Atlas Copco
Annual report 2021
GRI Standards and external review
Atlas Copco reports on its sustainability work for 2021 according to
GRI Standards, Global Reporting Initiative’s reporting guidelines,
level Core, which in combination with EU taxonomy – classication
of sustainable activities on page 132 also constitutes Atlas Copco’s
statutory sustainability report. Ernst & Young has expressed an opinion
that a statutory sustainability report has been prepared according to
the Swedish Annual Accounts Act, and has performed a limited review
of the sustainability report according to GRI Standards, core option,
see page 143. More information can be found at:
www.atlascopcogroup.com
Notice
The amounts are presented in MSEK unless otherwise indicated
and numbers in parentheses represent comparative gures for
the preceding year. The gures presented in this report refer to
continuing operations unless otherwise stated.
Atlas Copco is the home of industrial ideas. We develop smart, sustainable and
highly ecient solutions that empower our customers to grow and drive society
forward. We do it with people, prot and planet in mind, and with the highest
business integrity.
Our innovative products, solutions, and services are demanded by every type
of industry. They enable everything from industrial automation to reliable
medical air solutions.
This annual report reects Atlas Copco’s mission of creating sustainable, protable
growth. It integrates nancial, sustainability, and governance information to
describe the Group in a comprehensive and cohesive manner.
INTRODUCTION 1 Summary of 2021
2 A decentralized group with four business areas
3 President and CEO
THIS IS
ATLAS COPCO
5 This is Atlas Copco – Home of Industrial ideas
6 Our targets
8 This is how we do business
12 Creating lasting value for all stakeholders
THE YEAR IN
REVIEW
14 The year in review (Administration report)
22 Business area: Compressor Technique
25 Business area: Vacuum Technique
28 Business area: Industrial Technique
31 Business area: Power Technique
34 Sustainable approach to delivering value
35 Raising our climate ambition
36 Products and service
39 People
41 Safety and well-being
42 Ethics
44 Environment
47 Risks, risk management and opportunities
52 The Atlas Copco share
GOVERNANCE 54 Corporate governance
FINANCIALS 64 Financial statements (Group)
69 Notes (Group)
110 Financial statements (Parent)
112 Notes (Parent)
OTHER
INFORMATION
123 Signatures of the Board of Directors
124 Audit report
127 Financial denitions
128 Sustainability notes (Group)
136 GRI index
143
Auditor’s Limited Assurance Report on
Atlas Copco AB’s sustainability report
144 Three years in summary
145 Contacts
Forward-looking statements
Some statements in this report are forward-looking, and the actual
outcomes could be materially dierent. In addition to the factors
explicitly discussed, others could have a material eect on the actual
outcomes. Such factors include, but are not limited to, general busi-
ness conditions, uctuations in exchange rates and interest rates,
political developments, the impact and pricing of competing prod-
ucts, product development, commercialization and technological
diculties, supply-chain interruptions, and major customer credit
losses.
are sometimes referred to as the Atlas Copco Group, the Group, the
company, or Atlas Copco. Atlas Copco AB is also sometimes referred
to as Atlas Copco or the company. Any mentioning of the Board of
Directors or the Board refers to the Board of Directors of Atlas Copco AB.
The audited annual accounts and consolidated accounts can be found on pages 14–41,
47–51 and 64–123, excluding the quarterly data on page 82. The corporate governance
report examined by the auditors can be found on pages 54–63.
Sustainability information that has been reviewed by the auditors can be found on
pages 5–13, 34–46 and 128–142.
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Atlas Copco 2021
Record orders, revenues and operating prot
Orders received, revenues and operating margin
0
20 000
40 000
60 000
80 000
100 000
120 000
140 000
2021202020192018
MSEK
0
20000
40000
60000
80000
100000
120000
2020201920182017*
MSEK
0
5
10
15
20
25
30
35
%
Operating cash ow and return on capital employed
0
7
14
21
28
35
2020201920182017*
%
0
7
14
21
28
35
0
5 000
10 000
15 000
20 000
2021202020192018
MSEK
0
10
20
30
40
%
Orders received, MSEK
Revenues, MSEK
Operating margin, %
Operating cash ow, MSEK
Return on capital employed, %
Key nancial data
MSEK 2021 2020 2019 2018
Orders received 129 545 100 554 106 104 97 132
Revenues 110 912 99 787 103 756 95 363
EBITDA 29 025 24 335 26 597 24 510
– in % of revenues 26.2 24.4 25.6 25.7
EBITA* 25 015 20 474 22 900 22 101
– in % of revenues 22.6 20.5 22.1 23.2
Operating prot 23 559 19 146 21 897 21 187
– in % of revenues 21.2 19.2 21.1 22.2
Adjusted operating prot 24 246 19 998 22 677 21 135
– in % of revenues 21.9 20.0 21.9 22.2
Prot before tax 23 410 18 825 21 572 20 844
– in % of revenues 21.1 18.9 20.8 21.9
Prot for the year 18 134 14 783 16 543 16 336
Basic earnings per share, SEK 14.89 12.16 13.60 13.45
Diluted earnings per share, SEK 14.85 12.14 13.59 13.43
* Operating prot excluding amortization of intangibles related to acquisitions.
Operating
margin: 21.2%
(19.2)
Operating cash ow:
MSEK 19 378
(18 910)
Revenues:
MSEK 110 912
(11%)
Return on
capital employed:
27% (23)
Dividend/earnings per share, average
1)
including discontinued operations
0
10
20
30
40
50
60
3 years5 years10 years
Goal
%
Dividend policy history
–2003 30–40% of earnings
2003–2011 40–50% of earnings
2011– about 50% of earnings
1)
Dividend for the scal
year 2021 is based on the
proposal from the Board
of Directors.
Atlas Copco 2021 1
SUMMARY OF 2021
INTRODUCTION
• Summary of 2021
A decentralized group with four
business areas
President and CEO
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
A decentralized group with four business areas
The Atlas Copco Group is a world- leading provider of sustainable produc-
tivity solutions, demanded by all types of industries, enabling everything
from industrial automation to reliable medical air solutions. The Group
oers innovative compressors, air treatment systems, vacuum solutions,
industrial power tools and assembly systems, machine vision, and power
and ow solutions. Atlas Copco develops products and services focused
on productivity, energy eciency, safety and ergonomics, supported by
insights from connected products. The company was founded in 1873,
is based in Nacka, Sweden, and has a global reach spanning more than
180countries. In 2021, Atlas Copco had revenues of BSEK 111 and about
43000 employees at year end.
Compressor
Technique
Page 22
Vacuum
Technique
Page 25
Industrial
Technique
Page 28
Power
Technique
Page 31
Revenues by region
Revenues by region
Orders received by customer category
Orders received by customer category
Asia/Oceania, 34
%N
orth
America, 21%
Africa/
Middle East, 6%
Europe, 34%
South
America, 5%
Asia/Oceania, 29% North
America, 31%
Africa/
Middle East, 1%
Europe, 36%
South
America, 3%
Asia/Oceania, 65%
North
America, 21%
Africa/
Middle East, 1% Europe, 13%
Asia/Oceania, 21
%N
orth
America, 27%
Africa/
Middle East, 8%
Europe, 36%
South
America, 8%
Other, 20%
General manu-
facturing, 27%
Construction, 13%
Service, 11%
Process industry, 25% Automotive, 1%
Electronics, 3%
Other, 10
%G
eneral manu-
facturing, 18%
Construction,5%
Service, 6%
Electronics, 4%
Automotive, 51%
Process industry, 6%
Other, 2%
General manu-
facturing, 10%
Process
industry, 18%
Electronics, 70%
General manu-
facturing, 21%
Other, 16%
Construction, 42%
Service, 7%
Process
industry, 14%
The Compressor Technique business area provides compressed air
solutions; industrial compressors, gas and process compressors and
expanders, air and gas treatment equipment, air management systems,
and service through a global network.
Orders received: MSEK 55 012
Revenues: MSEK 49 657
Operating margin: 23.9%
The Vacuum Technique business area provides vacuum products,
exhaust management systems, valves and related products, and
service through a global network.
Orders received: MSEK 39 529
Revenues: MSEK 29 219
Operating margin: 24.2%
Revenues by region
Revenues by region
Orders received by customer category
Orders received by customer category
The Industrial Technique business area provides industrial power tools,
assembly and machine vision solutions, quality assurance products,
software, and service through a global network.
Orders received: MSEK 20 545
Revenues: MSEK 19 421
Operating margin: 20.5%
The Power Technique business area provides air, power and ow solu-
tions through products such as mobile compressors, pumps, light towers
and generators, along with a number of complementary products. It also
oers specialty rental and provides service through a global network.
Orders received: MSEK 15 155
Revenues: MSEK 13 234
Operating margin: 16.0%
Revenues by region, Group
Asia/Oceania, 40%
North
America, 23%
Africa/
Middle East, 4%
Europe, 29%
South
America, 4%
Share of revenues, Group
Equipment, 65%Service, 35%
Orders received by customer category, Group
Other, 12%
General manu-
facturing, 20%
Construction, 11%
Service, 6%
Process industry, 18%
Electronics, 24%
Automotive, 9%
Share of revenues
Service, 43% Equipment, 57%
Share of revenues
Equipment, 76%Service, 24%
Share of revenues
Equipment, 73%Service, 27%
Share of revenues
Equipment, 57%Service, 11%
Service (Specialty
Rental), 32%
Atlas Copco 2021 2
A DECENTRALIZED GROUP WITH FOUR BUSINESS AREAS
INTRODUCTION
Summary of 2021
• A decentralized group with four
business areas
President and CEO
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
The transformation into a better tomorrow
is driven by technology
Atlas Copco delivered a record result in 2021, with new record levels for both orders received and revenues. Our increased
investments in R&D over the past couple of years also resulted in several new product launches. Through our sustainable innovations
we support our customers’ eorts to lower their energy consumption as well as strengthen their productivity and oering.
Mats Rahmström, CEO and President of the Atlas Copco Group,
what were the main achievements during 2021?
I am very pleased to see that our long-term eorts and strong focus,
as well as our strive to be agile and always nd better ways, have
paid o. We have continued to increase our R&D-investments in
areas where we believe we can make a dierence, as well as our pres-
ence in segments and markets where we see potential for sustain-
able protable growth. These are fundamental parts of our strategy
and how we improve our customers’ technologies and processes
and drive development forward, which is what Atlas Copco is all
about. We also signicantly raised our climate ambitions by setting
science- based targets for reducing our greenhouse gas emissions in
line with the goals of the Paris Agreement.
Why has Atlas Copco set science-based targets?
The science is clear, we need to act to limit the eects of climate
change and companies as well as individuals and governments need
to do their part. We have set goals to reduce the emissions from our
own operations in line with keeping the global temperature rise
below 1.5 degrees, and to reduce emissions from the value chain in
line with well below a 2-degree temperature rise. I’m also happy
with the process behind setting the targets, where each business
area has developed its own plans for how to achieve this.
The main benet of these targets is that they inspire new ways of
thinking, new initiatives and the actions needed for positive change.
The absolute majority of our emissions comes from the use of our
products and this is where we can make the most impact. We will
continue to focus on increasing the energy eciency of products
and support our customers in reaching their sustainability ambi-
tions, while reducing the emissions from our own operations.
PAGE 35
How do you comment on the nancial results for the year?
We saw a very high demand from our customers in 2021 and our
orders received reached a new record level. Despite constrains in the
supply chain we also delivered record revenues. Our operating prot
also reached record levels. Our strong nancial position enables us
to continue investing in our competitiveness.
What trends and change-drivers do you consider most
important for the Group going forward?
The climate challenge is an important change-driver. We see clear
business opportunities in being part of driving the transformation
into a low-carbon society, by enabling new technologies and con-
tinuing to develop products used in the manufacturing of solar
panels, wind turbines, electrical vehicles and sustainably produced
hydrogen, to name a few examples.
For us digitalization is very much part of everything we do. It is a
very important change-driver for our customers and how we inter-
act with them, as well as for how we run our factories. Digital solu-
tions enable reskilling and upskilling on a massive scale. As an exam-
ple, we have recently completed several virtual product launches
and use augmented reality to provide technical insights to both our
eld technicians and customers.
In service, connectivity is a game changer. Previously, we relied on
information from our customers, but we now fully control the health
status and performance of our machines. All business areas com-
bined have hundreds of thousands of connected machines in the
eld, and the amount of data they generate is impressive and grow-
ing. It enables us to oer performance-based service solutions. We
also avoid over or under servicing, and instead we move into pre-
scriptive service. As a bonus, the data is fed back to our development
engineers. We want to be the best at analyzing and acting on all this
data, and data analytics is already a core competency.
We will continue to focus on
increasing the energy eciency
of products and supporting our
customers to reach their sustainability
ambitions, while reducing the
emissions from our own operations.
Atlas Copco 2021 3
PRESIDENT AND CEO
INTRODUCTION
Summary of 2021
A decentralized group with four
business areas
• President and CEO
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
The transformation into a better tomorrow
is driven by technology, continued
How do you work with upskilling and reskilling to make sure
that you have the right competencies?
We consider learning as a lifelong journey and a crucial contributor
to Atlas Copco’s success. Performance is very much driven by mind-
set and it is everyone’s responsibility to continuously upskill them-
selves. I believe that encouraging curiosity and creativity is one of
the most important things we can do to grow and develop as an
organization. In 2021, we organized our rst-ever learning week
where we welcomed all employees to learn more about strategic
and business-critical topics. Of course, learning takes place every
day, not least in the job, but by dedicating a specic week we show
that scheduling time for learning is not only allowed but also encour-
aged. Another aspect of developing as an organization is making
sure we attract new kinds of talent and that we explore the entire
talent pool in doing so.
PAGE 39
What about the diculties in supply-chains that aected
nearly all industries during the year?
We have been aected by disturbances in our supply chain. Being
both global and local gives us the ability to adapt quickly, and our teams
have worked very hard to support our customers. This is a challeng-
ing situation that we have not experienced on this scale before, but I
am proud of how we have managed to handle it. Having a complete
value-chain in Europe, Asia, and the Americas, is another strength.
Our strong local presence in terms of people and R&D, combined with
local manufacturing, has also proved to be an advantage.
As a leading manufacturer of vacuum equipment, how has
Atlas Copco been aected by the shortages of semiconductors?
Today, semiconductors are found in products everywhere, from
chips in electronical devices and household appliances to cars and
computers. The demand for semiconductors is increasing but only a
few manufacturers have the technological knowledge and invest-
ment capacity to increase production. As supplier of equipment to
this industry we can of course see an increased demand for our prod-
ucts and solutions as well. At the same time, other industries that
depend on semiconductors have been forced to slow down produc-
tion due to the shortage. Our strategy of being close to our custom-
ers worldwide and supporting a diverse customer base has once
again proven to serve us well.
What are your main priorities going forward?
Our main priority is to ensure that we create increased value for our
stakeholders. We help increase our customers’ productivity, safety,
ergonomics and energy eciency while decreasing their environ-
mental impact and total cost of ownership. We provide value to our
employees by being an inclusive company where resourceful people
grow and feel empowered. For our shareholders, we generate divi-
dends that also contribute to funding research and pensions. And
to our business partners and society in general, we bring new tech-
nologies and solutions that drive development forward. We also
want to be part of the solution to the climate challenge, by develop-
ing energy-ecient products and making our own operations as
ecient as possible. So no matter if you invest in, work for or buy
from the Atlas Copco Group, you are part of contributing to a better
tomorrow.
Mats Rahmström, President and CEO
Nacka, Sweden, January 2022
Atlas Copco 2021 4
PRESIDENT AND CEO
INTRODUCTION
Summary of 2021
A decentralized group with four
business areas
• President and CEO
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
This is Atlas Copco – Home of Industrial Ideas
DIVERSIFIED
– Diverse customer base
– Sales in Asia/Oceania,
Americas, and EMEA
– Production in Europe, Asia
and America
AGILE
– Outsourced production model, 75% of production
cost of equipment is purchased components
– Flexible workforce
– Continuous scenario planning
– Leadership model with clear accountability
– Transparent organization with strong follow up
RESILIENT
– 35% of sales is service business
– Asset-light operations
To succeed in our mission, Atlas Copco strives for a leading position in selected markets and segments. This is achieved
through innovations and by delivering leading dierentiated technology. With products and services critical to the
customers’ operations, Atlas Copco strives to support customers in their success. To support protable growth over a
business cycles, the Group aims to have an agile balance sheet and focuses on marketplaces with high service potential.
SERVICE
Increase the service
oer by giving our
customers new
insights and peace of
mind, more and more
based on customer
data and real-time
insights.
INNOVATION
Invest in research
and development to
develop new solutions
that improve our cus-
tomers’ performance.
Connectivity and
data-driven insights
are key drivers in this.
PRESENCE
Increase market
presence by expanding
into selected markets,
segments, and technol-
ogies. Whether we sell
directly or indirectly,
and under which brand,
depends on the custom-
er and market.
OPERATIONAL
EXCELLENCE
Continuously strive for
improved operational
eciency with respon-
sible use of resources,
including developing
top-quality and highly
ecient products and
services.
PEOPLE
Rely on competent
people who are
passionate about their
jobs, performance,
and committed to
deliver customer value.
Attract resourceful
people and empower
them to grow.
Our industrial ideas empower our customers to grow and drive society forward. This is how we create a better tomorrow.
We are convinced that leading products, together with a decentralized organization with full accountability
for individuals and teams make our customers, and our company, future-proof.
Our vision is to become and remain First in Mind—First in Choice of our customers and other stakeholders. Our mission is to achieve sustainable, protable growth.
This means that we must create lasting results with responsible use of resources and with the highest business integrity.
Strategy and fundamentals
for growth
Leading
position in
selected end
markets
Products
critical to the
customers’
operations
Leading
dierentiated
technology
Leading
service
oer
Atlas Copco 2021 5
THIS IS ATLAS COPCO
THIS IS ATLAS COPCO
• This is Atlas Copco – Home of
Industrial ideas
Our targets
This is how we do business
Creating lasting value for all stakeholders
Contributing to the UN Sustainable
Development Goals
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Atlas Copco sets ambitious targets to deliver sustainable, protable growth. The targets have dierent time horizons: annual, three-year, over a business cycle,
and by 2030 for the longer-term ambitions. Sustainability plays an important role in Atlas Copco’s vision and is an integral part of the Group’s mission. An integrated
sustainable strategy, backed by ambitious targets, helps the company deliver greater value to all stakeholders in a way that is economically, environmentally and
socially responsible. Below you nd our targets and progress until 2021. Updated sustainable targets valid from 2022 can be found on the next page.
FINANCIAL
Revenue growth measured over a business cycle Target: 8% per annum
Sustained high return on capital employed by constantly
striving for operational excellence and generating growth
Earnings as dividends to shareholders Target: about 50%
0
2
4
6
8
10
3 years5 years10 years
0
20 000
40 000
60 000
80 000
100 000
2021202020192018
0
10
20
30
40
50
60
3 years5 years10 years
Goal
Goal
%
MSEK %
%
0
10
20
30
40
50
0
2
4
6
8
10
3 years5 years10 years
0
20 000
40 000
60 000
80 000
100 000
2021202020192018
0
10
20
30
40
50
60
3 years5 years10 years
Goal
Goal
%
MSEK %
%
0
10
20
30
40
50
Annual revenue growth rate, average
1)
Capital employed and return
1)
Capital employed, MSEK
Return on capital employed, %
1)
Figures for the years between 2012 and 2017
are best estimated numbers, as the eects of
the distribution of Epiroc and restatements for
IFRS15 are not fully reconciled.
Our targets
PEOPLE 2021 2020 2019 Target*
The degree to which employees agree there is opportunity to learn and grow should
be above the global benchmark and continuously increase 73 Survey every two years 71 >71
The degree to which employees agree we have a work culture of respect, fairness and
openness should be above the global benchmark and continuously increase 76 Survey every two years 74 >75
Share of female employees (year end). Goal by 2030 20.9% 20.0% 19.8% 30%
ETHICS 2021 2020 2019 Target*
Employees sign the Business Code of Practice 98% 99% 98% 100%
Employees are trained in the Business Code of Practice 97% 99% 94% 100%
Managers in risk countries lead trainings in the Business Code of Practice 96% 99% 91% 100%
Signicant suppliers sign the Business Code of Practice 93% 93% 90% 100%
Signicant distributors sign the Business Code of Practice 87% 84% 59% 100%
PRODUCTS & SERVICE 2021 2020 2019 Target*
Projects for new or redesigned products with goals for reduced environmental
impact by 2021 98% Reported in 2021 100%
Projects for new or redesigned products that will achieve a signicantly reduced
environ mental impact, i.e. 5% or lower carbon footprint over the product’s life cycle 43% The divisions set their own goals
SAFETY & WELL-BEING 2021 2020 2019 Target*
The degree to which employees agree that the company takes a genuine
interest in their well-being should continuously increase 73
Survey every
two years 69 Increase
Balanced safety pyramid, meaning that more near misses than minor injuries, and
more minor injuries than recordable injuries are reported Yes Yes Yes Yes
ENVIRON MENT 2021 2020 2019 Target*
CO
2
emissions from energy in operations and transport (tonnes) in relation to
cost of sales. Goal by 2030. Base year: 2018 ** 3.3 3.8 4.3 –50%
Waste (kg) in relation to cost of sales 590 581 597 Decrease
Water consumption (m
3
) in relation to cost of sales 6.6 7.2 7.2 Decrease
Signicant direct suppliers with an approved environmental management system 31% 30% 28% Increase
* For more information about the
sustainability focus areas, targets,
and processes, see pages 34–46
and the sustainability notes on
pages 128–142.
** In 2018 (the base year), CO
2
emissions from energy in
operations and transport (tonnes)
in relation to cost of sales was 5.3.
Dividend/earnings per share, average
2)
including discontinued operations
0
2
4
6
8
10
3 years5 years10 years
0
20 000
40 000
60 000
80 000
100 000
2021202020192018
0
10
20
30
40
50
60
3 years5 years10 years
Goal
Goal
%
MSEK %
%
0
10
20
30
40
50
Dividend policy history
–2003 30–40% of earnings
2003–2011 40–50% of earnings
2011– about 50% of earnings
2)
Dividend for the scal year 2021 is based on the
proposal from the Board of Directors.
Atlas Copco 2021 6
THIS IS ATLAS COPCO
THIS IS ATLAS COPCO
This is Atlas Copco – Home of
Industrial ideas
• Our targets
This is how we do business
Creating lasting value for all stakeholders
Contributing to the UN Sustainable
Development Goals
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Fully committed to being part of the solution for a better tomorrow, Atlas Copco
has reviewed its sustainability targets. The targets have dierent time horizons:
annual, three-year and by 2030, for the longer-term ambitions. Atlas Copco has
set science-based targets for greenhouse gas emission reductions in line with the
Paris Agreement.
Sustainability targets valid from 2022
The sustainability targets cover the areas: people, ethics, products and service, climate
and the environment, and safety and wellbeing. Some of the previous targets have
been revised to reect changing stakeholder expectations and to support the organi-
zation’s implementation of prioritized strategies and behaviors. For instance, a key
performance indicator (KPI) measuring employees’ sense of belonging at the com-
pany has been added. The ethics-related targets from 2022 extend the requirement
for a leader-led training to all employees, with an additional training requirement for
new employees. To increase circularity in product design, a Group methodology for
assessing the circularity of new or redesigned products will also be developed.
Science-based targets for greenhouse gas emission reductions
In 2021, Atlas Copco set science-based targets to reduce greenhouse gas emissions
in line with the goals of the Paris Agreement. Atlas Copco aims to reduce emissions
from our own operations in line with keeping the global temperature rise below 1.5
degrees, and to reduce emissions from the value chain in line with keeping well below
a 2-degree temperature rise. The science-based targets signicantly raise Atlas Copco’s
ambition for carbon emissions reduction, as they involve the entire value chain, most
notably the use of sold products, and since the targets are set for absolute emission
reductions. The targets have been validated by the Science Based Targets initiative and
replace our previous greenhouse gas emission targets from 2022.
For more information about how Atlas Copco works to achieve its sustainability
targets, see pages 34–46.
PEOPLE TARGET
Female employees by 2030 30%
Employees agree that they feel a sense of belonging at the company
Above the global
benchmark and a
continuous increase
Employees agree we have a work culture of respect, fairness and openness
Employees agree there is opportunity to learn and grow in the company
ETHICS TARGET
Employees sign the Group’s Code of Conduct
1)
compliance statement annually 100%
New employees participate in the Group’s ethics training within 12 months of
joining the company 100%
Employees participate in the Group’s biennial ethics training, starting 2022 100%
Signicant suppliers conrm compliance with the Group’s Code of Conduct
1)
100%
Signicant distributors conrm compliance with the Group’s Code of Conduct
1)
100%
SAFETY & WELL-BEING TARGET
Employees agree that the company takes a genuine interest in their well-being Continuous increase
Balanced safety pyramid = more reports of risk observations than near misses, more
reports of near misses than minor injuries, and more or equal reports of minor injuries
relative to recordable injuries A balanced safety pyramid
CLIMATE & ENVIRON MENT TARGET
Reduction in line with the 1.5 degree warming trajectory in CO
2
e
2)
emissions (tonnes)
from scopes 1 & 2 by 2030. Base year: 2019 –46%
Reduction in line with the well-below 2 degrees warming trajectory in CO
2
e
2)
emissions
(tonnes) from scope 3 by 2030. Base year: 2019 –28%
Signicant direct suppliers with an approved environmental management system Continuous increase
Water consumption (m
3
) in relation to cost of sales Continuous decrease
Reused, recycled or recovered waste from internal operations by 2030 100%
PRODUCTS & SERVICE TARGET
Projects for new and redesigned products with targets for reduced carbon impact 100%
By 2024, Atlas Copco has a Group-common methodology for assessing the
circularity of new or redesigned products Common methodology
1)
Previously referred to as the Business Code of Practice.
2)
CO
2
e means carbon dioxide equivalent emissions.
Atlas Copco aims to reduce emissions from
its own operations in line with keeping the
global temperature rise below 1.5 degrees,
and to reduce emissions from the value chain
in line with keeping the temperature rise well
below 2-degrees.
Atlas Copco 2021 7
THIS IS ATLAS COPCO
THIS IS ATLAS COPCO
This is Atlas Copco – Home of
Industrial ideas
• Our targets
This is how we do business
Creating lasting value for all stakeholders
Contributing to the UN Sustainable
Development Goals
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
This is how we do business
Atlas Copco is characterized by focused
businesses in selected market segments,
high customer focus through a decentralized
organization, global presence, a stable
service business, professional people, and
an asset-light and exible manu facturing
setup. By providing professional service,
technical competence, application knowledge
and digital capabilities the Group builds
close customer relationships through direct
and indirect channels.
Power Technique, 12%
Compressor
Technique, 45%
Vacuum
Technique, 26%
Industrial
Technique, 17%
Share of revenues by business area
Other, 12%
General manufacturing,
20%
Construction,
11%
Service, 6%
Process industry, 18%
Electronics, 24%
Automotive, 9%
Orders received by customer category
Share of revenues
Equipment, 65%Service, 35%
Sales and service
Atlas Copco’s ambition is to build close relation-
ships with customers and help them increase their
productivity in a sustainable way. Customer
engagement, sales, and service take place
through direct and indirect channels (mainly dis-
tributors), online as well as oine, to maximize
market presence. Digital interaction is becoming
increasingly important to support customers and
create business opportunities. Consequently, we
continuously develop our teams to make sure they
are equipped with the right competencies to
make sure it is easy to do business with us. Atlas
Copco aims at always being available to customers
when they need us, wherever we can support
them best. The Group has a global reach with sales
in more than 180 countries.
Sales of equipment is performed by engineers
with strong application knowledge and with the
ambition to oer the best solution for specic
applications. Service and maintenance performed
by skilled technicians is an integral part of our
oer. Service is the responsibility of dedicated
divisions in each business area. This includes the
development of service products, sales and mar-
keting, technical support, and service delivery,
all supported by data analysis from connected
equipment.
Stable service business
35% of the Group’s revenues are generated from
service (spare parts, maintenance, repairs, con-
sumables, accessories, and specialty rental). These
revenues are more stable than equipment sales
and provide a strong base for the business.
Increase customer loyalty
Customer focus is a guiding principle for Atlas
Copco. Customer surveys are regularly conducted
75%
Global reach
with local
presence
Atlas Copco has a global
reach with sales in more
than 180 countries. Sales
and service are performed
by employees with strong
application and process
knowledge.
About 75% of the production
cost of equipment represents
purchased components.
to learn from their experience and opinions about
their interaction with Atlas Copco. Customers are
often engaged in feedback discussions to improve
our products and services. A number of key per-
formance indicators have been established, which
are continuously followed up to ensure that
customer satis faction improves.
Manufacturing and logistics
We strive to have manufacturing close to where
our customers are located. As a result, production
facilities are located in Europe, Asia, and the
Americas. The philosophy is to manu facture
inhouse those components that are critical to the
performance of the equipment. For other compo-
nents, Atlas Copco leverages the capacity and
competence of business partners. Flexible pur-
chasing and logistics are of great importance.
Approximately 75% of the production cost of
equipment represents purchased components,
and about 25% are internally manufactured core
components, assembly costs, and overhead.
Equipment represents about 65% of revenues,
and manufacturing and logistics are organized
to be able to quickly adapt to changes in
demand. The manufacturing of equipment is
based primarily on customer orders, and only
some standard, high-volume equipment is
manufactured based on projected demand.
The assembly of equipment is, to a large degree,
carried out in Atlas Copco’s own facilities, and we
take responsibility for the products’ functionality
and quality. In order to optimize production ows
the assembly is typically lean, and the nal prod-
uct is generally shipped directly to the end user.
The organization works continuously to eciently
use human, natural, and capital resources, while
ensuring highest quality.
Atlas Copco 2021 8
THIS IS ATLAS COPCO
THIS IS ATLAS COPCO
This is Atlas Copco – Home of
Industrial ideas
Our targets
• This is how we do business
Creating lasting value for all stakeholders
Contributing to the UN Sustainable
Development Goals
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
This is how we do business, continued
Innovation
Atlas Copco believes that there is always a better
way of doing things. Innovation and product
development are of greatest importance, and
products are designed internally. Innovation will
improve customer satisfaction and contribute to
strengthening customer relations, the brand, and
nancial performance. Research and develop-
ment expenditures correspond to about 4% of
total revenues.
The fundamental objective is to design, and
eciently produce, new or improved products
that provide sustainable and tangible benets for
customers in terms of productivity, energy e-
ciency, and/or lower life-cycle cost. New hardware
and software are developed by skilled engineers
in the divisions. We protect technical innovations
with patents.
Innovation also includes better processes to
improve the ow and utilization of assets and
AGILE AND RESILIENT OPERATIONAL SETUP
RESILIENCE
DETERIORATING BUSINESS CLIMATE
Atlas Copco can:
– reduce variable costs
– reduce working capital
IMPROVING BUSINESS CLIMATE
Atlas Copco can:
– add needed resources
– add working capital
– add small incremental investments
Time
Volume/
Prot
information. Overcapacities and ineciencies
must always be challenged.
Investments in xed assets and working
capital
The Group’s need for investments in property,
plant and equipment are moderate due to the
manufacturing philosophy and can be adapted to
short and medium-term changes in demand.
Most investments are related to machining equip-
ment for core manufacturing activities and to pro-
duction facilities, primarily for core component
manufacturing and assembly operations.
The working capital requirements are aected
by the relatively high share of sales through own
customer centers, which aects the amount of
inventory and receivables. In an improving busi-
ness climate with higher volumes, more working
capital will be tied up. If the business climate dete-
riorates, working capital will be released.
Acquisitions
Acquisitions are primarily made in, or very close to,
existing core businesses. All divisions are required
to map and evaluate businesses that are adjacent
and that may oer tangible synergies to existing
businesses. All acquired businesses are expected
to contribute positively to economic value added.
Agility
Atlas Copco has organized its
manufacturing and logistics to be
able to quickly adapt to changes in
equipment demand.
Research and development expenditures
correspond to about 4% of total revenues.
Atlas Copco 2021 9
THIS IS ATLAS COPCO
THIS IS ATLAS COPCO
This is Atlas Copco – Home of
Industrial ideas
Our targets
• This is how we do business
Creating lasting value for all stakeholders
Contributing to the UN Sustainable
Development Goals
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Atlas Copco’s organization is based on the principle of
decentralized responsibilities and authorities
STRUCTURE AND GOVERNANCE
Atlas Copco’s organization is based on the principle of decentral-
ized responsibilities and authorities (see organization chart to the
right). The organization consists of both operating and legal units.
Each opera ting unit has a business board reecting the Group’s
operational structure. The duty of the business board is to serve in
an advisory and decision-making capacity concerning strategic
and operative issues. It also ensures the implementation of con-
trols and assessments. Each legal company has a legal board focus-
ing on compliance and reecting the legal structure of the Group.
The Board of Directors is responsible for the organization and
management of the Group, regularly assessing the Group’s nan-
cial situation and nancial, legal, social and environmental risks,
and ensuring that the organization is designed for satisfactory
control.
The President and CEO is responsible for the daily manage-
ment of the Group following the Board’s guidelines and instruc-
tions. The President and CEO is also responsible for ensuring that
the organization works towards achieving the goals for sustain-
able, protable growth. The President and CEO leads the Group
Management, which also consists of the business area presidents
and four functional heads.
The business areas are responsible for developing their respec-
tive operations by implementing and following up on strategies
and objectives to achieve sustainable, protable growth.
The divisions are separate operational units, responsible for
delivering results in line with the strategies and objectives set by
the business area. Each division has global responsibility for a spe-
cic product or service oering. A division can include one or more
product companies (units responsible for product development,
manufac turing and product marketing), distribution centers, and
several customer centers (units responsible for customer contacts,
sales and service) dedicated or shared with other divisions.
Regional holding functions are established world-wide to
support the divisional structure of the Group and to represent
Group Management.
As of January 1, 2022
The sharing of
resources and
infrastructure/
service providers
Common processes and shared
best practices collected in the
handbook of policies and guide-
lines The Way We Do Things
A common
leadership
model
An internal
job market
One Group Treasury
A shared vision
and a common
identity
Shared goals
and strategic
pillars for
growth
The corporate culture
and the core values:
interaction, commitment,
and innovation
The sharing
of brand names
and trademarks
The Atlas Copco Group is unied and strengthened through:
GROUP MANAGEMENT
BOARD OF DIRECTORS
PRESIDENT AND CEO
Divisions generally conduct business through product companies, distribution centers and customer centers.
COMPRESSOR TECHNIQUE
Divisions
Compressor Technique Service
Industrial Air
Oil-free Air
Professional Air
Gas and Process
Medical Gas Solutions
Airtec
Divisions
Vacuum Technique Service
Semiconductor Service
Semiconductor
Semiconductor Chamber
Solutions
Scientic Vacuum
Industrial Vacuum
VACUUM TECHNIQUE
Divisions
Industrial Technique Service
Motor Vehicle Industry Tools
and Assembly Systems
General Industry Tools and
Assembly Systems
Chicago Pneumatic Tools
Industrial Assembly Solutions
Machine Vision Solutions
INDUSTRIAL TECHNIQUE
Divisions
Power Technique Service
Specialty Rental
Portable Air
Power and Flow
POWER TECHNIQUE
This is how we do business, continued
The Group’s Business Code
of Practice
Atlas Copco 2021 10
THIS IS ATLAS COPCO
THIS IS ATLAS COPCO
This is Atlas Copco – Home of
Industrial ideas
Our targets
• This is how we do business
Creating lasting value for all stakeholders
Contributing to the UN Sustainable
Development Goals