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Group Handout Atlas Copco Group – September 30 th 2000

This handout provides an overview of the Q3 highlights and strategic moves of Atlas Copco Group, including market development, business areas, financials, and outlook.

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Group Handout Atlas Copco Group – September 30 th 2000

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

  2. Contents • Q3 Highlights and Strategic Moves • Market Development • Business Areas • Financials • Outlook

  3. Q3 Highlights and Strategic Moves • Highest results ever in a single quarter • Demand remained robust • Softening in U.S. construction market has not affected demand for rental equipment • Merger of Prime and RSC • Improved operating margins - a good step towards our ambitions • Innovative and successful product launches

  4. Atlas Copco GroupVolume Growth per Quarter

  5. Market Development

  6. Atlas Copco Group - Orders received, July - SeptemberGroup Total 11,743 MSEK +25% 27 +1 53 +39 10 +59 4 +9 4 +17 2 +8 Portion of Group Sales Change in value 2000 / 1999

  7. Q3 - The Americas • Robust demand level in North America • Rental • High activity in petrochemical industry • Construction related products affected at the end of period • South America mixed • Brazil strong • Peru and Argentina slowing down 53 +39 4 +17 Portion of Group Sales Change in value 2000 / 1999

  8. Q3 - Europe and Africa • Mixed in Western Europe • Investments in Germany still low • UK, France and southern Europe strong • Positive development in Central Europe • Improving business climate in Russia • Southern Africa shows good demand • Positive development in Middle East 27 +1 4 +9 Portion of Group Sales Change in value 2000 / 1999

  9. Q3 - Asia and Australia • Strong growth in China • Internal consumption • Infrastructure development • Good demand from export driven industries • Positive trend in Japan and South East Asia 10 +59 6 2 +8 Portion of Group Sales Change in value 2000 / 1999

  10. Atlas Copco GroupGroup Total* * Including non-recurring items

  11. Atlas Copco GroupNon-recurring items Q3

  12. Atlas Copco GroupGroup Total - exkl. non-recurring items

  13. Business Areas

  14. Atlas CopcoCompressor Technique • Strong growth, particularly in industrial compressors • Innovations • Profit increase by 20% • Very positive development in Asia • Clear and positive trend toward service contracts

  15. Atlas CopcoCompressor Technique

  16. Atlas CopcoConstruction and Mining Technique • Continues robust order intake from the mining sector, particularly consumables • Infrastructure projects in China • Acquisition of Hobic, a drill-bit manufacturer

  17. Atlas CopcoConstruction & Mining Technique

  18. Atlas Copco Industrial Technique • Professional Electric Tools • Growing demand in Europe • Signs of less growth in U.S. • Very strong order intake for computer controlled tools • Strong increase in recurring operating profit

  19. Atlas CopcoIndustrial Technique * EBIT in Q3 1999 includes SEK 83 m. of non-recurring gain. Adjusted profit was SEK 205 m. and margin 8.1% in the quarter, and SEK 678 m. and margin 8.9% in the nine-months

  20. Atlas Copco Rental Service • Solid increase in revenues • High level of demand in construction industry • Continues strengthening of industrial rental operations • Merger of Prime and RSC • 14 new greenfield operations and 14 stores acquired • Improved fleet utilization Prime RSC

  21. Atlas CopcoRental Service * EBIT in Q3 2000 includes SEK 127 m. of non-recurring cost. Adjusted profit is SEK 597 m. and margin 15.9% in the quarter, and SEK 1,450 m. and margin 14.3% in the nine-months.

  22. Financials

  23. Atlas Copco GroupCash Flow

  24. Atlas Copco GroupCapital Expenditures in Tangible Fixed Assets Net rental fleet investment = approx. SEK 4.1 billion SEK m 12months Quarterly 1996 1997 1998 1999 2000 Sept.

  25. Atlas Copco GroupBalance Sheet, September 30

  26. Atlas Copco GroupIncome Statement

  27. Outlook

  28. October 2000 Weight by Industry Weight by Region 4% Africa/Middle East Others 5% Asia/Australia 11% Process 15% South America 4% Mining 10% Automotive 10% North America 50% Mechanical 20% Europe 31% Construction 40% Total Demand Outlook Atlas Copco GroupIndustrial and Geographical Near Term Demand Outlook (Dotted Arrows Indicate Risk/Opportunity)

  29. The face of interaction

  30. Additional Information

  31. Atlas Copco Group - Orders received, January - September Group Total 34,451 MSEK +31% 30 +3 51 +55 9 +43 4 +25 4 +28 2 +12 Portion of Group Sales Change in value 2000 / 1999

  32. Atlas Copco GroupVolume Growth per Quarter by Business Area

  33. Atlas Copco GroupLong Term Trend

  34. Atlas CopcoCompressor Technique

  35. Atlas CopcoConstruction & Mining Technique

  36. Atlas CopcoIndustrial Technique

  37. Atlas CopcoRental Service

  38. Atlas Copco GroupEarnings before Interest and Taxes 12 month values % of NIS SEK m Group Target 13.5 12.9 12.3* 11.7 9.2 9.3 9.0 7.3 * Excluding non-recurring items 12.1 1988 1990 1992 1994 1998 1996 2000 September

  39. Atlas Copco GroupTaxes Oct. - Sept. 1996 1997 1998 1999 2000

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

  41. Atlas Copco GroupCash and Interest Bearing Debt SEKm 2,485 1,613 2,118 1,286 1,121 1,866 Cash 1,889 Short-term loans 2,586 7,610 4,922 11,027 8,192 1,924 1,910 2,201 Long-term loans 5,308 10,969 2,016 1,940 12,139 Pensions 1,450 1,456 3,166 1,899 23,501 Net borrowings 10,214 10,052 19,325 Dec. 1995 Dec. 1997 Dec. 1998 Dec. 1999 Sept. 2000 Dec. 1996

  42. Atlas Copco GroupProfit per Share - Quarterly and 12 Month Values SEK 13:10 11:96 11:50 11:56 10:15 3:71 3:34 3:32 3:27 3:23 3:27 3:06 3:02 3:15 2:94 2:80 2:81 2:83 2:76 2:71 2:53 2:30 2:08 1:87 1997 1996 1998 1999 2000

  43. 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 effected by other factors like for example, the effect of economic conditions, exchange-rate and interest-rate movements, political risks, impact of competing products and their pricing, product development, commercialization and technological difficulties, supply disturbances, and the major customer credit losses.”

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