ATLAS COPCO GROUP - ADM · 1956 by Atlas Copco In 1968 Atlas Copco moves all production and...

ATLAS COPCO GROUP

Brussels, Belgium, September, 2014

Ronnie Leten, President and CEO

WHY CONTINUE TO INVEST IN BELGIUM AS A

GLOBAL COMPANY?

Case: Atlas Copco

Atlas Copco Group - September 2014

2

Established 1873 in Stockholm, Sweden

Four focused

business areas

Compressor Technique

Industrial Technique

Mining and Rock Excavation Technique

Construction Technique

Global presence Customers in more than 180 countries

Employees1) 43 937 in 91 countries

Revenues2) BSEK 87 (BEUR 9.4)

Market Cap.1) BSEK 232 (BEUR 25)

FACTS IN BRIEF


1) End of June 20142) 12 months until June 2014

3

ATLAS COPCO: WHERE USED?


4

OUR PRODUCTS AND SERVICES IN FOUR BUSINESS AREAS


5

Compressor

Technique

Industrial

Technique

Mining and

Rock Excavation

Technique

Construction Technique

11%44% 28% 17%

76

acquisitions

GROWTH AND OPERATING MARGIN2003 – 2013, continuing operations

6

~ BSEK 20

Revenues

10 year

CAGR

~11%

30

84

0

10

20

30

40

50

60

70

80

90

100

2003 Acquisitions Organic Currency 2013

Estimated contribution from acquisitions, organic growth and currency, excl. divested operations in rental service and professional electric tools.

BSEK

CAGR

~ 4%

CAGR

~ 8.5%

CAGR

~ -1.5%

EBIT

~ 15%

EBIT

~20%


DIVERSIFIED BUSINESSES

Construction

Manufacturing

Process industry

Mining

Services

Others

Orders received per customer category

Equipment

Service

Revenues by business type

57%


28%

11%

26%

5%23%

7%

43%

2013

7

CUSTOMERS EVERYWHERE

8

NorthAmerica

22%

SouthAmerica

9%

Asia/Australia

28%

Europe31%

Africa/Middle East

10%

Orders received by region Q2 2014


ATLAS COPCO ENTITIESBelgium

Rumst

Rental EuropeBelux Customer Center

Overijse

Power Tools Distribution

Hoeselt

Wilrijk

Airpower Compressors

AC Finance Belgium

AC Finance Europe

AC Bus. Services Europe

International Distribution Airpower Construction

FACTS AND FIGURES

Atlas Copco employs

nearly 3 000 people in

Belgium

9


GLOBAL HEAD OFFICE OF COMPRESSOR TECHNIQUE

In Antwerp since 1937

Arpic Engineering NV was acquired

1956 by Atlas Copco

In 1968 Atlas Copco moves all

production and research of

compressors from Sweden to Belgium

130 000 square meters production

and office space

Most advanced R&D-center of

compressed air in the world


10

WHY ARE WE IN BELGIUM?

It’s our history: strong successful legacy

Fully integrated set-up marketing, engineering,

manufacturing

Innovation is our driving force

– Boost (customer) Benefits (BB)

– Cut (operating) Cost (CC)

The University of Compressed Air

– No innovation without production

– No production without competitivity


11

WHAT IS GOOD IN BELGIUM?

Competence

– Universities: Leuven, Gent, Brussel, Luik, Antwerp,

Hasselt

– Techno Centers: Sirris, FMTC, VITO, IWT, FWO

– Financial know-how: Financial HQ moved to

Belgium

Infrastructure

– @ the center of Western Europe

– Dynamic layer of SME

– Close to business partners (suppliers)

Society

– Multilingual, social, cultural society and safe

– Stable relation with social partners

Incentives

– Incentive for R&D engineers

– Support for training & IP


12

WHAT IS CHALLENGING IN BELGIUM?

Labor cost and flexibility

Traffic (around Antwerp)

Increased administration and legislation

An external observation: (perceived) political

stability...


13

… BUT

The real challenge is that the good points are not a differentiator anymore in this global world,

WE NEED MORE…..


14

WHY CONTINUE TO INVEST IN BELGIUM AS A

GLOBAL COMPANY?

Case: Atlas Copco


15

ARE WE FIT FOR CHANGE…?Our business model – agile and resilient


16

Variable cost structure and asset light operations

Stable service business

Continuous investments in innovation

Competent and committed employees

Resilience

Agile

operational

set-up

Volu

me /

Pro

fits

Time

Deteriorating business climate

Reduce variable costs

Working capital reduction

Improving business climate

Add variable costs

Working capital increase

Small incremental investments

ARE WE LEVERAGING THE DIGITAL TECHNOLOGY FOR

OPERATIONAL EXCELLENCE?

Activity based working


9 3

12

6

From 8 to 5 AnyTime

SEP MAR

DEC

JUNAlone Together Office AnyWhere

Between us with AnyOnePC Laptop AnyDevice Closed and Open but

Restricted protected

Corporate Network

Hybrid Networks

17

ARE WE BOOSTING CUSTOMER BENEFITS (BB)?

Know your competitors

Know your customers

Add features and extend the offer

Make differentiated value propositions

Glocalization: Local to global

Benchmark: Strive to be number one!

China/Asia: Be there and be market

leader

Drive innovation (incremental and

breakthrough)

Energy efficiency, connectivity...

Extend offer for the same customers

(dryers, vacuum, Adhesives…)


18

ARE WE CUTTING COSTS (CC)?

Strive for operational excellence in everything

what you do

– Reduce time to market (R&D)

– Lean manufacturing

– Agility

– …

You can not be good in everything

– Focus on core activity

It is a never ending story...


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Before

WE FOCUS ON OUR CORE

Understand the customers problems

– Direct contact

Be the first on the market

– Reduce time-to-market

Keep product core knowledge

– Understand the new technology (it is a race)

– Golden triangle: innovation – production –

competitiveness

Leverage the competence of your partners

– Share operational capacity

– Attract competence (open innovation)

Invest continuously in people

– Reduce time to competence


20

TO BE NUMBER ONE

Have high ambitious goal: To be the number one in your field

Differentiate: There is no place for me too’s

Be an innovation leader in everything what we do

– Innovation creates the next innovation

And don’t forget what Prof Rafael Reif of MIT said:

– “local production is very important to sustaining a vibrant innovation

ecosystem in a region”


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COMMITTED TO

SUSTAINABLE PRODUCTIVITY.


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ATLAS COPCO GROUP - ADM · 1956 by Atlas Copco In 1968 Atlas Copco moves all production and...

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