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Atlas Copco Group Q2 Highlights and Market Development

This handout provides an overview of the Q2 highlights and market development of the Atlas Copco Group. It covers the strong volume development, increase in orders, and the company's financial performance. The handout also includes information on the market development in different regions and the performance of various business areas. Additionally, it highlights the company's strategic moves for growth and expansion. This handout aims to provide a comprehensive understanding of the Atlas Copco Group's performance and outlook.

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Atlas Copco Group Q2 Highlights and Market Development

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  1. Group HandoutAtlas Copco Group – June 30th 2000 The face of interaction

  2. Contents • Q2 Highlights • Market Development • Business Areas • Financials • Outlook

  3. Atlas Copco GroupHighlights in Q2 • Strong volume development, orders up 13 percent

  4. Atlas Copco GroupVolume Growth per Quarter

  5. Atlas Copco GroupHighlights in Q2 • Strong volume development, orders up 13 percent • Operating margin increased to 13.5% (12.3), still with areas of large improvement potential • Double-digit rental growth in spite of flat underlying construction markets • E-business projects on track

  6. “More of the same” geography - applications technology - products Continuous improvements production products marketing organization business flows Innovations new technology new concepts new methods Asia Project organization to safeguard long-term results Flow organization to better serve our customers Use of Products Strategy

  7. Strategic Moves • Growth • Rapid expansion of production in China • Rental Service completed 20 cold starts and acquired 20 stores in the quarter • Development • VSD technology expand in range of compressors • Internal service providers (ASAP + ISP) in operation • Full e-trade functionality in Milwaukee web-site • People

  8. People Use of Products • People in service positions increased with four percentage points to 35% in the second quarter

  9. Market Development

  10. Market Quotes

  11. Atlas Copco Group - Orders received, April - JuneGroup Total 11,620 MSEK +33% 31 +5 50 +62 8 +29 5 +47 4 +18 2 +14 Portion of Group Sales Change in value 2000 / 1999

  12. Q2 - The Americas • Continued high level of demand in North America • Market share gains in North America • Brazilian economy continued to progress • Good demand for mining equipment 50 +62 4 +18 Portion of Group Sales Change in value 2000 / 1999

  13. Q2 - Europe and Africa • Overall improved demand in Europe. • GB, Alpine region and parts of Southern Europe strong • Relatively weak in Germany and Nordic region • Positive development in South Africa and Middle East 31 +5 5 +47 Portion of Group Sales Change in value 2000 / 1999

  14. Q2 - Asia and Australia • Growth continues in Asia • Highlight - upturn in Chinese market 8 +29 6 2 +14 Portion of Group Sales Change in value 2000 / 1999

  15. Atlas Copco GroupGroup Total

  16. Business Areas

  17. Atlas Copco Compressor Technique • Overall strong sales growth • Successful launch of new Variable Speed Drive (VSD) compressors

  18. Atlas CopcoCompressor Technique

  19. Atlas Copco Construction and Mining Technique • Strong demand from the mining industry • Successful introduction of new drilling rigs • Efficiency measures give result

  20. Atlas CopcoConstruction & Mining Technique

  21. Atlas CopcoIndustrial Technique • Orders for sophisticated Atlas Copco branded industrial tools were very strong • Milwaukee Electric Tools launched a new Internet site, which offers fully integrated e-trade

  22. Atlas CopcoIndustrial Technique

  23. Atlas Copco Rental Service • Margins up in the second quarter • Outsourcing trend secures growth • ISP, an internal administrative and marketing service provider, was established. • More synergies still to come. • 20 cold starts, 20 acquired stores, 538 stores in total.

  24. Atlas CopcoRental Service

  25. Financials

  26. Atlas Copco GroupCash Flow

  27. Atlas Copco GroupCapital Expenditures in Tangible Fixed Assets SEK m 12months Quarterly 1996 1997 1998 1999 2000 June

  28. Atlas Copco GroupBalance Sheet, June 30

  29. Atlas Copco GroupIncome Statement

  30. Outlook

  31. Atlas Copco GroupIndustrial and Geographical Near Term Demand Outlook (Dotted Arrows Indicate Risk/Opportunity) Weight by Industry August 2000 Weight by Region 4% Africa/Middle East Others 5% Asia/Australia Process 15% 10% South America 4% Mining 10% North America 50% Automotive 10% Mechanical 20% Construction 40% Europe 32% Total Demand Outlook

  32. The face of interaction

  33. End of Presentation The face of interaction

  34. Extra Information • New Group Website • Growth and Trends • Margins and Earnings • Taxes • Inventories, Customer Receivables andNet Rental Equipment • Cash and Interest Bearing Debt • Profit per Share • Demand Keys

  35. www.atlascopco-group.com • New Group Website • Group • Press • Investor • Career • etc... • Multibrand - each brand has own site • Atlas Copco Brand - www.atlascopco.com • Prime - www.prime-equip.com • etc. ...

  36. Atlas Copco Group - Orders received, Jan. - JuneGroup Total 22,708 MSEK +34% 32 +4 50 +67 8 +35 4 +34 4 +34 2 +14 Portion of Group Sales Change in value 2000 / 1999

  37. Atlas Copco GroupVolume Growth per Quarter by Business Area

  38. Atlas Copco GroupLong Term Trend

  39. Atlas CopcoCompressor Technique

  40. Atlas CopcoConstruction & Mining Technique

  41. Atlas CopcoIndustrial Technique

  42. Atlas CopcoRental Service

  43. Atlas Copco GroupOperating Margins per Quarter

  44. Atlas Copco GroupEarnings by Business Area April - June

  45. Atlas Copco GroupEarnings by Business Area January - June

  46. Atlas Copco GroupEarnings before Interest and Taxes 12 month values % of NIS SEK m Group Target 13.3* 12.9 12.3* 11.7 9.2 9.3 9.0 7.3 * Excluding non-recurring items 12.1 and 13.1 percent respectively 1988 1990 1992 1994 1998 1996 2000 June

  47. Atlas Copco GroupProfit after Financial Items 12 month values % of NIS SEK m 11.8 10.8 9.7* 9.3 9.0 9.4* 7.9 6.4 * Excluding non-recurring items 9.2 and 9.5 percent respectively 1988 1990 1992 1998 1994 1996 2000 June

  48. Atlas Copco GroupTaxes 36.1 36.4 36.3 35.0 33.3 July - June 1996 1997 1998 1999 2000

  49. Atlas Copco GroupInventories, Customer Receivables andNet Rental Equipment, Percent of Sales 12 Month Values 2000 1995 1996 1997 1998 1999

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