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Interim report first quarter 2010

President's comment:

"The recovery that began in the fourth quarter continued during the first quarter and demand for Sandvik's products grew in all business areas. The Chinese market remained very strong and demand also increased in most other markets. Order intake totaled more than SEK 22 billion, of which about SEK 3 billion was attributable to major project orders within materials handling, mining operations and energy production for delivery commencing in the latter part of 2010. Invoicing amounted to SEK 18.5 billion, which was somewhat higher than the preceding quarter, but slightly down on the preceding year. There was a marked improvement in the operating margin and operating result, which were 10% and SEK 1.9 billion, respectively. Forceful cost savings and steadily increasing production rates, combined with increased sales for Sandvik Tooling, yielded a positive effect and is the main reason for the earnings improvement," says Sandvik's President and CEO Lars Pettersson.

"The market situation improved gradually in the first quarter. The positive trend is more tangible within Sandvik Tooling, but the performance of several other market segments was also favorable. In addition to the improvement in earnings, our programs to increase capital and cost efficiency generated a strong cash flow during the quarter. Invoiced volumes were still lower than before the downturn. Production rates were somewhat lower than sales rates, which contributed to some underabsorption of fixed costs but also reduced inventories."