Atlas Copco Ab earning presentation

1April 27, 2009, www.atlascopco.com

Atlas Copco Group

Q1 Results

April 27, 2009


Contents

Q1 Business Highlights

Market Development

Business Areas

Financials

Outlook


Q1 - Highlights

Demand from most customer segments in all regions remained low– Construction equipment in China was one of the brighter spots

– Still cancellations in mining but at a lower rate

The aftermarket business doing well with growth in many regions

Capacity and cost reductions continued in the quarter – 3 850 employees have left since the beginning of October

Strong cash flow and efficient capital structure


Q1 - Figures in summary

-33% organic order intake, -37% including cancellations

Revenues of MSEK 16 577; 17% organic decline

Operating profit at MSEK 2 172 (3 248)– Including redundancy costs of MSEK 230

– MSEK 500 in positive currency effect compared to last year

– Adjusted for non-recurring items, operating margin at 14.5% (18.9)

Profit before tax at MSEK 1 794 (3 026)

Earnings per share SEK 1.13 (1.94)

Operating cash flow MSEK 2 851 (900)


Contents


Market Development

Business Areas

Financials

Outlook


Orders received - Local currencyGroup total -37% YTD(Structural change 0% YTD)

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

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

12 -19

21 -26

39 -39

16 -52

4 -308 -35

(-33% organically)


Q1 - The Americas

Heavy decline in North America– Low demand from most customer

segments and for most product categories

– Still some order cancellations from the mining industry

Low demand for most types of equipment in South America– Construction segment doing

relatively well

March 2009

A B

8 -35

16 -52

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

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


Q1 - Europe and Africa/Middle East

Weak demand across the board in Europe– Large declines in both Western

and Eastern Europe

– Low mining activity in Eastern Europe

– Large order for tunneling drill rigs in Russia

Pockets of strength in Africa / Middle East but the total region was down

March 2009

A B

12 -19

39 -39




Q1 - Asia and Australia

Most parts of Asia weak– Good construction demand in

China, while most other segments were weaker

– Weak demand in India and South Korea

– Relatively better development in Japan

Low demand from the important mining sector in Australia– Good development for

compressed air solutions

March 2009

A B

21 -26

4 -30




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

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100

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300

Q4

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101

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104

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308

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109

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309

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*Volume and price

Order cancellations


Atlas Copco Group – Sales Bridge

January - MarchOrders Revenues

MSEK Received

2008 19 505 17 122Structural change, % 0 +1Currency, % +10 +13Price, % +1 +2Cancellations, % -4 -Volume, % -34 -19Total, % -27 -32009 14 331 16 577


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 Mar. 2009 Mar. 2009 Mar. 2009 Mar. 2009

Compressor Technique 35 894 7 032 19.6% 53%Construction and Mining Technique 31 132 5 218 16.8% 26%Industrial Technique 7 108 992 14.0% 32%Eliminations/Common Group Functions -502 -512Atlas Copco Group 73 632 12 730 17.3% 29%


Compressor Technique


30% organic order decline– Large decline in equipment sales in most regions

– Aftermarket sales held up well

Good adjusted operating margin at 18.0%, excluding redundancy costs of MSEK 120

– Affected by under-absorption

– Positive currency effect

Aggreko acquisition finalized



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Quarterly operating margin, %

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


Order intake continued on levels well below the previous year– Organic order decline of 35% and 9% from cancellations

– Good growth for aftermarket products

Operating profit at MSEK 868, including MSEK 58 in redundancy costs– Adjusted margin at 13.6%, strongly supported by currency but

negatively affected by inventory

Acquisition of two rock tool

Construction and Mining Technique

adjustments and under-absorption

companies in India


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Construction and Mining Technique

*Volume and price


Industrial Technique

Tough market situation– 42% organic order decline

– Aftermarket business also affected but to a lesser extent

Adjusted operating profit margin at 8.4% (22.6), excluding redundancy costs of MSEK 49– Margin hurt by falling volumes and under-absorption of

fixed costs

The Chicago Pneumatic divisions Industrial

and Vehicle Service merged to one in March



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*Volume and price


Contents


Market Development

Business Areas

Financials

Outlook


Group Total

January - MarchMSEK 2009 2008 %

Orders received 14 331 19 505 -27

Revenues 16 577 17 122 -3

Operating profit 2 172 3 248 -33

- as a percentage of revenues 13.1 19.0

Profit before tax 1 794 3 026 -41

- as a percentage of revenues 10.8 17.7

Profit from continuing operations 1 378 2 192 -37

Profit from discontinued operations, net of tax - 184

Profit for the period 1 378 2 376

Basic earnings per share, SEK 1.13 1.94

- of which continuing operations, SEK 1.13 1.79

Return on capital employed, % 29 331)

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


Profit BridgeJanuary – March, 2009 vs 2008

Organic Growth One-time items

MSEK Price/Volume Acq./Div.

Atlas Copco Group

Revenues 16 577 -2 955 2 310 100 17 122

EBIT 2 172 -1 336 500 -240 3 248

% 13.1% 45% - - 19.0%

Q1 2009 Currency Q1 2008

One-time items include redundancy costs as well as reversal of previous year’s one-time items.


Profit Bridge – by Business AreaJanuary – March, 2009 vs 2008

Q1 2009 Organic Growth Currency One-time items Q1 2008

MSEK Price/Volume Acq./Div.


Revenues 8 360 -998 1 255 50 8 053

EBIT 1 384 -449 325 -135 1 643

% 16.6% 45% - - 20.4%

Construction & Mining Technique

Revenues 6 816 -1 393 835 30 7 344

EBIT 868 -729 405 -60 1 252

% 12.7% 52% - - 17.0%


Revenues 1 483 -592 225 25 1 825

EBIT 76 -308 15 -43 412

% 5.1% 52% - - 22.6%

One-time items include redundancy costs in all three business areas as well as reversal of previous year’s one-time items.


Balance Sheet

MSEK Mar 31, 2009 Dec 31, 2008 Mar 31, 2008

Intangible assets 13 208 17% 12 916 17% 11 475 19%

Rental equipment 2 344 3% 2 282 3% 1 712 3%

Other property, plant and equipment 6 517 8% 6 353 8% 4 914 8%

Other fixed assets 7 804 10% 7 977 11% 4 437 7%

Inventories 17 000 22% 17 106 23% 13 721 23%

Receivables 20 513 26% 21 603 29% 17 737 30%

Current financial assets 1 780 2% 1 659 2% 1 265 2%

Cash and cash equivalents 8 336 11% 5 455 7% 3 975 7%

Assets classified as held for sale 38 0% 43 0%

TOTAL ASSETS 77 540 75 394 59 236

Total equity 25 729 33% 23 768 32% 16 181 27%

Interest-bearing liabilities 30 819 40% 30 404 40% 23 772 40%

Non-interest-bearing liabilities 20 992 27% 21 222 28% 19 283 33%

TOTAL EQUITY AND LIABILITIES 77 540 75 394 59 236

*

* The large increase in total assets is partly explained by currency translation effects that have had an impact of approximately MSEK 9 000 since March 2008.


0,90,6

0,8 0,8

-1,1 -1,1

1,91,6

1,41,2 1,3

1,4 1,4 1,4

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2005 2006Q1

2006Q2

2006Q3

2006 2007Q1

2007Q2

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2007 2008Q1

2008Q2

2008Q3

2008 2009Q1

Capital Structure Net Debt*/EBITDA

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


0

1000

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9000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Public Bonds Bank Loans

Atlas Copco AB’s Loan Maturity Profile


Cash FlowContinuing operations

January - MarchMSEK 2009 2008

Operating cash surplus after tax 1 885 3 304 of which depreciation added back 616 469Change in working capital 1 394 -1 625 Cash flows from operating activities 3 279 1 679Investments in tangible fixed assets -492 -543Sale of tangible fixed assets 129 127Other investments, net -65 -363Cash flow from investments -428 -779 Operating cash flow 2 851 900Company acquisitions/ divestments -142 128


Contents


Market Development

Business Areas

Financials

Outlook


Near-term Outlook

The economic situation still makes the outlook very uncertain. Demand is however expected to remain weak in most industries and regions and stay around the current level.

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.”

Investor Relations

Atlas Copco Ab earning presentation