Sandvik Ab · OMXSTO:SAND
Sandvik Ab — Investor Day (September 2009)
15 slides from Sandvik Ab's investor day presentation, September 2009
Slide 1: Capital Markets Day 2009: Managing the downturn
CAPITAL MARKETS DAY 2009 Managing the downturn Lars Pettersson Chief Executive Officer Sandvik Capital Markets Day September 2009 page 1
Slide 2: The Sandvik Group
The Sandvik Group Sandvik Sandvik Sandvik Mining and Materials Tooling Construction Technology 2008: Sales, SEK M 25,975 38,651 21,480 Margin, % 21.0 12.9 5.5 ROCE, % 27.0 24.2 6.3 Sandvik Capital Markets Day September 2009 page 2
Slide 3: The downturn
The downturn Order intake 20% 20% 10% 10% 2009 0% 0% 2004 2005 2006 2007 2008 -10% -10% -20% -20% -30% -30% -40% -40% Sandvik Capital Markets Day September 2009 page 3
Slide 4: Summary Q2 2009
Summary Q2 2009 z Strong cash flow due to reduced working capital z Globally weak demand, except for energy z Negative result due to 9 Sharp decline in sales 9 Very low production rates 9 Substantial one-off costs z Significant cost saving measures gradually increasing Sandvik Capital Markets Day Se
Slide 5: The downturn summary
The downturn summary z Customers and end users under financial constraints z Unprecedented decline in demand z Customers cut investments z Customers destocking z Sharp drop in raw material prices z Sandvik affected early Sandvik Capital Markets Day September 2009 page 5
Slide 6: Measures taken
Measures taken SEK M Monthly order intake at annual running rate with fixed currency rates, dampend 80,000 z Closure of 15 plants z Reduced capex z Product mix 60,000 z Personnel reductions z Cost reductions 40,000 20,000 1980 1985 1990 1995 2000 2005 2009 Sandvik Capital Markets Day September 2009
Slide 7: Cost reductions
Cost reductions z Generated H1 SEK ~2,300 M z Q2 09 running rate SEK ~5,500 M z Estimated FY2009 SEK ~6,000 M z Q4 09 running rate SEK ~8,000 M Sandvik Capital Markets Day September 2009 page 7
Slide 8: Personnel reduction
Personnel reduction Since September 2008 z Reduction of permanent employees 4,800 z Reduction of temporary employees >2,000 z Further permanent employee reductions announced 1,350 z Reduced work time for employees by 15-20% >14,000 Total estimated effect ~11,000 (~ -20%) Sandvik Capital Markets Day
Slide 9: Cash flow
Cash flow SEK M 5 000 5,000 4 000 4,000 3 000 3,000 2 000 2,000 1 000 1,000 00 -1 000 -1,000 -2 000 -2,000 -3 000 -3,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2005 2006 2007 2008 2009 Change in NWC Cash flow from operating activities Sandvik Capital Markets Day September 2009 page 9
Slide 10: Capex
Capex SEK M 2,500 2,000 1,500 1,000 500 2005 2006 2007 2008 2009 2010 Capex Depreciation (excluding impairments and write downs) Sandvik Capital Markets Day September 2009 page 10
Slide 11: Sandvik strength factors
Sandvik strength factors z Advanced R&D z High value-added products z In-house manufacturing z Direct customer sales z Own market channels Sandvik Capital Markets Day September 2009 page 11
Slide 12: Downturn opportunities: strengthening the company
Downturn opportunities strengthening the company z Accelerate mix changes z Net working capital reduction z Accelerate organizational changes z Acquisitions and divestments z Cost efficiency Sandvik Capital Markets Day September 2009 page 12
Slide 13: Downturn opportunities: strengthening the market position
Downturn opportunities strengthening the market position z Increased market share z BRIC expansion z Meet the demand for new technologies z Persistent close customer contacts Sandvik Capital Markets Day September 2009 page 13
Slide 14: Q&A session
Q&A session Sandvik Capital Markets Day September 2009 page 14
Slide 15: Cautionary Statement
Cautionary 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 effected by other factors like for example, the effect of economic conditions, exchange-