Gunnar Brock comments on Atlas Copco’s Q1 results
April 27, 2009
Stockholm, Sweden, April 27, 2009: The impact of the global economic crisis led to a fall in revenues and profits for Atlas Copco in the first quarter. Actions to reduce capacity and costs were implemented at a high pace throughout the period.
Revenues during the first quarter decreased 3% to MSEK 16 577, supported by positive currency effects. The organic decline was 17%. Order intake dropped 33% organically. The operating profit was MSEK 2 172 (3 248). Excluding redundancy costs of MSEK 230, the profit corresponds to an operating margin of 14.5% (18.9).
“Our profitability is still very good bearing in mind the sharp fall in sales, the high costs for redundancy measures and under-absorption in most of our business units. This is a proof of the resilience of our business model.” says Gunnar Brock, President and CEO of the Atlas Copco Group.
Since October 2008, major efforts have been carried out in order to adapt capacity and costs to the present low demand level. During these six months, 3 800 people have left the company and the workforce is likely to be reduced by around 1 200 more during the coming quarters. This will result in an annual cost saving of more than MSEK 2 000.
“Although sales of equipment are down considerably, we are pleased to have been able to maintain a good price level. Additionally, the aftermarket business is holding up very well,” Gunnar Brock says.
The economic situation still makes the outlook very uncertain. Demand is however expected to remain weak in most industries and regions and stay around the current level.
“In these difficult times it is particularly important to concentrate on the aftermarket business and continue to invest in research and development. Our financial strength allows us to focus on this and will help us come out of the crisis an even stronger company,” Gunnar Brock says.
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Atlas Copco discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act.