Atlas Copco

Atlas Copco’s business model focuses on niche product areas with substantial market shares. It can, therefore, invest heavily in research and development, resulting in the most innovative portfolio. Its exposure in structurally attractive end markets such as energy efficiency, renewable energy and autonomous transportation should continue to drive growth in the years ahead.

Atlas Copco is asset-light as an assembler, given that it produces approximately 25 per cent of its components in-house. The company is focused on making the business more resilient from one cycle to the next to reduce the volatility of its revenues and profits. The service business accounts for over a third of group sales, which also helps lower cyclicality and provides greater earnings resilience in a downturn.

Atlas Copco is the gold standard in terms of corporate culture. The core belief is that a devolved organisation is faster and more entrepreneurial. Each business unit has responsibility for its financial performance, and management says this motivates employees – they call it “freedom with accountability”. Jobs at the company are called ‘missions’ and are typically fixed for three to five years.

The company showcased on this page is part of a diversified portfolio. The commentary should not be taken as advice on an individual stock.