Atlas Copco; Demand continues to improve in fourth quarter
ATLAS COPCO Preliminary 12-month Report, 1999 Demand continues to improve in fourth quarter January-December Change 1999 1998 % Revenues 36,234 33,740 +7 Operating profit 4,470 4,345 +3 - as a percentage of 12.3 12.9 revenues Profit after financial 3,412 3,637 -6 items - as a percentage of 9.4 10.8 revenues Earnings per share*, 11.50 11.96 -4 SEK * Previous year's figure has been restated for equity rights issue. The Atlas Copco Group's revenues for 1999 increased 7 percent, to SEK 36,234 m. (33,740), corresponding to a volume decrease of 2 percent. The net effect from acquisitions and divestments was an increase of approximately 8 percent. Foreign exchange fluctuations had a positive translation effect of 2 percentage points. Orders received increased 11 percent, to SEK 36,534 m. (32,979), corresponding to a volume increase of 1 percent for comparable units. The Atlas Copco Group's profit after financial items decreased, to SEK 3,412 m. (3,637). The profit margin was 9.4 percent (10.8). Dividend The Board of Directors proposes that a dividend of SEK 4.75 (4.32) per share be paid for the 1999 fiscal year. Near-term outlook The healthy level of demand in North America is expected to remain at its present level. The equipment rental industry is foreseen to continue growing at a faster pace than the economy in general. The rise in interest rates may effect negatively the demand from some industry sectors. Overall, demand in Europe is expected to increase, as higher production output will eventually trigger investment for capacity expansion. Infrastructure projects in Europe are also expected to have some positive effect on demand. The recovery in the Asian region is foreseen to continue, leading to improved demand from most industry sectors. In South America, Africa, and the Middle East, higher commodity prices are expected to lead to a slightly higher level of activity in related industries. In summary, the overall demand for Atlas Copco's products and services is expected to improve in the near term. Market development Overall, demand in North America remained at a high level. Increases in oil and metal prices contributed to stronger demand from the petrochemical and mining industries, respectively. Non-residential building activity continued to be strong but showed large regional differences. At the end of the period certain sectors, such as residential construction and car sales, showed some signs of levelling off due to the rise in interest rates. In Europe, demand improved somewhat in the last quarter, mainly owing to favorable development in France and Spain, while Germany remained at the level of the two preceding quarters. The manufacturing industry in Great Britain and the Nordic countries continued to develop unfavorably throughout the period, affecting overall demand from this sector. ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/02/14/20000214BIT00280/bit0001.doc http://www.bit.se/bitonline/2000/02/14/20000214BIT00280/bit0002.pdf