1
Atlas Copco Group – Product Development
Atlas Copco Capital Markets Day, November 19, 2009
Ronnie Leten, President and CEO
Atlas Copco Capital Markets Day, November 19, 20092
Why Product Development?
� New products and solutions, a driving force in organic growth
� Increase customer value
� Long-term strategic importance– Stay ahead of competition
– Support profitability and pricing
– Stay ahead of trends and regulations
Atlas Copco Capital Markets Day, November 19, 20093
External Drivers for Product Development
� Safety
� Emissions
� Noise
� Vibration levels
� Energy efficiency
� Enhanced productivity
� Design and ergonomics
� Intelligent product concept
� Set the benchmark
2
Atlas Copco Capital Markets Day, November 19, 20094
Innovation Steps
Atlas Copco Capital Markets Day, November 19, 20095
Incremental Steps
Atlas Copco Capital Markets Day, November 19, 20096
Core Process
Define the feasabilityFeasibility
Define product specificationsDesign
Define processesPilot batch
Define the conceptsDevelopment
Define customer acceptanceField follow-up
� Project Team– Marketing
– Engineering
– Process engineering
– Purchasing
– Aftermarket
3
Atlas Copco Capital Markets Day, November 19, 20097
Financial Committment
0 200
400 600 800
1 000
1 2001 4001 600
1 8002 000
2005 2006 2007 2008 Sep.2009
0
1
2
3
4
5
R&D expenses (excluding amortization of capitalized expenditures)
in % of revenues
MSEK %
Atlas Copco Capital Markets Day, November 19, 20098
Vitality of the Product PortfolioShare of revenues and product age
38%19%
41%
46%
33%
24%
15%
48%35%
CompressorTechnique
Construction andMining Technique
IndustrialTechnique
> 6years
3-6years
< 3years
Atlas Copco Capital Markets Day, November 19, 20099
Leverage Product Development – Result in Greater Presence
Best ChannelBest Product Brand Promise Presence
Countries
10
30
150
50
The Air That powers your business
A technology you can trust
Vehicle ServiceLight Industry
Fluid Service Specialist Industry
Semi-Pro Professional Traders OEM
Light Industry Service
Distribution
Compressed Air, available anywhere
Driven by technology, Made by experience
& Associates
Local brand Affiliates
4
Atlas Copco Capital Markets Day, November 19, 200910
Leverage Product Development – Result in Greater Productivity
Atlas Copco Capital Markets Day, November 19, 200911
Leverage Product Development – Result in Greater Energy Efficiency
Evolution of Specific Energy Requirement for CT products
88,0
90,0
92,0
94,0
96,0
98,0
100,0
102,0
104,0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Year
% (
ref.
2002
)
Atlas Copco Capital Markets Day, November 19, 200912
Leverage Product Development – Result in Lower Cost
-14%-16%Weight reduction
+4% +2%Capacity increase
5
Atlas Copco Capital Markets Day, November 19, 200913
Leverage Product Development – Result in Greater Safety
� Roofex Rock Bolts
Atlas Copco Capital Markets Day, November 19, 200914
Leverage Product Development – Result in Greater Ergonomics
� Tensor Revo– 50% lighter
– 41% shorter
– 30% faster
Comparison: ETP ST101-1000-25 vs. ETP S9-1000-25
6 kg
364 mm
Atlas Copco Capital Markets Day, November 19, 200915
Leverage Product Development – Result in Greater Customer Value
6
Atlas Copco Capital Markets Day, November 19, 200916
Summary
� Product development – a key to success– Core process
– High focus
– Increase investments
Atlas Copco Capital Markets Day, November 19, 200917
Atlas Copco Capital Markets Day, November 19, 200918
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.”