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1 Atlas Copco Group – Product Development Atlas Copco Capital Markets Day, November 19, 2009 Ronnie Leten, President and CEO Atlas Copco Capital Markets Day, November 19, 2009 2 Why Product Development? New products and solutions, a driving force in organic growth Increase customer value Long-term strategic importance Stay ahead of competition Support profitability and pricing Stay ahead of trends and regulations Atlas Copco Capital Markets Day, November 19, 2009 3 External Drivers for Product Development Safety Emissions Noise Vibration levels Energy efficiency Enhanced productivity Design and ergonomics Intelligent product concept Set the benchmark

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  • 1

    Atlas Copco Group – Product Development

    Atlas Copco Capital Markets Day, November 19, 2009

    Ronnie Leten, President and CEO

    Atlas Copco Capital Markets Day, November 19, 20092

    Why Product Development?

    � New products and solutions, a driving force in organic growth

    � Increase customer value

    � Long-term strategic importance– Stay ahead of competition

    – Support profitability and pricing

    – Stay ahead of trends and regulations

    Atlas Copco Capital Markets Day, November 19, 20093

    External Drivers for Product Development

    � Safety

    � Emissions

    � Noise

    � Vibration levels

    � Energy efficiency

    � Enhanced productivity

    � Design and ergonomics

    � Intelligent product concept

    � Set the benchmark

  • 2

    Atlas Copco Capital Markets Day, November 19, 20094

    Innovation Steps

    Atlas Copco Capital Markets Day, November 19, 20095

    Incremental Steps

    Atlas Copco Capital Markets Day, November 19, 20096

    Core Process

    Define the feasabilityFeasibility

    Define product specificationsDesign

    Define processesPilot batch

    Define the conceptsDevelopment

    Define customer acceptanceField follow-up

    � Project Team– Marketing

    – Engineering

    – Process engineering

    – Purchasing

    – Aftermarket

  • 3

    Atlas Copco Capital Markets Day, November 19, 20097

    Financial Committment

    0 200

    400 600 800

    1 000

    1 2001 4001 600

    1 8002 000

    2005 2006 2007 2008 Sep.2009

    0

    1

    2

    3

    4

    5

    R&D expenses (excluding amortization of capitalized expenditures)

    in % of revenues

    MSEK %

    Atlas Copco Capital Markets Day, November 19, 20098

    Vitality of the Product PortfolioShare of revenues and product age

    38%19%

    41%

    46%

    33%

    24%

    15%

    48%35%

    CompressorTechnique

    Construction andMining Technique

    IndustrialTechnique

    > 6years

    3-6years

    < 3years

    Atlas Copco Capital Markets Day, November 19, 20099

    Leverage Product Development – Result in Greater Presence

    Best ChannelBest Product Brand Promise Presence

    Countries

    10

    30

    150

    50

    The Air That powers your business

    A technology you can trust

    Vehicle ServiceLight Industry

    Fluid Service Specialist Industry

    Semi-Pro Professional Traders OEM

    Light Industry Service

    Distribution

    Compressed Air, available anywhere

    Driven by technology, Made by experience

    & Associates

    Local brand Affiliates

  • 4

    Atlas Copco Capital Markets Day, November 19, 200910

    Leverage Product Development – Result in Greater Productivity

    Atlas Copco Capital Markets Day, November 19, 200911

    Leverage Product Development – Result in Greater Energy Efficiency

    Evolution of Specific Energy Requirement for CT products

    88,0

    90,0

    92,0

    94,0

    96,0

    98,0

    100,0

    102,0

    104,0

    1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

    Year

    % (

    ref.

    2002

    )

    Atlas Copco Capital Markets Day, November 19, 200912

    Leverage Product Development – Result in Lower Cost

    -14%-16%Weight reduction

    +4% +2%Capacity increase

  • 5

    Atlas Copco Capital Markets Day, November 19, 200913

    Leverage Product Development – Result in Greater Safety

    � Roofex Rock Bolts

    Atlas Copco Capital Markets Day, November 19, 200914

    Leverage Product Development – Result in Greater Ergonomics

    � Tensor Revo– 50% lighter

    – 41% shorter

    – 30% faster

    Comparison: ETP ST101-1000-25 vs. ETP S9-1000-25

    6 kg

    364 mm

    Atlas Copco Capital Markets Day, November 19, 200915

    Leverage Product Development – Result in Greater Customer Value

  • 6

    Atlas Copco Capital Markets Day, November 19, 200916

    Summary

    � Product development – a key to success– Core process

    – High focus

    – Increase investments

    Atlas Copco Capital Markets Day, November 19, 200917

    Atlas Copco Capital Markets Day, November 19, 200918

    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 and adversely affected by other factors such as the effect of economic conditions, exchange-rate and interest-rate movements, political risks, the impact of competing products and their pricing, product development, commercialization and technological difficulties, supply disturbances, and major customer credit losses.”