Slide 1: Interim report on third quarter 2013
Sandvik Interim report on third quarter 2013 Stabilized demand 1 Sandvik third quarter 2013
Slide 2: Quarterly highlights
Sandvik Interim report on third quarter 2013 Quarterly highlights • Stabilized demand • EBIT 2,531 MSEK, 12.4% • Signs of improvement for Sandvik Machining • Currency effects -250 MSEK Solutions • ROCE 12 month rolling 14.7% • Stable demand for Sandvik Mining, Sandvik Materials Technology and Sandvi
Slide 3: Invoicing by market
Sandvik Interim report on third quarter 2013 Invoicing by market 37% +3% 19% 19% -16% -9% 10% 7% 8% -13% -3% -27% Share of Group total Invoicing (p/v) Q3 2013, change compared with Q3 2012 3 Sandvik third quarter 2013
Slide 4: Customer segments
Sandvik Interim report on third quarter 2013 Consumer related Other Aerospace Mining Customer Energy segments Invoicing growth vs. Q3 2012 > 10% Automotive 0 to 10% -10 to 0% < -10% Construction Demand trend compared to preceding quarter Pie chart representing share of invoicing 2012 Engineering 4 S
Slide 5: Order intake
Sandvik 30 000 150% Interim report on third quarter 2013 25 000 125% Order intake 20 000 100% Order intake 20,221 MSEK 15 000 75% • Major mining systems orders 1.2 bn SEK Change p/v -2% 10 000 50% 5 000 25% 0 0% -5 000 -25% -10 000 -50% Order intake Organic order intake change y-o-y 5 Sandvik third
Slide 6: Invoicing
Sandvik Interim report on third quarter 2013 30 000 120% 25 000 100% Invoicing 20 000 80% Invoicing 20,416 MSEK 15 000 60% Change p/v -9% 10 000 40% 5 000 20% 0 0% -5 000 -20% -10 000 Invoicing Organic invoicing change y-o-y -40% 6 Sandvik third quarter 2013
Slide 7: EBIT and ROCE
Sandvik Interim report on third quarter 2013 6 000 40% 5 000 30% EBIT and ROCE 4 000 Q3 2013 3 000 20% 2 000 • EBIT 2,531 MSEK 10% 1 000 • EBIT margin 12.4% • ROCE reported rolling 12 months 14.7% 0 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 -1 000 -10% -2 000 EBIT EBIT
Slide 8: Cash flow
Sandvik Operating cash flow Interim report on third quarter 2013 MSEK 5 000 Capex / Depreciation 350% 4 500 Cash flow 4 000 300% Cash flow from operating 3 500 250% activities +3,229* MSEK 3 000 200% 2 500 150% 2 000 1 500 100% 1 000 50% 500 *Adjusted due to tax payment of about 5,800 MSEK related t
Slide 9: Net Working Capital
Sandvik Interim report on third quarter 2013 Net Working Capital Net working capital MSEK Net working capital / Invoiced sales 35 000 45% 40% 30 000 35% 25 000 30% 20 000 25% Target 15 000 20% 15% 10 000 10% 5 000 5% 0 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 9 Sandvik third quarter
Slide 10: Bridge analysis
Sandvik Interim report on third quarter 2013 Bridge analysis Price/ Structure, MSEK Q3 2012 volume/ Currency Q3 2013 one-offs* Productivity Sandvik Group Invoiced sales 23,424 -2,020 -990 - 20,416 EBIT 3,325 -550 -250 +10 2,531 EBIT margin 14.2% -27% 12.4% * Includes metal price effects 10 Sandvik t
Slide 11: Sandvik Mining
Sandvik Interim report on third quarter 2013 Sandvik Mining • Order intake stable at low level • Investments by mining companies remained low • Customer production levels largely maintained • EBIT 858 MSEK (1,506), 12.3% • Low sales volumes and production levels • Currency effects of -140 MSEK • ROC
Slide 12: Sandvik Machining Solutions
Sandvik Interim report on third quarter 2013 Sandvik Machining Solutions • Signs of improved demand • EBIT 1,454 MSEK (1,343) • EBIT margin 21.0% (19.6) • Currency effects -80 MSEK Slightly • ROCE reported rolling 12 months 27.1% improved • Net working capital 27% (29) of invoicing demand • GC4325 n
Slide 13: Sandvik Materials Technology, Construction and Venture
Sandvik Interim report on third quarter 2013 • Sandvik Materials Technology • Adjusted EBIT excluding metal price effects 265 MSEK, 8.2% • Continued high activity in oil and gas • Inventory reduction • Sandvik Construction • EBIT 88 MSEK, 4.3% • Weaker demand Mixed demand • Sandvik Venture • EBIT 19
Slide 14: Summary Q3 2013
Sandvik Interim report on third quarter 2013 Summary Q3 2013 • Stabilized demand • Maintained profitability level • Significant product introductions 14 Sandvik third quarter 2013
Slide 15: Prof. Olle Wijk
Sandvik Interim report on third quarter 2013 Prof. Olle Wijk Head of Sandvik Group R&D 15 Sandvik third quarter 2013
Slide 16: Innovation is the base for success
Sandvik Interim report on third quarter 2013 Innovation is the base for success New Sales Ratio ~30% Today Ambition 16 Sandvik third quarter 2013
Slide 17: Innovation is the base for success
Sandvik Interim report on third quarter 2013 Innovation is the base for success New Sales Ratio ~45% ~30% Today Ambition 17 Sandvik third quarter 2013
Slide 18: R&D initiatives to support growth
Sandvik Interim report on third quarter 2013 R&D initiatives to support growth Drivers Actions 1. Demand for expert knowledge 1. Formation of Group Centers of Excellence 2. Enhance customer cooperation 2. R&D centers in emerging markets 3. Career paths within R&D 3. Career paths for R&D experts 4. E
Slide 19: Pantera – latest line of drill rigs
Pantera – latest line of drill rigs Breakthrough among mining products • One platform - multiple rigs • Established on SICA platform, enabling lower costs and shorter time-to-market • New ways of working built on • In parallel rather the sequential • Simulation rather than trial-and-error • Predefin
Slide 20: High forces and temperatures
Sandvik Interim report on third quarter 2013 High forces and temperatures 20 Sandvik third quarter 2013
Slide 21: Steel turning
Sandvik Interim report on third quarter 2013 Steel turning Technology shift • New coating enables new technology shift in metal cutting • Forms a new base for future development and products to be released coming years GC4325, 19 min Competitor A, 15 min Competitor B, 16 min 21 Sandvik third quarter
Slide 22: Additive manufacturing at a glance
Additive manufacturing at a glance Manufacturing by design 22 Sandvik third quarter 2013
Slide 23: Sandvik named a Thomson Reuters Top 100 Global Innovator
“Sandvik has earned the distinct honor of being one of the world's most innovative companies, a Thomson Reuters 2013 Top 100 Global Innovator” 23 Sandvik third quarter 2013
Slide 24: Q&A
Sandvik Interim report on third quarter 2013 Q&A 24 Sandvik third quarter 2013
Slide 25: Back-up slides
Sandvik Interim report on third quarter 2013 Back-up slides 25 Sandvik third quarter 2013
Slide 26: Quarterly financials
Sandvik Interim report on third quarter 2013 Quarterly financials vs MSEK Q3 2012 Q3 2013 Q3 2012 Order intake 21,795 20,221 -2%* Invoicing 23,424 20,416 -9%* EBIT 3,325 2,531 -24% EBIT margin 14.2% 12.4% - Operating cash flow +3,979 -2 571 Neg. Cash flow after investing activities +3,173 -3 603 100
Slide 27: Sandvik Mining
Sandvik 10 000 MSEK 50% Interim report on third quarter 2013 8 000 40% Sandvik Mining 6 000 30% Q3 2013 • Order intake 7,033 MSEK • Invoicing 6,961 MSEK 4 000 20% • EBIT 858 MSEK • ROCE 29.0% 2 000 10% 0 0% 2007 2008 2009 2010 2011 2012 2013 -2 000 -10% Invoicing EBIT margin ROCE 12 months 27 Sandvi
Slide 28: Sandvik Machining Solutions
10 000 MSEK 50% Sandvik Interim report on third quarter 2013 8 000 40% Sandvik Machining Solutions 6 000 30% Q3 2013 • Order intake 6,882 MSEK 4 000 20% • Invoicing 6,922 MSEK • EBIT 1,454 MSEK 2 000 10% • ROCE 27.1% 0 0% 2007 2008 2009 2010 2011 2012 2013 -2 000 -10% Invoicing EBIT margin ROCE 12 m
Slide 29: Sandvik Materials Technology
Sandvik MSEK Interim report on third quarter 2013 6 000 60% 5 000 50% Sandvik Materials 4 000 40% Technology 3 000 30% Q3 2013 2 000 20% • Order intake 3,152 MSEK • Invoicing 3,224 MSEK 1 000 10% • EBIT 175 MSEK 0 0% • Adjusted for metal price effects, 265 MSEK, 2007 2008 2009 2010 2011 2012 2013 8.
Slide 30: Sandvik Construction
Sandvik MSEK Interim report on third quarter 2013 4 000 40% Sandvik 3 000 30% Construction 2 000 20% Q3 2013 • Order intake 1,892 MSEK 1 000 10% • Invoicing 2,055 MSEK • EBIT 88 MSEK 0 0% • ROCE 7.3% 2007 2008 2009 2010 2011 2012 2013 -1 000 -10% -2 000 -20% Invoicing EBIT margin ROCE 12 months 30 S
Slide 31: Sandvik Venture
Sandvik MSEK Interim report on third quarter 2013 4 000 40% 3 000 30% Sandvik Venture 2 000 20% Q3 2013 1 000 10% • Order intake 1,263 MSEK 0 0% • Invoicing 1,252 MSEK 2007 2008 2009 2010 2011 2012 2013 • EBIT 199 MSEK -1 000 -10% • ROCE 8.5% -2 000 -20% -3 000 -30% -4 000 -40% -5 000 -50% Invoicing
Slide 32: Income statement
Sandvik Interim report on third quarter 2013 Income statement MSEK Q3 2012 Q2 2013 Q3 2013 Invoiced sales 23,424 23,043 20,416 Cost of goods sold -14,993 -15,285 -13,319 Gross profit 8,431 36% 7,758 34% 7,097 35% Admin, sales and R&D costs -4,920 -5,183 -4,600 Other operating income and expenses -18
Slide 33: Bridge analysis
Sandvik Interim report on third quarter 2013 Bridge analysis Price/volume/ Structure, MSEK Q3 2012 Currency Q3 2013 productivity one-offs Sandvik Mining Invoiced sales 9,485 -1,920 -600 - 6,961 EBIT 1,506 -500 -140 - 858 EBIT margin 16% -26% 12% Sandvik Machining Solutions Invoiced sales 6,845 +250
Slide 34: Bridge analysis
Sandvik Interim report on third quarter 2013 Bridge analysis Price/volume/ Structure, MSEK Q3 2012 Currency Q3 2013 productivity one-offs Sandvik Construction Invoiced sales 2,256 -110 -90 - 2,055 EBIT 230 -100 -40 - 88 EBIT margin 10% -97% 4% Sandvik Venture Invoiced sales 1,378 -110 -10 - 1,252 EB
Slide 35: Balance sheet
Sandvik Interim report on third quarter 2013 Balance sheet vs MSEK Q3 2012 Q2 2013 Q3 2013 Q3 2012 Intangible fixed assets 11 340 11,673 11,484 +1% Tangible fixed assets 25 398 25,057 24,779 -2% Financial fixed assets 6 598 7,613 7,866 +19% Inventories 26 723 25,031 24,036 -10% Receivables 22 977 22
Slide 36: Loan and duration profile
Sandvik Interim report on third quarter 2013 Loan and duration profile Average Long term 76% Amount MSEK duration US Private Placement 5,411 6 years Fin institutions, EIB, NIB 2,633 8 years Swedish MTN 6,685 5 years European MTN 5,537 12 years Bank loans 282 2 years Share swap 1,778 2 years Short te
Slide 37: Loan maturity profile
Sandvik Interim report on third quarter 2013 Loan maturity profile 4 000 Loan Cash position 3 000 2 000 1 000 0 -1 000 -2 000 -3 000 -4 000 -5 000 -6 000 37 Sandvik third quarter 2013
Slide 38: Financial key figures
Sandvik Interim report on third quarter 2013 Financial key figures MSEK Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Cash flow from operations +3,979 +4,520 +2,207 +2,640 -2,571 Capex 949 1,429 898 942 1042 ROCE, 12 months 19.5% 19.8% 17.6% 16.0% 14.7% ROE, 12 months 25.7% 25.3% 21.8% 19.2% 17.6% Net deb
Slide 39: Guidance
Sandvik Interim report on third quarter 2013 Guidance Metal price effects Given currency rates, stock levels and metal prices at end of September, a negative EBIT effect of about -75 MSEK is expected for Q4 2013. Net financial items Currency effects Net financial items is estimated Given currency ra
Slide 40: Cautionary statement
Sandvik Interim report on third quarter 2013 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 affected by other factors for example, the