Atlas Copco Annual General Meeting
27 apr 2000
Stockholm - Thursday, April 27, 2000 - Atlas Copco's Annual General Meeting was held today. In his address to the shareholders, Giulio Mazzalupi, President and CEO, reported, among other things, on the company's performance in 1999, the financial targets, and use of the Internet in the Group.
“In 1999, Atlas Copco made a number of important moves in line with the strategy. The most important was that we completed our project of forming a new business area, by acquiring Rental Service Corporation,” Mazzalupi said. Rental Service has operated as a separate business area since the beginning of last year, with Prime Service Inc. and Rental Service Corp. as its two divisions. Atlas Copco's revenues increased 7 percent to SEK 36,234 million in 1999 while profit after financial items decreased 6 percent to SEK 3,412 million. The operating profit increased 3 percent to SEK 4,345 million, corresponding to a margin of 12.3 percent. Atlas Copco reported its first quarter results earlier today. Revenues were SEK 10,517 million, up 36 percent compared with the corresponding period in 1999. Profit after financial items increased 69 percent, to SEK 943 million, compared to a weak first quarter in the preceding year. “We are pleased about these positive developments and expect continued growth in demand for Atlas Copco's products and services in the near future.” In his address to the shareholders Mazzalupi outlined the financial targets of the Atlas Copco Group; “Our overall objective as a Group is to achieve a return on capital employed that will always exceed the Group's total cost of capital. Our targets over the next business cycle are to have an annual revenue growth of 8 percent, to have an average operating margin of 15 percent, and to continuously challenge our operating capital efficiency in terms of stock, receivables, and hire fleet utilization. Overall, this will ensure that shareholder value is created and continuously increased.” Mazzalupi added that the strategy to reach the objectives would follow the proven development process for all operational units in the Group of stability first, then profitability, and finally growth. Atlas Copco announced today the launch of an extended stock option program to further align the goals of some 200 key employees with the interests of shareholders. “We want this program to be a long-term incentive plan, to provide benefits linked to the share price.” Mazzalupi also reported on use of the Internet within the Atlas Copco Group to provide customers with better service, and he gave a number of examples of how it is used today to broaden and deepen sales penetration. The Internet will be used to improve efficiency: “By challenging the way we work now, and introducing new types of structures, the sales organizations will save an estimated 30-50 percent in administration costs over the next few years.” The Meeting adopted the Board of Directors' proposed dividend for the 1999 fiscal year of SEK 4.75 per share. May 3, 2000, was approved as the record date. It is estimated that dividends will be distributed via Värdepapperscentralen VPC AB (the Swedish Securities Register Center) on May 8, 2000. One amendment of the Articles of Association was adopted, to reflect the increased importance of equipment rental. The Meeting re-elected all members of the Board: Anders Scharp (Chairman), Jacob Wallenberg (Vice Chairman), Sune Carlsson, Paul-Emmanuel Janssen, Lennart Jeansson, Giulio Mazzalupi, Hari Shankar Singhania, Michael Treschow, Kurt Hellström and Ulla Litzén. The auditors are Stefan Holmström and Peter Markborn and the deputy auditors are Thomas Jansson and Björn Sundkvist, elected by the Meeting in1999, each for a three-year term. Atlas Copco is an international industrial Group with its head office in Stockholm, Sweden. In 1999, the Group had revenues of SEK 36 billion, with 97 percent of revenues outside Sweden, and over 26,000 employees. Atlas Copco companies develop, manufacture, and market electric and pneumatic tools, compressed air equipment and generators, construction and mining equipment, assembly systems, and offer related service and equipment rental. More information is available on www.atlascopco.com.