Interim report third quarter 2010

President's comment:

"The market situation continued to improve sequentially. Adjusted for seasonal effects, both order intake and invoiced sales rose. A high level of demand was noted in the energy sector and the improvement continued primarily in the automotive, mining and process industries. Order intake exceeded invoiced sales, resulting in a further strengthening of the order book. Order intake and invoiced sales increased by 23% and 21%, respectively, at fixed exchange rates, compared with the preceding year. Of the order intake of nearly SEK 22 billion, major project orders from the nuclear power industry accounted for SEK 700 M. The operating result amounted to SEK 2.5 billion, or 13% of invoiced sales," says Sandvik's President and CEO Lars Pettersson.

"The seasonal weakening, which adversely impacts sales and earnings, was offset by a continued improvement in demand in most markets. However, earnings were negatively affected by the strengthening of the SEK, particularly in relation to the EUR and USD. Furthermore, earnings were affected by a provision for variable compensation and certain nonrecurring costs. Capital efficiency was further improved and net working capital neared the target level of 25% of invoicing. Combine with a low investment level, this contributed to continuedstrong cash flow."