July 16, 2007, Atlas Copco Group Q2 Results July 16, 2007.

1July 16, 2007, www.atlascopco.com

Atlas Copco Group

Q2 Results

July 16, 2007


Contents

Q2 Business Highlights

Market Development

Business Areas

Financials

Outlook


Q2 - Highlights

Strong growth in equipment and aftermarket sales– Double-digit growth in all regions– Organic order growth 17%

Operating profit exceeds BSEK 3 for the first time

Completion of capital restructuring– Distribution to shareholders of BSEK 27

ABAC and Dynapac acquisitions finalized

Investments for increased capacity


Q2 - Figures in summary

Revenues up 28% to MSEK 15 985– 20% organic growth

Operating profit up 30% to MSEK 3 037– Operating margin at record 19.0% (18.8)

Profit before tax at MSEK 3 215 (2 200)– Including capital gain of MSEK 134

Profit from continuing operations up 53% to MSEK 2 377– Earnings per share continuing operations SEK 1.94 (1.23)

Operating cash flow, continuing operations, MSEK 1 232 (964)


Contents


Market Development

Business Areas

Financials

Outlook


Orders received - Local currencyGroup total +27% YTD, +27% last 3 months(Structural change +7% YTD, +10% last 3 months)

June 2007

7 +42 +27

10 +42 +40

18 +31 +31

5 +23 +10

40 +27 +28

20 +18 +25

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


Q2 - The Americas

Solid growth in North America– Good demand from most customer

segments within mining, process, and manufacturing industries

– Demand from the motor vehicle industry still on the weak side

Strong demand continues from all customer segments in South America

June 2007 A = Portion of sales, Year-to-date, %B = Year-to-date vs. prev. year, %C = Last 3 months vs. prev. year, %

A B C

7 +42 +27

20 +18 +25


Q2 - Europe and Africa/Middle East

Positive development in Europe– Healthy demand from manufacturing and

process industries– Very strong demand from most customer

segments in Eastern Europe

Continued good demand in the Africa / Middle East region – Very strong increase in sales of mining

equipment in Africa

June 2007

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

10 +42 +40

40 +27 +28


Q2 - Asia and Australia

Asia continues to deliver strong growth– Good demand for industrial equipment in

most major markets, particularly in China – Solid growth for construction and mining

equipment

Demand from most customer segments remained strong in Australia

June 2007 A = Portion of sales, Year-to-date, %B = Year-to-date vs. prev. year, %C = Last 3 months vs. prev. year, %

A B C

18 +31 +31

5 +23 +10


Volume Growth per Quarter

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

Atlas Copco Group, continuing operations

-10

-5

0

5

10

15

20

25

00 Q

100

Q2

00 Q

300

Q4

01 Q

101

Q2

01 Q

301

Q4

02 Q

102

Q2

02 Q

302

Q4

03 Q

103

Q2

03 Q

303

Q4

04 Q

104

Q2

04 Q

304

Q4

05 Q

105

Q2

05 Q

305

Q4

06 Q

106

Q2

06 Q

306

Q4

07 Q

107

Q2

07 Q

307

Q4


Atlas Copco Group – Sales Bridge

Orders Revenues Orders RevenuesMSEK Received Received2006 13 562 12 444 27 261 24 392Structural change, % +10 +12 +7 +7Currency, % -4 -4 -6 -6Price, % +2 +2 +2 +2Volume, % +15 +18 +18 +17Total, % +23 +28 +21 +202007 16 735 15 985 32 855 29 375

April - June January - June


Contents


Market Development

Business Areas

Financials

Outlook


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

*including discontinued operations

Revenues Operating Operating ROCEMSEK profit margin12 month values, period ending Jun. 2007 Jun. 2007 Jun. 2007 Jun. 2007Compressor Technique 28 404 5 915 20.8% 66%Construction and Mining Technique 21 012 3 623 17.2% 35%Industrial Technique 6 440 1 429 22.2% 60%Eliminations/Common Group Functions -361 -619Atlas Copco Group 55 495 10 348 18.6% 33%*


Compressor Technique

Strong growth for both equipment and aftermarket sales– Organic order growth 20%– Double-digit growth in all regions

Record operating profit– Margin affected negatively by recent acquisitions,

comparable units above 21% margin

ABAC acquisition finalized on April 2

http://img01.atlascopco.com/lowres/Compressors/Industrial%20air/1/G00228.jpg




Compressor Technique

-10

-5

0

5

10

15

20

25

-10

-5

0

5

10

15

20

25

01 Q

1

01 Q

201

Q3

01 Q

4

02 Q

102

Q2

02 Q

3

02 Q

4

03 Q

103

Q2

03 Q

3

03 Q

404

Q1

04 Q

2

04 Q

3

04 Q

405

Q1

05 Q

2

05 Q

305

Q4

06 Q

1

06 Q

2

06 Q

306

Q4

07 Q

1

07 Q

207

Q3

07 Q

4

Revenue volume growth: Change vs. same quarter previous year, %Quarterly operating margin, %

Quarterly operating margins include Prime Energy from Q1 2006.


Solid demand from both mining and construction industry

Organic order growth 16%– 21st consecutive quarter with volume growth

Operating profit up 56%– Margin at record level, 17.9%– Comparable units 18.5%

Dynapac acquisition finalized on May 31

Construction and Mining Technique


Dynapac

Consolidated as from June 1

Revenues increased 7% in the first 6 months of the year

Operating profit contribution of MSEK 65 in June– Almost no amortization of intangibles as Dynapac brand

name is deemed to have indefinite useful life and is not amortized

Synergy projects under way

Expanding presence in the road development market


-10

-5

0

5

10

15

20

25

30

-10

-5

0

5

10

15

20

25

30

01 Q

1

01 Q

201

Q3

01 Q

4

02 Q

1

02 Q

202

Q3

02 Q

4

03 Q

1

03 Q

203

Q3

03 Q

4

04 Q

1

04 Q

204

Q3

04 Q

4

05 Q

1

05 Q

205

Q3

05 Q

4

06 Q

1

06 Q

206

Q3

06 Q

4

07 Q

1

07 Q

207

Q3

07 Q

4


Construction and Mining Technique


Industrial Technique

Strong order growth in general industry offset by weakness in motor vehicle industry

2% organic order growth in total

High operating profit and margin at 22.9%

New generation of the Tensor tool introduced


Industrial Technique

-5

0

5

10

15

20

25

-5

0

5

10

15

20

25

03 Q

1

03 Q

2

03 Q

3

03 Q

4

04 Q

1

04 Q

2

04 Q

3

04 Q

4

05 Q

1

05 Q

2

05 Q

3

05 Q

4

06 Q

1

06 Q

2

06 Q

3

06 Q

4

07 Q

1

07 Q

2

07 Q

3

07 Q

4



Contents


Market Development

Business Areas

Financials

Outlook


Group Total

MSEK 2007 2006 % 2007 2006 %Orders received 16 735 13 562 +23 32 855 27 261 +21Revenues 15 985 12 444 +28 29 375 24 392 +20Operating profit 3 037 2 337 +30 5 578 4 433 +26- as a percentage of revenues 19.0 18.8 19.0 18.2Profit before tax 3 215 2 200 +46 5 692 4 232 +34- as a percentage of revenues 20.1 17.7 19.4 17.3Profit from continuing operations 2 377 1 555 +53 4 150 3 018 +38Profit from discontinued operations, net of tax - 743 53 1 066Profit for the period 2 377 2 298 4 203 4 084



Balance Sheet

MSEK June 30, 2007 Dec 31, 2006 June 30, 2006

Intangible assets 11 326 20% 4 299 8% 3 540 6%Rental equipment 2 018 4% 1 979 4% 1 987 3%Other property, plant and equipment 4 553 8% 3 777 7% 3 631 6%Other fixed assets 4 963 9% 3 161 6% 1 766 3%Inventories 11 962 22% 8 487 15% 7 986 14%Receivables 16 080 29% 12 401 22% 12 590 22%Current financial assets 1 084 2% 1 016 2% 602 1%Cash and cash equivalents 3 609 6% 20 135 36% 2 946 5%Assets classified as held for sale 22 890 40%TOTAL ASSETS 55 595 55 255 57 938

Total equity 11 651 21% 32 708 59% 26 300 45%Interest-bearing liabilities 26 627 48% 8 787 16% 10 951 19%Non-interest-bearing liabilities 17 317 31% 13 760 25% 13 403 23%Liabilities associated with assets classified as held for sale 7 284 13%TOTAL EQUITY AND LIABILITIES 55 595 55 255 57 938


1,91,6

2,7

2,21,9

1,5

1,10,8 0,9

-1,1

1,8

-1,5

-1,0

-0,5

0,0

0,5

1,0

1,5

2,0

2,5

3,0

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 June2007

Capital Structure Net Debt/EBITDA


Cash FlowContinuing operations

MSEK 2007 2006* 2007 2006*Operating cash surplus after tax 2 718 2 491 4 736 4 408 of which depreciation added back 443 397 857 787Change in working capital -787 -738 -1 293 -1 267 Cash flows from operating activities 1 931 1 753 3 443 3 141Investments in tangible fixed assets -544 -618 -1 072 -1 117Sale of tangible fixed assets 195 109 367 254Other investments, net -350 -280 -661 -603Cash flow from investments -699 -789 -1 366 -1 466 Operating cash flow 1 232 964 2 077 1 675Company acquisitions/ divestments -5 463 -145 -5 682 -413*Restated, continuing operations



Contents


Market Development

Business Areas

Financials

Outlook


Near-term Outlook

The demand for Atlas Copco’s products and services, from most customer segments such as mining, construction, and the manufacturing and process industries, is expected to remain at the current high level.

28


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 major customer credit losses.”

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July 16, 2007, Atlas Copco Group Q2 Results July 16, 2007.

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