Atlas Copco Group

Q4 Results February 4, 2008

1

February 4, 2008, www.atlascopco.com

Contents

 Q4 Business Highlights  Market Development  Business Areas  Financials  2007 Summary  Outlook

2

February 4, 2008, www.atlascopco.com

Q4 - Highlights

 Growth accelerated – High organic order growth – Double-digit in all regions  Strong development for both capital equipment and aftermarket  Excellent performance in all Business areas  Record operating profits  Increased dividend and proposed share buy-back mandate

3

February 4, 2008, www.atlascopco.com

Q4 - Figures in summary

 Orders up 33%; 20% organic growth  Revenues up 29% to MSEK 17 549; 18% organic growth  Operating profit up 36% to MSEK 3 361 – Operating margin at record 19.2% (18.1)  Profit before tax at MSEK 2 134 (2 382) – Includes MSEK 864 write-down of right to notes  Earnings per share for continuing operations SEK 1.83 (1.42), excluding non-recurring write-down  Operating cash flow, continuing operations, MSEK 926 (474)

4

February 4, 2008, www.atlascopco.com

Contents

 Q4 Business Highlights  Market Development  Business Areas  Financials  2007 Summary  Outlook

5

February 4, 2008, www.atlascopco.com

Orders received - Local currency

Group total +29% YTD, +35% last 3 months

(Structural change +11% YTD, +15% last 3 months)

40 +28 +37 20 +25 +37 18 +33 +30 10 +41 +47 7 +34 +10 5 +33 +45

December 2007

A B C

A = Portion of sales, Year-to-date, % B = Year-to-date vs. prev. year, % C = Last 3 months vs. prev. year, %

6

February 4, 2008, www.atlascopco.com

Q4 - The Americas

 Good growth in North America – Strong demand from mining customers in Canada and Mexico – Demand from the motor vehicle industry and parts of the construction market related to housing still on a weaker level  Positive development within most customer segments in South America

20 +25 +37 7 +34 +10

December 2007

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

February 4, 2008, www.atlascopco.com

Q4 - Europe and Africa/Middle East

 Solid organic growth in Europe – Strong demand for compressed air equipment and industrial tools – Mining segment strong while construction leveled off in Western Europe – Very strong growth in Russia  High growth continues in the Africa / Middle East region – Increased demand for industrial and construction equipment in the Middle East – Strong development in mining in Southern Africa December 2007

A B C

A = Portion of sales, Year-to-date, % B = Year-to-date vs. prev. year, % C = Last 3 months vs. prev. year, %

8

February 4, 2008, www.atlascopco.com

40 +28 +37 10 +41 +47

Q4 - Asia and Australia

 Asia continues strong – Strong demand for all types of equipment in most parts of the region – Good growth in India and China  Strong demand for mining equipment in Australia

18 +33 +30 5 +33 +45

December 2007

A B C

A = Portion of sales, Year-to-date, % B = Year-to-date vs. prev. year, % C = Last 3 months vs. prev. year, %

9

February 4, 2008, www.atlascopco.com

Organic

*

Growth per Quarter

Atlas Copco Group, continuing operations

 Change in orders received in % vs. same quarter previous year 30 -5 -10 5 0 25 20 15 10 *Volume and price

10

February 4, 2008, www.atlascopco.com

Atlas Copco

Growth – Orders received Continuing operations

(excl. Professional Electric Tools and Rental Service) 30% 20% 21% 15% 10% 0% 2003 2004 Organic growth, % 2005 CAGR, 2003 - 2007, organic growth 2006 2007 Structural changes, % CAGR, 2003 - 2007, total excl. currency

11

February 4, 2008, www.atlascopco.com

Atlas Copco Group – Sales Bridge

MSEK

2006 Structural change, % Currency, % Price, % Volume, % Total, % 2007

October - December Orders Revenues Received

14 131 +15 -2 +3 +17 +33 18 816 13 582 +13 -2 +3 +15 +29 17 549

January - December Orders Revenues Received

55 239 +11 -4 +2 +16 +25 69 059 50 512 +11 -4 +2 +16 +25 63 355

12

February 4, 2008, www.atlascopco.com

Contents

 Q4 Business Highlights  Market Development  Business Areas  Financials  2007 Summary  Outlook

13

February 4, 2008, www.atlascopco.com

Atlas Copco Group

Operating Profit and Return On Capital Employed (ROCE) by Business Area MSEK 12 month values, period ending

Compressor Technique Construction and Mining Technique Industrial Technique Eliminations/Common Group Functions

Atlas Copco Group

*excluding non-recurring write-down of RSC notes

Revenues Operating Operating ROCE profit margin Dec. 2007 Dec. 2007 Dec. 2007 Dec. 2007

31 900 25 140 6 871 -556

63 355

6 749 4 384 1 539 -606

12 066

21.2% 17.4% 22.4%

19.0%

65% 32% 58%

31%* 14

February 4, 2008, www.atlascopco.com

Compressor Technique

 Good growth in all geographic regions – Organic order growth 13% – Strong sales of both equipment and aftermarket  Operating profit at MSEK 1 886, a margin of 21.7% – Includes MSEK 37 gain from sale of rental business  New service division effective January 2008 will give increased focus to the important aftermarket

Compressor Technique

5 0 -5 -10 25 20 15 10 Organic* revenue growth: Change vs. same quarter previous year, % Quarterly operating margin, % 5 0 -5 -10 25 20 15 10

16

*Volume and price Quarterly operating margins include Prime Energy from Q1 2006.

February 4, 2008, www.atlascopco.com

Construction and Mining Technique

 Very strong increase in demand from the mining segment  Organic order growth 30% – 23 rd consecutive quarter with volume growth  Operating profit up 47%, margin at 17.2% – 20% margin for comparable units

17

February 4, 2008, www.atlascopco.com

Construction and Mining Technique

10 -5 -10 5 0 30 25 20 15 *Volume and price

18

February 4, 2008, www.atlascopco.com

Organic* revenue growth: Change vs. same quarter previous year, % Quarterly operating margin, % 10 5 0 -5 -10 30 25 20 15

Industrial Technique

 Volume growth, both in general industry and motor vehicle industry – 11% organic order growth – North America still slow for motor vehicle industry  Operating profit-margin at 22.2%, including restructuring costs  Acquisition of Japanese air tools manufacturer, strengthening presence in vehicle service market

19

February 4, 2008, www.atlascopco.com

10 5 0 -5 25 20 15

Industrial Technique

Organic* revenue growth: Change vs. same quarter previous year, % Quarterly operating margin, % 0 -5 10 5 25 20 15 *Volume and price

20

February 4, 2008, www.atlascopco.com

Contents

 Q4 Business Highlights  Market Development  Business Areas  Financials  2007 Summary  Outlook

21

February 4, 2008, www.atlascopco.com

Group Total

MSEK Orders received Revenues Operating profit

- as a percentage of revenues

Profit before tax

- as a percentage of revenues

Profit from continuing operations Profit from discontinued operations, net of tax Profit for the period October - December 2007 2006 18 816 17 549 3 361

19.2

2 134

12.2

1 376 1 376 14 131 13 582 2 464

18.1

2 382

17.5

1 767 7 405 9 172 % +33 +29 +36 -10 -22 January - December 2007 2006

69 059 63 355 12 066

19.0

10 534

16.6

7 416 53 7 469 55 239 50 512 9 203

18.2

8 695

17.2

6 260 9 113 15 373

%

+25 +25 +31 +21 +18

22

February 4, 2008, www.atlascopco.com

Profit Bridge

October – December, 2007 vs 2006 MSEK Atlas Copco Group Q4 2007 Organic Grow th Price/Volum e Revenues EBIT 17 549 3 361 2 427 977 % 19.2% 40%

One-time items on corporate level include an accounting adjustment related to the personnel stock option program

Currency -270 -220 One-tim e item s Acq./Div.

1 810 140 8% Q4 2006 13 582 2 464 18.1% 23

February 4, 2008, www.atlascopco.com

Profit Bridge – by Business Area

October – December, 2007 vs 2006 MSEK Com pressor Technique Revenues EBIT % Construction & Mining Technique Revenues EBIT % Industrial Technique Revenues EBIT % Q4 2007 8 676 1 886 21.7% 7 121 1 228 17.2% 1 920 426 22.2% Organic Grow th Price/Volum e 1 132 430 38% 1 136 430 38% 238 101 42% Currency -100 -130 -125 -60 -22 -15 One-tim e item s Acq./Div.

700 175 25% 1 050 20 2% 62 -8 -13% Q4 2006 6 944 1 411 20.3% 5 060 838 16.6% 1 642 348 21.2%

One-time items include a charge related to pension benefits in 2006 and a capital gain for the divestment of a rental company in Compressor Technique and restructuring costs in Industrial Technique

24

February 4, 2008, www.atlascopco.com

Balance Sheet

MSEK

Intangible assets Rental equipment Other property, plant and equipment Other fixed assets Inventories Receivables Current financial assets Cash and cash equivalents

TOTAL ASSETS

Total equity Interest-bearing liabilities Non-interest-bearing liabilities

TOTAL EQUITY AND LIABILITIES Dec 31, 2007 Dec 31, 2006

11 665 1 906 4 894 4 245 12 725 16 627 1 124 3 473

56 659

14 640 24 397 17 622

56 659

21% 3% 9% 7% 22% 29% 2% 6% 26% 43% 31% 4 299 1 979 3 777 3 161 8 487 12 401 1 016 20 135

55 255

32 708 8 787 13 760

55 255

8% 4% 7% 6% 15% 22% 2% 36% 59% 16% 25%

25

February 4, 2008, www.atlascopco.com

Capital Structure

Net Debt/EBITDA

3,0 2,5 2,0 1,5 1,0 0,5 0,0 -0,5 -1,0 -1,5 1,9 1,6 2,7 2,2 1,9 1,5 1,1 0,8 0,9 -1,1 1,4 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

26

February 4, 2008, www.atlascopco.com

Cash Flow

Continuing operations MSEK

Operating cash surplus after tax

of which depreciation added back

Change in working capital

Cash flows from operating activities

Investments in tangible fixed assets Sale of tangible fixed assets Other investments, net Cash flow from investments

Operating cash flow

Company acquisitions/ divestments *Restated, continuing operations

October - December 2007 2006*

2 693

498

-865

1 828

-652 180 -430 -902

926

32 1 777

449

-462

1 315

-543 163 -461 -841

474

-282

January - December 2007 2006*

10 005

1 800

-2 326

7 679

-2 359 712 -1 443 -3 090

4 589

-5 718 8 197

1 637

-2 045

6 152

-2 167 586 -1 506 -3 087

3 065

-1 332

27

February 4, 2008, www.atlascopco.com

Atlas Copco Group

Earnings per Share, Dividend and Redemption

25

22,38

20 Earnings per share 15 Dividend per share

12,24

10 Dividend + redemption of share 5

1,93 0,68 2,00 0,72 1,92 0,79 2,33 0,88 2,44 0,92 2,32 0,96 2,61 1,25 4,84 3,71 1,50 5,22 2,13 2,38 6,09 3,00 CAGR 10 yrs 12% CAGR 10 yrs 16%

0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007* * Proposed by the Board of Directors

28

February 4, 2008, www.atlascopco.com

Contents

 Q4 Business Highlights  Market Development  Business Areas  Financials  2007 Summary  Outlook

29

February 4, 2008, www.atlascopco.com

2007 - Figures in summary

 Strong demand from most customer segments and double digit order growth in all regions  Order intake up 25%, 18% organic growth  Revenues up 25% to 63 355, 18% organic growth  Operating profit up 31% to MSEK 12 066, a record margin of 19.0% (18.2)  Profit before tax at MSEK 10 534 (8 695)  Proposed dividend for 2007, SEK 3.00 (2.38) per share and a proposed share buy-back program

30

February 4, 2008, www.atlascopco.com

Contents

 Q4 Business Highlights  Market Development  Business Areas  Financials  2007 Summary  Outlook

31

February 4, 2008, www.atlascopco.com

Near-term Outlook

The demand for Atlas Copco’s products and services from most customer segments and regions is expected to remain at the current high level. The positive outlook includes the main part of the construction segment, while construction related to housing is expected to remain weak, primarily in North America.

32

February 4, 2008, www.atlascopco.com

33

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 major customer credit losses.”

34

February 4, 2008, www.atlascopco.com