Atlas Copco AB (PNK:ATLKY) Q4 2023 Earnings Call Transcript January 25, 2024

Atlas Copco AB misses on earnings expectations. Reported EPS is $0.13 EPS, expectations were $0.14. Atlas Copco AB isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Welcome to the Atlas Copco Group Q4 2023 Report Presentation. For the first part of the presentation, participants will be in listen-only mode. [Operator Instructions] Now, I will hand the conference over to CFO, Peter Kinnart. Please go ahead.

Peter Kinnart: Thank you, operator. Good morning, good afternoon, good evening, everybody to this quarterly earnings call for the Atlas Copco Group. I'm happy to be here together with Mats Rahmstrom to comment on the results of the quarter, and also to give you some guidance on the upcoming quarter. Before I hand over to Mats, I would like already now like to point out as usual that after this presentation, we will have the Q&A session, and I would like to ask all of the participants to only raise one question at a time in order to make sure that all participants have the opportunity to at least raise one question. Should there be more time after the first question has been raised, we will be happy to come back to you for a second follow-up question. And with that, I hand over to Mats for the start of the earnings call.

Mats Rahmstrom: Thank you so much, Peter, and welcome, everyone. I thought I would mention a couple of words of the starting picture first. We normally write about large industrial compressors and this is what you have in front of you. So, these are the rotary screw oil-free machines and it's been successful in this quarter and in many quarters before. So it's tenor range with VSD. So this is a variable speed compressors and up to 35% savings -- cost savings in energy. And in this case also, we take the excess heat from the compressor, process and use that for the integrated driver as well, which also helps them to save on energy, up to 60%. And this is a typical machine that we sell for food and beverage, pharmaceutical, electronics, semiconductor, textile and paper, for example.

So when we talk about large industrial, this is what it could look like. And the sales pitch for our teams around the world is not that difficult. Energy efficiency comes from VSD so it's a cost leadership. And of course, they are also a good pitch for sustainability. It's reliability and uptime, and of course, with connected services, we will also give them more uptime on their machines. So this is one of the successes that I have on compressor side. If I then go to Slide number 2. We mentioned in the heading a mixed demand. And as we could see them, we talked about the activity level between Q3 and Q4, and we could see sequentially a decline as expected. All the orders received year-on-year, SEK 37 billion, so 1% up, so pretty flat. Fantastic by Compressor Technique, 7% up.

A warehouse filled with industrial products reflecting efficiency and growth.

And once again, it was these large compressors and service that really stands out as a good performance in the quarter. Slight change in Vacuum Technologies. That was minus 5. And there we could see Industrial and science vacuum. And then instead, is being kind of flat. So a little bit changed scenario there. Industrial Technique, up 3%. Strong development for auto in Europe and a weaker development for auto in Asia and a very strong development in general industry accounts. PT minus 11%. There, I must say that it might look like a big number. But last year, we had some unique orders to Ukraine and also that along at the time. So the early ordering for some of the rental companies. And then continued the positive development for service in all our business areas.

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