Slide 1: Interim Report Third Quarter 2022
INTERIM REPORT THIRD QUARTER 2022
Slide 2: Summary Q3
SUMMARY Q3 22% Revenue growth at SOLID BUSINESS PERFORMANCE AND STRATEGY EXECUTION fixed exchange rates • Strong broad-based demand, supply chain and pricing well managed, and important progress in shift to growth • Total order intake growth was 28%, and at fixed exchange rates 16%, of which organic
Slide 3: Staying Ahead Through Innovation
STAYING AHEAD THROUGH INNOVATION AUTOMINE® CONCEPT UG DRILL, THE SECOND TECHNOLOGY DEMONSTRATOR FOR THE FUTURE AUTONOMOUS MINING VISION • Battery electric, fully autonomous, twin-boom development drill rig capable of drilling without human interaction • Increased safety • Complete drilling autonomy
Slide 4: YoY Market Development
YOY MARKET DEVELOPMENT Mining Engineering Automotive Energy Infrastructure Aerospace 47% 21% 8% 3% 10% 4% Percent of revenue 2021 Percent of Q3 Y/Y* revenue 2021 order intake EUROPE 31% +13% NORTH AMERICA 21% +27% ASIA 20% +14% AFRICA AND MIDDLE EAST 11% -13% AUSTRALIA 11% +12% SOUTH AMERICA 6% +36%
Slide 5: Order Intake and Revenues
ORDER INTAKE AND REVENUES MSEK 35,000 120,000 ORDER INTAKE 30,000 110,000 REPORTED (SEK M) 29,231 100,000 25,000 90,000 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 Q3 0 29,267 OR
Slide 6: Growth in Order Intake and Revenues
GROWTH IN ORDER INTAKE AND REVENUES ORDER INTAKE REVENUES MSEK MSEK 50% 130,000 50% 120,000 40% 120,000 40% 110,000 30% 110,000 30% 100,000 20% 100,000 20% 90,000 10% 90,000 10% 80,000 0% 80,000 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 Q3 Q1 Q2
Slide 7: Adjusted EBITA Development
Adj. EBITA margin: ADJUSTED EBITA DEVELOPMENT 20.1% MSEK +27% 6,000 24% • Adj. EBITA SEK 5,889 M (4,620) • Margin 20.1% (21.3) 5,000 20% 4,000 16% • Leverage: 3,000 12% • Higher volumes and currency tailwind was offset by structure and one-time adjustments 2,000 8% • Diluting impact of -140 bps from
Slide 8: Mining and Rock Solutions
48%SHARE OF MINING AND ROCK REVENUES 2021 ORDER INTAKE AND REVENUES SOLUTIONS MSEK 20,000 150% ORDER INTAKE 16,000 100% 12,000 • Strong aftermarket demand and positive momentum for surface with a sizeable surface order secured and record order intake level on 8,000 50% Rotary drilling 4,000 • Total
Slide 9: Rock Processing Solutions
9% SHARE OF ROCK PROCESSING REVENUES 2021 ORDER INTAKE AND REVENUES SOLUTIONS MSEK 3,000 150% ORDER INTAKE 2,000 100% • Order intake on solid levels, positive momentum in aftermarket while weaker in equipment 1,000 50% • Total order intake grew by 5% due to currency tailwinds, while at 0% fixed exch
Slide 10: Manufacturing and Machining Solutions
43% SHARE OF MANUFACTURING AND REVENUES 2021 ORDER INTAKE AND REVENUES MACHINING SOLUTIONS MSEK 12,000 150% ORDER INTAKE 8,000 100% • Strong demand in all regions and segments with the highest growth in energy and aerospace. Double-digit growth in automotive and 4,000 50% general engineering 0 0% •
Slide 11: Congratulations Alleima!
CONGRATULATIONS ALLEIMA! 11 SANDVIK: Interim Report on the third quarter 2015
Slide 12: Cecilia Felton, CFO
CECILIA FELTON CFO 12
Slide 13: Financial Summary
FINANCIAL SUMMARY MSEK Q3 2021* Q3 2022 GROWTH OI REV. ORGANIC 8% 13% ORDER INTAKE 22,870 29,231 STRUCTURE 7% 7% REVENUES 21,725 29,267 ORG + STR 16% 22% ADJUSTED EBITA 4,620 5,889 CURRENCY 12% 12% ADJUSTED EBITA MARGIN 21.3% 20.1% TOTAL 28% 35% NET FINANCIAL ITEMS -39 -183 TAX RATE EXCLUDING IAC 13
Slide 14: Bridge Analysis
BRIDGE ANALYSIS GROUP LEVERAGE: Q3 Q3 MSEK 2021* ORGANIC CURRENCY** STRUCTURE 2022 REVENUES 21,725 2,828 3,121 1,593 29,267 ADJUSTED EBITA 4,620 3 1,042 224 5,889 ADJUSTED EBITA MARGIN 21.3% 0% 20.1% ACCRETION/DILUTION -2.4% 1.8% -0.5% * Best estimates excluding SMT ** Currency effect net of structu
Slide 15: Net Financials
NET FINANCIALS SEK Q3 2021 Q3 2022 • Interest net increase due to increased borrowed INTEREST NET -57 -231 volumes PENSION -26 -12 • Increase in FX and other class effects mainly due BANK CHARGES -11 -6 to temporarily positive effects from hedge of electricity prices and hedge in foreign currencies
Slide 16: Tax Rate
TAX RATE Q3 2021* Q3 2022 • The higher IAC tax rate was due to a REPORTED 13.0% 29.6% positive effect from FX hedging related EXCLUDING IAC 13.7% 26.7% to acquisitions NORMALIZED 22.4% 23.9% For continuing operations IN LINE WITH 22-24% GUIDANCE FOR 2022 * Best estimates excluding SMT 16 SANDVIK: In
Slide 17: Net Working Capital
NET WORKING CAPITAL NET WORKING CAPITAL MSEK 35,000 40% 30,000 35% 25,000 30% 20,000 15,000 25% • Growth momentum 20% 10,000 5,000 • Logistics and supply chain issues 0 0% • Exchange rates and acquisition impact Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2018 2019 2020 2021 2022 NWC %
Slide 18: Free Operating Cash Flow
FREE OPERATING CASH FLOW MSEK 7,000 140% 6,000 120% MSEK Q3 2021 Q3 2022 EBITDA * 5,436 6,314 5,000 100% NON-CASH ITEMS -289 -300 4,000 80% NWC CHANGE -718 -1,263 3,000 60% CAPEX ** -672 -1,117 40% 2,000 FOCF *** 3,758 3,634 1,000 20% 0 0% * Adjusted for cash items related to certain acquisition cos
Slide 19: Net Debt
NET DEBT GROUP TOTAL MSEK RATIO 50,000 1.5 • Financial net debt / R12 EBITDA 1.30 40,000 1.2 0.9 30,000 • Financial net debt SEK 35.6 billion 0.6 20,000 0.3 10,000 • Net debt SEK 41.9 billion 0.0 0 -0.3 -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 Q3 2018 2019 2020
Slide 20: Outcome Versus Guidance
OUTCOME VERSUS GUIDANCE Outcome Guidance Underlying currency yoy effect (MSEK) 1 042 1 050 Capex (BSEK) -1.1 Interest net (BSEK) -0.2 Normalized tax rate (%) 23.9% 20 SANDVIK: Interim report on the third quarter 2022 Comments and numbers refer to continuing operations unless otherwise stated.
Slide 21: Guidance Q4 and FY 2022
GUIDANCE Q4 AND FY 2022 CAPEX (CASH) Estimated to approx. SEK 4.0 B for 2022. CURRENCY Given currency rates at end of September 2022 the effect on operating profit from transaction and EFFECTS translation would be SEK +1,400 M for Q4 2022 INTEREST NET Underlying interest net is estimated to approxim
Slide 22: Conclusion
CONCLUSION OPTIMISM DESPITE UNCERTAINTIES AHEAD • Important industry segments with inherent and solid growth fundamentals • Progress on pricing to mitigate inflationary pressure • Supply chain issues expected to ease, and release of working capital CONTINUED SOLID STRATEGY EXECUTION • Further steps
Slide 23: Q&A
Q&A a) > Z iS A
Slide 24: Back-up Slides
BACK-UP SLIDES SANDVIK P|
Slide 25: Q3 Segment Bridge Analysis (MSEK)
Q3 STRUCTURE/ Q3 MSEK 2021 ORGANIC CURRENCY METALS SMT* 2022 MINING AND ROCK SOLUTIONS REVENUES 11,114 1,743 1,904 240 15,001 ADJUSTED EBITA 2,365 -11 635 57 3,046 ADJUSTED EBITA MARGIN 21.3% 20.3% ROCK PROCESSING SOLUTIONS REVENUES 1,790 194 265 91 2,340 ADJUSTED EBITA 302 -68 132 10 376 ADJUSTED E
Slide 26: Loan and Duration Profile
LOAN AND DURATION PROFILE AMOUNT DURATION LONG TERM Swedish MTN -1,000 1.3 Years 78% European MTN Bank Loans -29,695 -8,549 5.1 Years 3.2 Years SHORT TERM Commercial Paper -10,403 0.2 Years 22% Swedish MTN 0 0.0 Years European MTN -767 0.8 Years Bank Loans -79 0.0 Years TOTAL -50,493 3.6 Years Commi
Slide 27: Loan Maturity Profile
LOAN MATURITY PROFILE AVERAGE MSEK INTEREST RATE: ~2.7% 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 27 SANDVIK: Interim report on the third quarter 2022 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