Vacuum Technique Capital Markets Day 2019 Geert Follens, Business - - PowerPoint PPT Presentation

Capital Markets Day 2019 Geert Follens, Business Area President

Vacuum Technique

Agenda

November 26, 2019 Atlas Copco Capital Markets Day

Facts in brief 1 The market and business fundamentals 2 Strategy for growth 3 Summary 4

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Facts in brief

Vacuum Technique

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Growth drivers Orders, revenues and operating margin

• Climate change (Drive for efficiency, batteries)
• Miniaturization (Moores law)
• New industrial production processes
• Digitalization (IOT, 5G, VR, AI…)
• Sophisticated healthcare
• Service 24/7 (Connectivity)
• Global to local investments

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ROCE 23%

0% 5% 10% 15% 20% 25% 30% 35% 1 000 2 000 3 000 4 000 5 000 6 000 7 000

Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Orders received, MSEK Revenues, MSEK Operating margin, %

Orders received – Local currency Q3 2019

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25% 16% 59%

SHARE OF ORDERS RECEIVED YEAR TO DATE: = Q3 Year-on-Year = Q3 VS. Q2

+17% % 0% +48%

The market and business fundamentals

The markets we operate in

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General manufacturing

• Market leader in the global steel

degassing industry.

• Increasing applications due to new industrial

processes.

Electronics

• Consumers demand ‘electronics as necessity’.
• Presence in all semiconductor fabs.
• Semiconductor technology advances and

manufacturing capability are critical.

Process industry

• Taking market share across the process industry –

food, chemical, metallurgy.

Other – Scientific

• Enabling progress in space simulation.

2%

Orders received by customer category

4% 15% 62% 17%

Service

Global/ Technology trends

Vacuum – a growing market

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Miniaturization

• Moore’s law
• Low power use
• 3D structures

Data Economy Healthcare

• Personalised

medicine

• Life sciences

Climate Change

• Exhaust

regulations

• CO2 footprint
• Connectivity
• AI
• Machine

learning

• Autonomous

driving

• Electric cars
• Hyperloop

Transportation User interface

• Foldable Oled
• Electronics

as necessity

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Customer Applications

Vacuum intensity

• EUV
• Minimal foot-

print systems Processing power Data Analysis

• MRI
• Wearables
• Mass

spectrometers Energy / Legal

• LED & Solar
• Efficiency
• Abatement

performance

• Quantum

computing

• Memory
• Edge Computing
• Lithium-ion

batteries

• Electric vehicle

applications Electrical Connectivity

• Mobility
• 5G
• VR

Data growth estimates and driving forces

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DATA GROWTH DRIVES COMPUTE, STORAGE, NETWORK DEMAND

5x 1x

Compute Demand Data Centers (MIPS)

PROCESS EVERYTHING

2013 2018 2023

COMPUTE DEMAND

Stored Data, Data Centers (ZB)

STORE MORE

2013 2018 2023

STORAGE DEMAND

Global Internet Traffic (ZB)

MOVE FASTER

2013 2018 2023

NETWORK DEMAND

Atlas Copco Capital Markets Day Sources: Global Internet Traffic; Cisco VTNI Forecasts (2016,2017,20180. Stored Data, IDC Data Age 2025 (2018). Compute demand, Intel analysis. Processed and analysed by Atlas Copco.

Extensive and innovative product offering across applications

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Atlas Copco GHS central vacuum system Edwards Ezenith integrated vacuum & abatement system Leybold steel degassing vacuum system Edwards nXRi multi stage roots EUV Edwards CTI & Edwards Polycold cryo pumps and coldheads

Market trends and driving forces

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Battery production Hyperloop Automotive electronics Technology in healthcare Quantum computing Freeze drying

Sustainable profitable growth

Strategy for profitable growth - Summary

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Miniaturization Growth in general vacuum Opportunities in China Cryogenics Product innovation Service People Agility and resilience

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Extensive pump range Vacuum systems Accessories

• Product

coverage 70%

• Multi brand strategy
• Modular design
• Customer

applications

• Innovation centers
• Localized systems

delivery

Product offering from rough to ultra high vacuum

Strategy for profitable growth – Innovation

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800+FTE 16 Global Sites Product Expertise Application Knowledge Talent Pipeline

Patented Innovation Modular Platforms Enhanced Productivity Application Solutions Continuous Improvement Reduced CO2 & TCoO Digital Connectivity

People Processes Product

Recent product launches

Continuous focus on innovation with more than 20 new products launched in past year

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Industrial & Scientific Semiconductor

Leybold – Novadry Edwards – EDO, dry scroll Atlas Copco – DSS dry scroll Edwards – EXDM Leybold – TURBOVAC MAGiNTEGRA MAG2207iS Edwards – nXR50/80i Multi Stage Roots iXH XCEDE iXM XCEDE New Atlas high flow environmental technology iForest EVO

Cryogenics

MaxCool 2000

Cryogenics

‒ PVD coating and Ion implant processes ‒ Oled evaporation and encapsulation ‒ Industrial coating ‒ Space simulation

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‒ Industrial coating ‒ Sample cooling ‒ Wafer chuck cooling ‒ Cryogenics refrigerators: MRI scanners ‒ Dilution refrigerators: quantum computing

Cryo Polycold

Miniaturization – Support technology investments

• Pumps working in extreme harsh conditions

‒ Temperature: cooling + heating ‒ Corrosive gasses used: XCEDE coating ‒ Deep etch and deposition

• Enhanced lithography

‒ EUV: H2 pumping and recycling

• Footprint reduction

‒ Matching envelope of the tool ‒ Integrated systems

• Foreline temperature management

‒ Controlled TMS

• Meeting all legislative requirements

‒ Abatement with exhaust control ‒ NOx management

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• New products
• New processes

‒ Lithium-ion batteries ‒ Steel degassing ‒ Food processing ‒ Centralised installations ‒ Point of use mass spectrometry

• New territories

Growth in general vacuum

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• Sales capability

‒ Highly technical application knowledge ‒ Global Semiconductor understanding ‒ Customer proximity

• Service Capability

‒ Investments in hub capacity ‒ Training centres

• Investments

‒ Qingdao factory ‒ Shanghai Innovation Centre

• Product Capability

‒ Integrated systems ‒ Environmental solutions

China

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XINJIANG QINGHAI NEI MONGOL GANSU NINGXIA SHAANXI XIZANG SICHUAN CHONGQING YUNNAN GUIZHOU GUANGXI HAINAN TAIWAN HUNAN JIANGXI ZHEJIA NG FUJIAN GUANGDONG HONG KONG MACAU SHANGHAI JIANGSU ANHUI HUBEI HENAN SHANXI SHANDONG BEIJIING HEBEI BEIJING SHI TIANJIN LIAONING JILIN HEILONGJIANG

VT business area Early Careers

Individual Contributor

Responsible for one's own work as well as supporting and guiding others.

Team Leader

Directly responsible for managing at least one employee, leading project teams, or applying expertise that directly impacts the work of others.

Business Leader

Directly responsible for the results of a business unit or a major segment thereof, responsible for a specific functional area of the business unit, or applies expertise on a national basis.

Global Leader

Directly responsible for the P&L of a global business, or a major segment thereof, responsible for a specific function of the global business or applies expertise on a global basis.

Talent framework aligned to career levels

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VT business area Programs progresses participants towards business leadership roles Atlas Copco Programs from GM-1

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Strategy for profitable growth – Service

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• Leading edge technology & advanced service solutions to maximize customers'

uptime providing low total cost of ownership in general vacuum applications.

• Convenience, quality & customer value.
• Mission to be present in every customer’s service experience.
• Supporting efficiency in processes and enterprise systems.

Vacuum Technique Service Semiconductor Service

• Supports the process vacuum and environmental needs our customers depend on in the

semiconductor, display, LED and PV solar industries.

• Provide and support customer-based data-driven outcomes, with the clear aim of

maximising customer throughput and uptime.

• Field Service, Service Product Management and Service Technology Centres.

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November 26, 2019

Vacuum Technique – Service

CAGR Service 24% Equipment 21%

0% 10% 20% 30% 40%

5 000 10 000 15 000 20 000

2014 2015 2016 2017 2018 2019

Equipment revenues, MSEK Service revenues, MSEK Service, share of revenues, %

The evolution of our offer

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VEasy Quoter Connectivity OEM contracts Increased sales presence Competitor service Tailored service products Multi-branded service hubs

High Low High Low CUSTOMER FOCUS OPERATIONAL EFFICIENCY

PREVENTATIVE MAINTENANCE EXCHANGE CERTIFIED PARTS AND OIL AD HOC SERVICE CONTRACTS ADVANCED SERVICES

Strategy for profitable growth – Agility & resilience

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 Flexible subcon manufacturing model  Back office consolidation

Cost of sales management

• Product cost reduction
• Insourcing of subcontracted

manufacturing

• Flexible workforce

Growth initiatives

• Service development
• Continuous investment in R&D
• Investment in growth markets

Optimize efficiencies

• Mergers of multi-branded factories,

service centers, financial support services

• Sales & administration cost

management

• Discontinued old, low-margin products

Summary

Summary – Vacuum Technique

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• Accelerated technology development and product innovation
• Integration of new acquisitions
• Expand coverage in general industry – products and service
• Semi presence in focused markets – customer proximity
• People – talent development and gender diversity
• Continue to build agile structures and processes
• Further focus on resilient business models

atlascopcogroup.com

Forward looking statements

“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.”

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