Slide 1: Interim Report Second Quarter 2021
INTERIM REPORT SECOND QUARTER 2021
Slide 2: Summary Q2
SUMMARY Q2 STRONG EXECUTION IN A HIGH-DEMAND ENVIRONMENT • Order intake growth of 43% year on year • Strong underlying demand in both the mining and construction segments with order intake well above pre-covid levels • Robust demand in automotive and general engineering with positive signs of improv
Slide 3: Stepping up the digital shift
STEPPING UP THE DIGITAL SHIFT SANDVIK MANUFACTURING SOLUTIONS ON TRACK TO MEET THE TARGET With DWFritz Automation, Sandvik +1.3* will take a leading position in high- BSEK speed, non-contact, in-line Target: metrology and precision 4 BSEK automation 700-800 MSEK A leading company with an end-to- end
Slide 4: Staying ahead through innovation: SAM by Sandvik
STAYING AHEAD THROUGH INNOVATION SAM BY SANDVIK • SAM by Sandvik, launched in April, is our rock processing digital service • Designed specifically for team members responsible for running daily operations • It will give customers direct access to: − data, analytics − communications − e-commerce − i
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 Q2 Y/Y Demand trend revenue FY20 order intake Sequential Q/Q EUROPE 35% +63% NORTH AMERICA 22% +49% ASIA 20% +34% AFRICA/MIDDLE EAST 9%
Slide 6: Order intake and revenues
ORDER INTAKE AND REVENUES ORDER INTAKE REVENUES REPORTED P/V REPORTED P/V 25,857 43% 23,460 22% SEK M SEK M 30,000 100,000 30,000 100,000 25,000 25,000 80,000 80,000 20,000 20,000 60,000 60,000 15,000 15,000 40,000 40,000 10,000 10,000 20,000 20,000 5,000 5,000 0 0 0 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 7: EBIT development
GROUP LEVERAGE: EBIT DEVELOPMENT +50% +58% SEK M • Margin at 19.1% (14.0) • 18.8% (14.4) excluding metal price 6,000 24% EBIT ADJUSTED 4,469 effects 5,000 20% • Currency had a margin diluting impact 4,000 16% • Permanent savings from the 2020 SEK M program had a positive 3,000 12% SEK 190 M impact 2
Slide 8: Sandvik Mining and Rock Solutions
SHARE OF REVENUES 2020 39% SANDVIK MINING AND SEK M Q2 2020 Q2 2021 CHANGE ROCK SOLUTIONS ORDER INTAKE 8,400 10,399 31%* REVENUES 7,899 9,090 21%* STRONG UNDERLYING DEMAND ADJ. OP. PROFIT 1,601 1,827 14% − Organic order intake growth of 31% year on year and two % OF REVENUES 20.3% 20.1% consecutive
Slide 9: Sandvik Rock Processing Solutions
SHARE OF REVENUES 2020 7% SANDVIK ROCK PROCESSING SEK M Q2 2020 Q2 2021 CHANGE SOLUTIONS ORDER INTAKE 1,373 2,147 61%* REVENUES 1,590 1,964 29%* CONTINUED MOMENTUM ADJ. OP. PROFIT 232 334 44% − Strong year on year organic order intake growth in both mining and % OF REVENUES 14.6% 17.0% construction,
Slide 10: Sandvik Manufacturing and Machining Solutions
SHARE OF REVENUES 2020 38% SANDVIK MANUFACTURING AND MACHINING SOLUTIONS SEK M Q2 2020 Q2 2021 CHANGE ORDER INTAKE 6,821 9,270 44%* GOOD UNDERLYING DEMAND REVENUES 7,247 9,083 33%* − Organic order intake grew 44% year on year ADJ. OP. PROFIT 927 2,097 126% − Demand in automotive and general engineer
Slide 11: Sandvik Materials Technology
SHARE OF REVENUES 2020 16% SANDVIK MATERIALS SEK M Q2 2020 Q2 2021 CHANGE TECHNOLOGY ORDER INTAKE REVENUES 2,377 3,495 4,041 3,324 74%* -4%* ADJ. OP. PROFIT 248 394 59% STRONG ORDER INTAKE GROWTH % OF REVENUES 7.1% 11.8% − Strong absolute order intake level indicating a healthy underlying demand acr
Slide 12: Tomas Eliasson, CFO
TOMAS ELIASSON CFO 12
Slide 13: Financial summary Q2
GROWTH, % Q2 2021 ORDER FINANCIAL SUMMARY Q2 REVENUES INTAKE ORGANIC 43% 22% CURRENCY -6% -6% STRUCTURE 1% 1% SEK M Q2 2020 Q2 2021 CHANGE % TOTAL 36% 16% ORDER INTAKE¹ 18,971 25,857 43% REVENUES¹ 20,230 23,460 22% ADJUSTED OPERATING PROFIT 2,837 4,469 58% % OF REVENUES 14.0% 19.1% NET FINANCIAL ITE
Slide 14: Bridge analysis
GROUP LEVERAGE: BRIDGE ANALYSIS +50% SANDVIK GROUP SEK M METAL PRICE STRUCTURE Q2 2021 Q2 2020 ORGANIC CURRENCY EFFECT SMT REVENUES 20,230 4,399 -1,499 134 196 23,460 ADJUSTED EBIT 2,837 2,188 -659 125 -22 4,469 ADJUSTED EBIT 14.0% +50% 19.1% MARGIN MARGIN ACCRETION / DILUTION 6.4% -1.6% 0.5% -0.2%
Slide 15: Savings
SAVINGS SEK M SANDVIK SANDVIK SANDVIK SANDVIK GROUP ROCK MANUFACTURING MATERIALS Annualized MINING & ROCK COMMON SOLUTIONS PROCESSING & MACHINING TECHOLOGY run-rate SOLUTIONS SOLUTIONS Total savings Program from Q3 2019 - - - - - - 1,700* New program announced in Q1 & Q2 2020 - 5 105 75 5 190 ~760**
Slide 16: Net financials
NET FINANCIALS SEK M Q2 2020 Q2 2021 • Interest net down year on year due to INTEREST NET -90 -88 reduced debt portfolio and higher interest of PENSION -32 -31 deposits BANK CHARGES -10 -11 • Temporary revaluations of currency hedges and positive effects from electricity and OTHER FINANCIAL INCOME &
Slide 17: Tax rate
TAX RATE Q2 2020 Q2 2021 REPORTED 28.1% 24.5% EXCLUDING IAC 24.3% 22.8% NORMALIZED 24.3% 22.8% IN LINE WITH 22-24% GUIDANCE FOR 2021 17 SANDVIK: Interim Report on the second 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 Q2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2017 201
Slide 19: Free operating cash flow
FREE OPERATING CASH FLOW SEK M 8 000 22 000 20 000 SEK M Q2 2020 Q2 2021 6 000 18 000 EBITDA + NON-CASH 3,514 5,162 NWC CHANGE -89 -1,152 4 000 16 000 CAPEX* -894 -921 14 000 FOFC** 2,531 3,088 2 000 12 000 *Including investments and disposals in rental, tangible and intangible assets **Cash flow be
Slide 20: Net debt
NET DEBT SEK M GEARING 35 000 0,80 30 000 0,70 25 000 0,60 • Net gearing at 0.06 20 000 0,50 15 000 0,40 10 000 • Financial net cash SEK 4.9 billion 0,30 5 000 0,20 0 -5 000 0,10 • Net debt SEK 3.9 billion -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 2017 2018 201
Slide 21: Outcome Q2
OUTCOME Q2 Q2 2021 Outcome Guidance Underlying currency yoy effect (SEK M): -632 -350 Total currency yoy effect (SEK M): -659 - Metal price effect in quarter (SEK M): +50 +50 Capex (SEK B): -0.9 Interest net (SEK B): -0.1 Tax rate ex. IAC (%): 22.8% 21 SANDVIK: Interim Report on the second quarter 2
Slide 22: Guidance Q3 21 and FY2021
GUIDANCE Q321 AND FY2021 CAPEX (CASH) Estimated to <SEK 4.0 B for 2021 CURRENCY Given currency rates at end of June 2021 the effect on operating profit from transaction and EFFECTS translation would be SEK +/- 0 M for Q3 2021 METAL PRICE Given currency rates, stock levels and metal prices at the end
Slide 23: Continuing the shift to growth
CONTINUING THE SHIFT TO GROWTH OVERALL SOLID DEMAND • Strong and broad-based demand for our products and services with order intake levels in mining and construction above pre-covid levels and robust demand in our short-cyclical businesses • Global supply chain challenges managed well in the quarter
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 +50% 2,763 -575 -575 -659 125 4,469 125 -22 2,763 -659 -22 2,837 ADJ. EBIT ORGANIC SAVINGS CURRENCY METAL PRICE STRUCTURE ADJ. EBIT GROWTH EFFECT SMT ADJUSTED EBIT MARGIN 14.0% 19.1% 26 SANDVIK: Interim Report on the second quarter 2021 Comments and numbers
Slide 27: Bridge analysis
BRIDGE ANALYSIS STRUCTURE/META SEK M Q2 2020 ORGANIC CURRENCY Q2 2021 LS SMT* MINING AND ROCK SOLUTIONS REVENUES 7,899 1,678 -487 9,090 ADJUSTED EBIT 1,601 474 -236 -12 1,827 ADJUSTED EBIT MARGIN 20.3% 20.1% ROCK PROCESSING SOLUTIONS REVENUES 1,590 458 -140 56 1,964 ADJUSTED EBIT 232 198 -101 5 334
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 8,935 6 years Bank loans 38 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 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 29 SANDVIK: Interim Report on the second 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