Atlas Copco AB (OTC:ATLKY) Q4 2022 Earnings Call Transcript

And I think over time now that we’ve seen a little bit less of activity and demand. I think we will normalize a little bit to operations. But the biggest challenge is still for us then to deliver on time with the lack of secure supply chain for electronics. Then you might ask a little bit why is it too much difficult here? Why don’t we fix it easily? Peter mentioned it before that many of these big customers work with something called copy exact. That means that we cannot change any components in a product without getting qualified by the customers. So to get the second source for something, we actually need to bring that component and get that qualified at customers. And of course, then we are limited to 1 source as well. So it’s not easy bargaining with pricing either.

So I think it will take a little bit more time to recover. And we have compensated ourselves for some of these things that is more related to pricing or components material but not fully to this adjustment that we think is more on our side than our customer sides. We don’t for that price increase to our customer. Maybe you want to comment on IT?

Peter Kinnart: Yes. On IT, I think it’s a mix of different things. There is, I think, similar to what we see in VT, although it’s, of course, a different segment. But also there, the pricing component is not as strong as it is in Compressor Technique and Power Technique, for example and that is also again related to the segment and the limited — the very concentrated customer base in motor vehicle industry particularly. The supply chain issues are also there, quite important. And again, the electronics is also there, the key issue. And so with the pricing that we are able to push in and which we are improving compared to the last quarter and the previous quarters, we still are not fully — compensate there for these kind of effects that we see.

And then on top of that, there are, as you mentioned, a couple of onetime items which are more related to difficult procedures that we do in the last quarter of the year and that required us to make some adjustments across the different divisions. And in ITBA, those, I think, were a little bit more significant. And therefore, we took we felt that it was relevant to mention them in the explanation in the quarterly report as well.

Mats Rahmström: And maybe you can say in general, when it comes to electronic supply with order volumes that we place with our suppliers today, we’re constantly really pushing the envelope to the maximum of their capacity. So it is difficult for them without machine investments to catch up. And of course, if volume will go down to something more normalized, we wouldn’t have any issues. So we have sort of — it’s really that pushing to a new level of supply that is struggling to get that right.

Operator: The next question comes from Daniela Costa from Goldman Sachs.

Daniela Costa: I’ll stick with 1 as requested. I was wondering if you could give us some visibility on how much your backlog extends, really? How many quarters or months you have across your business? The reason I’m asking is, when we look at your book-to-bill, it’s 1 of the lowest, I guess, we have to go way back probably 2009 but obviously, you might have accumulated a lot. So as we look about thinking how we should model the next couple of quarters, can you shed some light on how much visibility ahead you have in each of the businesses now after what you’ve accumulated given the supply chain issues?