The equipment and service business continued to grow. The order intake increased for industrial compressors, gas and process compressors and service. Geographically,order volumes increased in all regions. The business area continued to invest inmarket presence, service, product development, and production.

 

　　Business development

 

　　The demand for the business area’s equipment and services was strong. In total, the order intake increased 9% organically. Orders received for equipment increased in all major regions.

 

　　Both large and small sized industrial compressors achieved good growth. The order development was slightly better in the first half of the year compared to the second half. Order volumes for gas and process compressors increased, primarily due to good order development in Asia and North America.

 

　　The service business continued to grow in all regions.

 

　　Market presence and organizational development

 

　　The business area continued to invest in innovation and market presence by adding resources in research and development, marketing and sales, as well as in service.

 

　　Through selected acquisitions, the business area increased its presence in targeted markets and customer segments. As an example, the acquisition of Pressure Compressores in Brazil added important piston compressor technology and strengthened the business area’s market position in South America.

 

　　Investments were also made in production facilities, including a new automated production for line filters in Italy.

 

　　Acquisitions

 

　　The business area made five acquisitions in 2017:

 

　　· Hb Kompressoren Druckluft- und Industrietechnik GmbH, a German distributor and service provider of industrial air compressors, with 10 employees.

 

　　· Orcan Basincli Hava Makinalari San. ve Tic. Ltd., a compressor distributor in the European part of Turkey, with 17 employees.

 

　　· Pressure Compressores, a Brazilian manufacturer of piston compressors and related equipment. The company had about 150 employees and revenues in 2016 of about MSEK 145.

 

　　· Certain assets of the US-based Atlas Copco compressor distributor Glauber Equipment Corporation was acquired. 16 employees joined Atlas Copco.

 

　　· The operating assets of C.H. Spencer & Company Co., a US distributor and service provider of industrial pumps, compressors, and related products. 40 employees joined Atlas Copco.

 

　　Revenues, profits and returns

 

　　Revenues increased 7% to MSEK 38 768 (36356), corresponding to a 4% organic increase. Operating profit increased 10% to a record of MSEK 8 960 (8115), corresponding to a margin of 23.1% (22.3). The operating margin was supported by currency and volume, but was negatively impacted by dilution from acquisitions. The return on capital employed was 80% (69).

 

　　THE MARKET

 

　　The global market for compressed air equipment, air and gas treatment equipment and related services is characterized by a diversified customer base. The customers demand solutions that are reliable, productive and efficient and suited to specific applications.

 

　　Compressors are used in a wide spectrum of applications. In industrial processes, clean, dry and oil-free air is needed in e.g. food, pharmaceutical, electronics, and textile industries.

 

　　Compressed air is also used to power industrial tools and in applications as diversified as snow making, fish farming, on high-speed trains, and in hospitals. Blowers are used in applications with a demand for a consistent flow of low-pressure air, for example wastewater treatment and conveying. Gas and process compressors and expanders are supplied to various process industries, such as air separation plants, power utilities, chemical and petrochemical plants, and liquefied natural gas applications.

 

　　Stationary industrial air compressors and associated air-treatment products, spare parts and service represent about 90% of sales. Large gas and process compressors, including related service represent about 10%.