Long-term financial targets
Sandvik has long-term financial targets focusing on growth, profitability, dividend and a strong financial position.
Growth1): ≥5%
Target
A growth of ≥5 percent through a business cycle, organically and through acquisitions.
Read about how our solid financial position supports our shift to growth
Outcome 2020: 0%
The revenue growth 2016–2020 was 0 percent. In 2020 the organic growth was –11 percent, due to a slow-down related to the Covid-19 pandemic.
Trough EBIT margin: ≥16%
Target
A trough EBIT margin of ≥16 percent rolling 12 months, adjusted for items affecting comparability and metal prices.
Read more about how we will achieve our trough EBIT margin target
Outcome 2020: 17%
The EBIT margin, adjusted for items affecting comparability and metal prices, amounted to 17 percent in 2020. The EBIT margin was 13, 16, 18 and 18 percent in 2016, 2017, 2018 and 2019, respectively.
Dividend1) payout ratio: 50%
Target
A dividend payout ratio of 50 percent of earnings per share, adjusted for items affecting comparability, through a business cycle.
Read more about our commitment to generating maximum shareholder value
Outcome 2020: 45%
The average payout ratio in 2016–2020 amounted to 45 percent. Sandvik’s strong performance in 2020 resulted in a proposed dividend of SEK 8 billion (0), corresponding to a payout ratio of 75 percent.
Net debt/equity ratio: <0.5
Target
A net debt/equity ratio below 0.5.
Read more about debt and funding strategy
Outcome 2020: 0.0
The target was achieved as the net debt to equity ratio was 0.04.
1) The growth and dividend targets refer to average through a business cycle, which is here defined as 2016–2020.