Atlas Copco Group
Q4 2013 results
January 30, 2014
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
2
January 30, 2014
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
3
January 30, 2014
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
4
January 30, 2014
Orders received - local currency
100
32
20
-6
-6
0
-2
+1
+1
23
11
10
-12
-1
0
+2
+11
-15
4
December 2013
A
5
January 30, 2014
B
C
A=
B=
C=
Share of orders received, year-to-date, %
Year-to-date vs. previous year, %
Last 3 months vs. previous year, %
-41
-35
Q4 - the Americas
 North America
– Increased orders for industrial tools and for
gas- and process compressors
– Stable development for industrial
compressors and construction equipment
20
-6
+1
– Lower order intake for mining equipment
 South America
– Low mining equipment demand and lower
order intake for compressors
– Growth in construction
December 2013
A
6
January 30, 2014
B
C
A=
B=
C=
Share of orders received, year-to-date, %
Year-to-date vs. previous year, %
Last 3 months vs. previous year, %
10
-12
-15
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
32
0
+1
– The service business grew for all business areas
 Africa / Middle East
– Good performance for construction and mining
December 2013
A
7
January 30, 2014
B
C
A=
B=
C=
Share of orders received, year-to-date, %
Year-to-date vs. previous year, %
Last 3 months vs. previous year, %
11
-1
+11
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
23
 Australia
0
+2
– Mining remained weak
4
December 2013
A
8
January 30, 2014
B
C
A=
B=
C=
Share of orders received, year-to-date, %
Year-to-date vs. previous year, %
Last 3 months vs. previous year, %
-41
-35
01 Q1
01 Q2
01 Q3
01 Q4
02 Q1
02 Q2
02 Q3
02 Q4
03 Q1
03 Q2
03 Q3
03 Q4
04 Q1
04 Q2
04 Q3
04 Q4
05 Q1
05 Q2
05 Q3
05 Q4
06 Q1
06 Q2
06 Q3
06 Q4
07 Q1
07 Q2
07 Q3
07 Q4
08 Q1
08 Q2
08 Q3
08 Q4
09 Q1
09 Q2
09 Q3
09 Q4
10 Q1
10 Q2
10 Q3
10 Q4
11 Q1
11 Q2
11 Q3
11 Q4
12 Q1
12 Q2
12 Q3
12 Q4
13 Q1
13 Q2
13 Q3
13 Q4
Organic* order growth per quarter
Atlas Copco Group, continuing operations
40
9
%
30
20
10
0
-10
-20
-30
-40
Organic growth, %
*Volume and price
January 30, 2014
Order cancellations, %
Atlas Copco Group – sales bridge
MSEK
2012
Structural change, %
Currency, %
Price, %
Volume, %
Total, %
2013
10
January 30, 2014
October - December
Orders
received
Revenues
21 101
22 748
+1
+1
-4
-4
+2
+1
-6
-5
-7
-7
19 714
21 266
January - December
Orders
received
Revenues
90 570
90 533
+1
+1
-4
-4
+1
+1
-8
-5
-10
-7
81 290
83 888
Atlas Copco Group
Revenues per business area
Construction
Technique 15%
40%
Mining
34%
and Rock
Excavation
Technique
11%
Industrial
Technique
12 months until December 2013
11
January 30, 2014
Compressor
Technique
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
Organic* revenue growth: Change vs. same period previous year, %
Operating margin, %
+30
Growth, %
Margin , %
+25
25
+20
20
+15
15
+10
10
+5
5
+0
0
-5
-5
-10
-10
-15
-15
20092010 11 11 11 11 12 12 12 12 13 13 13 13
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
12
January 30, 2014
30
Industrial Technique
 10% organic order growth
Organic* revenue growth: Change vs. same period previous year, %
– Motor vehicle industry grew strongly
– General industry and service
developed positively
Operating margin, %
+40
Growth, %
Margin , %
+30
30
 Operating margin at 23.1% (22.3)
+20
20
 Two acquisitions finalized
+10
10
+0
0
– Assembly solution expert
– Bolt tightening solutions
-10
-10
-20
-20
-30
-30
-40
-40
20092010 11
Q1
13
40
January 30, 2014
11
Q2
11
Q3
11
Q4
12
Q1
12
Q2
12
Q3
12
Q4
13
Q1
13
Q2
13
Q3
13
Q4
Mining and Rock Excavation Technique
 17% organic order decline
– Continued weak demand for mining
equipment
– Service and consumables business
remained at a good level
Operating margin, %
Growth, %
+50
Margin, %
50
+40
40
+30
30
– Including MSEK 70 restructuring costs
+20
20
– Negatively affected by lower volumes,
currency and acquisitions
+10
10
+0
0
 Adjusted margin at 18.8% (23.8)
 Further efficiency measures
-10
-10
 Acquisitions
-20
-20
– Oil and gas service business
– Well- and geotechnical drilling business
14
Organic* revenue growth: Change vs. same period previous year, %
January 30, 2014
-30
-30
20092010 11 11 11 11
Q1 Q2 Q3 Q4
12 12 12 12 13 13 13 13
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
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
Organic* revenue growth: Change vs. same period previous year, %
Operating margin, %
+40
Growth, %
Margin, %
+30
15
+20
10
+10
5
+0
0
-10
-5
-20
-10
-30
-15
-40
-20
2009 2010 11
Q1
15
January 30, 2014
20
11
Q2
11
Q3
11
Q4
12
Q1
12
Q2
12
Q3
12
Q4
13
Q1
13
Q2
13
Q3
13
Q4
Group total
2013 vs. 2012
MSEK
Orders received
Revenues
%
January - December
2013
2012
%
19 714
21 266
21 101
22 748
-7%
-7%
81 290
83 888
90 570
90 533
-10%
-7%
Operating profit
– as a percentage of revenues
Profit before tax
4 155
19.5
3 925
4 699
20.7
4 488
-12%
19 266
21.3
18 562
-11%
-13%
17 056
20.3
16 266
– as a percentage of revenues
Profit for the period
18.5
2 903
19.7
3 416
-15%
19.4
12 082
20.5
13 933
2.39
28
2.81
36
9.95
11.47
Basic earnings per share, SEK
Return on capital employed, %
16
October - December
2013
2012
January 30, 2014
-12%
-13%
Profit bridge
October – December 2013 vs. 2012
MSEK
Atlas Copco Group
Revenues
EBIT
%
17
January 30, 2014
Volume, price,
Q4 2013 mix and other
21 266
4 155
19.5%
-842
-573
68.1%
Currency
One-time items
Acquisitions
-880
-210
240
75
Share based
LTI programs
164
Q4 2012
22 748
4 699
20.7%
Profit bridge
January – December 2013 vs. 2012
MSEK
Atlas Copco Group
Revenues
EBIT
%
18
January 30, 2014
Volume, price,
2013 mix and other
83 888
17 056
20.3%
-3 345
-1 215
36.3%
Currency
One-time items
Acquisitions
Share based
LTI programs
-4 150
-1 225
850
75
0
155
2012
90 533
19 266
21.3%
Profit bridge – by business area
October – December 2013 vs. 2012
Volume, price,
Q4 2013 mix and other
MSEK
Compressor Technique
Revenues
9 107
EBIT
2 092
%
23.0%
Industrial Technique
Revenues
2 692
EBIT
621
%
23.1%
Mining and Rock Excavation Technique
Revenues
6 709
EBIT
1 190
%
17.7%
Construction Technique
Revenues
3 003
EBIT
254
%
8.5%
19
January 30, 2014
Currency
One-time items
Acquisitions
240
-20
nm
-280
-90
30
-5
9 117
2 207
24.2%
257
98
38.1%
-40
-15
80
5
2 395
533
22.3%
-1 462
-606
41.5%
-435
-150
110
-80
8 496
2 026
23.8%
197
71
36.0%
-125
-25
20
65
2 911
143
4.9%
Q4 2012
Profit bridge – by business area
January – December 2013 vs. 2012
Volume, price,
2013 mix and other
MSEK
Compressor Technique
Revenues
33 839
EBIT
7 823
%
23.1%
Industrial Technique
Revenues
9 501
EBIT
2 138
%
22.5%
Mining and Rock Excavation Technique
Revenues
29 013
EBIT
6 083
%
21.0%
Construction Technique
Revenues
12 257
EBIT
1 214
%
9.9%
20
January 30, 2014
Currency
One-time items
Acquisitions
230
291
126.5%
-1 385
-490
280
5
34 714
8 017
23.1%
115
45
39.1%
-320
-70
140
5
9 566
2 158
22.6%
-3 621
-1 417
39.1%
-1 825
-690
405
-145
34 054
8 335
24.5%
-41
-13
31.7%
-615
-170
25
65
12 888
1 332
10.3%
2012
Balance sheet
MSEK
21
January 30, 2014
Dec. 31, 2013
Dec. 31, 2012 restated
Intangible assets
Rental equipment
Other property, plant and equipment
Other non-current assets
Inventories
Receivables
Current financial assets
Cash and cash equivalents
Assets classified as held for sale
TOTAL ASSETS
17 279
2 420
6 907
3 401
16 826
21 726
1 697
17 633
2
87 891
20%
3%
8%
4%
19%
25%
2%
20%
0%
15 879
2 030
6 846
3 481
17 653
21 155
1 333
12 416
1
80 794
20%
3%
8%
4%
22%
26%
2%
15%
0%
Total equity
Interest-bearing liabilities
Non-interest-bearing liabilities
TOTAL EQUITY AND LIABILITIES
39 794
27 006
21 091
87 891
45%
31%
24%
34 185
23 201
23 408
80 794
42%
29%
29%
Cash flow
MSEK
Operating cash surplus
of which depreciation added back
Net financial items
Taxes paid
Pension funding
Change in working capital
Increase in rental equipment, net
Cash flows from operating activities
Investments of property, plant & eq., net
Other investments, net
Cash flow from investments
Adjustment - pension funding
Operating cash flow
Company acquisitions/ divestments
22
January 30, 2014
October - December
2013
2012
4 310
5 357
705
691
-71
19
-1 348
-1 111
-591
-93
603
1 168
-234
-309
2 669
5 031
-341
-412
-356
-373
-697
-785
591
93
2 563
4 339
-415
-146
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
23
January 30, 2014
Near-term outlook
The overall demand for the Group’s products and services is
expected to remain at the current level.
24
January 30, 2014
Committed to
sustainable productivity.
26
January 30, 2014
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.”
27
January 30, 2014