Slide 1: Interim Report First Quarter 2021
INTERIM REPORT FIRST QUARTER 2021
Slide 2: Summary Q1
SUMMARY Q1 POSITIVE MOMENTUM AND BROAD-BASED IMPROVEMENT • Strong order intake growth of +12% year on year • Positive momentum in both the mining and construction segments with record-high order intake level • Continued improvement in short-cycle segments driven by automotive and general engineering
Slide 3: A Refined Strategy to Make the Shift: Creating Value
A REFINED STRATEGY TO MAKE THE SHIFT CREATING VALUE
Slide 4: Q1 Launch – Top Hammer XL
Q1 LAUNCH –TOP HAMMER XL NEW GROUND BREAKING DRILLING SYSTEM • Fully optimized top hammer system for large hole size drilling in surface mining. Increases the application area of top hammer into larger hole diameters • Serves customers with the best solutions order to maximize customers' productivit
Slide 5: Market Development
Y/Y UNDERLYING DEMAND TREND MARKET DEVELOPMENT % of group revenue 2020 Mining 40% Engineering 23% Automotive 11% Energy 10% Construction 8% Aerospace 5% % of group Q1 Y/Y Demand trend revenue FY20 order intake Sequential Q/Q EUROPE 35% -1% NORTH AMERICA 22% +5% ASIA 20% +26% AFRICA/MIDDLE EAST 9% +2
Slide 6: Order Intake and Revenues
ORDER INTAKE AND REVENUES ORDER INTAKE REVENUES REPORTED P/V REPORTED P/V 25,847 12% 21,691 1% SEK M SEK M 30 000 100 000 30 000 100 000 25 000 80 000 25 000 80 000 20 000 20 000 60 000 60 000 15 000 15 000 40 000 40 000 10 000 10 000 20 000 5 000 20 000 5 000 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 7: EBIT Development
EBIT DEVELOPMENT +12% • Margin at 19.2% (15.8) SEK M • 18.7% (16.6) excluding metal price effects 6 000 24% EBIT ADJUSTED 4,170 • Currency had a margin diluting impact of 5 000 20% -0.3% 4 000 16% • Operating leverage of +288% 3 000 12% SEK M • Resilient earnings performance in all business areas 2
Slide 8: Sandvik Mining and Rock Solutions
SHARE OF REVENUES 2020 39% SANDVIK MINING AND Q1 2020 Q1 2021 CHANGE ROCK SOLUTIONS SEK M ORDER INTAKE 8,598 10,469 36%* REVENUES 8,244 8,019 8%* ALL-TIME HIGH ORDER INTAKE ADJ. OP. PROFIT 1,453 1,644 13% − Organic order intake growth of +36%, with exceptionally strong growth in equipment % OF REVEN
Slide 9: Sandvik Rock Processing Solutions
SHARE OF REVENUES 2020 7% SANDVIK ROCK PROCESSING Q1 2020 Q1 2021 CHANGE SOLUTIONS SEK M ORDER INTAKE 1,973 2,358 28%* REVENUES 1,531 1,727 19%* ORDER INTAKE INCREASED ORGANICALLY BY +28% ADJ. OP. PROFIT 208 283 36% − Strong organic order intake growth in both the mining and construction segments %
Slide 10: Sandvik Manufacturing and Machining Solutions
SHARE OF REVENUES 2020 38% SANDVIK MANUFACTURING AND MACHINING SOLUTIONS SEK M Q1 2020 Q1 2021 CHANGE ORDER INTAKE 10,124 9,379 0%* ORDER INTAKE ON PAR WITH LAST YEAR REVENUES 9,766 8,782 -3%* − The automotive and general engineering segments continued to be the ADJ. OP. PROFIT 2,054 2,013 -2% main
Slide 11: Sandvik Materials Technology
SHARE OF REVENUES 2020 16% SANDVIK MATERIALS SEK M Q1 2020 Q1 2021 CHANGE TECHNOLOGY ORDER INTAKE 4,365 3,641 -13%* REVENUES 3,782 3,162 -13%* ADJ. OP. PROFIT 139 355 155% POSITIVE YOY GROWTH OF +3% EX. MAJOR ORDERS % OF REVENUES 3.7% 11.2% − Strong development in consumer-related segments as well a
Slide 12: Tomas Eliasson, CFO
TOMAS ELIASSON CFO 12
Slide 13: Financial Summary Q1
GROWTH Q121, % ORDER REVENUES FINANCIAL SUMMARY Q1 INTAKE ORGANIC: 12 1 CURRENCY: -9 -9 STRUCTURE: 0 0 TOTAL 2 -8 SEK M Q1 2020 Q1 2021 CHANGE % ORDER INTAKE¹ 25,356 25,847 12 REVENUES¹ 23,620 21,691 1 ADJUSTED OPERATING PROFIT 3,728 4,170 12 % OF REVENUES 15.8 19.2 NET FINANCIAL ITEMS -416 -271 -35
Slide 14: Bridge Analysis
GROUP LEVERAGE: BRIDGE ANALYSIS +288% SANDVIK GROUP PRICE/ VOLUME/ METAL PRICE SEK M Q1 2020 PRODUCTIVITY CURRENCY EFFECTS SMT STRUCTURE Q1 2021 REVENUES 23,620 +227 -2,133 +89 -113 21,691 ADJUSTED EBIT 3,728 +654 -483 +320 -10 4,170 ADJUSTED EBIT MARGIN 15.8% 19.2% MARGIN ACCRETION / DILUTION +2.6%
Slide 15: Summary Savings Programs Q1
SUMMARY SAVINGS PROGRAMS Q1 SEK M SANDVIK SANDVIK SANDVIK SANDVIK GROUP ROCK MANUFACTURING MATERIALS Annualized MINING & ROCK COMMON SOLUTIONS PROCESSING & MACHINING TECHOLOGY full run rate SOLUTIONS SOLUTIONS Total savings Program from Q3 2019 10 - 50 5 5 70 1,700 ✔ New program announced in Q1 & Q2
Slide 16: Net Financials
NET FINANCIALS SEK M Q1 20 Q1 21 • Interest net down year on year due to debt Interest net -126 -90 re-payments and lower hedging costs Pension -31 -30 • Temporary revaluations of currency hedges Bank charges -14 -16 and positive effects from electricity and Other fin income & costs -10 2 commodity
Slide 17: Tax Rate
TAX RATE Q1 2020 Q1 2021 REPORTED 21.8% 20.1% EXCLUDING IAC 19.2% 20.7% NORMALIZED 23.1% 22.4% IN LINE WITH 22-24% GUIDANCE FOR 2021 17 SANDVIK: Interim Report on the first quarter 2021 Comments and numbers refer to continuing operations unless otherwise stated.
Slide 18: Net Working Capital
NET WORKING CAPITAL NET WORKING CAPITAL NET WORKING CAPITAL AS % OF SEK M REVENUES 30 000 32% 40% 27 500 30% 35% 25 000 28% 30% 22 500 26% 25% 20 000 24% 20% 17 500 22% 15 000 20% 15% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2017 2018 2019
Slide 19: Free Operating Cash Flow
FREE OPERATING CASH FLOW SEK M 8 000 22 000 20 000 SEK M Q1 2020 Q1 2021 6 000 EBITDA + non-cash 4,553 4,902 18 000 NWC change -697 -1,156 4 000 16 000 Capex* -680 -800 FOCF** +3,176 +2,946 14 000 2 000 12 000 *Including investments and disposals in rental, tangible and intangible assets **Cash flow
Slide 20: Net Debt
NET DEBT SEK M GEARING 35 000 0,80 30 000 0,70 25 000 0,60 • Net gearing at -0.02 20 000 0,50 15 000 0,40 10 000 • Financial Net Cash position SEK 10.7 B 0,30 5 000 0,20 0 -5 000 0,10 -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 2017 2018 2019 2020 2021 Net pension l
Slide 21: Outcome Q1
OUTCOME Q1 Q1 2021 Underlying currency yoy effect (SEK M): - 789 (-750) Total currency yoy effect (SEK M): - 483 Metal price effect in quarter (SEK M): +119 (+60) Capex (SEK B): 0.8 Interest net (SEK B): 0.1 Underlying tax rate (%): 20.7 21 SANDVIK: Interim Report on the first quarter 2021 Comments
Slide 22: Guidance Q2 2021 and FY2021
GUIDANCE Q221 AND FY2021 CAPEX (CASH) Estimated to <SEK 4.0 B for 2021 CURRENCY Given currency rates at end of March 2021 the effect on operating profit from transaction and EFFECTS translation would be SEK -350 M for Q2 2021 METAL PRICE Given currency rates, stock levels and metal prices at the end
Slide 23: Setting the Scene for Growth
SETTING THE SCENE FOR GROWTH POSITIVE MOMENTUM AND SOLID RESULTS • Strong momentum and growth in the mining and construction segments • Gradual improvement in our short-cycle businesses driven by automotive and general engineering • Solid results and significantly stronger margins MARKET CONDITIONS
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 +288% -50 4,170 -483 550 320 3,728 105 ADJ. ORGANIC SAVINGS CURRENCY METAL PRICE STRUCTURE ADJ. EBIT Q1 20 GROWTH EFFECT SMT EBIT Q1 21 ADJUSTED EBIT MARGIN 15.8% 19.2% 26 SANDVIK: Interim Report on the first quarter 2021 Comments and numbers refer to contin
Slide 27: Bridge Analysis by Business Area
BRIDGE ANALYSIS PRICE/ VOLUME/ STRUCTURE/ SEK M Q1 2020 PRODUCTIVITY CURRENCY METALS SMT* Q1 2021 MINING AND ROCK SOLUTIONS REVENUES 8,244 679 -904 - 8,019 ADJUSTED EBIT 1,453 321 -124 -7 1,644 ADJUSTED EBIT MARGIN 17.6% 47% - - 20.5% ROCK PROCESSING SOLUTIONS REVENUES 1,531 295 -173 73 1,727 ADJUST
Slide 28: Loan and Duration Profile
LOAN AND DURATION PROFILE AMOUNT MSEK AVERAGE DURATION LONG TERM US Private Placement - - 81% Fin institutions, EIB, NIB - - Swedish MTN 1,000 3 years European MTN 9,012 6 years Bank loans 27 2 years Share swap - - SHORT TERM US Private Placement - - 19% Fin institutions, EIB, NIB - - Swedish MTN 65
Slide 29: Loan Maturity Profile
LOAN MATURITY PROFILE MSEK AVERAGE 4 000 INTEREST RATE: ~5% 3 500 3 000 2 500 2 000 1 500 1 000 500 0 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 29 SANDVIK: Interim Report on the first 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