Atlas Copco Group Q1 Results Stockholm, April 26, 2001

Atlas Copco Group

Q1 ResultsStockholm, April 26, 2001

Page 2 April 26, 2001 www.atlascopco-group.com

Q1 Highlights

Order volume up 4 percent Slowdown of growth in the U.S. Operating profit up 10 percent Strong positive currency effect Outsourcing trend in rental business continues Adjustment of cost structure to fit current

demand level


Contents

Market Development Business Areas Financials Outlook


Change in % vs. same Quarter previous year

-10

-5

0

5

10

15

20

97Q1

97Q2

97Q3

97Q4

98Q1

98Q2

98Q3

98Q4

99Q1

99Q2

99Q3

99Q4

00Q1

00Q2

00Q3

00Q4

01Q1

Volume Growth per Quarter


Group Total

MSEK Jan. - March2001

Jan. - March2000

Change%

Orders Received 12,488 11,088 +13- volume +4Orders Invoiced 12,101 10,517 +15- volume +5


-151

-24

-32

+230

+64

+49

Orders received, 12 month trend Change in Local Currency

Portion of Group Sales, %

Change in %, last 3 month trend

March 2001


-151

-24

Q1 - The Americas

Demand slowed down overall in North America

Reduced purchases of construction related machines and equipment

Productivity enhancing investments in manufacturing and process industries

Outsourcing trend supports rental demand at reduced growth

Weaker trend in South America 12 months, Portion of Group Sales, %12 months, Change in %, last 3 month trend

March 2001


+230

+64

Q1 - Europe and Africa/Middle East

Continued improvement overall in Europe, but with highs and lows

Steady growth in Italy, France and UK Germany slightly up Strong demand for industrial

compressors and industrial tools Continued strong development in

Africa/Middle East Construction equipment fuel growth in

the Middle East

March 2001

12 months, Portion of Group Sales, %12 months, Change in %, last 3 month trend


-32

+49

Q1 - Asia and Australia

Continued overall positive development in Asia

High level in China and southeast Asia

Improvement in India and Korea Low demand from mining

industry in Australia

March 2001

12 months, Portion of Group Sales, %12 months, Change in %, last 3 month trend


Contents



-20

-15

-10

-5

0

5

10

15

20

25

97Q1

97Q2

97Q3

97Q4

98Q1

98Q2

98Q3

98Q4

99Q1

99Q2

99Q3

99Q4

00Q1

00Q2

00Q3

00Q4

01Q1

CompressorTechnique

Construction &Mining Technique

IndustrialTechnique

Rental Service

Volume Growth per Quarter by Business Area

Change in % vs. same Quarter previous year


Compressor Technique

Strong market reception for new industrial compressors

Favourable development in Europe and Asia, while demand in North America was lower

After-market share of business continued to increase

Overall – volume up 7 percent and profit up 27 percent, amplified by currency


Construction & Mining Technique

Over 10% operating margin Positive currency effect

Good demand from mining industry in Africa, weak in Americas and Australia

Slowdown of demand from construction and rental industry

Robust demand for consumables Use-of-products acquisition strategy


Industrial Technique

Weak demand for professional electric tools, primarily in North America

Adjustment of operating costs to current demand levels

Productive fastening tools continue to be in strong demand


Rental Service

Revenues up 5 percent in volume Rental revenue up about 10 percent Sales of equipment, parts and

merchandise decreased 8 greenfields and 4 stores acquired

Outsourcing trend continues Merger complete

34 stores consolidated Additional restructuring program launched


Earnings by Business Areaexcl. non-recurring items

January – March MSEK2001 2000

Margin 2001 2000

Compressor Technique 738 580 18.8 17.3Construction & Mining T. 185 142 10.1 8.6Industrial Technique 277 263 9.8 10.0Rental Service 388 390 10.6 12.9Corporate items -65 -47EBIT 1,523 1,328 12.6 12.6


Contents



Income Statement

MSEK 3 months ended 12 months endedMar. 31

2001Mar. 31

2000Mar. 31

2001Mar. 31

2000Revenues 12,101 10,517 48,111 39,000Operating expenses -10,638 -9,189 -41,584 -33,927Operating profit 1,463 1,328 6,527 5,073As a percentage of revenues 12.1 12.6 13.6 13.0

Financial income and expenses -414 -385 -1,732 -1,275Profit after financial items 1,049 943 4,795 3,798As a percentage of revenues 8.7 9.0 10.0 9.7

Taxes -364 -347 -1,740 -1,288Minority interest -9 -10 -41 -35Net profit 676 586 3,014 2,475

Earnings per share, SEK 3.23 2.80 14.38 12.43


Balance Sheet March 31, 2001

MSEK Mar. 312001

% Dec. 312000

% Mar. 312000

%

Intangible fixed assets 22,516 34 20,792 34 19,060 35Rental equipment 16,044 24 15,225 25 11,703 22Other fixed assets 7,601 12 7,032 11 6,985 13Inventories 6,346 10 5,881 9 5,592 10Receivables 11,844 18 11,521 19 9,502 18Cash and bank 1,319 2 1,237 2 857 2Total assets 65,670 61,688 53,699

Equity 25,980 40 23,982 39 21,512 40Minority interest 251 0 219 0 202 0Interest-bearing liabilities 23,721 36 23,507 38 19,639 37Non-interest-bearing liabilities 15,718 24 13,980 23 12,346 23Total liabilities and equity 65,670 61,688 53,699


Cash Flow

MSEK January – March2001 2000

Operating cash surplus after tax 1,692 1,296– of which depreciation added back 1,059 870Change in working capital -135 20 Cash flow from operations 1,557 1,316Investments in tangible fixed assets -767 -775Sale of tangible fixed assets 408 546Company acquisitions/divestments -72 -134Cash flow from investments -431 -363 Cash flow after net investments 1,126 953Dividends paid -1 0 Net cash flow 1,125 953


MSEK

289 301426 415

345426 470

649

382 377

927

756

265

2372

1636

606

333

190 199 207 244 160 178 191 324 207 171 318 243 196 265 183 279 2080

500

1000

1500

2000

2500

0

1000

2000

3000

4000

5000

Net, Rental Equipment Machinery & buildings 12 month valuesQuarterly 12 months

Net rental fleet investment = approx. SEK 4.0 billion

Capital Expenditures in Tangible Fixed Assets

1997 1998 1999 2000 2001Q1


Contents



April 2001

Near Term Demand Outlook Industrial and Geographical (Dotted Arrows Indicate Risk/Opportunity)

Weight by Industry

13%

8%

6%

15%

28%

8%

Building

Manufacturing

Automotive

Mining

Process

Others

6%Services

16%Non-building

Weight by Region

North America

11%

4%

51%

30%

Africa/Middle East

Asia/Australia

4%

South America

Europe

Total Demand Outlook


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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 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 the major customer credit losses.”


Contents

Market Development Business Areas Financials Outlook Additional Information


Orders received, Jan. - Mar. 2001Group Total MSEK 12,488 +13

12 months, Portion of Group Sales, %

Change Q1 2001 / Q1 2000, %

+1151

04

-152

+1430

+294

+269


0

10000

20000

30000

40000

50000

60000

70000

9012 9112 9212 9312 9412 9512 9612 9712 9812 9912 00120

1000

2000

3000

4000

5000

6000

7000Revenues, 12 month values Earnings bef. Int + tax

Long Term Trend




Jan. - March2000

Change%

Orders Received 4,216 3,741 +13Orders Invoiced 3,928 3,345 +17EBIT 738 580 +27- margin, % 18.8 17.3ROCE, 12 months value, % 65 55


0

10000

20000

30000

9012 9112 9212 9312 9412 9512 9612 9712 9812 9912 00120

1000

2000

3000Revenues, 12 month values EBIT





Jan. - March2000

Change%



-3000

0

3000

6000

9000

9012 9112 9212 9312 9412 9512 9612 9712 9812 9912 0012-300

0

300

600






Jan. - March2000

Change%



0

3000

6000

9000

12000

15000

9012 9112 9212 9312 9412 9512 9612 9712 9812 9912 00120

300

600

900

1200




Rental Service

* EBIT includes MSEK 60 of restructuring cost. Adjusted profit is MSEK 388 and margin 10.6%.


Jan. – March2000

Change%

Orders Invoiced 3,659 3,023 +21EBIT 328 390 -16- margin, % 9.0 12.9ROCE, 12 months value, % 5 6


0

4000

8000

12000

16000

20000

9612 9712 9812 9912 00120

400

800

1200

1600


Rental Service


* Including non-recurring items

Group Total*

MSEK Jan. - Mar. Change Apr. - Mar. Change2001 2000 % 00-01 99-00 %

Orders Received 12,488 11,088 +13 48,029 39,465 +22Revenues 12,101 10,517 +15 48,111 39,000 +23EBIT 1,463 1,328 +10 6,527 5,073 +29- margin, % 12.1 12.6 13.6 13.0Profit after financialitems (PAFI)

1,049 943 +11 4,795 3,798 +26

- margin, % 8.7 9.0 10.0 9.7


Non-recurring items

MSEK Q1 2001 Q4 2000 Q3 2000 Q3 1999Compressor Technique Move of production from Mauguire -13 Move of dryer production from Hamrins -14 Outsourcing of painting for Portable Air -6Industrial Technique Net of Capital gain and restruct. costs 83Rental Service Merging of Prime and RSC -127 Rationalization program -60Corporate Pension refund 226 Less early retirement provision -92Group Total -60 -20 -6 83


Group Totalexcl. non-recurring items MSEK Jan. - Mar. Change Apr. - Mar. Change

2001 2000 % 00-01 99-00 %Orders Received 12,488 11,088 +13 48,029 39,465 +22Revenues 12,101 10,517 +15 48,111 39,000 +23EBIT 1,523 1,328 +15 6,613 4,990 +33- margin, % 12.6 12.6 13.7 12.8Profit after financialitems (PAFI)

1,109 943 +18 4,881 3,715 +31

- margin, % 9.2 9.0 10.1 9.5


Earnings Before Interest and Taxes

1741 14861099 1172 1225

18902665 2931

38134345 4470

6392 6527

1179

9,2

11,6

9,3

7,3 7,36,5

9,0

10,911,7

12,7 12,912,3

13,6

15

13,7

0

1000

2000

3000

4000

5000

6000

7000

0,0

5,0

10,0

15,0

20,0EBIT EBIT margin, % Group EBIT targetMSEK %

1988 1990 1992 1994 1996 1998 2000

12 month values

EBIT margin excluding non-recurring items 1999 = 12.1%, 2000 = 13.8%, Q1 2001 = 13,7%

2001Q1


Atlas Copco Group Return on Capital Employed

12 month values

21,1

17,2

14,1 14,5 14,3

0

5

10

15

20

25

ROCE Weighted average cost of capital (WACC), pre-tax

1997 1998 1999 2000 2001Q1


Taxes

13221137

1723 1740

1280

36,4 36,3

33,3

36,7 36,3

0

500

1000

1500

2000

2500

0

10

20

30

40

12 month values 12 month values in % of profit before taxesMSEK %

1997 1998 1999 2000 2001Q1


Inventories, Customer Receivables and Net Rental Equipment

0

5

10

15

20

25

30

35Inventories Customer receivables Net Rental Equipment

Percent of Sales12 Month Values

1997 1998 1999 2000 2001Q1


Cash and Interest-Bearing Debt

10,214

Dec.1997

10,052

Dec.1998

19,325

Dec.1999

22,270

Dec.2000

Net borrowings

-7610 -4922 -8192 -9987 -9129

-5308

-10969

-11999 -12968

-2016 -1940

1613 12862118 1237 1319

-2201

-1450

-1521 -1624

Cash Short-term loans Long-term loans Pensions

22,402

Mar.2001

MSEK


Earnings per Share and Dividend

1996 1997 1998 1999 2000Dividend 2000 as proposed by the Board of Directors

10,15

11,5611,96

11,50

13,9514,38

3,604,08 4,32

4,755,25

0

5

10

15Quarter values12 month valuesDividend

2001Q1


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Documents

Atlas Copco Group Q1 Results Stockholm, April 26, 2001