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Atlas Copco Q3 2014 Results: Improved Industrial Demand, Record Revenues, and Strong Cash Flow

Atlas Copco's Q3 2014 results show improved industrial demand, order growth for industrial tools, strong quarter for vacuum solutions, and unchanged demand for mining equipment. The service business continues to develop well, with strong results in North America and weak results in Asia. The company achieved record revenues and strong operating cash flow during the quarter.

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Atlas Copco Q3 2014 Results: Improved Industrial Demand, Record Revenues, and Strong Cash Flow

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  1. Committed to sustainable productivity Q3 2014 results October 20, 2014

  2. Atlas Copco - Q3 results 2014

  3. Q3 in brief • Improved industrial demand • Order growth for industrial tools and small industrial compressors • Strong quarter for vacuum solutions • Unchanged demand for mining equipment • The service business continued to develop well • Strong North America, weak Asia • Record revenues and strong operating cash flow Atlas Copco - Q3 results 2014

  4. Q3 figures in summary • Orders received increased by 20% to MSEK 23 395, organic growth of 2% • Revenues were MSEK 23 590, organic decline of 2% • Adjusted operating profit was MSEK 4 604 (4 214) • Reported operating profit was MSEK 4 145 (4 212) • Impairment of assets, restructuring costs and other items affecting comparability was MSEK -459 (-2) • Adjusted operating margin at 19.5% (20.5) • Reported operating margin 17.6% (20.5) • Profit before tax at MSEK 3 879 (4 017) • Basic earnings per share SEK 2.37 (2.52) • Operating cash flow at MSEK 3 915 (2 394) Atlas Copco - Q3 results 2014

  5. Orders received - local currency September 2014 Atlas Copco - Q3 results 2014

  6. Organic* order growth per quarter Atlas Copco Group, continuing operations * Volume and price Atlas Copco - Q3 results 2014

  7. Atlas Copco Group – sales bridge Atlas Copco - Q3 results 2014

  8. Atlas Copco Group 16% 43% 29% 12% January - September 2014 Atlas Copco - Q3 results 2014

  9. Compressor Technique • Record quarter with robust demand for small machines and service • Soft demand for larger machines • A strong quarter for Edwards vacuum solutions • Acquisition of compressor distributor in New Zealand • Adjusted operating margin at 22.7% (23.4) • Consolidation of manufacturing in the U.S., MSEK -60 Oil-injected rotary screw compressors with many energy savings features Organic revenue growth has not been restated for 2012 and 2013 following the move of Specialty Rental from Compressor Technique to Construction Technique Atlas Copco - Q3 results 2014

  10. Industrial Technique • Record quarter with solid organic order growth in all businesses and in all major regions • The best development geographically in Asia • Acquisition of Henrob • A market leader in self-pierce riveting • Operating margin at 22.5% (23.0) Self-pierce riveting tool Atlas Copco - Q3 results 2014

  11. Mining and Rock Excavation Technique • Unchanged demand for mining equipment • Higher order intake in North and South America, lower in Asia and Africa/Middle East • Sequential growth for service and stable orders for consumables • Impairment of assets and restructuring costs of MSEK -340 (-50) • Adjusted operating margin at 18.5% (20.8) A hydraulic handheld rock-drill system with outstanding drill rate and considerable energy efficiency Atlas Copco - Q3 results 2014

  12. Construction Technique • Order intake decreased somewhat • Growth for road construction equipment and for construction and demolition tools • Low orders for large portable compressors • Low demand in BRIC • Good development for specialty rental • Operating margin at 11.4% (13.0), negatively impacted by product mix • Andrew Walker appointed business area president A reversible plate with a compaction indicator, which reduces the risk of over- or under-compaction. Organic revenue growth has not been restated for 2012 and 2013 following the move of Specialty Rental from Compressor Technique to Construction Technique Atlas Copco - Q3 results 2014

  13. Group total July – September 2014 vs. 2013 Atlas Copco - Q3 results 2014

  14. Profit bridge July – September 2014 vs. 2013 Atlas Copco - Q3 results 2014

  15. Profit bridge – by business area July – September 2014 vs. 2013 Atlas Copco - Q3 results 2014

  16. Balance sheet Atlas Copco - Q3 results 2014

  17. Cash flow Atlas Copco - Q3 results 2014

  18. Near-term outlook The overall demand for the Group’s equipment and service is expected to increase somewhat. Atlas Copco - Q3 results 2014

  19. Atlas Copco - Q3 results 2014

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