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
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
INTERACTION
We interact and develop close relations
with customers, internally and externally,
as well as with other stakeholders. This
takes place in many ways: physically,
online or in directly through business
partners. We always look for what is best
for a specic target group.
INNOVATION
Our innovative spirit is reected in every-
thing we do. Our customers expect the
best from Atlas Copco and our objective is
to consistently deliver high-quality prod-
ucts and service that increase customers’
productivity and competitiveness.
COMMITMENT
We operate worldwide with a long-term
commitment to our customers in each
country and market served. We keep our
promises and always strive to exceed high
expectations.
LEADERSHIP AND PEOPLE
In Atlas Copco, leadership is dened as the ability
to create lasting results through people. Atlas
Copco believes that competent and committed
leaders are crucial to achieving sustainable, prot-
able growth. Freedom to act and accountability
are guiding principles.
All leaders are given a mission statement from
their leader, outlining long-term expectations and
goals in both quantitative and qualitative terms.
The timeframe of a mission is typically three to ve
years. Based on the mission statement, the man-
ager is expected to develop a vision, and clarify
how the mission will be achieved, including the
strategies, organization and people needed to
make it happen.
Atlas Copco’s performance is closely related
to how the Group succeeds in being a good
employer, attracting and developing resourceful
and motivated people. With a global business
Our core values reect
how we behave
internally and in relation
to external stakeholders.
THE BUSINESS CODE OF PRACTICE
Internal policy documents related to
business ethics and social and environ-
mental performance are summarized in
Atlas Copco’s Business Code of Practice.
All employees in Group companies, as
well as our business partners, are
expected to adhere to these policies.
All employees are required to annually
take ethics trainings and to sign a
compliance statement.
In Atlas Copco, leadership
is dened as the ability
to create lasting results.
conducted through numerous companies, we
work with continuous competence development,
knowledge sharing, while embedding the core
values: interaction, commitment, and innovation
across all people processes.
Atlas Copco has a strong culture of growing
talent by encouraging employees to take account-
ability for their own career and learning journey.
The Group enables internal mobility and growth
by oering continuous competence development
activities and the internal job market. With the
ambition to develop individuals and teams to
reach their full potential, Atlas Copco oers acces-
sible tools and targeted learning content, both
digital and classroom courses and programs, for
all employees.
If Atlas Copco needs to adapt its capacity in a
deteriorating business climate, the rst action
is to stop recruitment. Layos are the last resort.
PROCESSES
Group-wide strategies, processes, principles,
guidelines, and shared best practices are gathered
in the handbook of policies and guidelines The
Way We Do Things. The handbook is available to all
employees. Although most of the processes are
self-explanatory, managers are provided regular
training in how to implement them. Wherever
Atlas Copco’s employees are located, they are
expected to work in accordance with the provided
processes, principles and guidelines.
The content of the handbook covers gover-
nance, safety, health, environment and quality,
accounting and business control, treasury, tax,
audit and internal control, information technol-
ogy, people management, legal, communications
and branding, risk, crisis management, administra-
tive services, insurance, standardization, and
acquisitions.
This is how we do business, continued
Atlas Copco 2021 11
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
Creating lasting value for all stakeholders
Atlas Copco’s vision is to become and remain First in Mind—First in Choice of its customers and other principal stakeholders.
The Group aims to continuously deliver sustainable, protable growth with an increased positive impact on society and the
environment. Below, we illustrate how we with a responsible use of resources – human, natural and capital – create value for
customers, employees, business partners, shareholders, as well as for society and the environment.
NATURAL
RESOURCES
– 385 GWh total energy use
– 58% renewable energy
of total MWh energy
used in operations
– 75% of production cost
of equipment is purchased
components
FINANCIAL
RESOURCES
– Average capital
employed
MSEK 87 537
– MSEK 4 163
investments in
innovation*
HUMAN
RESOURCES
– 41 300 employees, on
average
– Employees in 70 countries
– 4 000 R&D engineers
generating industrial ideas
and innovations
The resources
we put in
Atlas Copco
Decentralized
leadership
model
Agile setup
and asset-light
operations
Core
values
Common vision,
mission and
strategy
Innovations
for customers’
success
Close customer
relationship with
application
knowledge and
professional service
Sustainability
priorities
The value
we create
CUSTOMERS
– Increased productivity
– Increased safety and
ergonomics in working
environment
– Energy savings
– Decreased total cost
of ownership
SOCIETY/ENVIRONMENT
– 98% of employees have signed the
Business Code of Practice
– 97% of employees were trained in the
Business Code of Practice
– 3% reduced CO
2
emissions from energy
in operations and transport of goods
– Employment for 43 000 employees in
70 countries at year end
SHAREHOLDERS
– 27% return on capital
employed
– MSEK 19 378 operating
cash ow
– 22% annual total return
A-share, 10 year
EMPLOYEES
– Employees agree there is
opportunity to learn and
grow in the company
– Employees agree Atlas
Copco has a work culture
of respect, fairness and
openness
BUSINESS PARTNERS
– More than 5000 signicant
suppliers
– Leverage competence
– Market access
– Long-term reliable partner
– Over 600 suppliers audited
on safety, health, environ-
ment and ethics
* Investments in product development, including capitalized expenditures.
Atlas Copco 2021 12
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
Contributing to the UN Sustainable Development Goals
Atlas Copco’s focus areas for sustainability are implemented in the daily operations, supported by policies, training material and
monitoring tools. Concrete targets and key performance indicators are used to continuously measure performance in these areas.
Progress in relation to the targets contributes to the achievement of the UN Sustainable Development Goals.
The UN Sustainable Development Goals are a call for action to pro-
mote prosperity while protecting the planet. The goals recognize
that ending poverty must go hand-in-hand with strategies that
build economic growth and address a range of social needs, while
tackling climate change and protecting the environment.
Atlas Copco endorses all 17 Sustainable Development Goals
and contributes directly to the following: 5 Gender Equality, 6 Clean
Water and Sanitation, 7 Aordable and Clean Energy, 8 Decent Work
and Economic Growth, 9 Industry, Innovation and Infrastructure,
12 Responsible Consumption and Production, 13 Climate Action,
and 16 Peace, Justice and Strong Institutions.
See pages 34–46 for more information
on how Atlas Copco contributes to the
achievement of the UN Sustainable
Development Goals.
Atlas Copco 2021 13
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
The year in review
Market review and demand
The overall demand for Atlas Copco’s equipment
and services improved considerably compared
to the previous year, which was heavily impacted
by the Covid-19 pandemic. The order intake
increased signicantly already in the rst quarter
and this continued throughout the year. In com-
parable currency, the Group’s order intake for
equipment increased by 46%, while the service
business, including specialty rental, grew by 15%,
with positive development in all business areas
and most regions.
The demand for compressors increased, which
led to signicantly increased order volumes in all
regions, primarily driven by industrial compres-
sors, although gas and process compressors also
achieved solid order growth.
The order intake for vacuum equipment
increased strongly in most regions mainly as a
result of substantially higher demand from the
semiconductor industry. Order volumes for indus-
trial vacuum applications also grew signicantly.
Order volumes for industrial power tools,
assembly and machine vision solutions increased
noticeably, supported by growing demand from
the automotive and general industry. Solid order
growth was achieved in all regions.
The order intake for portable air and power and
ow products, such as portable compressors, con-
struction tools, generators and pumps, increased
signicantly. Strong order growth was achieved in
all regions, particularly in North America.
In total, the Group’s order intake increased by
29% to a record MSEK 129545 (100554), corre-
sponding to an organic growth of 33%. Currency
had a negative eect of 6% while acquisitions
contributed with 2%.
Further information can be found in the
business area sections on pages 21–33.
North America
Orders received in North America increased 43%
in local currencies. Order volumes increased for all
types of equipment. In particular, strong order
growth was achieved for vacuum equipment to
the semiconductor industry, and for power equip-
ment, such as portable compressors, generators
and pumps. The last was primarily supported by
increased demand from equipment rental compa-
nies in the second half of the year. The order intake
for industrial power tools, assembly and vision
solutions, increased signicantly, supported by
increased demand from the automotive and gen-
eral industry. Order volumes for service increased
in all business areas. In total, North America
accounted for 24% (23) of orders received.
South America
Order intake in South America increased 31% in
local currencies. The growth was primarily driven
by increased demand for power equipment, and
industrial and portable compressors, in the big-
gest market Brazil. Solid order growth was also
achieved for industrial power tools and assembly
solutions, and order intake for service increased in
all business areas. In total, South America
accounted for 4% (4) of orders received.
Europe
Orders received in Europe increased 27% in local
currencies. In particular, strong order growth was
achieved for industrial and portable compres-
sors, vacuum equipment for semiconductor appli-
cations and industrial customers, industrial power
tools and assembly solutions to the general indus-
try and vision solutions. However, order volumes
for gas and process compressors, and industrial
power tools and assembly solutions to the auto-
motive industry, did not reach previous year’s
level. The order intake for service increased in all
business areas. In total, Europe accounted for 28%
(30) of orders received.
Africa/Middle East
Orders received increased 5% in Africa/Middle
East in local currencies. The order intake for indus-
trial and portable compressors increased signi-
cantly, while order volumes for gas and process
compressors and vacuum equipment did not
reach the previous year’s level. Order volumes for
the service business increased in all business areas
except Vacuum Technique, where order intake
decreased. In total, Africa/Middle East accounted
for 4% (5) of orders received.
Asia/Oceania
Order intake in local currencies in Asia/Oceania
increased by 40%. Order volumes for equipment
increased considerably, and solid order growth
was achieved for service.
The order intake for small/medium and large-
sized industrial compressors increased signi-
cantly. Solid order growth was achieved for gas
and process compressors, and portable compres-
sors. Order volumes for vacuum equipment also
increased signicantly, primarily driven by higher
demand from the semiconductor and at panel
industry. The order intake for industrial power
tools, assembly and vision solutions also
increased, supported by higher demand from the
automotive and general industry. Asia/Oceania
accounted for 40% (38) of orders received.
Market presence
Atlas Copco had own customer centers in 70 (71)
countries and production facilities in 21 (21)
countries. Revenues were reported in 183 (184)
countries.
Important events
Acquisitions and divestments
The Group completed 17 acquisitions during the
year. In total, the acquisitions added net revenues
of approximately MSEK 2200.
In December, the CMM (Coordinate Measuring
Machine) part of the Perceptron business in the
Industrial Technique business area (acquired in
December 2020) was divested. The divestment
was a result of further focus on in-line metrology
in contrast to o-line applications. The CMM
business has revenues of about 100 MSEK.
Changes in Group Management
Peter Kinnart was appointed Senior Vice President,
Chief Financial Ocer eective July 17, 2021,
replacing Hans Ola Meyer who retired. Peter
Kinnart was previously Vice President Business Con-
trol at the business area Compressor Technique.
Eva Klasén was appointed Senior Vice President,
Chief Legal Ocer eective May 1, 2022, replacing
Håkan Osvald who will retire. Eva Klasén was previ-
ously Deputy Chief Legal Ocer at Atlas Copco AB.
Sara Hägg Liljedal was appointed Senior Vice
President, Chief Communications Ocer eective
February 1, 2022. Sara Hägg Liljedal was previ-
ously Media Relations Manager for the Group,
and replaced Gisela Lindstrand, who left the
Group in September 2021.
ESG recognitions
In 2021 Atlas Copco received, among others,
rating of AA in the MSCI ESG Ratings assessment,
was given Prime status by the ISS ESG rating, and
remains a constituent of the FTSE4Good Index
Series. Atlas Copco scored a B by CDP in 2021 for
the carbon-related disclosure and a B for the
water-related disclosure.
Atlas Copco 2021 14
THE YEAR IN REVIEW
THE YEAR IN REVIEW
• Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Financial targets – growth and
return development
Annual revenue growth rate, average (FX adjusted)
1)
The Group’s goal for annual revenue growth is
8%, measured over a business cycle. At the same
time the ambition is to grow faster than the most
important competitors. Growth should primarily
be organic, supported by selective acquisitions.
Atlas Copco aims to have a strong and cost-
ecient nancing of the business. The priority
for the use of capital, is to develop and grow
the business. The strong protability and cash
generation allow the Group to do that while at
the same time maintaining the ambition to
distribute about 50% of earnings as dividends
to shareholders.
Dividend/earnings per share, average
2)
including discontinued operations
Capital employed and return
The Group’s goal is to deliver sustained high return
on capital employed, by constantly striving for
operational excellence and generating growth.
1)
Figures for the years between 2012 and 2016 are best
estimated numbers, as the eects of the distribution of
Epiroc and restatements for IFRS 15 are not fully reconciled.
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
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.
Orders received by region and order
development in local currency
North
America
Share: 24%
Change:
+43%
South
America
Share: 4%
Change:
+31%
Europe
Share: 28%
Change:
+27%
Africa/
Middle East
Share: 4%
Change:
+5%
Asia/
Oceania
Share: 40%
Change:
+40%
Capital employed, MSEK
Return on capital employed, %
Atlas Copco 2021 15
THE YEAR IN REVIEW
THE YEAR IN REVIEW
• Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Revenues
The Group’s revenues increased 11% to record MSEK 110912
(99787), an organic increase of 14%. Currency had a negative eect
of 5%, while acquisitions contributed with 2% during the year. The
Group’s goal is to achieve an annual revenue growth of 8% over a
business cycle. For the period 2012–2021, the average annual reve-
nue growth has been 8%*.
Operating prot
The operating prot also reached a record of MSEK 23559 (19146),
corresponding to a margin of 21.2% (19.2). Items aecting compara-
bility includes a change in provision for share-related long-term
incentive programs, reported in Common Group Items of MSEK
–687 (–312). Previous year also included other items aecting com-
parability of MSEK –540. The adjusted operating prot increased
21% to MSEK24246 (19998) corresponding to a margin of 21.9%
(20.0). See the sales and prot bridge below.
The operating prot for the Compressor Technique business area
increased by 11% to MSEK 11874 (10658), corresponding to a margin
of 23.9% (22.5). The higher operating margin was mainly explained
by increased organic revenue volumes, while acquisitions had a small
negative eect. Currency had essentially no impact on the operating
margin.
The operating prot for the Vacuum Technique business area
reached a new record and increased 28% to MSEK 7066 (5519).
Previous year included items aecting comparability of MSEK –300,
mainly related to provisions for pension liability from prior year.
The operating margin was 24.2% (22.4, adjusted 23.6). The higher
margin was mainly explained by increased revenue volumes. The
margin was negatively aected by currency, while acquisitions had
no impact.
The operating prot for the Industrial Technique business area
increased 64% to MSEK 3976 (2422). Previous year included items
aecting comparability of MSEK –190, related to restructuring costs.
Revenues and return
* Currency adjusted. Figures for the years 2012–2016 are best estimated numbers, as the
eects of the distribution of Epiroc and restatements for IFRS 15 are not fully reconciled.
Bridge – revenues
and operating prot, MSEK 2021
Volume, price,
mix and other Currency Acquisitions
Items aecting
comparability
Share-based long-term
incentive programs
2020
Revenues 110 912 14 140 –5 215 2 200 – – 99 787
Operating prot 23 559 5 458 –1 295 85 540 –375 19 146
Eect on margin, % 21.2 19.2
Sales bridge,
Atlas Copco Group
Orders received Revenues
2020, MSEK 100 554 99 787
Structural change, % +2 +2
Currency, % –6 –5
Organic *, % +33 +14
Total, % +29 +11
2021, MSEK 129 545 110 912
* Volume, price and mix
Sales bridge Compressor Technique Vacuum Technique Industrial Technique Power Technique
Orders received Revenues Orders received Revenues Orders received Revenues Orders received Revenues
2020, MSEK 47 401 47 329 25 583 24 685 16 254 16 176 11 810 12 106
Structural change, % +2 +1 +1 +0 +8 +8 +1 +1
Currency, % –6 –5 –8 –6 –5 –5 –6 –5
Organic*, % +20 +9 +62 +24 +23 +17 +33 +13
Total, % +16 +5 +55 +18 +26 +20 +28 +9
2021, MSEK 55 012 49 657 39 529 29 219 20 545 19 421 15 155 13 234
* Volume, price and mix
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
%
Orders received, revenues and operating margin
Orders received, MSEK
Revenues, MSEK
Operating margin, %
The operating margin was 20.5% (15.0, adjusted 16.1), primarily
driven by signicantly higher revenue volumes, but negatively
aected by dilutions from acquisitions. Currency had no impact on
the operating margin.
The operating prot for the Power Technique business area
increased 33% to MSEK 2121 (1594). Previous year included items
aecting comparability of MSEK –50 related to restructuring costs.
The operating margin increased to 16.0% (13.2, adjusted 13.6), driven
by increased organic revenue volumes. Currency and acquisitions had
no eect on the operating margin.
Net costs for common Group items and eliminations were MSEK
–1478 (–1047). The increase was primarily due to a higher provision,
than previous year for share-related long-term incentive programs
of MSEK –687 (–312).
Atlas Copco 2021 16
THE YEAR IN REVIEW
THE YEAR IN REVIEW
• Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Revenues and operating prot, MSEK
Revenues Operating prot Operating margin, % Return on capital employed, % Investments in tangible xed assets
1)
2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Compressor Technique 49 657 47 329 11 874 10 658 23.9 22.5 93 79 620 577
Vacuum Technique 29 219 24 685 7 066 5 519 24.2 22.4 25 19 993 540
Industrial Technique 19 421 16 176 3 976 2 422 20.5 15.0 16 13 269 223
Power Technique 13 234 12 106 2 121 1 594 16.0 13.2 27 18 571 580
Common Group functions/eliminations –619 –509 –1 478 –1 047 27 25
Total Group 110 912 99 787 23 559 19 146 21.2 19.2 27 23 2 480 1 945
1)
Excluding right-of-use assets
Depreciation and EBITDA
Depreciation, amortization and impairment costs were MSEK 5 466
(5 189) and earnings before depreciation and amortization, EBITDA,
reached MSEK 29 025 (24 335), corresponding to a margin of 26.2%
(24.4).
Net nancial items
The Group’s net nancial items decreased to MSEK –149 (–321). The
net interest expense was MSEK –234 (–245). Other nancial items
were MSEK 85 (–76). See notes 8 and 27.
Prot before tax
Prot before tax increased 24% to MSEK 23 410 (18825). Excluding
items aecting comparability, prot before tax was MSEK 24 097
(19677), corresponding to margin of 21.7% (19.7).
Taxes
Taxes for the year amounted to MSEK 5 276 (4042), corresponding
to an eective tax rate of 22.5% (21.5) in relation to prot before tax.
Previous year included one-time adjustments, mainly related to a
reduction of provisions for withholding taxes on dividends from
subsidiaries that reduced the eective tax rate. See note 9.
Prot and earnings per share
Prot for the year increased 23% to MSEK 18 134 (14783). This corre-
sponds to basic and diluted earnings per share of SEK 14.89 (12.16)
and SEK 14.85 (12.14) respectively.
Depreciation, amortization
and impairment, MSEK 2021 2020
Rental equipment 707 735
Other property, plant and equipment 1 361 1 314
Right-of-use assets 1 147 1 164
Intangible assets 2 251 1 976
Total 5 466 5 189
Key nancial data, MSEK 2021 2020 Change, %
Orders received 129 545 100 554 29
Revenues 110 912 99 787 11
EBITDA 29 025 24 335
– in % of revenues 26.2 24.4
EB ITA * 25 016 20 474
– in % of revenues 22.6 20.5
Operating prot 23 559 19 146 23
– in % of revenues 21.2 19.2
Adjusted operating prot 24 246 19 998 21
– in % of revenues 21.9 20.0
Prot before tax 23 410 18 825 24
– in % of revenues 21.1 18.9
Prot for the year 18 134 14 783 23
Basic earnings per share, SEK 14.89 12.16
Diluted earnings per share, SEK 14.85 12.14
* Operating prot excluding amortization of intangibles related to acquisitions.
Revenues and return, continued
Atlas Copco 2021 17
THE YEAR IN REVIEW
THE YEAR IN REVIEW
• Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Balance sheet
The Group’s total assets increased 21% to MSEK 136 683 (113366).
Cash, cash equivalents and other current nancial assets increased
to MSEK 19 837 (11713), as a net eect of strong operational cash
generation (see next page), dividend to shareholders MSEK –8889,
and acquisitions MSEK –2 334.
Working capital ratios
The ratio of inventories to revenues at year end increased to 16.0%
(13.5), and trade receivables to 19.8% (18.8). Trade payables
increased to 13.7% (11.2).
Capital turnover
The capital turnover ratio was 0.88 (0.86) and the capital employed
turnover ratio was 1.27 (1.19).
Equity
At year end, Group equity including non-controlling interests was
MSEK 67 634 (53534), corresponding to 49% (47) of total assets.
Equity per share was SEK 56 (44). Atlas Copco’s market capitalization
at year end was BSEK 733 (497), an increase of 47%. The information
related to public takeover bids is the same as for the Parent Company
and described on page 20.
Total comprehensive income for the year was MSEK 23 025
(8948). The relatively large dierence to reported prot for the
year and versus previous year, is related to translation dierences
on the value of foreign operations (see page 65 and note 10).
Shareholders’ transactions include dividends totaling MSEK –8 889
(–8506), sales and repurchases of own shares of net MSEK –1 034
(–274), and share-based payments of net MSEK –234 (–42). See
page 67 and note 20.
Return on capital employed and return on equity
Return on capital employed reached 27% (23) and the return on
equity was 30% (27). The Group uses a weighted average cost of
capital (WACC) of 8% (8) after tax as an investment and overall
performance benchmark.
Revenues and return, continued
Balance sheet in summary, MSEK Dec 31, 2021 Dec 31, 2020
Intangible assets 50 348 45 840
Rental equipment 2 350 2 241
Other property, plant and equipment 12 227 7 889
Right-of-use assets 1 962 3 261
Other xed assets 1 790 3 190
Inventories 17 801 13 450
Receivables 30 363 25 777
Current nancial assets 847 58
Cash and cash equivalents 18 990 11 655
Assets classied as held for sale 5 5
Total assets 136 683 113 366
Total equity 67 634 53 534
Interest-bearing liabilities 27 988 28 134
Non-interest-bearing liabilities 41 061 31 698
Total equity and liabilities 136 683 113 366
Equity, MSEK 2021 2020
Opening balance 53 534 53 290
Prot for the year 18 134 14 783
Other comprehensive income for the year 4 891 –5 835
Shareholders’ transactions –8 089 –8 822
Change in non-controlling interest –836 118
Closing balance 67 634 53 534
Equity attributable to
– owners of the parent 67 633 53 215
– non-controlling interests 1 319
Atlas Copco 2021 18
THE YEAR IN REVIEW
THE YEAR IN REVIEW
• Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Interest-bearing debt and net indebtedness
Total interest-bearing debt was MSEK 27988 (28134), whereof
MSEK 3114 (3488) in post-employment benets.The Group has
an average maturity of 4.1 years on interest-bearing liabilities. See
notes 21 and 23 for additional information. The Group’s net indebt-
edness, amounted to MSEK 8151 (16421) at year end. The net debt/
EBITDA ratio was 0.3 (0.7) and the debt/equity ratio was 12% (31).
Credit rating
Atlas Copco’s long-term and short-term debt is rated by Standard
& Poor’s and Fitch with the long-/short-term rating A+/A-1 and
A+/F1+, respectively.
Operating cash ow and investments
Operating cash surplus was MSEK 28 952 (25 081). Cash ows from
nancial items were MSEK 459 (244). Net pension funding and pay-
ments were MSEK –330 (–340). The working capital increased by
MSEK 244 (decrease of 2166), primarily due to higher inventories
and trade receivables. Net investments in rental equipment were
MSEK 474 (416).
Gross investments in property, plant and equipment increased to
MSEK 1970 (1459). Notable investments in 2021 were made by
Compressor Technique in further automation of its main production
facility in Belgium and in a new production unit in Italy.
Vacuum Technique invested in increased production capacity in
China, new production units in the USA and South Korea, expansion
of an existing production unit in the United Kingdom, and two new
service technology centers, one in Ireland, and one in China. Indus-
trial Technique invested in a new factory for machine vision systems in
Revenues and return, continued
Germany and new machining equipment in a production facility in
Sweden. Power Technique invested in a new rental depot in Canada.
Cash received from sale of property, plant and equipment were
MSEK 93 (39).
Net investments in intangible assets, mainly related to capitaliza-
tion of product development expenditures, were MSEK 1389
(1337). Net investments in other assets were MSEK –514 (+54). In
total, the operating cash ow reached MSEK 19378 (18910).
Cash ow from structural changes
The net cash ow from structural changes, i.e. acquisitions and
divestments, amounted to MSEK –2 341 (–13 583). Previous year
included approximately MSEK 10 300 related to the acquisition of
ISRA VISION. See also note 2.
Cash ow from nancing
Dividends paid amounted to MSEK –8 889 (–8 506). Sales and repur-
chases of own shares resulted in a net of MSEK 1 034 (–274), all
related to hedging or deliveries of shares for the long-term incentive
plans described on page 94. Change in interest-bearing liabilities
was MSEK –1 645 (444).
Employees
In 2021, the average number of employees in the Group increased
by 1666 to 41272. At year end, the number of employees was
42862 (40160), and the number of consultants/external work-
force was 3762 (2907). For comparable units, the total workforce
increased by 3 249. See also note 5.
Calculation of operating cash ow, MSEK 2021 2020
Operating cash surplus 28 952 25 081
Net nancial items 459 244
Taxes paid –5 211 –4 531
Pension funding –330 –340
Change in working capital –244 2 166
Increase in rental equipment, net –474 –416
Cash ows from operating activities 23 152 22 204
Investments of property, plant and
equipment, net –1 877 –1 420
Other investments, net –1 356 –1 283
Cash ow from investments –3 233 –2 703
Adjustment for currency hedges of loans –541 –591
Operating cash ow 19 378 18 910
Average number of employees 2021 2020
Atlas Copco Group 41 272 39 606
– Sweden 1 402 1 447
– Outside Sweden 39 870 38 160
Business areas
– Compressor Technique 18 785 18 212
– Vacuum Technique 8 961 8 226
– Industrial Technique 8 745 8 308
– Power Technique 3 973 4 059
– Common Group functions 808 801
Atlas Copco 2021 19
THE YEAR IN REVIEW
THE YEAR IN REVIEW
• Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Atlas Copco Group and is headquartered in Nacka , Sweden .
Earnings
Prot before tax amounted to MSEK 5515 (11040) and prot for
the year amounted to MSEK 5176 (11111).
Financing
The total assets of the Parent Company were MSEK 173859 (178591).
At year end 2021, cash and cash equivalents amounted to MSEK 0 (8)
and interest-bearing liabilities amounted to MSEK 23121 (25351),
whereof the main part is Group-internal loans. Equity represented
86% (85) of total assets and non-restricted equity totaled MSEK
143591 (146504).
Employees
The average number of employees in the Parent Company was
107 (107).
Remuneration
Principles for remuneration, fees and other remuneration paid to
the Board of Directors, the President and CEO, and other members of
Group Management, other statistics and the guidelines regarding
remuneration and benets to Group Management as approved by
the Annual General Meeting are specied in note 5.
Financial risks, risks and factors of uncertainty
Atlas Copco is subject to currency risks, interest rate risks and other
nancial risks. Atlas Copco has adopted a policy to control the nan-
cial risks to which Atlas Copco AB and other Group companies are
exposed. A nancial risk management committee meets regularly
to make decisions about how to manage these risks. See also Risks,
risk management and opportunities on pages 47–51.
Appropriation of prot and proposed share split
The Board of Directors proposes to the Annual General Meeting an
ordinary dividend of SEK 7.60 (7.30) per share for the 2021 scal year.
In order to facilitate a more ecient cash management, the ordi-
nary annual dividend is proposed to be paid in two installments, the
rst with record date April 28, 2022, and the second with record date
October 21, 2022. The rst installment amount will be SEK 3.80 per
share. The second installment amount will be SEK 3.80 per share (or
SEK 0.95 per share if the proposed share split is decided by the Annual
General Meeting).
The Board also proposes to the Annual General Meeting a share
split and redemption share procedure, whereby every share is split
into four (4) ordinary shares and one (1) redemption share. The
redemption share is automatically redeemed at SEK 8.00 per share.
Combined with the proposed ordinary dividend, shareholders will
receive SEK 15.60 per share which corresponds to a total capital dis-
tribution of MSEK 19004 to shareholders. This excludes shares cur-
rently held by the company. If the Annual General Meeting 2022
decides in accordance with the Board’s proposal, the payment of the
redemption share will be made around June 13, 2022.
SEK
Retained earnings including reserve for fair value 138 414 537 596
Prot for the year 5 176 207 640
The Board of Directors proposes that these earnings
be appropriated as follows:
To the shareholders, a dividend of SEK 7.60 per share 9 258 246 797
To be retained in the business 134 332 498 439
Total 143 590 745 236
Parent Company
Shares and share capital
At year end, Atlas Copco’s share capital totaled MSEK 786 (786) and
a total number of 1229613 104 shares divided into 839394096
class A shares and 390219008 class B shares were issued. Net of
11422736 class A shares and 0 class B shares held by Atlas Copco,
1218190368 shares were outstanding. Class A shares entitle the
owner to one vote while class B shares entitle the owner to one tenth
of a vote. Class A shares and class B shares carry equal rights to a part
of the Company’s assets and prot.
Investor AB is the single largest shareholder in Atlas Copco AB.
At year end 2021, Investor AB held a total of 207754141 shares,
representing 22.3% of the votes and 16.9% of the capital.
There are no restrictions prohibiting the right to transfer shares of
the Company, nor is the Company aware of any such agreements.
In addition, the Company is not party to any material agreement that
enters into force or is changed or ceases to be valid if the control of
the Company is changed as a result of a public takeover bid. There is
no limitation to the number of votes that can be cast at a General
Meeting of shareholders.
As prescribed by the Articles of Association, the General Meeting
has sole authority for the election of Board members and there are
no other rules relating to the election or dismissal of Board members
or changes in the Articles of Association. Correspondingly, there are
no agreements with Board members or employees regarding com-
pensation in case of changes of current position reecting a public
takeover bid.
Statutory sustainability report
Atlas Copco has prepared a sustainability report in accordance with
the Global Reporting Initiative’s guidelines (GRI Standards) which, in
combination with EU taxonomy – classication of sustainable activi-
ties on page 132, also constitutes Atlas Copco’s statutory sustainabil-
ity report. The sustainability report has been prepared in accordance
with disclosure requirements set out in the Swedish Annual
Accounts Act chapter 6 paragraph 11. The scope and content of the
sustainability report is dened on page 136.
Atlas Copco 2021 20
THE YEAR IN REVIEW
THE YEAR IN REVIEW
• Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Business areas
Key gures, MSEK 2021 2020 Change, %
Orders received 55 012 47 401 16%
Revenues 49 657 47 329 5%
EBITA* 12 205 10 952
– as a percentage of revenue 24.6 23.1
Operating prot 11 874 10 658 11%
Operating margin, % 23.9 22.5
Return on capital employed, % 93 79
Investments 620 577
Average number of employees 18 785 18 212
* Operating prot excluding amortization of intangibles related to acquisitions.
Key gures, MSEK 2021 2020 Change, %
Orders received 39 529 25 583 55%
Revenues 29 219 24 685 18%
EBITA* 7 569 6 036
– as a percentage of revenue 25.9 24.5
Operating prot 7 066 5 519 28%
Operating margin, % 24.2 22.4
Return on capital employed, % 25 19
Investments 993 540
Average number of employees 8 961 8 226
* Operating prot excluding amortization of intangibles related to acquisitions.
Key gures, MSEK 2021 2020 Change, %
Orders received 20 545 16 254 26%
Revenues 19 421 16 176 20%
EBITA* 4 538 2 868
– as a percentage of revenue 23.4 17.7
Operating prot 3 976 2 422 64%
Operating margin, % 20.5 15.0
Return on capital employed, % 16 13
Investments 269 223
Average number of employees 8 745 8 308
* Operating prot excluding amortization of intangibles related to acquisitions.
Key gures, MSEK 2021 2020 Change, %
Orders received 15 155 11 810 28%
Revenues 13 234 12 106 9%
EBITA* 2 182 1 666
– as a percentage of revenue 16.5 13.8
Operating prot 2 121 1 594 33%
Operating margin, % 16 13.2
Return on capital employed, % 27 18
Investments 571 580
Average number of employees 3 973 4 059
* Operating prot excluding amortization of intangibles related to acquisitions.
The Compressor Technique business area provides compressed air solutions: industrial compressors,
gas and process compressors and expanders, air and gas treatment equipment, and air management
systems. The business area has a global service network and innovates for sustainable productivity
mainly for the manufacturing and process industries.
Compressor Technique, page 22
Vacuum Technique, page 25
The Vacuum Technique business area provides vacuum products, exhaust management systems,
valves and related products. The main markets served are semi conductor and scientic, as well as
a wide range of industrial segments including chemical process industries, food packaging and
paper handling. The business area has a global service network and innovates for sustainable
productivity in order to further improve its customers’ performance.
Industrial Technique, page 28
Power Technique, page 31
The Industrial Technique business area provides industrial power tools, assembly and machine vision
solutions, quality assurance products, software and service through a global network. The business
area innovates for sustainable productivity for customers in the automotive and general industries.
The Power Technique business area provides air, power and ow solutions 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 services through a global network. Guided by a
forward-thinking approach to innovation, Power Technique provides sustainable productivity solu-
tions across multiple industries, including construction, manufacturing, oil and gas, and exploration
drilling.
Atlas Copco 2021 21
THE YEAR IN REVIEW
THE YEAR IN REVIEW
Administration report
• Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Compressor Technique
The demand for equipment and service was strong, and the order intake increased signicantly with strong
growth in all regions. The business area continued to invest in product development, market presence, and
service with an intensied focus on sustainability. In addition, ten acquisitions were completed during the year.
Market development
The demand for the business area’s equipment and
services was strong, and order volumes increased
noticeably, primarily due to increased demand
for equipment in the rst half of 2021. In total, the
order intake increased 20% organically.
The service business achieved solid order
growth, mainly driven by increased demand in
Asia, although the order intake also grew notice-
ably in other regions.
Order volumes for equipment increased signi-
cantly supported by strong demand in all regions.
The order intake for large industrial, and small and
medium-sized compressors, grew at about the
same pace supported by solid demand in all
regions, particularly in North America and Asia.
The order intake for gas and process compressors
increased markedly driven by increased demand
in North America and Asia, while order volumes
decreased in South America, Europe, and Africa/
Middle East.
Market presence and organizational
development
The business area continued to invest in innova-
tion and market presence by adding resources
and digital capabilities in research and develop-
ment, marketing and sales, and service. Several
new innovative products were launched, and the
service oer was strengthened with an increased
focus on connectivity and data analytics to sup-
port customer needs.
Activities were carried out during the year to
increase the focus on market segments contribut-
ing to the ongoing shift in society towards green
Sales bridge
Orders
received Revenues
2020, MSEK 47 401 47 329
Structural change, % +2 +1
Currency, % –6 –5
Organic*, % +20 +9
Total, % +16 +5
2021, MSEK 55 012 49 657
* Volume, price and mix
Revenues,
MSEK
49 657
2020: 47 329
Operating
prot margin
23.9%
2020: 22.5%
Return on capital
employed
93%
2020: 79%
0
12 000
24 000
36 000
48 000
60 000
2021202020192018
0
5
10
15
20
25
MSEK
%
Orders received, revenues
and operating margin
Orders received, MSEK
Revenues, MSEK
Operating margin, %
energy, both through organizational structure,
product development, and market presence.
The business area also developed a plan for how
to contribute to the Group’s commitment to
science-based targets.
The work to reduce the environmental footprint
from the business area’s own operations contin-
ued with, for example, the transition to renewable
energy in the production facility in Wuxi, China.
The business area invested in further automa-
tion in its main factory in Antwerp, Belgium, and
in a new production unit in Brendola, Italy.
Through several acquisitions, the business area
also increased its presence in targeted markets
and customer segments.
Acquisitions
The business area completed ten acquisitions in
2021:
• Kawalek Kompressoren, a German compressed
air distributor and service provider with 10
employees.
• DGM SRL, an Italian distributor of compressed
air equipment and related services with 21
employees.
• Cooper Freer Ltd, a UK-based compressed
air distributor and service provider with
18 employees.
• The operating assets of MidState Air Compres-
sor, a US-based compressor distributor with
15 employees.
• The operating assets of Medigas Service &
Testing Co. Inc., a US-based supplier of medical
gas systems with 6 employees and revenues of
about MSEK 23.
• The operating assets of Compressed Air
Systems, Inc. (CAS), a US-based compressor
distributor with 30 employees.
• Airow Compressors & Pneumatics Ltd
(Airow), a UK-based compressor distributor
with 16 employees.
• CPC Pumps International Inc., a Canadian com-
pany specialized in the design, manufacturing,
and servicing of custom-engineered, mission-
critical centrifugal pumps. The company has
110 employees and revenues of about
MSEK 385 in 2020.
• AEP, a French compressor distributor and
service provider with 8 employees.
• S.T.E.R.I. srl, an Italian compressor distributor
and service provider with 19 employees.
Revenues, prots and returns
Revenues reached MSEK 49657 (47329), an
organic increase of 9%. The operating prot
increased by 11% to MSEK 11874 (10658),
corresponding to a margin of 23.9% (22.5). The
higher operating margin was mainly explained by
increased organic revenue volumes, while acqui-
sitions had a small negative eect. Currency had
essentially no impact on the operating margin.
Return on capital employed was 93% (79).
Atlas Copco 2021 22
THE YEAR IN REVIEW – COMPRESSOR TECHNIQUE
THE YEAR IN REVIEW
Administration report
Business areas
• Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
The market
The global market for compressed air equipment,
air and gas treatment equipment, and related ser-
vices is characterized by a diversied customer
base. The customers requests solutions that are
reliable, productive, ecient, and suited to spe-
cic applications. Customers are also increasingly
looking for partners to support their sustainability
ambitions.
Compressors are used in a wide spectrum of
applications. Clean, dry, and oil-free air is needed
in industrial processes in e.g. the food, pharma-
ceutical, electronics, and textile industries. Com-
pressors are used in wastewater treatment, and
green economy segments such as green hydro-
gen. Compressed air is also used in automation
and in sectors as diversied as hospitals, sh farm-
ing, and in high-speed trains. Blowers are used
in applications where a consistent ow of low-
pressure air is needed, for example in waste water
treatment, conveying, and industrial gases such
as production of nitrogen and oxygen.
Gas and process compressors and expanders
are supplied to various process industries, such as
air separation plants, power utilities, chemical and
petro chemical plants, and liqueed natural gas
applications.
Stationary industrial air compressors and asso-
ciated air-treatment products, spare parts and
service represent about 90% of sales. Large gas
and process compressors, including related
service, represent about 10%.
Other, 20%
General manu-
facturing, 27%
Construction, 13%
Service, 11%
Process industry, 25% Automotive, 1%
Electronics, 3%
Orders received by
customer category
Asia/Oceania, 34
%N
orth
America, 21%
Africa/
Middle East, 6%
Europe, 34%
South
America, 5%
Revenues by region
Service, 43% Equipment, 57%
Share of revenues
Market trends
• Increased focus on energy eciency, energy
recovery, and the reduction of CO
2
emissions
• Focus on total solution and total life- cycle cost
• Investments in customer segments contributing
to transformation to a low carbon society
• The combination of cloud technology, big data
and machine learning increases the demand
for data-driven service solutions
• New applications for compressed air
Demand drivers
• Industrial production
• Investments in machinery
• Energy costs
• The need for decreased CO
2
emissions drives
demand for more energy-ecient machinery
Vision and strategy
The vision is to be First in Mind—First in Choice as
a supplier of compressed air and gas solutions by
being interactive, committed and innovative, and
by oering customers the best value. The strat-
egy is to further develop Atlas Copco’s leading
position in selected niches and growing the busi-
ness in a way that is economically, environmen-
tally and socially responsible. This should be done
by capitalizing on the strong global market pres-
ence, improving market penetration in mature
and developing markets, and continuously devel-
oping improved products and solutions to satisfy
customer demands. The presence is enhanced by
utilizing several commercial brands. Key strategies
include growing the service business as well as
developing businesses within focused areas such
as air-treatment equipment, blowers, and com-
pressor solutions for trains, ships, and hospitals.
By oering the most energy-ecient products,
the business aims to contribute to a better tomor-
row and support customers to meet their sustain-
ability ambitions.
The business area is actively looking at acquir-
ing complementary businesses.
Strategic activities
• Intensify focus on research and development
• Increase focus on digitalization and connected
products
• Increase market coverage and improve presence
in targeted markets/segments
• Develop new sustainable products and solu-
tions oering better value and improved energy
eciency to customers
• Activities supporting customers to meet their
sustainability ambitions
• Extend the product and service oering at
current customers and adjacent segments and
applications
• Perform more service on a higher share of the
installed base of equipment
• Increase operational eciency
• Invest in people and competence development
• Acquire complementary businesses
Competition
Compressor Technique’s principal competitors
in the market for industrial compressors and air
treatment equipment are Ingersoll Rand, Kaeser,
Hitachi, and Parker Hannin. There are also
numerous regional and local competitors, includ-
ing many in China. In the market for gas and
process compressors and expanders, the main
competitors are Siemens and MAN Turbo.
Market position
A leading market position globally in most of its
operations.
Atlas Copco 2021 23
THE YEAR IN REVIEW – COMPRESSOR TECHNIQUE
THE YEAR IN REVIEW
Administration report
Business areas
• Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Compressor Technique: Products and applications
Piston compressors
Piston compressors are available as oil-
injected and oil-free. They are used in
general industrial applications as well as
specialized applications.
Oil-free tooth and scroll compressors
Oil-free tooth and scroll compressors are
used in industrial and medical applications
with a demand for high-quality oil-free air.
Some models are available as a WorkPlace
AirSystem with integrated dryers as well as
with energy-ecient variable speed drive
(VSD).
Rotary screw compressors
Rotary screw compressors are available as
oil-injected and oil-free. They are used in
numerous industrial applications and can
feature the WorkPlace AirSystem with inte-
grated dryers, as well as the energy-ecient
variable speed drive (VSD) technology and
energy recovery kits.
Oil-free blowers
Oil-free blowers are available with dierent
technologies: rotary lobe blowers, rotary
screw blowers and centrifugal blowers.
Blowers are used in process industry applica-
tions with a demand for a consistent ow of
low-pressure air, for example in wastewater
treatment and conveying.
Oil-free centrifugal compressors
Oil-free centrifugal compressors are used in
industrial applications that demand con-
stant, large volumes of oil-free air. They are
also called turbo compressors.
Gas and process compressors
Gas and process compressors are supplied
primarily to the oil and gas, chemical/petro-
chemical process and power industries. The
main product category is single-stage and
multi-stage centrifugal, or turbo compres-
sors, which are complemented by turbo
expanders.
Air and gas treatment equipment
and medical air solutions
Dryers, coolers, gas puriers and lters are
supplied to produce the right quality of com-
pressed air or gas. In addition, the oering
includes solutions for medical air, oxygen
and nitrogen generation as well as systems
for biogas upgrading.
Principal product development and
manufacturing units are located in:
Belgium, the United States, China, India,
Germany and Italy.
Oil-injected
screw compressor
with variable
speed
Oil-free medical air system
Gas and process compressors supply
large amounts of air or gas for
processes across many industries
Atlas Copco oers all major air compression technologies as well as air and gas treatment equipment,
and air management systems and is able to oer customers the best solution for every application.
Innovations during 2021
Several new products were intro-
duced during the year, including:
Atlas Copco G 2-7, a new range of
small-sized industrial compressors
with high energy eciency, low car-
bon footprint and reduced noise level
of 20% compared to similar products.
The ZS 5 VSD, a new oil-free screw
blower, oering 20% more energy
eciency than previous generations.
Alup Evoluto 30-45kW, a new range
of oil-injected screw compressors
delivering higher energy eciency,
lower noise levels, and a reduced sur-
face footprint.
A new range of oil-injected screw
compressors, the GA 22-37 VSDS,
delivering further energy eciency vs.
previous VSD models and up to 60%
more energy ecient compared to
xed speed compressors.
Business Area President: Vagner Rego
Divisions:
1. Compressor Technique Service President Dirk Beyts
2. Industrial Air President Joeri Ooms
3. Oil-free Air President Philippe Ernens
4. Professional Air President Alain Lefranc
5. Medical Gas Solutions President Ben Van Hove
6. Gas and Process President Robert Radimeczky
7. Airtec President Wouter Ceulemans
Management
Compressor Technique, January 1, 2022
2
4 5
6
3
7
1
Atlas Copco 2021 24
THE YEAR IN REVIEW – COMPRESSOR TECHNIQUE
THE YEAR IN REVIEW
Administration report
Business areas
• Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Vacuum Technique
The demand for vacuum equipment and service was strong and order intake increased signicantly, particularly for equipment to the
semiconductor industry. Several investments in operations were made to better support customers’ increased demand for equipment and
services. The business area completed ve acquisitions and continued to invest in innovation, market presence, and digital capabilities.
Market development
The demand for vacuum equipment and services
was strong, and order volumes increased signi-
cantly compared to the previous year. Overall,
the order intake increased 62% organically.
Order volumes for service increased notice-
ably in all major regions, most notably in Asia.
The strong order growth was driven by increased
demand from the semiconductor and at panel
industry, supported by customers’ high capacity
utilization, and from industrial and scientic
customers.
The order intake for equipment to the semicon-
ductor and at panel display industry increased
remarkably, primarily due to customers’ invest-
ments in new production capacity but also due to
investments in new technology. Signicant order
growth was achieved in all major regions. Order
volumes for equipment to industrial and scientic
vacuum applications increased considerably with
strong order growth in all regions.
Market presence and organizational
development
The business area continued to invest in innova-
tion, market presence, research and development,
marketing, sales, and service. Additional resources
were added to research and development to fur-
ther increase the focus on innovation, and several
new products with new technology were intro-
duced to the market.
The focus on strengthening market presence
remained with additional resources and increased
focus on direct sales, particularly for the industrial
and scientic vacuum market. A new service hub
in Dublin, Ireland, was also established to better
support customers in the semiconductor industry.
Sales bridge
Orders
received Revenues
2020, MSEK 25 583 24 685
Structural change, % +1 +0
Currency, % –8 –6
Organic*, % +62 +24
Total, % +55 +18
2021, MSEK 39 529 29 219
* Volume, price and mix
Revenues,
MSEK
29 219
2020: 24 685
Operating
prot margin
24.2%
2020: 22.4%
Return on capital
employed
25%
2020: 19%
0
12 000
24 000
36 000
48 000
60 000
2021202020192018
0
5
10
15
20
25
MSEK
%
Orders received, revenues
and operating margin
Orders received, MSEK
Revenues, MSEK
Operating margin, %
Several initiatives to increase the digital presence
were carried out, resulting in enhanced digital
marketing and improved customer experience
through digital interaction.
The ability to service and support customers
through connectivity increased further by the
launch of GENIUS Instant Insights™ – a remote
monitoring system for vacuum pumps.
Eorts to reduce the environmental footprint
from own operations continued, with the transi-
tion to fully renewable energy supply to the busi-
ness area’s largest production unit in South Korea.
During the year, the business area also developed
a plan for how to contribute to the Group’s com-
mitment to science-based targets.
Several investments were made in operations to
strengthen the business area’s closeness to its cus-
tomers. As an example, the business area invested
in increased production capacity in its pump fac-
tories in Qingdao, China, as well as in new produc-
tion units in Haverhill, USA, and Asan, South
Korea. In addition, investments were made to
expand an existing production unit for abatement
systems in Clevedon, United Kingdom, and two
new service technology centers, one in Dublin,
Ireland, and one in Beijing, China.
Acquisitions
The business area completed ve acquisitions in
2021:
• Ehrler & Beck GmbH, a European distributor
of industrial vacuum equipment and service
solutions. The company is based in Germany
and has 15 employees.
• IBVC Vacuum, S.L.U, a Spanish vacuum distribu-
tor and service provider with 10 employees.
• ARPUMA regel- und fördertechnische Geräte
GmbH, a vacuum systems and solutions provider
based in Germany with 14 employees and
revenues of MSEK 41.
• Eugen Theis GmbH, a German distributor of
vacuum equipment and service solutions with
4employees.
• Provac Limited, an Irish vacuum distributor and
service provider with 11 employees.
Revenues, prots and returns
Revenues increased 18% to MSEK 29219 (24685),
corresponding to a 24% organic increase. The
operating prot also reached a new record and
increased 28% to MSEK 7 066 (5 519). The previous
year included items aecting comparability of
MSEK –300, mainly related to provisions for pen-
sion liability from prior years. The operating mar-
gin was 24.2% (22.4, adjusted 23.6). The higher
margin was mainly explained by increased reve-
nue volumes. Currency aected the margin nega-
tively, while acquisitions had no impact on the
margin. Return on capital employed was 25% (19).
Atlas Copco 2021 25
THE YEAR IN REVIEW – VACUUM TECHNIQUE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
• Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
The market
Vacuum and abatement solutions are required
in a number of applications where the pressure
needs to be below atmospheric pressure and/or
the environment needs to be clean.
The Vacuum Technique business area sells prod-
ucts, systems and services across several targeted
market sectors.
The market can be categorized into semicon-
ductor, industrial vacuum and scientic vacuum.
However, each of these sectors contains several
sub-sectors and specic applications.
Vacuum products include a broad range of
dry pumps, turbomolecular pumps and other
vacuum pumps. They are used to create highly con-
trolled, low-pressure, particle-free environments in
a diverse set of manufacturing processes. Such pro-
cesses include semiconductor, at panel display,
LED and solar, glass and optical coating, scientic
instruments used in life sciences, research institutes
focused on renewable energy, high-energy lasers
and nanotechnology, pharmaceuticals, heat treat-
ment, lithium-ion batteries, and food processing
and packaging.
Abatement systems include stand-alone and
customized solutions which integrate vacuum and
exhaust management technologies. Abatement
is required both to prevent adverse chemical reac-
tions within production processes and to com-
ply with strict regulatory emission controls. The
business area also provides value-added services
including equipment monitoring, eld and on-site
servicing, remanufacturing, service upgrades and
provision of spare parts and oils.
Other, 2%
General manu-
facturing, 10%
Process
industry, 18%
Electronics, 70%
Orders received by
customer category
Asia/Oceania, 65%
North
America, 21%
Africa/
Middle East, 1% Europe, 13%
Revenues by region
Equipment, 76%Service, 24%
Share of revenues
Market trends
• Increased use of demanding materials and
extreme working temperatures in processes for
semiconductor and industrial production
• Focus on energy-eciency
• Continued trend towards stricter regulatory
emission standards
• Increased demand for digitally supported
service oers
• Focus on total solutions and total life-cycle cost
• Focus on circularity as a sustainability solution
Demand drivers
• Industrial production
• Manufacturing of semiconductors, research and
development equipment, lithium-ion batteries,
at panel display and solar energy products
• Demand for energy-ecient vacuum pumps
• Increase in vacuum requirements to support
new production processes
Vision and strategy
The vision is to be First in Mind—First in Choice
for vacuum and abatement solutions. The
strategy focuses on technology leadership,
market leadership and agility, to support
growth. This is done by focusing on product
research and development programs together
with deployment of highly innovative products
and services. Continued execution of market
leadership will be done by an organization
focused on agility, growing market share in our
traditional heartlands and further expansion of
the geographical footprint.
Additionally, the business area has a strong focus
on developing the service business and an e-
cient and exible global operations footprint.
Strategic activities
• Increase market coverage and improve presence
in targeted markets and segments
• Fast introduction of highly innovative products
and services oering better value and improved
energy eciency
• Increased market penetration and coverage
through brand portfolio management
• Perform more service on a higher share of the
installed base of equipment
• Invest in service presence close to customers
• Increase organizations’ agility and operational
eciency
• Invest in people and competence development
• Grow through strategically attractive
acquisitions
Competition
Vacuum Technique’s principal competitors are:
Semiconductor market:
DAS Environmental Expert, Ebara, Kashiyama,
Pfeier Vacuum, Shimadzu Corporation.
Industrial and scientic market:
Ingersoll Rand, Pfeier Vacuum, and Busch.
Market position
A global market leader for vacuum and
abatement solutions.
Atlas Copco 2021 26
THE YEAR IN REVIEW – VACUUM TECHNIQUE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
• Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Vacuum Technique: Products and applications
Oil-sealed rotary vane vacuum pumps
The latest generation of oil-sealed rotary
vane pumps has been rened to produce a
better quality of vacuum while extending
the pressure range over which the pump can
operate. They are used in a wide variety of
industrial, and research and development
applications.
Dry vacuum pumps
Dry pumps are oil-free pumping mecha-
nisms to create vacuum environments. They
use no lubricants within the pumping mech-
anism and have a series of available monitor-
ing and control options. Dry pumps are used
extensively in many semiconductor applica-
tions, as well as in industrial processes such
as metallurgy, coating, drying and solar.
They are also used in scientic instruments
such as scanning electron microscopes.
Turbomolecular pumps
In turbomolecular pumps, or turbo pumps, a
turbine rotor spins rapidly to create vacuum.
The dening feature of a turbo pump is the
high rotational speed. These pumps are typi-
cally used in conjunction with primary wet or
dry pumps. They are commonly used in semi-
conductor applications, research and devel-
opment, industrial applications and high
energy physics.
Liquid ring vacuum pumps
Liquid ring pumps are equipped with a xed
blade impeller. As the impeller rotates, the
liquid forms a ring around the circumference
Dry vacuum pump for analysis applications
and research laboratories
Integrated abatement system used
in the semiconductor industry
Dry screw vacuum pump used in chemical
and other industrial applications
The Vacuum Technique business area oers an extensive range of
vacuum and abatement solutions to the market.
Innovations during 2021
Several new products were intro-
duced during the year, including:
Leybold DRYVAC DV 800, a new
vacuum pump with smart connectiv-
ity capabilities for industrial applica-
tions, with increased energy eciency
compared to older technologies.
New variants of Edwards iXM dry
pumps with an extended applications
coverage, oering reduced surface
footprint, lower weight, and 30%
more energy ecient vs. competing
products.
The new vacuum gauge range
Leybold THERMOVAC, supporting
customer’s processes optimization
and increased process throughputs
through reliable sensor measuring.
The iXH6550HTX, a dry vacuum
pump oering increased throughput
resulting in energy savings of about
30% compared to alternative
solutions.
Business Area President: Geert Follens
Divisions:
1. Vacuum Technique Service President Eckart Roettger
2. Semiconductor Service President Troy Metcalf
3. Semiconductor President Kate Wilson
4. Semiconductor Chamber Solutions President Martin Tollner
5. Scientic Vacuum President Carl Brockmeyer
6. Industrial Vacuum President Koen Lauwers
Management
Vacuum Technique, January 1, 2022
2
4 5
6
3
1
of the casing. Standard liquid ring vacuum
solutions are perfect for use in humid, dusty
and dirty environments commonly found in
industrial processes, including food and bev-
erage, mining, chemicals, oil, steel, cement,
plastics and textiles.
Abatement and integrated systems
Abatement systems are used to manage
gases and other process by products from
dry pump exhaust. Abatement is required to
prevent adverse chemical reactions with
production processes and to comply with
strict regulatory emission controls. Abate-
ment and integrated systems are primarily
used in semiconductor, at panel display,
solar and LED applications.
Cryogenic pumps
Cryogenic pumps create vacuum by condens-
ing (freezing) gas onto special arrays of cryo-
genically cooled surfaces within the pump
envelope. The temperature of the surfaces
can be below 20K/–250°C to enable the cap-
ture of most gas species. Cryogenic pumps
are used in a spectrum of high-technology
research applications as well as in manufac-
turing of semiconductor, at panel and
optical devices.
Principal product development and
manufacturing units are located in:
The United States, Mexico, United Kingdom,
Czech Republic, Germany, South Korea,
China and Japan.
Atlas Copco 2021 27
THE YEAR IN REVIEW – VACUUM TECHNIQUE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
• Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Industrial Technique
The demand for equipment and service increased, and solid order growth was achieved in all regions, supported
by increased demand from automotive and general industry customers. The business area continued to invest in
research and development and further intensied its focus on machine vision solutions.
Market development
The overall demand for equipment and services
increased signicantly, supported by increased
levels of customer activity in both the automo-
tive and general industry. In total, the order intake
increased 23% organically.
The service business achieved solid order growth
with increased order volumes in all regions.
Order volumes for advanced industrial tools,
assembly- and vision solutions to the automotive
industry increased markedly, supported by cus-
tomers’ increased investments in the production
of electric vehicles, particularly in Asia and North
America. The order intake also increased in South
America but decreased somewhat in Europe.
The order intake for industrial power tools and
vision solutions to the general industry increased
noticeably, supported by increased demand from
most customer segments. Order growth was
achieved in all regions.
Market presence and organizational
development
The business area continued to invest in inno-
vation with an added number of employees in
research and development.
Several new and innovative products were
introduced to the market during the year. The
business area intensied its eorts on data-
driven service to even better support the custom-
ers in improving quality and uptime. The focus
on increasing digital market presence continued
Sales bridge
Orders
received Revenues
2020, MSEK 16 254 16 176
Structural change, % +8 +8
Currency, % –5 –5
Organic*, % +23 +17
Total, % +26 +20
2021, MSEK 20 545 19 421
* Volume, price and mix
Revenues,
MSEK
19 421
2020: 16 176
Operating
prot margin
20.5%
2020: 15.0%
Return on capital
employed
16%
2020: 13%
0
5 000
10 000
15 000
20 000
25 000
2021202020192018
0
5
10
15
20
25
MSEK
%
Orders received, revenues
and operating margin
Orders received, MSEK
Revenues, MSEK
Operating margin, %
through digital marketing activities and further
roll out of an e-commerce platform in new
markets.
The focus on reducing the environmental foot-
print continued with, for example, the invest-
ments in renewable electricity in three manufac-
turing sites, one in Germany, one in Japan, and
one in the United States.
The business area also developed a plan for
how to contribute to the Group’s commitment to
science-based targets.
Investments were made in new machining
equipment in the production facility in Tierp,
Sweden, and a new innovation center and factory
for vision systems in Darmstadt, Germany.
Acquisitions and divestments
The business area made one acquisition and
one divestment in 2021:
• The operating assets of the German-based
NATEV GmbH was acquired. The company is
specialized in positioning solutions for assem-
bly tools used in industrial production and has
10 employees and revenues of approximately
MSEK 5.
• In December, the CMM (Coordinate Measuring
Machine) business part of Perceptron (acquired
in December 2020) was divested. The divest-
ment was a result of further focus on in-line
metrology in contrast to o-line applications.
The CMM business has annual revenues of
about MSEK 100.
Revenues, prots and returns
Revenues increased 20% to MSEK 19421 (16176),
corresponding to a 17% organic increase. The
operating prot increased 64% to MSEK 3 976
(2422). Previous year included items aecting
comparability of MSEK –190, related to restructur-
ing costs. The operating margin was 20.5% (15.0,
adjusted 16.1), primarily driven by signicantly
higher revenue volumes but negatively aected
by dilutions from acquisitions. Currency had no
impact on the operating margin. Return on capital
employed was 16% (13).
Atlas Copco 2021 28
THE YEAR IN REVIEW – INDUSTRIAL TECHNIQUE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
• Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
The market
The global market for industrial power tools and
assembly systems with related services has a large
number of participants with a wide range of prod-
ucts in dierent applications such as assembly of
parts, drilling and material removal. Customers
are found in industries such as the automotive
industry, o-highway vehicles, the electronics
industry, aerospace, appliances, the energy sector,
and general industrial manufacturing. In particu-
lar, the business area has been successful in devel-
oping advanced electric industrial tools and sys-
tems that assist customers in achieving fastening
according to their specications and minimizing
errors and interruptions in production.
With an increasing demand for electric cars,
battery production, and growing use of lighter
materials, the automotive industry looks to alter-
native assembly solutions. The market demands
new assembly technologies such as dispensing
equipment for adhesives and sealants and self-
pierce riveting equipment and rivets to cater to
these needs.
The market for machine vision becomes increas-
ingly important, driven by growing demand for
automation, quality and productivity in industrial
production. Machine vision solutions are used
in discrete production, such as the automotive
industry, and in continuous processes production
applications, such as metal and paper production,
advanced material manufacturing, and solar
panels.
Other, 10
%G
eneral manu-
facturing, 18%
Construction,5%
Service, 6%
Electronics, 4%
Automotive, 51%
Process industry, 6%
Orders received by
customer category
Asia/Oceania, 29% North
America, 31%
Africa/
Middle East, 1%
Europe, 36%
South
America, 3%
Revenues by region
Equipment, 73%Service, 27%
Share of revenues
Market trends
• Automation in customers’ production
• Digitalization and demand for connectivity
in production
• Increased customer focus on reducing CO
2
emissions
• Increased demand for electric vehicles
• Higher requirements for quality, productiv-
ity, exibility and ergonomics, and increased
demand for in-line quality control
• Increased focus on renewable energy and
storage
• Use of light-weight material in transportation-
related industries
Demand drivers
• Industrial production
• Investments in customer segments’ contribu-
tion to transformation to a low-carbon society
• Capital expenditure in the automotive industry
• Changes in manufacturing methods and
higher requirements, e.g. quality assurance
and exibility
Vision and strategy
The vision is to be First in Mind—First in Choice as
a supplier of industrial power tools, joining and
dispensing solutions, machine vision, and related
services. The strategy is to continue to grow the
business protably by building on technological
leadership and continuously oering products
and services that improve customers’ productivity,
exibility, quality, energy eciency, safety, and
ergonomics. Key strategic initiatives include
adjusting the product oer to meet increased
automation in customers’ production processes,
and providing additional service, know-how and
training.
The business area is also increasing its presence
in targeted geographical markets. The presence is
enhanced by a brand portfolio strategy. The busi-
ness area is actively looking at acquiring comple-
mentary businesses. Growth should be achieved
in a way that is economically, environmentally and
socially responsible.
Strategic activities
• Increase market coverage and improve presence
in targeted markets/segments
• Develop new innovative products and solutions,
oering increased quality and productivity, and
improved ergonomics
• Develop products helping customers to reduce
their environmental impact
• Further increased focus on automation and
digitalization, through connected products and
solutions, to support customers’ productivity
and exibility
• Increase share of proactive services and the
share of service on the installed base
• Increase operational eciency
• Invest in people and competence development
• Acquire complementary businesses and
integrate them successfully
Competition
Industrial Technique’s principal competitors are:
Industrial tools business:
Apex Tool Group, Ingersoll Rand, Stanley Black &
Decker, Uryu, and Bosch, as well as several local
and regional competitors
Adhesive and sealant equipment:
Nordson, Graco, Viscotec, BD Tronic and Dürr
Self-pierce riveting:
Stanley Black & Decker, and Böllho
Machine vision:
Zeiss, ISV, Coherix, Ametek, and Dr. Schenk
Market position
A leading market position globally in most of its
operations.
Atlas Copco 2021 29
THE YEAR IN REVIEW – INDUSTRIAL TECHNIQUE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
• Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Industrial Technique: Products and applications
Industrial assembly tools and solutions
Advanced assembly tools and systems are
used in the automotive industry and general
industrial production such as aerospace,
o-highway, and electronics. The business
area provides a broad range of pneumatic,
hydraulic and electric assembly tools, control
systems, and associated software for safety-
critical tightening. These systems generally
make it possible for customers to collect,
record, and process assembly data in their
production.
Self-pierce riveting solutions, adhesive
dispensing and ow drill fastening
equipment
Self-pierce rivets, adhesive, and ow-drill
fasteners are primarily used in the automo-
tive industry driven by increased use of light
materials in car manufacturing. The business
area oers self-pierce riveting tools and riv-
ets, dispensing equipment for adhesives and
sealants, as well as ow-drill fastening
equipment.
Material removal tools, drills and other
pneumatic products
Pneumatic and electric industrial grinders,
drills and percussive tools are used in several
industrial applications, for example in metal
fabrication and aerospace production. The
business area also oers airline infrastruc-
ture for optimization of pneumatic tools,
and air motors that are used as drive units in
various industries and applications.
Machine vision solutions
Machine vision is a key technology for indus-
trial automation and digital manufacturing.
The core competence involves the develop-
ment of surface inspection systems and 3D
machine vision products. The combination
of high-performance cameras and illumina-
tion units, specialized software and business
intelligence architecture allows for detailed
analysis of production ows and quality
assurance in a wide range of industries.
Principal product development and
manufacturing units are located in:
Sweden, Germany, Hungary,
United Kingdom, France, China, Japan,
and the United States.
Self-pierce
riveting system
Machine vision
solutions
The Industrial Technique business area oers the most extensive range of industrial power tools,
assembly systems, and machine vision solutions on the market.
Innovations during 2021
Several new products were intro-
duced during the year, including:
The new Henrob 4mm self-pierce
riveting system, oering car manu-
facturers retained structural joint
strength and consistency in safety-
critical areas despite thinner frames
in the car body.
A multi-stereo 3D scanner, the ISRA
X-GAGE3D, providing peerless
measurement accuracy and fast
image processing for robot guidance
and in-line metrology application in
vehicle production.
A dispensing system, Scheugen pug
DosPL DPL2001/DosP DP2001,
oering high productivity, process
reliability and accuracy in production
of battery systems.
A controller, Power Focus 8, meets
customers’ need for more exible
production and digitalization at
production lines.
Business Area President: Henrik Elmin
Divisions:
1. Industrial Technique Service President Håkan Andersson
2. Motor Vehicle Industry Tools and Assembly Systems President Lars Eklöf
3. General Industry Tools and Assembly Systems President Carl von Schantz
4. Chicago Pneumatic Tools President Ivo Maltir
5. Industrial Assembly Solutions President Berthold Peters
6. Machine Vision Solutions President Tomas Lundin
Management
Industrial Technique, January 1, 2022
2
4 5
6
3
1
Handheld battery
tool for assembly
applications
Atlas Copco 2021 30
THE YEAR IN REVIEW – INDUSTRIAL TECHNIQUE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
• Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Power Technique
The demand for equipment, service and specialty rental solutions increased, and signicant order growth was
achieved in most regions. The business area continued to invest in research and development, digital presence,
and the oer for temporary steam solutions was further strengthened through an acquisition.
Market development
The overall demand for equipment, service and
specialty rental solutions increased considerably,
supporting strong order growth in most regions,
particularly North America and Europe. In total,
the order intake increased 33% organically.
Order volumes to the specialty rental busi-
ness increased noticeably, particularly in the sec-
ond half of the year. The order intake grew in all
regions except Africa/Middle East, where order
volumes remained unchanged. The demand for
service also increased and strong order growth
was achieved in all regions.
The demand for equipment increased signi-
cantly, particularly in the second half of the year,
supported by increased investments by equip-
ment rental companies. Order volumes increased
for portable compressors and power and ow
equipment, such as generators and pumps.
Market presence and organizational
development
The business area continued to invest in innova-
tion and market presence in targeted markets
and segments. Numerous new innovative prod-
ucts were introduced during the year, and the
oer for temporary steam solutions was strength-
ened through the acquisition of Eco Steam and
Heating Solutions.
The digital presence was improved through
several market activities and the launch of a new
e-commerce platform. The ability to support and
provide service to customers also increased by
more connected products through FleetLink – a
remote monitoring system for power equipment.
Sales bridge
Orders
received Revenues
2020, MSEK 11 810 12 106
Structural change, % +1 +1
Currency, % –6 –5
Organic*, % +33 +13
Total, % +28 +9
2021, MSEK 15 155 13 234
* Volume, price and mix
Revenues,
MSEK
13 234
2020: 12 106
Operating
prot margin
16.0%
2020: 13.2%
Return on capital
employed
27%
2020: 18%
0
5 000
10 000
15 000
20 000
25 000
2021202020192018
0
5
10
15
20
25
MSEK
%
Orders received, revenues
and operating margin
Orders received, MSEK
Revenues, MSEK
Operating margin, %
The focus on reducing the environmental foot-
print of the business area’s own operations con-
tinued, with an increased number of production
units having solar panels installed for their power
supply as one result. The oer of electrical-driven
equipment was also extended, as an example of
how customers are supported in meeting their
sustainability ambitions.
During the year, the business area also devel-
oped a plan for how to contribute to the Group’s
commitment to science-based targets.
To better support customers in need of tempo-
rary power equipment and service, investments
were made in a new rental depot in Varennes,
Canada.
Acquisitions
The business area completed one acquisition in
2021:
• Eco Steam and Heating Solutions, a specialty
steam rental company based in the Netherlands,
with 23 employees and revenues of MSEK 198.
Revenues, prots and returns
Revenues increased 9% to MSEK 13234 (12106),
corresponding to a 13% organic increase. The
operating prot increased 33% to MSEK 2121
(1594). Previous year included items aecting
comparability of MSEK –50 related to restruc-
turing costs. The operating margin increased to
16.0% (13.2, adjusted 13.6), driven by increased
organic revenue volumes. Currency and acqui-
sitions had no eect on the operating margin.
Return on capital employed was 27% (18).
Atlas Copco 2021 31
THE YEAR IN REVIEW – POWER TECHNIQUE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
• Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
The market
The market for air, power and ow solutions
includes a large number of participants oering
a wide product range for dierent applications.
The Power Technique business area focuses on
a selected number of applications.
Multiple segments are served by the business
area’s oering. General and civil engineering con-
tractors, often involved in infrastructure projects,
demand light construction tools. Mobile compres-
sors, generators, energy storage systems, light
towers, and pumps provide reliable power for
tools and applications in the construction
sector and for numerous industrial applications.
Contractors and rental companies are important
customers for service, including spare parts,
maintenance contracts and repairs.
Market trends
• Higher requirements regarding productivity,
exibility and ergonomics
• Increased customer focus on reducing
CO
2
emissions
• Increased customer focus on safety
• Equipment connectivity
• Increased demand for service support/contracts
General manu-
facturing, 21%
Other, 16%
Construction, 42%
Service, 7%
Process
industry, 14%
Orders received by
customer category
Asia/Oceania, 21
%N
orth
America, 27%
Africa/
Middle East, 8%
Europe, 36%
South
America, 8%
Revenues by region
Equipment, 57%Service, 11%
Service (Specialty
Rental), 32%
Share of revenues
Demand drivers
• Infrastructure growth
• Investment in products that contribute to the
transformation to a low carbon society
• Industrial production
• Emergency relief eorts
• Engine regulations
Vision and strategy
The vision is to be First in Mind—First in Choice
provider of on-site air, power and ow solutions
for sustainable productivity.
The strategy is to grow by developing Atlas
Copco’s market position and presence as a global
supplier within portable compressors, pumps,
generators and light towers, along with a range of
complementary, market specic, niche products,
such as high-pressure boosters. The strategy also
includes further development of specialty-rental
services and of the service business; increasing
revenues by oering more services to more cus-
tomers. Growth should be achieved in a way that
is economically, environmentally and socially
responsible.
Strategic activities
• Increase market coverage and improve
presence in targeted markets/segments
• Capture sales and service synergies
• Develop new sustainable products and
solutions oering enhanced productivity,
safety and reduced environmental impact
• Invest in design, development and production
capacity in growth markets
• Develop more competitive oerings with
dierent value propositions
• Perform more service on a higher share of
the installed base of machines
• Develop the service business
• Increase operational eciency
• Invest in employees and competence
development
• Acquire complementary businesses and
integrate them successfully
Competition
Power Technique’s principal competitors include
Doosan, Generac, Kaeser, and Sullair. In addition,
there are a large number of competitors operat-
ing locally or regionally.
Market position
A leading or strong market position globally
in most of its operations.
Atlas Copco 2021 32
THE YEAR IN REVIEW – POWER TECHNIQUE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
• Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Power Technique: Products and applications
Portable compressors
Portable oil-injected compressors are pri-
marily used in construction applications
where compressed air is used as a power
source for equipment, such as pneumatic
breakers and rock drills. Portable oil-free
compressors are rented by customers to
meet a temporary need for oil-free air,
primarily in industrial applications. Electric
portable air compressors generate less noise
compared to compressors with combustion
engines, and are ideal for low noise and
emission zones or indoor applications.
Boosters
When extra high pressure is needed, boost-
ers are used to boost the air fed by portable
compressors. This high-pressure air is mainly
used in the drilling industry or in oil and gas
applications.
Generators
Portable generators fulll a temporary need
for electricity, primarily in construction
applications. Other common applications
are power supply for events, emergency
power and power in remote locations.
Lighting towers
Lighting towers provide light for safe
operations 24/7.
Pumps
Portable diesel-driven pumps and sub-
mersible electric pumps, primarily for water.
Construction and demolition tools
Hydraulic, pneumatic and gasoline-
powered breakers, cutters and drills used
in construction, demolition and mining
businesses.
Principal product development and
manufacturing units are located in:
Belgium, Spain, the United States,
China and India.
Portable medium-pressure compressor
Handheld breaker
Generator
The Power Technique business area oers a range of products across
multiple industries including, civil engineering, demolition, manufacturing
and exploration drilling.
Innovations during 2021
Several new products were intro-
duced during the year, including:
A new TwinPower® generator with
reduced fuel consumption by up to
40% and nitrogen oxide (NOx) emis-
sions reduced by up to 80% compared
to other models.
An energy storage system, the
ZenergiZe range, that can be used
combined with generators or renew-
ables to make hybrid power solutions
and to create microgrids for several
applications.
A new range of portable compressors,
the XAS 500 and LUY15, suitable for
harsh working conditions, oers
reduced fuel consumption compared
to previous models.
A new portable compressor, the XAS
400 PACE. With built-in pressure
adjustments, a patented compressor
element and ECO mode, this compres-
sor oers high eciency and low fuel
consumption, and can be used in a
wide range of applications.
Business Area President: Andrew Walker
Divisions:
1. Power Technique Service President Stefaan Vertriest
2. Specialty Rental President Tim Last
3. Portable Air President Bert Derom
4. Power and Flow President Mikael Andersson
Management
Power Technique, January 1, 2022
2
43
1
Atlas Copco 2021 33
THE YEAR IN REVIEW – POWER TECHNIQUE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
• Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
A sustainable approach to delivering lasting value
At Atlas Copco, we are committed to being part of the solution for a better tomorrow.
By integrating sustainability into everything we do and by acting in an ethical way in all
operations and markets, we bring value to our customers and society as a whole.
Sustainability is at the core of Atlas Copco’s busi-
ness. To deliver lasting value for our customers and
other key stakeholders, we focus our work in ve
areas for sustainability: products and service,
people, safety and well-being, ethics, and the
environment. Working systematically with these
areas helps us reach our mission of achieving
sustainable, protable growth while at the same
time reducing risks to our company.
Through our operations, values and processes,
we also contribute to the UN Sustainable Develop-
ment Goals and its targets, see pages 36–46.
Enabling the transformation
Climate change is at the top of both our own and
our customers’ sustainability agendas. Our drive
to innovate with a lifecycle perspective supports
the development of highly energy-ecient prod-
ucts with a low climate impact. Many of our tech-
nologies and solutions are also used in indus-
tries and applications that are at the center of the
transformation to a low-carbon society.
Sharpening our targets
We focus our eorts to the areas where we have
the biggest impact and where we deliver value for
our stakeholders. Through the materiality analysis
conducted in 2021, we concluded that the climate,
and related topics such as a lifecycle approach
to product development and carbon impact, is
gaining increased attention from stakeholders.
Diversity and inclusion as well as talent develop-
ment are also areas where they would like to see
us focus our resources and eorts. Based on the
materiality analysis we have revised the sustain-
ability targets against which we will measure
our progress from 2022 onwards. These include
science-based targets to reduce our greenhouse
gas emissions, throughout the value- chain, in line
with the Paris Agreement. Read more on pages 7
and 35 and in the following sections.
Focus areas Products and service, page 36 People, page 39 Safety and well-being, page 41 Ethics, page 42 The environment, page 44
Material issues – Product eco-eciency
– Life-cycle perspective
– Product carbon impact
– Product quality and safety
– Employee satisfaction and engagement
– Diversity and non-discrimination
– Occupational health, safety and
well-being
– Business ethics and integrity
– Human rights
– Transparency and accountability
– Responsible supply chain
– Climate change
– Energy use and eciency
– Waste
– Water use
Atlas Copco 2021 34
THE YEAR IN REVIEW – SUSTAINABILITY
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
• Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Purchased goods
and services
Fuel and energy
related activities
Transportation
and distribution
Waste from
operations
Employee
communiting
Company
facilities
Company
vehicles
Transportation
and
distribution
Processing of
sold products
Business
travel
Use of sold
products
End-of-Life treatment
of sold products
Leased
assets
Investments
Capital
goods
Franchises
Purchased
electricity, steam,
heating and cooling
for own use
Leased
assets
Upstream activities including suppliers
Downstream activities including products in use
Value chain CO
Atlas Copco Group
Scope 2
Indirect
Scope 3
Indirect
Scope 3
Indirect
Scope 1
Direct
CO
2
impact in the value chain
More than 90% of the greenhouse gas
emissions in our value chain are generated
when the products are used. Less than 1%
of emissions come from Atlas Copco’s own
operations, and less than 5% originate from
components, transport etc.
The world urgently needs low-carbon solutions, and Atlas Copco’s
innovations are part of enabling the transformation. Our technolo-
gies are critical in existing low-carbon technologies like electric vehi-
cles and solar power, and they are also part of emerging technolo-
gies for energy production, energy storage, smart manufacturing
processes, transportation, and more.
As a leading and global supplier, Atlas Copco can also make a pos-
itive impact through our operations, transportation, and product
design. In fact, more than 90% of all the greenhouse gas emissions
that we generate come from when the products are in use.
Committing to science-based targets
To ensure that we fulll our climate ambitions, in 2021 Atlas Copco
set two science-based targets to reduce our greenhouse gas emis-
sions in line with the Paris Agreement. This means that Atlas Copco
has committed to take action in line with the Paris Agreement goal
of keeping the global temperature rise to well below 2°C, and pref-
erably not higher than 1.5°C. The science-based targets are set for
the entire value chain, including the use of products. They are set for
absolute reductions, and not in relation to cost of sales.
Target 1: Emissions from purchased energy and our own
operations
The rst target concerns emissions from Atlas Copco’s own opera-
tions and the energy we purchase (scope 1 and 2). Here our target is
to reduce our greenhouse emissions in line with the Paris Agreement
to limit the global temperature rise to maximum 1.5 °C. To do this, we
have a target of reducing emissions generated in these parts of the
value chain by 46% by 2030. Read more about how we work with
lowering the emissions from our own operations on pages 44–45.
Target 2: Upstream and downstream activities
Our second target concerns emissions generated outside of Atlas
Copco’s own operations, in up- and downstream activities (scope 3).
Here we will reduce greenhouse gas emissions in line with the Paris
Agreement to keep global temperature rise at well below 2 °C. To
achieve this, we have set a target to reduce our indirect upstream
and downstream emissions by 28% by 2030. Read more about how
we work with lowering the emissions from our products on pages
36–38.
Atlas Copco’s science-based targets are valid from 2022, and are set
for 2030 with 2019 as the base year. The targets have been validated
by the Science Based Targets initiative.
Raising our climate ambition
To contribute to a more sustainable future, Atlas Copco has committed to science-based
targets for the reduction of greenhouse gas emissions in the entire value chain.
The Science Based Targets initiative (SBTi)
provides companies with a clear path and
methods for setting targets for reducing their
greenhouse gas emissions in line with the
Paris Agreement. They also dene and pro-
mote best practices in emissions reductions
and net-zero targets in line with the latest
climate science. The SBTi is a partnership
between CDP, the United Nations Global
Compact, World
Resources Insti-
tute (WRI) and
the World Wide
Fund for Nature
(WWF).
Source: GHG-protocol
Atlas Copco 2021 35
THE YEAR IN REVIEW – SUSTAINABILITY
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
• Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Atlas Copco is a leader in developing innovative technologies and
we continuously launch products, solutions and services that set
new industry standards. We always innovate with a clear purpose
in mind, in areas where we believe we can make a dierence to our
customers, the environment and to society as a whole.
Our products are developed to contribute to our customers’ sus-
tainability ambitions by optimizing their productivity, energy e-
ciency, ergonomics and safety. Our technologies and products are
also found in several industries that are key in the transformation to
a low-carbon society. We develop leading technologies to custom-
ers in segments such as battery manufacturing, hydrogen, wind
power and solar energy, and are well positioned to be a part in
enabling this transformation.
Innovating for a better tomorrow
At Atlas Copco, we always innovate with a clear purpose and in response to real challenges. Developing highly
ecient and sustainable products that meet the needs of our customers, the society and the planet is the biggest
contribution we can make to a sustainable future.
Products and service
Vision:
Our products create
lasting value and make
a positive impact
Action:
We take a life-cycle
approach to innovation
Reducing our customers’ footprint
Our customers request equipment, solutions and service that
increase productivity and lower their carbon footprint. Energy e-
ciency is at the core of the innovations in many of Atlas Copco’s prod-
ucts and even higher gains are possible through the support we pro-
vide on how to use our products and through our service oer. As
most of our products use electricity, the impact from the use-phase of
our products, and consequently their value-chain footprint, is aected
by the availability of renewable energy in national energy mixes.
One of Atlas Copco’s most well-known and groundbreaking inno-
vations is the VSD (variable speed drive) technology in compressors.
This is an example of an innovative technology helping customers
optimize their energy eciency, reducing CO
2
emissions as well as
costs. The VSD-technology is also available in generators and pumps,
as well as in stationary and portable compressors.
Atlas Copco’s abatement systems that remove highly potent
greenhouse gases is another technology with positive environmen-
tal eects in industrial processes. In 2021, Atlas Copco’s installed
base of abatement products removed around 19 million tonnes of
CO
2
e emissions at customers’ facilities. Our partnerships in recycling
technologies for customers’ process gases can further reduce their
carbon footprint.
Increasing uptime and productivity
Increased connectivity and big data help transform the eciency
of many industrial processes. We support our customers in optimiz-
ing their production performance by monitoring and collecting real-
time data from the equipment to minimize downtime, predict main-
tenance needs and suggest energy-saving measures.
One example is the Smart Link data-monitoring system for com-
pressors. A growing number of compressors are connected globally,
enabling continuous status monitoring and predictive maintenance.
Majority of emissions come from products in use
More than 90% of the CO
2
emissions from Atlas Copco’s value chain
are generated when the customers use our products. This is where we
can make our biggest impact and we therefore focus on developing
products and solutions that are more energy ecient than their pre-
decessors and with a lower carbon footprint over their entire lifecycle.
In 2021, we raised our ambitions further by committing to reduc-
ing our greenhouse gas emissions in line with the goals of the Paris
Agreement. As part of this commitment we will reduce our indirect
emissions (scope 3), including the emissions when our products are
in use, in line with keeping the average global temperature rise well
below 2-degrees. The new targets will be implemented and mea-
sure our progress from 2022 onwards. Read more on page 35.
Designing with a lifecycle perspective
Atlas Copco takes a lifecycle approach to innovation. In 2020, we
adopted a Group- standard for how to measure a product’s carbon
footprint throughout its lifecycle in the design phase. The Product
Carbon Foot Printing tool assesses the carbon impact of dierent
aspects of the product lifecycle, from choice of materials, to product
use, as well as from its recycling and disposal.
All projects for new or redesigned products must set targets
for reduced carbon impact. Our divisions set their own targets for
the percentage of projects that are to achieve a signicant carbon
impact reduction. This is dened as a 5% or lower carbon footprint
over the product’s life cycle, compared to the most comparable Atlas
Copco product.
Atlas Copco contributes to the following
Sustainable Development Goals:
9.4 Sustainable industries, with resource-use
eciency and clean and environmentally
sound technologies and processes
12.2 Sustainable management and use of natural
resources
12.3 Responsible management of chemicals and
waste
12.5 Reduce waste generation
13.2 Integrate climate change measures into
policies, strategies and planning
Key performance indicators Target 2021
Projects for new or redesigned products with goals
for reduced environmental impact by 2021 100% 98%
Projects for new or redesigned products that will achieve signicantly
reduced environmental impact, i.e. 5% or lower carbon footprint over
the product’s life cycle.
Divisions set their
own targets 43%
Atlas Copco 2021 36
THE YEAR IN REVIEW – SUSTAINABILITY: PRODUCTS AND SERVICE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
• Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Enabling the transition to renewable energy
Upscaling the access to renewable energy will be key in reaching a
low-carbon future and the demand is increasing. Many of the tech-
nologies in this sector are closely related to Atlas Copco’s products
and solutions in vacuum technology, compressor technology, power
storage and supply, and industrial production and inspection.
Vacuum and abatement solutions, for example, are essential parts
in the manufacturing of solar panels. Vacuum pumps are needed in
the production of the silicon wafers and photovoltaic cells that cap-
ture the sunlight and convert it into energy. The surface of the panels
must also be awless in order to eciently capture the energy. Atlas
Copco develops optical inspection systems for complete control of
the panels, which helps improve their eciency and throughput.
In wind energy, Atlas Copco’s industrial tools, such as grinders,
wrenches and tensioners, are used in building the turbines, and our
generators are used to start them up.
Recovering and storing energy generated by renewable sources
is one of the main challenges, and Atlas Copco has the technology
and expertise to take a leading position in this area. Read more
about how Atlas Copco has developed a solution addressing this
challenge in the case below. Another example is the ZenergiZe
battery-powered energy storage system that can be combined with
renewable sources of energy for immediate or later use. It captures
the energy and stores it for delivery at any given time. Its intelligent
control system then manages the energy oer and demand to
increase the eciency of hybrid power solutions.
Our service supports circularity and optimizes customers’
investments
Through a strong service oering we ensure that our customers get
the most out of each investment. Our service divisions ensure the
repair and reuse of used products, which extends their useful life and
minimizes waste. They also provide support on how to optimally use
the products, which enables energy-eciency gains. The iXM Hybrid
upgrade service product is an example of an oering where cus-
tomers can return their current pump to their local Atlas Copco ser-
vice technology center, where the pumps are converted to use a low
power mechanism, thus reducing its CO
2
emissions, read more in the
case to the right.
Many of Atlas Copco’s products are also designed so they can be
returned, refurbished and resold. This contributes to increased circu-
larity and such used equipment meet the same high standards as
when they were new in terms of quality, performance and energy
eciency. Furthermore, some Atlas Copco units accept contami-
nated products, which otherwise would be disposed of as hazard-
ous waste, and return them to full operation.
Innovating for a better tomorrow, continued
Storing electric energy is a challenge in the green transi-
tion. Non-dispatchable renewables such as wind and
solar PV are a poor t to the load on the grid. It works for
low-to-medium penetration with renewables, but not in
a full-blown green transition.
Collaborations between industries is critical in the
eort to nd new and innovative solutions to curb climate
change. Together with a company specialized in storage
technologies with a high impact on climate change, Atlas
Copco has developed a solution to collecting and storing
excess renewable energy. The solution combines our
customer’s expertise in storing technologies with Atlas
Copco’s technologies in turbomachinery compressing
and expanding the working gas.
The energy is stored as heat and cold in crushed rock,
encapsulated in insulated tanks. Charging and discharg-
ing is carried out by circulating pure compressed air
through the crushed rock reservoirs, transferring heat
between rocks and air. The Atlas Copco turbomachinery
represents the centerpiece of this system, as it is ecient-
ly converting the excess electricity into thermally stored
energy and nally back into electricity, thus being the
most important part of the thermal battery.
This thermal energy storage solution has an assumed
55% of roundtrip eciency. Calculating with a com-
plete charge/discharge cycle every three days of the rst
demonstration plant, the developed solution could save
up to 7 500 metric tons of CO
2
over its lifetime, which
equals greenhouse gas emissions from around 1 600
passenger cars driven for one year in the US.
The iXH semiconductor dry pump range is the lead-
ing pumping technology used in the semiconductor
industry over the last 8 years. The iXM range is the
latest dry pump technology oering lower power
products with improved capability to handle a wider
portfolio of applications than any previous low
power design from Atlas Copco.
Combining applications knowledge of semicon-
ductor processes, with technical product knowl-
edge has enabled the development of the iXM
Hybrid service upgrade product. The solution oers
pumps currently in the market to be returned to
Atlas Copco’s local service technology center.
Through a fully engineered upgrade the iXH1210
dry pump is converted to utilize the iXM low power
mechanism, whilst retaining all other elements of
the iXH system.
The iXM Hybrid product provides a 25% power
saving over the original iXH product. Utilizing the
existing pump system allows for upgraded products
to be re-installed directly with no change to custom-
er connections or settings.
The iXM Hybrid product is currently deployed
at a world leading semiconductor customer. This
project delivered around 700 metric tons reduction
in CO
2
emissions over rst 20 months, correspond-
ing to the greenhouse gas emissions from 160 pas-
senger cars being driven in the US for one year. The
above project
could deliver a
total annual sav-
ings of around
13000 metric
tons of CO
2
emis-
sions following
the completion
of the full ve-
year program.
Supporting the
energy transition
Power-ecient pumping
technology used in
semiconductor application
Atlas Copco 2021 37
THE YEAR IN REVIEW – SUSTAINABILITY: PRODUCTS AND SERVICE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
• Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Innovating for a better tomorrow, continued
Building on Atlas Copco in-house developed technology, the new
E-AIR V1100VSD portable compressor uses electricity instead of
diesel to deliver compressed air for our customers. The ecient
drivetrain has more power density than a comparable power
diesel engine enabling similar airow in a smaller and lighter com-
pressor. Noise levels are lower, and varying air demand can be met
by the minimally required energy over a wider range of airows.
Moreover, the required pressure can be exactly matched without
any sacrices in eciency.
The E-AIR V1100VSD is versatile since the amperage and sock-
ets available on the customer’s site can be easily implemented.
In addition to substantially reduced operating costs, the highly
ecient electricity usage also reduces emissions compared to
the diesel-driven unit.
Equivalent energy saved from swapping a diesel-driven com-
pressor to the E-AIR V1100 VSD is calculated at up to 22 percent.
By replacing diesel-driven units in the same airow category,
based on the E-AIR V1100VSD orders between October 2020 and
October 2021, customers could reduce CO
2
emissions by approx-
imately 300 metric tons per year, corresponding to greenhouse
gas emissions of 65 passenger cars driven for one year in the US.
New battery tool drives
smarter assembly
Portable electric compressor
used in tough customer
applications like mining
The global assembly industry is transforming, becoming digi-
tal and more exible, while achieving better ergonomics and
reducing carbon footprint. The Tensor ITB-A has been devel-
oped to meet the shifting market demands and drive smart-
er assembly.
The Tensor ITB-A is a range of handheld, cordless tools,
which share an integrated controller platform which manages
the tool and real time integration to a production system.
With the Tensor ITB-A, Atlas Copco is developing the assembly
process by increasing the production exibility and reducing
the need for hardware and equipment in the factories,
as well as reducing power consumption. By substitut-
ing the traditional setup of one battery tool and
one physical controller box with the Tensor
ITB-A, the lifecycle carbon impact can be re-
duced by 75 percent per year. Firstly, the setup
with an integrated controller eliminates the
environmental impact in the supply chain from
producing and transporting physical controllers.
Secondly, Tensor ITB-A consumes less power
while in use, reducing both carbon footprint
and cost for customers.
By replacing traditional systems, a tool and a
separate controller, with the new Tensor ITB-A,
savings can amount to around 650 metric tons
of CO
2
emissions per year. This is based on an esti-
mation of replacement of traditional systems
the coming two years and the equivalent of 140
passenger cars driven for one year in the US.
HEX@ – a new evolution in vacuum pump control
A vacuum service technician explaining the functionalities of
the HEX@ Controller to a customer. This is the next generation
in vacuum control, with possibilities of remote controlling the
system via PC, mobile phone or tablet.
In 2021 the Atlas Copco Group
had 6 600 patents, linked to
around 2 400 inventions.
Atlas Copco 2021 38
THE YEAR IN REVIEW – SUSTAINABILITY: PRODUCTS AND SERVICE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
• Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Enabling development and lifelong learning
Atlas Copco’s ambition is to be the most attractive employer in our industry. To reach this position, we nurture and grow our
culture and enable the full potential of our people so they can deliver world-class solutions to our customers every day.
People
As a world-leading provider of innovative productivity solutions,
Atlas Copco depends on all our talented and committed employees.
One of our focus areas is to attract, develop and retain passionate
people, to be First in Mind—First in Choice as an employer and
to achieve long-term business success.
Aligning people success with business success
Atlas Copco has developed a talent framework based on a common
set of competencies that have been identied as the most critical to
our business success and are relevant to all employees.
The framework breaks down the ve key competencies into
behaviors that strengthen Atlas Copco’s ability to drive real change
in employee performance. It emphasizes our belief that every
employee has a critical role in driving the Group’s success.
Developing passionate people
Atlas Copco has a strong culture of growing talent by encouraging
employees to take accountability for their own development. We
encourage curiosity and enable learning through continuous feed-
back and coaching. We also have the ambition to learn from each
other each day at work, and create personalized and interactive
learning opportunities to drive upskilling for business and personal
success.
In 2021, Atlas Copco implemented a new process for performance
and development dialogues. The purpose is to increase the number
and quality of dialogues and hold leaders accountable for growing
people through ongoing feedback and coaching. The talent frame-
work competencies are fully integrated in the process.
Atlas Copco’s learning management system is another key ingre-
dient of our learning culture. Through the system, they gain easy
access to an extensive library of digital and classroom courses and
programs, relevant across the business, or targeted to a specic
subject, function or role.
Developing future-proof leaders
Developing future-proof leaders is another pillar of Atlas Copco’s
people philosophy. We strive to develop leaders who coach and
develop teams and individuals to reach their full potential through
inclusion, collaboration, and trust.
In Atlas Copco, leadership is dened as the ability to create lasting
results. Our leadership portfolio oers personalized learning through
a modular set-up. Each module focuses on a specic skill mapped
against the talent framework competencies. In 2021, new modules
were added to the portfolio and, in response to the pandemic, trans-
formed into virtual trainings.
Attracting talent
We believe that inclusion is a critical driver for long-term success.
To ensure a strong and diverse pipeline, Atlas Copco seeks to pro-
actively attract talent from the entire talent pool. Targeted employer
branding activities and competence-based recruitment safeguard
cultural t and diversity. This includes structured interview guides
with a focus on behaviors.
The biggest gap in the area of diversity is within gender balance,
and we address this through our goal of 30% women in the Group
by 2030. In 2021, progress was made towards better gender balance
with 20.9% (20.0) women in the workforce by year end.
Atlas Copco contributes to the following
Sustainable Development Goals:
5.1 End discrimination against women and girls
5.5 Ensure women’s full participation and equal
opportunities for leadership and decision
making
8.8 Protect labour rights and promote safe and
secure working environments
Key performance indicators Target 2021 2020 2019 Comment
Degree to which employees agree
there is opportunity to learn and grow
in the company *
Above
bench mark (71) 73 – 71
The employee
survey is
conducted
every two years.
Degree to which employees agree
there is a work culture of respect,
fairness and openness *
Above
benchmark (75) 76 – 74
Share of female employees at year
end 2030, % 30% 20.9 20.0 19.8
* Scores based on scale 0–100 where 0 is “strongly disagree” and 100 is “strongly agree”.
Vision: Our culture
of collaboration and
inclusion drives our
success
Action: We help each
other grow and thrive
Atlas Copco 2021 39
THE YEAR IN REVIEW – SUSTAINABILITY: PEOPLE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
• Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Diversity and inclusion drives business success
We strongly believe that diversity and inclusion promote innovation,
strengthen employee engagement and lead to better decision mak-
ing. We take pride in enabling a sense of belonging for all colleagues
where they can align their individual purpose with the organiza-
tional purpose, bringing their true selves to work every day.
The Diversity and Inclusion Council, chaired by President and CEO
Mats Rahmström, includes representatives from all business areas
and meets regularly to follow up on action plans and results in the
operations. The work is mainly driven by business area task forces
and ambassadors in each operational entity. Diversity and inclu-
sion trainings available to all employees improve their understand-
ing of how our biases are relevant and come into play in our day-to-
day interactions.
Developing our corporate culture
Our culture is characterized by a commitment to people, customers,
products, and innovation. We believe that there is always a better
way of doing things and advocate freedom with accountability. Sev-
eral activities are carried out to support and develop our corporate
culture, such as recurring workshops for employees on company
values, strategy, and guidelines.
To measure the strength of our culture over time, Atlas Copco
runs a global employee survey every two years. This brings import-
ant insights in four areas: employee engagement, Group culture,
safety and leadership. The overall results of 2021 year’s survey are
above the global benchmark and show that our colleagues are more
engaged now than two years ago. The scores improved on 27 out
of 29 questions and none of the scores decreased. The high lev-
els of engagement are reected in nearly 40000 comments, with
35% of employees leaving at least one comment. The response rate
was 92%. The results are followed up in mandatory workshops held
by each manager, where concrete actions are shaped to further
strengthen the company culture.
Growing people through
ongoing feedback
Atlas Copco’s employees should feel recognized for their eorts, and
the best way to accomplish this is through ongoing feedback and
coaching. This conviction motivated the implementation of a new
process for performance and development dialogues during the
year. The new practice focuses on how to enable development and
drive growth, and how to tap into each employee’s full potential.
As previously, the process includes setting performance and
development goals at the start of each year and a follow-up eval-
uation from managers at year end. But there is a stronger focus on
measuring the behaviors that drive success, besides the result itself.
To provide timely and constructive feedback, managers are also
encouraged to have continuous 1:1 check-ins or discussions with
employees throughout the year.
Another feature is encouraging peer-to-peer feedback, which
requires both practice and a change of mindset. To support this,
learning material is provided, including workshop material for man-
agers to facilitate a good discussion with their teams on the topic
of feedback, what it is and why it matters. The ambition is for each
team to have a plan for developing a feedback culture.
Reinforcing our learning
culture
In 2021, Atlas Copco rolled out the “NeverStopLearningWeek”,
an initiative designed to inspire employees to future-proof their
skills and capabilities. The week included lunch & learn sessions,
team learning activities, global webinars, online courses and much
more. Each day of the week was dedicated to a specic theme.
The activity resulted in an overall increase in self-requested learn-
ing and feedback was positive. The “NeverStopLearningWeek”
will be a yearly activity going forward.
Enabling development and lifelong learning, continued
Atlas Copco 2021 40
THE YEAR IN REVIEW – SUSTAINABILITY: PEOPLE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
• Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Committed to safety and well-being
We are committed to ensuring that our employees and others aected by our operations work in a way that
contributes to their safety and well-being. Transparent reporting is encouraged and helps build awareness of
risks and safe behavior preventing injuries in the workforce.
Key performance indicators Target 2021 2020 2019 Comment
A balanced safety pyramid Yes Yes Yes Yes
Degree to which employees
agree that the company takes
a genuine interest in their
well-being * Continuous
increase 73 – 69
The employ-
ment engage-
ment survey
is conducted
every two years.
* Scores based on scale 0–100 where 0 is “strongly disagree” and 100 is “strongly agree”.
Atlas Copco contributes to the following
Sustainable Development Goal:
8.8 Protect labour rights and promote safe and
secure working environments
Covid-19 – adapting to local needs and conditions
Covid-19 has exposed the whole organization to a new reality with
increased focus on safety and well-being. Being a decentralized
organization has made it easier for Atlas Copco to adapt to local con-
ditions and handling situations in an ecient and exible manner.
Among several activities during the year, the Group oered sup-
port and toolkits to managers and to employees on topics such as
virtual leadership, maintaining emotional well-being, and building
resilience in times of uncertainty and change.
To stimulate an open dialogue about the challenges during the
pandemic and understand the needs of the teams, managers have
received feedback through short pulse surveys.
Safety and well-being is a core priority at Atlas Copco. We pursue
this by engaging everyone in eliminating hazards, reducing occu-
pational health and safety risks and in promoting the immediate
reporting of near-misses, incidents and risk observations.
Robust safety standards in place
We are committed to providing a safe and healthy working environ-
ment for all our employees in all operations. The global SHEQ policy
(safety, health, environment and quality) ensures that there are
robust standards for safety and well-being in the workplace. We
seek to reinforce a culture and behaviors that contribute to the
safety and well-being of our people and others aected by our oper-
ations, including contractors. This includes risk assessment and
safety procedures, good environment within and around the work-
place, appropriate follow-up procedures, transparent reporting and
training. The Group’s Safety, Health, Environment and Quality coun-
cil oversees the work and supports the organization with the devel-
opment of policies, processes and best practice sharing.
Since Atlas Copco is highly decentralized, there may be regional
and local policies and practices that complement Group processes.
All divisions set targets and make action plans to enhance awareness
and improve behaviors, policies and processes. Group companies
must have an Atlas Copco veried Safety, Health, Environment and
Quality management system which is documented, implemented
and maintained on an ongoing basis. Read more on pages 133–134.
Annual Safety Days have been arranged in the Group since 2014.
Measuring progress
Progress is measured by continuous safety reporting and follow-up,
and in the employee engagement survey every two years. The tar-
get is that an increasing part of employees should agree that Atlas
Copco takes a genuine interest in their well-being. The results from
the 2021 employment engagement survey conrm this.
To further strengthen the safety work Atlas Copco measures prog-
ress by using a safety pyramid. The target is that the pyramid should
be balanced. This means that more risk observations and near-
misses than minor injuries are reported, and more minor injuries than
recordable injuries. The approach supports transparent reporting,
risk awareness and encourages safe behavior to decrease risks and
ultimately prevent workforce injuries. In 2021, the result was in line
with this target. Read more on page 134.
Well-being framework enables a great workplace
A key ingredient to Atlas Copco’s business success is to support and
protect our employees’ mental health and well-being. This enables
employees to cope with the stresses of life, work more productively,
and to make the contribution they want at work and at home.
In addition to the learnings from Covid 19, this sparked the
Vacuum Technique business area to create a new well-being frame-
work. The framework puts focus on four areas; sense of purpose,
social connections, physical health and mental well-being. It aligns
the business area’s well-being activities by providing a consistent
language and each dimension is explained in terms of its key ele-
ments, drivers, and threats.
Sustainability ergonomics program awarded
Atlas Copco’s Safety and Health Award 2021 was awarded to
Product Company Zaragoza, Power and Flow Division, Spain, for
their Sustainable Ergonomics program, an innovative and science-
based approach to improving ergonomics in the workplace.
The program started in 2019 by a group of volunteers at the
company and is designed to improve ergonomic work conditions
and create awareness on how to prevent musculoskeletal disorders.
A physiotherapist and an ergonomist provided all workers with per-
sonalized recommendations on how to improve their health at work
and in their private life. They were also taught stretch and warm-up
exercises. The factory received a report with suggestions on how to
improve the work environment from an ergonomic perspective.
We are committed to providing a safe
and healthy working environment for
all our employees in all operations.
Safety and well-being
Vision: The way we work
contributes to our safety
and well-being
Action: We look after each
other’s well-being
Atlas Copco 2021 41
THE YEAR IN REVIEW – SUSTAINABILITY: SAFETY AND WELL-BEING
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
• Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Acting with integrity throughout the value chain
How we conduct ourselves globally is more than just a matter of upholding regulations, policy and law. It is a reection
of our core values. We have an unwavering commitment to the highest ethical behavior, including zero tolerance
for human rights abuse, bribery and corruption.
Atlas Copco’s contribution to the
Sustainable Development Goals:
8.7 Eradicate forced labour, modern slavery
and human tracking
8.8 Protect labour rights and promote safe
and secure working environments for
all workers
16.5 Substantially reduce corruption and bribery
Ethics
Atlas Copco aims to earn the trust of everyone impacted by our oper-
ations, demonstrating our commitment to ethical behavior and
human rights through our words and actions. We expect the same
high standards of our business partners and work continuously with
our value chain to reduce risks and achieve positive results.
Our ability to ensure that the highest ethical standards are applied
depends on the values and behavior of our people and business
partners. Signicant weight is therefore put on communication,
training and monitoring to ensure the awareness and adherence to
our values and principles.
Training for employees worldwide
We assess the potential risks for breaches of the Business Code of
Practice and train our employees in its practical implementation.
This process reinforces Atlas Copco’s high expectations on how we
behave in relation to each other, our customers, and all stakeholders
in the communities we serve.
All employees, including the additional workforce, are required
to annually participate in digital training in the Business Code and
to sign their compliance. New employees participate in Business
Code training and sign it as part of their introduction. Managers in
countries with higher risks of corruption and human rights viola-
tions are required to lead annual in-depth classroom training with
their employees. The development within these areas is followed up
annually and the goal is set to 100 percent.
The trainings are based on ethical dilemmas inspired by actual
cases within the organization. Through the trainings, employees
learn how to identify and handle such situations, while strengthen-
ing their awareness of our values and guidelines.
The trainings and the dilemma cases are continuously updated
to maintain relevance and stimulate a high uptake. An updated
training will be rolled-out from 2022 in connection with the imple-
mentation of the revised Group targets.
A responsible value-chain approach
Working with business partners who share our high standards
regarding quality, business ethics, the environment and resource
eciency, is necessary to eciently manage risks and to enhance
productivity in the value chain.
The Business Code of Practice is the backbone of the responsible
value-chain process, reinforced by a signed commitment to follow
it, screening and audits, customer sustainability assessment and
targeted training. See page 135.
Sustainable sourcing practices
Atlas Copco has a large international supplier base, which presents
signicant challenges. Purchased components represent about 75%
of the product cost.
We use a risk-based approach and prioritize following-up signi-
cant suppliers who represent the bulk of the purchase value or who
operate in markets with high corruption or human-rights risk.
Signicant suppliers are evaluated on parameters including price,
quality and reliability as well as key environmental, social and ethical
concerns. The parameters are based on the UN Global Compact and
the International Labour Organization’s Declaration on Fundamen-
tal Principles and Rights at Work. On-site visits are made to ensure
compliance. See page 134–135.
The Business Partner Criteria document translates the Business
Code of Practice into practical requirements and is available in more
than 30 languages on our corporate website. All signicant business
partners are required to conrm their compliance to the Business
Code by signing the document.
Distributors and agents
A Group target requires that all signicant distributors sign the
Business Partner Criteria document. Distributors who represent the
bulk of the sales value or who operate in high-risk markets are
prioritized.
Sales compliance process
General managers, and ultimately the divisional presidents, are
responsible for the implementation of the Group’s policies and
guidelines and to make sales decisions. The Head of Group Compli-
ance supports the organization on trade compliance related mat-
ters, including sanctions and export control.
Key performance indicators Target 2021 2020 2019
Employees sign the Business Code of Practice, % 100 98 99 98
Employees trained in the Business Code of Practice, % 100 97 99 94
Managers in risk countries lead trainings in the
Business Code of Practice, % 100 96 99 91
Signicant suppliers sign the Business Code of Practice, % 100 93 93 90
Signicant distributors sign the Business Code of Practice, % 100 87 84 59
Vision:
We are known for ethical
behavior, openness and respect
Action: We act with honesty
and integrity
Atlas Copco 2021 42
THE YEAR IN REVIEW – SUSTAINABILITY: ETHICS
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
• Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Encouraging the reporting of misconduct
Complying with regulations, laws and internal guidelines, such as
the Business Code of Practice, has top priority at Atlas Copco. We
support ethical business practices and to uphold this standard it is
important that we hear of potential misconduct and put a stop to it.
It helps protect our values, the company, our brand and each other.
SpeakUp is the Group’s system for reporting potential miscon-
duct and violations. Through the system, our employees or external
stakeholders can anonymously report potential misconduct in their
own language by leaving a voice or text message. The system is
operated by an external third party and is open 24/7. Retaliation in
any form is strictly prohibited. Atlas Copco takes violations to the
Business Code of Practice very seriously, and strongly encourages
transparent reporting.
HUMAN RIGHTS IN THE VALUE CHAIN
Atlas Copco’s Business Code of Practice endorses the UN International Bill of Human Rights and
guides the business in working with all issues relating to ethical behavior, including human rights.
Human rights risks
Business partners
Business partners not complying with
labor standards, including working
hours, forced/bonded or under-age
labor and the freedom of association.
Occurrence of conict minerals in
sourced products.
Atlas Copco’s own operations
Risks of violations including poor
working conditions and discrimina-
tion in the workforce. Operations in
countries with high risks of human
rights abuse, including corruption
and limited freedom of association.
Customers
Environmental impact and unsafe
use of products, including sub-
stances with potential health impact,
and risks of mismanaging customer
integrity. Risks related to local com-
munities, such as land rights.
Community
Risks of corruption and unethical tax
planning, impeding fair competition
and depriving people of their rights
to critical societal functions such as
healthcare and education.
Policies
Business partners
Atlas Copco has integrated the
UN Global Compact principles into
business partner evaluation and
management. Read more on
page134.
Atlas Copco’s own operations
Group targets and policies aim to
create safe, healthy and fair working
environments. The Human Rights
Policy and Business Code of Practice.
Read more on page 130 and 134.
Customers
Product safety and environmental
standards. The Group is strengthen-
ing its approach using the UN Guid-
ing Principles on Business and
Human Rights. Read more on page
130 and 134.
Community
The Business Code of Practice is the
main policy document on anti-
corruption. The Group’s tax policy is
available on the corporate website.
Activities
Business partners
Prohibiting child labor and forced
labor, promoting adherence to inter-
national guidelines on working condi-
tions, environmental management
and freedom of association. Respon-
sible sourcing practices, which covers
the occurrence of conict minerals.
Atlas Copco’s own operations
Ensuring fair labor conditions, non-
discrimination in the workplace and
the right to join trade unions.
Training for all employees in the
Business Code of Practice, including
issues of working conditions, labor
rights and discrimination.
Customers
Product safety, minimizing environ-
mental impact through usage of
products, security concerns and
issues related to community reloca-
tion. Customer assessment tool
and Compliance Board oversight
of policy implementation.
Community
Community engagement activities
increases access to health, educa-
tion and safe develop ment of chil-
dren and vulnerable groups, as well
as disaster relief. Training for all
employees in the Business Code of
Practice, including on corruption.
When relevant, we partner with customers to address human-rights
risks in the value chain. The customer assessment tool is used to
investigate potential environmental, labor, human rights and corrup-
tion risks. In-depth dialogue and eld visits complement this tool.
Zero tolerance against corruption
Atlas Copco does not tolerate bribery such as the oering, prom-
ising, giving, accepting or soliciting of an advantage, or corrup-
tion in any form, whether direct or through third parties, including
facilitation payments. Firm actions will be taken on any violation.
This rule applies to all employees as well as the Board of Directors
and to all business dealings and transactions in all countries where
Atlas Copco operates. Corruption or facilitation payments are never
acceptable in order to secure a sale. This rule strengthens the brand
and contributes to fair market competition.
There are no negative consequences, such as demotion or other
reprisals, for refusing to receive or pay bribes or for reporting vio-
lations. The Group’s misconduct reporting system SpeakUp can be
used by any stakeholder, within or outside the company, to report
perceived violations of laws or the Business Code of Practice. The sys-
tem is provided by a third-party actor and reporting is anonymous.
Approach to human rights
Atlas Copco is committed to the UN Guiding Principles for Business
and Human Rights and have an ongoing process to identify, prevent
and mitigate the impact on human rights related to our business.
Atlas Copco works throughout the value chain covering the human
rights of individuals and groups who may be impacted by our activi-
ties or business relationships, see the table to the right. Atlas Copco’s
Compliance Board oversees the implementation of and compliance
with the Business Code of Practice and our commitment to the UN
Guiding Principles.
Fighting corruption is a central aspect to working with human
rights, since corruption can cripple the governmental bodies and
processes needed to address the issues. Lacking legal and politi-
cal infra structure in some markets is a potential challenge. Bilateral
engagement with civil society is crucial to successfully escalate issues
in such markets. Through memberships in local business associa-
tions and in cooperation with others, we collaborate to further our
Group’s values.
Acting with integrity throughout the value chain, continued
Atlas Copco 2021 43
THE YEAR IN REVIEW – SUSTAINABILITY: ETHICS
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
• Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Optimizing our environmental performance
Atlas Copco is committed to continuously improving our environmental performance. We improve the energy eciency of
our products and our operations, while also managing our water use and waste. In 2021, we signicantly raised our ambitions
by adopting science-based targets for the reduction of greenhouse gas emissions, throughout the value chain.
Climate change presents a huge threat to society and Atlas Copco
wants to be part of the solution in order to avoid the worst impacts
of a warming world.
In 2021, we signicantly raised our ambitions by committing to
reducing the greenhouse gas emissions throughout our value chain
in line with the goals of the Paris Agreement. For Atlas Copco’s own
operations, this means that we aim to reduce emissions in line with
keeping the global temperature rise below 1.5 degrees. The targets
have been validated by the Science Based Targets initiative and will
be implemented from 2022. Read more on page 35.
The absolute majority of Atlas Copco’s impact comes from the
use of our products. Therefore we will continue to develop energy-
ecient products with a lower carbon footprint over their entire life-
cycle. Read more about how we support customers’ sustainability
ambitions on pages 36–38.
Operations and transportation
To reduce the impact from our own operations we focus on increas-
ing the use of renewable energy, switching to biofuels in compressor
testing, energy-conservation measures, installing solar panels, logis-
tics planning, and switching to more environmentally friendly trans-
port when possible. Collaborations with transport partners, and to
some extent technical developments, are key enablers to achieve
our target in this area.
In 2021, the CO
2
emissions from energy in operations and trans-
port of goods in relation to cost of sales decreased by 13%. The
decrease in absolute numbers was 3%. CO
2
emissions from direct
energy increased by 10% in absolute numbers, mainly because of
increased production volumes. CO
2
emissions from indirect energy
decreased by 47% in absolute numbers. An increased share of
renewable electricity was the main driver for lower emissions from
energy. CO
2
emissions from transport of goods increased by 15% in
absolute numbers, mainly due to increased production levels, and to
some extent due to supply chain shortages causing more air freight.
Against the baseline of 2018, CO
2
emissions from transport of
goods decreased by 16%. Our emissions from energy in operations
and transport, in relation to cost of sales, has decreased 38% in the
same period. The reduction in absolute numbers was 26%.
Increased use of renewable energy
We strive to increase the share of renewable energy in our opera-
tions. Major production units have switched to renewable energy,
including investments in onsite solar power. In 2021, the percentage
of renewable energy used increased to 58% (44). Main reasons for
the increase are purchase of renewable electricity.
In 2021, Atlas Copco transferred to renewable electricity for
certain larger facilities in South Korea and China. The investment
resulted in savings of more than 25 000 tonnes of CO
2
emissions.
In some markets, the availability of renewable energy poses a chal-
lenge to our ability to increase the share of renewable electricity.
Reducing waste from operations
Reducing waste is important to decrease the total environmental
impact from production and increasing circularity.
Most of our waste is constituted by scrap metal and the vast
majority is reused or recycled. This share has been consistently high
for many years and we now focus on decreasing the total waste
volume. In 2021, the total volume in relation to cost of sales
increased by 2%, mainly due to increased production volumes.
Atlas Copco’s contribution to the Sustainable Development Goals:
6.4 Increase water-use eciency
7.2 Increase the share of renewable energy
7.3 Double the rate of improvement in energy eciency
12.2 Ecient use of natural resources
12.4 Environmentally sound management of chemicals and all
wastes throughout their life cycle
13.3 Knowledge and capacity building to meet climate change
The environment
Vision: Our processes
minimize our impact on
the environment
Action: We use resources
responsibly
Key performance indicator Target 2021 2020 2019
Carbon dioxide emissions from energy in operations and
transport of goods (tonnes)/COS, base year: 2018
1)
–50% by 2030 3.3 3.8 4.3
Waste (kg)/COS Continuous decrease 590 581 597
Water consumption (m
3
)/COS Continuous decrease 6.6 7.2 7.2
Signicant direct suppliers with an approved
Environmental Management System, % Continuous increase 31 30 28
1)
CO
2
emissions from energy in operations and transport (tonnes) in relation
to cost of sales in the base year 2018 was 5.3.
Atlas Copco 2021 44
THE YEAR IN REVIEW – SUSTAINABILITY: THE ENVIRONMENT
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
• Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Water management
Atlas Copco’s overall water consumption is relatively low due to our
focus on assembly rather than on other resource-intensive activities.
Nevertheless, we seek to decrease our use of water and to increase
its reuse and circulation. Innovative product design and improved
processes also contributes to reducing our customers’ use of water.
In 2021, the consolidated consumption of water in relation to cost
of sales decreased with 8%. In absolute numbers, the consumption
increased by 3%, mainly due to one-time events such as leakages
and increase in production volumes.
Rail transport outperforms air and ocean freight when it comes to balancing
aspects such as costs, speed and environmental impact. This was shown in
a pilot project for rail freight between Atlas Copco’s industrial vacuum
production facility in Germany and its counterpart in China. The rail
transport also proved to be reliable during the pandemic.
The facility sends growing volumes of heavy pumps, weighing over
150kilograms, and semi-nished parts, from Cologne in Germany to
Tianjin, China and raised the issue of exploring more sustainable alterna-
tives for transportation.
Optimizing costs and environmental impact
Since the project started in 2019, the benets of train transports have
become clear. On this particular 8 000 kilometer route, rail freight is 75%
less costly than air freight, and carbon emissions are 90% lower. Compared
to ocean freight, the train is 50% quicker as the distance by rail is less than
half the distance by ocean.
During the pilot, goods were placed in ocean freight packaging to avoid
corrosion. The amount of plywood used was reduced and the need for
polyurethane foam eliminated. The transports were monitored via GPS
tracker and temperature, humidity and load shocks were measured, with
no reports of signicant damage to the goods.
This prompted a decision to switch to rail for all but the heaviest of
cargoes, which are still transported by container ship. Further rail pilot
projects are now underway within Atlas Copco.
Awarded the Giulio Mazzalupi Award in 2021
The team behind the project was awarded with the Giulio Mazzalupi
Award for operational excellence in 2021.
Atlas Copco’s employees contribute to the
following Sustainable Development Goal:
6.1 Access to safe drinking water for all
Water for All: Employee community engagement
Water for All is the main community engagement initiative of both Atlas Copco
and Epiroc. The numbers convey Water for All’s global achievements in 2021
including both companies.
Water for All is Atlas Copco’s main community engagement initiative.
Through the dedicated work of volunteering employees, Water for
All funds projects which empower people through access to clean
drinking water, sanitation, and hygiene, thereby contributing to
healthy societies. All projects supported by Water for All aim to
positively impact the lives of women and young girls in particular,
as they are particularly aected by the lack of water and sanitation.
All employee donations are matched with twice the amount by
AtlasCopco.
In 2021, more than 60 water and sanitation projects were implemented
with Water for All funding in 31 countries, in total reaching more
than 337 000 people. We also launched a historically large project
in the Pader district in Uganda, to which twelve Water for All organi-
zations contribute with funding together with the Peter Wallenberg
Water for All Foundation. The project will run for a period of three
years, targeting 48 villages and more than 30000 people.
Optimizing our environmental performance, continued
When the train beats the plane
Environmental risks in the supply chain
Atlas Copco recognizes the importance of managing environmen-
tal risks throughout the value chain. By committing to the business
partner criteria our suppliers take responsibility to minimize the
environmental impact of products and services during manufactur-
ing, distribution, and usage, as well as after disposal. Screening and
audits are part of the Group’s supplier management system.
We work with tier-one suppliers using the business partner crite-
ria and, if needed, we develop action plans together to enhance the
environmental management of certain suppliers. To further reduce
our impact along the value chain, we measure the percentage of
signicant direct suppliers that have an approved environmen-
tal management system. In 2021, 31% of these suppliers met this
requirement. Read more on page 135.
Major production units have switched
to renewable energy, including
investments in onsite solar power.
Atlas Copco 2021 45
THE YEAR IN REVIEW – SUSTAINABILITY: THE ENVIRONMENT
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
• Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
The European Union (EU) taxonomy aims to provide
guidance and over time a comprehensive classication
system for when an economic activity can be deemed
sustainable. It consists of six environmental objectives
of which two are relevant for the nancial year 2021:
climate change mitigation and climate change
adaptation.
Atlas Copco develops and oers a wide range of products for
dierent end markets and applications. We strive to provide
the most energy-ecient products for each specic applica-
tion to support our customers in minimizing their energy
consumption and reducing the climate impact of a product’s
use phase.
Based on the now available EU taxonomy delegated act for
climate mitigation and climate adaptation, Atlas Copco is
eligible for climate mitigation under the denition “manufac-
ture of low-carbon technologies aimed at substantial green-
house gas emission reductions in other sectors of the econ-
omy” (section 3.6).
Due to the lack of specic denitions for “substantial green-
house gas emission reductions” in section 3.6 provided in the
delegated act, Atlas Copco applies a conservative approach
regarding which technologies are included as eligible in the
taxonomy reporting. The most ecient products in terms
of energy savings or other means to avoid, reduce, remove,
or store greenhouse gas emissions, compared to alterna-
tive technologies commonly used on the market, have been
included as taxonomy eligible.
Eligible products have been identied as products that:
1) prevent the venting of environmentally hazardous gases directly
into the atmosphere, or
2) enable substantial energy savings compared to available tech-
nologies commonly used on the market by either use optimiza-
tion, in and of themselves, by enabling the shift to electric/battery
power, or by introducing new solutions on the market.
Eligible products include e.g. Atlas Copco’s VSD (variable speed
drive) compressors, abatement systems, electrical portable com-
pressors, and our latest electric range of industrial power tools.
Furthermore, Atlas Copco’s products and solutions are critical to
several manufacturing processes for customer segments dened as
eligible in the taxonomy sections 3.1–3.4 including customers within
renewable energy technologies (e.g. solar energy, wind energy,
hydropower or tide energy), production of electrical cars, battery
manufacturing, and hydrogen manufacturing equipment. Hence,
revenues related to the above segments are included as taxonomy
eligible.
For further details, see page 132.
EU taxonomy – classication of sustainable activities
22%
6%
19%
17% from product
segments
5% from customer
segments
Taxonomy eligible revenues
Taxonomy eligible capital expenditure
Taxonomy eligible operating expenses
Atlas Copco 2021 46
THE YEAR IN REVIEW – SUSTAINABILITY: THE ENVIRONMENT
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
• Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Risks, risk management and opportunities
All business activities involve risks, therefore there is a need for a structured and proactive approach to manage the company’s risks,
both locally and centrally within the organization. Well-managed risks can create opportunities and add value to the business while
risks that are not well-managed can cause incidents and losses.
Atlas Copco’s global and diversied business towards many cus-
tomer segments results in a variety of risks and opportunities, geo-
graphically and operationally. Thus, the ability to identify, analyze
and manage risks is crucial for eective governance and control of
the business. The aim is to achieve Group targets with a high risk
awareness and well-managed risk taking, in line with the strategy
and within the frame of the handbook of policies and guidelines The
Way We Do Things. Atlas Copco sees the benets of an ecient risk
management both from risk reduction and business opportunity
perspectives, which can lead to good business growth.
Atlas Copco’s risk management approach follows the Group’s
decentralized structure. Local companies are responsible for their
own risk management, which is monitored and followed up regu-
larly, e.g. at local board meetings. Group functions for legal, insur-
ance, sustainability, treasury, tax, controlling and accounting, pro-
vide policies, guidelines and instructions regarding risk manage-
ment. This is regularly audited by internal and external audits. Exam-
ples of risks and how they are handled in Atlas Copco are shown in
the table in this section.
The Covid-19 pandemic has been handled as a crisis, resulting in
the activation of local, regional and central crisis committees, in line
with the established structure for crisis management. The crisis orga-
nization has enabled reporting and the exchange of information
and experience within the Group, and contributed to decisions to
ensure safe and ecient handling of the situation and new chal-
lenges. The risk management processes have also been adapted to
the circumstances, activities have been digitized and temporary
adjustments have been made so that the processes can continue
and contribute to increased risk awareness and a focus on risk
management.
Insurance
The Group Insurance Program is provided by the inhouse insurance
company Industria Insurance Company Ltd. which retains part of the
risk exposure for the following insurance lines; property damage,
business interruption, transport, and general and product liability.
Financial lines insurance and business travel insurance are managed
by the Group’s Insurance and Risk Management department. How-
ever, Industria is not the insurer for these two lines. Insurance capac-
ity is purchased from leading insurers and reinsurers by way of using
international insurance brokers. Claims management services are
partly purchased on a global basis from leading providers. Insurance
policies are issued on a local basis to ensure compliance with local
insurance laws where required.
Loss prevention
The main purpose of Atlas Copco’s loss prevention process is to
prevent potential property losses and business interruptions. Atlas
Copco’s Loss Prevention Standard stipulates Group requirements in
regards of loss prevention for product companies and distribution
centers, including areas like: construction, safety systems, loss pre-
vention procedures and plans that need to be prepared. To ensure
alignment with the standard and to support sites’ understanding of
how the standard applies to each site, around 25 risk surveys are per-
formed annually. The results from the risk surveys are consolidated
and reported to Group Management.
Enterprise risk management
Atlas Copco has developed an enterprise risk management process
to map strategic risks. The methodology used is applied on divisions,
which is the highest operational level in the Group. Annual work-
shops are held by each divisional management team where risks are
identied, analyzed, evaluated/re-evaluated and managed to
ensure a structured and proactive approach to risks exposing Atlas
Copco. The ownership of managing the risks raised in this process
lies within each division, while the Insurance and Risk Management
department manages the overall process, moderates the sessions
and consolidates the results on business area and Group levels. This
hands-on approach is also in line with Atlas Copco’s decentralized
structure.
ATLAS COPCO
Enterprise Risk
Management
process
Monitor and
re-evaluate
Risk
identication
Risk
management
Risk
evaluation
Risk
analysis
Risk process
In Atlas Copco, Enterprise Risk Management is not seen as a project
but as a continuous process. The risk environment changes over time
and it is therefore necessary to continuously revisit, update and identify
new risks. The dened framework is described in the picture above.
Atlas Copco 2021 47
THE YEAR IN REVIEW – RISKS, RISK MANAGEMENT AND OPPORTUNITIES
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
• Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
RISK CONTEXT MITIGATING ACTIVITIES OPPORTUNITIES
LEGAL Atlas Copco’s business operations are aected by numerous laws,
regulations and trade sanctions as well as commercial and nan-
cial agreements with customers, suppliers and other counterpar-
ties, and also by licenses, patents and other intangible property
rights.
• Inhouse lawyers on ve continents support Group companies with advice on laws and
regulations, including compliance, as well as support with contract reviews. Proactive
training is also done.
• A yearly legal risk survey of all companies in the Group is performed in addition to conti-
nuous follow-up of the legal risk exposure. The result of the survey is compiled, analyzed
and reported to the Board and the auditors.
• A separate central function, Group Compliance, is in place. It is responsible for aligning
and coordinating the compliance organization which, in line with Atlas Copco’s decen-
tralized structure, is hosted in the business areas and divisions.
Complying with legal norms and laws minimizes costs and
increases opportunities to strengthen Atlas Copco’s reputation.
It also develops reliable partnerships and improves business
stability.
The ability to trade on all markets, in compliance with applicable
trade sanctions, increases revenue and lowers risk.
FINANCIAL Changes in exchange rates can adversely aect Group earnings
when revenues from sales and costs for production and sourcing
are denominated in dierent currencies (transaction risks). An
adverse eect on Group earnings can also occur when earnings of
foreign subsidiaries are translated into SEK and on the value of
the Group equity when the net assets of foreign subsidiaries are
translated into SEK (translation risks).
Atlas Copco’s net interest cost is aected by changes in market
interest rates.
Funding risk refers to the risk that the Group and its subsidiaries
do not have access to nancing on acceptable terms.
As in any business, there can be a credit risk linked to our
customers’ abilities to pay.
• A Financial Risk Management Committee meets regularly to manage nancial risks.
• Atlas Copco Financial Solutions is responsible for these risks and supports Group
companies to implement nancial policies and guidelines.
• The Group’s operations continuously monitor relevant exchange rates and try to oset
negative changes by adjusting sales prices and costs.
• Translation risks are partially hedged by borrowings in foreign currency and nancial
derivatives.
• The Group’s Financial Risk Policy stipulates that a minimum amount of standby credit
facilities should exist and that a minimum average time to maturity for the external
debt is set.
• Stringent credit policies are applied and there is no major concentration of credit risk.
The provision for bad debt is based on historical loss levels and up-to-date information
and is deemed sucient.
Working proactively with nancial risks improves the prot
margin and creates possibilities for more stable cash ow.
Overall, nancial risk mitigation has the ability to improve
business resilience for AtlasCopco.
REPORTING
(INCLUDING TAX)
The risk related to the communication of nancial information to
the capital market is that the reports do not give a fair view of the
Group’s true nancial position and results of operations.
Reporting errors could result in management drawing the wrong
conclusions. However, with many small entities, the material
impact is low.
Taxes is an area with increased focus, especially transfer pricing
risks but also new tax rules and regulations.
Estimations sometimes form a portion of the sustainability data
which is reported, and thus by its nature the numbers presented
may not be representative of the Group’s impact.
• Atlas Copco subsidiaries report their nancial statements regularly in accordance with
International Financial Reporting Standards (IFRS). The Group’s consolidated nancial
statements, based on those reports, are prepared in accordance with IFRS and applica-
ble parts of the Annual Accounts Act as stated in RFR 1 “Supplementary Rules for
Groups”.
• The Group’s operational and legal consolidated results are based on the same num-
bers and system. These are analyzed by divisional, business area, Group Management
and corporate functions before being published externally.
• The Group has procedures in place to ensure compliance with Group instructions,
standards, laws and regulations, for example internal and external audits.
• Group Tax monitors and ensures compliance with local tax rules. Transfer pricing poli-
cies and agreements are implemented in operations and regularly updated. Quarterly
updates on tax are presented to the Board and Group Management.
• Atlas Copco reports sustainability information according to GRI Standards and works
with training to improve reporting practices.
Integrated reporting provides a better understanding of business
risks and opportunities which in turn allows for improved decision
making. It also allows the company to identify opportunities for
business synergies.
Addressing reporting risks increases trans parency and improves
the potential to represent the business fairly and accurately.
Improved reporting results in improved business insights and risk
management, especially when the data has been integrated to
highlight interdependencies.
Ecient and consistent reporting based on clear standards and
principles creates transparency, supports decision making and
drawing the right conclusions.
Increased reporting requirements on taxes improves transparency.
CORRUPTION
AND FRAUD
Corruption and bribery exist in many markets where Atlas Copco
conducts business.
Fraud or criminal deception intended to result in nancial or
personal gain, is always present in global operations.
• Zero-tolerance policy on bribery and corruption, including facilitation payments.
• Internal control routines aimed at preventing and detecting deviations. The Internal
Audit function is established to ensure compliance with the Group’s corporate gover-
nance, internal control and risk management policies.
• Control self-assessment tool to analyze internal control processes.
• Training in the Business Code of Practice and signing compliance to the Code for all
employees and signicant business partners.
• The global Group misconduct reporting system to report violations anonymously.
• The Group supports fair competition and forbids discussions or agreements with
competitors concerning pricing or market sharing.
By ghting against corruption and fraud, Atlas Copco has the
opportunity to work with industry peers to inuence international
market practices. Refusing to pay bribes may cause temporary
delays and setbacks; however it reduces costs in both the long and
short run, builds opportunities to improve operational eciencies
and creates more stability in society and in markets where the
Group operates.
Working against corruption and fraud improves Atlas Copco’s
credibility and transparency and creates more ways to improve
stakeholder relations.
Examples of risks and how they are handled by Atlas Copco
Atlas Copco 2021 48
THE YEAR IN REVIEW – RISKS, RISK MANAGEMENT AND OPPORTUNITIES
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
• Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
RISK CONTEXT MITIGATING ACTIVITIES OPPORTUNITIES
HUMAN RIGHTS Atlas Copco operates in countries/areas with high risk of human
rights abuse, including child labor, forced or compulsory labor,
poor working conditions, limitations of the freedom of associa-
tion and discrimination.
Atlas Copco encounters customers who are exposed to human
rights issues.
Risks to the Group’s reputation may arise from relationships with
business suppliers who do not comply with internationally
accepted ethical, social and environmental standards.
• Guidance by interaction with well-established non-governmental organizations to
identify and mitigate risks.
• Policies and procedures corresponding to the UN Guiding Principles on Business and
Human Rights, which Atlas Copco has committed to since 2011.
• Due diligence process and integration of internal controls for human rights violations
in relevant processes.
• The Group customer sustainability assessment tool.
• Regular supplier evaluations in accordance with the UN Global Compact.
Following the UN Guiding Principles on Business and Human
Rights to respect human rights reduces risks and costs.
Strong business ethics help promote societal prosperity and a
more stable market place.
Working with human rights positively impacts both the Atlas
Copco brand and stakeholder relations.
SAFETY AND HEALTH Poor physical and mental health and too much stress among
employees aect the individual and can cause sick leave and
disturbances in the production.
Accidents or incidents in the workplace, due to the lack of proper
safety measures, harm employees and can negatively aect Atlas
Copco’s productivity and brand.
Atlas Copco recognizes the risk that serious diseases and pandem-
ics can interrupt business operations and harm employees.
• The Group regularly assesses and manages safety and health risks in operations.
• Training is held regularly.
• The ambition is to certify all major units in accordance with the ISO 45001 standard.
• Workplace wellness programs.
• Atlas Copco’s business partners are trained in Group policies including the approach
to health and safety.
Improved safety and well-being among employees increases
employee satisfaction and engagement, productivity and
strengthens the brand.
Improving working conditions for customers and business partners
benets their employees and local societies and can enhance
long-lasting relationships that result in repeat orders.
ENVIRON MENTAL
AND CLIMATE
The primary drivers for external environmental risk are physical
changes in climate and natural resources, changes in regulations,
taxes and resource prices.
Natural disasters as a consequence of climate change can
disrupt own operations or impact the supply chain.
Increased fuel/energy taxes increase operational costs.
Regulations and requirements related to carbon-dioxide
emissions from products and industrial processes are gradually
increasing.
Climate-related and environmental events can aect all of
Atlas Copco’s operations and negatively aect operations either
directly or by disrupting the supply chain.
Market shifts toward a low-carbon economy may impact the
viability of certain sectors.
• Atlas Copco continuously develops products with improved energy eciency, reduced
emissions and lower environmental footprint.
• Atlas Copco has several key performance indicators (KPIs) that address resource and
energy usage in order to reduce carbon-dioxide emissions.
• Strict handling processes for hazardous waste and chemicals are implemented in
all operational units. Compliance is audited regularly and awareness is reinforced by
training.
• All cooling agents in Atlas Copco products have a zero-ozone depleting impact during
the product’s lifecycle, and the aim is to continue to introduce cooling agents with
lower Global Warming Potential (GWP).
Working proactively with environmental risks can provide signi-
cant opportunities to drive innovation at Atlas Copco.
Given that many customers are operating in areas of extreme
water stress/scarcity, water-ecient or water-recycling products
can have a strong customer appeal. This presents a strong business
opportunity to extend Atlas Copco’s innovations to the focused
area of water consumption.
Climate change impacts and predictions can induce changes in
consumers’ habits and behavior. As a result of climate events, Atlas
Copco’s customers can become more risk averse and demand sus-
tainable products from the Group. New businesses and business
models that are being served by Atlas Copco arise. For instance,
increased renewable energy generation and the surge in produc-
tion of electrical vehicles present opportunities to provide prod-
ucts to the industries.
MARKET A widespread nancial crisis and economic downturn would not
only aect the Group negatively but could also impact customers’
ability to nance their investments. Changes in customers’ pro-
duction levels also have an eect on the Group’s sales of spare
parts, service and consumables.
In developing markets, new smaller competitors continuously
appear which may aect Atlas Copco negatively.
• Well-diversied sales to customers in multiple countries and industries. Sales of
spare parts and service are relatively stable in comparison to sales of equipment.
• Monthly follow-up of market and sales development enables quick actions.
• Agile manufacturing set-up makes it possible to quickly adapt to changes in the
demand for equipment.
• Leading position in most market segments provides economies of scale.
A signicant competitive advantage as a result of a strong global
presence, including growth markets.
Opportunities to positively impact both society and environment,
through the Group’s high-quality sustainable products and high
ethical standards.
Continue to develop close, long-term and strategic relationships
with customers and suppliers.
Examples of risks and how they are handled by Atlas Copco, continued
Atlas Copco 2021 49
THE YEAR IN REVIEW – RISKS, RISK MANAGEMENT AND OPPORTUNITIES
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
• Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
RISK CONTEXT MITIGATING ACTIVITIES OPPORTUNITIES
REPUTATION The Group’s reputation is a valuable asset which may be
aected in part through the Group’s operations or actions and
in part through the actions of external stakeholders. Products
must deliver on the brand promise and be of high quality, safe
and have a low negative impact on the environment when used
by the customer. There is potential for reputational risk from
non-compliance to product labeling standards or if there are
cases of false advertising.
Unsatised employees may potentially detract the Atlas Copco
brand.
• All Atlas Copco products are tested and quality assured. Product labeling is monitored
and there are regular communications trainings.
• The Group actively engages in stakeholder dialogue.
• Compulsory training in the Business Code of Practice includes the yearly signing of a
compliance statement.
• A clear and well known corporate identity and brand management.
• An employee survey is carried out every two years and followed up actively.
Brand positioning.
Stakeholder engagement not only mitigates reputational risks in
certain cases but it also presents opportunities to increase aware-
ness and credibility of Atlas Copco’s brand through improvements
and innovations.
Delivering tested and quality-assured products improves customer
satisfaction and promotes repeat business.
Attract and develop employees who adhere to the Business Code
of Practice.
PRODUCTION Core component manufacturing is concentrated to a few locations
and if there are interruptions or lack of capacity in these locations,
this may have an eect on deliveries or on the quality of products.
Production facilities could also have a risk of damaging the environ-
ment through their operations, e.g. through hazardous waste and
emissions.
Atlas Copco is directly and indirectly exposed to raw material prices.
Atlas Copco primarily distributes products and services directly to
the end customer. If the distribution is not ecient, it may impact
customer satisfaction, sales and prots. Damages and losses during
the course of distribution can be costly.
Some sales are made indirectly through distributors and rental
companies and their performance may have a negative eect on
sales.
The distribution of products results in CO
2
emissions from transport.
• Manufacturing units continuously monitor the production process, test the safety
and quality of products, make risk assessments, and train employees.
• Atlas Copco has an internal Loss Prevention Standard to ensure high level of
protection.
• Production units have developed business continuity plans.
• Ambition to certify all manufacturing units in accordance with the ISO 14001
standard.
• Physical distribution of products is concentrated to a number of distribution centers
and their delivery eciency is continuously monitored.
• Resources are allocated to training and development of the service organization.
• As indirect sales are local/regional, the negative impact of poor performance is
limited.
• Increased focus on safer and more eective transports to reduce losses, costs and
total emissions per transport.
Continued opportunities to extensively promote operational
excellence to streamline production, minimize ineciencies and
maintain a high exibility in the production process.
Continue to strengthen the relationship with customers through
timely deliveries of products and services.
Transport eciencies and safe transports can save the customers
time and cost while reducing the environ mental impact of their
own operations.
Reduce fuel costs and resource requirements which improves
business agility for the Group.
SUPPLY CHAIN Atlas Copco and its business partners, such as suppliers, subcon-
tractors and joint venture partners, must share the same values as
expressed in the Group’s Business Code of Practice regarding
issues such as human rights standards and principles of ethical
conduct.
The availability of many components is dependent on suppliers
and if they have interruptions or lack capacity, this may aect
deliveries.
Using a large number of suppliers gives rise to the risk that prod-
ucts contain components which are not sustainably produced,
e.g. hazardous substances or electronic components containing
conict minerals, or components with a large carbon footprint.
• Business partners are selected and evaluated based on objective factors including
quality, delivery, price, and reliability, as well as on social/environmental responsibility.
• Signicant direct suppliers are required to have an approved environmental manage-
ment system.
• The presence of conict minerals in Atlas Copco’s value chain is investigated and eradicated.
• Establishment of a global network of sub-suppliers, to prevent supplier dependency.
• E-learning for business partners (suppliers and distributors) to raise awareness of the
Business Code of Practice, including the requirement for signicant business partner to
sign and follow the Business Code of Practice. Action plans developed together with
suppliers to deal with shortcomings and deviations.
• Atlas Copco maintains lists of substances that are prohibited or restricted due to their
potential negative impact on health or the environment. Compliance with these lists is
part of the business partner criteria.
Further increase business agility and reduce costs by improving
supplier inventory management in response to changes in
demand.
Continue to be a preferred business partner and promote e-
ciency, sustainability and safety. Good supplier relations help to
improve Atlas Copco’s competitive position.
Strengthen customer relationships by supporting customers
impacted by the Dodd Frank legislation on conict minerals.
Promote human rights and work towards improving labor condi-
tions, reducing corruption and conicts.
EMPLOYEE Atlas Copco must have access to and attract skilled and motivated
employees and safeguard the availability of competent managers
to achieve established strategic and operational objectives.
• The competence mapping and plan secure access to people with the right expertise at
the right time. Recruitment can be both external and internal. Internal recruitment and
job rotation are facilitated by the Internal job market.
• Salaries and other conditions are adapted to the market and linked to business priorities.
Atlas Copco strives to maintain good relationships with unions.
Motivated and skilled employees and managers are crucial to
achieve or exceed business goals and objectives.
Examples of risks and how they are handled by Atlas Copco, continued
Atlas Copco 2021 50
THE YEAR IN REVIEW – RISKS, RISK MANAGEMENT AND OPPORTUNITIES
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
• Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
RISK CONTEXT MITIGATING ACTIVITIES OPPORTUNITIES
INFORMATION
TECHNOLOGY (IT)
Atlas Copco relies on IT systems in its day-to-day operations.
Disruptions or faults in critical systems have a direct impact on
production.
Errors in the handling of nancial systems can aect the
company’s reporting of results.
Theft or modication of intellectual property constitutes a risk
to our products and future business success.
Cyber security risks are increasing in importance and can have a
major impact on Atlas Copco operations.
The General Data Protection Regulation (GDPR) impacts the han-
dling of personal data. Failure to comply may result in substantial
nes and reputational damage.
• Atlas Copco has a global IT Security policy, including quality-assurance procedures
that govern IT operations. Information security is monitored through IT Security
audits. Standardized processes are in place for the implementation of new systems,
changes to existing systems and daily operations. The system landscape is based on
well-proven technologies.
• IT Security tracks globally major downloads of les. Screening of business partners/
consultants working in our systems.
• Cyber security is regularly discussed, addressed and invested in by the IT Security
function. Awareness of cyber security risks increases the readiness to quickly detect
and respond to any attacks.
• A privacy- and data compliance council tracks the essential activities to ensure
compliance with the regulation.
Stable IT systems, secure IT environment and standardized pro-
cesses increase eciencies and reduce costs.
Quick action on major download of product development les
minimizes the potential damage.
Quick action to address a cyber-attack gives opportunity to stable
work environment and business continuity.
As the approach has been global, Atlas Copco is well prepared to
face future data privacy initiatives in all regions or continents.
ACQUISITIONS AND
DIVESTMENTS
When making acquisitions, there are risks related to the selection
and valuation of the potential targets as well as the process of
acquiring them. Integrating acquired businesses may also be a
complex and demanding process. There is no guarantee for an
acquisition to be successful even if all steps are done properly.
Annual impairment tests are made on acquired goodwill. If the
carrying values are not deemed justied in such tests, it can result
in a write-down, aecting the Group’s result.
Acquisitions and divestments can impact local communities and/
or the environment, directly or indirectly.
• The Group’s Acquisitions Process Council has established a process for acquisitions.
The process is continually updated and improved to address and mitigate risks. The
Council also provides training and supports business units prior to, during and after
an acquisition. Before any acquisition is completed, a detailed due diligence will be
performed in order to evaluate the risks involved.
• Atlas Copco guidelines and policies are applied to assess and manage the environmen-
tal and social impact of operations in the aected communities after an acquisition is
completed.
Acquisitions bring possibilities to enter new markets, segments,
new technologies, new clients, increase revenues, etc.
Identifying the obstacles to integration can allow Atlas Copco to
improve the process through methods such as job rotation, train-
ing or teambuilding exercises. This would not only result in a
smoother process but also lower operational costs by decreasing
downtime and allowing newly acquired companies to become
even more productive and ecient.
PRODUCT
DEVELOPMENT
One of the challenges for Atlas Copco’s long-term growth and
protability is to continuously develop innovative, sustainable
products that consume less resources over the entire life cycle.
Atlas Copco’s product oering is also aected by national and
regional legislation on issues such as emissions, noise, vibrations,
recycling, etc. However, there may be increased risk of competi-
tion in emerging markets where low-cost products are not
aected to the same extent by such rules.
• Continuous investments in research and development to develop products in line with
customer demand and expectations, even during economic downturns.
• Designing products with a life-cycle perspective and measurable eciency targets for
the main product categories in each division.
• Designing products with reduced emissions, vibrations or noise, and increased
recycling potential to meet legal requirements.
Substantial opportunities to strengthen the competitive edge by
innovating high-quality, sustainable products and creating an inte-
grated value proposition for customers.
Examples of risks and how they are handled by Atlas Copco, continued
Atlas Copco 2021 51
THE YEAR IN REVIEW – RISKS, RISK MANAGEMENT AND OPPORTUNITIES
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
• Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Share price development and returns
In 2021, the price of the A share increased 48.6% to SEK 625.8 (421.1)
and the B share increased 44.5% to SEK 532.2 (368.3). The annual total
return on the Atlas Copco A share, equal to dividend, redemption
and the change in the share price, including the distribution of Epiroc
AB, was on average 22% for the past ten years and 27% for the past
ve years. The corresponding total return for Nasdaq Stockholm
was 17% and 18%, respectively.
Trading and market capitalization
The Atlas Copco shares are listed on Nasdaq Stockholm, which
represented 28.6% of the total trading of the A share (34.3% of
the B share) in 2021. Other markets, so called Multilateral Trad-
ing Facilities (MTF), e.g. CBOE and Turquoise, accounted for 40.0%
(35.3% of the Bshare), and the remaining 31.4% (30.4% of the
Bshare) were traded outside public markets, for example through
over-the-counter trading.
The market capitalization at year end 2021 was MSEK 732967
(497187) and the company represented 5.9% (5.7) of the total
market value of Nasdaq Stockholm. Atlas Copco was the fth
(second) most traded share in 2021 by total turnover.
The Atlas Copco share
A program for American Depositary Receipts (ADRs) was established
in the United States in 1990. One ADR corresponds to one share.
The depositary bank is Citibank N.A. At year end 2021, there were
32781544 ADRs outstanding, of which 31509088 represented
Ashares and 1272456 represented B shares.
Personnel stock option program and repurchase of own shares
The Board of Directors will propose to the Annual General Meeting
2022 a similar performance-based long-term incentive program as
in previous years, increasing the number of possible candidates in
the program from 335 to 500. For Group Management, participa-
tion in the plan will require own investment in Atlas Copco shares.
The intention is to cover the plan through the repurchase of the
company’s own shares. The company’s holding of own shares on
December 31, 2021, appears in the table to the right.
Dividend, mandatory redemption of shares, and share split
The Board of Directors proposes to the Annual General Meeting
2022 an ordinary dividend of SEK 7.60 (7.30) per share to be paid for
the 2021 scal year. In order to facilitate a more ecient cash man-
agement, the dividend is proposed to be paid in two installments.
SHARE INFORMATION 2021-12-31 A share B share
Nasdaq Stockholm ATCO A ATCO B
ISIN code SE0011166610 SE0011166628
ADR ATLKY.OTC ATLCY.OTC
Total number of shares 839 394 096 390 219 008
% of votes 95.6 4.4
% of capital 68.3 31.7
Whereof shares held by Atlas Copco 11 422 736 0
% of votes 1.3 0.0
% of capital 0.9 0.0
Ordinary dividend per share, SEK
Earnings per share, SEK
* Proposed by the Board of Directors
SEK
0
5
10
15
20
25
20212020*201920182017201620152014201320122011
12.00
15.00
Dividend and redemption per share, SEK
Extraordinary items, SEK
SEK
0
5
10
15
20
25
2021*20202019201820172016201520142013201220112010
9.00
12.00
15.00
15.60
EARNINGS AND DISTRIBUTION PER SHARE
Dividend and redemption
per share, SEK
Extraordinary items, SEK
Earnings per share, SEK
Ordinary dividend
per share, SEK
Distribution of Epiroc AB
on June 18, 2018
* Proposed by the
Board of Directors
Distribution of Epiroc AB
on June 18, 2018
0
50
100
150
200
250
300
350
400
450
20192018201720162015
SEK
Highest–lowest share
price, A share
General index
(OMXS)
Industrials index
(OMXSI)
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
1000000
1100000
1200000
1300000
1400000
1500000
1600000
1700000
1800000
1900000
2000000
Total average daily volume
traded A shares, thousands
0
2 500
5 000
7 500
10 000
0
100
200
300
400
500
600
700
20212020201920182017
0
100
200
300
400
500
600
700
SEK
Distribution of Epiroc AB
on June 18, 2018
Highest–lowest share
price, A share
General index
(OMXS)
Industrials index
(OMXSI)
Total average daily volume
traded A shares, thousands
Distribution of Epiroc AB
on June 18, 2018
0
2 000
4 000
6 000
8 000
10 000
SHARE PRICE
If approved, the dividend has averaged 52% of basic earnings per
share during the last ve years. The ambition is to distribute about
50% of earnings as dividends to shareholders. See more information
on page 20.
In order to adjust the Group’s balance sheet to a more ecient
structure, while preserving adequate nancial exibility for future
growth, the Board of Directors proposes to the Annual General
Meeting 2022 a share split and redemption share procedure,
whereby every share is split into four (4) ordinary shares and one
(1) redemption share. The redemption share is then automatically
redeemed at SEK 8.00 per share. Combined with the proposed ordi-
nary dividend, shareholders will receive MSEK 19 004.
Atlas Copco 2021 52
THE YEAR IN REVIEW – THE ATLAS COPCO SHARE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
• The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Ownership structure
At the end of 2021, Atlas Copco had 87923 (82079) shareholders.
The ten largest shareholders registered directly or as a group with
Euroclear Sweden, the Swedish Central Securities Depository, by
voting rights, accounted for 34% (35) of the voting rights and 31%
(32) of the capital. Swedish investors held 47% (48) of the capital
and represented 44% (45) of the voting rights.
TEN LARGEST SHAREHOLDERS*
December 31, 2021 % of votes % of capital
Investor AB 22.3 16.9
Swedbank Robur fonder 2.3 3.5
Alecta Pensionsförsäkring 2.1 3.9
Handelsbanken fonder 1.8 1.8
SEB Investment Management 1.6 1.2
Folksam 1.0 1.0
SPP Fonder AB 0.8 0.8
Avanza Fonder 0.7 0.7
Länsförsäkringar fondförvaltning AB 0.6 0.5
Nordea Investment Funds 0.4 0.4
Others 66.4 69.3
Total 100.0 100.0
– of which shares held by Atlas Copco 1.3 0.9
* Shareholders registered directly or as a group with Euroclear Sweden, the
Swedish Central Securities Depository.
OWNERSHIP STRUCTURE
Number of shares, December 31, 2021 % of shareholders % of capital
1–500 75.2 0.6
501–2 000 16.8 1.3
2 001–10 000 6.3 1.9
10 001–50 000 1.1 1.6
50 001–100 000 0.2 0.8
>100 000 0.4 93.8
Total 100.0 100.0
SHAREHOLDERS BY COUNTRY
December 31, 2021, percent of capital
Other, 14% Sweden, 47%
The United
Kingdom, 8%
The United
States, 32%
Other, 14% Sweden, 47%
The United Kingdom, 8%
The United States, 31%
SHARE ISSUES
1)
Change of share capital, MSEK Amount distributed, MSEK
2011 Split 2:1
Share redemption
2)
1 229 613 104 shares at SEK 5 –393.0 –6 067.0
Bonus issue No new shares issued 393.0
2015 Split 2:1
Share redemption
3)
1 229 613 104 shares at SEK 6 –393.0 –7 304.7
Bonus issue No new shares issued 393.0
2018 Split 2:1
Share redemption
4)
1 229 613 104 shares at SEK 8 –393.0 –9 704.6
Bonus issue No new shares issued 393.0
1)
For more information please visit www.atlascopcogroup.com/investor-relations.
3)
1 217 444 513 shares net of shares held by Atlas Copco.
2)
1 213 493 751 shares net of shares held by Atlas Copco.
4)
1 213 080 695 shares net of shares held by Atlas Copco.
IMPORTANT DATES
2022 April 26 First quarter results
April 26 Annual General Meeting
April 27* Shares trade excluding right to dividend of SEK 3.80
May 3* Dividend payment date (preliminary)
May 12* Shares trade excl. right to redemption share of SEK 8.00
June 13* Redemption payment date (preliminary)
July 19 Second quarter results
October 19 Third quarter results
October 20* Shares trade excluding right to dividend of SEK 3.80
October 26* Dividend payment date (preliminary)
November 17 Capital Markets Day
2023 January 26 Fourth quarter results 2022
* Board of Directors proposal to the Annual General Meeting. The record date is the rst
trading day after shares trade excluding the right to dividend.
More information
– More data per share can be found on page 144
in the three-year summary.
– For more information on distribution of shares,
option programs and repurchase of own shares,
see notes 5, 20 and 23.
– Detailed information on the share and
debt can be found on
www.atlascopcogroup.com/investor-relations
OWNERSHIP CATEGORY
December 31, 2021 % of capital
Shareholders domiciled abroad (legal entities and individuals) 53.1
Swedish nancial companies 37.0
Swedish individuals 4.3
Other Swedish legal entities 1.8
Swedish social insurance funds 2.6
Swedish trade organizations 0.9
Swedish government and municipals 0.3
Total 100.0
The Atlas Copco share, continued
Atlas Copco 2021 53
THE YEAR IN REVIEW – THE ATLAS COPCO SHARE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
• The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Atlas Copco does not report any deviations from the Code for
the nancial year 2021. The corporate governance report has been
examined by the auditors, see page 124.
Corporate governance
In the corporate governance report, Atlas Copco presents how applicable rules are implemented in ecient control systems to
achieve long-term growth. Good corporate governance is not only about following applicable rules, it is also about doing what
is right. The objective is to nd the right balance between risk and control in a decentralized management model. The goal is
sustainability in pro ductivity and protability, as well as in governance.
Atlas Copco is a truly global industrial company, which creates
lasting value and empowers customers to drive society for-
ward in over 180 countries. Through energy-ecient products
that save carbon emissions, and by implementing values and
processes with respect for people and the planet, Atlas Copco
can contribute to a better tomorrow.
In 2021, Atlas Copco set science-based targets to reduce
greenhouse gas emissions in line with the goals of the Paris
Agreement. As a leading industrial innovator and global sup-
plier, Atlas Copco can play a role in combating climate change.
By making this commitment Atlas Copco shows its ambition to
be part of the transformation to a low-carbon society.
The Atlas Copco Business Code of Practice is the most
important instrument to make sure the company always acts
with the highest ethical standards and integrity. The main
international ethical standards supported by Atlas Copco are
the International Bill of Human Rights, the International
Labour Organization’s Declaration on Fundamental Principles
and Rights at Work, the OECD Guidelines for Multinational
Companies and the UN Global Compact. Atlas Copco is a
member of the UN Global Compact since 2008.
Meetings of the Board and the
Nomination Committee during 2021
Preliminary full-year 2020 results,
the annual audit and review of
Vacuum Technique
Meeting per
capsulam
Half-year report meeting
Various investments’
approvals
BOARD OF DIRECTORS’
MEETINGS AND ACTIVITIES
NOMINATION
COMMITTEE MEETINGS
First-quarter results
meeting and review of
Industrial Technique
Q1
Q2
Q3
Q4
January
February
March
April
May
June
July
August
September
October
November
December
Nomination
Committee
meeting
Nomination
Committee
meeting
Nomination
Committee
meeting
Statutory meeting
Review of management,
succession planning and
strategy discussion
Third-quarter results meeting
and review of Compressor
Technique and Group
Treasury Report
The following information is available at
www.atlascopcogroup.com
Atlas Copco’s Articles of Association
The Business Code of Practice
Corporate governance reports since 2004
(as a part of the annual report)
Information on Atlas Copco’s Annual General Meeting
The annual signing of the Business
Code of Practice, together with
training, supports Atlas Copco’s
employees to identify and handle
ethical dilemmas and strengthens
the awareness of Atlas Copco’s
values and guidelines. Atlas Copco
also requests that signicant busi-
ness partners commit to comply
with the Business Code of Practice.
This is further supported by a third-
party operated system providing anonymous reporting of
suspected ethical misconduct.
To safeguard the Group’s reputation, Atlas Copco relies on
solid governance and the leaders’ ability to defend values,
including of course, internal and external control and audits.
Hans Stråberg
Chair since 2014
Comment from the Chair
Atlas Copco 2021 54
THE YEAR IN REVIEW – CORPORATE GOVERNANCE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
• Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
1. Shareholders
At the end of 2021, Atlas Copco had 87 923 (82 079) shareholders.
The ten largest shareholders registered directly or as a group with
Euroclear Sweden, the Swedish Central Securities Depository, by
voting rights, accounted for 34% (35) of the voting rights and 31%
(32) of the capital. Swedish investors held 47% (48) of the capital
and represented 44% (45) of the voting rights. The largest share-
holder is Investor AB, holding 16.9% of capital and 22.3% of votes.
More information on Atlas Copco’s shareholders can be found on
pages 52–53.
2. General Meeting
The General Meeting is Atlas Copco’s supreme decision-making
body in which all shareholders are entitled to take part. Anyone reg-
istered in the shareholders’ register who have given due notication
to the Company of their intention to attend, may join the meeting
and vote for their total shareholdings. Atlas Copco encourages all
shareholders to vote at the General Meeting and share holders who
cannot participate in person may be represented by proxy holders or
vote by mail. A shareholder or a proxy holder may be accompanied
by two assistants and a proxy form can be found prior to the General
Meeting at www.atlascopcogroup.com/agm.
The Annual General Meeting (AGM) 2021 was held on April 27,
2021. Due to Covid-19 there was only mail voting. 56% of the total
number of votes in the Company and 57% of the shares were repre-
sented.
Decisions at the AGM 2021 included:
• Adoption of the income statements and balance sheets of
Atlas Copco AB and the Group for 2020.
• Discharge of liability of the Company’s aairs during the
2020 nancial year for the President and CEO and the Board of
Directors.
• Adoption of the Board’s proposal for prot distribution with a
dividend of SEK 7.30 per share to be paid in two equal installments
of SEK 3.65 each.
• That the number of directors elected by the AGM for a term end-
ing at the next AGM would be eight directors and no alternates.
• Election of the Board of Directors.
• A resolution of the Board of Directors’ fee.
• Approval of the remuneration report for 2020.
• Approval of the reported scope and principals for a performance
based employee stock option plan for 2021 including mandate for
the Board to decide upon repurchase and sales of Atlas Copco
shares to hedge the plan and previous similar plans.
• Election of Ernst & Young AB as auditing company up to and
including the Annual General Meeting 2022.
Annual General Meeting 2022
The Annual General Meeting will be held on April 26, 2022.
Shareholders who wish to contact the Nomination Committee or
have a matter addressed by the Board of Directors at the AGM may
submit their proposals by ordinary mail or e-mail to:
Atlas Copco AB, Attn: Chief Legal Ocer, SE-105 23 Stockholm,
Sweden, nominations@atlascopco.com or board@atlascopco.com
Proposals have to be received by the Board of Directors and the
Nomination Committee respectively, no later than seven weeks prior
to the AGM to be included in the notice to the AGM and the agenda.
Business areas and divisions
2. General Meeting
4. Board of Directors
1. Shareholders
9. Group Management
3. Nomination Committee
6. Remuneration Committee 5. Audit Committee
8. Internal Audit and Assurance
7. Auditor
0
20
40
60
80
2021
)
2020
)
201920182017
0
150
300
450
600
%
AGM, votes, %
EGM, votes, %
Number
Shareholders and proxy
holders, number
General Meeting Attendance
0
20
40
60
80
2020*2019201820172016
0
150
300
450
600
%
AGM, votes, %
EGM, votes, %
Number
Shareholders and proxy
holders, number
1)
AGM 2021, due to Covid-19 only mail
voting, no physical attendance.
2)
AGM 2020, due to Covid-19 mail
voting was available and
recommended.
EGM 2020, due to Covid-19 only mail
voting, no physical attendance.
Corporate governance, continued
Atlas Copco 2021 55
THE YEAR IN REVIEW – CORPORATE GOVERNANCE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
• Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
3. Nomination Committee
The goal of the Nomination Committee is to propose a Board with a
broad and complementary experience from a number of important
industries and markets, as well as a composition that is characterized
by diversity, broadness and gender balance. Experience from manufac-
turing industry with international coverage is important, as it is Atlas
Copco’s main focus. The Nomination Committee’s diversity policy is
based on section 4.1 in the Corporate Governance Code. The eight
Board members elected by the shareholders have backgrounds from
various industries. As proposed to the AGM 2021, two of the seven
non-executive members are women. One member is born in the
1940’s, four in the 1950’s, one in the 1960’s, and one is born in the
1970’s. The Board members are of three dierent nationalities, from
Germany and the United States, and a majority of the Board members
coming from Sweden. Increasing the diversity of the Board of Directors
with regard to gender is a priority for the Nomination Committee.
Based on the ndings of the Chair of the Board, the Nomination
Committee annually evaluates the work of the Board. Further to
that, the Nomination Committee proposes the Chair to the Annual
General Meeting, prepares a proposal regarding number and names
of Board members, including Chair and a proposal for remuneration
to the Chair and other Board members not employed by the Com-
pany, as well as a proposal for remuneration for Board committee
work. Finally, the Nomination Committee proposes an audit com-
pany including remuneration for the audit.
The proposals and the Nomination Committee’s statement will
be published at the latest with the notice to the AGM 2022. In view
of the Nomination Committee’s strive to reach gender balance, for
example in case of equal competence, the candidate that will lead to
improved gender balance should be proposed.
In compliance with the Swedish Corporate Governance Code and
the procedures adopted by the AGM 2016, the representatives of
the four largest shareholders, listed in the shareholders’ register as
of August 31, 2021, together with the Chair of the Board shall form
the Nomination Committee. The members of the Nomination Com-
mittee for the AGM 2022 were announced on September 8, 2021,
and represented approximately 29% of all votes in the Company.
The members of the Nomination Committee receive no compensa-
tion for their work in the committee.
Nomination Committee members for the AGM 2022: Petra
Hedengran, Investor AB, Chair of the Nomination Committee; Jan
Andersson, Swedbank Robur funds; Mikael Wiberg, Alecta; Helen
Fasth Gillstedt, Handelsbanken Fonder AB; and Hans Stråberg, Atlas
Copco AB, Chair of the Board.
4. Board of Directors
The Board of Directors is responsible for the overall organization,
administration and management of Atlas Copco in the best interest
of the Company and its shareholders. The Board is responsible for
following applicable rules and implementing ecient control sys-
tems in the decentralized organization. An ecient control system
oers the correct balance between risk and control. The long-term
goals are regularly evaluated by the Board based on the Group’s
nancial situation and nancial, legal, social and environmental
risks. The mission is to achieve a sustainable and protable develop-
ment of the Group.
Board of Directors’ members
At the end of 2021 the Board of Directors consisted of eight elected
members, including the President and CEO. The Board also had two
employee representatives, each with one personal deputy. Atlas
Copco fullled the 2021 requirements of Nasdaq Stockholm and the
rules of the Swedish Corporate Governance Code regarding inde-
pendency of board members.
The Board of Directors’ work
The Board continuously addresses the strategic direction, the nan-
cial performance, and the methods to maintain sustainable prot-
ability of the Group. Further, the Board regularly ensures that e-
cient control systems are in place. The Board also follows up on the
compliance of the Business Code of Practice as well as on the whis-
tleblowing system. Besides the general distribution of responsibili-
ties that apply, in accordance with the Swedish Companies Act and
the Code, the Board and its committees (Audit Committee, Remu-
neration Committee and others) annually review and adopt “The
Rules of Procedure” and “The Written Instructions”, which are
documents that govern the Board’s work and distribution of tasks
between the Board, the committees and the President, as well as
the Company’s reporting processes.
The Board held eight meetings in 2021. Seven meetings were
held at Atlas Copco AB in Nacka and virtually and one per capsulam.
The attendance at Board meetings is presented on page 58–59.
The Board continuously evaluates the performance of the Presi-
dent and CEO, Mats Rahmström. For the Annual Audit, the Compa-
ny’s principal auditor, Erik Sandström, Ernst & Young AB, reported
his observations to the Board and the Board also had a separate
session with the auditor where members of Group Management
were not present.
Evaluation of the Board of Directors’ work
The annual evaluation of the Board of Directors’ work, including the
Board’s committees (Audit Committee, Remuneration Committee
and others) was conducted by the Chair of the Board, Hans Stråberg.
He evaluated the Board’s working procedures, competence and
composition, including the background, experience and diversity of
Board members. His ndings were presented to the Nomination
Committee.
Remuneration to the Board of Directors
Remuneration and fees are based on the work performed by the
Board. The AGM 2021 decided to adopt the Nomination Commit-
tee’s proposal for remuneration to the Chair and other Board mem-
bers not employed by the Company, and the proposed remunera-
tion for committee work. See also note 5.
• The Chair was granted an amount of SEK 2 600 000.
• Each of the other Board members not employed by the Company
was granted SEK 825 000.
• An amount of SEK 335 000 was granted to the Chair of the Audit
Committee and SEK 210000 to each of the other members of this
committee.
• An amount of SEK 130000 was granted to the Chair of the Remu-
neration Committee and SEK 95 000 to each of the other members
of this committee.
• An amount of SEK 100000 was granted to each non-executive
director who, in addition, participates in committee work decided
upon by the Board.
• The meeting further resolved that 50% of the director’s Board fee
could be received in the form of synthetic shares.
5. Audit Committee
The Audit Committee is elected by the Board at the statutory Board
meeting after the Annual General Meeting and until the statutory
Board meeting the following year. The work of the Audit Committee
is directed by the Audit Committee Charter, which is reviewed and
approved annually by the Board. The Chair of the committee has the
accounting competence required by the Swedish Companies Act
and two of the members are independent from the Company and its
main shareholder. The Audit Committee’s primary task is to support
the Board of Directors in fullling its responsibilities in the areas of
audit and internal control, accounting, nancial reporting and risk
management as well as to supervise the nancial structure and oper-
ations of the Group and approve nancial guarantees and new legal
Corporate governance, continued
Atlas Copco 2021 56
THE YEAR IN REVIEW – CORPORATE GOVERNANCE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
• Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
entities, delegated by the Board. The Audit Committee work further
includes reviewing internal audit procedures, monitoring the exter-
nal auditor, considering any inspection ndings, review and monitor
the independence of the external auditor, and assist the Nomination
Committee in the selection of the auditor.
During the year, the committee convened ve times. All members
were present at these meetings. All meetings of the Audit Commit-
tee have been reported to the Board of Directors and the corre-
sponding Minutes have been distributed to the Board.
The Audit Committee members during 2021 were Staan
Bohman, Anna Ohlsson-Leijon, Johan Forssell and Hans Stråberg.
Staan Bohman was Chair of the committee until November 2021,
when Anna Ohlsson-Leijon took over as Chair.
6. Remuneration Committee
The Remuneration Committee is elected by the Board at the statu-
tory Board meeting after the Annual General Meeting and until the
statutory Board meeting the following year. The work of the Remu-
neration Committee is directed by the Remuneration Committee
Charter, which is reviewed and approved annually by the Board. The
Remuneration Committee’s primary task is to propose to the Board
the remuneration to the President and CEO and a long-term incen-
tive plan for key employees. The purpose of a long-term incentive
plan is to align the interests of key personnel with those of the share-
holders. The guidelines for executive remuneration in Atlas Copco
aim to establish principles for fair and consistent remuneration with
respect to compensation, benets, and termination. The base salary
is based on competence, area of responsibility, experience and per-
formance, while the variable compensation is linked to predeter-
mined and measurable criteria which can be both nancial or non-
nancial. The guidelines for executive remuneration are reviewed
annually and the Annual General Meeting 2021 approved the guide-
lines for remuneration. See also note 5.
The Remuneration Committee had three meetings in 2021. All
members were present. During the year, the Remuneration Commit-
tee also supported the President and CEO in determining remunera-
tion to the other members of Group Management. All meetings of
the Remuneration Committee have been reported to the Board
and the corresponding Minutes have been distributed to the Board.
The Remuneration Committee members during 2021 were
Hans Stråberg, Chair, Peter Wallenberg Jr, and Staan Bohman.
7. Auditor
The task of the external auditor is to examine Atlas Copco’s consoli-
dated accounts and annual report, as well as to review the Board and
the CEO’s management of the Company. At the AGM 2021 the audit
rm Ernst & Young AB, Sweden, was elected external auditor until
the AGM 2022 in compliance with a proposal from the Nomination
Committee. The principal auditor is Erik Sandström, Authorized Pub-
lic Accountant at Ernst & Young AB. At the AGM 2021, Erik Sand-
ström referred to the auditor’s report for the Company and the
Group in the annual report and explained the process applied when
performing the audit. He also recommended adoption of the pre-
sented income statements and balance sheets, discharge of liability
for the President and CEO and the Board of Directors, and adoption
of the proposed distribution of prots.
8. Internal Audit and Assurance
Internal Audit and Assurance aims to provide independent and
objective assurance on internal control by conducting internal
audits. It reports ve times per year to the Audit Committee.
Read more on pages 62–63.
9. Group Management
Besides the President and CEO, the Group Management consists of
four business area presidents and four senior vice presidents respon-
sible for the main Group functions; Corporate Communications,
Human Resources, Controlling and Finance, and Legal. The President
and CEO is responsible for the ongoing management of the Group
following the Board’s guidelines and instructions.
Remuneration to Group Management
The guidelines for executive remuneration in Atlas Copco are
reviewed annually by the Board of Directors and presented to the
AGM for approval at least every four years. In 2021, the AGM decided
to adopt the Board’s proposal. The remuneration shall consist of
base salary, variable compensation, possible long-term incentives
(personnel options), pension benets and other benets. The vari-
able compensation is limited to a maximum percentage of the base
salary and is linked to predetermined and measurable criteria which
can be nancial or non-nancial. Non-nancial criteria for 2021 has
been to reduce the Group’s CO
2
emissions. No fees are paid for board
memberships in Group companies.
Atlas Copco is registered in Sweden and is legally governed by the
Swedish Companies Act (2005:551). This act requires that the Board of
Directors governs the Company to be protable and create value for
its shareholders. However, Atlas Copco recognizes going beyond this,
extending it to integrating sustainability into its business creating long-
term value for all stakeholders, which is ultimately in the best interest of
the Company, the shareholders and society. The signicant stakeholder
audience, as outlined in Atlas Copco’s Business Code of Practice, in-
cludes representatives of society, em ployees, customers, business
partners and shareholders.
The Business Code of Practice is the central guiding policy for
AtlasCopco, and is owned by the Board of Directors. Its commitment
goes beyond the requirements of legal compliance, to supporting
voluntary international ethical guidelines. These include the United
Nations International Bill of Human Rights, International Labour Orga-
nization’s Declaration on Fundamental Principles and Rights at Work,
the ten principles of the United Nations Global Compact, and OECD’s
Guidelines for Multinational Enterprises. Atlas Copco has employed a
stakeholder-driven approach in order to identify the most material
environmental, human rights, labor and ethical aspects of its business.
These priorities guide how the Group develops and drives its business
strategy, as well as its roadmap to support the UN Sustainable Develop-
ment Goals.
The strategy and fundamentals for growth together with the Group
targets presen ted on pages 5–7 aim at continuously delivering sustain-
able, protable growth for the Group. This means an increased eco-
nomic value creation and, simultaneously, a positive impact on society
and the environment, thus creating shared value.
Atlas Copco monitors and voluntarily discloses the progress on
these material nancial and non-nancial aspects, through an exter-
nally assured, integrated annual report. In addition to the Annual
General Meeting, Atlas Copco also creates engagement opportunities
so that non-shareholders can address the Group in various stake-
holder dialogues.
Corporate governance, continued
Statement of materiality and signicant audiences
Atlas Copco 2021 57
THE YEAR IN REVIEW – CORPORATE GOVERNANCE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
• Corporate Governance
Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Name
Position, Born
Hans Stråberg
Chair since 2014, born 1957
Mats Rahmström
Board member, President and CEO. Born 1965
Staan Bohman
Board member, born 1949
Tina Donikowski
Board member, born 1959
Education M.Sc. in Mechanical Engineering, Chalmers
University of Technology, Gothenburg.
MBA from the Henley Management College,
the United Kingdom.
B.Sc. in Economics and Business Administra-
tion, Stockholm School of Economics and
Stanford Executive Program, United States.
B.Sc. in Industrial Management from
Gannon University, United States.
Nationality / Elected Swedish / 2013 Swedish / 2017 Swedish / 2003 American / 2017
External memberships Chair of SKF, Roxtec AB, CTEK AB and Anocca
AB. Board member of Investor AB and Mellby
Gård AB. Member of The Royal Swedish
Academy of Engineering Sciences.
Chair of Piab AB. Board member of Wärtsilä
Oyj Abp, Finland and the Association of
Swedish Engineering Industries. Member of
The Royal Swedish Academy of Engineering
Sciences.
Chair of AB Electrolux, The German-Swedish
Chamber of Commerce, and The Research
Institute of Industrial Economics. Member of
The Royal Swedish Academy of Engineering
Sciences.
Board member of Circor International, Inc,
TopBuild, Advanced Energy and Eriez
Manufacturing Co.
Principal work experience
and other information
President and CEO for AB Electrolux. Various
executive positions in the Electrolux Group
based in Sweden and the U.S. EU Co-Chair
TABD, Trans-Atlantic Business Dialogue.
President and CEO of Atlas Copco AB*.
President of the Atlas Copco Tools and
Assembly Systems General Industry division.
Before he was appointed President and CEO
he was Business Area President for Industrial
Technique.
CEO of Sapa AB, Gränges AB and DeLaval AB. Vice President for Global Locomotive Business,
Propulsion Business, Six Sigma Quality Leader,
and General Manager Aftermarket Sales and
Service, all with GE Transportation.
Attendance
Board meetings 8 of 8 8 of 8 8 of 8 8 of 8
Annual General Meeting Yes Yes No No
Independence
To Atlas Copco and its management Yes No
3)
Yes Yes
To major shareholders No
4)
Yes Yes Yes
Fees and holdings
Total fees 2021, KSEK
1)
3 002 1 283 804
Holdings in
Atlas Copco AB
2)
25 000 class B shares
14 651 synthetic shares
13 087 class A shares
5 000 class B shares
258 427 employee stock options
10 000 class A shares
40 000 class B shares
2 759 synthetic shares 4 234 synthetic shares
Board of Directors
Board members
appointed
by the unions
Benny Larsson
Position: Board member
Born: 1972
Nationality: Swedish
Elected: 2018
Board meetings: 8 of 8
Mikael Bergstedt
Position: Board member
Born: 1960
Nationality: Swedish
Elected: 2004
Board meetings: 8 of 8
REFERENCES:
All educational institutions and companies are based in Sweden, unless otherwise stated.
1)
See more information on the calculation of fees in note 5.
2)
Holdings as per end 2021, including those of close relatives or legal entities and grant for 2021.
3)
President and CEO of Atlas Copco AB.
4)
Board member in a company, which is a larger owner (Investor AB).
5)
President and CEO of a company, which is a larger owner (Investor AB).
6)
Board member of an indirect owner of Atlas Copco AB.
7)
Deputy appointed by the union from June 17, 2021.
* Current position.
Atlas Copco 2021 58
THE YEAR IN REVIEW – CORPORATE GOVERNANCE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
• Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Name
Position, Born
Johan Forssell
Board member, born 1971
Anna Ohlsson-Leijon
Board member, born 1968
Gordon Riske
Board member, born 1957
Peter Wallenberg Jr
Board member, born 1959
Education M.Sc. in Economics and Business
Administration, Stockholm School of
Economics.
B.Sc. in Business Administration and
Economics from Linköping University.
MBA programme at GSBA, Zurich, Switzerland,
in collaboration with the State University of
New York, United States, and BBA, Oekreal
School of Business, Zurich, Switzerland.
BSBA Hotel Administration, University of
Denver, United States, and International
Bachaloria, American School, Leysin,
Switzerland.
Nationality / Elected Swedish / 2008 Swedish / 2020 American / German / 2020 Swedish / 2012
External memberships Board member of EQT AB, Investor AB, Patricia
Industries AB, Wärtsilä Oyj Abp, Finland, Epiroc
AB, Confederation of Swedish Enterprise and
Stockholm School of Economics. Member of The
Royal Swedish Academy of Engineering Sciences.
Board member of Schneider Electric. Member of the Executive Board for the
non-prot Hertie-Stiftung GmbH, Frankfurt,
Germany, and a Non-Executive Director at
Weichai Power Co., Ltd., Weifang, China.
Chair of Knut and Alice Wallenberg
Foundation, Wallenberg Foundations AB
and The Grand Group AB. Board member of
Scania.
Principal work experience
and other information
President and CEO of Investor AB*. Managing
Director, Head of Core Investments and member
of the management group of Investor AB.
Head of Business Area Europe, Executive Vice
President, AB Electrolux*. Chief Financial
Ocer of AB Electrolux. Other senior positions
within Electrolux, including CFO of Major
Appliances EMEA and Head of Electrolux
Corporate Control & Services. Chief Financial
Ocer of Kimoda. Various positions within
Price waterhouseCoopers.
CEO of KION Group AG, Germany. Chairman of
the Management Board of Linde Material Han-
dling GmbH, Germany, Chairman of the Man-
agement Board of Deutz AG, Germany, Manag-
ing Director of KUKA Roboter GmbH, Germany,
and management positions at KUKA Schweiß-
anlagen & Roboter GmbH, Germany and KUKA
Welding Systems & Robot Corporation, U.S.
President and CEO of The Grand Hotel
Holdings, General Manager, The Grand Hotel,
President Hotel Division Stockholm-Saltsjön.
Attendance
Board meetings 8 of 8 8 of 8 8 of 8 8 of 8
Annual General Meeting No No No No
Independence
To Atlas Copco and its management Yes Yes Yes Yes
To major shareholders No
5)
Yes Yes No
6)
Fees and holdings
Total fees 2021, KSEK
1)
1 023 1 160 815 909
Holdings in Atlas Copco AB
2)
11 000 class B shares, 6 134 synthetic shares 350 class B shares, 795 synthetic shares 1 900 synthetic shares 166 667 class A shares, 6 134 synthetic shares
Board of Directors, continued
REFERENCES:
All educational institutions and companies are based in Sweden, unless otherwise stated.
1)
See more information on the calculation of fees in note 5.
2)
Holdings as per end 2021, including those of close relatives or legal entities and grant for 2021.
3)
President and CEO of Atlas Copco AB.
4)
Board member in a company, which is a larger owner (Investor AB).
5)
President and CEO of a company, which is a larger owner (Investor AB).
6)
Board member of an indirect owner of Atlas Copco AB.
7)
Deputy appointed by the union from June 17, 2021.
* Current position.
Board members
appointed
by the unions
Thomas Nilsson
Position: Deputy to
Benny Larsson
Born: 1972
Nationality: Swedish
Elected: 2021
Board meetings: 8 of 8
Helena Hemström
Position: Deputy to
Mikael Bergstedt
Born: 1969
Nationality: Swedish
Elected: 2021
Board meetings: 4 of 8
7)
Atlas Copco 2021 59
THE YEAR IN REVIEW – CORPORATE GOVERNANCE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
• Board of Directors
Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Besides the President and CEO, Group Management consists of four business area executives and four executives responsible for the main Group
functions; Corporate Communications, Human Resources, Controlling and Finance, and Legal.
Group Management
Mats Rahmström
Mats Rahmström has held positions in sales,
service, marketing and general management
within the Industrial Technique business area.
He has been President of the Atlas Copco Tools
and Assembly Systems General Industry divi-
sion. Before he was appointed President
and CEO he was Business Area President for
Industrial Technique.
Position: President and CEO
Born: 1965
Education: MBA from the Henley Manage-
ment College, the United Kingdom.
Nationality: Swedish
Employed/In current position since:
1988/2017
External memberships: Chair of Piab AB.
Board member of Wärtsilä Oyj Abp, Finland,
and the Association of Swedish Engineering
Industries. Member of The Royal Swedish
Academy of Engineering Sciences.
Holdings in Atlas Copco AB
1)
13 087 class A shares
5 000 class B shares
258 427 employee stock options
Vagner Rego
Vagner Rego joined Atlas Copco as a trainee
engineer in São Paulo State, Brazil, and was
later appointed Business Line Manager for
Compressor Technique Service. He later be-
came Vice President Marketing and Sales for
the Compressor Technique Service division in
Belgium. Before he was appointed President
of the Compressor Technique Service division,
he was General Manager for Construction
Technique’s customer center in Brazil.
Position: Senior Executive Vice President
and Business Area President Compressor
Technique
Born: 1972
Education: Mechanical engineering from
Mackenzie University and an MBA from
Ibmec Business School, both in Brazil.
Nationality: Brazilian
Employed/In current position since:
1996/2017
Holdings in Atlas Copco AB
1)
4 318 class A shares
82 946 employee stock options
Geert Follens
Geert Follens has held positions in purchasing,
supply chain and general management. He has
served as General Manager of Atlas Copco
Compressor Technique’s customer center in the
United Kingdom. Before he became President
of the Vacuum Solutions division he was rst
President of the Portable Energy division and
then of the Industrial Air division.
Position: Senior Executive Vice President and
Business Area President Vacuum Technique
Born: 1959
Education: M. Sc. in Electromechanical
Engineering and a post-graduate degree in
Business Economics from the University of
Leuven, Belgium.
Nationality: Belgian
Employed/In current position since:
1995/2017
External memberships: Board member of
SKF.
Holdings in Atlas Copco AB
1)
4 698 class A shares
53 382 employee stock options
Henrik Elmin
Henrik Elmin joined Atlas Copco as General
Manager for Atlas Copco Tools Customer
Center Nordic in the Industrial Technique
business area. He was later appointed President
of the General Industry Tools and Assembly
Systems division. Before his current position
he was President of the Industrial Technique
Service division.
Position: Senior Executive Vice President and
Business Area President Industrial Technique
Born: 1970
Education: M.Sc. in Mechanical Engineering
from Lund Institute of Technology and an
MBA from INSEAD, France.
Nationality: Swedish
Employed/In current position since:
2007/2017
Holdings in Atlas Copco AB
1)
4 060 class A shares
93 190 employee stock options
1)
Holdings as per end 2021 including those held by related natural or legal persons. See note 23 for more information on the option programs and matching shares.
2)
In current position since February 1, 2022.
All educational institutions and companies are based in Sweden, unless otherwise indicated.
Andrew Walker
Andrew Walker has held several dierent
management positions in markets including
the United Kingdom, Ireland, Belgium and the
United States. Before his current position, he
was President of the Service division within
Compressor Technique.
Position: Senior Executive Vice President and
Business Area President Power Technique
Born: 1961
Education: M.Sc. in Industrial Engineering
and an MBA, both from University College
Dublin, Ireland.
Nationality: Irish
Employed/In current position since:
1986/2014
Holdings in Atlas Copco AB
1)
9 100 class A shares
95 270 employee stock options
Atlas Copco 2021 60
THE YEAR IN REVIEW – CORPORATE GOVERNANCE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
• Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Håkan Osvald
Håkan Osvald has been General Counsel for
Atlas Copco North America Inc. and Chicago
Pneumatic Tool Company in the United States.
He was subsequently appointed Vice President
Deputy General Counsel Atlas Copco Group,
with a special responsibility for acquisitions. Prior
to his current position, he was General Counsel
Operations. Since 2012 he is Senior Vice Presi-
dent General Counsel and Secretary of the Board
of Directors for Atlas Copco AB.
Position: Senior Vice President,
Chief Legal Ocer
Born: 1954
Education: Master of Law from Uppsala
University.
Nationality: Swedish
Employed/In current position since:
1985/2012
External memberships: Member of the Board
of Sweden-China Trade Council and the Board of
Djurgården Hockey.
Holdings in Atlas Copco AB
1)
6 989 class A shares
2 600 class B shares
23 203 employee stock options
Peter Kinnart
Peter Kinnart started his career at Atlas Copco
as business controller at Airpower in Antwerp.
He has held several management positions
within dierent areas at Atlas Copco in Belgium,
Germany, Spain and Switzerland. Prior to his
current position, he was Vice President Business
Control at Atlas Copco’s Business Area Compres-
sor Technique.
Position: Senior Vice President,
Chief Financial Ocer
Born: 1969
Education: Master in Applied Economic Science
and a Master in Commercial Engineering from
the University of Antwerp (UFSIA), Belgium.
Nationality: Belgian
Employed/In current position since:
1993/2021
Holdings in Atlas Copco AB
1)
700 class A shares
44 931 employee stock options
Sara Hägg Liljedal
2)
Sara Hägg Liljedal began her career as a
journalist working for dierent Swedish media.
Between 2007 and 2013 she worked as Press
Secretary for the Speaker of the Swedish Parlia-
ment. She has also held roles as a Press and PR
Manager for Swedish investment services com-
panies Swedbank Robur and Skandia. Before
she was appointed Senior Vice President, Chief
Communications Ocer, she was Media
Relations Manager for the Atlas Copco Group.
Position: Senior Vice President,
Chief Communications Ocer
Born: 1980
Education: BA in Journalism from
Stockholm University.
Nationality: Swedish
Employed/In current position since:
2018/2022
Holdings in Atlas Copco AB
1)
54 class A shares
55 class B shares
10 525 employee stock options
Cecilia Sandberg
Cecilia Sandberg began her career as Human
Resources consultant for a travel agency.
1999–2007 she held dierent Human Resources
roles at Scandinavian Airlines and AstraZeneca.
Between 2007 and 2015 Cecilia Sandberg was
Vice President Human Resources for Atlas Copco’s
Industrial Technique business area. Before she
started her current position she was Senior Vice
President Human Resources at Permobil.
Position: Senior Vice President, Chief Human
Resources Ocer
Born: 1968
Education: B.Sc. in Human Resources and a
M.Sc. in Sociology from Stockholm University.
Nationality: Swedish
Employed/In current position since:
2017/2017
Holdings in Atlas Copco AB
1)
2 105 class A shares
30 122 employee stock options
Group Management, continued
1)
Holdings as per end 2021, including those held by related natural or legal persons. See note 23 for more information on the option programs and matching shares.
2)
In current position since February 1, 2022.
All educational institutions and companies are based in Sweden, unless otherwise indicated.
Atlas Copco 2021 61
THE YEAR IN REVIEW – CORPORATE GOVERNANCE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
• Group Management
Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Internal control over nancial reporting
This section includes a description of Atlas Copco’s system of internal controls over nancial reporting in accordance with the
requirements set forth in the Swedish Code of Corporate Governance and as stipulated by the Swedish Companies Act.
1
Risk assessment
The company applies dierent processes to assess and identify
the main risks relating to nancial reporting misstatements. The
risk assessments are regularly performed to identify new risks and
follow up that internal control is adequate to address the identied
risks. The key risk areas for the nancial reporting and control activi-
ties that are in place to manage the risks are presented in the table
on the next page.
The purpose of well-developed internal controls over nancial
reporting is to ensure correct and reliable nancial statements and
disclosures.
The basis for the internal control is dened by the overall control
environment. The Board of Directors is responsible for establishing
an ecient system for internal control and governs the work
through the Audit Committee and CEO. Group Management sets
the tone for the organization, inuencing the control consciousness
of employees. One key success factor for a strong control environ-
ment lies in ensuring that the organizational structure, decision hier-
archy, corporate values in terms of ethics and integrity as well as
authority to act, are clearly dened and communicated through
guiding documents such as internal policies, guidelines, manuals,
and codes.
The nancial reporting accounting policies and guidelines are
issued by Group Management to all subsidiaries, which are followed
up with newsletters and conference calls. Trainings are also held
for complex accounting areas and new accounting policies. The
policies and guide lines detail the appropriate accounting for key
risk areas such as revenues, trade receivables, including bad debt
provisions, inventory costing and obsolescence, accounting for
income taxes (current and deferred), nancial instruments and
business acquisitions.
The internal control process is based on a control framework that
creates structure for the other four components of the process – risk
assessment, control activities, information and communication as
well as monitoring. The starting point of the process is the frame-
work for internal control issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO), www.coso.org.
ATLAS COPCO’S INTERNAL CONTROL SYSTEM
Control environment
Risk
assessment
Control activities
(see next page)
1 2
4 3
Monitoring
(see next page)
Information and
commu ni cation
(see next page)
Atlas Copco 2021 62
THE YEAR IN REVIEW – CORPORATE GOVERNANCE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
• Internal control over nancial
reporting
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
KEY FINANCIAL REPORTING RISKS
Revenues are not recognized in the
appropriate accounting period
Trade receivables
are not appropriately valued
Inventory is not appropriately valued at
the lower of cost or net realizable value
Income taxes are not accounted for in
accordance with applicable tax
legislation
Business acquisitions and associated
goodwill as well as intangible assets are
not appropriately accounted for
2
Control activities
to manage key nancial
reporting risks
Customer contracts are signed at
appropriate level within the Group.
Trade receivables and provisions for
bad debt are appropriately reconciled
at each reporting date.
Inventory counts are performed on a
regular basis.
Tax calculations are prepared and
reviewed at each reporting date.
All business acquisitions are approved
by the Board, CEO or Divisional
President.
Revenues are disaggregated and
analyzed by type (e.g. goods, services
and rental) and by period at local, divi-
sional, business area and Group level.
Credit assessments are performed,
and credit limits are reviewed on a
regular basis.
Inventories are appropriately recon-
ciled at each reporting date.
The eective tax rate for each country
is analyzed at each reporting date by
Group Tax.
Purchase price allocations are
prepared at divisional level and
reviewed at Group level.
Revenues for goods shipped are scruti-
nized at period end against shipping
terms and the percentage of comple-
tion for services and projects are
assessed at each reporting date.
Provisions for bad debts are made
according to Group policy.
Inventory costs are reviewed and
approved by the divisions.
Compliance with transfer pricing
policies is monitored regularly.
Goodwill impairment tests are
prepared at business area level and
reviewed at Group level.
Days of sales are analyzed at local, divi-
sional, business area and Group level.
Inventory levels and the saleability of
inventory are assessed at each report-
ing date together with obsolescence.
Ongoing tax audits and disputes are
monitored by Group tax specialists.
3
Information and communication
The company has information and communication channels
designed to ensure that information is identied, captured and
communicated in a form and timeframe that enable managers and
other employees to carry out their responsibilities. Reporting
instructions and accounting guidelines are communicated to per-
sonnel concerned through the nancial reporting accounting poli-
cies and guidelines, which are included in the handbook of policies
and guidelines The Way We Do Things, and supported by, for exam-
ple, training programs for dierent categories of employees. A com-
mon Group reporting system is used to report and consolidate all
nancial information.
4
Monitoring
Examples of monitoring activities for the nancial reporting
include:
• Management at divisional, business area and Group level regularly
reviews the nancial information and assess compliance to Group
policies.
• The Audit Committee and the Board of Directors regularly review
reports on nancial performance of the Group, by business area
and geography.
• The internal audit process aims to provide independent and objec-
tive assurance on internal control. Furthermore, the process aims
to serve as a tool for employee professional development and to
identify and recommend leading practices within the Group. Inter-
nal audits are annually planned or initiated by the Group internal
audit function with a risk-based approach. Internal audits are con-
ducted under leadership of Group internal audit sta with audit
team members having diverse functional competencies but
always with expertise in accounting and controlling. The results of
the internal audits undertaken are regularly reported to the Audit
Committee and to Group Management.
• A control self-assessment (CSA) is performed primarily to support
local unit managers to evaluate the status of their control routines
and to address areas for improvement. One of the areas in the CSA
is internal control, which includes internal control over nancial
reporting. Other areas include legal matters, communication and
branding, and the Business Code of Practice.
• The Group has an independent misconduct reporting system
where employees and other stakeholders can anonymously report
on behavior or actions that are possible violations of laws or of
Group policies, including violations of accounting and nancial
reporting guidelines and policies. The reporting system also
includes perceived cases of human rights violation, discrimination
or corruption. The reports are treated condentially and the per-
son reporting is guaranteed anonymity via an independent third-
party service provider. More information about the grievance
mechanism can be found on page 131.
• In the compliance process, all managers and all employees are
requested to sign a statement conrming understanding and
compliance to nancial policies, the Business Code of Practice
and applicable laws and regulations.
Internal control over nancial reporting, continued
Atlas Copco 2021 63
THE YEAR IN REVIEW – CORPORATE GOVERNANCE
THE YEAR IN REVIEW
Administration report
Business areas
Compressor Technique
Vacuum Technique
Industrial Technique
Power Technique
Sustainable approach
to delivering value
Raising our climate ambition
Products and service
People
Safety and well-being
Ethics
Environment
Risks, risk management and
opportunities
The Atlas Copco share
Corporate Governance
Board of Directors
Group Management
• Internal control over nancial
reporting
Financial statements and notes
MSEK unless otherwise stated
ATLAS COPCO GROUP Page
Consolidated income statement 65
Consolidated statement of comprehensive income 65
Consolidated balance sheet 66
Consolidated statement of changes in equity 67
Consolidated statement of cash ows 68
Note
1 Signicant accounting principles, critical accounting estimates and judgements 69
2 Acquisitions 76
3 Assets held for sale and divestments 78
4 Segment information 79
5 Employees and personnel expenses 82
6 Remuneration to auditors 86
7 Other operating income and expenses 86
8 Financial income and expenses 86
9 Taxes 86
10 Other comprehensive income 88
11 Earnings per share 88
12 Intangible assets 89
13 Property, plant and equipment 91
14 Investments in associated companies and joint ventures 92
15 Other nancial assets 92
16 Inventories 93
17 Trade receivables 93
18 Other receivables 93
19 Cash and cash equivalents 93
20 Equity 94
21 Borrowings 95
22 Leases 97
23 Employee benets 99
24 Other liabilities 104
25 Provisions 104
26 Assets pledged and contingent liabilities 104
27 Financial exposure and principles for control of nancial risks 105
28 Related parties 109
PARENT COMPANY Page
Income statement 110
Statement of comprehensive income 110
Balance sheet 110
Statement of changes in equity 111
Statement of cash ows 111
Note
A1 Signicant accounting principles 112
A2 Employees and personnel expenses and remuneration to auditors 113
A3 Other operating income and expenses 113
A4 Financial income and expenses 113
A5 Appropriations 114
A6 Income tax 114
A7 Intangible assets 114
A8 Property, plant and equipment 114
A9 Deferred tax assets and liabilities 115
A10 Shares in Group companies 115
A11 Other nancial assets 115
A12 Other receivables 115
A13 Cash and cash equivalents 115
A14 Equity 115
A15 Post-employment benets 116
A16 Other provisions 117
A17 Borrowings 117
A18 Other liabilities 118
A19 Financial exposure and principles for control of nancial risks 118
A20 Assets pledged and contingent liabilities 118
A21 Directly owned subsidiaries 119
A22 Related parties 120
Atlas Copco 2021 64
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
Notes
Parent company
For the year ended December 31
Amounts in MSEK Note 2021 2020
Revenues 4 110 912 99 787
Cost of sales –64 383 –58 607
Gross prot 46 529 41 180
Marketing expenses –12 178 –11 334
Administrative expenses –7 283 –6 493
Research and development expenses –4 125 –3 762
Other operating income 7 781 270
Other operating expenses 7 –201 –748
Share of prot in associated companies and joint ventures 14 36 33
Operating prot 4, 5, 6, 16 23 559 19 146
Financial income 8 243 161
Financial expenses 8 –392 –482
Net nancial items –149 –321
Prot before tax 23 410 18 825
Income tax expense 9 –5 276 –4 042
Prot for the year 18 134 14 783
Prot attributable to:
– owners of the parent 18 130 14 779
– non-controlling interests 4 4
Basic earnings per share, SEK 11 14.89 12.16
Diluted earnings per share, SEK 11 14.85 12.14
For the year ended December 31
Amounts in MSEK Note 2021 2020
Prot for the year 18 134 14 783
Other comprehensive income
Items that will not be reclassied to prot or loss
Remeasurements of dened benet plans 808 93
Income tax relating to items that will not be reclassied –160 –19
Items that may be reclassied subsequently to prot or loss
Translation dierences:
– on foreign operations 4 571 –6 398
Hedge of net investments in foreign operations –342 673
Cash ow hedges –102 27
Income tax relating to items that may be reclassied 116 –211
Other comprehensive income for the year, net of tax 10 4 891 –5 835
Total comprehensive income for the year 23 025 8 948
Total comprehensive income attributable to:
– owners of the parent 23 018 8 963
– non-controlling interests 7 –15
Consolidated statement of comprehensive incomeConsolidated income statement
Atlas Copco 2021 65
FINANCIAL STATEMENTS
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
Notes
Parent company
Consolidated balance sheet
Amounts in MSEK Note Dec. 31, 2021 Dec. 31, 2020
ASSETS
Non-current assets
Intangible assets 12 50 348 45 840
Rental equipment 13 2 342 2 241
Other property, plant and equipment 13 8 991 7 889
Right-of-use assets 22 3 244 3 261
Investments in associated companies and joint ventures 14 931 931
Other nancial assets 15 965 673
Other receivables 66 102
Deferred tax assets 9 1 790 1 484
Total non-current assets 68 677 62 421
Current assets
Inventories 16 17 801 13 450
Trade receivables 17 21 954 18 801
Income tax receivables 990 969
Other receivables 18 7 419 6 007
Other nancial assets 15 847 58
Cash and cash equivalents 19 18 990 11 655
Assets classied as held for sale 3 5 5
Total current assets 68 006 50 945
TOTAL ASSETS 136 683 113 366
Amounts in MSEK Note Dec. 31, 2021 Dec. 31, 2020
EQUITY Page 64
Share capital 786 786
Other paid-in capital 8 557 7 855
Reserves 7 208 2 913
Retained earnings 51 082 41 661
Total equity attributable to owners of the parent 67 633 53 215
Non-controlling interests 1 319
TOTAL EQUITY 67 634 53 534
LIABILITIES
Non-current liabilities
Borrowings 21 20 893 21 669
Post-employment benets 23 3 114 3 488
Other liabilities 328 278
Provisions 25 1 686 1 195
Deferred tax liabilities 9 2 225 1 736
Total non-current liabilities 28 246 28 366
Current liabilities
Borrowings 21 3 981 2 977
Trade payables 15 159 11 202
Income tax liabilities 1 893 1 367
Other liabilities 24 18 144 13 987
Provisions 25 1 626 1 933
Total current liabilities 40 803 31 466
TOTAL EQUITY AND LIABILITIES 136 683 113 366
Information concerning assets pledged and contingent liabilities is disclosed in note 26.
Atlas Copco 2021 66
FINANCIAL STATEMENTS
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
Notes
Parent company
2021 Equity attributable to owners of the parent
Amounts in MSEK Share capital Other paid-in capital Hedging reserve Trans lation reserve Retained earnings Total Non-controlling interests Total equity
Opening balance, Jan. 1 786 7 855 59 2 854 41 661 53 215 319 53 534
Prot for the year 18 130 18 130 4 18 134
Other comprehensive income for the year –83 4 323 648 4 888 3 4 891
Transfer of reserves 55 –55 – –
Total comprehensive income for the year –83 4 378 18 723 23 018 7 23 025
Dividend –8 889 –8 889 –8 889
Acquisition of series A shares –416 –416 –416
Divestment of series A shares 702 748 1 450 1 450
Change of non-controlling interests –511 –511 –325 –836
Share-based payment, equity settled:
– expense during the year 212 212 212
– exercise option –446 –446 –446
Closing balance, Dec. 31 786 8 557 –24 7 232 51 082 67 633 1 67 634
2020 Equity attributable to owners of the parent
Amounts in MSEK Share capital Other paid-in capital Hedging reserve Trans lation reserve Retained earnings Total Non-controlling interests Total equity
Opening balance, Jan. 1 786 7 622 40 8 764 36 019 53 231 59 53 290
Prot for the year 14 779 14 779 4 14 783
Other comprehensive income for the year 19 –5 910 75 –5 816 –19 –5 835
Total comprehensive income for the year 19 –5 910 14 854 8 963 –15 8 948
Dividend –8 506 –8 506 –8 506
Acquisition of series A shares –1 097 –1 097 –1 097
Divestment of series A shares 230 590 820 820
Divestment of series B shares 3 – 3 3
Change of non-controlling interests –157 –157 275 118
Share-based payment, equity settled:
– expense during the year 158 158 158
– exercise option –200 –200 –200
Closing balance, Dec. 31 786 7 855 59 2 854 41 661 53 215 319 53 534
Consolidated statement of changes in equity
Atlas Copco 2021 67
FINANCIAL STATEMENTS
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
Notes
Parent company
Consolidated statement of cash ows
For the year ended December 31
Amounts in MSEK Note 2021 2020
Cash ows from operating activities
Operating prot 23 559 19 146
Adjustments for:
Depreciation, amortization and impairment 12, 13, 22 5 466 5 189
Capital gain/loss and other non-cash items –73 746
Operating cash surplus 28 952 25 081
Net nancial items received/paid 459 244
Taxes paid –5 211
–4 531
Pension funding and payment of pension to employees –330 –340
Cash ow before change in working capital 23 870 20 454
Change in:
Inventories –3 381 535
Operating receivables –2 786 1 208
Operating liabilities 5 923 423
Change in working capital –244 2 166
Increase in rental equipment –510 –486
Sale of rental equipment 36 70
Net cash from operating activities 23 152 22 204
For the year ended December 31
Amounts in MSEK Note 2021 2020
Cash ows from investing activities
Investments in other property, plant and equipment 13 –1 970 –1 459
Sale of other property, plant and equipment 93 39
Investments in intangible assets 12 –1 389 –1 337
Acquisition of subsidiaries 2 –2 334 –13 583
Divestment of subsidiaries 3 –7 –
Investment in other nancial assets, net –514 54
Net cash from investing activities –6 121 –16 286
Cash ows from nancing activities
Ordinary dividend –8 889 –8 506
Acquisition of non-controlling interest –823 –216
Repurchase of own shares –416 –1 097
Divestment of own shares 1 450 823
Borrowings 1 471 2 407
Repayment of borrowings –1 522 –729
Settlement of CSA
1)
–440 –79
Payment of lease liabilities 22 –1 154 –1 155
Net cash from nancing activities –10 323 –8 552
Net cash ow for the year 6 708 –2 634
Cash and cash equivalents, Jan. 1 11 655 15 005
Net cash ow for the year 6 708 –2 634
Exchange-rate dierence in cash and cash equivalents 627 –716
Cash and cash equivalents, Dec. 31 19 18 990 11 655
1)
Credit Support Annex, see note 27.
Atlas Copco 2021 68
FINANCIAL STATEMENTS
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
Notes
Parent company
1. Signicant accounting principles, critical accounting estimates and judgements
SIGNIFICANT ACCOUNTING PRINCIPLES
The consolidated nancial statements comprise Atlas Copco AB, the Parent
Company (“the Company”), and its subsidiaries (together “the Group” or Atlas
Copco) and the Group’s interest in associated companies and joint ventures.
Atlas Copco AB is headquartered in Nacka, Sweden.
Basis of preparation
The consolidated nancial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as endorsed by the EU. The
statements are also prepared in accordance with the Swedish recommenda-
tion RFR 1 “Supplementary Accounting Rules for Groups” and applicable state-
ments issued by the Swedish Financial Reporting Board. These require certain
addi tional disclosures for Swedish consolidated nancial statements prepared
in accordance with IFRS.
The accounting principles set out below have been consistently applied to all
periods presented, unless otherwise stated, and for all entities included in the
consolidated nancial statements. The annual report for the Group and for
Atlas Copco AB, including nancial statements, was approved for issuance on
March 2, 2022. The balance sheets and income statements are subject to
approval by the Annual General Meeting of the shareholders on April 26, 2022.
Basis of consolidation
The consolidated nancial statements have been prepared in accordance with
the acquisition method. Accordingly, business combinations are seen as if the
Group directly acquires the assets and assumes the liabilities of the entity
acquired. The consolidated income statements and balance sheets of the Group
include all entities in which the Company, directly or indirectly, has control.
Control exists when the Company has power over the entity, is exposed, or
has rights, to variable returns from its involvement with the entity and has the
ability to use its power to aect its returns. Generally, control and hence con-
solidation is based on ownership. In a few exceptions, consolidation is based
on agreements that give the Group control over an entity. See note A22 for
information on the Group’s subsidiaries.
Intra-group balances and internal income and expense arising from intra-
group transactions are fully eliminated in preparing the consolidated nancial
statements. Gains and losses arising from intra-group transactions that are
recognized in assets, such as inventory and xed assets, are eliminated in full,
but losses only to the extent that there is no evidence of impairment.
Business combinations
At the acquisition date, i.e. the date on which control is obtained, each identi-
able asset acquired and liability assumed is recognized at its acquisition-date
fair value. The consideration transferred, measured at fair value, includes
assets transferred by the Group, liabilities to the former owners of the acquiree
and the equity interests issued by the Group in exchange for control of the
acquiree. Any subsequent change in such fair value is recognized in prot or
loss, unless the contingent consideration is classied as equity. Transactions
costs that the Group incur in connection with a business combination are
expensed as incurred.
Goodwill is measured as the excess of the sum of the consideration trans-
ferred, the amount of any non-controlling interests in the acquiree, and the
fair value of the Group’s previously held equity interest in the acquiree (if any)
over the net of acquisition-date fair value amounts of the identiable assets
acquired and liabilities assumed.
Non-controlling interest is initially measured either
• at fair value, or
• at the non-controlling interest’s proportionate share of the fair value of
identiable net assets.
Subsequent prot or loss attributable to the non-controlling interest is allo-
cated to the non-controlling interest, even if it puts the non-controlling inter-
est in a decit position. Acquisitions of non-controlling interests are recog-
nized as a transaction between equity attributable to owners of the parent
and non-controlling interests. The dierence between consideration paid and
the proportionate share of net assets acquired is recognized in equity. For
details on the acquisitions made during the year, see note 2.
Associated companies and joint ventures
An associate is an entity in which the Group has signicant inuence, but not
control, over nancial and operating policies. When the Group holds 20–50%
of the voting power, it is presumed that signicant inuence exists, unless oth-
erwise demonstrated. A joint venture is an entity over which the Group has
joint control, through contractual agreements with one or more parties.
Investments in associated companies and joint ventures are reported accord-
ing to the equity method. This means that the carrying value of interests in an
associate or joint venture corresponds to the Group’s share of reported equity
of the associate or joint venture, plus any goodwill, and any other remaining
fair value adjustments recognized at acquisition date.
“Share of prot in associated companies and joint ventures”, included in the
income statement, comprises the Group’s share of the associate’s and joint ven-
ture’s income after tax adjusted for any amortization and depreciation, impair-
ment losses, and other adjustments arising from any remaining fair value
adjustments recognized at acquisition date. Dividends received from an associ-
ated company or joint venture reduce the carrying value of the investment.
Unrealized gains and losses arising from transactions with an associate or a
joint venture are eliminated to the extent of the Group’s interest, but losses
only to the extent that there is no evidence of impairment of the asset. When
the Group’s share of losses in an associate or a joint venture equals or exceeds
its interest in the associate or joint venture, the Group does not recognize fur-
ther losses unless the Group has incurred obligations or made payments on
behalf of the associate.
Functional currency and foreign currency translation
The consolidated nancial statements are presented in Swedish krona (SEK),
which is the functional currency for Atlas Copco AB and also the presentation
currency for the Group’s nancial reporting. Unless otherwise stated, the
amounts presented are in millions Swedish krona (MSEK).
Transactions in foreign currencies are translated at the foreign exchange
rate ruling at the date of the transaction. Non-monetary items carried at his-
torical cost are reported using the exchange rate at the date of the transaction
and non-monetary items carried at fair value are reported at the rate that
existed when the fair values were determined. Tangible and intangible assets,
inventory and advanced payments are examples of non-monetary items.
Receivables and liabilities and other monetary items denominated in foreign
currencies are translated using the foreign exchange rate at the balance sheet
date. The exchange rate gains and losses related to receivables and payables
and other operating receivables and liabilities are included in “Other operating
income and expenses” and foreign exchange rate gains and losses attributable
to other nancial assets and liabilities are included in “Financial income and
expenses”. Exchange rate dierences on translation to functional currency are
reported in “Other comprehensive income” in the following cases:
• translation of a nancial liability designated as a hedge of the net invest-
ment in a foreign operation,
• translation of intra-group receivables from, or liabilities to, a foreign opera-
tion that in substance is part of the net investment in the foreign operation,
• cash ow hedges of foreign currency to the extent that the hedge is
eective.
In the consolidation, the balance sheets of foreign subsidiaries are translated
to SEK using exchange rates at the end of the reporting period and the income
statements are translated at the average rates for the reporting period. For-
eign exchange dierences arising on such translation are recognized in “Other
comprehensive income” and are accumulated in the currency translation
reserve in equity. Exchange rates for major currencies that have been used for
the consolidated nancial statements are shown in note 27.
Segment reporting
An operating segment is a component of the Group that engages in business
activities from which it may earn revenue and incur expenses, and for which
discrete nancial information is available. The operating results of all operating
segments are reviewed regularly by the Group’s President and CEO, the chief
operating decision maker, to make decisions about allocation of resources to
the segments and also to assess their performance. See note 4 for additional
information.
Revenue recognition
Revenue is recognized at an amount that reects the expected and entitled
consideration for transferring goods and/or services to customers when
control has passed to the customer.
Goods sold
Revenue from goods sold are recognized at one point in time when control of
the good has been transferred to the customer. This occurs for example when
the Group has a present right to payment for the good, the customer has legal
title of the good, the good has been delivered to the customer and/or the cus-
tomer has the signicant risks and rewards of the ownership of the good.
When the goods sold are highly customized and an enforceable right to
payment is present, revenue is recognized over time using the proportion of
cost incurred to date compared to estimated total cost to measure the prog-
ress towards complete satisfaction of that performance obligation and
thereby transferring the control of the good to the customer.
Installation services are sold together with the good or separately. The
Group assesses the contract at inception, and the installation service is either
consid ered as part of the performance obligation of the sale of the good or as
a sepa rate performance obligation. The installation service is a separate per-
formance obligation when the customer can benet from the service either on
its own or together with other resources readily available and the promise to
transfer the service to the customer is separately identiable from other prom-
ises in the contract.
For buy-back commitments where the buy-back price is lower than the orig-
inal selling price but there is an economic incentive for the customer to use the
buy-back commitment option, the transaction is accounted for as a lease.
Atlas Copco 2021 69
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
Variable consideration
Some contracts with customers provide a right of return, trade discounts or
volume rebates. If revenue cannot be reliably measured, the Group defers rev-
enue until the uncertainty is resolved. Such liabilities are estimated at contract
inception and updated thereafter.
Rights of return
When a contract with a customer provides a right to return the good within a
specied period, the Group accounts for the right of return using the expected
value method. The amount of revenue related to the expected returns is
deferred and recognized in the statement of nancial position within “Other
liabilities”. A corresponding adjustment is made to the cost of sales and recog-
nized in the statement of nancial position within “Inventories”.
Rendering of service
Revenue from service is recognized over time by reference to the progress towards
satisfaction of each performance obligation. The progress towards satisfaction of
each performance obligation is measured by the proportion of cost incurred to
date compared to estimated total cost of each performance obligation.
Where the outcome of a service contract cannot be estimated reliably, reve-
nue is recognized to the extent of cost incurred that are expected to be recov-
erable. When it is probable that total contract costs will exceed total revenue,
the expected loss is recognized as an expense immediately. When the value of
the service performed to the customer corresponds directly to the right to
invoice for that service, revenue is recognized to the amount invoiced.
Specialty rental
Income from specialty rental is recognized on a straight-line basis over the
rental period. The specialty rental business is considered to be a service as this
includes a complete solution to the customers to fulll the customer needs.
Sale of equipment from the specialty rental business is recognized as revenue
when the control of the asset has been transferred to the buyer. Indicators of
transfer of control is explained under “Goods sold” see page 66. The carrying
value of the specialty rental equipment sold is recognized as cost of sales.
Investments in and sales of specialty rental equipment are included in cash
ows from operating activities.
Contract assets and contract liabilities
The timing of revenue recognition, billings and cash collections results in billed
account receivables, unbilled receivables (contract assets), and customer
advances and deposits (contract liabilities) in the consolidated balance sheet.
Billing occurs either as work progresses in accordance with agreed-upon con-
tractual terms, upon achievement of contractual milestones or when the con-
trol of the goods has been transferred to the customer. The Group sometimes
receives advances or deposits from customers, before revenue is recognized,
resulting in contract liabilities. These contract assets and contract liabilities are
reported in the consolidated balance sheet, in “Other receivables” or “Other
liabilities”, on a contract-by-contract basis at the end of each reporting period.
Payment terms range from contract to contract and are dependent upon the
agreement with the customer.
Practical expedients
The Group has elected to apply the following practical expedients:
For the disclosure of the aggregate amount of the transaction price allocated
to the performance obligations that are unsatised (or partially unsatised) at
the end of the reporting period, the Group does not disclose the value related
to the following expedients:
• the performance obligation that is part of the contract that has an original
expected duration of one year or less, and
• the entity has a right to consideration from a customer in an amount that
corresponds directly with the value to the customer of the entity’s perfor-
mance completed to date.
For incremental cost of obtaining the contract, the Group uses the practical expe-
dient of recognizing the incremental cost as an expense if the amortization period
of the asset, that otherwise would have been recognized, is one year or less.
Other operating income and expenses
Gains and losses on disposals of an item of non-current tangible and intangi-
ble assets are determined by comparing the proceeds from disposal with the
carrying amount. See note 7 for additional information.
Government grants
Government grants are recognized when there is reasonable assurance that
the Group will comply with the conditions attached to the grants and that the
grants will be received. Government grants related to expenses are recog-
nized in the income statement as a deduction of the associated expenses. If the
grants cannot be allocated to an associated expense, government grants are
recognized in “Other operating income”. Government grants related to assets are
recognized as a deduction in arriving at the carrying amount of the asset and rec-
ognized as revenue over the useful life of the asset through a reduction of the
depreciation expense. See note 7 for additional information.
Financial income and expenses
Interest income and interest expenses are recognized in prot or loss using the
eective interest rate method. Dividend income is recognized in prot or loss
on the date that the Group’s right to receive payment is established. See note 8
for additional information.
Income taxes
Income taxes include both current and deferred taxes. Income taxes are
reported in prot or loss unless the underlying transaction is reported in
“Other comprehensive income” or in “Equity”, in which case the corresponding
tax is reported according to the same principle.
A current tax liability or asset is recognized for the estimated taxes payable
or refundable for the current year or prior years.
Deferred tax is recognized using the balance sheet liability method. The cal-
culation of deferred taxes is based on dierences between the values reported
in the balance sheet and their valuation for taxation, which are referred to as
temporary dierences, and the carry forward of unused tax losses and tax
credits. Temporary dierences attributable to the following assets and liabili-
ties are not provided for:
• the initial recognition of goodwill,
• the initial recognition (other than in business combinations) of assets or lia-
bilities that aect neither accounting nor taxable prot,
• dierences related to investments in subsidiaries, associated companies
and joint ventures to the extent that they will probably not reverse in the
foreseeable future, and for which the Company is able to control the timing
of the reversal of the temporary dierences.
A deferred tax asset is recognized only to the extent that it is probable that
future taxable prots will be available against which the asset can be utilized.
In the calculation of deferred taxes, enacted or substantively enacted tax rates
are used for the individual tax jurisdictions.
Current and deferred tax assets and liabilities are oset when there is a
legally enforceable right to set o current tax assets against current tax liabili-
ties and when they relate to income taxes levied by the same taxation author-
ity and the Group intends to settle its current tax assets and liabilities on a net
basis. For details regarding taxes, see note 9.
Earnings per share
Basic earnings per share are calculated based on the prot for the year attribut-
able to owners of the parent and the basic weighted average number of shares
outstanding. Diluted earnings per share are calculated based on the prot for
the year attributable to owners of the parent and the diluted weighted aver-
age number of shares outstanding. Dilutive eects arise from stock options
that are settled in shares, or that at the employees’ choice can be settled in
shares or cash in the share-based incentive programs.
Stock options have a dilutive eect when the average share price during the
period exceeds the exercise price of the options. When calculating the dilutive
eect, the exercise price is adjusted by the value of future services related to
the options. If options for which employees can choose settlement in shares or
cash are dilutive, the prot for the year is adjusted for the dierence between
cash-settled and equity-settled treatment of options and the more dilutive of
cash settlement and share settlement is used in calculating earnings per share.
See note 11 for more details.
Intangible assets
Goodwill
Goodwill is recognized at cost, as established at the date of acquisition of a
business (see “Business combinations”), less accumulated impairment losses, if
any. Goodwill is allocated to the cash-generating units (CGU) that are expected
to benet from the synergies of the business combination. Impairment testing
is made at least annually and whenever the need is indicated. The impairment
test is performed at the level on which goodwill is monitored for internal man-
agement purposes. The four business areas of Atlas Copco’s operations have
been identied as CGUs. Goodwill is reported as an intangible asset with indef-
inite useful life.
Technology-based intangible assets
Expenditure on research activities is expensed as incurred. Research projects
acquired as part of business combinations are initially recognized at their fair
value at the acquisition date. Subsequent to initial recognition, these research
projects are carried at cost less amortization and impairment losses. Expendi-
ture on development activities are expensed as incurred unless the activities
meet the criteria for being capitalized i.e.:
• the product or process being developed is estimated to be technically
and commercially feasible, and
• the Group has the intent and ability to complete and sell or use the
product or process.
The expenditure capitalized includes the cost of materials, direct labor, and
other costs directly attributable to the project. Capitalized development
expenditure is carried at cost less accumulated amortization and impairment
losses. Amortization related to research and development expenditure for
1. Signicant accounting principles, critical accounting estimates and judgements, continued
Atlas Copco 2021 70
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
2021 amounted to 1 028 (975). This has been reported as part of research and
development costs in the income statement since the Group follows up on
the research and development function as a whole.
Trademarks
Trademarks acquired by the Group are capitalized based on their fair value at
the time of acquisition. Certain trademarks are estimated to have an inde-
nite useful life and are carried at cost less accumulated impairment losses.
They are tested at least annually for impairment. Other trademarks, which
have nite useful lives, are carried at cost less accumulated amortization and
impairment losses.
Marketing and customer related intangible assets
Acquired marketing and customer related intangibles are capitalized based
on their fair value at the time of acquisition and are carried at cost less accu-
mulated amortization and impairment losses.
Other intangible assets
Acquired intangible assets relating to contract-based rights, such as licenses
or franchise agreements, are capitalized based on their fair value at the time
of acquisition and carried at cost less accumulated amortization and impair-
ment losses. Expenditure on internally generated goodwill, trademarks and
similar items is expensed as incurred. Changes in the Group’s intangible assets
during the year are described in note 12.
Property, plant and equipment
Items of property, plant and equipment are carried at cost less accumulated
depreciation and impairment losses. Cost of an item of property, plant and
equipment comprises purchase price, import duties, and any cost directly
attributable to bringing the asset to the location and condition for use. The
cost also includes dismantlement and removal of the asset in the future if
applicable. Borrowing cost for assets that need a substantial period of time to
get ready for their intended use are included in the cost value until the assets
are substantially ready for their use or sale and are thereafter depreciated
over the useful life of the asset. The Group capitalizes costs on initial recogni-
tion and on replacement of signicant parts of property, plant and equip-
ment if it is probable that the future economic benets embodied will ow to
the Group and the cost can be measured reliably. All other costs are recog-
nized as an expense in prot or loss when incurred. Changes in the Group’s
property, plant and equipment during the year are described in note 13.
Rental equipment
The rental eet is comprised of diesel and electric powered air compressors,
generators, air dryers, and to a lesser extent general construction equipment.
Rental equipment is initially recognized at cost and is depreciated over the
estimated useful lives of the equipment. Rental equipment is depreciated to a
residual value estimated at 0–10% of cost.
Depreciation and amortization
Depreciation and amortization are calculated based on cost using the
straight-line method over the estimated useful life of the asset. Parts of prop-
erty, plant and equipment with a cost that is signicant in relation to the total
cost of the item are depreciated separately when the useful lives of the parts
do not coincide with the useful lives of other parts of the item. The following
useful lives are used for depreciation and amortization:
Technology-based intangible assets 3–15 years
Trademarks with nite lives 5–15 years
Marketing and customer related intangible assets 5–15 years
Buildings 25–50 years
Machinery and equipment 3–10 years
Vehicles 4–5 years
Computer hardware and software 3–10 years
Rental equipment 3–8 years
The useful lives and residual values are reassessed annually. Land, assets under
construction, goodwill, and trademarks with indenite lives are not depreci-
ated or amortized.
Leases
Group as lessee
Recognition of a lease
Upon initiation, contracts are assessed by the Group, to determine whether a
contract is, or contains a lease. If the contract conveys the right to control the use
of an identied asset for a certain period of time in exchange for consideration,
then it is or contains a lease. The right to control the use of an identiable asset is
assessed by the Group based upon if there is an identiable asset, if the Group has
the right to obtain substantially all economic benets from the use of the asset
and if the Group has the right to steer the use of the asset. The Group has elected
to separate the non-lease components and apply a number of practical expedi-
ents with regard to short-term leases and leases for which the underlying asset is
of low value. In cases where the Group acts as an intermediate lessor, it accounts
for its interests in the head-lease and the sub-lease separately.
Measurement of a right-of-use asset and lease liability
Right-of-use asset
On commencement date, the Group measures the right-of-use asset at cost,
which includes the following: the initial amount of the lease liability adjusted for
any lease payments made at or before the commencement date, less any lease
incentives received and any initial direct costs incurred by the Group as well as an
estimate of costs to be incurred by the Group in dismantling and removing the
underlying asset, restoring the site on which it is located or restoring the under-
lying asset to the condition required by the lease contract. Cost for dis mantling,
removing or restoring the site on which it is located and/or the unde rlying asset
is only recognized when the Group incurs an obligation to do so.
The right-of-use asset is depreciated over the lease term, using the straight-
line method. Changes in the Group’s right-of-use asset during the year is
described in note 22.
Lease liability
On commencement date, the lease liability is measured at the present value of
the unpaid lease payments, discounted using the interest rate implicit in the
lease, or if the rate cannot be readily determined, the Group’s incremental bor-
rowing rate. Lease payments included in the lease liability comprise of xed
payments, variable lease payments that depend on an index or a rate, amounts
to be paid under a residual value guarantee and lease payments in an optional
renewal period if the Group is reasonably certain to exercise an extension
option as well as penalties for early termination of a lease, if the Group is rea-
sonably certain to terminate early. If there is a purchase option present, this will
be included if the Group is reasonably certain to exercise the option.
The lease liability is measured at amortized cost by using the eective interest
rate method. For additional information see note 21.
Short-term leases and leases for which the underlying asset is of low value
The Group has elected to apply recognition exemptions for short-term leases
and leases for which the underlying asset is of low value, for example oce
equipment such as printers and computers. Lease payments associated with
those leases are recognized as an expense on a straight-line basis over the
lease term.
Group as a lessor
At inception of a lease contract, the Group assess whether the lease is a nance
lease or an operating lease. If the lease transfers substantially all of the risks
and rewards incidental to ownership of the asset, it is considered to be a
nance lease; if not, it is an operating lease. Under nance leases where the
Group acts as lessor, the transaction is recognized as a sale and a lease receiv-
able, comprising the future minimum lease payments and any residual value
guaranteed to the Group. Lease payments are recognized as repayment of the
lease receivable and interest income. In cases where the Group acts as a lessor
under an operating lease, the lease payments are included in prot or loss on a
straight-line basis over the term of the lease.
In cases where the Group acts as an intermediate lessor, it accounts for its
interests in the head-lease and the sub-lease separately. The Group assesses
the lease classication of a sub-lease with reference to the right-of-use asset
arising from the head-lease.
Impairment of non-nancial assets
The carrying values of the Group’s non-nancial assets are reviewed at least at
each reporting date to determine whether there is any indication of impair-
ment. If any such indication exists, the Group estimates the recoverable
amount of the asset. An impairment loss is recognized if the carrying amount
of an asset or its cash-generating unit (CGU) exceeds its recoverable amount
(i.e. the greater of fair value less costs to sell and value in use). In assessing the
value in use, the estimated future cash ows are discounted to their present
value using a discount rate that reects current market assessments of the time
value of money and the risks specic to the asset or CGU. For the purpose of
assessing impairment, assets are grouped in CGUs, which are the smallest
identiable groups of assets that generate cash inows that are largely inde-
pendent of the cash inows from other assets or group of assets. Impairment
losses are recognized in prot or loss. An impairment loss related to goodwill is
not reversed. In respect of other assets, impairment losses in prior periods are
reviewed for possible reversal of the impairment at each reporting date.
Inventories
Inventories are valued at the lower of cost and net realizable value. Net realiz-
able value is the estimated selling price for inventories less all estimated costs
of completion and costs necessary to make the sale. Inventories are recognized
according to the rst-in, rst-out principle and includes the cost of acquiring
inventories and bringing them to their existing location and condition. Inven-
tories manufactured by the Group and work in progress include an appropri-
ate share of production overheads based on normal operating capacity. Inven-
tories are reported net of deductions for obsolescence and internal prots aris-
ing in connection with deliveries from the production companies to the cus-
tomer centers. See note 16 for more details.
1. Signicant accounting principles, critical accounting estimates and judgements, continued
Atlas Copco 2021 71
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
Equity
Shares issued by the company are classied as equity. Incremental costs
directly attributable to the issue of ordinary shares and share options are
recognized as a deduction from equity, net of any tax eect.
When Atlas Copco shares are repurchased, the amount of the consideration
paid is recognized as a deduction from equity net of any tax eect. Repur-
chased shares are classied as treasury shares and are presented as a deduc-
tion from total equity. When treasury shares are sold or subsequently reissued,
the amount received is recognized as an increase in equity and the resulting
surplus or decit on the transaction is transferred to or from Other paid-in
capital.
Supply chain nancing
The Group and Banks, with close relations to Atlas Copco, oer suppliers the
opportunity to use a supply chain nancing scheme (SCF) which allows them
to be paid earlier than the invoice due date. The Group evaluates supplier
arrangements against a number of indicators to assess if the payable contin-
ues to hold characteristics of a trade payable or should be classied as borrow-
ings; these indicators include whether the payment terms exceed customary
payment terms in the industry. These transactions have been recognized as
either “Account payables” or “Borrowings” in the Group’s balance sheet and as
“Change in operating liabilities” or change in “Borrowings” or “Repayment of
borrowings” in the statement of cash ows.
Provisions
Provisions are recognized:
• when the Group has a legal or constructive obligation as a result of a
past event,
• it is probable that the Group will have to settle the obligation, and
• the amount of the obligation can be estimated reliably.
The amount recognized as a provision is the best estimate of the consideration
required to settle the present obligation at the balance sheet date.
If the eect of the time value of money is material, the provision is determined
by discounting the expected future cash ows of estimated expenditures.
Provisions for product warranties are recognized as cost of sales at the time
the products are sold based on the estimated cost using historical data for level
of repairs and replacements.
A restructuring provision is recognized when the Group has approved a
detailed and formal restructuring plan and the restructuring has either com-
menced or been announced publicly.
Present obligations arising under onerous contracts are recognized as pro-
visions. An onerous contract is considered to exist where the Group has a con-
tract under which the unavoidable costs of meeting the obligations under the
contract exceed the economic benets expected to be received from the con-
tract. Before a provision is established, the Group recognizes any impairment
loss on the asset associated with the contract. For details on provisions see
note 25.
Post-employment benets
Post-employment benet plans are classied either as dened contribution or
dened benet plans. Under a dened contribution plan, the Group pays xed
contributions into a separate entity and will have no legal or constructive obli-
gation to pay further amounts if the fund does not hold sucient assets to pay
all employee benets. Contributions to dened contributions plans are
expensed when employees provide services entitling them to the contribution.
Other post-employment benet plans are dened benet plans and it is the
Group’s obligation to provide agreed benets to current and former employ-
ees. The net obligation of dened benet plans is calculated by estimating the
amount of future benets that employees have earned in return for their ser-
vices in current and prior periods. The amount is discounted to determine its
present value and the fair values of any plan assets are deducted. Funded plans
with net assets, i.e. plans with assets exceeding the commitments, are
reported as nancial non-current assets.
The cost for dened benet plans is calculated using the Projected Unit
Credit Method, which distributes the cost over the employee’s service period.
The calculation is performed annually by independent actuaries using actuarial
assumptions such as employee turnover, mortality, future increase in salaries
and medical cost. Changes in actuarial assumptions, experience adjustments of
obligations and changes in fair value of plan assets result in remeasurements
and are recognized in “Other comprehensive income”. Each quarter a remea-
surement is performed to adjust the present value of pension liabilities and the
fair value of pension assets against “Other comprehensive income”. Net interest
on dened benet obligations and plan assets is reported as “Interest income”
or “Interest expense”. See note 23 for additional information.
Share-based compensation
The Group has share-based incentive programs, consisting of share options and
share appreciation rights, which have been oered to certain employees based
on position and performance. Additionally, the Board is oered synthetic
shares.
The fair value of share options that can only be settled in shares (equity-
settled) is recognized as an employee expense with a corresponding increase in
equity. The fair value, measured at grant date using the Black-Scholes formula,
is recognized as an expense over the vesting period. The amount recognized as
an expense is adjusted to reect the actual number of share options that vest.
The fair value of the share appreciation rights, synthetic shares, and
options with a choice for employees to settle in shares or cash is recognized in
accordance with principles for cash-settled share-based payments. The value is
recognized as an employee expense with a corresponding increase in liabili-
ties. The fair value, measured at grant date and remeasured at each reporting
date using the Black-Scholes formula, is accrued and recognized as an expense
over the vesting period. Changes in fair value are, during the vesting period
and after the vesting period until settlement, recognized in prot or loss as an
employee expense. The accumulated expense recognized equals the cash
amount paid at settlement.
Social security charges are paid in cash and are accounted for in consistence
with the principles for cash-settled share-based payments, regardless of
whether they are related to equity- or cash-settled share-based payments.
See note 23 for details.
Financial assets and liabilities – nancial instruments
Recognition and derecognition
Financial assets and liabilities are recognized when the Group becomes a party
to the contractual provision of the instrument. Transactions of nancial assets
are accounted for at trade date, which is the day when the Group contractually
commits to acquire or dispose of the assets. Trade receivables are recognized
on issuance of invoices. Liabilities are recognized when the other party has
performed and there is a contractual obligation to pay. Derecognition, fully or
partially, of a nancial asset occurs when the rights in the contract have been
realized or matured, or when the Group no longer has control over it. A nan-
cial liability is derecognized, fully or partially, when the obligation specied in
the contract is discharged or otherwise expires. A nancial asset and a nancial
liability are oset and the net amount presented in the balance sheet when
there is a legal right to oset the recognized amounts and there is an intention
to either settle on a net basis or to realize the asset and settle the liability simul-
taneously.
Gains and losses from derecognition and modications are recognized in
prot or loss.
Measurement of nancial instruments
Financial instruments are classied at initial recognition. The classication
decides the measurement of the instruments.
Classication and measurement of nancial assets
Equity instruments: are classied at fair value through prot or loss (FVTPL).
Derivative instruments: are classied at FVTPL, unless they are classied as a
hedging instrument and the eective part of the hedge is recognized in “Other
comprehensive income”.
Debt instruments: the classication of nancial assets that are debt instru-
ments, including hybrid contracts, is based on the Group’s business model for
managing the assets and the asset’s contractual cash ow characteristics. The
instruments are classied at:
• amortized cost,
• fair value through “Other comprehensive income” (FVOCI), or
• fair value through prot or loss (FVTPL).
Financial assets at amortized cost are at initial recognition measured at fair
value including transaction costs. After initial recognition, they are measured at
amortized cost using the eective interest rate method. Assets classied at
amortized cost are held under the business model of collecting the contractual
cash ows that are solely payments of principal and interest on the principal
amount outstanding. The assets are subject to a loss allowance for expected
credit losses.
Fair value through “Other comprehensive income” (FVOCI) are assets held
under the business model of both selling and collecting the contractual cash
ows that are solely payments of principal and interest on the principal amount
outstanding. Financial instruments in this category are recognized at fair value
at initial recognition and changes in fair value are recognized in “Other compre-
hensive income” (OCI) until derecognition, when the amounts in OCI are reclas-
sied to prot or loss. The assets are subject to a loss allowance for expected
credit losses.
Fair value through prot or loss (FVTPL) are all other debt instruments that
are not measured at amortized cost or FVOCI. Financial instruments in this cat-
egory are recognized at fair value at initial recognition and changes in fair
value are recognized in prot or loss.
Classication and measurement of nancial liabilities
Financial liabilities are classied at amortized cost, except derivatives. Financial
liabilities at amortized cost are at initial recognition measured at fair value
including transaction costs. After initial recognition, they are measured at the
eective interest rate method.
1. Signicant accounting principles, critical accounting estimates and judgements, continued
Atlas Copco 2021 72
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
Derivatives are classied at FVTPL, unless they are classied as a hedging
instrument and the eective part of the hedge is recognized in “Other
comprehensive income”.
Fair value for nancial assets and nancial liabilities is determined in the
manner described in note 27.
Impairment of nancial assets
Financial assets, except those classied at fair value through prot and loss
(FVTPL), are subject to impairment for expected credit losses. In addition, the
impairment model applies to contract assets, loan commitments and nancial
guarantees that are not measured at FVTPL. The IFRS 9 expected credit loss (ECL)
model is forward looking and a loss allowance is recognized when there is an
exposure to credit risk, usually at rst recognition of an asset or receivable. The
ECL reects the present value of all cash shortfalls related to default events either
over the following 12 months or over the expected life of a nancial instrument,
depending on the type of asset and on the credit deterioration from inception.
The ECL reects an unbiased, probability-weighted outcome that considers mul-
tiple scenarios based on reasonable and supportable forecasts.
The simplied model is applied on trade receivables, lease receivables, con-
tract assets and certain other nancial receivables. A loss allowance is recog-
nized over the expected lifetime of the receivable or asset. For other items sub-
ject to ECL, the impairment model with a three-stage approach is applied. Ini-
tially, and at each reporting date, a loss allowance will be recognized for the
following 12 months, or a shorter time period depending on the time to matu-
rity (stage 1). If it has been a signicant increase in credit risk since origination,
a loss allowance will be recognized for the remaining lifetime of the asset
(stage 2). For assets that are considered as credit impaired, allowance for credit
losses will continue to capture the lifetime expected credit losses (stage 3). For
credit impaired receivables and assets, the interest revenue is calculated based
on the carrying amount of the asset, net of the loss allowance, rather than its
gross carrying amount as in previous stages.
In the respective model applied, the measurement of ECL is based on dier-
ent methods for dierent credit risk exposures. For trade receivables, contract
assets and certain other nancial receivables, the method is based on historical
loss rates in combination with forward looking considerations. Lease receiv-
ables, certain other nancial receivables and cash and cash equivalent are
impaired by a rating method, where ECL is measured by the product of the
probability of default, loss given default, and exposure at default. Both external
credit agencies rating and internally developed rating methods are applied.
The measurement of ECL considers potential collaterals and other credit
enhancements in the form of guarantees.
The nancial assets are presented in the nancial statements at amortized
cost, i.e. net of gross carrying amount and the loss allowance. Changes in the
loss allowance is recognized in prot or loss, as impairment losses within the
line cost of sales.
Derivatives and hedge accounting
Derivatives are initially recognized at fair value on the date a derivative con-
tract is entered into and are subsequently measured at fair value. The method
of recognizing the resulting gain or loss depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of the item hedged.
Changes in fair value for derivatives that do not fulll the criteria for hedge
accounting are recognized as operating or nancial transactions based on the
purpose of the use of the derivative. Interest payments for interest rate swaps
are recognized as interest income or expense, whereas changes in fair value of
future payments are presented as gains or losses from nancial instruments.
IFRS 9 Hedge accounting is applied. In order to qualify for hedge accounting
the hedging relationship must be:
• formally identied and designated,
• expected to full the eectiveness requirements, and
• documented.
The Group assesses, evaluates, and documents eectiveness both at hedge
inception and on an ongoing basis. Hedge eectiveness is assessed by an anal-
ysis of the economic relationship between the hedged item and the hedging
instrument, and the eect of credit risk must not dominate the value changes’
that result from that economic relationship. Further, the hedge ratio, as
dened in the Group´s risk management strategy, must be the same in the
hedging relationship as in the actually hedge performed.
Cash ow hedges: Changes in the fair value of the hedging instrument are rec-
ognized in “Other comprehensive income” to the extent that the hedge is
eective and the accumulated changes in fair value are recognized as a sepa-
rate component in equity. Gains or losses relating to the ineective part of
hedges are recognized immediately in prot or loss.
The amount recognized in equity through “Other comprehensive income”
is reversed to prot or loss in the same period in which the hedged item aects
prot or loss. When the hedged forecast transaction results in the recognition
of a non-nancial asset or a non-nancial liability, the amount previously rec-
ognized in other comprehensive income and accumulated in equity is trans-
ferred from equity and included in the initial measurement of the cost of the
non-nancial asset or liability. The Group uses foreign currency forwards to
hedge part of the future cash ows from forecasted transactions in foreign
currencies. Interest rate swaps can also be used as cash ow hedges for hedg-
ing interest on borrowings with variable interest.
Hedge of net investments in foreign operations: The Group hedges a substan-
tial part of net investments in foreign operations. Changes in the value of the
hedge instrument relating to the eective portion of the hedge are recog-
nized in “Other comprehensive income” and accumulated in equity. Gains or
losses relating to the ineective portion are recognized immediately in prot
or loss. On divestment of foreign operations, the gain or loss accumulated in
equity is recycled through prot or loss, increasing or decreasing the prot or
loss on the divestment. The Group uses loans and forward contracts as hedg-
ing instruments.
Accounting for discontinuation of hedges: Hedge accounting may not be
voluntarily discontinued. Hedge accounting is discontinued:
• when the hedging instrument expires or is sold, terminated, or exercised,
• when there is no longer an economic relationship between the hedged
item and the hedging instrument or the eect of credit risk dominates the
value changes that result from the economic relationship, or
• when the hedge accounting no longer meets the risk management
objectives.
For cash ow hedges, any gain or loss recognized in “Other comprehensive
income” and accumulated in equity at the time of hedge discontinuation
remains in equity and is recognized when the forecast transaction is ultimately
recognized in prot or loss. When a forecast transaction is no longer expected
to occur, the gain or loss accumulated in equity is recognized immediately in
prot or loss. For net investment hedges, any gain and loss recognized in “Other
comprehensive income” and accumulated in equity at the time of hedge dis-
continuation remains in equity until divestment of foreign operations, when
the gain or loss accumulated in equity is recycled through prot or loss.
Assets held for sale
Assets are classied as held for sale if their value, within one year, will be
recovered through a sale and not through continued use in the operations.
On the reclassication date, assets and liabilities are measured at the lower
of fair value less selling expenses and the carrying amount. Gains and losses
recognized on remeasurement and disposal are reported in prot or loss. In
the balance sheet assets held for sale and associated liabilities are reported
separately, the comparative period is not aected.
Contingent liabilities
A contingent liability is a possible obligation or a present obligation that arises
from past events that is not reported as a liability or provision, due either to that
it is not probable that an outow of resources will be required to settle the obli-
gation or that a suciently reliable calculation of the amount cannot be made.
New or amended accounting standards in 2021
The following new or amended IFRS standards have been applied by the
Group from 2021, with none, or no material impact on the Group.
Leases Covid-19 Related Rent Concessions beyond 30 June 2021
(Amendment to IFRS 16)
The amendment provided relief to lessees from applying IFRS 16 guidance on
lease modication accounting for rent concessions arising as a direct conse-
quence of the Covid-19 pandemic. As a practical expedient, a lessee may elect
not to assess whether a Covid-19 related rent concession from a lessor is a lease
modication. A lessee that made this election accounted for any change in
lease payments resulting from Covid-19 related rent concession in the same
way as it would account for the change under IFRS 16 if the change was not a
lease modication. The IASB extended the period of application of the practi-
cal expedient to June 30, 2022.
Interest Rate Benchmark Reform – Phase 2 (Amendments to IFRS 9,
IAS 39, IFRS 7, IFRS 4 and IFRS 16)
The amendments to IFRS 9 introduce a practical expedient if a modication of
contractual cash ows of a nancial asset or a nancial liability is necessary as a
direct consequence of the IBOR reform and occurs on an “economically equiv-
alent” basis. In those cases, changes will be accounted for by updating the
eective interest rate. The amendments to IFRS 16 introduce a similar practical
expedient when accounting for lease modications required by the IBOR
reform. The practical expedient allows a remeasurement of the lease liability
by using the revised discount rate. The amount of the remeasurement is recog-
nized as an adjustment to the right-of-use asset.
Conguration or Customization Costs in a Cloud Computing Arrangement
(IAS 38)
In April 2021, International Financial Reporting Interpretations Committee
(IFRS IC) published an agenda decision on accounting for cloud computing
costs. The new guidance addresses conguration and customization costs on a
supplier’s application in a cloud arrangement. The agenda decision should be
1. Signicant accounting principles, critical accounting estimates and judgements, continued
Atlas Copco 2021 73
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
applied retrospectively and implies that depending on facts and circum-
stances, some costs should be recognized as operating expenses when the
work is performed. The new guidance is not expected to have any signicant
eect on the Group.
New or amended accounting standards eective after 2021
The following standards, interpretations, and amendments have been issued
but were not eective as of December 31, 2021 and in some cases had not
been adopted by the EU. The Group has not applied the new standards, inter-
pretations or amendments. The current assessment is that these amendments
will have none or no material eect on the Group.
Reference to the Conceptual Framework (Amendment to IFRS 3)
The amendments mainly relate to updated references in IFRS 3 as a conse-
quence of previous amendments in the Conceptual Framework. Further, a new
exception is introduced for obligations and contingent liabilities within the
scope of IAS 37 and IFRIC 21. Finally, the amendment adds an explicit state-
ment that an acquirer should not recognize any contingent assets acquired in a
business combination. The amendments are eective for business combina-
tions for which the date of acquisition is on or after January 1, 2022.
Proceeds before Intended Use (Amendment to IAS 16)
The amendments clarify that any proceeds from selling items produced before
the property, plant and equipment is available for use, shall not be deducted
from the cost of that property, plant and equipment. Consequently, an entity
recognizes such sales proceeds and related costs in prot or loss. The amend-
ments also clarify the meaning of ‘testing whether an asset is functioning
properly’ and that IAS 2 Inventories is applicable for measuring those costs to
proceed. The amendments are eective for annual periods beginning on or
after January 1, 2022.
Onerous Contracts—Cost of Fullling a Contract (Amendment to IAS 37)
The amendments specify that the ‘cost of fullling’ a contract comprises both
incremental costs of fullling that contract and an allocation of other costs
that relate directly to fullling that contract. The amendments apply to
contracts for which the entity has not yet fullled all its obligations at the
beginning of the annual reporting period in which the entity rst applies the
amendments. Comparatives are not restated. The amendments are eective
for annual periods beginning on or after January 1, 2022.
Annual Improvements to IFRS Standards 2018-2020 (Amendments to
IFRS 1, IFRS 9, IFRS 16 and IAS 41)
The amendments to IFRS 9 clarify which liabilities that shall be included in apply-
ing the ‘10 per cent test’ to assess whether to derecognize a nancial liability.
The amendments to illustrative example 13 accompanying IFRS 16 remove
the text related to reimbursement of leasehold improvements. The other
Annual Improvements related to IFRS 1 and IAS 41 are not impacting the
Group. The amendments are eective for annual periods beginning on or after
January 1, 2022.
IFRS 17 Insurance Contracts
IFRS 17 establishes the principles for the recognition, measurement, presenta-
tion, and disclosure of insurance contracts and supersedes IFRS 4 Insurance
Contracts. Some contracts that have not been within the scope of IFRS 4, may
1. Signicant accounting principles, critical accounting estimates and judgements, continued
be applicable within the scope of IFRS 17 and therefore the Group is investigat-
ing the possible eects of IFRS 17. The Group has a wholly owned captive.
Intra-group transactions are eliminated upon consolidation. The reinsurance
contracts that the captive holds with the third-party reinsurer are not reinsur-
ance contracts according to the denition within IFRS 17, instead the Group is
the policyholder in that relationship. Hence, the contracts are not in scope of
IFRS 17. IFRS 17 also outlines that some xed fee service contracts can meet the
denition of insurance contracts. If specied conditions are met, the Group
however can choose to apply IFRS 15 instead of IFRS 17 to such contracts that it
issues. IFRS 17 is eective for annual reporting periods beginning on or after
January 1, 2023. The Group’s current estimate is that IFRS 17 will have no mate-
rial eect. The Group is still assessing the eect of IFRS 17 and will continue to
assess the eect during 2022.
Classication of Liabilities as Current or Noncurrent (Amendment to IAS 1)
The amendments to IAS 1 aect the presentation of liabilities as current or
non-current in the statement of nancial position. The classication of liabili-
ties as current or non-current should be based on rights that are in existence at
the end of the reporting period. The classication is unaected by expecta-
tions about whether an entity will or will not exercise its right to defer settle-
ment of a liability. The amendments are applied retrospectively for annual
periods beginning on or after January 1, 2023.
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS
Practice Statement 2)
The amendments change the requirements in IAS 1 regarding disclosure of
accounting policies. The amendments replace the term ‘signicant accounting
policies’ with ‘material accounting policy information’. Accounting policy
information is material if, when considered together with other information
included in an entity’s nancial statements, it can reasonably be expected to
inuence decisions that the primary users of general purpose nancial state-
ments make on the basis of those nancial statements. Amendments to IAS 1
also clarify that accounting policy information that relates to immaterial trans-
actions, other events or conditions is immaterial and need not be disclosed.
Accounting policy information may be material because of the nature of the
related transactions, other events or conditions, even if the amounts are imma-
terial. Further, the guidance and examples have been developed to explain
and demonstrate the application of the materiality criteria on disclosures of
accounting policy information described in IFRS Practice Statement 2. The
amendments to IAS 1 are eective for annual periods beginning on or after
January 1, 2023. The amendments to IFRS Practice Statement 2 do not contain
an eective date or transition requirements.
Denition of Accounting Estimates (Amendment to IAS 8)
The amendments to IAS 8 include a change to the denition of accounting
estimates. Under the new denition, accounting estimates are “monetary
amounts in nancial statements that are subject to measurement uncer-
tainty”. The denition of a change in accounting estimates was deleted and
the concept of changes in accounting estimates in the Standard has been clari-
ed. The amendments are eective for annual periods beginning on or after
January 1, 2023.
Deferred Tax related to Assets and Liabilities arising from a
Single Transaction (Amendment to IAS 12)
The amendments introduce an exception from the initial recognition of
deferred tax for a transaction that gives rise to an asset or liability, if certain cri-
teria are met. The amendments clarify that the exception is not applicable for
transactions that give rise to equal taxable and deductible temporary dier-
ences. This may for example arise upon recognition of a lease liability and the
corresponding right-of-use asset applying IFRS 16 at the commencement date
of a lease. Another example may be provisions for estimated future costs of
dismantling, removal and restoration, recognized as part of Property, plant
and equipment. The amendments are applied retrospectively for annual
periods beginning on or after January 1, 2023.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of nancial reports requires management’s judgement and
the use of estimates and assumptions that aects the amounts reported in
the consolidated nancial statements. These estimates and associated
assumptions are based on historical experience and various other factors that
are believed to be reasonable under the prevailing circumstances. Actual
result may dier from those estimates. The estimates and assumptions are
reviewed on an on-going basis. Changes in accounting estimates are recog-
nized in the period which they are revised in and in any future periods
aected.
The estimates and the judgements which, in the opinion of management,
are signicant to the underlying amounts included in the nancial reports
and for which there is a signicant risk that future events or new information
could entail a change in those estimates or judgements are as follows:
Revenue recognition
Key sources of estimation uncertainty
Revenue for services and for highly customized goods where an enforceable
right of payment is present is recognized over time in prot or loss by refer-
ence to the progress towards satisfaction of the performance obligation at
the balance sheet date. The progress towards satisfaction is determined by
the proportion of cost incurred to date compared to the estimated total cost
of each performance obligation. There is always an uncertainty if the total
estimated expenditure is correctly calculated, and if the expenditure incurred
reects accurately the actual costs incurred, which means that there is uncer-
tainty in the estimates of the degree of completion of the work performed.
Management has assessed this method of determining the progress towards
satisfaction of the performance obligation as most suitable as it reects the
progression of work performed, and the enforceable right of payment from
the customer as the costs are incurred on the performance obligations.
Revenue for goods sold is recognized in prot or loss at one point in time
when control of the good has been transferred to the customer.
Accounting judgement
Management’s judgement is used, for instance, when assessing:
• the degree of progress towards satisfaction of the performance obligations
and the estimated total costs for such contracts when revenue is recog-
nized over time, to determine the revenue and cost to be recognized in the
current period, and whether any losses need to be recognized,
Atlas Copco 2021 74
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
• if the control has been transferred to the customer (for example the Group
has a present right to payment for the good, the customer has legal title of
the good, the good has been delivered to the customer and/or the customer
has the signicant risks and rewards of the ownership of the good), to deter-
mine if revenue and cost should be recognized in the current period,
• the transaction price of each performance obligation when a contract
includes more than one performance obligation, to determine the revenue
and cost to be recognized in the current period,
• certain contracts which include a right of return and/or volume rebates
that give rise to variable consideration, variable consideration is assessed to
identify possible constrains, and
• the customer credit risk (i.e. the risk that the customer will not meet the
payment obligation), to determine and justify the revenue recognized in
the current period.
Impairment of goodwill, other intangible assets and other
long-lived assets
Key sources of estimation uncertainty
Goodwill and certain trademarks are not amortized but are subject to annual
tests for impairment. Other intangible assets and other long-lived assets are
amortized or depreciated based on management’s estimates of the period
that the assets will generate revenue but are also reviewed regularly for indica-
tions of impairment.
The impairment tests are based on a review of the recoverable amount,
which is estimated based on management’s projections of future cash ows
using internal business plans and forecasts.
Accounting judgement
Asset impairment requires management’s judgement, particularly in
assessing:
• whether an event has occurred that may aect asset values,
• whether the carrying value of an asset can be supported by the net present
value of future cash ows, which are estimated based upon the continued
use of the asset in the business,
• the appropriate assumptions to be applied in preparing cash ow
projections, and
• the discounting of these cash ows.
Changing the assumptions selected by management to determine the level, if
any, of impairment could aect the nancial position and results of operation.
See note 12.
Deferred taxes
Key sources of estimation uncertainty
Deferred tax assets are recognized for temporary dierences between the car-
rying amounts for nancial reporting purposes of assets and liabilities and the
amounts used for taxation purposes and for tax loss carry-forwards. The
Group recognizes deferred tax assets based upon management’s estimates of
future taxable prot in dierent tax jurisdictions. The actual results may dier
from these estimates, due to change in the business climate and change in tax
legislation. See note 9.
Inventory
Accounting judgement
The Group values inventory at the lower of historical cost, based on the rst-in,
rst-out basis, and net realizable value. The calculation of net realizable value
1. Signicant accounting principles, critical accounting estimates and judgements, continued
involves management’s judgement on the estimated sales prices, over-stock
articles, outdated articles, damaged goods, and selling costs. If the estimated
net realizable value is lower than cost, a valuation allowance is established for
inventory obsolescence. See note 16 for additional information.
Leases
Key sources of estimation uncertainty
When the Group cannot readily determine the interest rate implicit in the
lease, it uses incremental borrowing rate (IBR) to measure lease liabilities. The
IBR is the rate of interest that the Group would have to pay to borrow over simi-
lar terms which requires estimations when no observable rates are available.
The Group estimates the IBR by using market interest rates and adjusting with
entity specic estimates such as currency and country risk.
Accounting judgement
The Group has several lease contracts that include extension options. The
Group applies judgement in evaluating the lease term, it considers all facts and
circumstances that create an economic incentive to exercise an extension
option. Extension options are only included in the lease term if the lease is rea-
sonably certain to be extended. For leases of premises, the following factors
are normally the most relevant:
• if any leasehold improvements are expected to have a signicant remaining
value, the Group is typically reasonably certain to extend.
• otherwise, the Group considers other factors including historical lease
durations and the costs and business disruption required to replace the
leased asset.
The renewal periods for leases of oces and warehouse premises with exten-
sion options exceeding 10 to 15 years are not included as part of the lease term
as these are not reasonably certain to be exercised. In addition, renewal
options for leases of motor vehicles are not part of the lease term because the
Group typically leases motor vehicles for not more than three to ve years and,
hence, is not exercising any renewal options.
After the commencement date, the Group reassesses the lease term if there
is a signicant event or change in circumstances that is within its control and
aects its ability to exercise the option to renew. Refer to note 22 for informa-
tion on potential future rental payments relating to extension options that are
not included in the lease term.
Trade and nancial receivable
Key sources of estimation uncertainty:
The Group measure the expected credit losses on nancial assets classied at
amortized cost including trade and nancial receivables, lease receivables and
contract assets. The expected credit losses for trade receivables and contract
assets are an assessment of specic loss provisions corresponding to individu-
ally signicant exposures as well as historical loss rates in combination with for-
ward looking considerations. The expected credit losses for lease receivables
and nancial receivables are an assessment that reects an unbiased, proba-
bility-weighted outcome based on reasonable and supportable forecasts.
Accounting judgement:
Management’s judgement considers rapidly changing market conditions. An
overlay control is performed to ensure that an adequate loss allowance is rec-
ognized. Additional information is included in section “Credit risk” in note 27.
Pension and other post-employment benet valuation assumptions
Key sources of estimation uncertainty
Pensions and other post-employment obligations are dependent on the
assumptions established by management and used by actuaries in calculating
such amounts. The key assumptions include discount rates, ination, future
salary increases, mortality rates, and healthcare-cost trend rates. The actuarial
assumptions are reviewed on an annual basis and are changed when it is
deemed appropriate.
See note 23 for additional information regarding assumptions used in the
calculation of pension and post-employment obligations.
Legal proceedings and tax claims
Accounting judgement
Atlas Copco recognizes a liability when the Group has an obligation from a
past event involving the transfer of economic benets and when a reasonable
estimate can be made of what the transfer might be. The Group reviews out-
standing legal cases regularly in order to assess the need for provisions in the
nancial statements. These reviews consider the factors of the specic case by
internal legal counsel and through the use of outside legal counsel and advi-
sors when necessary. The nancial statements may be aected to the extent
that management’s assessments of the factors considered are not consistent
with the actual outcome.
Additionally, the legal entities of the Group are frequently subject to audits
by tax authorities in accordance with standard practice in the countries where
the Group operates. In instances where the tax authorities have a dierent
view on how to interpret the tax legislation, the Group makes estimates as to
the likelihood of the outcome of the dispute, as well as estimates of potential
claims. The actual results may dier from these estimates.
Warranty provisions
Key sources of estimation uncertainty
Provisions for product warranties should cover future commitments for the
sales volumes already realized. Warranty provisions are complex accounting
estimates due to the variety of variables which are included in the calculations.
The calculation methods are based on the type of products sold and historical
data for level of repairs and replacements. The underlying estimates for
calculating the provision are reviewed at least quarterly as well as when new
products are introduced or when other changes occur which may aect the
calculation. See note 25.
Acquisitions
Key sources of estimation uncertainty
The Group performs purchase price allocations related to business combina-
tions. Purchase prices are allocated to the underlying acquired assets and liabili-
ties based on their estimated fair value at the time of the acquisition. Fair value is
commonly based on valuation models. The valuation methods rely on various
assumptions, such as estimated future cash ows, remaining economic useful
life etc. The determination of the fair value requires the Group to apply assump-
tions and estimates. These can vary from the actual outcomes. See note 2.
Atlas Copco 2021 75
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
2. Acquisitions
The following summarizes the acquisitions during 2021 and 2020:
Acquisition date Country Business area Revenues
1)
Number of
employees
1)
2021 Dec. 10 Provac Limited Ireland Vacuum Technique
2)
11
2021 Nov. 9 S.T.E.R.I. srl (STERI) Italy Compressor Technique
2)
19
2021 Oct. 19 Eugen Theis GmbH Germany Vacuum Technique
2)
4
2021 Sep. 28 AEP France Compressor Technique
2)
8
2021 Aug. 31 NATEV GmbH Germany Industrial Technique 5 10
2021 Aug. 5 CPC Pumps International Inc. Canada Compressor Technique 385 110
2021 Jun. 24 Airow Compressors & Pneumatics Ltd (Airow) United Kingdom Compressor Technique
2)
16
2021 Jun. 14 Compressed Air Systems, Inc. (CAS) U.S.A. Compressor Technique
2)
30
2021 May 31 ARPUMA regel- und fördertechnische Geräte GmbH Germany Vacuum Technique 41 14
2021 May 25 Medigas Service & Testing Co. Inc. U.S.A. Compressor Technique 23 6
2021 May 10 MidState Air Compressor U.S.A. Compressor Technique
2)
15
2021 May 3 Eco Steam and Heating Solutions Netherlands Power Technique 198 23
2021 Apr. 7 IBVC Vacuum, S.L.U. Spain Vacuum Technique
2)
10
2021 Mar. 3 Cooper Freer Ltd United Kingdom Compressor Technique
2)
18
2021 Jan. 26 DGM SRL Italy Compressor Technique
2)
21
2021 Jan. 7 Ehrler & Beck GmbH Germany Vacuum Technique
2)
15
2021 Jan. 5 Kawalek Kompressoren Germany Compressor Technique
2)
10
2020 Dec. 31 Purication Solutions LLC U.S.A. etc. Compressor Technique 242 60
2020 Dec. 21 Perceptron U.S.A. etc. Industrial Technique 516 300
2020 Sep. 2 MEDGAS-Technik GmbH Germany etc. Compressor Technique 126 80
2020 Aug. 4 iTrap (the technology and operating assets) Germany Vacuum Technique
2)
4
2020 Aug. 4 THN Druckluft and Produktions GmbH & Co. KG Germany Compressor Technique
2)
15
2020 Jun. 24 ISRA VISION AG Germany etc. Industrial Technique 1 619 800
2020 Jun. 5 Ovity Air Comprimé France Compressor Technique
2)
8
2020 Feb. 28 Dekker Vacuum Technologies, Inc. U.S.A. Vacuum Technique 217 70
2020 Feb. 27 Dr. Gustav Gail Drucklufttechnik GmbH Germany Compressor Technique
2)
10
2020 Jan. 22 M.C. Schroeder Equipment Co., Inc. U.S.A. Vacuum Technique
2)
8
2020 Jan. 16 Hydra Flow West U.S.A. Compressor Technique
2)
7
2020 Jan. 3 Scheugenpug AG Germany etc. Industrial Technique 850 600
1)
Annual revenues and number of employees at the time of acquisition.
2)
Former distributor of Atlas Copco products. No revenues are disclosed for former Atlas Copco distributors.
With exception of the acquisition of Eco Steam and Heating Solutions in 2021
and of ISRA VISION (92.19% of shares acquired) in 2020, all acquisitions were
made through the purchase of 100% of shares and voting rights or through
the purchase of the net assets of the acquired operations. The remaining
shares of ISRA VISION was acquired in 2021, see note 20. The Group received
control over the operations upon the date of closing the acquisition. In the
case of Eco Steam and Heating Solutions, the majority of the shares were
acquired, and the terms of the transaction provide Atlas Copco a present own-
ership interest in the remaining shares. Non-controlling interest has therefore
not been recognized. No equity instruments have been issued in connection
with the acquisitions. All acquisitions have been accounted for using the
acquisition method.
The amounts presented in the following tables detail the recognized
amounts aggregated by business area, as the relative amounts of the individ-
ual acquisitions are not considered signicant, except for ISRA VISION in 2020
which is disclosed separately. The fair values related to intangible assets other
than goodwill are amortized over 5–15 years. For more information about the
valuation of contingent consideration, see note 27. The Group is in the process
of reviewing the nal values for certain of the recently acquired businesses. No
adjustments are expected to be material. Adjustments related to the acquisi-
tions made in 2020 are included in the following tables.
Atlas Copco 2021 76
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
2. Acquisitions, continued
Compressor Technique Recognized values
2021 2020
Intangible assets 881 210
Property, plant and equipment
1)
147 36
Other assets 240 141
Cash and cash equivalents 72 48
Interest-bearing liabilities and borrowings –84 –78
Other liabilities and provisions –419 –112
Net identiable assets 837 245
Goodwill 1 075 185
Total consideration 1 912 430
Deferred consideration –1 –33
Cash and cash equivalents acquired –72 –48
Net cash outow 1 839 349
1)
Includes right-of-use assets.
In May, the Compressor Technique business area acquired the operating assets
of Medigas Service & Testing Co. Inc. The company services, sells, veries, and
installs piped medical and laboratory gas equipment and systems and is based
in Ronkonkoma, New York State, U.S.A. The acquisition is expected to further
strengthen and expand Atlas Copco´s support to both healthcare and labora-
tory customers in the strategic New York area. Intangible assets of 9 were
recorded on the purchase.
In August, CPC Pumps International Inc., based in Burlington in Ontario,
Canada was acquired. The company specializes in the design, manufacturing,
and servicing of custom-engineered, mission critical centrifugal pumps. The
acquisition of CPC Pumps adds complementary assets to Atlas Copco´s portfo-
lio and is expected to strengthen the Company’s market position. Intangible
assets of 624 and goodwill of 1 062 were recorded on the purchase. The good-
will is not deductible for tax purposes.
In addition, the business area acquired eight distributors during the year. In
January, Kawalek Kompressoren, located in Germany and DGM SRL, located in
Italy, were acquired. Cooper Freer Ltd and Airow Compressors & Pneumatics
Ltd, both located in the United Kingdom, were acquired in March and June
respectively. The operating assets of MidState Air Compressors and the oper-
ating assets of Compressed Air Systems, Inc., both located in the U.S.A. were
acquired in May and June respectively. French AEP was acquired in September
and nally in November, Italian S.T.E.R.I. srl was acquired. The acquisitions are
expected to increase Atlas Copco’s presence in their respective markets. In
total, intangible assets of 248 were recorded on the purchases.
Minor adjustments were made in the year related to the acquisitions in
2020.
Vacuum Technique Recognized values
2021 2020
Intangible assets 118 194
Property, plant and equipment
1)
18 25
Other assets 32 88
Cash and cash equivalents 22 1
Interest-bearing liabilities and borrowings –18 –14
Other liabilities and provisions –57 –33
Net identiable assets 115 261
Goodwill – 122
Total consideration 115 383
Deferred consideration –31 –6
Cash and cash equivalents acquired –22 –1
Net cash outow 62 376
1)
Includes right-of-use assets.
In May, the Vacuum Technique business area acquired ARPUMA regel- und
fördertechnische Geräte GmbH, located in Kerpen, Germany. The company is a
highly specialized vacuum systems and solutions provider for the chemical and
pharmaceutical industry. The customer base is in Germany, and the company
serves big chemical process customers. Arpuma’s systems are installed glob-
ally and the acquisition is expected to enable Atlas Copco to grow the systems
and solutions business within the chemical and pharmaceutical industry.
Intangible assets of 38 were recorded on the purchase.
In addition, the business area acquired four distributors during the year.
Ehrler and Beck GmbH and Eugen Theis GmbH, both based in Germany were
acquired in January and October respectively. In April, IBVC Vacuum, S.L.U,
located in Madrid, Spain, was acquired. Finally, Provac Limited, located in
Wexford, Ireland, was acquired in December. The acquisitions are expected to
increase Atlas Copco’s presence in their respective markets. In total, intangible
assets of 62 were recorded on the purchases.
Minor adjustments were made in the year related to the acquisitions in
2020.
Industrial Technique Recognized values
2021 2020
Intangible assets 43 4 818
Property, plant and equipment
1)
14 478
Other assets –245 2 486
Cash and cash equivalents – 426
Interest-bearing liabilities and borrowings – –686
Other liabilities and provisions 81 –2 300
Net identiable assets –107 5 222
Non-controlling interests 13 –334
Goodwill 111 8 389
Total consideration 17 13 277
Deferred consideration –8 7
Cash and cash equivalents acquired – –426
Net cash outow 9 12 858
1)
Includes right-of-use assets.
In August, the Industrial Technique business area acquired the assets of NATEV
GmbH. The company is located in Borken, in north-western Germany, and spe-
cializes in position solutions for assembly tools used in industrial production.
NATEV develops systems for real-time positioning and imaging solutions in
close cooperation with key customers in the automotive industry. Products
include hardware and software used to monitor and error proof dened pro-
duction steps linked to the tightening processes. Through NATEV’s solutions,
Atlas Copco expects to be able to expand the oering of positioning solutions.
This is an important technology to enable exible production in line with the
Industry 4.0 vision. Intangible assets of 16 were recorded on the purchase.
Some adjustments related to the 2020 acquisitions of ISRA VISION and Per-
ceptron were made in 2021. For ISRA VISION, the changes were mainly related
to inventories, receivables and related deferred tax and resulted in an increase
of goodwill with 149.
Atlas Copco 2021 77
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
2. Acquisitions, continued
The goodwill recognized on acquisitions is primarily related to the synergies
expected to be achieved from integrating these companies into the Group’s
existing structure.
The total consideration for all acquisitions was 2 589 (14 089). Deferred con-
sideration includes both deferred consideration not yet paid for acquisitions
made in 2021 and settlement of deferred consideration for acquisitions made
in prior years. For all acquisitions, the net cash outow totaled 2 334 (13 583)
after deducting cash and cash equivalents acquired of 167 (475).
Acquisition-related costs amounted to 25 (175) and were included in the
“Administrative expenses”. Costs related to acquisitions nalized in 2021 were
included in the income statements for 2020 and 2021.
Contribution from businesses
acquired in 2021 and 2020 by
business area
Compressor Technique Vacuum Technique Industrial Technique Power Technique Group
2021 2020 2021 2020 2021 2020* 2021 2020 2021 2020
Contribution from date of
control
Revenues 275 108 87 216 – 1 301 128 – 490 1 625
Operating prot –26 –10 –2 2 –4 –28 28 – –4 –36
Prot for the year –11 –31
Contribution if the acquisition
had occurred on Jan. 1
Revenues 611 484 130 253 15 2 431 192 – 948 3 168
Operating prot 0 –4 –1 –9 –3 –63 42 – 38 –76
Prot for the year 22 –69
* From the date of control, ISRA VISION had revenues of MSEK 690 and operating prot of MSEK 15, including negative purchase price allocation eects of MSEK 90.
Power Technique Recognized values
2021 2020
Intangible assets 107 –
Property, plant and equipment
1)
271 –5
Other assets 35 –7
Cash and cash equivalents 73 –
Interest-bearing liabilities and borrowings –122 –
Other liabilities and provisions –51 3
Net identiable assets 313 –9
Goodwill 232 8
Total consideration 545 –1
Deferred consideration –48 1
Cash and cash equivalents acquired –73 –
Net cash outow 424 –
1)
Includes right-of-use assets.
In May, the Power Technique business area acquired Eco Steam and Heating
Solutions (E.K.S. HOLDING B.V.), an industrial steam and hot water boiler com-
pany located in Tilburg, in the Netherlands. The acquisition will strengthen and
expand Atlas Copco´s specialized rental product oering to industrial custom-
ers in all segments and territories. Intangible assets of 107 and goodwill of 232
were recorded on the purchase. The goodwill is not deductible for tax pur-
poses.
3. Assets held for sale and divestments
Assets held for sale
Carrying value of assets held for sale 2021 2020
Property, plant and equipment 5 5
Net carrying value 5 5
Divestments
In December, the CMM (Coordinate Measuring Machine) part of the Percep-
tron business (acquired in December 2020) was divested. The divestment was
a result of further focus on in-line metrology to oine applications. Net cash
eect of the divestment was –7 and it resulted in a capital loss of 28. The loss is
included in “Other operating expense”. See note 7.
Carrying value of divested assets and liabilities 2021 2020
Property, plant and equipment
1)
14 –
Inventories 18 –
Trade receivables 17 –
Other current assets 3 –
Cash and cash equivalents 7 –
Interest bearing liabilities and borrowings –4 –
Other liabilities and provisions –27 –
Net identiable assets 28 –
1)
Includes right-of-use assets.
Total fair value of
acquired assets and
liabilities
Group recognized values
2021 2020
ISRA
VISION
2)
Intangible assets 1 149 5 222 4 151
Property, plant and equipment
1)
450 534 211
Other non-current assets 21 16 10
Inventories –83 907 368
Trade receivables
3)
102 1 021 504
Other current assets 22 764 632
Cash and cash equivalents 167 475 304
Interest-bearing liabilities and
borrowings
–224 –778 –528
Other liabilities and provisions –273 –866 –390
Deferred tax assets/
liabilities, net
–173 –1 576 –1 342
Net identiable assets 1 158 5 719 3 920
Non-controlling interests 13 –334 –321
Goodwill 1 418 8 704 7 005
Total consideration 2 589 14 089 10 604
Deferred consideration –88 –31 –
Cash and cash equivalents acquired –167 –475 –304
Net cash outow 2 334 13 583 10 300
1)
Includes right-of-use assets.
2)
ISRA VISION refers to the acquisition of ISRA VISION AG in 2020 and includes
adjustments made in 2021.
3)
The gross amount is 146 (1 073) of which 44 (52) is expected to be uncollectible.
Atlas Copco 2021 78
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
2021 Compressor Technique Vacuum Technique Industrial Technique Power Technique Common Group functions Eliminations Group
Revenues from external customers 49 216 29 200 19 390 13 106 – – 110 912
Inter-segment revenues 441 19 31 128 – –619 –
Total revenues 49 657 29 219 19 421 13 234 – –619 110 912
Operating prot
11 874 7 066
3 976
2 121 –1 486
8
23 559
– of which share of prot in associated companies and joint ventures 0 30 6 – – – 36
Net nancial items –149
Income tax expense –5 276
Prot for the year 18 134
Non-cash expenses
Depreciation/amortization 1 434 1 283 1 315 1 101 237 –32 5 338
Impairment 15 36 71 8 –2 – 128
Other non-cash expenses –119 32 –228 34 281 – –
Segment assets 33 164 36 463 29 423 11 230 9 044 –6 956 112 368
– of which goodwill 5 580 12 047 13 124 1 362 – – 32 113
Investments in associated companies and joint ventures 1 801 128 – 1 – 931
Unallocated assets 23 384
Total assets 33 165 37 264 29 551 11 230 9 045 –6 956 136 683
Segment liabilities 19 172 7 326 5 287 3 353 8 334 –6 854 36 618
Unallocated liabilities 32 431
Total liabilities 19 172 7 326 5 287 3 353 8 334 –6 854 69 049
Capital expenditures
Property, plant and equipment 1 082 1 181 427 703 130 –26 3 497
– of which right-of-use assets 462 188 158 132 77 – 1 017
Intangible assets 191 473 527 141 57 – 1 389
Total capital expenditures 1 273 1 654 954 844 187 –26 4 886
Goodwill acquired 1 075 – 111 232 – – 1 418
2021 Compressor Technique Vacuum Technique Industrial Technique Power Technique Common Group functions Eliminations Group
Items aecting comparability in Operating prot – – – – –687
1)
– –687
1)
Refers to a change in provision for share-related long-term incentive programs.
4. Segment information
Atlas Copco 2021 79
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
2020 Compressor Technique Vacuum Technique Industrial Technique Power Technique Common Group functions Eliminations Group
Revenues from external customers 46 979 24 673 16 141 11 994 – – 99 787
Inter-segment revenues 350 12 35 112 – –509 –
Total revenues 47 329 24 685 16 176 12 106 – –509 99 787
Operating prot
10 658
5 519 2 422
1 594
–1 060 13
19 146
– of which share of prot in associated companies and joint ventures 0 33 0 – – – 33
Net nancial items –321
Income tax expense –4 042
Prot for the year 14 783
Non-cash expenses
Depreciation/amortization 1 398 1 211 1 175 1 147 265 –33 5 163
Impairment 2 – 12 4 8 – 26
Other non-cash expenses –12 –20 112 6 24 – 110
Segment assets 26 943 30 869 27 949 9 863 2 721 –1 161 97 184
– of which goodwill 4 164 11 099 12 534 1 076 – – 28 873
Investments in associated companies and joint ventures 1 809 121 – – – 931
Unallocated assets 15 251
Total assets 26 944 31 678 28 070 9 863 2 721 –1 161 113 366
Segment liabilities 15 517 5 070 4 451 2 397 2 255 –1 053 28 637
Unallocated liabilities 31 195
Total liabilities 15 517 5 070 4 451 2 397 2 225 –1 053 59 832
Capital expenditures
Property, plant and equipment 1 152 737 352 687 161 –21 3 068
– of which right-of-use assets 575 197 129 107 115 – 1 123
Intangible assets 165 521 502 136 13 – 1 337
Total capital expenditures 1 317 1 258 854 823 174 –21 4 405
Goodwill acquired 185 122 8 389 8 – – 8 704
2020 Compressor Technique Vacuum Technique Industrial Technique Power Technique Common Group functions Eliminations Group
Items aecting comparability in Operating prot – –300
1)
–190
2)
–50
2)
–312
3)
– –852
1)
Refers to restructuring costs and a provision of –210 for the settlement of a pension dispute in Edwards Ltd dating from before the acquisition of Edwards Ltd in 2014.
2)
Refers to restructuring costs.
3)
Refers to a change in provision for share-related long-term incentive programs.
4. Segment information, continued
Atlas Copco 2021 80
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
The Group is organized in separate and focused but still integrated business
areas, each operating through divisions. The business areas oer dierent
products and services to dierent customer groups. They are also the basis for
management and internal reporting and are regularly reviewed by the
Group’s President and CEO, the chief operating decision maker. The chief
operating decision maker uses more than one measure of the operating seg-
ments’ prot or loss to assess performance and allocate resources. The operat-
ing prot of the business areas is the primary prot measure used by the chief
operating decision maker, and is reconciled to the consolidated operating
prot in the tables on the previous pages. Items aecting comparability are
included in a separate table since the chief operating decision maker reviews
also these as part of allocating resources to the dierent business areas. All
business areas are managed on a worldwide basis and their role is to develop,
implement and follow up the objectives and strategies within their respective
business.
See pages 21–33 for a description of the business areas.
Common group functions, i.e. functions which serve all business areas or
the Group as a whole, are not considered a segment.
The accounting principles for the segments are the same as those described
in note 1. Atlas Copco’s inter-segment pricing is determined on a commercial
basis.
Segment assets are comprised of property, plant and equipment, right-
of-use assets, intangible assets, other non-current receivables, inventories,
and current receivables.
Segment liabilities include the sum of non-interest-bearing liabilities such
as operating liabilities, other provisions, and other non-current liabilities.
Capital expenditure includes property, plant and equipment, and intangible
assets, but excludes the eect of goodwill, intangible assets and property,
plant and equipment through acquisitions.
Revenues from external customers
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
20202021
MSEK
Equipment
Service (incl. spare parts,
consumables, accessories
and rental)
4. Segment information, continued
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
20202021
MSEK
Equipment
Service (incl. spare parts,
consumables, accessories
and rental)
Geographic distribution
2021
Compressor Technique, % Vacuum Technique, % Industrial Technique, % Power Technique, %
Group, %
Orders
received Revenues
Orders
received Revenues
Orders
received Revenues
Orders
received Revenues
Orders
received Revenues
North America 21 21 21 21 31 31 29 27 24 23
South America 5 5 – – 2 3 7 8 4 4
Europe 34 34 14 13 36 36 36 36 28 29
Africa/Middle East 7 6 1 1 2 1 8 8 4 4
Asia/Oceania 33 34 64 65 29 29 20 21 40 40
100 100 100 100 100 100 100 100 100 100
By geographic
area/country
Revenues Non-current assets
2021 2020 2021 2020
North America
U.S.A. 22 317
20 513
12 481 11 668
Other countries 3 678 3 135 2 115 268
25 995 23 648 14 596 11 936
South America Brazil 2 449 2 076 435 447
Other countries 1 793
1 488
128 146
4 242 3 564 563 593
Europe Belgium
1 087 1 102
2 501
2 224
France 3 272 3 385 565 731
Germany 6 468
6 116 20 964
20 604
Italy 2 955 2 631 2 103 2 025
Sweden 1 558 1 425 1 235 1 330
United Kingdom 2 835 2 646 13 743 12 639
Other countries 13 646 13 016 2 343 1 650
31 821 30 321 43 454 41 203
Africa/Middle East South Africa 710 522 79 85
Other countries 4 178 4 635 319 366
4 888 5 157 398 451
Asia/Oceania Greater China 25 544 20 519 2 667 2 200
India 3 930 3 197 289 286
Japan 2 485 2 918 568 489
South Korea 6 024 5 008 1 818 1 491
Other countries 5 983 5 455 572 582
43 966 37 097 5 914 5 048
Total 110 912 99 787 64 925 59 231
Geographical information
The revenues presented are based on the location of the
customers while non-current assets are based on the
geographical location of the assets. These assets include
non-current assets other than nancial instruments,
investments in associated companies and joint ventures,
deferred tax assets, and post-employment benet assets.
Atlas Copco 2021 81
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
4. Segment information, continued
Quarterly data, Revenues by business area
Revenues 2021 2020
1 2 3 4 1 2 3 4
Compressor Technique 11 522 12 212 12 792 13 131 11 588 11 405 11 890 12 446
– of which external 11 423 12 099 12 677 13 017 11 470 11 322 11 806 12 381
– of which internal 99 113 115 114 118 83 84 65
Vacuum Technique 6 808 7 220 7 249 7 942 6 159 6 535 5 928 6 063
– of which external 6 804 7 214 7 245 7 937 6 154 6 535 5 925 6 059
– of which internal 4 6 4 5 5 – 3 4
Industrial Technique 4 713 4 880 4 630 5 198 4 193 3 355 4 221 4 407
– of which external 4 705 4 873 4 622 5 190 4 180 3 347 4 215 4 399
– of which internal 8 7 8 8 13 8 6 8
Power Technique 3 121 3 377 3 312 3 424 3 325 2 930 2 932 2 919
– of which external 3 089 3 348 3 280 3 389 3 294 2 898 2 903 2 899
– of which internal 32 29 32 35 31 32 29 20
Common Group
functions/eliminations
–143
–155
–159
–162
–167
–123
–122
–97
Total 26 021 27 534 27 824 29 533 25 098 24 102 24 849 25 738
Quarterly data, Operating prot by business area
Operating prot
2021 2020
1 2 3 4 1 2 3 4
Compressor Technique 2 730 2 916 3 087 3 141 2 520 2 444 2 729 2 965
in % of revenues 23.7% 23.9% 24.1% 23.9% 21.7% 21.4% 23.0% 23.8%
Vacuum Technique 1 695 1 789 1 748 1 834 1 497 1 278 1 354 1 390
in % of revenues 24.9% 24.8% 24.1% 23.1% 24.3% 19.6% 22.8% 22.9%
Industrial Technique 917 981 958 1 120 799 334 513 776
in % of revenues 19.5% 20.1% 20.7% 21.5% 19.1% 10.0% 12.2% 17.6%
Power Technique 476 539 548 558 473 286 410 425
in % of revenues 15.3% 16.0% 16.5% 16.3% 14.2% 9.8% 14.0% 14.6%
Common Group
functions/eliminations
–431
–301
–341
–405
–165
–453
–246
–183
Operating prot 5 387 5 924 6 000 6 248 5 124 3 889 4 760 5 373
in % of revenues 20.7% 21.5% 21.6% 21.2% 20.4% 16.1% 19.2% 20.9%
Net nancial items –44 –52 –55 2 –114 –63 –64 –80
Prot before tax 5 343 5 872 5 945 6 250 5 010 3 826 4 696 5 293
in % of revenues 20.5% 21.3% 21.4% 21.2% 20.0% 15.9% 18.9% 20.6%
Average number of employees 2021 2020
Women Men Total Women Men Total
Parent Company
Sweden 64 43 107 69 38 107
Subsidiaries
North America 1 257 4 977 6 234 1 198 4 788 5 986
South America 436 1 491 1 927 400 1 459 1 859
Europe 3 873 14 941 18 814 3 673 14 497 18 170
– of which Sweden 286 1 009 1 295 293 1 047 1 340
Africa/Middle East 207 882 1 089 186 891 1 077
Asia/Oceania 2 599 10 502 13 101 2 369 10 038 12 407
Total in subsidiaries 8 372 32 793 41 165 7 826 31 673 39 499
Total 8 436 32 836 41 272 7 895 31 711 39 606
5. Employees and personnel expenses
Females in the Board of Directors and Group Management, % Dec. 31, 2021 Dec. 31, 2020
Parent Company
Board of Directors
1)
22 22
Group Management 13 22
1)
Which excludes President and CEO, includes employee representatives but excludes employee representatives’ alternate members.
Remuneration and other benets Group
2021 2020
Salaries and other remuneration 21 954 20 657
Contractual pension benets 1 286 1 399
Other social costs 3 911 3 526
Total 27 151 25 582
Pension obligations to Board members and Group Management
1)
5 4
1)
Refers to former members of Group Management.
Atlas Copco 2021 82
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
5. Employees and personnel expenses, continued
2020
Remuneration and other benets to the Board, KSEK Fee
Value of synthetic
shares at grant date
Number of synthetic
shares at grant date Other fees
1)
Total fees incl. value of
synthetic shares at grant date
Eect of vesting and
change in stock price
2)
Total expense recognized
3)
Chair:
Hans Stråberg 1 163 1 162 3 423 425 2 750 767 3 517
Other members of the Board:
Anders Ullberg
4)
185 – – 48 233 – 233
Staan Bohman 648 – – 483 1 131 270 1 401
Johan Forssell 370 370 1 089 200 940 448 1 388
Tina Donikowski 648 – – – 648 350 998
Peter Wallenberg Jr 370 370 1 089 90 830 448 1 278
Sabine Neuβ
4)
283 – – – 283 – 283
Gunilla Berg
4)
93 – – 50 143 474 617
Gordon Riske
5)
278 370 1 089 – 648 –26 622
Anna Ohlsson-Leijon
5)
555 – – 150 705 – 705
Other members of the Board previous year 124 124
Employee representatives (3)
6)
90 – – – 90 – 90
Total 4 683 2 272 6 690 1 446 8 401 2 855 11 256
2021
Remuneration and other benets to the Board, KSEK Fee
Value of synthetic
shares at grant date
Number of synthetic
shares at grant date Other fees
1)
Total fees incl. value of
synthetic shares at grant date
Eect of vesting and
change in stock price
2)
Total expense recognized
3)
Chair:
Hans Stråberg 1 266 1 300 2 505 436 3 002 2 748 5 750
Other members of the Board:
Staan Bohman 804 – – 479 1 283 572 1 855
Johan Forssell 402 413 795 208 1 023 1 180 2 203
Tina Donikowski 804 – – – 804 878 1 682
Peter Wallenberg Jr 402 413 795 94 909 1 180 2 089
Gordon Riske 402 413 795 – 815 303 1 118
Anna Ohlsson-Leijon 494 413 795 253 1 160 –41 1 119
Other members of the Board previous year 878 878
Employee representatives (4)
4)
73 – – – 73 – 73
Total 4 647 2 952 5 685 1 470 9 069 7 698 16 767
1)
Refers to fees for membership in board committees.
2)
Refers to synthetic shares received in 2017–2021.
3)
Provision for synthetic shares as at December 31, 2021 amounted to MSEK 25 (18).
4)
Employee representatives receive compensation to prepare for their participation in board meetings.
1)
Refers to fees for membership in board committees.
2)
Refers to synthetic shares received in 2016–2020.
3)
Provision for synthetic shares as at December 31, 2020 amounted to MSEK 18 (15).
4)
Gunilla Berg and Anders Ullberg left the board at the Annual General Meeting 2020. Sabine Neuβ left the
board at her own request on May 18, 2020. The fees received were in accordance with this.
5)
Gordon Riske and Anna Ohlsson-Leijon were elected board members at the Annual General Meeting 2020.
6)
Employee representatives receive compensation to prepare for their participation in board meetings.
Atlas Copco 2021 83
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
5. Employees and personnel expenses, continued
2021
Remuneration and other benets to Group Management, KSEK Base salary Variable compensation
2)
Other benets
3)
Pension fees
Total, excl. recognized costs
for share based payments
Recognized costs for
share based payments
4)
Total expense
recognized
President and CEO
Mats Rahmström
1)
16 500 13 200 445 5 795 35 940 7 758 43 698
Other members of Group Management (8 positions) 30 843 14 931 11 105 11 095 67 974 15 383 83 357
Total 47 343 28 131 11 550 16 890 103 914 23 141 127 055
Total remuneration and other benets to the Board and Group Management 143 822
1)
Further details on the President and CEO remuneration is part of the Remuneration Report that will be published in connection with the notice to the Annual General Meeting.
2)
Refers to variable compensation earned in 2021 to be paid in 2022, based on actual base salary entitlement.
3)
Refers to vacation pay, company car, medical insurance, and other benets.
4)
Refers to stock options and SARs received in 2016–2021 and includes recognized costs due to change in stock price and vesting period, see also note 23.
2020
Remuneration and other benets to Group Management, KSEK Base salary
2)
Variable compensation
3)
Other benets
4)
Pension fees
Total, excl. recognized costs
for share based payments
Recognized costs for
share based payments
5)
Total expense
recognized
President and CEO
Mats Rahmström
1)
15 600 5 824 347 5 625 27 396 12 594 39 990
Other members of Group Management (8 positions) 31 670 9 054 5 168 8 567 54 459 13 794 68 253
Total 47 270 14 878 5 515 14 192 81 855 26 388 108 243
Total remuneration and other benets to the Board and Group Management 119 499
1 )
Further details on the President and CEO remuneration is part of the Remuneration Report that will be published in connection with the notice to the Annual General Meeting.
2)
President and CEO as well as members in Group Management based in Sweden decided to abstain 10% of their base salary for the months April, May and June to a good cause project related to Covid-19 research.
3)
Refers to variable compensation earned in 2020 to be paid in 2021, based on actual base salary entitlement.
4)
Refers to vacation pay, company car, medical insurance, and other benets.
5)
Refers to stock options and SARs received in 2016–2020 and includes recognized costs due to change in stock price and vesting period, see also note 23.
The guidelines for remuneration to the Board and Group Management are
approved at the Annual General Meeting of the shareholders. The guidelines
approved by the 2021 meeting are described in the following paragraphs.
Board members
Remuneration and fees are based on the work performed by the Board. The
remuneration and fees approved for 2021 are detailed in the table on the pre-
vious page. The remuneration to the President and CEO, who is a member of
Group Management, is described in the following sections and in the Remu-
neration Report.
The Annual General Meeting decided that each board member can elect to
receive 50% of the 2021 gross fee before tax, excluding other committee fees,
in the form of synthetic shares and the remaining part in cash. The number of
synthetic shares is based upon an average end price of series A shares during
ten trading days following the release of the rst quarterly interim report for
2021. The share rights are earned 25% per quarter as long as the member
remains on the Board. After ve years, the synthetic shares give the right to
receive a cash payment per synthetic share based upon an average price for
series A shares during ten trading days following the release of the rst quar-
terly interim report of the year of payment. The board members will receive divi-
dends on series A shares until payment date in the form of new synthetic shares.
If a board member resigns from his or her position before the stipulated pay-
ment date as stated above, the board member has the right to request a pre-
payment. The prepayment will be made twelve months after the date when the
board member resigned or otherwise the original payment date is valid.
Status end of year
Five board members accepted the right to receive synthetic shares. The
number and costs at grant date and at the end of the nancial year are
disclosed by board member in the table on the previous page.
Remuneration and other committees 2021
The board has three committees:
• Remuneration committee consisting of Hans Stråberg (Chair), Peter
Wallenberg Jr and Staan Bohman. The committee proposed compensa-
tion to the President and CEO for approval by the Board. The committee
also supported the President and CEO in determining the compensation
to the other members of Group Management.
• Audit committee consisting of Staan Bohman (Chair until October 21,
2021), Anna Ohlsson-Leijon (Chair from October 22, 2021), Johan Forssell
and Hans Stråberg.
• Repurchase committee consisting of Staan Bohman (Chair) and Hans
Stråberg.
Guidelines for remuneration and other fees for members of the Board, the President and CEO, and other members of Group Management
Atlas Copco 2021 84
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
5. Employees and personnel expenses, continued
Group Management
Group Management consists of the President and CEO and eight other mem-
bers of the Executive Committee. The compensation to Group Management
shall consist of base salary, variable compensation, possible long-term incen-
tive (personnel stock options), pension benets and other benets.
The following describes the various guidelines in determining the amount of
remuneration:
• Base salary is based on competence, area of responsibility, experience and
performance.
• Variable compensation is linked to predetermined and measurable criteria
which can be nancial or non-nancial. Non-nancial criteria for 2021 has
been to reduce the CO emissions in the Group. The variable compensation
is maximized to 80% of the base salary for the President and CEO, 60% for
Business Area Presidents, and 50% for other members of Group Manage-
ment.
• Performance-based personnel stock option program for 2021, see note 23.
• Pension benets are paid in accordance with a dened contribution plan
with premiums set in line with Atlas Copco Group Pension Policy for
Swedish Executives and Atlas Copco terms and conditions for expatriate
employments.
• Other benets consist of company car and medical insurance.
• For the expatriates, certain benets are paid in compliance with the
Atlas Copco terms and conditions for expatriate employment.
A mutual notice of termination of employment of six months shall apply.
The Board may resolve to deviate from the guidelines, in whole or in part, if in a
specic case there are special reasons for the deviation and the Board deems
deviation is needed to serve the company’s long-term interests or to ensure
the company’s nancial viability. No fees are paid to Group Management for
board memberships in Group companies.
President and CEO
The variable compensation can give a maximum of 80% of the base salary.
The variable compensation is not included in the basis for pension benets.
According to an agreement, the President and CEO has the option to receive
variable compensation in the form of cash payment or as a pension contribu-
tion. The President and CEO is a member of the Atlas Copco Group Pension
Policy for Swedish Executives, which is a dened contribution plan. The contri-
bution is age related and is up to a maximum of 35% of the base salary. These
pension plans are vested. In addition, premiums for private health insurance
are added. The retirement age of the President and CEO is set at the age of 65.
Other members of Group Management
The variable compensation is not included in the basis for pension benets.
Members of Group Management have dened contribution pension plans,
with contribution up to a maximum of 35% of the base salary according to age.
These pension plans are vested. The retirement age is 65, unless there is an
agreement between the company and the individual on a longer employment.
Workforce prole
Atlas Copco strives to grow local leaders where it operates. The geo graphical
spread of employees and senior managers is in continuous development.
As a customer-focused company, 51% (51) of all employees work in marketing,
sales or service.
Geographical spread of
employees as at Dec. 31, 2021, % Employees
Nationality of
senior managers
North America 15 10
South America 5 4
Europe 45 69
Africa/Middle East 3 4
Asia/Oceania 32 13
Total 100 100
Employees by professional category, %
2021 2020
Production 24 23
Marketing 8 8
Sales and support 14 14
Service 29 29
Administration 16 16
Research & development 9 10
Total 100 100
Termination of employment
The President and CEO is entitled to a severance pay of twelve months if the
Company terminates the employment and a further twelve months if other
employment is not available.
Other members of Group Management are entitled to severance pay if the
Company terminates their employment. The amount of severance pay is
dependent on the length of employment with the Company and the age of
the executive, but is never less than 12 months and never more than 24
months’ salary.
Any income that the President and CEO and other members of Group Man-
agement receives from employment or other business activity, whilst sever-
ance pay is being paid, will reduce the amount of severance pay accordingly.
Severance pay for the President and CEO and other members of Group Man-
agement is calculated only on the base salary and does not include variable
compensation. Severance pay cannot be elected by the employee, but will only
be paid if employment is terminated by the Company.
Stock options/share appreciation rights, holdings for
Group Management – year end
The stock options/share appreciation rights holdings as at December 31 are
detailed below:
Stock options/share appreciations rights holdings as at Dec. 31, 2021
1)
Grant Year President and CEO
Other members of
Group Management
2016 – 20 483
2017 – 94 593
2018 66 191 101 570
2019 187 760 199 516
2020 4 476 6 682
2021
2)
111 115 128 323
Total 369 542 551 167
1)
The numbers have been adjusted for the eect of the distribution of Epiroc. See note 23
for additional information.
2)
Estimated grants for the 2021 stock option program including matching options.
Atlas Copco 2021 85
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
6. Remuneration to auditors
Audit fees and other services 2021 2020
Ernst & Young
Audit fee 67 62
Other services, tax 3 2
Other services, other 1 0
Deloitte
Audit fee 5 8
Other services, tax 4 4
Other services, other 1 3
Other audit rms
Audit fee 10 11
Total 91 90
Audit fee refers to audit of the nancial statements and the accounting
records. For the Parent Company, this also includes the administration of the
business by the Board of Directors and the President and CEO.
Tax services include mostly tax consultancy services.
Other services essentially comprise consultancy services, such as due diligence
services in connection with acquisitions, investigations and similar.
At the Annual General Meeting 2021, Ernst & Young was re-elected as audi-
tor for the Group up to and including the Annual General Meeting 2022.
Additional information on costs by nature
Cost of goods sold includes expenses for inventories, see note 16, warranty
costs and transportation costs.
Salaries, remunerations and employer contributions amounted to 27 151
(25582) whereof expenses for post-employment benets amounted to 1286
(1399). See note 5 for further details.
Government grants of 210 (444) have been deducted in the related
expenses or included in other operating income. The decrease in government
grants is mainly related to additional government grants received in 2020 due
to temporary measures related to the Covid-19 pandemic. Government grants
related to assets have been recognized as a deduction when establishing the
carrying amount of the asset. Therefore, the government grants are reported
as income over the useful life of the asset through a reduction in depreciation
expense. The remaining value of these grants, at the end of 2021, amounted to
34 (32).
Included in the operating prot are exchange rate changes on payables and
receivables, and the eects from currency hedging. The operating prot also
includes –109 (–29) of realized foreign exchange hedging result, which were
previously recognized in equity. Amortization, depreciation and impairment
charge for the year amounted to 5 466 (5189). See note 12, 13 and 22 for fur-
ther details. Costs for research and development amounted to 4125 (3762).
8. Financial income and expenses
Financial income and expenses 2021 2020
Interest income:
– cash and cash equivalents 22 42
– derivatives 136 94
– other – 9
Capital gain:
– other assets 51 16
Change in fair value – other assets 29 –
Foreign exchange gain, net 5 –
Financial income 243 161
Interest expenses:
– borrowings –348 –350
– pension provisions, net –34 –37
– deferred considerations –10 –4
Change in fair value – other liabilities and borrowings – –1
Foreign exchange loss, net – –87
Impairment loss – –3
Financial expenses –392 –482
Financial expenses, net –149 –321
“Foreign exchange gain/loss, net” includes foreign exchange gains of
545 (353) on nancial assets at fair value through prot or loss and foreign
exchange losses of –540 (–440) on other liabilities.
7. Other operating income and expenses
Other operating income 2021 2020
Commissions received 12 11
Income from insurance operations 135 101
Capital gain on sale of property, plant and
equipment
51 23
Exchange-rate dierences, net 392 –
Other operating income 191 135
Total 781 270
Other operating expenses 2021 2020
Capital loss on sale of property, plant and
equipment
–22
–42
Capital loss on divestment of business –28 –
Exchange-rate dierences, net – –397
Other operating expenses
1)
–151 –309
Total –201 –748
1)
Other operating expenses for 2020 include –210 related to a provision for settlement of a
pension dispute in Edwards Ltd (Vacuum Technique) dating from before the acquisition
of Edwards Ltd in 2014.
7. Other operating income and expenses, continued
9. Taxes
Income tax expense 2021 2020
Current taxes –5 372 –4 801
Deferred taxes 96 759
Total –5 276 –4 042
The following is a reconciliation of the companies’ weighted average tax based
on the nominal tax for the country as compared to the actual tax charge:
2021 2020
Prot before tax 23 410 18 825
Weighted average tax based on national rates –5 481 –4 320
in % 23.4 22.9
Tax eect of:
– non-deductible expenses –268 –534
– withholding and other taxes on dividends –322 –29
– tax-exempt income 686 617
Adjustments from prior years:
– current taxes 216 85
– deferred taxes –60 229
Eects of tax losses/credits utilized 22 1
Change in tax rate, deferred tax –151 –65
Tax losses not recognized 163 –57
Other items –81 31
Income tax expense –5 276 –4 042
Eective tax in % 22.5 21.5
The eective tax rate was 22.5% (21.5). Withholding and other taxes on divi-
dends of –322 (–29) relate to provisions on retained earnings in countries where
Atlas Copco incur withholding and other taxes on dividends. Tax-exempt
income of 686 (617) refers to income that is not subject to taxation or subject
to reduced taxation under local law in various countries. Adjustments from
prior years – current tax includes the net from tax issues, tax disputes and also
one-time positive tax eects in dierent countries and amounted to 216 (85).
In 2021, eects of income tax rate changes have aected the result with
–151 (– 65).
Atlas Copco 2021 86
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
European Commission’s decision on Belgium’s tax rulings
On January 11, 2016, the European Commission announced its decision that
Belgian tax rulings granted to companies regarding “Excess Prot” shall be
considered as illegal state aid and that unpaid taxes shall be reclaimed by the
Belgian state. Atlas Copco had such tax ruling since 2010.
Following the European Commission decision, Atlas Copco has paid, in
total MEUR 313 (MSEK 2 952). During 2015, Atlas Copco made a provision of
MEUR300 (MSEK 2 802) and paid MEUR 239 (MSEK 2 250) in 2016. In the
second quarter of 2017, Atlas Copco paid the remaining amount of MEUR 68
(MSEK 655). During 2017, MEUR 13 (MSEK 125) was expensed as an interest
cost.
The Belgian government, as well as Atlas Copco, appealed the decision to
the General Court of the European Union (EGC) in Luxembourg and on Febru-
ary 14, 2019, the EGC annulled the decision taken by the European Commission
on January 11, 2016. On May 3, 2019, the European Commission appealed the
EGC’s annulment. Following a decision by the European Court of Justice in
2021, the annulment was incorrect, and the case has again been referred to
the General Court for judgement.
In September 2020, the European Commission also published individual
opening decision stating that the specic decisions granted by Belgium
between 2005 and 2014 regarding tax rulings granted to multinationals
regarding “Excess Prot” violated the EU rules for state aid. One of these
individual decisions concerns Atlas Copco.
It is likely several years before nal decisions are made.
The following table reconciles the net asset balance of deferred taxes at the
beginning of the year to the net asset at the end of the year:
Change in deferred taxes 2021 2020
Opening balance net, Jan. 1 –252 747
Business acquisitions –173 –1 576
Charges to prot for the year 96 759
Tax on amounts recorded to other
comprehensive income
–90 –179
Translation dierences –16 –3
Closing balance net, Dec. 31 –435 –252
The deferred tax assets and liabilities recognized in the balance sheet are attributable to the following:
Deferred tax assets and liabilities
2021 2020
Assets Liabilities Net balance Assets Liabilities Net balance
Intangible assets 460 4 088 –3 628 391 3 533 –3 142
Property, plant and equipment
1)
222 850 –628 222 893 –671
Other nancial assets 33
131
–98 21
55 –34
Inventories 1 705 25 1 680 1 378 33 1 345
Current receivables 169
274
–105 165
260 –95
Operating liabilities 821 11 810 705 9 696
Provisions 344
8
336 327
5 322
Post-employment benets 788 14 774 860 15 845
Borrowings
1)
598
15
583 500
5 495
Loss/credit carry-forwards 233 – 233 293 – 293
Other items
2)
3 395 –392 8 314 –306
Deferred tax assets/liabilities 5 376 5 811 –435 4 870 5 122 –252
Netting of assets/liabilities –3 586 –3 586 – –3 386 –3 386 –
Net deferred tax balances 1 790 2 225 –435 1 484 1 736 –252
1)
The gross amount of deferred tax assets and liabilities relating to right-of-use assets and lease liabilities are included in Property, plant and equipment and Borrowings.
The net amount of these items is not material.
2)
Other items primarily include tax deductions which are not related to specic balance sheet items.
9. Taxes, continued
Deferred tax assets regarding tax loss carry-forwards are reported to the
extent that realization of the related tax benet through future taxable results
is probable. At December 31, the Group had total tax loss carry-forwards of
2345 (3254), of which deferred tax assets were recognized for 881 (1 387).
The tax value of reported tax loss carry-forwards totals 231 (293). There is no
expiration date for utilization of the major part of the tax losses carry-forwards
for which deferred tax assets have been recognized.
Tax loss carry-forwards for which no deferred tax have been recognized expire
in accordance with below table:
2021 2020
Expires after 1–2 years 111 109
Expires after 3–4 years 69 69
Expires after 5–6 years 29 49
No expiry date 1 255 1 640
Total 1 464 1 867
Changes in temporary dierences during the year that are recognized in the
income statement are attributable to the following:
2021 2020
Intangible assets –75 297
Property, plant and equipment
1)
73 17
Other nancial assets –11 –14
Inventories 178 121
Current receivables 31 –11
Operating liabilities 63 38
Provisions –6 48
Post-employment benets –7 21
Borrowings
1)
–4 –28
Other items –84 231
Changes due to temporary dierences 158 720
Loss/credit carry-forwards –62 39
Charges to prot for the year 96 759
1)
Changes in Property, plant and equipment and Borrowings mainly relate to right-of-use
asset and lease liabilities. The net amount of these items is not material.
Atlas Copco 2021 87
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
10. Other comprehensive income
Other comprehensive income for the year
2021 2020
Before tax Tax After tax Before tax Tax After tax
Attributable to owners of the parent
Items that will not be reclassied to prot or loss
Remeasurements of dened benet plans 808 –160 648 93 –19 74
Items that may be reclassied subsequently to prot or loss
Translation dierences:
– on foreign operations 4 568 26 4 594 –6 379 –57 –6 436
Hedge of net investments in foreign operations –342 71 –271 673 –146 527
Cash ow hedges –102 19 –83 27 –8 19
Total other comprehensive income 4 932 –44 4 888 –5 586 –230 –5 816
Attributable to non-controlling interests
Translation dierences on foreign operations 3 – 3 –19 – –19
Total other comprehensive income 4 935 –44 4 891 –5 605 –230 –5 835
11. Earnings per share
Amounts in SEK
Basic earnings per share Diluted earnings per share
2021 2020 2021 2020
Earnings per share 14.89 12.16 14.85 12.14
The calculation of earnings per share presented above is based on prots and number of shares as detailed below.
Prot for the year attributable to owners of the parent
2021 2020
Prot for the year 18 130 14 779
Average number of shares outstanding
2021 2020
Basic weighted average number of shares outstanding 1 217 733 248 1 215 423 710
Eect of employee stock options 2 735 677 1 788 839
Diluted weighted average number of shares outstanding 1 220 468 925 1 217 212 549
Potentially dilutive instruments
As of December 31, 2021, Atlas Copco had six outstanding employee stock
option programs. For the 2020 program, no options were issued as the EVA
target for the Group was not met. The exercise price including adjustment for
remaining vesting costs for the 2021 program exceeded the average share
price for series A shares, SEK 539.47 per share. These programs are therefore
considered anti-dilutive and not included in the calculation of diluted earnings
per share. If the average share price, after adjustment with the above, exceeds
the strike price in the future, these options will be dilutive, which is the case for
the 2016, 2017, 2018 and 2019 programs.
Atlas Copco 2021 88
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
12. Intangible assets
Impairment tests for cash-generating units with goodwill and
for intangible assets with indenite useful lives
Impairment tests (including sensitivity analyses) are performed as per
September 30 each year and when there is an indication of impairment.
Current goodwill is monitored for internal management purposes at busi-
ness area level which also represents the Group’s operating segments. The
goodwill has therefore been tested for impairment at business area level.
The recoverable amounts of the cash generating units have been calculated
as value-in-use based on management’s ve-year forecast for net cash ows
where the most signicant assumptions are revenues, operating prots, work-
ing capital, and capital expenditures.
All assumptions for the ve-year forecast are estimated individually for each
of the business areas based on their particular market position and the charac-
teristics and development of their end-markets. The forecasts represent man-
agement’s assessment and are based on both external and internal sources.
The perpetual growth for the period after ve years is estimated at 2% (2).
The Group’s average weighted cost of capital in 2021 was 8% (8) after tax
(approximately 10.5% (10.5) before tax) and has been used in discounting the
cash ows to determine the recoverable amounts. The business areas are all
relatively diversied and have similar geographical coverage, similar organiza-
tion and structure and, to a large extent, an industrial customer base. Specic
risks, if any, have aected projected cash ows. The same discount rate has
therefore been used for all business areas. All business areas are expected to
generate a return well above the values to be tested, including sensitivity
analyses/worst-case scenarios.
The following table presents the carrying value of goodwill and trademarks
with indenite useful lives allocated by business area:
2021 2020
Trademarks Goodwill Trademarks Goodwill
Compressor Technique – 5 580 – 4 164
Vacuum Technique 2 640 12 047 2 436 11 099
Industrial Technique – 13 124 – 12 534
Power Technique – 1 362 – 1 076
Total 2 640 32 113 2 436 28 873
The trade names of Edwards, Leybold, CTI and Polycold in the Vacuum
Technique business area represent strong trade names that have been used for
a long time in their industries. Management’s intention is that these trade
names will be used for an indenite period of time. Apart from the assessment
of future customer demand and the protability of the business, future mar-
keting strategy decisions involving the trade names, can aect the carrying
value of these intangible assets.
Amortization and impairment of intangible assets are recognized in the following line items in the income statement:
2021 2020
Internally generated Acquired Total Internally generated Acquired Total
Cost of sales 41 36 77 32 38 70
Marketing expenses 15 911 926 5 773 778
Administrative expenses 94 96 190 100 52 152
Research and development expenses 498 560 1 058 398 578 976
Total 648 1 603 2 251 535 1 441 1 976
Impairment charges on intangible assets totaled 104 (16) of which 8 (0) was classied as cost of sales, 64 (1) was classied as research and development expenses,
0 (5) was classied as marketing expenses, and 32 (10) as administrative expenses. Of the impairment charges, 30 (1) was due to capitalized development costs
relating to projects discontinued.
Atlas Copco 2021 89
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
Internally generated intangible assets Acquired intangible assets
2021
Product
development
Other technology
and contract based
Product
development Trademarks
Marketing and
customer related
Other technology
and contract based Goodwill Total
Cost
Opening balance, Jan. 1 5 414
1 565
469 4 501
9 768 7 858
28 904
58 479
Investments 1 106 192 1 – – 90 – 1 389
Business acquisitions
– –
– 66
855
228 1 418
2 567
Disposals –12 –25 –14 –3 –19 –51 – –124
Reclassications
50 –5
110
– –
–150
– 5
Translation dierences 162 47 44 302 622 531 1 822 3 530
Closing balance, Dec. 31 6 720 1 774 610 4 866 11 226 8 506 32 144 65 846
Amortization and impairment losses
Opening balance, Jan. 1 3 041 975 43 1 219 4 207 3 123 31 12 639
Amortization for the period 447 137 3 141 783 636 – 2 147
Impairment charge for the period 51 13 – – – 40 – 104
Disposals –12 –25 –14 –3 –19 –51 – –124
Reclassications 24 –5 60 – – –78 – 1
Translation dierences 69 33 9 61 334 225 – 731
Closing balance, Dec. 31 3 620 1 128 101 1 418 5 305 3 895 31 15 498
Carrying amounts at Jan. 1 2 373 590 426 3 282 5 561 4 735 28 873 45 840
Carrying amounts at Dec. 31 3 100 646 509 3 448 5 921 4 611 32 113 50 348
12. Intangible assets, continued
Internally generated intangible assets Acquired intangible assets
2020
Product
development
Other technology
and contract based
Product
development Trademarks
Marketing and
customer related
Other technology
and contract based Goodwill Total
Cost
Opening balance, Jan. 1 4 611 1 321 538 4 433 7 549 7 030 22 789 48 271
Investments 1 034 161 3 – – 139 – 1 337
Business acquisitions – – – 494 3 117 1 611 8 704 13 926
Disposals –5 –13 –13 – –20 –50 – –101
Reclassications 9 170 –5 – – –170 – 4
Translation dierences –235 –74 –54 –426 –878 –702 –2 589 –4 958
Closing balance, Dec. 31 5 414 1 565 469 4 501 9 768 7 858 28 904 58 479
Amortization and impairment losses
Opening balance, Jan. 1 2 788 727 28 1 166 3 975 3 006 32 11 722
Amortization for the period 393 131 5 145 678 608 – 1 960
Impairment charge for the period 1 10 – 1 4 – – 16
Disposals –5 –13 –10 – –20 –50 – –98
Reclassications –22 170 22 – – –170 – –
Translation dierences –114 –50 –2 –93 –430 –271 –1 –961
Closing balance, Dec. 31 3 041 975 43 1 219 4 207 3 123 31 12 639
Carrying amounts at Jan. 1 1 823 594 510 3 267 3 574 4 024 22 757 36 549
Carrying amounts at Dec. 31 2 373 590 426 3 282 5 561 4 735 28 873 45 840
Other technology and contract based intangible
assets include computer software, patents, and
contract based rights such as licenses and fran-
chise agreements. Marketing and customer
related intangible assets include Internet domain
names, customer lists, customer contracts and
relationships with customers. All intangible
assets other than goodwill and trademarks with
indenite useful lives are amortized.
For information regarding principles for
amortization and impairment, see note 1.
See note 2 for information on business
acquisitions.
Atlas Copco 2021 90
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
2021 Buildings and land Machinery and equipment Construction in progress and advances Total Rental equipment
Cost
Opening balance, Jan. 1
6 355 11 710
670 18 735
5 223
Investments 51 607 1 312 1 970 510
Business acquisitions
82
29 –
111 228
Divestment of business –13 –1 – –14 –
Disposals –215 –444 –8 –667 –324
Reclassications 145 671 –825 –9 –25
Translation dierences 352 612 55 1 019 349
Closing balance, Dec. 31 6 757 13 184 1 204 21 145 5 961
Depreciation and impairment losses
Opening balance, Jan. 1 2 636 8 210 – 10 846 2 982
Depreciation for the period 247 1 087 – 1 334 707
Impairment charge for the period 3 19 5 27 –
Disposals –181 –422 – –603 –278
Reclassications –4 – – –4 –12
Translation dierences 141 413 – 554 220
Closing balance, Dec. 31 2 842 9 307 5 12 154 3 619
Carrying amounts at Jan. 1 3 719 3 500 670 7 889 2 241
Carrying amounts at Dec. 31 3 915 3 877 1 199 8 991 2 342
2020 Buildings and land Machinery and equipment Construction in progress and advances Total Rental equipment
Cost
Opening balance, Jan. 1 6 353 12 000 565 18 918 5 980
Investments 96 534 829 1 459 486
Business acquisitions 243 103 23 369 –5
Disposals –39 –651 – –690 –433
Reclassications 153 591 –704 40 –117
Translation dierences –451 –867 –43 –1 361 –688
Closing balance, Dec. 31 6 355 11 710 670 18 735 5 223
Depreciation and impairment losses
Opening balance, Jan. 1 2 593 8 304 – 10 897 3 122
Depreciation for the period 246 1 066 – 1 312 735
Impairment charge for the period – 2 – 2 –
Disposals –37 –597 – –634 –410
Reclassications 18 16 – 34 –92
Translation dierences –184 –581 – –765 –373
Closing balance, Dec. 31 2 636 8 210 – 10 846 2 982
Carrying amounts at Jan. 1 3 760 3 696 565 8 021 2 858
Carrying amounts at Dec. 31 3 719 3 500 670 7 889 2 241
13. Property, plant and equipment
For information regarding principles for
depreciation and impairment, see note 1.
See note 2 for information on business
acquisitions.
Atlas Copco 2021 91
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
14. Investments in associated companies and joint ventures
Accumulated capital participation 2021 2020
Opening balance, Jan. 1 931 1 037
Acquisitions of joint ventures – 0
Dividends –36 –49
Prot for the year after income tax 36 33
Translation dierences
0 –90
Closing balance, Dec. 31 931 931
The tables below are based on the most recent nancial reporting available from associated companies and joint ventures.
2021
Summary of nancial information for associated
companies and joint ventures Country Assets
1)
Liabilities
1)
Equity
1)
Revenues
1)
Prot for
the year
1)
Group’s
share, %
2)
Carrying
value Dec. 31
Associated companies
Qingdao Qianshao Pneumatic Tool Manufacturing Tech Ltd. China 59 18 41 31 –7 25 10
Reintube S.L. Spain 9 5 4 14 0 47 1
ISRA Immobilie Berlin GmbH Germany 74 80 –6 6 1 49.99 0
Joint ventures
Toku-Hanbai Group Japan 419 183 236 883 16 50 118
Ulvac Cryogenics Inc. Japan 1 260 430 830 716 59 50 802
Total 931
1)
Presented amounts for associated companies and joint ventures are for 100% of the company.
2)
The Atlas Copco percentage share of each holding represents both ownership interest and voting power.
2020
Summary of nancial information for associated
companies and joint ventures Country Assets
1)
Liabilities
1)
Equity
1)
Revenues
1)
Prot for
the year
1)
Group’s
share, %
2)
Carrying
value Dec. 31
Associated companies
Qingdao Qianshao Pneumatic Tool Manufacturing Tech Ltd. China 59 16 43 28 –7 25 11
Reintube S.L. Spain 7 3 4 9 0 47 1
ISRA Immobilie Berlin GmbH Germany 75 81 –6 2
3)
0
3)
49.99 0
Joint ventures
Toku-Hanbai Group Japan 399 180 219 819 4 50 110
Ulvac Cryogenics Inc. Japan 1 257 416 841 752
69 50 809
Total
931
1)
Presented amounts for associated companies and joint ventures are for 100% of the company.
2)
The Atlas Copco percentage share of each holding represents both ownership interest and voting power.
3)
Included from the date of acquisition.
The fair value of nancial instruments under other nancial assets corresponds
to their carrying value.
2021 2020
Non-current
Pension and other similar benet assets (note 23) 781 496
Financial assets at fair value through OCI 16 15
Financial assets at fair value through prot or loss 37 26
Financial assets measured at amortized cost:
– lease receivables 72 82
– other nancial receivables 59 54
Closing balance, Dec. 31 965 673
Current
Financial assets at fair value through prot or loss 587 –
Financial assets measured at amortized cost:
– lease receivables 29 20
– other nancial receivables 231 38
Closing balance, Dec. 31 847 58
See note 22 for information on leases and note 27 for information on credit
risk.
15. Other nancial assets
Atlas Copco 2021 92
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
The fair value for trade receivables corresponds to their carrying value.
Trade receivables are measured at amortized cost.
Expected credit losses, trade 2021 2020
Opening balance, Jan. 1 780 711
Business acquisitions and divestments 42 52
Provisions recognized for potential losses 268 401
Amounts used for established losses –172 –144
Release of unnecessary provisions –222 –163
Translation dierences 49 –77
Closing balance, Dec. 31 745 780
Trade receivables of 21 954 (18 801) are reported net of expected credit losses
and other impairments amounting to 745 (780).
Expected credit losses and impairment losses recognized in the income
statement totaled –10 (193).
For credit risk information, see note 27.
17. Trade receivables
2021 2020
Raw materials 3 052 2 075
Work in progress 3 553 2 806
Semi-nished goods 4 963 3 626
Finished goods 6 233 4 943
Closing balance, Dec. 31
17 801 13 450
Provisions for obsolescence and other write-downs of inventories recorded
as cost of sales amounted to 553 (547). Reversals of write-downs which were
recognized in earnings totaled 71 (30). Previous write-downs have been
reversed as a result of improved market conditions in certain markets.
Inventories recognized as expense amounted to 46717 (41989).
16. Inventories
The fair value of nancial instruments included in other receivables corre-
sponds to their carrying value.
2021 2020
Derivatives:
– at fair value through prot or loss 9 307
– at fair value through OCI – 89
Financial assets measured at amortized cost:
– other receivables 2 922 2 178
– contract assets 3 545 2 826
Prepaid expenses 943 607
Closing balance, Dec. 31 7 419 6 007
Other receivables consist primarily of VAT claims and advances to suppliers.
Contract assets relate mainly to service and construction projects. Impairment
losses recognized on contract assets were insignicant. Prepaid expenses
include items such as insurance, IT and employee costs.
See note 27 for information on the Group’s derivatives.
18. Other receivables
The fair value of cash and cash equivalents corresponds to their carrying value.
Cash and cash equivalents are measured at amortized cost.
2021 2020
Cash 17 863 10 778
Cash equivalents 1 127 877
Closing balance, Dec. 31 18 990 11 655
During 2021, cash and cash equivalents had an estimated average eective
interest rate of 0.15% (0.38). The committed, but unutilized, credit lines were
MEUR 1 640 (1 640), which equaled to MSEK 16 788 (16 467).
See note 27 for additional information.
19. Cash and cash equivalents
Atlas Copco 2021 93
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
20. Equity
2021 2020
Shares outstanding
A shares B shares Total A shares B shares Total
Opening balance, Jan. 1
839 394 096
390 219 008 1 229 613 104
839 394 096 390 219 008
1 229 613 104
Total number of shares, Dec. 31 839 394 096 390 219 008 1 229 613 104 839 394 096 390 219 008 1 229 613 104
– of which held by Atlas Copco
–11 422 736
– –11 422 736
–13 420 451 –
–13 420 451
Total shares outstanding, Dec. 31 827 971 360 390 219 008 1 218 190 368 825 973 645 390 219 008 1 216 192 653
At December 31, 2021 Atlas Copco AB’s share capital amounted to SEK 786 008 190 distributed among 1 229 613 104 shares, each with a quota value of approximately SEK 0.64 (0.64).
Series A shares entitle the holder to one voting right and series B shares entitle the holder to one-tenth of a voting right per share.
Number of shares held by Atlas Copco Cost value aecting equity
Repurchases/Divestment of shares
2021 AGM mandate 2021 Apr.–Dec. AGM mandate 2020 Jan.–Mar. 2020 AGM mandate 2020 Apr.–Dec. AGM mandate 2019 Jan.–Mar. 2021 2020
Opening balance, Jan. 1 13 420 451 12 566 840 3 718 3 211
Repurchase of A shares 700 000 700 000 3 000 000 3 000 000 416 1 097
Divestment of A shares –2 697 715 –2 039 772 –657 943 –2 137 490 –1 922 667 –214 823 –748 –590
Divestment of B shares – – – –8 899 –8 899 – – –
Closing balance, Dec. 31 11 422 736 13 420 451 3 386 3 718
Percentage of shares outstanding 0.9% 1.1%
The 2021 AGM approved a mandate for the Board of Directors to repurchase
and sell series A shares on Nasdaq Stockholm in order to fulll the obligations
under the performance stock option plan. The mandate is valid until the next
AGM and allows:
• The purchase of not more than 2450000 series A shares, whereof a maxi-
mum 2000000 may be transferred to personnel stock option holders
under the performance stock option plan 2021.
• The purchase of not more than 15000 series A shares, later to be sold on the
market in connection with payment to board members who have opted to
receive synthetic shares as part of their board fee.
• The sale of not more than 15000 series A shares to cover costs related to
previously issued synthetic shares to board members.
• The sale of maximum 6800000 series A shares in order to cover the obliga-
tions under the performance stock option plans 2016, 2017 and 2018.
The 2020 AGM approved a mandate for the Board of Directors to repurchase
and sell series A shares and series B shares on Nasdaq Stockholm in order to
fulll the obligations under the performance stock option plan. The mandate
is valid until the next AGM and allows:
• The purchase of not more than 3 350 000 series A shares, whereof a maxi-
mum 2 700 000 may be transferred to personnel stock option holders
under the performance stock option plan 2020.
• The purchase of not more than 15 000 series A shares, later to be sold on the
market in connection with payment to board members who have opted to
receive synthetic shares as part of their board fee.
• The sale of not more than 10000 series A shares to cover costs related to
previously issued synthetic shares to board members.
• The sale of maximum 7000000 series A and B shares in order to cover the
obligations under the performance stock option plans 2015, 2016 and 2017.
Repurchases and sales are subject to market conditions, regulatory restric-
tions, and the capital structure at any given time. During 2021, 700000 series A
shares were repurchased while 2697715 series A shares were divested in
accordance with mandates granted by the 2020 and 2021 AGM. Further infor-
mation regarding repurchases and sales in accordance with AGM mandates is
presented in the table above. The series A shares are held for possible delivery
under the 2016–2021 personnel stock option programs.
The series B shares held can be divested over time to cover costs related to
the personnel stock option programs, including social insurance charges, cash
settlements or performance of alternative incentive solutions in countries
where allotment of employee stock options are unsuitable. The total number
of shares of series A and series B held by Atlas Copco is presented in the table
above.
Reserves
Consolidated equity includes certain reserves which are described below:
Hedging reserve
The hedging reserve comprises the eective portion of net changes in fair
value for certain cash ow hedging instruments.
Translation reserve
The translation reserve comprises all exchange dierences arising from the
translation of the nancial statements of foreign operations, the translation
of intra-group receivables from or liabilities to foreign operations that in sub-
stance are part of the net investment in the foreign operations, as well as from
the translation of liabilities that hedge the company’s net investments in for-
eign operations.
Non-controlling interest
Non-controlling interest amounts to 1 (319). During 2021, the Group acquired
the remaining part of the non-controlling interest of ISRA VISION and a
portion of the remaining non-controlling interest of Atlas Copco (India) Ltd.
In total ve subsidiaries have non-controlling interest.
Appropriation of prot
The Board of Directors proposes a dividend of SEK 7.60 (7.30) per share, total-
ing SEK 9258246797, to be paid in two installments. Shares held by the com-
pany on December 31, 2021 are excluded.
SEK
Retained earnings including reserve for fair value 138 414 537 596
Prot for the year 5 176 207 640
143 590 745 236
The Board of Directors proposes that these earnings
be appropriated as follows:
To the shareholders, a dividend of SEK 7.60 per share 9 258 246 797
To be retained in the business 134 332 498 439
Total 143 590 745 236
The proposed dividend for 2020 amounted of SEK 7.30 per share was approved
by the AGM on April 27, 2021 and was paid accordingly by Atlas Copco AB.
Total dividend paid amounted to SEK 8 889 311 863.
Share split and mandatory share redemption
The Board also proposes a share split and redemption share procedure,
whereby every share is split into four (4) ordinary shares and one (1) redemp-
tion share. The redemption share is automatically redeemed at SEK 8.00 per
share. This corresponds to a total of MSEK 9 746. Combined with the proposed
ordinary dividend, shareholders will receive MSEK 19 004. The payment of the
redemption share would, if approved, be made around June 13, 2022.
Atlas Copco 2021 94
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
21. Borrowings
2021 2020
Maturity
Repurchased
nominal amount
Carrying
amount
Fair
value
Carrying
amount
Fair
value
Non-current
Medium Term Note Program MEUR 500 2023 5 114 5 283 5 013 5 316
Medium Term Note Program MEUR 500
2026
5 114
5 226 5 015
5 223
Medium Term Note Program MEUR 300 2029 3 050 3 019 2 989 3 037
Bilateral borrowings NIB MEUR 200
2024
2 047
2 078 2 008
2 058
Bilateral borrowings EIB MEUR 200 2022 MEUR 100 1 024 1 026 2 008 2 021
Bilateral borrowings EIB MEUR 200
2027
2 047
2 051 2 008
2 091
Bilateral borrowings EIB MEUR 100 2028 1 024 1 024 – –
Other bank loans
167
167 210
210
Less current portion of long-term
borrowings
–1 045 –1 026 –1 –1
Total non-current bonds and loans 18 542 18 848 19 250 19 955
Lease liabilities 2 328 2 328 2 400 2 400
Other nancial liabilities 23 23 19 19
Total non-current borrowings 20 893 21 199 21 669 22 374
Current
Current portion of long-term borrowings 1 045 1 026 1 1
Short-term loans 1 915 1 915 2 007 2 007
Lease liabilities 1 021 1 021 969 969
Total current borrowings 3 981 3 962 2 977 2 977
Closing balance, Dec. 31 24 874 25 161 24 646 25 351
The dierence between carrying value and fair value relates to the measurement method as certain liabilities are
reported at amortized cost and not at fair value. Changes in interest rates and credit margins create the dierence
between fair value and amortized cost. See additional information about the Group’s exposure to interest rate risk
and foreign currency risk in note 27.
In 2019, Atlas Copco AB entered into a 7-year MEUR 300 loan agreement with the European Investment Bank.
MEUR 200 was utilized in 2020 and additional MEUR 100 was utilized in 2021.
Short term loans include supply chain nancing contracts with remaining payment terms exceeding 180 days.
Atlas Copco has a long-term debt rating of A+ (A+) from Standard & Poor’s Corporation and A+ (A+) from Fitch
Ratings. Other than standard undertakings such as negative pledge and pari passu, interest-bearing loans, borrowings
and committed credit lines are not subject to any nancial covenants.
The Group’s credit facilities are specied in the table below.
Credit facilities Nominal amount Maturity Utilized
Commercial papers
1) 2)
MSEK 14 095 – –
Credit-line MEUR 640 2025 –
Credit-line MEUR 1 000 2024 –
Equivalent in SEK MSEK 30 882 –
1)
Interest is based on market conditions at the time when the facility is utilized. Maturity is set when the facility is utilized.
2)
The maximum amounts available under these programs total MEUR 400 and MSEK 10000 corresponding to a total of MSEK14 095
(10016).
The Group’s short-term and long-term borrowings are distributed among the currencies detailed in the table below.
2021 2020
Currency
Local currency (millions) MSEK % Local currency (millions) MSEK %
EUR 2 165 22 166 89 2 159 21 681 88
SEK 184 184 1 261 261 1
USD 81 734 3 95 778 3
Others – 1 790 7 – 1 926 8
Total 24 874 100 24 646 100
The following table shows the maturity structure of the Group’s borrowings and includes the eect of interest rate
swaps.
Maturity Fixed Floating
1)
Carrying amount Fair value
2022 130 3 853 3 983 3 986
2023 5 955 – 5 955 6 124
2024 579 2 047 2 626 2 657
2025 315 – 315 315
2026 5 328 – 5 328 5 440
2027 2 219 – 2 219 2 222
2028 1 147 – 1 147 1 147
2029 3 139 – 3 139 3 108
2030 and after 162 – 162 162
Total 18 974 5 900 24 874 25 161
1)
Floating interest in the table corresponds to borrowings with xings shorter or equal to six months.
Atlas Copco 2021 95
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
21. Borrowings, continued
2021 Cash changes Non cash changes
Reconciliation of liabilities from nancing activities
Opening
balance, Jan. 1
Financing
cash ows
Business
acquisitions Lease additions
Lease
deductions
Business
acquisitions
and
divestments
Change in fair value
through P/L
Change in fair value
through equity FX change Reclassi ca tion Other
Closing balance,
Dec. 31
Non-current
Non-current bonds and loans 19 250
–136
– –
– 86
8
300 81
–1 038
–9 18 542
Lease liabilities 2 400 – – 447 –94 81 20 – 128 –654 – 2 328
Other nancial liabilities
19
4 –4
–
– 2
1 –
1
– –
23
Total non-current liabilities 21 669 –132 –4 447 –94 169 29 300 210 –1 692 –9 20 893
Current
Current portion of long-term borrowings 1 –14 – – – – – – – 1 058 – 1 045
Short-term loans 1 793 95 – – – 24 – – 35 –20 –12 1 915
Lease liabilities 969 –1 214
1)
– 565 –75 25 48 – 49 654 – 1 021
Total current liabilities 2 763 –1 133 – 565 –75 49 48 – 84 1 692 –12 3 981
Total 24 432 –1 265 –4 1 012 –169 218 77 300 294 – –21 24 874
1)
Includes paid interest on lease liabilities.
2020 Cash changes Non cash changes
Reconciliation of liabilities from nancing activities
Opening
balance, Jan. 1
Financing
cash ows
Business
acquisitions Lease additions
Lease
deductions
Business
acquisitions
Change in fair value
through P/L
Change in fair value
through equity FX change Reclassi ca tion
Closing balance,
Dec. 31
Non-current
Non-current bonds and loans 17 704 2 252 – – – 59 6 –554 –215 –2 19 250
Lease liabilities 2 670 – – 519 –71 128 21 – –197 –670 2 400
Other nancial liabilities 26 2 –5 – – – – – –2 –2 19
Total non-current liabilities 20 400 2 254 –5 519 –71 187 27 –554 –414 –674 21 669
Current
Current portion of long-term borrowings 11 –10 – – – – – – –1 1 1
Short-term loans 1 970 –566 – – – 502 1 – –115 1 1 793
Lease liabilities 973 –1 227
1)
– 602 –66 42 59 – –84 670 969
Total current liabilities 2 954 –1 803 – 602 –66 544 60 – –200 672 2 763
Total 23 354 451 –5 1 121 –137 731 87 –554 –614 –2 24 432
1)
Includes paid interest on lease liabilities.
Cash ow from nancing activities also includes net “Settlement of CSA” (Credit Support Annex) of MSEK –440 (–79) which is not included in the tables above.
In December 2021, the nancial liability related to CSA amounted to MSEK 0 (214).
Atlas Copco 2021 96
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
Right-of-use assets, 2021 Buildings and land Machinery and equipment Rental equipment Total
Cost
Opening balance, Jan. 1 3 491 1 510 38 5 039
Additions 583 434 – 1 017
Business acquisitions and divestments 84 19 7 110
Deductions –246 –245 –12 –503
Reclassications –11 –13 – –24
Translation dierences 216 71 1 288
Closing balance, Dec. 31 4 117 1 776 34 5 927
Depreciation and impairment losses
Opening balance, Jan. 1 1 080 674 24 1 778
Depreciation and impairment for the period 701 438 8 1 147
Divestments – –1 – –1
Deductions –109 –218 –7 –334
Reclassications –15 –8 – –23
Translation dierences 81 35 – 116
Closing balance, Dec. 31 1 738 920 25 2 683
Carrying amounts, Jan. 1 2 411 836 14 3 261
Carrying amounts, Dec. 31 2 379 856 9 3 244
Right-of-use assets, 2020 Buildings and land Machinery and equipment Rental equipment Total
Cost
Opening balance, Jan. 1 3 176 1 408 47 4 631
Additions 677 446 – 1 123
Business acquisitions 157 13 – 170
Deductions –208 –192 –3 –403
Reclassications –25 –37 –4 –66
Translation dierences –286 –128 –2 –416
Closing balance, Dec. 31 3 491 1 510 38 5 039
Depreciation and impairment losses
Opening balance, Jan. 1 610 442 22 1 074
Depreciation and impairment for the period 702 454 8 1 164
Deductions –121 –143 –3 –267
Reclassications –25 –25 –2 –52
Translation dierences –86 –54 –1 –141
Closing balance, Dec. 31 1 080 674 24 1 778
Carrying amounts, Jan. 1 2 566 966 25 3 557
Carrying amounts, Dec. 31 2 411 836 14 3 261
22. Leases
Group as a lessee
Atlas Copco´s lease portfolio consists mainly of leased buildings such as oces and warehouses, vehicles and production equipment. There are several lease
contracts with extension options and variable lease payments. Carrying amounts and movements of the right-of-use asset are presented in the tables below:
The following amounts have been recognized in prot or loss:
Leasing in income statement 2021 2020
Depreciation and impairment expense on
right-of-use assets
–1 147 –1 164
Interest expense on lease liabilities –68 –80
Expense relating to leases of low value assets –53 –44
Expense relating to short-term leases –105 –105
Expense relating to variable lease payments –27 –29
Income from subleasing right-of-use assets 8 6
Total amount recognized in prot or loss –1 392 –1 416
For cash outows related to leases, the principal payment amounts to 1 154
(1155) and the interest portion of lease payments to 60 (72). The principal pay-
ment is recognized as cash ow from nancing activities and the interest por-
tion of the lease payment as cash ow from operating activities, net nancial
items paid. For further information, see consolidated statements of cash ow
and note 21.
Lease contracts that include extension options are mainly related to prem-
ises, machinery and equipment. Management uses signicant judgement in
determining whether these extension options are reasonably certain to be
exercised. Extension options reasonably certain to be exercised are included in
the lease term. Future cash outow relating to extension options expected not
to be exercised amounts to 175 (157). For leases that have not yet commenced,
the future cash outow amounts to 48 (13).
For carrying amounts and movements of lease liabilities related to
the right-of-use assets, see note 21.
The maturity analysis of lease liabilities is disclosed in note 27.
Atlas Copco 2021 97
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
22. Leases, continued
Group as a lessor
As a lessor, the Group has nance and operating lease contracts, see note 1 for further information.
Finance leases – lessor
Atlas Copco has equipment which is leased to customers under nance leases. Future payments to be received fall due as follows:
2021 2020
Gross investment
Present value of
minimum lease payments Gross investment
Present value of
minimum lease payments
Less than one year 31 29 21 20
Between one and ve years 67 61 77 69
More than ve years 9 6 8 7
Total 107 96 106 96
Unearned nance income – 6 – 4
Unguaranteed residual value – 5 – 6
Total 107 107 106 106
Operating leases – lessor
Atlas Copco has equipment which is leased to customers under operating leases. Future payments for non-cancellable operating leasing contracts fall due
as follows:
2021 2020
Less than one year 117 103
Between one and ve years 235 148
More than ve years 47 18
Total 399 269
Contingent rent recognized as income amounted to 1 (5).
Atlas Copco 2021 98
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
23. Employee benets
Post-employment benets
Atlas Copco provides post-employment dened benet pensions and other
long-term employee benets in most of its major locations. The most signi-
cant countries in terms of size of plans are Belgium, Germany, Sweden, the
United Kingdom and the United States. Some plans are funded in advance
with certain assets or funds held separately from the Group for future benet
payment obligations. Other plans are unfunded and the benets from those
plans are paid by the Group as they fall due.
The plans in Belgium cover early retirement, jubilee, and termination
indemnity and are all unfunded.
The plans in Germany cover pensions, early retirements and jubilee. The
plans are funded.
There are three dened benet pension plans in Sweden. The ITP plan is a
nal salary pension plan covering the majority of white-collar employees in
Sweden. Atlas Copco nances the benets through a pension foundation.
The second plan relates to a group of employees earning more than ten
income base amounts that has opted out from the ITP plan. This plan is
insured. The third dened benet pension plan relates to former senior
employees now retired. In Sweden, in addition to benets relating to retire-
ment pensions, Atlas Copco has obligations for family pensions for many of
the Swedish employees, which are funded through a third-party insurer,
Alecta. This plan is accounted for as a dened contribution plan as sucient
information for calculating the net pension obligation is not available.
In the United Kingdom, there is a nal salary pension plan. This plan is
funded. In 2010, the plan was converted to a dened contribution plan for
future services.
In the United States, Atlas Copco provides a pension plan, a post-retirement
medical plan, and a number of supplemental retirement pension benets for
executives. The pension plan is funded while the other plans are unfunded.
The Group identies a number of risks in investments of pension plan assets.
The main risks are interest rate risk, market risk, counterparty risk, liquidity and
ination risk, and currency risk. The Group is working on a regular basis to han-
dle the risks and has a long-term investment horizon. The investment portfolio
should be diversied, which means that multiple asset classes, markets and
issuers should be utilized. An asset and liability management assessment
should be conducted periodically. The study should include a number of ele-
ments. The most important elements are the duration of the assets and the
timing of liabilities, the expected return of the assets, the expected develop-
ment of liabilities, the forecasted cash ows and the impact of a shift in interest
rates on the obligation.
The net obligations for post-employment benets and other long-term
employee benets have been recorded in the balance sheet as follows:
2021 2020
Financial assets (note 15) –781 –496
Post-employment benets 3 114 3 488
Other provisions (note 25) 91 91
Closing balance, net 2 424 3 083
The tables below show the Group’s obligations for post-employment benets and other long-term employee benets, the assumptions used to determine these
obligations and the assets relating to these obligations for employee benets, as well as the amounts recognized in the income statement and the balance sheet.
The net amount recognized in the balance sheet amounted to 2 424 (3 083). The weighted average duration of the obligation is 15.8 (15.5) years.
Post-employment benets
2021 Funded pension plans Unfunded pension plans Other funded plans Other unfunded plans Total
Present value of dened benet obligations 10 350 1 451 76 153 12 030
Fair value of plan assets –9 586 – –85 – –9 671
Present value of net obligations 764 1 451 –9 153 2 359
Eect of asset ceiling 25 – – – 25
Other long-term service obligations – – 40 – 40
Net amount recognized in the balance sheet 789 1 451 31 153 2 424
Post-employment benets
2020 Funded pension plans Unfunded pension plans Other funded plans Other unfunded plans Total
Present value of dened benet obligations 9 728 1 416 72 160 11 376
Fair value of plan assets –8 248 – –73 – –8 321
Present value of net obligations 1 480 1 416 –1 160 3 055
Other long-term service obligations – – 28 – 28
Net amount recognized in the balance sheet 1 480 1 416 27 160 3 083
Plan assets consist of the following: 2021
2020Quoted market price Unquoted market price Total
Debt instruments 986 166 1 152 1 360
Equity instruments 711 322 1 033 730
Property 830 928 1 758 1 116
Assets held by insurance companies 151 1 822 1 973 1 872
Cash 622 – 622 624
Investment funds 806 712 1 518 1 358
Derivatives 787 4 791 7
Others 38 786 824 1 254
Closing balance, Dec. 31 4 931 4 740 9 671 8 321
Atlas Copco 2021 99
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
23. Employee benets, continued
Movements in present value of the obligations for
dened benets 2021 2020
Dened benet obligations at Jan. 1 11 376 11 665
Current service cost 356 359
Past service cost –7 145
Interest expense (+) 141 179
Actuarial gains (–)/ losses (+) arising from
experience adjustments
–11 –135
Actuarial gains (–)/ losses (+) arising from
nancial assumptions
215 505
Actuarial gains (–)/ losses (+) arising from
demographic assumptions
–46 –42
Business acquisitions 3 55
Settlements –24 –
Benets paid from plan or company assets –544 –498
Reclassications – –137
Translation dierences 571 –720
Dened benet obligations, Dec. 31 12 030 11 376
Remeasurements recognized in other comprehensive income amounted to
–808 (–93) and –1 (10) in prot and loss. The Group expects to pay 384 (373) in
contributions to dened benet plans in 2021.
Expenses recognized in the income statement 2021 2020
Current service cost 356 359
Past service cost –7 145
Net interest cost 34 38
Employee contribution/ participant contribution –13 –14
Remeasurement of other long-term benets –1 10
Administrative expenses 10 11
Total 379 549
The total benet expense for dened benet plans amounted to 379 (549),
whereof 345 (511) have been charged to operating expenses and 34 (38) to
nancial expenses. Expenses related to dened contribution plans amounted
to 941 (888).
0
2 000
4 000
6 000
8 000
10 000
12 000
20202021
MSEK
Europe
North America
Rest of the world
0
2 000
4 000
6 000
8 000
10 000
20202021
MSEK
Europe
North America
Rest of the world
The dened benet obligations for employee benets consist
of plans in the following geographic areas:
Movements in plan assets 2021 2020
Fair value of plan assets at Jan. 1 8 321 8 586
Interest income 107 141
Remeasurement – return on plan assets 991 411
Settlements –12 –
Employer contributions
100 143
Plan members contributions 13 14
Administrative expenses –14 –11
Benet paid by the plan –312 –270
Reclassications – –138
Translation dierences 477 –555
Fair value of plan assets, Dec. 31 9 671 8 321
The plan assets are allocated among the
following geographic areas: 2021 2020
Europe 8 556 7 249
North America 682 647
Rest of the world 433 425
Total 9 671 8 321
Asset ceiling 2021 2020
Asset ceiling at Jan. 1 – –
Remeasurements – asset ceiling 24 –
Translation dierences 1 –
Asset ceiling, Dec. 31 25 –
Principal actuarial assumptions at the balance sheet
date (expressed as weighted averages in %) 2021 2020
Discount rate
Europe 1.16 1.09
North America 2.71 2.10
Future salary increases
Europe
2.27 1.53
Medical cost trend rate
North America 6.22 6.22
The Group has identied discount rate, future salary increases, and mortality
as the primary actuarial assumptions for determining dened benet obliga-
tions. Changes in those actuarial assumptions aect the present value of the
net obligation. The discount rate is determined by reference to market yields at
the balance sheet date using, if available, high quality corporate bonds (AAA
or AA) matching the duration of the pension obligations. In countries where
corporate bonds are not available, government bonds are used to determine
the discount rate. In Sweden in line with prior years, mortgage bonds are used
for determining the discount rate.
Atlas Copco’s mortality assumptions are set by country, based on the most
recent mortality studies that are available. Where possible, generational mor-
tality assumptions are used, meaning that they include expected improve-
ments in life expectancy over time.
The table below shows the sensitivity analysis for discount rate and increase
in life expectancy and describes the potential eect on the present value of the
dened pension obligation.
Sensitivity analysis Europe North America
Change in discount rate +0.5% –814 –33
Change in discount rate –0.5% 908 36
Increase in life expectancy, +1 year 376 19
Atlas Copco 2021 100
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
23. Employee benets, continued
Share value based incentive programs
In 2016–2020, the Annual General Meeting decided on performance-based
personnel stock option programs based on a proposal from the Board on an
option program for the respective years. In 2021, the Annual General Meeting
decided on a performance-based personnel stock option program for 2021
similar to the 2016–2020 programs.
Option programs 2016–2021
At the Annual General Meeting 2016–2021 respectively, it was decided to
implement performance-based personnel stock option programs. The deci-
sion to grant options was made in April each year and the options were issued
in March the following year (issue date). The number of options issued for each
program year depended on the value creation in the Group, measured as Eco-
nomic Value Added (EVA, dened as the sum of adjusted operating prot and
interest income less tax expenses and cost of capital), for the respective pro-
gram year. For the 2021 option program, the number of options varies on a lin-
ear basis within a preset EVA interval. The size of the plan and the limits of the
interval have been established by the Board and have been approved by the
Annual General Meeting and are compatible with the long-term business plan
of the Group.
In connection to the issue, the exercise price was calculated as 110% of the
average trading price for series A shares during a ten-day period following the
date of the publishing of the fourth quarter report. The options were issued
without compensation paid by the employee and the options remain the
property of the employee only to the extent that they are exercisable at the
time employment is terminated. The 2016–2021 programs have a term of
seven years. The options in the 2016–2021 programs are not transferable and
become exercisable at 100% three years after grant.
The 2016–2021 programs include a requirement for Group Management
and division presidents (33 in total) to purchase Atlas Copco A shares for 10%
of their gross base salary in order to be granted options. A lower amount of
investment will reduce the number of options proportionately. Further,
Group Management and division presidents who have invested in Atlas
Copco A shares will have the right (a “matching option”) to purchase one
share per each share purchased at a price equal to 75% of the average trading
price for series A shares during a ten-day period following the date of the
publishing of the fourth quarter report. This right applies from three years
after grant until the expiration of the stock option program.
The Board had the right to decide to implement an alternative incentive
solution (SARs) for key persons in such countries where the grant of personnel
stock options was not feasible.
In the 2016–2017 programs, the options have been possible to be settled
by the Company paying cash equal to the excess of the closing price of the
shares over the exercise price on the exercise day, less any administrative fees.
Due to this choice of settlement, these options where classied for account-
ing purposes as cash-settled in accordance with IFRS 2. As from 2021, such
request can no longer be made and therefore only those options where the
participant has opted for cash conversion prior to 2021 are accounted for as
cash-settled.
The Black-Scholes model is used to calculate the fair value of the options/SARs
in the programs at issue date. For the programs in 2020 and 2021, the fair value
of the options/SARs was based on the following assumptions:
Key assumptions
2021 Program
(Dec. 31, 2021)
2020 Program
(at issue date)
Expected exercise price SEK 685/467
1)
SEK 0/357
1) 2)
Expected volatility 30% 30%
Expected options life (years) 4.3 4.1
Expected share price SEK 622.60 SEK 546.80
Expected dividend (growth) 7.3 (6%) 7.0 (6%)
Risk free interest rate 1.00% 1.00%
Expected average grant value SEK 119.54/200.65 SEK 0/176.43
Maximum number of options 1 920 585 2 653 352
– of which forfeited –16 668 –2 653 352
Number of matching options 23 301 28 840
1)
Matching options for Group Management and division presidents.
2)
Actual.
The expected volatility has been determined by analyzing the historic
development of the Atlas Copco A share price as well as other shares on the
stock market.
When determining the expected option life, assumptions have been
made regarding the expected exercising behavior of dierent categories of
optionees.
For the stock options in the 2016–2021 programs, the fair value is recognized
as an expense over the following vesting periods:
Program Vesting period Exercise period
Stock options From To From To
2016 May 2016 April 2019 May 2019 April 2023
2017 May 2017 April 2020 May 2020 April 2024
2018 May 2018 April 2021 May 2021 April 2025
2019 May 2019 April 2022 May 2022 April 2026
2020
1)
N/a N/a N/a N/a
2021 May 2021 April 2024 May 2024 April 2028
1)
No options issued as the EVA target for the Group was not met.
For the 2021 program, a new valuation of the fair value has been made and will
be made at each reporting date until the issue date.
Timeline 2021 long term incentive program
Annual General Meeting Information of grant
Group Management´s
and division presidents’ own
investments Exercise price set Issue of options Plan expires
Vesting period Options and matching options exercisable
April 2021 May 2021 June 2021 February 2022 March 2022 May 1, 2024 April 30, 2028
Atlas Copco 2021 101
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
23. Employee benets, continued
For SARs and the options classied as cash-settled, the fair value is recognized as an expense over the same vesting
period; the fair value is, however, remeasured at each reporting date and changes in the fair value after the end of
the vesting period continue to be recognized as a personnel expense.
In accordance with IFRS 2, the expense in 2021 for all share-based incentive programs, excluding social costs,
amounted to 459 (239) of which 212 (158) refer to equity-settled options. The related costs for social security
contributions are accounted for in accordance with the statement from the Swedish Financial Reporting Board (UFR 7)
and are classied as personnel expenses.
In the balance sheet, the provision for share appreciation rights and stock options classied as cash-settled as of
December 31 amounted to 391 (259). Atlas Copco shares are held by the Parent Company in order to cover commitments
under the programs 2016–2021, see also note 20.
Summary of share value based incentive programs
Program
Initial
number of
employees
Initial
number
of options
Expiration
date
Exercise
price, SEK
Type of
share
Fair value
at issue
date
Intrinsic
value for
vested SARs
Stock options
2015 254 3 430 049 Apr. 30, 2020 144.14 A 33.90 –
2016 256 7 279 231 Apr. 30, 2023 230.18 A 66.70 –
2017 262 3 046 532 Apr. 30, 2024 286.81 A 64.20 –
2018 269 2 401 107 Apr. 30, 2025 264.00 A 58.70 –
2019 267 3 343 789 Apr. 30, 2026 393.00 A 56.50 –
Matching options
2015 29 52 357 Apr. 30, 2020 98.54 A 63.20 –
2016 27 41 048 Apr. 30, 2023 157.38 A 106.20 –
2017 34 36 743 Apr. 30, 2024 195.62 A 108.40 –
2018 29 41 616 Apr. 30, 2025 180.00 A 92.80 –
2019 30 27 622 Apr. 30, 2026 268.00 A 98.20 –
2020 31 28 840 Apr. 30, 2027 357.00 A 176.43 –
Share appreciation rights
2015 64 748 096 Apr. 30, 2020 144.14 A – –
2016 64 1 586 550 Apr. 30, 2023 230.18 A – 395.62
2017 61 606 994 Apr. 30, 2024 286.81 A – 338.99
2018 57 434 055 Apr. 30, 2025 264.00 A – 361.80
2019 62 652 550 Apr. 30, 2026 393.00 A – –
Number of options/rights 2021
1)
Program
Outstanding
Jan. 1
Conversion
options/
rights
2)
Exercised
Expired/
forfeited
Outstanding
Dec. 31
–of which
exercisable
Time to
expiration,
in months
Average
stock price for
exercised
options, SEK
Stock options
2016 1 074 763 –148 564 361 184 – 565 015 565 015 16 525
2017 1 332 678 –203 538 405 611 – 723 529 723 529 28 531
2018 2 309 690 92 010 875 860 15 230 1 510 610 1 510 610 40 544
2019 3 312 214 168 400 – 105 667 3 374 947 – 52 –
Matching options
2016 10 999 – 2 026 – 8 973 8 973 16 506
2017 22 739 – 8 578 – 14 161 14 161 28 508
2018 40 102 – 7 542 – 32 560 32 560 40 547
2019 27 622 – – 677 26 945 – 52 –
2020 28 840 – – 691 28 149 – 64 –
Share appreciation rights
2016 347 613 148 564 147 413 – 348 764 348 764 16 521
2017 276 939 203 538 192 280 – 288 197 288 197 28 496
2018 418 825 –92 010 169 609 – 157 206 157 206 40 539
2019 652 550 –168 400 – 21 050 463 100 – 52 –
1)
All numbers have been adjusted for the eect of the distribution of Epiroc and share split in 2018 in line with the method used by Nasdaq
Stockholm to adjust exchange-traded options contracts.
2)
Change in Sweden and China with reference to the terms and conditions.
Atlas Copco 2021 102
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
23. Employee benets, continued
Number of options/rights 2020
1)
Program
Outstanding
Jan. 1 Issued Exercised
Expired/
forfeited
Outstanding
Dec. 31
–of which
exercisable
Time to
expiration,
in months
Average
stock price for
exercised
options, SEK
Stock options
2015 234 518 – 234 518 – – – – 340
2016 1 747 686 – 672 923 – 1 074 763 1 074 763 28 384
2017 2 288 581 – 916 787 39 116 1 332 678 1 332 678 40 392
2018 2 393 492 – – 83 802 2 309 690 – 52 –
2019 3 343 789 – – 31 575 3 312 214 – 64 –
Matching options
2015 8 218 – 8 218 – – – – 339
2016 15 091 – 4 092 – 10 999 10 999 28 427
2017 28 228 – 4 404 1 085 22 739 22 739 40 408
2018 41 616 – – 1 514 40 102 – 52 –
2019 27 622 – – – 27 622 – 64 –
2020 – 28 840 – – 28 840 – 76 –
Share appreciation rights
2015 32 832 – 32 832 – – – – 338
2016 433 472 – 85 859 – 347 613 347 613 28 409
2017 421 013 – 144 074 – 276 939 276 939 40 390
2018 434 055 – – 15 230 418 825 – 52 –
2019 652 550 – – – 652 550 – 64 –
1)
All numbers have been adjusted for the eect of the distribution of Epiroc and share splits in 2015 and 2018 in line with the method used
by NASDAQ Stockholm to adjust exchange-traded options contracts.
Atlas Copco 2021 103
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
24. Other liabilities
Fair value of other liabilities corresponds to carrying value.
Other current liabilities 2021 2020
Derivatives:
– at fair value through prot and loss 163 69
– at fair value through OCI 59 –
Other nancial liabilities:
– other liabilities 2 206 2 099
– accrued expenses 8 182 6 617
Prepaid income other 40 28
Contract liabilities:
– advances from customers 5 114 3 027
– deferred revenues construction contracts 429 516
– deferred revenues service contracts 1 951 1 631
Closing balance, Dec. 31 18 144 13 987
Accrued expenses include items such as social costs, vacation pay liability,
accrued interest, and accrued operational expenses. See note 27 for informa-
tion on the Group’s derivatives.
The amounts included in contract liabilities at the beginning of the year
have been recognized as revenue during the year except for 447 (376). The
main reason for revenues not recognized during the year is that they are
related to performance obligations that will be performed in future periods.
As of the end of 2021, transaction price allocated to remaining performance
obligations was 14 296 (12 772) and the majority will be recognized as revenue
over the next three years. The transaction price does not include consideration
that is constrained.
25. Provisions 26. Assets pledged and contingent liabilities
2021
Product
warranty Restruc turing Other Total
Opening balance, Jan. 1 1 217 411 1 500 3 128
During the year:
– provisions made 1 219 100 926 2 245
– provisions used –918 –242 –407 –1 567
– provisions reversed –330 –12 –268 –610
Reclassication – 10 2 12
Translation dierences 73 4 27 104
Closing balance, Dec. 31 1 261 271 1 780 3 312
Non-current 224 100 1 362 1 686
Current 1 037 171 418 1 626
Total 1 261 271 1 780 3 312
Assets pledged for debts to credit
institutions and other commitments 2021 2020
Inventory and property, plant and equipment 57 61
Endowment insurances 201 183
Total 258 244
Contingent liabilities 2021 2020
Notes discounted 7 8
Sureties and other contingent liabilities 252 244
Total 259 252
Sureties and other contingent liabilities relate primarily to pension commit-
ments and commitments related to customer claims and various legal matters.
2020
Product
warranty Restruc turing Other Total
Opening balance, Jan. 1 1 193 225 1 344 2 762
During the year:
– provisions made 1 216 290 638 2 144
– provisions used –945 –79 –269 –1 293
– provisions reversed
–169 –7 –179 –355
Business acquisitions 23 – 16 39
Translation dierences –101 –18 –50 –169
Closing balance, Dec. 31 1 217 411 1 500 3 128
Non-current 193 28 974 1 195
Current 1 024 383 526 1 933
Total 1 217 411 1 500 3 128
Maturity
2021
Product
warranty Restruc turing Other Total
Less than one year 1 037 171 418 1 626
Between one and ve years 214 81 857 1 152
More than ve years 10 19 505 534
Total 1 261 271 1 780 3 312
Other provisions consist primarily of amounts related to share-based pay-
ments including social fees, other long-term employee benets (see note 23),
and asset restoration obligations.
25. Provisions, continued
Atlas Copco 2021 104
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
27. Financial exposure and principles for control of nancial risks
FINANCIAL RISKS
The Group is exposed to various nancial risks in its operations. These nancial risks include: Funding and liquidity risk,
Interest rate risk, Currency risk, Credit risk and Other market and price risks.
The Board of Directors establishes the overall nancial policies and monitors compliance with the policies. The Group’s
Financial Risk Management Committee (FRMC) manages the Group’s nancial risks within the mandate given by the
Board of Directors. The members of the FRMC are the CEO, CFO and Group Treasurer. The FRMC meets on a quarterly
basis or more often if circumstances require.
Financial Solutions has the operational responsibility for nancial risk management in the Group. Financial Solutions
manages and controls nancial risk exposures, ensures that appropriate nancing is in place through loans and commit-
ted credit facilities, and manages the Group’s liquidity.
Financial Solutions
Financial Risk Management Committee (FRMC)
BOARD OF DIRECTORS ATLAS COPCO AB
Policies
Decisions
Financial Solutions Asia
and Pacic
Financial Solutions Europe,
Middle East and Africa
Financial Solutions North America
and South America
Execution and monitoring
Capital management
Atlas Copco denes capital as borrowings and equity, which at December 31 totaled MSEK 92 508 (78 180). The Group’s
policy is to have a capital structure to maintain investor, creditor and market condence and to support future develop-
ment of the business. The Board’s ambition is that the annual dividend shall correspond to about 50% of earnings per
share. In recent years, the Board has sometimes also proposed, and the Annual General Meeting has approved, distribu-
tions of “excess” equity to the shareholders through share redemptions and share repurchases.
There are no external capital requirements imposed on the Group.
Funding and liquidity risk
Funding risk is the risk that the Group does not have access to adequate nancing on acceptable terms at any given
point in time. Liquidity risk is the risk that the Group does not have access to its funds, when needed, due to poor market
liquidity.
Policy
The Group’s policy refers to Atlas Copco AB and Atlas Copco Finance DAC as external borrowings mainly have been
held in these entities.
• The Group should maintain minimum MSEK 8 000 committed credit facilities to meet operational, strategic and
rating objectives.
• The average tenor, time to maturity, of the Group’s external debt, shall be at least three years.
• No more than MSEK 8 000 of the Group’s external debt may mature within the next 12 months.
• Adequate funding at subsidiary level shall at all times be in place.
Status at year end
As per December 31, there were no deviations from the Group’s policy.
Funding and liquidity risk 2021 2020
Committed credit facilities 16 788 16 467
Cash and cash equivalents 18 990 11 655
Average tenor, years 4.1 4.8
Short-term external debt maturities 1 024 1
The overall liquidity of the Group is strong considering the maturity prole of the external borrowings, the balance of
cash and cash equivalent as of year end, and available back-up credit facilities from banks. Please refer to note 21 for
information on utilized borrowings, maturity, and back-up facilities.
The following cash ow table shows the maturity structure of the Group’s nancial liabilities. The gures shown are con-
tractual undiscounted cash ows based on contracted date, when the Group is liable to pay, including both interest and
nominal amounts. The short-term assets are well matched with the short-term liabilities in terms of maturity. Further-
more, the Group has back-up facilities with maturity 2024 and 2025 to secure liquidity.
Financial instruments Up to 1 year 1–3 years 4–5 years Over 5 years
Liabilities
Bonds and loans – 7 441 5 204 6 219
Lease liabilities – 1 404 545 485
Other nancial liabilities 3 3 3 16
Other liabilities 72 61 41 0
Non-current nancial liabilities 75 8 909 5 793 6 720
Bonds and loans 2 094 – – –
Lease liabilities 1 030 – – –
Current portion of interest-bearing liabilities 1 045 – – –
Derivatives 222 – – –
Other accrued expenses 8 182 – – –
Trade payables 15 159 – – –
Other liabilities 2 206 – – –
Current nancial liabilities 29 938 – – –
Financial liabilities 30 013 8 909 5 793 6 720
Ordinary dividend per share, SEK
Earnings per share, SEK
* Proposed by the Board of Directors
SEK
0
5
10
15
20
25
20212020*201920182017201620152014201320122011
12.00
15.00
Dividend and redemption per share, SEK
Extraordinary items, SEK
SEK
0
5
10
15
20
25
2021*20202019201820172016201520142013201220112010
9.00
12.00
15.00
15.60
EARNINGS AND DISTRIBUTION PER SHARE
Dividend and redemption per share, SEK
Extraordinary items, SEK
Earnings per share, SEK
Ordinary dividend per share, SEK
Distribution of Epiroc AB
on June 18, 2018
Distribution of Epiroc AB on June 18, 2018
* Proposed by the Board of Directors
Atlas Copco 2021 105
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
27. Financial exposure and principles for control of nancial risks, continued
Interest rate risk
Interest rate risk is the risk that the Group is negatively aected by changes
in the interest rate levels.
Policy
The Group’s policy states that the average interest duration (i.e. period for
which interest rates are xed) should be a minimum of 6 months and without a
maximum limit.
Status at year end
The Group’s borrowings have a mix of xed and oating rates. No interest rate
swaps are used to convert interest. For more information about the Group’s
borrowings, see note 21.
Interest risk 2021 2020
Eective interest rate on bonds and loans 0.9% 0.9%
Eective interest rate on lease liabilities 2.0% 2.4%
Duration (months) 45 51
16% (21) of the Group’s bonds and loans have oating interest rates. A shift of
one percentage point upward of all oating rates would impact the Group’s
interest net with MSEK –31 (–40). Same shift downwards would impact the
Group’s interest net with MSEK 0 (0), based on the assumption that the interest
rate on the Group’s bonds and loans cannot be negative.
The book value of the Group’s bonds and loans are not exposed to market
interest rate risk at year end as all bonds and loans are reported at amortized
cost, compared to if borrowings were reported at fair value where cash ows
are discounted using market interest rate.
Currency risk
The Group is present in various geographical markets and undertakes trans-
actions denominated in foreign currencies and is consequently exposed to
exchange rate uctuations. The exposure occurs in relation to payments in for-
eign currency (transaction exposure) and when translating foreign subsidiar-
ies’ balance sheets and income statements into SEK (translation exposure).
Transaction exposure risk
Transaction exposure risk is the risk that protability is negatively aected by
changes in exchange rates, aecting cash ows in foreign currencies in the
operations. Due to the Group’s global presence, there are inows and out-
ows in dierent currencies. As a normal part of business, net surpluses or de-
cits in specic currencies emerge. The values of these net positions uctuate
subject to changes in currency rates and, thus, render transaction exposure for
the Group.
Policy
The Group’s policy states that exposure shall be reduced by matching in- and
outows of the same currencies. Business area and divisional management are
responsible for maintaining readiness to adjust their operations (price and
cost) to compensate for adverse currency movements. Based on the assump-
tion that hedging does not have any signicant eect on the Group’s long-
term result, the policy recommends to leave transaction exposures unhedged
GRAPH 1 Estimated operational transaction exposure in the Group’s most important currencies *
–15 000
–10 000
–5 000
0
5 000
10 000
15 000
20 000
OtherUSDTHBSEKRUBKRWINRGBPEURCZKCNYCADBRLAUD
MSEK
2021
–15 000
–10 000
–5 000
0
5 000
10 000
15 000
20 000
OtherUSDTHBSEKRUBKRWINRGBPEURCZKCNYCADBRLAUD
MSEK
2020
–15 000
–10 000
–5 000
0
5 000
10 000
15 000
20 000
OtherUSDTHBSEKRUBKRWINRGBPEURCZKCNYCADBRLAUD
MSEK
2021
–15 000
–10 000
–5 000
0
5 000
10 000
15 000
20 000
OtherUSDTHBSEKRUBKRWINRGBPEURCZKCNYCADBRLAUD
MSEK
2020
* Without adjustments for onetime eects.
Outstanding derivative
instruments related to
transaction exposure
2021
Nominal amount, net in
transaction currency
2020
Nominal amount, net in
transaction currency
Foreign exchange forwards
GBP 269 187
USD –368 –242
The Financial Risk Management Committee has decided to hedge part of the
transaction exposure with foreign exchange forward contracts. All contracts
mature within 18 months. The fair value of all outstanding contracts is
MSEK 0 (89) for assets and MSEK –55 (0) for liabilities. Out of the net nominal
amounts in the table, the largest cross is GBP/USD with nominal amounts of
MGBP 269/ MUSD –368 (MGBP 187/ MUSD –242).
Translation exposure risk
Translation exposure risk is the risk that the value of the Group’s net invest-
ments in foreign currencies is negatively aected by changes in exchange
rates. The Group’s global presence creates currency eects when subsidiaries’
nancial statements with functional currencies other than SEK are translated
to SEK in the Group’s consolidated nancial statements. Translation of subsid-
iaries’ prot aects the Group’s prot and balance sheet translation aect
other comprehensive income. The translation exposure is measured as the net
of assets and liabilities in a specic currency.
Policy
The Group’s policy states that translation exposure should be reduced by
matching assets and liabilities in the same currencies. The FRMC can decide to
hedge part or all remaining translation exposure. Any hedge of translation
exposure shall qualify for hedge accounting in accordance with IFRS.
on an ongoing basis. In general, business areas and divisions shall not hedge
currency risks. The FRMC can decide to hedge part of the transaction exposure.
Transactions shall then qualify for hedge accounting in accordance with IFRS
and hedging beyond 18 months is not allowed. Financial transaction exposure
is substantially hedged.
Status at year end
The Group has continued to manage transaction exposures primarily by
matching in- and outows in the same currencies. Graph 1 shows the net of in-
and outows per currency for currencies which have the largest surplus or
decit. The operational transaction exposure is dened as the net operational
cash ow exposure and amounts to MSEK –4 678 (–3 207). The estimated
amounts are based on the Group’s operational external payments from cus-
tomers and to suppliers.
The transaction exposure sensitivity analysis is based on the operational
transaction exposure. It shows how the cash ow and prot before tax would
theoretically be impacted by a ve percentage point change in SEK, USD or
EUR, against all other currencies. The analysis is based on the assumption that
no hedging transaction has been undertaken and is done before any impact of
osetting price adjustments or similar measures.
As an example, the net transaction exposure of in-and outow payments in
EUR is a decit as shown in graph 1. A strengthening in the EUR currency rate
against all other currencies with +5% would have a negative impact on the
cash ow and prot before tax of MSEK –681, and a weakening would have a
positive impact of MSEK 681.
Transaction exposure sensitivity 2021 2020
SEK exchange rate + 5% –234 –160
USD exchange rate + 5% 682 695
EUR exchange rate + 5% –681 –602
Transaction exposure
Atlas Copco 2021 106
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
Status at year end
Graph 2 shows the Group’s sensitivity to currency translation eects when
earnings of foreign subsidiaries are translated to SEK. A ve percentage points
upward change in SEK would impact the Group’s prot before tax with
MSEK –1110 (–905).
–5
–4
–3
–2
–1
0
1
2
3
4
5
–1110
–888
–666
–444
–222
0
222
444
666
888
1110
Change in exchange rate SEK, %
Change in prot, MSEK
555
444
333
222
111
0
–111
–222
–333
–444
–555
Change in exchange rate SEK, %
Change in prot, MSEK
–5
–4
–3
–2
–1
0
1
2
3
4
5
550
440
330
220
110
0
–110
–220
–330
–440
–550
GRAPH 2
Translation eect on
prot before tax
The Group has hedged part of the translation exposure using loans and
foreign exchange forward contracts. The hedges have reduced the exposure
on net investments in EUR in the consolidated nancial statements and the
exchange rate risk related to net assets in subsidiaries. The hedges are
designated as net investment hedges in the consolidated nancial statements.
The nancial instruments shown in the table below are used to hedge
EUR-denominated net assets.
Outstanding
nancial
instru ments related
to trans lation
exposure
2021 2020
Eect in OCI
Nominal
amount Eect in OCI
Nominal
amount
Derivatives MSEK –5 MEUR 100 MSEK 95 MEUR 300
Loans in EUR
1)
MSEK –993 MEUR 1 600 MSEK –1 047 MEUR 1 400
1)
In the balance sheet, loans designated as net investment hedges are reported at
amortized cost and not at fair value.
Most of the Group´s bonds and loans are designated as net investments
hedges, and movements in currency rates are accounted for in other compre-
hensive income. A ve percentage points upward change in EUR against SEK
would aect other comprehensive income with MSEK 689 (676), see also
note1, Signicant accounting principles, Financial assets and liabilities –
nancial instruments.
27. Financial exposure and principles for control of nancial risks, continued
Credit risk
Credit risk can be divided into operational and nancial credit risk. These risks
are described further in the following sections.
Operational credit risk
Operational credit risk is the risk that the Group’s customers do not meet their
payment obligations.
Policy
The Group’s operational credit risk policy is that business areas, divisions and
individual business units are responsible for the commercial risks arising from
their operations. The operational credit risk is measured as the net aggregate
value of receivables on a customer.
Status at year end
The table below shows the total credit risk exposure related to assets classied
as nancial instruments as per December 31.
Credit risk 2021 2020
Receivables at amortized cost:
– trade receivables 22 020 18 903
– lease receivables 101 102
– other nancial receivables 290 92
– other receivables 2 560 1 891
– contract assets 3 545 2 826
– cash and cash equivalents 18 990 11 655
Financial assets at fair value through OCI 16 15
Financial assets at fair value through prot or loss 624 26
Derivatives 9 396
Total 48 155 35 906
Since the Group’s sales are dispersed among many customers, of whom no
single customer represents a signicant share of the Group’s commercial risk,
the monitoring of commercial credit risks is primarily done at the business area,
divisional or business unit level. Each business unit is required to have
an approved commercial risk policy.
Provision for credit risks
The business units establish provisions for their expected credit losses in
respect of trade and other receivables. The IFRS 9 expected credit loss (ECL)
model is forward looking and a loss allowance is recognized when there is an
exposure to credit risk. For assets such as trade receivables, lease receivables,
contract assets and certain other nancial receivables, the simplied model is
applied. The main components of this provision are specic loss provisions
corresponding to individually signicant exposures as well as historical loss
rates in combination with forward looking considerations. Lease receivables,
certain other nancial receivables and cash and cash equivalents are impaired
by a rating method, where ECL is measured by the product of the probability
of default, loss given default, and exposure at default. At year end 2021,
the provision for bad debt amounted to 3.3% (4.0) of gross total customer
receivables.
The following table presents the gross value of trade receivables, both current
and non-current, by maturity, together with the related impairment provisions.
Trade receivables
2021 2020
Gross Impairment Gross Impairment
Not past due 17 837 12 15 245 38
Past due but not
individually impaired
0–30 days 2 021 – 1 713 –
31–60 days 818 – 673 –
61–90 days 394 – 378 –
More than 90 days 1 408 – 1 428 –
Past due and
individually impaired
0–30 days 2 1 34 1
31–60 days 3 1 23 2
61–90 days 13 4 10 5
More than 90 days 269 226 179 155
Collective impairment – 501 – 579
Total 22 765 745 19 683 780
Based on historical default statistics and the diversied customer base, the
credit risk is assessed to be limited.
The gross amount of lease receivables amounted to 101 (102), of which 0 (0)
have been impaired, and the gross amount of other nancial receivables
amounted to 292 (99), of which 2 (7) have been impaired.
There are no signicant amounts past due that have not been impaired.
Atlas Copco 2021 107
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
Financial credit risk
Credit risk on nancial transactions is the risk that the Group incurs losses as a
result of non-payment by counterparts related to the Group’s investments,
bank deposits or derivative transactions.
Policy
The Group’s nancial credit risk is measured dierently depending on trans-
action type; investment transactions or derivative transactions.
Investment transactions
Cash and cash equivalent may only be invested with a counterparty if the
counter party rating is above a rating threshold. The threshold for cash and
cash equivalent is set at A-/A3 (as rated by Standard & Poor’s, Fitch Ratings and
Moody’s). Investments in structured nancial products are not allowed, unless
approved by the FRMC. Furthermore, counterparty exposure, tenor and liquid-
ity of the investment are considered before any investment is made. A list of
each approved counterparty and its maximum exposure limit is maintained
and monitored.
Derivative transactions
Derivative transactions may only be undertaken with approved counterparts
for which credit limits are established and with which ISDA (International
Swaps and Derivatives Association) master agreements and CSA (Credit
Support Annex) agreements are in force. Derivative transactions may only be
entered into by Atlas Copco Financial Solutions or in rare cases by another sub-
sidiary, but only with approval from the Group Treasurer. Atlas Copco primarily
uses derivatives as hedging instruments and the policy allows only standard-
ized (as opposed to structured) derivatives.
Status at year end
Investment transactions in form of cash and cash equivalents amounted to
MSEK 18 990 (11 655) at year end. These consist of cash, short term bank
deposits and investments in liquidity funds. At year end, the measured credit
risk on derivatives, taking into account the market value and collaterals,
amounted to MSEK 29 (115).
The table below presents the reported value of the Group’s derivatives.
Outstanding derivative instruments
2021 2020
Assets 9 396
Liabilities 222 69
No nancial assets or liabilities are oset in the balance sheet. The table below
shows derivatives covered by master netting agreements.
Outstanding net position for derivative instruments
Gross
Oset in
balance
sheet
Net in
balance
sheet
Master
netting
agreement
Cash
collateral
Net
position
Assets
Derivatives 9 – 9 –222 225 12
Liabilities
Derivatives 222 – 222 –222 – –
The positive net position in assets is due to the fact that the exchange of
security is done on a weekly basis.
Other market and price risks
Commodity-price risk is the risk that the cost of direct and indirect materials
could increase as underlying commodity prices rise in global markets. The
Group is directly and indirectly exposed to raw material price uctuations.
Cost increases for raw materials and components often coincide with strong
end-customer demand and are compensated for by increased market prices.
Therefore, the Group does not hedge commodity-price risks.
Fair value of nancial instruments
In Atlas Copco’s balance sheet, nancial instruments are carried at fair value
or at amortized cost. The fair value is established according to a fair value hier-
archy. The hierarchy levels should reect the extent to which fair value is based
on observable market data or own assumptions. Below is a description of each
level and valuation methods used for each nancial instrument.
Level 1
In the Level 1 method, fair value is based on quoted (unadjusted) prices in
active markets for identical assets or liabilities. A market is considered as active
if quoted prices from an exchange, broker, industry group, pricing service, or
supervisory body are readily and regularly available and those prices represent
actual and regularly occurring market transactions at arm’s length.
Level 2
In the Level 2 method, fair value is based on models that utilize observable data
for the asset or liability other than the quoted prices included within Level 1
that are observable for the asset or liability, either directly (i.e. as prices) or indi-
rectly (i.e. derived from prices). Such observable data may be market interest
rates and yield curves.
Level 3
In the Level 3 method, fair value is based on a valuation model, whereby signi-
cant input is based on unobservable market data.
Valuation methods
Derivatives
Fair values of forward exchange contracts are calculated based on pre vailing
markets. Interest rate swaps are valued based on market rates and present
value of future cash ows. Discounted cash ow models are used for the
valuation.
Interest-bearing liabilities
Fair values are calculated based on market rates and present value of future
cash ows.
Finance leases and other nancial receivables
Fair values are calculated based on market rates for similar contracts and
present value of future cash ows.
27. Financial exposure and principles for control of nancial risks, continued
Atlas Copco 2021 108
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
27. Financial exposure and principles for control of nancial risks, continued
In other liabilities, MSEK 125 (97) relate to contingent considerations for acquisitions. The fair value of these liabilities has been calculated based on the expected
outcome of the targets set out in the contracts, given a discount rate of 10.5%. For information about changes due to acquisitions, see note 2.
Reconciliation of nancial liabilities
in Level 3
Opening
balance
Business
acquisitions Settlement Discounting eect Remeasurement
Translation
dierences
Closing
balance
Prot/loss related to liabilities
included in closing balance
Contingent considerations 2021 97 31 –10 10 –13 10 125 3
Currency rates used in the nancial statements Value Code
Year-end rate Average rate
2021 2020 2021 2020
Canada 1 CAD 7.07 6.39 6.82 6.84
China 1 CNY 1.42 1.25 1.33 1.33
EU 1 EUR 10.24 10.04 10.15 10.49
India 1 INR 0.12 0.11 0.12 0.12
South Korea 1 000 KRW 7.61 7.53 7.50 7.79
United Kingdom 1 GBP 12.19 11.07 11.77 11.82
U.S.A. 1 USD 9.05 8.18 8.57 9.18
The Group’s nancial instruments by level
The carrying value for the Group’s nancial instruments corresponds to fair value in all categories except for borrowings. See note 21 for additional
information about the Group’s borrowings. The following table includes nancial instruments at their fair value and by category.
28. Related parties
Relationships
The Group has related party relationships with the Company’s largest share-
holder, its associates, joint ventures and with its Board members and Group
Management. The Company’s largest shareholder, Investor AB, controls
approximately 22% (22) of the voting rights in Atlas Copco.
The subsidiaries that are directly owned by the Parent Company are pre-
sented in note A21 to the nancial statements of the Parent Company. Holding
companies and operating subsidiaries are listed in note A22. Information
about associated companies and joint ventures is found in note 14. Informa-
tion about Board members and Group Management is presented on pages
58 – 61.
Transactions and outstanding balances
The Group has not had any transactions with Investor AB during the year, other
than dividends declared and has no outstanding balances with Investor AB.
Investor AB has controlling or signicant inuence in companies with which
Atlas Copco may have transactions within the normal course of business. Any
such transactions are made on commercial terms.
The Group has leasing agreements related to buildings owned by the
Group’s German pension trust. These agreements are on market terms. “Lease
liabilities” in the table below represents the outstanding balances over the
lease term with the Group’s German pension trust.
In addition, the Group sold various products and purchased goods through
certain associated companies and joint ventures on terms generally similar to
those prevailing with unrelated parties.
The following table summarizes the Group’s related party transactions
with its associates, joint ventures and other related parties:
2021 2020
Revenues 20 41
Goods purchased 23 18
Service purchased 90 107
At Dec. 31:
Trade receivables 25 18
Trade payables 14 21
Lease liabilities 227 249
Compensation to key management personnel
Compensation to the Board and to Group Management is disclosed in note 5.
Financial instruments by
fair value hierarchy
2021 2020
Fair value Level 1 Level 2 Level 3 Fair value Level 1 Level 2 Level 3
Financial assets 184 30 154 – 177 26 151 –
Other receivables 66 – 66 – 102 – 102 –
Non-current nancial assets 250 30 220 – 279 26 253 –
Trade receivables 21 954 – 21 954 – 18 801 – 18 801 –
Financial assets 847 20 827 – 58 – 58 –
Other receivables 2 560 – 2 560 – 1 891 – 1 891 –
Derivatives 9 – 9 – 396 – 396 –
Contract assets 3 545 – 3 545 – 2 826 – 2 826 –
Current nancial assets 28 915 20 28 895 – 23 972 – 23 972 –
Financial assets 29 165 50 29 115 – 24 251 26 24 225 –
Bonds and loans 18 848 13 528 5 320 – 20 133 13 731 6 402 –
Other nancial liabilities 23 – 23 – 19 – 19 –
Other liabilities 174 – 100 74 161 – 94 67
Non-current nancial liabilities 19 045 13 528 5 443 74 20 313 13 731 6 515 67
Current portion of long-term loans 1 026 – 1 026 – 1 – 1 –
Short-term loans 1 915 – 1 915 – 2 007 – 2 007 –
Derivatives 222 – 222 – 69 – 69 –
Other accrued expenses 8 182 – 8 182 – 6 617 – 6 617 –
Trade payables 15 159 – 15 159 – 11 202 – 11 202 –
Other liabilities 2 206 – 2 155 51 2 099 – 2 069 30
Current nancial liabilities 28 710 – 28 659 51 21 995 – 21 965 30
Financial liabilities 47 755 13 528 34 102 125 42 308 13 731 28 480 97
Atlas Copco 2021 109
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
• Notes
Parent company
Financial statements, Parent Company
Income statement
For the year ended December 31
Amounts in MSEK Note 2021 2020
Administrative expenses A2 –764 –615
Other operating income A3 121 105
Other operating expenses A3 –1 –19
Operating loss –644 –529
Financial income A4 3 858 12 125
Financial expenses A4 –394 –644
Prot after nancial items 2 820 10 952
Appropriations A5 2 695 88
Prot before tax 5 515 11 040
Income tax A6 –339 71
Prot for the year 5 176 11 111
Statement of comprehensive income
For the year ended December 31
Amounts in MSEK Note 2021 2020
Prot for the year 5 176 11 111
Other comprehensive income
for the year
– –
Total comprehensive income
for the year
5 176 11 111
Balance sheet
As at December 31
Amounts in MSEK Note 2021 2020
ASSETS
Non-current assets
Intangible assets A7 13 12
Tangible assets A8 34 38
Financial assets:
Deferred tax assets A9 63 183
Shares in Group companies A10, A21 163 569 161 228
Other nancial assets A11 223 204
Total non-current assets 163 902 161 665
Current assets
Income tax receivables 610 810
Other receivables A12 9 347 16 108
Cash and cash equivalents A13 0 8
Total current assets 9 957 16 926
TOTAL ASSETS 173 859 178 591
As at December 31
Amounts in MSEK Note 2021 2020
EQUITY
Restricted equity
Share capital 786 786
Legal reserve 4 999 4 999
Total restricted equity 5 785 5 785
Non-restricted equity
Reserve for fair value –1 180 –1 180
Retained earnings 139 595 136 573
Prot for the year 5 176 11 111
Total non-restricted equity 143 591 146 504
TOTAL EQUITY 149 376 152 289
PROVISIONS
Post-employment benets A15 205 188
Other provisions A16 813 478
Total provisions 1 018 666
LIABILITIES
Non-current liabilities
Borrowings A17 22 195 23 007
Total non-current liabilities 22 195 23 007
Current liabilities
Borrowings A17 926 2 344
Other liabilities A18 344 285
Total current liabilities 1 270 2 629
TOTAL EQUITY AND LIABILITIES 173 859 178 591
Atlas Copco 2021 110
FINANCIAL STATEMENTS
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
Notes
• Parent company
Statement of changes in equity
MSEK unless otherwise stated Number of shares outstanding Share capital Legal reserve Reserve for fair value – translation reserve Retained earnings Total
Opening balance, Jan. 1, 2021 1 216 192 653 786 4 999 –1 180 147 684 152 289
Total comprehensive income for the year 5 176 5 176
Ordinary dividend –8 889 –8 889
Acquisition series A shares –700 000 –416 –416
Divestment series A shares 2 697 715 1 451 1 451
Share-based payment, equity settled:
– expense during the year 212 212
– exercise of options –447 –447
Closing balance, Dec. 31, 2021 1 218 190 368 786 4 999 –1 180 144 771 149 376
Opening balance, Jan. 1, 2020 1 217 046 264 786 4 999 –1 180 145 395 150 000
Total comprehensive income for the year 11 111 11 111
Ordinary dividend –8 506 –8 506
Acquisition series A shares
–3 000 000 –1 097 –1 097
Divestment series A shares 2 137 490 820 820
Divestment series B shares 8 899 3 3
Share-based payment, equity settled:
– expense during the year 158 158
– exercise of options –200 –200
Closing balance, Dec. 31, 2020 1 216 192 653 786 4 999 –1 180 147 684 152 289
See note A14 for additional information.
Statement of cash ows
For the year ended December 31, MSEK 2021 2020
Cash ows from operating activities
Operating loss –644 –529
Adjustments for:
Depreciation 11 10
Capital gain/loss and other non-cash items –596 –283
Operating cash decit –1 229 –802
Net nancial items received 3 639 11 902
Group contributions received 88 1 930
Taxes paid –210 –124
Cash ow before change in working capital 2 288 12 906
Change in
Operating receivables 9 573 –2 408
Operating liabilities 60 –35
Change in working capital 9 633 –2 443
Net cash from operating activities 11 921 10 463
For the year ended December 31, MSEK 2021 2020
Cash ow from investing activities
Investments in tangible assets –3 –7
Investments in intangible assets –5 –
Investments in subsidiaries –1 833 –3 105
Repayments/investments in nancial assets –2 –2
Net cash from investing activities –1 843 –3 114
Cash ow from nancing activities
Dividends paid –8 889 –8 506
Repurchase and divestment of own shares 1 034 –274
Change in interest-bearing liabilities –2 231 1 402
Net cash from nancing activities –10 086 –7 378
Net cash ow for the year –8 –29
Cash and cash equivalents, Jan. 1 8 36
Net cash ow for the year –8 –29
Cash and cash equivalents, Dec. 31 0 8
Atlas Copco 2021 111
FINANCIAL STATEMENTS
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
Notes
• Parent company
Notes to the Parent Company nancial statements
MSEK unless otherwise stated
A1. Signicant accounting principles
Atlas Copco AB is the ultimate Parent Company of the Atlas Copco Group and
is headquartered in Nacka, Sweden. Its operations include administrative
functions, holding company functions as well as parts of Atlas Copco Financial
Solutions (Treasury).
The nancial statements of Atlas Copco AB have been prepared in accordance
with the Swedish Annual Accounts Act and the recommendation RFR 2,
“Accounting for Legal Entities”, hereafter referred to as “RFR 2”, issued by the
Swedish Financial Reporting Board. In accordance with RFR 2, parent compa-
nies that issue consolidated nancial statements according to International
Financial Reporting Standards (IFRS), as endorsed by the European Union, shall
present their nancial statements in accordance with IFRS, to the extent these
accounting principles comply with the Swedish Annual Accounts Act and may
use exemptions from IFRS provided by RFR 2 due to Swedish accounting or tax
legislation.
The nancial statements are presented in Swedish krona (SEK), rounded to
the nearest million. The parent company’s accounting principles have been
consistently applied to all periods presented unless otherwise stated. The
nancial statements are prepared using the same accounting principles as
described in note 1 in the Group’s consolidated nancial statements, except
for those disclosed in the following sections.
For discussion regarding accounting estimates and judgments, see 74.
Subsidiaries
Participations in subsidiaries are accounted for by the Parent Company at his-
torical cost. The carrying amounts of participations in subsidiaries are reviewed
for impairment in accordance with IAS 36, Impairment of Assets. See the
Group’s accounting policies, Impairment of nancial assets, for further details.
Transaction costs incurred in connection with a business combination are
accounted for by the Parent Company as part of the acquisition costs and are
not expensed.
Lease contracts
All lease contracts entered into by the Parent Company are expensed
continuously on a straight-line basis over the lease term. Leases are not carried
as assets, since the risk and rewards associated with ownership of the assets
have not been transferred to the Parent Company.
Employee benets
Dened benet plans
Dened benet plans are not accounted for in accordance with IAS 19. In
the Parent Company dened benet plans are accounted for according to the
Swedish law regarding pensions, ”Tryggandelagen” and regulations issued by
the Swedish Financial Supervisory Board. The primary dierences as compared
to IAS 19 are the way discount rates are xed, that the calculation of dened
benet obligations is based on current salary levels, without consideration of
future salary increases and that all actuarial gains and losses are included in
prot or loss as they occur.
Share-based payments
The share-based payments that the Parent Company has granted to employ-
ees in the Parent Company are accounted for using the same principle as
described in note 1 in the Group’s consolidated nancial statements.
The share-based payments that the Parent Company has granted to
employees in subsidiaries are not accounted for as an employee expense in the
Parent Company, but are recognized against Shares in Group companies. This
vesting cost is accrued over the same period as in the Group and with a corre-
sponding increase in equity for equity-settled programs and as a change in lia-
bilities for cash-settled programs.
Financial guarantees
Financial guarantees issued by the Parent Company for the benet of subsid-
iaries are not valued according to IFRS 9. They are reported as contingent liabil-
ities, unless it becomes probable that the guarantees will lead to payments. In
such case, provisions will be recorded.
Hedge accounting
Interest-bearing liabilities denominated in other currencies than SEK, used to
hedge currency exposure from investments in shares of foreign subsidiaries
are not translated using the foreign exchange rates on the reporting date, but
measured based on the exchange rate the day that the hedging relation was
established.
Derivatives used to hedge investments in shares in foreign subsidiaries are
recognized at fair value and changes therein are recognized in prot or loss.
The corresponding fair value change on shares in subsidiaries is recognized in
prot or loss, as fair value hedge accounting is applied.
Group and shareholders’ contributions
In Sweden, Group contributions are deductible for tax purposes but share-
holders’ contributions are not. Group contributions are recognized as appro-
priations in the income statement. Shareholders’ contributions are recognized
as an increase of Shares in Group companies and tested for impairment.
Atlas Copco 2021 112
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
Notes
• Parent company
A2. Employees and personnel expenses and remuneration to auditors
Average number of employees 2021 2020
Women Men Total Women Men Total
Sweden 64 43 107 69 38 107
Women in Atlas Copco Board and Management, % Dec. 31, 2021 Dec. 31, 2020
Board of Directors excl. employee representatives 22 25
1)
Group Management 13 22
1)
One female board member left the board after the Annual General Meeting at her own request, and no replacement has been made.
Salaries and other remunerations 2021 2020
Board members and Group Management
1)
Other employees Board members and Group Management
1)
Other employees
Sweden 107 107 77 100
of which variable compensation 20 10
1)
Includes 7 (7) board members who receive fees from Atlas Copco AB as well as the President and CEO and 5 (5) positions of the Group Management who are employed by and
receive salary and other fees from the Company.
For information regarding remuneration and other fees for members of the Board, the President and CEO, and other members of Group Management,
see note 5 of the consolidated nancial statements.
Audit fee refers to audit of the nancial state-
ments and the accounting records. For the Parent
Company the audit also includes the administra-
tion of the business by the Board of Directors, the
President and CEO.
Tax services include tax compliance services.
Other services essentially comprise consultancy
services.
At the Annual General Meeting Ernst & Young
AB was re-elected as the company’s auditor until
the end of the annual general meeting 2022.
Pension benets and other social costs 2021 2020
Contractual pension benets for Board members and Group Management 12 11
Contractual pension benets for other employees 23 23
Other social costs 79 67
Total 114 101
Pension obligations to former members of Group Management 5 4
A3. Other operating income and expense
2021 2020
Commissions received 121 105
Other operating income 0 0
Total other operating income 121 105
Exchange-rate dierences, net –1 –2
Other operating expense
0 –17
Total other operating expense –1 –19
Other operating expense, 0 (17) MSEK, essentially comprise costs associated
with the split of the Group.
A4. Financial income and expenses
Financial income and expenses 2021 2020
Interest income:
– cash and cash equivalents 0 0
– receivables from Group companies 9 26
– derivatives 0 3
Dividend income from Group companies 3 849 11 381
Capital gain 0 713
Foreign exchange gain, net 0 2
Financial income 3 858 12 125
Interest expense:
– borrowings –189 –186
– liabilities to Group companies –29 –37
Change in fair value:
– other liabilities 0 0
Foreign exchange loss, net –1 0
Impairment loss:
– write-down of shares in Group companies –175 –421
Financial expenses –394 –644
Financial income, net 3 464 11 481
Following table presents the net gain or loss by category of nancial instruments.
Net gain/loss on 2021 2020
– loans and receivables, incl. bank deposits 8 28
– other liabilities 0 –223
– derivatives –218 3
Prot from shares in Group companies 3 674 11 673
Total 3 464 11 481
Prot from shares in Group companies mainly refers to dividend income from sub-
sidiaries and capital gains from transfer of shares in subsidiaries. These transactions
are eliminated in the Group accounts since they are internal. For further informa-
tion about the hedges, see note 27 of the consolidated nancial statements.
Remuneration to auditors
Audit fees and consultancy fees for advice or assistance other than audit, were as follows:
2021 2020
Ernst & Young
–audit fee 5 5
– other services, tax 0 0
– other services, other 1 –
Deloitte
– other services, other – 2
Total 6 7
Atlas Copco 2021 113
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
Notes
• Parent company
A5. Appropriations
2021 2020
Group contributions paid –9 –2
Group contributions received 2 704 90
Total
2 695 88
2021 2020
Buildings and land Machinery and equipment Total Buildings and land Machinery and equipment Total
Accumulated cost
Opening balance, Jan. 1 46 67 113 46 60 106
Investments 2 1 3 – 7 7
Closing balance, Dec. 31 48 68 116 46 67 113
Accumulated depreciation
Opening balance, Jan. 1 16 59 75 14 55 69
Depreciation for the year 3 4 7 2 4 6
Closing balance, Dec. 31 19 63 82 16 59 75
Carrying amount
Opening balance, Jan. 1 30 8 38 32 5 37
Closing balance, Dec. 31 29 5 34 30 8 38
Buildings and land relates to improvements in leased properties. Depreciation
is accounted for under administrative expenses in the Income Statement.
The leasing costs for assets, such as rented premises, cars and oce equip-
ment are reported among administrative expenses and amounted to 58 (58).
Future payments for non-cancelable leasing contracts amounted to 175 (177)
and fall due as follows in the table beside.
2021 2020
Less than one year 59 59
Between one and ve years 116 117
More than ve years – 1
Total 175 177
A8. Property, plant and equipmentA6. Income tax
2021 2020
Current tax –219 –44
Deferred tax –120 115
Total –339 71
Prot before taxes 5 515 11 040
The Swedish corporate tax rate, % 20.6 21.4
National tax based on prot before taxes –1 137 –2 364
Tax eects of:
– non-deductible expenses –39 –94
– tax exempt income 793 2 588
– deductible expenses, not recognized in
Income statement
26 57
– tax nancial net 48 –41
– change in tax rate, deferred tax – –7
– controlled foreign company taxation –24 –24
– adjustments from prior years –6 –44
Total –339 71
Eective tax in % 6.1 –0.6
The Parent Company’s eective tax rate of 6.1% (–0.6) is primarily aected by
non-taxable income such as dividends from Group companies.
A7. Intangible assets
Capitalized expenditures
for computer programs
2021 2020
Accumulated cost
Opening balance, Jan. 1 67 67
Investments 5 –
Closing balance, Dec. 31 72 67
Accumulated depreciation
Opening balance, Jan. 1 55 51
Depreciation for the year 4 4
Closing balance, Dec. 31 59 55
Carrying amount
Opening balance, Jan. 1 12 16
Closing balance, Dec. 31 13 12
Atlas Copco 2021 114
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
Notes
• Parent company
A9. Deferred tax assets and liabilities
2021 2020
Assets Liabi lities
Net
balance Assets Liabi lities
Net
balance
Post-employment
benets
42 – 42 38 – 38
Other provisions 21 – 21 18 – 18
Loss/credit carry-
forward
– – – 127 – 127
Total 63 – 63 183 – 183
Deferred tax assets regarding tax loss carry-forward last year are used this year.
The following reconciles the net balance of deferred taxes at the beginning of
the year to that at the end of the year:
2021 2020
Net opening balance, Jan. 1 183 68
Charges to prot for the year –120 115
Net closing balance, Dec. 31, net 63 183
A10. Shares in Group companies
2021 2020
Accumulated cost
Opening balance, Jan. 1 240 808 237 414
Investments 282 –
Net investment hedge 128 43
Shareholders’ contribution 2 106 6 456
Divestments – –3 105
Closing balance, Dec. 31 243 324 240 808
Accumulated write-up
Opening balance, Jan. 1 600 600
Closing balance, Dec. 31 600 600
Accumulated write-down
Opening balance, Jan. 1 –80 180 –79 759
Write-down –175 –421
Closing balance, Dec. 31 –80 355 –80 180
Total 163 569 161 228
For further information about Group companies, see note A21.
A11. Other nancial assets
2021 2020
Endowment insurances 201 183
Financial assets measured at amortized cost:
– other nancial receivables 22 21
Closing balance, Dec. 31 223 204
Endowment insurances relate to dened contribution pension plans and are
pledged to the pension beneciary (see note A15 and A20).
A12. Other receivables
2021 2020
Receivables from Group companies 9 288 16 049
Financial assets measured at amortized cost:
– other receivables 16 17
Prepaid expenses and accrued income 43 42
Closing balance, Dec. 31 9 347 16 108
A14. Equity
For information on share transactions and mandates approved by the Annual
General Meeting and proposed dividend for 2021, see note 20 in the consoli-
dated nancial statements.
Reserves
The Parent Company’s equity includes certain reserves which are described
as follows:
Legal reserve
The legal reserve is a part of the restricted equity and is not available for
distribution.
Reserve for fair value – Translation reserve
The reserve comprises translation of intragroup receivables from or liabilities
to foreign operations that in substance are part of the net investment in the
foreign operations, as well as cash ow hedges to convert variable interest
rates to xed interest rates.
A13. Cash and cash equivalents
2021 2020
Cash and cash equivalents measured at
amortized cost:
– cash 0
8
Closing balance, Dec. 31 0 8
The Parent Company’s guaranteed, but unutilized, credit lines equaled 6 551
(6 426).
Atlas Copco 2021 115
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
Notes
• Parent company
A15. Post-employment benets
2021 2020
Dened contribution
pension plans
Dened benet
pension plans Total
Dened contribution
pension plans
Dened benet
pension plans Total
Opening balance, Jan. 1 183 5 188 190 5 195
Provision made 42
–
42 16
1 17
Provision used –24 –1 –25 –23 –1 –24
Closing balance, Dec. 31 201
4
205 183
5 188
The Parent Company has endowment insurances of 201 (183) relating to dened contribution pension plans. The insurances are recognized as other nancial
assets, and pledged to the pension beneciary.
Description of dened benet pension plans
The Parent Company has two dened benet pension plans. The ITP plan is a nal salary pension plan covering the majority of salaried employees in Atlas Copco
AB which benets are secured through the Atlas Copco pension trust. The second plan relates to retired former senior employees. These pension arrangements
are provided for.
2021 2020
Funded pension Unfunded pension Total Funded pension Unfunded pension Total
Dened benet obligations 150 5 155 147 5 152
Fair value of plan assets –672 – –672 –460 – –460
Present value of net obligations –522 5 –517 –313 5 –308
Not recognized surplus 522 – 522 313 – 313
Net amount recognized in balance sheet – 5 5 – 5 5
2021 2020
Reconciliation of dened benet obligations
Funded pension Unfunded pension Total Funded pension Unfunded pension Total
Dened benet obligations at Jan. 1 147 5 152 148 5 153
Service cost 4 – 4 4 – 4
Interest expense 5 – 5 5 – 5
Benets paid from plan –8 –1 –9 –8 –1 –9
Other changes in obligations 2 1 3 –2 1 –1
Dened benet obligations at Dec. 31 150 5 155 147 5 152
2021 2020
Reconciliation of plan assets
Funded pension Unfunded pension Total Funded pension Unfunded pension Total
Fair value of plan assets at Jan. 1 460 – 460 391 – 391
Return on plan assets 220 – 220 77 – 77
Payments/Renumeration of plan assets –8 – –8 –8 – –8
Fair value of plan assets at Dec. 31 672 – 672 460 – 460
2021 2020
Pension commitments provided
for in the balance sheet
Costs excluding interest 15 15
Total 15 15
Pension commitments provided for through
insurance contracts
Service cost
23 23
Total 23 23
Net cost for pensions, excluding taxes 38 38
Special employer’s contribution 6 6
Total 44 44
Pension expenses excluding taxes for the year, included within administrative
expenses amounted to 38 (38) of which the Board members and Group
Management 12 (11) and others 26 (27).
The Parent Company’s share in plan assets fair value in the Atlas Copco
pension trust amounts to 672 (460) and is allocated as follows:
2021 2020
Equity securities 54 37
Bonds 50 191
Real estate 308 172
Alternative investments 212 144
Cash and cash equivalents 48 60
Total 672 460
The plan assets of the Atlas Copco pension trust are not included in the
nancial assets of the Parent Company.
The return on plan assets in the Atlas Copco pension trust amounted to
47.7% (14.4) inclusive of MSEK 7.7 (7.7) paid remuneration.
The Parent Company adheres to the actuarial assumptions used by
TheSwedish Pension Registration Institute (PRI) i.e. discount rate 2.9% (3.8).
The Parent Company estimates MSEK 12 will be paid to dened benet
pension plans during 2022.
Atlas Copco 2021 116
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
Notes
• Parent company
A16. Other provisions
2021 2020
Opening balance, Jan. 1 478 429
During the year:
– provisions made 496 152
– provisions used –161 –103
Closing balance, Dec. 31 813 478
Other provisions include primarily provisions for costs related to employee
option programs accounted for in accordance with IFRS 2 and UFR 7.
A17. Borrowings
2021 2020
Maturity Repurchased nominal amount Carrying amount Fair value Carrying amount Fair value
Non-current
Medium Term Note Program MEUR 500 2023 4 552 5 283 4 548 5 316
Medium Term Note Program MEUR 500 2026
5 074 5 225
5 073 5 223
Bilateral borrowings EIB MEUR 200 2022 MEUR 100 926 1 026 1 851 2 021
Bilateral borrowings NIB MEUR 200 2024 2 100 2 078 2 100 2 058
Bilateral borrowings EIB MEUR 200 2027 2 030 2 051 2 008 2 092
Bilateral borrowings EIB MEUR 100 2028 1 012 1 024 – –
Non-current borrowings from Group companies 7 427 7 165 7 427 7 051
Less current portion of long-term borrowings –926 –1 026 – –
Total non-current borrowings 22 195 22 826 23 007 23 761
Current
Current portion of long-term borrowings 926 1 026 – –
Current borrowings from Group companies – – 2 344 2 344
Total current borrowings 926 1 026 2 344 2 344
Closing balance, Dec. 31 23 121 23 852 25 351 26 105
Whereof external borrowings
15 694 16 687 15 580 16 710
The dierence between carrying value and fair value relates to the measurement method as certain liabilities are reported at amortized cost and not at fair value.
Changes in interest rates and credit margins create the dierence between fair value and amortized cost. In 2019, Atlas Copco AB entered into a 7-year MEUR 300
loan agreement with the European Investment Bank. MEUR 200 was drawn down in 2020 and additional MEUR 100 was drawn in 2021.
The following table shows the maturity structure of the Parent Company’s
external borrowings.
Maturity Fixed Floating
1)
Carrying amount Fair value
2022 – 926 926 1 026
2023 4 552 – 4 552 5 283
2024 – 2 100 2 100 2 078
2026 5 074 – 5 074 5 225
2027 2 030 – 2 030 2 051
2028 1 012 – 1 012 1 024
Total 12 668 3 026 15 694 16 687
1)
Floating interest in the table is borrowings with xings shorter or equal to six months.
Atlas Copco 2021 117
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
Notes
• Parent company
A18 . Other liabilities
2021 2020
Accounts payable
16
18
Liabilities to Group companies 64 48
Other nancial liabilities:
– other liabilities 16 9
Accrued expenses and prepaid income 248 210
Closing balance, Dec. 31 344 285
Accrued expenses include items such as social costs, vacation pay liability, and
accrued interest.
A19.
Financial exposure and principles for control
of nancial risks
A20. Assets pledged and contingent liabilities
2021 2020
Assets pledged for pension commitments
Endowment insurances
201 183
Total 201 183
Contingent liabilities
Sureties and other contingent liabilities:
– for external parties 4 3
– for Group companies 3 262 3 287
Total 3 266 3 290
Sureties and other contingent liabilities include bank and commercial guaran-
tees and performance bonds.
Parent Company borrowings
Atlas Copco AB had MSEK 15 694 (15 580) of external borrowings and MSEK
7427 (9771) of internal borrowings at December 31, 2021. Derivative instru-
ments are used to manage the currency and interest rate risk in line with poli-
cies set by the Financial Risk Management Committee, see note 27 in the con-
solidated nancial statements.
Hedge accounting
The Parent Company hedges shares in subsidiaries through loans of MEUR
2291 (2091) and derivatives of MEUR 100 (300). The deferral hedge account-
ing of the loans is based on a RFR 2 exemption. The derivative is an internal con-
tract with Atlas Copco Finance DAC resulting with MSEK –4 (98) to Receivables
from Group companies in below table.
Financial credit risk
Credit risk on nancial transactions is the risk that the Parent Company incurs
losses as a result of non-payment by counterparts related to the Parent
Company’s investments, bank deposits or derivative transactions. For further
information regarding investment and derivative transactions, see note 27 of
the consolidated nancial statements. The table below shows the actual expo-
sure of nancial instruments as per December 31.
Financial credit risk 2021 2020
Cash and cash equivalents 0 8
Receivables from Group companies 9 288 16 049
Other 81 80
Total 9 369 16 137
Fair value hierarchy
Fair values are based on observable market prices or, in the case that such prices
are not available, on observable inputs or other valuation techniques. Amounts
shown in other notes are unrealized and will not necessarily be realized. For
more information about fair value hierarchy, see note 27 of the consolidated
nancial statements. There are no level 3 instruments in the Parent Company.
Valuation methods
Derivatives
Fair values of forward exchange contracts are calculated based on prevailing
markets. Interest rate swaps are valued based on market rates and present
value of future cash ows.
Interest-bearing liabilities
Fair values are calculated based on market rates and present value of future
cash ows.
The Parent Company’s nancial instruments by category
The carrying value for the Parent Company’s nancial instruments corresponds
to fair value in all categories except for borrowings. See A17 for additional
information.
Atlas Copco 2021 118
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
Notes
• Parent company
A21. Directly owned subsidiaries
2021 2020
Number of
shares
Percent
held
Carrying
value
Number of
shares
Percent
held
Carrying
value
Directly owned product companies
Atlas Copco Airpower n.v., Wilrijk 76 415 100 46 806 76 415 100 46 521
Directly owned customer centers
AGRE Kompressoren GmbH, Steyr 200 000 100 7 200 000 100 7
ALUP Kompressoren Polska sp. Z.o.o.,
Janki
9 000 100 14 – – –
Atlas Copco (Cyprus) Ltd., Nicosia 99 998 100 0 99 998 100 0
Atlas Copco (India) Ltd., Pune 21 731 917 100 874 21 731 917 100 827
Atlas Copco (Ireland) Ltd., Dublin 250 000 100 28 250 000 100 28
Atlas Copco (Malaysia), Sdn. Bhd.,
Shah Alam
1 000 000 100 14 1 000 000 100 11
Atlas Copco (Philippines) Inc., Binan 677 980 100 69 677 980 100 34
Atlas Copco (Schweiz) AG., Studen 8 000 100 63 8 000 100 63
Atlas Copco (South East Asia) Pte.Ltd.,
Singapore
4 500 000 100 35 4 500 000 100 34
Atlas Copco Argentina S.A.C.I.,
Buenos Aires
5 120 025 93/100
1)
84 5 120 025 93/100
1)
84
Atlas Copco Brasil Ltda., Barueri 70 358 841 100 257 70 358 841 100 253
Atlas Copco Canada Inc., Toronto 6 946 100 2 185 6 946 100 665
Atlas Copco Chile SpA, Santiago 24 998 100 6 24 998 100 6
Atlas Copco Compressor AB,
556155-2794, Nacka
60 000 100 36 60 000 100 34
Atlas Copco Eastern Africa Limited.,
Nairobi
482 999 100 40 482 999 100 40
Atlas Copco Equipment Egypt
S.A.E., Cairo
5 0/100
1)
4 5 0/100
1)
4
Atlas Copco GmbH, Vienna 1 100 43 1 100 43
Atlas Copco Indoeuropeiska AB,
556155-2760, Nacka
3 500 100 20 3 500 100 20
Atlas Copco KK, Tokyo 100 000 100 39 100 000 100 38
Atlas Copco Kompressorteknik A/S,
Albertslund
4 000 100 5 4 000 100 5
Atlas Copco Maroc SA., Casablanca 3 960 99 6 3 960 99 6
Atlas Copco Polska Sp. z o. o., Warsaw 4 000 100 80 – – –
Atlas Copco Services Middle East
OMC, Manama
500 100 27 500 100 18
Atlas Copco Ukraine LLC, Kiev 10 000 000 100 3 – – –
Atlas Copco Venezuela SA,
Valencia (Caracas)
25 812 000 100 0 25 812 000 100 0
Servatechnik AG, Oftringen 3 500 100 25 3 500 100 28
Soc. Atlas Copco de Portugal Lda.,
Porto Salvo
1 100 15 1 100 14
2021 2020
Number of
shares
Percent
held
Carrying
value
Number of
shares
Percent
held
Carrying
value
Directly owned holding companies
and others
AB Atlas Diesel, 556019-1610, Nacka 1 000 100 0 1 000 100 0
Atlas Copco A/S, Langhus 2 500 100 44 2 500 100 44
Atlas Copco Beheer B.V., Zwijndrecht 15 712 100 84 15 712 100 247
Atlas Copco Finance Belgium BVBA,
Wilrijk
1 0/100
1)
0 1 0/100
1)
0
Atlas Copco Finance DAC, Dublin 5 162 000 001 100 54 428 5 162 000 001 100 54 300
Atlas Copco France Holding S.A.,
Cergy Pontoise
278 255 100 341 278 255 100 314
Atlas Copco Holding GmbH, Essen 2 100 4 351 2 100 4 341
Atlas Copco Internationaal B.V.,
Zwijndrecht
10 002 100 27 455 10 002 100 27 376
Atlas Copco Järla Holding AB,
556062-0212, Nacka
95 000 100 716 95 000 100 717
Atlas Copco Nacka Holding AB,
556397-7452, Nacka
100 000 100 12 100 000 100 12
Atlas Copco Sickla Holding AB,
556309-5255, Nacka
1 000 100 25 084 1 000 100 25 004
Econus S A, Montevideo 21 582 605 100 17 21 582 605 100 17
Industria Försäkrings AB,
516401-7930, Nacka
300 000 100 30 300 000 100 30
JSC Atlas Copco, Moscow 2 644 100 185 – – –
Oy Atlas Copco AB, Vantaa 150 100 33 150 100 33
Power Tools Distribution n.v., Hoeselt 1 0/100
1)
4 1 0/100
1)
1
Saltus Industrial Technique AB,
559053-5455, Nacka
500 100 0 500 100 9
Carrying amount, Dec. 31 163 569 161 228
1)
First gure: percentage held by Parent Company, second gure: percentage held by Atlas Copco Group.
Atlas Copco 2021 119
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
Notes
• Parent company
A22. Related parties
Relationships
The Parent Company has related party relationships with its largest share-
holder, its subsidiaries, its associates, its joint ventures and with its Board
members and Group Management.
The Parent Company’s largest shareholder, Investor AB, controls approxi-
mately 22% of the voting rights in Atlas Copco AB.
The subsidiaries that are directly owned by the Parent Company are pre-
sented in note A21 and all directly and indirectly owned operating subsidiaries
are listed on the following pages.
Information about Board members and Group Management is presented
on pages 58–61.
Transactions and outstanding balances
The Group has not had any transactions with Investor AB during the year other
than dividends declared and has no outstanding balances with Investor AB.
Investor AB has controlling or signicant inuence in companies which Atlas
Copco AB may have transactions with in the normal course of business. Any
such transactions are made on com mercial terms.
The following table summarizes the Parent Company’s transactions with
Group companies:
2021 2020
Revenues
Dividends 3 849 11 381
Group contribution 2 704 90
Interest income 9 26
Expenses
Group contribution –9 –2
Interest expenses –29 –37
Receivables 9 288 16 049
Liabilities 7 491 9 819
Guarantees 3 262 3 287
Country/Area Company Location (City) Country/Area Company Location (City)
The following details directly and indirectly owned holding and operational subsidiaries (excluding branches), presented by country/area of incorporation.
Algeria SPA Atlas Copco Algérie Algiers
Angola Atlas Copco Angola Ltd Luanda
Argentina Atlas Copco Argentina S.A.C.I. Buenos Aires
Australia Atlas Copco Australia Pty Ltd Blacktown
SCS Filtration Melbourne
Walker Filtration Pty. Australia Melbourne
Austria AGRE Kompressoren GmbH Steyr
Atlas Copco GmbH Vienna
Medgas-Technik medical systems GmbH Leisach
Bahrain Atlas Copco Services Middle East OMC Manama
Bangladesh Atlas Copco Bangladesh Ltd. Dhaka
Belgium Atlas Copco Airpower nv Wilrijk
Atlas Copco Belgium nv Overijse
Atlas Copco Finance Belgium bv Wilrijk
Atlas Copco Rental Europe nv Boom
Atlas Copco Support Services nv Wilrijk
Atlas Copco Vacuum Belgium nv Estaimpuis
EDMAC Europe nv Wilrijk
International Compressor Distribution nv Wilrijk
MultiAir BELUX nv Deinze
Power Tools Distribution nv Hoeselt
Bolivia Atlas Copco Bolivia S.A Compresores,
Maquinaria y Servicio Santa Cruz
Brazil Atlas Copco Brasil Indústria e Comércio Ltda. Barueri
Atlas Copco Brasil Ltda. Barueri
Chicago Pneumatic Brasil Ltda. Barueri
Edwards Vacuo Ltda. Sao Paulo
ISRA VISION Comércio, Serviços,
Importação E Exportação Ltda. Sao Paulo
Itubombas Locação, Comércio,
Importação e Exportação Ltda. Itu
Leybold do Brasil Ltda. Jundiaí
Perceptron do Brazil Ltda. Sao Paulo
Pressure Compressores Ltda. Maringa
Bulgaria Atlas Copco Bulgaria EOOD Soa
Canada Atlas Copco Canada Inc. Toronto
Atlas Copco CPC Holdings Inc. Burlington
Chicago Pneumatic Tool Co. Canada Ltd. Toronto
Class 1 Incorporated Cambridge
CPC Pumps International Inc. Burlington
Lucas Drive - 2352341 Ontario Inc. Burlington
Photonfocus Imaging Ltd. Oakville
Sutton Drive - 2485283 Ontario Inc. Burlington
Chile Atlas Copco Chile SpA Santiago
China Atlas Copco (Wuxi) Compressor Co., Ltd. Wuxi
China Atlas Copco (Shanghai) Equipment
Rental Co., Ltd. Shanghai
Atlas Copco Industrial Technique (Shanghai)
Co., Ltd. Shanghai
Atlas Copco (China) Investment Co., Ltd. Shanghai
Atlas Copco (Shanghai) Process Equipment
Co., Ltd. Shanghai
Atlas Copco (Shanghai) Trading Co., Ltd. Shanghai
Bolaite (Shanghai) Trading Co. Ltd. Shanghai
CSK China Co. Ltd. Wuxi
CSK Xian China Co. Ltd. Xian
Edmac (Shanghai) Trading Co., Ltd. Shanghai
Edwards Technologies Trading (Shanghai)
Company Ltd. Shanghai
Edwards Technologies Vacuum Engineering
(Qingdao) Company Ltd. Qingdao
Edwards Technologies Vacuum Engineering
(Shanghai) Company Ltd. Shanghai
Edwards Technologies Vacuum Engineering
(Xian) Company Ltd. Xian
Factory for Industrial Air Compressors
(Jiangmen) Co., Ltd. Jiangmen
ISRA VISION (Shanghai) Co. Ltd. Shanghai
Kunshan Q-Tech Air System Technologies Ltd. Kunshan
Leybold Equipment (Tianjin) Co., Ltd. Tianjin
Leybold (Tianjin) International Trade Co.Ltd. Tianjin
Linghein (Shanghai) Gas Technologies Co., Ltd. Shanghai
Liutech Machinery Equipment Co., Ltd. Liuzhou
Liuzhou Tech Machinery Co., Ltd. Liuzhou
Pan-Asia Gas Technology (Wuxi) Co., Ltd. Wuxi
Perceptron Metrology Technology (Shanghai)
Co., Ltd. Shanghai
Q-Tech (Shanghai) Gas Equipment Co.,Ltd. Shanghai
Scheugenpug Resin Metering Technologies
co., Ltd. Suzhou
Shanghai Beacon Medaes Medical Gas
Engineering Consulting Co., Ltd. Shanghai
Shanghai Tooltec Industrial Tool Co., Ltd. Shanghai
Wuxi Pneumatech Air/Gas Purity Equipment
Co., Ltd. Wuxi
Wuxi Shengda Air/Gas Purity Equipment
Co., Ltd. Wuxi
Colombia Atlas Copco Colombia Ltda Bogota
Cyprus Atlas Copco (Cyprus) Ltd. Nicosia
Czech Republic ALUP CZ spol. S.r.o Breclav
Atlas Copco s.r.o. Prague
Atlas Copco Services s.r.o. Brno
Edwards s.r.o. Lutin
Next Metrology Software s.r.o. Prague
Atlas Copco 2021 120
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
Notes
• Parent company
A22. Related parties, continued
Country/Area Company Location (City) Country/Area Company Location (City) Country/Area Company Location (City)
Czech Republic Schneider Airsystems s.r.o. Line
Denmark Atlas Copco Kompressorteknik A/S Albertslund
RENO A/S Give
Egypt Atlas Copco Equipment Egypt S.A.E. Cairo
Atlas Copco Service Egypt Cairo
Finland Oy Atlas Copco Ab Vantaa
Oy Atlas Copco Kompressorit Ab Vantaa
Oy Atlas Copco Tools Ab Vantaa
France ABAC France S.A.S. Valence
AEP Saint Michel sur Orge
Air Compresseur Service S.A.S. Saint-Ouen-L'Aumône
Atlas Copco Applications Industrielles S.A.S. Cergy Pontoise
Atlas Copco Crépelle S.A.S. Lille
Atlas Copco France Holding S.A. Cergy Pontoise
Atlas Copco France SAS Cergy Pontoise
Edwards SAS Herblay
ETS Georges Renault S.A.S. Saint-Herblain
Exlair S.A.S. Saint Ouen L’Aûmone
Leybold France SAS Bourg-Les-Valence
Location Thermique Service SAS Carvin
MultiAir France S.A.S Chambly
Ovity Air Comprimé SAS Le Mans
Perceptron EURL Montigny le Bretonneux
Seti-Tec S.A.S. Lognes
Germany 3D-Shape GmbH Erlangen
ALUP-Kompressoren GmbH
1)
Reutlingen
ARPUMA regel- und fördertechnische
Geräte GmbH Kerpen
Atlas Copco Beteiligungs GmbH
1)
Essen
Atlas Copco Energas GmbH
1)
Cologne
Atlas Copco Holding GmbH
1)
Essen
Atlas Copco IAS GmbH
1)
Bretten
Atlas Copco Industry GmbH
1)
Essen
Atlas Copco Kompressoren und
Drucklufttechnik GmbH
1)
Essen
Atlas Copco Power Technique GmbH
1)
Essen
Atlas Copco Technology GmbH
1)
Essen
Atlas Copco Tools Central Europe GmbH
1)
Essen
Desoutter GmbH
1)
Maintal
Dipotec GmbH Neustadt a.d. Donau
Edwards GmbH Kirchheim
Ehrler & Beck Vakuum- und
Drucklufttechnik GmbH
1)
Renningen
GP Inspect GmbH Neuried
Germany GP Solar GmbH Neuried
IPV Industrie-Pumpen Vertriebs GmbH Dresden
1)
Dresden
ISRA Immobilie Darmstadt GmbH Darmstadt
ISRA Immobilie Herten GmbH Darmstadt
ISRA PARSYTEC GmbH Aachen
ISRA SURFACE VISION GmbH Herten
ISRA VISION GmbH
1)
Darmstadt
ISRA VISION Graphikon GmbH Berlin
ISRA VISION LASOR GmbH Bielefeld
ISRA VISION PARSYTEC AG Aachen
ISRA VISION POLYMETRIC GmbH Darmstadt
KDS Kompressoren- und
Druckluftservice GmbH
1)
Essen
Leybold Dresden GmbH Dresden
Leybold GmbH Cologne
Leybold Real Estate GmbH
1)
Cologne
Medgas-Technik GmbH Medical Technology
1)
Berndroth
metronom Automation GmbH Mainz
nano-purication solutions GmbH
1)
Krefeld
Perceptron GmbH Munich
PMH Druckluft GmbH
1)
Moers
QUISS Qualitäts-Inspektionssysteme
und Service GmbH
1)
Puchheim
Scheugenpug GmbH
1)
Neustadt a.d. Donau
Schneider Druckluft GmbH
1)
Reutlingen
Synatec GmbH
1)
Leinfelden-
Echterdingen
Vision Experts GmbH Karlsruhe
Greece Atlas Copco Hellas AE Koropi
Hong Kong Atlas Copco China/Hong Kong Ltd Hong Kong
Hungary Atlas Copco Hungary Kft Szigetszentmiklós
India Atlas Copco (India) Ltd. Pune
Edwards India PrivateLtd. Pune
ISRA VISION INDIA Private Limited Mumbai
Leybold India Pvt Ltd. Pune
Perceptron Non-Contact Metrology
Solutions Pvt Ltd. Chennai
Indonesia PT Atlas Copco Indonesia Jakarta
Iraq Atlas Copco Iraq LLC Erbil
Ireland Atlas Copco (Ireland) Ltd. Dublin
Atlas Copco Finance DAC Dublin
Edwards Vacuum Technology IrelandLtd Dublin
Provac Limited Wexford
Israel Edwards Israel VacuumLtd Kiryat Gat
Italy ABAC Aria Compressa S.r.l Robassomero
Atlas Copco BLM S.r.l. Milan
Atlas Copco Italia S.r.l. Milan
Ceccato Aria Compressa S.r.l Vicenza
DGM S.r.l. Sovizzo(VI)
EdwardsS.r.l. Milan
Eurochiller S.r.l. Castello d'Agogna (Pv)
Fiac Professional Air Compressors S.r.l. Bologna
FIAC S.r.l. Bologna
Leybold Italia S.r.l Milan
MultiAir Italia S.r.l Cinisello Balsamo
STERI Srl Turin
Varisco S.r.l. Padova
Varisco Wellpoint s.r.l. Padova
Japan Atlas Copco KK Tok yo
Edwards JapanLtd. Chiba
Fuji Industrial Technique Co., Ltd. Osaka
ISRA VISION JAPAN Co., Ltd. Yokohama
Leybold Japan Co.Ltd. Shin-Yokohama AK bldg
Kohoku-Ku,
Yokohama-Shi
Perceptron Asia Pacic Ltd. Tokyo
Kazakhstan Atlas Copco AirPower Central Asia LLP Almaty
Kenya Atlas Copco Eastern Africa Limited Nairobi
Latvia Atlas Copco Baltic SIA Riga
Lebanon Atlas Copco Levant S.A.L. Beirut
Luxembourg Atlas Copco Finance S.á.r.l. Luxembourg
Malaysia Atlas Copco (Malaysia) Sdn. Bhd. Shah Alam
Edwards Technologies Malaysia Sdn. Bhd. Puchong
Mexico Atlas Copco Mexicana S.A. de C.V. Tlalnepantla
Desarrollos Técnologicos ACMSA S.A. de C.V. Tlalnepantla
Desoutter Tools Mexico SA de CV Tlalnepantla
ISRA VISIONS. de R.L. de C.V. Queretaro
Scheugenpug Mexico, S.de R.L. de C.V. Guadalajara
Vacuum Technique Mexico Monterrey
Morocco Atlas Copco Maroc SA Casablanca
Myanmar Atlas Copco Services Myanmar Co., Ltd. Yangon
Netherlands Alup Grassair Kompressoren BV Oss
Atlas Copco Beheer B.V. Zwijndrecht
Atlas Copco Internationaal B.V. Zwijndrecht
Creemers Compressors B.V. Oss
Eco Ketelservice Verhuur B.V. Tilburg
Eco Steam Trading & Consultancy B.V. Tilburg
E.K.S. Holding B.V. Tilburg
Leybold Nederland B.V. Utrecht
Perceptron B.V. The Haghe
1)
For the business year ending December 31, 2021 several German subsidiaries will make use of the §§ 264, 291 Handels-
gesetzbuch (German Commercial Code) exemption rules of ling their own (consolidated) nancial statements.
Atlas Copco 2021 121
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
Notes
• Parent company
New Zealand Atlas Copco (N.Z.) Ltd. Auckland
Exlair (NZ) Limited Auckland
Nigeria Atlas Copco Nigeria Ltd. Lagos
Norway Atlas Copco A/S Langhus
Atlas Copco Kompressorteknikk A/S Langhus
Atlas Copco Tools A/S Langhus
Berema A/S Langhus
Pakistan Atlas Copco Pakistan (Private) Limited Lahore
Peru Atlas Copco Perú S.A.C. Lima
Philippines Atlas Copco (Philippines) Inc. Binan
Poland ALUP Kompressoren Polska sp. z.o.o. Janki
Atlas Copco Polska Sp. z o.o. Warsaw
Portugal Sociedade Atlas Copco de Portugal
Unipessoal Lda Porto Salvo
Romania Atlas Copco Romania S.R.L. Bucharest
Scheugenpug S.R.L. Sibiu
Russia Airgrupp LLC Moscow
ISRA VISION LLC Moscow
JSC Atlas Copco Moscow
Serbia Atlas Copco Srbija doo Belgrade
Singapore Atlas Copco (South East Asia) Pte. Ltd Singapore
Leybold Singapore Pte Ltd Singapore
Vacuum Technique Singapore Pte Ltd Singapore
Slovakia Atlas Copco s.r.o Bratislava
ISRA VISION s.r.o. Bratislava
Perceptron Slovensko s.r.o. Bratislava
Schneider Airsystems s.r.o. Nitra
Slovenia Atlas Copco d.o.o. Trzin
South Africa Atlas Copco Industrial South Africa (Pty) Ltd Boksburg
Rand Air South Africa (Pty) Ltd Boksburg
South Korea Atlas Copco Korea Co., Ltd. Seongnam
CP Tools Korea Co., Ltd. Anyang
CSK Inc. Yongin
Edwards KoreaLtd Cheonan
ISRA VISION Korea Co. Ltd Seoul
Leybold Korea Ltd Bundang
Spain Aire Comprimido Industrial Iberia, S.L. Madrid
Atlas Copco S.A.E. Madrid
Grupos Electrógenos Europa, S.A. Zaragoza
IBVC Vacuum, S.L.U. Madrid
Leybold Hispanica S.A. Cornellá de Llobregat
Perceptron Iberica, S.L. Barcelona
Photonfocus Spain, S.L. Barcelona
Sweden Atlas Copco Compressor AB Nacka
Atlas Copco Industrial Technique AB Nacka
Sweden Atlas Copco Järla Holding AB Nacka
Atlas Copco Nacka Holding AB Nacka
Atlas Copco Sickla Holding AB Nacka
Industria Insurance Company Ltd
Industria Försäkringsaktiebolag Nacka
Switzerland ALUP Kompressoren AG Oftringen
Atlas Copco (Schweiz) AG Studen
Leybold Schweiz AG Steinhausen
Medgas-Technik Schweiz AG Sankt-Gallen
Photonfocus AG Lachen
Taiwan Atlas Copco Taiwan Ltd. Taoyuan
CSKT Inc. Jubei
Edwards TechnologiesLtd Jhunan
Leybold Taiwan Ltd Hsin-Chu
Thailand Atlas Copco (Thailand) Limited Bangkok
Turkey Atlas Copco Makinalari Imalat AS Istanbul
Chicago Pneumatic Endüstriyel Ürünler
Ticaret A.Ş Istanbul
Dost Kompresör Endüstri Makinaları İmal
Bakım ve Ticaret A.Ş Istanbul
Ekomak Endüstriyel Kompresör Makine
Sanayi ve Ticaret A.Ş Istanbul
ISRA VISION Yapay Görme Ve Otomasyon
San. Ve Tı
c. A.ş Istanbul
Ukraine Atlas Copco Ukraine LLC Kiev
United Arab
Emirates Atlas Copco Middle East FZE Dubai
United
Kingdom Air Compressors and Tools Limited Hemel Hempstead
Airow Compressors and Pneumatics Limited Warington
Atlas Copco IAS UK Limited Flintshire
Atlas Copco Ltd. Hemel Hempstead
Atlas Copco UK Holdings Ltd. Hemel Hempstead
BeaconMedaes Ltd Staveley
Cooper Freer Ltd Leicester
Cooper Freer Holdings Ltd Leicester
Edwards High Vacuum InternationalLtd. Burgess Hill
EdwardsLtd. Burgess Hill
Isocool Limited Braintree
ISRA VISION Ltd. London
ISRA VISION PARSYTEC Ltd. Eastleigh
Leybold UK Ltd. Chessington
Nano Purication Solutions Ltd Newcastle
Purication Solutions UK Limited Gateshead
Perceptron Metrology UK Ltd. Birmingham
Tentec Ltd. Birmingham
Walker Filtration Ltd. UK Washington
U.S.A. Air & Gas Solutions LLC Charlotte
Atlas Copco Compressors LLC Rock Hill
Atlas Copco Comptec LLC Voorheesville
Atlas Copco IAS LLC Auburn Hills
Atlas Copco Ma-Trench Company LLC Santa Maria
Atlas Copco North America LLC Parsippany
Atlas Copco Rental LLC Laporte
Atlas Copco Tools & Assembly Systems LLC Auburn Hills
Atlas Copco USA Holdings Inc. Parsippany
BeaconMedaes LLC Rock Hill
C H Spencer LLC Salt Lake City
Chicago Pneumatic International Inc. Rock Hill
Chicago Pneumatic Tool Company LLC Rock Hill
Dekker Vacuum Technologies Inc Michigan City
Edwards Vacuum, LLC Wilmington
Henrob Corporation New Hudson
ISRA SURFACE VISION Inc. Berkeley Lake
ISRA VISION PARSYTEC Inc. Berkeley Lake
Leybold USA Inc. Wilmington
Mid-South Engine & Power Systems LLC White Oak
Nowvac Inc. Parsippany
Perceptron Inc. Plymouth
Perceptron Global Inc. Plymouth
Perceptron Software Technology, Inc. Plymouth
Powerhouse Equipment & Engineering Co. Inc. Delanco
Power Technique North America LLC Rock Hill
Quincy Compressor LLC Bay Minette
Scheugenpug Inc. Kennesaw
Vacuum Technique LLC Michigan City
Walker Filtration Inc. US Erie
Venezuela Atlas Copco Venezuela SA Valencia
Vietnam Atlas Copco Vietnam Company Ltd. Hanoi
Zambia Atlas Copco Industrial Zambia Limited Kitwe
A22. Related parties, continued
Country/Area Company Location (City) Country/Area Company Location (City) Country/Area Company Location (City)
Atlas Copco 2021 122
FINANCIAL STATEMENTS – NOTES
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
FINANCIALS
Group
Consolidated income statement
Consolidated statement of
comprehensive income
Consolidated balance sheet
Consolidated statement
of changes in equity
Consolidated statement
of cash ows
Notes
• Parent company
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Signatures of the Board of Directors
The Parent Company nancial statements have been prepared in accordance with generally
accepted accounting principles in Sweden and the consolidated nancial statements have been
prepared in accordance with International Accounting Standards as prescribed by the European
Parliament and the Regulation (EC) No 1606/2002 dated July 19, 2002 on the application of Inter-
national Accounting Standards. The Parent Company nancial statements and the consolidated
nancial statements give a true and fair view of the Parent Company’s and the Group’s nancial
position and results of operations.
Our audit report was submitted on March 18, 2022, Ernst & Young AB
Erik Sandström
Authorized Public Accountant
Atlas Copco AB is required to publish information included in this annual report in accordance with
the Swedish Securities Market Act. The information was made public on March 21, 2022.
Mats Rahmström Gordon Riske Peter Wallenberg Jr Mikael Bergstedt Benny Larsson
Board member
President and CEO
Board member Board member Board member
Employee representative
Board member
Employee representative
Nacka, March 2, 2022, Atlas Copco AB
Hans Stråberg Staan Bohman Tina Donikowski Johan Forssell Anna Ohlsson-Leijon
Chair Board member Board member Board member Board member
The administration report for the Group and Parent Company provides a true and fair overview of the
development of the Group’s and Parent Company’s business activities, nancial position and results of
operations as well as the signicant risks and uncertainties which the Parent Company and its subsidiaries
are exposed to.
The Annual Report also contains the Group’s and Parent Company’s statutory sustainability report
in accordance with the Swedish Annual Accounts Act, Chapter 6, Section 11, see page 20.
Atlas Copco 2021 123
SIGNATURES OF THE BOARD OF DIRECTORS
OTHER INFORMATION
• Signatures of the Board of Directors
Audit Report
Financial denitions
Sustainability notes
Three years in summary
Contacts
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Audit report
To the general meeting of the shareholders of Atlas Copco AB (publ),
corporate identity number 556014-2720
Report on the annual accounts and consolidated accounts
Opinions
We have audited the annual accounts and consolidated accounts of Atlas
Copco AB (publ) except for the corporate governance statement on pages
54–63 and the quarterly data on page 82 for the year 2021. The annual
accounts and consolidated accounts of the company are included on pages
14–41, 47–51 and 64–123 in this document.
In our opinion, the annual accounts have been prepared in accordance with
the Annual Accounts Act and present fairly, in all material respects, the nan-
cial position of the parent company as of December 31, 2021 and its nancial
performance and cash ow for the year then ended in accordance with the
Annual Accounts Act. The consolidated accounts have been prepared in accor-
dance with the Annual Accounts Act and present fairly, in all material respects,
the nancial position of the group as of December 31, 2021 and their nancial
performance and cash ow for the year then ended in accordance with Inter-
national Financial Reporting Standards (IFRS), as adopted by the EU, and the
Annual Accounts Act. The statutory administration report is consistent with
the other parts of the annual accounts and consolidated accounts.
We therefore recommend that the general meeting of shareholders adopts
the income statement and balance sheet for the parent company and the group.
Our opinions in this report on the annual accounts and consolidated
accounts are consistent with the content of the additional report that has been
submitted to the parent company’s audit committee in accordance with the
Audit Regulation (537/2014) Article 11.
Basis for Opinions
We conducted our audit in accordance with International Standards on Audit-
ing (ISA) and generally accepted auditing standards in Sweden. Our responsi-
bilities under those standards are further described in the Auditor’s Responsi-
bilities section. We are independent of the parent company and the group in
accordance with professional ethics for accountants in Sweden and have oth-
erwise fullled our ethical responsibilities in accordance with these require-
ments. This includes that, based on the best of our knowledge and belief, no
prohibited services referred to in the Audit Regulation (537/2014) Article 5.1
have been provided to the audited company or, where applicable, its parent
company or its controlled companies within the EU.
We believe that the audit evidence we have obtained is sucient and
appropriate to provide a basis for our opinions.
Key Audit Matters
Key audit matters of the audit are those matters that, in our professional judg-
ment, were of most signicance in our audit of the annual accounts and con-
solidated accounts of the current period. These matters were addressed in the
context of our audit of, and in forming our opinion thereon, the annual
accounts and consolidated accounts as a whole, but we do not provide a sepa-
rate opinion on these matters. For each matter below, our description of how
our audit addressed the matter is provided in that context.
We have fullled the responsibilities described in the Auditor’s responsibilities
for the audit of the nancial statements section of our report, including in rela-
tion to these matters. Accordingly, our audit included the performance of pro-
cedures designed to respond to our assessment of the risks of material mis-
statement of the nancial statements. The results of our audit procedures,
including the procedures performed to address the matters below, provide
the basis for our audit opinion on the accompanying nancial statements.
Valuation of goodwill
Description
At December 31, 2021, the total value of goodwill amounts to 32,1 billion SEK
and is allocated to the group’s dierent cash generating units. Goodwill must
be tested for impairment at least annually or whenever there are indicators of
impairment. The test is carried out by comparing the recoverable amount to
the carrying value. To calculate the recoverable amount management apply
signicant judgment and estimates regarding future cash ows, perpetual
growth rate and discount rates. The impairment tests for 2021 did not result in
any impairment write o.
Disclosures related to the group’s accounting principles, signicant account-
ing estimates and judgements are provided in note 1 and disclosures related to
goodwill and the impairment test performed is provided in note 12.
Based on carrying value of the goodwill and the high degree of manage-
ment estimate required to perform the impairment tests, we have assessed the
accounting for the valuation of goodwill as a key audit matter in our audit.
How our audit addressed this key audit matter
In the audit, we have evaluated the group’s process for conducting impair-
ment tests. Based on established criteria, we have examined how the group
identies cash-generating units.
With support from our internal valuation specialists, we have evaluated the
valuation methods used. We have assessed the reasonableness of assump-
tions, conducted sensitivity analysis, and compared them to historical out-
comes as well as external sources and industry benchmarks.
Finally, we have assessed the appropriateness of the disclosures provided
in the annual report.
Revenue recognition
Description
The group recognize revenue from a wide range of geographical markets and
the revenues are generated from product- and product related oerings rang-
ing from equipment, service and rental to the customers. The appropriate tim-
ing of revenue recognition can vary from a point in time to recognition over
time. Judgement may be required in assessing if control has been transferred
to the customer and to determine the satisfaction of performance obligations.
The group’s decentralized organization where revenues are generated
from a large number of subsidiaries further increases the complexity of ensur-
ing that the revenue recognition principles are consistently applied across the
group.
Disclosures related to the group’s accounting principles, critical accounting
estimates and judgement are provided in note 1 and note 4 provides disclo-
sures regarding revenue disaggregated by operating segment and geography.
Based on the above, we have assessed the revenue recognition as a key audit
matter in our audit.
How our audit addressed this key audit matter
In our audit we have assessed the group’s processes for revenue recognition.
Further, we have reviewed the group’s accounting manual and assessed
whether the policies for revenue recognition are in accordance with the appli-
cable accounting standards.
We have obtained an understanding of the dierent types of signicant rev-
enue contracts and evaluated the identied performance obligations and
determinations made regarding when performance obligations are considered
satised. In addition, we have performed detailed revenue transaction testing
and revenue data analytical procedures to assess the revenue recognition.
We have assessed the appropriateness of the disclosures provided in the
annual report.
Accounting for income taxes
Description
Atlas Copco is a global group with subsidiaries world-wide. The accounting for
income taxes requires adherence to local tax legislation which often can be
complex and allow for dierent interpretations and judgement. The group’s
subsidiaries are regularly subject to tax audits in which the local tax authorities
might challenge the group’s interpretation of the local legislation.
In instances where the tax authorities are of a dierent opinion of how to
interpret the tax legislation the outcome is often dependent on negotiations
with the local tax authorities or legal proceedings. In order to account for
income taxes in these instances, management may have to apply signicant
estimates. Changes to these estimates can have a material eect on the
income tax reported.
Disclosures related to the group’s accounting principles, critical accounting
estimates and judgement are provided in note 1 and disclosures related to
taxes are provided in note 9.
Based on the above, we have assessed accounting for income taxes as a key
audit matter in our audit.
How our audit addressed this key audit matter
We have evaluated the group’s process for accounting for income taxes. We
have reviewed communication between Atlas Copco and the tax authorities
for signicant uncertain income tax matters. Our internal tax specialists have
been engaged to evaluate the assessments and interpretations made by the
group. We have also assessed the reasonability of the accounting for these
matters by comparisons to historical outcome in similar cases and by obtaining
assessments from the group’s external tax advisors where appropriate.
We have assessed the appropriateness of the disclosures provided in the
annual report.
Other Information than the annual accounts and consolidated accounts
This document also contains other information than the annual accounts and
consolidated accounts and is found on pages 1–13, 42–46, 52–53 and 127–145.
The Board of Directors and the Managing Director are responsible for this
other information.
Atlas Copco 2021 124
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OTHER INFORMATION
Signatures of the Board of Directors
• Audit Report
Financial denitions
Sustainability notes
Three years in summary
Contacts
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Our opinion on the annual accounts and consolidated accounts does not cover
this other information and we do not express any form of assurance conclusion
regarding this other information.
In connection with our audit of the annual accounts and consolidated
accounts, our responsibility is to read the information identied above and
consider whether the information is materially inconsistent with the annual
accounts and consolidated accounts. In this procedure we also take into
account our knowledge otherwise obtained in the audit and assess whether
the information otherwise appears to be materially misstated.
If we, based on the work performed concerning this information, conclude
that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
Responsibilities of the Board of Directors and the Managing Director
The Board of Directors and the Managing Director are responsible for the
preparation of the annual accounts and consolidated accounts and that they
give a fair presentation in accordance with the Annual Accounts Act and, con-
cerning the consolidated accounts, in accordance with IFRS as adopted by the
EU. The Board of Directors and the Managing Director are also responsible for
such internal control as they determine is necessary to enable the preparation
of annual accounts and consolidated accounts that are free from material mis-
statement, whether due to fraud or error.
In preparing the annual accounts and consolidated accounts, The Board of
Directors and the Managing Director are responsible for the assessment of the
company’s and the group’s ability to continue as a going concern. They disclose,
as applicable, matters related to going concern and using the going concern
basis of accounting. The going concern basis of accounting is however not
applied if the Board of Directors and the Managing Director intends to liquidate
the company, to cease operations, or has no realistic alternative but to do so.
The Audit Committee shall, without prejudice to the Board of Director’s
responsibilities and tasks in general, among other things oversee the company’s
nancial reporting process.
Auditor’s responsibility
Our objectives are to obtain reasonable assurance about whether the annual
accounts and consolidated accounts as a whole are free from material mis-
statement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinions. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with ISAs and gener-
ally accepted auditing standards in Sweden will always detect a material mis-
statement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably
be expected to inuence the economic decisions of users taken on the basis of
these annual accounts and consolidated accounts.
As part of an audit in accordance with ISAs, we exercise professional judg-
ment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the annual
accounts and consolidated accounts, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit
evidence that is sucient and appropriate to provide a basis for our opinions.
Audit report, continued
The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of
internal control.
• Obtain an understanding of the company’s internal control relevant to
our audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
eectiveness of the company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reason-
ableness of accounting estimates and related disclosures made by the
Board of Directors and the Managing Director.
• Conclude on the appropriateness of the Board of Directors’ and the Man-
aging Director’s use of the going concern basis of accounting in preparing
the annual accounts and consolidated accounts. We also draw a conclu-
sion, based on the audit evidence obtained, as to whether any material
uncertainty exists related to events or conditions that may cast signicant
doubt on the company’s and the group’s ability to continue as a going con-
cern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures in the
annual accounts and consolidated accounts or, if such disclosures are inad-
equate, to modify our opinion about the annual accounts and consolidated
accounts. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may
cause a company and a group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the annual
accounts and consolidated accounts, including the disclosures, and
whether the annual accounts and consolidated accounts represent the
underlying transactions and events in a manner that achieves fair presenta-
tion.
• Obtain sucient and appropriate audit evidence regarding the nancial
information of the entities or business activities within the group to express
an opinion on the consolidated accounts. We are responsible for the direc-
tion, supervision and performance of the group audit. We remain solely
responsible for our opinions.
We must inform the Board of Directors of, among other matters, the planned
scope and timing of the audit. We must also inform of signicant audit ndings
during our audit, including any signicant deciencies in internal control that
we identied.
We must also provide the Board of Directors with a statement that we have
complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reason-
ably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Board of Directors, we determine
those matters that were of most signicance in the audit of the annual
accounts and consolidated accounts, including the most important assessed
risks for material misstatement, and are therefore the key audit matters.
We describe these matters in the auditor’s report unless law or regulation
precludes disclosure about the matter.
Report on other legal and regulatory requirements
Opinions
In addition to our audit of the annual accounts and consolidated accounts, we
have also audited the administration of the Board of Directors and the Manag-
ing Director of Atlas Copco AB (publ) for the year 2021 and the proposed
appropriations of the company’s prot or loss.
We recommend to the general meeting of shareholders that the prot be
appropriated (loss be dealt with) in accordance with the proposal in the statu-
tory administration report and that the members of the Board of Directors and
the Managing Director be discharged from liability for the nancial year.
Basis for opinions
We conducted the audit in accordance with generally accepted auditing stan-
dards in Sweden. Our responsibilities under those standards are further
described in the Auditor’s Responsibilities section. We are independent of the
parent company and the group in accordance with professional ethics for
accountants in Sweden and have otherwise fullled our ethical responsibilities
in accordance with these requirements.
We believe that the audit evidence we have obtained is sucient and
appropriate to provide a basis for our opinions.
Responsibilities of the Board of Directors and the Managing Director
The Board of Directors is responsible for the proposal for appropriations of the
company’s prot or loss. At the proposal of a dividend, this includes an assess-
ment of whether the dividend is justiable considering the requirements
which the company’s and the group’s type of operations, size and risks place
on the size of the parent company’s and the group’s equity, consolidation
requirements, liquidity and position in general.
The Board of Directors is responsible for the company’s organization and
the administration of the company’s aairs. This includes among other things
continuous assessment of the company’s and the group’s nancial situation
and ensuring that the company’s organization is designed so that the account-
ing, management of assets and the company’s nancial aairs otherwise are
controlled in a reassuring manner. The Managing Director shall manage the
ongoing administration according to the Board of Directors’ guidelines and
instructions and among other matters take measures that are necessary to ful-
ll the company’s accounting in accordance with law and handle the manage-
ment of assets in a reassuring manner.
Auditor’s responsibility
Our objective concerning the audit of the administration, and thereby our
opinion about discharge from liability, is to obtain audit evidence to assess
with a reasonable degree of assurance whether any member of the Board of
Directors or the Managing Director in any material respect:
• has undertaken any action or been guilty of any omission which can give
rise to liability to the company, or
• in any other way has acted in contravention of the Companies Act, the
Annual Accounts Act or the Articles of Association.
Atlas Copco 2021 125
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OTHER INFORMATION
Signatures of the Board of Directors
• Audit Report
Financial denitions
Sustainability notes
Three years in summary
Contacts
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Our objective concerning the audit of the proposed appropriations of the
company’s prot or loss, and thereby our opinion about this, is to assess with
reasonable degree of assurance whether the proposal is in accordance with
the Companies Act.
Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with generally accepted auditing stan-
dards in Sweden will always detect actions or omissions that can give rise to lia-
bility to the company, or that the proposed appropriations of the company’s
prot or loss are not in accordance with the Companies Act.
As part of an audit in accordance with generally accepted auditing stan-
dards in Sweden, we exercise professional judgment and maintain profes-
sional skepticism throughout the audit. The examination of the administration
and the proposed appropriations of the company’s prot or loss is based pri-
marily on the audit of the accounts. Additional audit procedures performed
are based on our professional judgment with starting point in risk and materi-
ality. This means that we focus the examination on such actions, areas and rela-
tionships that are material for the operations and where deviations and viola-
tions would have particular importance for the company’s situation. We exam-
ine and test decisions undertaken, support for decisions, actions taken and
other circumstances that are relevant to our opinion concerning discharge
from liability. As a basis for our opinion on the Board of Directors’ proposed
appropriations of the company’s prot or loss we examined the Board of Direc-
tors’ reasoned statement and a selection of supporting evidence in order to be
able to assess whether the proposal is in accordance with the Companies Act.
The auditor’s examination of the ESEF report
Opinion
In addition to our audit of the annual accounts and consolidated accounts, we
have also examined that the Board of Directors and the Managing Director
have prepared the annual accounts and consolidated accounts in a format that
enables uniform electronic reporting (the ESEF report) pursuant to Chapter 16,
Section 4(a) of the Swedish Securities Market Act (2007:528) for Atlas Copco
AB (publ) for the nancial year 2021.
Our examination and our opinion relate only to the statutory requirements.
In our opinion, the ESEF report #[checksum] has been prepared in a format
that, in all material respects, enables uniform electronic reporting.
Basis for opinion
We have performed the examination in accordance with FAR’s recommenda-
tion RevR 18 Examination of the ESEF report. Our responsibility under this
recommendation is described in more detail in the Auditors’ responsibility
section. We are independent of Atlas Copco AB (publ) in accordance with pro-
fessional ethics for accountants in Sweden and have otherwise fullled our
ethical responsibilities in accordance with these requirements.
We believe that the evidence we have obtained is sucient and appropriate
to provide a basis for our opinion.
Responsibilities of the Board of Directors and the Managing Director
The Board of Directors and the Managing Director are responsible for the
preparation of the ESEF report in accordance with Chapter 16, Section 4(a) of
the Swedish Securities Market Act (2007:528), and for such internal control
Audit report, continued
that the Board of Directors and the Managing Director determine is necessary
to prepare the ESEF report without material misstatements, whether due to
fraud or error.
Auditor’s responsibility
Our responsibility is to obtain reasonable assurance whether the ESEF report is
in all material respects prepared in a format that meets the requirements of
Chapter 16, Section 4(a) of the Swedish Securities Market Act (2007:528),
based on the procedures performed.
RevR 18 requires us to plan and execute procedures to achieve reasonable
assurance that the ESEF report is prepared in a format that meets these
requirements.
Reasonable assurance is a high level of assurance, but it is not a guarantee
that an engagement carried out according to RevR 18 and generally accepted
auditing standards in Sweden will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in aggregate, they could reasonably be expected to
inuence the economic decisions of users taken on the basis of the ESEF report.
The audit rm applies ISQC 1 Quality Control for Firms that Perform Audits
and Reviews of Financial Statements, and other Assurance and Related Ser-
vices Engagements and accordingly maintains a comprehensive system of
quality control, including documented policies and procedures regarding
compliance with professional ethical requirements, professional standards
and legal and regulatory requirements.
The examination involves obtaining evidence, through various procedures,
that the ESEF report has been prepared in a format that enables uniform elec-
tronic reporting of the annual and consolidated accounts. The procedures
selected depend on the auditor’s judgment, including the assessment of the
risks of material misstatement in the report, whether due to fraud or error. In
carrying out this risk assessment, and in order to design audit procedures that
are appropriate in the circumstances, the auditor considers those elements of
internal control that are relevant to the preparation of the ESEF report by the
Board of Directors and the Managing Director, but not for the purpose of
expressing an opinion on the eectiveness of those internal controls. The
examination also includes an evaluation of the appropriateness and reason-
ableness of assumptions made by the Board of Directors and the Managing
Director.
The procedures mainly include a technical validation of the ESEF report, i.e.
if the le containing the ESEF report meets the technical specication set out in
the Commission’s Delegated Regulation (EU) 2019/815 and a reconciliation of
the ESEF report with the audited annual accounts and consolidated accounts.
Furthermore, the procedures also include an assessment of whether the
ESEF report has been marked with iXBRL which enables a fair and complete
machine-readable version of the consolidated statement of nancial perfor-
mance, nancial position, changes in equity and cash ow.
The auditor’s examination of the corporate governance statement
The Board of Directors is responsible for that the corporate governance state-
ment on pages 54–63 has been prepared in accordance with the Annual
Accounts Act.
Our examination of the corporate governance statement is conducted in
accordance with FAR’s auditing standard RevU 16 The auditor´s examination
of the corporate governance statement. This means that our examination of
the corporate governance statement is dierent and substantially less in scope
than an audit conducted in accordance with International Standards on Audit-
ing and generally accepted auditing standards in Sweden. We believe that the
examination has provided us with sucient basis for our opinions.
A corporate governance statement has been prepared. Disclosures in accor-
dance with chapter 6 section 6 the second paragraph points 2–6 of the Annual
Accounts Act and chapter 7 section 31 the second paragraph the same law are
consistent with the other parts of the annual accounts and consolidated
accounts and are in accordance with the Annual Accounts Act.
Ernst & Young AB with Erik Sandström as auditor in charge, Box 7850,
103 99 Stockholm, was appointed auditor of Atlas Copco AB by the general
meeting of the shareholders on April 27, 2021 and has been the company’s
auditor since April 23, 2020.
Stockholm, March 18, 2022
Ernst & Young AB
Erik Sandström
Authorized Public Accountant
Atlas Copco 2021 126
AUDIT REPORT
OTHER INFORMATION
Signatures of the Board of Directors
• Audit Report
Financial denitions
Sustainability notes
Three years in summary
Contacts
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Financial denition s *
Reference is made in the Annual Report to a number of nancial performance measures which are not dened according to IFRS. These performance
measures provide complementary information and are used to help investors as well as Group Management analyze the company’s operations
and facilitate an evaluation of the performance. Since not all companies calculate nancial performance measures in the same manner, these are
not always comparable with measures used by other companies. These nancial performance measures should therefore not be regarded as a
replacement for measures as dened according to IFRS.
Adjusted operating prot
Operating prot (earnings before interest and tax),
excluding items aecting comparability.
Adjusted operating prot margin
Operating prot margin excl. items aecting
comparability.
Average number of shares outstanding
The weighted average number of shares outstanding
before or after dilution. Shares held by Atlas Copco are
not included in the number of shares outstanding. The
dilutive eects arise from the stock options that are
settled in shares or that at the employees’ choice can be
settled in shares or cash in the share based incentive
programs. The stock options have a dilutive eect when
the average share price during the period exceeds the
exercise price of the options.
Capital employed
Average total assets less non-interest-bearing liabilities/
provisions. Capital employed for the business areas
excludes cash, tax liabilities and tax receivables.
Capital employed turnover ratio
Revenues divided by average capital employed.
Capital turnover ratio
Revenues divided by average total assets.
Debt/equity ratio
Net indebtedness in relation to equity, including
non-controlling interests.
Dividend yield
Dividend divided by the average share price quoted
of the A-share.
Earnings per share
Prot for the period attributable to owners of the parent
divided by the average number of shares outstanding.
EBITA – Earnings before Interest, Taxes, and
Amortization
Operating prot plus amortization and impairment of
intangibles related to acquisitions.
EBITA margin
EBITA as a percentage of revenues.
EBITDA – Earnings Before Interest, Taxes,
Depreciation and Amortization
Operating prot plus depreciation, amortization and
impairment.
EBITDA margin
EBITDA as a percentage of revenues.
Equity/assets ratio
Equity including non-controlling interests, as a
percentage of total assets.
Equity per share
Equity including non-controlling interests divided by
the average number of shares outstanding.
Items aecting comparability
Restructuring costs, capital gains/losses, impairments,
changes in provision for share-related long-term incen-
tive program and other items with the character of
aecting comparability.
Net cash ow
Change in cash and cash equivalents excluding currency
exchange rate eects.
Net debt/EBITDA ratio
Net indebtedness in relation to EBITDA.
Net indebtedness/net cash position
Borrowings plus post-employment benets minus cash
and cash equivalents and other current nancial assets,
adjusted for the fair value of interest rate swaps.
Net interest expense
Interest expense less interest income.
Operating cash ow
Cash ow from operations and cash ow from invest-
ments, excluding company acquisitions/divestments
and currency hedges of loans.
Operating cash surplus
Operating prot adding back depreciation,
amortization and impairments as well as capital gains/
losses and other non-cash items.
Operating prot
Revenues less all costs related to operations, but
excluding net nancial items and income tax expense.
Operating prot margin
Operating prot as a percentage of revenues.
Organic growth
Sales growth that excludes translation eects
from exchange rate dierences, and acquisitions/
divestments.
Prot margin
Prot before tax as a percentage of revenues.
Return on capital employed (ROCE)
Prot before tax plus interest paid and foreign exchange
dierences (for business areas: operating prot) as a
percentage of capital employed.
Return on equity
Prot for the period, attributable to owners of the
parent as a percentage of average equity, excluding
non-controlling interests.
Total return to shareholders
Share price performance including reinvested
dividends and share redemptions.
Weighted average cost of capital (WACC)
interest-bearing liabilities x i
+ market capitalization x r
interest-bearing liabilities
+ market capitalization
i: An estimated average risk-free interest rate
of 4% plus a premium of 0.5%.
An estimated standard tax rate has been applied.
r: An estimated average risk-free interest rate of
4% plus an equity risk premium of 5%.
* Atlas Copco has chosen to present the company’s alternative performance measures in accordance with the guidance by the European Securities and Markets Authority (ESMA) in a separate appendix.
The appendix is published on www.atlascopcogroup.com/en/investor-relations/key-gures/nancial-denitions
Atlas Copco 2021 127
FINANCIAL DEFINITIONS
OTHER INFORMATION
Signatures of the Board of Directors
Audit Report
• Financial denitions
Sustainability notes
Three years in summary
Contacts
VERY
HIGH
Importance
to Atlas Copco´s
stakeholders
MEDIUM
MEDIUM
Atlas Copco’s economic, social and environmental impact
VERY
HIGH
1
2
3
4
5
6
7
16
14
15
17
18
19
20
8
13
11 22
12
10 9
21
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Sustainability notes
Atlas Copco’s mission is to achieve sustainable, protable growth. The sustainability report is an integrated part of the Group’s annual report. The sustainability notes
on the following pages include complementary information about the materiality analysis, stakeholder dialogue, governance, results and reporting principles.
Stakeholder engagement
Atlas Copco’s sustainability report aims to provide stakeholders with relevant information
about the Group’s economic, environmental and social impact. In dening the report
content, Atlas Copco applies Global Reporting Initiative’s (GRI) reporting principles on
stakeholder inclusiveness, sustainability context, materiality and completeness.
Atlas Copco’s Business Code of Practice denes the Group’s ve key stakeholders – those
who can be signicantly aected by Atlas Copco’s operations and who similarly aect Atlas
Copco. Internal stakeholders include functions such as research and development, logis-
tics, human resources and purchasing. For external stakeholders’ input, Atlas Copco
directly and indirectly engages with international NGOs, unions, key investors, civil society
and business advocacy groups, customers and business partners. This stakeholder-driven
approach takes inspiration from GRI’s guidance for materiality.
Materiality analysis
A materiality analysis is conducted regularly, involving internal and external stakeholders
through surveys and interviews. A survey asking stakeholders to prioritize a set of pre-
dened issues is posted on the intranet and spread externally in order to capture a broad
array of stakeholder views. In-depth interviews with stakeholder groups such as custom-
ers, employees, investors, NGOs, peers and board members complement the survey. The
result is discussed in internal workshops with employees representing functions such as
marketing, purchasing, engineering, HR and logistics and the specialist safety, health,
environment and quality function and is reviewed by Group Management.
Atlas Copco uses the stakeholder input together with UN Global Compact’s ten princi-
ples, mapping of the business’ impact on the UN Sustainable Development Goals, and risk
and opportunity assessments to dene the Group’s signicant environmental, economic
and social impact. The analysis is used in the review of the Group’s focus areas for sustain-
ability. It also serves as input to the formulation of the sustainability KPIs and targets, as
presented on page 6, that measure Atlas Copco’s progress.
Materiality analysis 2021
In 2021, Atlas Copco conducted a renewed materiality analysis with the objective to gain
the perspectives of external and internal stakeholders and to identify risks and opportuni-
ties relating to sustainability.
Among the conclusions from the analysis, compared to the one in 2018, are that stake-
holders place increased focus on issues such as diversity and inclusion, and talent develop-
ment and retention. Gender balance in leadership positions within the Group also gained
attention. Issues relating to climate change, such as circular business models, life-cycle
approach to product development, and carbon impact, were also prioritized higher by
stakeholders compared with the previous years’ analyses. Among the topics identied as
less material were water use, community engagement and tax policy.
The ndings are presented in the materiality matrix to the right and has formed the
basis for dening the Group’s focus areas for sustainability as well as the corresponding
updated KPIs and targets which apply from 2022 onwards. Read more on page 7.
1 Business integrity
2 Human rights
3 Labor rights
4 Responsible value chain
5 Responsible tax policy
6 Diversity and inclusion
7 Occupational health, safety
and well-being
8 Community engagement
9 Talent development and
retention
10 Gender balance in leadership
positions
11 Gender pay equality
12 Data protection and privacy
13 Multi-stakeholder collaboration
14 Product quality and service
15 Life-cycle approach to product
development
16 Product carbon impact
17 Climate impact along the
value chain
18 Water use
19 Circular business models
20 Material traceability and
sourcing
21 Energy use and eciency
22 Natural environments and
ecosystems
Value creators
These are topics that are central to long-term
value creation and working with them should
help position Atlas Copco as a leader within
sustainability. Our ambition level is expressed
through our targets and KPIs.
Trust builders
Working with these topics help build trust in
Atlas Copco’s business. Our ambition is to
deliver transparency and to keep pace with
stakeholder expectations.
Strategic enablers
These are topics that play a central role to
delivering on Atlas Copco’s business strategy.
Working with them should build and ensure
business resilience.
Topics
– Business ethics and integrity
– Occupational health, safety & well-being
– Product quality and service
– Life-cycle approach to product
development
– Product carbon impact
Topics
– Energy use and eciency
– Human rights
– Responsible value chain
– Data protection and privacy
– Climate impact along the value chain
Topics
– Diversity and inclusion
– Talent development and retention
– Gender balance in leadership positions
– Circular business models
Materiality analysis 2021
Atlas Copco 2021 128
SUSTAINABILITY NOTES
OTHER INFORMATION
Signatures of the Board of Directors
Audit Report
Financial denitions
• Sustainability notes
Three years in summary
Contacts
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
Business partners Our own operations Customers
IMPACT
Atlas Copco has a large supplier base and purchased compo-
nents account for about 75% of the product cost. The choice
of suppliers is therefore of great importance for the Group’s
impact from a social and environmental perspective. The col-
laboration with business partners and the supplier require-
ments aim to protect Atlas Copco from risks and promote
better standards in society.
Atlas Copco’s operations is global with employees and manufac-
turing in a large number of countries. In some of these, there is a
high risk of human rights violations, corruption, and non-compli-
ance with laws and Atlas Copco’s policies. The impact of our own
operations relates mainly to the manufacturing and transport
of products, and employees’ working conditions, including their
health and safety.
Atlas Copco’s customers demand innovative,
high-quality products that are resource and
energy ecient, safe and ergonomic. The main
part of the products’ climate impact occurs
when they are being used.
RISKS
– Business partners who do not live up to human rights
standards, such as decent working conditions and the
freedom of association
– Business partners who do not live up to the principles
of ethical business, for example regarding corruption
– Purchased components that are not produced in a
sustainable way, e.g. the presence of conict minerals, or
components with a large carbon footprint
– Climate- or environmental-related events causing
disruptions in the supply or distribution chain
– Insucient standards regarding safety and health
– Lack of access to skilled and competent employees
– Violations of human rights, such as discrimination and
restrictions on freedom of association
– Unethical behavior or corruption
– Environmental impact from waste and emissions
– Manufacturing and transport of products lead to greenhouse
gas emissions
– Climate- or environmental-related events causing disruptions
in operations or manufacturing
– Customers´ impact on the environment, the
climate, human rights or other social aspects
– Risks of sanctions
– Risks of corruption
ACTIVITIES
– Risk-based assessment of business partners, including
quality and social/environmental responsibility aspects
– Requirement that signicant direct suppliers must have an
approved environmental management system
– Requirement that signicant business partners must
sign and follow the Business Code of Practice
– Action plans developed together with the supplier to deal
with any shortcomings and deviations
– Employee training in the Business Code of Practice, and a
system for reporting violations
– Safety, health and environmental training for business
partners
– Global network of sub-suppliers reducing the dependence
on individual suppliers
– Promoting international standards, such as UN Global
Compact
– Technology development in collaboration with business
partners
– Adopting Science-Based Targets for the reduction of
greenhouse-gas emissions (scope 3), including plans by
each business area for how to contribute to the targets.
– Regular assessment of sustainability risks, including climate-
related risks
– Targeted recruiting and competence development
– Certication of major operating units according to ISO 9001,
ISO 14001 and ISO 45001
– Training for all employees in the Business Code of Practice,
and a system for reporting violations
– Follow-up and control through internal audits
– Safety and health training
– Increased use of renewal energy and eorts to decrease
energy consumption
– Eorts to decrease waste volumes and to increase the share
of reused and recycled waste
– Eorts to reduce water consumption
– Reduced use of air freight in favor of more environmentally
friendly transport
– Applying international standards and guidelines, such as
the UN Global Compact
– Adopting Science-Based Targets for the reduction of green-
house-gas emissions (scope 1 and 2), including plans by each
business area for how to contribute to the targets.
– Continuous development of products with
improved ergonomics, safety, energy e-
ciency and reduced emissions
– Employee training in the Business Code of
Practice, and a system for reporting violations
– Evaluation of customers’ sustainability work
and dialogue with customers in complex
markets
– Collaborations with customers to develop
ecient, safe and environmentally friendly
solutions
– Adopting Science-Based Targets for the
reduction of greenhouse-gas emissions
(scope 3), including plans by each business
area for how to contribute to the targets.
Sustainability impact and risks in the value chain
Understanding our sustainability impact and risks throughout the value chain helps us choose the right actions to handle them.
The table below shows where our impact takes place, the corresponding risks and examples of how we work to minimize them.
Read more about our climate-related risks and how we handle them on page 133.
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Stakeholders and their key topics and concerns
As a global Group, it is vital for Atlas Copco to ensure accountability for its
actual and potential impact on stakeholders.
To receive input from external stakeholders, Atlas Copco engages with
international NGOs, unions, key investors, civil society, customers and business
partners in a number of ways, both directly and indirectly.
Stakeholder
group Key topics and concerns Dialogue form
Customers • Product safety
• Product innovation
• Product carbon impact
• Product resource-eciency
and circularity
• Customer visits
• Surveys and interviews
• Customer events
• Website
Investors,
analysts,
shareholders
• Growth and protability
• Risk management
• Climate and environmental
impact
• Business ethics
• Gender balance
• Investor interaction
• Capital market days
• Annual general meeting
• Website
• Financial reports and
presentations
Employees • Health and safety
• Diversity and inclusion
• Working conditions
• Competence development
• Compensation and benets
• Yearly appraisal
• Employee surveys
• Work councils
• Employee representatives
on the Board
Society • Climate and environmental
impact
• Social and environmental
compliance
• Human rights
• Labor market issues
• Memberships in
international
collaborations and
industry initiatives
• Local engagement
• Website
• Surveys and interviews
Business
partners
• Occupational health and
safety
• Labor conditions
• Human rights
• Business ethics
• Climate and environmental
impact
• Collaborations with
suppliers
• On-site evaluation and
audits
• Surveys and interviews
Material topics and boundaries
Based on the materiality analyses in 2015 and 2018, Atlas Copco has identied
material topics according to the GRI Standards framework. Atlas Copco’s work
impacts the dierent parts of the value chain as described in the table below.
The ndings in the materiality analysis in 2021 dene the Group’s focus areas
and targets which apply from 2022 onwards, see page 7.
Impact on
suppliers
Impact on
Atlas Copco
Impact on
customers
ECONOMIC IMPACT
Economic performance
Anti-corruption
ENVIRONMENTAL IMPACT
Energy and emissions
Environmental compliance
Supplier assessment
SOCIAL IMPACT
Employment
Occupational health and safety
Training and education
Diversity and inclusion
Non-discrimination
Human rights assessment
Supplier assessment
Product responsibility
Socioeconomic compliance
Sustainability governance
The Board of Atlas Copco has the overarching responsibility for the governance
of the company, including nancial and non-nancial strategies and targets.
The Board is also the owner of Atlas Copco’s Business Code of Practice which
regulates how employees act towards each other and in their relations to
stakeholders. The Board of Directors approves the focus areas for sustainabil-
ity, as well as the related key performance indicators (KPIs), and targets.
Progress in relation to the KPIs is monitored quarterly by Group Management
and by the Board of Directors. In 2021, The Board of Directors approved the
science-based targets that has been adopted by Atlas Copco and that will
measure the Group’s climate-related work from 2022 onwards.
All members of Group Management are responsible for the implementa-
tion of targets and strategies although the CEO has the ultimate responsibility.
Progress in relation to these targets is part of the variable compensation for
members of Group Management as well as for other employees. The Vice Pres-
ident Sustainability is responsible for coordinating the sustainability work and
reports to the SVP Chief Communications Ocer, who is a member of Group
Management.
Implementation is mainly handled by the divisions, which are separate
operational units, responsible for delivering results in line with the strategies
and targets set by the business area. The business areas and divisions set quan-
tied targets for delivering on the Group targets. The divisional presidents and
general managers are responsible for ensuring that targets are set as a part of
the three-year plan, and that they are followed-up and reported to the Group.
Safety, Health, Environment and Quality (SHEQ) managers in the opera-
tional entities, divisions and business areas, play an important role in support-
ing the Group’s sustainability work. At corporate level, a sustainability team
and controller provide coordination and support to the entire organization,
working closely with a SHEQ representative from each business area. The
Group SHEQ council is chaired by a division president and consists of the SHEQ
managers for each business area, the Vice President Sustainability for the
Group, and representatives for HR, Holding and controlling. The SHEQ council
comes together quarterly to discuss actions, policies and guidelines to support
the organization to reach set ambitions.
Policies and guidelines
Atlas Copco’s Business Code of Practice is the Group’s central guiding policy to
doing business ethically and optimizing the social and environmental impact
of our operations. It is owned by Atlas Copco’s board of directors and designed
to make sure that we always act with the highest ethical standards and integ-
rity. All employees and managers in Group companies, as well as business part-
ners, are expected to adhere to the Business Code of Practice. In cases where
the Business Code is stronger than local laws and regulations, we insist on fol-
lowing the Code.
The Business Code has been translated into 33 languages and it is based on the
following international standards and guidelines:
• United Nations International Bill of Human Rights
• The ILO Declaration on Fundamental Principles and Rights at Work
• The United Nations Global Compact
• The OECD Guidelines for Multinational Enterprises
Atlas Copco’s Business Code of Practice is supported and complemented by
other Group policies and guidelines, such as:
• SHEQ policy: global Safety, Health, Environment and Quality policy that
ensures robust standards for safety and well-being, as well as an environ-
mental and quality perspective on technologies, products and services to
make sure these contribute to a sustainable productivity for customers.
• Human Rights Statement: expands on the Group’s commitment to respect
and support human rights and denes procedures that ensure respect for
human rights throughout Atlas Copco’s operations.
• Business partner criteria: signicant business partners must commit to
following Atlas Copco’s Business Code of Practice by signing the Business
partner criteria which states the Group’s expectations regarding business
ethics, social, safety, health and environmental performance.
• The Enterprise Risk Management process, which is conducted annually on
divisional level, and includes sustainability-related risks. The results are
aggregated on business area and Group level.
The Business Code of Practice, along with other principles and guidelines are
gathered in the internal database The Way We Do Things, accessible to all
employees. Training is provided through the Group’s Circles program.
Management system standards
Atlas Copco strives for all major operating units to be triple-certied according
to the standards ISO 9001 (quality management), ISO 14001 (environmental
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management) and ISO 45001 (occupational health and safety). All production
units with more than ten employees and all customer companies and rental
companies with more than 70 employees are to be triple-certied. By the end
of 2021 the share of required units that were not triple-certied was 10% of
the total number of operational units. The same measure for each individual
certication was 6% for ISO 9001, 9% for ISO 14001 and 9% for ISO 45001.
These units are mainly acquisitions which still within the two-year timeframe
to comply, or newly restructured units. Some units which are not yet triple-
certied are in the process of becoming so, and a smaller portion has lacked
the resources so far to commit to a triple certication.
Grievance mechanism
The Group promotes a culture of integrity through mutual respect, trust in
each other, and high standards of ethics in all business interactions. Since 2020,
Atlas Copco uses a misconduct reporting system called “SpeakUp”. The system
is accessible 24 hours per day/7 days a week, and oers anonymous reporting
in more than 70 languages via a message function or local phone number. It
can be used by employees or external stakeholders to report behavior or
actions that are, or may be perceived as, violations of laws or of the Business
Code of Practice. The Group’s legal department handles cases and initiates
investigations. The Group is positive to receiving reports through the system
and promotes it actively, both internally and externally.
External initiatives and membership of associations
Atlas Copco is a signatory to the UN Global Compact, a strategic policy initia-
tive for businesses that are committed to aligning their operations and strate-
gies with ten universally accepted principles in the areas of human rights,
labor, environment and anti-corruption.
Atlas Copco is a member of the Swedish Leadership for Sustainable Devel-
opment, a business network for accelerating the implementation of the
Sustainable Development Goals, coordinated by the Swedish International
Development Cooperation Agency.
Atlas Copco is also active in a number of international organizations and
industry collaborations and initiatives, such as:
• The Stockholm Chamber of Commerce
• The International Council of Swedish Industry
• The Association of Swedish Engineering Industries
• Transparency International Sweden Chapter
• Pneurop – European Association of Manufacturers of Compressors, Vacuum
Pumps, Pneumatic Tools and Air & Condensate Treatment Equipment
• The Responsible Minerals Initiative
While the general objectives of these organizations are in line with Atlas
Copco’s interests, there may be dierences of opinion regarding specic
issues. The memberships do not indicate that Atlas Copco endorses all actions
or policy statements made by the respective organization.
ECONOMIC IMPACT
Economic performance
Direct economic value generated and distributed
Atlas Copco creates employment and nancial stability through subcontract-
ing manufacturing and other activities. The Group’s shareholders and credi-
tors provide funds to nance the asset base that is used to create economic
value. In return, these stakeholders receive dividend and interest.
Atlas Copco contributes to economic development within the regions where
we operate, through payments to pension funds and social security, and pay-
ment of taxes, social costs and other duties. Community investments
amounted to MSEK 31 (19).
Local purchasing (non-core) is encouraged in order to generate societal
value in the communities where Atlas Copco operates, by creating job oppor-
tunities as well as generating direct and indirect income. This is mostly carried
out by individual companies, which also decreases the environmental impact
from transport.
Economic value 2021 2020
Direct economic value 111 972 100 251
Revenues 110 912 99 787
Economic value distributed
Operating costs 61 019 55 362
Employee wages and benets, including other
social costs
27 151 25 582
Costs for providers of capital 9 281 8 988
Costs for direct taxes to governments 5 372 4 801
Economic value retained 9 149 5 518
– Redemption of shares – –
Anti-corruption
Atlas Copco has zero tolerance against corruption. The Business Code of Practice
is the Group’s central policy document, accessible to all employees in the inter-
nal database. All employees are required to sign the compliance statement for
adherence to the Business Code of Practice, and take online trainings annually.
Division presidents have the ultimate responsibility for the adherence to the
Group’s values and policies. Internal control is exercised through distribution
of responsibility and internal audits. The Compliance Board oversees compli-
ance with the Business Code of Practice.
Reported potential violations, number 2021
Fraud 18
Labor relations, including discrimination and harassment 186
Corruption & regulatory breach 11
Conict of interest 8
Other 21
Total 244
During the year, there were a total of 244 reported potential violations
through Atlas Copco´s grievance mechanism. In 35 cases no evidence of
wrongdoing was found, in 33 cases evidence could conrm that no wrong-
doing had occurred, in 8 cases disciplinary action, such as a written warning,
were taken against one or several employees as a result of an investigation.
In 31 cases weaknesses were found in internal processes which were improved
as a result. Two cases was settled in court. The reminder of cases are under
active investigations.
There were no signicant nes or non-monetary sanctions for non-
competitive behavior or for non-compliance with laws and/or regulations in
the social and economic area during the year.
ENVIRONMENTAL IMPACT
Atlas Copco has integrated the most material environmental KPIs into its
strategic work. This drives improvement and eciency, while reducing our
impact on the environment.
Environmental performance is monitored and reported at unit level and
aggregated to Group level. General managers are responsible for overseeing
the implementation of divisional strategies and targets, including undertaking
initiatives to reduce waste generation and increase the proportion of reused,
recycled or recovered waste, reduce water consumption, to curb energy use
and emissions as well as increase the proportion of renewable energy used.
Environmental management systems
To minimize the environmental impact and to secure that the precautionary
approach is applied, Atlas Copco has the ambition to implement environmen-
tal management systems (EMS) in all operations. All product companies
should be certied according to ISO 14001. Acquired product companies are
normally certied within a two-year period.
The Group also measures the share of signicant suppliers with an approved
EMS and the target is that this share should increase continuously. An
approved EMS is dened as ISO14001, or that EMAS (EU Eco-Management and
Audit Scheme) requirements are fullled. The direct signicant supplier needs
to be third party certied for ISO 14001 or registered EMAS and hold a valid
certicate or registration. In 2021, 31% of signicant direct suppliers had an
approved environmental management system according to this denition.
Energy consumption within the organization
Energy consumption*, MWh 2021
Direct energy, renewable 5 747
Direct energy, non-renewable 109 465
Indirect energy, renewable (incl. renewable of mix) 216 365
Indirect energy, non-renewable 53 125
* The calculation of indirect energy, i.e. energy purchased externally by the company,
includes electricity (98%) and district heating (2%) used at the sites. Atlas Copco does not
report cooling or steam separately. The calculation of direct energy, i.e. energy generat-
ed by the company for its own production or operation, comprises all fuels used on the
sites, including diesel, oil, bio-fuel, gasoline, solar, geothermal, propane and natural gas.
Environmental compliance
Atlas Copco follows applicable environmental laws in all countries where the
Group operates. Incidents or nes are reported for non-compliance with envi-
ronmental legislation, as well as incidents involving chemical, oil or fuel spill-
ages. In 2021, there was 0 (1) accident resulting in adverse environmental
eects, and monetary sanctions for non-compliance amounted to KSEK 0 (43)
and clean-up costs relating to adverse environmental eects amounted to
KSEK 0 (44).
Two Swedish companies require permits based on Swedish environmental
regulations. These operations mainly involve machining and assembly of com-
ponents. The permits relate to areas such as emissions to water and air, and
noise pollution. The Group has been granted two permits needed to conduct
its business and none of them was under revision in 2021.
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INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
EU TAXONOMY
– classication of sustainable activities
Total (MSEK)
Taxonomy
eligible (%)
Taxonomy
non-eligible (%)
Revenues 110 912 22 78
Capital expenditures 6 486 6 94
Operating expenses 4 135 19 81
Background
Based on the now available EU taxonomy delegated act for climate change
mitigation and climate change adaptation, the Atlas Copco is eligible for
climate change mitigation under the ‘3.6 Manufacture of other low-car-
bon technologies’ section. Atlas Copco is an enabler and also considers
sales to the following customer segments as eligible: ‘3.1 Manufacture of
renewable energies’, ‘3.2 Manufacture of equipment for production and
use of hydrogen’, ‘3.3 Manufacture of low carbon technologies for trans-
port’, and ‘3.4 Manufacture of batteries’. In total, 22% of Atlas Copco’s reve-
nues are eligible (17% from product segments and 5% from customer seg-
ments). At this stage, Atlas Copco has not identied any activities relevant for
climate change adaptation.
3.6 Manufacture of other low-carbon technologies
“Manufacture of technologies aimed at substantial greenhouse gas
emission reductions in other sectors of the economy.”
Product segment revenues
Atlas Copco uses the following denition for identication of 3.6 taxonomy
eligible technologies for climate change mitigation: “Technologies which
enable substantial energy savings and/or other means to avoid, reduce,
remove, or store greenhouse-gas emissions compared to alternative tech-
nologies commonly used on the market.”
The term “substantial” lacks a measurable and quantiable denition
in the taxonomy. Atlas Copco has therefore evaluated a technology’s capa-
bilities in relation to its market context. This means that the quantied
threshold for “substantial emissions reductions” varies between dierent
product portfolios and/or dierent parts of the organization.
Atlas Copco considers technologies taxonomy eligible for climate
change mitigation if they:
• Prevent the venting of environmentally hazardous gases directly into
the atmosphere, (avoid principle), or
• Enable substantial energy savings compared to available technologies
commonly used on the market by either (reduce principle):
– Use optimization
– The nature of the product / In and of itself (e.g. variable instead of
xed speed)
– Introduce completely new solutions on the market
– Enable the shift to electric/battery power
The taxonomy eligible revenues include both product and service reve-
nues. It excludes sales to oil and gas extraction industries. Sales relevant for
both product and customer segment revenues have only been included
under the former to avoid double reporting.
Eligible technologies
From the Compressor Technique business area, all variable speed drive
(VSD) compressors are included as taxonomy eligible for climate change
mitigation due to their signicant energy saving capabilities compared to
xed speed compressors. Additional technologies included are the latest
gas generation technology which enables on-site nitrogen and oxygen
generation (normally delivered by truck in liquid form), as well as the latest
ranges of blowers, boosters, and rotary drum dryers all of which oer sig-
nicant energy savings compared to market standards.
From the Vacuum Technique business area, two main product groups
are included as taxonomy eligible for climate change mitigation: abate-
ment systems and the latest generation of dry pumps. The latest genera-
tion of dry pumps oers signicant energy savings compared to previous
designs and abatement systems are an exhaust management solution
that destroys toxic and global warming gases which negatively impact the
environment.
From the Industrial Technique business area the following products are
included as taxonomy eligible for climate change mitigation: the latest
range of electric power tools, which aid the shift from air to electric power
while oering signicant energy savings. Also included are technologies
which through node optimization reduce the number of controller units
needed in a production line, thereby reducing the energy consumed.
Lastly, the latest versions of the Industrial Technique business area’s bat-
tery driven products are included, as they oer signicant energy savings.
From the Power Technique business area, three main product groups
are included as taxonomy eligible for climate change mitigation: all elec-
tric portable compressors, the business area’s battery solution products,
and the Stage V range of portable compressors (Stage T4F in the U.S.A.).
The latter is a diesel-driven portable compressor range meeting the latest
EU market standard while oering additional energy savings compared to
the standard’s requirements. Stage V portable compressors are often
used at construction sites where it is not possible to rely on electric
machinery until the necessary infrastructure is in place. On such occa-
sions, the Stage V range is a very good option from an energy consump-
tion perspective, making it relevant for taxonomy eligibility as a transi-
tional economic activity.
Customer segment revenues
Atlas Copco considers customer segment revenues taxonomy eligible for
climate change mitigation if the products and solutions aid manufacturing
processes of taxonomy eligible customers’ end-product. Atlas Copco is an
enabler of manufacturing processes rather than a supplier of components.
As such, our products and services enable others to make substantial con-
tributions to the climate change mitigation objective. The relevant taxon-
omy sections for the customer segment reporting are 3.1, 3.2, 3.3 and 3.4.
The taxonomy eligible revenues include both product and service reve-
nues.
Atlas Copco bases its reporting on the North American code standard
NAICS which means that Atlas Copco have translated the taxonomy men-
tioned NACE codes into their closest NAICS equivalent.
All external revenues to eligible customer segments in scope have been
included. This includes customers within renewable energy technologies
(e.g. solar energy, hydropower, or wind and tide energy), production of
electrical cars, battery manufacturing, and lastly, hydrogen manufacturing
equipment. Sales to distributors or to companies that rent out equipment
has been excluded.
Capital expenditure and operating expenditure
The taxonomy eligible capital expenditure (CapEx) and operating expen-
diture (OpEx) that have been identied include capitalized expenditures
for; relevant R&D projects of eligible technologies, solar panels and other
energy-eciency measures in buildings, vehicle eet electrication and
energy ecient hire eet technologies.
The CapEx denominator used for the taxonomy KPI calculation consists
of additions to tangible and intangible assets (including right of use assets)
during the nancial year, considered before depreciation, amortization,
and any re-measurements, including those resulting from revaluations
and impairments, and excluding fair value changes. The denominator also
includes additions to tangible and intangible assets resulting from busi-
ness combinations.
The OpEx denominator used for the taxonomy KPI calculation consists
only of taxonomy related OpEx dened as; non-capitalized costs that
relate to research and development, building renovation measures, main-
tenance and repair, and any other direct expenditures relating to the day-
to-day servicing of assets of property, plant, and equipment by the under-
taking or third party to whom activities are outsourced that are necessary
to ensure the continued and eective functioning of such assets.
Concluding comment
Atlas Copco has chosen a conservative approach as to which products and
technologies to include as eligible under taxonomy section 3.6. Atlas
Copco considers revenues that originate from enabling key manufacturing
processes of customers in sections 3.1, 3.2, 3.3, and 3.4 as eligible. As
reporting practice and guidelines develop, and as the taxonomy scope
evolves, Atlas Copco may reevaluate the current approach.
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SOCIAL IMPACT
Employment
Information on employees and other workers
Atlas Copco is a signicant employer on the global market. The Group reports
the number of employees as full time equivalents (FTE) per geographical
spread and per professional category, as well as divided between white-collar
and blue-collar employees.
New employee hires and employee turnover
The total number and rate of external new employee hires in 2021 was 6 524
(3352) which constitutes 15.8% (8.5) of the total average number of employ-
ees during the year. The percentage of externally recruited females was 27%
(26). The total number of resignations was 2 833 (1 727), which constitutes
6.9% (4.4) of the total average number of employees during the year. The
mobility in 2021 was largely in line with the level during 2019, before the pan-
demic.
The Group’s KPIs for employee satisfaction and engagement measure how
employees perceive the opportunities to grow in the company and how they
perceive the company culture. The targets for both KPIs are to be above the
employee engagement survey provider’s proprietary benchmark for global
companies. The benchmark is based on anonymized data from the survey
provider’s customer base with tens of millions of respondents in more than
150 countries, as well as input from industry panel studies to produce robust
and unbiased normative data.
Freedom of association and collective bargaining
Atlas Copco views trade unions and employee representatives as a valuable
support for its employees, and fosters relationships based on mutual respect
and constructive dialogue. Labor practices and employee rights, such as col-
lective bargaining, are included in the Business Code of Practice. In 2021, 32%
(32) of all employees were covered by collective bargaining agreements.
As a decentralized organization, the engagement and dialogue with labor
unions takes place at a local level. In countries where no independent labor
unions exist, Atlas Copco has taken measures to establish forums for
employer/employee relations, through environment and safety committees.
Labor relations are followed-up regularly on the operational level and
reviewed by internal audit. The compliance of signicant suppliers to Atlas
Copco’s Business Code of Practice, which is based on international guidelines
and frameworks such as the UN Global Compact and the International Labour
Organization Declaration on Fundamental Principles and Rights at Work, is
audited regularly.
Occupational health and safety
Safety and well-being are key priorities for Atlas Copco due to the importance
of a sound working environment to employees’ health and motivation, as well
as to the Group’s productivity and competitiveness. The global Safety, Health
and Environmental policy ensures that there are robust standards for safety
and well-being in the workplace.
All divisions set targets and make action plans to enhance awareness and
improve behavior, policies and processes with the purpose of oering a safe
and healthy work environment and to identify and address risks. Group com-
panies must have an Atlas Copco veried Safety Health Environment and
Quality management system, which is documented, implemented and main-
tained on an ongoing basis. Customer companies and rental companies with
more than 70 employees and all product companies shall be certied accord-
ing to ISO 45001. This involves regular risk assessments and follow-up on con-
ditions and safety-related processes of both our own workplaces and those
CLIMATE-RELATED INFORMATION
There are a growing number of voluntary reporting standards,
initiatives and regulations concerning climate, such as the
Taskforce for Climate-related Financial Disclosures (TCFD).
Atlas Copco follows the development closely, takes inspiration
from the guidelines and seeks to address major areas of infor-
mation sought.
Our reporting on climate-related risks and opportunities is a
continuous improvement project and the eorts to under-
stand, report and act upon climate topics is developing at a
good pace.
Governance
The Board of Directors is responsible for Atlas Copco’s overall
strategy, organization, administration and management. This
includes climate-related risks and opportunities. The Board of
Directors have approved the science-based targets that were
adopted by Atlas Copco in 2021 and that will measure the
Group’s climate-related work from 2022 onwards. Climate-
related issues concern several functions and areas of expertise
in the organization. At an operational level, risks and opportu-
nities are governed by Group Management and the divisional
presidents. Read more about corporate governance on pages
54 –57.
Strategy
Atlas Copco assesses climate-related risks and opportunities
that have an actual and potential impact on our business and
strategy. The process for identication of risks and opportuni-
ties is centered at the divisions. The Group has identied and
assessed the following market, regulatory and physical risks
related to climate change:
• Market risks: Market shifts toward a low-carbon economy
may impact the viability of certain sectors and products.
Atlas Copco’s continuous work to increase the energy e-
ciency of our products helps mitigate these risks. This shift
also represents an opportunity to continue developing
highly energy-ecient products and may give rise to new
businesses and business models. For instance, increased
generation of renewable energy, such as solar panels and
wind mills, and the surge in production of electrical vehicles,
present both existing and future opportunities to provide
products and services to these industries.
• Regulatory risks: Climate and energy policy will gradually
be sharpened and favor companies that deliver energy-
ecient products and comply with sustainable practices.
Among the risks are increased energy prices and taxes, and
regulations related to CO
2
or other greenhouse-gas emis-
sions. As the Group invests in innovative products via
research and development, more strict regulations will
likely oer opportunities for Atlas Copco.
• Physical risks: Changing weather patterns may pose a
physical risk to operational units or suppliers in areas in risk
of rising sea levels, water scarcity or violent storms that
could result in disruptions in the production or logistics
chain. The physical risk is assessed at site level and safety
measures are taken if needed, as part of the loss prevention
program. Atlas Copco has a global network of suppliers,
which provides resilience to local or regional disruptions.
Risk management
Climate-related risks, such as physical risks for operational
entities or market risks connected to products, are assessed at
the divisional level and are, if deemed relevant, included in the
annual Enterprise Risk Management process. An aggregated
analysis of the identied risks is presented annually to Group
Management. Read more about the risk management process
on page 47.
Metrics and targets
For the period 2019–2021, Atlas Copco set targets for reduc-
ing the carbon emissions from our new and re-designed prod-
ucts, own operations, as well as from inbound and outbound
transport of goods. From 2022, Atlas Copco will implement
science-based targets covering the entire value-chain. Atlas
Copco’s greenhouse gas emission reduction targets are
approved by the Science-based Target initiative as being
aligned with the Paris Agreement.
Read more about the targets and the progress made on pages
35–36, 44, 131 and 141.
Atlas Copco 2021 133
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of contractors. Targets and KPIs on safety and well-being are monitored
continuously by local management and followed up regularly by Group Man-
agement together with other sustainability data in the quarterly reporting.
Total recordable injuries, 2021
Per million
working
hours Number
Recordable injuries total workforce 4.5 387
Recordable injuries Atlas Copco employees
4.3 337
Recordable injuries additional workforce 7.4 50
Fatalities total workforce 0
0
Fatalities Atlas Copco employees 0 0
Fatalities additional workforce 0 0
High-consequence injuries total workforce 0.03 3
High-consequence injuries Atlas Copco
employees
0.04 3
High-consequence injuries additional
workforce
0 0
The safety pyramid
Since 2019, Atlas Copco uses a safety pyramid for reporting to encourage safe
behavior in order to decrease risks and prevent injuries in the workforce. The
method supports transparent reporting, risk-averse behavior and behavior
change. The denitions of dierent severity of incidents and injuries are
aligned with international standards. It is not possible to compare the number
and rate of incidents and injuries with the years before 2019, as this was the
rst year this Group-wide reporting tool was used.
The Group’s target for safety-related measures is to have a balanced safety
pyramid. This means that more risk observations than near misses, more near
misses than minor injuries, and more minor injuries than recordable injuries are
reported.
The results of the 2021 reporting in the safety pyramid model is described
in the table and in the illustration above. Major hazards reported for high-
consequence injuries were slips and trips, lone working and manual handling.
Common injuries were for instance cuts or other injuries from operating
machines. Actions undertaken to mitigate hazards are among others aware-
ness training and risk assessment of working environment, inspections,
mechanical handling aids, and ensuring safe access to equipment. There
were 0(0) work-related fatalities in the Group in 2021.
Human rights assessment
Atlas Copco’s central guiding policy is the Business Code of Practice. Atlas Copco
is a signatory of the UN Global Compact and is committed to working with the
ten universally accepted principles in the areas of human rights, labor, environ-
ment and anti-corruption. The Business Code of Practice also supports the
International Labour Organization Declaration on Fundamental Principles and
Rights at Work, as well as the OECD’s Guidelines for Multinational Enterprises.
The Group committed to the UN Guiding Principles for Business and Human
Rights when it was launched in 2011 and works to develop the implementa-
tion of the principles. In accordance with the requirements, Atlas Copco has an
ongoing process to identify, prevent, mitigate and account for the human
rights impacts related to Atlas Copco’s business and business relations.
The Group strives to work according to the UN Guiding Principles across the
value chain, covering procurement, human resources, sales, marketing and
other business processes. The Group’s commitment covers all individuals and
groups who may be impacted by our activities or business relationships.
Human rights are monitored by the Compliance Board, which has two mem-
bers of Group Management: the SVP Chief Legal Ocer and the SVP Chief
Communications Ocer. The Compliance Board addresses training needs,
impact assessment and the action points related to the implementation of the
UN Guiding Principles.
Human rights due diligence is carried out when deemed relevant for spe-
cic markets, for instance when Atlas Copco enters a market that is perceived
as presenting severe human rights risks. The Atlas Copco misconduct report-
ing system can be used to report perceived human rights violations anony-
mously. Atlas Copco’s human rights statement can be found at the Group’s
website www.atlascopcogroup.com.
Training on human rights policies and procedures
Atlas Copco has developed human rights specic training in addition to train-
ing in the Business Code of Practice to increase employee awareness. The train-
ing is available to all employees through the Group’s intranet.
Diversity and inclusion
Atlas Copco’s Diversity and Inclusion guideline states that we strive for diver-
sity and inclusion in every aspect of our operations. Atlas Copco believes in
having an inclusive culture, which means that all of our employees are treated
fairly and with respect, are able to make a professional career, are seen and
heard, and have the opportunity to thrive and grow. We provide equal oppor-
tunity to all applicants and employees and do not discriminate based on race,
religion, gender, age, nationality, disability, sexual orientation or political opin-
ion. The diversity and inclusion guideline covers all employees. Atlas Copco
companies establish local diversity policies and guidelines in alignment with
the Group policy, local laws and regulations, and local ambitions. Anti-harass-
ment and non-discrimination are addressed in the ethics training that all
employees are required to take yearly.
The Diversity and Inclusion Council is chaired by President and CEO Mats
Rahmström, and consists of representatives from all business areas, along with
the corporate communications, human resources and accounting and con-
trolling functions. The council meets regularly to follow up on action plans and
results in the operations.
Atlas Copco strives to increase the share of women in the organization, and
the target is that by 2030, there should be 30% women in the Group. In 2021,
the share of women in the workforce was 20.9% (20.0) at year end. The Board
of Directors (excluding worker representatives) constituted of 6 men and 2
women (25% women) and Group Management were 7 men and 2 women
(22% women).
Atlas Copco has managers on international assignments coming from 46
countries and working in 44. In 2021, a total of 77% (73%) of all senior manag-
ers were locally employed. 42 (40) nationalities were represented among the
509 most senior managers worldwide.
Taxes
The Group recognizes the key role that tax plays in advancing economic devel-
opment and considers it vital to combat corruption and support sound busi-
ness practices in order to create the most value for society. Atlas Copco believes
in good corporate practice in the area of tax management, balancing the inter-
ests of various stakeholders, including customers, investors as well as the gov-
ernments and communities in the countries in which the Group operates. Atlas
Copco does not engage in aggressive tax planning, but instead takes care to
pay the correct taxes in its countries of operation. Atlas Copco’s tax policy can
be found at the Group’s website www.atlascopcogroup.com. See note 9 of the
consolidated nancial statements for the details of taxes paid, reported
according to the international nancial reporting standards.
Disclosing tax by country
Atlas Copco has been in dialogue with investors, NGOs and peers regarding
disclosure of tax paid per country. At present, there is no established interna-
tional standard for reporting taxes paid by country and the resulting data is
therefore not comparable between dierent companies. Atlas Copco is not
opposed to reporting tax paid by country if guidelines are broadened to apply
to all companies in the industry so that the data can be compared and ana-
lyzed fairly.
Responsibility throughout the value chain
Working with business partners who share Atlas Copco’s high standards
regarding quality, business ethics, the environment and resource eciency is
necessary to eectively manage risks, and to enhance productivity in the value
chain. The ambition is to work with suppliers and distributors who share these
standards and who comply with the Business Code of Conduct.
Business
partner Role in the value chain
Primary responsible for risk
management and compliance
Suppliers,
subcontractors
Provide key parts as well as
manufacturing services
Purchasing councils
Joint ventures
Partly owned companies
that provide complementary
products and services
Division presidents
Agents,
distributors
Sell and distribute
products to customers on
the Group’s behalf
Marketing councils
Total recordable
injuries
Safety pyramid 2021
Total workforce,
number
Fatality
Work-related
fatality (0)
High-consequence
injury
Injury where recovery to
pre-injury tness takes longer
than six months (3)
Other recordable injury
Injury resulting in absence from work, restricted
work, medical treatment, loss of consciousness
or signicant injury diagnosed by a physician (384)
Minor injury
Minor injury requiring rst aid treatment only (1 148)
Near miss
Event that did not result in an injury but had the potential to do so (5758)
Risk observations
Observations of unsafe conditions that could cause harm/injury (105 069)
Atlas Copco 2021 134
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Suppliers
Atlas Copco has a large international supplier base. Around 75% of product
cost stems from purchased components. Atlas Copco’s purchasing strategies
are decentralized to give the organization higher exibility and to ensure the
right competence. Purchasing councils oversee supply chain management at
divisional level, and come together as a part of the Group purchasing council to
develop central policies and tools that impact all operations. Local purchasing
is encouraged.
Geographical spread of suppliers
Asia/Oceania 42%
North America 11%
Europe 44
%S
outh America 3%
Evaluation process
Suppliers are evaluated during and after selection by product companies,
primarily by personnel in the purchasing function. Internal training on how
to carry out supplier evaluations is published in the handbook of policies and
guidelines The Way We Do Things.
The supplier evaluation process examines:
• Business partners’ record of governance, ethics and stance against
corruption
• Labor issues: Rejection of forced, compulsory or child labor, elimination
of discrimination, safeguarding employee health and safety, collective
bargaining rights
• Environmental performance: Managing waste, minimizing emissions, and
reducing consumption of natural resources
• Human rights issues: Responsible sourcing and respect for human rights in
operations
At times, self-assessment checklists are sent to suppliers and on-site evalua-
tions are conducted regularly or when deemed necessary. These result in a
report with concrete suggestions in the form of an action plan or improve-
ments to be followed up on at an agreed time. Atlas Copco can provide experi-
ence and know-how to suppliers who need support in order to comply with
the minimum standards set forth in the business partner compliance docu-
ment. However, suppliers who fail to meet the criteria and do not show a will-
ingness to improve are rejected. Due to restrictions for travel and visits in view
of Covid-19, the number of on-site audits was lower in 2021 than before the
pandemic.
Suppliers´ commitment 2021 2020
Signicant suppliers, number 5 580 5 309
Suppliers audited on safety, health, social, and
environmental issues
1)
647 669
Suppliers approved (no need to follow up) 629 655
Suppliers conditionally approved (monitored) 18
14
Suppliers rejected (relationship ended)
2)
0 0
Suppliers asked on commitment to the
Business Code of Practice, number
5 421 5 160
Signicant suppliers that have conrmed their
commitment to the Code, %
93 93
1)
Audits are conducted by Atlas Copco teams directly at the suppliers’ sites.
2)
Reasons for rejection relate to safety in the workplace, labor conditions, environment
issues, or non compliance of laws. Suppliers are rejected if they do not meet Atlas
Copco’s requirements and are not willing to improve. In 2021, 0 business partner(s) were
rejected due to environ mental, health & safety issues, and 0 business partner(s) due to
corruption.
Denition of signicant suppliers: All external suppliers of goods and ser-
vices, direct and indirect, with a purchasing value above a set threshold, based
on 12-month values from October previous year to September current year.
For suppliers in countries with heightened risk for human rights violations,
environmental risks or corruption etc., the purchasing threshold is lower
(approximately 13% of set value).
Responsible sourcing of minerals
Responsible sourcing of minerals is essential to Atlas Copco and though the
Group does not procure directly from smelters/reneries, some parts of the
supply chain do. Atlas Copco is not in the scope of Dodd-Frank Act or the EU
regulation 2017/821, but based on concerns of violations of human rights
including forced labor, human tracking and child labor, and to support our
customers’ obligation to these Acts, the Group has measures to detect and
prevent the use of conict minerals in its supply chain.
Atlas Copco requires its direct suppliers to commit to responsible sourcing
of all minerals included in parts and products they sell to us. This commitment
is exercised through minerals data collection and due diligence, implemented
every year. Moreover, all our signicant suppliers must sign the Business Code of
Practice that includes an article on responsible sourcing requirements. The pro-
cess is described in detail on the Group’s website www.atlascopcogroup.com.
Atlas Copco has a comprehensive program to investigate the possible use of
all conict minerals in components used in Atlas Copco products. The program
ensures responsible sourcing of tin, tantalum, tungsten and gold. Cobalt was
added to the program in 2020, and data collection and due diligence using
the Responsible Minerals Initiative (RMI) guidelines and Cobalt Reporting
Template (CRT) will be rolled out continuously.
As a member of the RMI, Atlas Copco adheres to its guidelines by encourag-
ing suppliers to source from smelters veried by a third party such as RMI’s
Responsible Minerals Assurance Process (RMAP), and commits to transparency
by submitting reporting templates to customers about smelters in the supply
chain and collaborates with stakeholders.
Distributors
Atlas Copco has a large international distributor base. Atlas Copco’s sales
strategies are set by the divisions on a global level and are tuned for local mar-
ket needs by the customer centers. These sales strategies include the choice of
sales channels and distributor management. The marketing councils ensure
cross- divisional alignment and develop central policies and tools that impact
all operations.
Starting in 2019, the percentage of signicant distributors that sign the
Atlas Copco business criteria is measured as a Group KPI. In 2021, 87% of all sig-
nicant distributors signed the business partner criteria. 96% of the signicant
distributors were asked to sign the criteria.
Denition of signicant distributors: All external distributors, including
agents and resellers with sales of the Group’s goods and services for a value
above a set threshold, based on 12-month values from October previous year
to September current year. For distributors, agents and resellers in countries
with a heightened risk for human rights violations, environmental risks or
corruption etc., the sales threshold is set to include all active distributors.
Product responsibility
Atlas Copco’s ambition is to follow all applicable laws and regulations regard-
ing safety, health and environmental aspects, product information, safety
information and labeling. The information required by the Group’s procedures
for product and service information and labeling covers aspects such as sourc-
ing of components, substances of concern, safe use and disposal of the prod-
uct. Customer training is included when relevant, to secure safe handling of
the products.
In general, all electrically driven Atlas Copco products sold into the EU fall
under the EU Waste Electrical and Electronic Equipment (WEEE) Directive. This
includes compressors, vacuum pumps, handheld electric tools and monitoring
control instruments. Atlas Copco is responsible for, and arranges with custom-
ers, the disposal of products that fall under the directive.
Atlas Copco maintains lists of substances which are either prohibited or
must be declared due to their potential negative impact on health or the envi-
ronment. Prohibited substances are not allowed in the Group’s products or
processes. Items containing declarable substances are avoided or replaced
whenever possible. Via a dedicated Atlas Copco communication platform all
our suppliers can be swiftly informed about upcoming legislative changes. The
Atlas Copco Prohibited and Declarable list is under continuous revision accord-
ing to applicable legislations worldwide. This includes REACH, RoHS, and U.S.
State of California Safe Drinking Water and Toxic Enforcement Act of 1986
(Proposition 65). The lists on prohibited and declarable substances are also
published on the Group’s website www.atlascopcogroup.com.
Incidents of non-compliance
No cases have been led in 2021 (0) for non-compliance with such laws and
regulations concerning the provision and use of such products and services.
Atlas Copco 2021 135
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About the sustainability report
Atlas Copco has prepared its sustainability report in accordance with the Global Reporting Initiative (GRI) guidelines since 2001. The sustainability report is published
annually and the most recent report, prior to this report, was published in March 2021 as a part of Atlas Copco’s annual report 2020.
Sustainability is an integral part of Atlas Copco’s business model and the Group
therefore reports nancial and non-nancial data in a consolidated annual
report. This provides Atlas Copco’s stakeholders with a relatively complete
overview of how the Group works in order to contribute to sustainable devel-
opment and increasing stakeholder value.
This report has been prepared in accordance with the Global Reporting
Initiative (GRI) Standards: Core option. Atlas Copco is also a signatory of UN
Global Compact since 2008, and this report is the Group’s Communication on
Progress (COP), a report on performance in relation to Global Compact’s ten
principles on human rights, labor law, the environment and anti-corruption.
The Atlas Copco Group’s external auditors, Ernst & Young, have performed
a limited review of the sustainability report according to GRI Standards: Core
option, see the Auditor’s report on page 143.
To accommodate stakeholders that are more familiar with the Sustainability
Accounting Standards Board (SASB), Atlas Copco has published a table with
cross-references to information found in the annual report. Information relat-
ing to the SASB standards for ‘Industrial machinery and goods’ is disclosed for
relevant aspects and where data is available. However, Atlas Copco does not
claim adherence to, or compliance with, the SASB reporting standards. The
SASB cross-reference table is found on page 140.
GRI content index
GRI Standards Description Page Comment
Organizational prole
102-1 Name of organization Inside cover
102-2 Activities, brands, products, and services Inside cover, 21–33
102-3 Location of headquarters Inside cover
102-4 Location of operations Inside cover
102-5 Ownership and legal form 53, 54–57
102-6 Markets served 2, 23, 26, 29, 32
102-7 Scale of the reporting organization 1–2, 14–15, 81
102-8 Information on employees and other workers 12, 19, 39–41, 133–134
Atlas Copco reports the aggregate number of full-time equivalents, without breaking down
the gures in full-time/part-time employees. Additional workforce may be temporary or
permanent, generally employed by a third party. Omission: Additional workforce by gender
is not reported.
102-9 Supply chain 42–43, 134–135
102-10 Signicant changes to the organization and its supply chain 14
102-11 Precautionary principle or approach 44–45, 131
102-12 External initiatives 131
102-13 Membership of associations 131
Report boundary
The sustainability report includes information regarding issues where Atlas
Copco has a signicant economic, environmental and social impact. GRI’s
materiality principle has been the guiding principle in determining the report
content. It covers the material issues that have the highest priority to Atlas
Copco’s stakeholders.
The report covers Atlas Copco’s operations for the scal year 2021, unless
otherwise stated. Operations divested during the year are excluded, acquired
units are included. This may at times cause changes in reported performance.
Environmental data covers production units and distribution centers. Supplier
data covers production units and distribution centers, while distributor data
covers all applicable units. Employee data covers all operations.
Sustainability information in the annual report is primarily presented on
pages 5–13, 34–46 and 128–142.
Data collection
Reported facts and gures in the sustainability report have been veried in
accordance with Atlas Copco’s procedures for internal control. Data collection
is integrated into the Group reporting consolidation systems and collected on
a quarterly basis. Reported values are normally not corrected retroactively.
When a restatement of historically reported numbers is made, this can be
due to a change of calculation method or scope.
Responsibility for reporting rests with the general manager of each
company. Data is reported at local operating unit level, aggregated to division/
business area and Group level. Data verication is performed at each level
before submitting to external auditors for verication.
For questions regarding the report and its contents,
please contact Soa Svingby, Vice President Sustainability,
sustainability@atlascopco.com
Atlas Copco 2021 136
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GRI Standards Description Page Comment
Strategy and analysis
102-14 Statement from senior decision-maker 3–4, 54, 57
Ethics and integrity
102-16 Values, principles, standards and norms of behavior 11, 42–43
Governance
102-18 Governance structure 10–11, 54–61, 130–131
Stakeholder engagement
102-40 List of stakeholder groups 130
102-41 Collective bargaining agreements 133
102-42 Identifying and selecting stakeholders 128
102-43 Approach to stakeholder engagement 128, 130
102-44 Key topics and concerns raised 128, 130
Reporting practice
102-45 Entities included in the consolidated nancial statements 119–122
102-46 Process for dening report content and topic boundaries 128, 130
102-47 List of material topics 130
102-48 Restatements of information 14, 136
102-49 Changes in reporting 128, 136
102-50 Reporting period 136
102-51 Date of most recent report 136
102-52 Reporting cycle 136
102-53 Contact point for questions regarding the report 136
102-54 Claims of reporting in accordance with GRI Standards 136
102-55 GRI content index 136–139
102-56 External assurance 143
ECONOMIC IMPACT
Economic performance
103-1/2/3 Explanation of the material topic, its boundary and management approach 5–6, 130–131
201-1 Direct economic value generated and distributed 131
Anti-corruption
103-1/2/3 Explanation of the material topic, its boundary and management approach 6, 42–43, 130–131
205-3 Conrmed incidents of corruption and actions taken 131
Anti-competitive behavior
103-1/2/3 Explanation of the material topic, its boundary and management approach 6, 42–43, 130–131
206-1 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices 131
GRI content index
Atlas Copco 2021 137
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GRI Standards Description Page Comment
ENVIRONMENTAL IMPACT
Energy
103-1/2/3 Explanation of the material topic, its boundary and management approach 6, 44–46, 130–131
302-1 Energy consumption within the organization 131, 141 Omission: Energy consumption is reported in MWh, not in joule.
302-3 Energy intensity 141
Emissions
103-1/2/3 Explanation of the material topic, its boundary and management approach 6, 35–37, 44–46,130–131
305-1 Direct greenhouse gas emissions (Scope 1) 141
305-2 Energy direct greenhouse gas emissions (Scope 2) 141
305-3 Other indirect greenhouse gas emissions (Scope 3) 141 Atlas Copco reports on CO
2
emissions related to transports of goods within Scope 3.
305-4 Greenhouse gas emissions intensity 141
Environmental compliance
103-1/2/3 Explanation of the material topic, its boundary and management approach 6, 44–46, 130–131
307-1 Non-compliance with environmental laws and regulations 131
Supplier environmental assessment
103-1/2/3 Explanation of the material topic, its boundary and management approach 6, 45, 134–135
308-1 New suppliers that were screened using environmental criteria 44, 135, 141
A risk-based approach is used to identify signicant suppliers. The scope can include
both new and old suppliers each year. Omission: Data for new suppliers specically is
not disclosed. Environmental and social screening is reported jointly.
SOCIAL IMPACT
Employment
103-1/2/3 Explanation of the material topic, its boundary and management approach 6, 39–40, 130, 133
401-1 New employee hires and employee turnover 133, 142 Omission: Atlas Copco does not report turnover by age group and gender.
Occupational health and safety
103-1/2/3 Explanation of the material topic, its boundary and management approach 6, 41, 129–130, 133–134 Atlas Copco is applying the 2018 GRI standard for Occupational health and safety.
403-1 Occupational health and safety management system 41, 130, 133
403-2 Hazard identication, risk assessment, and incident investigation 41, 129–131, 134
403-3 Occupational health services 41, 130
403-4 Worker participation, consultation, and communication on occupational health and safety 41
403-5 Worker training on occupational health and safety 41, 130
403-6 Promotion of worker health 39–41
403-7 Prevention/mitigation of occupational health/safety impacts directly linked by business relationships 129
403-9 Work-related injuries 41, 134, 142 Omission: Near misses are reported in absolute numbers only.
Training and education
103-1/2/3 Explanation of the material topic, its boundary and management approach 6, 39–40, 129–130
404-3 Percentage of employees receiving regular performance and career development reviews 142 Omission: Atlas Copco does not report breakdown by gender or employee category.
GRI content index
Atlas Copco 2021 138
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GRI Standards Description Page Comment
Diversity and inclusion
103-1/2/3 Explanation of the material topic, its boundary and management approach 6, 39–40, 130, 134
405-1 Diversity of governance bodies and employees 39–40, 58–61, 134, 142
Omission: Age group is not disclosed at Group level. Minority group membership is not
reported on in the Group.
Non-discrimination
103-1/2/3 Explanation of the material topic, its boundary and management approach 6, 39–40, 130, 134
406-1 Incidents of discrimination and corrective actions taken 131
Human rights assessment
103-1/2/3 Explanation of the material topic, its boundary and management approach 6, 42–43, 129–130, 134
412-2 Employee training on human rights policies or procedures 42–43, 134, 139
All employees are trained in the Business Code of Practice, which includes respect for human
rights. Omission: Employee training is not reported by category of training at Group level.
Supplier social assessment
103-1/2/3 Explanation of the material topic, its boundary and management approach 6, 42, 134–135
414-1 New suppliers that were screened using social criteria 42, 135, 142
A risk-based approach is used to identify signicant suppliers. The scope can include both
new and old suppliers each year. Omission: Data for new suppliers specically is not
disclosed. Environmental and social screening is reported jointly.
Customer health and safety
103-1/2/3 Explanation of the material topic, its boundary and management approach 43, 130, 135
416-2 Incidents of non-compliance concerning the health and safety impacts of products and services 135
Marketing and labeling
103-1/2/3 Explanation of the material topic, its boundary and management approach 129, 133
417-2 Incidents of non-compliance concerning product and service information and labeling 133
Socioeconomic compliance
103-1/2/3 Explanation of the material topic, its boundary and management approach 6, 129, 130
419-1 Non-compliance with laws and regulations in the social and economic area 130
GRI content index
Atlas Copco 2021 139
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Energy management 1. Total energy consumed
2. Percentage grid electricity
3. Percentage renewable RT-IG-130a.1 Total energy is reported in MWh, not in gigajoules. Percentage of grid electricity is not reported. 131
Employee health & safety 1. Total recordable incident rate (TRIR)
2. Fatality rate
3. Near-miss frequency rate (NMFR) RT-IG-320a.1 134, 142
Fuel economy and emissions
in use-phase
Sales-weighted fuel eciency for
non-road equipment
RT-IG-410a.2
Product fuel eciency is not reported but the Group innovates to help customers increase energy
eciency and reduce emissions. The goal at divisional level is for new or redesigned products to achieve
signicantly reduced environmental impact of 5% or lower carbon footprint over a product’s life cycle. 35–38
Materials sourcing Description of the management of risks
associated with the use of critical materials RT-IG-440a.1 Risk management associated with conict minerals is described. 43, 50, 129, 135
Remanufacturing design & services Revenue from remanufactured products
and remanufacturing services RT-IG-440b.1 Share of revenues is not reported but topic is addressed. 37
Topic Metric Code Comment Page
SASB Index 2021
Table 1. Sustainability disclosure topics and accounting metrics
Number of units produced by product category RT-IG-000.A Not reported.
Number of employees RT-IG-000.B 19, 85, 142
Table 2. Activity metrics
Metric Code Comment Page
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Sustainability performance
1)
ECONOMIC VALUE 2019 2020 2021
Direct economic value
2)
104 230 100 251 111 972
Revenues 103 756 99 787 110 912
Economic value distributed
Operating costs
3)
56 952 55 362 61 019
Employee wages and benets, including other social costs 25 220 25 582 27 151
Costs for providers of capital
4)
8 149 8 988 9 281
Costs for direct taxes to governments 4 909 4 801 5 372
Economic value retained 9 000 5 518 9 149
– Redemption of shares – – –
ENVIRONMENT
Renewable energy for operations, % of total energy use 41 44 58
Direct energy use in GWh
5)
105 100 115
Indirect energy use in GWh
5)
264 251 270
Total energy use in GWh
5)
369 351 385
Total energy use in MWh/COS
5)
6.8 6.6 6.5
CO
2
emissions ’000 tonnes (direct energy) – scope 1
6) 7)
22 20 22
CO
2
emissions ’000 tonnes (indirect energy) – scope 2
6) 7)
60 57 30
CO
2
emissions ’000 tonnes (total energy) – scope 1+2
6) 7)
82 77 52
CO
2
emissions ’000 tonnes (indirect energy, location-based) – scope 2
6) 7)
98 95 102
CO
2
emissions ’000 tonnes (transports) – scope 3
6) 7)
150 124 142
CO
2
emissions tonnes (transports)/COS
6) 7)
2.8 2.3 2.4
CO
2
emissions tonnes total energy and transport (scope 1, 2, 3)/COS
6) 7)
4.3 3.8 3.3
Total waste (in ’000 kg) 32 459 31 036 35 071
Waste (in kg)/COS 597 581 590
Reused or recycled waste, % 95 93 93
Water consumption (in ’000 m
3
) 394 384 395
Water consumption (m
3
)/COS 7.2 7.2 6.6
Signicant direct suppliers with an approved environmental management system, % 28 30 31
1)
Calculations according to GRI Standard Guidelines, www.globalreporting.org.
2)
Direct economic value includes revenues, other operating income, nancial income,
prot from divested companies and share of prot in associated companies.
3)
Operating costs include cost of sales, marketing expenses, administration expenses,
research and development expenses, other operating expenses, deducted for
employee wages and benets. COS when presented in relation to sustainability
information refers to cost of sales at standard cost in MSEK.
4)
Costs for providers of capital include nancial costs and dividend, but exclude
redemption of shares and repurchase of own shares.
5)
Total energy includes both indirect and direct energy used. Atlas Copco does not
report cooling or steam separately. The calculation of direct energy, i.e. energy
generated by the company for its own production or operation, comprises all fuels
used on the sites, including diesel, oil, biofuel, gasoline, solar, geothermal, propane
and natural gas.
6)
The reporting of greenhouse gas emissions is done in accordance with the GHG
Protocol (ghgprotocol.org). Country factors used for energy come from the
International Energy Agency. Indirect energy (Scope 2) is presented both as market-
based and location-based according to the GHG Protocol. A market-based approach
has been applied unless otherwise stated. Factors from NTM (transportmeasures.
org) are used for transport of goods when emission data is not provided by the
transport company. Scope 3 emissions include inbound and outbound transport
of goods that the company is responsible for as dened by Incoterm. Out of scope
emissions data for direct CO
2
emissions from biologically sequestered carbon
(e.g. CO
2
from burning biomass/biofuels) was 938 tonnes in 2021.
7)
CO
2
emissions from energy in operations and transport (tonnes) in relation to cost
of sales in the base year 2018 was 5.3.
Atlas Copco 2021 141
SUSTAINABILITY NOTES
OTHER INFORMATION
Signatures of the Board of Directors
Audit Report
Financial denitions
• Sustainability notes
Three years in summary
Contacts
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
PEOPLE 2019 2020 2021
White-collar employees, % 69 70 69
Blue-collar employees, % 31 30 31
Employee turnover white-collar employees, % 6.0 4.2 6.4
Employee turnover blue-collar employees, % 5.6 4.8 7.8
Total turnover, voluntary leave, % 5.9 4.4 6.9
Yearly performance and development discussion, % 84 85 82
Proportion of female employees, % year end 19.8 20.0 20.9
Proportion of female managers, % year end 19.5 19.7 20.5
Degree to which employees agree that there are opportunities to learn and grow in the company (score)
8)
71 – 73
Degree to which employees agree that we have a work culture of respect, fairness and openness (score)
8)
74 – 76
SAFETY AND WELL-BEING
Recordable injuries total workforce, number 406 385 387
Recordable injuries per million working hours total workforce 5.2 4.8 4.5
Minor injuries total workforce, number 997 922 1 148
Minor injuries per million working hours total workforce 12.7 11.6 13.4
Fatalities, number 1 0 0
Fatalities per million working hours total workforce 0.01 0 0
Sick leave due to diseases and recordable injuries, % 2.0 2.1 2.2
Degree to which employees agree that Atlas Copco takes a genuine interest in their well-being (score)
8)
69 – 73
A balanced safety pyramid (yes/no) yes yes yes
ETHICS
Employees signed compliance to the Business Code of Practice, % 98 99 98
Employees trained in the Business Code of Practice, % 94 99 97
Managers in risk countries held trainings in the Business Code of Practice, % 91 99 96
Signicant distributors committed to the Business Code of Practice, % 59 84 87
Signicant suppliers committed to the Business Code of Practice, % 90 93 93
Sustainability performance, continued
8)
Results are, as a rule, collected every two years through
the Group’s employee survey.
Atlas Copco 2021 142
SUSTAINABILITY NOTES
OTHER INFORMATION
Signatures of the Board of Directors
Audit Report
Financial denitions
• Sustainability notes
Three years in summary
Contacts
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
This is the translation of the auditor’s report in Swedish.
To Atlas Copco AB, corporate identity number 556014-2720
Stockholm, March 18, 2022
Ernst & Young AB
Introduction
We have been engaged by the Board of Directors of Atlas
Copco AB to undertake a limited assurance engagement
of Atlas Copco AB’s Sustainability Report for the year
2021. The scope of the Sustainability Report has been
dened on page 136–139. Furthermore, we have per-
formed an examination of the Statutory Sustainability
Report. The scope of the Statutory Sustainability Report
has been dened on page 20.
Responsibilities of the Board and Executive
Management
The Board of Directors and Executive Management are
responsible for the preparation of the Sustainability
Report including the Statutory Sustainability Report in
accordance with applicable criteria and the Annual
Accounts Act respectively. The criteria are dened on
pages 136–139 in the Sustainability Report and consist of
the GRI Sustainability Reporting Standards, as well as the
accounting and calculation principles that the company
has developed. This responsibility includes the internal
control relevant to the preparation of a Sustainability
Report that is free from material misstatements, whether
due to fraud or error.
Responsibilities of the auditor
Our responsibility is to express a conclusion on the
Sustainability Report based on our limited assurance
procedures and to express an opinion regarding the
Statutory Sustainability Report. Our engagement is
limited to historical information presented in this document
and does therefore not cover future oriented information.
We have conducted our engagement in accordance
with ISAE 3000 Assurance engagements other than audits
or reviews of historical nancial information. A limited
assurance engagement consists of making inquiries, pri-
marily of persons responsible for the preparation of the
Sustainability Report, and applying analytical and other
limited assurance procedures. Our examination regard-
ing the Statutory Sustainability Report has been con-
ducted in accordance with FAR’s accounting standard
RevR 12 The auditor’s opinion regarding the statutory
sustainability report. A limited assurance engagement
and an examination according to RevR 12 are dierent
from and substantially less in scope than reasonable
assurance conducted in accordance with IAASB’s Stan-
dards on Auditing and other generally accepted auditing
standards in Sweden.
The rm applies ISQC 1 (International Standard on
Quality Control) and accordingly maintains a comprehen-
sive system of quality control including documented poli-
cies and procedures regarding compliance with ethical
requirements, professional standards and applicable
legal and regulatory requirements. We are independent
of Atlas Copco AB in accordance with professional ethics
for accountants in Sweden and have otherwise fullled
our ethical responsibilities in accordance with these
requirements.
The procedures performed in a limited review and an
examination according to RevR 12 do not enable us to
obtain assurance that we would become aware of all sig-
nicant matters that might be identied in a reasonable
assurance engagement. The conclusion based on limited
assurance procedures and an examination according to
RevR 12 does not provide the same level of assurance as a
conclusion based on reasonable assurance.
Our procedures are based on the criteria dened by
the Board of Directors and the Executive Management as
described above. We consider these criteria suitable for
the preparation of the Sustainability Report.
We believe that the evidence we have obtained is
sucient and appropriate to provide a basis for our
conclusions below.
Conclusions
Based on the limited assurance procedures we have per-
formed, nothing has come to our attention that causes us
to believe that the Sustainability Report is not prepared,
in all material respects, in accordance with the criteria
dened by the Board of Directors and Executive
Management.
A Statutory Sustainability Report has been prepared.
Outi Alestalo
Expert Member of FAR
Erik Sandström
Authorized Public Accountant
Auditor’s Limited Assurance Report on Atlas Copco AB’s Sustainability Report
and statement regarding the Statutory Sustainability Report
Atlas Copco 2021 143
SUSTAINABILITY NOTES
OTHER INFORMATION
Signatures of the Board of Directors
Audit Report
Financial denitions
• Sustainability notes
Three years in summary
Contacts
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
ORDERS, REVENUES AND PROFIT 2019 2020 2021
Orders, MSEK 106 104 100 554 129 545
Revenues, MSEK 103 756 99 787 110 912
Change, organic from volume, price and mix, % 2 –3 14
EBITDA, MSEK 26 597 24 335 29 025
EBITDA margin, % 25.6 24.4 26.2
Operating prot, MSEK 21 897 19 146 23 559
Operating prot margin, % 21.1 19.2 21.2
Net interest expense, MSEK –359 –245 –234
Prot before tax, MSEK 21 572 18 825 23 410
Prot margin, % 20.8 18.9 21.1
Prot for the year, MSEK 16 543 14 783 18 134
EMPLOYEES
2019 2020 2021
Average number of employees 37 805 39 606 41 272
Revenues per employee, SEK thousands 2 745 2 519 2 687
CASH FLOW
2019 2020 2021
Operating cash surplus, MSEK 26 696 25 081 28 952
Cash ow before change in working capital, MSEK 20 209 20 454 23 870
Change in working capital, MSEK –2 971 2 166 –244
Cash ow from investing activities, MSEK –9 683 –16 286 –6 121
Gross investments in other property, plant and equipment, MSEK –1 662 –1 459 –1 970
Gross investments in rental equipment, MSEK –1 140 –486 –510
Net investments in rental equipment, MSEK –1 087 –416 –474
Cash ow from nancing activities, MSEK –8 024 –8 552 –10 323
of which dividends paid, MSEK –7 663 –8 506 –8 889
Operating cash ow, MSEK 14 625 18 910 19 378
Three years in summary
FINANCIAL POSITION AND RETURN 2019 2020 2021
Total assets, MSEK 111 722 113 366 136 683
Capital turnover ratio 0.98 0.86 0.88
Capital employed, average MSEK 72 732 83 649 87 537
Capital employed turnover ratio 1.43 1.19 1.27
Return on capital employed, % 30 23 27
Net indebtedness, MSEK 12 013 16 421 8 151
Net debt/EBITDA, MSEK 0.5 0.7 0.3
Equity, MSEK 53 290 53 534 67 634
Debt/equity ratio, % 23 31 12
Equity/assets ratio, % 48 47 49
Return on equity, % 35 27 30
KEY FIGURES PER SHARE
2019 2020 2021
Basic earnings / diluted earnings, SEK 13.60 / 13.59 12.16 / 12.14 14.89 / 14.85
Dividend, SEK 7.00 7.30 7.60
1)
Dividend as % of basic earnings 51.5 60.0 51.0
Dividend yield, % 2.4 1.9 1.4
Redemption of shares, SEK – – 8.00
1)
Operating cash ow, SEK 12.04 15.56 15.91
Equity, SEK 44 44 56
Share price, December 31, A share / B share, SEK 373.6 / 325.2 421.1 / 368.3 625.8 / 532.2
Highest price quoted, A share / B share, SEK 386.5 / 336.9 445.5 / 390.0 629.4 / 533.6
Lowest price quoted, A share / B share, SEK 205.0 / 188.5 266.7 / 231.6 434.1 / 379.3
Average closing price, A share / B share, SEK 288.0 / 258.8 385.0 / 338.0 539.6 / 459.6
Average number of shares, millions 1 214.7 1 215.4 1 217.7
Diluted average number of shares, millions 1 215.8 1 217.2 1 220.5
Number of shareholders, December 31 81 656 82 079 87 923
Market capitalization, December 31, MSEK 440 497 497 187 732 967
1)
Proposed by the Board
Atlas Copco 2021 144
THREE YEARS IN SUMMARY
OTHER INFORMATION
Signatures of the Board of Directors
Audit Report
Financial denitions
Sustainability notes
• Three years in summary
Contacts
INTRODUCTION THIS IS ATLAS COPCO THE YEAR IN REVIEW FINANCIALS OTHER INFORMATION
CONTACTS
Investor relations
Daniel Altho, Vice President Investor Relations
ir@atlascopco.com
Sustainability
Soa Svingby, Vice President Sustainability
sustainab[email protected]
Media
Sara Hägg Liljedal, Chief Communications Ocer
media@atlascopco.com
Production: Atlas Copco in cooperation with
Griller grask form AB and Text Helene AB
Copyright 2022, Atlas Copco AB, Stockholm, Sweden
Prepress: Bildrepro
Print: Hylte Tryck
8993 0001 76
CONTACTS
Atlas Copco 2021 145
OTHER INFORMATION
Signatures of the Board of Directors
Audit Report
Financial denitions
Sustainability notes
Three years in summary
• Contacts
Phone: +46 8 743 80 00
Reg. no: 556014-2720
atlascopcogroup.com