Sandvik Ab · OMXSTO:SAND
Sandvik Ab — Q4 2021 Earnings Presentation
34 slides from Sandvik Ab's earnings presentation, January 2022
Slide 1: Interim Report Fourth Quarter 2021
INTERIM REPORT FOURTH QUARTER 2021
Slide 2: Summary Q4
SUMMARY Q4 STRONG ORGANIC AND ACQUISITIVE GROWTH • Broad-based demand with positive development in all business areas and most regions and segments • Organic order intake growth of 23% and all business areas with double-digit gains • Solid contribution from acquisitions, total order intake growth of
Slide 3: Digital Shift Continues
DIGITAL SHIFT CONTINUES DESWIK DIGITAL MINING TECHNOLOGIES • The leading and fastest growing mine planning • New division Digital Mining Technologies established software company with a unique software suite • Three BUs: Automation, Newtrax and Deswik • More than 10,000 licenses, high quality custom
Slide 4: Staying Ahead Through Innovation
STAYING AHEAD THROUGH INNOVATION THE NEW GIBBSCAM 2022 VERSION • Program, simulate, and control any CNC machine – from 2D to 5-axis milling, turning, multi-task machining (MTM) and wire-EDM • More powerful with broader surface and solid modeling • Improvements such as pre-drilling, rotary machining
Slide 5: YoY Market Development
YOY MARKET DEVELOPMENT % of group Mining Engineering Automotive Energy Infrastructure Aerospace revenue 2021 41% 23% 8% 8% 9% 4% % of group Q4 Y/Y revenue FY21 order intake EUROPE 31% +17% NORTH AMERICA 23% +47% ASIA 17% -2% AFRICA/MIDDLE EAST 12% +46% AUSTRALIA 9% +9% SOUTH AMERICA 6% +48% 5
Slide 6: Order Intake and Revenues
ORDER INTAKE AND REVENUES ORDER INTAKE REVENUES REPORTED ORGANIC TOTAL* REPORTED ORGANIC TOTAL* 30,902 23% 36% 29,128 14% 26% SEK M SEK M 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 * At fixed exchange rates 6 SANDVIK: Interim Report on the fourth quarter 2021 Comments and numbers refer to con
Slide 7: Adj. EBIT and EBITA Development
GROUP LEVERAGE: ADJ. EBIT AND EBITA DEVELOPMENT +14% +13% SEK M • Adj. EBIT Margin ADJ. EBIT • 17.1% (19.5) excluding metal price effects 5,106 • M&A transaction costs had a 60 bps diluting impact on the margin SEK M • Permanent savings had a positive ADJ. EBIT % SEK 230 M impact 17.5% • Reversal of
Slide 8: Sandvik Mining and Rock Solutions
SHARE OF REVENUES 2021 42% SANDVIK MINING AND ROCK SOLUTIONS ORDER INTAKE AT AN ALL-TIME HIGH − Order intake increased organically by 30% year on year and total growth of 52%*. Aftermarket with highest order intake level on record *At fixed exchange rates for comparable units. Last years figures has
Slide 9: Sandvik Rock Processing Solutions
SHARE OF REVENUES 2021 8% SANDVIK ROCK PROCESSING SOLUTIONS SOLID BROAD-BASED DEMAND − Strong organic order intake growth of 18% driven by equipment − Equipment order intake grew year on year by 51%, aftermarket flattish − Record high revenues despite supply chain challenges ADJ. EBITA AND EBIT DEVE
Slide 10: Sandvik Manufacturing and Machining Solutions
SHARE OF REVENUES 2021 37% SANDVIK MANUFACTURING AND MACHINING SOLUTIONS POSITIVE MOMENTUM − Continued positive momentum in general engineering and significant step up in aerospace yielded an organic order intake growth of 11% yoy − Solid contribution from acquisitions, with total order intake growt
Slide 11: Sandvik Materials Technology
SHARE OF REVENUES 2021 13% SANDVIK MATERIALS TECHNOLOGY SOLID BROAD-BASED MARKET DEMAND − Solid demand across all segments and regions with strong organic order intake growth of 40% − Continued positive trend in the oil & gas segment *At fixed exchange rates for comparable units. MARGIN RESILIENCE D
Slide 12: Cecilia Felton, Acting CFO & Head of Group Control
CECILIA FELTON ACTING CFO & HEAD OF GROUP CONTROL 12
Slide 13: Financial Summary Q4
FINANCIAL SUMMARY Q4 ¹ At fixed exchange rates for comparable units ² Quarterly calculation i.e. annualized revenues and one quarter average NWC ³ Free operating cash flow before acquisitions and disposals, financial items and taxes 13 SANDVIK: Interim Report on the fourth quarter 2021 Comments and
Slide 14: Bridge Analysis
GROUP LEVERAGE: BRIDGE ANALYSIS +14% SANDVIK GROUP Includes metal price effects within Sandvik Materials Technology of SEK 300 M in alloy surcharges on revenues and SEK +129 M (+129) in metal price effect on EBITA. Structure incl M&A transaction costs 14 SANDVIK: Interim Report on the fourth quarter
Slide 15: Savings Q4
SAVINGS Q4 SEK M SANDVIK SANDVIK SANDVIK SANDVIK GROUP ROCK MANUFACTURING MATERIALS Annualized MINING & ROCK COMMON SOLUTIONS PROCESSING & MACHINING TECHOLOGY run-rate SOLUTIONS SOLUTIONS Total savings New program announced in ~90% delivered Q1 & Q2 2020 15 5 145 55 10 230 SEK 1.1 Bn* Total permanen
Slide 16: Net Financials
NET FINANCIALS • Interest net down year on year due to high yield debt maturities replaced by debt with lower yield cost • Other financial income and cost includes a capital gain of SEK 173 million related to divestment 16 SANDVIK: Interim Report on the fourth quarter 2021 Comments and numbers refer
Slide 17: Tax Rate
TAX RATE IN LINE WITH 22-24% GUIDANCE FOR 2021 For continuing operations. 17 SANDVIK: Interim Report on the fourth 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 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 Q4 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 SMM SMR SMT SRP 18 SANDVIK: Interim Report on the fourth quarter 2021 C
Slide 19: 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 *Adjusted for cash items related to certain acquisition costs ** Including investments and disposals of rental equipment and tangible and intangible assets ***Free operating cash flow before ac
Slide 20: Net Debt
NET DEBT SEK M GEARING 35 000 0,80 30 000 0,70 25 000 0,60 • Net gearing at 0.35 20 000 0,50 15 000 10 000 0,40 • Financial net debt SEK 16.8 billion 0,30 5 000 0,20 0 0,10 • Net debt SEK 26.9 billion -5 000 -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 Q4 2017
Slide 21: Outcome Q4
OUTCOME Q4 *Metal price effect in the previous year had an in-quarter impact of SEK 129 million. Year on year impact was rounded SEK 1 million. 21 SANDVIK: Interim Report on the fourth quarter 2021 Comments and numbers refer to continuing operations unless otherwise stated.
Slide 22: Dividend Proposal
DIVIDEND PROPOSAL SEK Payout ratio % 11.24 10.39 11.12 2017 2018 2019 2020 2021 8.04 8.61 2.00* 44 41 - 75 42 2.00 2.11 6.49 6.14 4.54 11.12 2.00 4.25 4.50 4.50* 3.50 4.25 3.50 4.75* 2.753.50 4.25 4.50 X.XX* 2017 2018 2019 2020 2021 Adjusted EPS Extra dividend Ordinary dividend SANDVIK: Interim Repo
Slide 23: Guidance Q1 22 and FY2022
GUIDANCE Q122 AND FY2022 CAPEX (CASH) Estimated to <SEK 5.0 B for 2022 CURRENCY Given currency rates at end of December 2021 the effect on operating profit from transaction and EFFECTS translation would be SEK +400 M for Q1 2022 METAL PRICE Given currency rates, stock levels and metal prices at the
Slide 24: A Successful Year for Sandvik
A SUCCESSFUL YEAR FOR SANDVIK SHIFT TO GROWTH WITH STRONG MARGINS • Strong performance across the group with organic and total order intake growth of 24% and 30% respectively • Organic revenues improved in the year by 12%, and total growth was 18% • Improved earnings and solid EBITA margin level of
Slide 25: Q&A
Q&A 25 SANDVIK: Interim Report on the third quarter 2021
Slide 26: Back-up Slides
BACK-UP SLIDES SANDVIK P|
Slide 27: End-Customer Segments
MINING ENERGY (41%) (8%) GENERAL CONSTRUCTION ENGINEERING (9%) (23%) AUTOMOTIVE AEROSPACE (8%) (4%) END-CUSTOMER SEGMENTS (% of group revenues 2021. Other e.g. consumer goods, electronics, chemical and miscellaneous accounted for 7%.) 27 SANDVIK: Interim Report on the fourth quarter 2021 Comments an
Slide 28: Profitability Development
GROUP LEVERAGE: PROFITABILITY DEVELOPMENT +14% ADJUSTED EBIT MARGIN 28 SANDVIK: Interim Report on the fourth quarter 2021 Comments and numbers refer to continuing operations unless otherwise stated.
Slide 29: Bridge Analysis
GROUP LEVERAGE: BRIDGE ANALYSIS +14% SANDVIK GROUP Includes metal price effects within Sandvik Materials Technology of SEK 300 M in alloy surcharges on revenues and SEK +129 M (+129) in metal price effect on EBIT. Structure incl M&A transaction costs 29 SANDVIK: Interim Report on the fourth quarter
Slide 30: * Difference Group common: Organic: -166 MSEK Currency: 5 MSEK M&A costs: -43 MSEK
* Difference Group common: Organic: -166 MSEK Currency: 5 MSEK M&A costs: -43 MSEK Includes metal price effects within Sandvik Materials Technology of SEK +300 M in alloy surcharges on revenues and SEK +129 M (+129) in metal price effect on EBIT.
Slide 31: Includes metal price effects within Sandvik Materials Technology of SEK 300 M in alloy
Includes metal price effects within Sandvik Materials Technology of SEK 300 M in alloy surcharges on revenues and SEK +129 M (+129) in metal price effect on EBITA.
Slide 32: Loan and Duration Profile
LOAN AND DURATION PROFILE AMOUNT MSEK AVERAGE DURATION LONG TERM US Private Placement - - 68% Fin institutions, EIB, NIB - - Swedish MTN 1,000 2 years European MTN 14,126 6 years Bank loans 5,545 2 years Share swap - - SHORT TERM US Private Placement - - Commercial paper 8,137 4 months 32% Swedish M
Slide 33: Loan Maturity Profile
LOAN MATURITY PROFILE AVERAGE MSEK INTEREST RATE: ~4% 33 SANDVIK: Interim Report on the fourth quarter 2021 Comments and numbers refer to continuing operations unless otherwise stated.
Slide 34: 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