Sandvik Materials Technology intends to divest the welding and stainless wire businesses
In order to further consolidate the product portfolio and improve its long term performance, Sandvik Materials Technology intends to divest parts of its wire operations.
- To be divested: welding and stainless wire. These businesses are subject to intense competition and Sandvik Materials Technology does not hold a No. 1-2 market position. In 2016 the wire businesses, which are to be divested, generated total annual revenues of about 700 million SEK.
- To remain in Sandvik Materials Technology: Kanthal wire for industrial heating etc. These businesses will be included in the Kanthal product area and are regarded as core businesses due to the strong market positions and growth potential. In 2016 operations now transferred into the Kanthal product area had annual revenues of about 800 million SEK.
A charge of -450 million SEK related to the transaction will impact the result for the second quarter 2017. This is primarily impairments related to fixed assets. The cash flow impact from the transaction is expected to be positive.
"The divestment of the welding and stainless wire businesses will make Sandvik Materials Technology more focused on its core operations; advanced stainless steels and special alloys for the most demanding industries. We will continue to develop our core businesses to ensure long term value creation. A new organizational structure is being created, effective as from 1 July 2017, whereby each product area will be responsible and accountable for the entire value chain and its results. The four new product areas will be Tube, Kanthal, Powder and Strip", says Petra Einarsson, President of business area Sandvik Materials Technology.
For further information, contact Ann-Sofie Nordh, Vice President Investor Relations, tel: +46 8 456 14 94 or Carina Aspenberg, Media and PR Manager, tel: +46 70 616 01 19.
Stockholm, 17 May 2017