ATLAS COPCO GROUP
Brussels, Belgium, September, 2014
Ronnie Leten, President and CEO
WHY CONTINUE TO INVEST IN BELGIUM AS A
GLOBAL COMPANY?
Case: Atlas Copco
Atlas Copco Group - September 2014
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Established 1873 in Stockholm, Sweden
Four focused
business areas
Compressor Technique
Industrial Technique
Mining and Rock Excavation Technique
Construction Technique
Global presence Customers in more than 180 countries
Employees1) 43 937 in 91 countries
Revenues2) BSEK 87 (BEUR 9.4)
Market Cap.1) BSEK 232 (BEUR 25)
FACTS IN BRIEF
Atlas Copco Group - September 2014
1) End of June 20142) 12 months until June 2014
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ATLAS COPCO: WHERE USED?
Atlas Copco Group - September 2014
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OUR PRODUCTS AND SERVICES IN FOUR BUSINESS AREAS
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Compressor
Technique
Industrial
Technique
Mining and
Rock Excavation
Technique
Construction Technique
11%44% 28% 17%
76
acquisitions
GROWTH AND OPERATING MARGIN2003 – 2013, continuing operations
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~ BSEK 20
Revenues
10 year
CAGR
~11%
30
84
0
10
20
30
40
50
60
70
80
90
100
2003 Acquisitions Organic Currency 2013
Estimated contribution from acquisitions, organic growth and currency, excl. divested operations in rental service and professional electric tools.
BSEK
CAGR
~ 4%
CAGR
~ 8.5%
CAGR
~ -1.5%
EBIT
~ 15%
EBIT
~20%
Atlas Copco Group - September 2014
DIVERSIFIED BUSINESSES
Construction
Manufacturing
Process industry
Mining
Services
Others
Orders received per customer category
Equipment
Service
Revenues by business type
57%
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28%
11%
26%
5%23%
7%
43%
2013
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CUSTOMERS EVERYWHERE
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NorthAmerica
22%
SouthAmerica
9%
Asia/Australia
28%
Europe31%
Africa/Middle East
10%
Orders received by region Q2 2014
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ATLAS COPCO ENTITIESBelgium
Rumst
Rental EuropeBelux Customer Center
Overijse
Power Tools Distribution
Hoeselt
Wilrijk
Airpower Compressors
AC Finance Belgium
AC Finance Europe
AC Bus. Services Europe
International Distribution Airpower Construction
FACTS AND FIGURES
Atlas Copco employs
nearly 3 000 people in
Belgium
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Atlas Copco Group - September 2014
GLOBAL HEAD OFFICE OF COMPRESSOR TECHNIQUE
In Antwerp since 1937
Arpic Engineering NV was acquired
1956 by Atlas Copco
In 1968 Atlas Copco moves all
production and research of
compressors from Sweden to Belgium
130 000 square meters production
and office space
Most advanced R&D-center of
compressed air in the world
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WHY ARE WE IN BELGIUM?
It’s our history: strong successful legacy
Fully integrated set-up marketing, engineering,
manufacturing
Innovation is our driving force
– Boost (customer) Benefits (BB)
– Cut (operating) Cost (CC)
The University of Compressed Air
– No innovation without production
– No production without competitivity
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WHAT IS GOOD IN BELGIUM?
Competence
– Universities: Leuven, Gent, Brussel, Luik, Antwerp,
Hasselt
– Techno Centers: Sirris, FMTC, VITO, IWT, FWO
– Financial know-how: Financial HQ moved to
Belgium
Infrastructure
– @ the center of Western Europe
– Dynamic layer of SME
– Close to business partners (suppliers)
Society
– Multilingual, social, cultural society and safe
– Stable relation with social partners
Incentives
– Incentive for R&D engineers
– Support for training & IP
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WHAT IS CHALLENGING IN BELGIUM?
Labor cost and flexibility
Traffic (around Antwerp)
Increased administration and legislation
An external observation: (perceived) political
stability...
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… BUT
The real challenge is that the good points are not a differentiator anymore in this global world,
WE NEED MORE…..
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WHY CONTINUE TO INVEST IN BELGIUM AS A
GLOBAL COMPANY?
Case: Atlas Copco
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ARE WE FIT FOR CHANGE…?Our business model – agile and resilient
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Variable cost structure and asset light operations
Stable service business
Continuous investments in innovation
Competent and committed employees
Resilience
Agile
operational
set-up
Volu
me /
Pro
fits
Time
Deteriorating business climate
Reduce variable costs
Working capital reduction
Improving business climate
Add variable costs
Working capital increase
Small incremental investments
ARE WE LEVERAGING THE DIGITAL TECHNOLOGY FOR
OPERATIONAL EXCELLENCE?
Activity based working
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9 3
12
6
From 8 to 5 AnyTime
SEP MAR
DEC
JUNAlone Together Office AnyWhere
Between us with AnyOnePC Laptop AnyDevice Closed and Open but
Restricted protected
Corporate Network
Hybrid Networks
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ARE WE BOOSTING CUSTOMER BENEFITS (BB)?
Know your competitors
Know your customers
Add features and extend the offer
Make differentiated value propositions
Glocalization: Local to global
Benchmark: Strive to be number one!
China/Asia: Be there and be market
leader
Drive innovation (incremental and
breakthrough)
Energy efficiency, connectivity...
Extend offer for the same customers
(dryers, vacuum, Adhesives…)
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ARE WE CUTTING COSTS (CC)?
Strive for operational excellence in everything
what you do
– Reduce time to market (R&D)
– Lean manufacturing
– Agility
– …
You can not be good in everything
– Focus on core activity
It is a never ending story...
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Before
WE FOCUS ON OUR CORE
Understand the customers problems
– Direct contact
Be the first on the market
– Reduce time-to-market
Keep product core knowledge
– Understand the new technology (it is a race)
– Golden triangle: innovation – production –
competitiveness
Leverage the competence of your partners
– Share operational capacity
– Attract competence (open innovation)
Invest continuously in people
– Reduce time to competence
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TO BE NUMBER ONE
Have high ambitious goal: To be the number one in your field
Differentiate: There is no place for me too’s
Be an innovation leader in everything what we do
– Innovation creates the next innovation
And don’t forget what Prof Rafael Reif of MIT said:
– “local production is very important to sustaining a vibrant innovation
ecosystem in a region”
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COMMITTED TO
SUSTAINABLE PRODUCTIVITY.
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