Thank you very much and hello everybody. I'm very happy for many reasons to welcome you to this call today on the 2nd quarter report from Atlas Copco. The report It has been out for a while, so I'm sure you've had the time to read it already. We will go straight into the comments from our CEO, Mats Ramstrom. And then after that, we will go into the Q and A session.
And I will come back to that after Mats' starting comments. So over to you Mats.
Thank you so much. We will start with Slide to Q2 in brief, trying to summarize the quarter for you. As you can see, record order intake. And it was €32,500,000,000 for the quarter. And the year on year It's up 54%.
It might not be so relevant, but sequentially, also an improvement on 6%. And then we also benchmarked with 2019, which was our best year in the past and then we're up 28%. So It's an all time high on orders for not only in vacuum, but also in compressor technique and industrial technique and it's spread out through all our regions. So a very positive trend there. And you can also see sequentially that was order growth for all our business areas.
Record revenues, we like many others have Huge challenges when it comes to sourcing of components. There's a scarcity of components, but I think and do believe that they handle the situation quite well. And to confirm that, we also have the record on €27,500,000,000 there as well. So quite proud of the team that is helping us in Manufacturing Logistics and Purchase. The margin reported margin 21.5 percent and adjusted for the revaluation of the long term incentive 21 point 9.
Go to slide number 3. And this just confirms the numbers and it's Quite an impressive graph. And we came in above our own expectations. And this time, driver was not only in semi, very strong semi, but we could see many of the general industry segments being very strong that helped us sequentially to improve from Q1 to Q2. On the bottom there, return on capital employed Stayed at 26%, supported by volume.
And of course, it dilutes by the intangibles from ISRA, Perceptrum and some of the CT distributors, but pleased about that as well. It's again good to do geographical picture on Slide number 4. In the 3rd box, you had the growth rates the last 3 months comparing them with the COVID year. But instead, I looked at the sequential improvement and then we have Double digit growth and strongest growth in North America. It was also double digit in Latin America and seeing a digit growth in Europe.
So spread throughout and I'm pleased to see with the 41% in Asia, which means that we are competitive in one of the most important regions. The 4% on Slide 5. And as I said, sequentially up 6% versus 2019, 28. So it's clearly a strong performance from the group.
If you
look at the sales bridge, the structural changes plus 3, it relates to the Isra, Perceptron and CT Distributors, but you can still see that we have headwinds when it comes to currency. This is mainly related to the U. S. Dollar. Slide 7, well, impressing group numbers.
And of course, gaining in the group is the most profitable part with the vacuum technique. So pleased to see such a Strong competitive technique and vacuum technique, but now we also see strong growth rates on Power and Industrial. And then we are at Slide 8, Compressor Technique, they did record order levels, SEK 14,000,000,000 Strong development for industrial compressors, small and large. We could see also strong service and also sequential increases in most of the areas. Revenues at 14% organically, €12,000,000,000 also strong from them and a very, very strong margin at 23.9 percent supported by volume, slightly negative on the currency.
And of course, very strong return on capital employed at 91%. Then I also wanted to highlight this product, another product with Extremely good energy efficiency, and this is really in line with the sustainability targets that we have to help Our customers to continuously improve their performance and help with the CO2 levels. So it'd be interesting to follow this new product as well. Vacuum, they had actually three records. They had both orders received, orders invoiced and operating profit.
So record orders and maybe this is why I said that we didn't expect from the fantastically strong Q1 to have another quarter this strong. But they really went for it and took A lot of orders for the customer here, we would expect orders to be placed early to us and making sure that they get part of the capacity and lineup for deliveries. Record revenues and a very healthy operating profit level at 24.8%. Go to Industrial Technique. Record orders, I think, automotive spelled out very strong in North America, but we can also see Strong development in general segment, which was very good and also continued strong growth for Service.
Industrial Technique with an operating margin back above 20%. And this, of course, includes then the intangibles for the Istria acquisition. And I think they were at 23, if we took that away, if I recall it correctly. And another new product from the this time, like to promote a little bit the ESA products, very interesting segment to be in. And then Power Technique, also strong, as you can see from the graph, SEK 3,900,000,000.
Happy to see that utilization, especially the rental is going up. But it was good performance from all the different product segments and happy to see the margin at 16% supported by volume and slightly negative on currency. We have another product that is supporting the sustainability journey. Energy storage normally goes hand in hand with generators to help our customer to reduce cost and improve sustainability. And on Slide number 12, you can see the profit and loss.
And I just wanted to highlight that We now help you out with EBITA, which is the operating profit excluding amortization of tablets related to acquisitions. So you get both these numbers. Hans Ursula?
Thank you, Mats. If we continue below the operating profit, you can see not much to comment on the financial items, but perhaps more on the tax expense, which looks to improve decrease Quite a lot compared to last year, but it's actually last year that included a couple of positive one times of releasing a few provisions, which you can also find in the report also commented last year. I think the 22% level is fairly representative of where we are and should be at this point in time. And then you can see the increase on net profit and consequently also basic earnings per share. And the return on capital employed has started to improve a little bit after the drop down to 23%, which was caused by the, let's say, immediate effect of the relatively large acquisitions last year.
I think if we move on to the next, we have the profit bridge. As you can see, moving from, of course, A low 16% last year, we got a little bit of help, of course, from The not having the restructuring costs of last year and also slightly less negative LTI program effect of the valuations. The acquisitions contribute, but of course, it dilutes somewhat the margin. And so does, of course, currency as well, as you can appreciate there. Whereas The residual, which is really the organic development, if I call it like that, volume, price, NICS and other is contributing with a flow through of 44%, which For those of you that have followed us for a long time know it's a very high number.
It's not the one that we expect to be repeated over a sequence of quarters, but it can certainly happen when we have a tailwind of demand like we have had right now. On the negative impact on currency, We had SEK 715 in absolute value compared to the situation in Q2 2020. For next quarter, we believe still that it It will be a negative comparison, but clearly less than this quarter. So that's what we expect for Q3. If we move on to the business areas, you just get a little bit more details here of the same things basically on that I commented on the group total.
All of the business areas, which is very rewarding, have a nice strong profit impact from the volume, price and mix. And by the way, I think the price increase It's bordering between 0.5% positive to 1% positive in that bracket somewhat, which we think is a reasonable level given the type for business model that we have. If we then just to repeat a little bit what Mats Touched upon, if you look at Industrial Technique, if we would take away all the impact of the recently acquired, We would be back at around 23% operating profit level, which I think just shows that it has gone pretty quick for the business to recover after the heavy drop of the COVID. And that was related to Industrial Technique, just to point that out. Rest of the comments, I think Mats already gave.
So we move on to the balance sheet. We're Not a lot to specifically focus on What we have in the equity this period is that a reduction of the full dividend, which equates to about €8,800,000,000 but only half of that has been paid in May and the other half, about €4,400,000,000 will be paid late October. And so that is now booked as part of the liabilities in the group just to see how you can reconcile the movement of the equity a little bit better there. All of that that we have talked about and then sums up in the next slide in terms of cash generation. You can see that it improved in the quarter compared to the same quarter last year in spite of the volume growth that normally ties up more working capital.
On the other hand, and that which it didn't, thanks to a lot of Invoicing, of course, but also perhaps to the point that we have both Equipment standing in the inventory that could have been delivered if we would have had all the components, but partly also perhaps a little bit lower than expected due to the same fact really that we haven't been able to bring in as much components that we would have liked to keep the production even higher or to increase the production even more and related to the comments of Mats on the supply chain. Taxes paid in the quarter stands out a bit And it is pretty high for a single quarter, but there is nothing very specific in it. It's a combination of what happened last year to a certain extent that some taxes were allowed to be delayed in terms of payment in many countries due to the COVID situation and the uncertainty. And that, of course, is not repeated this year, so that's why it's higher. And then the rest is normal variations on when Preliminary taxes are paid in certain countries vis a vis others.
But all in all, a good solid cash flow again with that at SEK 3,700,000,000 And with that, I give the word back to you, Mats.
Thank you, Hans Ulla. And on the near term outlook then, we are trying to guide on the activity level we see among our key customers from Q2 to Q3. And we say that we see them remain high at the current level, and it is rather high for us. What we have seen in Q2 is a strong semi, improved General Industry for many of our segments and improved service. So I think the trends are positive.
Then we still have to have in mind that semis and Alto could be seen as key accounts, but positive trends. On the negatives, although the societies are open up, we can also see warning signs regarding the coronavirus on the delta, although our operations are up and running today. The other thing is, of course, if we see the shortest in the supply chains, if that would stop our customers over operating. But overall, we see a positive market with an high activity level when we start the Q3.
Very good. Thanks a lot. And that's
and before the Q and A, We have a new picture for you, Hans Ouellet, that you haven't seen in the deck yet. So It's always a legacy coming to an end today with Hans Hola's last quarter report, retiring after 35 years in the group, 22 years as the CFO and 112 quarterly reports. That must be some sort of a record. So I'd like to thank you, Hans Ulla, for your guidance and your support during my time and when we work together and for being a fantastic and appreciated colleague. And you know that I always challenge you on the golf course whenever you want.
And at the same time, Peter is in the room and is also on the picture. You can see the dress exactly the same. And you will get to know Peter more than we have the Q3 report. So welcome, Peter, as well. And now I think For Q and A.
Okay. But let me first thank you so much, Mats, for those kind words and thank everybody on the call for challenging us so well during many, many years. With that, we move over to your Q and A session then. And I'd like the operator, please, if you can repeat The process for the questions, please. Absolutely.
Thank you, ladies and gentlemen. I have a question from the line of Guillermo Peigneau from UBS. Please go ahead.
Good afternoon. Guillermo Peigneau And I want to thank also Hansola for all these years. To be honest, all the things that I've learned It's such a unique influence. I'm very happy to share with you all these years that I share with you. And I have 2 questions, one and a follow-up.
I think I will disappoint you, Guillermo, this time. I have strict orders only to accept one question at a time. All
right. Okay.
Tough until the end. But the question is, obviously, when it comes to the last the second part of the year, I guess, your operating leverage this quarter It was good according to or even exceeding your expectations. But I wonder whether dynamics that you've seen in component pricing on the assembly process on your Working capital will highlight that maybe actually going into the second half of this year, the operating leverage that we could assume might be somewhat more modest. And that is my question.
I'm very sorry, Guillermo. There was some confusion here. Could you repeat please the question?
Yes. Towards the second half of this year, The operating leverage that you got obviously during the first half was very good. In the second quarter and the first half was very good and it was exceeding your I wonder what the dynamics on lower yields, component pricing, working capital terms. We could assume that the second half If we are a bit more modest from an operating leverage perspective.
Yes. Sorry for not catching that the first time. Sorry, Gjermot. But Now I think as I indicated already before, this is an extremely high level. And with the type of business model that we have, we're not I think to see that when, let's say, the revenue growth is more moderate, so to speak.
Now, of course, with this order intake, we expect indeed to have A good trajectory for revenues for some time, of course, because certainly, we want to deliver the goods that we have orders more. But I think one should be careful to project the same type of flow through. So Your statement, if I understood you right, is that we probably should not expect the same. I would agree with that. I mean, We're in the beginning of a recovery phase still and we know from investments that are granted, investments that are coming on stream as we speak.
We know from recruitments. We know from a number of these things that We are adding some cost. It's not the problem, of course, because we have the strong growth in the business. But indeed, it can have a certain moderating effect on the flow through, yes.
Thank you.
Thank you.
Our next question comes from the line of Daniela Costa from Goldman Sachs. Please go ahead.
Hi, good afternoon. Thanks for taking my question and extending the wishes of happy retirement to Hanzula as well. My question is regarding understanding a bit better the profile of orders delivery in the vacuum technology business going forward. So How shall we think about like the orders that you have at hand now? Are they mainly for delivery this year?
Sort of like Will they impact organic sales growth next year as well? Can you just give us a little bit about like how you're seeing order to sales development?
So as I said briefly on the DTE part, I think customers are aware that there is a shortage of capacity industry considering the huge demand for semiconductors in many different segments of the market. And I'm sure that we have some preorders. So some of the orders are booked with the delivery time. But I would say the majority is expected to push out as much as we can this year. So it's not like it's scheduled for mid next year or anything like that, but a normal delivery time or that they placed the order for delivery as soon as possible.
Yes. Maybe kind of clarify just if I understood. Because when we look at like 40% growth rates year to date on the order side, we shouldn't sort of like extrapolating towards next year Revenue
growth. I think you should Take Matt's question as well, there is some pre ordering, meaning that we don't know whether that will actually be deliveries exactly by the end of the year or even spill over something. But we are talking about the majority being something that we see projects and where we definitely do everything we can in order to respond in terms of deliveries. But To your point, it's an extraordinary increase that we have seen. So to expect that everything Can be from a capacity point of view even be coped with inside the next two quarters is perhaps too optimistic, yes.
Got it. Thank you. Thanks.
Our next question comes from the line of Max Yates from Credit Suisse. Please go ahead.
Thank you very much. I just want to ask about geographic trends in compressor technique. And I know you don't to sort of talk about trends through the order through the quarter. But I just wanted to understand if you could give us a little bit of color around What you're seeing in Europe, North America and China and maybe not necessarily how that developed through the quarter, but are you seeing Very different trends through those three regions. A bit of color there would be helpful.
The comments that are in the report is basically As much as we can say to your point, it's not about whether April was super strong or June was strong or anything like that. But the strong take on the quarter in general is the impressive growth in both North America and Asia of the industrial and pretty diverse diversely exposed divisions, if we call it like that. And then I'm referring to all three business areas at least, compressor technique and vacuum technique, but also industrial technique that to address, let's say, manufacturing segments primarily. And so it's really not As Mats have already pointed out, it's not only about semiconductor making the big numbers this time. It's much more spread than that.
So is it fair to assume that all regions in Compressors are above their sort of pre pandemic levels because obviously we can see compressors as a whole, but is it fair to assume That's true of all the regions? Or is it mainly driven by 1 if we compare it to 20 19?
It's Pretty well spread, I would say. But as I alluded to, that perhaps North America and Asia stands out a little bit more than the others. I don't have exactly in my head whether it's a record level on all regions unfortunately, but it's high levels in those 2 at least and record levels.
Okay. Thank you very much.
Thank you.
Our next question comes from the line of Andy Wilson from JPMorgan. Please go ahead.
Hi, good afternoon everyone. Thanks for taking my question. I wanted to touch on compressor. There's sort of an interesting phrase you used in the report this time, which I don't recall seeing at least recently, in terms of the increased market penetration, which obviously has contributed to some of the growth. I just wondered if that was Or if you can kind of elaborate a little bit on exactly, I mean, clearly that would point to further market share gains.
But just given that you've Specifically highlighted that I'd be interested if there's anything particularly either changing in the market or do you like to emphasize in, I guess, how you're winning those market share gains? Thanks.
Yes, but that's correct. And I think there is a couple of segments where we have invested over the last a few years, slightly more. And one of them being in fresh scarcity of fresh water, so it's low pressure machines, Well, we do believe that we gained market shares and you could see that we introduced even more products in this segment. So that's something that we are proud of and that Increased the penetration of that market. Same thing for high pressure, where we also invest a little bit more in the product portfolio.
And I can also see that Medical has been performing very well, not only linked to the COVID situation, So there's a couple of segments in the market and on-site gases, oxygen and nitrogen generation On-site, it's another segment. So there you have 4 areas where we think that we are gaining penetration in the market and up Grading equipment to something that is much more efficient than the present
equipment. Thank
you. That's very helpful. And all Thanks, guys.
Thank you very much. Thank you.
Our next question comes from the line of Matti Singh from Bank of America. Please go ahead.
Yes, hi. Thanks for taking my question. And before I ask my question, again, All the best and I'll be pleased to hand Sola for his retirement. So in terms of question, The order growth which you have reported across the board looks very strong. So just wondering whether There have been areas where you actually have seen any growth rate peaking or any slowdown per se Or any regional slowdown as well if you have noticed especially coming from let's say China where The second quarter had already seen recovery last year.
So if you could talk about some of those things. Thank you.
So we if you look at our key markets, The power hubs of the world throughout the quarter being Asia, North America and Europe, we see strong sequential growth. And the only region where we had a slight negative was Africa, which is a very small region for us. But otherwise, we have seen now a very strong demand throughout many geographical areas.
And to conclude, as you alluded to China and the already good comparison levels last year compared to the other regions due to recovery from COVID. No, we didn't see any different Relative growth rates or anything there, it's exactly what Mats pointed out. And this is a,
I would say it's a positive surprise because given the kind of some logistical challenges plus Shortage of chips, semiconductors, those concerns. So despite these issues, you have been able to see strong sequential growth. So is that a fair conclusion that these issues like Chip shortages and logistics issues didn't really have any impact on your performance?
No. It do have an impact on our performance as well. But as long as we are better than competition, And then probably it's likely that they placed the order with us. And remember then, going into the COVID situation almost 2 years ago, we kept investing in R and D and our portfolio. We kept investing in competence And we kept investing in digitalization.
So I and this was the reason to see if we can gain market share when the market is coming back. And we started to talk about supply chain mid last year that we see that, okay, what can we do? How can we be ahead of the game. And it's not scientific, but hopefully those are the things initiatives that put us in a better position right now. And hopefully, we are gaining market shares in many different markets.
In one way that Mats already commented upon, it, of course, has already have impacted also us in the sense that without them, we could possibly have Had a little bit even higher deliveries already. But when it comes to orders, it's exactly to what Mats commented on.
Great. Thanks very much.
Thank you.
Our next question comes from the line of Lars Barry Linde from Citi. Please go ahead.
Thank you. Hi, Mats and Anzola. It's Klas from Citi. So My one question is on Senlis and Flat Panel. It's flat quarter on quarter and still a very good level, of course.
But the reason for the Very strong growth quarter on quarter in BT was obviously growth outside of 70s. Have you seen much any difference between 70s and Panel towards the end
of the quarter, I'm interested
to hear this flat panel weakened at all. There is probably some giveaway or giveback of the
previous Q1, but interested if
there has been any underlying slowdown in parts of the semi flat panel
I'm also honored to say I have followed the differentiation there at the time. I don't have any numbers for you that would be accurate.
I think we touched upon it lightly before that we haven't seeing a major change in the underlying customer activity. So it's really, as we have always said, the key account It's extremely difficult to judge months, of course, but even quarters to what will be the actual demand level and how can you interpret a little bit of a softer week or month or something. It's extremely difficult. So that's why we revert back to the more general statement that we haven't seen anything that We interpret as a slowdown nor an even stronger pickup for that reason in that segment.
Thank you and best of luck on today. Have fun.
Thank you. Thank you. I will.
Our next question comes from the line of James Moore from Redburn. Please go ahead.
Yes. Good Good morning, everyone. And Hans Ola, can I join the long lead? Congratulations. Thank
you for
asking me about flow growth. So could you help us understand what's happening in your vacuum business a bit more? The numbers are very big and I know you don't have to make it happen. Could you give us a rough flavor about how the service the 2 service businesses, do they kind of Carry on growing at, I don't know, a 10% type growth rate and everything else is just on the equipment side. Really my question is about speed and service in vacuum and whether that has extraordinary growth rates.
Well, it does not reach the extraordinary growth rates of the equipment. That would be Physically impossible, but it's interesting to see the type of growth that they've had compared to 2019, for example, which was previous past year we had. And it's very, very strong and it's very comforting levels We see when we make that comparison. But they probably come to a sort of a yearly growth rate in that region that you mentioned yourself roughly. But not in 20 years, not on the 50%, 60%, 70% levels that we see for the rest of the month.
And when we talk about the equipment side on the orders, How much of this strong business is a function of the near term shortages of semiconductor supply chain versus The ongoing structurally to the good growing Moore's Law clinical
No, but you know we don't really we're not in the market per quarter. We have looked at the number of construction sites around the world for semi plants coming up in the coming years. And just to look at that map, I must say that it feels like we are truly in the right segment. And then of course, how much is the demand When the auto industry picked up again in terms of it's very difficult for us to judge and I'm not sure the customer would tell us either. But to be in this segment, considering 5 gs is coming along, I can see more and more of our factories being connected.
So I'm not really so concerned about the demand level for a number of years to come, but it's been fluctuated between quarters, as we have said. And then on the industrial and scientific, of course. And we are gaining by just bringing better products to the market. So I'm very pleased with the position that we have going forward.
Thank you very much.
Thank you, James.
Our next question comes from the line of Sebastian Kannur from RBC. Please go ahead.
Yes. Hi, gentlemen. My question was related to the IT division. I would like to know Roughly, what's the portion of businesses there that you do with electric car manufacturers? So battery, And secondly and so on, what part of that business is currently related to
If you look at Industrial Technique as a whole, I believe 50% to 60% of the business is related to Aalto in one way or the other. And when I ask the same questions, because I do ask the same question, they say that the majority today is related to cell manufacturing batteries or hybrid or full electric. And of course, the full electric is the one that is taking off more with different programs. So Very little CapEx goes in from our side, at least into fossil fuel combustion engine type. And Most of what you see in the report is linked in one way or the other to electrification.
I would have one
other question, if I may.
Do we have other questions still to take? Well, If you don't mind, if we continue with the next question, next person in line and then we'll be happy to come back. I think we will have that. Perfect. Thank you.
Thanks. Thank you.
Our next question comes from the line of Alfred Asbjorn from Antwerponder. Please
Hello. Thanks for your presentation and thanks for taking my question. I was wondering if you could share some additional thoughts on your new Machine Solutions department, what kind of future growth do you anticipate here? And do you plan to
do any more acquisitions? Thank you.
We have entered into this because we believe it's growing faster than GDP. You can see that they have a it's a if I start with that and had a very interesting surface vision, which was 75% of the business. And on industrial application, of course, we have access to All accounts within Aalto, for example, and we can see that the metrology park and industrial vision is growing. So We do expect higher growth rates from this and that you can also see on the multi filter we paid for the company. It's developing quite well, not only for us, but also for competition.
So it's a very good segment for us to be in. And that's the reason why we have entered it. And it's also a good combination with a lot of our our own equipment, because we see automation entering into many of our tightening applications. And then we can combine tools, software and vision systems. So I think I see both synergies when it comes to the industrial Together with our tools.
And then in terms of acquisition, you can take it segment by segment to say, Is there a possibility for a roll up? Absolutely. Is that the number one priority right now? Probably not, Because now we need to integrate this. We need to fix Perceptron from a profit point of view.
And then we are probably ready then to look at other candidates if we do it successfully. And so far, we are very pleased with the acquisitions that we have done in this space.
Thank you. Thank you.
We have a question from the line of Del De Bray from Deutsche Bank. Please go ahead.
Yes, good afternoon. Thank you very much.
Congratulations, Hamsola, obviously, but also congratulations to the entire Group for
a very strong commercial performance this quarter.
So I have a question in this respect. At the latest to CMD, you highlighted that a large part of CT's financial success was related to a strong increase in R and D for in particular over the past few years. And I think this effort led to I think the number you provided at the time was 55 new products released in 2020, which compared to only 35 or so in the previous years. So would it be possible to have an Dave, on this for 2021, on the
number of new products, which is in
the pipe for this year. And since you have a clear innovation focus on energy efficiency products, CO2 emission reduction, energy recovery and I wonder if you would also have any comments on the new EU climate for the architecture, which was released just a couple of days ago. Thank you very much.
If I start with The last question then. We have not really digged deep into the new regulations. But in general, we are positive to support the transition of the society to be more CO2 neutral. And that we do for a personal reason, of course, on the planet, but also from a business reason where we see that we provide Our customers with the most energy efficient product and we tend to continue to do that. And we think that might leave a gap between us and some other competitors.
So for us, this type of regulations where industries like to see less I see your 2 footprint is beneficial for a company like ours. And we do invest, like you saw in today's presentation as well, Even me more resources into providing financially something that is better for the customer, but also from an environmental perspective. In terms of what we will release and when in the market, I think we will keep that To ourselves and not to share that with competition so much, but I think Wagner was generous at least to show that there's tons of new products coming. And we would not release anything that's worse than we have or not better than competition. Every release will be the best product.
All right.
Thank you, guys.
Our next question comes from the line of Rick Khimendi from Jefferies. Please go ahead.
Yes, hi. Thanks for taking my question. I just have a question on the order intake, which was quite impressive. So it's quite a Short quarter for Hanzola's last quarter. So we've been at 30% above 2019 levels.
And if I look at the bar chart On Page 5, this last quarter seems a bit odd when compared to the trend of order intake since 20 Well, what would you attribute the strong demand to? Is there an element of double ordering? Is it the availability of liquidity out there? Or is this emerging trend on the back of COVID such as shortening of supply chain and we're showing off capacity?
Wow, I think we have to take turns, being Mads, on that one, which is basically a very, very broad World economy almost related question, it's difficult for us to pinpoint those factors, of course. But The combination, of course, I mean, I think the COVID recovery cannot explain All this, I. E. That people were scared to do investments for a while, then we would have possibly seeing some growth. But to your point, it's way above those levels.
Of course, our Exposure to very interesting end markets like the semiconductor market with the tailwinds that, that Segment has is a contributing factor definitely. And then what also Mats Saluted to, we really focus on the product development and innovation and try to dig out so many as many segments as possible where we feel that we have a product offer that we haven't really penetrated that specific segment with. I don't think that it's an effect of a big change from globalization to regional or localization yet. But I don't know if I forget something there, Mats or
No, but we were debating ourselves A little bit the gap between 2019 and where we are today. And okay, you can say that it builds back Quickly than expected to the 2019 level, but now we are significantly above that. And we do see these investments in semi, Well, we do believe that the customers are pre ordering equipment, making sure that they are first in line for deliveries. How much that is, is very difficult to speculate in. But then we also went through the other business areas and say, some are preordering tools in industrial We don't think so.
Industrial compressors, no, we don't think so. And power technician, we don't think so. So that is in that scoop, I think. But we can also see the close link to some of the things in the segments that we presented on the Capital Markets Day where we are gaining speed in some segments, which we
also talked about in
terms of penetration. So I think many of these So I think many of these strategies are paying off. And right Now when we speak, we are working on the next segments that we like to penetrate in the coming months and years.
Thank you very much and best of luck, Angela.
Thank you. Thank you.
So
we welcome Guillermo back then. Okay. Perhaps we should wait with Guillermo a little bit. We can go on to the Hello, is that Guillermo?
Yes, I have an additional question. Sorry for that. I wanted to ask about the size Business, you mentioned Vision in a number of occasions in your report. And I wanted to ask whether you could share with us the Size of the Vision, the Machine Vision business as we speak.
I think that you can calculate more or less from yourself. We have reported a nice steady growth a couple of quarters ago and that I would say continues. And you know the size of the 2 acquired companies. So there's nothing magic in that. It's not the CI engine part of Industrial Technique as of yet, of course.
But yes, it has grown repeatedly in the quarters that we have owned them.
Thank you.
Thank you.
We have a question from the line of Lars Dusan from Barclays. Please go ahead.
Hi. Thank you. Good luck, Hans Werner. Matt, if I can just try to peel the onion a little bit on your comment around China And the industrial businesses in China, I noticed that your Gas and Process business is moving sideways sequentially. It was up The Q1 and now we're talking about sequential development.
Is that driven by China? And what are you seeing in that part of your I mean obviously you see a notable correction in Asian gas and petrochem prices this year. I wonder whether you're starting to see an impact on your business. And then on sort of other industrial short cycle businesses in China, again, we had Sandvik just earlier talk about a notable Slow down in part driven by automotive. I wonder whether you can recognize that in your, let's say, legacy Cyclical businesses or your power tool business, your consumables, which perhaps are more production driven, but maybe that's being offset by strong growth in new emergencies like So I'm just trying to understand and or maybe get a bit of flavor for the G and A of the growth profile of your Chinese business for for industrial assets, please.
Thank you.
Yes. Maybe I should start on Sola. On Gas and Process Business, you say go sideways, Yes. But we have had a couple of quarters where it also has been negative, not specifically related to China, But with the barrel price at 75, I think that we start at least to see a more positive trend there even though it That has not shown in this quarter just yet. And in China, if I look at the quarter and the last few quarters, it's been Very solid.
And I don't think we have any evidence that it's weakening for us just yet at least. But I can also follow your comments and we have to wait and see a little bit. I don't know if Hans Ole can elaborate on that. And was it Teil?
No, I think the Numbers that are reported from China when it comes to CT, but many of the other business areas as well are really very good. So it's not at all that it's only the semiconductor industry, the famous This one with all the spend that is driving the growth. If we look at compressor technique, it's at very high levels. And that is irrespective of what type of compressors we're looking at basically. So it's at very high levels.
We can only reiterate that the there is nothing in the cards that indicate the change of trend in that respect. Understood. Thank you. Thank you.
Our next question comes from the line of William Keith from Kepler Cheuvreux. Please go ahead.
Good afternoon. Thank you very much for taking the question. Congratulations. My question actually relates to how you're thinking about investment across your business. If we look 2 record quarters, rising backlogs, Positive global economic outlook and yet really your investment rates across the business haven't moved much against the 20 'nineteen levels in comparison.
So can you maybe flesh out how you're thinking about where to prioritize Investments across the businesses, the 4 business areas and perhaps where you see the most critical bottlenecks or areas that need to be expedited to meet this backlog that you face. Thank you.
In our case then, each business area has a plan to invest. And What we do see as a change strategically with the pandemic and with the protectionist that we have seen that we need to be more local for local. So we need to have a closer presence to customers and their application. So A lot of the investments lately have gone to Asia to support the vacuum divisions. And there we always would like to have some extra capacity to take these peaks of orders.
And now we utilize all the capacity that we have and we continue to invest in And local development and local sourcing. And that also go for South Korea as well. So I will say that and then we have the hubs, of course, with here in Sweden for Industrial Technik and in Belgium for CT. But if I just take what we have done the last Yes, I would say that a lot of investment in Asia to support the growth rate we have in Asia. And we have 42% of the group's business in Asia today.
So this is where we are bumping up capacity and competence.
Thank you very much. Thank you. Thank you. Thank you very much, William. I think that concludes right the line of questions, operator.
Is that correct?
We do have a follow-up question from Sebastian Taner from RBC.
Okay. So we take the follow-up from Sebastian.
I'd be honored to ask the last question for you, Hans.
Go ahead.
In the compressor business, there's a lot of work on hydrogen economy, of course, which will require very large Scale gas compression if you transport methane or hydrogen from Chile or from Africa or wherever you wanted to get it from. And I feel that I thought
the corporate doesn't have that type
of compressor yet because they're usually You know, reciprocating compressors that compress up to 3,000 more. Where do you see your portfolio In respect to 10 years from now where you have to be in the hydrogen economy, do you think you're ready for that market? That would be my last question. Thank you.
No, but I think it's Basel Jorg. When it comes to product range for all application in hydrogen, We don't have a full range of product there. We are, of course, evaluating ourselves a little bit. Will Hydrogen be the winner or will you see other winners like battery technology for the truck industry, for example. But we are preparing our case to be ready and having the best product in this segment as well.
But we think it's a few years away as well to really be a huge potential for compression. As you say, it's more of 500 bars and upwards in this segment. And we have a range, but it's not a complete range, but it's For sure, one of the future segments where we show an interest and we intend to have a strong position in this segment when it takes off and
It could include M and A, of course.
Absolutely, it could include that. It's probably like we do everything.
It may, it may to your point. That's what Matt's trying to say, yes.
Yes, yes. Very good.
Thank you so much for that, Jan.
Then I would like to say thank you to everybody and I extend it to not just for this call, but as I indicated before for all the years and all the challenges and support given to me and to Atlas Copco, of course. So with that, Thanks everybody and have a nice summer for those of you that have the opportunity to that. Thank you and goodbye.