Atlas Copco Group

1February 2, 2010 www.atlascopco.com

Atlas Copco Group

Q4 Results

February 2, 2010


Contents

Q4 Business Highlights

Market Development

Business Areas

Financials

2009 Summary

Outlook


Q4 - Highlights

Slight improvement in demand compared with previous quarters– Noticeable in most emerging markets…– …and from the mining industry– Still low investment level

Sales of aftermarket products and services increased

Healthy profit margins– Low volumes continue to affect negatively– Cost reductions, favorable sales mix and low financial costs gave support

Operating cash flow remained very strong

Proposed dividend of SEK 3.00 (3.00) per share and a share buyback program


Q4 - Figures in summary

Organic order intake down 9%...– …but flat if adjusted for cancellations previous year

Revenues of MSEK 15 942; 18% organic decline

Operating profit at MSEK 2 450 (3 288)– Restructuring cost of MSEK 80 (258)– Adjusted operating margin of 15.9% (18.7)

Profit before tax at MSEK 2 324 (3 508)– Previous year included tax-free gain of MSEK 939

Earnings per share SEK 1.39 (2.39)

Operating cash flow MSEK 3 672 (2 401)


Contents


Market Development

Business Areas

Financials

2009 Summary

Outlook


Orders received - Local currency

December 2009

A B CA = Portion of sales, Year-to-date, %B = Year-to-date vs. prev. year, %C = Last 3 months vs. prev. year, %

10 -15 +25

16 -38 -12

36 -30 0

12 -28 -23

21 -15 +15

5 -25 -9

Group total -27% YTD, 0% last 3 monthsEffect of cancellations 1% YTD, 9% last 3 months


Q4 - The Americas

Slight sequential improvement in North America– Sales of industrial equipment and related

aftermarket improved somewhat– Construction remain very weak

Order growth in South America– Improved demand for mining and

construction equipment

December 2009


10 -15 +25

16 -38 -12


Q4 - Europe and Africa/Middle East

Overall demand remained low in Europe, but…– …slight improvement in Germany and in the

Nordic countries – …improved demand from mining industry in

Eastern Europe– Solid aftermarket

Weak quarter in Africa / Middle East– Sales of gas and process compressors declined– No improvement in Southern Africa

December 2009


36 -30 0

12 -28 -23


Q4 - Asia and Australia

Positive development for all business areas in Asia– Growth in China, India and many other

markets in South Asia. – Negative development in Japan and South

Korea

Gradual recovery of demand in Australia– Pick-up in the mining industry

December 2009 A = Portion of sales, Year-to-date, %B = Year-to-date vs. prev. year, %C = Last 3 months vs. prev. year, %

A B C

21 -15 +15

5 -25 -9


Organic* Growth per Quarter

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

Atlas Copco Group, continuing operations

-40

-30

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0

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300

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101

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102

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302

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103

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108

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109

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309

Q4

Organic growth Order cancellations

*Volume and price


Atlas Copco Group – Sales Bridge

October - December January - DecemberOrders Orders

MSEK Received Revenues Received Revenues2008 15 437 19 731 73 572 74 177Cancellations, % +9 * - +1 * -Structural change, % 0 0 0 0Currency, % -1 -1 +7 +8Price, % +1 +1 +1 +1Volume, % -10 -19 -30 -23Total, % -1 -19 -21 -142009 15 276 15 941 58 451 63 762

* Cancellations in Q4 2008 and Q1 2009


Contents


Market Development

Business Areas

Financials

2009 Summary

Outlook


Atlas Copco GroupOperating Profit and Return On Capital Employed (ROCE) by Business Area

Revenues Operating Operating ROCEMSEK profit margin12 month values, period ending Dec. 2009 Dec. 2009 Dec. 2009 Dec. 2009Compressor Technique 32 524 5 752 17.7% 45%Construction and Mining Technique 25 909 3 470 13.4% 17%Industrial Technique 5 392 253 4.7% 9%Eliminations/Common Group Functions -63 -385Atlas Copco Group 63 762 9 090 14.3% 18%


Compressor Technique

Overall demand remained on low level– 12% organic order decline vs. Q4 2008– Good development in emerging markets– Improved demand for standard compressors– Weak order intake for gas and process compressors– Stable aftermarket business

Operating margin at 19.6% – Improvement from previous quarters thanks to

increased revenues and favorable sales mix

Agreement to acquire Quincy Compressor

Investment in manufacturing facility in China

14February 2, 2010, www.atlascopco.com

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http://img01.atlascopco.com/Standard/Preview.jsp?recordView=SearchResult_RecordInfo&catalogID=2&recordID=32791


Compressor Technique

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Organic* revenue growth: Change vs. same quarter previous year, %Quarterly operating margin, %

Quarterly operating margins include Prime Energy from Q1 2006.*Volume and price


Construction and Mining Technique

Improved order intake compared with previous quarters– Demand in mining and infrastructure construction developed positively– Growth in aftermarket and consumables – Organic order decline of 5% vs. Q4 2008

Operating margin at 14.1% – Low volumes compared with previous year affected negatively, while

cost savings gave support– Less favorable sales mix compared with Q3


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Construction and Mining Technique

*Volume and price


Industrial Technique

Slight improvement in order intake compared with previous quarters– Continued weak demand in most developed

markets– Growth in Asia, both from the motor vehicle

industry and the general industry.– Organic order intake down 14% vs. Q4 2008

Adjusted operating profit margin at 12.9%– Restructuring costs of MSEK 80, primarily

related to closure of manufacturing facilities in Germany and Japan.




Industrial Technique

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*Volume and price


Contents


Market Development

Business Areas

Financials

2009 Summary

Outlook


Group Total

October - December January - DecemberMSEK 2009 2008 % 2009 2008 %Orders received 15 276 15 437 -1 58 451 73 572 -21Revenues 15 942 19 731 -19 63 762 74 177 -14Operating profit 2 450 3 288 -25 9 090 13 806 -34- as a percentage of revenues 15.4 16.7 14.3 18.6Profit before tax 2 324 3 508 -34 8 271 13 112 -37- as a percentage of revenues 14.6 17.8 13.0 17.7Profit from continuing operations 1 700 2 919 -42 6 276 10 006 -37Profit from discontinued operations, net of tax - - - 184Profit for the period 1 700 2 919 6 276 10 190Basic earnings per share, SEK 1.39 2.39 5.14 8.33- of which continuing operations, SEK 1.39 2.39 5.14 8.18Return on capital employed, % 18 34


Profit BridgeOctober – December, 2009 vs 2008

Organic Growth One-time itemsMSEK Price/Volume Acq./Div.Atlas Copco GroupRevenues 15 942 -3 684 -160 55 19 731EBIT 2 450 -1 016 0 178 3 288% 15.4% 28% 16.7%

Q4 2009 Currency Q4 2008


Profit Bridge – by Business AreaOctober – December, 2009 vs 2008

Organic Growth One-time itemsMSEK Price/Volume Acq./Div.Compressor TechniqueRevenues 8 144 -1 617 -135 30 9 866EBIT 1 594 -495 -20 93 2 016% 19.6% 31% - - 20.4%Construction & Mining TechniqueRevenues 6 395 -1 607 -30 25 8 007EBIT 904 -436 -40 100 1 280% 14.1% 27% - - 16.0%Industrial TechniqueRevenues 1 455 -551 5 0 2 001EBIT 107 -113 -20 -21 261% 7.4% 21% - - 13.0%

Q4 2009 Currency Q4 2008


MSEK Dec 31, 2009 Sep 30, 2009 Dec 31, 2008

Intangible assets 12 697 19% 12 593 19% 12 916 19%Rental equipment 2 056 3% 2 048 3% 2 282 3%Other property, plant and equipment 5 993 9% 6 046 9% 6 353 9%Other fixed assets 6 556 10% 6 060 9% 7 977 12%Inventories 11 377 17% 12 623 19% 17 106 26%Receivables 15 433 23% 15 883 23% 21 603 32%Current financial assets 1 530 2% 1 598 2% 1 659 2%Cash and cash equivalents 12 165 18% 10 005 15% 5 455 8%Assets classified as held for sale 67 0% 35 0% 43 0%TOTAL ASSETS 67 874 66 891 75 394

Total equity 25 671 38% 23 404 34% 23 768 36%Interest-bearing liabilities 25 735 38% 27 498 41% 30 404 45%Non-interest-bearing liabilities 16 468 24% 15 989 24% 21 222 32%TOTAL EQUITY AND LIABILITIES 67 874 66 891 75 394

Balance Sheet


Capital Structure Net Debt*/EBITDA

0,90,6

0,8 0,8

-1,1 -1,1

1,91,6

1,41,2 1,3

1,51,2

0,9

1,4 1,4 1,4

-1,5

-1,0

-0,5

0,0

0,5

1,0

1,5

2,0

2,5

2005 2006Q1

2006Q2

2006Q3

2006 2007Q1

2007Q2

2007Q3

2007 2008Q1

2008Q2

2008Q3

2008 2009Q1

2009Q2

2009Q3

2009

*Net Debt adjusted for the fair value of interest rate swaps


0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Public Bonds Bank Loans

Atlas Copco AB’s Loan Maturity Profile


Cash Flow

October - December January - DecemberMSEK 2009 2008 2009 2008Operating cash surplus after tax 2 247 3 300 7 630 11 857 of which depreciation added back 614 597 2 454 2 080Change in working capital 1 597 112 6 715 -2 991 Cash flows from operating activities 3 844 3 412 14 345 8 866Investments in tangible fixed assets -391 -891 -1 723 -2 899Sale of tangible fixed assets 165 145 636 515Other investments, net 54 -265 32 -1 731Cash flow from investments -172 -1 011 -1 055 -4 115 Operating cash flow 3 672 2 401 13 290 4 751Company acquisitions/ divestments -6 -55 -171 -278


Contents


Market Development

Business Areas

Financials

2009 Summary

Outlook


0

10 000

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2005 2006 2007 2008 20090

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Revenues, MSEK Operating margin, %

MSEK %

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2005 2006 2007 2008 2009

Operating profit, MSEK

MSEK

2004 pro forma, excluding divested businesses

2009 - Figures in summary


2009 - Highlights

Healthy profitability in very challenging business climate

Quick adaptation to low demand

Sustained strong focus on market presence and product development

Order intake declined 21%, 29% organic decline

Revenues declined 14% to 63 762, 22% organic decline

Operating profit down 34% to MSEK 9 090– Restructuring costs of MSEK 569, adjusted margin of 15.1% (19.0)

Very strong cash flow of MSEK 13 290 (4 751)


2,00 1,92 2,33 2,44 2,32 2,613,71

6,09

8,33

5,14

0,79 0,88 0,92 0,96 1,25 1,502,13 2,38

3,00 3,00 3,00

12,24

5,22

0,72

4,84

22,38

0

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25

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009*

Earnings pershare

Dividend pershare

Dividend +redemptionof share

Atlas Copco GroupEarnings per Share, Dividend and Redemption

* Proposed by the Board of Directors


Committed to Sustainable Productivity

Committed to sustainable productivity means:

… that Atlas Copco people do everything they can to ensure reliable, lasting results with responsible use of resources; human, natural, and capital.

32

New brand promise for Atlas Copco


Contents


Market Development

Business Areas

Financials

2009 Summary

Outlook


Near-term Outlook

The overall demand for the Group’s products and services is expected to improve somewhat.

Many emerging markets are foreseen to have a continued favorable development and demand from the mining industry is expected to improve.

35


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 and adversely 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.”

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