Slide 1: Interim Report Second Quarter 2022
INTERIM REPORT SECOND QUARTER 2022
Slide 2: Summary Q2
SUMMARY Q2 25% Revenue growth at DELIVERING ON THE SHIFT, 25% IN REVENUE GROWTH AT FIXED FX fixed exchange rates • Overall solid underlying demand across the business and strong contribution from acquisitions • Total order intake growth was 32%, and at fixed exchange rates 22%, of which organic 4% •
Slide 3: Staying Ahead Through Innovation
STAYING AHEAD THROUGH INNOVATION 3D INSPECTION SOLUTION COMBINING ZEROTOUCH® AND METROLOG X4® • New solution combining DWFritz ZeroTouch® machine with Metrologic software Metrolog X4® • 3D measurement of mechanical parts integrated on the shop floor to validate and adjust the manufacturing process.
Slide 4: Staying Ahead Through Innovation
STAYING AHEAD THROUGH INNOVATION ELECTRIC CONCEPT RIG • Demonstrating the sustainable future of surface drilling at Vei og Anlegg 2022 exhibition • CommandoTM DC300Ri top hammer drill rig used as platform for the concept drill rig • CO2 free drilling, meeting customers needs with possibility to oper
Slide 5: YoY Market Development
YOY MARKET DEVELOPMENT Mining Engineering Automotive Energy Infrastructure Aerospace 47% 21% 8% 3% 10% 4% Percent of revenue 2021 Percent of Q2 Y/Y* revenue 2021 order intake EUROPE 31% +2% NORTH AMERICA 21% +21% ASIA 20% -4% AFRICA AND MIDDLE EAST 11% +32% AUSTRALIA 11% +12% SOUTH AMERICA 6% +20% (
Slide 6: Order Intake and Revenues
ORDER INTAKE AND REVENUES MSEK 35,000 110,000 ORDER INTAKE 30,000 100,000 REPORTED (SEK M) 25,000 90,000 28,740 20,000 80,000 15,000 70,000 10,000 60,000 REVENUES 5,000 10,000 REPORTED (SEK M) 0 Q1 Q2 2018* Q3 Q4 Q1 Q2 2019* Q3 Q4 Q1 Q2 2020* Q3 Q4 Q1 Q2 2021* Q3 Q4 Q1 Q2 2022 0 27,050 ORDER INTAKE,
Slide 7: Growth in Order Intake and Revenues
GROWTH IN ORDER INTAKE AND REVENUES ORDER INTAKE REVENUES MSEK MSEK 50% 120,000 50% 120,000 40% 110,000 40% 110,000 30% 100,000 30% 100,000 20% 20% 90,000 90,000 10% 10% 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 Q1 Q2 Q3 Q4 Q1 Q2 Q1 Q2 Q3 Q4 Q1 Q
Slide 8: Adjusted EBITA Development
Adj. EBITA margin: ADJUSTED EBITA DEVELOPMENT 19.0% MSEK 6,000 +23% 24% • Adj. EBITA SEK 5,141 M (4,192) • Margin 19.0% (20.8) 5,000 20% 4,000 16% • Leverage: 3,000 12% • Weak leverage due to cost inflation not yet fully mitigated by pricing, higher share of air freight, and impact 2,000 8% from Rus
Slide 9: Mining and Rock Solutions
42%SHARE OF MINING AND REVENUES 2021 ORDER INTAKE AND REVENUES ROCK SOLUTIONS MSEK 20,000 150% 16,000 120% ORDER INTAKE 12,000 90% • Solid demand with particularly strong development in aftermarket 8,000 60% • Total order intake growth was 46% and at fixed exchange rates, 4,000 30% growth was 35%, o
Slide 10: Rock Processing Solutions
8% SHARE OF ROCK PROCESSING REVENUES 2021 ORDER INTAKE AND REVENUES SOLUTIONS MSEK 3,000 150% ORDER INTAKE 2,000 100% • Continued solid demand driven by aftermarket 1,000 50% • Total order intake grew by 17% and at fixed exchange rates, by 7%, of which organic was 0% 0 0% • Excluding Russia, organic
Slide 11: Manufacturing and Machining Solutions
37% SHARE OF MANUFACTURING AND REVENUES 2021 ORDER INTAKE AND REVENUES MACHINING SOLUTIONS MSEK 12,000 120% ORDER INTAKE 8,000 80% • Solid underlying demand. Excluding Russia, 5% growth in orders for the core cutting tool brands driven by aerospace and general 4,000 40% engineering 0 0% • Total orde
Slide 12: Materials Technology
DISCONTINUED OPERATIONS 13% SHARE OF MATERIALS REVENUES 2021 ORDER INTAKE AND REVENUES TECHNOLOGY MSEK 8,000 160% 120% ORDER INTAKE 6,000 • Continued solid demand across all segments, with record high 4,000 80% order intake levels driven mainly by Energy and Industrial Heating 2,000 40% • Total orde
Slide 13: Cecilia Felton, CFO
CECILIA FELTON CFO 13
Slide 14: Financial Summary
FINANCIAL SUMMARY MSEK Q2 2021* Q2 2022 GROWTH OI REV. ORGANIC 4% 6% ORDER INTAKE 21,816 28,740 STRUCTURE 18% 19% REVENUES 20,136 27,050 ORG + STR 22% 25% ADJUSTED EBITA 4,192 5,141 CURRENCY 9% 9% ADJUSTED EBITA MARGIN 20.8% 19.0% TOTAL 32% 34% NET FINANCIAL ITEMS -128 18 TAX RATE EXCLUDING IAC 24.4
Slide 15: Bridge Analysis
BRIDGE ANALYSIS GROUP LEVERAGE: N/A Q2 Q2 MSEK 2021* ORGANIC CURRENCY** STRUCTURE 2022 REVENUES 20,136 1,079 2,054 3,781 27,050 ADJUSTED EBITA 4,192 -349 779 519 5,141 ADJUSTED EBITA MARGIN 20.8% N/A 19.0% ACCRETION/DILUTION -2.7% 2.0% -1.1% * Best estimates excluding SMT ** Currency effect net of s
Slide 16: Net Financials
NET FINANCIALS MSEK Q2 2021 Q2 2022 INTEREST NET -68 -154 • Interest net increase due to increased borrowed volumes PENSION -26 -18 • Increase in FX and other class effects mainly BANK CHARGES -11 -20 due to temporarily positive effects from hedge OTHER FINANCIAL INCOME AND COST -5 10 of electricity
Slide 17: Tax Rate
TAX RATE Q2 2021* Q2 2022 REPORTED 26.0% 29.2% EXCLUDING IAC 24.4% 23.5% For continuing operations. IN LINE WITH 22-24% GUIDANCE FOR 2022 * Best estimates excluding SMT 17 SANDVIK: Interim report on the second quarter 2022 Comments and numbers refer to continuing operations unless otherwise stated.
Slide 18: Net Working Capital
NET WORKING CAPITAL NET WORKING CAPITAL MSEK 35,000 40% 30,000 35% 25,000 30% 20,000 • Ramp up for growth 25% 15,000 20% 10,000 5,000 • Seasonality 0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 2021 2022 • Logistics issues NWC % OF REVENUES PER BA, % OF REVENUES • Supply
Slide 19: Free Operating Cash Flow
FREE OPERATING CASH FLOW MSEK 7,000 140% 6,000 120% MSEK Q2 2021 Q2 2022 EBITDA * 5,218 5,265 5,000 100% NON-CASH ITEMS -465 -597 4,000 80% NWC CHANGE -968 -3,633 3,000 60% CAPEX ** -840 -1,083 40% 2,000 FOCF *** 2,945 -49 1,000 20% 0 0% * Adjusted for cash items related to certain acquisition costs
Slide 20: Net Debt
NET DEBT GROUP TOTAL MSEK RATIO 50,000 1,5 1,2 40,000 • Financial net debt / R12 EBITDA 1.23 0,9 30,000 0,6 20,000 0,3 • Financial net debt SEK 32.8 billion 10,000 0,0 0 -0,3 • Net debt SEK 39.4 billion -10,000 -0,6 -20,000 -0,9 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2018 2019 2020 20
Slide 21: Outcome Versus Guidance
OUTCOME VERSUS GUIDANCE Outcome Guidance Underlying currency yoy effect (MSEK) 918 600 whereof SMT 139 Metal price effect in quarter (MSEK) 649 700 Capex (BSEK) -0.9 Interest net (BSEK) -0.2 Normalized tax rate (%) 23.5% 21 SANDVIK: Interim report on the second quarter 2022 Comments and numbers refe
Slide 22: Guidance Q3 and FY 2022
GUIDANCE Q3 AND FY 2022 CAPEX (CASH) Estimated to approx. SEK 4.0 B for 2022. (Alleima to provide guidance on their CMD) CURRENCY Given currency rates at end of June 2022 the effect on operating profit from transaction and EFFECTS translation would be SEK +1,050 M for Q3 2022 (Alleima to provide gui
Slide 23: Conclusion
CONCLUSION CONTINUED SOLID DEMAND AND STRONG CONTRIBUTION FROM ACQUISITIONS • 6th consecutive quarter with strong growth driven by solid underlying demand and acquisitions • High interest and good development for Sandvik’s automation and digital solutions as well as battery-electric vehicles • Growt
Slide 24: Q&A
Q&A a) > Z iS A
Slide 25: Back-up Slides
BACK-UP SLIDES SANDVIK P|
Slide 26: Business area bridge by revenue and adjusted EBITA
Q2 STRUCTURE/ Q2 MSEK 2021 ORGANIC CURRENCY METALS SMT* 2022 MINING AND ROCK SOLUTIONS REVENUES 9,090 835 1,112 2,621 13,658 ADJUSTED EBITA 1,876 -74 460 366 2,628 ADJUSTED EBITA MARGIN 20.6% 19.2% ROCK PROCESSING SOLUTIONS REVENUES 1,964 -7 212 78 2,247 ADJUSTED EBITA 337 -85 87 20 359 ADJUSTED EBI
Slide 27: Loan and Duration Profile
LOAN AND DURATION PROFILE AMOUNT DURATION LONG TERM Swedish MTN -1,000 1.5 Years 77% European MTN Bank Loans -25,135 -6,223 4.8 Years 2.1 Years SHORT TERM Commercial Paper -8,545 0.3 Years 23% Swedish MTN 0 0.0 Years European MTN 0 0.0 Years Bank Loans -957 0.0 Years TOTAL -41,860 3.3 Years Committe
Slide 28: Loan Maturity Profile
LOAN MATURITY PROFILE AVERAGE MSEK INTEREST RATE: ~2% 12 000 10 000 8 000 6 000 4 000 2 000 0 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 28 SANDVIK: Interim report on the second quarter 2022 Comments and numbers refer to continuing operations unless otherwise stated.
Slide 29: 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