Atlas Copco Reports Record Fourth Quarter, Share Redemption Plan

Feb. 2, 2007
Stockholm, Sweden-based Atlas Copco last week reported record fourth-quarter 2006 results.

Stockholm, Sweden-based Atlas Copco last week reported record fourth-quarter 2006 results.

Revenues rose to MSEK 13,582 (about U.S. $1.9 billion), an organic growth of 18 percent from MSEK 11,982 (about U.S. $1.7 billion). Operating profit was up 15 percent to about U.S. $354.8 million, a margin of 18.1 percent, from U.S. $309.0 million or a margin of 17.9 percent a year ago. The company reported earnings per share of U.S. $2.12, of which U.S. $1.71 was from discontinued operations.

“Atlas Copco performed extremely well in 2006,” said Gunnar Brock, president and CEO of the Atlas Copco Group. “Our continuous efforts to strengthen the market presence and penetration are clearly paying off. We achieved double-digit growth in all regions also in the fourth quarter, with an overall organic growth as high as 21 percent.”

Orders received for Atlas Copco’s continuing operations was up 16 percent to about $2.0 billion in the fourth quarter, from about $1.7 billion, an organic growth of 21 percent. Atlas Copco has now achieved volume growth for 19 consecutive quarters.

The board of directors of Atlas Copco AB proposed to the annual general meeting a capital distribution to the shareholders of SEK 44.75 per share (U.S. $6.44) or BSEK 27 (U.S. $3.9 billion) in total.

“The strong profitability development, the cash proceeds from the equipment rental divestment and a lower operational risk than before the divestment support a significant capital distribution,” said Brock. “At the same time, we will keep sufficient financial strength to carry on with our ambitious growth strategy.”

In order to adjust the group’s balance sheet to a more efficient structure while preserving adequate financial flexibility for further growth, the board of directors proposes to the annual general meeting a share redemption procedure, whereby every share is split into two ordinary shares and one redemption share.

Atlas Copco is a global provider of industrial productivity solutions. The products and services range from compressed air and gas equipment, generators, construction and mining equipment, industrial tools and assembly systems, to related aftermarket and rental.