 First in Mind First in Choice Capital Markets Day 26 Gunnar Brock, President and CEO 1 December 4, 26

2 Atlas Copco in a Snapshot Continuing operations A world leading provider of industrial productivity solutions Three focused, profitable and strong industrial businesses The products and services range from compressed air and gas equipment, generators, construction and mining equipment, industrial tools and assembly systems, to related aftermarket and rental LTM revenues of BSEK 49, operating margin of 18.2% and high return on capital employed More than 25 employees 2 December 4, 26 Innovative Solutions Products Services Knowledge 3 December 4, 26 Businesses and Market Position Compressors 1 Construction and Mining Industrial Tools 4 December 4,

3 Compressors Compressor Technique World leader in compressed air products and solutions Global coverage with own resources in sales and aftermarket support Technology and cost leadership 5 December 4, 26 Construction and Mining Equipment Construction and Mining Technique Leading market position, globally Good balance in product portfolio and geographical markets Strong foundation for growth 6 December 4, 26 Industrial Tools Industrial Technique Strong global leadership Application focus on both Motor Vehicle Industry and General Industry Leading technology development 7 December 4,

4 Vision To be a leader First in Mind First in Choice Lead in the share of mind and share of choice of our customers Be seen as the innovator, setting the standards Exceed high expectations Be #1 or #2, in every product market/application and geographic segment where we compete Society and the environment Customers Business Employees partners Shareholders 8 December 4, 26 Atlas Copco Continuing operations Construction and Mining Technique 37% Compressor Technique 5% incl. Prime Energy Other Services 9% 5% Mining 18% Construction 22% 13% Industrial Technique 15% Process 31% Manufacturing January September 26 9 December 4, 26 Worldwide Presence 22% 39% 1% 22% 7% Countries covered by Atlas Copco Customer Centers Production sites Portion of orders received, 12 months 1 December 4,

5 Atlas Copco Revenues and operating margin Pro forma excluding divested businesses: professional electric tools and equipment rental MSEK % Sep Revenues, MSEK Operating margin, % 11 December 4, 26 Q Highlights Value creation High growth Double digit growth in all regions Good demand from most customer segments Solid growth in the aftermarket business Increased profits All business areas improved profit margins Atlas Copco sells majority stake of the equipment rental business 12 December 4, 26 Q Figures in summary Orders received up 21%, +19% in volume Revenues up 17% to MSEK , up 15% in volume Operating profit up 29% to MSEK 2 36, a margin of 18.4% (16.6) Profit before tax at MSEK 2 81 (1 8), a margin of 16.6% (16.9) 13 December 4,

6 Orders received - Local currency Group total +24% YTD, + 25% last 3 months (Structural change +2% YTD, +3% last 3 months) September 26 A B C A = B = C = Portion of orders received, YTD, % YTD vs. prev. year, % Last 3 months vs. prev. year, % 14 December 4, 26 Atlas Copco Group Operating Profit and Return On Capital Employed (ROCE) by Business Areas Revenues Operating Operating ROCE MSEK profit margin 12 month values, period ending Sep. 26 Sep. 26 Sep. 26 Sep. 26 Compressor Technique % 72% Construction and Mining Technique % 34% Industrial Technique % 64% Rental Service % na. Eliminations/Common Group Functions Atlas Copco Group % 36%* * including discontinued operations 15 December 4, 26 Financial Targets Create Shareholder Value 8% Growth Return on revenue 15% Total cost of capital (WACC) Capital turnover 16 December 4,

7 Atlas Copco Growth Revenues Atlas Copco Group, excl. Professional Electric Tools and Rental Service Change in revenue volume and price, % Structural changes, % CAGR, 22-YTD 26, volume and price CAGR, 22-YTD 26, excl. currency 3% 25% 2% 15% 1% 5% % -5% -1% Q1-Q % 1% 17 December 4, 26 Atlas Copco Growth Orders received Atlas Copco Group, excl. Professional Electric Tools and Rental Service Change in revenue volume and price, % Structural changes, % CAGR, 22-YTD 26, volume and price CAGR, 22-YTD 26, excl. currency 3% 25% 2% 15% 1% 5% % -5% -1% Q1-Q % 12% 18 December 4, 26 Volume Growth per Quarter Atlas Copco Group, excluding Rental Service Change in orders received in % vs. same Quarter previous year Q1 Q2 Q3 Q4 1 Q1 1 Q2 1 Q3 1 Q4 2 Q1 2 Q2 2 Q3 2 Q4 3 Q1 3 Q2 3 Q3 3 Q4 4 Q1 4 Q2 4 Q3 4 Q4 5 Q1 5 Q2 5 Q3 5 Q4 6 Q1 6 Q2 6 Q3 6 Q4 19 December 4,

8 Why should Atlas Copco Succeed in growing 8% per year? Strong portfolio of businesses and products Commitment to product development Market position and brand value Dedication to aftermarket Our house is in order stability and profitability. Processes in place. Acquisition potential Strong and competent leadership Continuous improvement 2 December 4, 26 Extend and develop the core and build new businesses and create options that are close to home. 21 December 4, 26 Sales Potential Extend and Defend Core Segment Products Presence Distribution Penetration Customer share Sales potential.75 x.5 x.4 =.15 Max 1 x 1 x 1 = 1 22 December 4,

9 Growth by region vs 22 Continuing operations, including acquisitions. Group Total +81% +5% +12% % Sept % 5 22 Sept % Sept Orders received 12 month figures in MSEK Average exchange rates USD % EUR % 22 Sept A B 22 Sept A = Sales by region, 22, % B = Sales by region, 12 months to Sept. 26, % 23 December 4, Largest Markets Continuing operations 1. USA 2. China 3. Germany 4. France 5. Canada 6. Australia 7. Italy 8. Spain 9. South Africa 1. Great Britain 11. Mexico 12. India 13. Russia 14. Brazil 15. Sweden 24 December 4, % Other 38% Other Top 15 69% OECD 62% Diversified Customers 25 December 4,

10 Atlas Copco Revenues, employees and assets by geographic area Continuing operations 6% Revenues by geographic area Employees by geographic area Business area assets, including goodwill, by geographic area 5% 4% 3% 2% 1% % North America South America Europe Africa / Middle East Asia / Australia 26 December 4, 26 Focused Markets CAGR Growth YTD 26 USA 3% 21% Russia 3% 53% 5% 28% India China 26% 24% Orders received in local currency 27 December 4, 26 Aftermarket Accessories, consumables, spare parts, service and maintenance and training High growth potential High profit potential Stable revenue stream Optimized business processes Enhanced product development Closer relationships with end-users Satisfied customers 28 December 4,

11 Acquisition Strategy 29 December 4, 26 Acquisition Strategy Screening of Alternatives High Attractiveness Size Growth Profits Low Low Value added logic High Customer/market Distribution channels / network Operational capabilities Technologies 3 December 4, 26 Economic Distance from the Core is measured on five dimensions Shared customers Shared costs Shared channels Shared competitors Shared capabilities/ technology Core 1 step away from home 2 steps away from home 3 steps away from home Diversification Source: Bain & Company Full Share Partial Share No Share 31 December 4,

12 Growth Acquisitions >3 acquisitions completed Annual sales, at the time of the acquisition, > BSEK 5 9 acquisitions in 26 Annual sales approximately BSEK 3 Includes all announced acquisitions (some pending final approval) and small acquisitions not announced. Some of the acquisitions are distributors where some of the annual sales has been Atlas Copco products. 32 December 4, 26 Compressor Technique Growth Strategy Capitalize on strong market presence Develop new businesses Aftermarket Focused markets Focused segments Multi-branding Global logistics and manufacturing strategy Innovative product development Acquisitions 33 December 4, 26 Construction and Mining Technique Growth Strategy Reinforce leading market position New product development Service and aftermarket Key customer strategy Acquisitions 34 December 4,

13 Construction and Mining Technique Position in the Unites States 4 regions Strong distribution network Revenues 25 > 5x revenues 23 Ingersoll-Rand Drilling Solutions and Baker Hughes Mining Tools acquired 22 Open Pit Mining Quarry & Construction Shallow Oil & Gas Waterwell UG Mining & Construction 35 December 4, 26 Construction and Mining Technique Product Development Intelligent product concept to enhance productivity Scooptram ST December 4,

14 Industrial Technique Growth Strategy Invest in sales force Increase sales of electric power tools in general industry Productivity and quality partner New product development Service and aftermarket Acquisitions 38 December 4, 26 Industrial Technique Product Development and Strategic Acquisition Products for small screw applications Atlas Copco electric screwdriver Microtec Systems 39 December 4, 26 Industrial Technique Service Operation and maintenance optimization Balancing the cost of maintenance with the reduction of possible failures Application analysis Optimize tool selection Growth >2% YTD Strategic acquisitions of BLM and Technisches Büro Böhm GmbH 4 December 4,

15 Financial Targets Create Shareholder Value 8% Growth Return on revenue 15% Total cost of capital (WACC) Capital turnover 41 December 4, 26 Value Creation Economic Value Added Continuing Operations Invested Capital BSEK 24 ROI after tax 27% WACC 7.8% ROCE 43% WACC, pre-tax, 11.5% Sept month figures in MSEK 42 December 4, 26 Atlas Copco Today Summary Three focused, profitable and strong industrial businesses Well balanced strong global positions #1 or #2 in all important market segments High operating margin Efficient and effective utilization of capital High return on capital employed Solid platform for growth Atlas Copco is well positioned to deliver on its financial targets 43 December 4,

16 44 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. 45 December 4,