July 16, Atlas Copco Group Q2 Results July 16, 2004

2 Contents  Q2 Business Highlights  Market Development  Business Areas  Financials  Outlook

July 16, Q2 - Highlights  Strong sales growth  Improved profitability –Strong volume gains across all product areas –Efficiency improvements –Sharply improved margin in Rental Service  Decision to divest the professional electric tool business

July 16, Q2 - Figures in summary  Order volume up 11%  Operating margin at 13.3% (11.7)  Profit after financial items MSEK (1 212) –Negative currency effect MSEK 190  Earnings per share at SEK 4.84 (3.87)  Operating cash flow at MSEK 821 (1 442)  ROCE at 19% (13)

July 16, Contents  Q2 Business Highlights  Market Development  Business Areas  Financials  Outlook

July 16, June 2004 Orders received - Local currency Group total +14% YTD (+14%, 3 months) B CA A= Portion of Group sales last 12 months, % B= Year-to-date vs prev. year, % C= Last 3 months vs prev. year, %

July 16, June 2004 Q2 - The Americas  Continued improvement in North America –Increased demand from manufacturing and process industries –Activity remained relatively flat in non- residential construction  Strong demand from most customer segments in South America B CA A= Portion of Group sales last 12 months, % B= Year-to-date vs prev. year, % C= Last 3 months vs prev. year, %

July 16, Q2 - Europe and Africa/Middle East  Better demand in Europe –Increased demand from both manufacturing and construction customers for equipment and aftermarket products –Strong growth in Eastern and Southern Europe –Good development in Germany, France and the Nordic countries  Increased demand from in Africa/Middle East June 2004 B CA A= Portion of Group sales last 12 months, % B= Year-to-date vs prev. year, % C= Last 3 months vs prev. year, %

July 16, Q2 - Asia and Australia  Continued strong growth in Asia –Strong growth in China, but with some signs of slower growth in primarily construction industry –Significant growth in India  Another quarter of positive development in Australia June 2004 B CA A= Portion of Group sales last 12 months, % B= Year-to-date vs prev. year, % C= Last 3 months vs prev. year, %

July 16, –Change in orders received in % vs. same Quarter previous year Volume Growth per Quarter

July 16, Group Total Sales Bridge

July 16, Contents  Q2 Business Highlights  Market Development  Business Areas  Financials  Outlook

July 16, Compressor Technique  Order volume up 17% –Strong new machine sales –Service products and increased presence support aftermarket growth –Double digit growth in all regions  Profit up 9% to MSEK 800 –Margins negatively affected by currency and sales mix

July 16, Compressor Technique %

July 16, Rental Service  Flat non-residential construction activity  Rental revenues increased 8% in USD –Price +6%, volume +2%  Record fleet utilization rate  Profitability improved sharply –Operating margin at 13.5% (8.1) –Return on operating capital at 13%

July 16, U.S. Construction July 1, 2004 Statistics until May 2004

July 16, Rental Service % Rental Revenue Volume Development

July 16, Industrial Technique  Decision to divest professional electric tool business  Order volume up 6% –Good growth for industrial tools, particularly in North America and Asia –Volumes for professional electric tools up in the United States and down in Europe  Record operating margin for Q2 at 11.4% (10.0)

July 16, % Industrial Technique

July 16, Construction & Mining Technique  Order volume growth 14% –Strong demand from mining industry. Volume growth in all product areas. –Improved demand for construction equipment continued with growth in all important markets.  Profit margin improved –Higher revenue volume, price increases and efficiency improvements.  Acquisition of Ingersoll-Rand Drilling Solutions finalized

July 16, % Construction & Mining Technique

July 16, Contents  Q2 Business Highlights  Market Development  Business Areas  Financials  Outlook

July 16, Income Statement

July 16, Balance Sheet June 30, 2004

July 16, Cash Flow

July 16, Capital Expenditures in Tangible Fixed Assets 2000 MSEK Quarterly 12 months Net rental fleet investment = MSEK

July 16, Contents  Q2 Business Highlights  Market Development  Business Areas  Financials  Outlook

July 16, Near-term Outlook The positive demand trend for Atlas Copco’s products and services is expected to continue. In North America, demand from the manufacturing and process industries is expected to increase, while the non- residential construction sector is expected to remain largely at present level. In Europe, demand is expected to continue to increase somewhat, with Eastern Europe still providing the best opportunities for growth. The strong development in Asia is foreseen to continue, but at lower rate than in the most recent quarters.

July 16,

July 16, Cautionary Statement  “Some statements herein are forward-looking and the actual outcome could be materially different. In addition to the factors explicitly commented upon, the actual outcome could be materially effected by other factors like for example, the effect of economic conditions, exchange-rate and interest-rate movements, political risks, impact of competing products and their pricing, product development, commercialization and technological difficulties, supply disturbances, and the major customer credit losses.”

July 16, Contents  Q2 Business Highlights  Market Development  Business Areas  Financials  Outlook  Additional Information

July 16, Long Term Trend Excluding goodwill impairment charge in Q3 2002

July 16, Compressor Technique

July 16, Rental Service Excluding goodwill impairment charge in Q3 2002

July 16, Industrial Technique

July 16, Construction & Mining Technique

July 16, Return on Capital Employed 12 month values Excluding goodwill impairment charge in Q

July 16, Percent of Sales 12 Month Values Inventories, Customer Receivables and Net Rental Equipment Atlas Copco Group

July 16, Effects of change in accounting principle RR29 / IAS 19 Employee benefits  Balance sheet (restatement of opening balance) –Equity decrease MSEK 424 –Provisions for pensions increase MSEK 773 –Balance is mainly deferred tax receivables  Income statement (Q2) –Pension costs net of employee contribution affected operating profit positively by MSEK 7 –Interest costs net of return on plan assets affected interest net negatively by MSEK 7

July 16, Capital Structure Net Debt/Equity

July 16, Cash and Interest-Bearing Debt Net borrowings MSEK Dec Restated June Dec Dec Dec. 2001

July 16,