Continued strong execution, but a more cautious market
"Our organization continued to successfully implement the strategy,
which again yielded results. Although operating profit was impacted by currency effects, declining metal prices and extended maintenance work, it still totaled 3.3 billion SEK, or 14.2%, in the seasonally weakest quarter of the year. At the same time, working capital was reduced, thereby contributing to the strongest cash flow recorded to date for a single quarter. We remain on the right track", says Sandvik's President and CEO Olof Faxander.
"The macroeconomic uncertainties seen earlier in the year, increased during the third quarter. Several of Sandvik's customer segments thus experienced weakening demand as the quarter progressed. Order intake declined to 21.8 billion SEK, while invoiced sales, supported by a strong backlog, totaled 23.4 billion SEK. Europe accounted for less than one third of Sandvik's total business, for the first time in the company's history. This shift in sales toward more rapidly expanding regions of the world is aligned with our long-term growth strategy."
"Production levels are being adjusted, in response to the market slowdown observed. Furthermore, various scenarios are being evaluated to enable us to adjust costs in accordance with new market conditions. The common objective is to proactively and efficiently manage a potentially weaker business climate, without negatively affecting our long-term growth ambitions."
Stockholm, 25 October 2012
Sandvik Aktiebolag (publ)