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Atlas Copco Group
Atlas Copco Capital Markets Day, November 29, 2011
Ronnie Leten, President and CEO
� Established 1873 in Stockholm, Sweden
� Four focused business areas � Compressor Technique(as from July 1, 2011) � Industrial Technique
� Mining and Rock Excavation Technique � Construction Technique
� Global presence In more than 170 countries
� Employees 1) 36 638
� Annual revenues 2) MSEK 78 314 (BEUR 8.5) (BUSD 11.4)
� Operating margin 2) 21.7%
Listed on NASDAQ OMX Stockholm and available as ADR in the United States
Atlas CopcoQuick facts
1) As of September 30, 20112) 12 months ending September 30, 2011SEK/USD 6.85 SEK/EUR 9.26 as of September 30, 2011
Symbols and Tickers
A share B share
NASDAQ OMX ATCO A ATCO B
ISIN code SE0000101032 SE0000122467
Reuters ATCOa.ST ATCOb.ST
Bloomberg ATCOA SS ATCOB SS
ADR (USA) ATLKY.OTC ATLCY.OTC
Atlas Copco Capital Markets Day - November 29, 20112
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Atlas Copco
� A leading provider of industrial productivity solutions, with four focused business areas
� Diversified sources of revenues and earnings: Worldwide presence and customer diversification.
� Consistent strategy
� Strong and stable service business
� Asset-light business model with focus on capital efficiency
� Strong value creation track record and well positioned for the future– Resilience in profit and cash flow
� Fit for more!
Atlas Copco Capital Markets Day - November 29, 20113
Our business model
� Direct sales/specialist distribution
� Direct service
� Application knowledge
� Focused businesses
� Commonality in process, quality and service
� Flexible organization
� Strong corporate culture
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Our business model – agile and resilient
Variable cost structure
“Asset-light” operations
Stable aftermarket business
Resilience
Agile operational set-up
Vol
ume
/ Pro
fits
Time
Deteriorating business climate� Reduce variable costs� Working capital reduction
Improving business climate� Add variable costs� Working capital increase� Small incremental investments
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Swedes say…
� … there is no such thing as bad weather, only bad clothing
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Atlas CopcoRevenues and operating margin
Continuing operations, excl. divested operations in rental service and professional electric tools. 12 month figures.
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Diversified businesses
Orders received by customer category
Revenues by business type
Revenues by geographic area
NorthAmerica
18%
Europe
31%Africa/MiddleEast
11%
29%
11%
Asia/Australia
SouthAmerica
Construction
24%
Manufacturing
24%Mining
28%
6%7%Services
Other
Equipment
59%
41%
Aftermarket
Process
11%
YTD September 2011 pro-forma
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Atlas Copco Group
CompressorTechnique38%
Industrial Technique
9%
ConstructionTechnique
36%
Revenues per business area
Mining and Rock ExcavationTechnique
17%
Pie chart: Revenues YTD September 2011,
Atlas Copco Capital Markets Day - November 29, 20119
Compressor Technique
� Develop Atlas Copco’s leading position in the field of compressed air and gas
0
5
10
15
20
25
30
35
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
2008 2009 2010 Sep. 2011
Revenues, MSEK Operating margin, %
MSEK %
NorthAmerica
16%
Europe
35%
Africa/MiddleEast
11%
30%
8%
Asia/Australia South
America
Pie chart: Revenues YTD September 2011, Graph: 12 months figures pro-forma
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Industrial Technique
� Develop Atlas Copco’s leading position in industrial power tools, assembly systems, quality assurance products, software and services
0
5
10
15
20
25
0
2 000
4 000
6 000
8 000
10 000
2008 2009 2010 Sep. 2011
Revenues, MSEK Operating margin, %
MSEK %
NorthAmerica
24%
Europe
47%
Africa/MiddleEast
1%
21%
7%
Asia/Australia
SouthAmerica
Pie chart: Revenues YTD September 2011, Graph: 12 months figures
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Industrial Technique
� Growing demand
� Sustainable productivity – Increased environmental concern
– Higher expectations on quality and traceability
– Improved ergonomics for the operator
– Extending the service offer
Trends
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2 operations – 3 persons
1 operation – 1 person
Industrial Technique
� Support customers to improve quality and productivity
� Extending the offer
� More feet on the street
� Improve the resilience
Priorities
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Industrial Technique
� Advanced pneumatic drill for the aerospace industry
� Assembly system for tightening in safety-critical applications
� Standard industrial tools
Product development
Positive Feed Drill
Assembly tools and system
Impact wrench
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Industrial Technique
� Advanced “new” assembly technology
� Fast growing segment driven by assembly trends in automotive
� Opportunity to expand in new segments
Acquisition – SCA Schucker
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Mining and Rock Excavation Technique
� Develop Atlas Copco’s leading position in rock excavation for mining and civil engineering applications
Pie chart: Revenues YTD September 2011, Graph: 12 months figures pro-forma
NorthAmerica
21%
Europe
21%
Africa/MiddleEast
17%
28%
13%
Asia/Australia
0
5
10
15
20
25
30
0
5 000
10 000
15 000
20 000
25 000
30 000
2008 2009 2010 Sep.2011
Revenues, MSEK Operating margin, %
MSEK %
SouthAmerica
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Construction Technique
� Develop Atlas Copco’s position in portable energy, construction and demolition tools, and road construction equipment
0
5
10
15
0
5 000
10 000
15 000
2008 2009 2010 Sep. 2011
Revenues, MSEK Operating margin, %
MSEK %
NorthAmerica
12%
Europe
38%
Africa/MiddleEast
10%
27%13%
Asia/Australia South
America
Pie chart: Revenues YTD September 2011, Graph: 12 months figures pro-forma
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Construction Technique
� Growing demand– Urbanization
– Emerging markets
– Roads and transport
� Sustainable productivity – Increased environmental concern
– Improved ergonomics and safety for the operator
– Extending the service offer
Trends
Capital expenditure - nonresidential infrastructure
Capital expenditure estimates for nonresidential infrastructure USD billions, real terms (2005)Source: IHS – Sept. 2011
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
2005
2010
2015
E
2020
E
2025
E
BUSD
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Construction Technique
� Extending the offer
� More feet on the street
� Develop service
� Increase operational efficiency
0
1 000
2 000
3 000
4 000
5 000
6 000
North Am.
South Am.
Europe Africa / ME
Asia / Aus.
MS
EK
Revenues YTD Sep. 2008
Revenues YTD Sep. 2011
Priorities
Revenues pro-forma
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Construction TechniquePortable Energy product strategy
Air Power Water Light Used
On-site compressors
On-site generators
On-SitePumps
On-SiteLight
Equipmentand
accessories
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Construction Technique
� Demolition and compaction equipment
� Road construction equipment
� Portable compressors and generators
Product development
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Construction Technique
� Extending the offer
� Presence in more markets / segments
� Critical mass for product development
Atlas Copco Capital Markets Day - November 29, 2011
Acquisition – GESAN
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Long term and vision driven
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Major trends
Emerging markets Energy and environment
China, India, Russia, Brazil and others Energy efficiency / CO2 reduction
Infrastructure investments New applications
Demand for raw material Innovation
Urbanization Productivity
GDP Growth estimates
Source: OECD Economic Outlook No. 87
Evolution of energyrequirement for compressors
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Major trends
4.0%
4.4%
4.7%
4.9%
5.0%
5.0%
5.1%
5.8%
5.9%
7.9%
8.1%
8.8%
Russia
Brazil
Mexico
Argentina
Saudi Arabia
South Africa
Turkey
Indonesia
China
Nigeria
India
Vietnam
Projected average annual real growth in GDP 2010-20 50
Source: PwC main scenario model projections for 2010-2050
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Priorities
Profitable growth
Presence in growth markets Developing our service business
Continued innovation Operational excellence
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5 000
10 000
15 000
20 000
25 000
30 000
2002 Sept.2011
0
2 000
4 000
6 000
8 000
10 000
12 000
2002 Sept.2011
0
2 000
4 000
6 000
8 000
10 000
2002 Sept. 2011
0
2 000
4 000
6 000
8 000
10 000
12 000
14 000
16 000
18 000
2002 Sept.2011
0
5 000
10 000
15 000
20 000
25 000
30 000
2002 Sept.2011
Worldwide presence 2002 vs Sept. 2011The shift
Share of orders received 12 months until September 30, 2011
Share of orders received 2002 (continuing operations)
+83%
+324%
+322%+478%
20%
47%
8%
20%
5%
19%
10%
31%
12%
28%
+176%
Average exchange rates
0212 1109 ∆
USD 9.72 6.50 -33%
EUR 9.15 9.06 -1%
MSEK.
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Aftermarket growth
12 month revenues. Aftermarket includes consumables and rental
32%
34%
36%
38%
40%
42%
44%
0
5 000
10 000
15 000
20 000
25 000
30 000
35 000
40 000
45 000
50 000
2005 2006 2007 2008 2009 2010 Sept.2011
Sh
are
of re
ven
ues
MS
EK
Equipment revenues, MSEK Aftermarket revenues, MSEKAftermarket share of revenues, %
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Climbing The Service
Ladder
Climbing The Service
Ladder
AftermarketIncreasing penetration
100%
100%
Cus
tom
er S
hare
1 to 1 ratio
PopulationManagement PopulationManagement
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Service divisions in all business areasDedicated organizations
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� New products and solutions, a driving force in organic growth
� Increase customer value
� Long-term strategic importance
� Core process
� Strong focus
Minetruck
Energy recovery unit forrotary screw compressors
Controller for electricnutrunner and screwdriver
Dynapacasphalt paver
Product development / innovations
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Product development in Asia
� Differentiated offer fit for the local need
� To have an offer for various segments
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Operational excellence
� Improving the flows– Information
– Cash
– Material/goods
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Investments for sustainable profitable growthNew companies, new markets, increased capacity
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Compressor manufacturing in China
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Increase capacity in Fagersta, Sweden
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Distributor/competence center in USA
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Customer Center in Mali
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Organic growth and acquisitions
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Summary
� Agile and resilient
� Fit for more!
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Committed tosustainable productivity.
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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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