Ronnie Leten comments on Atlas Copco’s Q3 results
Stockholm, Sweden, October 22, 2009: Atlas Copco achieved a healthy profitability in the third quarter, supported by sales of aftermarket products and services, and continued efficiency improvements. While demand for equipment remained low in most regions, all business areas increased their profitability compared to the second quarter.
“We are pleased to see that our efforts to increase customer focus, strengthen the aftermarket and reduce costs are paying off in these difficult market conditions,” says Ronnie Leten, President and CEO of the Atlas Copco Group. “We have now achieved annual savings of more than MSEK 2 000.” Commenting on the near-term outlook, Ronnie Leten says: “Overall demand is expected to stay around the current level. The demand in some emerging markets, including China and India, is expected to gradually improve.” Revenues in the third quarter fell 18% to MSEK 15 088, an organic decline of 25%. Organic order intake dropped 30%. Operating profit was MSEK 2 402, corresponding to a margin of 15.9% (19.7 a year earlier and 12.8 in the second quarter). Demand remained stable on a lower level than the previous year, but some emerging markets noted improved demand during the quarter compared to the beginning of 2009. “Even with the changes we have done, overall efficiency is not yet at the level we believe it can be. We have to improve organizational efficiency but at the same time invest in sales and service people,” Ronnie Leten says. “We must make sure we are visiting all potential customers with a constant flow of new products and services.” Products launched during the third quarter included oil-free compressors for sensitive applications, for instance in hospitals, radio remote controlled surface drill rigs and ergonomically designed sanders.