Slide 1: Interim Report Second Quarter 2023
INTERIM REPORT SECOND QUARTER 2023
Slide 2: Summary Q2
SUMMARY Q2 16% Revenue growth at fixed exchange rates 9TH CONSECUTIVE QUARTER WITH DOUBLE-DIGIT REVENUE GROWTH • Continued solid momentum with strong growth in order intake and revenue • Total order intake growth was 10%, and at fixed exchange rates 7%, of which organic 3% • Total revenue growth was
Slide 3: Staying Ahead Through Innovation
STAYING AHEAD THROUGH INNOVATION NEW BATTERY IMPROVING BEV RUNTIME BY 36 PERCENT • Higher-capacity battery for BEV loaders and trucks with 36 percent more energy on equivalent battery size • With the same high safety lithium iron phosphate (LFP) chemistry ideal for underground mining, the new batter
Slide 4: YoY Market Development
YOY MARKET DEVELOPMENT Mining Engineering Automotive Energy Infrastructure Aerospace Other Percent of revenue 2022 48% 22% 7% 2% 11% 3% 7% Percent of Q2 Y/Y revenue 2022 order intake EUROPE 27% +3% NORTH AMERICA 25% -2% ASIA 19% -6% AFRICA AND MIDDLE EAST 12% -5% AUSTRALIA 12% +32% SOUTH AMERICA 7%
Slide 5: Order Intake and Revenues
ORDER INTAKE AND REVENUES MSEK 35,000 130,000 ORDER INTAKE 120,000 REPORTED (SEK M) 30,000 110,000 25,000 100,000 90,000 31,660 20,000 80,000 15,000 70,000 60,000 10,000 REVENUES 5,000 REPORTED (SEK M) 10,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 0 32,243 2019* 2020* 2021* 2022* 20
Slide 6: Growth in Order Intake and Revenues
GROWTH IN ORDER INTAKE AND REVENUES ORDER INTAKE REVENUES MSEK MSEK 50% 140,000 50% 140,000 130,000 130,000 40% 40% 120,000 120,000 30% 30% 110,000 110,000 20% 100,000 20% 100,000 10% 90,000 10% 90,000 80,000 80,000 0% 0% -10% -10% -20% -20% -30% -30% -40% -40% Q1 Q2 Q3 Q4* Q1 Q2 Q3 Q4* Q1 Q2 Q3 Q4*
Slide 7: Adjusted EBITA Development
Adj. EBITA margin: ADJUSTED EBITA DEVELOPMENT 20.5% MSEK 28% 7,000 24% • Adj. EBITA SEK 6,599 M (5,141) 6,000 20% • Margin 20.5% (19.0) 5,000 16% • Leverage: 4,000 12% • Positive impact from volume and 3,000 price 8% • Structure and currency had a 2,000 negative impact of 10 and 30 basis 1,000 4% po
Slide 8: Mining and Rock Solutions
51%SHARE OF REVENUES 2022 MINING AND ROCK ORDER INTAKE AND REVENUES MSEK SOLUTIONS 20,000 150% ORDER INTAKE 16,000 100% • Second highest order intake ever with growth in equipment and 12,000 aftermarket. Particularly strong growth noted in Rotary Drilling 8,000 50% • Total order intake growth was 10
Slide 9: Rock Processing Solutions
8% SHARE OF REVENUES 2022 ROCK PROCESSING ORDER INTAKE AND REVENUES MSEK SOLUTIONS 4,000 150% 3,000 ORDER INTAKE 100% • Solid demand in mining, while soft demand continued within 2,000 infrastructure. Strong contribution from acquisitions 50% 1,000 • Total order intake grew by 17% and at fixed excha
Slide 10: Manufacturing and Machining Solutions
41% SHARE OF REVENUES 2022 MANUFACTURING AND ORDER INTAKE AND REVENUES MSEK MACHINING SOLUTIONS 16,000 150% ORDER INTAKE 12,000 100% • Double-digit order intake growth in aerospace and good support from 8,000 automotive. Lower volumes in general engineering and energy 50% compensated by price 4,000
Slide 11: Cecilia Felton, CFO
CECILIA FELTON CFO 11
Slide 12: Financial Summary
FINANCIAL SUMMARY MSEK Q2 2022* Q2 2023 GROWTH OI REV. ORGANIC 3% 12% ORDER INTAKE 28,740 31,660 STRUCTURE 4% 4% REVENUES 27,050 32,243 ORG + STR 7% 16% ADJUSTED EBITA 5,141 6,599 CURRENCY 3% 4% ADJUSTED EBITA MARGIN 19.0% 20.5% TOTAL 10% 19% NET FINANCIAL ITEMS 18 -704 TAX RATE EXCLUDING IAC 23.5%
Slide 13: Bridge Analysis
GROUP LEVERAGE: BRIDGE ANALYSIS Q2 Q2 MSEK 2022 ORGANIC CURRENCY* STRUCTURE 2023 REVENUES 27,050 2,781 1,453 960 32,243 ADJUSTED EBITA 5,141 1,059 232 167 6,599 ADJUSTED EBITA MARGIN 19.0% 38% 20.5% ACCRETION/DILUTION 1.8% -0.3% -0.1% * Currency effect net of structure component 13 SANDVIK: Interim
Slide 14: Restructuring Program 2022
RESTRUCTURING PROGRAM 2022 ONE STEP AHEAD Group SMM SMR SRP ONE-OFF COSTS activities 1,705 MSEK, IN 2022 AND 2023 (1,710) 1,240 80 305 80 ESTIMATED RUN-RATE SAVINGS ~ 785 (~ 610) MSEK, MAJORITY ACHIEVED BY END 2024 540 100 140 5 INDICATED FTE REDUCTION ~ 870 (~ 580) (Numbers within brackets were com
Slide 15: Net Financials
NET FINANCIALS SEK Q2 2022 Q2 2023 Interest net increase due to increased borrowed INTEREST NET -154 -411 volumes and higher interest rates PENSION -18 -25 BANK CHARGES -20 -18 OTHER FINANCIAL INCOME AND COST 10 9 LEASES IFRS16 -37 -52 FX AND OTHER ASSET CLASSES 236 -208 TOTAL 18 -704 * Best estimat
Slide 16: Tax Rate
TAX RATE Q2 2022 Q2 2023 REPORTED 29.2% 24.9% EXCLUDING IAC 23.5% 24.4% NORMALIZED 23.5% 24.4% For continuing operations IN LINE WITH 23-25% GUIDANCE FOR 2023 * Best estimates excluding SMT 16 SANDVIK: Interim report on the second quarter 2023 Comments and numbers refer to continuing operations unle
Slide 17: Net Working Capital
NET WORKING CAPITAL NET WORKING CAPITAL PER BA, % OF REVENUES MSEK 40,000 40% 40% 35,000 35% 35% 30,000 30% 30% 25,000 20,000 25% 25% 15,000 20% 20% 10,000 15% 5,000 0 0% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2020 2021 202
Slide 18: Free Operating Cash Flow
FREE OPERATING CASH FLOW MSEK 7,000 140% 6,000 120% MSEK Q2 2022 Q2 2023 EBITDA * 5,265 6,783 5,000 100% NON-CASH ITEMS -597 442 4,000 80% NWC CHANGE -3,633 -1,210 3,000 60% CAPEX ** -1,083 -1,436 2,000 40% FOCF *** -49 4,578 1,000 20% 0 0% * Adjusted for cash items related to certain acquisition co
Slide 19: Net Debt
NET DEBT GROUP TOTAL MSEK RATIO 3,0 60,000 • Financial net debt / R12 EBITDA 1.50 50,000 2,5 2,0 40,000 • Financial net debt SEK 42.6 billion 30,000 1,5 20,000 1,0 • Net debt SEK 50.4 billion 10,000 0,5 0 0,0 -10,000 -0,5 -20,000 -1,0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2019 2020 2
Slide 20: Outcome Versus Guidance
OUTCOME VERSUS GUIDANCE Outcome Q2 Guidance Q2 Underlying currency yoy effect (MSEK) 232 200 Outcome Q2 Guidance FY Capex (BSEK) 1.2 4.5 Interest net (BSEK) -0.4 -1.7 Normalized tax rate (%) 24.4% 23-25% 20 SANDVIK: Interim report on the second quarter 2023 Comments and numbers refer to continuing o
Slide 21: Guidance Q3 and FY 2023
GUIDANCE Q3 AND FY 2023 CAPEX (CASH) Estimated to approximately SEK 4.5 B for 2023. CURRENCY Given currency rates at end of June 2023 the effect on operating profit from transaction and EFFECTS translation would be SEK -100 M for Q3 2023 INTEREST NET Underlying interest net is estimated to approxima
Slide 22: Conclusion
CONCLUSION CONTINUED SOLID BUSINESS MOMENTUM • Continued solid business momentum with double-digit revenue growth • Softness in infrastructure and general engineering offset by positive development in other key segments • Margin within our target range and solid leverage through good cost control an
Slide 23: Q&A
O&A (a) > Z Ss a
Slide 24: Back-up Slides
BACK-UP SLIDES SANDVIK P|
Slide 25: Q2 Segment Bridge Analysis (MSEK)
Q2 Q2 MSEK 2022 ORGANIC CURRENCY STRUCTURE 2023 MINING AND ROCK SOLUTIONS REVENUES 13,658 2,496 558 43 16,755 ADJUSTED EBITA 2,628 1,041 -53 5 3,621 ADJUSTED EBITA MARGIN 19.2% 21.6% ROCK PROCESSING SOLUTIONS REVENUES 2,247 -34 106 554 2,872 ADJUSTED EBITA 359 -88 39 83 394 ADJUSTED EBITA MARGIN 16.
Slide 26: Loan and Duration Profile
LOAN AND DURATION PROFILE AMOUNT DURATION LONG TERM Bonds MTN 28,229 4.7 years 75% Bank Loans 8,425 2.6 years SHORT TERM Commercial Paper 5,852 0.2 years 4,826 0.6 years 25% Bonds MTN Bank Loans 1,521 0.0 years TOTAL 48,853 3.3 years Committed Credit facilities SEK 17,004 M 26 SANDVIK: Interim repor
Slide 27: Loan Maturity Profile
LOAN MATURITY PROFILE AVERAGE MSEK INTEREST RATE: ~3.9% 12 000 10 000 8 000 6 000 4 000 2 000 - 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 27 SANDVIK: Interim report on the second quarter 2023 Comments and numbers refer to continuing operations unless otherwise stated.
Slide 28: 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