Atlas Copco - Annual Report 1999

Product development
1999 1998
Research and development costs 943 945
In percent of revenues* 3.3 3.4
* Excluding Rental Service revenues
More than ever before, continuous research, development, and
innovation are critical success factors for safeguarding the competitiveness
of Atlas Copco’s divisions. During 1999, the level of
activity in this respect remained largely unchanged in comparison
with 1998.
Compressor Technique took several important steps forward.
The business area introduced a number of innovative and complementary
compressors that focus on reducing customers’ energy
consumption. All divisions launched new products adapted
to refined customer needs, and the modularization of products
progressed. Patents on core technologies were granted or renewed,
and at year-end a decision was made to invest in a new research
Environmental impact
Atlas Copco aims at conducting its business in a manner that
does not put nature at risk. In all operations and processes,
environmental legislation is complied with. The Group conducts
operations in five Swedish companies requiring permission
based on Swedish environmental regulations.
To support environmental efforts, Atlas Copco has a policy
that guides the organization in this area. All divisions shall implement
an Environmental Management System (EMS), and the
Group aims to have its major manufacturing sites certified according
to ISO 14001 by the end of the year 2000. Today, 51 percent of
Parent Company
Earnings
Earnings from shares in subsidiaries equaled SEK 1,086 m. (1,275),
from associated companies SEK 0 m. (81). Profit after financial
items totaled SEK 1,261 m (1,428). The Parent Company reported
a net profit after appropriations and taxes of SEK 1,037 m. (1,045).
Hence, undistributed earnings totaled SEK 4,018 m. (3,807).
Financing
The total assets of the Parent Company increased SEK 14,855 m.,
to SEK 34,425 m. The increase was chiefly financed by the issue of
new shares of SEK 4,125 m., and SEK 9,571 m. from increased
external borrowing. At year-end 1999, cash, bank deposits, and
short-term investments amounted to SEK 341 m. (525). The equity
portion of total assets equaled 34 percent (38).
THE BOARD OF DIRECTORS’ REPORT
ATLAS COPCO GROUP
laboratory in Antwerp, Belgium. For further information, see
pages 44–49.
In Construction and Mining Technique’s Rock Drilling
Equipment division, two new series of underground and surface
drilling rigs were launched. The new rigs have been designed to
surpass customer demands in the areas of overall performance
and productivity, reach and ergonomics. In the other divisions,
efforts were largely concentrated on improving further the productivity
and production of core products. For further information,
see pages 50–55.
Overall, Industrial Technique’s divisions brought a record
number of new, state-of-the-art products to their markets.
Among other things, new high-performance electrical motors,
ergonomic solutions, niche tools, and improved electronic
motion control systems were introduced. For further information,
see pages 56–61.
For the Rental Service business area, which does not have
any production, service development efforts are not classified
as research and development costs. For further information,
see pages 62–65.
production capacity is certified, the main sites being Atlas Copco
Airpower in Belgium, Milwaukee Electric Tools in the United
States, and Atlas Copco Electric Tools in Germany.
Almost all products have a greater impact on the environment
over its useful life than from its manufacture. Environmental
and ergonomic aspects have been integrated in Atlas
Copco’s product development process for many years. A good
example of this is the extended range of compressors with variable-speed
drives, which consume up to 30 percent less energy
than the previous generation. A new range of turbine grinders
has a lower weight than similar machines with the same output,
thus putting less strain on the operator. Yet another example is
a cabin for surface drilling rigs that protects the operator from
hazards and provides a better working environment.
Personnel
The average number of employees in the Parent Company was
60 (64). A specification of the fees and other remuneration paid
to the Board of Directors, the President, and other members of
Group management is shown in Note 2.
Distribution of shares
At year-end 1999, Atlas Copco had share capital totaling
SEK 1,048 m. (918). Each share has a par value of SEK 5. For
further information, see page 72.
Dividend
The Atlas Copco Group’s non-restricted shareholders’ equity
equals SEK 10,022 m. Of the retained earnings, SEK 20 m. will
be transferred to restricted reserves.
The Board of Directors propose a dividend of SEK 4.75
(4.32) per share, corresponding to a total of SEK 996 (826). See
page 36.
ATLAS COPCO 1999 9