Atlas Copco - Annual Report 1999

ATLAS COPCO AND THE
BUSINESS ENVIRONMENT
Atlas Copco is a global industrial group headquartered in Stockholm, Sweden. Revenues for 1999 totaled SEK 36,234 m.
The Group employs more than 26,000 people and manufactures products in 14 countries on four continents. The products
are sold and rented under different brands through a worldwide
sales and service network reaching 150 countries, half of which
are served by wholly or partly owned sales companies.
Customers / Applications Characteristics Key Events in 1999
Compressed air is either used as a source
of power or the air itself plays an active
role in industrial processes. Clean and dry
oil-free air is a crucial input in the electronics,
food processing, and pharmaceutical
industries. Filters and drying equipment
are offered as integrated parts of its compressor
packages. Portable compressors
are a reliable power source for machines
and tools used primarily in the construction
sector. Gas and process compressors
and expanders are supplied to various
process industries.
Construction and Mining Technique provides
products and services for infrastructure,
construction, and mining projects.
Drilling rigs are used in tunneling, mining,
ground engineering and exploration
drilling. Atlas Copco also manufactures
drilling tools such as drill steel, drill bits,
and cutters. Light rock drills and breakers
are used for demolition. Loading equipment
is used in underground mining
operations and construction projects.
Industrial tools powered by compressed
air or electricity have many industrial
applications, including drilling, grinding,
riveting, and tightening of nuts and
screws. Electric tools are used extensively
in the construction industry. Assembly
systems, containing high-precision and
computerized control systems, are supplied
primarily to the automotive industry,
for multiple and synchronized nut
tightening.
Rental Service serves a well-balanced and
diversified customer base of contractors,
industrial companies, and homeowners
with different needs and activities. Larger
multi-regional industrial customers, for
example in the petrochemical sector, form
an important customer segment. In total,
Rental Service has more than 330,000
active customers in the U.S., Canada, and
Mexico.
Compressor Technique claims world
leadership in air compressors. Because
of its size, the business area can maintain
a solid position in world markets
and conduct basic research and development
in all compressor technologies and
fields related to the environment. The
main production plant is ISO 14001 certified
and the business area has made
major achievements in reducing energy
consumption for some of the key products.
Construction and Mining Technique builds
its business on its well-established reputation
as a global supplier of state-of-the-art
products. Serving mature markets, Construction
and Mining Technique aims to
remain a leader in terms of quality, reliability,
productivity, service, the environment,
and ergonomics.
Industrial Technique’s success is based
on intensive research and development,
high quality products offering ergonomic
features, an ability to serve large customers
on a global basis, and on potent
distribution concepts.
Rental Service operates in a fast-growing
industry undergoing rapid consolidation.
It has developed its strong market position
by applying superior service concepts,
efficient information systems, and
economies of scale in logistics and purchasing.
Goal 5-year Average
Profit margin before tax (%) 10 11.1
Sales growth (%) 8 11.6
• New generation of compressors
launched across all areas.
• Key patents on core technology
granted.
• Manufacturing capacity in Wuxi, China,
expanded.
• Rental companies Rand-Air Ltd., South
Africa, and ABIRD BV, the Netherlands,
acquired.
• New sales companies established in
Indonesia and Egypt.
• Major orders received from Russia,
Hong Kong, Brazil, India, and
Switzerland.
• New range of drill rigs, both surface
and underground, introduced.
• Increased emphasis on rental of drilling
rigs.
• Distribution of construction tools moved
to Power Tools Distribution in Belgium
• Alliance Tools launched program to
consolidate manufacturing.
• Atlas Copco Controls sold to Danaher
Corporation.
• Tool Technics NV, Belgium, a specialty
service company, was acquired.
• Production and sales operations in and
between most divisions further consolidated.
• Rental Service established as separate
business area.
• Rental Service Corporation (RSC)
acquired.
ATLAS COPCO 1999 41