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Inside story: Atlas Copco

Zehrid Osmani, Head of Global Long-Term Unconstrained, provides an insight into Atlas Copco, a long-established global manufacturer of industrial tools and equipment.

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Date published
22 Jun 2021
Zehrid Osmani Head of Global Long-Term Unconstrained

Video Script

One of our core positions, and our largest stock in industrials (at 30 April 2021).  Atlas Copco is a long-established global manufacturer of industrial tools and equipment, and is a leader in vacuum and compressor technologies, selling its industrial equipment to a broad range of end-users, notably the autos, industrials, construction, and semi-conductors industries.

It is a leading player in air compressors - compressed air is sometimes referred to as the fifth utility - critical in powering certain industries.  Reasons we like Atlas Copco:

  • It gives us exposure to many parts of the industrial cycle, with its diverse end-user markets exposure
  • It is also well-diversified geographically, which reduces the risk of exposure to one single country or regional economic cycle
  • More than a third of its revenues are derived from service, providing resilience through the cycle
  • It has scale benefits, giving the company greater R&D firepower and leverage, making the company more innovative than the competition
  • This in turns gives it stronger pricing power, which is an important characteristic we seek in companies
  • It is best in class within the industrials sector in terms of returns on invested capital
  • It has managed to more than cover its cost of capital through the cycle, even during past severe recessions, making it one of the high-quality cyclical businesses within the Industrials sector globally

Finally, it is exposed, directly or indirectly, to some attractive structural growth opportunities, notably related to:

  • Green infrastructure initiatives such as renewable energy and efficient buildings construction
  • Electric transportation - both railway infrastructure and electric vehicles
  • 5G telephony infrastructure upgrades that are currently being undertaken
  • Healthcare infrastructure which is in need of upgrades

All in all, Atlas Copco is a company that fits our search for companies that have quality growth profiles and sustainable business models.


  • The inside story on the leading companies in our global portfolio and why they offer sustainable, long-term growth potential.

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Important information:

This information is issued and approved by Martin Currie Investment Management Limited (‘MCIM’), authorised and regulated by the Financial Conduct Authority. It does not constitute investment advice. Market and currency movements may cause the capital value of shares, and the income from them, to fall as well as rise and you may get back less than you invested.

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