Sandvik Ab · OMXSTO:SAND
Sandvik Ab — Q2 2003 Earnings Presentation
20 slides from Sandvik Ab's earnings presentation, Aug 5, 2003
Slide 1: Interim report April - June 2003
Interim report April - June 2003 5 August, 2003 5 August, 2003 Page 1
Slide 2: Highlights Q2, 2003
Highlights Q2, 2003 ! Order intake SEK 12,410 M, +2%* " Organic growth continued " Weaker in Europe and continued slow in Nafta but strong in Asia, South America and Africa " General Engineering and Automotive weak but Mining strong and some signs of improvement in the Semiconductor area ! Invoiced
Slide 3: Highlights Q2, 2003
Highlights Q2, 2003 ! Operating profit SEK 1,403 M, 11% of sales (SEK 1,614 M last year) " Negative currency effect, SEK 180 M " Improved underlying margin for Tooling " Stable margin for Mining and Construction " Materials Technology underperforming ! Cash flow from operations, SEK 1,119 M " SEK 30
Slide 4: Order intake by Quarter
Order intake by Quarter Q2: SEK 12,410 M, -4% +2% for comparable units excl. currency effects SEK M 14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 1999 2000 2001 2002 2003 5 August, 2003 Page 4
Slide 5: Order Intake by Market region
Order Intake by Market region %-change* vs LY 2002 2003 Quarter SEK M % Q1 Q2 Q3 Q4 Q1 Q2 EU 4 950 40 -9 -8 -8 +3 +4 -3 Other Europe 989 8 -19 -4 -10 +47 +24 +3 EUROPE TOTAL 5 939 48 -10 -7 -9 +8 +7 -2 NAFTA 2 465 20 -7 -7 +1 +18** -8 -6 South America 505 4 +/-0 -19 +8 +8 -12 +11 Africa/Middle East
Slide 6: Order Intake by Business area
Order Intake by Business area 2002 2003 Quarter, % vs LY Q1 Q2 Q3 Q4 Q1 Q2 Svk Tooling * -11 -5 +1 +3 +3 +1 Svk Mining and Construction * +7 -12 +9 +19 +4 +5 Svk Materials Technology * -10 -8 -2 +21 +9 +2 GROUP * -6 -9 +2 +12 +6 +2 Currency +2 -2 -6 -8 -7 -8 Structure +6 10 +12 +9 +7 +3 GROUP TOTAL
Slide 7: Operating Profit
Operating Profit SEK M, Quarter Q2: SEK 1,403 M, -13% vs LY % of sales 2 000 16 1 500 12 1 000 8 500 4 0 0 1999 2000 2001 2002 2003 EBIT % of sales 5 August, 2003 Page 7
Slide 8: Sandvik Tooling
Sandvik Tooling SEK M, Quarter Invoicing SEK M, Quarter Operating Profit 5 000 20 000 1 000 25% 4 000 16 000 800 20% • 3 000 12 000 600 15% 2 000 8 000 400 10% 1 000 4 000 200 5% 0 0 0 0% 99 00 01 02 03 99 00 01 02 03 Rolling 12 months EBIT % ! Q2/03 EBIT: SEK 705 M, 16% ! Q2/03 Invoicing: +1% for c
Slide 9: Tooling Highlights
Tooling Highlights ! Flat demand but improved underlying margin " Negative currency effect offset by internal improvements " Cemented carbide products stronger than high speed steel ! Integration of Valenite proceeds as planned " Weaker demand from US automotive industry " Production units closed "
Slide 10: Sandvik Mining and Construction
Sandvik Mining and Construction SEK M, Quarter Invoicing SEK M, Quarter Operating Profit 5 000 20 000 500 15% 4 000 16 000 400 12% 3 000 12 000 300 9% 2 000 8 000 200 6% 1 000 4 000 100 3% 0 0 0 0% 99 00 01 02 03 99 00 01 02 03 Rolling 12 months EBIT % ! Q2/03 Invoicing: +9% for comparable ! Q2/03 E
Slide 11: Mining and Construction Highlights
Mining and Construction Highlights ! Stable demand and earnings " Negative currency effect offset by internal improvement " Mining industry strong, construction weak " Strong demand for Tools and Service ! Bluefield production closed in April ! Successful introduction of new products " Low profile e
Slide 12: New President of Sandvik Mining and Construction
New President of Sandvik Mining and Construction ! Lars Josefsson - President of Sandvik Mining and Construction - effective from 1 January 2004 " born 1953, M.Sc.Eng. " Alstom: Country President ALSTOM Sweden and President ALSTOM Power AB 5 August, 2003 Page 12
Slide 13: Sandvik Materials Technology
Sandvik Materials Technology SEK M, Quarter Invoicing SEK M, Quarter Operating Profit 5 000 20 000 600 12% 500 10% 4 000 16 000 400 8% 3 000 12 000 300 6% 2 000 8 000 200 4% 1 000 4 000 100 2% 0 0 0 0% 99 00 01 02 03 99 00 01 02 03 Rolling 12 months EBIT % ! Q2/03 Invoicing: +5% for comparable units
Slide 14: Materials Technology Highlights
Materials Technology Highlights ! Continued weak margin as previously indicated " Negative currency effect " Low capacity utilization in certain product areas " Increased order intake and improved product mix in the order book ! Improvement activities proceeds " Product assortment " Manufacturing st
Slide 15: Sales and Earnings by Business area
Sales and Earnings by Business area April - June Invoicing EBIT Q2 2003 _Q2 2003 Q2 2002 April-June SEK M Change* % SEK M % SEK M % Tooling 4 522 +1 705 16** 757 17 Mining and Construction 3 671 +9 364 10 398 11 Materials Technology 3 150 +5 191 6 332 10 Seco Tools 969 -1 162 17 187 18 Other 18 / -1
Slide 16: Net Profit, Earnings Per Share
Net Profit, Earnings Per Share Net Profit EPS, SEK SEK M, Quarter rolling 12 months 1 200 24 1 000 20 800 16 600 12 400 8 200 4 0 0 2000 2001 2002 2003 Net Profit EPS, rolling 12 months 5 August, 2003 Page 16
Slide 17: Financial Position
Financial Position June 30 Dec. 31 2003 2002 • Cash flow from operations, SEK M * 2,547 7,190 • CAPEX * 1,433 2,357 • Net debt, SEK M 14,454 13,110 • Net debt, ratio 0.7 0.5 • Equity/Assets 43 48 • ROCE,% 15.0 15.4 • ROE,% 15.5 14.9 • Share buyback, no. of shares ‘000 8,697 8,697 * first six months
Slide 18: Short-term market outlook August 2003
Short-term market outlook 5 August 2003 The same as previous quarter: “Uncertainty regarding economic development remains. However, no significant change in the demand situation is expected for Sandvik in the near future.” 5 August, 2003 Page 18
Slide 19: Cautionary Statement
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 effected by other factors like for example, the effect of economic conditions, exchange-
Slide 20: www.sandvik.com
www.sandvik.com 5 August, 2003 Page 20