Atlas Copco Group

1
Atlas Copco Group

• Q4 Results
• February 2, 2011

2
Q4 - highlights

• Order growth continued
• Record operating profit
• All business areas above 20 operating margin
• Investments in market organization and production
  capacity
• Proposed dividend of 4.00 (3.00) and redemption
  of 5.00 per share
• Totaling BSEK 11 in capital distribution
• Updated goals for sustainable, profitable
  development

3
Q4 - figures in summary

• 28 organic order growth
• Revenues of MSEK 19 401 23 organic growth
• Operating profit increased 64 to MSEK 4 007
• Operating margin at 20.7 (15.4)
• Profit before tax at MSEK 3 920 (2 324)
• Basic earnings per share SEK 2.39 (1.39)
• Operating cash flow MSEK 2 529 (4 131)

4
Orders received - local currency
Group total 33 YTD (31 excl. cancellations),
31 last 3 months Structural change 2 YTD, 3
last 3 months
31 20 20
18 50 47
23 41 24
11 22 61
11 40 26
6 50 38
December 2010
A Share of orders received, year-to-date,
B Year-to-date vs. previous year,
C Last 3 months vs. previous year,
A B C
5
Q4 - the Americas

• Order intake continued to improve in North
  America
• Demand from the mining industry particularly
  strong
• Positive development in the manufacturing sector
• Demand remained strong in South America
• Stable growth in all countries and most customer
  segments

18 50 47
11 40 26
December 2010
A Share of orders received, year-to-date,
B Year-to-date vs. previous year,
C Last 3 months vs. previous year,
A B C
6
Q4 - Europe and Africa/Middle East

• Strong and soft in Europe
• Eastern Europe continued to recover at a good
  pace
• Continued soft demand for construction equipment
• Strong quarter in Africa / Middle East
• High demand from mining customers in southern and
  central Africa
• Good development in the Middle East

31 20 20
11 22 61
December 2010
A Share of orders received, year-to-date,
B Year-to-date vs. previous year,
C Last 3 months vs. previous year,
A B C
7
Q4 - Asia and Australia

• Order intake remained high in Asia
• Strong demand for construction and mining
  equipment
• Good demand for small to medium sized compressed
  air equipment
• Positive development for industrial tools
• Demand from mining customers remained at a high
  level in Australia

23 41 24
6 50 38
December 2010
A Share of orders received, year-to-date,
B Year-to-date vs. previous year,
C Last 3 months vs. previous year,
A B C
8
Organic growth per quarter
Atlas Copco Group, continuing operations

• Change in orders received in vs. same quarter
  previous year

Volume and price
9
Atlas Copco Group sales bridge
10
Atlas Copco Group
Revenues, operating profit and return on capital
employed (ROCE) by business area
11
Compressor Technique

• 21 organic order growth vs. Q4 2009
• Demand for stationary and portable compressors
  remained solid
• Soft demand for larger units in the quarter
• Continued good development in the aftermarket
  business
• Operating margin at 23.7 (19.6)
• Supported by volume, efficiency improvements,
  currency and price
• Higher share of equipment revenues in Q4 compared
  to Q3
• Expansion in production capacity

12
Compressor Technique
Volume and price
13
Construction and Mining Technique

• Strong development for both equipment and
  aftermarket
• 39 organic order growth vs. Q4 2009
• Very strong demand from the mining industry
• Large order for road development equipment in
  China
• Record operating profit and margin
• Operating margin at 20.1 (14.1), supported by
  volume, price and efficiency improvements
• New customer center and production facility
  investments

14
Construction and Mining Technique
Volume and price
15
Industrial Technique

• Good demand from all customer segments
• 19 organic order growth vs. Q4 2009
• Positive development in Asia
• High operating profit and margin
• Operating margin at 21.9 compared to 12.9
  previous year (adjusted for restructuring costs)
• Positively affected by increased volumes, price
  and cost savings
• Awarded for product design (iF design award)

16
Industrial Technique
Volume and price
17
Group total
18
Profit bridge
October December, 2010 vs 2009
19
Profit bridge by business area
October December, 2010 vs 2009
20
Balance sheet
21
Capital structure
Net Debt/EBITDA
Net Debt adjusted for the fair value of
interest rate swaps
22
Cash flow
23
2010 - Highlights

• Strong recovery in all business areas and all
  regions
• Investments in market presence and production
  capacity focus on emerging markets
• Many new energy efficient products launched
• Order intake increased 29 to MSEK 75 178
• Revenues up 10 to MSEK 69 875, a 12 organic
  increase
• Operating profit up 53 to a record MSEK 13 915
• Record operating margin of 19.9
• Operating cash flow of MSEK 9 698 (13 761)
• Proposed dividend of 4.00 (3.00) and redemption
  of 5.00 per share
• Totaling BSEK 11 in capital distribution

24
2010 - Figures in summary
Revenues and operating margin
24
25
Atlas Copco Group
Earnings per Share, Dividend and Redemption
Proposed by the Board of Directors
26
Near-term outlook

• The overall demand for the Groups products and
  services is expected to increase somewhat. The
  demand in the emerging markets as well as from
  the mining industry is expected to stay strong.
  Some mature markets, like North America, are
  expected to continue the recent improvement.

27
Goals for sustainable, profitable development
Historic performance average
28
Goals for sustainable, profitable development
Products, services and solutions Increase customer satisfaction year-on-year. Increase customer energy efficiency by 20 by 2020. Offer safe and reliable products and services.
Operations Develop new products and services with a life -cycle perspective. Decrease CO2 emissions from operations by 20 in relation to cost of sales by 2020. Decrease CO2 emissions from transport of goods by 20 in relation to cost of sales by 2020. Keep water consumption at current level.
Operations Reuse or recycle waste. Construct Atlas Copco buildings according to sustainable building standards. No corruption or bribes. Work with business partners committed to high ethical, environmental and social standards.
Operations Zero work-related accidents. Competence development and yearly appraisals to all employees. Safe and healthy working environment for all employees. Sick leave below 2.5. Increase diversity in both gender and nationality. Encourage internal mobility.
Financials Annual revenue growth of 8 over a business cycle. Sustained high return on capital employed. All acquired businesses to contribute to economic value added. Annual dividend distribution about 50 of earnings per share.
Base year 2010 Leadership in Energy and
Environmental Design (LEED) or comparable green
building criteria
29
(No Transcript)
30
(No Transcript)
31
Cautionary Statement

• Some statements herein are forward-looking and
  the actual outcome could be materially different.
  In addition to the factors explicitly commented
  upon, the actual outcome could be materially and
  adversely affected by other factors such as the
  effect of economic conditions, exchange-rate and
  interest-rate movements, political risks, the
  impact of competing products and their pricing,
  product development, commercialization and
  technological difficulties, supply disturbances,
  and major customer credit losses.