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

Peter Kinnart: I think on the revenue side, of course, we continue to push very, very hard to get as much output as we can out of the factories because as you, of course, know, we do have quite a significant orders on hand position. And we have those commitments to customers. We will do everything possible to continue to get the maximum invoicing and output based on the expectations of our customers. So if we can continue to boost revenues, we will not hesitate to do so. Then on the orders, of course, it will depend quite a lot on the activity level in the market and that we expect to be similar to the previous quarter.

Daniela Costa: Sorry, I might not have expressed myself maybe correctly. So as for your point on what you have on hand, how much does it cover far out in the future? Is it — does it cover 1 year of visibility? Does it cover 6 months? If you could give some color per provision? Because we have the orders but we don’t have the backlog, especially if you had some cancellations.

Mats Rahmström: We, of course, well aware exactly what we have orders on hand per division and per — but we are not willing to share that fully with the market at this point.

Operator: The next question comes from Andreas Koski from Exane. The next question comes from Vlad Sergievskii from Bank of America.

Vladimir Sergievskii: Let me ask about more conceptual question on longer-term margin . How feasible do you think it is to expect them to recover to the historical 24%, 25% range which is above even compressing margins, given that you’re obviously deliver into a relatively more concentrated client base and the proportion of aftermarket is lower than what it is in compressors?

Mats Rahmström: For us, it’s, of course, the benchmark for us to get back to the table that you have seen in the past, there’s not really any reason why we shouldn’t be able to — there is no structural changes in the marketplace. The only caveat — a caveat here is that we have the pricing that we work with and in some time — in some cases with the copy exact, we also delivered the same product. And of course, there is as much as the market accept as a price increase. I mean sometimes, it takes a generation of products then with better efficient, better value generation to get back to the same gross margins as we have seen in the past. And I think that might take — so it’s not done overnight thing. And I don’t think you will see it in Q1, if that’s what you’re expecting.

I think it’s just like Atlas Copco is grinding away on both our operational issues. And of course, on pricing. And I think the more of the short term is more that the fixed operations and adjustments in our profit and loss. So we take it step by step. And of course, we you see that as a benchmark presence to get back to those levels.

Operator: The next question comes from Mattias Holmberg from DNB.