April 24, 2008, Atlas Copco Group Q1 Results April 24, 2008.

1April 24, 2008, www.atlascopco.com

Atlas Copco Group

Q1 Results

April 24, 2008


Contents

Q1 Business Highlights

Market Development

Business Areas

Financials

Outlook


Q1 - Highlights

Solid growth continues over strong comparison period– 24th consecutive quarter of organic growth

– Contribution from all regions and business areas

Emerging markets well over 40% of orders received

Strong profit increase despite currency headwind– Two percentage-point effect on the operating margin


Q1 - Figures in summary

Orders up 21%; 11% organic growth

Revenues up 28% to MSEK 17 122; 18% organic growth

Operating profit up 28% to MSEK 3 248– Operating margin at 19.0% (19.0)

Profit before tax at MSEK 3 026 (2 477)

Earnings per share for continuing operations SEK 1.79 (1.45)

Operating cash flow MSEK 900 (845)


Contents


Market Development

Business Areas

Financials

Outlook


Orders received - Local currencyGroup total +24% YTDStructural change +13%

March 2008 A = Portion of sales, last 12 months, %

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

42 +26

17 +18

10 +19

8 +29

19 +30

A B

4 +7


Q1 - The Americas

Strong performance in North America– Increased activity in US coal mining

generating strong order intake

– Improvement in demand from previously slow motor vehicle industry

– Continued weakness in parts of the construction segment

Sustained high growth rate in South America


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

19 +30

8 +29


Q1 - Europe and Africa/Middle East

Good development in Europe– Very high growth rates in Eastern Europe

– Good demand from manufacturing industries

– Mining segment strong, while construction related to housing continued to slow down in Western Europe

Solid growth in the Africa / Middle East region – Good demand for construction equipment

in Northern Africa and the Middle East



42 +26

10 +19


Q1 - Asia and Australia

Stable, high growth in Asia – Strong demand for both equipment

and aftermarket products

– India and China remain strong markets, while Japan slows down

Continued strength in Australian mining



17 +18

4 +7


Organic* Growth per Quarter

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

Atlas Copco Group, continuing operations

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100

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300

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101

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301

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102

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302

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103

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303

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104

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304

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105

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305

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106

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306

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107

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307

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108

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308

Q4

*Volume and price


Atlas Copco Group – Sales Bridge

January - MarchOrders Revenues

MSEK Received

2007 16 120 13 390Structural change, % +13 +13Currency, % -3 -3Price, % +3 +3Volume, % +8 +15Total, % +21 +282008 19 505 17 122


Contents


Market Development

Business Areas

Financials

Outlook


Revenues Operating Operating ROCEMSEK profit margin12 month values, period ending Mar. 2008 Mar. 2008 Mar. 2008 Mar. 2008

Compressor Technique 33 159 6 952 21.0% 63%Construction and Mining Technique 27 391 4 724 17.2% 30%Industrial Technique 7 105 1 573 22.1% 56%Eliminations/Common Group Functions -568 -476Atlas Copco Group 67 087 12 773 19.0% 33%*

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

*excluding write-down of RSC notes


Compressor Technique


Continued growth– Organic order growth 12% excluding Gas and Process business

– Good growth in all regions

– Strong sales of both equipment and aftermarket

Operating profit at MSEK 1 643, a margin of 20.4%– Heavy negative impact of currencies

– Price increases offset increased material costs



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

Quarterly operating margin, %

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


Organic order growth 14%– Continued strong demand from mining industry

– Housing related construction demand slower in some countries

Operating profit up 37%, margin at 17.0%– Margin negatively affected by currency

changes

– Dynapac margin at 9.6%, excluding restructuring costs

Construction and Mining Technique


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Construction and Mining Technique

*Volume and price


Industrial Technique

Strong organic growth– 9% in orders

– 14% in revenues

Motor vehicle industry showing good growth

Operating profit margin at 22.6%



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*Volume and price


Contents


Market Development

Business Areas

Financials

Outlook


Group Total

January - MarchMSEK 2008 2007 %

Orders received 19 505 16 120 +21

Revenues 17 122 13 390 +28

Operating profit 3 248 2 541 +28

- as a percentage of revenues 19.0 19.0

Profit before tax 3 026 2 477 +22

- as a percentage of revenues 17.7 18.5

Profit from continuing operations 2 192 1 773 +24

Profit from discontinued operations, net of tax 184 53

Profit for the period 2 376 1 826

Basic earnings per share, SEK 1.94 1.49

- of which continuing operations, SEK 1.79 1.45

Return on capital employed, % 331) 342)

1) Excluding write-down of RSC notes

2) Including discontinued operations


Profit BridgeJanuary – March, 2008 vs 2007

Organic Growth One-time items

MSEK Price/Volume Acq./Div.

Atlas Copco Group

Revenues 17 122 2 312 -360 1 780 13 390

EBIT 3 248 942 -380 145 2 541

% 19.0% 41% - 8% 19.0%

Q1 2008 Currency Q1 2007


Profit Bridge – by Business AreaJanuary - March, 2008 vs 2007

Q1 2008 Organic Growth Currency One-time items Q1 2007

MSEK Price/Volume Acq./Div.


Revenues 8 053 989 -150 420 6 794

EBIT 1 643 383 -205 25 1 440

% 20.4% 39% - 6% 21.2%

Construction & Mining Technique

Revenues 7 344 1 131 -180 1 300 5 093

EBIT 1 252 460 -235 115 912

% 17.0% 41% - 9% 17.9%


Revenues 1 825 216 -40 58 1 591

EBIT 412 46 -20 8 378

% 22.6% 21% - 14% 23.8%

One-time items include a capital gain for the divestment of a rental company in Compressor Technique and restructuring costs in Construction and Mining Technique


Balance Sheet

MSEK Mar 31, 2008 Dec 31, 2007 Mar 31, 2007

Intangible assets 11 475 19% 11 665 21% 4 722 9%

Rental equipment 1 712 3% 1 906 3% 2 010 4%

Other property, plant and equipment 4 914 8% 4 894 9% 4 000 7%

Other fixed assets 4 437 7% 4 245 7% 3 554 7%

Inventories 13 721 23% 12 725 22% 9 783 18%

Receivables 17 737 30% 16 627 29% 13 523 25%

Current financial assets 1 265 2% 1 124 2% 944 2%

Cash and cash equivalents 3 975 7% 3 473 6% 16 139 30%

TOTAL ASSETS 59 236 56 659 54 675

Total equity 16 181 27% 14 640 26% 35 730 65%

Interest-bearing liabilities 23 772 40% 24 397 43% 4 564 8%

Non-interest-bearing liabilities 19 283 33% 17 622 31% 14 381 26%

TOTAL EQUITY AND LIABILITIES 59 236 56 659 54 675


1,91,6

2,7

2,21,9

1,5

1,10,8 0,9

-1,1

1,41,3

-1,5

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0,0

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1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008Q1

Capital Structure Net Debt/EBITDA


Cash FlowContinuing operations

January - MarchMSEK 2008 2007

Operating cash surplus after tax 3 304 2 018 of which depreciation added back 469 414Change in working capital -1 625 -506 Cash flows from operating activities 1 679 1 512Investments in tangible fixed assets -543 -528Sale of tangible fixed assets 127 172Other investments, net -363 -311Cash flow from investments -779 -667 Operating cash flow 900 845Company acquisitions/ divestments 128 -219


Contents


Market Development

Business Areas

Financials

Outlook


Near-term Outlook

The demand for Atlas Copco’s products and services from most customer segments and regions is expected to remain at a high level.

The positive outlook includes the main part of the construction segment, while certain sectors, primarily related to housing is expected to remain weak in North America and parts of Europe.


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 major customer credit losses.”

April 24, 2008, Atlas Copco Group Q1 Results April 24, 2008.

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Transcript of April 24, 2008, Atlas Copco Group Q1 Results April 24, 2008.