Mazzalupi comments on Atlas Copco's Q2 results

Mazzalupi comments on Atlas Copco's Q2 results Stockholm, August 8, 2000- In the second quarter of 2000, the Atlas Copco Group increased its order intake, corresponding to volume gain of 13 percentage for comparable units. "The volume development is particularly encouraging, since the period we are comparing with was relatively strong," said Giulio Mazzalupi, President and Chief Executive Officer of Atlas Copco. "The demand for our products remained robust in all region in the world." Atlas Copco's order received for the first half of 2000 was 34 percent higher than in 1999, representing a volume increase of 13 percent after adjustment for acquisitions, etc. Revenues increased 34 percent, to SEK 21,891 m., up 11 percent in volume. The operating profit margin was 13.1 percent (10.9), and 13.5 percent in the quarter. "Through positive volume development, and rationalizations carried out last year, we achieved a better operating margin. However, there are still a number of areas with potential for further improvements." The targets over the next business cycle are to have an annual revenue growth of 8 percent, an average operating margin of 15 percent, and to continuously challenge the operating capital efficiency in terms of stock, receivables, and hire fleet utilization. "During the second quarter, we finalized a number of important e-business projects such as e-commerce in the Industrial Technique business area and the Internet plant room where we can monitor, control, and administer compressors from anywhere in the world. We are currently in the process of integrating all our Internet sites and all brands in the Group can today be reached through one common gateway." Since 1997, Atlas Copco operates in the growing equipment rental business in the United States. "The Rental Service business area achieved a real volume increase of 11 percent in the quarter, reflecting the sustained strong outsourcing trend in the industry throughout the business cycle. As a comparison, the overall demand level in the construction industry is reported to be flat, compared with the same period last year," Mazzalupi says. "Moreover, we will accelerate the process aimed at realizing synergies in the business area, in all fields." Overall, the strong demand for Atlas Copco's products and services is expected to remain in the near term. "We anticipate a continued healthy demand for our products during the reminder of the year 2000." Atlas Copco is an international group of industrial companies with its head office in Stockholm, Sweden. In 1999, the Group had revenues of SEK 36 billion, with 98 percent of revenues outside Sweden, and over 26,000 employees. Atlas Copco companies develop, manufacture, and market electric and pneumatic tools, compressed air equipment, construction and mining equipment, assembly systems, and offer related service and equipment rental. Additional information about Atlas Copco is available at the Group's web site, www.atlascopco-group.com, which provides access to current news about the Company. Atlas Copco Group Summary of result for the period ended June 30, 2000 Atlas Copco Group April - Chang January - Chang June e June e 2000 1999 % 2000 1999 % Orders received 11,62 8,743 +33 22,70 16,90 +34 0 8 0 Revenues 11,37 8,619 +32 21,89 16,37 +34 4 1 0 Operating profit 1,541 1,062 +45 2,869 1,787 +61 - as a percentage of 13.5 12.3 13.1 10.9 revenues Profit after 1,130 868 +30 2,073 1,425 +45 financial items - as a percentage of 9.9 10.1 9.5 8.7 revenues Earnings per share*, 3.32 3.02 6.12 4.89 SEK *) Number of shares: 209.6 m. (183.5) April - Chang January - Chang June e June e 2000 1999 % 2000 1999 % Compressor Technique Orders received 3,879 3,433 +13 7,620 6,604 +15 Revenues 3,625 3,422 +6 6,970 6,393 +9 Operating profit 664 572 +16 1,244 962 +29 - as a percentage of 18.3 16.7 17.8 15.0 revenues Construction and Mining Technique Orders received 1,802 1,582 +14 3,577 3,027 +18 Revenues 1,809 1,477 +22 3,459 2,830 +22 Operating profit 173 104 +66 315 188 +68 - as a percentage of 9.6 7.0 9.1 6.6 revenues Industrial Technique Orders received 2,894 2,664 +9 5,634 5,274 +7 Revenues 2,805 2,645 +6 5,424 5,093 +6 Operating profit 299 257 +16 562 473 +19 - as a percentage of 10.7 9.7 10.4 9.3 revenues Rental Service Revenues 3,332 1,202 +177 6,355 2,284 +178 Operating profit 464 146 +218 854 229 +273 - as a percentage of 13.9 12.1 13.4 10.0 revenues More detailed information on financial performance in the second quarter is published in the interim report for the period. The interim report on the Atlas Copco Group's operations ended September 30, 2000 will be published on October 24, 2000. For further information, please contact: Annika Berglund, Senior Vice President, Group Communications, (media) phone +46 8 743 8070, mobile +46 70 322 8070, annika.berglund@atlascopco.com Mattias Olsson, Investor Relations Manager, (analysts) Phone +46 8 743 8291, mobile +46 70 518 8291, mattias.olsson@atlascopco.com ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2000/08/08/20000808BIT00420/bit0001.doc http://www.bit.se/bitonline/2000/08/08/20000808BIT00420/bit0002.pdf