Atlas Copco Group

1. Atlas Copco Group Q2 Results July 17, 2003

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

3. Q2 Highlights • Good performance despite weak market conditions and adverse currency effects • Strong development in priority markets • Product cost reductions and increased efficiency contributed to the good result • Strategic focus on the aftermarket pays off • Improved performance in rental services despite no improvement in market conditions • Efficient processes contribute to high and stable cash flow

4. Q2 in Summary • Order volumes down 1%, • Revenue volume up 1% • Large negative currency effects on sales and profits • Operating margin at 11.7% (10.8) • Profit after financial items MSEK 1,212 (1,074) • Operating cash flow at MSEK 1,424 (1,029) • EPS up 20% to SEK 3.87

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

6. Orders received June 2003 Change in Local Currency 35 +9 45 -4 10 +15 5 -12 3 0 +4 2 Portion of Group Sales, % Change in %, Q2 2003 vs. Q2 2002

7. 45 -4 3 0 Q2 - The Americas June 2003 • Unchanged demand • Weak construction activity continued to affect demand for rental equipment and light construction equipment • No improvement in demand for investment related equipment • Mining demand favorable Portion of Group Sales, % Change in %, Q2 2003 vs. Q2 2002

8. 35 +9 5 -12 Q2 - Europe and Africa/Middle East June 2003 • Mixed demand in Europe • Strong development in Eastern Europe and United Kingdom • Southern Europe and Nordic weakened • Demand from industrial customers offset weak construction in EU • South Africa very strong • Comparison affected by large orders in Middle East in 2002 Portion of Group Sales, % Change in %, Q2 2003 vs. Q2 2002

9. 10 +15 2 +4 Q2 - Asia and Australia June 2003 • Strong demand in Asia and Australia • China continued to grow. South Korea, Taiwan and South East Asia also developed positively. Portion of Group Sales, % Change in %, Q2 2003 vs. Q2 2002

10. Volume Growth per Quarter • Change in orders received in % vs. same Quarter previous year

11. Group Total

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

13. Compressor Technique • Order volume up 2% • Growth continued for industrial compressors, particularly oil-free units, and aftermarket • Specialty rental and aftermarket mitigate effects of weak demand for equipment in the portable compressor and generator business • Asia strongest region • Profit margin at 18.5%, despite large negative currency effects

14. Compressor Technique % %

15. Rental Service • Market remained weak • Rental revenues declined 4% in USD • Operating profit margin improved to 8.1% • Higher rental rates and significant efficiency improvements more than offset volume drop • Utilization rate improved and non-available fleet was reduced further • Strong cash flow continued

16. U.S. Construction May, 2003 Construction Put in PlaceSeasonally adjusted rate in current dollarsSource: US Dep. of CommerceJuly 1, 2003

17. U.S. Construction May, 2003 Non-Residential Construction 12 month year-on-year changeSource: US Dep. of CommerceJuly 1, 2003

18. Rental Service Rental Revenue Volume Development % %

19. EBIT - Bridge

20. Industrial Technique • Order volume flat • Volumes up for industrial tools • Professional electric tools suffered from overall weak construction activity • Restructuring projects on track • Operating margin at 10.0% • Higher revenue volume, product cost reductions, sales mix and acquired business more than offset negative currency effects

21. Industrial Technique % %

22. Construction & Mining Technique • Healthy volume growth, + 11% • Good demand from mining industry and for drilling equipment for construction purposes • Continued weak demand for light construction equipment • Transfer of loader business on track • Restructuring charge MSEK 15 • Acquisition of exploration drilling businesses in South Africa • Negative currency impact increased and affected operating margins heavily

23. Construction & Mining Technique % %

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

25. Income Statement

26. Balance Sheet June 30, 2003

27. RR29 / IAS 19 Change in accounting principles • As of January 1, 2004 the Group will implement the new Swedish accounting standards RR29 “Employee benefits”. • The one-time-effect of this change will be charged directly to shareholders’ equity in accordance with RR5 “Accounting for changes in accounting principles”, and has no cash flow or income statement effect. • The one-time effect on equityhas been preliminarily estimated toMSEK 700. The preliminary amount is calculated on the situation as per December 31, 2002. The amount to be booked on January 1, 2004 will of course be affected by changes during 2003 in key parameters, e.g. interest rates and valuations of pension funds. • The Group’s obligations related to pension benefits and other employee benefits will not be affected by the change.

28. Cash Flow

29. Capital Expenditures in Tangible Fixed Assets Net rental fleet investment = MSEK 740 MSEK 12 months Quarterly 1999 2000 2001 2002 2003

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

31. Near-term Outlook The overall demand for the Group’s products and services is expected to be unchanged or improve slightly. The construction business is expected to remain weak in most regions while the outlook for demand from industrial sectors is slightly positive. Demand from the mining industry is foreseen to be favorable and Asia is expected to continue its positive development.

32. The face of interaction

33. 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.”

34. Contents • Q2 Business Highlights • Market Development • Business Areas • Financials • Outlook • Additional Information

35. Long Term Trend • Excluding goodwill impairment charge in Q3 2002

36. Compressor Technique

37. Rental Service • Excluding goodwill impairment charge in Q3 2002

38. Industrial Technique

39. Construction & Mining Technique

40. Items Affecting Comparability

41. Atlas Copco Group excl. items affecting comparability

42. Return on Capital Employed 12 month values 1999 2000 2001 2002 2003 • Excluding goodwill impairment charge in Q3 2002

43. Atlas Copco Group Inventories, Customer Receivables and Net Rental Equipment Percent of Sales 12 Month Values 1999 2000 2001 2002 2003

44. Capital Structure Net Debt/Equity

45. Cash and Interest-Bearing Debt MSEK Net borrowings 19,325 Dec. 1999 22,270 Dec. 2000 20,078 Dec. 2001 13,694 Dec. 2002 11,506 June 2003

46. The face of interaction