Sandvik AB · OMXSTO:SAND

Sandvik AB — Investor Day (September 2010)

15 slides from Sandvik AB's investor day presentation, September 2010

  1. Slide 1: Sandvik Capital Markets Day 2010

    Sandvik Capital Markets Day 2010 Prepared for the future Ola Salmén Chief Financial Officer Sandvik Capital Markets Day September 2009 page 1

  2. Slide 2: Sandvik Group – Business model

    Sandvik Group – Business model SANDVIK SANDVIK SANDVIK TOOLING MINING AND MATERIALS CONSTRUCTION TECHNOLOGY • Vertical integration • Extensive supplier network • Vertical integration • In-house manufacturing • Strategic manufacturing • In-house manufacturing • Direct sales • Direct sales • Direct sa

  3. Slide 3: Sandvik – a cyclical company?

    Sandvik – a cyclical company? MSEK Downturn duration 3 years 4 years 2 years 1 year+ Organic invoicing -x% -20% -4% -30% Margin drop -600 bps -750 bps -300 bps -1,600 bps Sandvik Capital Markets Day September 2010 page 3

  4. Slide 4: Leverage works both ways

    Leverage works both ways EBIT 2008-2010 YTD June 14% 14% -2% e- es -2 les on s & sur 1 a s i ng s a 1Q0 les & s g&e vi ing e 00 008 sa ring ric e ing s 009 umicein, g rianng ric e t ssaavcy m 12 2IT0 , h p 2 e tu al p sa v 2 Vonlvo rod ctcu al st n CCoosficie IT lu m ruc et s st I T I p torury et ct

  5. Slide 5: Success factors in managing cyclicality

    Success factors in managing cyclicality  Cost flexibility  Process and capital efficiency  Balance sheet management  In hard times – focus on cash generation  Geographic and segment diversity Sandvik Capital Markets Day September 2010 page 5

  6. Slide 6: Cost flexibility

    Cost flexibility  Find a balance between short term cost flexibility and long term cost efficiency  Explore synergies for increased cost efficiency  Use outsourcing where applicable  Time banks and flexible work schemes  Third party engagements  Create routines for rapid adaption to volume cha

  7. Slide 7: Capital efficiency

    Capital efficiency  25% NWC/Sales is the target  >25% is inefficient  <20% requires a changed business model  Operational challenge  Changed processes 50% 25% ► Target 2012 0% Sandvik Capital Markets Day September 2010 page 7

  8. Slide 8: Balance sheet management

    Balance sheet management MSEK  Capital employed long-term funded  Diversified loan portfolio Sandvik Capital Markets Day September 2010 page 8

  9. Slide 9: In hard times – cash rules

    In hard times – cash rules MSEK  Limits stock obsolescence  Mitigates risk for lack of funding  Strengthens the balance sheet  Enables consistent shareholder returns  …but, will hurt margins short term Sandvik Capital Markets Day September 2010 page 9

  10. Slide 10: Leverage works both ways

    Leverage works both ways EBIT 2008-2010 YTD June 14% 14% -2% s les on e- gs & ure s 1 0 -2 a s n a s 1Q les & s g&e vi nge 00 008 sa ring ric e ing s 009 umicein, g rianng ric e t sa cayvim 12 2IT0 , h p s 2 e tu al p sa v 2 Vonlvo rod ctcu al os siet n IT lu m ruc et s st I T I p torury et cts C C

  11. Slide 11: Regional and customer diversity

    Regional and customer diversity Invoicing by Region Invoicing by Customer segment Sandvik Capital Markets Day September 2010 page 11

  12. Slide 12: On my agenda

    On my agenda Short term  Leverage on the global recovery  Achieve capital efficiency target  Keep focus on cost efficiency  Reduce total debt Medium and long term  Explore synergies  Maintain capital efficiency  Explore growth opportunities Sandvik Capital Markets Day September 2010 page 12

  13. Slide 13: Summary and conclusions

    Summary and conclusions  Sandvik is negatively affected by volume downturns  The 2009 downturn was extreme but might re-occur  Reach the best balance between strong business models and adaptability to changes in business environment  Operational excellence  Diversity in geography and customer s

  14. Slide 14: www.sandvik.com

    www.sandvik.com Sandvik Capital Markets Day September 2009

  15. 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-

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