Atlas Copco Group

Atlas Copco Group Q1 Results April 29, 2002

Contents • Q1 Highlights and Strategic Moves • Market Development • Business Areas • Financials • Outlook www.atlascopco-group.com

Q1 Highlights • Weaker demand - as anticipated • Order volumes down 7% • Low invoicing, primarily rental revenues and investment-related products, affected profit • Operating margin 10.0% (12.1) • Profit after financial items MSEK 912 • Continued strong operating cash flow of MSEK 1,523 www.atlascopco-group.com

Actions & Strategic moves • Short-term and long-term actions • Ongoing adjustment to low demand situation • Investing in market- and product development, production- and logistics efficiency • Priority to Use-of-Products projects • Strategic moves • Build presence in China and Russia • Acquisitions • Launch of Milwaukee brand in Europe www.atlascopco-group.com

Group Total www.atlascopco-group.com

Volume Growth per Quarter • Change in orders received in % vs. same Quarter previous year www.atlascopco-group.com

Portion of Group Sales, % Change in %, Q1 2002 vs. Q1 2001 Orders received, Q1 2002 vs. Q1 2001 Change in Local Currency -7 March 2002 30 -7 50 -11 9 0 5 +14 4 -16 2 +12 www.atlascopco-group.com

50 -11 4 -16 Q1 - The Americas March 2002 • Weak demand in North America • Non-residential building and manufacturing industry affected equipment rental negatively • Low demand for investment related goods • Slightly improved demand for production related equipment • South America • Negative development in most markets Portion of Group Sales, % Change in %, Q1 2002 vs. Q1 2001 www.atlascopco-group.com

30 -7 5 +14 Q1 - Europe and Africa/Middle East March 2002 • Negative trend in Europe Continue • Low construction activity except for the Nordic Region • Slowdown for investment-related products in most customer segments • Africa/Middle East • Construction projects and bulk orders behind good quarter Portion of Group Sales, % Change in %, Q1 2002 vs. Q1 2001 www.atlascopco-group.com

9 0 2 +12 Q1 - Asia and Australia March 2002 • Mixed Situation in Asia • Continued growth in China and positive trend in Korea • Decline in demand in Japan and India • Electronics industry in South-East Asia continue to be weak Portion of Group Sales, % Change in %, Q1 2002 vs. Q1 2001 www.atlascopco-group.com

Volume Growth Compressor Technique • Change in orders received vs. same quarter previous year, % www.atlascopco-group.com

Compressor Technique • Weak demand • Order volumes decline 5 percent • Large industrial compressors declined most, while after-sales is still growing • Europe showing a volume drop and the Americas still weak • Continued growth in China • Lower volumes affect operating margin • Acquisition of Liutech finalized in April www.atlascopco-group.com

Volume Growth Rental Service • Change in orders received vs. same quarter previous year, % www.atlascopco-group.com

Rental Service • Demand remain weak • Weak non-residential building segment • Low activity in manufacturing industry • Profit margin affected by low demand and price compression • Actions • More fleet available for rent and improved mix • Reinforced sales organization • Continued strong cash generation www.atlascopco-group.com

Volume Growth Industrial Technique • Change in orders received vs. same quarter previous year, % www.atlascopco-group.com

Industrial Technique • Order volumes decline 8 percent • Low order intake from motor vehicle industry - major producers slowed/stopped investments • Weak demand from general industry and automotive aftermarket continue • Stable development for professional electric tools in the U.S., while weak trend continue in Europe • Profit margin affected by lower volume and an unfavorable product mix • Launch of Milwaukee in Europe www.atlascopco-group.com

Volume Growth Construction & Mining Technique • Change in orders received vs. same quarter previous year, % www.atlascopco-group.com

Construction & Mining Technique • Stable performance • Increase in use-of-products revenues • Lower demand for large investment-related equipment for tunnelling and mining and for prospecting equipment • Surface drill rigs and construction tools show positive development • Stable profit margin • Acquisition of MAI finalized in April and Krupp is on schedule for Q2 www.atlascopco-group.com

Contents • Q1 Highlights and strategic moves • Market Development • Business Areas • Financials • Outlook www.atlascopco-group.com

Income Statement www.atlascopco-group.com

Income Statement(accounting changes) MSEK Q1 2002 Operating profit, as reported 1,166 less - capitalization of development cost 54 - useful life estimates on rental fleet, net 45 Pro-forma operating profit, “old” rules 1,057 www.atlascopco-group.com

Balance Sheet March 31, 2002 www.atlascopco-group.com

Capital Structure Net Debt/Equity www.atlascopco-group.com

Atlas Copco Group Return on Capital Employed 12 month values 1998 1999 2000 2001 2002 www.atlascopco-group.com

Cash Flow www.atlascopco-group.com

Capital Expenditures in Tangible Fixed Assets Net rental fleet investment = MSEK 921 MSEK 12 months Quarterly 1998 1999 2000 2001 2002 www.atlascopco-group.com

Earnings per Share and Dividend * 1997 1998 1999 2000 2002 2001 *Proposed by the Board of Directors www.atlascopco-group.com

Near-term Outlook Overall, demand for our products and services is foreseen to stay at the present level in the near-term. The demand for large investment-related equipment in North America is foreseen to remain weak, while the recent increases in consumption and industrial production in the U.S. should positively affect the demand for production-related equipment and tools. Demand for rental equipment is foreseen to show normal seasonal increases in the next two quarters. In Europe, the business cycle is expected to lag behind North America and consequently, no improvement of demand is foreseen in the near-term. Demand in Asia is expected to be good, supported by continued strong growth in China. www.atlascopco-group.com

The face of interaction www.atlascopco-group.com

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.” www.atlascopco-group.com

Contents • Q1 Highlights and Strategic Moves • Market Development • Business Areas • Financials • Outlook • Additional Information www.atlascopco-group.com

Orders received, Jan. - Mar. 2002Group Total MSEK 12,058 -3 30 -5 50 -5 9 +4 5 +6 4 -14 2 +18 12 months, Portion of Group Sales, % Change 2002 / 2001, % www.atlascopco-group.com

Long Term Trend www.atlascopco-group.com

Compressor Technique www.atlascopco-group.com

Rental Service www.atlascopco-group.com

Industrial Technique www.atlascopco-group.com

Construction & Mining Technique www.atlascopco-group.com

Group Total www.atlascopco-group.com

Items Affecting Comparability www.atlascopco-group.com

Group Totalexcl. items affecting comparability www.atlascopco-group.com

Earnings Before Interest and Taxes 12 month values % MSEK 1988 1994 1996 1998 1990 1992 2000 2002 March EBIT margin excluding items affecting comparability 1999 = 12.1%, 2000 = 13.8%, 2001 = 12.5%, 2002 March = 11.7% www.atlascopco-group.com

Taxes % MSEK 1998 1999 2000 2001 2002 March www.atlascopco-group.com

Inventories, Customer Receivables and Net Rental Equipment Percent of Sales 12 Month Values 1997 1998 1999 2000 2001 www.atlascopco-group.com

Atlas Copco Group