Sandvik Ab · OMXSTO:SAND
Sandvik Ab — Investor Day (2013)
26 slides from Sandvik Ab's investor day presentation, Dec 4, 2013
Slide 1: Sandvik Mining Capital Markets Day 2013
Sandvik Mining Capital Markets Day 2013 Gary Hughes President 1
Slide 2: Safety first
Safety first Our EHS vision is to achieve Zero Harm to our people, to the environment we work in, to our customers and our suppliers Protective Equipment Emergency Number Assembly Point Emergency Exit Alarm 2 Sandvik Capital Markets Day 2013 Business Area Mining
Slide 3: Sandvik Mining
Sandvik Interim report on second quarter 2013 Sandvik Mining 10 000 50% 8 000 40% • Weaker demand • Weaker demand for equipment and systems 6 000 30% • Stable aftermarket demand 4 000 20% • EBIT 1,153 MSEK (1,800) • EBIT margin 14.2% (18.3) 2 000 10% • Currency effects of -150 MSEK 0 0% • ROCE repor
Slide 4: January 2012 - What we set out to do
January 2012 - What we set out to do • Drive clear targets for sales and product lines • Implement a leaner organization • Clear accountabilities • Well defined and known Core areas • Reduce time to market and drive modularity • Improve downturn management 4 Sandvik Capital Markets Day 2013 Business
Slide 5: Achievements
Achievements • Operational and financial improvements • 40% reduction in LTIFR • 25% improvement in sales efficiency • 45% reduction in Time To Market • Improved transparency and accountability • Increased number of new product launches 5 Sandvik Capital Markets Day 2013 Business Area Mining
Slide 6: Market growth
Market growth Correction Note: CAPEX ‘95-’02 based on Deutsche Bank, ‘03-’12E based on Sandvik internal CAPEX estimates, 2013-2020 based on mining equipment model Source: IMF, BMI, USGS, EIA, Deutsche bank, Sandvik strategy material, Expert interviews 6 Sandvik Capital Markets Day 2013 Business Area
Slide 7: Improved downturn management
Improved downturn management EBIT drop EBIT drop % points “2008 – 2009” Q2 2012 – Q2 2013 Sandvik Mining -14 -4 Best in class -4 -3 Peer group average -4 -6 / -7 7 Sandvik Capital Markets Day 2013 Business Area Mining
Slide 8: Short term actions
Short term actions Target Accomplished • ∆ Cost base ~ -2 BSEK 0% 100 % • ∆ Headcount > -1,000 0% 100 % • One-offs ~ 700 MSEK 0% 100 % 8 Sandvik Capital Markets Day 2013 Business Area Mining
Slide 9: Market trends
Market trends Demand Shifting customer Technological Intensified slowdown preferences evolution competition • Slower growth in ore output • From focus on volume • Automation in • CAT and Joy pursuing to focus on cost underground mines underground hardrock market • Excess capacity • Total Cost of Own
Slide 10: A mix of strong and weak positions
A mix of strong and weak positions 10 Sandvik Capital Markets Day 2013 Business Area Mining
Slide 11: Sandvik Mining Strategic direction
Sandvik Mining Building the future industry leader Strategic direction 2020 11 Sandvik Capital Markets Day 2013 Business Area Mining
Slide 12: The mine of the future
Smart Services Smart Equipment Mining Software Control Systems Auto- mine Auto- mine Mine- LAN The mine of the future 12 Sandvik Capital Markets Day 2013 Business Area Mining
Slide 13: Where we will be leading!
Focus on defined core applications Where we will be leading! • Core geographies • Emerging Markets • Mid-Market 13 Sandvik Capital Markets Day 2013 Business Area Mining
Slide 14: Maximizing customer value
Maximizing customer value • Most competitive offering • Most competitive supply chain • Speed to market • Leader in Automation and Smart Service • A true Winning culture 14 Sandvik Capital Markets Day 2013 Business Area Mining
Slide 15: Strategy 2020
Strategy 2020 Constantly What? improve our customers’ safety and productivity and help them exceed their targets. LTIFR Growth EBIT margin ROCE x xx xx xx • Global leader in UG HR • Clear Value proposition • # 1 or 2 in select niches • Drive Customer advocacy • Grow in tools, service and parts • Set
Slide 16: The Excelerate Program
The Excelerate Program How? 16 Sandvik Capital Markets Day 2013 Business Area Mining
Slide 17: The Excelerate Program
The Excelerate Program How? • Footprint • S&OP • Modularization • Pricing • Service efficiency • Fleet management • Rightsizing • Systems & Processes • Sourcing • Automation • Emerging markets • xxxxx • xxxxx • Solution sales • Go2market model • Sales efficiency 17 Sandvik Capital Markets Day 2013 B
Slide 18: The new organization
The new organization Who? Mining President Finance and IT Human Resources Business Global Sourcing Development Sales and Global Tools and Global Mining Emerging Mining systems Marketing Services Equipment Automation Markets 18 Sandvik Capital Markets Day 2013 Business Area Mining
Slide 19: A new way of working
A new way of working 19 Sandvik Capital Markets Day 2013 Business Area Mining
Slide 20: Aftermarket transformation
Aftermarket transformation Execution • Service offering and execution • Parts and Tools supply chain • Installed base • Account management • Bundling with equipment 20 Sandvik Capital Markets Day 2013 Business Area Mining
Slide 21: World Class Supply Chain
World Class Supply Chain Execution • Challenging footprint • Improvement focus • Transformation 21 Sandvik Capital Markets Day 2013 Business Area Mining
Slide 22: Value creation per pillar
Value creation per pillar EBIT development 2013 Market World class Transform Offering of Excel in Cost 2020 growth supply the the future sales efficiency chain aftermarket 22 Sandvik Capital Markets Day 2013 Business Area Mining
Slide 23: Risks and mitigation
Risks and mitigation Execution risks Mitigation • HR capabilities • HR structure in place • Slow transition • Well planned transitions • Product quality • Recruit and appoint key competence • Key leadership capabilities • Follow-up and Communication • Organization commitment • Leadership and behavio
Slide 24: Building the future industry leader
Building the future industry leader Actions Increase Consolidate Develop offering organizational supply chain of the future efficiency Shift strategic Strengthen focus aftermarket 24 Sandvik Capital Markets Day 2013 Business Area Mining
Slide 25: Building the future industry leader
Building the future industry leader 25 Sandvik Capital Markets Day 2013 Business Area Mining
Slide 26: Q & A Capital Markets Day 2013
Q&A Capital Markets Day 2013 26