Sandvik AB Interim report fourth quarter 2009
"During the fourth quarter, the market showed positive tendencies and the gradual recovery that began in the third quarter continued. This improvement is derived from very low levels and is largely a result of an easing of customer destocking. Order intake from the energy sector, and large parts of the Asian market, remained strong. The market situation improved slightly in North and South America, Australia and Africa, but remained weak in Europe," says Sandvik's President and CEO Lars Pettersson.
"Low invoicing combined with continued destocking due to planned low production rates had a negative impact on the operating result. Furthermore, earnings were charged with approximately SEK 600 M for restructuring and impairment and amounted to SEK 408 M. Implemented action programs generated favorable results in reduced costs and working capital, and a strong cash flow.
"Full-year 2009 placed considerable demands on Sandvik to rapidly adjust to a significantly deteriorated market climate. Demand declined by approximately 30% and the rate of production was reduced by about 40%. During the year, extensive measures were conducted with the aim of reducing costs and tied-up capital, and ensuring a favorable cash flow. The costs were reduced during the year by approximately SEK 6 billion and savings amounted on an annualized basis to SEK 8 billion in the fourth quarter. Working capital was lowered by more than 30% and the operating cash flow was slightly more than SEK 12 billion. Meanwhile, the Group strengthened its market position and market shares increased.
"With the extensive adaptations implemented in 2009 to the organization, capacity and costs, we are well positioned to improve earnings through higher sales volumes and production rates.
"The Board of Directors proposes a dividend of 1 SEK per share (3.15) for 2009."