Sandvik consolidates to three business areas and identifies non-strategic operations
Sandvik reorganises its operations in business area Sandvik Venture. This includes:
- moving Wolfram (Wolfram Bergbau und Hütten) and two selected production sites from Sandvik Hyperion into Sandvik Machining Solutions
These businesses are internal suppliers to Sandvik Machining Solutions. Wolfram supplies raw material through virgin material from the mine, through its recycling operations as well as from third party suppliers. The selected production sites in Sandvik Hyperion supplies metal powder and develops round tool blanks.
- moving Sandvik Drilling and Completions (Varel) into Sandvik Mining and Rock Technology
The product offering comprises consumables - drill bits and down-the-hole products - to the oil & gas and mining industries. Drill bit products have the equivalent business logic as the consumable offering in Sandvik Mining and Rock Technology, in being an important driver for customer productivity.
- Sandvik Process Systems and Sandvik Hyperion, excluding the two sites to be merged into Sandvik Machining Solutions, are identified as non-strategic operations and will remain in Sandvik Venture, now to be labeled other operations
Over time, Sandvik has the ambition to exit from these businesses, although the process is yet to be initiated.
“By consolidating operations we will achieve total ownership and accountability for the respective businesses, aiming to improve the long term efficiency in Sandvik. For Sandvik Machining Solutions the structural change is driven by achieving total ownership of the supply chain and strengthening the position in the round tools segment. For Sandvik Mining and Rock Technology we consolidate the similar product offering of Rock Tools and Drilling and Completions under the same umbrella. Over time we will exit from the businesses now reported in other operations, making Sandvik even more focused on its core businesses, says Björn Rosengren, Sandvik’s President and CEO.
The new structure will be effective as of 1 July 2016. Sandvik Venture business area and management team will hence be dissolved. Björn Rosengren, Sandvik’s President and CEO will have the formal responsibility for other operations, while the responsibility for further development of the business will remain with the respective product area management teams. Jim Nixon, current President of Sandvik Venture will leave Sandvik as of 1 July 2016.
“I would like to take the opportunity to thank Jim Nixon for his dedicated work in supporting the merger of the new organization. I wish him all the best in his future career”, says Björn Rosengren.
| SANDVIK OLD STRUCTURE 2015, MSEK |
SANDVIK MACHINING SOLUTIONS | SANDVIK MINING AND ROCK TECHNOLOGY |
SANDVIK MATERIALS TECHNOLOGY | SANDVIK VENTURE |
SANDVIK GROUP |
|
| Revenues | 32,652 | 30,971 | 13,909 | 8,292 | 85,845 | |
| Adjusted operating margin, % | 20.1 | 11.9 | 5.9 | 7.0 | 12.3 | |
| SANDVIK NEW STRUCTURE 2015, MSEK |
SANDVIK MACHINING SOLUTIONS | SANDVIK MINING AND ROCK TECHNOLOGY |
SANDVIK MATERIALS TECHNOLOGY | OTHER OPERATIONS |
SANDVIK GROUP |
|
| Revenues | 33,809 | 33,131 | 13,909 | 4,976 | 85,845 | |
| Operating profit | 5,476 | 2,417 | 8 | 518 | 7,271 | |
| Operating margin, % | 16.2 | 7.3 | 0.1 | 10.4 | 8.5 | |
| Adjusted operating profit | 6,786 | 3,492 | 818 | 558 | 10,595 | |
| Adjusted operating margin, % | 20.1 | 10.5 | 5.9 | 11.2 | 12.3 | |
| ROCE, % | 21.7 | 9.7 | 0.1 | 13.3 | 9.5 | |
| Net Working Capital, % | 26 | 31 | 25 | 31 | 27 | |
| No. of employees | 18,736 | 14,595 | 6,533 | 2,050 | 44,663 | |
For further information, please contact Ann-Sofie Nordh, Vice President Investor Relations, tel: +46 8 456 1494, Anna Vilogorac, Investor Relations, tel: +46 8 456 1194 or Carina Aspenberg, Media Relations Manager,
tel. +46 8 456 1307.
Stockholm, 3 May 2016
Sandvik AB
Sandvik consolidates to three business areas and identifies non-strategic operations
