1

Compressor TechniqueCompressor Technique

Bengt KvarnbäckSeptember 19, 2002

2

? Machines

? Solutions

? Services

Our BusinessesCompressed Air...

3

? Gas Compressors

? Generators

? SpecialtyRental

Our Businesses …and a bit of

2

4

Our Customers

? Industry

? Service Providers

? Distributors

5

Our VisionTo be...

First in Mind…

First in Choice…

6

Our VisionThrough...

InteractionInnovation

Commitment

3

7

Our Vision

OFFERING CUSTOMERS

Best ValueBest Value

8

CT SILENT VIDEO

9

The Foundation

StrategicStrategicBuilding BlocksBuilding Blocks

4

10

The Foundation

Global Presence – Local ServiceGlobal Presence – Local Service

--Own PeopleOwn People

11

The Foundation

Product FocusProduct Focus--

Product Range ManagementProduct Range Management

--Application KnowledgeApplication Knowledge

12

The Foundation

TechnologyTechnologyAndAnd

Cost LeadershipCost Leadership--

StructureStructure

5

13

Technology – The Future“Innovation Matrix”

-3.5

0

3.5

7

10.5

14

-2.25 0 2.25 4.5 6.75 9 11.25 13.5 15.75 18SUPPORT BREAKTHROUGHNEW PLATFORMDERIVATIVE

BA

SIC

New Core ValueNew BenefitsImprovementsNo Changes Variants

INC

RE

ME

NT.

NE

WG

EN

ER

AT

ION

RA

DIC

AL

14

Product ProjectsThe Portfolio

? BB 7

? CC 7

15

-- Customer Service Customer Service

--Lean Structure - Capital ManagementLean Structure - Capital Management

Global LogisticsGlobal Logistics

The Foundation

6

16

The logistics video

17

The Foundation

IS - ManagementIS - Management

18

The Foundation

People DevelopmentPeople Development--

Shared ValuesShared Values

7

19

The Foundation

Are we doing the things right ?Are we doing the things right ?

20

Concept DevelopmentsConcept Developments

--BenchmarkingBenchmarking

Is there a Better Way?Is there a Better Way?

The Foundation

21

The Growth - 10 years

Development

91 92 93 94 95 9 6 97 98 99 000

2

4

6

8

10

12

14

16

18

MSEK

Year

x1000

01

sales

+7%+7%

02

+7%+7%

8

22

Development - Now

23

EARLY 90-iesEARLY 90-ies RECENT YEARSRECENT YEARS

13 – 14 %13 – 14 % 17 – 19 %17 – 19 %

DevelopmentProfitability (EBIT)

24

200019951991

DevelopmentProfitability

Compressor Element Demand Evolution - 10 years

0

1

2

9

25

? Volume

? Currency

? Market- and Product Development ProjectsUnchanged

? Acquisitions

Development

Profitability Trend - Slight Dip

26

? Receivables

+

? Inventories

? 34 % of revenues

Lean Balance Sheet

Development

? Operating Capital Turn-over rate ? 3.8

27

DevelopmentInventories in Days

50

60

70

80

90

100

9812

9912

0012

0112

Days

Inventory, 12 months

10

28

After MarketAfter Market

--Continuous GrowthContinuous GrowthNow at Now at approx. 4%approx. 4%

Development

29

Development

? After-market? One division - a consistent trend

1

1.5

2

12m value

12m total (right)

30

After - MarketAfter - Market

Share of Total “Industrial” BusinessShare of Total “Industrial” Business

36%36%

Trend: IncreasingTrend: Increasing

Development

11

31

Development

BRANDSBRANDS

32

DevelopmentBrands

? Better Territory Coverage? Market Share? Customer Choice

? Synergies

33

Priority? Distributors Channel

? Smaller machines

? Specialty Rental

DevelopmentBrands

12

34

Development

Efficiency - ConceptsEfficiency - Concepts

35

The Airtec video

36

Industry - Value Focus

? Solutions

? Convenience

? Energy Efficiency - Life-cycle Cost

? Global Consistency? Quality? Service and Support

? Outsourcing

? Fewer Suppliers

OutlookMarket Trends

13

37

Construction

? More “maintenance” - less new

? Rental

? Hydraulics vs. Pneumatics

OutlookMarket Trends

? Market for small compressors declining slowly

38

Strong driving forces in product development

OutlookMarket Trends

Environment - Sustainability

? Energy Focus

? Air Quality

? Emissions

? Noise Pollution

? Remote Control - Diagnostics

? Recycling

39

Liuzhou

Wuxi

Taipei

Hongkong

Shanghai

Atlas Copco “key hub” 2002-09

Liutech “key hub” 2002-09

Outlook China

14

40

Atlas Copco sales office 2002-09

OutlookMarket Coverage Atlas Copco

41

Liutech “key hub” & sales offices 2002-09

OutlookMarket Coverage Liutech

42

OutlookChina

? Strong Growth in Machine Sales,After-market business and personnel

15

43

IndiaIndia

The Country of Eternal HopesThe Country of Eternal Hopesand Growth Potentialand Growth Potential

Outlook

44

ACI Branch OfficesCP Branch OfficesACI Factory

CP Factory

Nashik

Pune

Baroda

Ahmedabad

Udaipur

Delhi

Lucknow

Mumbai

Banglore

Hyderabad

Rourkela

Kolkata

Nagpur

Kolhapur

Chennai

Madurai

Arbad

Jaipur

Cochin

Gurgaon

Chandigarh

IndoreBhopal

Bhubaneshwar

Jamshedpur

Sura t

Securandabad

Visakhapatnam

Panchkula

Vijaywada

OutlookIndia

45

OutlookIndia

? Lean, Modern Structure

? Stable Profitability

? Prepared for Growth

16

46

OutlookRussia

? Steady demand increase

? More orderly business climatesupports investment confidence

47

Outlook

RUSSIARUSSIA

48

The Gulf AreaThe Gulf Area

Growth OpportunitiesGrowth Opportunities(Provided Politically Stable and Oil Priced kept up)(Provided Politically Stable and Oil Priced kept up)

Outlook

17

49

OutlookThe Gulf Area

? New Regional Rental and Business Support Hubin Bahrain

50

OutlookUSA

? Strengthening Marketing,Distribution and After-marketpresence

? Increased Market Shares

51

? Increase Share inInstalled Base

? Direct and through

Distributors

OutlookBusiness Focus - After-market

? More ServiceContracts

18

52

No. 2 No. 1

OutlookBusiness Focus - Air Treatment

? Grow Market Share

53

Outlook

Growth Objective > 7%

? Organic

? Product Range Extensions

? Scope of Supply

? Acquisitions

? Price

54

? …and intend tokeep it that way!

Development and Outlook

? We are well ahead ofcompetition in size andperformance...