Slide 1: Interim report on second quarter 2013: Tentative market
Sandvik Interim report on second quarter 2013 Tentative market 1 Sandvik second quarter 2013
Slide 2: Quarterly highlights
Sandvik Interim report on second quarter 2013 Quarterly highlights • Stable but tentative market • EBIT 2,961 MSEK, 12.8% • Unchanged market conditions for Sandvik • Adjusted EBIT 3,161 MSEK, 13.7% Machining Solutions, Sandvik Materials • Nonrecurring charges of -200 MSEK Technology and Sandvik Vent
Slide 3: Invoicing by market
Sandvik Interim report on second quarter 2013 Invoicing by market 37% -1% 19% 18% -5% -6% 10% 8% 8% +4% -8% -27% Share of Group total Invoicing (p/v) Q2 2013, change compared with Q2 2012 3 Sandvik second quarter 2013
Slide 4: Customer segments
Sandvik Interim report on second quarter 2013 Consumer related Other Aerospace Mining Customer Energy segments Invoicing growth vs. Q2 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
Slide 5: Order intake
Sandvik 30 000 150% Interim report on second quarter 2013 25 000 125% Order intake 20 000 100% Order intake 20,719 MSEK 15 000 75% • Adjustment of nuclear order backlog of 1.1 bn. SEK 10 000 50% Change p/v -16% 5 000 25% 0 0% -5 000 -25% -10 000 -50% Order intake Organic order intake change y-o-y 5
Slide 6: Invoicing
Sandvik Interim report on second quarter 2013 30 000 120% 25 000 100% Invoicing 20 000 80% Invoicing 23,043 MSEK 15 000 60% Change p/v -6% 10 000 40% 5 000 20% 0 0% -5 000 -20% -10 000 Invoicing Organic invoicing change y-o-y -40% 6 Sandvik second quarter 2013
Slide 7: EBIT and ROCE
Sandvik Interim report on second quarter 2013 6 000 40% 5 000 30% EBIT and ROCE 4 000 Q2 2013 3 000 20% Reported 2 000 • EBIT 2,961 MSEK 10% 1 000 • EBIT margin 12.8% • ROCE reported rolling 12 months 16.0% 0 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Adjusted for nonre
Slide 8: Cash flow
Sandvik Operating cash flow Interim report on second quarter 2013 MSEK 5 000 Capex / Depreciation 350% 4 500 Cash flow 4 000 300% Cash flow from operating 3 500 250% activities +2,640 MSEK 3 000 200% 2 500 150% 2 000 1 500 100% 1 000 50% 500 0 0% 2007 2008 2009 2010 2011 2012 2013 8 Sandvik second q
Slide 9: Net Working Capital
Sandvik Interim report on second 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 second quart
Slide 10: Bridge analysis
Sandvik Interim report on second quarter 2013 Bridge analysis Price/ Structure, MSEK Q2 2012 volume/ Currency Q2 2013 one-offs* Productivity Sandvik Group Invoiced sales 25,939 -1,350 -1,320 -210 23,043 EBIT 4,212 -750 -300 -190 2,961 EBIT margin 16.2% -56% 12.8% * Includes metal price effects 10 Sa
Slide 11: Sandvik Mining
Sandvik Interim report on second quarter 2013 Sandvik Mining • Weaker demand • Weaker demand for equipment and systems • Stable aftermarket demand • EBIT 1,153 MSEK (1,800) • EBIT margin 14.2% (18.3) • Currency effects of -150 MSEK Challenges • ROCE reported rolling 12 months 32.4% short term • Net
Slide 12: Sandvik Machining Solutions
Sandvik Interim report on second quarter 2013 Sandvik Machining Solutions • Stable market conditions • Slightly improved demand in Europe • EBIT 1,525 MSEK (1,855) • EBIT margin 20.9% (23.9) • Currency effects -150 MSEK • Production rates in line with sales Stable market conditions • ROCE reported r
Slide 13: Sandvik Materials Technology, Construction and Venture
Sandvik Interim report on second quarter 2013 • Sandvik Materials Technology • Adjusted EBIT excluding metal price effects 496 MSEK, 12.5% • Continued profitability improvement • Adjustment of nuclear order backlog and capacity • Sandvik Construction • EBIT 141 MSEK, 6.1% • Tentative business condit
Slide 14: Strategy Execution
Sandvik Interim report on second quarter 2013 Strategy Execution 14 Sandvik second quarter 2013
Slide 15: Customers in focus
Sandvik Interim report on second quarter 2013 Customers in focus • Customer centric organizational structure • Five market oriented Business Areas • Full ownership of core business, e.g. Seco Tools • Divestment of non-core business, e.g. MedTech • Mid-market initiatives – enablers for growth • Sandv
Slide 16: Sustainable profitability
Sandvik Interim report on second quarter 2013 Sustainable profitability • Two restructuring programs successfully launched • First program implemented 2012 • Second program to be fully implemented by end of 2013 • Targeting cost savings of 2 bn. SEK in total • Turnaround cases showing significant pr
Slide 17: Leverage scale and talent base
Sandvik Interim report on second quarter 2013 Leverage scale and talent base • Enhanced coordination and utilization of Group resources • Implemented R&D Board - Increasingly coordinating Group initiatives in the organization • Global indirect purchasing • IT infrastructure outsourcing • Global Fina
Slide 18: Focus going forward
Sandvik Interim report on second quarter 2013 Focus going forward Cost & Supply chain Structure efficiency & Growth 18 Sandvik second quarter 2013
Slide 19: Summary Q2 2013
Sandvik Interim report on second quarter 2013 Summary Q2 2013 • Stable demand • Sequentially improved earnings • Continued strong operating cash flow 19 Sandvik second quarter 2013
Slide 20: Q&A
Sandvik Interim report on second quarter 2013 Q&A 20 Sandvik second quarter 2013
Slide 21: Back-up slides
Sandvik Interim report on second quarter 2013 Back-up slides 21 Sandvik second quarter 2013
Slide 22: Quarterly financials
Sandvik Interim report on second quarter 2013 Quarterly financials vs MSEK Q2 2012 Q2 2013 Q2 2012 Order intake 26,190 20,719 -16%* Invoicing 25,939 23,043 -6%* EBIT 4,212 2,961 -30% EBIT margin 16.2% 12.8% - Operating cash flow +2,293 +2,640 +15% Cash flow after investing activities +1,100 +1,508 +
Slide 23: Sandvik Mining
Sandvik 10 000 MSEK 50% Interim report on second quarter 2013 8 000 40% Sandvik Mining 6 000 30% Q2 2013 • Order intake 6,652 MSEK • Invoicing 8,136 MSEK 4 000 20% • EBIT 1,153 MSEK • ROCE 32.4% 2 000 10% 0 0% 2007 2008 2009 2010 2011 2012 2013 -2 000 -10% Invoicing EBIT margin ROCE 12 months 23 San
Slide 24: Sandvik Machining Solutions
Sandvik 10 000 MSEK 50% Interim report on second quarter 2013 8 000 40% Sandvik Machining Solutions 6 000 30% Q2 2013 • Order intake 7,332 MSEK 4 000 20% • Invoicing 7,281 MSEK • EBIT 1,525 MSEK 2 000 10% • ROCE 26.0% 0 0% 2007 2008 2009 2010 2011 2012 2013 -2 000 -10% Invoicing EBIT margin ROCE 12
Slide 25: Sandvik Materials Technology
Sandvik MSEK Interim report on second quarter 2013 6 000 60% 5 000 50% Sandvik Materials 4 000 40% Technology 3 000 30% Q2 2013 2 000 20% • Order intake 2,820 MSEK • Invoicing 3,967 MSEK 1 000 10% • EBIT 409 MSEK 0 0% • Adjusted for metal price effects, 496 MSEK, 2007 2008 2009 2010 2011 2012 2013 1
Slide 26: Sandvik Construction
Sandvik MSEK Interim report on second quarter 2013 4 000 40% Sandvik 3 000 30% Construction 2 000 20% Q2 2013 • Order intake 2,384 MSEK 1 000 10% • Invoicing 2,326 MSEK • EBIT 141 MSEK 0 0% • ROCE 9.6% 2007 2008 2009 2010 2011 2012 2013 -1 000 -10% -2 000 -20% Invoicing EBIT margin ROCE 12 months 26
Slide 27: Sandvik Venture
Sandvik MSEK Interim report on second quarter 2013 4 000 40% 3 000 30% Sandvik Venture 2 000 20% Q2 2013 1 000 10% • Order intake 1,532 MSEK 0 0% • Invoicing 1,332 MSEK 2007 2008 2009 2010 2011 2012 2013 • EBIT -18 MSEK -1 000 -10% • ROCE 9.2% -2 000 -20% -3 000 -30% -4 000 -40% -5 000 -50% Invoicin
Slide 28: Income statement
Sandvik Interim report on second quarter 2013 Income statement MSEK Q2 2012 Q1 2013 Q2 2013 Invoiced sales 25,939 22,098 23,043 Cost of goods sold -16,466 -14,528 -15,285 Gross profit 9,473 37% 7,570 34% 7,758 34% Admin, sales and R&D costs -5,236 -4,872 -5,183 Other operating income and expenses -2
Slide 29: Bridge analysis
Sandvik Interim report on second quarter 2013 Bridge analysis Price/volume/ Structure, MSEK Q2 2012 Currency Q2 2013 productivity one-offs Sandvik Mining Invoiced sales 9,826 -1,050 -640 0 8,136 EBIT 1,800 -500 -150 0 1,153 EBIT margin 18% -48% 14% Sandvik Machining Solutions Invoiced sales 7,759 -4
Slide 30: Bridge analysis
Sandvik Interim report on second quarter 2013 Bridge analysis Price/volume/ Structure, MSEK Q2 2012 Currency Q2 2013 productivity one-offs Sandvik Construction Invoiced sales 2,592 -110 -150 0 2,326 EBIT 222 -60 -20 0 141 EBIT margin 9% -55% 6% Sandvik Venture Invoiced sales 1,556 -150 -70 0 1,332 E
Slide 31: Balance sheet
Sandvik Interim report on second quarter 2013 Balance sheet vs MSEK Q2 2012 Q1 2013 Q2 2013 Q2 2012 Intangible fixed assets 11,750 11,213 11,673 -1% Tangible fixed assets 25,834 25,174 25,057 -3% Financial fixed assets 6,436 5,807 7,613 +18% Inventories 27,869 24,680 25,031 -10% Receivables 24,429 2
Slide 32: Loan and duration profile
Sandvik Interim report on second quarter 2013 Loan Long term and duration 83% profile Amount MSEK Average duration US Private Placement 5,657 6 years Fin institutions, EIB, NIB 3,161 7 years Swedish MTN 6,685 5 years European MTN 5,607 12 years Bank loans 2,040 1 years Share swap 1,778 2 years Short
Slide 33: Loan maturity profile
Sandvik Interim report on second quarter 2013 Loan maturity profile 8 000 Loan Cash position 6 000 4 000 2 000 0 -2 000 -4 000 -6 000 -8 000 33 Sandvik second quarter 2013
Slide 34: Financial key figures
Sandvik Interim report on second quarter 2013 Financial key figures MSEK Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Cash flow from operations 2,293 3,979 4,520 2,207 2,640 Capex 1,114 949 1,429 898 942 ROCE, 12 months 17.2% 19.5% 19.8% 17.6% 16.0% ROE, 12 months 21.5% 25.7% 25.3% 21.8% 19.2% Net debt/e
Slide 35: Guidance
Sandvik Interim report on second quarter 2013 Guidance Metal price effects Given currency rates, stock levels and metal prices at end of June, a negative EBIT effect of about -125 MSEK is expected for Q3 2013. Net financial items Currency effects Net financial items is estimated Given currency rates
Slide 36: Cautionary statement
Sandvik Interim report on second 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