Atlas Copco (ATCO) Q1 2025 earnings summary

Executive summary

• Orders received reached SEK 46.6 billion (MSEK 46,604), flat organically year-over-year, with strong Gas and Process Compressor and service growth, but flat equipment orders and vacuum business.

• Revenues were MSEK 42,730, representing a 2% organic decline year-over-year.

• Operating profit was MSEK 8,605 (margin 20.1%), down from MSEK 9,345 (margin 21.8%) in Q1 2024, mainly due to lower volumes, mix, and higher costs.

• Ten acquisitions were completed in the quarter, supporting growth and diversification.

• Cash flow remained solid, supported by inventory reductions and stable operating cash flow at MSEK 6,575.

Financial highlights

• Profit before tax was SEK 8.47 billion, with net profit at MSEK 6,598 and basic EPS of SEK 1.35, both lower year-over-year.

• Adjusted operating profit was MSEK 8,869 (margin 20.8%), down 7% year-over-year.

• Return on capital employed was 27% (down from 30%), and return on equity was 28% (down from 31%).

• Net financial items were negative SEK 135 million, mainly due to exchange differences and hyperinflation impacts.

• Net indebtedness reduced to MSEK 13,396; net debt/EBITDA ratio improved to 0.3.

Outlook and guidance

• Near-term outlook is uncertain, with customer activity expected to weaken somewhat due to global economic conditions and market hesitation.

• No significant recovery is projected in the semiconductor market; uncertainty and hesitation are impacting industrial compressor, vacuum, and general industry segments.

• Currency effects are expected to turn negative next quarter, potentially up to SEK -1 billion.