April 29, 2002
Stockholm, Sweden, April 29, 2002 - "As expected, the demand for our products and services was weaker during the first part of 2002," says Giulio Mazzalupi, President and CEO of the Atlas Copco Group. The slowdown in demand affected all business areas, and in particular the investment-related businesses.
Order intake decreased 3% in the quarter, year-on-year, corresponding to a volume decrease of 7%. In the quarter, revenues were MSEK 11,635 (12,101), and profit after financial items totaled MSEK 912, a margin of 7.8%. “The strong operating cash flow continued and improved our financial position further,” Mazzalupi notes.
“A number of efficiency projects have been carried out to adjust our structure to the prevailing lower demand and to keep costs contained. At the same time we continue to invest aggressively in people, in product development, and in market expansion. The broad launch of Milwaukee professional electric tools to the European market is a good example of the latter.”
Following the slack in the non-residential building sector, demand for rental equipment remained weak. “Through improved internal procedures, Rental Service has increased the fleet available for rent, and the fleet has a mix that better meets customers’ demand. Also, the sales organization has been reinforced compared to only a few months ago, and is in better shape for the expected normal seasonal increase.”
The Group has a target of 8% average annual revenue growth over a business cycle, to be achieved through a combination of organic growth and complementary acquisitions. “We have just finalized the acquisitions of compressor manufacturer Liutech, China, and of rock-reinforcement company Ankertechnik, Austria. The acquisition of Krupp, Germany, a manufacturer of hydraulic demolition products, is expected to be finalized during the second quarter.”
Overall, the demand for Atlas Copco’s products and services is foreseen to stay at the present level in the near-term. “The economy is still slow, and we do not expect any major change until the investment cycle improves.”
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Atlas Copco is an international industrial Group with its head office in Stockholm, Sweden. In 2001, the Group had revenues of SEK 51 billion (EUR 5.4 billion), with 98% of revenues outside Sweden, and close to 26,000 employees. The Group produces and markets compressed air equipment and generators, construction and mining equipment, electric and pneumatic tools, and assembly systems and offers related service and equipment rental. The Atlas Copco Group includes famous brands such as Atlas Copco, RSC, Milwaukee Electric Tool, Chicago Pneumatic, and AEG Power Tools. More information can be found on the web site: www.atlascopco-group.com.
To the editor: As previously announced, Gunnar Brock will succeed Giulio Mazzalupi as President and CEO for the Atlas Copco Group on July 1, 2002.