February 1, 2007 Atlas Copco Group Q4 Results February 1, 2007

1February 1, 2007 www.atlascopco.com

Atlas Copco Group

Q4 Results

February 1, 2007


Contents

Q4 Business Highlights

Market Development

Business Areas

Financials

Capital Distribution

2006 Summary

Outlook


Q4 - Highlights

Continuous efforts to strengthen market presence and penetration pay off– Double digit growth in all regions

Record results

Significant capital distribution – 18.4 million B-shares repurchased in Q4 2006 for BSEK 3.8

– Proposed dividend and share redemption of BSEK 27.3 SEK 44.75 per share

Completion of the equipment rental business divestment – Total gain of MSEK 7 789


Q4 - Figures in summary

Organic order growth 21%

Revenues up 13% to MSEK 13 582, 18% organic growth

Operating profit up 15% to MSEK 2 464, a margin of 18.1% (17.9)– Includes one time charge of MSEK 83 related to pension provisions

Profit before tax at MSEK 2 382 (2 097), a margin of 17.5% (17.5)

Profit for the period of MSEK 9 172 (2 182)– from continuing operations MSEK 1 767 (1 535)– from discontinued operations MSEK 7 405 (647)


Contents


Market Development

Business Areas

Financials


2006 Summary

Outlook


Orders received - Local currencyGroup total +23% YTD, + 24% last 3 months(Structural change +3% YTD, +3% last 3 months)

December 2006

A B C

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

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

C = Last 3 months vs. prev. year, %

7 +26 +60

39 +16 +12

10 +61 +72

18 +33 +38

4 +22 +34

22 +19 +16


Q4 - The Americas

Continued strong demand from most customer segments in North America– Manufacturing industry investments at good

level

– Solid demand for mining and construction equipment in the region

Improvement in South America– Investments in mining, construction and

compressed air equipment particularly strong

December 2006

A B C




7 +26 +60

22 +19 +16


Q4 - Europe and Africa/Middle East

Healthy growth in Europe– Continued strong growth for all types of

compressed air equipment

– Solid demand from the construction and mining industries

– Strong growth for industrial tools to general industry but slow demand from the motor vehicle industry

– Russia continued to grow rapidly

Strong growth in the Africa / Middle East region– Significant order increase for construction and

industrial equipment in the Middle East

December 2006

A B C




39 +16 +12

10 +61 +72


Q4 - Asia and Australia

High growth in Asia– Strong development in all major markets

– Large compressor orders in China, on top of already strong underlying growth

Significant growth for mining in Australia

December 2006

A B C




18 +33 +38

4 +22 +34


Volume Growth per Quarter

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

Atlas Copco Group, continuing operations

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Atlas CopcoGrowth – Orders receivedAtlas Copco Group, excl. Professional Electric Tools and Rental Service

12%

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Change in order volume and price, % Structural changes, %

CAGR, 2002 - 2006, volume and price CAGR, 2002 - 2006, excl. currency


Atlas Copco Group – Sales Bridge

Orders Revenues Orders RevenuesMSEK Received Received2005 12 145 11 982 44 744 42 205Structural change, % +3 +3 +3 +3Currency, % -8 -8 0 0Price, % +2 +2 +2 +2Volume, % +19 +16 +18 +15Total, % +16 +13 +23 +202006 14 131 13 582 55 239 50 512

October - December January - December


Contents


Market Development

Business Areas

Financials


2006 Summary

Outlook


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

Revenues Operating Operating ROCEMSEK profit margin12 month values, period ending Dec. 2006 Dec. 2006 Dec. 2006 Dec. 2006Compressor Technique 24 907 5 071 20.4% 70%Construction and Mining Technique 18 914 3 010 15.9% 35%Industrial Technique 6 440 1 346 20.9% 63%Rental Service - continuing operations 757 252 33.3% na.Eliminations/Common Group Functions -506 -476Atlas Copco Group 50 512 9 203 18.2% 37%


Compressor Technique

Very strong order growth in all markets – Organic order growth 25%

– Increased market presence and penetration support equipment and aftermarket growth

– Several large orders won in the gas and process business

Operating profit up 12%. – Margin at 21%, excluding one-time pension provision

Prime Energy part of the Compressor Technique business area as of January 1, 2007– New Specialty Rental Division


Compressor Technique

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Revenue volume growth: Change vs. same quarter previous year, %

Quarterly operating margin, %


Continued strong demand, particularly in mining

Organic order growth 26%– 19th consecutive quarter with volume growth

Operating profit up 23%. – Record margin at 16.6%

Launch of new range of small hydraulic breakers

Construction and Mining Technique


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Construction and Mining Technique


Industrial Technique

Strong growth within general industry

Weaker demand from the motor vehicle industry

Significant increase of the aftermarket business

Strategic acquisition in the vehicle service business

Record operating margin


Industrial Technique

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Rental Service

Result of discontinued operations– Operating results, net of tax 1 324

– Effect of discontinued depreciation, IFRS 889

– Capital gain 6 900

– Profit from discontinued operations, net of tax 9 113

Continuing operations in 2006– Revenues MSEK 757

– Operating profit MSEK 252, margin 33,3%

– Prime Energy and Prime Mexico will be integrated into the rental operations in the Compressor Technique business area on January 1, 2007

2006


Contents


Market Development

Business Areas

Financials


2006 Summary

Outlook


Group Total

MSEK 2006 2005 % 2006 2005 %Orders received 14 131 12 145 +16 55 239 44 744 +23

Revenues 13 582 11 982 +13 50 512 42 205 +20

Operating profit 2 464 2 146 +15 9 203 6 938 +33

- as a percentage of revenues 18.1 17.9 18.2 16.4

Profit before tax 2 382 2 097 +14 8 695 6 863 +27

- as a percentage of revenues 17.5 17.5 17.2 16.3

Profit for the period

from continuing operations 1 767 1 535 +15 6 260 4 964 +26

Profit for the period from

discontinued operations, net of tax 7 405 647 9 113 1 617

Profit for the period 1) 9 172 2 182 +320 15 373 6 581 +134

Basic earnings per share, SEK 1) 14.74 3.46 +326 24.48 10.43 +1351) Including discontinued operations.



Balance Sheet

MSEK

Intangible assets 4 299 8% 10 607 19%

Rental equipment 1 979 4% 13 456 24%

Other property, plant and equipment 3 777 7% 4 503 8%

Other fixed assets 3 161 6% 1 818 3%

Inventories 8 487 15% 7 215 13%

Receivables 12 401 22% 13 240 24%

Current financial assets 1 016 2% 389 1%

Cash and cash equivalents 20 135 36% 3 727 7%

TOTAL ASSETS 55 255 54 955

Total equity 32 708 59% 25 808 47%

Interest-bearing liabilities 8 787 16% 11 345 21%

Non-interest-bearing liabilities 13 760 25% 17 802 32%

TOTAL EQUITY AND LIABILITIES 55 255 54 955

* including discontinued operations

Dec. 31, 2006 Dec. 31, 2005*


Cash FlowIncluding discontinued operations

MSEK 2006 2005 2006 2005

Operating cash surplus after tax 3 444 2 997 12 305 10 230 of which depreciation added back 442 929 2 142 3 320Change in working capital -1 960 -561 -3 100 -231 Cash flow from operations 1 484 2 436 9 205 9 999Investments in tangible fixed assets -938 -1 853 -7 555 -7 236Sale of tangible fixed assets 252 724 1 963 2 548Other investments, net -461 -429 -1 507 -790Cash flow from investments -1 147 -1 558 -7 099 -5 478 Operating cash flow 337 878 2 106 4 521Company acquisitions/ divestments 22 686 -168 21 636 3 482Dividends paid -1 - -2 676 -1 890Share redemption - - - -4 192Repurchase of own shares -3 776 - -3 776Change in interest-bearing liabilities -2 018 -482 -1 045 -1 439



Contents


Market Development

Business Areas

Financials


2006 Summary

Outlook



Substantial increase in Group profits in the last 3 years

Very strong financial position already before RSC divestment

Substantial cash proceeds from RSC divestment

Reduced operating risk after RSC divestment

Background


3,38 3,85 3,99 3,83 4,65 4,88 4,63 5,21

10,43

24,48

1,42 1,50 1,58 1,75 1,83 1,92 2,50 3,004,25 4,75

7,41

1,25

44,75

9,67

0

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25

30

35

40

45

50

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006*

Earnings pershare

Dividend pershare

Dividend +redemptionof share

Atlas Copco GroupBasic earnings per share, dividend and redemption

* Proposed by the Board of Directors


4 192

2 899

24 416

1 205 1 572

6 078

27 315

2 672

0

5 000

10 000

15 000

20 000

25 000

30 000

2002 2003 2004 2005 2006*

Dividend Redemption of shares Total

Dividend and Redemption

* Proposed by the Board of Directors


Redemption Procedure

Split 3:1

2 new ordinary shares

1 new redemption share– Redeemed automatically

for SEK 402 new shares (A or B)

1 share (A or B)

1 new redemption share

Example: Based on Board proposal

SEK 40


Contents


Market Development

Business Areas

Financials


2006 Summary

Outlook


2006 Full Year Summary

Strong demand from most customer segments, double digit order growth in all regions, and improved market positions

Order intake up 23%, up 18% in volume

Revenues up 20% to MSEK 50 512, up 15% in volume

Operating profit up 33% to MSEK 9 203, a margin of 18.2% (16.4)

Profit before tax at MSEK 8 695 (6 863), a margin of 17.2% (16.3)

Significant capital distribution proposed


Contents


Market Development

Business Areas

Financials


2006 Summary

Outlook


Near-term Outlook

The demand for Atlas Copco’s products and services, from most customer segments such as mining, construction, and the manufacturing and process industries, is expected to remain at the current high level.

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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.”

Documents

February 1, 2007 Atlas Copco Group Q4 Results February 1, 2007