Vacuum Technique Geert Follens, Business Area President Capital - PowerPoint PPT Presentation

Vacuum Technique Geert Follens, Business Area President Capital Markets Day 2018

Agenda 1 1. Facts in brief 2 1. Trends and driving forces 3 1. Focus and priorities 4 1. Innovation in reality 5 1. Summary 2 November 15 2018 Atlas Copco Capital Markets Day

Vacuum is everywhere! Space Simulation Semiconductor Flat panel displays Metallurgy Electric Vehicles Conveying Food & Beverages Packaging Forming & Shaping Coating 3 November 15 2018 Atlas Copco Capital Markets Day

Vacuum Technique ROCE 27% Growth drivers ORDERS, REVENUES AND OPERATING MARGIN 7 000 28% Successful integration of acquisitions 6 000 24% Embedding of decentralized organizational structure 5 000 20% China focus 4 000 16% Leverage synergies with other 3 000 12% business areas and the Group 2 000 8% Innovation and Digitalization 1 000 4% 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2016* 2016* 2016* 2016* 2017 2017 2017 2017 2018 2018 2018 Orders received, MSEK Revenues, MSEK Operating margin, % * 2016 figures not restated per IFRS 15. 4 November 15 2018 Atlas Copco Capital Markets Day

Orders received – local currency Q3 2018 Q3 YoY vs. SHARE OF ORDERS 26% 19% 55% Q2 RECEIVED YEAR TO DATE: -7% +16% -31% +2% +0% 5 November 15 2018 Atlas Copco Capital Markets Day

What is sustainable profitable growth? Vacuum & Abatement Technology Growth Drivers  Technology Leadership Macro Factors:  Application know-how  Climate change  Speed to market  Miniaturization  Digitalization  Urbanization Market Leadership Sustainable  World-class Key Account Micro Factors: Profitable Management Growth  China Investment  Application based solutions  Internet of Things delivered through technology  High demand for leadership increasing process  Extensive Aftermarket efficiency  Lean hi-tech manufacturing close to our customer base 6 November 15 2018 Atlas Copco Capital Markets Day

Impact of growth drivers Short Term Mid-Long Term Division Key Drivers of Change Growth Growth Miniaturization, Legislation, China, Semiconductor Global Data Use, IoT Application Technology Leadership, High Vacuum Broader Product Portfolio, Digitalization New Vacuum Applications, Industrial Vacuum Energy Efficiency and Dry Pumps Global Manufacturing Capacity, Semiconductor Service Digitalization, Legislation Vacuum Technique Service Digitalization, Brand Management 7 November 15 2018 Atlas Copco Capital Markets Day

Summary focus, priorities and strategy Agility and Opportunities resilience in China Growth in Integration of industrial cryogenics vacuum business Technology Service leadership 8 November 15 2018 Atlas Copco Capital Markets Day

Agility and resilience Structure built for agility SEMICONDUCTOR Flexible and agile cost structure. Additional 200 MUSD of cryo business with HIGH low overheads. VACUUM Adaptable workforce >20% temporary roles. INDUSTRIAL VACUUM Agile supply chain. VACUUM Move from sellers to buyers market. TECHNIQUE SERVICE Strong development in both service divisions. SEMICONDUCTOR SERVICE Agility without compromising strategy. 9 November 15 2018 Atlas Copco Capital Markets Day

Becoming the undisputed leader in vacuum technology Glass/web/ National & Silicon semiconductors optical coating Gov. labs TFT-LCD display Space Display simulation coatings 10 November 15 2018 Atlas Copco Capital Markets Day

Brooks Cryogenic Business Leader in high value cryogenics solutions under two leading brands – CTI and Polycold Extensive track record – 85,000+ CTI Cryopumps and 20,000+ REVENUE REVENUE Polycold chillers installed globally. BY REGION BY BUSINESS TYPE Market leader in Semiconductor – Service Europe critical products in deposition and 16% ion implant processes. 23% Asia and 45% Used in a wide range of thin film Other and scientific applications. North 40% 77% America 50/50 JV with Ulvac Inc which Products produces cryopumps for flat panel display market. 11 November 15 2018 Atlas Copco Capital Markets Day

Cryo Technology: Increasing footprint on Process Tool Chambers Inside the Fab and Sub-Fab Fab Floor (Clean room) New: Wafer Chuck Cooling Deposition Implant Etch Process Process Criticality Tools Cryo Pumps Turbo Pumps Sub-Fab Majority of current VT Semiconductor business Floor is for sub-fab vacuum and abatement Dry Pumps Abatement 12 November 15 2018 Atlas Copco Capital Markets Day

Fab Mapping – SEMI China mainland 2018 HEILONGJIANG XINJIANG JILIN LIAONING HEBEI NEI MONGOL BEIJING SHANXI NINGXIA QINGHAI SHANDONG GANSU HENAN SHAANXI JIANGSU XIZANG SHANGHAI SICHUAN HUBEI ANHUI CHONG- QING ZHEIJANG JIANGXI HUNAN GUIZHOU FUJIAN YUNNAN GUANGXI GUANGDONG TAIWAN MACAU HONG KONG HAINAN 13 November 15 2018 Atlas Copco Capital Markets Day

Industrial Vacuum 14 November 15 2018 Atlas Copco Capital Markets Day

Industrial Vacuum New technologies market Traditional markets (old products, traditional users) Introduce disruptive innovations in a traditional market 15 November 15 2018 Atlas Copco Capital Markets Day

Service Two stable and growing service businesses Semiconductor Service Vacuum Technique Service Share growth potential Ongoing high fab utilization Investing in presence Benefiting from huge growth of install base Merged Leybold and over last 5-years Edwards hubs; Plan to merge Cryo business hubs Customer presence with >1,000 on-site service Develop a Product Portfolio personnel for proactive Service offerings 16 November 15 2018 Atlas Copco Capital Markets Day

Innovative products to be launched in the coming months Revolution in liquid ring Next generation dry vacuum vacuum technology pump for harsh processes  Harsher process capability  Lower power  Smaller footprint Innovation in LRP VSD+ vane technology Atlas Mk4 iXHMk2 DHS VSD+ Extended range EDS dry screw pump technology  Easy operation – clean exhaust  Easy integration – compact  Comfortable operation – low noise level New dry screw vacuum pumps Next generation abatement system 17 November 15 2018 Atlas Copco Capital Markets Day

Innovation in reality 18 November 15 2018 Atlas Copco Capital Markets Day

19 November 15 2018 Atlas Copco Capital Markets Day

20 November 15 2018 Atlas Copco Capital Markets Day

Summary Very strong service growth Market share through gain. utilization Growth through and presence. breakthrough innovative new products. An integrated sustainable strategy. Clear Excellence in divisional Brand Portfolio roadmaps driving management. towards strategic convergence and Sustainable Profitable Growth. 21 November 15 2018 Atlas Copco Capital Markets Day

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 and adversely affected by other factors such as the effect of economic conditions, exchange-rate and interest-rate movements, political risks, the impact of competing products and their pricing, product development, commercialization and technological difficulties, supply disturbances, and major customer credit losses.” 23 November 15 2018 Atlas Copco Capital Markets Day