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Atlas Copco — Interim / Quarterly Report 2016
Jan 27, 2017
2883_10-k_2017-01-27_7c9e56c5-4ee8-46ac-88c7-66e11118b089.pdf
Interim / Quarterly Report
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Press Release from the Atlas Copco Group
January 27, 2017
Atlas Copco Interim report on Q4 and full-year summary 2016 (unaudited)
Strong end to a solid year
The figures presented in this report refer to continuing operations unless otherwise stated
- Orders increased 19% to MSEK 27 617 (23 206), organic growth of 7%
- Revenues increased 14% to MSEK 28 495 (25 003), organic growth of 2%
- Operating profit increased 18% to MSEK 5 785 (4 882), corresponding to a margin of 20.3% (19.5) Adjusted operating profit, excluding items affecting comparability, was MSEK 5 849 (4 977)
- Profit before tax amounted to MSEK 5 618 (4 704)
- Reported earnings per share were SEK 3.49 (0.89)
- Previous year includes a negative effect of SEK 2.30 from the large Belgian tax provision
- Record strong operating cash flow at MSEK 6 537 (5 355), including discontinued operations
- Proposed dividend of SEK 6.80 (6.30) per share, paid in two installments
- Mats Rahmström was appointed new President and CEO of Atlas Copco AB, effective April 27, 2017
- Proposal for AGM 2018 to split the group in two parts, one industrial and one mining/civil engineering
- Divestment of Road Construction Equipment division
| October - December | January - December | |||||
|---|---|---|---|---|---|---|
| MSEK | 2016 | 2015 | 2016 | 2015 | ||
| Orders received | 27 617 | 23 206 | 19% | 102 812 | 97 002 | 6% |
| Revenues | 28 495 | 25 003 | 14% | 101 356 | 98 973 | 2% |
| Operating profit | 5 785 | 4 882 | 18% | 19 798 | 19 772 | 0% |
| – as a percentage of revenues | 20.3 | 19.5 | 19.5 | 20.0 | ||
| Profit before tax | 5 618 | 4 704 | 19% | 18 805 | 18 875 | 0% |
| – as a percentage of revenues | 19.7 | 18.8 | 18.6 | 19.1 | ||
| Profit for the period from | ||||||
| continuing operations | 4 254 | 1 078 | 295% | 13 785 | 11 777 | 17% |
| Loss for the period from | ||||||
| discontinued operations | -1 793 | -48 | -1 837 | -54 | ||
| Profit for the period | 2 461 | 1 030 | 139% | 11 948 | 11 723 | 2% |
| Basic earnings per share, SEK | 2.01 | 0.85 1) | 9.81 | 9.62 1) | ||
| - of which continuing operations | 3.49 | 0.89 1) | 11.32 | 9.67 1) | ||
| Diluted earnings per share, SEK | 2.01 | 0.85 1) | 9.79 | 9.58 1) | ||
| - of which continuing operations | 3.48 | 0.89 1) | 11.30 | 9.62 1) | ||
| Return on capital employed, % | 26 2) | 27 2) |
1) Effect of SEK -2.30 from the Belgian tax provision 2) Estimated for continuing operations
Near-term demand outlook
The overall demand for the Group is expected to improve somewhat.
Previous near-term demand outlook (published October 20, 2016): The overall demand for the Group is expected to remain at current level.
Atlas Copco Group Center
Sweden Nacka Reg. Office Nacka
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
Atlas Copco Group – Summary of full-year 2016
Orders and revenues
Orders received in 2016 increased 6% to a record MSEK 102 812 (97 002), corresponding to an organic growth of 4%. Revenues increased 2%, to MSEK 101 356 (98 973), unchanged organically.
Sales bridge
| January - December | |||||
|---|---|---|---|---|---|
| Orders | |||||
| MSEK | received | Revenues | |||
| 2015 | 97 002 | 98 973 | |||
| Structural change, % | +3 | +3 | |||
| Currency, % | -1 | -1 | |||
| Price, % | +0 | +0 | |||
| Volume, % | +4 | +0 | |||
| Total, % | +6 | +2 | |||
| 2016 | 102 812 | 101 356 |
Orders received, MSEK Revenues, MSEK Operating margin, %
Results and cash flow
Operating profit reached a record MSEK 19 798 (19 772), corresponding to a margin of 19.5% (20.0). Items affecting comparability amounted to MSEK -264 (-359), whereof the change in provision for share-related long-term incentive programs, reported in Common Group Functions, accounted for MSEK -314 (-144). Adjusted operating margin was 19.8% (20.3). Changes in exchange rates compared with the previous year had a MSEK 250 negative effect on the operating profit. Profit before tax amounted to MSEK 18 805 (18 875), corresponding to a margin of 18.6 %
(19.1). Income tax expense amounted to MSEK 5 020 (7 098). Previous year includes a provision of MSEK 2 802 following the European Commission's decision on Belgium's tax rulings.
Profit for the period was MSEK 13 785 (11 777). Basic and diluted earnings per share were SEK 11.32 (9.67) and SEK 11.30 (9.62), respectively.
Operating cash flow (including discontinued operations) before acquisitions, divestments and dividends reached MSEK 18 109 (16 955).
Dividend
The Board of Directors proposes to the Annual General Meeting 2017 that an ordinary dividend of SEK 6.80 (6.30) per share be paid for the 2016 fiscal year. Excluding shares currently held by the company, this corresponds to a total of MSEK 8 258 (7 665). The dividend is proposed to be paid in two equal installments, the first with record date April 28, 2017 and the second with record date October 30, 2017.
Discontinued operations
On January 19, Atlas Copco announced the agreement to sell its Road Construction Equipment division to the French industrial and construction company Fayat Group. The deal includes sales and service operations in 37 countries and production units in five countries; Sweden, Germany, Brazil, India and China. The business has 1 265 employees and revenues of MSEK 2 912 (MEUR 309) in 2016.
The divestment is expected to be completed during Q2 2017, and has resulted in an impairment of intangible assets of MSEK 1 754, net after tax, in Q4 2016. For further information, please see page 15.
Board of Directors proposes to split the Group
Atlas Copco has initiated a work in order to propose to the Annual General Meeting 2018 to decide on a split of the Group into two listed companies; one focused on industrial customers and another focused on mining/civil engineering customers. For further information, please visit: http://www.atlascopcogroup.com/investor-relations
Personnel stock option program
The Board of Directors will propose to the Annual General Meeting a similar performance-based long-term incentive program as in previous years. For Group Management, participation in the plan will require own investment in Atlas Copco shares. It is proposed that the plan is covered as before through the repurchase of the company's own shares. The details of the proposal will be communicated in connection with the Notice of the Annual General Meeting.
Review of the fourth quarter
Market development
The order volumes for equipment increased significantly compared to the previous year, and growth was achieved in all major equipment segments.
The service business also recorded growth, both compared to the previous year and sequentially. Order volumes for mining consumables remained fairly stable compared to the previous year.
Geographically, a positive year-on-year order development was achieved in all regions.
Geographic distribution of orders received
| Atlas Copco Group | |||
|---|---|---|---|
| %, October - December 2016 | Orders Received | Change* | |
| North America | 24 | +8 | |
| South America | 7 | +1 | |
| Europe | 30 | +14 | |
| Africa/Middle East | 9 | +5 | |
| Asia | 27 | +29 | |
| Australia | 3 | +16 | |
| Atlas Copco Group | 100 | +14 |
*Change in orders received compared to the previous year in local currency, %.
Sales bridge
| October - December | |||||
|---|---|---|---|---|---|
| Orders | |||||
| MSEK | received | Revenues | |||
| 2015 | 23 206 | 25 003 | |||
| Structural change, % | +7 | +7 | |||
| Currency, % | +5 | +5 | |||
| Price, % | +0 | +0 | |||
| Volume, % | +7 | +2 | |||
| Total, % | +19 | +14 | |||
| 2016 | 27 617 | 28 495 |
Geographic distribution of orders received
| Compressor | Industrial | Mining and Rock | Construction | Atlas Copco | |
|---|---|---|---|---|---|
| %, October - December 2016 | Technique | Technique | Excavation Tech. | Technique | Group |
| North America | 22 | 33 | 24 | 24 | 24 |
| South America | 4 | 3 | 15 | 6 | 7 |
| Europe | 29 | 39 | 23 | 40 | 30 |
| Africa/Middle East | 8 | 2 | 14 | 10 | 9 |
| Asia/Australia | 37 | 23 | 24 | 20 | 30 |
| 100 | 100 | 100 | 100 | 100 |
5% 10% 15% 20% 25% 30% 5 000 10 000 15 000 20 000 25 000 30 000
Orders, revenues and operating profit margin
2015 Orders received, MSEK Revenues, MSEK Operating margin, %
2015
2016
2016
2016
2016
2015
2014
2014
2014
2014
2015
Revenues, profits and returns
Revenues increased 14% to MSEK 28 495 (25 003), corresponding to a 2% organic increase. The currency translation effect was +5%.
The operating profit increased 18% to MSEK 5 785 (4 882) and includes items affecting comparability of MSEK -64 (-95). The MSEK -64 consists of a net MSEK +50 in Compressor Technique (a release of pension provision related to the acquisition of Edwards and restructuring costs), and MSEK -114 (-40) from a change in provision for share-related long-term incentive programs, reported in Common Group Functions.
The adjusted operating profit of MSEK 5 849 (4 977), corresponds to a margin of 20.5% (19.9). The net currency effect compared to the previous year was positive at MSEK 500, mainly due to a stronger USD.
Net financial items were MSEK -167 (-178). Interest net was MSEK -200 (-190). Other financial items were MSEK 33 (+12).
Profit before tax amounted to MSEK 5 618 (4 704), corresponding to a margin of 19.7% (18.8).
Income tax expense amounted to MSEK 1 364 (3 626). Previous year includes a provision of MSEK 2 802 following the European Commission's decision on Belgium's tax rulings.
Profit for the period was MSEK 4 254 (1 078). Basic and diluted earnings per share were SEK 3.49 (0.89) and SEK 3.48 (0.89), respectively. Adjusted for the tax provision, profit for the period and basic earnings per share in 2015 were MSEK 3 880 and SEK 3.19, respectively.
The return on capital employed during the last 12 months was 26% (27). Return on equity was 24% (24). The Group uses a weighted average cost of capital (WACC) of 8.0% as an investment and overall performance benchmark.
Operating cash flow and investments (including discontinued operations)
Operating cash surplus reached MSEK 7 071 (5 914). Cash flows from financial items were MSEK -450 (-855). The main explanation, this quarter as well as previous year, is negative cash flows from currency hedges of loans of MSEK -526 (-621) where the offsetting cash flow from the loans occurs in the future. Working capital decreased by MSEK 1 155 (1 381), primarily due to a reduction of inventory. Net investments in rental equipment were MSEK 171 (221). Net investments in property, plant and equipment were MSEK 349 (424).
In total, operating cash flow, adjusted for currency hedges of loans, reached a record MSEK 6 537 (5 355). The contribution from discontinued operations was insignificant.
Net indebtedness
The Group's net indebtedness, adjusted for the fair value of interest rate swaps, amounted to MSEK 14 829 (14 805), of which MSEK 3 907 (2 225) was attributable to postemployment benefits. The Group has an average maturity of 5.7 years on interest-bearing liabilities. The net debt/EBITDA ratio was 0.6 (0.6). The net debt/equity ratio was 28% (32).
Acquisition and divestment of own shares
During the quarter, 2 833 985 A shares, net, were acquired and 61 220 B shares, net, were divested for a total net value of MSEK 781. These transactions are in accordance with mandates granted by the Annual General Meeting and relate to the Group's long-term incentive programs.
Employees
On December 31, 2016, the number of employees was 44 695 (41 852). The number of consultants/external workforce was 3 300 (2 804). For comparable units, the total workforce increased by 228 from December 31, 2015.
Volume, price, One-time items Share based MSEK Q4 2016 mix and other Currency Acquisitions LTI programs Q4 2015 Atlas Copco Group Revenues 28 495 572 1 135 1 785 - 25 003 Operating profit 5 785 284 500 193 -74 4 882 % 20.3% 49.7% 19.5%
Revenues and operating profit – bridge
Compressor Technique
| October - December | January - December | |||||
|---|---|---|---|---|---|---|
| MSEK | 2016 | 2015 | 2016 | 2015 | ||
| Orders received | 13 984 | 11 201 | 25% | 50 536 | 45 458 | 11% |
| Revenues | 14 438 | 11 851 | 22% | 49 991 | 46 237 | 8% |
| Operating profit | 3 274 | 2 620 | 25% | 11 175 | 10 324 | 8% |
| – as a percentage of revenues | 22.7 | 22.1 | 22.4 | 22.3 | ||
| Return on capital employed, % | 40 | 38 |
Record orders, revenues and profit
- Strong organic growth in vacuum
- Highest growth in Europe and Asia
Sales bridge
| October - December | ||||
|---|---|---|---|---|
| Orders | ||||
| MSEK | received | Revenues | ||
| 2015 | 11 201 | 11 851 | ||
| Structural change, % | +14 | +14 | ||
| Currency, % | +5 | +5 | ||
| Price, % | +0 | +0 | ||
| Volume, % | +6 | +3 | ||
| Total, % | +25 | +22 | ||
| 2016 | 13 984 | 14 438 |
Industrial compressors
The order volumes for industrial compressors increased compared to the previous year, with similar growth rates for both small and large compressors. Sequentially, the overall order intake increased somewhat.
Geographically, and compared to the previous year, the order intake increased in all regions, except from North America were the volumes were somewhat down. The strongest growth was achieved in Europe and in Asia.
Compressor service
The compressor service business continued to achieve growth in all regions, except for a weak Brazil.
Gas and process compressors
The order intake increased compared to the previous year from a low level, driven by important orders in the Middle East. Orders grew also sequentially.
Vacuum solutions
The order volumes for vacuum solutions were significantly higher compared to the previous year as well as sequentially, with Asia being the main contributor to the growth. A major contribution to growth also came from the recent acquisitions of Leybold and CSK.
Innovation
A new range of refrigerant air dryers was introduced in the quarter. Several new technologies integrated into the new dryers provide the opportunity for 50% energy consumption savings.
Acquisitions
In December, an agreement to acquire the business of Kompressoren Druckluft- und Industrietechnik GmbH, a German distributor and service provider was signed. About 10 people from the company will join Atlas Copco. The acquisition was completed in January 2017.
The US-based distributor and service provider Air Power of Nebraska, with 12 employees, was acquired in December.
Revenues and profitability
Revenues increased 22% to MSEK 14 438 (11 851), corresponding to an organic increase of 3%.
Operating profit increased 25% to MSEK 3 274 (2 620). Adjusted for restructuring costs, MSEK -330 (-55), related to recent acquisitions, and a release of a pension provision of MSEK +380, related to the acquisition of Edwards, the adjusted operating margin was 22.3% (22.6). The margin was supported by currency and efficiency improvements but diluted by acquisitions. Return on capital employed (last 12 months) was 40% (38).
Orders, revenues and operating profit margin
Industrial Technique
| October - December | January - December | |||||
|---|---|---|---|---|---|---|
| MSEK | 2016 | 2015 | 2016 | 2015 | ||
| Orders received | 3 897 | 3 574 | 9% | 15 112 | 14 612 | 3% |
| Revenues | 4 137 | 3 819 | 8% | 15 017 | 14 578 | 3% |
| Operating profit | 997 | 854 | 17% | 3 430 | 3 355 | 2% |
| – as a percentage of revenues | 24.1 | 22.4 | 22.8 | 23.0 | ||
| Return on capital employed, % | 34 | 31 |
Record orders, revenues and profit
Order growth in all customer segments and all major regions
Sales bridge
| October - December | |||||
|---|---|---|---|---|---|
| Orders | |||||
| MSEK | received | Revenues | |||
| 2015 | 3 574 | 3 819 | |||
| Structural change, % | +1 | +1 | |||
| Currency, % | +4 | +4 | |||
| Price, % | +0 | +0 | |||
| Volume, % | +4 | +3 | |||
| Total, % | +9 | +8 | |||
| 2016 | 3 897 | 4 137 |
Motor vehicle industry
The demand for advanced industrial tools and assembly solutions from the motor vehicle industry continued to be strong, and orders grew compared to the previous year.
Geographically, the order volumes increased in Asia and Europe while order intake declined slightly in North America.
General industry
The order volumes for industrial power tools from the general manufacturing industries increased compared to the previous year and sequentially. Orders for application segments such as general assembly, electronics industries, off-road and energy increased.
Compared to the previous year, the orders received increased in North America and Asia, while Europe was flat.
Service
The service business, including maintenance and calibration services, continued to grow. Geographically, all regions achieved growth compared to the previous year.
Innovation
A new range of high torque electrical nutrunners was launched in the quarter. The products allow high accessibility and full traceability tightening. Primary applications for the products can be found in wind energy operations, and aircraft and off-road assembly.
Acquisition
The self-pierce riveting business of Phillip-Tech in China, with about 45 employees was acquired in November. The business sells products and solutions designed by Atlas Copco-owned Henrob.
Revenues and profitability
Revenues increased to a record of MSEK 4 137 (3 819), corresponding to an organic growth of 3%.
Operating profit increased 17% to MSEK 997 (854), corresponding to an operating margin of 24.1% (22.4). The margin was supported by increased volume and currency. Return on capital employed (last 12 months) was 34% (31).
Orders, revenues and operating profit margin
Mining and Rock Excavation Technique
| October - December | January - December | |||||
|---|---|---|---|---|---|---|
| MSEK | 2016 | 2015 | 2016 | 2015 | ||
| Orders received | 6 799 | 5 891 | 15% | 25 565 | 25 587 | 0% |
| Revenues | 6 971 | 6 558 | 6% | 25 043 | 26 665 | -6% |
| Operating profit | 1 395 | 1 163 | 20% | 4 465 | 4 993 | -11% |
| – as a percentage of revenues | 20.0 | 17.7 | 17.8 | 18.7 | ||
| Return on capital employed, % | 32 | 34 |
Strong order growth for underground equipment and service
Operating margin back on track
Sales bridge
| October - December | ||||
|---|---|---|---|---|
| Orders | ||||
| received | Revenues | |||
| 5 891 | 6 558 | |||
| +0 | +0 | |||
| +6 | +5 | |||
| +0 | +0 | |||
| +9 | +1 | |||
| +15 | +6 | |||
| 6 799 | 6 971 | |||
Mining equipment
The order volumes for mining equipment increased significantly compared to the previous year and improved slightly sequentially.
Geographically, and compared to the previous year, the order intake increased in all regions except Africa/Middle East. The highest growth was achieved in Australia and North America.
Civil engineering equipment
The orders received for equipment for infrastructure projects increased compared to the previous year.
Service and consumables
The service and spare parts business grew compared to the previous year and sequentially. The main contributor to the order growth was North America but most other regions also increased.
Consumables revenues improved somewhat sequentially and compared to the previous year. The development was good in the Americas and Australia, while Asia and Africa/Middle East decreased.
Innovation
A new surface exploration drilling rig was introduced. The drilling rig offers a range of new safety features to meet the most stringent safety standards. With a capability of long cores, the machine can also provide increased productivity.
Revenues and profitability
Revenues increased 6% to MSEK 6 971 (6 558), corresponding to an organic growth of 1%.
Operating profit increased 20% to MSEK 1 395 (1 163), corresponding to a margin of 20.0% (17.7). The margin was supported by currency and better absorption of costs in the factories. Return on capital employed (last 12 months) was 32% (34).
Orders, revenues and operating profit margin
Construction Technique
| October - December | January - December | |||||
|---|---|---|---|---|---|---|
| MSEK | 2016 | 2015 | 2016 | 2015 | ||
| Orders received | 3 066 | 2 654 | 16% | 12 110 | 11 927 | 2% |
| Revenues | 3 073 | 2 911 | 6% | 11 794 | 12 112 | -3% |
| Operating profit | 428 | 452 | -5% | 1 769 | 1 883 | -6% |
| – as a percentage of revenues | 13.9 | 15.5 | 15.0 | 15.5 | ||
| Return on capital employed, % | 17* | 18* |
The figures presented refer to continuing operations, unless otherwise stated.
- Increased equipment orders
- Operating margin affected by sales mix
- Divestment of Road Construction Equipment division
Sales bridge
| October - December | |||||
|---|---|---|---|---|---|
| Orders | |||||
| MSEK | received | Revenues | |||
| 2015 | 2 654 | 2 911 | |||
| Structural change, % | +2 | +3 | |||
| Currency, % | +5 | +4 | |||
| Price, % | +1 | +1 | |||
| Volume, % | +8 | -2 | |||
| Total, % | +16 | +6 | |||
| 2016 | 3 066 | 3 073 |
Construction equipment
The order volumes for construction equipment increased compared to the previous year and stayed more or less unchanged sequentially. Year-on-year growth was primarily due to good orders for portable compressors.
Overall, and compared to the previous year, orders received increased in Europe, Asia and North America, but decreased in Africa/Middle East and South America.
Specialty rental
The order intake for the specialty rental business decreased somewhat compared to the previous year, mainly due to lower demand from the oil and gas sector.
Europe was strong while North America and Africa/Middle East decreased.
Service
The orders received for the service business decreased somewhat compared to the previous year and sequentially.
Geographically, the best performance was in Asia, while North and South America decreased.
Innovation
During the quarter Atlas Copco introduced a petrol breaker with electronic fuel injection, a technology that offers significant benefits for users in construction work: easy to start, better handling through compact measurement and lower in weight combined with 10% less fuel consumption versus comparable models.
Discontinued operations
On January 19 Atlas Copco announced the agreement to sell its Road Construction Equipment division to the French industrial and construction company Fayat Group. The deal includes sales and service operations in 37 countries and production units in five countries; Sweden, Germany, Brazil, India and China. The business has 1 265 employees and revenues of MSEK 2 912 (MEUR 309) in 2016. For further information, please see page 15.
*Estimated for continuing operations
Revenues and profitability
Revenues reached MSEK 3 073 (2 911), corresponding to an organic decrease of 1%.
Operating profit was MSEK 428 (452), corresponding to a margin of 13.9% (15.5). The margin was negatively affected by sales mix as service and rental volumes decreased. Return on capital employed (last 12 months and estimated for continuing operations) was 17% (18).
Orders received, MSEK Revenues, MSEK Operating margin, %
Accounting principles
The consolidated accounts of the Atlas Copco Group are prepared in accordance with International Financial Reporting Standards (IFRS). The description of the accounting principles and definitions are found in the annual report 2015. The interim report is prepared in accordance with IAS 34 Interim Financial Reporting. Non-IFRS measures are also presented in the report since they are considered to be important supplemental measures of the company´s performance. For further information on how these measures have been calculated, please visit: http://www.atlascopcogroup.com/investor-relations
Risks and factors of uncertainty
Market risks
The demand for Atlas Copco's equipment and services is affected by changes in the customers' investment and production levels. A widespread financial crisis and economic downturn affects the Group negatively both in terms of revenues and profitability. However, the Group's sales are well diversified with customers in many industries and countries around the world, which limits the risk.
Financial risks
Atlas Copco is subject to currency risks, interest rate risks, tax risks, and other financial risks. In line with the overall goals with respect to growth, return on capital, and protecting creditors, Atlas Copco has adopted a policy to control the financial risks to which the Group is exposed. A financial risk management committee meets regularly to manage and follow up financial risks, in line with the policy.
Production risks
Many components are sourced from sub-suppliers. The availability is dependent on the sub-suppliers and if they have interruptions or lack capacity, this may adversely affect production. To minimize these risks, Atlas Copco has established a global network of sub-suppliers, which means that in most cases there are more than one sub-supplier that can supply a certain component.
Atlas Copco is also directly and indirectly exposed to raw material prices. Cost increases for raw materials and components often coincide with strong end-customer demand and can partly be offset by increased sales to mining customers and partly compensated for by increased market prices.
Acquisitions
Atlas Copco has the ambition to grow all its business areas, primarily through organic growth, complemented by selected acquisitions. The integration of acquired businesses is a difficult process and it is not certain that every integration will be successful. Therefore, costs related to acquisitions can be higher and/or synergies can take longer to materialize than anticipated.
For further information, see the annual report 2015.
Forward-looking statements
Some statements in this report are forward-looking, and the actual outcome could be materially different. In addition to the factors explicitly discussed, other factors could have a material effect on the actual outcome. Such factors include, but are not limited to, general business conditions, fluctuations in exchange rates and interest rates, political developments, the impact of competing products and their pricing, product development, commercialization and technological difficulties, interruptions in supply, and major customer credit losses.
Atlas Copco AB
Atlas Copco AB and its subsidiaries are sometimes referred to as the Atlas Copco Group, the Group or Atlas Copco. Atlas Copco AB is also sometimes referred to as Atlas Copco. Any mentioning of the Board of Directors or the Directors refers to the Board of Directors of Atlas Copco AB.
Consolidated income statement
| 3 months ended | 12 months ended | |||
|---|---|---|---|---|
| Dec. 31 | Dec. 31 | Dec. 31 | Dec. 31 | |
| MSEK | 2016 | 2015 | 2016 | 2015 |
| Continuing operations | ||||
| Revenues | 28 495 | 25 003 | 101 356 | 98 973 |
| Cost of sales | -17 381 | -15 020 | -61 237 | -59 348 |
| Gross profit | 11 114 | 9 983 | 40 119 | 39 625 |
| Marketing expenses | -3 088 | -2 704 | -11 044 | -10 669 |
| Administrative expenses | -1 944 | -1 595 | -6 824 | -6 232 |
| Research and development costs | -850 | -815 | -3 096 | -3 151 |
| Other operating income and expenses | 553 | 13 | 643 | 199 |
| Operating profit | 5 785 | 4 882 | 19 798 | 19 772 |
| - as a percentage of revenues | 20.3 | 19.5 | 19.5 | 20.0 |
| Net financial items | -167 | -178 | -993 | -897 |
| Profit before tax | 5 618 | 4 704 | 18 805 | 18 875 |
| - as a percentage of revenues | 19.7 | 18.8 | 18.6 | 19.1 |
| Income tax expense | -1 364 | -3 626 | -5 020 | -7 098 |
| Profit for the period from continuing operations | 4 254 | 1 078 | 13 785 | 11 777 |
| Discontinued operations | ||||
| Loss for the period from discontinued operation | -1 793 | -48 | -1 837 | -54 |
| Profit for the period | 2 461 | 1 030 | 11 948 | 11 723 |
| Profit attributable to | ||||
| - owners of the parent | 2 450 | 1 030 | 11 931 | 11 717 |
| - non-controlling interests | 11 | 0 | 17 | 6 |
| Basic earnings per share, SEK | 2.01 | 0.85 | 9.81 | 9.62 |
| - of which continuing operations | 3.49 | 0.89 | 11.32 | 9.67 |
| Diluted earnings per share, SEK | 2.01 | 0.85 | 9.79 | 9.58 |
| - of which continuing operations | 3.48 | 0.89 | 11.30 | 9,62 |
| Basic weighted average number | ||||
| of shares outstanding, millions | 1 216.1 | 1 216.9 | 1 216.1 | 1 217.4 |
| Diluted weighted average number | ||||
| of shares outstanding, millions | 1 217.2 | 1 217.3 | 1 216.8 | 1 218.7 |
| Key ratios | ||||
| Equity per share, period end, SEK | 44 1) | 38 1) | ||
| Return on capital employed, 12 month values, % | 26 2) | 27 2) | ||
| Return on equity, 12 month values, % | 24 1) | 24 1) | ||
| Debt/equity ratio, period end, % | 28 1) | 32 1) | ||
| Equity/assets ratio, period end, % | 46 1) | 45 1) | ||
| Number of employees, period end | 44 695 | 41 852 |
1) Including discontinued operations 2) Estimated for continuing operations
Consolidated statement of comprehensive income, including discontinued operations
| 3 months ended | 12 months ended | |||
|---|---|---|---|---|
| Dec. 31 | Dec. 31 | Dec. 31 | Dec. 31 | |
| MSEK | 2016 | 2015 | 2016 | 2015 |
| Profit for the period | 2 461 | 1 030 | 11 948 | 11 723 |
| Other comprehensive income | ||||
| Items that will not be reclassified to profit or loss | ||||
| Remeasurements of defined benefit pension plans | 590 | 544 | -113 | 662 |
| Income tax relating to items that will not be reclassified | -165 | -104 | -3 | -124 |
| 425 | 440 | -116 | 538 | |
| Items that may be reclassified subsequently to profit or loss | ||||
| Translation differences on foreign operations | 554 | -1 218 | 3 201 | -1 370 |
| Hedge of net investments in foreign operations | 119 | 485 | -762 | 681 |
| Cash flow hedges | -3 | 6 | -25 | 68 |
| Income tax relating to items that may be reclassified | -73 | -301 | 487 | -457 |
| 597 | -1 028 | 2 901 | -1 078 | |
| Other comprehensive income for the period, net of tax | 1 022 | -588 | 2 785 | -540 |
| Total comprehensive income for the period | 3 483 | 442 | 14 733 | 11 183 |
| Total comprehensive income attributable to | ||||
| - owners of the parent | 3 470 | 446 | 14 711 | 11 173 |
| - non-controlling interests | 13 | -4 | 22 | 10 |
Consolidated balance sheet
| MSEK | Dec. 31, 2016 | Dec. 31, 2015 |
|---|---|---|
| Intangible assets | 37 828 | 33 520 |
| Rental equipment | 3 095 | 3 076 |
| Other property, plant and equipment | 9 793 | 8 947 |
| Financial assets and other receivables | 2 286 | 2 305 |
| Deferred tax assets | 1 889 | 1 823 |
| Total non-current assets | 54 891 | 49 671 |
| Inventories | 16 912 | 16 906 |
| Trade and other receivables | 27 685 | 25 985 |
| Other financial assets | 2 455 | 1 576 |
| Cash and cash equivalents | 11 458 | 8 861 |
| Assets classified as held for sale | 2 491 | 11 |
| Total current assets | 61 001 | 53 339 |
| TOTAL ASSETS | 115 892 | 103 010 |
| Equity attributable to owners of the parent | 53 105 | 46 591 |
| Non-controlling interests | 72 | 159 |
| TOTAL EQUITY | 53 177 | 46 750 |
| Borrowings | 23 148 | 21 888 |
| Post-employment benefits | 3 907 | 2 225 |
| Other liabilities and provisions | 1 589 | 1 595 |
| Deferred tax liabilities | 1 028 | 1 497 |
| Total non-current liabilities | 29 672 | 27 205 |
| Borrowings | 1 574 | 1 101 |
| Trade payables and other liabilities | 28 519 | 26 481 |
| Provisions | 2 139 | 1 473 |
| Liabilities directly associated with assets classified | 811 | - |
| as held for sale | ||
| Total current liabilities | 33 043 | 29 055 |
| TOTAL EQUITY AND LIABILITIES | 115 892 | 103 010 |
Fair value of derivatives and borrowings
The carrying value and fair value of the Group's outstanding derivatives and borrowings are shown in the tables below. The fair values of bonds are based on level 1 and the fair values of derivatives and other loans are based on level 2 in the fair value hierarchy. Compared to 2015, no transfers have been made between different levels in the fair value hierarchy for derivatives and borrowings and no significant changes have been made to valuation techniques, inputs or assumptions.
| Outstanding derivative instruments recorded to fair value | ||||||||
|---|---|---|---|---|---|---|---|---|
| MSEK | Dec. 31, 2016 | Dec. 31, 2015 | ||||||
| Non-current assets and liabilities | ||||||||
| Assets | 0 | 102 | ||||||
| Liabilities | 126 | 134 | ||||||
| Current assets and liabilities | ||||||||
| Assets | 128 | 324 | ||||||
| Liabilities | 730 | 190 |
Carrying value and fair value of borrowings
| MSEK | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2015 |
|---|---|---|---|---|
| Carrying value | Fair value | Carrying value | Fair value | |
| Bonds | 15 611 | 16 385 | 17 199 | 18 408 |
| Other loans | 9 111 | 9 364 | 5 790 | 5 920 |
| 24 722 | 25 749 | 22 989 | 24 328 |
Consolidated statement of changes in equity
| Equity attributable to | |||
|---|---|---|---|
| owners of the | non-controlling | ||
| MSEK | parent | interests | Total equity |
| Opening balance, January 1, 2016 | 46 591 | 159 | 46 750 |
| Changes in equity for the period | |||
| Total comprehensive income for the period | 14 711 | 22 | 14 733 |
| Dividends | -7 665 | -22 | -7 687 |
| Change of non-controlling interests | -68 | -87 | -155 |
| Acquisition and divestment of own shares | -470 | -470 | |
| Share-based payments, equity settled | 6 | 6 | |
| Closing balance, December 31, 2016 | 53 105 | 72 | 53 177 |
| Equity attributable to | |||
|---|---|---|---|
| owners of the | non-controlling | ||
| MSEK | parent | interests | Total equity |
| Opening balance, January 1, 2015 | 50 575 | 178 | 50 753 |
| Changes in equity for the period | |||
| Total comprehensive income for the period | 11 173 | 10 | 11 183 |
| Dividends | -7 305 | -29 | -7 334 |
| Redemption of shares | -7 305 | - | -7 305 |
| Acquisition and divestment of own shares | -453 | - | -453 |
| Share-based payments, equity settled | -94 | - | -94 |
| Closing balance, December 31, 2015 | 46 591 | 159 | 46 750 |
Consolidated statement of cash flows, including discontinued operations
| MSEK 2016 2015 2016 2015 Cash flows from operating activities Operating profit, continuing operations 5 785 4 882 19 798 19 772 Operating loss, discontinued operations -40 -58 -85 -44 Depreciation, amortization and impairment (see below) 1 204 1 105 4 392 4 347 Capital gain/loss and other non-cash items 310 -15 495 -528 Operating cash surplus 7 259 5 914 24 600 23 547 Net financial items received/paid -414 -855 -771 -2 037 Taxes paid -863 -801 -7 132 1) -4 238 Pension funding and payment of pension to employees -449 12 -543 78 Change in working capital 1 155 1 381 2 875 1 599 Investments in rental equipment -306 -310 -1 207 -1 263 Sale of rental equipment 135 89 459 426 Net cash from operating activities 6 517 5 430 18 281 18 112 Cash flows from investing activities Investments in property, plant and equipment -411 -486 -1 369 -1 705 Sale of property, plant and equipment 62 62 144 600 Investments in intangible assets -210 -354 -1 027 -1 168 Sale of intangible assets 9 1 15 17 Acquisition of subsidiaries and associated companies -60 -80 -4 716 -1 852 2) Sale of subsidiaries - - 15 58 Other investments, net 44 81 -195 197 Net cash from investing activities -566 -761 -7 148 -3 853 Cash flows from financing activities Dividends paid -3 835 -3 654 -7 665 -7 305 Dividends paid to non-controlling interest -9 1 -22 -29 Acquisition of non-controlling interest -1 - -68 - Redemption of shares - - - -7 305 Repurchase and sales of own shares -781 -397 -470 -453 Change in interest-bearing liabilities -798 43 -766 595 Net cash from financing activities -5 424 -4 007 -8 991 -14 497 Net cash flow for the period 527 662 2 142 -238 Cash and cash equivalents, beginning of the period 10 785 8 279 8 861 9 404 Exchange differences in cash and cash equivalents 180 -80 489 -305 Cash and cash equivalents, end of the period 11 492 8 861 11 492 8 861 Depreciation, amortization and impairment Rental equipment 256 228 988 1 006 Other property, plant and equipment 450 448 1 659 1 694 Intangible assets 498 429 1 745 1 647 |
October - December January - December |
||||||
|---|---|---|---|---|---|---|---|
| Total | 1 204 | 1 105 | 4 392 | 4 347 |
1) Includes tax payment in Belgium of MSEK 2 250. 2) Includes deferred consideration for acquisitions made in 2014.
Calculation of operating cash flow
| October - December | January - December | |||
|---|---|---|---|---|
| MSEK | 2016 | 2015 | 2016 | 2015 |
| Net cash flow for the period | 527 | 662 | 2 142 | -238 |
| Add back: | ||||
| Change in interest-bearing liabilities | 798 | -43 | 766 | -595 |
| Repurchase and sales of own shares | 781 | 397 | 470 | 453 |
| Dividends paid | 3 835 | 3 654 | 7 665 | 7 305 |
| Dividends paid to non-controlling interest | 9 | -1 | 22 | 29 |
| Acquisition of non-controlling interest | 1 | - | 68 | - |
| Redemption of shares | - | - | - | 7 305 |
| Acquisitions and divestments | 60 | 65 | 4 716 | 1 794 |
| Currency hedges of loans | 526 | 621 | 10 | 1 322 |
| Divestment of property | - | - | - | -420 |
| Tax payment related to Belgian tax rulings | - | 2 250 | ||
| Operating cash flow | 6 537 | 5 355 | 18 109 | 16 955 |
Discontinued operations
Road Construction Equipment division within the Construction Technique business area
On January 19, 2017 Atlas Copco announced the agreement to sell its Road Construction Equipment division to the French industrial and construction company Fayat Group.
The reason for the divestment is that the division does not have the economies of scale to become number one or two in this market segment. Atlas Copco believes that Fayat Group will be a good owner that can develop the business further.
The divestment is expected to be completed during Q2 2017, and has resulted in an impairment of intangible assets of MSEK 1 754, net after tax, in Q4 2016.
As from the fourth quarter 2016 and until closure of the divestment, the Road Construction Equipment division will be reported separately as discontinued operations in the Atlas Copco Group's financial statements, with a retrospective restatement of previous periods.
The following tables present the income statement for the financial year and the condensed balance sheet at December 31, 2016 for Road Construction Equipment. The cash flow statement for the financial year will be reported later, but the indicative operating cash flow for 2016, after investing activities, is close to zero.
Assets and Liabilities held for sale
| Dec. 31 | |
|---|---|
| MSEK | 2016 |
| Total non-current assets | 450 |
| Total current assets | 2 037 |
| Total Assets | 2 487 |
| Total non-current liabilities | 42 |
| Total current liabilities | 769 |
| Total Liabilities | 811 |
Income Statement
| 3 months ended | 12 months ended | ||||
|---|---|---|---|---|---|
| Dec. 31 | Dec. 31 | Dec. 31 | Dec. 31 | ||
| MSEK | 2016 | 2015 | 2016 | 2015 | |
| Discontinued operations | |||||
| Revenues | 670 | 579 | 2 912 | 3 188 | |
| Cost of sales | -577 | -494 | -2 415 | -2 683 | |
| Gross profit | 93 | 85 | 497 | 505 | |
| Marketing expenses | -76 | -81 | -310 | -329 | |
| Administrative expenses | -33 | -31 | -125 | -122 | |
| Research and development costs | -38 | -35 | -144 | -136 | |
| Other operating income and expenses | 14 | 4 | -3 | 38 | |
| Operating loss | -40 | -58 | -85 | -44 | |
| - as a percentage of revenues | -6.0 | -10.0 | -2.9 | -1.4 | |
| Net financial items | -3 | -2 | -12 | -8 | |
| Loss before tax | -43 | -60 | -97 | -52 | |
| - as a percentage of revenues | -6.4 | -10.4 | -3.3 | -1.6 | |
| Income tax expense | 4 | 12 | 14 | -2 | |
| Loss on remeasurement to fair value less cost to sell | |||||
| Impairment of intangible assets | -2 094 | -2 094 | |||
| Income tax on remeasurement | 340 | 340 | |||
| Impairment of intangible assets, net of tax | -1 754 | -1 754 | |||
| Loss for the period from discontinued operations | -1 793 | -48 | -1 837 | -54 | |
| Basic earnings per share, SEK | -1.48 | -0.04 | -1.51 | -0.05 |
Revenues by business area
| 2014 | 2015 | 2016 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| MSEK (by quarter) | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 |
| Compressor Technique | 9 409 | 10 353 | 10 718 | 11 685 | 11 049 | 11 462 | 11 875 | 11 851 | 10 692 | 11 929 | 12 932 | 14 438 |
| - of which external | 9 361 | 10 307 | 10 682 | 11 653 | 10 951 | 11 378 | 11 806 | 11 793 | 10 611 | 11 847 | 12 870 | 14 358 |
| - of which internal | 48 | 46 | 36 | 32 | 98 | 84 | 69 | 58 | 81 | 82 | 62 | 80 |
| Industrial Technique | 2 505 | 2 650 | 2 827 | 3 468 | 3 394 | 3 697 | 3 668 | 3 819 | 3 417 | 3 622 | 3 841 | 4 137 |
| - of which external | 2 493 | 2 636 | 2 816 | 3 454 | 3 382 | 3 684 | 3 656 | 3 806 | 3 406 | 3 611 | 3 830 | 4 125 |
| - of which internal | 12 | 14 | 11 | 14 | 12 | 13 | 12 | 13 | 11 | 11 | 11 | 12 |
| Mining and Rock | ||||||||||||
| Excavation Technique | 6 251 | 6 396 | 6 449 | 6 622 | 6 756 | 6 870 | 6 481 | 6 558 | 5 736 | 6 124 | 6 212 | 6 971 |
| - of which external | 6 237 | 6 373 | 6 398 | 6 618 | 6 724 | 6 856 | 6 451 | 6 527 | 5 723 | 6 111 | 6 204 | 6 957 |
| - of which internal | 14 | 23 | 51 | 4 | 32 | 14 | 30 | 31 | 13 | 13 | 8 | 14 |
| Construction Technique | 2 761 | 3 094 | 2 965 | 3 015 | 2 910 | 3 236 | 3 055 | 2 911 | 2 718 | 3 042 | 2 961 | 3 073 |
| - of which external | 2 708 | 3 024 | 2 905 | 2 952 | 2 849 | 3 144 | 2 967 | 2 830 | 2 628 | 2 954 | 2 890 | 3 001 |
| - of which internal | 53 | 70 | 61 | 63 | 61 | 92 | 87 | 82 | 90 | 88 | 71 | 72 |
| Common Group functions/ | ||||||||||||
| Eliminations | -96 | -119 | -96 | -40 | -152 | -174 | -157 | -136 | -110 | -152 | -103 | -124 |
| Atlas Copco Group | 20 830 | 22 374 | 22 863 | 24 750 | 23 957 | 25 091 | 24 922 | 25 003 | 22 453 | 24 565 | 25 843 | 28 495 |
Operating profit by business area
| 2014 | 2015 | 2016 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| MSEK (by quarter) | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 |
| Compressor Technique | 1 915 | 2 219 | 2 369 | 2 471 | 2 392 | 2 603 | 2 709 | 2 620 | 2 296 | 2 700 | 2 905 | 3 274 |
| - as a percentage of revenues | 20.4 | 21.4 | 22.1 | 21.1 | 21.6 | 22.7 | 22.8 | 22.1 | 21.5 | 22.6 | 22.5 | 22.7 |
| Industrial Technique | 543 | 595 | 636 | 783 | 770 | 865 | 866 | 854 | 737 | 799 | 897 | 997 |
| - as a percentage of revenues | 21.7 | 22.5 | 22.5 | 22.6 | 22.7 | 23.4 | 23.6 | 22.4 | 21.6 | 22.1 | 23.4 | 24.1 |
| Mining and Rock Excavation Technique |
1 071 | 1 155 | 856 | 1 225 | 1 276 | 1 258 | 1 296 | 1 163 | 866 | 1 041 | 1 163 | 1 395 |
| - as a percentage of revenues | 17.1 | 18.1 | 13.3 | 18.5 | 18.9 | 18.3 | 20.0 | 17.7 | 15.1 | 17.0 | 18.7 | 20.0 |
| Construction Technique | 429 | 494 | 448 | 457 | 458 | 427 | 546 | 452 | 408 | 484 | 449 | 428 |
| - as a percentage of revenues | 15.5 | 16.0 | 15.1 | 15.1 | 15.7 | 13.2 | 17.9 | 15.5 | 15.0 | 15.9 | 15.2 | 13.9 |
| Common Group functions/ | ||||||||||||
| Eliminations | -175 | -175 | -138 | -103 | -369 | -111 | -96 | -207 | -137 | -255 | -340 | -309 |
| Operating profit | 3 783 | 4 288 | 4 171 | 4 833 | 4 527 | 5 042 | 5 321 | 4 882 | 4 170 | 4 769 | 5 074 | 5 785 |
| - as a percentage of revenues | 18.2 | 19.2 | 18.2 | 19.5 | 18.9 | 20.1 | 21.4 | 19.5 | 18.6 | 19.4 | 19.6 | 20.3 |
| Net financial items | -158 | -165 | -266 | -335 | -229 | -220 | -270 | -178 | -181 | -341 | -304 | -167 |
| Profit before tax | 3 625 | 4 123 | 3 905 | 4 498 | 4 298 | 4 822 | 5 051 | 4 704 | 3 989 | 4 428 | 4 770 | 5 618 |
| - as a percentage of revenues | 17.4 | 18.4 | 17.1 | 18.2 | 17.9 | 19.2 | 20.3 | 18.8 | 17.8 | 18.0 | 18.5 | 19.7 |
Incl. discontinued operations
Acquisitions and divestments
Acquisitions and Divestments
| Revenues | Number of | ||||
|---|---|---|---|---|---|
| Date 2017 Jan. 3 |
Acquisitions hb Kompressoren Druckluft und Industrietechnik Distributor Germany |
Divestments | Business area Compressor Technique |
MSEK* | employees* 10 |
| 2016 Dec. 22 | Air Power of Nebraska Distributor USA |
Compressor Technique | 12 | ||
| 2016 Nov. 24 | Phillip-Tech Distributor China |
Industrial Technique | 45 | ||
| 2016 Sep. 1 | Leybold | Compressor Technique | 3 150 | 1 600 | |
| 2016 Aug. 5 | CSK | Compressor Technique | 870 | 400 | |
| 2016 Aug. 2 | Schneider Druckluft | Compressor Technique | 250 | 110 | |
| 2016 July 4 | Roxel Rental | Construction Technique | 12 | 2 | |
| 2016 June 14 | Bondtech | Industrial Technique | 32 | 12 | |
| 2016 May 2 | Kohler Druckluft Distributor Austria, Switzerland and Liechtenstein |
Compressor Technique | 30 | ||
| 2016 Apr. 15 | Scales Industrial Technologies Distributor USA |
Compressor Technique | 180 | ||
| 2016 Apr. 4 | Air et Fluides Lyonnais Distributor France |
Compressor Technique | 6 | ||
| 2016 Mar. 2 | FIAC | Compressor Technique | 640 | 400 | |
| 2016 Jan. 12 | Varisco | Construction Technique | 270 | 135 | |
| 2016 Jan. 5 | Capitol Research Equipment | Compressor Technique | 22 | 15 | |
| 2015 Dec. 15 | Air Supply Systems and A1 Distributors USA |
Compressor Technique | 37 | ||
| 2015 Dec. 4 | Innovative Vacuum Solutions | Compressor Technique | 32 | 19 | |
| 2015 Oct. 5 | NJS Technologies | Industrial Technique | 9 | 7 | |
| 2015 Sep. 9 | Air Repair Sales and Services Limited Distributor Canada |
Compressor Technique | 12 | ||
| 2015 Aug. 7 | Applied Plasma Systems | Compressor Technique | 5 | ||
| 2015 July 2 | Mustang Services | Construction Technique | 45 | ||
| 2015 Mar. 24 | Ortman Fluid Power | Compressor Technique | 30 | 19 | |
| 2015 Mar. 3 | Kalibriercentrum Bayern | Industrial Technique | 28 | 27 | |
| 2015 Feb. 9 | J.C. Carter | Compressor Technique | 35 | ||
| 2015 Jan. 8 | Maes Compressoren Distributor Belgium |
Compressor Technique | 30 |
*Annual revenues and number of employees at time of acquisition/divestment. No revenues are disclosed for former Atlas Copco distributors. Due to the relatively small size of the acquisitions and divestments made in 2016, full disclosure as per IFRS 3 is not given in this interim report. Disclosure will be given in the annual report 2016. See the annual report for 2015 for disclosure of acquisitions made in 2015.
Parent company
Income statement
| October - December | January - December | ||||
|---|---|---|---|---|---|
| MSEK | 2016 | 2015 | 2016 | 2015 | |
| Administrative expenses | -186 | -157 | -619 | -566 | |
| Other operating income and expenses | 58 | 43 | 171 | 142 | |
| Operating profit/loss | -128 | -114 | -448 | -424 | |
| Financial income and expenses | 2 871 | 2 786 | 5 219 | 8 201 | |
| Appropriations | 5 031 | 4 523 | 5 031 | 4 523 | |
| Profit/loss before tax | 7 774 | 7 195 | 9 802 | 12 300 | |
| Income tax | -847 | -783 | -570 | -563 | |
| Profit/loss for the period | 6 927 | 6 412 | 9 232 | 11 737 | |
Balance sheet
| Dec. 31 | Dec. 31 | |
|---|---|---|
| MSEK | 2016 | 2015 |
| Total non-current assets | 110 912 | 111 026 |
| Total current assets | 12 186 | 7 331 |
| TOTAL ASSETS | 123 098 | 118 357 |
| Total restricted equity | 5 785 | 5 785 |
| Total non-restricted equity | 35 578 | 34 468 |
| TOTAL EQUITY | 41 363 | 40 253 |
| Total provisions | 413 | 267 |
| Total non-current liabilities | 53 200 | 49 198 |
| Total current liabilities | 28 122 | 28 639 |
| TOTAL EQUITY AND LIABILITIES | 123 098 | 118 357 |
| Assets pledged | 988 | 279 |
Accounting principles
Atlas Copco AB is the ultimate Parent Company of the Atlas Copco Group. The financial statements of Atlas Copco AB have been prepared in accordance with the Swedish Annual Accounts Act and the accounting standard RFR 2, Accounting for Legal Entities. The same accounting principles and methods of computation are followed in the interim financial statements as compared with the most recent annual financial statements. See also accounting principles, page 9.
Parent Company
Distribution of shares
Share capital equaled MSEK 786 (786) at the end of the period, distributed as follows:
| Class of share | Shares |
|---|---|
| A shares | 839 394 096 |
| B shares | 390 219 008 |
| Total | 1 229 613 104 |
| - of which A shares | |
| held by Atlas Copco | -14 813 384 |
| - of which B shares | |
| held by Atlas Copco | -332 659 |
| Total shares outstanding, net of | |
| shares held by Atlas Copco | 1 214 467 061 |
Performance-based personnel option plan
The Annual General Meeting 2016 approved a performancebased long-term incentive program. For Group Executive Management, the plan requires management's own investment in Atlas Copco shares. The intention is to cover Atlas Copco's obligation under the plan through the repurchase of the company's own shares. For further information, visit: www.atlascopcogroup.com/agm
Transactions in own shares
Atlas Copco has mandates to acquire and sell own shares as per below:
- Acquisition of not more than 7 250 000 series A shares, whereof a maximum of 7 000 000 may be transferred to personnel stock option holders under the performancebased stock option plan 2016.
-
Acquisition of not more than 70 000 series A shares to hedge the obligation of the company to pay remuneration to Board members who have chosen to receive 50% of the remuneration in synthetic shares.
-
The sale of not more than 30 000 series A shares to cover costs related to previously issued synthetic shares to Board members.
- The sale of a maximum 5 500 000 series A and B shares currently held by the company, for the purpose of covering costs of fulfilling obligations related to the option plans 2011, 2012 and 2013.
- The shares may only be acquired or sold on NASDAQ Stockholm at a price within the registered price interval at any given time.
During 2016, 1 690 281 series A shares, net, were acquired and 61 220 series B shares were sold. These transactions are in accordance with mandates granted. The company's holding of own shares at the end of the period appears in the table to the left.
Risks and factors of uncertainty
Financial risks
Atlas Copco is subject to currency risks, interest rate risks, tax risks, and other financial risks. In line with the overall goals with respect to growth, return on capital, and protecting creditors, Atlas Copco has adopted a policy to control the financial risks to which Atlas Copco AB and the Group is exposed. A financial risk management committee meets regularly to manage and follow up financial risks, in line with the policy.
For further information, see the 2015 annual report.
Related parties
There have been no significant changes in the relationships or transactions with related parties for the Group or Parent Company compared with the information given in the annual report 2015.
This is Atlas Copco
Atlas Copco is a world-leading provider of sustainable productivity solutions. The Group serves customers with innovative compressors, vacuum solutions and air treatment systems, construction and mining equipment, power tools and assembly systems. Atlas Copco develops products and service focused on productivity, energy efficiency, safety and ergonomics. The company was founded in 1873, is based in Stockholm, Sweden, and has a global reach spanning 180 countries. In 2016, Atlas Copco had revenues of BSEK 101 (BEUR 11) and more than 42 000 employees.
Business areas
Atlas Copco has four business areas. The business areas are responsible for developing their respective operations by implementing and following up on strategies and objectives to achieve sustainable, profitable growth.
The Compressor Technique business area provides industrial compressors, vacuum solutions, gas and process compressors and expanders, air and gas treatment equipment and air management systems. The business area has a global service network and innovates for sustainable productivity in the manufacturing, oil and gas, and process industries. Principal product development and manufacturing units are located in Belgium, the United States, China, South Korea, Germany, Italy and the United Kingdom.
The Industrial Technique business area provides industrial power tools and systems, industrial assembly solutions, quality assurance products, software and service through a global network. The business area innovates for sustainable productivity for customers in the automotive and general industries, maintenance and vehicle service. Principal product development and manufacturing units are located in Sweden, Germany, the United States, United Kingdom, France and Japan.
The Mining and Rock Excavation Technique business area provides equipment for drilling and rock excavation, a complete range of related consumables and service through a global network. The business area innovates for sustainable productivity in surface and underground mining, infrastructure, civil works, well drilling and geotechnical applications. Principal product development and manufacturing units are located in Sweden, the United States, Canada, China and India.
The Construction Technique business area provides construction and demolition tools, portable compressors, pumps and generators, and lighting towers. The business area offers specialty rental and provides service through a global network. Construction Technique innovates for sustainable productivity in infrastructure, civil works, oil and gas, energy and drilling. Principal product development and manufacturing units are located in Belgium, Spain, Sweden, the United States, China, and India.
Vision, mission and strategy
The Atlas Copco Group's vision is to become and remain First in Mind—First in Choice® of its customers and other principal stakeholders. The mission is to achieve sustainable, profitable growth. Sustainability plays an important role in Atlas Copco's vision and it is an integral aspect of the Group's mission. An integrated sustainability strategy, backed by ambitious goals, helps the company deliver greater value to all its stakeholders in a way that is economically, environmentally and socially responsible.
For further information
• Analysts and investors Daniel Althoff, Investor Relations Manager Phone: +46 8 743 95 97 or +46 768 99 95 97 [email protected]
• Media
Ola Kinnander, Media Relations Manager Phone: +46 8 743 8060 or +46 70 347 2455 [email protected]
Conference call
A presentation for investors, analysts and media will be held on January 27, at 3.00 PM CET. The dial-in numbers are:
| | Sweden: | +46 8 566 426 90 |
|---|---|---|
| | United Kingdom: | +44 20 300 898 04 |
| | United States: | +1 855 831 5946 |
The conference call will be broadcasted live via the Internet. Please see our website for link and presentation material: www.atlascopco.com/ir
The webcast and a recorded audio presentation will be available on our homepage following the call.
Report on Q1 2017
The report on Q1 2017 will be published on April 26, 2017.
Annual General Meeting
The Annual General Meeting for Atlas Copco AB will be held April 26, 2017 at 4 PM CEST in Aula Medica, Nobels väg 6, Solna, Sweden.
This information is information that Atlas Copco AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 12.00 CET on January 27, 2017