Atlas Copco - Annual Report 1999

COMPRESSOR TECHNIQUE
COMPRESSOR TECHNIQUE
Stable Demand for Industrial
Compressors and Generators
Demand for compressors ended strong despite a slow start in 1999. European
markets remained stable, and the Asia-Pacific region showed encouraging
signs of recovery during the second half of the year. Sales reached SEK 13,202 m.
(13,540), and operating profit was SEK 2,153 m. (2,283). From January 1, 1999, the
equipment rental operations are reorganized into a new business area, Rental
Service (see page 62–65), outside Compressor Technique.
1999 1998 1997
Revenues, SEK m. 13,202 13,540 12,674
Operating profit, SEK m. 2,153 2,283 2,299
Return on capital employed, % 27 30 36
Investments, SEK m. 453 488 521
Number of employees 8,288 8,565 8,037
The Compressor Technique business area, headquartered in
Antwerp, Belgium, develops Atlas Copco’s position as the
world’s leading provider of equipment for air compression.
The business area develops, manufactures, and markets top
quality products for industrial customers who demand a high
level of operating reliability and productivity in their operations.
Each division is responsible for the development, manufacture,
marketing, and sales of its own products. Manufacturing
and assembly are concentrated to Belgium, the U.S.,
Germany and France.
Revenues
Compressor Technique’s revenues remained largely unchanged
at sek 13,202 m. (13,540), while orders received ended at sek
12,965 m. (13,161). Business in Central Europe and the
Mediterranean region was strong, while demand was flat in
North America and quite weak in South America. East and
Southeast Asia showed solid signs of recovery, especially in
South Korea and China.
Earnings
Operating profit decreased to sek 2,153 m. (2,283). Earnings
equaled 16.3 percent (16.9) of revenues. The return on capital
employed ended at 27 percent (30).
Business development
In 1999, Compressor Technique made several important moves
to develop its business.
New compressor types from Industrial Air and Oil-free
44 ATLAS COPCO 1999
Air divisions attracted heightened interest
from customers in new market
segments and new markets. For
example, variable speed drive compressors
and compact industrial compressors,
which reduce customers’ operating
costs, are products with continued
growth potential.
Sales and rentals of portable compressors
and generators were particularly
healthy. For Portable Air, organic
growth was complemented by acquisitions,
and inter-company sales to Atlas Copco’s rental operations
in North America remained strong.
Process industries were uneven in 1999. Orders from the
chemical and petrochemical sectors were reasonable, while the
air separation market was extremely weak. Important orders
were received from key customers and these niche segments
and applications represent good growth opportunities.
To further emphasize market presence, new sales companies
were established in two important markets: Indonesia
and Egypt.
Product development
In 1999, Compressor Technique confirmed its position as the
world’s leading developer and innovator of compressor technologies.
Key compressor components, overall performance,
productivity, and designs were all enhanced to better fulfill the
demands of existing and new customers.
Industrial Air and Oil-free Air continued to develop the
popular variable speed drive compressors that employ a system
that continuously adjusts the machine’s energy consumption
to the level needed, thus dramatically reducing energy
costs in many applications. Also, several ranges of small and
large compressors were augmented to better fit customers’
demands.
Portable Air launched several new compressor models,
including oil-free compressors for rental, and a new open
frame generator range.
Applied Compressor and Expander Technique, which traditionally
manufactures large customized compressor installations,
shipped its first standardized turbo compressors for air
separation.
To safeguard Atlas Copco’s strong position in compressor
technologies, various patent applications emanating from basic
development activities were filed and granted during the year.
These patents will further sharpen Compressor Technique’s
competitive edge during the next decade.