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Construction and Mining Technique
Björn Rosengren
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Capital Markets Day November 12, 2003 www.atlascopco-group.com
Construction & Mining Technique
Capital Markets Day November 12, 2003 www.atlascopco-group.com
0
5 000
10 000
-98 -99 -00 -01 -02 -03Sept
Revenues Operating profit
MSEK
7.7% 6.9% 9.2% 10.2% 8.9% 7.7%
Construction and Mining TechniqueSeptember 200312 month figures
North America
Asia/Australia
Europe
South America
Africa/ Middle East
43%
17%
18%
8%
14%
9.8%* 9.1%*
%* Excluding restructuring costs
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Construction and Mining Technique
Construction> 50% of Business Area– Tunnelling and road
construction– Dam construction – Quarrying– Breaking and demolition– Ground engineering
Demand keys– Infrastructure- and public
investments– Non-building construction
activity
Mining
< 50% of Business Area– Production and
development work− Underground and
surface mining
– Loading and haulage– Exploration drilling
Demand keys– Mining machine
investments– Ore production
Markets / Customers
2
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Construction & Mining TechniqueUnderground Drilling Equipment
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Södra Länken
Construction & Mining Technique
Södra länken, connecting the southern suburbs of Stockholm, is the largest road tunnel system ever built in Sweden.
Excavated rock volume 2 million m3
Total length of tunnels 16.6 km
Construction period 1998 - 2004
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Construction & Mining TechniqueLHDs and Trucks
3
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Integration of Wagner into ÖrebroFocus
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Wagner new product range
Increased investments in R&D
New product range in 5 years
Focus
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Construction & Mining TechniqueSurface Drilling Equipment
4
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Construction & Mining TechniqueRock Drilling Tools
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Rock Drilling Tools
Shanks andDTH-bits
Rodplant
Hammerplant
Östersund
SouthAfrica
Fagersta
Closure of Östersund Plant
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Construction & Mining TechniqueGeotechnical Drilling Equipment
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Products
1992
ProductsTerritory
1998
ProductsTerritory
2000
ProductsTerritory
2001
ProductsTerritory
2003
All acquisitions are operating under the Atlas Copco brand
Geotechnical Drilling Equipment in 11 years
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Construction & Mining TechniqueConstruction Tools
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Construction ToolsKrupp - further implementation of synergies
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Construction & Mining Technique
-3000
0
3000
6000
9000
9012 9112 9212 9312 9412 9512 9612 9712 9812 9912 0012 0112 0212 0312-300
0
300
600
900
Revenues, 12 month values, MSEK (left axis)
Earnings before interest and tax, MSEK (right axis)
Earnings before interest and tax before restructuring costs in Wagner, MSEK (right axis)
September 200312 month figures
Capital Markets Day November 12, 2003 www.atlascopco-group.com
Construction and Mining Technique ROCE
September 200312 month figures
0%
5%
10%
15%
20%
25%
30%
98 Q
4
99 Q
1
99 Q
2
99 Q
3
99 Q
4
00 Q
1
00 Q
2
00 Q
3
00 Q
4
01 Q
1
01 Q
2
01 Q
3
01 Q
4
02 Q
1
02 Q
2
02 Q
3
02 Q
4
03 Q
1
03 Q
2
03 Q
3
ROCE, excl. restructuring costs ROCE
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Modular design conceptExample surface drill rigs ROC D, F and L
7
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Research and Development
Years
0
5
10
15
1990 Today
Underground drill rigs Surface drill rigs
Average product age - drill rigs
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Flow ManufacturingExample surface drill rigs
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Aftermarket - Use of ProductsSeptember 200312 month figures
Construction & Mining Technique
Consumables– Outsourcing– Logistics management
Service and Spare Parts– Service contracts
Rental
40%
45%
50%
55%
60%
0
1000
2000
3000
4000
5000
1998 1999 2000 2001 2002 Sept.2003
Use of products, share of revenues, %Use of products, MSEKEquipment sales, MSEK
8
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StrategyOrganic Growth and Acquisitions
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Research and Development
New products and solutions, the driving force in organic growth
Extend the product offer based on modular design concept
Design and ergonomics
Develop intelligent product concept
New product development
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Radio Remote Control
Balanced design– Low center of gravity– High ground clearance– Exceptional rough
terrain capabilities
ROC D5 RRC
Product Innovation
9
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Diamec U6 APC
Product Innovation
New Drill Design– Reliability– Power– Flexibility– Safety and
Ergonomics
New Hydraulic Control System
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Simba M6 C
Product Innovation
Computer Controlled
RCS - Rig Control System
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Cobra Combi
Product Innovation
Petrol driven drill and breaker– Multi-purpose tool
Portable, Flexible, Economical
Higher operator comfort and less environmental impact– Lower vibrations
− New vibration-dampening handles reduce vibration levels from 8 to 5m/s2
– Less noise− Fulfilling the European Noise Directive (NED)
– Cleaner emissions− Meets US emission regulations EPA1
10
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Aftermarket concept
Aggressive growth of aftermarket business
Develop global service concept/competence
Introduce fleet management system
Introduce more aftermarket products
Focus through a separate organisation
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Key account strategy
A closer partnership relationship between customers and suppliers, when possible based on performance contracts.
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Fundamental believes
Stability
Profitability
Growth
11
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Construction and Mining Technique
Year Aquisition Divestment
1998 JKS Boyles Robbins TBM
2000 Hobic JKS Lamage
2001 Christensen Products
2002 Ankertechnik (MAI)
Krupp Berco Bautechnik
2003 Professional Diamond Drilling Equipment and Mining Drilling Services
Shenyang Rock Drilling Machinery
Aftermarket - Use of ProductsAcquisitions / Divestments
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World ore production
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Surface mining
12
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North America
Russia
Asia
AustraliaSouth Africa
Focused Markets
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Construction & Mining Technique
Order volume growth, +8% – Mining orders continued to improve– Stabilization of order trend for light
construction equipment
Operating margins rebound– Very high invoicing offset sharply negative
impact from currency
Acquisition of Chinese rock drilling equipment manufacturer
Q3 2003
Capital Markets Day November 12, 2003 www.atlascopco-group.com
%
-20
-15
-10
-5
0
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10
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20
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-20
-15
-10
-5
0
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10
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98 Q
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98 Q
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Volume growth: Change in revenues vs. same quarter previous year, %Quarterly operating margin, % %
Construction & Mining TechniqueSeptember 200312 month figures
13
Capital Markets Day November 12, 2003 www.atlascopco-group.com
Construction and Mining Technique
+
Change in volume, Q3 2003 vs. Q3 2002
+
+
+-
+
+8%Orders received per region and trend in Q3 2003
September 200312 month figures
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Market Position
Construction & Mining Technique
Global leader in rock drilling and excavation equipment and tools for hard rock construction and mining applications
Defend strong market position by continuous product and service development and improved market presence and penetration
Further develop position in mining, exploration drilling and light construction equipment
Capital Markets Day November 12, 2003 www.atlascopco-group.com