October 22, 2009, Atlas Copco Group Q3 Results October 22, 2009.

1October 22, 2009, www.atlascopco.com

Atlas Copco Group

Q3 Results

October 22, 2009


Contents

Q3 Business Highlights

Market Development

Business Areas

Financials

Outlook


Q3 - Highlights

Stable demand– Still very low investment level

– Improved demand in some emerging market

– Increased activity within mining but still low equipment order level

Sales of aftermarket products and services remained at good level

Healthy profitability– Annual cost savings in excess of MSEK 2 000 now achieved

– Favorable sales mix supported margin

Operating cash flow very strong


Q3 - Figures in summary

Organic order intake down 30%

Revenues of MSEK 15 088; 25% organic decline

Operating profit at MSEK 2 402 (3 640)– An operating margin of 15.9% (19.7)

– MSEK 60 in positive currency effect compared to last year

Profit before tax at MSEK 2 210 (3 224)

Earnings per share SEK 1.42 (1.99)

Operating cash flow MSEK 4 275 (1 054)


Contents


Market Development

Business Areas

Financials

Outlook


Orders received - Local currency

September 2009 A = Portion of sales, Year-to-date, %

B = Year-to-date vs. prev. year, %

16 -44 -36

36 -36 -34

13 -28 -23

21 -24 -16

5 -28 -389 -24 -10

A B CA = Portion of sales, Year-to-date, %


C = Last 3 months vs. prev. year, %

Group total -35% YTD (-34 excl. cancellations), -30% last 3 months(Structural change 0% YTD, 0% last 3 months)


Q3 - The Americas

Continued weak demand in North America– Low order intake for equipment in

construction, mining and most industrial segments

– Some good orders for oil and gas and energy recovery

Situation improved in South America– Recovery noted in both mining and

construction segment

September 2009

A B C

9 -24 -10

16 -44 -36

A = Portion of sales, Year-to-date, %




Q3 - Europe and Africa/Middle East

Demand remained low in Europe– Better development in Western than in

Eastern Europe

– Russia remained very weak

Mixed development in Africa / Middle East– Good demand within oil and gas sector in

Northern Africa and Middle East but poor development in the south

September 2009

A B C

36 -36 -34

13 -28 -23

A = Portion of sales, Year-to-date, %




Q3 - Asia and Australia

Positive development in Asia– Sequential improvement in China and

India in most customer segments

– Good mining demand in South East Asia

– Weak demand in Japan

Weak quarter in Australia

September 2009 A = Portion of sales, Year-to-date, %


C = Last 3 months vs. prev. year, %A B C

21 -24 -16

5 -28 -38


Organic* Growth per Quarter

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

Atlas Copco Group, continuing operations

-40-35-30-25-20-15-10

-505

1015202530

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

08 Q

108

Q2

08 Q

308

Q4

09 Q

109

Q2

09 Q

309

Q4

*Volume and price

Order cancellations


Atlas Copco Group – Sales Bridge

July - September January - SeptemberOrders Revenues Orders Revenues

MSEK Received Received

2008 18 842 18 440 58 135 54 446Structural change, % 0 +1 0 +1Currency, % +6 +6 +9 +10Price, % +1 +1 +1 +1Cancellations, % - - -1 -Volume, % -31 -26 -35 -24Total, % -24 -18 -26 -122009 14 309 15 088 43 175 47 820


Contents


Market Development

Business Areas

Financials

Outlook


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

Revenues Operating Operating ROCEMSEK profit margin12 month values, period ending Sep. 2009 Sep. 2009 Sep. 2009 Sep. 2009

Compressor Technique 34 246 6 174 18.0% 45%Construction and Mining Technique 27 521 3 846 14.0% 18%Industrial Technique 5 938 407 6.9% 13%Eliminations/Common Group Functions -154 -499Atlas Copco Group 67 551 9 928 14.7% 21%


Compressor Technique


Overall demand stable on low level– 27% organic order decline

– Good orders from oil and gas segment

– Aftermarket continued to hold up well

Operating margin at 18.6% – Improvement from previous quarters thanks

to lower costs and favorable sales mix

Acquisition of Czech service company



-25

-20

-15

-10

-5

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08

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09

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09

Q2

09

Q3

09

Q4

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

Quarterly operating margin, %

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


Solid aftermarket but low equipment demand – Organic order decline of 34%

– Improved activity level within mining

Operating profit at MSEK 823, a margin of 13.8%– Under-absorption and currency had a negative

impact

– Favorable sales mix and good cost development

Construction and Mining Technique


-35

-30

-25

-20

-15

-10

-5

0

5

10

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25

30

-35

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-25

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Q1

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Q2

09

Q3

09

Q4



Construction and Mining Technique

*Volume and price


Industrial Technique

Continued tough market conditions– Weak demand, both from the motor vehicle industry and the

general industry, organic order intake down 38%

– Positive service development in emerging markets

Operating profit margin at 6.7%– Still heavily affected by under-absorption

– Gradual improvement from efficiency initiatives



-45

-40

-35

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

-45

-40

-35

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

03 Q

1

03 Q

3

04 Q

1

04 Q

3

05 Q

1

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1

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3

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09 Q

3



*Volume and price


Contents


Market Development

Business Areas

Financials

Outlook


Group Total

July - September January - SeptemberMSEK 2009 2008 % 2009 2008 %

Orders received 14 309 18 842 -24 43 175 58 135 -26

Revenues 15 088 18 440 -18 47 820 54 446 -12

Operating profit 2 402 3 640 -34 6 640 10 518 -37

- as a percentage of revenues 15.9 19.7 13.9 19.3

Profit before tax 2 210 3 224 -31 5 947 9 604 -38

- as a percentage of revenues 14.6 17.5 12.4 17.6

Profit from continuing operations 1 730 2 432 -29 4 576 7 087 -35

Profit from discontinued operations, net of tax - - - 184

Profit for the period 1 730 2 432 4 576 7 271

Basic earnings per share, SEK 1.42 1.99 3.75 5.94

- of which continuing operations, SEK 1.42 1.99 3.75 5.79

Return on capital employed, % 21 341)

1) Excluding non-recurring w rite dow n of RSC notes.


Profit BridgeJuly – September, 2009 vs 2008

Organic Growth One-time items

MSEK Price/Volume Acq./Div.

Atlas Copco Group

Revenues 15 088 -4 542 1 140 50 18 440

EBIT 2 402 -1 308 60 10 3 640

% 15.9% 29% - - 19.7%

Q3 2009 Currency Q3 2008


Profit Bridge – by Business AreaJuly– September, 2009 vs 2008

Q3 2009 Organic Growth Currency One-time items Q3 2008

MSEK Price/Volume Acq./Div.


Revenues 7 799 -1 864 610 25 9 028

EBIT 1 451 -525 50 5 1 921

% 18.6% 28% - - 21.3%

Construction & Mining Technique

Revenues 5 976 -2 206 420 20 7 742

EBIT 823 -517 -120 5 1 455

% 13.8% 23% - - 18.8%


Revenues 1 243 -655 105 5 1 788

EBIT 83 -255 0 1 337

% 6.7% 39% - - 18.8%


MSEK Sept 30, 2009 Dec 31, 2008 Sept 30, 2008

Intangible assets 12 593 19% 12 916 17% 12 177 19%

Rental equipment 2 048 3% 2 282 3% 1 992 3%

Other property, plant and equipment 6 046 9% 6 353 8% 5 698 9%

Other fixed assets 6 060 9% 7 977 11% 4 797 7%

Inventories 12 623 19% 17 106 23% 16 371 25%

Receivables 15 883 24% 21 603 29% 19 770 30%

Current financial assets 1 598 2% 1 659 2% 1 531 2%

Cash and cash equivalents 10 005 15% 5 455 7% 3 403 5%

Assets classified as held for sale 35 0% 43 0% 39 0%

TOTAL ASSETS 66 891 75 394 65 778

Total equity 23 404 35% 23 768 32% 18 759 29%

Interest-bearing liabilities 27 498 41% 30 404 40% 27 694 42%

Non-interest-bearing liabilities 15 989 24% 21 222 28% 19 325 29%

TOTAL EQUITY AND LIABILITIES 66 891 75 394 65 778

Balance Sheet


0,90,6

0,8 0,8

-1,1 -1,1

1,91,6

1,41,2 1,3

1,5

1,21,4 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

Capital Structure Net Debt*/EBITDA

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


0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Public Bonds Bank Loans

Atlas Copco AB’s Loan Maturity Profile


Cash Flow

July - September January - SeptemberMSEK 2009 2008 2009 2008

Operating cash surplus after tax 2 360 2 936 5 383 8 557 of which depreciation added back 661 524 1 840 1 483Change in working capital 2 032 -772 5 118 -3 103 Cash flows from operating activities 4 392 2 164 10 501 5 454Investments in tangible fixed assets -387 -708 -1 332 -2 008Sale of tangible fixed assets 164 126 471 370Other investments, net 106 -528 -22 -1 466Cash flow from investments -117 -1 110 -883 -3 104 Operating cash flow 4 275 1 054 9 618 2 350Company acquisitions/ divestments -10 -45 -165 -223


Contents


Market Development

Business Areas

Financials

Outlook


Near-term Outlook

The overall demand is expected to stay around the current level.

The demand in some emerging markets, including China and India, is expected to gradually improve.

30


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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October 22, 2009, Atlas Copco Group Q3 Results October 22, 2009.

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