Mazzalupi comments on Atlas Copcos Q3 Result

Mazzalupi comments on Atlas Copco's Q3 results Stockholm, October 26, 1999- In the third quarter of 1999, the Atlas Copco Group achieved an increase in orders received corresponding to a two- percentage-point gain in volumes for comparable units. "Signs of improvement seen in the second quarter were confirmed in the third," said Giulio Mazzalupi, President and Chief Executive Officer of Atlas Copco. The operating margin was almost in line with one year earlier, excluding nonrecurring items. "Particularly encouraging was strong development in operating profit, from an already very high level, in the Compressor Technique business area." Atlas Copco's order intake for the first nine months of 1999 increased 6 percent compared to 1998, a marginal volume drop of 1 percent. Revenues were up 3 percent, to SEK 25,727 m., while volumes were 4 percent lower. The profit margin was 9.3 percent for the full period, 9.0 percent excluding nonrecurring items. "In spite of the better results, we must continue our rationalization measures to further improve our competitiveness," Mazzalupi commented. "One major action is to consolidate the production structure of the Alliance Tools division. For that purpose, we made a provision in the third quarter. "To safeguard future growth, we will dedicate more resources to the e-commerce area, which we believe will have an enormous impact on the business. We will also emphasize innovative product development even more." On July 29, 1999, Atlas Copco successfully completed its second major acquisition in the growing equipment rental business in the United States: Rental Service Corporation (RSC). RSC now constitutes a division in the Rental Service business area, which also contains the Prime division. "The new, reinforced management team for the business area is in place with a mission to grow the business and deliver results," Mazzalupi said. "Project plans to develop synergies in areas like administration, procurement, and logistics are on the way." Atlas Copco's outlook for the near term remains positive, with expectations for an overall improvement in customer demand. "However, in some regions there is uncertainty about how fast the economies will grow, and how much. Europe seems to be slower, while Asia is recovering faster." Atlas Copco is an international group of industrial companies with its head office in Stockholm, Sweden. In 1998, the Group had revenues of SEK 34 billion, with 97 percent of revenues outside Sweden, and more than 22,000 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.com, which provides access to current news about the Company. Atlas Copco Group Summary of January- September 1999 Results SEK m. Jan-Sep Jan-Sep Change 1999 1998 % Atlas Copco Group Orders received 26,324 24,917 +6 Revenues 25,727 24,895 +3 Operating profit 3,070 3,221 -5 - as a percentage of 11.9 12.9 revenues Profit after financial 2,390 2,691 -11 items - as a percentage of 9.3 10.8 revenues Earnings per share, SEK 8.56 9.26 -8 Compressor Technique Orders received 9,758 10,087 -3 Revenues 9,681 10,074 -4 Operating profit 1,541 1,750 -12 - as a percentage of 15.9 17.4 revenues Construction and Mining Technique Orders received 4,404 4,751 -7 Revenues 4,153 4,787 -13 Operating profit 276 372 -26 - as a percentage of 6.6 7.8 revenues Industrial Technique Orders received 7,927 7,451 +6 Revenues 7,615 7,380 +3 Operating profit 761 765 1 - as a percentage of 10.0 10.4 revenues Rental Service Orders received 4,616 2,846 +62 Revenues 4,619 2,859 +62 Operating profit 588 391 +50 - as a percentage of 12.7 13.7 revenues More detailed information on financial performance for the first nine months is published in the interim report for the period. The preliminary report on the Atlas Copco Group's operations for 1999 will be published on February 14, 2000. For further information, please contact: Annika Berglund, Vice President, Corporate Communications, (media) phone +46 8 743 8070, mobile +46 70 322 8070, annika.berglund@atlascopco.com Hans Ola Meyer, Senior Vice President, Group Treasurer, (analysts) Phone +46 8 743 8292, mobile +46 70 588 8292, hans.ola.meyer@atlascopco.com ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/10/26/19991026BIT00350/bit0001.doc http://www.bit.se/bitonline/1999/10/26/19991026BIT00350/bit0002.pdf