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    ATCO A   SE0011166610

ATLAS COPCO AB

(ATCO A)
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Atlas Copco: Second-quarter report 2021

07/16/2021 | 07:52am EDT

Press release from Atlas Copco AB

July 16, 2021

Atlas Copco

Second-quarter report 2021

Record order intake and revenues

The comparison figures presented in this report refer to previous year unless otherwise stated.

  • Order intake increased 45% to record MSEK 32 529 (22 401), organic growth of 54%
  • Revenues increased 14% to record MSEK 27 534 (24 102), organic growth of 21%
  • Operating profit increased 52% to MSEK 5 924 (3 889), corresponding to a margin of 21.5% (16.1)
    • Adjusted operating profit, excluding items affecting comparability, was MSEK 6 026 (4 476), corresponding to a margin of 21.9% (18.6)
  • Profit before tax amounted to MSEK 5 872 (3 826)
  • Basic earnings per share were SEK 3.75 (2.58)
  • Operating cash flow at MSEK 3 743 (3 483)
  • Return on capital employed was 26% (26)

April - June

January - June

MSEK

2021

2020

2021

2020

Orders received

32 529

22 401

45%

62 997

50 440

25%

Revenues

27 534

24 102

14%

53 555

49 200

9%

EBITA*

6 285

4 201

50%

12 027

9 631

25%

- as a percentage of revenues

22.8

17.4

22.5

19.6

Operating profit

5 924

3 889

52%

11 311

9 013

25%

- as a percentage of revenues

21.5

16.1

21.1

18.3

Profit before tax

5 872

3 826

53%

11 215

8 836

27%

- as a percentage of revenues

21.3

15.9

20.9

18.0

Profit for the period

4 571

3 129

46%

8 688

6 969

25%

Basic earnings per share, SEK

3.75

2.58

7.14

5.73

Diluted earnings per share, SEK

3.75

2.57

7.12

5.73

Return on capital employed, %

26

26

* Operating profit excluding amortization of intangibles related to acquisitions.

Near-term demand outlook

Atlas Copco expects that the customers' business activity level will remain at the high current level.

Previous near-term demand outlook (published April 27, 2021):

Although the world's economic development remains uncertain, Atlas Copco expects that the customers' business activity level will remain at the high current level.

Quarterly and annual financial data in Excel format can be found at: https://www.atlascopcogroup.com/en/investor-relations/financial-reports-presentations/latest-results

Atlas Copco Group Center

Atlas Copco AB

Visitors address:

Telephone: +46 8 743 8000

A Public Company (publ)

SE-105 23 Stockholm

Sickla Industriväg 19

www.atlascopcogroup.com

Reg. No: 556014-2720

Sweden

Nacka

Reg. Office Nacka

Atlas Copco - Q2 2021

Summary of half-year results

Orders received in the first six months of 2021 increased by 25% to MSEK 62 997 (50 440), corresponding to an organic growth of 34%. Acquisitions contributed with 3% and currency had a negative effect of 12%. Revenues reached MSEK 53 555 (49 200), corresponding to a 17% organic increase.

Operating profit increased by 25% to MSEK 11 311

(9 013). The operating margin was 21.1% (18.3). Adjusted for items affecting comparability, the margin was 21.8%

2 (19)

(19.5). There was a negative impact of changes in exchange rates for the first half-year of MSEK 1 780.

Profit before tax was MSEK 11 215 (8 836), corresponding to a margin of 20.9% (18.0). Profit for the period totaled MSEK 8 688 (6 969). Basic and diluted earnings per share were SEK 7.14 (5.73) and 7.12 (5.73) respectively.

Operating cash flow before acquisitions, divestments and dividends totaled MSEK 8 064 (7 308).

Review of the second quarter

Market development

The customers' activity level remained high and the demand for Atlas Copco's products and services improved considerably compared to the previous year, which was heavily impacted by the COVID-19 pandemic. The order intake increased significantly year on year but also grew compared to the previous quarter to a new record level.

Compared to the previous year, strong order growth was achieved for all business areas in all regions, for all types of equipment and service.

Sequentially, the order growth was primarily driven by increased order volumes for industrial compressors, industrial and scientific vacuum equipment, and the service businesses, while vacuum equipment to the semiconductor industry remained basically unchanged at a high level.

Geographic distribution of orders received

Atlas Copco Group

April - June 2021

Orders Received, %

Change*, %

North America

25

+84

South America

3

+84

Europe

28

+46

Africa/Middle East

4

+36

Asia/Oceania

40

+50

Atlas Copco Group

100

+57

*Change in orders received compared to the previous year in local currency.

Sales bridge

April - June

Orders

MSEK

received

Revenues

2020

22 401

24 102

Structural change, %

+3

+3

Currency, %

-12

-10

Organic*, %

+54

+21

Total, %

+45

+14

2021

32 529

27 534

*Volume, price and mix.

Orders, revenues and operating profit margin

35 000

35%

30 000

30%

25 000

25%

20 000

20%

15 000

15%

10 000

10%

5 000

5%

0

0%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021

Orders received, MSEK

Revenues, MSEK

Operating margin, %

Adjusted operating margin, %

Geographic distribution of orders received and revenues

April - June 2021

Compressor Technique, %

Vacuum Technique, %

Industrial Technique, %

Power Technique, %

Atlas Copco, %

Orders

Revenues

Orders

Revenues

Orders

Revenues

Orders

Revenues

Orders

Revenues

received

received

received

received

received

North America

21

20

25

21

32

31

32

27

25

23

South America

5

5

0

0

3

2

7

8

3

4

Europe

34

35

12

13

35

36

34

35

28

29

Africa/Middle East

6

7

1

1

1

2

7

8

4

4

Asia/Oceania

34

33

62

65

29

29

20

22

40

40

100

100

100

100

100

100

100

100

100

100

Atlas Copco - Q2 2021

Revenues, profits and returns

Revenues increased 14% to MSEK 27 534 (24 102), corresponding to an organic growth of 21%. Currency had a negative effect of 10%, and acquisitions added 3%.

The operating profit increased 52% to MSEK 5 924

(3 889) and includes a change in provision for share-relatedlong-term incentive programs, reported in Common Group Items of MSEK -102(-237). Previous year's items affecting comparability also included restructuring costs of MSEK -140 in the business areas Vacuum Technique and Power Technique, and MSEK -210 related to a provision for settlement of a pension dispute in Edwards Ltd (Vacuum Technique) dating back to before the acquisition of Edwards Ltd in 2014.

Adjusted operating profit increased 35% to MSEK 6 026 (4 476), corresponding to a margin of 21.9% (18.6). Higher revenue volume was the main explanation for the higher margin, while currency had a negative impact.

The net currency effect compared to the previous year was negative MSEK 715, mainly due to the weaker USD.

Net financial items were MSEK -52(-63) whereof interest net at MSEK -64(-71). Other financial items, mainly financial exchange differences, were MSEK +12 (+8). Profit before tax amounted to MSEK 5 872 (3 826), corresponding to a margin of 21.3% (15.9). Corporate income tax amounted to MSEK -1 301 (-697), corresponding to an effective tax rate of 22.2% (18.2). Previous year included one-time adjustments, mainly related to provisions for withholding taxes on dividends from subsidiaries that reduced the effective tax rate by approximately 5 percentage points.

Profit for the period was MSEK 4 571 (3 129). Basic and diluted earnings per share were SEK 3.75 (2.58) and SEK 3.75 (2.57), respectively.

The return on capital employed during the last 12 months was 26% (26). Return on equity was 29% (30). The Group uses a weighted average cost of capital (WACC) of 8.0% as an investment and overall performance benchmark.

Revenues and operating profit - bridge

3 (19)

Operating cash flow and investments Operating cash surplus increased to MSEK 7 268 (5 780). Working capital increased by MSEK 345 (increase of 387). Net investments in rental equipment were MSEK -124 (-118)and net investments in property, plant and equipment were MSEK -396 (-303).

Operating cash flow (important internal KPI, but not an IFRS measurement, and hence defined on page 13) reached MSEK 3 743 (3 483).

Net indebtedness

The Group's net indebtedness amounted to MSEK 13 076 (23 772), of which MSEK 2 564 (3 480) was attributable to post-employment benefits. The Group's interest-bearing liabilities have an average maturity of 4.6 years. The net debt/EBITDA ratio was 0.5 (0.9) and the net debt/equity ratio was 23% (44).

Acquisition and divestment of own shares

During the quarter, 878 652 series A shares, net, were sold for a net value of MSEK 453. These transactions are in accordance with mandates granted by the Annual General Meeting and relate to the Group's long-term incentive programs. See page 17.

Employees

On June 30, 2021, the number of employees was 41 105 (39 909). The number of consultants/external workforce was 3 595 (2 761). For comparable units, the total workforce increased by 1 417 from June 30, 2020.

Volume, price,

Items affecting

Share-based

MSEK

Q2 2021

mix and other

Currency

Acquisitions

comparability

LTI* programs

Q2 2020

Atlas Copco Group

Revenues

27 534

4 992

-2 280

720

-

-

24 102

Operating profit

5 924

2 210

-715

55

350

135

3 889

21.5%

16.1%

*LTI= Long term incentive

Atlas Copco - Q2 2021

4 (19)

Compressor Technique

April-June

January - June

MSEK

2021

2020

2021

2020

Orders received

14 272

11 134

28%

27 304

23 934

14%

Revenues

12 212

11 405

7%

23 734

22 993

3%

EBITA*

2 994

2 526

19%

5 798

5 119

13%

- as a percentage of revenues

24.5

22.1

24.4

22.3

Operating profit

2 916

2 444

19%

5 646

4 964

14%

- as a percentage of revenues

23.9

21.4

23.8

21.6

Return on capital employed, %

91

76

* Operating profit excluding amortization of intangibles related to acquisitions .

  • Record order intake
  • Strong order growth for all types of equipment and service
  • Operating profit margin at 23.9%

Sales bridge

April-June

Orders

MSEK

received

Revenues

2020

11 134

11 405

Structural change, %

+1

+1

Currency, %

-10

-8

Organic*, %

+37

+14

Total, %

+28

+7

2021

14 272

12 212

*Volume, price and mix.

Industrial compressors

The demand for industrial compressors was strong, and the order intake for all compressor sizes increased significantly compared to the previous year. The strong order growth was supported by the generally improved business climate and increased market penetration. Sequentially, the order volumes also increased markedly for both smaller and larger compressors.

All compressor sizes generated strong order growth in all regions compared to the previous year.

Gas and process compressors

Order volumes for gas and process compressors increased significantly compared to the previous year, primarily in North America and Asia, but remained flat sequentially.

Compressor service

The order intake for service increased considerably compared to the previous year and also grew compared to the previous quarter.

Geographically, and compared to the previous year, solid order growth was achieved in all regions.

Innovation

A new oil-free screw blower, the ZS 5 VSD, was introduced. The new product is targeting applications such as wastewater treatment, food and beverage, pneumatic conveying, and pharma. Thanks to the new screw technology, the blower offers 20% more energy efficiency than previous generations. It is a compact plug-and-play solution enabling easy replacement of older equipment for customers.

Acquisitions

The business area made four acquisitions in the quarter: The operating assets of MidState Air Compressor, a US-

based compressor distributor with 15 employees.

The operating assets of Medigas Service & Testing Co. Inc., a US-based supplier of medical gas systems with 6 employees and revenues of MSEK 23.

The operating assets of Compressed Air Systems, Inc. (CAS), a US-based compressor distributor, with 30 employees.

Airflow Compressors & Pneumatics Ltd (Airflow), a UK- based compressor distributor with 16 employees.

Revenues and profitability

Revenues reached MSEK 12 212 (11 405), corresponding to an organic increase of 14%.

The operating profit increased 19% to MSEK 2 916 (2 444), corresponding to a margin of 23.9% (21.4). The higher margin was primarily due to higher revenue volume. Return on capital employed (last 12 months) increased to 91% (76).

Orders, revenues and operating profit margin

15 000

30%

12 500

25%

10 000

20%

7 500

15%

5 000

10%

2 500

5%

0

0%

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021

Orders received, MSEK

Revenues, MSEK

Operating margin, %

Atlas Copco - Q2 2021

5 (19)

Vacuum Technique

April-June

January - June

MSEK

2021

2020

2021

2020

Orders received

9 137

5 723

60%

17 936

12 839

40%

Revenues

7 220

6 535

10%

14 028

12 694

11%

EBITA*

1 912

1 413

35%

3 729

3 043

23%

- as a percentage of revenues

26.5

21.6

26.6

24.0

Operating profit

1 789

1 278

40%

3 484

2 775

26%

- as a percentage of revenues

24.8

19.6

24.8

21.9

Return on capital employed, %

23

20

  • Operating profit excluding amortization of intangibles related to acquisitions .
  • Record order intake, revenues and operating profit
  • Strong order growth for semiconductor and industrial vacuum equipment
  • Continued growth for service

Sales bridge

April-June

Orders

MSEK

received

Revenues

2020

5 723

6 535

Structural change, %

+1

+0

Currency, %

-17

-11

Organic*, %

+76

+21

Total, %

+60

+10

2021

9 137

7 220

*Volume, price and mix.

Semiconductor and flat panel display equipment The order intake to the semiconductor and flat panel industry increased significantly compared to the previous year, primarily due to several key accounts that invested in new production capacity. Sequentially, the order volumes remained at about the same high level as in the first quarter.

Geographically, and compared to the previous year, all regions recorded strong order growth.

Industrial and scientific vacuum equipment Order volumes for industrial and scientific vacuum equipment increased considerably, both compared to the previous year and sequentially, supported by increased demand from most customer segments.

Year on year, the order intake increased in all geographical regions.

Vacuum service

Service orders increased year on year and sequentially, both to industrial vacuum customers and to the semiconductor industry.

Compared to the previous year, the order intake increased in all major regions.

Innovation

The business area introduced a new range of advanced vacuum gauges, the Leybold THERMOVAC, to strengthen its position in vacuum sensing technology. With reliable and robust measurement results, customers will benefit from optimized processes and the increased process throughputs, whatever the application.

Acquisitions

The business area made two acquisitions in the quarter: IBVC Vacuum, S.L.U, a Spanish vacuum distributor and

service provider with 10 employees.

ARPUMA regel- und fördertechnische Geräte GmbH, a vacuum systems and solutions provider based in Germany with 14 employees and revenues of MSEK 41.

Revenues and profitability

Revenues increased 10% to record MSEK 7 220 (6 535), corresponding to an organic increase of 21%.

The operating profit also reached a record of MSEK

1 789 (1 278). Previous year included restructuring costs of MSEK -90 and MSEK -210 related to a provision for settlement of a pension dispute in Edwards Ltd. The operating margin was 24.8% (19.6, adjusted 24.1). Increased revenue volume was the main explanation for the higher operating margin, while currency had a negative impact. Return on capital employed (last 12 months) was 23% (20).

Orders, revenues and operating profit margin

10 000

50%

9 000

45%

8 000

40%

7 000

35%

6 000

30%

5 000

25%

4 000

20%

3 000

15%

2 000

10%

1 000

5%

0

0%

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021

Orders received, MSEK

Revenues, MSEK

Operating margin, %

Adjusted operating margin, %

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Atlas Copco AB published this content on 16 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 July 2021 11:51:09 UTC.


© Publicnow 2021
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