Atlas Copco Group · Atlas Copco Capital Markets Day 2017 GA 75-110 VSD+ range extension Extended Nitrogen Range Up to 50% energy savings Fully automated 24/7 on–site nitrogen at

Atlas Copco

Group

Capital Markets Day 2017

Mats Rahmström

President and CEO

Hans Ola Meyer

CFO

Sofia Svingby

VP Corporate Responsibility

Agenda

Group Presentation

Atlas Copco Capital Markets Day 2017

1. Performance review1

1. Sustainable profitable growth2

1. Business areas3

1. Summary4

2

Performance review

Group Presentation


3

January – September in brief

Strong order growth

– Particularly strong growth for vacuum and mining

– Double-digit order growth in almost all regions

All business areas growing with solid profitability

Strong operating cash flow, in spite of growth

The split project progressing according to plan

Near-term outlook

The overall demand for the Group is expected to remain at current high level

Group Presentation


4

Orders received – local currency

Group Presentation

Atlas Copco Capital Markets Day 2017 September 2017

100 +21 +21

Share of orders received,

year-to-date, %

Year-to-date vs.

previous year, %

Last 3 months vs.

previous year, %

23 +22 +19

6 +14 +15

29 +16 +14

8 +6 +11

30 +33 +33

4 +21 +40

5

Group total

Group Presentation


January – September 2017 vs. 2016

6

Continuing operations

MSEK 2017 2016 %

Orders received 93 059 75 195 24%

Revenues 85 556 72 861 17%

Operating profit 17 967 14 013 28%

– as a percentage of revenues 21.0 19.2

Profit before tax 17 183 13 187 30%

– as a percentage of revenues 20.1 18.1

Income tax expense -4 664 -3 656 28%

Profit for the period from

continuing operations 12 519 9 531 31%

Basic earnings per share, SEK 10.30 7.83

Return on capital employed, % 30 27

January - September

Sustainable profitable growth

Group Presentation


7

ReturnsSustained high return on capital employed (ROCE)

Cash dividend50% of net profit in annual dividend

Revenues8% average growth per year over a business cycle

Our financial targets

Group Presentation


8

How we create value and grow

Group Presentation


SOCIETY

CUSTOMERSSHARE-

HOLDERS

ENVIRONMENT

9

SOCIETY

CUSTOMERSSHARE-

HOLDERS

ENVIRONMENT

First in mind, first in choice

10


Customer focus

Group Presentation


11

The best products

Group Presentation


12

Leading differentiated technology

Group Presentation


13

People

Group Presentation


Knowledgeable,

professional and

passionate

Diversity

Trust

14

Speed

Operation – Modularization and flow

manufacturing


15

Leveraging the

competence of

business partners

Supplier

Productivity gains

Reduced total cost

of ownership

Customer

Design and

development

Sales and service

Core manufacturing

Atlas Copco

Group Presentation

Agility and resilience

Group Presentation


16

Volu

me /

Pro

fits

Time

RESILIENCE

DETERIORATING BUSINESS CLIMATE

Reduce variable costs

Working capital reduction

IMPROVING BUSINESS CLIMATE

Add variable costs

Working capital increase

Small incremental investments

AGILE OPERATIONAL

SET-UP

Asset light operations

Profitable service business

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

Equipmentrevenues,MSEK

Servicerevenues,MSEK

Proactive service

Group Presentation


17

Digitalization

Group Presentation


18

Digital for uptime

Digital for customer

Digital for operations

Presence

Develop local

competences

Direct, indirect and

digital presence

Create high

brand awareness

Group Presentation


19

Why we can continue to grow

Market leader with strong portfolio of

businesses and products

Commitment to innovation

Strong service offering

Capacity for strategic acquisitions

Top organization, world-class people

and top execution

Sustainability embedded in everything

Group Presentation


20

Revenues8% average growth

per year over a

business cycle

High return on capital employed

Standardization and efficient flow

Asset light operations

Variable cost structure

Strong service business

Sustainability embedded in everything

Group Presentation


High

ROCE

21

ReturnsSustained high

return on capital

employed (ROCE)

0%

5%

10%

15%

20%

25%

30%

35%

40%

-

15 000

30 000

45 000

60 000

75 000

90 000

105 000

120 000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Sep.

Revenues, MSEK

Operating margin, %

Adjusted operating margin, %

ROCE %

Financial performance

Group Presentation


22

10 y Revenue

CAGR 7%

10 y average

ROCE 29%

Atlas Copco Currency Index

23

70

75

80

85

90

95

100

105

110

115

120

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Group Presentation


Asset light

0%

5%

10%

15%

20%

25%

30%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sep.

Average net workingcapital in % ofrevenues

Average property,plant and equipment in% of revenues

Group Presentation


24

Cash generation

-5 000

0

5 000

10 000

15 000

20 000

25 000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sep.

Profit for the period, MSEK

Operating cash flow,MSEK

Gross investments inproperty, plant andequipment, MSEK

Group Presentation


25

Average cash

conversion

107%

Including discontinued operations

0

5

10

15

20

25

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Dividend per share, SEK Redemption per share, SEK Earnings per share, SEK

Sustainable cash distribution

Average

payout ratio

65% Average

yield

5%

Group Presentation

26


Cash dividend50% of net profit in

annual dividend

Integrated strategy

Group Presentation


PeoplePresence Innovation ServiceOperational

Excellence

Values and Business Code of Practice

RESOURCES

COMPETENCE

INNOVATION

SAFETY ANDWELL-BEING

ETHICS

27

Driving sustainable, profitable growth

Group Presentation


28

Stakeholder

demand drives

sustainable

productivity and

innovation

Grasping opportunity – balancing risk

Source: Transparency International CPI 2016Corruption Perceptions Index © 2016 by Transparency International. Licensed under CC-BY-ND 4.0

Group Presentation


29

EFFICIENT USE OF RESOURCES

HIGHEST ETHICAL BEHAVIOUR

SAFETY & WELL-BEING

THE MOST COMPETENT TEAMS

INNOVATION

Progress

Business Code of Practice

Accidents

Innovation

Inflow of women

Emissions

Group Presentation


30

Business areas

Group Presentation


31

Compressor Technique

Group Presentation


Compressors

Medical ElectronicsChemical

/petrochemical…and more

Textile Wood & paper Food & beveragesAssembly

Air treatment &

gas solutions

Major customer segments

32

Compressor Technique

Growth drivers Orders, revenues and operating margin

Group Presentation


ROCE

74%

Innovation

Develop core for equipment and service

Expand core

Compliment organic growth with acquisition

Connectivity

Multi brand

33

Innovative products to be launched in the coming months

Group Presentation


GA 75-110 VSD+ range extensionUp to 50% energy savingsExtended Nitrogen Range

Fully automated 24/7 on–site nitrogen at a low cost

Brand portfolioIndustry leading performance

~35% energy savings

34

New Dryer range providing stable air quality and silent operation ensuring

reliable and efficient production processes.

Integration of Dryersin Medical Applications

.

Connectivity

Group Presentation


>85.000CONNECTIONS

SERVICE LEADSMORE

REVENUEADDITIONAL

LOYALTYCUSTOMER

UPTIME

>98%

35

Power Technique

Group Presentation


Customer segments

Petrochemical Events Construction Water well, oil & gas Offshore

Emergency Relief Manufacturing Power plants Mining Quarries

Dirk BeytsDirk Beyts

36

Power Technique

Growth drivers Orders, revenues and operating margin

Group Presentation


ROCE

20%

Innovation

Expand the offer

Strengthen market position in our niches

Develop a service network for an indirect channel

37

Innovation is key

Group Presentation


Main Technologies Industry Focused Solutions

Portable offshore equipment, boosters, steam and nitrogen generation, oil-

free compressors and air treatment

38

Air, power and flow

+

Portable compressors, pumps, generators, light towers and handheld tooling

Containerized efficient Twin-engine generator for Europe

New portable efficient

electric compressors

Battery technologyin light towers

Full range of compact utility compressors

Start to roll out

stage 5 ready generators

Extended high-flow pump range

Monitoring controlAs standard on select new units

Retrofitting field units

Innovative products to be launched in the coming months

Group Presentation


39

Summary

Group Presentation


40

Summary

Group Presentation


41

SOCIETY

CUSTOMERSSHARE-

HOLDERS

ENVIRONMENT

Identify and

“own” profitable

business niches

Use our core

competencies to

develop the nichesTop execution through

a decentralized

leadership model

Committed to

sustainable productivity.

Group Presentation


42

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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Atlas Copco Group · Atlas Copco Capital Markets Day 2017 GA 75-110 VSD+ range extension Extended Nitrogen Range Up to 50% energy savings Fully automated 24/7 on–site nitrogen at