Investment case

Sandvik’s equity story is built on more than 150 years of leading materials and applications know-how with close long-term customer relationships forming the basis for the Group’s productivity-enhancing offering. Key drivers for improved performance at Sandvik comprise:

  • Maintained technology leadership for continued leading market positions (number one or two) in our selected segments
  • A more decentralized and cost efficient business model for increased accountability, transparency and speed
  • Growth in Sandvik Mining and Rock Technology’s aftermarket business for improved profitability and reduced earnings volatility
  • Consolidation of the manufacturing footprint and other announced savings initiatives, including completion of the ongoing supply chain optimization program, for targeted savings of 2.1 billion SEK by the end of 2017
  • Strict control of Capex and net working capital
  • Continuous review of the business portfolio
  • Incorporation of sustainable solutions across the value chain creating competitive advantages

Björn Rosengren, President and CEO:

"We do not look for quantum leaps, but expect each business to make continuous small improvements to drive shareholder value."

Runway for achieving financial targets

The challenges and opportunities for Sandvik’s various businesses differ given that operational decisions are based on priorities that stipulate stability and profitability ahead of growth.

Financial targets up until 2018

Sandvik’s financial targets stipulate improved operating profit, higher returns and a strengthening of the balance sheet, while maintaining a generous dividend policy.

≥7%

EBIT growth
CAGR baseline 2015
Excluding metal price effects in Sandvik Materials Technology and currency impact

≥3% PTS

ROCE improvement
Improvement compared with baseline 2015

<0.8

Net debt/equity ratio
Excluding major aquisitions, including net pension liabilities

50%

Dividend payout ratio
of reported earnings per share

Long-term focus

The long-term focus for Sandvik is driven by our vision “We set the industry standard” with the aim of sustainably creating value for customers, shareholders and employees. Our roadmap covers several focus areas that support Sandvik’s growth, profitability and cash flow generation, including:


Improving customer productivity

Based on our materials and applications know-how – in combination with extensive R&D – we continuously develop new products that improve customer productivity. This will affirm our global leading (number one or two) position in our core segments.


Capital and cost efficiency

In a lean and agile operating structure where decisions are made close to the customer, we will drive capital and cost allocation toward segments and product areas with the highest potential for growth and returns.


Focused business portfolio

To achieve the number one or two position in our selected segments, we will make acquisitions in order to grow in core areas and add new technologies to broaden the scope of our offering. We will exit non-core operations in our endeavor to achieve the optimal operational structure and a stronger performance.

Sandvik's business areas

Sandvik's operations are organized into three business areas responsible for R&D, production and sales of their respective products. The business areas are:

  • Sandvik Machining Solutions
  • Sandvik Mining and Rock Technology
  • Sandvik Materials Technology

Read more about Sandvik's business areas in the About us section