Gunnar Brock comments on Atlas Copco’s Q1 results
- 20 May 2007
- Financial News
"This is our 20th straight quarter of volume growth, and we are continuing to strengthen our market presence," says President and CEO Gunnar Brock. "In the near term, we expect that demand from most customer segments will remain at the current high level."
Atlas Copco's revenues increased 12% to MSEK 13 390, representing organic growth of 17%. Operating profit increased 21% to MSEK 2 541 and the operating margin was 19%, the highest ever achieved for the Group. Organic order growth in the first quarter was 24%.
"We took several measures during the first quarter to further strengthen the market organization, for example by opening new customer centers in Pakistan and Tanzania," Brock says. Atlas Copco also expanded manufacturing capacity in many locations to meet the increase in orders, and today the company announced an investment of MSEK 224 at its drill steel factory in Fagersta, Sweden.
Selective acquisitions will continue to be part of the Group's growth strategy. The purchase of Dynapac, announced in February, is making Atlas Copco a leading supplier of compaction and paving equipment for road development, and the acquisition of Greenfield improves the offering of compressors aimed at the natural gas vehicles market. The Dynapac deal is expected to be closed in the second quarter.
"With three focused business areas, that all are contributing to the improvement in profits, Atlas Copco has a strong base for future growth," Brock says. "We are using our solid financial position to increase the sales force, make acquisitions in interesting growth segments and invest in our factories. At the same time, we are able to carry out a significant return of cash to our shareholders."
Atlas Copco's Annual General Meeting will be held today. The Board of Directors has proposed that shareholders approve an ordinary dividend of SEK 4.75 per share and a mandatory redemption procedure, through which SEK 40 per share will be distributed.
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