Slide 1: Interim Report Third Quarter 2021
INTERIM REPORT THIRD QUARTER 2021
Slide 2: Summary Q3
SUMMARY Q3 SOLID PERFORMANCE AND STRONG UNDERLYING DEMAND • Organic order intake growth of 21% year on year, and total growth was a full 31% • Continued strong underlying demand in both mining and infrastructure with all-time high levels in order intake • Demand in automotive and general engineering
Slide 3: Staying Ahead Through Innovation
STAYING AHEAD THROUGH INNOVATION SANDVIK TH550B BATTERY-ELECTRIC TRUCK • Combination of proven solutions and 3rd generation BEV technology − Sandvik’s half-century of experience manufacturing underground loaders and trucks − Innovative electric driveline and battery technology • Rethink the equipmen
Slide 4: Market Development
Y/Y UNDERLYING DEMAND TREND MARKET DEVELOPMENT % of group revenue 2020 Mining 40% Engineering 23% Automotive 11% Energy 10% Infrastructure 8% Aerospace 5% % of group Q3 Y/Y revenue FY20 order intake EUROPE 37% +16% NORTH AMERICA 21% +25% ASIA 21% +23% AFRICA/MIDDLE EAST 8% +39% AUSTRALIA 8% -4% SOUT
Slide 5: Order Intake and Revenues
ORDER INTAKE AND REVENUES ORDER INTAKE REVENUES REPORTED ORGANIC GROWTH TOTAL GROWTH* REPORTED ORGANIC GROWTH TOTAL GROWTH* 26,292 21% 31% 24,826 13% 23% SEK M SEK M 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 * At fixed exchange rates 5 SANDVIK: Interim Report on the third quarter 2021 Commen
Slide 6: Adj. EBIT and EBITA Development
GROUP LEVERAGE: ADJ. EBIT AND EBITA DEVELOPMENT +32% +25% SEK M • Adj. EBIT Margin ADJ. EBIT • 16.8% (17.5) excluding metal price effects 4,371 • • Currency had a margin accretive impact M&A costs had a 100 bps diluting impact SEK M on adj. EBIT margin ADJ. EBIT % • Permanent savings from the 2020 1
Slide 7: Sandvik Mining and Rock Solutions
SHARE OF REVENUES 2020 39% SANDVIK MINING AND ROCK SOLUTIONS RECORD HIGH ORDER INTAKE LEVEL − Organic order intake growth of 21% year on year and total growth of 41% − Strong contribution from all divisions *At fixed exchange rates for comparable units. Last years figures has been restated due to th
Slide 8: Sandvik Rock Processing Solutions
SHARE OF REVENUES 2020 7% SANDVIK ROCK PROCESSING SOLUTIONS STRONG ORDER INTAKE GROWTH − Solid year on year organic order intake growth in both mining and infrastructure, with all-time high order intake in aftermarket − Organic order intake growth for equipment was 13% and 38% for aftermarket ADJ. E
Slide 9: Sandvik Manufacturing and Machining Solutions
SHARE OF REVENUES 2020 38% SANDVIK MANUFACTURING AND MACHINING SOLUTIONS SOLID UNDERLYING DEMAND − Organic order intake grew 16% year on year driven by general engineering and automotive − Automotive production cuts noted in the cutting tool business *At fixed exchange rates for comparable units. −
Slide 10: Sandvik Materials Technology
SHARE OF REVENUES 2020 16% SANDVIK MATERIALS TECHNOLOGY STRONG ORGANIC ORDER INTAKE GROWTH OF 29% − Continued strong organic order intake growth and solid absolute levels across most segments and divisions − The activity in oil & gas segment continued to improve, albeit still on low *At fixed exchan
Slide 11: Tomas Eliasson, CFO
TOMAS ELIASSON CFO 11
Slide 12: Financial Summary Q3
FINANCIAL SUMMARY Q3 ¹ At fixed exchange rates for comparable units ² Quarterly calculation i.e. annualized adj. EBIT or revenues and one quarter average CE or NWC ³ Free operating cash flow before acquisitions and disposals, financial items and taxes 12 SANDVIK: Interim Report on the third quarter
Slide 13: Bridge Analysis
GROUP LEVERAGE: BRIDGE ANALYSIS +32% SANDVIK GROUP Includes metal price effects within Sandvik Materials Technology of SEK 218 M in alloy surcharges on revenues and SEK +190 M (-25) in metal price effect on EBIT. Structure in revenues and EBIT includes predominantly DSI. 13 SANDVIK: Interim Report o
Slide 14: Savings Q3
SAVINGS Q3 SEK M SANDVIK SANDVIK SANDVIK SANDVIK GROUP ROCK MANUFACTURING MATERIALS Annualized MINING & ROCK COMMON SOLUTIONS PROCESSING & MACHINING TECHOLOGY run-rate SOLUTIONS SOLUTIONS Total savings Program from Q3 2019 - - - - - - 1,700* New program announced in Q1 & Q2 2020 - 5 140 75 10 230 ~9
Slide 15: Net Financials
NET FINANCIALS • Interest net down year on year due to lower average interest in the debt portfolio • Other financial income and cost consist of a capital gain of SEK 588 million related to divestment of an associated company last year 15 SANDVIK: Interim Report on the third quarter 2021 Comments an
Slide 16: Tax Rate
TAX RATE IN LINE WITH 22-24% GUIDANCE FOR 2021 16 SANDVIK: Interim Report on the third quarter 2021 Comments and numbers refer to continuing operations unless otherwise stated.
Slide 17: Net Working Capital
NET WORKING CAPITAL NET WORKING CAPITAL NET WORKING CAPITAL AS % OF SEK M REVENUES 40,0% 35,0% 30,0% 25,0% 20,0% 15,0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2017 2018 2019 2020 2021 Sandvik Manufacturing and Machining Solutions 2017 2018 2019 2020 2021 Sandvik Mining and Rock Solu
Slide 18: Free Operating Cash Flow
FREE OPERATING CASH FLOW SEK M 7 000 25 000 6 000 20 000 5 000 15 000 4 000 3 000 10 000 2 000 5 000 1 000 *Including investments and disposals in rental, tangible and intangible assets **Cash flow before acquisitions and disposals, financial items and taxes 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q
Slide 19: Net Debt
NET DEBT SEK M GEARING 35 000 0,80 30 000 0,70 25 000 0,60 • Net gearing at 0.25 20 000 0,50 15 000 0,40 10 000 0,30 • Financial net debt SEK 7.4 billion 5 000 0,20 0 -5 000 0,10 • Net debt SEK 17.9 billion -10 000 0,00 -15 000 -0,10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2017 2018
Slide 20: Outcome Q3
OUTCOME Q3 20 SANDVIK: Interim Report on the third quarter 2021 Comments and numbers refer to continuing operations unless otherwise stated.
Slide 21: Guidance Q421 and FY2021
GUIDANCE Q421 AND FY2021 CAPEX (CASH) Estimated to <SEK 4.0 B for 2021 CURRENCY Given currency rates at end of September 2021 the effect on operating profit from transaction and EFFECTS translation would be SEK +150 M for Q4 2021 METAL PRICE Given currency rates, stock levels and metal prices at the
Slide 22: Growth Focus and Solid Execution
GROWTH FOCUS AND SOLID EXECUTION SOLID PERFORMANCE AND STRONG UNDERLYING DEMAND • Solid performance underpinned by strong underlying demand for Sandvik’s products and services • Continued strong order intake growth, with both organic and acquisitive contribution • Successful execution on our M&A str
Slide 23: Q&A
Q&A 23 SANDVIK: Interim Report on the third quarter 2021
Slide 24: Back-up Slides
BACK-UP SLIDES SANDVIK P|
Slide 25: End-Customer Segments
MINING ENERGY (40%) (10%) GENERAL CONSTRUCTION ENGINEERING (8%) (23%) AUTOMOTIVE AEROSPACE (11%) (5%) END-CUSTOMER SEGMENTS (% of group revenues 2020 excl. Mining systems, Varel Oil & Gas and Other Operations; Other e.g. consumer goods, electronics, chemical and miscellaneous accounted for 3%.) 25 S
Slide 26: Profitability Development
GROUP LEVERAGE: PROFITABILITY DEVELOPMENT +32% ADJUSTED EBIT MARGIN 26 SANDVIK: Interim Report on the third quarter 2021 Comments and numbers refer to continuing operations unless otherwise stated.
Slide 27: * Difference Group common: Organic: -34 MSEK Currency: 32 MSEK M&A costs: -4 MSEK
* Difference Group common: Organic: -34 MSEK Currency: 32 MSEK M&A costs: -4 MSEK Includes metal price effects within Sandvik Materials Technology of SEK 218 M in alloy surcharges on revenues and SEK +190 M (-25) in metal price effect on EBIT. Structure in revenues and EBIT includes predominantly DS
Slide 28: Loan and Duration Profile
LOAN AND DURATION PROFILE AMOUNT MSEK AVERAGE DURATION LONG TERM US Private Placement - - 56% Fin institutions, EIB, NIB - - Swedish MTN 1,000 2 years European MTN 8,989 6 years Bank loans 70 2 years Share swap - - SHORT TERM US Private Placement - - Commercial paper 5,339 4 months 44% Swedish MTN E
Slide 29: Loan Maturity Profile
LOAN MATURITY PROFILE MSEK AVERAGE INTEREST RATE: ~5% 29 SANDVIK: Interim Report on the third quarter 2021 Comments and numbers refer to continuing operations unless otherwise stated.
Slide 30: Disclaimer Statement
DISCLAIMER STATEMENT “Some statements herein are forward-looking and the actual outcome could be materially different. In addition to the factors explicitly commented upon, the actual outcome could be materially affected by other factors for example, the effect of economic conditions, exchange-rate