Atlas Copco Group

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Atlas Copco Group

• Q4 Results
• February 2, 2009

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Contents

• Q4 Business Highlights
• Market Development
• Business Areas
• Financials
• 2008 Summary
• Outlook

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Q4 - Highlights

• Declining demand from most customer segments
• Sharpest drop and order cancellations within the
  mining business
• Continued growth of the aftermarket business
• Measures taken in all three business areas to
  reduce capacity and costs
• Unchanged dividend proposed

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Q4 - Figures in summary

• -19 organic order intake, -27 including
  cancellations
• Revenues of MSEK 19 731 3 organic growth
• Operating profit at MSEK 3 288 (3 361)
• Including redundancy costs of MSEK 258
• MSEK 350 in positive currency effect compared to
  last year
• Adjusted for non-recurring items, operating
  margin at 18.0 (19.3)
• Profit before tax at MSEK 3 508 (2 134)
• Including capital gains of MSEK 939 (tax-free)
  and MSEK 33
• Earnings per share for continuing operations SEK
  2.39 (1.12)
• Operating cash flow MSEK 2 401 (926)

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Contents

• Q4 Business Highlights
• Market Development
• Business Areas
• Financials
• 2008 Summary
• Outlook

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Orders received - Local currency
(-19 organically)
Group total 7 YTD, -27 last 3 months
(Structural change 5 YTD, 0 last 3 months)
December 2008
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Q4 - The Americas

• Demand declined in North America
• The construction and automotive industries
  remained weak
• Low demand and order cancellations from the
  mining industry
• Relatively stable demand for compressors
• Drop in demand from most mining customers in
  South America, other segments holding up better

December 2008
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Q4 - Europe and Africa/Middle East

• Weak Europe
• Continued low activity in the construction
  segment
• Deteriorating demand from many manufacturing
  industries
• Mining segment in Eastern Europe weak
• Demand declined also in Africa / Middle East but
  to a lesser extent.

December 2008
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Q4 - Asia and Australia

• Substantial slowdown in Asia
• Weaker demand from most customer segments in the
  major countries
• Good development of the aftermarket business
• Good quarter in Japan
• Weaker demand in Australia
• Mining segment relatively better than in other
  regions

December 2008
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Organic Growth per Quarter
Atlas Copco Group, continuing operations

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

Volume and price
Order cancellations
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Atlas Copco
Growth Orders received Continuing operations
(excl. Professional Electric Tools and Rental
Service)
12
Atlas Copco Group Sales Bridge
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Contents

• Q4 Business Highlights
• Market Development
• Business Areas
• Financials
• 2008 Summary
• Outlook

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Atlas Copco Group
Operating Profit and Return On Capital Employed
(ROCE) by Business Area
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Compressor Technique

• 15 organic order decline
• Lower demand in most customer segments and
  regions
• Good aftermarket sales
• Sustained high operating margin
• 21.4 adjusted for MSEK 93 in
• Acquisition of Aggrekos European

redundancy costs
compressor rental business
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February 2, 2009, www.atlascopco.com
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Compressor Technique
Volume and price
Quarterly operating margins include Prime Energy
from Q1 2006.
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Construction and Mining Technique

• Sharp decline in order intake
• Organic order decline of 27 and -16 from
  cancellations, mainly from mining customers
• Good growth for aftermarket products
• Operating profit up 4, including MSEK 100 in
  redundancy costs
• Comparable operating margin unchanged at 17.2,
  supported by currency

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Construction and Mining Technique
Volume and price
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Industrial Technique

• 20 organic order decline
• Both general and motor vehicle industry down
• Service business still growing
• Adjusted operating profit margin at 16.0,
  excluding redundancy costs of MSEK 59
• Previous year at 23.1 adjusted for restructuring
  costs
• Margin negatively affected by sales mix,
  production disturbances related to restructuring
  of pneumatic tools manufacturing, currency and
  under-absorption of fixed costs

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Industrial Technique
Volume and price
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Contents

• Q4 Business Highlights
• Market Development
• Business Areas
• Financials
• 2008 Summary
• Outlook

22
Group Total
Adjusted operating margins 18.0 in 2008 and
19.3 in 2007
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Profit Bridge
October December, 2008 vs 2007
One-time items include redundancy costs as well
as reversal of previous years one-time items.
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Profit Bridge by Business Area
October December, 2008 vs 2007
One-time items include redundancy costs in all
three business areas as well as reversal of
previous years one-time items.
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Balance Sheet
The large increase in total assets is partly
explained by currency translation effects that
have had an impact of MSEK 4 000 since September
and MSEK 5 400 since December 2007
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Capital Structure
Net Debt/EBITDA
Net Debt adjusted for the fair value of interest
rate swaps
27
Atlas Copco ABs Loan Maturity Profile
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Cash Flow
Continuing operations
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Atlas Copco Group
Earnings per Share, Dividend and Redemption
Proposed by the Board of Directors
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Contents

• Q4 Business Highlights
• Market Development
• Business Areas
• Financials
• 2008 Summary
• Outlook

31
2008 - Figures in summary
Revenues and operating margin
2004 pro forma, excluding divested businesses
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2008 - Figures in summary

• Strong demand from most customer segments and
  high growth in all regions until September,
  partly offset by a weak fourth quarter
• Order intake up 7, 2 organic growth
• Revenues up 17 to 74 177, 12 organic growth
• Operating profit up 14 to MSEK 13 806, a margin
  of 18.6 (19.0)
• Profit before tax at MSEK 13 112 (10 534)
• Proposed dividend for 2008, at SEK 3.00 (3.00)
  per share

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Contents

• Q4 Business Highlights
• Market Development
• Business Areas
• Financials
• 2008 Summary
• Outlook

34
Near-term Outlook

• The current economic situation makes the outlook
  very uncertain but demand is expected to remain
  very weak in most industries and regions.

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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
  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.